Document:

exv10w9

Exhibit 10.9

FORM OF

TRANSPORTATION SERVICES AGREEMENT

(SLC Short Haul Pipelines)

     This TRANSPORTATION SERVICES AGREEMENT (this “Agreement”) is dated as of ______ __,
2011, by and between Tesoro Logistics Operations LLC, a Delaware limited liability company
(“TLO”) and Tesoro Refining and Marketing Company, a Delaware corporation (“TRMC”),
each individually a “Party” and collectively referred to as “Parties.”

RECITALS

     WHEREAS, TLO owns three short-haul crude petroleum pipelines (the “Crude Pipelines”),
depicted on Schedule A as Items No. 1 and 2, which connect to terminals or manifolds operated by
interstate crude petroleum pipeline companies;

     WHEREAS, TLO also owns two short-haul petroleum product pipelines (the “Products
Pipelines”, and together with the Crude Pipelines, the “Short Haul Pipelines”),
depicted on Schedule A as Item No. 3, which connect to a petroleum products terminal or manifold
that is owned by another company;

     WHEREAS, each of the Short Haul Pipelines provides services only to TRMC as direct support for
the operations of TRMC’s refinery located in Salt Lake City, Utah (the “SLC Refinery”), and
none of the Short Haul Pipelines are designed, located or configured to provide services to any
customer other than TRMC or to provide transportation services for any locations other than the SLC
Refinery and TRMC’s storage tank farm, also located in Salt Lake City, Utah (the “Storage
Facility”);

     WHEREAS, TLO intends to provide transportation services with respect to crude petroleum and
refined petroleum products delivered by TRMC on the Short Haul Pipelines, subject to and upon the
terms and conditions of this Agreement; and

     WHEREAS, TLO will agree to operate and maintain the Short Haul Pipelines in good working order
and ship crude petroleum on the Crude Pipelines and refined petroleum products for TRMC on the
Products Pipelines that collectively comprise the Short Haul Pipelines, subject to the terms and
conditions of this Agreement.

     NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the
Parties to this Agreement hereby agree as follows:

1. DEFINITIONS

The definitions set forth below shall apply whenever a capitalized term specified below is used in
this Agreement.

     “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.

     “bpd” means Barrels per day.

     “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 Expansion” has the meaning set forth in Section 2(b)(ii).

     “Capacity Resolution” has the meaning set forth in Section 13(c).

     “Commencement Date” has the meaning set forth in Section 3.

     “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.

     “Credit” has the meaning set forth in Section 6.

     “Crude Pipelines” has the meaning set forth in the Recitals.

     “Excess Barrels” means, with respect to any Month, all Barrels of crude petroleum and
refined petroleum products shipped by TRMC on the Short Haul Pipelines during such Month in excess
of the Minimum Throughput Commitment.

     “Extension Period” has the meaning set forth in Section 4.

     “First Offer Period” has the meaning set forth in Section 11(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” and “Force Majeure Period” each have the meaning set
forth in Section 12(a).

     “FERC” means the Federal Energy Regulatory Commission.

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     “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.

     “Minimum Throughput Commitment” means an aggregate volume of 54,000 bpd of crude
petroleum and petroleum products combined per Month; provided however, that the Minimum Throughput
Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance
with the ratio of the number of days, including and following the Commencement Date, in such Month
to the total number of days in such Month.

     “Minimum Throughput Capacity” has the meaning set forth in Section 2(b)(i).

     “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 14.

     “Party” and “Parties” each have the meaning set forth in the Preamble.

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

     “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.

     “Products Pipelines” has the meaning set forth in the Recitals.

     “Receiving Party Personnel” has the meaning set forth in Section 19(d).

     “Restoration” has the meaning set forth in Section 13(b)(2).

     “Segment” means each of the five separate Short Haul Pipelines including (i) each of
the Crude Pipelines that transport crude petroleum to the Storage Facility from the Plains All
American Crude Terminal and the Chevron Crude Products Terminal and (ii) each of the Products
Pipelines that transport petroleum products from the TRMC Salt Lake City Refinery to the Chevron
Products Terminal, all as depicted in the diagram in Schedule A of this Agreement.

     “Shortfall Payment” has the meaning set forth in Section 6.

     “Short Haul Pipelines” has the meaning set forth in the Recitals.

     “SLC Refinery” has the meaning set forth in the Recitals.

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

     “Suspension Notice” has the meaning set forth in Section 14.

     “Term” and “Initial Term” each have the meaning set forth in Section 4.

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

     “Transportation Fee” has the meaning set forth in Section 5(a).

     “Transportation Right of First Refusal” has the meaning set forth in Section 11(d).

     “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 12(b).

2. VOLUME COMMITMENT; RESERVED CAPACITY

     (a) Minimum Throughput Commitment. Each Month during the Term, TRMC shall ship the
Minimum Throughput Commitment on the Short Haul Pipelines, or, in the event it fails to do so,
shall remit to TLO the Shortfall Payment pursuant to Section 6 below. TRMC shall be deemed to have
shipped its Minimum Throughput Commitment if the aggregate quantity of crude petroleum and refined
petroleum products that TRMC ships on the Short Haul Pipelines in any Month equals at least the
Minimum Throughput Commitment, regardless of the particular Segments on which those shipments are
made.

     (b) Minimum Throughput Capacity.

     (i) Minimum Throughput Capacity. TLO represents to TRMC that as of the Commencement Date, the
average throughput capacity of each Segment is set forth on Schedule B (the “Minimum Throughput
Capacity”). TLO agrees to reserve the entire throughput capacity of each Segment (including
any increase in the throughput capacity of any Segment in connection with a Capacity Expansion) for
throughput by TRMC. TLO shall maintain the average throughput capacity of each Segment at no less
than the Minimum Throughput Capacity.

     (ii) Capacity Expansion. TRMC may at any time make a written request to TLO to increase the
throughput capacity of any Segment or to construct any new pipelines between the SLC Refinery, the
Storage Facility or any local third party terminals (a “Capacity Expansion”), and shall
include in such written request the parameters and specifications of the requested Capacity
Expansion. Upon the receiving such a request, TLO shall promptly evaluate the relevant factors
related to such request, including, without limitation: engineering and design criteria,
limitations affecting such Capacity Expansion and any related tankage, cost and financing factors
and the effect of such Capacity Expansion on the overall operation of the Short Haul Pipelines. If
TLO determines that such a Capacity Expansion is operationally and commercially feasible, TLO shall
present a proposal to TRMC concerning the design of such Capacity Expansion, its projected costs
and how such costs might be funded by or recovered from TRMC. If TLO determines that such a
Capacity Expansion is not commercially or operationally feasible, it shall provide TRMC with an
explanation of and justification for why it made such determination. If TLO notifies TRMC that the
Capacity Expansion may be commercially and operationally feasible, the Parties shall negotiate
reasonably and in good faith to determine appropriate terms and conditions for the Capacity
Expansion, which shall include, without limitation, the scope of the Capacity Expansion, the
appropriate timing for constructing the Capacity Expansion and a mechanism for TLO to recover its
costs, plus a reasonable return on capital associated with such Capacity Expansion, which may
include, without limitation, direct funding of all or part of the costs by TRMC, an increase in
Transportation Fee and/or an increase in the Minimum Throughput Commitment.

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3. COMMENCEMENT DATE

The Parties anticipate that the “Commencement Date” will be _______ __, 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. TRANSPORTATION FEES AND REIMBURSEMENT FOR CAPITAL EXPENDITURES

     (a) Transportation Fees. TRMC agrees to pay to TLO a fee of $0.25 per Barrel (the
“Transportation Fee”) for all Barrels of crude petroleum and refined petroleum products
shipped by TRMC on the Short Haul Pipelines. TLO shall not increase the Transportation Fee during
the Term of this Agreement except as specifically set forth in paragraphs (b), and (c) of this
Section.

     (b) Index-Based
Changes. 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.

     (c) Other Surcharges and Reimbursements. TRMC shall reimburse TLO for, or TLO shall
be permitted to charge TRMC an additional monthly surcharge for, the following:

	 	(i)	 	The costs that TLO incurs in complying with any new Applicable
Laws that affect the services provided by TLO to TRMC under this Agreement;
provided, that (A) compliance by TLO with any such new law or regulation
requires substantial unanticipated capital expenditures by TLO, (B) TLO has
made good faith efforts to mitigate the effect of any such law or regulation
and (C) TLO has negotiated in good faith with TRMC in order to agree on the
level of any surcharge;
	 
	 	(ii)	 	All taxes (other than income taxes, gross receipt taxes and
similar taxes) that TLO specifically incurs on TRMC’s behalf for the services
TLO provides to TRMC under this Agreement, if such reimbursement is not
prohibited by law; and

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	 	(iii)	 	Actual costs of any capital expenditures TLO agrees to make at
TRMC’s request, including those provided for under Section 13 below.

6. PAYMENTS

     (a) Monthly Shortfall Payment. If, during any Month, actual shipments by TRMC on the
Short Haul Pipelines are less than the Minimum Throughput Commitment, then TRMC shall pay to TLO,
in addition to Transportation Fee owed for actual barrels shipped during such Month, an amount
equal to (i) the amount of such shortfall (in Barrels) multiplied by (ii) the Transportation Fee
(the “Shortfall Payment”). The dollar amount of any Shortfall Payment included in the
monthly invoice described in Section 6(c) below and paid by TRMC shall be posted as a credit to
TRMC’s account (the “Credit”), and such Credit shall be applied in subsequent monthly
invoices against amounts owed by TRMC for Transportation Fees on Excess Barrels shipped on the
Short Haul Pipelines during any of the succeeding three (3) Months. Credits will be
applied in the order in which such Credits accrue and any portion of the Credit that is not used by
TRMC during the succeeding three (3) Months will expire (e.g., a Credit which accrues in January
will be available in February, March and April, will expire at the end of April, and must be
applied prior to applying any Credit which accrues in February).

     (b) Monthly Reconciliation. At the end of each Month, TLO will calculate the total
fees that TRMC incurred for shipments on the Short Haul Pipelines during such Month as follows:

	 	(i)	 	the Transportation Fee owed by TRMC for actual barrels shipped
during such Month; less
	 
	 	(ii)	 	any applicable Credits, provided, however, that the Credits
applied in any Month shall not exceed the amount of Transportation Fees
allocable for such Month to Excess Barrels; plus
	 
	 	(iii)	 	any applicable Shortfall Payment for such Month; plus
	 
	 	(iv)	 	any monthly surcharges payable for such Month pursuant to
Section 5(c).

     (c) Invoice. TLO will invoice TRMC monthly providing its calculations of all the
items set forth above, 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.

7. TRANSPORTATION SERVICES; VOLUME LOSSES

     (a) The services provided by TLO pursuant to this Agreement shall only consist of the
transportation of crude petroleum and refined petroleum products on the Short Haul Pipelines.

     (b) TLO shall have no obligation to measure volume gains or losses of petroleum in the normal
course of transportation, and shall have no liability to TRMC for physical losses of crude
petroleum or petroleum products, except for losses resulting from gross negligence, willful
misconduct or breach of this Agreement by TLO or its employees, agents or contractors.

8. EXCLUSIVE SERVICE

In order to effectuate the underlying objectives of this Agreement, TLO agrees as follows:

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     (a) Subject to Applicable Law, during the Term, each Segment of the Short Haul Pipelines shall
be dedicated exclusively to the use of TRMC, and TLO shall not use any Segment to provide services
for any third party, except upon specific directions from TRMC.

     (b) Subject to Force Majeure and required maintenance and repairs and the other provisions
hereunder, TLO shall make each active Segment continuously available to TRMC at all times, and
shall ship all volumes of crude petroleum and products nominated by TRMC for shipment in such
Segment upon request. TLO and TRMC shall coordinate shipment schedules with each other and with
connecting pipelines, and TLO shall not be obligated to make any shipment at any time when a
connecting pipeline is not prepared to deliver or receive it, as applicable, it being understood
that TRMC shall be primarily responsible for nominating receipts and deliveries to third party
pipeline carriers. In the event that TLO must remove a Segment from active service for repair or
maintenance, then TLO shall provide TRMC with as much advance notice as possible under the
circumstances, and the Parties shall cooperate to minimize the impact of such downtime on operation
of the SLC Refinery.

     (c) In the event TLO is required to file a tariff with the FERC or any other Governmental
Authority with respect to the Short Haul Pipelines, to the maximum extent permitted under
Applicable Law, TLO shall ensure that any such tariffs do not prejudice any of TRMC’s rights under
the terms of this Agreement.

9. REGULATORY MATTERS

     (a) As of the date of this Agreement, the shipment of crude petroleum and refined petroleum
products on the Short Haul Pipelines are not subject to regulation by the State of Utah.

     (b) TLO has filed a request with the FERC for a determination that the Short Haul Pipelines
are not subject to FERC jurisdiction. In the event the shipment of crude petroleum or refined
petroleum products on the Short Haul Pipelines are determined by the FERC to be subject to FERC
regulation, TLO shall file with the FERC and diligently pursue a request for exemption from FERC
filing and reporting requirements for the Short Haul Pipelines. TRMC agrees that it will not,
during the Term, challenge or assist others in challenging TLO’s requested exemption from FERC
regulation. If the FERC confirms that the Short Haul Pipelines are not subject to regulation, then
TLO shall not take any further actions that would require any Segment to subsequently become
subject to regulation by the FERC, except as required by Applicable Law.

     (c) In the event that the FERC asserts jurisdiction over the shipment of crude petroleum or
refined petroleum products on the Short Haul Pipelines, the Parties agree to negotiate in good
faith to adjust the terms of this Agreement and the Transportation Fee to conform to FERC
requirements and to preserve, to the extent possible, each Party’s economic benefits under this
Agreement. The Parties further agree that in the event TLO is required to file a tariff with the
FERC with respect to any of the Short Haul Pipelines, TLO will first obtain the agreement of TRMC
to the rates, terms and conditions of any such tariff, consistent with FERC ratemaking principles,
which shall not cause TRMC’s aggregate fees for shipping the minimum throughput commitment to
exceed the amount payable for such shipments under the terms stated herein.

     (d) The Parties are entering into this Agreement in reliance upon and shall fully comply with
all Applicable Law which directly or indirectly affect the crude petroleum or refined petroleum
products to be throughput hereunder, or any receipt, throughput delivery, transportation, handling
or storage of crude petroleum or petroleum products hereunder or the ownership, operation or
condition of the Storage Facility. Each Party shall fully comply with all Applicable Law
associated with such Party’s respective performance hereunder and the maintenance and operation of
such Party’s facilities. In the event any

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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 Applicable Law, and all
other provisions of this Agreement shall remain effective.

     (e) If during the Term, any new Applicable Law becomes effective or any existing Applicable
Law are or its interpretations is materially changed, which change is not addressed by another
provision of this Agreement and has a material adverse economic impact upon a Party 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.

10. 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 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.

11. TERMINATION; RIGHT TO ENTER INTO NEW AGREEMENT

     (a) 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.

     (b) If any of the Parties is in default as described above, then (A) if TRMC is in default,
TLO may or (B) 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, including the remedies of TRMC set forth
below.

     (c) 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 12 or Section 14,
TRMC shall have the right to require TLO to enter into a new transportation services agreement with
TRMC that (i) is consistent with the terms set forth in this
Agreement, and (ii) 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,

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however;
that the term of any such new transportation services agreement shall
not extend beyond April 30, 2031.

     (d) In the event that TLO proposes to enter into a transportation services agreement with a
third party 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 12 or Section 14, TLO
shall give TRMC 90 days’ prior written notice of any proposed new 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
transportation agreement with TLO (the “Transportation 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
transportation services agreement during the First Offer Period, then TLO shall be obligated to
enter into a transportation services agreement with TRMC on the terms set forth above. If TRMC does
not exercise its Transportation 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 transportation services
agreement. If no third party agreement is consummated during such ninety-day period, the terms and
conditions of this Section 11(d) shall again become effective.

     (e) Upon termination or expiration of this Agreement, TRMC shall promptly remove all of its
crude petroleum and refined petroleum products from the Short Haul Pipelines within thirty (30)
days of such termination or expiration.

12. 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 particular Segment or Segments of the Short Haul
Pipelines that are affected by the Force Majeure and 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 13 below, at any time after TLO delivers such Force Majeure Notice, either Party
may terminate that portion of this Agreement relating to the affected Segment, 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 ends prior to
the expiration of such twelve (12)-Month period. For the avoidance of
doubt, neither Party may exercise its right under this Section 12(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 restored to working order since, the
applicable Force Majeure, including pursuant to a Restoration under
Section 13.

     (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.

     (c) Subject to Section 13 below, TLO’s obligations may be temporarily suspended during the
occurrence of, and for the entire duration of, a Force Majeure that prevents TLO from shipping the
Minimum Throughput Commitment. If, for reasons of Force Majeure, TLO is prevented from shipping
volumes equal to the full Minimum Throughput Commitment, then TRMC’s obligation to ship the Minimum
Throughput Commitment and pay the Shortfall Payment shall be reduced to the extent that

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TLO is prevented from shipping the full Minimum Throughput Commitment. At such time as TLO is
capable of shipping volumes equal to the Minimum Throughput Commitment, TRMC’s obligation to ship
the full Minimum Throughput Commitment shall be restored. In addition, if TRMC is prevented from
receiving crude petroleum from the Crude Pipelines as a result of a Force Majeure event affecting
the Storage Facility or other facilities owned by TLO, its obligation to ship the Minimum
Throughput Commitment shall be reduced accordingly. TLO agrees that it shall declare a Force
Majeure if TLO is prevented from shipping volumes equal to the full Minimum Throughput Commitment
due to the inability of any pipeline connecting to the Short Haul Pipelines to supply or accept
crude petroleum or refined petroleum products, as applicable.

13. CAPABILITIES OF SHORT HAUL PIPELINES

     (a) Interruptions of Service. TLO shall use reasonable commercial efforts to minimize
the interruption of service on the Short Haul Pipelines and any Segment thereof. TLO shall
promptly inform TRMC of any anticipated partial or complete interruption of service which is
projected to extend more than twenty-four (24) hours on any part of the Short Haul Pipelines
affecting TLO’s ability to receive or deliver crude petroleum or refined petroleum products on any
Segment of the Short Haul Pipelines, 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.

     (b) Maintenance and Repair Standards.

     (i) Subject to Force Majeure, interruptions for routine repair and maintenance
consistent with customary crude petroleum and refined petroleum products pipeline standards,
and any applicable regulatory requirements, TLO shall accept for shipment on the Short Haul
Pipelines in accordance with pipeline industry standards all crude petroleum and refined
petroleum products that TRMC requests TLO to transport. Further, TLO shall maintain and
repair all portions of the Short Haul Pipelines in accordance with pipeline industry
standards and in a manner which allows the Short Haul Pipelines to be capable, subject to
Force Majeure, of shipping, storing and delivering volumes of crude petroleum and refined
petroleum products which are no less than the Minimum Throughput Capacity.

     (ii) If for any reason, including without limitation a Force Majeure event, the
throughput capacity of any Segment of the Short Haul Pipelines should fall below the Minimum
Throughput Capacity, then (A) during such period of reduced throughput capacity, TRMC’s
obligation to ship the Minimum Throughput Commitment and pay the Shortfall Payment shall be
reduced as described in Section 12(c) above and (B) within a reasonable period of time after
the commencement of such reduction, TLO shall make repairs to and/or replace the affected
portion of the Short Haul Pipelines to restore the capacity of each Segment to the required
Minimum Throughput Capacity (“Restoration”). Except as provided below in Sections
13(c) and 13(d), all 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.

     (iii) Notwithstanding the above provisions, except pursuant to a Capacity Expansion
requested by TRMC, TLO shall not be required to install any additional pumping capacity or
other improvements on the Crude Pipelines to facilitate shipment of a heavier grade of crude
petroleum than has historically been shipped to the Storage Facility for use in the SLC
Refinery. Upon request by TRMC for upgraded capacity for shipment of heavier crude
petroleum grades in

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connection with a Restoration, the Parties shall negotiate in good faith arrangements
whereby TLO will install suitable upgrades to the Crude Pipelines, consistent with
Applicable Law, accepted pipeline design and operating procedures that will allow shipment
of volumes of such heavier crude petroleum commensurate with historical volumes of lighter
crude petroleum shipments, with TRMC to reimburse TLO for associated capital costs and
increased operating costs, as otherwise provided herein.

     (c) Capacity Resolution. In the event of the failure of TLO to maintain any Segment of
the Short Haul Pipelines at its Minimum Throughput 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 (hereinafter defined). 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 affected portion of the Short Haul Pipelines 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 pipeline transportation industry standards and shall take
into consideration TLO’s economic considerations relating to costs of the repairs and TRMC’s
requirements concerning the operation of the SLC Refinery. In the event that TRMC’s economic
considerations justify incurring additional costs to restore the Short Haul Pipelines in a more
expedited manner than the time schedule determined in accordance with the preceding sentence, 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 the Parties agree to an expedited Restoration plan wherein TRMC agrees
to fund a portion of the Restoration cost, then neither Party shall have the right to terminate
this Agreement pursuant to Section 12(a) above so long as such Restoration is completed with due
diligence, and TRMC shall pay such portion to TLO in advance based on an estimate conforming to
reasonable engineering standards applicable to petroleum or products pipelines, as applicable.
Upon completion, TRMC shall pay the difference between the actual portion of Restoration costs to
be paid by TRMC pursuant to this Section 13(c) 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.

     (d) 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 SLC Refinery, TLO
either (i) refuses or fails to meet with TRMC
within the period set forth in Section 13(c), (ii) fails to agree to perform a Capacity
Resolution in accordance with the standards set forth in Section
13(c) 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 13(c), require TLO to complete a Restoration of the affected portion
of the Short Haul Pipelines.

- 11 -

 

Any such Restoration required under
this Section 13(d) shall be completed by TLO at TRMC’s cost. TLO shall use commercially reasonable efforts to
continue to provide transportation of crude petroleum and refined petroleum products tendered by
TRMC while such Restoration is being completed. Any work performed by TLO pursuant to this Section 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 SLC 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 described herein.

14. SUSPENSION OF SLC REFINERY OPERATIONS

     (a) In the event that TRMC decides to permanently or indefinitely suspend refining operations
at the SLC 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 SLC Refinery, then the Suspension Notice shall be
deemed revoked and the applicable portion of this Agreement shall continue in full force and effect
as if such Suspension Notice had never been delivered.

     (b) If refining operations at the SLC Refinery are suspended for any reason (including
refinery turnaround operations and other scheduled maintenance), then TRMC shall remain liable for
Shortfall Payments 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 SLC Refinery due to a planned turnaround or
scheduled maintenance. Shortfall Payments due for each Month during which TRMC does not ship any
volumes on the Short Haul Pipelines will be equal to (i) the Minimum Throughput Commitment
multiplied by (ii) the Transportation Fee.

15. INDEMNITIES

     (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 customers, representatives, and agents; (ii) loss of or damage to any property, products,
material, and/or equipment belonging to TRMC and, as applicable, its customers, representatives,
and agents, and each of their respective affiliates, contractors, and subcontractors (except for
those volume losses provided for in Section 7); (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 in Section 7), 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 Short Haul Pipelines 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 HARMLESS TRMC

- 12 -

 

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
in Section 7); (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 in Section 7), 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 and its customers’ use of the Short Haul Pipelines and
the services provided hereunder, and, as applicable, its 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.

16. 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 SLC 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 Short Haul Pipelines 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.

     (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.

- 13 -

 

     (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.

17. 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) if by e-mail one 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

Attn:

19100 Ridgewood Parkway

San Antonio, Texas 78259

Phone:

Facsimile:

e-mail:

If to TLO, to:

Tesoro Logistics Operations LLC

Attn:

19100 Ridgewood Parkway

San Antonio, Texas 78259

Phone:

Facsimile:

e-mail:

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

18. 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

- 14 -

 

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, including contractual liability
insurance covering Carrier’s indemnity obligations under this Agreement, 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. Coverage must assure compliance with
Sections 29 and 30 of the Motor Carrier Act of 1980 and all applicable rules and
regulations of the Federal Highway Administration’s Bureau of Motor Carrier Safety and
Interstate Commerce Commissioner (Form MCS 90 Endorsement). Limits of liability for
this insurance must be in accordance with the financial responsibility requirement of
the Motor Carrier Act, but 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 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

- 15 -

 

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.

19. CONFIDENTIAL INFORMATION

     (a) Obligations. Each Party shall use reasonable efforts to retain the other Partys’
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 19. 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 TLO that was in the possession of TRMC or any of its
affiliates as a result of their ownership or operation of the Short Haul Pipelines prior to the
Commencement Date);

          (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 19, 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 19(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.

- 16 -

 

     (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 19, 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 19 shall survive
the termination of this Agreement for a period of two (2) years.

20. 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 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

- 17 -

 

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.

[SIGNATURE PAGES FOLLOW]

- 18 -

 

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

	 	 	 	 	 

	TESORO REFINING AND MARKETING COMPANY	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Name:	 	 
	 
	 	 	 	 
	Title:	 	 
	 
	 	 	 	 
	TESORO LOGISTICS OPERATIONS LLC	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

Signature Page to

SLC Short Haul Pipelines

Transportation Services Agreement

 

 

SCHEDULE A

 

 

Schedule B

Crude Oil Pipeline Segments:

16” pipeline from Plains All American Pipeline to Storage Facility: 87,600 bpd

10” pipeline from Chevron Crude Products Terminal to Storage Facility: 30,000 bpd. The Parties
acknowledge that this Line is currently idle, and is available for use only as a backup in the
event of repairs or maintenance to or disruption of operation other pipelines and shall not be
required for normal operations so long as the other two Crude Oil Pipeline Segments remain
operational.

8” pipeline from Chevron Crude Products Terminal to Storage Facility: 30,000 bpd

Products Pipeline Segments:

6” diesel pipeline from SLC Refinery to Chevron Products Terminal: 30,000 bpd

8” gasoline pipeline from SLC Refinery to Chevron Products Terminal: 42,000 bpdexv10w10

Exhibit 10.10

FORM OF

SALT LAKE CITY STORAGE AND TRANSPORTATION SERVICES AGREEMENT

     This Salt Lake City Storage and Transportation Services Agreement (the “Agreement”) is
dated as of ________ ___, 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).

 

 

     “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 _________ ___ 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

5

 

economic considerations 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

6

 

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

     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

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     (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.

     (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

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     (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.

     (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

9

 

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 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.

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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.

     (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

11

 

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 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

12

 

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.

     (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;

13

 

	 	(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 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

Attention:

phone:

e-mail:

If to TLO, to:

Tesoro Logistics Operations LLC

19100 Ridgewood Parkway

San Antonio, Texas 78259

Attention:

14

 

phone:

e-mail:

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 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

15

 

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 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

16

 

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.]

17

 

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

	 	 	 

	TESORO REFINING AND MARKETING COMPANY  
	 
	 	 
	 
	 	 
	 

Name:

	 	 
	Title:
	 	 
	 
	 	 
	TESORO LOGISTICS OPERATIONS LLC
	 
	 	 
	 
	 	 
	 

Name:

	 	 
	Title:
	 	 

Signature Page to

SLC Storage and Transportation Services Agreement

 

 

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

 

 

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

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