Document:

Exhibit 10.2

 

FORM OF

 

MERGER, CONTRIBUTION, CONVEYANCE AND ASSUMPTION

 

AGREEMENT

 

By and Among

 

LEHIGH GAS PARTNERS LP,

 

LEHIGH GAS GP LLC,

 

LEHIGH GAS CORPORATION,

 

LEHIGH KIMBER REALTY, LLC,

 

ENERGY REALTY OP LP,

 

EROP — OHIO HOLDINGS, LLC,

 

KWIK PIK REALTY — OHIO HOLDINGS, LLC,

 

KWIK PIK — OHIO HOLDINGS, LLC,

 

KIMBER PETROLEUM CORPORATION,

 

LEHIGH GAS WHOLESALE SERVICES, INC.,

 

LEHIGH GAS WHOLESALE LLC,

 

JOHN B. REILLY, III,

 

And

 

JOSEPH V. TOPPER, JR.

 

Dated as of                , 2012

 

 

MERGER, CONTRIBUTION, CONVEYANCE AND ASSUMPTION

 

AGREEMENT

 

This Merger, Contribution, Conveyance and Assumption Agreement, dated as of                 , 2012 (this “Agreement”), is by and among Lehigh Gas Partners LP, a Delaware limited partnership (the “Partnership”), Lehigh Gas GP LLC, a Delaware limited liability company (the “General Partner”), Lehigh Gas Corporation, a Delaware corporation (“LGC”), Lehigh Kimber Realty, LLC, a Delaware limited liability company, Energy Realty OP LP, a Delaware limited partnership, EROP — Ohio Holdings, LLC, a Delaware limited liability company, Kwik Pik Realty — Ohio Holdings, LLC, a Delaware limited liability company, Kwik Pik — Ohio Holdings, LLC, a Delaware limited liability company, Kimber Petroleum Corporation, a New Jersey corporation, Lehigh Gas Wholesale Services, Inc., a Delaware corporation (“LGW”), Lehigh Gas Wholesale LLC, a Delaware corporation (“LG LLC”), John B. Reilly, III and Joseph V. Topper, Jr.  The above named entities are sometimes referred to in this Agreement individually as a “Party” and collectively as the “Parties.”  Capitalized terms used herein shall have the meanings assigned to such terms in Article I.

 

RECITALS

 

WHEREAS, prior to the date hereof, LGC formed the General Partner and contributed $1,000 in exchange for all of the membership interest in the General Partner;

 

WHEREAS, thereafter and prior to the date hereof, the General Partner and LGC formed the Partnership pursuant to the Delaware LP Act for the purpose of engaging in any business activity that lawfully may be conducted by a limited partnership organized pursuant to the Delaware LP Act with the General Partner receiving a non-economic general partnership in the Partnership and LGC having contributed $1,000 to the Partnership in exchange for all of the limited partnership interests in the Partnership;

 

WHEREAS, thereafter and prior to the date hereof, the Partnership formed: (a) LG LLC, to which the Partnership contributed $1,000 in exchange for all of the membership interest of LG LLC, and (b) LGW, to which the Partnership contributed $1,000 in exchange for all of the outstanding common stock of LGW;

 

WHEREAS, pursuant hereto and at least one (1) day prior to the date of the Effective Time, LGO will have distributed and assigned the Former LGO Assets/Liabilities to LGO Distributee;

 

WHEREAS, pursuant hereto and immediately prior to the Effective Time:

 

1.             Topper will, in accordance with the terms and conditions of the Plan of Merger attached hereto as Exhibit A (for each Contributed Entity, such Contributed Entity’s “Merger Plan”), cause each Contributed Entity to be merged (each such merger, a “Contributed Entity Merger” and, collectively, the “Contributed Entity Mergers”) with and into one or more Partnership Merger Subsidiaries, with each Partnership Merger Subsidiary to be the surviving entity and with the separate existence of each Contributed Entity to thereupon cease, and, contemporaneously therewith, to contribute and assign its Contributed LGW Assets/Liabilities

 

 

directly to LGW in a single transfer, in exchange for which the Partnership shall issue to the member(s)/partner(s) of such Contributed Entity such number of Common Units and such number of Subordinated Units, and shall distribute to such member(s)/partner(s) of such Contributed Entity such amount of cash, all as set forth on Exhibit B attached hereto.

 

2.             Each Contributed Entity will have distributed its Spun-Off Assets to                     .

 

3.             Topper will cause LGC to contribute and assign all of the LGC MLP Assets/Liabilities directly to LG LLC in a single transfer and all of the LGC LGW Assets/Liabilities directly to LGW in a single transfer in exchange for which the Partnership shall issue to LGC such number of Common Units and such number of Subordinated Units, and shall distribute to LGC such amount of cash, all as set forth on Exhibit B attached hereto.

 

4.             Topper will cause KPC to contribute and assign all of the KPC MLP Assets/Liabilities directly to LG LLC in a single transfer and all of the KPC LGW Assets/Liabilities directly to LGW in a single transfer in exchange for which the Partnership shall issue to KPC such number of Common Units and such number of Subordinated Units, and shall distribute to KPC such amount of cash, all as set forth on Exhibit B attached hereto.

 

5.             Topper will cause KPO to contribute and assign all of the KPO MLP Assets/Liabilities directly to LG LLC in a single transfer and all of the KPO LGW Assets/Liabilities directly to LGW in a single transfer in exchange for which the Partnership shall issue to KPO such number of Common Units and such number of Subordinated Units, and shall distribute to KPO such amount of cash, all as set forth on Exhibit B attached hereto.

 

6.             LGO Distributee will contribute and assign all of the Former LGO Assets/Liabilities directly to LG LLC in a single transfer in exchange for which the Partnership shall issue to LGO Distributee such number of Common Units and such number of Subordinated Units, and shall distribute to LGO Distributee such amount of cash, all as set forth on Exhibit B attached hereto.

 

7.             Topper will contribute and assign all of the Topper MLP Assets/Liabilities directly to LG LLC in a single transfer and all of the Topper LGW Assets/Liabilities directly to LGW in a single transfer in exchange for which the Partnership shall issue to Topper such number of Common Units and such number of Subordinated Units, and shall distribute to Topper such amount of cash, all as set forth on Exhibit B attached hereto.

 

WHEREAS, pursuant hereto, each of following will occur at the Effective Time in the order set forth herein:

 

1.             In connection with the Offering, the public, through the Underwriters, will contribute to the Partnership an amount of cash agreed upon by the Underwriters, LGC and the Partnership pursuant to the Underwriting Agreement, less the Underwriters’ Spread (such amount of cash less the Underwriters’ Spread, the “Net Offering Proceeds”), in exchange for the Firm Units.

 

2.             The Partnership will pay Raymond James & Associates, Inc. a structuring fee equal to     % of the gross proceeds of the Offering (the “Structuring Fee”).  The Parties

 

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receiving cash distributions in connection with the exercise of the Over-Allotment Option will pay to Raymond James & Associates, Inc. their pro rata share of the Structuring Fee associated with any exercise of the Over-Allotment Option (the “Option Structuring Fee”).

 

3.             The Partnership will pay all transaction expenses incurred in connection with the transactions contemplated hereby and by the Registration Statement.

 

4.             The Partnership will enter into the Credit Agreement providing the Partnership with up to a $                 million credit facility (the “New Credit Facility”).

 

5.             In accordance with, and as contemplated by, this Agreement, the Partnership will use proceeds drawn under the New Credit Facility and/or Net Offering Proceeds (or some combination thereof) to (i) re-finance, and pay off, all amounts outstanding under the Existing Credit Agreement; (ii) pay all transaction expenses, and (iii) fund the distributions to member(s)/partner(s) of one or more of the Contributed Entities, LGC, KPC, KPO, LGO Distributee, as applicable.

 

6              The Partnership will issue to the General Partner                Incentive Distribution Rights.

 

WHEREAS, the shareholders, members or partners of the Parties have taken all corporate, limited liability company and partnership action, respectively, as the case may be, required to approve the transactions contemplated by this Agreement; and

 

WHEREAS, LGC and the Partnership may adjust upward or downward the number of Firm Units to be offered to the public through the Underwriters.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements herein contained, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

The terms set forth below in this Article I shall have the meanings ascribed to them below or in the part of this Agreement referred to below:

 

“Agreement” is defined in the Preamble.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Unit” means a common unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

 

“Contributed Entity” means each of Energy Realty OP LP, a Delaware limited partnership, Lehigh Kimber Realty, LLC, a Delaware limited liability company, EROP — Ohio Holdings, LLC, a Delaware limited liability company, and Kwik Pik Realty — Ohio Holdings, LLC, a

 

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Delaware limited liability company.  “Contributed Entities” means, collectively, each Contributed Entity.

 

“Contributed Entity Merger” and “Contributed Entity Mergers” are defined in paragraph 1 of the fifth “Whereas” clause hereof.

 

“Contributed LGW Assets/Liabilities” means, with respect to any Contributed Entity, such Contributed Entity’s underground storage tank(s) and such of the Contributed Entity’s personal property and contractual rights (including, without limitation, under any lease, sub-lease or supply agreement to which such Contributed Entity is a party), together with those of such Contributed Entity’s liabilities and obligations related thereto, associated therewith and/or secured thereby, that are expressly identified and set forth on Exhibit C attached hereto.

 

“Credit Agreement” means the Credit Agreement, dated as of                  , 2012, by and among               .

 

“Credit Facility Proceeds” means amounts drawn by the Partnership under the New Credit Facility.

 

“Delaware LP Act” means the Delaware Revised Uniform Limited Partnership Act, as same may be amended from time to time.

 

“Effective Time” means            prevailing Eastern Time on the date of the closing of the Offering.

 

“Existing Credit Agreement” means the Amended and Restated Credit Agreement, dated as of December 30, 2010, by and among LGC, Energy Realty OP LP, Lehigh Kimber Petroleum Corporation, Lehigh Kimber Realty, LLC, EROP — Ohio, LLC, LGO, each of the lenders from time to time party thereto and KeyBank National Association, as has been amended from time to time.

 

“Firm Units” means the Common Units to be sold to the Underwriters pursuant to the terms of the Underwriting Agreement, but does not include any Option Units.

 

“Former LGO Assets/Liabilities” means such of LGO’s contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which LGO is a party) and other assets and property related to, and/or employed by LGO in, LGO’s wholesale motor fuel distribution and supply business, operations and/or activities (including, without limitation, dealer deposits, collateral and intangible assets), together with those of LGO’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that are expressly identified and set forth on Exhibit D attached hereto.

 

“GAAP” means generally accepted accounting principles in the United States, consistently applied.

 

“General Partner” is defined in the Preamble.

 

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“Governmental Authority” means the United States, any foreign county, state, county, city or other incorporated or unincorporated political subdivision, agency or instrumentality thereof.

 

“Incentive Distribution Right” means a non-voting limited partner partnership interest that confers upon its holder only the rights and obligations specifically provided in the Partnership Agreement for Incentive Distribution Rights.

 

“KPC” means Kimber Petroleum Corporation, a New Jersey corporation.

 

“KPC LGW Assets/Liabilities” means KPC’s underground storage tanks and such of KPC’s personal property and contractual rights (including, without limitation, under any lease, sub-lease or supply agreement to which KPC is a party), together with those of KPC’s liabilities and obligations related thereto, associated therewith and/or secured thereby, that are expressly identified and set forth on Exhibit E-1 attached hereto.

 

“KPC MLP Assets/Liabilities” means such of KPC’s real property and personal property, together with the contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which KPC is a party) and other assets and property related to, and/or employed by KPC in, KPC’s wholesale motor fuel distribution and supply business, operations and/or activities (including, without limitation, dealer deposits, collateral and intangible assets), together with those of KPC’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that are expressly identified and set forth on Exhibit E-2 attached hereto.

 

“KPO” means Kwik Pik — Ohio Holdings, LLC, a Delaware limited liability company.

 

“KPO LGW Assets/Liabilities” means KPO’s underground storage tanks and such of KPO’s personal property and contractual rights (including, without limitation, under any lease, sub-lease or supply agreement to which KPO is a party), together with those of KPO’s liabilities and obligations related thereto, associated therewith and/or secured thereby, that are expressly identified and set forth on Exhibit F-1 attached hereto.

 

“KPO MLP Assets/Liabilities” means such of KPO’s real property and personal property, together with the contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which KPO is a party) and other assets and property related to, and/or employed by KPO in, KPO’s wholesale motor fuel distribution and supply business, operations and/or activities (including, without limitation, dealer deposits, collateral and intangible assets), together with those of KPO’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that are expressly identified and set forth on Exhibit F-2 attached hereto.

 

“LGC” is defined in the Preamble.

 

“LG LLC” is defined in the Preamble.

 

“LGC LGW Assets/Liabilities” means LGC’s underground storage tanks and such of LGC’s personal property and contractual rights (including, without limitation, under any lease, sub-lease or supply agreement to which LGC is a party), together with those of LGC’s liabilities and

 

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obligations related thereto, associated therewith and/or secured thereby, that are expressly identified and set forth on Exhibit G-1 attached hereto.

 

“LGC MLP Assets/Liabilities” means such of LGC’s real property and personal property, together with the contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which LGC is a party) and other assets and property related to, and/or employed by LGC in, LGC’s wholesale motor fuel distribution and supply business, operations and/or activities (including, without limitation, dealer deposits, collateral and intangible assets), together with those of LGC’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that are expressly identified and set forth on Exhibit G-2 attached hereto.

 

“LGO” means Lehigh Gas-Ohio, LLC a Delaware limited liability company.

 

“LGO Distributee” means, collectively, Topper and Reilly.

 

“LGW” is defined in the Preamble.

 

“Merger Plan” is defined in the first paragraph of the fifth “Whereas” clause hereof.

 

“Net Offering Proceeds” is defined in the first paragraph of the sixth “Whereas” clause thereof.

 

“New Credit Facility” is defined in the fourth paragraph of the sixth “Whereas” clause hereof.

 

“Offering” means the Partnership’s initial public offering of Common Units contemplated herein.

 

“Omnibus Agreement” means the Omnibus Agreement , dated as of                 , 2012, by and among the Partnership, the General Partner, LGC, LGO and Topper.

 

“Option Closing Date” has the meaning assigned to it in the Partnership Agreement.

 

“Option Structuring Fee” is defined in the Recitals.

 

“Option Units” means the Common Units that the Partnership will agree to issue upon an exercise of the Over-Allotment Option.

 

“Original Partnership Agreement” means that certain Agreement of Limited Partnership of the Partnership, dated as of December 2, 2011.

 

“Over-Allotment Option” has the meaning set forth in the Partnership Agreement.

 

“Partnership” is defined in the Preamble.

 

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, substantially in the form attached as Appendix A to the Registration Statement.

 

“Partnership Merger Subsidiary” means any direct or indirect wholly-owned limited liability company, limited partnership or other entity of the Partnership that is a “disregarded entity” for

 

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United States federal income tax purposes and which the Partnership or the General Partner causes to be formed and to be the surviving entity in one or more of the Contributed Entity Mergers. “Partnership Merger Subsidiaries” means, collectively, each and all Partnership Merger Subsidiaries.

 

“Party” and “Parties” are defined in the Preamble.

 

“Registration Statement” means the Registration Statement on Form S-1 filed with the Commission (Registration No. 333-181370), as amended.

 

“Reilly” means John B. Reilly, III.

 

“Spun-Off Assets” means, with respect to any Contributed Entity, those real and personal properties (including underground storage tanks) and contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which such Contributed Entity is a party), together with those of such Contributed Entity’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that shall not be contributed and/or assigned to, or assumed by, the Partnership, all as are expressly identified and set forth on Exhibit H attached hereto.

 

“Structuring Fee” is defined in the Recitals.

 

“Subordinated Unit” means a subordinated unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

 

“Topper” means Joseph V. Topper, Jr.

 

“Topper LGW Assets/Liabilities” means Topper’s underground storage tanks and such of Topper’s personal property and contractual rights (including, without limitation, under any lease, sub-lease or supply agreement to which Topper is a party), together with those of Topper’s liabilities and obligations related thereto, associated therewith and/or secured thereby, that are expressly identified and set forth on Exhibit I-1 attached hereto.

 

“Topper MLP Assets/Liabilities” means such of Topper’s real property and personal property, together with the contractual rights (including, without limitation, under any lease, sub-lease, supply, distribution or other agreement to which Topper is a party) and other assets and property related to, and/or employed by Topper in, Topper’s wholesale motor fuel distribution and supply business, operations and/or activities (including, without limitation, dealer deposits, collateral and intangible assets), together with those of Topper’s liabilities and obligations related thereto, associated therewith and/or secured thereby (including, without limitation, for motor fuel taxes), that are expressly identified and set forth on Exhibit I-2 attached hereto.

 

“Underwriters” means the underwriters listed in the Underwriting Agreement.

 

“Underwriters’ Spread” means the total amount of the Underwriters’ discount.

 

“Underwriting Agreement” means a firm commitment underwriting agreement to be entered into by and among LGC, the Partnership, the General Partner and the Underwriters.

 

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ARTICLE II

 

MERGERS, CONTRIBUTIONS, ACKNOWLEDGEMENTS AND DISTRIBUTIONS

 

The transactions contemplated by Section 2.1 through Section 2.3 shall occur immediately prior to the Effective Time in the order set forth herein.

 

Section 2.1            Contributed Entity Mergers (and Agreed Tax Treatment and Reporting Thereof).

 

(A)          Each Contributed Entity Merger shall be consummated and, contemporaneously therewith, the Partnership shall issue to the member(s)/partner(s) of each Contributed Entity such number of Common Units and such number of Subordinated Units, and the Partnership shall distribute to such member(s)/partner(s) such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall distribute in connection with any Contributed Entity Merger shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties hereto hereby agree to treat and report the Contributed Entity Mergers for all United States federal, state, local and, as applicable, foreign income tax purposes as direct mergers of the Contributed Entity with and into the Partnership and, further, as an “assets over” form of merger under Treasury Regulations Section 1.708-1(c) with the Contributed Entities being the terminated partnerships in such Contributed Entity Mergers and the Partnership being the “resulting partnership” under such Treasury Regulations.  The Parties further agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed in connection with each Contributed Entity Merger (if any) as a reimbursement to such Contributed Entity of capital expenditures incurred by it with respect to property that the Contributed Entity is so deemed to contribute to the Partnership in the Contributed Entity Merger under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is eligible for such treatment. For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis.

 

(B)          Contemporaneously with the Contributed Entity Mergers, each Contributed Entity shall contribute and assign its Contributed LGW Assets/Liabilities directly to LGW in a single transfer and transaction, with each of the Parties hereto agreeing to treat and report such contribution and assignment: (1) for United States federal, state and local income tax purposes, as the contribution and assignment by the Contributed Entity of the Contributed LGW Assets/Liabilities to the Partnership, consistent with the treatment of the corresponding Contributed Entity Mergers as “assets over” forms of merger under Treasury Regulations Section 1.708 -1(c) with the Contributed Entities being the terminated partnerships and the Partnership being the “resulting partnership” under said Treasury Regulations; and (2) for all other taxes (including, without limitation, state and local sales, use, personal property, real property transfer, real estate transfer, documentary stamp, recording, realty transfer, controlling interest and other

 

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transfer tax), as a single transfer and assignment of the Contributed LGW Assets/Liabilities by the Contributed Entity to LGW. LGW hereby accepts and assumes the Contributed LGW Assets/Liabilities.

 

Section 2.2            LGC Contributions, KPC Contributions, KPO Contributions and LGO Distributee Contributions (and Agreed Tax Treatment and Reporting thereof).

 

(A)          LGC shall grant, contribute, bargain, convey, assign, transfer, set over and deliver directly and in a single transfer to: (1) LG LLC (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the LGC MLP Assets/Liabilities, and (2) LGW (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the LGC LGW Assets/Liabilities, in exchange for which the Partnership shall issue to LGC such number of Common Units and such number of Subordinated Units, and shall distribute to LGC such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall so distribute to LGC shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed to LGC as a reimbursement to LGC of capital expenditures incurred by it with respect to property that it contributes and assigns to LG LLC and LGW under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment. For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis).LG LLC hereby accepts and assumes the LGC MLP Assets/Liabilities and LGW hereby accepts and assumes the LGC LGW Assets/Liabilities.

 

(B)          KPC shall grant, contribute, bargain, convey, assign, transfer, set over and deliver directly and in a single transfer to: (1) LG LLC (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the KPC MLP Assets/Liabilities, and (2) LGW (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the KPC LGW Assets/Liabilities, in exchange for which the Partnership shall issue to KPC such number of Common Units and such number of Subordinated Units, and shall distribute to KPC such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall so distribute to KPC shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed to KPC as a reimbursement to KPC of capital expenditures incurred by it with respect to property that it contributes and assigns to the LG LLC and LGW under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment. For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-

 

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fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis).  LG LLC hereby accepts and assumes the KPC MLP Assets/Liabilities and LGW hereby accepts and assumes the KPC LGW Assets/Liabilities.

 

(C)          KPO shall grant, contribute, bargain, convey, assign, transfer, set over and deliver directly and in a single transfer to: (1) LG LLC (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the KPO MLP Assets/Liabilities, and (2) LGW (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the KPO LGW Assets/Liabilities, in exchange for which the Partnership shall issue to KPO such number of Common Units and such number of Subordinated Units, and shall distribute to KPO such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall so distribute to KPO shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed to KPO as a reimbursement to KPO of capital expenditures incurred by it with respect to property that it contributes and assigns to the LG LLC and LGW under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment. For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis). LG LLC hereby accepts and assumes the KPO MLP Assets/Liabilities and LGW hereby accepts and assumes the KPO LGW Assets/Liabilities.

 

(D)          LGO Distributee shall grant, contribute, bargain, convey, assign, transfer, set over and deliver directly and in a single transfer to LG LLC (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the Former LGO Assets/Liabilities in exchange for which the Partnership shall issue to LGO Distributee such number of Common Units and such number of Subordinated Units, and shall distribute to LGO Distributee such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall so distribute to LGO Distributee shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed to LGO Distributee as a reimbursement to LGO Distributee of capital expenditures incurred by it with respect to property that it contributes and assigns to the LG LLC under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment.  For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis). LG LLC hereby accepts and assumes the Former LGO Assets/Liabilities.

 

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Section 2.3            Topper Contributions. Topper shall grant, contribute, bargain, convey, assign, transfer, set over and deliver directly and in a single transfer to: (1) LG LLC (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the Topper MLP Assets/Liabilities, and (2) LGW (and its successors and assigns, for its and their own use forever), all right, title and interest in and to the Topper LGW Assets/Liabilities, in exchange for which the Partnership shall issue to Topper such number of Common Units and such number of Subordinated Units, and shall distribute to Topper such amount of cash, all as set forth on Exhibit B attached hereto.  Any such cash that the Partnership shall so distribute to Topper shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth on Exhibit B attached hereto.  The Parties agree to treat and report for all United States federal, state and local and, as applicable, foreign income tax purposes the amount of the cash to be distributed to Topper as a reimbursement to Topper of capital expenditures incurred by it with respect to property that it contributes and assigns to the LG LLC and LGW under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment. For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis). LG LLC hereby accepts and assumes the Topper MLP Assets/Liabilities and LGW hereby accepts and assumes the Topper LGW Assets/Liabilities.

 

The transactions contemplated by Section 2.4 through Section 2.8 shall be completed at the Effective Time in the order set forth herein.

 

Section 2.4            Execution of the Partnership Agreement.  The General Partner, LGC and the other limited partners of the Partnership shall amend and restate the Original Partnership Agreement by executing the Partnership Agreement in substantially the form included in Appendix A to the Registration Statement, with such changes as are necessary to reflect any adjustment to the number of Firm Units and Option Units as the Partnership and LGC may agree with the Underwriters and such other changes as the Partnership, the General Partner and LGC may agree.

 

Section 2.5            Contribution of Cash by the Public Through the Underwriters.  The Parties acknowledge that the Partnership is undertaking the Offering and the public, through the Underwriters will, pursuant to the Underwriting Agreement, agree to make a capital contribution to the Partnership of an amount determined pursuant to the Underwriting Agreement in exchange for the issuance and sale of the Firm Units.

 

Section 2.6            Payment of Structuring Fee.  The Partnership agrees to pay Raymond James & Associates, Inc. the Structuring Fee.

 

Section 2.7            Payment of Transaction Expenses.  The Parties acknowledge the payment by the Partnership of the transaction expenses incurred in connection with the transactions contemplated hereby and by the Registration Statement.

 

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Section 2.8            Issuance of Incentive Distribution Rights.  The Partnership shall issue to the General Partner                Incentive Distribution Rights.

 

ARTICLE III

 

DEFERRED ISSUANCE AND DISTRIBUTION

 

Section 3.1            Deferred Issuance and Distribution; Payment of the Option Structuring Fee.  If the Over-Allotment Option is exercised in whole or in part, the public, through the Underwriters, shall make an additional capital contribution to the Partnership in cash in an amount determined pursuant to the Underwriting Agreement in exchange for the sale of the Option Units.  Upon the earlier to occur of the expiration of the Over-Allotment Option period or the exercise in full of the Over-Allotment Option, the Partnership will issue to one or more of LGC, KPC, KPO, the LGO Distributee, and/or one or more of the members or partners of one or more of the Contributed Entities a number of additional Common Units that is equal to the excess, if any, of (x) the maximum number of Option Units issuable pursuant to the Over-Allotment Option over (y) the aggregate number of Option Units, if any, actually purchased by and issued to the Underwriters pursuant to any exercise(s) of the Over-Allotment Option.  The Parties hereto hereby agree to treat and report for United States federal, state, local and, as applicable, foreign income tax purposes any and all such Common Units that may be so issued to LGC, KPC, KPO, the LGO Distributee, and/or one or more of the members or partners of one or more of the Contributed Entities as a non-taxable exchange by such entity or person of property solely for an interest in the Partnership under Section 721(a) of the Code and the Treasury Regulations thereunder.  Upon each Option Closing Date, the Partnership shall make a distribution in cash in an aggregate amount equal to the total amount of proceeds received by the Partnership from such exercise of the Over-Allotment Option, net of the Underwriters’ Spread, and which cash the Partnership shall distribute to one or more of LGC, KPC, KPO, the LGO Distributee, and/or one or more of the members or partners of one or more of the Contributed Entities and in such amount(s), all as shall be set forth in a writing submitted by Topper (in his capacity as general partner, managing member, officer and/or other fiduciary thereof) to the Partnership.  Any such cash that the Partnership shall so distribute shall be funded with the Net Offering Proceeds, Credit Facility Proceeds or some combination thereof, as shall be set forth in such writing.  Further, the Parties hereto hereby agree to treat and report for United States federal, state, local and, as applicable, foreign income tax purposes such cash distributions as a reimbursement with respect to property that it (or, as applicable, a Contributed Entity) contributed and assigned to LGW or LG LLC, as applicable, under Treasury Regulations Section 1.707-4(d) or, otherwise, so much of such cash that the Topper tax return preparer is reasonably able to establish is so eligible for such treatment.  For these purposes, the Parties hereto hereby expressly agree that the Topper tax return preparer may (among other ways) reasonably establish such eligibility by assuming that reimbursements of capital expenditures that were funded with the proceeds of third party debt would be so eligible for such treatment and/or that the “20%-of-fair market value” limitation of Treasury Regulations Section 1.707-4(d) (2)(ii) can apply either on an aggregate or property-by-property basis). The Parties receiving cash distributions hereby agree to pay to Raymond James & Associates, Inc. their pro rata share of the applicable Option Structuring Fee associated with any exercise of the Over-Allotment Option.

 

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ARTICLE IV

 

OTHER ASSURANCES

 

Section 4.1            Further Assurances.  From time to time after the Effective Time, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and to do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (b) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended to be so and (c) more fully and effectively to carry out the purposes and intent of this Agreement.

 

ARTICLE V

 

EFFECTIVE TIME

 

Notwithstanding anything contained in this Agreement to the contrary, none of the provisions of Article II, Article III or Article IV shall be operative or have any effect until the Underwriting Agreement has been executed by each of the parties thereto, at which time all such provisions shall be effective and operative in accordance this Agreement without further action by any Party.

 

ARTICLE VI

 

TITLE MATTERS

 

Section 6.1            Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.

 

(A)          EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING THE PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE ASSETS, INCLUDING THE ENVIRONMENTAL CONDITION OF THE ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE ASSETS, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE SUITABILITY OF THE ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS OR THEIR OPERATION WITH ANY LAWS (INCLUDING ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE

 

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HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS.  EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH HAS HAD THE OPPORTUNITY TO INSPECT THE ASSETS, AND EACH IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE ASSETS AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ANY OF THE PARTIES. NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EACH OF THE PARTIES ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS”, “WHERE IS” CONDITION WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE.

 

(B)          Each of the Parties agrees that the disclaimers contained in this Section 6.1 are “conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words “contribute,” “distribute,” “assign,” “transfer,” “deliver” or “set over” or any of them or any other words used in this Agreement are hereby expressly disclaimed, waived or negated.

 

(C)          Each of the Parties hereby waives compliance with any applicable bulk sales law or any similar law in any applicable jurisdiction in respect of the transactions contemplated by this Agreement.

 

(D)          The General Partner and the Partnership hereby acknowledge and agree that the express provisions of this Agreement and the Omnibus Agreement contain the sole and exclusive remedies available to them with respect to the transactions contemplated hereunder.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

Section 7.1            Representations and Warranties of All Parties.  Each of the Parties to this Agreement hereby represents and warrants severally as to itself as follows:

 

(A)          Formation and Good Standing.  Such Party is a corporation, limited partnership or limited liability company, legally formed, validly existing and in good standing under the laws of the state of its formation.  Such Party is duly qualified to do business and is in good standing as a foreign corporation, limited partnership or limited liability company, as applicable, in each

 

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jurisdiction where the character of the properties owned or leased by it or the nature of the businesses transacted by it requires it to be so qualified.

 

(B)          Authority, Execution and Enforceability.  Such Party has full corporate, limited partnership or limited liability company, as applicable, power and authority to enter into this Agreement and the documents to be delivered by such Party hereunder and to perform its obligations hereunder and thereunder.  The execution, delivery and performance of this Agreement and the documents to be delivered by such Party hereunder and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by such Party.  Such Party has duly executed and delivered this Agreement and the documents to be delivered by such Party hereunder, and this Agreement and the documents to be delivered by such Party hereunder constitute such Party’s legal, valid and binding obligation, enforceable against it in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable remedies).

 

(C)          No Conflicts.  Neither the execution, delivery nor performance of this Agreement nor the documents to be delivered by such Party hereunder by such Party will:

 

(i)            require the approval or consent of any Governmental Authority;

 

(ii)           conflict with or result in the breach or violation of any term or provision of, or will constitute a default under, or will otherwise impair the good standing, validity or effectiveness of, any provision of its charter, bylaws, certificate of limited partnership, certificate of formation, agreement of limited partnership, limited liability company agreement or other formation and governing documents;

 

(iii)          result in the material breach or violation by it of any material term or provision of, or constitute a default or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any material agreement to which it is bound or by which its property or business is affected, except for such defaults (or rights of termination, cancellation or acceleration) as to which waivers or consents have been obtained; or

 

(iv)          violate in any material respect any federal, state, local or other governmental law ordinance, or any order, writ, injunction, decree, rule or regulation of any Governmental Authority applicable to such Party.

 

Section 7.2            Investment Representations and Warranties.

 

(A)          Each Party that receives Common Units and Subordinated Units hereunder hereby represents and warrants that the following statements are true and correct as of the date hereof:  (i) it is an “accredited investor” within the meaning of the federal securities laws; (ii) it is accepting the Common Units and Subordinated Units for its own account and not for the account or benefit of any other person or entity and not with a view to, or for offer or sale in connection with, any distribution thereof; and (iii) it understands that any Common Units and Subordinated Units delivered to it hereunder shall be “restricted securities” within the meaning of federal and state securities laws and that if in the future it decides to sell or otherwise transfer or dispose of

 

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any of the Common Units and Subordinated Units, it understands and agrees that it may do so only in compliance with applicable federal or state securities laws.

 

(B)          The Partnership hereby represents and warrants that the following statements are true and correct as of the date hereof: (i) the Partnership and, to its knowledge, any person acting on its behalf has complied and will comply with the limitations on manner of offering and sale set forth in the federal securities laws with respect to all offers and sales of the Common Units and the Subordinated Units; and (ii) the Partnership has not made any other offers, issuances, sales or deliveries of any securities of the Partnership to any persons within the six month period prior to the date hereof other than any offers, issuances, sales or deliveries of any securities of the Partnership made pursuant either to an effective registration statement or pursuant to an exemption from registration under federal securities laws.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1            Order of Completion of Transactions.  The transactions contemplated by Section 2.1 through Section 2.3 shall occur immediately prior to the Effective Time in the order set forth herein.  The transactions contemplated by Section 2.4 through Section 2.8 shall be completed at the Effective Time in the order set forth herein. Following the completion of the transactions provided for in Article II, the transactions provided for in Article III, if they occur, shall be completed.

 

Section 8.2            Headings; References; Interpretation.  All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof.  The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Agreement.  All references herein to Articles, Sections, Schedules and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Schedules and Exhibits attached hereto, and all such Schedules and Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes.  All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa.  The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

 

Section 8.3            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

 

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Section 8.4            No Third Party Rights.  The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

 

Section 8.5            Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all Parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

 

Section 8.6            Applicable Law; Forum, Venue and Jurisdiction.  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.  Each of the Parties (i) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to this Agreement shall be exclusively brought in the Court of Chancery of the State of Delaware, in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims; (ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware in connection with any such claim, suit, action or proceeding; (iii) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper; (iv) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and (v) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof; provided, nothing in clause (v) hereof shall affect or limit any right to serve process in any other manner permitted by law.

 

Section 8.7            Severability.  If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement.  Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

 

Section 8.8            Amendment or Modification.  This Agreement may be amended or modified from time to time only by the written agreement of all the Parties.  Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement.

 

Section 8.9            Integration.  Other than the Omnibus Agreement, this Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior contracts or agreements among the Parties with respect to the subject matter hereof and the matters addressed or governed hereby, whether oral or written.

 

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Section 8.10         Deed; Bill of Sale; Assignment.  To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.

 

Section 8.11         Costs.  Each transferee/assignee hereunder shall pay all sales, use and similar taxes arising out of the contributions, conveyances and deliveries to be made hereunder, and shall pay all documentary, filing, recording, transfer, deed and conveyance taxes and any fees required in connection therewith.

 

[Signature Pages Follow]

 

18

 

IN WITNESS WHEREOF, the parties to this Agreement have caused it to be duly executed as of the date first above written.

 

	
 
    	
LEHIGH GAS PARTNERS LP, a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By:  Lehigh   Gas GP LLC, its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH GAS GP LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH GAS CORPORATION, a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH KIMBER REALTY, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY REALTY OP LP, a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EROP — OHIO HOLDINGS, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

19

 

	
 
    	
KWIK PIK REALTY — OHIO   HOLDINGS, LLC, a Delaware   limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
KWIK PIK — OHIO HOLDINGS,   LLC, a Delaware limited liability   company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
KIMBER PETROLEUM   CORPORATION, a New Jersey   corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH GAS WHOLESALE   SERVICES, INC., a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH GAS WHOLESALE, LLC, a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
John B. Reilly, III
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Joseph V. Topper, Jr.
    

 

20Exhibit 10.3

 

FORM OF

 

OMNIBUS AGREEMENT

 

BY AND AMONG

 

LEHIGH GAS PARTNERS LP,
 LEHIGH GAS GP LLC,
 LEHIGH GAS CORPORATION,
 LEHIGH GAS-OHIO, LLC

 

AND

 

JOSEPH V. TOPPER, JR.

 

 

OMNIBUS AGREEMENT

 

This Omnibus Agreement is entered into on, and effective as of,                 , 2012 (the “Closing Date”), and is by and among Lehigh Gas Partners LP, a Delaware limited partnership (the “MLP” or the “Partnership”), Lehigh Gas GP LLC, a Delaware limited liability company and the general partner of the MLP (the “General Partner”), Lehigh Gas Corporation, a Delaware corporation (“LGC”), and, for purposes of Article X only, Lehigh Gas-Ohio, LLC, a Delaware limited liability company (“LGO”), and, for purposes of Section 2.5 and Article X only, Joseph V. Topper, Jr. (“Topper”).  The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

 

RECITALS:

 

WHEREAS, on the Closing Date, LGC and certain of its Affiliates will contribute and/or sell certain assets and interests to the MLP (the “Contribution”) in exchange for limited partnership interests in the MLP, cash and other consideration agreed to by the Parties; and

 

WHEREAS, in connection with the Contribution, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in this Agreement, with respect to (1) specified indemnification obligations of LGC, (2) Services to be provided by LGC hereunder and (3) certain payment, reimbursement, and other obligations of the Parties.

 

NOW, THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

1.1          Definitions.

 

“Affiliate” is defined in the MLP Agreement.

 

“Agreement” means this Omnibus Agreement, as it may be amended, modified or supplemented from time to time in accordance with the terms hereof.

 

“Audit Right” is defined in Article IX.

 

“Base Management Fee” is defined in Section 5.1(a).

 

“Board” means the Board of Directors of the General Partner.

 

“Business Day” means any day that is not a Saturday, Sunday or day on which banks are authorized by law to close in the State of New York.

 

“Closing Date” is defined in the Preamble.

 

“Common Unit” is defined in the MLP Agreement.

 

 

“Confidential Information” means all information, including information relating to the MLP Group, (i) furnished to LGC or its representatives by or on behalf of the General Partner or (ii) prepared by or at the direction of the General Partner (in each case irrespective of the form of communication and whether such information is furnished before, on or after the date hereof), and all analyses, compilations, data, studies, notes, interpretations, memoranda or other documents prepared by LGC or its representatives containing or based in whole or in part on any such furnished information.

 

“Conflicts Committee” is defined in the MLP Agreement.

 

“Contribution” is defined in the Recitals.

 

“Contribution Agreement” means the Merger, Contribution, Conveyance and Assumption Agreement dated as of the Closing Date by and among the MLP, the General Partner, LGC, Lehigh Kimber Realty, LLC, Energy Realty OP LP, EROP — Ohio Holdings, LLC, Kwik Pik Realty — Ohio Holdings, LLC, Kwik Pik, - Ohio Holdings, LLC, Kimber Petroleum Corporation, Lehigh Gas Wholesale Services, Inc., Lehigh Gas Wholesale LLC, John B. Reilly, III and Topper.

 

“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.

 

“Environmental Activity” shall mean any investigation, study, assessment, evaluation, sampling, testing, monitoring, containment, removal, disposal, closure, corrective action, remediation (regardless of whether active or passive), natural attenuation, restoration, bioremediation, response, repair, corrective measure, cleanup or abatement that is required or necessary under any applicable Environmental Law, including institutional or engineering controls or participation in a governmental voluntary cleanup program to conduct voluntary investigatory and remedial actions for the clean-up, removal or remediation of Hazardous Substances that exceed actionable levels established pursuant to Environmental Laws, or participation in a supplemental environmental project in partial or whole mitigation of a fine or penalty.

 

“Environmental Closure” means completion of Environmental Activities in accordance with applicable Environmental Laws such that a release, covenant not to sue, no further action letter, or other written approval by a Governmental Authority with jurisdiction over the remediation process is issued by such Governmental Authority or is established by operation of law.

 

“Environmental Laws” means all federal, regional, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law relating to (i) pollution or protection of human health or the environment or natural resources, (ii) any Release or threatened Release of, or any exposure of any Person or property to, any Hazardous Substances or (iii) the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport, arrangement for disposal or transport, or handling of any Hazardous Substances.

 

2

 

Without limiting the foregoing, Environmental Laws include the federal Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Oil Pollution Act of 1990, the Federal Hazardous Materials Transportation Law, the Occupational Safety and Health Act, the Marine Mammal Protection Act, the Endangered Species Act, the National Environmental Policy Act and other environmental conservation and protection laws, each as amended through the Closing Date.

 

“Environmental Permit” means any permit, approval, identification number, license, registration, certification, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

 

“General Partner” is defined in the Preamble.

 

“Governmental Authority” means the United States, any foreign country, state, county, city or other incorporated or unincorporated political subdivision, agency or instrumentality thereof.

 

“Hazardous Substance” means (i) any substance that is designated, defined, listed, regulated or classified under any Environmental Law as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law, including any hazardous substance as defined under the Comprehensive Environmental Response, Compensation and Liability Act, as amended, or the Release of which may give rise to Liability under any Environmental Law, (ii) oil as defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons and petroleum products and fractions or by-products thereof, in each case whether in their virgin, used or waste state, and (iii) radioactive materials, asbestos containing materials or polychlorinated biphenyls.

 

“Indemnified Party” is defined in Section 6.2.

 

“Indemnifying Party” is defined in Section 2.3(a).

 

“Initial Term” means the period from the Closing Date until 12:01 a.m. on the forty-second month anniversary of the Closing Date (or the next Business Day thereafter).

 

“LGC” is defined in the Preamble.

 

“LGC Covered Environmental Losses” means Losses by reason of or arising out of:

 

(i)            with respect to assets of the Partnership or its subsidiaries, any violation or correction of violation of Environmental Law, including the performance of any Environmental Activity; or

 

(ii)           any event, omission, or condition associated with the assets of the Partnership or its subsidiaries (including the exposure to or presence of Hazardous Substances on, under, about

 

3

 

or Releasing to or from the assets of the Partnership or its subsidiaries or the exposure to or Release of Hazardous Substances arising out of operation of the assets of the Partnership or its subsidiaries at locations not owned by the Partnership or its subsidiaries) including (a) the cost and expense of any Environmental Activities and (b) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal or litigation support work;

 

but only to the extent that such violation described in clause (i), or such events, omissions or conditions described in clause (ii), first occurred on or after the Closing Date.

 

“LGC Indemnified Party” is defined in Section 6.2.

 

“LGO” is defined in the Preamble.

 

“Losses” means any and all losses, damages, obligations, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including court costs and reasonable attorneys’ and experts’ fees) of any and every kind or character.

 

“Management Fee” is defined in Section 5.1(a).

 

“MLP” is defined in the Preamble.

 

“MLP Agreement” means the First Amended and Restated Agreement of Limited Partnership of the MLP, dated as of the Closing Date, as it may be amended, modified or supplemented from time to time; provided, however, that if any such amendment, modification or supplement in the reasonable discretion of the General Partner (i) would have a material adverse effect on the holders of Common Units, or (ii) materially limit or impair the rights of the MLP or reduce the obligations of LGC, LGO or Topper under this Agreement, then such amendment, modification or supplement shall not be given effect for purposes of this Agreement unless it has been approved by the Conflicts Committee.

 

“MLP Assets” means the assets contributed to the Partnership pursuant to the Contribution Agreement.

 

“MLP Change of Control” means LGC and Topper cease to Control the General Partner or the General Partner is removed as general partner of the MLP.

 

“MLP Covered Environmental Losses” means Losses by reason of or arising out of:

 

(i)            with respect to the MLP Assets, any violation or correction of violation of Environmental Law, including the performance of any Environmental Activity; or

 

(ii)           any event, omission, or condition associated with the MLP Assets (including the exposure to or presence of Hazardous Substances on, under, about or Releasing to or from the MLP Assets or the exposure to or Release of Hazardous Substances arising out of operation of the MLP Assets at non-MLP Asset locations) including (a) the cost and expense of any Environmental Activities and (b) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal or litigation support work;

 

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but only to the extent that such violation described in clause (i), or such events, omissions or conditions described in clause (ii), first occurred before the Closing Date.

 

“MLP Group” means the MLP, the General Partner and the subsidiaries of the MLP.

 

“MLP Indemnified Party” is defined in Section 2.3.

 

“MLP Services Indemnified Party” is defined in Section 6.1.

 

“Offering” means the initial public offering of Common Units as contemplated in the Registration Statement.

 

“Partnership” is defined in the Preamble.

 

“Party” and “Parties” are defined in the Preamble.

 

“Person” means an individual or entity (including a corporation, partnership, joint venture, trust, limited liability company, unincorporated organization or any other entity or governmental agency or authority).

 

“Properties” means the properties now owned or hereafter acquired by the MLP Group, including the MLP Assets.

 

“Registration Statement” means the Registration Statement on Form S-1, as amended (No. 333-181370), filed with the Securities and Exchange Commission with respect to the initial public offering of Common Units.

 

“Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or disposing into the environment.

 

“Services” means the services to be provided by or on behalf of LGC to the General Partner for the benefit of the MLP Group pursuant to this Agreement as set forth in Exhibit A.

 

“State Programs” is defined in Section 2.3(e).

 

“Tax Authority” means any Governmental Authority having jurisdiction over the assessment, determination, collection or imposition of any Tax.

 

“Tax Return” means any report, return, election, document, estimated tax filing, declaration or other filing provided to any Tax Authority, including any amendments thereto.

 

“Tax” or “Taxes” means (i) all taxes, assessments, charges, duties, levies, imposts or other similar charges imposed by a Tax Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental (including taxes under Code section 59A), alternative minimum, add-on, value-added, withholding and other taxes, assessments, charges,

 

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duties, levies, imposts or other similar charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), and all estimated taxes, deficiency assessments, additions to tax, additional amounts imposed by any Tax Authority, penalties and interest, but excluding any and all taxes based on net income, net worth, capital or profit; (ii) any liability for the payment of any amount of the type described in the immediately preceding clause (i) as a result of being a member of a consolidated, affiliated, unitary, combined, or similar group with any other corporation or entity at any time on or prior to the Closing Date; and (iii) any liability for the payment of any amount of the type described in the preceding clauses (i) or (ii) whether as a result of contractual obligations to any other Person or by operation of law.

 

“Term” means the period commencing with the Closing Date and ending on the date of termination of this Agreement pursuant to Section 8.1.

 

“Topper” is defined in the Preamble.

 

“Variable Management Fee” is defined in Section 5.1(a).

 

1.2          Construction.  Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) the terms “include,” “includes,” “including” and words of like import shall be deemed to be followed by the words “without limitation;” and (d) the terms “hereof,” “herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement.  The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

 

ARTICLE II
 INDEMNIFICATION

 

2.1          Title, Tax and Environmental Indemnifications.  Subject to the provisions of Sections 2.2, 2.3 and 2.4, LGC shall indemnify, defend and hold harmless the MLP Group from and against:

 

(a)           any Losses suffered or incurred by the MLP Group by reason or arising out of the failure (i) of the MLP Group to be the owner of valid and indefeasible title, easement rights, leasehold and/or fee ownership interests in and to the MLP Assets, and such failure deprives the MLP Group from the economic benefits of the MLP Assets or renders the MLP Group liable or unable to use or operate the MLP Assets in substantially the same manner that the MLP Assets were (A) used and operated by LGC and/or its applicable Affiliate immediately prior to the Closing Date as described in the Registration Statement or (B) are intended to be used by the MLP Group from and after the Closing Date as described in the Registration Statement, and (ii) of the owner or operator of the MLP Assets to obtain, prior to the Closing Date, all material consents and permits necessary to conduct the MLP Group’s business;

 

(b)           other than federal, state and local income taxes disclosed in the most recent pro forma balance sheet of the MLP included in the Registration Statement or incurred in

 

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the ordinary course of business thereafter, any Losses suffered or incurred by the MLP Group by reason of or arising out of any federal, state and local income tax liabilities attributable to the ownership or operation of the MLP Assets prior to the Closing Date; and

 

(c)           any MLP Covered Environmental Losses suffered or incurred by the MLP Group.

 

2.2          Limitations Regarding Indemnification.

 

(a)           The indemnification obligations set forth in Section 2.1(a) shall survive until the third anniversary of the Closing Date and the indemnification obligations set forth in Section 2.1(b) and (c) shall survive until 60 days after the expiration of any applicable statute of limitations; provided, however, that any such indemnification obligation shall remain in full force and effect thereafter only with respect to any bona fide claim made thereunder prior to any such expiration and then only for such period as may be necessary for the resolution thereof.

 

(b)           Each of the Parties hereto understands and agrees that, in the absence of fraud or willful misconduct, the indemnity provisions set forth in this Article II are the sole and exclusive remedy of the MLP Indemnified Parties (as defined below) with respect to any Losses that have been or may be suffered by an MLP Indemnified Party in connection with the Contribution and/or the matters that are the subject of indemnification under Section 2.1.

 

2.3          Indemnification Procedures.

 

(a)           Each member of the MLP Group seeking indemnification (each, an “MLP Indemnified Party”) pursuant to this Article II agrees that within a reasonable period of time after it shall become aware of facts giving rise to a claim for indemnification pursuant to this Article II, it will provide notice thereof in writing to the Parties from whom indemnification is sought pursuant to this Article II (each, an “Indemnifying Party”) specifying the nature of and specific basis for such claim; provided, however, that no MLP Indemnified Party shall submit claims more frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to the expiration of the applicable indemnity coverage under this Agreement); provided further, that failure to timely provide such notice shall not affect the right of the MLP Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is materially prejudiced by such delay or omission.

 

(b)           The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the MLP Indemnified Party that are covered by the indemnification set forth in this Article II, including, without limitation, the selection of counsel (provided that such counsel shall be reasonably acceptable to the MLP Indemnified Parties), determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (which consent shall not be unreasonably withheld, conditioned or delayed) of the MLP Indemnified Parties unless it includes a full release of the MLP Indemnified Parties and their respective Subsidiaries from such matter or issues, as the case may be.

 

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(c)           In the event that any claim brought against the MLP Indemnified Parties that is covered by the indemnification set forth in Article II is based on the presence of Hazardous Substances on, under, about or Releasing to or from property of the MLP Indemnified Parties that requires or necessitates Environmental Activity, the Indemnifying Party shall have the right to control all aspects of the Environmental Activity, including, without limitation, the selection of remediation or cleanup standards (to the extent such selection is permitted under applicable Environmental Law) based on activity and/or use limitations, so long as (i) the selected remediation or cleanup standards, and any activity or use limitations imposed (by deed restriction, environmental covenant or otherwise) in connection with the Environmental Activity would not unreasonably interfere with the current use of the property, (ii) the MLP Indemnified Parties shall have the right, but not the obligation, to fully participate in any Environmental Activities including making comments to documents to be submitted to any Governmental Authority, participating in meetings, and providing advice to LGC regarding procedural, substantive and strategic decisions, which LGC shall consider in good faith, (iii) the Indemnifying Party diligently and promptly pursues the completion of the Environmental Activity so as to attain Environmental Closure, and (iv) the Indemnifying Party complies with the requirements of Section 2.4.  Where imposition of an activity or use limitation as part of remediation of a property is permissible pursuant to the terms of this Section 2.3(c), the MLP Group shall cooperate with LGC with respect to the execution and recording of the required restrictive covenant, environmental covenant, or other instrument required in order to effectuate the limitation.  The Indemnifying Party’s indemnification obligations with respect to the remediation of Hazardous Substances shall cease upon Environmental Closure.

 

(d)           The MLP Indemnified Parties agree to cooperate fully with the Indemnifying Parties with respect to all aspects of the defense of any claims covered by the indemnification set forth in Article II, including, without limitation, the prompt furnishing to the Indemnifying Parties of any correspondence or other notice relating thereto that the MLP Indemnified Parties may receive, permitting the names of the MLP Indemnified Parties to be utilized in connection with such defense, the making available to the Indemnifying Parties of any files, records or other information of the MLP Indemnified Parties that Indemnifying Parties consider relevant to such defense and the making available to Indemnifying Parties of any employees of the MLP Indemnified Parties; provided, however, that in connection therewith Indemnifying Parties agree to use reasonable efforts to minimize the impact thereof on the operations of the MLP Indemnified Parties and further agree to reasonably maintain the confidentiality of all files, records and other information furnished by the MLP Indemnified Parties pursuant to this Section 2.3.  In no event shall the obligation of the MLP Indemnified Parties to cooperate with Indemnifying Parties as set forth in the immediately preceding sentence be construed as imposing upon the MLP Indemnified Parties an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article II; provided, however, that the MLP Indemnified Parties may, at their option, cost and expense, hire and pay for counsel in connection with any such defense.  The Indemnifying Parties agree to keep any such counsel hired by the MLP Indemnified Parties reasonably informed as to the status of any such defense, but Indemnifying Parties shall have the right to retain sole control over such defense.

 

(e)           In determining the amount of any Losses for which the MLP Indemnified Parties are entitled to indemnification under this Agreement, the gross amount of the

 

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indemnification will be reduced by (i) any insurance proceeds realized by the MLP Indemnified Parties, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the MLP Indemnified Parties as a result of such claim and (ii) all amounts recovered by the MLP Indemnified Parties under contractual indemnities from third parties or under state underground storage tank indemnification programs (“State Programs”).  The MLP Indemnified Parties hereby agree to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities and State Programs; provided, however, that the costs and expenses (including, without limitation, court costs and reasonable attorneys’ fees or State Program fees) of the MLP Indemnified Parties in connection with such efforts shall be promptly reimbursed by the Indemnifying Parties.  To the extent that Indemnifying Parties have made any indemnification payment hereunder in respect of a claim for which the MLP Indemnified Parties have asserted a related claim for insurance proceeds or under a contractual indemnity or a State Program, Indemnifying Parties shall be subrogated to the rights of the MLP Indemnified Parties to receive the proceeds of such insurance or contractual indemnity or state programs.

 

(f)            LGC shall cause the Partnership and its subsidiaries to be named as additional insureds under its environmental insurance policies, except for the remediation cost containment policies set forth on Exhibit B hereto (and any replacements thereof).

 

(g)           LGC hereby agrees to use commercially reasonable efforts to (i) realize any applicable insurance proceeds under the remediation cost containment policies set forth on Exhibit B hereto (and any replacements thereof) and (ii) access escrow accounts with respect to which LGC is the beneficiary that are attributable to a Property for which the MLP Indemnified Parties are entitled to indemnification hereunder.

 

2.4          Access Rights.  Upon reasonable advance notice, the MLP Group shall afford to the directors, officers, employees, accountants, counsel, agents, consultants, auditors and other authorized representatives of LGC reasonable access, during normal business hours, to the MLP Assets in order to conduct any Environmental Activity that LGC has agreed to perform or is responsible for performing or to otherwise observe, review or evaluate any matters for which the MLP Group may seek indemnification from LGC pursuant to this Article II; provided that any such access shall be conducted in a manner so as not to interfere unreasonably with the operation of the business of the MLP Group and LGC shall indemnify, defend and hold harmless the MLP Group from and against any Losses of the MLP Group arising from personal injury, property damage, or threatened or actual environmental contamination as a result of the access granted hereby to the directors, officers, employees, accountants, counsel, agents, consultants, auditors and other authorized representatives of LGC.

 

2.5          Past Acquisitions.  LGC and Topper agree to (and to cause their applicable Affiliates to) assign to the MLP all legal rights to pursue claims for indemnification included in any acquisition agreements pursuant to which LGC or such Affiliates (excluding the MLP Group) acquired any of the MLP Assets.  If such legal rights are not assignable pursuant to the terms of such acquisition agreements or for any other reason, LGC and Topper agree to (and to cause their applicable Affiliates to) pursue its remedies for any indemnifiable claims on behalf of the MLP.

 

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ARTICLE III
 PROVISION OF SERVICES

 

3.1          Services.  During the Term, LGC shall provide (or cause to be provided) the Services to the General Partner for the benefit of the MLP Group.  LGC is authorized to enter into and act on the General Partner’s behalf, as agent, in connection with any agreement with third parties reasonably related to the provision of the Services.  The General Partner may temporarily or permanently exclude any particular service from the scope of Services upon 90 days’ written notice to LGC.  LGC represents and warrants that the services set forth on Exhibit A are sufficient to operate the MLP Assets consistent with past practice.

 

3.2          LGC Information.  It is contemplated by the Parties that, during the Term, the General Partner will be required to provide certain notices, information and data necessary for LGC to perform the Services and its obligations under this Agreement.  LGC shall be permitted to rely on any information or data provided by the General Partner to LGC in connection with the performance of its duties and provision of Services under this Agreement, except to the extent that LGC has actual knowledge that such information or data is inaccurate or incomplete.

 

ARTICLE IV
 STANDARD OF CARE

 

4.1          Standard of Performance.  Subject to the liability standard set forth in Article VI, LGC shall (and shall cause its applicable subsidiaries, excluding the MLP Group, to) provide Services (a) using at least the same level of care, quality, timeliness and skill in providing the Services as it employs for itself and its Affiliates and no less than the same degree of care, quality, timeliness, and skill as the applicable Person’s past practice in performing like services for itself and its Affiliates in connection with the ownership or operation of the MLP Assets during the one-year period prior to the Closing Date, and (b) in any event, using no less than a reasonable level of care in accordance with industry standards, in compliance with all applicable laws.

 

4.2          Procurement of Goods and Services.  To the extent that LGC is permitted to arrange for contracts with third parties for goods and services in connection with the provision of the Services, LGC shall use commercially reasonable efforts (a) to obtain such goods and services at rates competitive with those otherwise generally available in the area in which services or materials are to be furnished, and (b) to obtain from such third parties such customary warranties and guarantees as may be reasonably required with respect to the goods and services so furnished.

 

4.3          Protection from Liens.  LGC shall not permit any liens, encumbrances or charges upon or against any of the Properties arising from the provision of Services or materials under this Agreement except as approved, or consented to, by the General Partner.

 

4.4          Commingling of Assets.  To the extent LGC shall have charge or possession of any of the General Partner’s or the MLP Group’s assets in connection with the provision of the Services, LGC shall separately maintain, and not commingle, the assets of the General Partner or the MLP Group with those of LGC or any other Person.

 

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4.5          Insurance.  LGC shall obtain and maintain during the Term from insurers who are reliable and acceptable to the General Partner and authorized to do business in the state or states or jurisdictions in which Services are to be performed by LGC, insurance coverages in the types and minimum limits as the Parties determine to be appropriate and as is consistent with standard industry practice and LGC’s past practices.  LGC agrees upon the General Partner’s request from time to time or at any time to provide the General Partner with certificates of insurance evidencing such insurance coverage and, upon request of the General Partner, shall furnish copies of such policies.  Except with respect to workers’ compensation coverage, the policies shall name the General Partner and the Partnership as additional insureds and shall contain waivers by the insurers of any and all rights of subrogation to pursue any claims or causes of action against the General Partner and the Partnership.  The policies shall provide that they will not be cancelled or reduced without giving the General Partner at least 30 days’ prior written notice of such cancellation or reduction.  The insurance policies and coverages shall be reviewed with the Board at least annually, beginning with the first Board meeting following the Closing Date.

 

4.6          Third-Party Intellectual Property.  If LGC uses or licenses intellectual property owned by third parties in the performance of the Services, LGC shall obtain and maintain any such licenses and authorizations necessary to authorize its use of such intellectual property in connection with the Services.

 

ARTICLE V
 MANAGEMENT FEE AND LGC REIMBURSEMENT

 

5.1          Management Fee.

 

(a)           The Partnership shall pay LGC a management fee for providing the Services in an amount equal to (1) $420,000 per month (the “Base Management Fee”) plus (2) $0.0025 for each gallon of motor fuel distributed by the Partnership and its subsidiaries per month (the “Variable Management Fee” and, together with the Base Management Fee, the “Management Fee”). The first Base Management Fee, which shall be pro rated based on the number of days remaining in the month of the Closing Date, shall be due and payable on the Closing Date and each subsequent Base Management Fee shall be due and payable, in advance, on the first Business Day of each month.  The Variable Management Fee shall be paid by the Partnership to LGC as soon as practicable upon receipt by the General Partner of an invoice from LGC setting forth the Variable Management Fee owed by the Partnership to LGC, but in no event later than seven (7) Business Days of receipt by the General Partner of such invoice.  If requested by the General Partner, LGC’s invoice for the Variable Management Fee shall provide reasonably detailed documentation supporting the gallons of motor fuel distributed reflected on such invoice.

 

(b)           At the end of each calendar year (i) the Partnership shall have the right to submit to LGC a proposal to reduce the amount of the Management Fee for such year if the Partnership believes, in good faith, that the Services performed by LGC for the benefit of the Partnership for such year do not justify payment of the amount of Management Fees paid by the Partnership for such year; and (ii) LGC shall have the right to submit to the Partnership a proposal to increase the amount of the Management Fee for such year if LGC believes, in good

 

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faith, that the Services performed by LGC for the benefit of the Partnership for such year justify an increase in the Management Fee for such year.  If either Party submits such a proposal, LGC and the Partnership shall negotiate in good faith to determine if the Management Fee for such year should be reduced or increased, and, if so, the amount of such reduction or increase.  If the Parties agree that the Management Fee for that year should be reduced, then LGC shall promptly pay to the Partnership the amount of any reduction for such year and if the Parties agree that the Management Fee for such year should be increased, then the Partnership shall promptly pay to LGC the amount of any increase for such year.  In addition, during the course of the year, the Conflicts Committee shall review the Management Fee upon a material change in the structure of the Partnership or its business to ensure that it is fair to the Partnership and to LGC. If the Conflicts Committee determines that, based on a change in the structure of the Partnership or its business, the Management Fee should be modified or otherwise altered, LGC and the Partnership shall negotiate in good faith to determine the appropriate modification or alteration of the Management Fee.

 

5.2          LGC Reimbursement.

 

(a)           Subject to the limitations set forth in paragraph A of Exhibit A, the MLP shall reimburse LGC for all reasonable out of pocket third party fees, costs, taxes and expenses incurred by LGC or the General Partner on the Partnership’s or its subsidiaries’ behalf in connection with providing the Services required to be provided by LGC hereunder, including, but not limited to:

 

(i)            legal, accounting and other fees and expenses associated with being a public company;

 

(ii)           expenses related to the Partnership’s financings, mergers, acquisitions or dispositions of assets, and other similar transactions;

 

(iii)          expenses related to insurance coverage for the Partnership’s assets or operations;

 

(iv)          sales, use, excise, value added or similar taxes with respect to the services provided by LGC to the Partnership;

 

(v)           costs and expenses of Environmental Activity, including, remediation costs or expenses incurred in connection with environmental liabilities and third party claims, that are based on environmental conditions that first arise at Properties following the date hereof; and

 

(vi)          cost or expenses incurred in connection with the Partnership’s environmental compliance, including, but not limited to, storage tank compliance and registration, as well as compliance monitoring and oversight expenses.

 

(b)           Reimbursement of the out of pocket third party fees, costs, taxes and expenses set forth in Section 5.2(a) shall be paid promptly by the Partnership to LGC upon receipt by the General Partner of an invoice from LGC setting forth amounts due under Section 5.2(a), but in no event later than seven (7) Business Days of receipt by the General Partner of

 

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such invoice. If requested by the General Partner, LGC’s invoice therefor shall provide reasonably detailed documentation supporting such costs and expenses.

 

5.3          Taxes.  The MLP shall be responsible for all applicable Taxes levied on items, goods or services that are sold, purchased or obtained for the provision of Services under this Agreement, including any Taxes in respect of the Services.

 

5.4          Disputed Reimbursements.

 

(a)           The General Partner may, within 30 days after receipt of an invoice from LGC, take written exception to any fees, costs, taxes and expenses described in Section 5.2(a) on the ground that the same was not a reasonable fee, cost, tax or expense incurred by LGC in connection with the provision of Services.  The General Partner shall nevertheless pay LGC in full when due the invoiced amount.  Such payment shall not be deemed a waiver of the right of the General Partner to recoup any contested portion of any amount so paid.  However, if the amount as to which such written exception is taken, or any part thereof, is ultimately determined not to be a reasonable fee, cost, tax and expense incurred by LGC in connection with the provision of Services, such amount or portion thereof (as the case may be) shall be refunded by LGC to the General Partner together with interest thereon at the lesser of (i) the prime rate per annum established by the administrative agent under the revolving credit agreement of the MLP, as applicable, as in effect on the date of payment by the General Partner in respect of such contested invoice or (ii) the maximum lawful rate during the period from the date of payment by the General Partner to the date of refund by LGC.

 

(b)           If, within 20 days after receipt of any written exception pursuant to Section 5.4(a), the General Partner and LGC have been unable to resolve any dispute, and if (i) such dispute relates to whether amounts were properly charged or Services actually performed and (ii) the aggregate amount in dispute exceeds $100,000, either of the General Partner or LGC may submit the dispute to an independent third party auditing firm that is mutually agreeable to the MLP Group, on the one hand, and LGC, on the other hand.  The Parties shall cooperate with such auditing firm and shall provide such auditing firm access to such books and records as may be reasonably necessary to permit a determination by such auditing firm.  The resolution by such auditing firm shall be final and binding on the Parties.

 

ARTICLE VI
 INDEMNIFICATION; LIMITATIONS

 

6.1          Indemnification by LGC.

 

(a)           LGC hereby agrees to defend, indemnify and hold harmless each member of the MLP Group and their respective members, partners and Affiliates (other than LGC) and each of their respective officers, managers, directors, employees and agents (each, an “MLP Services Indemnified Party”) from any and all threatened or actual Losses incurred by, imposed upon or rendered against one or more of the MLP Services Indemnified Parties, whether based on contract, or tort, or pursuant to any statute, rule or regulation, and regardless of whether the Losses are foreseeable or unforeseeable, all to the extent that such Losses arise out of the bad faith, fraud or willful misconduct (or, in the case of a criminal matter, acts or omissions taken

 

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with the knowledge that the conduct was criminal) of LGC in providing Services, but except to the extent arising out of the willful misconduct of any MLP Services Indemnified Party.

 

(b)           In no event shall the aggregate liability of LGC for claims under Section 6.1(a) exceed $5,000,000.  Each of the Parties hereto understands and agrees that, in the absence of fraud or willful misconduct, the indemnity provision set forth in this Section 6.1 is the sole and exclusive remedy of the MLP Services Indemnified Parties with respect to any Losses that have been or may be suffered by an MLP Services Indemnified Party in connection with the matters that are the subject of indemnification under Section 6.1 and/or the Services provided under this Agreement.

 

6.2          Indemnification by the MLP.  The MLP hereby agrees to defend, indemnify and hold harmless LGC and its members, partners and Affiliates (other than the MLP Group) and each of their respective officers, managers, directors, employees and agents (each, a “LGC Indemnified Party” and, collectively with the MLP Services Indemnified Parties, each an “Indemnified Party”) from any and all threatened or actual Losses incurred by, imposed upon or rendered against one or more of the LGC Indemnified Parties, whether based on contract, or tort, or pursuant to any statute, rule or regulation, and regardless of whether the Liabilities are foreseeable or unforeseeable, all to the extent that such Losses (a) arise out of any acts or omissions of the LGC Indemnified Parties in connection with the provision of (or failure to provide) Services or (b) are LGC Covered Environmental Losses, in each case except to the extent that LGC is responsible for such Losses pursuant to Section 6.1.  Where permitted under its insurance policies, the Partnership shall cause LGC to be named as an additional insured under such policies.

 

6.3          Negligence; Strict Liability.  EXCEPT AS EXPRESSLY PROVIDED IN SECTION 6.1 AND SECTION 6.2, THE DEFENSE AND INDEMNITY OBLIGATIONS IN SECTION 6.1 AND SECTION 6.2 SHALL APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS (INCLUDING SOLE NEGLIGENCE, CONCURRENT NEGLIGENCE OR STRICT LIABILITY), BREACH OF DUTY (STATUTORY OR OTHERWISE), VIOLATION OF LAW OR OTHER FAULT OF ANY INDEMNIFIED PARTY, OR ANY PRE-EXISTING DEFECT; PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT APPLY TO THE WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY OR IN ANY WAY LIMIT OR ALTER ANY QUALIFICATIONS SET FORTH IN SUCH DEFENSE AND INDEMNITY OBLIGATIONS EXPRESSLY RELATING TO INTENTIONAL MISCONDUCT OR BREACH OF THIS AGREEMENT.  BOTH PARTIES AGREE THAT THIS STATEMENT COMPLIES WITH THE REQUIREMENT KNOWN AS THE ‘EXPRESS NEGLIGENCE RULE’ TO EXPRESSLY STATE IN A CONSPICUOUS MANNER AND TO AFFORD FAIR AND ADEQUATE NOTICE THAT THIS ARTICLE VI HAS PROVISIONS REQUIRING ONE PARTY TO BE RESPONSIBLE FOR THE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANOTHER PARTY.

 

6.4          Exclusion of Damages; Disclaimers.

 

(a)           NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY HERETO (INCLUDING UNDER ARTICLE II HEREOF) FOR EXEMPLARY, PUNITIVE,

 

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CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM IN WHICH ANY ACTION IS BROUGHT; PROVIDED, HOWEVER, THAT THIS SECTION 6.4(a) SHALL NOT LIMIT A PARTY’S RIGHT TO RECOVERY UNDER SECTION 6.1 OR SECTION 6.2 FOR ANY SUCH DAMAGES TO THE EXTENT SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION UNDER SECTION 6.1 OR SECTION 6.2.

 

(b)           OTHER THAN AS SET FORTH IN SECTION 4.1, LGC DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO SERVICES RENDERED OR PRODUCTS PROCURED FOR THE GENERAL PARTNER FOR THE BENEFIT OF THE MLP GROUP, OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER LGC KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.  HOWEVER, IN THE CASE OF OUTSOURCED SERVICES PROVIDED SOLELY FOR THE GENERAL PARTNER, IF THE THIRD-PARTY PROVIDER OF SUCH SERVICES MAKES AN EXPRESS WARRANTY TO THE GENERAL PARTNER, THE GENERAL PARTNER IS ENTITLED TO CAUSE LGC TO RELY ON AND TO ENFORCE SUCH WARRANTY.

 

6.5          Survival.  The provisions of this Article VI shall survive the termination of this Agreement.

 

ARTICLE VII
 CONFIDENTIALITY

 

7.1          Confidential Information.

 

(a)           Non-disclosure.  LGC shall maintain the confidentiality of all Confidential Information; provided, however, that LGC may disclose such Confidential Information:

 

(i)            to its Affiliates to the extent deemed by LGC to be reasonably necessary or desirable to enable it to perform the Services;

 

(ii)           in any judicial or alternative dispute resolution Proceeding to resolve disputes between LGC and the MLP Group arising hereunder;

 

(iii)          to the extent disclosure is legally required under applicable laws (including applicable securities and tax laws) or any agreement existing on the date hereof to which LGC is a party or by which it is bound; provided, however, that prior to making any legally required disclosures in any judicial, regulatory or dispute resolution Proceeding, LGC shall, if requested by the General Partner, seek a protective order or other relief to prevent or reduce the scope of such disclosure;

 

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(iv)          to LGC’s existing or potential lenders, investors, joint interest owners, purchasers or other parties with whom LGC may enter into contractual relationships, to the extent deemed by LGC to be reasonably necessary or desirable to enable it to perform the Services; provided, however, that LGC shall require such third parties to agree to maintain the confidentiality of the Confidential Information so disclosed;

 

(v)           if authorized by the General Partner; and

 

(vi)          to the extent such Confidential Information becomes publicly available other than through a breach by LGC of its obligation arising under this Section 7.1(a).

 

LGC acknowledges and agrees that the Confidential Information is being furnished to LGC for the sole and exclusive purpose of enabling it to perform the Services and the Confidential Information may not be used by it for any other purpose.

 

(b)           Business Conduct. Subject to the last sentence of Section 7.1(a), nothing in this Article VII shall prohibit the MLP, LGC or any of their respective Affiliates from conducting business in any location, including in and near the areas where the MLP Assets are located.

 

(c)           Remedies and Enforcement.  LGC acknowledges and agrees that a breach by it of its obligations under this Article VII would cause irreparable harm to the General Partner and that monetary damages would not be adequate to compensate the General Partner.  Accordingly, LGC agrees that the General Partner shall be entitled to immediate equitable relief, including a temporary or permanent injunction, to prevent any threatened, likely or ongoing violation by LGC, without the necessity of posting bond or other security.  The General Partner’s right to equitable relief shall be in addition to other rights and remedies available to the General Partner, for monetary damages or otherwise.

 

7.2          Survival.  The provisions of this Article VII shall survive the termination of this Agreement.

 

ARTICLE VIII
 TERM AND TERMINATION

 

8.1          Term.  Except as set forth in Section 8.3, this Agreement shall remain in force and effect through the end of the Initial Term, and shall thereafter continue on a year-to-year basis, in each case unless terminated pursuant to Section 8.2.

 

8.2          Termination.

 

(a)           After the end of the Initial Term, this Agreement may be terminated by either Party prior to the expiration of any applicable annual term thereafter, upon 180 days’ written notice to the other Party;

 

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(b)           This Agreement may be terminated at any time by LGC upon the General Partner’s or the MLP’s material breach of this Agreement, if (i) such breach is not remedied within 60 days (or 15 days in the event of material breach arising out of a failure to make payment hereunder) after the General Partner’s receipt of written notice thereof, or such longer period as is reasonably required to cure such breach, provided that the General Partner commences to cure such breach within the applicable period and proceeds with due diligence to cure such breach, and (ii)  such breach is continuing at the time notice of termination is delivered to the General Partner;

 

(c)           This Agreement may be terminated at any time by the General Partner upon LGC’s material breach of this Agreement, if (i) such breach is not remedied within 60 days after LGC’s receipt of the General Partner’s written notice thereof, or such longer period as is reasonably required to cure such breach, provided that LGC commences to cure such breach within such 60-day period and proceeds with due diligence to cure such breach, and (ii) such breach is continuing at the time notice of termination is delivered to LGC;

 

(d)           This Agreement may be terminated immediately by any Party upon an MLP Change of Control; or

 

(e)           This Agreement may be terminated by the General Partner at any time upon 365 days’ written notice to LGC.

 

8.3          Survival.  The provisions of Article II, Article V (with respect to unpaid amounts due hereunder), Section 5.4, Article VI, Article VII, Article IX, Article X and Article XI shall survive any termination of this Agreement.

 

ARTICLE IX
 AUDIT RIGHTS

 

At any time during the Term and for one year thereafter, the General Partner shall have the right to review and, at the General Partner’s expense, to copy, the books and records maintained by LGC relating to the provision of the Services.  In addition, to the extent necessary to verify the performance by LGC of its obligations under this Agreement, the General Partner shall have the right, at the General Partner’s expense, to audit, examine and make copies of or extracts from the books and records of LGC (the “Audit Right”).  The General Partner may exercise the Audit Right through such auditors as the General Partner may determine in its sole discretion.  The General Partner shall (a) exercise the Audit Right only upon reasonable written notice to LGC and during normal business hours and (b) use its reasonable efforts to conduct the Audit Right in such a manner as to minimize the inconvenience and disruption to LGC.

 

ARTICLE X
 BUSINESS OPPORTUNITIES

 

10.1        Right of First Refusal.  Topper, LGC and LGO hereby agree, and will cause their controlled Affiliates to agree, for so long as Topper, LGC or their controlled Affiliates, individually or as part of a group, control the General Partner, that if Topper, LGC, LGO or any of their controlled Affiliates has the opportunity to acquire assets used, or a controlling interest in any business primarily engaged, in the wholesale motor fuel distribution or retail gas station

 

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operation businesses, then Topper, LGC, LGO or their controlled Affiliates will offer such acquisition opportunity to the Partnership and give the Partnership a reasonable opportunity to acquire, at a price equal to the purchase price paid or to be paid by Topper, LGC, LGO or their controlled Affiliates plus any related transaction costs and expenses incurred by Topper, LGC, LGO or their controlled Affiliates, such assets or business either before Topper, LGC, LGO or their controlled Affiliates acquire such assets or business or promptly after the consummation of such acquisition by Topper, LGC, LGO or their controlled Affiliates.  Any assets or businesses that the Partnership does not acquire pursuant to this right of first refusal may be acquired and operated by Topper, LGC, LGO or their controlled Affiliates.

 

10.2        Right of First Offer.  Topper, LGC and LGO hereby agree, and will cause their controlled Affiliates to agree, for so long as Topper, LGC, LGO or their controlled affiliates, individually or as part of a group, control the General Partner, to notify the Partnership of their desire to sell any of its assets or businesses if Topper Group, LGO or any of their controlled Affiliates decides to attempt to sell (other than to another controlled Affiliate of Topper, LGC or LGO) any assets used, or any interest in any business primarily engaged, in the wholesale motor fuel distribution or retail gas station operation businesses, to a third party. Prior to selling such assets or businesses to a third party, Topper, LGC or LGO will negotiate with the Partnership exclusively and in good faith for a reasonable period of time, not to exceed 30 days, in order to give the Partnership an opportunity to enter into definitive documentation for the purchase and sale of such assets or businesses on terms that are mutually acceptable to Topper, LGC, LGO or their controlled Affiliates and the Partnership. If the Partnership and Topper, LGC, LGO or their controlled Affiliates have not entered into a letter of intent or a definitive purchase and sale agreement with respect to such assets or businesses within such period, Topper, LGC, LGO or their controlled Affiliates will have the right to sell such assets or businesses to a third party following the expiration of such period on any terms that are acceptable to Topper, LGC, LGO or their controlled Affiliates and such third party.  This right of first offer will not apply to the sale of any assets or interests that Topper, LGC, LGO or their Affiliates own at the closing of the Offering that are not contributed to the Partnership in connection with the Offering.

 

10.3        No Business Opportunities.  Subject to Section 10.1 and Section 10.2, none of the Parties nor any of their Affiliates shall have any obligation to offer, or provide any opportunity to pursue, purchase or invest in, any business opportunity to any other Party or their Affiliates.

 

10.4        No Non-Compete.  Subject to the last sentence of Section 7.1(a) and to Section 10.1 and Section 10.2, the Parties and their Affiliates shall be free to engage in any business activity whatsoever without the participation of the other, including any activity that may be in direct competition with the MLP Group or LGC, as the case may be.

 

ARTICLE XI
 MISCELLANEOUS

 

11.1        Choice of Law; Jurisdiction.  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.  Each of the Parties (i) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to this Agreement shall be exclusively brought in the Court of Chancery of the State of Delaware, in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort,

 

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fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims; (ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware in connection with any such claim, suit, action or proceeding; (iii) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper; (iv) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and (v) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof; provided, nothing in clause (v) hereof shall affect or limit any right to serve process in any other manner permitted by law.

 

11.2        Notice.  All notices, requests or consents provided for 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 telecopier or telegram to such Party.  Notice given by personal delivery or mail shall be effective upon actual receipt.  Notice given by telegram or telecopier 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 or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 11.2.

 

To LGC:

 

702 West Hamilton Street, Suite 203
 Allentown, PA 18101
 Attention:  Chief Executive Officer
 Telephone:  (610) 625-8000
 Facsimile:                

 

To the MLP Group:

 

702 West Hamilton Street, Suite 203
 Allentown, PA 18101
 Attention:  Chief Executive Officer
 With Copies to: Chair of the Conflicts Committee of the General Partner
 Telephone:  (610) 625-8000
 Facsimile:                 

 

11.3        Entire Agreement.  Other than the Contribution Agreement, this Agreement constitutes the entire agreement of the Parties relating to the matters contained herein,

 

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superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

 

11.4        Jointly Drafted.  This Agreement, and all the provisions of this Agreement, shall be deemed drafted by all of the Parties, and shall not be construed against any Party on the basis of that Party’s role in drafting this Agreement.

 

11.5        Effect of Waiver or Consent.  No waiver or consent, express or implied, by any Party of or to any breach or default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a consent or waiver of or to any other breach or default in the performance by such Person of the same or any other obligations of such Person hereunder.  Failure on the part of a Party to complain of any act of any Person or to declare any Person in default, irrespective of how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder until the applicable statute of limitations period has run.

 

11.6        Amendment or Modification.  This Agreement may be amended or modified only from time to time by the written agreement of the Parties; provided, however, that the MLP may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement that, in the reasonable discretion of the General Partner (a) would have a material adverse effect on the holders of Common Units or (b) materially limit or impair the rights of the MLP or reduce the obligations of LGC, LGO or Topper under this Agreement.  Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” to this Agreement.

 

11.7        Assignment; No Third-Party Beneficiaries.  None of the Parties shall have the right to assign its rights or obligations under this Agreement without the prior written consent of all other Parties.  Notwithstanding the foregoing, a merger of a Party shall not be deemed to be an assignment or transfer of its rights or a delegation of its obligations under this Agreement.  Furthermore, the transfer of all or substantially all of the assets of a Party shall not be deemed an assignment or transfer of its rights or a delegation of its obligations under this Agreement if the assignee assumes all of the obligations under this Agreement.  The provisions of this Agreement are enforceable solely by the Parties (including any permitted assignee), and no limited partner or member of the MLP or other Person shall have the right, separate and apart from the Parties hereto, to enforce any provision of this Agreement or to compel any Party to comply with the terms of this Agreement.

 

11.8        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.

 

11.9        Relationship of the Parties.  Nothing in this Agreement shall be construed to create a partnership or joint venture or give rise to any fiduciary or similar relationship of any kind.

 

11.10      Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this

 

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Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

11.11      Further Assurances.  In connection with this Agreement and all transactions contemplated by this Agreement, each Party 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.

 

11.12      Withholding or Granting of Consent.  Except as expressly provided to the contrary in this Agreement, each Party may, with respect to any consent or approval that it is entitled to grant pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled discretion, with or without cause, and subject to such conditions as it shall deem appropriate.

 

11.13      Laws and Regulations.  Notwithstanding any provision of this Agreement to the contrary, no Party shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule or regulation.

 

11.14      No Recourse Against Officers, Directors, Managers or Employees. For the avoidance of doubt, the provisions of this Agreement shall not give rise to any right of recourse against any officer, director, manager or employee of LGC, the General Partner or any of their respective Affiliates.

 

[Signatures on the following page]

 

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

 

	
 
    	
LEHIGH GAS PARTNERS LP, a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By: Lehigh Gas GP LLC, its general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LEHIGH GAS GP LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
LEHIGH GAS CORPORATION, a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FOR PURPOSES OF ARTICLE X  
    
	
 
    	
 
    
	
 
    	
LEHIGH GAS-OHIO, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FOR PURPOSES OF SECTION 2.5 AND ARTICLE   X
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Joseph V. Topper, Jr.
    

 

Signature Page to Omnibus Agreement

 

22

 

EXHIBIT A

 

DESCRIPTION OF SERVICES

 

SERVICES

 

A.            The following services will be provided by, or on behalf of, LGC consistent with LGC’s past practice in providing such services to manage and operate the MLP Assets and will not be outsourced to an independent third party, unless (1) it is an out of pocket expense associated with being a public company, or (2) LGC, believes, in good faith, that such services require a specialized level of expertise that LGC is unable to provide without the assistance of an independent third-party. Expenses incurred for such third-party services shall be reimbursed by the MLP.

 

Accounting; administrative; billing and invoicing; books and record keeping; budgeting, forecasting, and financial planning and analysis; management (including the management and oversight of the MLP’s wholesale motor fuel distribution and real estate business consistent with past practice); operations; payroll; contract administration; maintenance of internal controls; financial reporting, including SEC reporting and compliance; office space; purchasing and materials management; risk management and administration of insurance programs; information technology (includes hardware and software existing or acquired in future which title is retained by LGC); in-house legal; compensation, benefits and human resources administration; cash management; corporate finance, treasury credit and debt administration; employee training; and miscellaneous administration and overhead expenses.

 

B.            The following services will also be provided by, or on behalf of, LGC; provided, however, such services may be outsourced to an independent third party such services. Expenses incurred for such third-party services shall be reimbursed by the MLP.

 

Internal audit; Sarbanes-Oxley compliance; investor relations; legal; technical accounting consulting, employee health and safety; acquisition and divestiture services including professional, consultants and advisor expenses; tax matters - K-1 preparation, tax return compliance, and tax reporting; interest rate hedging and derivatives administration; marketing; property management; environmental compliance and remediation management oversight (with any Environmental Activity, including, remediation costs or expenses incurred in connection with environmental liabilities and third party claims, that are based on environmental conditions that first arise at Properties following the date hereof and any costs or expenses incurred in connection with environmental compliance, including, but not limited to, storage tank compliance and registration, as well as compliance monitoring and oversight expenses being the responsibility of the MLP); regulatory management; real estate administration; investor relations; government and public relations; and other services as required.

 

A-1

 

EXHIBIT B

 

REMEDIATION COST CONTAINMENT POLICIES

 

B-1

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