SHARED SERVICES AGREEMENT among WESTERN REFINING SOUTHWEST, INC. WESTERN REFINING COMPANY, L.P. and NORTHERN TIER ENERGY LLC SHARED SERVICES AGREEMENT

This SHARED SERVICES AGREEMENT (“Agreement”) is entered into as of October 30, 2014, to be effective as of September 1, 2014 (the “Effective Date”), by and among (a) Western Refining Southwest, Inc. an Arizona corporation, and Western Refining Company, L.P., a Delaware limited partnership (collectively, “Western”), on behalf of themselves and the other Western Parties (as defined herein), and (b) Northern Tier Energy LLC, a Delaware limited liability company (“Northern Tier”), on behalf of itself and the Northern Tier Parties (as defined herein). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties”.

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to the amount to be paid by Northern Tier for certain general and administrative services to be performed by Western and its Subsidiaries (as defined herein) for and on behalf of the Northern Tier Parties (as defined herein) and Northern Tier’s obligations to reimburse Western and its Subsidiaries for certain costs and expenses incurred in connection therewith; and

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to the amount to be paid by the Western Parties for certain general and administrative services to be performed by Northern Tier and its Subsidiaries (as defined herein) for and on behalf of the Western Parties (as defined herein) and Western’s obligations to reimburse Northern Tier and its Subsidiaries for certain costs and expenses incurred in connection therewith.

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

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with, the Person in question.

“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.

“Limited Partner” is defined in the Partnership Agreement.

“Northern Tier Parties” means Northern Tier, Northern Tier Oil Transport, LLC, St. Paul Park Refining Co. LLC and Northern Tier Retail Holdings LLC and any of their Subsidiaries.

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of Northern Tier Energy LP, dated as of July 31, 2012, as such agreement is in effect on the Effective Date.

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

“Partnership” means Northern Tier Energy, LP, a Delaware limited partnership.

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

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

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

“Western Parties” means Western Refining Company, L.P. and Western Refining Southwest, Inc. and any of either or their Subsidiaries. “Western Party” means any of the Western Parties.

2.1    Provision of Services.

(a)    Western agrees to provide, an agrees to cause its Subsidiaries to provide, on behalf of the Northern Tier Parties and for the Northern Tier Parties’ benefit, the services set forth on Exhibit A-1, which such services (collectively, the “Western Services”) are necessary to run the business of the Northern Tier Parties (the “NTI Business”), and such other services as may be agreed by the Parties in writing from time to time.

(b)    Northern Tier agrees to provide, and agrees to cause its Subsidiaries to provide, on behalf of the Western Parties and for the Western Parties benefit, the services set forth on Exhibit B-1, which such services (collectively, the “NTI Services”) are necessary to run the business of the Western Parties (the “Western Business”), and such other services as may be agreed by the Parties in writing from time to time.

(c)    All NTI Services and Western Services provided hereunder, as applicable, shall be done in a safe and workmanlike manner consistent with standard industry practices.

(d)    Notwithstanding anything herein to the contrary, and in recognition of the fact that the services to be performed and provided by the Parties hereunder are to be furnished, performed and provided in exchange for the reimbursement provided herein, the Parties shall only be liable to one another for gross negligence or willful misconduct in the performance of their obligations hereunder, AND NO PARTY NOR ANY OF ITS AFFILIATES OR AGENTS AS SUCH PARTY SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES, SHALL BE LIABLE TO THE OTHER PARTY OR PERSONS WHO HAVE ACQUIRED INTERESTS IN THE OTHER PARTY, WHETHER AS SHAREHOLDERS, PARTNERS, ASSIGNEES OR OTHERWISE, FOR ERRORS IN JUDGMENT OR FOR ANY ACTS OR OMISSIONS THAT DO NOT CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

2.2    Reimbursement for Services.

(a)    Northern Tier hereby agrees to reimburse the Western Parties for all cash expenses and expenditures that the Western Parties and their Subsidiaries incur or payments the Western Parties and their Subsidiaries make on behalf of the Northern Tier Parties in connection with providing the Western Services, as well as for certain other direct or allocated costs and expenses incurred by the Western Parties and their Subsidiaries on behalf of the Northern Tier Parties, in each case as provided in Exhibit A-2.

(b)    Western hereby agrees to reimburse the Northern Tier Parties for all cash expenses and expenditures that the Northern Tier Parties and their Subsidiaries incur or payments the Northern Tier Parties or their Subsidiaries make on behalf of the Western Parties in connection with providing the NTI Services, as well as for certain other direct or allocated costs and expenses incurred by the Northern Tier Parties and their Subsidiaries on behalf of the Western Parties, in each case, as provided in Exhibit B-2.

(c)    Within ten (10) days following the end of each calendar month, each of Western, on behalf of the Western Parties, on the one hand, and Northern Tier, on behalf of the Northern Tier Parties, on the other hand, shall deliver to the other party an invoice or other mutually acceptable record of the fees owed to such party for services performed under Section 2.1(a) or Section 2.1(b) hereof during the prior calendar month, as applicable. Such reimbursements shall be made on or before the twenty-first (21^st) calendar day of the month following the month such costs and expenses are incurred. As long as Western is an Affiliate of Northern Tier, Western and Northern Tier may settle Northern Tier’s financial obligations to the Western Parties through the Western Parties’ normal intercompany settlement processes, which shall include the netting of such obligations, in which case the Party, if any, owning payment after effectuating such netting shall reimburse the other Party on or before the twenty-first (21^st) calendar day of the month as set forth above.

(d)    For the avoidance of doubt, the costs and expenses set forth in Section 2.2(a) shall be paid by Northern Tier in addition to, and not as a part of or included in, certain expenses of Western that are reimbursed under the Partnership Agreement.

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

3.2    Notice. All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by facsimile to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party’s signature to this Agreement or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 3.2.

If to the Western Parties:

If to the Northern Tier Parties:

3.3    Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

3.4    Termination of Agreement. This Agreement may be terminated by Western or Northern Tier upon a Partnership Change of Control.

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

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

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

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

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

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

 

 

 

Northern Tier will reimburse the Western Parties for all expenses and out-of-pocket costs incurred by the Western Parties and their Subsidiaries in connection with providing the Western Services or the Western Parties will arrange to have those expenses and out-of-pocket costs paid directly by Northern Tier.

Northern Tier will pay the Western Parties for the resources and overhead support to provide the activities listed in Exhibit A-1 based on an allocation of the costs (without markup) that are incurred by the Western Parties for such resources and support. The costs for each service will be allocated to Northern Tier based upon key metrics identified by the Western Parties as part of their annual budgeting process and the allocation of those costs to their Subsidiaries.

Prior to the Effective Date, the Western Parties and Northern Tier have agreed on the resources and overhead support that are anticipated to be required for the Western Services through March 31, 2015 and based on the cost allocation methodology described above, the Western Parties have established service fees to be paid by Northern Tier for the Western Services, as set forth below. This initial estimate of resources and support will be used as the monthly service fee for the Western Services through March 31, 2015.

For each six month period starting April 1, 2015 until April 1, 2017, the Parties will review the amount of resources and overhead support actually required to perform the Western Services during the prior six-month period, and the Western Parties will use the actual level of resources and support in that prior period (with any adjustments which the Parties may mutually establish) to determine the monthly service fees for the Western Services for the following six-month period using the cost allocation methodology described above.

For each twelve-month period starting on April 1, 2017 and thereafter, the Parties will review the amount of resources and overhead support actually required to perform the Western Services during the prior twelve-month period, and the Western Parties will use the actual level of resources and support in that prior period (with any adjustments which the Parties may mutually establish) to determine the monthly service fees for the Western Services for the following twelve-month period using the cost allocation methodology described above.

In connection with the foregoing, the revised service fees will be effective on April 1^st and October 1^st for each six-month adjustment and on April 1^st for each annual adjustment. Prior to the effective date of the revised service fees, the Parties shall use commercial reasonable efforts to determine the amount of resources and overhead support actually required to perform the Western Services in each prior period, and the Western Parties will prepare a statement summarizing the revised service fees based on the cost allocation methodology described above for such resources and support.

Western will reimburse the Northern Tier Parties for all expenses and out-of-pocket costs incurred by the Northern Tier Parties and their Subsidiaries in connection with providing the NTI Services or Northern Tier will arrange to have those expenses and out-of-pocket costs paid directly by Western.

Western will pay Northern Tier for the resources and overhead support to provide the activities listed in Exhibit B-1 based on an allocation of the costs (without markup) that are incurred by Northern Tier for such resources and support. The costs for each service will be allocated to Western based upon key metrics identified by Northern Tier as part of their annual budgeting process and the allocation of those costs to their Subsidiaries.

Prior to the Effective Date, the Northern Tier and the Western Parties have agreed on the resources and overhead support that are anticipated to be required for the NTI Services through March 31, 2015 and based on the cost allocation methodology described above, Northern Tier has established service fees to be paid by the Western Parties for the NTI Services, as set forth below. This initial estimate of resources and support will be used as the monthly service fee for the NTI Services through March 31, 2015.

For each six month period starting April 1, 2015 until April 1, 2017, the Parties will review the amount of resources and overhead support actually required to perform the NTI Services during the prior six-month period, and Northern Tier will use the actual level of resources and support in that prior period (with any adjustments which the Parties may mutually establish) to determine the monthly service fees for the NTI Services for the following six-month period using the cost allocation methodology described above.

For each twelve-month period starting on April 1, 2017 and thereafter, the Parties will review the amount of resources and overhead support actually required to perform the NTI Services during the prior twelve-month period, and Northern Tier will use the actual level of resources and support in that prior period (with any adjustments which the Parties may mutually establish) to determine the monthly service fees for the NTI Services for the following twelve-month period using the cost allocation methodology described above.

In connection with the foregoing, the revised service fees will be effective on April 1^st and October 1^st for each six-month adjustment and on April 1^st for each annual adjustment. Prior to the effective date of the revised service fees, the Parties shall use commercial reasonable efforts to determine the amount of resources and overhead support actually required to perform the NTI Services in each prior period, and Northern Tier will prepare a statement summarizing the revised service fees based on the cost allocation methodology described above for such resources and support.