Exhibit 10.5
EXECUTION VERSION
SALT LAKE CITY STORAGE AND TRANSPORTATION SERVICES AGREEMENT
     This Salt Lake City Storage and Transportation Services Agreement (the
“Agreement”) is dated as of April 26, 2011, by and between Tesoro Refining and
Marketing Company, a Delaware corporation (“TRMC”) and Tesoro Logistics
Operations LLC, a Delaware limited liability company (“TLO”).
RECITALS
     WHEREAS, TLO owns a storage facility for crude oil and refined products
(the “Storage Facility”) and certain related tanks and pipelines;
     WHEREAS, TLO desires to provide storage and transportation services with
respect to crude oil and refined products owned by TRMC and stored in one or
more of TLO’s Tanks (as defined below) and crude oil and refined products owned
by TRMC and transported from time to time through the Pipelines (as defined
below) between the Storage Facility and TRMC’s refinery located at Salt Lake
City, Utah (the “Refinery”);
     WHEREAS, TLO’s Tanks (as defined below) at the Storage Facility have an
aggregate Shell Capacity (as defined below) of 878,000 Barrels (as defined
below) and an aggregate Operating Capacity (as defined below) of 712,540 Barrels
(as defined below) due to existing soil conditions at the Storage Facility; and
     WHEREAS, TRMC and TLO desire to enter into this Agreement to memorialize
the terms of their commercial relationship.
     NOW, THEREFORE, in consideration of the covenants and obligations contained
herein, the Parties (as defined below) to this Agreement hereby agree as
follows:
1. DEFINITIONS
     Capitalized terms used throughout this Agreement shall have the meanings
set forth below, unless otherwise specifically defined herein.
     “Agreement” has the meaning set forth in the Preamble.
     “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.
     “Barrel” means a volume equal to 42 U.S. gallons of 231 cubic inches each,
at 60 degrees Fahrenheit under one atmosphere of pressure.
     “Business Day” means a day, other than a Saturday or Sunday, on which banks
in New York, New York are open for the general transaction of business.
     “Capacity Resolution” has the meaning set forth in Section 6(d).

 

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     “Commencement Date” has the meaning set forth in Section 3.
     “Commitment” has the meaning set forth in Section 2.
     “Confidential Information” means all confidential, proprietary or
non-public information of a Party, whether set forth in writing, orally or in
any other manner, including all non-public information and material of such
Party (and of companies with which such Party has entered into confidentiality
agreements) that another Party obtains knowledge of or access to, including
non-public information regarding products, processes, business strategies and
plans, customer lists, research and development programs, computer programs,
hardware configuration information, technical drawings, algorithms, know-how,
formulas, processes, ideas, inventions (whether patentable or not), trade
secrets, schematics and other technical, business, marketing and product
development plans, revenues, expenses, earnings projections, forecasts,
strategies, and other non-public business, technological, and financial
information.
     “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.
     “Extension Period” has the meaning set forth in Section 4.
     “First Offer Period” has the meaning set forth in Section 19(d).
     “Force Majeure” means circumstances not reasonably within the control of
TLO and which, by the exercise of due diligence, TLO is unable to prevent or
overcome that prevent performance of TLO’s obligations, including: acts of God,
strikes, lockouts or other industrial disturbances, wars, riots, fires, floods,
storms, orders of 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 20(a).
     “Force Majeure Period” has the meaning set forth in Section 20(a).
     “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.
     “Month” means the period commencing on the Commencement Date and ending on
the last day of the calendar month in which service begins and each successive
calendar month thereafter.
     “Notice Period” has the meaning set forth in Section 21(a).
     “Operating Capacity” means the effective storage capacity of a Tank, taking
into account accepted engineering principles, industry standards, American
Petroleum Institute guidelines and Applicable Laws, under actual conditions as
they may exist at any time. The current Operating Capacity of each Tank as of
the date hereof is listed on Schedule 2 attached hereto.
     “Operating Procedures” has the meaning set forth in Section 12(a).

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     “Partnership” means Tesoro Logistics LP.
     “Partnership Change of Control” means Tesoro Corporation ceases to Control
the general partner of the Partnership.
     “Party” or “Parties” means that each of TRMC and TLO is a “Party” and
collectively are the “Parties” to this Agreement.
     “Person” means any individual, partnership, limited partnership, joint
venture, corporation, limited liability company, limited liability partnership,
trust, unincorporated organization or Governmental Authority or any department
or agency thereof.
     “Pipeline” or “Pipelines” means the four certain interconnecting pipelines
extending from the Storage Facility to the Refinery listed on Schedule 1
attached hereto.
     “Product” or “Products” means crude oil, refined products, and other
materials transported on the Pipelines and/or stored in the Tanks in the
ordinary course of business.
     “Receiving Party Personnel” has the meaning set forth in Section 25.
     “Refinery” has the meaning set forth in the Recitals.
     “Restoration” has the meaning set forth in Section 6(c).
     “Right of First Refusal” has the meaning set forth in Section 19(d).
     “Shell Capacity” means the gross storage capacity of a Tank, based upon its
dimensions, as set forth for each Tank on Schedule 2 attached hereto.
     “Storage and Transportation Fee” has the meaning set forth in Section 5(a).
     “Storage Facility” has the meaning set forth in the Recitals.
     “Suspension Notice” has the meaning set forth in Section 21(a).
     “Tanks” mean the thirteen (13) tanks owned by TLO and listed on Schedule 2
attached hereto, each of which is used for the storage of Products and located
at the Storage Facility.
     “Term” and “Initial Term” each have the meaning set forth in Section 4.
     “Termination Notice” has the meaning set forth in Section 20(a).
     “TLO” has the meaning set forth in the Preamble.
     “TRMC” has the meaning set forth in the Preamble.
     “TRMC Termination Notice” has the meaning set forth in Section 20(b).
2. TRANSPORTATION OR STORAGE COMMITMENT
     During the Term of this Agreement and subject to the terms and conditions
of this Agreement and the effective Operating Capacity of each Tank and the
Storage Facility as a whole, TLO shall, as

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applicable, store all Products tendered by TRMC at the Storage Facility or on
the Pipelines and transport such Products on TLO’s Pipelines between the
Refinery and the Storage Facility (the “Commitment”). The Pipelines identified
on Schedule 1 attached hereto and the Tanks identified on Schedule 2 attached
hereto shall be dedicated and used exclusively for the storage and throughput of
TRMC’s Products. For those dedicated Pipelines and Tanks, TRMC shall be
responsible for providing all line fill and tank heels required for the
operation of such Pipelines and Tanks. At any time after any such Product has
been received in such Tanks, TLO may, for operational, environmental or safety
reasons, move such Product to one or more other Tanks within the Storage
Facility, at TLO’s sole cost and expense.
3. COMMENCEMENT DATE
     The Parties anticipate that the “Commencement Date” will be April 26, 2011.
The actual Commencement Date shall be the date specified by TLO in a written
notice to TRMC. The Parties agree that there are a number of factors that may
affect the actual Commencement Date. Consequently, neither Party shall have any
right or remedy against the other Party if the actual Commencement Date is
earlier or later than the anticipated Commencement Date.
4. TERM
     The initial term of this Agreement shall commence on the Commencement Date
and shall continue through April 30, 2021 (the “Initial Term”); provided,
however, that TRMC may, at its option, extend the Initial Term for up to two
(2) renewal terms of five (5) years each (each, an “Extension Period”) by
providing written notice of its intent to TLO no less than ninety (90) days
prior to the end of the Initial Term or the then-current Extension Period. The
Initial Term, and any extensions of this Agreement as provided above, shall be
referred to herein as the “Term”.
5. STORAGE AND TRANSPORTATION FEE
     (a) Storage and Transportation Fee. TRMC shall pay a monthly fee (the
“Storage and Transportation Fee”) to reserve, on a firm storage or
transportation basis (as applicable), all of the existing aggregate Shell
Capacity of all of the Tanks in the Storage Facility and all of the throughput
capacity on TLO’s Pipelines. Such fee shall be payable by TRMC on a monthly
basis throughout the Term of the Agreement, regardless of the actual volumes of
Products stored and/or transported by TLO on behalf of TRMC, provided, however,
that the Parties shall from time to time negotiate an appropriate adjustment to
such fee if the following conditions are met: (a) TRMC requires the full
Operating Capacity of the Tanks, (b) the full Operating Capacity of the Tanks is
not available to TRMC for any reason (other than any reason resulting from or
relating to actions or inactions by TRMC), and (c) TLO is unable to otherwise
accommodate the actual volumes of Products required to be stored and/or
transported by TRMC pursuant to the terms of this Agreement. The Parties
recognize that the existing Operating Capacity of certain Tanks is less than the
Shell Capacity of such Tanks, but the Parties acknowledge and agree that the
Storage and Transportation Fee shall be based upon the aggregate Shell Capacity
of the Tanks. Such fee shall include all storage, pumping, and transshipment
between and among the Tanks and the Pipelines.
     (b) Initial Rate and Fee. The Storage and Transportation Fee shall
initially be calculated using a rate of $0.50 per barrel per Month for the
then-existing aggregate Shell Capacity of all of the Tanks in the Storage
Facility. As of the date hereof, such Storage and Transportation Fee shall be
equal to $439,000 per Month; provided however, that the fee owed during the
Month in which the Commencement Date occurs shall be prorated in accordance with
the ratio of (i) the number of days in such Month during which this Agreement is
effective to (ii) the total number of days in such Month.

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     (c) Index Based Rate Increases. All fees set forth in this Agreement shall
be increased on July 1 of each year of the Term, by a percentage equal to the
greater of zero or the positive change in the CPI-U (All Urban Consumers), as
reported by the U.S. Bureau of Labor Statistics.
6. REIMBURSEMENT; CAPABILITIES OF FACILITIES
     (a) Reimbursements. TRMC shall reimburse TLO for all of the following:
(i) the actual cost of any capital expenditures that TLO agrees to make upon
TRMC’s request; and (ii) any cleaning, degassing or other preparation of the
Tanks at the expiration of this Agreement or as requested by TRMC. Such
reimbursement shall be made each Month at the time of the payment of the Storage
and Transportation Fee.
     (b) Service Interruptions. TLO shall use reasonable commercial efforts to
minimize the interruption of service at each Pipeline and Tank. TLO shall
promptly inform TRMC’s operational personnel of any anticipated partial or
complete interruption of service at any Pipeline or Tank, including relevant
information about the nature, extent, cause and expected duration of the
interruption and the actions TLO is taking to resume full operations, provided
that TLO shall not have any liability for any failure to notify, or delay in
notifying, TRMC of any such matters except to the extent TRMC has been
materially prejudiced or damaged by such failure or delay.
     (c) Maintenance and Repair Standards. Subject to Force Majeure and
interruptions for routine repair and maintenance, consistent with customary
terminal industry standards, TLO shall maintain each Pipeline and Tank in a
condition and with a capacity sufficient to throughput a volume of TRMC’s
Products at least equal to the current Operating Capacity for such Pipeline and
Tanks and the Storage Facility as a whole. TLO’s obligations may be temporarily
suspended during the occurrence of, and for the entire duration of, a Force
Majeure or other interruption of service, to the extent such Force Majeure or
other interruption of service impairs TLO’s ability to perform such obligations.
If for any reason, including, without limitation, a Force Majeure event, the
throughput or storage capacity of any Pipeline or Tank should fall below its
current Operating Capacity, then within a reasonable period of time thereafter,
TLO shall make repairs to restore the capacity of such Pipeline or Tank to
current Operating Capacity (“Restoration”). Except as provided below in
Section 6(d), all of such Restoration shall be at TLO’s cost and expense unless
the damage creating the need for such repairs was caused by the negligence or
willful misconduct of TRMC, its employees, agents or customers.
     (d) Capacity Resolution. In the event of the failure of TLO to maintain any
Pipeline or Tank in a condition and with a capacity sufficient to throughput and
store a volume of TRMC’s Products equal to its current Operating Capacity, then
either Party shall have the right to call a meeting between executives of both
Parties by providing at least two (2) Business Days’ advance written notice. Any
such meeting shall be held at a mutually agreeable location and will be attended
by executives of both Parties each having sufficient authority to commit his or
her respective Party to a Capacity Resolution (as defined below). At the
meeting, the Parties will negotiate in good faith with the objective of reaching
a joint resolution for the Restoration of capacity on the Pipeline or Tank which
will, among other things, specify steps to be taken by TLO to fully accomplish
Restoration and the deadlines by which the Restoration must be completed (the
“Capacity Resolution”). Without limiting the generality of the foregoing, the
Capacity Resolution shall set forth an agreed upon time schedule for the
Restoration activities. Such time schedule shall be reasonable under the
circumstances, consistent with customary terminal industry standards and shall
take into consideration TLO’s economic considerations relating to costs of the
repairs and TRMC’s requirements concerning its refining and marketing
operations. TLO shall use commercially reasonable efforts to continue to provide
storage and throughput of TRMC’s Products at the Pipelines and Storage Facility,
to the extent the Pipelines and Storage Facility have capability of doing so,
during the period before Restoration is completed. In the event that TRMC’s
economic considerations

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justify incurring additional costs to restore the Pipeline or Tank in a more
expedited manner than the time schedule determined in accordance with the
preceding sentences, TRMC may require TLO to expedite the Restoration to the
extent reasonably possible, subject to TRMC’s payment, in advance, of the
estimated incremental costs to be incurred as a result of the expedited time
schedule. In the event that the Operating Capacity of a Tank is reduced, and the
Parties agree that the Restoration of such Tank to its full Operating Capacity
is not justified under the standards set forth in the preceding sentences, then
the Parties shall negotiate an appropriate adjustment to the Storage and
Transportation Fee to account for the reduced Operating Capacity available for
TRMC’s use. In the event the Parties agree to an expedited Restoration plan in
which TRMC agrees to fund a portion of the Restoration cost or a reduced Storage
and Transportation Fee, then neither Party shall have the right to terminate
this Agreement pursuant to Section 20 below, so long as any such Restoration is
completed with due diligence. TRMC shall pay its portion of the Restoration
costs to TLO in advance based on an estimate based on reasonable engineering
standards promulgated by the Association for Facilities Engineering. Upon
completion, TRMC shall pay the difference between the actual portion of
Restoration costs to be paid by TRMC pursuant to this Section 6(d) and the
estimated amount paid under the preceding sentence within thirty (30) days after
receipt of TLO’s invoice therefor, or, if appropriate, TLO shall pay TRMC the
excess of the estimate paid by TRMC over TLO’s actual costs as previously
described within thirty (30) days after completion of the Restoration.
     (e) TRMC’s Right To Cure. If at any time after the occurrence of (x) a
Partnership Change of Control or (y) a sale of the Refinery, TLO either
(i) refuses or fails to meet with TRMC within the period set forth in
Section 6(d), (ii) fails to agree to perform a Capacity Resolution in accordance
with the standards set forth in Section 6(d), or (iii) fails to perform its
obligations in compliance with the terms of a Capacity Resolution, TRMC may, as
its sole remedy for any breach by TLO of any of its obligations under
Section 6(d), require TLO to complete a Restoration of the affected Pipeline or
Tank, and the Storage and Transportation Fee shall be reduced to account for the
reduced Operating Capacity available for TRMC’s use until such Restoration is
completed. Any such Restoration required under this Section 6(e) shall be
completed by TLO at TRMC’s cost. TLO shall use commercially reasonable efforts
to continue to provide storage and throughput of TRMC’s Products at the affected
Tank or Pipeline while such Restoration is being completed. Any work performed
by TLO pursuant to this Section 6(e) shall be performed and completed in a good
and workmanlike manner consistent with applicable pipeline industry standards
and in accordance with all applicable laws, rules and/or regulations.
Additionally, during such period after the occurrence of (x) a Partnership
Change of Control or (y) a sale of the Refinery, TRMC may exercise any remedies
available to it under this Agreement (other than termination), including the
right to immediately seek temporary and permanent injunctive relief for specific
performance by TLO of the applicable provisions of this Agreement, including,
without limitation, the obligation to make Restorations as described herein.
7. SURCHARGES
     If, during the term of this Agreement, new laws or regulations are enacted
that require TLO to make substantial and unanticipated capital expenditures with
respect to the Storage Facility or the Pipeline or with respect to the services
provided hereunder, TLO may impose a monthly surcharge to cover TRMC’s pro rata
share of the cost of complying with these laws or regulations after TLO has made
efforts to mitigate the impact of these laws and regulations. TLO and TRMC shall
use their reasonable commercial efforts to comply with these laws and
regulations, and shall negotiate in good faith to determine the level of the
monthly surcharge.
8. PAYMENTS

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     TLO will invoice TRMC on a monthly basis, and all amounts owed shall be due
and payable no later than ten (10) days after TRMC’s receipt of TLO’s invoice.
Any past due payments owed by TRMC to TLO shall accrue interest, payable on
demand, at the rate of eight percent (8%) per annum from the due date of the
payment through the actual date of payment.
9. SCHEDULING
     All scheduling of delivery into and redelivery out of the Tanks shall be
decided by mutual agreement of the Parties. TRMC shall identify to TLO prior to
the delivery of any Product to the Storage Facility or the Pipelines, the
specific Pipelines and Tanks to be used for receiving, transporting and storing
such Product.
10. SERVICES; VOLUME LOSSES
     (a) Services. The services provided by TLO pursuant to this Agreement shall
only consist of storage of the Products at the Tanks and transportation of the
Products through the Pipelines.
     (b) Volume Losses. TLO shall have no obligation to measure volume gains and
losses and shall have no liability whatsoever for normal course physical losses
that may result from the storage of the Products at the Tanks and the
transportation of the Products through the Pipelines, except if such losses are
caused by the gross negligence or willful misconduct of TLO, as further
described in Section 18 herein. TRMC will bear any volume losses that may result
from the storage or transportation of the Products at the Storage Facility and
through the Pipelines, respectively.
11. CUSTODY TRANSFER AND TITLE
     TLO shall be deemed to have custody of the Product being transported on the
Pipelines to the Storage Facility at the time it enters the Pipeline; for other
Product, TLO shall be deemed to have custody where it enters the receiving line
at the Storage Facility. TRMC shall be deemed to receive custody of the Product
at the time it enters the Refinery from the Pipelines. Upon re-delivery of any
Product to TRMC’s account, TRMC shall become solely responsible for any loss,
damage or injury to Person or property or the environment, arising out of
transportation, possession or use of such Product after transfer of custody.
Title and risk of loss to all TRMC’s Products received in the Storage Facility,
the Tanks, and the Pipelines shall remain with TRMC at all times. Both Parties
acknowledge that this Agreement represents a bailment of Products by TRMC to TLO
and not a consignment of Products, it being understood that TLO has no authority
hereunder to sell or seek purchasers for the Products of TRMC. TRMC hereby
warrants that it shall have good title to and the right to deliver, store and
receive Products pursuant to the terms of this Agreement. TRMC acknowledges
that, notwithstanding anything to the contrary contained in this Agreement, TRMC
acquires no right, title or interest in or to any of the Storage Facility
(including the Tanks) and the Pipelines, except the right to receive, deliver,
load, unload and store the Products in the Tanks and through the Pipelines as
set forth herein. TLO shall retain control of the Storage Facility, including
the Tanks, and the Pipelines at all times.
12. OPERATING PROCEDURES
     (a) Operating Procedures for TRMC. TRMC hereby agrees to strictly abide by
any and all laws, regulations, rules, conditions and procedures (the “Operating
Procedures”) relating to the operation and use of the Storage Facility
(including the Tanks) and the Pipelines that generally apply to receipt,
delivery, loading, unloading, storage, and transportation of Products at the
Storage Facility and through the Pipelines.

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     (b) Operating Procedures for TLO. TLO shall carry out the handling of the
Products at the Storage Facility, the Tanks, and the Pipelines in accordance
with the Operating Procedures.
13. TANK MODIFICATION AND CLEANING
     (a) Tank Modifications. Each of Tanks shall be used for its historical
service, provided however, that TRMC may request that a Tank be changed for
storage of a different grade or type of Product. In such an instance, TLO shall
agree in good faith to a change in such service, if the same can be accomplished
in accordance with reasonable commercial standards, accepted industry and
engineering guidelines, permit requirements and Applicable Law. If any such
modifications, improvements, vapor recovery, cleaning, degassing, or other
preparation of the Tanks is performed by TLO at the request of TRMC, TRMC shall
bear all direct costs attributable thereto, including, without limitation, the
cost of removal, processing, transportation, and disposal of all waste and the
cost of any taxes or charges TLO may be required to pay in regard to such waste.
TLO may require TRMC to pay all such amounts prior to commencement of any
remodeling work on the Tanks, or by mutual agreement, the Parties may agree upon
an increase in the Storage and Transportation Fee to reimburse TLO for its costs
of such modifications, plus a reasonable return on capital.
     (b) Responsibility for Fees. Should TLO take any of Tanks out of service
for regulatory requirements, repair, or maintenance, TRMC shall be solely
responsible for any alternative storage or product movements as required and all
fees associated with such movements. TRMC shall not be reimbursed for any
outside storage or transportation costs associated with any alternative
movements that result from foregoing requirements. TRMC shall not be responsible
to TLO for any throughput fees and dedicated tank storage fees associated with
any Tanks taken out of service during the period that such Tank is out of
service.
14. LIEN WAIVERS
     TLO hereby waives, relinquishes and releases any and all liens, including
without limitation, any and all warehouseman’s liens, custodian’s liens, rights
of retention and/or similar rights under all applicable laws, which TLO would or
might otherwise have under or with respect to all Products stored or handled
hereunder. TLO further agrees to furnish documents reasonably acceptable to TRMC
and its lender(s) (if applicable), and to cooperate with TRMC in assuring and
demonstrating that Product titled in TRMC’s name shall not be subject to any
lien on the Storage Facility or TLO’s crude oil and other products stored there.
15. TAXES
     TRMC 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 TLO incurs on TRMC’s
behalf for the services provided by TLO under this Agreement. If TLO is required
to pay any of the foregoing, TRMC shall promptly reimburse TLO in accordance
with the payment terms set forth in this Agreement.
16. COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS
     (a) Compliance With Law. Each Party certifies that none of the Products
covered by this Agreement were or will be derived from crude petroleum,
petrochemical, or gas which was produced or withdrawn from storage in violation
of any federal, state or other governmental law, nor in violation of any rule,
regulation or promulgated by any governmental agency having jurisdiction in the
premises.

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     (b) Licenses and Permits. TLO shall maintain all necessary licenses and
permits for the storage of Products at the Storage Facility.
     (c) Applicable Law. The Parties are entering into this Agreement in
reliance upon and shall fully comply with all Applicable Law which directly or
indirectly affects the Products throughput hereunder, or any receipt, throughput
delivery, transportation, handling or storage of Products hereunder or the
ownership, operation or condition of the Storage Facility. Each Party shall be
responsible for compliance with all Applicable Laws associated with such Party’s
respective performance hereunder and the operation of such Party’s facilities.
In the event any action or obligation imposed upon a Party under this Agreement
shall at any time be in conflict with any requirement of Applicable Law, then
this Agreement, shall immediately be modified to conform the action or
obligation so adversely affected to the requirements of the Applicable Law, and
all other provisions of this Agreement shall remain effective.
     (d) New Or Changed Applicable Law. If during the Term, any new Applicable
Law becomes effective or any existing Applicable Law or its interpretation is
materially changed, which change is not addressed by another provision of this
Agreement and which has a material adverse economic impact upon a Party, then
either Party, acting in good faith, shall have the option to request
renegotiation of the relevant provisions of this Agreement with respect to
future performance. The Parties shall then meet and negotiate in good faith
amendments to this Agreement that will conform this Agreement to the new
Applicable Law while preserving the Parties’ economic, operational, commercial
and competitive arrangements in accordance with the understandings set forth
herein.
17. LIMITATION ON LIABILITY
     Notwithstanding anything to the contrary contained herein, except to the
extent set forth herein, neither Party shall be liable or responsible to the
other Party or such other Party’s affiliated Persons for any consequential,
incidental, or punitive damages, or for loss of profits or revenues
(collectively referred to as “special damages”) incurred by such Party or its
affiliated Persons that arise out of or relate to this Agreement, regardless of
whether any such claim arises under or results from contract, 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.
18. INDEMNIFICATION
     (a) Notwithstanding anything else contained in this Agreement, TLO shall
release, defend, protect, indemnify, and hold harmless TRMC from and against any
and all demands, claims (including third-party claims), losses, costs, suits, or
causes of action (including, but not limited to, any judgments, losses,
liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs
of suit, and damages, whether in law or equity and whether in contract, tort, or
otherwise) for or relating to (i) personal or bodily injury to, or death of the
employees of TRMC and, as applicable, its carriers, customers, representatives,
and agents, (ii) loss of or damage to any property, products, material, and/or
equipment belonging to TRMC and, as applicable, its carriers, customers,
representatives, and agents, and each of their respective affiliates,
contractors, and subcontractors (except for those volume losses provided for
herein), (iii) loss of or damage to any other property, products, material,
and/or equipment of any other description (except for those volume losses
provided for herein), and/or personal or bodily injury to, or death of any other
Person or Persons; and with respect to clauses (i) through (iii) above, which is
caused by or resulting in whole or in part from the acts and omissions of TLO in
connection with the ownership or operation of the Pipelines or the Storage
Facility and the services provided hereunder, and, as applicable, its carriers,
customers (other than TRMC), representatives, and agents, or those of their
respective employees with respect to such matters, and (iv) any losses incurred
by TRMC due to violations of this Agreement by TLO, or, as applicable, its
customers (other than TRMC), representatives, and agents; PROVIDED THAT TLO
SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD

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HARMLESS TRMC FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE
BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRMC.
     (b) Notwithstanding anything else contained in this Agreement, TRMC shall
release, defend, protect, indemnify, and hold harmless TLO and, and each of its
respective affiliates, officers, directors, shareholders, agents, employees,
successors-in-interest, and assignees from and against any and all demands,
claims (including third-party claims), losses, costs, suits, or causes of action
(including, but not limited to, any judgments, losses, liabilities, fines,
penalties, expenses, interest, reasonable legal fees, costs of suit, and
damages, whether in law or equity and whether in contract, tort, or otherwise)
for or relating to (i) personal or bodily injury to, or death of the employees
of TLO and, as applicable, its carriers, customers, representatives, and agents;
(ii) loss of or damage to any property, products, material, and/or equipment
belonging to TLO and, as applicable, its carriers, customers, representatives,
and agents, and each of their respective affiliates, contractors, and
subcontractors (except for those volume losses provided for herein); (iii) loss
of or damage to any other property, products, material, and/or equipment of any
other description (except for those volume losses provided for herein), and/or
personal or bodily injury to, or death of any other Person or Persons; and with
respect to clauses (i) through (iii) above, which is caused by or resulting in
whole or in part from the acts and omissions of TRMC, in connection with TRMC’s
use of the Pipelines or the Storage Facility and the services provided hereunder
and TRMC’s Products stored hereunder, and, as applicable, its carriers,
customers, representatives, and agents, or those of their respective employees
with respect to such matters; and (iv) any losses incurred by TLO due to
violations of this Agreement by TRMC, or, as applicable, its carriers,
customers, representatives, and agents; PROVIDED THAT TRMC SHALL NOT BE
OBLIGATED TO INDEMNIFY OR HOLD HARMLESS TLO FROM AND AGAINST ANY CLAIMS TO THE
EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF TLO. For the avoidance of doubt, nothing herein shall constitute a
release by TRMC of any volume losses that are caused by the TLO’s gross
negligence, breach of this Agreement or willful misconduct.
19. TERMINATION; RIGHT TO ENTER INTO A NEW AGREEMENT
     (a) 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; or
     (ii) the Party (A) files a petition or otherwise commences, authorizes or
acquiesces in the commencement of a proceeding or cause of action under any
bankruptcy, insolvency, reorganization or similar Applicable Law, or has any
such petition filed or commenced against it, (B) makes an assignment or any
general arrangement for the benefit of creditors, (C) otherwise becomes bankrupt
or insolvent (however evidenced) or (D) has a liquidator, administrator,
receiver, trustee, conservator or similar official appointed with respect to it
or any substantial portion of its property or assets.
     If either Party is in default as described above, then (i) if TRMC is in
default, TLO may or (ii) if TLO is in default, TRMC may: (1) terminate this
Agreement upon notice to the defaulting Party; (2) withhold any payments due to
the defaulting Party under this Agreement; and/or (3) pursue any other remedy at
law or in equity.

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     (b) Obligations at Termination. TRMC shall, upon expiration or termination
of this Agreement, promptly remove all of its Products from the Storage Facility
within thirty (30) days of such termination or expiration. In the event all of
the Product is not removed within such thirty (30) day period, TRMC shall be
assessed a holdover storage fee, calculated on the same basis as the Storage and
Transportation Fee, to all Products held in storage more than thirty (30) days
beyond the termination or expiration of this Agreement until such time TRMC’s
entire Product is removed from the Tanks and the Storage Facility.
     (c) Right to Enter New Agreement. Upon termination of this Agreement for
reasons other than (x) a default by TRMC and (y) any other termination of this
Agreement initiated by TRMC pursuant to Section 20 or Section 21, TRMC shall
have the right to require TLO to enter into a new storage and transportation
services agreement with TRMC that (i) is consistent with the terms set forth in
this Agreement, (ii) relates to the same Storage Facility, the Tanks and the
Pipelines that are the subject matter of this Agreement, and (iii) has
commercial terms that are, in the aggregate, equal to or more favorable to TLO
than fair market value terms as would be agreed by similarly-situated parties
negotiating at arm’s length; provided, however, that the term of any such new
storage and transportation services agreement shall not extend beyond April 30,
2031.
     (d) Right of First Refusal. In the event that TLO proposes to enter into a
storage and transportation services agreement with a third party upon the
termination of this Agreement for reasons other than (x) by default by TRMC and
(y) any other termination of this Agreement initiated by TRMC pursuant to
Section 20 or Section 21, TLO shall give TRMC 90 days’ prior written notice of
any proposed new storage and transportation services agreement with a third
party, including (i) details of all of the material terms and conditions thereof
and (ii) a thirty (30)-day period (beginning upon TRMC’s receipt of such written
notice) (the “First Offer Period”) in which TRMC may make a good faith offer to
enter into a new storage and transportation services agreement with TLO (the
“Right of First Refusal”). If TRMC makes an offer on terms no less favorable to
TLO than the third-party offer with respect to such storage and transportation
services agreement during the First Offer Period, then TLO shall be obligated to
enter into a storage and transportation services agreement with TRMC on the
terms set forth in subsection (c) above. If TRMC does not exercise its Right of
First Refusal in the manner set forth above, TLO may, for the next ninety
(90) days, proceed with the negotiation of the third-party storage and
transportation services agreement. If no third-party storage and transportation
services agreement is consummated during such ninety-day period, the terms and
conditions of this Section 19(d) shall again become effective.
20. FORCE MAJEURE
     (a) As soon as possible upon the occurrence of a Force Majeure, TLO shall
provide TRMC with written notice of the occurrence of such Force Majeure (a
“Force Majeure Notice”). TLO shall identify in such Force Majeure Notice the
approximate length of time that TLO reasonably believes in good faith such Force
Majeure shall continue (the “Force Majeure Period”). If TLO advises in any Force
Majeure Notice that it reasonably believes in good faith that the Force Majeure
Period shall continue for more than twelve (12) consecutive Months, then,
subject to Section 6 above, at any time after TLO delivers such Force Majeure
Notice, either Party may terminate that portion of this Agreement relating to
the affected Pipeline(s) and/or Tank(s) (with a corresponding and pro rata
adjustment in the Storage and Transportation Fee), but only upon delivery to the
other Party of a notice (a “Termination Notice”) at least twelve (12) Months
prior to the expiration of the Force Majeure Period; provided, however; that
such Termination Notice shall be deemed cancelled and of no effect if the Force
Majeure Period ends prior to the expiration of such twelve-Month period. For the
avoidance of doubt, neither Party may exercise its right under this Section
20(a) to terminate this Agreement as a result of a Force Majeure with respect to
any machinery, storage, tanks, lines of pipe or other equipment that has been
unaffected by, or has been

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restored to working order since, the applicable Force Majeure, including
pursuant to a Restoration under Section 6.
     (b) Notwithstanding the foregoing, if TRMC delivers a Termination Notice to
TLO (the “TRMC Termination Notice”) and, within thirty (30) days after receiving
such TRMC Termination Notice, TLO notifies TRMC that TLO reasonably believes in
good faith that it shall be capable of fully performing its obligations under
this Agreement within a reasonable period of time, then the TRMC Termination
Notice shall be deemed revoked and the applicable portion of this Agreement
shall continue in full force and effect as if such TRMC Termination Notice had
never been given.
21. SUSPENSION OF REFINERY OPERATIONS
     (a) In the event that TRMC decides to permanently or indefinitely suspend
refining operations at the Refinery for a period that shall continue for at
least twelve (12) consecutive Months, TRMC may provide written notice to TLO of
TRMC’s intent to terminate this Agreement (the “Suspension Notice”). Such
Suspension Notice shall be sent at any time after TRMC has publicly announced
such suspension and, upon the expiration of the twelve (12)-Month period
following the date such notice is sent (the “Notice Period”), this Agreement
shall terminate. If TRMC publicly announces, more than two Months prior to the
expiration of the Notice Period, its intent to resume operations at the
Refinery, then the Suspension Notice shall be deemed revoked, and this Agreement
shall continue in full force and effect as if such Suspension Notice had never
been delivered.
     (b) During the Notice Period, TRMC shall remain liable for monthly payments
of the Storage and Transportation Fees.
     (c) TRMC is not permitted to suspend or reduce its obligations under this
Agreement in connection with a shutdown of the Refinery for scheduled
turnarounds or other regular servicing or maintenance. If refining operations at
the Refinery are suspended for any reason (including Refinery turnarounds and
other scheduled maintenance), then TRMC shall remain liable for Storage and
Transportation Fees under this Agreement for the duration of the suspension,
unless and until this Agreement is terminated as provided above. TRMC shall
provide at least thirty (30) days’ prior written notice of any suspension of
operations at the Refinery due to a planned turnaround or scheduled maintenance.
22. ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL
     (a) TRMC shall not assign any of its rights or obligations under this
Agreement without TLO’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that TRMC may
assign this Agreement without TLO’s consent in connection with a sale by TRMC of
the Refinery so long as the transferee: (i) agrees to assume all of TRMC’s
obligations under this Agreement and (ii) is financially and operationally
capable of fulfilling the terms of this Agreement, which determination shall be
made by TRMC in its reasonable judgment.
     (b) TLO shall not assign any of its rights or obligations under this
Agreement without TRMC’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that (i) TLO
may assign this Agreement without TRMC’s consent in connection with a sale by
TLO of the Storage Facility so long as the transferee: (A) agrees to assume all
of TLO’s obligations under this Agreement; (B) is financially and operationally
capable of fulfilling the terms of this Agreement, which determination shall be
made by TLO in its reasonable judgment; and (C) is not a competitor of TRMC; and
(ii) TLO shall be permitted to make a collateral assignment of this Agreement
solely to secure working capital financing for TLO.

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     (c) Any assignment that is not undertaken in accordance with the provisions
set forth above shall be null and void ab initio. A Party making any assignment
shall promptly notify the other Party of such assignment, regardless of whether
consent is required. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted
assigns.
     (d) TRMC’s obligations hereunder shall not terminate in connection with a
Partnership Change of Control, provided, however, that in the case of any
Partnership Change of Control, TRMC shall have the option to extend the Term of
this Agreement as provided in Section 4. TLO shall provide TRMC with notice of
any Partnership Change of Control at least sixty (60) days prior to the
effective date thereof.
23. INSURANCE
     (a) At all times during the Term of this Agreement and for a period of two
(2) years after termination of this Agreement for any coverage maintained on a
“claims-made” or “occurrence” basis, TRMC shall maintain at its expense the
below listed insurance in the amounts specified below which are minimum
requirements. Such insurance shall provide coverage to TLO and such policies,
other than Worker’s Compensation Insurance, shall include TLO as an Additional
Insured. Each policy shall provide that it is primary to and not contributory
with any other insurance, including any self-insured retention, maintained by
TLO (which shall be excess) and each policy shall provide the full coverage
required by this Agreement. All such insurance shall be written with carriers
and underwriters acceptable to TLO, and eligible to do business in the State of
Utah and having and maintaining an A.M. Best financial strength rating of no
less than “A-” and financial size rating no less than “VII”; provided that TRMC
may procure worker’s compensation insurance from the State of Utah. All limits
listed below are required MINIMUM LIMITS:

  (i)   Workers Compensation and Occupational Disease Insurance which fully
complies with Applicable Law of the State of Utah, in limits not less than
statutory requirements;     (ii)   Employers Liability Insurance with a minimum
limit of $1,000,000 for each accident, covering injury or death to any employee
which may be outside the scope of the worker’s compensation statute of the
jurisdiction in which the worker’s service is performed, and in the aggregate as
respects occupational disease;     (iii)   Commercial General Liability
Insurance, with minimum limits of $1,000,000 combined single limit per
occurrence for bodily injury and property damage liability, or such higher
limits as may be required by TLO or by Applicable Law from time to time. This
policy shall include Broad Form Contractual Liability insurance coverage which
shall specifically apply to the obligations assumed in this Agreement by TRMC;  
  (iv)   Automobile Liability Insurance covering all owned, non-owned and hired
vehicles, with minimum limits of $1,000,000 combined single limit per occurrence
for bodily injury and property damage liability, or such higher limit(s) as may
be required by TRMC or by Applicable Law from time to time. Limits of liability
for this insurance must be not less than $1,000,000 per occurrence;     (v)  
Excess (Umbrella) Liability Insurance with limits not less than $4,000,000 per
occurrence. Additional excess limits may be utilized to supplement inadequate
limits in the primary policies required in items (ii), (iii), and (iv) above;  
  (vi)   Pollution Legal Liability with limits not less than $25,000,000 per
loss with an annual aggregate of $25,000,000. Coverage shall apply to bodily
injury and property damage including loss of use of damaged property and
property that has not been physically

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      injured; clean up costs, defense, including costs and expenses incurred in
the investigation, defense or settlement of claim; and     (vii)   Property
Insurance, with a limit of no less than $1,000,000, which property insurance
shall be first-party property insurance to adequately cover TRMC’s owned
property; including personal property of others.

     (b) All such policies must be endorsed with a Waiver of Subrogation
endorsement, effectively waiving rights of recovery under subrogation or
otherwise, against TLO, and shall contain where applicable, a severability of
interest clause and a standard cross liability clause.
     (c) Upon execution of this Agreement and prior to the operation of any
equipment by TRMC, TRMC will furnish to TLO, and at least annually thereafter
(or at any other times upon request by TLO) during the Term of this Agreement
(and for any coverage maintained on a “claims-made” basis, for two (2) years
after the termination of this Agreement), insurance certificates and/or
certified copies of the original policies to evidence the insurance required
herein. Such certificates shall be in the form of the “Accord” Certificate of
Insurance, and reflect that they are for the benefit of TLO and shall provide
that there will be no material change in or cancellation of the policies unless
TLO is given at least thirty (30) days prior written notice. Certificates
providing evidence of renewal of coverage shall be furnished to TLO prior to
policy expiration.
     (d) TRMC shall be solely responsible for any deductibles or self-insured
retention.
24. 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
facsimile or 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 TRMC, to:
Tesoro Refining and Marketing Company
19100 Ridgewood Parkway
San Antonio, Texas 78259
For legal notices:
Attention: Charles S. Parrish, General Counsel
phone: (210) 626-4280
fax: (210) 745-4494
email: charles.s.parrish@tsocorp.com
For all other notices and communications:
Attention: Ralph J. Grimmer, Vice President, Logistics
phone: (210) 626-4379
fax: (210) 745-4631
email: Ralph.J.Grimmer@tsocorp.com
If to TLO, to:
Tesoro Logistics Operations LLC

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19100 Ridgewood Parkway
San Antonio, Texas 78259
For legal notices:
Attention: Charles S. Parrish, General Counsel
phone: (210) 626-4280
fax: (210) 745-4494
email: charles.s.parrish@tsocorp.com
For all other notices and communications:
Attention: Victoria R. Somers, Contracts Administrator — Logistics
phone: (210) 626-6390
fax: (210) 745-4490
email: victoria.r.somers@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.
25. 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 25. 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;
          (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 25, 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 25 (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

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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 or destroyed with destruction certified by the
receiving Party upon termination of this Agreement, 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 25, 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. Any third party contractors that are given access
to Confidential Information of a disclosing Party pursuant to the terms hereof
shall be required to sign a written agreement pursuant to which such Receiving
Party Personnel agree to be bound by the provisions of this Agreement, which
written agreement will expressly state that it is enforceable against such
Receiving Party Personnel by the disclosing Party.
     (e) Survival. The obligation of confidentiality under this Section 25 shall
survive the termination of this Agreement for a period of two (2) years.
26. 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) Entire Agreement. This Agreement, together with the Schedules,
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.
     (c) Governing Law; Jurisdiction. This Agreement shall be governed by the
laws of the State of Texas without giving effect to its conflict of laws
principles. Each Party hereby irrevocably submits to the exclusive jurisdiction
of any federal court of competent jurisdiction situated in the United States
District Court for the Western District of Texas, San Antonio Division, or if
such federal court declines to exercise or does not have jurisdiction, in the
district court of Bexar County, Texas. The Parties expressly and irrevocably
submit to the jurisdiction of said Courts and irrevocably waive any objection
which they

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may now or hereafter have to the laying of venue of any action, suit or
proceeding arising out of or relating to this Agreement brought in such Courts,
irrevocably waive any claim that any such action, suit or proceeding brought in
any such Court has been brought in an inconvenient forum and further irrevocably
waive the right to object, with respect to such claim, action, suit or
proceeding brought in any such Court, that such Court does not have jurisdiction
over such Party. The Parties hereby irrevocably consent to the service of
process by registered mail, postage prepaid, or by personal service within or
without the State of Texas. Nothing contained herein shall affect the right to
serve process in any manner permitted by law.
     (d) 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.
     (e) 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.
     (f) No Third Party Beneficiaries. It is expressly understood that the
provisions of this Agreement do not impart enforceable rights in anyone who is
not a Party or successor or permitted assignee of a Party.
     (g) 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.
     (h) 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.
[Remainder of this page intentionally left blank.]

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

            TESORO REFINING AND MARKETING COMPANY
      By:   /s/ Gregory J. Goff         Name:   Gregory J. Goff        Title:  
President        TESORO LOGISTICS OPERATIONS LLC
      By:   TESORO LOGISTICS LP,         its sole member            By:   TESORO
LOGISTICS GP, LLC,         its general partner            By:   /s/ Phillip M.
Anderson         Name:   Phillip M. Anderson        Title:   President   

Signature Page to
SLC Storage and Transportation Services Agreement

 

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SCHEDULE 1
PIPELINES
• one 6” pipeline used to transport diesel fuel
• one 8” pipeline used to transport gasoline
• one 8” pipeline used to transport off-test product
• one 10” pipeline used to transport crude oil

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SCHEDULE 2
TANKS

                  TANK NUMBER   SHELL CAPACITY (in Barrels)     OPERATING
CAPACITY (in Barrels)  
401
    64,000       49,370  
402
    64,000       51,380  
405
    120,000       97,210  
411
    64,000       41,470  
412
    64,000       50,880  
413
    64,000       50,880  
414
    64,000       50,880  
421
    62,000       53,400  
422
    62,000       52,390  
423
    62,000       54,700  
424
    62,000       49,370  
431
    64,000       56,420  
432
    62,000       54,190  
TOTAL:
    878,000       712,540  

20