4. Acquisitions

Wholesale Acquisition

On October 15, 2014 (the "Closing Date"), under the terms of the Contribution Agreement, WNRL purchased all of the outstanding limited liability company interests of WRW from WRSW, in exchange for $320 million of cash and 1,160,092 common units representing limited partner interests in WNRL. The issuance of these units to Western increased Western's limited partner interest in WNRL to 66.2%. We funded the cash consideration through $269 million in new borrowings under the Revolving Credit Facility and $51 million from cash on hand.

At the Closing Date, WNRL purchased substantially all of Western’s southwest wholesale assets including assets and related inventories of WRW's lubricant distribution, southwest bulk petroleum fuels distribution and products transportation. The purchased assets were recorded at Western's historical book value as the purchase of WRW's assets was treated as a reorganization of entities under common control as required for accounting purposes.

We entered into the following agreements that have initial ten year terms with Western in connection with our entry into the Contribution Agreement:


•	Product Supply Agreement, as amended – Western supplies and we purchase approximately 79,000 barrels per day of refined products for sale to our wholesale customers. The agreement includes product pricing based upon OPIS or Platts.

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Fuel Distribution and Supply Agreement – Western has agreed to purchase a minimum of 645,000 barrels per month of branded and unbranded motor fuels for its retail and cardlocks at a price equal to our product cost at each terminal, plus actual transportation costs, plus a margin of $0.03 per gallon. Under the Fuel Distribution and Supply Agreement, a subsidiary of Western is obligated to offer us the first opportunity to satisfy all of its incremental branded and unbranded motor fuel requirements.


•	Crude Oil Trucking Transportation Services Agreement, as amended – Western has agreed to utilize our crude oil trucks to haul a minimum of 1.525 million barrels of crude oil each month. Western pays a flat rate per barrel based on the distance between the applicable pick-up and delivery points plus monthly fuel adjustments and customary applicable surcharges.

TexNew Mex Pipeline Acquisition

On October 30, 2015, WNRL acquired the TexNew Mex Pipeline System in exchange for $170 million in cash, 421,031 common units representing limited partner interests in WNRL and 80,000 TexNew Mex Units.

In connection with the TexNew Mex Pipeline Acquisition, WNRL also entered into Amendment No. 1 to the Pipeline and Gathering Services Agreement, dated as of October 16, 2013, with Western (the "Amendment to the Pipeline Agreement"). Among other things, the Amendment to the Pipeline Agreement amends the scope of the existing agreement to include the provision of storage services and a minimum volume commitment of 80,000 barrels of storage at the Star Lake storage tank. In this Amendment to the Pipeline Agreement, Western also agreed to provide a minimum volume commitment of 13,000 barrels per day ("bpd") of crude oil on the TexNew Mex Pipeline for 10 years from the date of the Amendment to the Pipeline Agreement.

In connection with the TexNew Mex Pipeline Acquisition, the General Partner adopted certain amendments to the First Amended and Restated Agreement of Limited Partnership of the Partnership by adopting the Second Amended and Restated Agreement of Limited Partnership (the “Second A&R Partnership Agreement”). The amendments contained in the Second A&R Partnership Agreement create a new class of limited partner interests in the Partnership, referred to as the TexNew Mex Units, and set forth the rights, preferences and obligations of the TexNew Mex Units.

The Second A&R Partnership Agreement provides for the creation of the “TexNew Mex Shared Segment” that will reflect the financial and operating results of the TexNew Mex Pipeline. The TexNew Mex Units are generally entitled to participate in 80% of the economics attributable to the TexNew Mex Shared Segment resulting from crude oil throughput on the TexNew Mex Pipeline above the 13,000 barrels per day contemplated by the commitment in the Amendment to the Pipeline Agreement. To the extent there is sufficient available cash from operating surplus under the Second A&R Partnership Agreement, the holder of the TexNew Mex Units will be entitled to receive a distribution equal to 80% of the excess of TexNew Mex Shared Segment Distributable Cash Flow over the TexNew Mex Base Amount (as such terms are defined in the Second A&R Partnership Agreement). The TexNew Mex Unit distributions are preferential to all other unit holder distributions.