Exhibit 10.8

SECONDMENT AND LOGISTICS SERVICES AGREEMENT

THIS SECONDMENT AND LOGISTICS SERVICES AGREEMENT (this “Agreement”), dated as of
July 1, 2014, is made and entered into by and among Tesoro Companies, Inc., a
Delaware corporation (“TCI”), Tesoro Refining & Marketing Company LLC, a
Delaware limited liability company (“TRMC”), Tesoro Alaska Company LLC, a
Delaware limited liability company (“TAC” and, together with TCI and TRMC, the
“Tesoro Group”), Tesoro Logistics GP, LLC, a Delaware limited liability company
(the “General Partner”), Tesoro Logistics Operations LLC, a Delaware limited
liability company (“TLO”), Tesoro Logistics Pipelines LLC, a Delaware limited
liability company (“TLP”), Tesoro High Plains Pipeline Company LLC, a Delaware
limited liability company (“THPPC”), Tesoro Logistics Northwest Pipeline LLC, a
Delaware limited liability company (“TLNP”), and Tesoro Alaska Pipeline Company
LLC, a Delaware limited liability company (“TAPC” and together with the General
Partner, TLO, TLP, THPPC and TLNP, the “Logistics Group”). Each of TCI, TRMC,
TAC, the General Partner, TLO, TLP, THPPC, TLNP and TAPC, is referred to herein
as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, on April 1, 2012, certain of the Parties entered into that certain
Amended and Restated Operational Services Agreement (the “Operational Services
Agreement”) pursuant to which the Tesoro Group agreed to provide to the
Logistics Group certain services necessary to operate, manage, maintain and
report the operating results of the Logistics Group’s assets, including
gathering pipelines, transportation pipelines, storage tanks, trucks, truck
racks, terminal facilities, offices and related equipment, real estate and other
assets or portions thereof of the Logistics Group;

WHEREAS, subsequent to April 1, 2012, the Logistics Group has expanded to
include TLP, TLNP and TAPC, who are to become Parties to this Agreement;

WHEREAS, the Parties desire to supersede the Operational Services Agreement as
of the date hereof and enter into this Agreement to allow, among other things,
for the Tesoro Group to second certain of their personnel to the General Partner
and the General Partner to second certain of its personnel to the Tesoro Group
in addition to the provision of certain services previously covered by the
Operational Services Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

 

1. DEFINITIONS

As used in this Agreement, the following capitalized terms have the meanings set
forth below:

“AFE” shall mean an approval for expenditure.

“Affiliate” means, with respect to any Person, (a) any other Person directly or
indirectly controlling, controlled by or under common control with such Person
or (b) any Person owning or controlling fifty percent (50%) or more of the
voting interests of such Person. For purposes of this definition, the term
“controls,” “is controlled by” or “is under common control with” shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

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

“Allocation Percentage” has the meaning set forth in Section 3(d).

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

“Assets” means the Logistics Assets and the Tesoro Assets.

“Benefit Plans” means each employee benefit plan, as defined in Section 3(3) of
ERISA, and any other material plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation or
other benefits to any Seconded Employee (or to any dependent or beneficiary
thereof), including, without limitation, any stock bonus, stock ownership, stock
option, stock purchase, stock appreciation rights, phantom stock, restricted
stock or other equity-based compensation plans, policies, programs, practices or
arrangements, and any bonus or incentive compensation plan, deferred
compensation, profit sharing, holiday, cafeteria, medical, disability or other
employee benefit plan, program, policy, agreement or arrangement sponsored,
maintained, or contributed to by the Tesoro Group or the General Partner, as the
case may be, or any of their ERISA Affiliates, or under which either the Tesoro
Group or the General Partner, or any ERISA Affiliate may have any obligation or
liability, whether actual or contingent, in respect of or for the benefit of any
Seconded Employee (but excluding workers’ compensation benefits (whether through
insured or self-insured arrangements) and directors and officers liability
insurance).

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

“Claim” means any existing or threatened future claim, including third-party
claims, demand, suit, action, investigation, proceeding, governmental action or
cause of action of any kind or character (in each case, whether civil, criminal,
investigative or administrative), known or unknown, under any theory, including
those based on theories of contract, tort, statutory liability, strict
liability, employer liability, premises liability, products liability, breach of
warranty or malpractice.

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

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

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity that would be treated as a single employer
with such other entity under Sections 414(b), (c) or (m) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
or Section 4001(b)(1) of ERISA.

“Extension Period” has the meaning set forth in Section 6.

“Facilities” means the facilities related to each of the entities in the
Logistics Group.

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

“Force Majeure Notice” has the meaning set forth in Section 12(a).

“General Partner” means Tesoro Logistics GP, LLC, and its successors and
assigns, who is the general partner of the Partnership.

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

“Group” shall mean either the Tesoro Group or the Logistics Group.

“Initial Term” shall have the meaning set forth in Section 6.

“Licensed Premises” shall have the meaning set forth in Section 4(b).

“Licensee Group” shall have the meaning set forth in Section 4(b).

“Licensor Group” shall have the meaning set forth in Section 4(b).

“Logistics Assets” means the assets owned by, leased by or necessary for the
operation of the business, properties or assets of any entity in the Logistics
Group, and any future expansions thereof.

“Logistics Group” has the meaning set forth in the Preamble.

“Logistics Group Indemnified Parties” has the meaning set forth in
Section 11(a).

“Logistics Services” means the Operational Services, Specialized Services and
Other Services with respect to the Logistics Assets either as set forth on the
Service Schedules or as agreed upon by the applicable Parties pursuant to a
Service Order.

 

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“Loss” and “Losses” shall have the meaning set forth in Section 11(a).

“Operational Services” means labor and other services performed for the purpose
of providing operational and maintenance services related to the applicable
Assets.

“Operational Services Agreement” has the meaning set forth in the Recitals.

“Other Services” means services that are provided to directly support the
applicable Assets that may be agreed upon between the Parties from time to time
pursuant to a Service Order, in addition to Operational Services and Specialized
Services.

“Partnership” means Tesoro Logistics LP, a Delaware limited partnership.

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

“Partnership Seconded Employees” has the meaning set forth in Section 2(a)(ii).

“Periods of Secondment” has the meaning set forth in Section 2(d).

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

“Receiving Party Personnel” has the meaning set forth in Section 15(d).

“Seconded Employees” means the Tesoro Seconded Employees and the Partnership
Seconded Employees.

“Seconded Employee Expenses” has the meaning set forth in Section 3(b).

“Seconded Services” shall mean the Logistics Services and/or the Tesoro
Services, as applicable, performed by the applicable Seconded Employees.

“Secondment” means each assignment of any Seconded Employees to a Secondment
Recipient in accordance with the terms of this Agreement.

“Secondment Provider” has the meaning set forth in Section 3(a).

“Secondment Recipient” has the meaning set forth in Section 3(a).

“Service Orders” shall mean documents to be executed by the Parties with respect
to the terms and conditions of professional and Logistics Services or Tesoro
Services that may be agreed upon from time to time.

“Services Reimbursement” has the meaning set forth in Section 3(a).

“Service Schedules” has the meaning set forth in Section 2(b)(i).

“Specialized Services” means services requiring professional or other highly
skilled and trained employees, which are provided to directly support the
applicable Assets and repairs, replacements, improvements and expansions
thereto, including engineering, procurement, environmental, safety and similar
services.

 

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

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

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

“Term” shall have the meaning set forth in Section 6.

“Terminated Service” has the meaning set forth in Section 9(a).

“Tesoro Assets” means the assets owned by, leased by or necessary for the
operation of the business, properties or assets of any entity in the Tesoro
Group.

“Tesoro Group” has the meaning set forth in the Preamble.

“Tesoro Group Indemnified Parties” has the meaning set forth in Section 11(b).

“Tesoro Seconded Employees” has the meaning set forth in Section 2(a)(i).

“Tesoro Services” means the Operational Services, Specialized Services and Other
Services with respect to the Tesoro Assets either as set forth on the Service
Schedules or as agreed upon by the applicable Parties pursuant to a Service
Order.

“Third Amended and Restated Omnibus Agreement” means that certain Third Amended
and Restated Omnibus Agreement, entered into concurrently herewith, among Tesoro
Corporation, TRMC, TCI, TAC, the General Partner and the Partnership, as such
agreement may be amended, supplemented or restated from time to time.

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

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

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

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

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

 

2. SECONDED EMPLOYEES

(a) Employees.

(i) Subject to the terms of this Agreement, the Tesoro Group agrees to second
the Tesoro Seconded Employees to the General Partner, and the General Partner
agrees to accept the Secondment of the Tesoro Seconded Employees for the purpose
of performing the Logistics Services. When used herein, the term “Tesoro
Seconded Employees” means those employees of any member of the Tesoro Group who
are engaged in providing the Logistics Services to the General Partner from time
to time. The Tesoro Seconded Employees will remain at all times the employees of
their respective employer in the Tesoro Group, but shall work under the
direction, supervision and control of the General Partner when they are serving
as Tesoro Seconded Employees.

 

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(ii) Subject to the terms of this Agreement, the General Partner agrees to
second the Partnership Seconded Employees to the Tesoro Group, and the Tesoro
Group agrees to accept the Secondment of the Partnership Seconded Employees for
the purpose of performing the Tesoro Services. When used herein, the term
“Partnership Seconded Employees” means those employees of the General Partner
who are engaged in providing the Tesoro Services to the Tesoro Group from time
to time. The Partnership Seconded Employees will remain at all times the
employees of the General Partner, but shall work under the direction,
supervision and control of the Tesoro Group when they are serving as Partnership
Seconded Employees.

(b) Services.

(i) The Tesoro Seconded Employees shall provide to the Logistics Group the
Operational Services more particularly described in Schedule A attached to this
Agreement for each respective Facility (the “Service Schedules”), which
Operational Services, the Parties agree, shall be performed under the direction
and control of the General Partner. In addition, the Parties acknowledge and
agree that some Operational Services listed on the Service Schedules may be
expanded, discontinued or modified in scope. These items will be negotiated in
good faith by the Parties and the Service Schedules will be revised in writing
by the Parties as required. Further, Tesoro Seconded Employees will provide
assistance to the Logistics Group from time to time with respect to Specialized
Services and Other Services. The terms applicable to Logistics Services will be
negotiated in good faith by the applicable Parties and will be reflected in
individual Service Orders executed by the applicable Parties identifying the
specific Logistics Services to be provided, the timing of those Logistics
Services, the method of compensation for those Logistics Services and other
terms that may be applicable to those Logistics Services, in addition to the
provisions of this Agreement and the other agreements among the Parties.

(ii) The Partnership Seconded Employees shall provide to the Tesoro Group the
Tesoro Services more particularly described in the Service Schedules for each
respective Facility, which Tesoro Services, the Parties agree, shall be
performed under the direction and control of the Tesoro Group. The Parties may
from time to time, by mutual agreement, agree on various Tesoro Services to be
provided by the Partnership Seconded Employees. The Tesoro Services shall be
exclusive of the primary services being provided by TLO to the Tesoro Group
under the commercial agreements executed by the applicable Parties and the
administrative services being provided under the Third Amended and Restated
Omnibus Agreement. Specific terms applicable to Tesoro Services will be
negotiated in good faith by the applicable Parties and will be reflected in
individual Service Orders executed by the applicable Parties identifying the
specific Tesoro Services to be provided, the timing of those Tesoro Services,
the method of compensation for those Tesoro Services and other terms that may be
applicable to those Tesoro Services, in addition to the provisions of this
Agreement and the other agreements among the Parties.

(c) Authority; Former Seconded Employees. Tesoro Seconded Employees shall have
no authority or apparent authority to act on behalf of the Tesoro Group while
performing Logistics Services under Secondment to the General Partner, and
Partnership Seconded Employees shall have no authority or apparent authority to
act on behalf of the General Partner while performing Tesoro Services under the
Secondment to the Tesoro Group. Those rights and obligations of the Parties
under this Agreement that relate to individuals while performing as Seconded
Employees will survive after such individuals are no longer serving as Seconded
Employees, to the extent necessary to enforce such rights and obligations.

 

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(d) Periods of Secondment. The Seconded Employees will be seconded hereunder
from time to time to the General Partner or the Tesoro Group, respectively,
starting on the date hereof and continuing, during the periods (and only during
the periods) that the Seconded Employees are performing Seconded Services for
the General Partner or the Tesoro Group (as applicable), until the earliest of:

(i) the end of the term of this Agreement;

(ii) such end date for any Seconded Services as may be mutually agreed by the
applicable Parties;

(iii) a withdrawal, departure, resignation or termination of such Seconded
Employees performing Seconded Services hereunder; and

(iv) a termination of Secondment of such Seconded Employees under Section 2(f).

The Parties acknowledge that the Seconded Employees will also provide services
to their primary employer, and the Parties intend that such Seconded Employees
shall only be seconded to the General Partner or the Tesoro Group, as the case
may be, during those specific times when the Seconded Employees are performing
Seconded Services hereunder for the Secondment Recipient, and that services
performed for such Seconded Employees’ primary employer shall not be Seconded
Services covered by this Agreement. The specific periods of time that any
Seconded Employee is seconded by his or her employer to the General Partner or
the Tesoro Group and is providing Logistics Services or Tesoro Services, as the
case may be, is referred to herein as the “Periods of Secondment.”

(e) Change of Seconded Employees. If any Seconded Employee tenders his or her
resignation to his or her employer, or if the employment of any Seconded
Employee is terminated by his or her employer, the employer will promptly
replace such Seconded Employee with another Seconded Employee of equivalent
skill and training as required to perform the Seconded Services. Unless
otherwise specifically agreed in writing by the Parties, the Parties acknowledge
and agree that multiple employees may be tasked to provide Seconded Services
during any Periods of Secondment, and that the individual employees who provide
such Seconded Services may change or rotate their assignments, and that the
employees actually providing such Seconded Services shall be Seconded Employees
during the period of time that they are actually providing such Seconded
Services for the Secondment Recipient. Unless otherwise specifically agreed in
writing by the Parties, the Secondment Provider shall have the right to
designate which of its employees shall provide Seconded Services to the
Secondment Recipient during any Periods of Secondment. The identification of
Seconded Employees who may provide Specialized Services or Other Services shall
be addressed in individual Service Orders covering such Seconded Services.

(f) Termination of Secondment. Subject to any restrictions contained in any
collective bargaining agreement to which any member of the Tesoro Group is a
party, the General Partner will have the right to terminate the Secondment of
any Tesoro Seconded Employee for any reason at any time. The Tesoro Group will
have the right to terminate the Secondment of any Partnership Seconded Employee
for any reason at any time. Upon the termination of any Seconded Employee’s
Periods of Secondment, the primary employer of such Seconded Employee will be
solely liable for any costs or expenses associated with the termination of the
Secondment, except as otherwise specifically set forth in this Agreement.

 

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(g) Supervision of Tesoro Seconded Employees.

During each of the Periods of Secondment for Tesoro Seconded Employees, the
General Partner shall:

(i) be ultimately and fully responsible for the work assignments of the Tesoro
Seconded Employees during those times that the Tesoro Seconded Employees are
performing Logistics Services for the Logistics Group hereunder, including
supervision of normal work activities and performance consistent with the job
functions associated with the Logistics Services;

(ii) set the hours of work and schedules in collaboration with the Tesoro Group;
and

(iii) have the right to determine training that should be received by the Tesoro
Seconded Employees in order for them to properly perform their duties as
Seconded Employees performing Logistics Services.

In the course and scope of performing any Tesoro Seconded Employee’s job
functions, the Tesoro Seconded Employees will report into the General Partner’s
management structure, and will be under the management and control of the
General Partner during the Periods of Secondment in which such Seconded
Employees are providing Logistics Services.

(h) Supervision of Partnership Seconded Employees.

During each of the Periods of Secondment for Partnership Seconded Employees, the
applicable Tesoro Group entity shall:

(i) be ultimately and fully responsible for the work assignments of the
Partnership Seconded Employees during those times that the Partnership Seconded
Employees are performing services for a member of the Tesoro Group hereunder,
including supervision of their normal work activities and performance consistent
with the job functions associated with the Tesoro Services;

(ii) set the hours of work and schedules in collaboration with the General
Partner; and

(iii) have the right to determine training that should be received by the
Partnership Seconded Employees in order for them to properly perform their
duties as Seconded Employees performing Tesoro Services.

In the course and scope of performing any Partnership Seconded Employee’s job
functions, the Partnership Seconded Employees will report into such entity’s
management structure, and will be under the management and control of the
applicable Tesoro Group entity during the Periods of Secondment in which such
Seconded Employees are providing Tesoro Services.

(i) Seconded Employees Qualifications; Approval. The Tesoro Group and the
General Partner will each provide such suitably qualified and experienced
Seconded Employees as they are reasonably able to make available to the General
Partner and the Tesoro Group, respectively. To the extent that the Seconded
Employees are required to undergo any training or certification to perform
Seconded Services, the Secondment Provider shall be responsible for ensuring
that such Seconded Employees have obtained such training and certifications,
unless otherwise specified in a Service Order. The General Partner will have the
right to approve such Tesoro Seconded Employees and the applicable entity in the
Tesoro Group will have the right to approve such Partnership Seconded Employees.

 

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(j) Workers Compensation. At all times, the Seconded Employee’s employer will
maintain workers’ compensation or similar insurance (either through an insurance
company or self-insured arrangement) applicable to the Seconded Employees, as
required by applicable state and federal workers’ compensation and similar laws,
and will name the General Partner or the applicable Tesoro Group entity, as the
case may be, as an additional named insured under each such insurance policy

(k) Benefit Plans.

(i) The Parties acknowledge that non-union represented employees of the Tesoro
Group and employees of the Logistics Group are currently covered by a single
Benefit Plan, and this Agreement and the Secondment is not intended to modify
any existing matters related to such Benefit Plan or the application to
individual employees. To the extent that the Tesoro Group and the Logistics
Group should have separate Benefit Plans for any employees, then the Secondment
of the Tesoro Seconded Employees shall not cause the General Partner or any
member of the Logistics Group to be deemed to be a participating employer in any
Benefit Plan of any member of the Tesoro Group during the Periods of Secondment.
Subject to the General Partner’s reimbursement obligations hereunder, the Tesoro
Group shall remain responsible for all obligations and liabilities arising under
the express terms of the Benefit Plans of any member of the Tesoro Group as the
employer of the Tesoro Seconded Employees, and the Tesoro Seconded Employees
will be covered under the Benefit Plans of any member of the Tesoro Group
subject to and in accordance with their respective terms and conditions, as they
may be amended from time to time. The Tesoro Group and their ERISA Affiliates
may amend or terminate any Benefit Plan of any member of the Tesoro Group in
whole or in part at any time (subject to the applicable provisions of any
collective bargaining agreement covering Tesoro Seconded Employees, if any). To
the extent that the Tesoro Group and the Logistics Group should have separate
Benefit Plans for any employees, then the Secondment of the Tesoro Seconded
Employees shall not cause the General Partner or any member of the Logistics
Group to assume any Benefit Plan of any member of the Tesoro Group or to have
any obligations, liabilities or rights arising under the express terms of the
Benefit Plans of any member of the Tesoro Group, in each case except for cost
reimbursement pursuant to this Agreement.

(ii) The Secondment of the Partnership Seconded Employees, shall not cause the
Tesoro Group entities to be deemed to be a participating employer in any Benefit
Plan of the General Partner during the Periods of Secondment. Subject to the
Tesoro Group’s reimbursement obligations hereunder, the General Partner shall
remain responsible for all obligations and liabilities arising under the express
terms of the Benefit Plans of the General Partner as the employer of the Tesoro
Seconded Employees, and the Partnership Seconded Employees will be covered under
their Benefit Plans subject to and in accordance with their respective terms and
conditions, as they may be amended from time to time. The General Partner and
its ERISA Affiliates may amend or terminate any Benefit Plan of the General
Partner in whole or in part at any time. The Secondment of the Tesoro Seconded
Employees shall not cause the Tesoro Group to assume any Benefit Plan of the
General Partner or to have any obligations, liabilities or rights arising under
the express terms of the Benefit Plans of the General Partner, in each case
except for cost reimbursement pursuant to this Agreement.

(l) Represented Employees. The Parties acknowledge that certain employees of the
Tesoro Group who may provide Logistics Services and certain employees of the
General Partner who may provide Seconded Services hereunder are represented
under one of more collective bargaining agreements with members of the Tesoro
Group. This Agreement and the Secondment hereunder is not intended to interfere
with or modify those collective bargaining agreements or the rights of the union
represented employees or other parties thereto. To the extent that Seconded
Services are provided hereunder by union represented employees, the Parties
acknowledge that the terms of the collective employment agreements shall apply
to such Seconded Services to the same extent that they would apply if such
services were not

 

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being performed as Seconded Services, and that for purposes of any matters
arising under the collective bargaining agreements with union represented
employees, the members of the Tesoro Group who are parties to such collective
bargaining agreements shall have the right to represent the interests of the
Parties hereto.

 

3. SERVICES REIMBURSEMENT

(a) Operational Expenses. The Party providing the Logistics Services or the
Tesoro Services (the “Secondment Provider”), as the case may be, shall invoice
the recipient of Logistics Services or Tesoro Services performed by the Seconded
Employees (the “Secondment Recipient”) on or before the tenth (10th) Business
Day after the end of each month during the Period of Secondment. The itemized
invoice (in a form mutually agreed upon by the Parties) shall list the flat
monthly fees for Operational Services, as provided under Section 3(e) and detail
all other reimbursable Seconded Services, as provided under Section 3(b) that
are incurred by the Secondment Recipient with respect to the Seconded Employees
in connection with the performance of the applicable Seconded Services during
the preceding month (the “Services Reimbursement”). The Secondment Recipient
shall, within ten (10) calendar days of receipt, pay such invoice, except for
any amounts therein being disputed in good faith by the Secondment Provider. Any
amounts that the Secondment Provider has disputed in good faith and that are
later determined by any court or other competent authority having jurisdiction,
or by agreement of the Parties, to be owing from the Secondment Provider to the
Secondment Recipient shall be paid in full within ten (10) days of such
determination.

(b) Services Reimbursement. Subject to Sections 3(c) and 3(d), the Services
Reimbursement shall include reimbursement for costs and expenses incurred by the
Secondment Provider for the Seconded Employees, including the following
(collectively, the “Seconded Employee Expenses”):

(i) salary and wages (including payroll and withholding taxes associated
therewith);

(ii) cash bonuses;

(iii) costs of matching and other employer 401(k) contributions;

(iv) costs of pension benefit accruals;

(v) any cash expense associated with any deferred compensation plan;

(vi) vacation, sick leave, personal leave, maternity leave and any other federal
or state mandated leave;

(vii) healthcare coverage, including medical, dental, vision and prescription
drug coverage;

(viii) flexible benefits plan, including medical care and dependent care expense
reimbursement programs;

(ix) short-term disability benefits and long-term disability insurance premiums;

(x) workers’ compensation insurance;

 

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(xi) premiums for life insurance, accidental death and dismemberment insurance
and any other insurance provided to the Seconded Employees;

(xii) the vesting of any long-term incentive awards, whether granted before or
during the Period of Secondment;

(xiii) business travel expenses and other business expenses reimbursed in the
normal course by the Secondment Provider, such as subscriptions to
business-related periodicals and dues to professional business organizations;

(xiv) any other employee benefit or compensation arrangement customarily
provided to all employees by the Secondment Provider for which the Secondment
Provider incurs costs with respect to Seconded Employees; and

(xv) any sales taxes imposed upon the provision of any taxable services provided
under this Agreement; provided, however, that, the General Partner and the
Tesoro Group contemplate that the services provided pursuant to this Agreement
are not taxable services for sales and use tax purposes.

(c) Adjustments Based on Periods of Secondment. It is understood and agreed that
the Secondment Recipient shall be liable for Seconded Employee Expenses to the
extent, and only to the extent, they are attributable to the Seconded Services
performed by such Seconded Employee.

(d) Adjustments. The Seconded Employee’s employer will determine in good faith
the percentage of each Seconded Employee’s time spent providing services to a
Secondment Recipient (the “Allocation Percentage”). The amount of the Services
Reimbursement payable with respect to each Seconded Employee shall be determined
by multiplying the Seconded Employee Expenses for such Seconded Employee times
the Allocation Percentage for such Seconded Employee; provided, however, that
certain Second Employee Expenses shall not be allocated based on the Allocation
Percentage but rather shall be allocated as follows:

(i) travel expenses and other specific identifiable expenses incurred with
respect to and/or reimbursable to a Seconded Employee shall be paid by the
Tesoro Group or the Logistics Group for whom the Seconded Services related to
such expenses were performed, except that expenses related to activities that
benefit both the Tesoro Group and the Logistics Group shall be shared in
accordance with the Allocation Percentage (or such other allocation as may be
agreed between the affected Parties); and

(ii) the taxes described in Section 3(b)(xv) shall be reimbursable in full by
the Secondment Recipient.

(e) Allocations for Operational Services. The Parties shall determine an average
amount of costs and expenses expected to be incurred for performance of
Operational Services, (whether Logistics Services and Tesoro Services) based
upon historical employee time spent on performing such services, the level of
employees performing such Operational Services, the compensation factors
outlined in Sections 3(b), (c) and (d) above, any anticipated changes in the
nature and level of Operational Services to be performed and any other
reasonable factors used to determine the correct amount of reimbursement to
cover the Secondment Provider’s costs of providing such Operational Services.
Such amounts shall be fixed as a flat monthly fee for performance of each type
of Operational Services at each Facility, and such flat monthly fee shall be
invoiced and paid as provided in Section 3(a) above. The initial reimbursable
fees payable for such Operational Services shall be as provided on the attached
Service Schedules, which fees shall be increased on July 1 of each year of the
Term, commencing on July 1, 2015, by a percentage

 

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equal to the greater of zero or the positive change, if any, in the CPI-U (All
Urban Consumers) for the prior calendar year, as reported by the U.S. Bureau of
Labor Statistics, and rounded to the nearest one-tenth (1/10) of one percent
(1%). The Parties shall periodically, but not less than annually, review the
existing fee structure for each Operational Service, to determine if it
accurately reflects the actual costs and expenses incurred by the Secondment
Provider in performing such Operational Services, and the Parties shall
negotiate in good faith and make such adjustments as are appropriate to cause
the fees for each such Operational Service to reflect the Secondment Provider’s
actual costs and expenses in providing the Operational Services. In the event
that the level of Operational Services are increased during any month above the
anticipated levels used to determine the flat monthly fee, or if the Secondment
Provider incurs any travel expense or other specific identifiable reimbursable
expenses associated with providing Operational Services that are not included in
the factors used to calculate flat monthly fees, then the Parties shall
negotiate in good faith to determine an additional amount that the Secondment
Provider may charge during such month to cover its increased costs of providing
Operational Services during such month.

(f) Where it is not reasonably practicable to determine the amount of any such
cost or expense described above, the Tesoro Group and the General Partner shall
mutually agree on the method of determining or estimating such cost or expense,
which may include the application of an agreed percentage benefit load to a
Seconded Employee’s salary and wages in order to value certain of the benefits
listed above. If the actual amount of any cost or expense, once known, varies
from the estimate used for billing purposes hereunder, the difference, once
determined, shall be reflected and adjusted in such manner as may be agreed upon
between the Tesoro Group and the General Partner at the time such variance is
identified.

 

4. FACILITIES, EQUIPMENT AND OFFICES

(a) Materials, Equipment and Supplies. Either Party may supply or provide
materials, equipment and supplies associated with Logistics Services or Tesoro
Services. In addition, a Party may incur costs and expenses relating to permits,
licenses, utilities, communications, consultants, security, and similar matters
that are related to Logistics Services or Tesoro Services. The Parties shall
establish procedures whereby the costs and expenses of providing such items are
allocated to and paid by the Parties in accordance with the extent to which each
Party realizes the benefit of each such item. If one Party incurs the costs and
expenses for any such item that is used solely for the benefit of another Party,
then the Party that pays for such item shall be entitled to reimbursement from
the Party who received the benefit of such item. If any items benefit both the
Tesoro Group and the Logistics Group, then the Group who incurs the costs and
expenses associated with such items shall be entitled to reimbursement from the
other Group in proportion to the benefits received by each Group from the
incurrence of such costs and expenses. The Parties shall negotiate such
allocations in good faith with respect to each such item at the time the
reimbursement is determined. For items that are associated with Operational
Expenses, the allocation may be included in the flat monthly fees reflected on
the Service Schedules.

(b) Use of Offices, Facilities and Equipment. The Parties may agree, pursuant to
a Service Order, to allow employees and contractors of one Group (the “Licensee
Group”) to have access to and utilize certain offices, facilities and equipment
(the “Licensed Premises”) of the other Group (the “Licensor Group”) for purposes
of conducting Operational Services. These Operational Services may include both
Seconded Services and other services that are performed by employees of the
Licensee Group related to its own Assets. In the event that the Parties so agree
pursuant to a Service Order, the employees and contractors of the Licensee Group
shall have a license to access and use those offices, facilities and equipment.
All such access to and use of the Licensed Premises shall be subject to all
rules, policies and procedures of the Licensor Party regarding access and use of
the Licensed Premises and adjacent areas by its own employees and contractors,
including all reasonable security requirements

 

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applicable to accessing the premises and any systems, technologies, or assets of
the Licensor Group. The Licensor Group shall have the right to exclude access to
any employee or contractor of the Licensee Group who is in violation of such
rules, policies and procedures. The Licensor Group shall have the right to
designate on the Service Order, the specific areas, facilities and equipment
that are within the Licensed Premises, to restrict access to and use of any
areas, facilities and equipment that are not included within the Licensed
Premises, and to designate specific routes for ingress and egress to the
Licensed Premises. Unless otherwise specified on such Service Order, access to
office space shall include access to common parking areas, restrooms and break
areas that are utilized by employees of the Licensor Group occupying areas
included within or immediately adjacent to the Licensed Premises, together with
use of computer servers, telephone lines, other communication equipment, copiers
and similar office equipment that serve the Licensed Premises. The Licensor
Group may charge the Licensee Group a fee for providing such access in amount to
be mutually agreed upon between the Parties pursuant to the applicable Service
Order. The identification of the Licensed Premises, the fees to be charged for
use of such Licensed Premises and any other special provisions or restrictions
regarding use and access of the Licensed Premises shall be set forth in Services
Orders entered into between the Parties.

 

5. BOOKS AND RECORDS

The Parties shall keep books of account and other records, in reasonable detail
and in accordance with generally accepted accounting principles and industry
standards, consistently applied, with respect to the provision of the Seconded
Services and the fees charged, as well as costs and expenses for materials,
equipment, supplies, communications, utilities and other charges that are
charged by one Group to the other Group, including support for allocations.
Allocations of Seconded Employee Expenses that are payable other than through
flat monthly fees shall be documented by AFEs, Service Orders or other standard
documentation to establish an Allocation Percentage and the amount of any
reimbursable Seconded Employee Expenses. Books of account and other records
shall be open for the Secondment Recipient’s inspection during normal business
hours upon at least five (5) Business Days’ prior written notice for twelve
(12) months following the end of the calendar year in which such Seconded
Services were rendered. This inspection right will include the right of the
Secondment Recipient to have its accountants or auditors review such books and
records. If an audit reveals that the Secondment Recipient paid more than the
applicable fees for any applicable audited period or service, the Secondment
Provider shall reimburse the Secondment Recipient for any amounts overpaid
together with interest at a rate equal to the prime rate of interest on the
original due date published by The Wall Street Journal, accruing from the date
paid by the Secondment Recipient to the date reimbursed by the Secondment
Provider.

 

6. TERM; RENEWAL

This Agreement shall have a term beginning on July 1, 2014, and shall terminate
on July 1, 2024 (the “Initial Term”). This Agreement may be extended by the
Tesoro Group for up to two (2) renewal terms of five (5) years each (each, an
“Extension Period,” and together with the Initial Term, the “Term”). To commence
an Extension Period, the Tesoro Group shall provide written notice of its intent
to the Logistics Group no less than ninety (90) days prior to the end of the
Initial Term or the then-current Extension Period.

 

7. COVENANTS

(a) Access to Premises. In addition to the access to the Licensed Premises
provided in Section 4 above, each Party shall give the other Parties reasonable
access to its premises as may be required for the Seconded Employees to provide
or receive the Seconded Services, as applicable, hereunder. Unless otherwise
agreed to in writing by the Parties or in connection with use of the Licensed
Premises, the Seconded Employees shall: (i) use the premises of the other
Parties solely for the purpose of

 

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providing or receiving the Seconded Services and not to provide goods or
services to or for the benefit of any third party or for any unlawful purpose;
(ii) comply with all policies and procedures governing access to and use of such
premises made known to such Party in advance, including all reasonable security
requirements applicable to accessing the premises and any systems, technologies,
or assets of the other Parties; (iii) instruct its employees and personnel, when
visiting the premises, not to photograph or record, duplicate, remove, disclose,
or transmit to a third party any of the other Parties’ Confidential Information,
except as necessary to perform or receive the Seconded Services; and (iv) return
such space to the other Parties in the same condition it was in prior to such
Party’s use of such space, ordinary wear and tear excepted.

(b) Data Back Up and Security. The Parties shall maintain industry standard data
back up and recovery procedures, as well as an industry standard disaster
avoidance and recovery plan, in connection with all of its systems used in
performing the Seconded Services. The Parties shall maintain and enforce
physical, technical and logical security procedures with respect to the access
and maintenance of any Confidential Information of the other Parties that is in
the Secondment Provider’s possession, which procedures shall: (i) be at least
equal to industry standards; (ii) be in full compliance with Applicable Law; and
(iii) provide reasonably appropriate physical, technical and organizational
safeguards against accidental or unlawful destruction, loss, alteration,
unauthorized disclosure, theft or misuse.

(c) Taxes. The Secondment Recipient shall pay or cause to be paid all taxes,
levies, royalties, assessments, licenses, fees, charges, surcharges and sums due
of any nature whatsoever (other than income taxes, gross receipt taxes and
similar taxes) imposed by any federal, state or local government that the
Secondment Provider incurs on its behalf for the Seconded Services provided by
the Seconded Employees under this Agreement. If the Secondment Provider is
required to pay any of the foregoing, the Secondment Recipient shall promptly
reimburse the Secondment Provider in accordance with the payment terms set forth
in this Agreement.

 

8. STANDARD OF PERFORMANCE

The Parties shall cause the Seconded Employees shall perform the Seconded
Services, as applicable, using at least the same level of care, quality,
timeliness, skill and adherence to applicable industry standards, in providing
the Seconded Services, as applicable, as such Parties do in providing the
Seconded Services to such Party’s subsidiaries and Affiliates.

 

9. TERMINATION

(a) Termination for Convenience. Any specific Operational Service provided by
Seconded Employees from the Service Schedules may be terminated by the
Secondment Recipient (each such specific Operational Service that has been
terminated by the Secondment Recipient, a “Terminated Service”) upon ninety
(90) days’ prior written notice to the Secondment Provider.

(b) Termination for Default.

A Party shall be in default under this Agreement if:

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

 

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

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

(c) Effect of Termination. Upon expiration or termination of this Agreement, all
rights and obligations of the Parties under this Agreement shall terminate;
provided, however, that such termination shall not affect or excuse the
performance of any Party (i) for any breach of this Agreement occurring prior to
such termination, (ii) the payment of any amounts due but not yet payable under
this Agreement, or (iii) under any of the following provisions of this Agreement
that survive the termination of this Agreement indefinitely: Section 11;
Section 15; and Section 16. Upon expiration or termination of this Agreement or
any Operational Service, each Party shall return to the other Party any
equipment or other property or materials of such other Party (including but not
limited to any materials containing Confidential Information) that are in the
possession or control of such Party or any Seconded Employees (except to the
extent they are required for use in connection with any non-terminated
Operational Services provided by Seconded Employees).

 

10. RELATIONSHIP OF THE PARTIES AND TO OTHER AGREEMENTS

(a) This Agreement does not form a partnership or joint venture between the
Parties. This Agreement does not make any member of the Tesoro Group an agent or
a legal representative of any member of the Logistics Group or any member of the
Logistics Group an agent or a legal representative of any member of the Tesoro
Group. No member of the Tesoro Group shall assume or create any obligation,
liability, or responsibility, expressed or implied, on behalf of or in the name
of any member of the Logistics Group in connection with the transactions
contemplated by this Agreement. No member of the Logistics Group shall assume or
create any obligation, liability or responsibility, expressed or implied, on
behalf of or in the name of any member of the Tesoro Group in connection with
the transactions contemplated by this Agreement.

(b) Except for the Operational Services Agreement, this Agreement does not amend
or supersede any other agreements between the Parties that may relate to
reimbursement or indemnities for costs and expenses, including the Third Amended
and Restated Omnibus Agreement and the various commercial agreements between the
Parties.

 

11. INDEMNIFICATION

(a) Indemnification by the Tesoro Group. The Tesoro Group, jointly and
severally, shall indemnify and hold harmless the Logistics Group, and the
officers, directors, employees, agents and representatives of each member of the
Logistics Group (collectively, the “Logistics Group Indemnified Parties”) from
and against all Claims, and upon demand by the Logistics Group, shall protect
and defend the Logistics Group Indemnified Parties from the same, alleged,
asserted or suffered by or arising in favor of any Person, and shall pay any and
all judgments or settlements of any kind or nature (to include interest) as well
as court costs, reasonable attorneys’ fees and expenses, and any expenses
incurred in

 

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enforcing this indemnity provision (each a “Loss” and collectively, “Losses”),
incurred by, imposed upon or rendered against one or more of the Logistics Group
Indemnified Parties, whether based on contract, or tort, or pursuant to any
statute, rule or regulation, and regardless of whether the Claims are
foreseeable or unforeseeable, all to the extent that such Losses are in respect
of or arise from (i) breaches by the Tesoro Group of this Agreement, or
(ii) Claims by a third-party relating to (A) breaches by the Tesoro Group of
this Agreement or (B) the Tesoro Group’s negligence, willful misconduct or
violation of law in connection with the performance of the Logistics Services,
PROVIDED THAT THE TESORO GROUP SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD
HARMLESS THE LOGISTICS GROUP INDEMNIFIED PARTIES FROM AND AGAINST ANY CLAIMS TO
THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, STRICT LIABILITY OR THE
NEGLIGENT ACTS, ERRORS, OMISSIONS OR WILLFUL MISCONDUCT OF ANY LOGISTICS GROUP
INDEMNIFIED PARTY. THE INDEMNITIES UNDER THIS SECTION 11(a) SHALL NOT APPLY TO
CLAIMS OR LOSSES THAT ARE CAUSED BY ACTIONS OR OMISSIONS OF TESORO SECONDED
EMPLOYEES WHILE ACTING IN THE COURSE OF SECONDMENT TO THE LOGISTICS GROUP.

(b) Indemnification by the Logistics Group. The Logistics Group shall indemnify
and hold harmless the Tesoro Group, and the officers, directors, employees,
agents and representatives of the Tesoro Group (collectively, the “Tesoro Group
Indemnified Parties”) from and against all Claims, and upon demand by the Tesoro
Group, shall protect and defend the Tesoro Group Indemnified Parties from the
same, alleged, asserted or suffered by or arising in favor of any Person, and
shall pay any and all Losses incurred by, imposed upon or rendered against one
or more of the Tesoro Group Indemnified Parties, whether based on contract, or
tort, or pursuant to any statute, rule or regulation, and regardless of whether
the Claims are foreseeable or unforeseeable, all to the extent that such Losses
are in respect of or arise from (i) breaches by the Logistics Group of this
Agreement or (ii) Claims by a third-party relating to (A) breaches by the
Logistics Group of this Agreement or (B) the Logistics Group’s negligence,
willful misconduct or violation of law in connection with the performance of the
Tesoro Services, PROVIDED THAT THE LOGISTICS GROUP SHALL NOT BE OBLIGATED TO
INDEMNIFY OR HOLD HARMLESS THE TESORO GROUP INDEMNIFIED PARTIES FROM AND AGAINST
ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, STRICT
LIABILITY OR THE NEGLIGENT ACTS, ERRORS, OMISSIONS OR WILLFUL MISCONDUCT OF ANY
TESORO GROUP INDEMNIFIED PARTY. THE INDEMNITIES UNDER THIS SECTION 11(b) SHALL
NOT APPLY TO CLAIMS OR LOSSES THAT ARE CAUSED BY ACTIONS OR OMISSIONS OF
LOGISTICS SECONDED EMPLOYEES WHILE ACTING IN THE COURSE OF SECONDMENT TO THE
LOGISTICS GROUP.

(c) The indemnifying Parties agree that, notwithstanding anything to the
contrary contained in Sections 11(a) and 11(b):

(i) the Secondment Recipient shall indemnify and hold harmless the Secondment
Provider and its officers, directors, employees, agents and representatives from
and against any and all Losses and Claims brought or raised by any individual
who is, or at one time was, a Seconded Employee relating to any act or omission
of the Secondment Recipient, its officers, directors, employees, agents or
representatives, including, without limitation, workers’ compensation,
discrimination, harassment, constructive dismissal, wages paid and hours worked,
or any other employment-related Claim; and

(ii) the Secondment Provider shall indemnify and hold harmless the Secondment
Recipient and its officers, directors, employees, agents and representatives
from and against any and all Losses and Claims brought or raised by any
individual who is, or at one time was, a Seconded Employee relating to any act
or omission of the Secondment Provider, its officers, directors,

 

16

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employees, agents or representatives, including, without limitation, workers’
compensation, discrimination, harassment, constructive dismissal, wages paid and
hours worked, or any other employment-related Claim.

(d) Indemnification Procedure. 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 Section 11, it will provide notice thereof in
writing to the indemnifying Party, specifying the nature of and specific basis
for such Claim.

(i) 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
Section 11, 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.

(ii) The indemnified Party agrees to cooperate fully with the indemnifying
Party, with respect to all aspects of the defense of any Claims covered by the
indemnification under this Section 11 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 and the making available to the indemnifying Party of any employees 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 11(d). 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 Section 11; 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.

(iii) In determining the amount of any loss, cost, damage or expense 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.

(e) Limitation on Liability. Notwithstanding anything to the contrary contained
herein, neither Party shall be liable or responsible to the other Party or such
other Party’s Affiliates for any consequential, incidental, or punitive damages,
or for loss of profits or revenues (collectively referred to as “special
damages”) incurred by such Party or its Affiliates that arise out of or relate
to this Agreement, regardless of whether any such Claim arises under or results
from contract, tort, or strict liability; provided that the foregoing limitation
is not intended and shall not affect special damages imposed in favor of
unaffiliated Persons that are not Parties to this Agreement.

 

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12. FORCE MAJEURE

(a) Notice. The Secondment Provider’s obligations under this Agreement may be
temporarily suspended during the occurrence of, and for the entire duration of,
a Force Majeure. As soon as possible upon the occurrence of a Force Majeure, the
Secondment Provider shall provide the Secondment Recipient with written notice
of the occurrence of such Force Majeure (a “Force Majeure Notice”). The
Secondment Provider shall identify in such Force Majeure Notice the approximate
length of time that it reasonably believes in good faith such Force Majeure
shall continue. During the period of the Force Majeure event, the Seconded
Employees shall be excused from the performance with respect to its obligations
related to the provision of the applicable Seconded Service(s) hereunder, but
only to the extent that such Force Majeure event actually precludes such
Seconded Employees from providing each Seconded Service. The Secondment
Recipient shall not be required to pay fees for any affected Seconded Services
during the period while its performance is precluded by the Force Majeure. The
Secondment Provider shall use commercially reasonable efforts to mitigate and to
overcome the effects of such event or circumstances and shall resume performance
of its obligations as soon as practicable and shall continue to perform all
Seconded Services that are not precluded by the Force Majeure.

(b) Continuation. If a Force Majeure preventing performance of any of the
Seconded Services hereunder continues for twelve (12) consecutive months or
more, either Party shall have the right to terminate its obligations under this
Agreement with respect to the applicable Seconded Service suspended by such
Force Majeure.

 

13. ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL

(a) Assignment. Neither the Logistics Group nor the Tesoro Group may assign this
Agreement without the prior written consent of the other Party; provided,
however, that either Party may subcontract any of the Seconded Services provided
hereunder so long as such Seconded Services continue to be provided in a manner
consistent with past practices and industry standards and in accordance with
Section 8 above. Notwithstanding the foregoing, the Logistics Group shall be
permitted to make a collateral assignment of this Agreement solely to secure
working capital financing for TLO. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns.

(b) Partnership Change of Control. The Tesoro Group may terminate this Agreement
upon a Partnership Change of Control. The Logistics Group shall provide the
Tesoro Group with notice of any Partnership Change of Control at least sixty
(60) days prior to the effective date thereof.

 

14. NOTICE

All notices, requests, demands, and other communications hereunder will be in
writing and will be deemed to have been duly given: (i) if by transmission by
hand delivery, when delivered; (ii) if mailed via the official governmental mail
system, five (5) Business Days after mailing, provided said notice is sent first
class, postage pre-paid, via certified or registered mail, with a return receipt
requested; (iii) if mailed by an internationally recognized overnight express
mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business
Day after deposit therewith prepaid; or (iv) by e-mail one (1) Business Day
after delivery with receipt confirmed. All notices will be addressed to the
Parties at the respective addresses as follows:

If to the Tesoro Group, to:

c/o Tesoro Refining & Marketing Company LLC

19100 Ridgewood Parkway

San Antonio, Texas 78259

 

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For legal notices:

Attention: Charles A. Cavallo, III, Managing Attorney - Commercial

phone: (210) 626-4045

email: Charles.A.Cavallo@tsocorp.com

For all other notices and communications:

Attention: Brian S. Coffman

phone: (210) 626-6861

email: Brian.S.Coffman@tsocorp.com

If to the Logistics Group, to:

c/o Tesoro Logistics Operations LLC

19100 Ridgewood Parkway

San Antonio, Texas 78259

For legal notices:

Attention: Charles S. Parrish, General Counsel

phone: (210) 626-4280

email: Charles.S.Parrish@tsocorp.com

For all other notices and communications:

Attention: Rick D. Weyen, Vice President, Logistics

phone: (210) 626-4379

email: Rick.D.Weyen@tsocorp.com

or to such other address or to such other Person as either Party will have last
designated by notice to the other Party.

 

15. CONFIDENTIAL INFORMATION

(a) Obligations. Each Party shall use reasonable efforts to retain the other
Parties’ Confidential Information in confidence and not disclose the same to any
third party nor use the same, except as authorized by the disclosing Party in
writing or as expressly permitted in this Section 15. Each Party further agrees
to take the same care with the other Party’s Confidential Information as it does
with its own, but in no event less than a reasonable degree of care. Excepted
from these obligations of confidence and non-use is that information which:

(i) is available, or becomes available, to the general public without fault of
the receiving Party;

(ii) was in the possession of the receiving Party on a non-confidential basis
prior to receipt of the same from the disclosing Party (it being understood, for
the avoidance of doubt, that this exception shall not apply to information of
the Logistics Group that was in the possession of the Tesoro Group or any of its
Affiliates as a result of their ownership or operation of the Logistics Assets
prior to the date hereof);

 

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(iii) is obtained by the receiving Party without an obligation of confidence
from a third party who is rightfully in possession of such information and, to
the receiving Party’s knowledge, is under no obligation of confidentiality to
the disclosing Party; or

(iv) is independently developed by the receiving Party without reference to or
use of the disclosing Party’s Confidential Information.

For the purpose of this Section 15, a specific item of Confidential Information
shall not be deemed to be within the foregoing exceptions merely because it is
embraced by, or underlies, more general information in the public domain or in
the possession of the receiving Party.

(b) Required Disclosure. Notwithstanding Section 15(a) above, if the receiving
Party becomes legally compelled to disclose the Confidential Information by a
court, Governmental Authority or Applicable Law, or is required to disclose by
the listing standards of the New York Stock Exchange, any of the disclosing
Party’s Confidential Information, the receiving Party shall promptly advise the
disclosing Party of such requirement to disclose Confidential Information as
soon as the receiving Party becomes aware that such a requirement to disclose
might become effective, in order that, where possible, the disclosing Party may
seek a protective order or such other remedy as the disclosing Party may
consider appropriate in the circumstances. The receiving Party shall disclose
only that portion of the disclosing Party’s Confidential Information that it is
required to disclose and shall cooperate with the disclosing Party in allowing
the disclosing Party to obtain such protective order or other relief.

(c) Return of Information. Upon written request by the disclosing Party, all of
the disclosing Party’s Confidential Information in whatever form shall be
returned to the disclosing Party upon termination of this Agreement or destroyed
with destruction certified by the receiving Party, without the receiving Party
retaining copies thereof except that one copy of all such Confidential
Information may be retained by a Party’s legal department solely to the extent
that such Party is required to keep a copy of such Confidential Information
pursuant to Applicable Law and the receiving Party shall be entitled to retain
any Confidential Information in the electronic form or stored on automatic
computer back-up archiving systems during the period such backup or archived
materials are retained under such Party’s customary procedures and policies;
provided, however, that any Confidential Information retained by the receiving
Party shall be maintained subject to confidentiality pursuant to the terms of
this Section 15, and such archived or back-up Confidential Information shall not
be accessed except as required by Applicable Law.

(d) Receiving Party Personnel. The receiving Party will limit access to the
Confidential Information of the disclosing Party to those of its employees,
attorneys and contractors that have a need to know such information in order for
the receiving Party to exercise or perform its rights and obligations under this
Agreement (the “Receiving Party Personnel”). The Receiving Party Personnel who
have access to any Confidential Information of the disclosing Party will be made
aware of the confidentiality provision of this Agreement, and will be required
to abide by the terms thereof. Seconded Employees who receive or access any
Confidential Information of a Secondment Recipient shall be bound to protect
such Confidential Information to the same extent and in the same manner as if
they received or accessed such Confidential Information as direct employees of
the Secondment Recipient, and they shall be representatives of the Secondment
Recipient with respect to use or disclosure of the Confidential Information so
received or accessed. Any third party contractors that are given access to
Confidential Information of a disclosing Party pursuant to the terms hereof
shall be required to sign a written agreement pursuant to which such Receiving
Party Personnel agree to be bound by the provisions of this Agreement, which
written agreement will expressly state that it is enforceable against such
Receiving Party Personnel by the disclosing Party.

 

20

--------------------------------------------------------------------------------

(e) Survival. The obligation of confidentiality under this Section 15 shall
survive the termination of this Agreement for a period of two (2) years.

 

16. MISCELLANEOUS

(a) Modification; Waiver. This Agreement may be terminated, amended or modified
only by a written instrument executed by the Parties. Any of the terms and
conditions of this Agreement may be waived in writing at any time by the Party
entitled to the benefits thereof. No waiver of any of the terms and conditions
of this Agreement, or any breach thereof, will be effective unless in writing
signed by a duly authorized individual on behalf of the Party against which the
waiver is sought to be enforced. No waiver of any term or condition or of any
breach of this Agreement will be deemed or will constitute a waiver of any other
term or condition or of any later breach (whether or not similar), nor will such
waiver constitute a continuing waiver unless otherwise expressly provided.

(b) Integration. This Agreement, together with the Service Orders, Service
Schedules and the other agreements executed on the date hereof in connection
with the other documents executed among the Parties on the date of the Third
Amended and Restated Omnibus Agreement, constitutes the entire agreement among
the Parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the Parties in connection therewith. In the
event of a conflict of provisions of this Agreement and the Third Amended and
Restated Omnibus Agreement or amendments thereto, the provisions of the Third
Amended and Restated Omnibus Agreement, as it may be amended, shall prevail with
respect to issues related to the contribution of the assets described therein,
but not with respect to the Seconded Services provided as set forth in this
Agreement.

(c) Construction and Interpretation. In interpreting this Agreement, unless the
context expressly requires otherwise, all of the following apply to the
interpretation of this Agreement:

(i) Preparation of this Agreement has been a joint effort of the Parties and the
resulting Agreement against one of the Parties as the drafting Party.

(ii) Plural and singular words each include the other.

(iii) Masculine, feminine and neutral genders each include the others.

(iv) The word “or” is not exclusive and includes “and/or.”

(v) The words “includes” and “including” are not limiting.

(vi) References to the Parties include their respective successors and permitted
assignees.

(vii) The headings in this Agreement are included for convenience and do not
affect the construction or interpretation of any provision of, or the rights or
obligations of a Party under, this Agreement.

(d) Governing Law; Jurisdiction. This Agreement shall be governed by the laws of
the State of Texas without giving effect to its conflict of laws principles.
Each Party hereby irrevocably submits to the exclusive jurisdiction of any
federal court of competent jurisdiction situated in the United States

 

21

--------------------------------------------------------------------------------

District Court for the Western District of Texas, San Antonio Division, or if
such federal court declines to exercise or does not have jurisdiction, in the
district court of Bexar County, Texas. The Parties expressly and irrevocably
submit to the jurisdiction of said Courts and irrevocably waive any objection
which they may now or hereafter have to the laying of venue of any action, suit
or proceeding arising out of or relating to this Agreement brought in such
Courts, irrevocably waive any claim that any such action, suit or proceeding
brought in any such Court has been brought in an inconvenient forum and further
irrevocably waive the right to object, with respect to such Claim, action, suit
or proceeding brought in any such Court, that such Court does not have
jurisdiction over such Party. The Parties hereby irrevocably consent to the
service of process by registered mail, postage prepaid, or by personal service
within or without the State of Texas. Nothing contained herein shall affect the
right to serve process in any manner permitted by law.

(e) Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile or portable document format (pdf)) for the convenience
of the Parties hereto, each of which counterparts will be deemed an original,
but all of which counterparts together will constitute one and the same
agreement.

(f) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be valid and effective under Applicable Law,
but if any provision of this Agreement or the application of any such provision
to any person or circumstance will be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision hereof, and the Parties
will negotiate in good faith with a view to substitute for such provision a
suitable and equitable solution in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid, illegal or
unenforceable provision.

(g) No Third Party Beneficiaries. Except as specifically provided herein,
including as set forth in Section 11, it is expressly understood that the
provisions of this Agreement do not impart enforceable rights in anyone who is
not a Party or successor or permitted assignee of a Party.

(h) WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM
OF ANY OBLIGATION HEREUNDER.

(i) Schedules and Amendment of Schedules. Each of the Schedules attached hereto
and referred to herein is hereby incorporated in and made a part of this
Agreement as if set forth in full herein. 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.

(j) Operational Services Agreement. This Agreement supersedes the Operational
Services Agreement in its entirety and the Parties agree that the terms and
provisions of this Agreement replace the terms and provisions of the Operational
Services Agreement, which is no longer in effect, as of the date hereof. Any
references in any other agreements between the Parties and any of their
Affiliates that reference the Operational Services Agreement shall be deemed to
refer to the Secondment Agreement as its successor.

[Signatures of the Parties follow on the next page.]

 

22

--------------------------------------------------------------------------------

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

 

TESORO COMPANIES, INC.     TESORO LOGISTICS GP, LLC By:  

/s/ G. Scott Spendlove

    By:  

/s/ Phillip M. Anderson

  G. Scott Spendlove       Phillip M. Anderson   Senior Vice President and Chief
Financial Officer       President TESORO REFINING & MARKETING COMPANY LLC    
TESORO LOGISTICS OPERATIONS LLC By:  

/s/ G. Scott Spendlove

    By:  

/s/ Phillip M. Anderson

  G. Scott Spendlove       Phillip M. Anderson   Senior Vice President and Chief
Financial Officer       President TESORO ALASKA COMPANY LLC     TESORO HIGH
PLAINS PIPELINE COMPANY LLC By:  

/s/ G. Scott Spendlove

    By:  

/s/ Phillip M. Anderson

  G. Scott Spendlove       Phillip M. Anderson   Senior Vice President and Chief
Financial Officer       President TESORO ALASKA PIPELINE COMPANY LLC     TESORO
LOGISTICS PIPELINES LLC By:  

/s/ G. Scott Spendlove

    By:  

/s/ Phillip M. Anderson

  G. Scott Spendlove       Phillip M. Anderson   Senior Vice President and Chief
Financial Officer       President       TESORO LOGISTICS NORTHWEST PIPELINE LLC
      By:  

/s/ Phillip M. Anderson

        Phillip M. Anderson         President

Signature Page to Secondment and Services Agreement

--------------------------------------------------------------------------------

SCHEDULE A-1 to A-32

SERVICE SCHEDULES

See below

Schedule A

Service Schedules

--------------------------------------------------------------------------------

Schedule A-1

Mandan Rack, North Dakota

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of
Seconded
Employees   Activities of Seconded Employees

Communications

     

Electricity

  $ 32,342       

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

Natural Gas

     

Water

     

Wastewater

     

Personnel Support – Operations, Supply & Trading, Marketing, Security and
Maintenance

  $ 163,670         

 

 

     

Total

  $ 196,012         

 

 

     

 

Schedule A-1

Service Schedules

--------------------------------------------------------------------------------

Schedule A-2

Anchorage Terminal, Alaska

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

 

Schedule A-2

Service Schedules

--------------------------------------------------------------------------------

Schedule A-3

Salt Lake City Rack, Utah

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

Plant Air

     

Steam

     

Water

     

Wastewater

     

 

Schedule A-3

Service Schedules

--------------------------------------------------------------------------------

Schedule A-4

Salt Lake City Storage Facility, Utah

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees    Activities of Seconded Employees

Communications

        

Electricity

        

Environmental Compliance Maintenance

        

Facility Maintenance

        

Fire and Safety

        

Water

        

Wastewater

        

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees   Activities of Seconded Employees

Partnership Seconded Employees to Tesoro Group (Personnel Support – Maintenance
and Operations)

  $ 61,736 (annually )    Operator   Operational support
provided for the SLC
remote tank farm
(TRMC).  

 

 

     

Total

  $ 61,736         

 

 

     

 

Schedule A-4

Service Schedules

--------------------------------------------------------------------------------

Schedule A-5

Vancouver Terminal, Washington

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

 

Schedule A-5

Service Schedules

--------------------------------------------------------------------------------

Schedule A-6

Boise Terminal, Idaho

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

 

Schedule A-6

Service Schedules

--------------------------------------------------------------------------------

Schedule A-7

Burley Terminal, Idaho

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

Water

     

Wastewater

     

 

Schedule A-7

Service Schedules

--------------------------------------------------------------------------------

Schedule A-8

Stockton Terminal, California

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

Wastewater

     

 

Schedule A-8

Service Schedules

--------------------------------------------------------------------------------

Schedule A-9

Wilmington Terminal, California

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees      Categories of Seconded
Employees    Activities of Seconded Employees

Communications

        

Electricity

        

Environmental Compliance Maintenance

        

Facility Maintenance

        

Fire and Safety

        

Water

        

Wastewater

        

Tesoro Seconded Employee to Logistics Group

   $ 51,447       Sr. Project Engineer    Creation and review of
project documentation   

 

 

       

Total

   $ 51,447            

 

 

       

 

Schedule A-9

Service Schedules

--------------------------------------------------------------------------------

Schedule A-10

Salt Lake City Pipelines, Utah

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

Water

     

Wastewater

     

 

Schedule A-10

Service Schedules

--------------------------------------------------------------------------------

Schedule A-11

High Plains Pipeline System, North Dakota and Montana

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

 

Schedule A-11

Service Schedules

--------------------------------------------------------------------------------

Schedule A-12

Amorco Terminal, Suisan Bay, California

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Booming

  $ 190,268       

Communications

     

Environmental Compliance Maintenance

     

Facility Maintenance

     

Fire and Safety

     

General Security

     

Internal Oil Spill Response Drill

  $ 11,967       

Personnel Support

     

Programmable Logic Control and Digital Control System

     

Routine Engineering Support

     

Routine support and repair of fiber optic line

     

Security at site of Wharf and Tankage

  $ 253,691       

Software Services

     

Wastewater Handling

     

 

Schedule A-12

Service Schedules

--------------------------------------------------------------------------------

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Tesoro Seconded Employees to Logistics Group

  $ 740,729      Gas Rack Operator B

Tank Car Operator B

LPG -HLPR Operator B
LPG B Operator

LPG A Operator

Operator D (Over 6 Months)
Operator D (0-6 Months)

 

Locomotive Engineer – moves groups of tank cars on and off track

 

Track Switchman – works with Engineer and operates tank switches to direct tank
car placement

 

Avon Wharf tram operator – drives tram back and forth between the dock and
Land’s End

 

Ship Tie-Up and Release –Assists TPIC in tying up and releasing vessels at
either Amorco or Avon

 

Wharf Helper – monitors the hoses and ship positions while cargo operations are
underway at Avon and Amorco Wharves

 

 

 

     

Total

  $ 1,196,655         

 

 

     

 

Schedule A-12

Service Schedules

--------------------------------------------------------------------------------

Schedule A-13

Long Beach Terminal, Port of Long Beach, California

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

Communications

        

Environmental Compliance Maintenance

        

Facility Maintenance

        

Fire and Safety

        

General Security

        

Tesoro Seconded Employee to Logistics Group

   $ 29,351       Fire Marshall    Review fire safety issues, processes and
procedures

Programmable Logic Control and Digital Control System

        

Routine Engineering Support

        

Routine support and repair of fiber optic line

        

Software Services

        

Wastewater Handling

        

Wharf Support Personnel

           

 

 

       

Total

   $ 29,351            

 

 

       

 

Schedule A-13

Service Schedules

--------------------------------------------------------------------------------

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of the Agreement:

 

  a) Electricity (SoCal Edison);

 

  b) Gas (City of Long Beach);

 

  c) Water (Long Beach Water);

 

  d) Right-of-Way Payments (SoCal Edison); and

 

  e) Outside services (e.g., Environmental and Engineering Consulting) through
direct bill work orders.

 

Schedule A-13

Service Schedules

--------------------------------------------------------------------------------

Schedule A-14

Anacortes Rail Facility, Anacortes, Washington

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees     Categories of Seconded
Employees

Communications

    

Environmental Compliance Maintenance

    

Facility Maintenance

    

Fire and Safety

    

General Security

    

Personnel Support

    

Programmable Logic Control and Digital Control System

    

Routine Engineering Support

    

Routine support and repair of fiber optic line

    

Software Services

    

Wastewater Handling (Anacortes Refinery)

    

Electricity (PSE)

   $ 365,273     

Water (City of Anacortes, including potable, non-potable and fire water)

       

 

 

   

Total

   $ 365,273 *      

 

 

   

 

* This amount is applicable until separate metering is installed pursuant to the
ground lease executed in connection with the Contribution, Conveyance and
Assumption Agreement related to the Anacortes Rail Facility.

 

Schedule A-14

Service Schedules

--------------------------------------------------------------------------------

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of the Agreement: Outside services (e.g.,
Environmental and Engineering Consulting) through direct bill work orders.

 

Schedule A-14

Service Schedules

--------------------------------------------------------------------------------

Schedule A-15

San Diego Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Personnel Support (Management support provided from Partnership Seconded
Employees to Tesoro Group to support fleet operations)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: SDG&E

 

  b) Gas: SDG&E

 

  c) Water & Sewer: City of San Diego

 

  d) Telephone: Sprint

 

Schedule A-15

Service Schedules

--------------------------------------------------------------------------------

Schedule A-16

Colton Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Personnel Support (Management support provided from Partnership Seconded
Employees to Tesoro Group to support fleet operations)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: Southern California Edison

 

  b) Water: West Valley Water District Sewage/ - City of Rialto

 

  c) Telephone: AT&T

 

Schedule A-16

Service Schedules

--------------------------------------------------------------------------------

Schedule A-17

Hathaway Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: Southern California Edison

 

  b) Gas: Southern California Gas Co.

 

  c) Telephone: Verizon & AT&T

 

Schedule A-17

Service Schedules

--------------------------------------------------------------------------------

Schedule A-18

Hynes Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: Southern California Edison

 

  b) Gas: Southern California Gas Co.

 

Schedule A-18

Service Schedules

--------------------------------------------------------------------------------

Schedule A-19

Vinvale Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: Southern California Edison

 

  b) Gas: Southern California Gas Co.

 

  c) Water/Sewer: City of South Gate

 

  d) Telephone: Verizon/AT&T

 

Schedule A-19

Service Schedules

--------------------------------------------------------------------------------

Schedule A-20

Carson Crude Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

Note that the following services shall be direct billed to TLO from third
parties and shall not be part of this Agreement:

 

  a) Electricity: Southern California Edison

 

Schedule A-20

Service Schedules

--------------------------------------------------------------------------------

Schedule A-21

City of Los Angeles, Port of Long Beach, Berth 121

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

 

Schedule A-21

Service Schedules

--------------------------------------------------------------------------------

Schedule A-22

City of Los Angeles, Port of Long Beach, Terminal 2 and associated tank farms

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

 

Schedule A-22

Service Schedules

--------------------------------------------------------------------------------

Schedule A-23

Storage facilities at City of Los Angeles, Port of Long Beach, Terminal 3

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

 

Schedule A-23

Service Schedules

--------------------------------------------------------------------------------

Schedule A-24

Tesoro SoCal Pipeline System

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

 

Schedule A-24

Service Schedules

--------------------------------------------------------------------------------

Schedule A-25

Carson Products Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

General Security

     

Wastewater Handling (occasional use of the refinery vacuum truck and refinery
processing of terminal wastewater)

     

 

Schedule A-25

Service Schedules

--------------------------------------------------------------------------------

Schedule A-26

Coke Handling Warehouse

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Fire and Safety

     

General Security

     

Wastewater Handling (removal of runoff from retention locations, use of the
refinery vacuum truck as needed and disposal according to documented procedures)

     

 

Schedule A-26

Service Schedules

--------------------------------------------------------------------------------

Schedule A-27

Carson Overhead Support

Unless otherwise noted, the Partnership Seconded Employees will provide the
following Tesoro Services to the Tesoro Group in accordance with Section 2 of
the Agreement:

 

Service

   Fees    Categories of Seconded
Employees

Environmental, Health and Safety Management Support (in support of retail fleet
and transportation business)

     

Planning and Optimization Management Support (in support of retail fleet and
transportation business)

     

Other Fleet Management Support

     

 

Schedule A-27

Service Schedules

--------------------------------------------------------------------------------

Schedule A-28

Martinez Terminal and Rail Facility

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Electricity

  $ 190,000       

Water

     

Communications

     

General Security

  $ 105,000       

Fire and Safety

     

Wastewater Handling

     

Tesoro Seconded Employees to Logistics Group

  $ 290,051      Operator Helper Trainee
(0-12 Months); (24-36
Months); (over 36
Months)  

Truck and Trailer –in charge of incoming propane stream from refinery and
loading propane trucks

 

Tankcars –in charges of loading/unloading tankcars and tracking movements of the
two propylene tanks 646/7

 

Gas Rack – in charge of unloading ethanol and biodiesel trucks and certifying
drivers

 

 

 

     

Total

  $ 585,051         

 

 

     

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement.

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Partnership Seconded Employees to Tesoro Group

  $ 1,352,006      Gas Rack Operator B
Tank Car Operator B

LPG - HLPR Operator B

LPG B Operator

LPG A Operator
Operator D (Over 6
Months)

 

Locomotive Engineer – moves groups of tank cars on and off track

 

Track Switchman – works with Engineer and operates tank switches to direct tank
car placement

 

Avon Wharf tram operator – drives tram back and forth between the dock and
Land’s End

 

Schedule A-28

Service Schedules

--------------------------------------------------------------------------------

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

    Operator D
(0-6 Months)  

Ship Tie-Up and Release –Assists TPIC in tying up and releasing vessels at
either Amorco or Avon

 

Wharf Helper – monitors the hoses and ship positions while cargo operations are
underway at Avon and Amorco Wharves

 

 

 

     

Total

  $ 1,352,006         

 

 

     

 

Schedule A-28

Service Schedules

--------------------------------------------------------------------------------

Schedule A-29

Anacortes Truck and Propane Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Electricity

  $ 60,000       

Water

     

Communications

     

General Security

  $ 100,000       

Fire and Safety

     

Wastewater Handling

     

Tesoro Seconded Employees to Logistics Group

        $ 411,923      Operator 1 – Loader/
Gauger on Tank Car
Rack (TCR):   Does all loading and unloading of tank cars.   $ 47,557     
Operator 1 – Asphalt   Responds to truck rack as needed for alarms, bill of
lading, and operational problems   $ 102,437      Operator 1 Special
Logistics Board
Operator:   Monitors shore tanks as part of board duties including: Deals with
propane truck drivers at the truck rack to address issues; Directs other
operators to address shore tanks, tank car rack and truck rack as needed based
on board readings, alarms and notifications.   $ 128,600      Shift Supervisor:
  Directs and supervises all operators; Addresses issues that are beyond the
operators experience or authority to address on equipment; May direct response
during an emergency situation.     Temporary Supervisor:   Fills in for Shift
Supervisor when needed due to vacation or illness.  

 

 

     

Total

  $ 850,517         

 

 

     

 

Schedule A-29

Service Schedules

--------------------------------------------------------------------------------

Schedule A-30

Anacortes Marine Crude Storage

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Electricity

  $ 10,000       

Water

     

Communications

     

General Security

  $ 28,000       

Fire and Safety

     

Wastewater Handling

     

Tesoro Seconded Employees to Logistics Group

        $ 45,769      Operator 1 – Tank
Farm   Deals with issues on shore tank including lineups, gauging and water
draining; Also walks the shore tanks for visual inspections as part of rounds.  
$ 51,218      Operator 1 special –
Logistics Board
Operator   Monitors shore tanks as part of board duties including; Deals with
propane truck drivers at the truck rack to address issues; Directs other
operators to address shore tanks, tank car rack and truck rack as needed based
on board readings, alarms and notifications.   $ 32,150      Shift Supervisor  
Directs and supervises all operators; Addresses issues that are beyond the
operator’s experience or authority to address on equipment; May direct response
during an emergency situation.     Temporary Supervisor   Fills in for Shift
Supervisor when needed due to vacation or illness.  

 

 

     

Total

  $ 167,137         

 

 

     

 

Schedule A-30

Service Schedules

--------------------------------------------------------------------------------

Schedule A-31

Tesoro Alaska Pipeline

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

  Fees     Categories of Seconded
Employees  

Activities of Seconded Employees

Electricity

  $ 365,000       

Water

     

Security

  $ 95,000       

Communications

     

General Security

  $ 5,000       

Fire and Safety

     

Wastewater Handling

     

Tesoro Seconded Employees to Logistics Group

        $ 141,156      Pumper I     $ 292,640      Operations/Oil
Movements Supervisor     $ 80,420      Manager Oil Movements    

 

 

     

Total

  $ 979,216         

 

 

     

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement.

 

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

Partnership Seconded Employees to Tesoro Group

            $ 102,524       Area Manager    Management oversight

 

Schedule A-31

Service Schedules

--------------------------------------------------------------------------------

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

   $ 21,528       Oil Movement, Staff
Assistant    Clerical work    $ 93,150       Control Center
Operator    Monitoring of tank movement, vessel loading and offloading, direct
Pumpers on tasks performed for KPL and Refinery tank farm.    $ 42,850       E/I
Technician    Maintain electrical and instrumentation equipment   

 

 

       

Total

   $ 260,052            

 

 

       

 

Schedule A-31

Service Schedules

--------------------------------------------------------------------------------

Schedule A-32

Nikiski Alaska Truck Terminal

Unless otherwise noted below, the Tesoro Seconded Employees will provide the
following Operational Services to the Logistics Group in accordance with
Section 2 of the Agreement:

 

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

Communications

        

Water

        

Security

   $ 48,000         

General Security

   $ 15,000         

Fire and Safety

        

Wastewater Handling

        

Tesoro Seconded Employees to Logistics Group

            $ 141,156       Pumper I       $ 126,659       Pumper II       $
48,773       Operations/Oil
Movements
Supervisor    Supervision of day to day operations    $ 13,403       Manager Oil
Movements    Management Oversight   

 

 

       

Total

   $ 392,991            

 

 

       

Unless otherwise noted below, the Partnership Seconded Employees will provide
the following Tesoro Services to the Tesoro Group in accordance with Section 2
of the Agreement.

 

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

Partnership Seconded Employees to Tesoro Group

            $ 51,262       Area Manager    Management oversight

 

Schedule A-32

Service Schedules

--------------------------------------------------------------------------------

Service

   Fees      Categories of Seconded
Employees   

Activities of Seconded Employees

   $ 7,176       Oil Movement, Staff
Assistant    Clerical work    $ 93,150       Control Center
Operator    Monitoring of tank movement, vessel loading and offloading, direct
Pumpers on tasks performed for KPL and Refinery tank farm.    $ 42,850       E/I
Technician    Maintain electrical and instrumentation equipment   

 

 

       

Total

   $ 194,438            

 

 

       

 

Schedule A-32

Service Schedules

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF COVER PAGE FOR

AMENDMENT AND RESTATEMENT OF SERVICE SCHEDULES

TO SECONDMENT AND SERVICES AGREEMENT

A Secondment and Services Agreement was executed as of July 1, 2014 (the
“Secondment Agreement”), among Tesoro Companies, Inc., Tesoro Refining &
Marketing Company LLC, Tesoro Alaska Company LLC, Tesoro Alaska Pipeline Company
LLC, Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Logistics
Pipelines LLC, Tesoro High Plains Pipeline Company LLC and Tesoro Logistics
Northwest Pipeline LLC. Capitalized terms not otherwise defined in this document
shall have the terms set forth in the Secondment Agreement.

The Parties agree that the Service Schedules are hereby amended and restated in
their entirety as of the date hereof to be as attached hereto. Pursuant to
Section 16(j) of the Secondment Agreement, such amended and restated Service
Schedules shall replace the prior Service Schedules as of the date hereof and
shall be incorporated by reference into the Secondment Agreement for all
purposes.

Executed as of             , 20    .

 

TESORO COMPANIES, INC.     TESORO LOGISTICS GP, LLC By:  

 

    By:  

 

Name:       Name:   Title:       Title:  

TESORO REFINING & MARKETING COMPANY LLC

   

TESORO LOGISTICS OPERATIONS LLC

By:  

 

    By:  

 

Name:       Name:   Title:       Title:  

Exhibit A

--------------------------------------------------------------------------------

TESORO ALASKA COMPANY LLC     TESORO HIGH PLAINS PIPELINE COMPANY LLC By:  

 

    By:  

 

Name:       Name:   Title:       Title:   TESORO ALASKA PIPELINE COMPANY LLC    
TESORO LOGISTICS PIPELINES LLC By:  

 

    By:  

 

Name:       Name:   Title:       Title:         TESORO LOGISTICS NORTHWEST
PIPELINE LLC       By:  

 

      Name:         Title: