GLOBAL PARTNERS LP CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

 

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

 

This Contribution, Conveyance and Assumption Agreement, dated as of October 4, 2005, is entered into by and among GLOBAL GP LLC , a Delaware limited liability company (“ GP LLC ”), GLOBAL PARTNERS LP , a Delaware limited partnership (“ MLP ”), GLOBAL OPERATING LLC, a Delaware limited liability company (“ OLLC ”), GLOBAL COMPANIES LLC , a Delaware limited liability company (“ Global ”), GLOBAL MONTELLO GROUP LLC, a Delaware limited liability company (“ GMG ”), CHELSEA SANDWICH LLC , a Delaware limited liability company (“ Chelsea LLC ”), GLOBAL PETROLEUM CORP. , a Massachusetts corporation (“ GPC ”), LAREA HOLDINGS LLC , a Delaware limited liability company (“ Larea ”), LAREA HOLDINGS II LLC , a Delaware limited liability company (“ Larea II ”), CHELSEA TERMINAL LIMITED PARTNERSHIP , a Massachusetts limited partnership (“ Chelsea LP ”), SANDWICH TERMINAL, L.L.C. , a Massachusetts limited liability company (“ Sandwich ”) and MONTELLO OIL CORPORATION , a New Jersey corporation (“ Montello ”).  The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties .”  Capitalized terms used herein shall have the meanings assigned to such terms in Section 1.1.

 

RECITALS :

 

WHEREAS , GPC and GP LLC have formed MLP pursuant to the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”) for the purpose of engaging in any business activity that is approved by GP LLC and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware LP Act.

 

WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, each of the following actions have been taken prior to the date hereof:

 

1.                                        GPC formed GP LLC under the terms of the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”) and contributed $1,000 to GP LLC in exchange for all of the member interests in GP LLC.

 

2.                                        GP LLC and GPC formed MLP under the terms of the Delaware LP Act to which GP LLC contributed $40 to MLP in exchange for a 2% general partner interest in MLP and GPC contributed $1,960 to MLP in exchange for a 98% limited partner interest in MLP.

 

3.                                        MLP formed OLLC under the terms of the Delaware LLC Act to which MLP contributed $1,000 to OLLC in exchange for all of the member interests in OLLC.

 

WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of the following shall occur:

 

 

1.                                        The New Credit Facility will be entered into by and among the parties thereto at which time borrowings under the New Credit Facility will be used to repay any outstanding borrowings under the Old Credit Facility.

 

2.                                        Global will distribute approximately $45,250,000 in cash and receivables (“ Working Capital Assets ”), to GPC, Montello, Larea and Larea II as follows:

 

(a)                                   GPC will receive $18,124,424;

 

(b)                                  Montello will receive $22,172,500;

 

(c)                                   Larea will receive $3,302,051; and

 

(d)                                  Larea II will receive $1,651,025.

 

3.                                        GPC, Montello, Larea and Larea II will convey a 36%, 49%, 10% and 5%, respectively, member interest in Global to GP LLC in exchange for a 36%, 49%, 10% and 5%, respectively, member interest in GP LLC.  Such member interests in Global have an aggregate value equal to 2% of the equity value of MLP at the closing of the transactions contemplated by this Agreement and shall be referred to herein as the “ Global Interests .”

 

4.                                        GMG will convey all its right, title and interest in the Qualifying Income Assets to Global as a capital contribution on behalf of GPC, Montello, Larea and Larea II.

 

5.                                        GP LLC will convey the Global Interests to MLP in exchange for (a) 230,303 General Partner Units, which represents a continuation of its 2% general partner interest in MLP, and (b) the issuance of the IDRs.

 

6.                                        GPC, Montello, Larea, Larea II, Chelsea LP and Sandwich (the “ Owners ”) will convey their member interests in Global, GMG and Chelsea LLC (the “ Operating Subsidiaries ”) to MLP in exchange for (a) 742,424 Common Units representing a 6.4% limited partner interest in MLP, of which (i) GPC will receive 226,736 Common Units, (ii) Montello will receive 308,552 Common Units, (iii) Larea will receive 74,242 Common Units, (iv) Larea II will receive 37,121 Common Units, (v) Chelsea LP will receive 94,659 Common Units and (vi) Sandwich will receive 1,114 Common Units, (b) 5,642,424 Subordinated Units representing a 49.0% limited partner interest in MLP, of which (i) GPC will receive 1,723,196 Subordinated Units, (ii) Montello will receive 2,344,992 Subordinated Units, (iii) Larea will receive 564,242 Subordinated Units, (iv) Larea II will receive 282,121 Subordinated Units, (v) Chelsea LP will receive 719,409 Subordinated Units and (vi) Sandwich will receive 8,464 Subordinated Units, and (c) the assumption by MLP of the GPC Term Loan.

 

7.                                        In connection with MLP’s initial public offering (the “ Offering ”), the public, through the Underwriters, will contribute $107,800,000 in cash to MLP, less the Underwriters’ discount of $7,144,200, in exchange for 4,900,000 Common Units representing a 42.6% limited partner interest in MLP.

 

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8.                                        MLP will convey all of its member interests in the Operating Subsidiaries to OLLC as a capital contribution.

 

9.                                        MLP will (a) pay or cause to be paid approximately $4,405,8000 of offering expenses (excluding the Underwriters’ discount) in connection with the Offering of the Common Units, (b) repay approximately $51,000,000 of outstanding indebtedness under the GPC Term Loan and (c) contribute its remaining cash of approximately $45,250,000 to OLLC as a capital contribution.

 

10.                                  OLLC will convey approximately $45,250,000 to Global as a capital contribution, which will use the funds to repay approximately $45,250,000 of outstanding borrowings under the New Credit Facility.

 

11.                                  Global will convey all of its right, title and interest in the Non-Qualifying Income Assets to GMG as a capital contribution on behalf of OLLC.

 

12.                                  GMG will, pursuant to the terms of the Delaware LLC Act and the Delaware General Corporation Law (the “ Delaware GCL ”), convert to Global Montello Group Corp., a Delaware corporation (“ GMG Corp. ”).

 

13.                                  To the extent the Underwriters exercise their over-allotment option to purchase up to 735,000 Common Units (the “ Over-Allotment Option ”), MLP will use the net proceeds to redeem from the Owners a number of Common Units equal to those sold pursuant to the Over-Allotment Option.

 

14.                                  The organizational documents of the Parties will be amended and restated as necessary to reflect the applicable matters set forth above and as contained in this Agreement.

 

NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties undertake and agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                       Terms .  The following defined terms shall have the meanings given below:

 

“ Agreement ” means this Contribution, Conveyance and Assumption Agreement.

 

“ Assets ” means all right, title and interest of GMG and Global in and to the Qualifying Income Assets and the Non-Qualifying Income Assets, respectively, whether tangible or intangible, whether real, personal or mixed, whether accrued or contingent, and wherever located.

 

“ Chelsea LLC ” has the meaning as set forth in the opening paragraph of this Agreement.

 

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“ Chelsea LP ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Code ” means Internal Revenue Code of 1986, as amended.

 

“ Common Units ” has the meaning as set forth in the Partnership Agreement.

 

“ Delaware GCL ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Delaware LLC Act ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Delaware LP Act ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Effective Time ” means 12:01 a.m. Eastern Daylight Time on October 4, 2005.

 

“ Employee-Related Liabilities ” means all liabilities arising out of or related to those agreements, contracts, plans and similar arrangements listed on Schedule A to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of Global or its affiliates.

 

“ FFE Assets ” means the furniture, fixtures and other equipment set forth on Schedule B and such other furniture, fixtures and other equipment in which Global has a right, title and interest in located at 800 South Street, Waltham, Massachusetts 02454, and at such other locations where employees of any of the Partnership Entities are situated.

 

“ FFE Liabilities ” means all liabilities arising out of or related to the ownership of the FFE Assets to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of Global or its affiliates.

 

“ General Partner Units ” has the meaning as set forth in the Partnership Agreement.

 

“ Glen Hes ” means Glen Hes Corp., a Delaware corporation.

 

“ Global ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Global Interests ” has the meaning as set forth in the Recitals of this Agreement.

 

“ GMG ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ GMG Corp. ” has the meaning as set forth in the Recitals of this Agreement.

 

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“ GP LLC ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ GPC ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ GPC Term Loan ” means that Term Loan Agreement dated as of July 2, 2004 by and among GPC, as the borrower, those entities identified as guarantors and Bank of America, N.A. and the other lending institutions listed on Schedule 1 thereto and Bank of America, N.A., as agent.

 

“ IDR ” has the same meaning as “Incentive Distribution Right” as set forth in the Partnership Agreement.

 

“ Larea ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Larea II ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ MLP ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ MLP Agreement ” means the First Amended and Restated Agreement of Limited Partnership of MLP, as it may be amended, supplemented or restated from time to time.

 

“ Montello ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ New Credit Facility ” means that Credit Agreement dated as of October 4, 2005, among OLLC, Global, GMG, Glen Hes and Chelsea LLC, as borrowers, MLP and GP LLC as initial guarantors, each lender from time to time party thereto and Bank of America, N.A., as administrative agent.

 

“ Non-Qualifying Income Assets ” means those assets set forth on Schedule C and such other assets that do not generate “qualifying income” as defined in Section 7704 of the Code.

 

“ Non-Qualifying Income Liabilities ” means all liabilities arising out of or related to the ownership of the Non-Qualifying Income Assets to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of Global or its affiliates.

 

“ Offering ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Old Credit Facility ” means that Eighth Amended and Restated Revolving Credit Agreement dated as of July 1, 2003 by and among Global, GMG, Glen Hes, Chelsea LLC and Fleet National Bank and the other lending institutions listed on Schedule 1 thereto and Fleet National Bank, as agent, as amended.

 

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“ OLLC ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Operating Subsidiaries ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Over-Allotment Option ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Owners ” has the meaning as set forth in the Recitals of this Agreement.

 

“ Party ” or “ Parties ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Partnership Entities ” means GP LLC, MLP, OLLC, the Operating Subsidiaries and Glen Hes.

 

“ Qualifying Income Assets ” means those assets set forth on Schedule D and such other assets that generate “qualifying income” as defined in Section 7704 of the Code.

 

“ Qualifying Income Liabilities ” means all liabilities arising out of or related to the ownership of the Qualifying Income Assets to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of GMG or its affiliates.

 

“ Sandwich ” has the meaning as set forth in the opening paragraph of this Agreement.

 

“ Subordinated Units ” has the meaning as set forth in the Partnership Agreement.

 

“ Underwriters ” means Lehman Brothers Inc., KeyBanc Capital Markets, a Division of McDonald Investments Inc., Raymond James & Associates, Inc., RBC Capital Markets Corporation and Banc of America Securities LLC.

 

“ Working Capital Assets ” has the meaning as set forth in the Recitals of this Agreement.

 

ARTICLE II
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

 

Section 2.1                                       Distribution and Assignment of Working Capital Assets to GPC, Montello, Larea and Larea II .  The Parties hereby acknowledge the distribution and assignment by Global of the Working Capital Assets to GPC, Montello, Larea and Larea II and the receipt by GPC, Montello, Larea and Larea II of $18,124,424, $22,172,500, $3,302,051 and $1,651,025, respectively, in cash and value associated with the Working Capital Assets.

 

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Section 2.2                                       Contribution of Global Interests by GPC, Montello, Larea and Larea II to GP LLC .  GPC, Montello, Larea and Larea II hereby grant, contribute, bargain, convey, assign, transfer, set over and deliver to GP LLC, its successors and assigns, for its and their own use forever, the Global Interests in exchange for a 36%, 49%, 10% and 5%, respectively, member interest in GP LLC, and GP LLC hereby accepts the Global Interests as a contribution to the capital of GP LLC.

 

Section 2.3                                       Contribution of Qualifying Income Assets by GMG to Global .  GMG hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Global, its successors and assigns, for its and their own use forever, all of its right, title and interest in and to the Qualifying Income Assets, and Global hereby accepts such assets as a contribution to the capital of Global on behalf of GPC, Montello, Larea and Larea II.

 

TO HAVE AND TO HOLD the Qualifying Income Assets unto Global, its successors and assigns, together with all and singular the rights and appurtenances thereto in any way belonging, subject, however, to the terms and conditions stated in this Agreement, forever.

 

Section 2.4                                       Contribution of Global Interests by GP LLC to MLP .  GP LLC hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and deli