GLOBAL PARTNERS LP (Form: 10-Q, Received: 11/05/2020 15:24:03)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32593

Global Partners LP

(Exact name of registrant as specified in its charter)

Delaware		74-3140887
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

P.O. Box 9161
800 South Street
Waltham, Massachusetts 02454-9161
(Address of principal executive offices, including zip code)

(781) 894-8800
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units representing limited partner interests	GLP	New York Stock Exchange

9.75% Series A Fixed-to-Floating Cumulative Redeemable	GLP pr A	New York Stock Exchange
Perpetual Preferred Units representing limited partner interests

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐			Accelerated filer ☒
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The issuer had 33,995,563 common units outstanding as of November 2, 2020.

Table of Contents

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)		3

Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019		3

Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019		4

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019		5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019		6

Consolidated Statements of Partners’ Equity for the three and nine months ended September 30, 2020 and 2019		7

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		52

Item 3. Quantitative and Qualitative Disclosures About Market Risk		80

Item 4. Controls and Procedures		81

PART II. OTHER INFORMATION		83

Item 1. Legal Proceedings		83

Item 1A. Risk Factors		83

Item 6. Exhibits		84

SIGNATURES		85

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Item 1.Financial Statements

GLOBAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)


	September 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	4,861	$	12,042
Accounts receivable, net		239,396		413,195
Accounts receivable—affiliates		5,282		7,823
Inventories		328,706		450,482
Brokerage margin deposits		23,455		34,466
Derivative assets		43,159		4,564
Prepaid expenses and other current assets		92,295		81,940
Total current assets		737,154		1,004,512
Property and equipment, net		1,070,251		1,104,863
Right of use assets, net		287,787		296,746
Intangible assets, net		38,627		46,765
Goodwill		323,889		324,474
Other assets		28,596		31,067
Total assets	$	2,486,304	$	2,808,427
Liabilities and partners’ equity
Current liabilities:
Accounts payable	$	186,794	$	373,386
Working capital revolving credit facility—current portion		10,100		148,900
Lease liability—current portion		70,965		68,160
Environmental liabilities—current portion		5,009		5,009
Trustee taxes payable		30,077		42,932
Accrued expenses and other current liabilities		99,898		102,802
Derivative liabilities		6,589		12,698
Total current liabilities		409,432		753,887
Working capital revolving credit facility—less current portion		150,000		175,000
Revolving credit facility		188,000		192,700
Senior notes		691,765		690,533
Long-term lease liability—less current portion		229,307		239,349
Environmental liabilities—less current portion		50,416		54,262
Financing obligations		146,994		148,127
Deferred tax liabilities		56,399		42,879
Other long—term liabilities		54,926		52,451
Total liabilities		1,977,239		2,349,188
Partners’ equity
Global Partners LP equity:
Series A preferred limited partners (2,760,000 units issued and outstanding at September 30, 2020 and December 31, 2019, respectively)		67,226		67,226
Common limited partners (33,995,563 units issued and 33,965,589 outstanding at September 30, 2020 and 33,995,563 units issued and 33,867,393 outstanding at December 31, 2019)		443,345		398,535
General partner interest (0.67% interest with 230,303 equivalent units outstanding at September 30, 2020 and December 31, 2019)		(2,403)		(2,620)
Accumulated other comprehensive income (loss)		897		(5,076)
Total Global Partners LP equity		509,065		458,065
Noncontrolling interest		—		1,174
Total partners’ equity		509,065		459,239
Total liabilities and partners’ equity	$	2,486,304	$	2,808,427

The accompanying notes are an integral part of these consolidated financial statements.

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Sales	$	2,061,382	$	3,245,653	$	6,126,052	$	9,732,819
Cost of sales		1,892,141		3,057,884		5,571,126		9,221,063
Gross profit		169,241		187,769		554,926		511,756
Costs and operating expenses:
Selling, general and administrative expenses		43,218		45,333		143,158		127,391
Operating expenses		82,235		87,827		241,502		257,222
Lease exit and termination gain		—		—		—		(493)
Amortization expense		2,712		2,766		8,137		8,719
Net loss (gain) on sale and disposition of assets		691		323		623		(252)
Long-lived asset impairment		203		643		1,927		643
Total costs and operating expenses		129,059		136,892		395,347		393,230
Operating income		40,182		50,877		159,579		118,526
Interest expense		(19,854)		(22,091)		(62,544)		(68,113)
Loss on early extinguishment of debt		—		(13,080)		—		(13,080)
Income before income tax (expense) benefit		20,328		15,706		97,035		37,333
Income tax (expense) benefit		(2,136)		(813)		205		(1,275)
Net income		18,192		14,893		97,240		36,058
Net loss attributable to noncontrolling interest		38		187		528		637
Net income attributable to Global Partners LP		18,230		15,080		97,768		36,695
Less: General partner’s interest in net income, including incentive distribution rights		324		395		857		1,065
Less: Series A preferred limited partner interest in net income		1,682		1,682		5,046		5,046
Net income attributable to common limited partners	$	16,224	$	13,003	$	91,865	$	30,584
Basic net income per common limited partner unit	$	0.48	$	0.38	$	2.71	$	0.91
Diluted net income per common limited partner unit	$	0.47	$	0.38	$	2.68	$	0.89
Basic weighted average common limited partner units outstanding		33,924		33,865		33,887		33,791
Diluted weighted average common limited partner units outstanding		34,209		34,266		34,241		34,255

The accompanying notes are an integral part of these consolidated financial statements.

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income	$	18,192	$	14,893	$	97,240	$	36,058
Other comprehensive income:
Change in fair value of cash flow hedges		528		—		5,715		—
Change in pension liability		878		391		258		2,871
Total other comprehensive income		1,406		391		5,973		2,871
Comprehensive income		19,598		15,284		103,213		38,929
Comprehensive loss attributable to noncontrolling interest		38		187		528		637
Comprehensive income attributable to Global Partners LP	$	19,636	$	15,471	$	103,741	$	39,566

The accompanying notes are an integral part of these consolidated financial statements.

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended
	September 30,
	2020		2019
Cash flows from operating activities
Net income	$	97,240	$	36,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		75,428		81,544
Amortization of deferred financing fees		3,896		3,777
Amortization of senior notes discount		—		902
Bad debt expense		375		517
Unit-based compensation expense		811		1,666
Write-off of financing fees		667		188
Net loss (gain) on sale and disposition of assets		623		(252)
Long-lived asset impairment		1,927		643
Loss on early extinguishment of debt		—		13,080
Changes in operating assets and liabilities
Accounts receivable		173,424		(1,492)
Accounts receivable-affiliate		2,541		(1,997)
Inventories		121,462		(7,724)
Broker margin deposits		11,011		(9,950)
Prepaid expenses, all other current assets and other assets		(9,978)		620
Accounts payable		(186,592)		1,389
Trustee taxes payable		(12,855)		(6,976)
Change in derivatives		(44,704)		20,606
Accrued expenses, all other current liabilities and other long-term liabilities		15,013		(23,074)
Net cash provided by operating activities		250,289		109,525
Cash flows from investing activities
Capital expenditures		(39,644)		(52,494)
Seller note issuances		(1,188)		(640)
Proceeds from sale of property and equipment		6,060		11,994
Net cash used in investing activities		(34,772)		(41,140)
Cash flows from financing activities
Net payments on working capital revolving credit facility		(163,800)		(400)
Net payments on revolving credit facility		(4,700)		(23,000)
Proceeds from senior notes, net		—		392,602
Repayment of senior notes		—		(381,886)
Repurchase of common units		(291)		—
LTIP units withheld for tax obligations		(273)		(646)
Noncontrolling interest capital contribution		400		—
Acquisition of noncontrolling interest		(1,650)		—
Distributions to limited partners and general partner		(52,384)		(57,396)
Net cash used in financing activities		(222,698)		(70,726)
Cash and cash equivalents
Decrease in cash and cash equivalents		(7,181)		(2,341)
Cash and cash equivalents at beginning of period		12,042		8,121
Cash and cash equivalents at end of period	$	4,861	$	5,780
Supplemental information
Cash paid during the period for interest	$	49,018	$	51,527

The accompanying notes are an integral part of these consolidated financial statements.

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GLOBAL PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands)

(Unaudited)


	Partners' Equity
	Series A						Accumulated
	Preferred		Common		General		Other				Total
	Limited		Limited		Partner		Comprehensive		Noncontrolling		Partners’
Three and nine months ended September 30, 2020	Partners		Partners		Interest		Loss		Interest		Equity
Balance at December 31, 2019	$	67,226	$	398,535	$	(2,620)	$	(5,076)	$	1,174	$	459,239
Net income (loss)		1,682		1,572		22		—		(201)		3,075
Noncontrolling interest capital contribution		—		—		—		—		400		400
Distributions to limited partners and general partner		(1,682)		(17,848)		(443)		—		—		(19,973)
Unit-based compensation		—		288		—		—		—		288
Other comprehensive income		—		—		—		(2,980)		—		(2,980)
LTIP units withheld for tax obligations		—		(25)		—		—		—		(25)
Dividends on repurchased units		—		68		—		—		—		68
Balance at March 31, 2020	$	67,226	$	382,590	$	(3,041)	$	(8,056)	$	1,373	$	440,092
Net income (loss)		1,682		74,069		511		—		(289)		75,973
Distributions to limited partners and general partner		(1,682)		(13,385)		(91)		—		—		(15,158)
Unit-based compensation		—		299		—		—		—		299
Other comprehensive income		—		—		—		7,547		—		7,547
Repurchase of common units		—		(291)		—		—		—		(291)
LTIP units withheld for tax obligations		—		(5)		—		—		—		(5)
Dividends on repurchased units		—		49		—		—		—		49
Balance at June 30, 2020	$	67,226	$	443,326	$	(2,621)	$	(509)	$	1,084	$	508,506
Net income (loss)		1,682		16,224		324		—		(38)		18,192
Acquisition of noncontrolling interest		—		(604)		—		—		(1,046)		(1,650)
Distributions to limited partners and general partner		(1,682)		(15,595)		(106)		—		—		(17,383)
Unit-based compensation		—		224		—		—		—		224
Other comprehensive income		—		—		—		1,406		—		1,406
LTIP units withheld for tax obligations		—		(243)		—		—		—		(243)
Dividends on repurchased units		—		13		—		—		—		13
Balance at September 30, 2020	$	67,226	$	443,345	$	(2,403)	$	897	$	—	$	509,065


	Partners' Equity
	Series A						Accumulated
	Preferred		Common		General		Other				Total
	Limited		Limited		Partner		Comprehensive		Noncontrolling		Partners’
Three and nine months ended September 30, 2019	Partners		Partners		Interest		Loss		Interest		Equity
Balance at December 31, 2018	$	67,226	$	437,874	$	(2,509)	$	(5,260)	$	1,863	$	499,194
Net income (loss)		1,682		5,140		304		—		(332)		6,794
Distributions to limited partners and general partner		(1,682)		(16,998)		(317)		—		—		(18,997)
Unit-based compensation		—		795		—		—		—		795
Other comprehensive income		—		—		—		1,744		—		1,744
LTIP units withheld for tax obligation		—		(8)		—		—		—		(8)
Balance at March 31, 2019	$	67,226	$	426,803	$	(2,522)	$	(3,516)	$	1,531	$	489,522
Net income (loss)		1,682		12,441		366		—		(118)		14,371
Distributions to limited partners and general partner		(1,682)		(17,338)		(373)		—		—		(19,393)
Unit-based compensation		—		795		—		—		—		795
Other comprehensive income		—		—		—		736		—		736
LTIP units withheld for tax obligation		—		(24)		—		—		—		(24)
Balance at June 30, 2019	$	67,226	$	422,677	$	(2,529)	$	(2,780)	$	1,413	$	486,007
Net income (loss)		1,682		13,003		395		—		(187)		14,893
Distributions to limited partners and general partner		(1,682)		(17,508)		(387)		—		—		(19,577)
Unit-based compensation		—		76		—		—		—		76
Other comprehensive income		—		—		—		391		—		391
LTIP units withheld for tax obligation				(614)		—		—		—		(614)
Dividends on repurchased units		—		571		—		—		—		571
Balance at September 30, 2019	$	67,226	$	418,205	$	(2,521)	$	(2,389)	$	1,226	$	481,747

The accompanying notes are an integral part of these consolidated financial statements.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

Organization

Global Partners LP (the “Partnership”) is a master limited partnership formed in March 2005. The Partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products and renewable fuels in Massachusetts, Maine, Connecticut, Vermont, New Hampshire, Rhode Island, New York, New Jersey and Pennsylvania (collectively, the “Northeast”). The Partnership is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. As of September 30, 2020, the Partnership had a portfolio of 1,542 owned, leased and/or supplied gasoline stations, including 278 directly operated convenience stores, primarily in the Northeast. The Partnership is also one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in the New England states and New York. The Partnership engages in the purchasing, selling, gathering, blending, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks (such as ethanol), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, crude oil and propane and in the transportation of petroleum products and renewable fuels by rail from the mid-continent region of the United States and Canada.

Global GP LLC, the Partnership’s general partner (the “General Partner”), manages the Partnership’s operations and activities and employs its officers and substantially all of its personnel, except for most of its gasoline station and convenience store employees who are employed by Global Montello Group Corp. (“GMG”), a wholly owned subsidiary of the Partnership.

The General Partner, which holds a 0.67% general partner interest in the Partnership, is owned by affiliates of the Slifka family. As of September 30, 2020, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 5,239,245 common units, representing a 15.4% limited partner interest.

2020 Events

2029 Notes Offering and 2023 Notes Redemption— On October 7, 2020, the Partnership and GLP Finance Corp. (the “Issuers”) issued $350.0 million aggregate principal amount of 6.875% senior notes due 2029 (the “2029 Notes”) to several initial purchasers (the “2029 Notes Initial Purchasers”) in a private placement exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). The Partnership used the net proceeds from the offering to fund the redemption of its 7.00% senior notes due 2023 (the “2023 Notes”) and to repay a portion of the borrowings outstanding under its credit agreement. See Note 8, “Debt and Financing Obligations—Senior Notes” for additional information on the 2029 Notes.

Amended Credit Agreement—On May 7, 2020, the Partnership and certain of its subsidiaries entered into the fourth amendment to third amended and restated credit agreement which, among other things, provides temporary adjustments to certain covenants and reduces the total aggregate commitment by $130.0 million. See Note 8 for additional information.

Basis of Presentation

The accompanying consolidated financial statements as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 reflect the accounts of the Partnership. Upon consolidation, all intercompany balances and transactions have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and reflect all adjustments (consisting of normal recurring

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial condition and operating results for the interim periods. The interim financial information, which has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 and notes thereto contained in the Partnership’s Annual Report on Form 10-K. The significant accounting policies described in Note 2, “Summary of Significant Accounting Policies,” of such Annual Report on Form 10-K are the same used in preparing the accompanying consolidated financial statements, except as described in Note 19, “New Accounting Standards,” as it relates to the adoption of Accounting Standard Update (“ASU”) ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” including modifications to that standard thereafter, and now codified as Accounting Standards Codification 326 (“ASC 326”), which the Partnership adopted on January 1, 2020.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results of operations that will be realized for the entire year ending December 31, 2020. The consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019.

Noncontrolling Interest

The Partnership acquired a 60% interest in Basin Transload, LLC (“Basin Transload”) on February 1, 2013. After evaluating Accounting Standards Codification (“ASC”) Topic 810, “Consolidations,” the Partnership concluded it is appropriate to consolidate the balance sheet and statements of operations of Basin Transload based on an evaluation of the outstanding voting interests. Amounts pertaining to the noncontrolling ownership interest held by third parties in the financial position and operating results of the Partnership are reported as a noncontrolling interest in the accompanying consolidated balance sheets and statements of operations.

In connection with the terms of an agreement between the Partnership and the minority members of Basin Transload, on September 29, 2020, the Partnership acquired the minority members’ collective 40% interest in Basin Transload (see Note 18, “Legal Proceedings” for additional information).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The outbreak of COVID-19 across the United States and the responses of governmental bodies (federal, state and municipal), companies and individuals, including mandated and/or voluntary restrictions to mitigate the spread of the virus, have caused a significant economic downturn. The uncertainty surrounding the short and long-term impact of COVID-19, including the inability to project the timing of an economic recovery, may have an impact on the Partnership’s use of estimates. Among the estimates made by management are (i) estimated fair value of assets and liabilities acquired in a business combination and identification of associated goodwill and intangible assets, (ii) fair value of derivative instruments, (iii) accruals and contingent liabilities, (iv) allowance for credit losses, (v) assumptions used to evaluate goodwill, property and equipment and intangibles for impairment, (vi) environmental and asset retirement obligation provisions, (vii) cost of sales accrual, and (viii) weighted average discount rate used in lease accounting. Although the Partnership believes its estimates are reasonable, actual results could differ from these estimates.

Concentration of Risk

Due to the nature of the Partnership’s businesses and its reliance, in part, on consumer travel and spending patterns, the Partnership may experience more demand for gasoline during the late spring and summer months than

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

during the fall and winter. Travel and recreational activities are typically higher in these months in the geographic areas in which the Partnership operates, increasing the demand for gasoline. Therefore, the Partnership’s volumes in gasoline are typically higher in the second and third quarters of the calendar year. However, the COVID-19 pandemic has had a negative impact on gasoline demand and the extent and duration of that impact is uncertain. As demand for some of the Partnership’s refined petroleum products, specifically home heating oil and residual oil for space heating purposes, is generally greater during the winter months, heating oil and residual oil volumes are generally higher during the first and fourth quarters of the calendar year. These factors may result in fluctuations in the Partnership’s quarterly operating results.

The following table presents the Partnership’s product sales and other revenues as a percentage of the consolidated sales for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Gasoline sales: gasoline and gasoline blendstocks (such as ethanol)	74	%	81	%	70	%	76	%
Distillates (home heating oil, diesel and kerosene), residual oil and propane sales	17	%	15	%	24	%	19	%
Crude oil sales and crude oil logistics revenue	3	%	—	%	1	%	1	%
Convenience store sales, rental income and sundries	6	%	4	%	5	%	4	%
Total	100	%	100	%	100	%	100	%

The following table presents the Partnership’s product margin by segment as a percentage of the consolidated product margin for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Wholesale segment	15	%	17	%	23	%	19	%
Gasoline Distribution and Station Operations segment	84	%	80	%	75	%	78	%
Commercial segment	1	%	3	%	2	%	3	%
Total	100	%	100	%	100	%	100	%

See Note 15, “Segment Reporting,” for additional information on the Partnership’s operating segments.

None of the Partnership’s customers accounted for greater than 10% of total sales for the three and nine months ended September 30, 2020 and 2019.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2. Revenue from Contract Customers

Disaggregation of Revenue

The following table provides the disaggregation of revenue from contracts with customers and other sales by segment for the periods presented (in thousands):


	Three Months Ended September 30, 2020
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels, crude oil and propane	$	262,068	$	696,184	$	109,963	$	1,068,215
Station operations		—		104,710		—		104,710
Total revenue from contracts with customers		262,068		800,894		109,963		1,172,925
Other sales:
Revenue originating as physical forward contracts and exchanges		797,775		—		71,964		869,739
Revenue from leases		572		18,146		—		18,718
Total other sales		798,347		18,146		71,964		888,457
Total sales	$	1,060,415	$	819,040	$	181,927	$	2,061,382


	Three Months Ended September 30, 2019
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels, crude oil and propane	$	303,525	$	1,010,655	$	189,941	$	1,504,121
Station operations		—		110,877		—		110,877
Total revenue from contracts with customers		303,525		1,121,532		189,941		1,614,998
Other sales:
Revenue originating as physical forward contracts and exchanges		1,488,245		—		123,824		1,612,069
Revenue from leases		521		18,065		—		18,586
Total other sales		1,488,766		18,065		123,824		1,630,655
Total sales	$	1,792,291	$	1,139,597	$	313,765	$	3,245,653


	Nine Months Ended September 30, 2020
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels, crude oil and propane	$	900,529	$	1,896,960	$	335,589	$	3,133,078
Station operations		—		272,579		—		272,579
Total revenue from contracts with customers		900,529		2,169,539		335,589		3,405,657
Other sales:
Revenue originating as physical forward contracts and exchanges		2,423,073		—		242,674		2,665,747
Revenue from leases		1,650		52,998		—		54,648
Total other sales		2,424,723		52,998		242,674		2,720,395
Total sales	$	3,325,252	$	2,222,537	$	578,263	$	6,126,052

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	Nine Months Ended September 30, 2019
Revenue from contracts with customers:	Wholesale		GDSO		Commercial		Total
Refined petroleum products, renewable fuels, crude oil and propane	$	1,187,004	$	2,866,496	$	580,100	$	4,633,600
Station operations		—		300,393		—		300,393
Total revenue from contracts with customers		1,187,004		3,166,889		580,100		4,933,993
Other sales:
Revenue originating as physical forward contracts and exchanges		4,317,457		—		426,071		4,743,528
Revenue from leases		1,564		53,734		—		55,298
Total other sales		4,319,021		53,734		426,071		4,798,826
Total sales	$	5,506,025	$	3,220,623	$	1,006,171	$	9,732,819

Nature of Goods and Services

Revenue from Contracts with Customers (ASC 606):

●

Refined petroleum products, renewable fuels, crude oil and propane sales—Under the Partnership’s Wholesale, Gasoline Distribution and Station Operations (“GDSO”) and Commercial segments, revenue is recognized at the point where control of the product is transferred to the customer and collectability is reasonably assured.

●

Station operations—Revenue from convenience store sales of grocery and other merchandise and sundries (such as car wash sales and lottery and ATM commissions) is recognized at the time of the sale to the customer.

Other Revenue:

●

Revenue Originating as Physical Forward Contracts and Exchanges—The Partnership’s commodity contracts and derivative instrument activity include physical forward commodity sale contracts. The Partnership does not take the normal purchase and sale exemption available under ASC 815, “Derivatives and Hedging,” for any of its physical forward contracts. This income is recognized under ASC 815 and is included in sales at the contract value at the point where control of the product is transferred to the customer. Income from net exchange differentials included in sales is recognized under ASC 845, “Nonmonetary Transactions,” upon delivery of product to exchange partners.

●

Revenue from Leases—The Partnership has rental income from gasoline stations and cobranding arrangements and lease income from space leased to several unrelated third parties at several of the Partnership’s terminals.

Transaction Price Allocated to Remaining Performance Obligations

The Partnership has elected certain of the optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Partnership applies the practical expedient in paragraph ASC 606-10-50-14 to its contracts with customers where revenue is tied to a market-index and does not disclose information about variable consideration from remaining performance obligations for which the Partnership recognizes revenue.

The fixed component of estimated revenues expected to be recognized in the future related to performance obligations tied to a market index that are unsatisfied (or partially unsatisfied) at the end of the reporting period are not significant.

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Contract Balances

A receivable, which is included in accounts receivable, net in the accompanying consolidated balance sheets, is recognized in the period the Partnership provides services when its right to consideration is unconditional. In contrast, a contract asset will be recognized when the Partnership has fulfilled a contract obligation but must perform other obligations before being entitled to payment.

The nature of the receivables related to revenue from contracts with customers and other revenue, as well as contract assets, are the same, given they are related to the same customers and have the same risk profile and securitization. Payment terms on invoiced amounts are typically 2 to 30 days.

A contract liability is recognized when the Partnership has an obligation to transfer goods or services to a customer for which the Partnership has received consideration (or the amount is due) from the customer. The Partnership had no significant contract liabilities at both September 30, 2020 and December 31, 2019.

Note 3. Net Income Per Common Limited Partner Unit

Under the Partnership’s partnership agreement, for any quarterly period, the incentive distribution rights (“IDRs”) participate in net income only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in the Partnership’s undistributed net income or losses. Accordingly, the Partnership’s undistributed net income or losses is assumed to be allocated to the common unitholders and to the General Partner’s general partner interest.

Common units outstanding as reported in the accompanying consolidated financial statements at September 30, 2020 and December 31, 2019 excludes 29,974 and 128,170 common units, respectively, held on behalf of the Partnership pursuant to its repurchase program (see Note 13). These units are not deemed outstanding for purposes of calculating net income per common limited partner unit (basic and diluted). For all periods presented below, the Series A Preferred Units (as defined in Note 14) are not potentially dilutive securities based on the nature of the conversion feature.

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The following table provides a reconciliation of net income and the assumed allocation of net income (loss) to the common limited partners (after deducting amounts allocated to Series A preferred unitholders) for purposes of computing net income per common limited partner unit for the periods presented (in thousands, except per unit data):


	Three Months Ended September 30, 2020								Three Months Ended September 30, 2019
			Common		General						Common		General
			Limited		Partner						Limited		Partner
Numerator:	Total		Partners		Interest		IDRs		Total		Partners		Interest		IDRs
Net income attributable to Global Partners LP	$	18,230	$	17,906	$	324	$	—	$	15,080	$	14,685	$	395	$	—
Declared distribution	$	17,306	$	16,998	$	106	$	202	$	18,091	$	17,678	$	119	$	294
Assumed allocation of undistributed net income (loss)		924		908		16		—		(3,011)		(2,993)		(18)		—
Assumed allocation of net income	$	18,230	$	17,906	$	122	$	202	$	15,080	$	14,685	$	101	$	294
Less net income attributable to Series A preferred limited partners				1,682								1,682
Net income attributable to common limited partners			$	16,224							$	13,003
Denominator:
Basic weighted average common units outstanding				33,924								33,865
Dilutive effect of phantom units				285								401
Diluted weighted average common units outstanding				34,209								34,266
Basic net income per common limited partner unit			$	0.48							$	0.38
Diluted net income per common limited partner unit			$	0.47							$	0.38

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	Nine Months Ended September 30, 2020								Nine Months Ended September 30, 2019
			Common		General						Common		General
			Limited		Partner						Limited		Partner
Numerator:	Total		Partners		Interest		IDRs		Total		Partners		Interest		IDRs
Net income attributable to Global Partners LP	$	97,768	$	96,911	$	857	$	—	$	36,695	$	35,630	$	1,065	$	—
Declared distribution	$	46,483	$	45,978	$	303	$	202	$	53,697	$	52,524	$	354	$	819
Assumed allocation of undistributed net income (loss)		51,285		50,933		352		—		(17,002)		(16,894)		(108)		—
Assumed allocation of net income	$	97,768	$	96,911	$	655	$	202	$	36,695	$	35,630	$	246	$	819
Less net income attributable to Series A preferred limited partners				5,046								5,046
Net income attributable to common limited partners			$	91,865							$	30,584
Denominator:
Basic weighted average common units outstanding				33,887								33,791
Dilutive effect of phantom units				354								464
Diluted weighted average common units outstanding				34,241								34,255
Basic net income per common limited partner unit			$	2.71							$	0.91
Diluted net income per common limited partner unit			$	2.68							$	0.89

The board of directors of the General Partner declared the following quarterly cash distributions on its common units:


	Per Unit Cash		Distribution Declared for the
Cash Distribution Declaration Date	Distribution Declared		Quarterly Period Ended
April 27, 2020	$	0.39375	March 31, 2020
July 31, 2020	$	0.45875	June 30, 2020
October 26, 2020	$	0.50000	September 30, 2020

The board of directors of the General Partner declared the following quarterly cash distributions on its Series A Preferred Units:


	Per Unit Cash		Distribution Declared for the
Cash Distribution Declaration Date	Distribution Declared		Quarterly Period Covering
April 16, 2020	$	0.609375	February 15, 2020 - May 14, 2020
July 20, 2020	$	0.609375	May 15, 2020 - August 14, 2020
October 19, 2020	$	0.609375	August 15, 2020 - November 14, 2020

See Note 14, “Partners’ Equity and Cash Distributions” for further information.

Note 4. Inventories

The Partnership hedges substantially all of its petroleum and ethanol inventory using a variety of instruments, primarily exchange-traded futures contracts. These futures contracts are entered into when inventory is purchased and are either designated as fair value hedges against the inventory on a specific barrel basis for inventories qualifying for fair value hedge accounting or not designated and maintained as economic hedges against certain inventory of the Partnership on a specific barrel basis. Changes in fair value of these futures contracts, as well as the offsetting change in

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fair value on the hedged inventory, are recognized in earnings as an increase or decrease in cost of sales. All hedged inventory designated in a fair value hedge relationship is valued using the lower of cost, as determined by specific identification, or net realizable value, as determined at the product level. All petroleum and ethanol inventory not designated in a fair value hedging relationship is carried at the lower of historical cost, on a first-in, first-out basis, or net realizable value. Renewable Identification Numbers (“RINs”) inventory is carried at the lower of historical cost, on a first-in, first-out basis, or net realizable value. Convenience store inventory is carried at the lower of historical cost, based on a weighted average cost method, or net realizable value.

Inventories consisted of the following (in thousands):


	September 30,		December 31,
	2020		2019
Distillates: home heating oil, diesel and kerosene	$	172,965	$	222,202
Gasoline		75,165		120,958
Gasoline blendstocks		25,574		39,702
Crude oil		9,864		16,018
Residual oil		21,012		26,521
Propane and other		392		1,356
Renewable identification numbers (RINs)		1,876		1,329
Convenience store inventory		21,858		22,396
Total	$	328,706	$	450,482

The decrease in inventories, with the exception of convenience store inventory, is primarily due to lower prices at September 30, 2020 compared to December 31, 2019.

In addition to its own inventory, the Partnership has exchange agreements for petroleum products and ethanol with unrelated third-party suppliers, whereby it may draw inventory from these other suppliers and suppliers may draw inventory from the Partnership. Positive exchange balances are accounted for as accounts receivable and amounted to $2.6 million and $9.2 million at September 30, 2020 and December 31, 2019, respectively. Negative exchange balances are accounted for as accounts payable and amounted to $9.2 million and $17.6 million at September 30, 2020 and December 31, 2019, respectively. Exchange transactions are valued using current carrying costs.

Note 5. Goodwill

The following table presents changes in goodwill, all of which has been allocated to the GDSO segment (in thousands):


Balance at December 31, 2019	$	324,474
Dispositions (1)		(585)
Balance at September 30, 2020	$	323,889

(1)	Dispositions represent derecognition of goodwill associated with the sale and disposition of certain assets. See Note 7.

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Note 6. Property and Equipment

Property and equipment consisted of the following (in thousands):


	September 30,		December 31,
	2020		2019
Buildings and improvements	$	1,221,025	$	1,196,502
Land		450,459		452,104
Fixtures and equipment		34,851		46,848
Idle plant assets		30,500		30,500
Construction in process		32,559		27,951
Capitalized internal use software		30,275		33,502
Total property and equipment		1,799,669		1,787,407
Less accumulated depreciation		729,418		682,544
Total	$	1,070,251	$	1,104,863

Property and equipment includes assets held for sale of $2.9 million and $4.6 million at September 30, 2020 and December 31, 2019, respectively.

At September 30, 2020, the Partnership had a $42.3 million remaining net book value of long-lived assets at its West Coast facility, including $30.5 million related to the Partnership’s ethanol plant acquired in 2013. The Partnership would need to take certain measures to prepare the facility for ethanol production in order to place the plant into service and commence depreciation. Therefore, the $30.5 million related to the ethanol plant was included in property and equipment and classified as idle plant assets at September 30, 2020 and December 31, 2019.

If the Partnership is unable to generate cash flows to support the recoverability of the plant and facility assets, this may become an indicator of potential impairment of the West Coast facility. The Partnership believes these assets are recoverable but continues to monitor the market for ethanol, the continued business development of this facility for ethanol or other product transloading, and the related impact this may have on the facility’s operating cash flows and whether this would constitute an impairment indicator.

Evaluation of Long-Lived Asset Impairment

The Partnership recognized an impairment charge relating to certain right of use assets allocated to the GDSO segment in the amount of $0.2 million for each of the three and nine months ended September 30, 2020 and to the Wholesale segment in the amount of $0 and $1.7 million for the three and nine months ended September 30, 2020, respectively, which is included in long-lived asset impairment in the accompanying statements of operations.

The Partnership recognized an impairment charge relating to long-lived assets used at certain gasoline stations and convenience stores in the amount of $0.6 million for each of the three and nine months ended September 30, 2019, which is included in long-lived asset impairment in the accompanying statements of operations. These assets are allocated to the GDSO segment.

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Note 7. Sales and Disposition of Assets

The following table provides the Partnership’s (gain) loss on sale and dispositions of assets for the periods presented (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Periodic divestiture of gasoline stations	$	—	$	—		(278)		(142)
Strategic asset divestiture program - Real estate firm coordinated sale		68		275		(32)		(1,455)
Loss on assets held for sale		558		9		964		1,274
Other		65		39		(31)		71
Total	$	691	$	323	$	623	$	(252)

Periodic Divestiture of Gasoline Stations

As part of the routine course of operations in the GDSO segment, the Partnership may periodically divest certain gasoline stations. The gain or loss on the sale, representing cash proceeds less net book value of assets and recognized liabilities at disposition, net of settlement and dispositions costs, is recorded in net loss (gain) on sale and disposition of assets in the accompanying consolidated statements of operations and amounted to $0 for each of the three months ended September 30, 2020 and 2019, and ($0.3 million) and ($0.1 million) for the nine months ended September 30, 2020, and 2019, respectively.

Strategic Asset Divestiture Program

The Partnership identified certain non-strategic GDSO sites that are part of its Strategic Asset Divestiture Program (the “Divestiture Program”). The gain or loss on the sales of these sites, representing cash proceeds less net book value of assets and recognized liabilities at disposition, net of settlement and dispositions costs, is recorded in net loss (gain) on sale and disposition of assets in the accompanying consolidated statements of operations.

Real Estate Firm Coordinated Sales—The Partnership has retained a real estate firm to coordinate the continuing sale of non-strategic GDSO sites. The Partnership sold zero sites and three sites during the three and nine months ended September 30, 2020, respectively. The Partnership recognized an immaterial gain on the sales of these sites for the nine months ended September 30, 2020, including the derecognition of $0.6 million of GDSO goodwill.

The Partnership recognized a loss of $0.3 million and a gain of ($1.5 million) on the sales of sites for the three and nine months ended September 30, 2019, respectively, including the derecognition of $0.4 million and $2.7 million of GDSO goodwill for these respective periods.

Loss on Assets Held for Sale

In conjunction with the periodic divestiture of gasoline stations and the sale of sites within the Divestiture Program, the Partnership may classify certain gasoline station assets as held for sale. Impairment charges related to assets held for sale are included in net loss (gain) on sale and disposition of assets in the accompanying consolidated statements of operations.

The Partnership classified 5 sites as held for sale at September 30, 2020 associated with the periodic divestiture of gasoline station sites and the real estate firm coordinated sales discussed above. Impairment charges related to these assets held for sale were $0.6 million and $1.0 million for the three and nine months ended September 30, 2020, respectively.

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The Partnership recorded impairment charges related to assets held for sale associated with the periodic divestiture of gasoline station sites and the real estate firm coordinated sales which were immaterial for the three months ended September 30, 2019 and $1.3 million for the nine months ended September 30, 2019.

Assets held for sale of $2.9 million and $4.6 million at September 30, 2020 and December 31, 2019, respectively, are included in property and equipment in the accompanying consolidated balance sheets. Assets held for sale are expected to be sold within the next 12 months.

Other

The Partnership recognizes gains and losses on the sale and disposition of other assets, including vehicles, fixtures and equipment, and the gain or loss on such other assets are included in other in the aforementioned table.

Note 8. Debt and Financing Obligations

Credit Agreement

Certain subsidiaries of the Partnership, as borrowers, and the Partnership and certain of its subsidiaries, as guarantors, have a $1.17 billion senior secured credit facility (the “Credit Agreement”) which was amended on May 7, 2020 to, among other things, provide temporary adjustments to certain covenants and reduce the total aggregate commitment by $130.0 million from $1.3 billion (see “–Fourth Amendment to the Credit Agreement” below). The Credit Agreement matures on April 29, 2022.

There are two facilities under the Credit Agreement:

●

a working capital revolving credit facility to be used for working capital purposes and letters of credit in the principal amount equal to the lesser of the Partnership’s borrowing base and $770.0 million; and

●

a $400.0 million revolving credit facility to be used for general corporate purposes.

Availability under the working capital revolving credit facility is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. Availability under the borrowing base may be affected by events beyond the Partnership’s control, such as changes in petroleum product prices, collection cycles, counterparty performance, advance rates and limits and general economic conditions.

The average interest rates for the Credit Agreement were 2.8% and 4.3% for the three months ended September 30, 2020 and 2019, respectively, and 3.0% and 4.5% for the nine months ended September 30, 2020 and 2019, respectively.

The Partnership classifies a portion of its working capital revolving credit facility as a current liability and a portion as a long-term liability. The portion classified as a long-term liability represents the amounts expected to be outstanding throughout the next twelve months based on an analysis of historical daily borrowings under the working capital revolving credit facility, the seasonality of borrowings, forecasted future working capital requirements and forward product curves, and because the Partnership has a multi-year, long-term commitment from its bank group. Accordingly, at September 30, 2020 the Partnership estimated working capital revolving credit facility borrowings will equal or exceed $150.0 million over the next twelve months and, therefore, classified $10.1 million as the current portion at September 30, 2020, representing the amount the Partnership expects to pay down over the next twelve months. The long-term portion of the working capital revolving credit facility was $150.0 million and $175.0 million at September 30, 2020 and December 31, 2019, respectively, and the current portion was $10.1 million and $148.9 million

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at September 30, 2020 and December 31, 2019, respectively. The decrease in total borrowings under the working capital revolving credit facility of $163.8 million from December 31, 2019 was in part due to lower prices.

As of September 30, 2020, the Partnership had total borrowings outstanding under the Credit Agreement of $348.1 million, including $188.0 million outstanding on the revolving credit facility. In addition, the Partnership had outstanding letters of credit of $48.5 million. Subject to borrowing base limitations, the total remaining availability for borrowings and letters of credit was $773.4 million and $660.2 million at September 30, 2020 and December 31, 2019, respectively.

The Credit Agreement imposes financial covenants that require the Partnership to maintain certain minimum working capital amounts, a minimum combined interest coverage ratio, a maximum senior secured leverage ratio and a maximum total leverage ratio. The Partnership was in compliance with the foregoing covenants at September 30, 2020. The Credit Agreement also contains a representation whereby there can be no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement). In addition, the Credit Agreement limits distributions by the Partnership to its unitholders to the amount of Available Cash (as defined in the Partnership’s partnership agreement).

Please read Note 8 of Notes to Consolidated Financial Statements in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on the Credit Agreement.

Deferred Financing Fees

The Partnership incurs bank fees related to its Credit Agreement and other financing arrangements. These deferred financing fees are capitalized and amortized over the life of the Credit Agreement or other financing arrangements. In connection with the Fourth Amendment (as defined below) in May 2020, the Partnership capitalized additional financing fees of $1.2 million. Also in connection with the Fourth Amendment, the Partnership incurred expenses of approximately $0.7 million associated with the write-off of a portion of the related deferred financing fees for the nine months ended September 30, 2020 which are included in interest expense in the accompanying statement of operations. The Partnership had unamortized deferred financing fees of $14.6 million and $18.0 million at September 30, 2020 and December 31, 2019, respectively.

Unamortized fees related to the Credit Agreement are included in other current assets and other long-term assets and amounted to $5.7 million and $7.8 million at September 30, 2020 and December 31, 2019, respectively. Unamortized fees related to the senior notes are presented as a direct deduction from the carrying amount of that debt liability and amounted to $8.2 million and $9.5 million at September 30, 2020 and December 31, 2019, respectively. Unamortized fees related to the Sale-Leaseback Transaction (defined below) are presented as a direct deduction from the carrying amount of the financing obligation and amounted to $0.7 million at both September 30, 2020 and December 31, 2019.

Amortization expense of approximately $1.3 million and $1.2 million for the three months ended September 30, 2020 and 2019, respectively, and $3.9 million and $3.8 million for the nine months ended September 30, 2020 and 2019, respectively, is included in interest expense in the accompanying consolidated statements of operations.

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Supplemental cash flow information

The following table presents supplemental cash flow information related to the Credit Agreement for the periods presented (in thousands):


	Nine Months Ended
	September 30,
	2020		2019
Borrowings from working capital revolving credit facility	$	1,041,600	$	1,290,700
Payments on working capital revolving credit facility		(1,205,400)		(1,291,100)
Net payments on working capital revolving credit facility	$	(163,800)	$	(400)
Borrowings from revolving credit facility	$	50,000	$	—
Payments on revolving credit facility		(54,700)		(23,000)
Net payments on revolving credit facility	$	(4,700)	$	(23,000)

Fourth Amendment to the Credit Agreement

On May 7, 2020, the Partnership and certain of its subsidiaries entered into the Fourth Amendment to Third Amended and Restated Credit Agreement (the “Fourth Amendment”), which further amends the Credit Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Credit Agreement.

The Fourth Amendment amends certain terms, provisions and covenants of the Credit Agreement, including, without limitation:

(i)

increases by 0.125% the applicable rate under the working capital facility for borrowings of base rate loans, Eurocurrency rate loans and cost of funds rate loans and for issuances of letters of credit;

(ii)

adds two pricing levels under the revolving credit facility for borrowings of base rate loans, Eurocurrency rate loans and cost of funds rate loans and for issuances of letters of credit;

(iii)

adds a Eurocurrency rate floor of 0.75% and a cost of funds rate floor of 0.50%;

(iv)

for the four (4) quarters commencing with the quarter ended June 30, 2020, (a) increases to Combined Total Leverage Ratio covenant levels and (b) a reduction to the Combined Interest Coverage Ratio covenant levels; and

(v)

reduces the aggregate commitments under the facilities by 10%, with the commitments under the working capital facility reduced to $770.0 million from $850.0 million and the commitments under the revolving credit facility reduced to $400.0 million from $450.0 million.

All other material terms of the Credit Agreement remain substantially the same as disclosed in Note 8 of Notes to Consolidated Financial Statements in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019.

Senior Notes

The Partnership had 7.00% senior notes due 2027 and 7.00% senior notes due 2023 outstanding at September 30, 2020. Please read Note 8 of Notes to Consolidated Financial Statements in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on these senior notes. On October 7, 2020, the Issuers issued $350.0 million aggregate principal amount of 6.875% senior notes due 2029 to the 2029 Notes Initial Purchasers in a private placement exempt from the registration requirements under the Securities Act. The Partnership

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used the net proceeds from the offering to fund the redemption of its 2023 Notes and to repay a portion of the borrowings outstanding under its Credit Agreement.

2029 Notes Indenture

In connection with the private placement of the 2029 Notes on October 7, 2020, the Issuers and the subsidiary guarantors and Regions Bank, as trustee, entered into an indenture (the “2029 Notes Indenture”).

The 2029 Notes mature on January 15, 2029 with interest accruing at a rate of 6.875% per annum. Interest is payable beginning July 15, 2021 and thereafter semi-annually in arrears on January 15 and July 15 of each year. The 2029 Notes are guaranteed on a joint and several senior unsecured basis by each of the Issuers and the subsidiary guarantors to the extent set forth in the 2029 Notes Indenture. Upon a continuing event of default, the trustee or the holders of at least 25% in principal amount of the 2029 Notes may declare the 2029 Notes immediately due and payable, except that an event of default resulting from entry into a bankruptcy, insolvency or reorganization with respect to the Issuers, any restricted subsidiary of the Partnership that is a significant subsidiary or any group of its restricted subsidiaries that, taken together, would constitute a significant subsidiary of the Partnership, will automatically cause the 2029 Notes to become due and payable.

The Issuers have the option to redeem up to 35% of the 2029 Notes prior to October 15, 2023 at a redemption price (expressed as a percentage of principal amount) of 106.875% plus accrued and unpaid interest, if any. The Issuers have the option to redeem the 2029 Notes, in whole or in part, at any time on or after January 15, 2024, at the redemption prices of 103.438% for the twelve-month period beginning on January 15, 2024, 102.292% for the twelve-month period beginning January 15, 2025, 101.146% for the twelve-month period beginning January 15, 2026, and 100% beginning on January 15, 2027 and at any time thereafter, together with any accrued and unpaid interest to the date of redemption. In addition, before January 15, 2024, the Issuers may redeem all or any part of the 2029 Notes at a redemption price equal to the sum of the principal amount thereof, plus a make whole premium, plus accrued and unpaid interest, if any, to the redemption date. The holders of the 2029 Notes may require the Issuers to repurchase the 2029 Notes following certain asset sales or a Change of Control Triggering Event (as defined in the 2029 Notes Indenture) at the prices and on the terms specified in the 2029 Notes Indenture.

The 2029 Notes Indenture contains covenants that limit the Partnership’s ability to, among other things, incur additional indebtedness and issue preferred securities, make certain dividends and distributions, make certain investments and other restricted payments, restrict distributions by its subsidiaries, create liens, sell assets or merge with other entities. Events of default under the 2029 Notes Indenture include (i) a default in payment of principal of, or interest or premium, if any, on, the 2029 Notes, (ii) breach of the Partnership’s covenants under the 2029 Notes Indenture, (iii) certain events of bankruptcy and insolvency, (iv) any payment default or acceleration of indebtedness of the Partnership or certain subsidiaries if the total amount of such indebtedness unpaid or accelerated exceeds $50.0 million and (v) failure to pay within 60 days uninsured final judgments exceeding $50.0 million.

2029 Notes Registration Rights Agreement

On October 7, 2020, the Issuers and the subsidiary guarantors entered into a registration rights agreement (the “2029 Notes Registration Rights Agreement”) with the 2029 Notes Initial Purchasers in connection with the Issuers’ private placement of the 2029 Notes. Under the 2029 Notes Registration Rights Agreement, the Issuers and the subsidiary guarantors have agreed to file and use commercially reasonable efforts to cause to become effective a registration statement relating to an offer to exchange the 2029 Notes for an issue of notes with terms identical to the 2029 Notes (except that the exchange notes will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with the 2029 Notes Registration Rights Agreement) that are registered under the Securities Act so as to permit the exchange offer to be consummated by December 1, 2021. If the exchange offer is not completed on or before December 1, 2021, the annual interest rate borne by the 2029 Notes will increase by 1.0% per

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annum until the exchange offer is completed or a shelf registration statement relating to resales of the 2029 Notes is declared effective.

Financing Obligations

Capitol Acquisition

On June 1, 2015, the Partnership acquired retail gasoline stations and dealer supply contracts from Capitol Petroleum Group (“Capitol”). In connection with the acquisition, the Partnership assumed a financing obligation of $89.6 million associated with two sale-leaseback transactions by Capitol for 53 leased sites that did not meet the criteria for sale accounting. During the terms of these leases, which expire in May 2028 and September 2029, in lieu of recognizing lease expense for the lease rental payments, the Partnership incurs interest expense associated with the financing obligation. Interest expense of approximately $2.3 million was recorded for each of the three months ended September 30, 2020 and 2019, and $7.0 million was recorded for each of the nine months ended September 30, 2020 and 2019, which is included in interest expense in the accompanying consolidated statements of operations. The financing obligation will amortize through expiration of the leases based upon the lease rental payments which were $2.5 million for each of the three months ended September 30, 2020 and 2019, and $7.6 million and $7.4 million for the nine months ended September 30, 2020 and 2019, respectively. The financing obligation balance outstanding at September 30, 2020 was $86.4 million associated with the Capitol acquisition.

Sale-Leaseback Transaction

On June 29, 2016, the Partnership sold to a premier institutional real estate investor (the “Buyer”) real property assets, including the buildings, improvements and appurtenances thereto, at 30 gasoline stations and convenience stores located in Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island (the “Sale-Leaseback Sites”) for a purchase price of approximately $63.5 million. In connection with the sale, the Partnership entered into a Master Unitary Lease Agreement with the Buyer to lease back the real property assets sold with respect to the Sale-Leaseback Sites (such Master Lease Agreement, together with the Sale-Leaseback Sites, the “Sale-Leaseback Transaction”).

As a result of not meeting the criteria for sale accounting for these sites, the Sale-Leaseback Transaction is accounted for as a financing arrangement. As such, the property and equipment sold and leased back by the Partnership has not been derecognized and continues to be depreciated. The Partnership recognized a corresponding financing obligation of $62.5 million equal to the $63.5 million cash proceeds received for the sale of these sites, net of $1.0 million financing fees. During the term of the lease, which expires in June 2031, in lieu of recognizing lease expense for the lease rental payments, the Partnership incurs interest expense associated with the financing obligation. Lease rental payments are recognized as both interest expense and a reduction of the principal balance associated with the financing obligation. Interest expense was $1.1 million for each of the three months ended September 30, 2020 and 2019 and $3.3 million for each of the nine months ended September 30, 2020 and 2019. Lease rental payments were $1.2 million for each of the three months ended September 30, 2020 and 2019, and $3.5 million for each of the nine months ended September 30, 2020 and 2019. The financing obligation balance outstanding at September 30, 2020 was $62.1 million associated with the Sale-Leaseback Transaction.

Note 9. Derivative Financial Instruments

The Partnership principally uses derivative instruments, which include regulated exchange-traded futures and options contracts (collectively, “exchange-traded derivatives”) and physical and financial forwards and over-the-counter (“OTC”) swaps (collectively, “OTC derivatives”), to reduce its exposure to unfavorable changes in commodity market prices. The Partnership uses these exchange-traded and OTC derivatives to hedge commodity price risk associated with its inventory, fuel purchases and undelivered forward commodity purchases and sales (“physical forward contracts”). The Partnership accounts for derivative transactions in accordance with ASC Topic 815, “Derivatives and Hedging,” and

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recognizes derivatives instruments as either assets or liabilities in the consolidated balance sheet and measures those instruments at fair value. The changes in fair value of the derivative transactions are presented currently in earnings, unless specific hedge accounting criteria are met.

The fair value of exchange-traded derivative transactions reflects amounts that would be received from or paid to the Partnership’s brokers upon liquidation of these contracts. The fair value of these exchange-traded derivative transactions is presented on a net basis, offset by the cash balances on deposit with the Partnership’s brokers, presented as brokerage margin deposits in the consolidated balance sheets. The fair value of OTC derivative transactions reflects amounts that would be received from or paid to a third party upon liquidation of these contracts under current market conditions. The fair value of these OTC derivative transactions is presented on a gross basis as derivative assets or derivative liabilities in the consolidated balance sheets, unless a legal right of offset exists. The presentation of the change in fair value of the Partnership’s exchange-traded derivatives and OTC derivative transactions depends on the intended use of the derivative and the resulting designation.

The following table summarizes the notional values related to the Partnership’s derivative instruments outstanding at September 30, 2020:


	Units (1)		Unit of Measure
Exchange-Traded Derivatives
Long		85,553	Thousands of barrels
Short		(90,087)	Thousands of barrels

OTC Derivatives (Petroleum/Ethanol)
Long		8,606	Thousands of barrels
Short		(7,666)	Thousands of barrels

(1)

Number of open positions and gross notional values do not measure the Partnership’s risk of loss, quantify risk or represent assets or liabilities of the Partnership, but rather indicate the relative size of the derivative instruments and are used in the calculation of the amounts to be exchanged between counterparties upon settlements.

Derivatives Accounted for as Hedges

The Partnership utilizes fair value hedges and cash flow hedges to hedge commodity price risk.

Fair Value Hedges

Derivatives designated as fair value hedges are used to hedge price risk in commodity inventories and principally include exchange-traded futures contracts that are entered into in the ordinary course of business. For a derivative instrument designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting change in fair value on the hedged item of the risk being hedged. Gains and losses related to fair value hedges are recognized in the consolidated statements of operations through cost of sales. These futures contracts are settled on a daily basis by the Partnership through brokerage margin accounts.

The Partnership’s fair value hedges include exchange-traded futures contracts and OTC derivative contracts that are hedges against inventory with specific futures contracts matched to specific barrels. The change in fair value of these futures contracts and the change in fair value of the underlying inventory generally provide an offset to each other in the consolidated statements of operations.

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The following table presents the gains and losses from the Partnership’s derivative instruments involved in fair value hedging relationships recognized in the consolidated statements of operations for the periods presented (in thousands):


	Statement of Gain (Loss)	Three Months Ended				Nine Months Ended
	Recognized in Income on	September 30,				September 30,
	Derivatives	2020		2019		2020		2019
Derivatives in fair value hedging relationship
Exchange-traded futures contracts and OTC derivative contracts for petroleum commodity products	Cost of sales	$	(8,054)	$	2,634	$	(6,356)	$	3,872

Hedged items in fair value hedge relationship
Physical inventory	Cost of sales	$	9,456	$	(2,136)	$	3,299	$	(5,121)

Cash Flow Hedges

The Partnership’s sales and cost of sales fluctuate with changes in commodity prices. In addition to the Partnership’s commodity price risk associated with its inventory and undelivered forward commodity purchases and sales, the Partnership’s gross profit may fluctuate in periods where commodity prices are rising or declining depending on the magnitude and duration of the commodity price change. In the Partnership’s GDSO segment, the Partnership has observed trends where margins may improve in periods where wholesale gasoline prices are declining and margins may compress during periods where wholesale gasoline prices are rising. Additionally, the Partnership has certain operating costs that are indirectly impacted by fluctuations in commodity prices such that its operating costs may increase during periods where margins compress and, conversely, operating costs may decrease during periods where margins improve. To hedge the Partnership’s cash flow risk as a result of this observed trend in the GDSO segment, the Partnership has entered into exchange-traded commodity swap contracts and has designated them as a cash flow hedge of its fuel purchases designed to reduce its cost of fuel if market prices rise through 2021 or increase its cost of fuel if market prices decrease through 2021. For a derivative instrument being designated as a cash flow hedge, the effective portion of the derivative gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into the consolidated statement of income through cost of goods sold in the same period that the hedged exposure affects earnings.

The amount of gain (loss) recognized in other comprehensive income for derivatives designated in cash flow hedging relationships was $1.5 million and $6.9 million for the three and nine months ended September 30, 2020, respectively. The amount of gain (loss) reclassified from other comprehensive income into cost of sales for derivatives designated in cash flow hedging relationships was $1.0 million and $1.2 million for the three and nine months ended September 30, 2020, respectively. The amount of gain (loss) recognized in other comprehensive income as of September 30, 2020 and expected to be reclassified into earnings within the next 12 months is $4.7 million.

Derivatives Not Accounted for as Hedges

The Partnership utilizes petroleum and ethanol commodity contracts to hedge price and currency risk in certain commodity inventories and physical forward contracts.

Petroleum and Ethanol Commodity Contracts

The Partnership uses exchange-traded derivative contracts to hedge price risk in certain commodity inventories which do not qualify for fair value hedge accounting or are not designated by the Partnership as fair value hedges. Additionally, the Partnership uses exchange-traded derivative contracts, and occasionally financial forward and OTC swap agreements, to hedge commodity price exposure associated with its physical forward contracts which are not designated by the Partnership as cash flow hedges. These physical forward contracts, to the extent they meet the

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definition of a derivative, are considered OTC physical forwards and are reflected as derivative assets or derivative liabilities in the consolidated balance sheet. The related exchange-traded derivative contracts (and financial forward and OTC swaps, if applicable) are also reflected as brokerage margin deposits (and derivative assets or derivative liabilities, if applicable) in the consolidated balance sheet, thereby creating an economic hedge. Changes in fair value of these derivative instruments are recognized in the consolidated statements of operations through cost of sales. These exchange-traded derivatives are settled on a daily basis by the Partnership through brokerage margin accounts.

While the Partnership seeks to maintain a position that is substantially balanced within its commodity product purchase and sale activities, it may experience net unbalanced positions for short periods of time as a result of variances in daily purchases and sales and transportation and delivery schedules as well as other logistical issues inherent in the businesses, such as weather conditions. In connection with managing these positions, the Partnership is aided by maintaining a constant presence in the marketplace. The Partnership also engages in a controlled trading program for up to an aggregate of 250,000 barrels of commodity products at any one point in time. Changes in fair value of these derivative instruments are recognized in the consolidated statements of operations through cost of sales.

The following table presents the gains and losses from the Partnership’s derivative instruments not involved in a hedging relationship recognized in the consolidated statements of operations for the periods presented (in thousands):

Statement of Gain (Loss)

Three Months Ended

Nine Months Ended

Derivatives not designated as

Recognized in

September 30,

hedging instruments

Income on Derivatives

2020

2019

2020

2019

Commodity contracts

Cost of sales

2,219

3,204

6,285

18,329

Margin Deposits

All of the Partnership’s exchange-traded derivative contracts (designated and not designated) are transacted through clearing brokers. The Partnership deposits initial margin with the clearing brokers, along with variation margin, which is paid or received on a daily basis, based upon the changes in fair value of open futures contracts and settlement of closed futures contracts. Cash balances on deposit with clearing brokers and open equity are presented on a net basis within brokerage margin deposits in the consolidated balance sheets.

Commodity Contracts and Other Derivative Activity

The Partnership’s commodity contracts and other derivative activity include: (i) exchange-traded derivative contracts that are hedges against inventory and either do not qualify for hedge accounting or are not designated in a hedge accounting relationship, (ii) exchange-traded derivative contracts used to economically hedge physical forward contracts, (iii) financial forward and OTC swap agreements used to economically hedge physical forward contracts and (iv) the derivative instruments under the Partnership’s controlled trading program. The Partnership does not take the normal purchase and sale exemption available under ASC 815 for any of its physical forward contracts.

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The following table presents the fair value of each classification of the Partnership’s derivative instruments and its location in the consolidated balance sheets at September 30, 2020 and December 31, 2019 (in thousands):


		September 30, 2020
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	6,001	$	58,032	$	64,033
Forward derivative contracts (1)	Derivative assets		—		43,159		43,159
Total asset derivatives		$	6,001	$	101,191	$	107,192

Liability Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	(6,915)	$	(62,233)	$	(69,148)
Forward derivative contracts (1)	Derivative liabilities		—		(6,589)		(6,589)
Total liability derivatives		$	(6,915)	$	(68,822)	$	(75,737)


		December 31, 2019
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	—	$	31,645	$	31,645
Forward derivative contracts (1)	Derivative assets		—		4,564		4,564
Total asset derivatives		$	—	$	36,209	$	36,209

Liability Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	(3,838)	$	(26,354)	$	(30,192)
Forward derivative contracts (1)	Derivative liabilities		—		(12,698)		(12,698)
Total liability derivatives		$	(3,838)	$	(39,052)	$	(42,890)

(1)	Forward derivative contracts include the Partnership’s petroleum and ethanol physical and financial forwards and OTC swaps.

Credit Risk

The Partnership’s derivative financial instruments do not contain credit risk related to other contingent features that could cause accelerated payments when these financial instruments are in net liability positions.

The Partnership is exposed to credit loss in the event of nonperformance by counterparties to the Partnership’s exchange-traded and OTC derivative contracts, but the Partnership has no current reason to expect any material nonperformance by any of these counterparties. Exchange-traded derivative contracts, the primary derivative instrument utilized by the Partnership, are traded on regulated exchanges, greatly reducing potential credit risks. The Partnership utilizes major financial institutions as its clearing brokers for all New York Mercantile Exchange (“NYMEX”), Chicago Mercantile Exchange (“CME”) and Intercontinental Exchange (“ICE”) derivative transactions and the right of offset exists with these financial institutions under master netting agreements. Accordingly, the fair value of the Partnership’s exchange-traded derivative instruments is presented on a net basis in the consolidated balance sheets. Exposure on OTC derivatives is limited to the amount of the recorded fair value as of the balance sheet dates.

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Note 10. Fair Value Measurements

The following tables present, by level within the fair value hierarchy, the Partnership’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 (in thousands):


	Fair Value at September 30, 2020
							Cash Collateral
	Level 1		Level 2		Level 3		Netting		Total
Assets:
Forward derivative contracts (1)	$	—	$	43,122	$	37	$	—	$	43,159
Exchange-traded/cleared derivative instruments (2)		(5,115)		—		—		28,570		23,455
Pension plans		17,820		—		—		—		17,820
Total assets	$	12,705	$	43,122	$	37	$	28,570	$	84,434

Liabilities:
Forward derivative contracts (1)	$	—	$	(6,538)	$	(51)	$	—	$	(6,589)


	Fair Value at December 31, 2019
							Cash Collateral
	Level 1		Level 2		Level 3		Netting		Total
Assets:
Forward derivative contracts (1)	$	—	$	4,002	$	562	$	—	$	4,564
Exchange-traded/cleared derivative instruments (2)		1,453		—		—		33,013		34,466
Pension plans		17,099		—		—		—		17,099
Total assets	$	18,552	$	4,002	$	562	$	33,013	$	56,129

Liabilities:
Forward derivative contracts (1)	$	—	$	(12,112)	$	(586)	$	—	$	(12,698)

(1)	Forward derivative contracts include the Partnership’s petroleum and ethanol physical and financial forwards and OTC swaps.

(2)	Amount includes the effect of cash balances on deposit with clearing brokers.

This table excludes cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. The carrying amounts of certain of the Partnership’s financial instruments, including cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate fair value due to their short maturities. The carrying value of the credit facility approximates fair value due to the variable rate nature of these financial instruments.

The carrying value of the inventory qualifying for fair value hedge accounting approximates fair value due to adjustments for changes in fair value of the hedged item. The fair values of the derivatives used by the Partnership are disclosed in Note 9.

The determination of the fair values above incorporates factors including not only the credit standing of the counterparties involved, but also the impact of the Partnership’s nonperformance risks on its liabilities.

The Partnership estimates the fair values of its senior notes using a combination of quoted market prices for similar financing arrangements and expected future payments discounted at risk-adjusted rates, which are considered

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Level 2 inputs. The fair values of the senior notes, estimated by observing market trading prices of the respective senior notes, were as follows (in thousands):


	September 30, 2020				December 31, 2019
	Face		Fair		Face		Fair
	Value		Value		Value		Value
7.00% senior notes due 2023	$	300,000	$	306,000	$	300,000	$	309,000
7.00% senior notes due 2027	$	400,000	$	406,000	$	400,000	$	423,000

Level 3 Information

The values of the Level 3 derivative contracts were calculated using market approaches based on a combination of observable and unobservable market inputs, including published and quoted NYMEX, CME, ICE, New York Harbor and third-party pricing information for a component of the underlying instruments as well as internally developed assumptions where there is little, if any, published or quoted prices or market activity.

The unobservable inputs used in the measurement of the Level 3 derivative contracts include estimates for location basis, transportation and throughput costs net of an estimated margin for current market participants. The estimated range and weighted average for these inputs include the following:


	September 30, 2020						December 31, 2019
	Low		High		Weighted		Low		High		Weighted
Product	($ per barrel)		($ per barrel)		Average		($ per barrel)		($ per barrel)		Average
Crude oil	$	(3.60)	$	(3.55)	$	(3.57)	$	(4.95)	$	(3.25)	$	(4.88)
Propane	$	—	$	—	$	—	$	0.84	$	15.54	$	11.04

The respective weighted averages were calculated by weighting the contractual volumes of the location basis, transportation and throughput costs net of an estimated margin for current market participants. The Partnership ceased marketing propane during the quarter ended June 30, 2020 and, therefore, inputs were not required at September 30, 2020. Gains and losses recognized in earnings (or changes in net assets) are disclosed in Note 9.

Uncertainty in changes in the significant unobservable inputs to the fair value measurement if those inputs reasonably could have been different at the reporting date is as follows:


Significant			Impact on Fair Value
Unobservable Input	Position	Change to Input	Measurement
Location basis	Long	Increase (decrease)	Gain (loss)
Location basis	Short	Increase (decrease)	Loss (gain)
Transportation	Long	Increase (decrease)	Gain (loss)
Transportation	Short	Increase (decrease)	Loss (gain)
Throughput costs	Long	Increase (decrease)	Gain (loss)
Throughput costs	Short	Increase (decrease)	Loss (gain)

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The following table presents a reconciliation of changes in fair value of the Partnership’s derivative contracts classified as Level 3 in the fair value hierarchy at September 30, 2020 (in thousands):


Fair value at December 31, 2019	$	(24)
Derivatives entered into during the period		22
Derivatives sold during the period		(36)
Realized gains (losses) recorded in cost of sales		24
Fair value at September 30, 2020	$	(14)

The Partnership’s policy is to recognize transfers between levels with the fair value hierarchy as of the beginning of the reporting period. The Partnership also excludes any activity for derivative instruments that were not classified as Level 3 at either the beginning or end of the reporting period.

Non-Recurring Fair Value Measures

Certain nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as acquired assets and liabilities, losses related to firm non-cancellable purchase commitments or long-lived assets subject to impairment. For assets and liabilities measured on a non-recurring basis during the period, accounting guidance requires quantitative disclosures about the fair value measurements separately for each major category. See Note 7 for a discussion of the Partnership’s assets held for sale.

Note 11. Environmental Liabilities and Renewable Identification Numbers

Environmental Liabilities

The following table presents a summary roll forward of the Partnership’s environmental liabilities at September 30, 2020 (in thousands):


	Balance at						Other		Balance at
	December 31,		Payments		Dispositions		Adjustments		September 30,
Environmental Liability Related to:	2019		2020		2020		2020		2020
Retail gasoline stations	$	55,493	$	(2,010)	$	(918)	$	(813)	$	51,752
Terminals		3,778		(105)		—		—		3,673
Total environmental liabilities	$	59,271	$	(2,115)	$	(918)	$	(813)	$	55,425
Current portion	$	5,009							$	5,009
Long-term portion		54,262								50,416
Total environmental liabilities	$	59,271							$	55,425

The Partnership’s estimates used in these environmental liabilities are based on all known facts at the time and its assessment of the ultimate remedial action outcomes. Among the many uncertainties that impact the Partnership’s estimates are the necessary regulatory approvals for, and potential modification of, its remediation plans, the amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment, relief of obligations through divestitures of sites and the possibility of existing legal claims giving rise to additional claims. Dispositions generally represent relief of legal obligations through the sale of the related property with no retained obligation. Other adjustments generally represent changes in estimates for existing obligations or obligations associated with new sites. Therefore, although the Partnership believes that these environmental liabilities are adequate, no assurances can be made that any costs incurred in excess of these environmental liabilities or outside of indemnifications or not otherwise covered by insurance would not have a material adverse effect on the Partnership’s financial condition, results of operations or cash flows.

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Renewable Identification Numbers (RINs)

A RIN is a serial number assigned to a batch of renewable fuel for the purpose of tracking its production, use and trading as required by the U.S. Environmental Protection Agency’s (“EPA”) Renewable Fuel Standard that originated with the Energy Policy Act of 2005 and modified by the Energy Independence and Security Act of 2007. To evidence that the required volume of renewable fuel is blended with gasoline and diesel motor vehicle fuels, obligated parties must retire sufficient RINs to cover their Renewable Volume Obligation (“RVO”). The Partnership’s EPA obligations relative to renewable fuel reporting are comprised of foreign gasoline and diesel that the Partnership may import and blending operations at certain facilities. As a wholesaler of transportation fuels through its terminals, the Partnership separates RINs from renewable fuel through blending with gasoline and can use those separated RINs to settle its RVO. While the annual compliance period for the RVO is a calendar year and the settlement of the RVO typically occurs by March 31 of the following year, the settlement of the RVO can occur, under certain EPA deferral actions, more than one year after the close of the compliance period.

The Partnership’s Wholesale segment’s operating results may be sensitive to the timing associated with its RIN position relative to its RVO at a point in time, and the Partnership may recognize a mark-to-market liability for a shortfall in RINs at the end of each reporting period. To the extent that the Partnership does not have a sufficient number of RINs to satisfy the RVO as of the balance sheet date, the Partnership charges cost of sales for such deficiency based on the market price of the RINs as of the balance sheet date and records a liability representing the Partnership’s obligation to purchase RINs. The Partnership’s RVO deficiency was $1.4 million and $0.9 million at September 30, 2020 and December 31, 2019, respectively.

The Partnership may enter into RIN forward purchase and sales commitments. Total losses from firm non-cancellable commitments were immaterial at both September 30, 2020 and December 31, 2019.

Note 12. Related Party Transactions

The Partnership is a party to a Second Amended and Restated Services Agreement with Global Petroleum Corp. (“GPC”), an affiliate of the Partnership that is 100% owned by members of the Slifka family, pursuant to which the Partnership provides GPC with certain tax, accounting, treasury, legal, information technology, human resources and financial operations support services for which GPC pays the Partnership a monthly services fee at an agreed amount subject to the approval by the Conflicts Committee of the board of directors of the General Partner. The Second Amended and Restated Services Agreement is for an indefinite term and any party may terminate some or all of the services upon ninety (90) days’ advanced written notice. As of September 30, 2020, no such notice of termination was given by GPC or the Partnership.

The General Partner employs substantially all of the Partnership’s employees, except for most of its gasoline station and convenience store employees, who are employed by GMG. The Partnership reimburses the General Partner for expenses incurred in connection with these employees. These expenses, including bonus, payroll and payroll taxes, were $29.7 million and $33.4 million for the three months ended September 30, 2020 and 2019, respectively, and $99.9 million and $91.4 million for the nine months ended September 30, 2020 and 2019, respectively. The Partnership also reimburses the General Partner for its contributions under the General Partner’s 401(k) Savings and Profit Sharing Plans and the General Partner’s qualified and non-qualified pension plans.

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The table below presents receivables from GPC and the General Partner (in thousands):


	September 30,		December 31,
	2020		2019
Receivables from GPC	$	28	$	53
Receivables from the General Partner (1)		5,254		7,770
Total	$	5,282	$	7,823

(1)	Receivables from the General Partner reflect the Partnership’s prepayment of payroll taxes and payroll accruals to the General Partner and are due to the timing of the payroll obligations.

In addition, the Partnership paid certain costs in connection with a compensation funding agreement with the General Partner. See Note 13, “Long-Term Incentive Plan–Repurchase Program.”

Note 13. Long-Term Incentive Plan

The Partnership has a Long-Term Incentive Plan, as amended (the “LTIP”), whereby a total of 4,300,000 common units were authorized for delivery with respect to awards under the LTIP. The LTIP provides for awards to employees, consultants and directors of the General Partner and employees and consultants of affiliates of the Partnership who perform services for the Partnership. The LTIP allows for the award of options, unit appreciation rights, restricted units, phantom units, distribution equivalent rights, unit awards and substitute awards. Awards granted pursuant to the LTIP vest pursuant to the terms of the grant agreements. Please read Note 17 of Notes to Consolidated Financial Statements in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on the LTIP.

The following table presents a summary of the non-vested phantom units granted under the LTIP:


		Weighted
	Number of	Average
	Non-vested	Grant Date
	Units	Fair Value ($)
Outstanding non—vested phantom units at December 31, 2019	562,906	9.74
Vested	(152,635)	10.41
Forfeited	(6,867)	11.31
Outstanding non—vested phantom units at September 30, 2020	403,404	9.46

The Partnership recorded total compensation expense related to the outstanding LTIP awards of $0.2 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.7 million for the nine months ended September 30, 2020 and 2019, respectively which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

The total compensation cost related to the non-vested awards not yet recognized at September 30, 2020 was approximately $1.8 million and is expected to be recognized ratably over the remaining requisite service periods.

Repurchase Program

In May 2009, the board of directors of the General Partner authorized the repurchase of the Partnership’s common units (the “Repurchase Program”) for the purpose of meeting the General Partner’s anticipated obligations to deliver common units under the LTIP and meeting the General Partner’s obligations under existing employment agreements and other employment related obligations of the General Partner (collectively, the “General Partner’s Obligations”). The General Partner is authorized to acquire up to 1,242,427 of its common units in the aggregate over an extended period of

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time, consistent with the General Partner’s Obligations. Common units may be repurchased from time to time in open market transactions, including block purchases, or in privately negotiated transactions. Such authorized unit repurchases may be modified, suspended or terminated at any time and are subject to price and economic and market conditions, applicable legal requirements and available liquidity. Since the Repurchase Program was implemented, the General Partner repurchased 868,505 common units pursuant to the Repurchase Program for approximately $25.1 million, of which approximately $0 and $0.3 million were purchased during the three and nine months ended September 30, 2020, respectively.

In June 2009, the Partnership and the General Partner entered into the Global GP LLC Compensation Funding Agreement (the “Agreement”) whereby the Partnership and the General Partner established obligations and protocol for (i) the funding, management and administration of a compensation funding account and underlying General Partner’s Obligations, and (ii) the holding and disposition by the General Partner of common units acquired in accordance with the Agreement for such purposes as otherwise set forth in the Agreement. The Agreement requires the Partnership to fund costs that the General Partner incurs in connection with performance of the Agreement. In accordance with the Agreement, the Partnership paid members of the General Partner $0 for each of the three months ended September 30, 2020 and 2019, and $0.3 million in the aggregate for each of the nine months ended September 30, 2020 and 2019.

Note 14. Partners’ Equity and Cash Distributions

Partners’ Equity

Common Units and General Partner Interest

At September 30, 2020, there were 33,995,563 common units issued, including 5,239,245 common units held by affiliates of the General Partner, including directors and executive officers, collectively representing a 99.33% limited partner interest in the Partnership, and 230,303 general partner units representing a 0.67% general partner interest in the Partnership. There have been no changes to common units or the general partner interest during the three and nine months ended September 30, 2020.

Series A Preferred Units

At September 30, 2020, there were 2,760,000 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units issued representing limited partner interests (the “Series A Preferred Units”) for $25.00 per Series A Preferred Unit. There have been no changes to the Series A Preferred Units during the three and nine months ended September 30, 2020.

Cash Distributions

Common Units

The Partnership intends to make cash distributions to common unitholders on a quarterly basis, although there is no assurance as to the future cash distributions since they are dependent upon future earnings, capital requirements, financial condition and other factors. The Credit Agreement prohibits the Partnership from making cash distributions if any potential default or Event of Default, as defined in the Credit Agreement, occurs or would result from the cash distribution. The indentures governing the Partnership’s outstanding senior notes also limit the Partnership’s ability to make distributions to its common unitholders in certain circumstances.

Within 45 days after the end of each quarter, the Partnership will distribute all of its Available Cash (as defined in its partnership agreement) to common unitholders of record on the applicable record date. The amount of Available Cash is all cash on hand on the date of determination of Available Cash for the quarter; less the amount of cash reserves

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established by the General Partner to provide for the proper conduct of the Partnership’s businesses, to comply with applicable law, any of the Partnership’s debt instruments or other agreements or to provide funds for distributions to unitholders and the General Partner for any one or more of the next four quarters.

The Partnership will make distributions of Available Cash from distributable cash flow for any quarter in the following manner: 99.33% to the common unitholders, pro rata, and 0.67% to the General Partner, until the Partnership distributes for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter; and thereafter, cash in excess of the minimum quarterly distribution is distributed to the common unitholders and the General Partner based on the percentages as provided below.

As holder of the IDRs, the General Partner is entitled to incentive distributions if the amount that the Partnership distributes with respect to any quarter exceeds specified target levels shown below:


			Marginal Percentage
	Total Quarterly Distribution		Interest in Distributions
	Target Amount		Unitholders		General Partner
First Target Distribution		up to $0.4625	99.33	%	0.67	%
Second Target Distribution		above $0.4625 up to $0.5375	86.33	%	13.67	%
Third Target Distribution		above $0.5375 up to $0.6625	76.33	%	23.67	%
Thereafter		above $0.6625	51.33	%	48.67	%

The Partnership paid the following cash distributions to common unitholders during 2020 (in thousands, except per unit data):


	For the	Per Unit
Cash Distribution	Quarter	Cash		Common		General		Incentive		Total Cash
Payment Date	Ended	Distribution		Units		Partner		Distribution		Distribution
2/14/2020	12/31/19	$	0.52500	$	17,848	$	123	$	320	$	18,291
5/15/2020	03/31/20		0.39375		13,385		91		—		13,476
8/14/2020	06/30/20		0.45875		15,595		106		—		15,701

In addition, on October 26, 2020, the board of directors of the General Partner declared a quarterly cash distribution of $0.50 per unit ($2.00 per unit on an annualized basis) on all of its outstanding common units for the period from July 1, 2020 through September 30, 2020. On November 13, 2020, the Partnership will pay this cash distribution to its common unitholders of record as of the close of business on November 9, 2020.

Series A Preferred Units

Distributions on the Series A Preferred Units are cumulative from August 7, 2018, the original issue date of the Series A Preferred Units, and payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, commencing on November 15, 2018 (each, a “Distribution Payment Date”), to holders of record as of the opening of business on the February 1, May 1, August 1 or November 1 next preceding the Distribution Payment Date, in each case, when, as, and if declared by the General Partner out of legally available funds for such purpose. Distributions on the Series A Preferred Units will be paid out of Available Cash with respect to the quarter immediately preceding the applicable Distribution Payment Date.

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The Partnership paid the following cash distributions on the Series A Preferred Units during 2020 (in thousands, except per unit data):


	For the	Per Unit
Cash Distribution	Quarterly Period	Cash		Total Cash
Payment Date	Covering	Distribution		Distribution
2/18/2020	11/15/19 - 2/14/20	$	0.609375	$	1,682
5/15/2020	2/15/20 - 5/14/20		0.609375		1,682
8/17/2020	5/15/20 - 8/14/20		0.609375		1,682

In addition, on October 19, 2020, the board of directors of the General Partner declared a quarterly cash distribution of $0.609375 per unit ($2.4375 per unit on an annualized basis) on the Series A Preferred Units for the period from August 15, 2020 through November 14, 2020. This distribution will be payable on November 16, 2020 to holders of record as of the opening of business on November 2, 2020.

Note 15. Segment Reporting

Summarized financial information for the Partnership’s reportable segments is presented in the table below (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Wholesale Segment:
Sales
Gasoline and gasoline blendstocks	$	767,538	$	1,466,111	$	2,182,321	$	4,106,434
Crude oil (1)		57,518		13,646		73,010		56,174
Other oils and related products (2)		235,359		312,534		1,069,921		1,343,417
Total	$	1,060,415	$	1,792,291	$	3,325,252	$	5,506,025
Product margin
Gasoline and gasoline blendstocks	$	16,318	$	20,194	$	83,241	$	76,568
Crude oil (1)		(2,729)		(3,019)		2,004		(10,043)
Other oils and related products (2)		14,031		17,071		58,764		40,566
Total	$	27,620	$	34,246	$	144,009	$	107,091
Gasoline Distribution and Station Operations Segment:
Sales
Gasoline	$	696,184	$	1,010,655	$	1,896,960	$	2,866,496
Station operations (3)		122,856		128,942		325,577		354,127
Total	$	819,040	$	1,139,597	$	2,222,537	$	3,220,623
Product margin
Gasoline	$	101,405	$	107,620	$	305,405	$	282,919
Station operations (3)		57,462		61,109		154,904		169,621
Total	$	158,867	$	168,729	$	460,309	$	452,540
Commercial Segment:
Sales	$	181,927	$	313,765	$	578,263	$	1,006,171
Product margin	$	2,855	$	7,213	$	11,773	$	18,217
Combined sales and Product margin:
Sales	$	2,061,382	$	3,245,653	$	6,126,052	$	9,732,819
Product margin (4)	$	189,342	$	210,188	$	616,091	$	577,848
Depreciation allocated to cost of sales		(20,101)		(22,419)		(61,165)		(66,092)
Combined gross profit	$	169,241	$	187,769	$	554,926	$	511,756

(1)	Crude oil consists of the Partnership’s crude oil sales and revenue from its logistics activities.

(2)	Other oils and related products primarily consist of distillates, residual oil and propane.

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(3)	Station operations consist of convenience store sales, rental income and sundries.

(4)	Product margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess its business. The table above includes a reconciliation of product margin on a combined basis to gross profit, a directly comparable GAAP measure.

Approximately 112 million gallons and 126 million gallons of the GDSO segment’s sales for the three months ended September 30, 2020 and 2019, respectively, and 300 million gallons and 256 million gallons of the GDSO segment’s sales for the nine months ended September 30, 2020 and 2019, respectively, were supplied from petroleum products and renewable fuels sourced by the Wholesale segment. The Commercial segment’s sales were predominantly sourced by the Wholesale segment. These intra-segment sales are not reflected as sales in the Wholesale segment as they are eliminated.

A reconciliation of the totals reported for the reportable segments to the applicable line items in the consolidated financial statements is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Combined gross profit	$	169,241	$	187,769	$	554,926	$	511,756
Operating costs and expenses not allocated to operating segments:
Selling, general and administrative expenses		43,218		45,333		143,158		127,391
Operating expenses		82,235		87,827		241,502		257,222
Lease exit and termination gain		—		—		—		(493)
Amortization expense		2,712		2,766		8,137		8,719
Net loss (gain) on sale and disposition of assets		691		323		623		(252)
Long-lived asset impairment		203		643		1,927		643
Total operating costs and expenses		129,059		136,892		395,347		393,230
Operating income		40,182		50,877		159,579		118,526
Interest expense		(19,854)		(22,091)		(62,544)		(68,113)
Loss on early extinguishment of debt		—		(13,080)		—		(13,080)
Income tax (expense) benefit		(2,136)		(813)		205		(1,275)
Net income		18,192		14,893		97,240		36,058
Net loss attributable to noncontrolling interest		38		187		528		637
Net income attributable to Global Partners LP	$	18,230	$	15,080	$	97,768	$	36,695

The Partnership’s foreign assets and foreign sales were immaterial as of and for the three and nine months ended September 30, 2020 and 2019.

Segment Assets

The Partnership’s terminal assets are allocated to the Wholesale and Commercial segments, and its retail gasoline stations are allocated to the GDSO segment. Due to the commingled nature and uses of the remainder of the Partnership’s assets, it is not reasonably possible for the Partnership to allocate these assets among its reportable segments.

The table below presents total assets by reportable segment at September 30, 2020 and December 31, 2019 (in thousands):


		Wholesale		Commercial		GDSO		Unallocated		Total
September 30, 2020	$	605,734	$	—	$	1,547,459	$	333,111	$	2,486,304
December 31, 2019	$	773,696	$	—	$	1,576,655	$	458,076	$	2,808,427

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Note 16. Income Taxes

Section 7704 of the Internal Revenue Code provides that publicly-traded partnerships are, as a general rule, taxed as corporations. However, an exception, referred to as the “Qualifying Income Exception,” exists under Section 7704(c) with respect to publicly-traded partnerships of which 90% or more of the gross income for every taxable year consists of “qualifying income.” Qualifying income includes income and gains derived from the transportation, storage and marketing of refined petroleum products, gasoline blendstocks, crude oil and ethanol to resellers and refiners. Other types of qualifying income include interest (other than from a financial business), dividends, gains from the sale of real property and gains from the sale or other disposition of capital assets held for the production of income that otherwise constitutes qualifying income.

Substantially all of the Partnership’s income is “qualifying income” for federal income tax purposes and, therefore, is not subject to federal income taxes at the partnership level. Accordingly, no provision has been made for income taxes on the qualifying income in the Partnership’s financial statements. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under the Partnership’s agreement of limited partnership. Individual unitholders have different investment basis depending upon the timing and price at which they acquired their common units. Further, each unitholder’s tax accounting, which is partially dependent upon the unitholder’s tax position, differs from the accounting followed in the Partnership’s consolidated financial statements. Accordingly, the aggregate difference in the basis of the Partnership’s net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder’s tax attributes in the Partnership is not available to the Partnership.

One of the Partnership’s wholly owned subsidiaries, GMG, is a taxable entity for federal and state income tax purposes. Current and deferred income taxes are recognized on the separate earnings of GMG. The after-tax earnings of GMG are included in the earnings of the Partnership. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes for GMG. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Partnership calculates its current and deferred tax provision based on estimates and assumptions that could differ from actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified.

The Partnership recognizes deferred tax assets to the extent that the recoverability of these assets satisfies the “more likely than not” criteria in accordance with the FASB’s guidance regarding income taxes. A valuation allowance must be established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including a company’s performance, the market environment in which the company operates, length of carryback and carryforward periods and projections of future operating results. The Partnership concluded, based on an evaluation of future operating results and reversal of existing taxable temporary differences, that a portion of these assets will not be realized in a future period. The valuation allowance decreased by approximately $0.2 million for the nine months ended September 30, 2020.

The Partnership computed its tax provision for the three and nine months ended September 30, 2020 based upon the year-to-date effective tax rate as opposed to an estimated annual effective tax rate. Given a reliable estimate of the annual effective tax rate cannot be made, the Partnership concluded that the year-to-date effective tax rate is the most appropriate method to use for the three and nine months ended September 30, 2020.

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Unrecognized tax benefits represent uncertain tax positions for which reserves have been established. The Partnership had gross-tax effected unrecognized tax benefits of $0 and $1.0 million at September 30, 2020 and December 31, 2019, respectively. The liability for unrecognized tax benefits for uncertain tax positions changed by $1.0 million for the nine months ended September 30, 2020 as a result of closure of various statutes of limitations.

GMG files income tax returns in the United States and various state jurisdictions. As of September 30, 2020, with few exceptions, the Partnership was subject to income tax examination by tax authorities for all years dated back to 2016.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. The CARES Act provides certain tax changes in response to the COVID-19 pandemic, including the temporary removal of certain limitations on the utilization of net operating losses, permitting the carryback of net operating losses generated in 2018, 2019 or 2020 to the five preceding taxable years, increasing the ability to deduct interest expense, deferring the employer share of social security tax payments, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. As a result, the Partnership recognized a benefit of $6.3 million related to the CARES Act net operating loss carryback provisions which is included in income tax benefit in the accompanying statement of operations for the nine months ended September 30, 2020. The Partnership expects to receive cash refunds totaling $15.8 million associated with the carryback of losses generated in 2018 to the 2016 and 2017 tax years, and this income tax receivable is included in prepaid expenses and other current assets in the accompanying consolidated balance sheet as of September 30, 2020.

Note 17. Changes in Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss by component for the periods presented (in thousands):


	Pension		Derivatives Designated as
Three Months Ended September 30, 2020	Plan		Cash Flow Hedges		Total
Balance at June 30, 2020	$	(5,696)	$	5,187	$	(509)
Other comprehensive income before reclassification of (gain) loss		921		1,485		2,406
Amount of (gain) loss reclassified from accumulated other comprehensive income (loss)		(43)		(957)		(1,000)
Total comprehensive income		878		528		1,406
Balance at September 30, 2020	$	(4,818)	$	5,715	$	897

	Pension		Derivatives Designated as
Nine Months Ended September 30, 2020	Plan		Cash Flow Hedges		Total
Balance at December 31, 2019	$	(5,076)	$	—	$	(5,076)
Other comprehensive income before reclassification of (gain) loss		388		6,906		7,294
Amount of (gain) loss reclassified from accumulated other comprehensive income (loss)		(130)		(1,191)		(1,321)
Total comprehensive income		258		5,715		5,973
Balance at September 30, 2020	$	(4,818)	$	5,715	$	897

Amounts are presented prior to the income tax effect on other comprehensive income. Given the Partnership’s partnership status for federal income tax purposes, the effective tax rate is immaterial.

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Note 18. Legal Proceedings

General

Although the Partnership may, from time to time, be involved in litigation and claims arising out of its operations in the normal course of business, the Partnership does not believe that it is a party to any litigation that will have a material adverse impact on its financial condition or results of operations. Except as described below and in Note 11 included herein, the Partnership is not aware of any significant legal or governmental proceedings against it or contemplated to be brought against it. The Partnership maintains insurance policies with insurers in amounts and with coverage and deductibles as its general partner believes are reasonable and prudent. However, the Partnership can provide no assurance that this insurance will be adequate to protect it from all material expenses related to potential future claims or that these levels of insurance will be available in the future at economically acceptable prices.

Other

In October 2020, the Partnership was served with a complaint filed against the Partnership and its wholly owned subsidiary, Global Companies LLC (“Global Companies”) alleging, among other things, wrongful death and loss of consortium. The complaint, filed in the Middlesex County Superior Court of the Commonwealth of Massachusetts, alleges, among other things, that a truck driver (whose estate is a co-plaintiff), while loading gasoline and diesel fuel at terminals owned and operated by the Partnership located in Albany, New York and Burlington, Vermont, was exposed to benzene-containing products and/or vapors therefrom. The Partnership and Global Companies have meritorious defenses to the allegations in the complaint and will vigorously contest the actions taken by the plaintiffs.

On June 1, 2020, Basin Transload filed for reorganization in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) under Chapter 11 of the United States Bankruptcy Code. Pursuant to the terms of a settlement agreement entered into as of August 12, 2020 by and among the Partnership, Global Operating LLC (“Global Operating”), Basin Transload and the minority members of Basin Transload (the “Basin Settlement Agreement”), Basin Transload filed a motion with the Bankruptcy Court to voluntarily dismiss the bankruptcy petition. On September 14, 2020, the Bankruptcy Court issued an order approving the Basin Settlement Agreement and dismissing the bankruptcy petition. The order became final and non-appealable on September 28, 2020. In connection with the Basin Settlement Agreement, Global Operating acquired the minority members’ collective 40% membership interest in Basin Transload, the arbitration petition previously filed by the minority members against the Partnership and Global Operating was withdrawn with prejudice and each of the actions filed in the state courts of Massachusetts and North Dakota by the Partnership and the minority members, respectively, were voluntarily dismissed with prejudice.

During the second quarter ended June 30, 2016, the Partnership determined that gasoline loaded from certain loading bays at one of its terminals did not contain the necessary additives as a result of an IT-related configuration error. The error was corrected, and all gasoline being sold at the terminal now contains the appropriate additives. Based upon current information, the Partnership believes approximately 14 million gallons of gasoline were impacted. The Partnership has notified the EPA of this error. As a result of this error, the Partnership could be subject to fines, penalties and other related claims, including customer claims.

On August 2, 2016, the Partnership received a Notice of Violation (“NOV”) from the EPA, alleging that permits for the Partnership’s petroleum product transloading facility in Albany, New York (the “Albany Terminal”), issued by the New York State Department of Environmental Conservation (“NYSDEC”) between August 9, 2011 and November 7, 2012, violated the Clean Air Act (the “CAA”) and the federally enforceable New York State Implementation Plan (“SIP”) by increasing throughput of crude oil at the Albany Terminal without complying with the New Source Review (“NSR”) requirements of the SIP. The Partnership denied the allegations and the NYSDEC did not issue any such NOV. The Albany Terminal is a 63-acre licensed, permitted and operational stationary bulk petroleum storage and transfer terminal that currently consists of petroleum product storage tanks, along with truck, rail and marine

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loading facilities, for the storage, blending and distribution of various petroleum and related products, including gasoline, ethanol, distillates, heating and crude oils. The applicable permits issued by the NYSDEC to the Partnership in 2011 and 2012 specifically authorized the Partnership to increase the throughput of crude oil at the Albany Terminal. According to the allegations in the NOV, the NYSDEC permit actions should have been treated as a major modification under the NSR program, requiring additional emission control measures and compliance with other NSR requirements. The NYSDEC has not alleged that the Partnership’s permits were subject to the NSR program and the NYSDEC never issued an NOV in the matter. The CAA authorizes the EPA to take enforcement action if there are violations of the New York SIP seeking compliance and penalties. The Partnership has denied the NOV allegations and asserts that the permits issued by the NYSDEC comply with the CAA and applicable state air permitting requirements and that no material violation of law occurred. The Partnership disputed the claims alleged in the NOV and first responded to the EPA in September 2016. The Partnership met with the EPA and provided additional information at the agency’s request. On December 16, 2016, the EPA proposed a Settlement Agreement in a letter to the Partnership relating to the allegations in the NOV. On January 17, 2017, the Partnership responded to the EPA indicating that the EPA had failed to explain or provide support for its allegations and that the EPA needed to better explain its positions and the evidence on which it was relying. The EPA did not respond with such evidence, but instead has requested that the Partnership enter into a series of tolling agreements. The Partnership signed the tolling agreements with respect to this matter, as requested by the EPA, and such agreements currently extend through December 31, 2020. To date, the EPA has not taken any further formal action with respect to the NOV.

By letter dated January 25, 2017, the Partnership received a notice of intent to sue (the “2017 NOI”) from Earthjustice related to alleged violations of the CAA; specifically alleging that the Partnership was operating the Albany Terminal without a valid CAA Title V Permit. On February 9, 2017, the Partnership responded to Earthjustice advising that the 2017 NOI was without factual or legal merit and that the Partnership would move to dismiss any action commenced by Earthjustice. No action was taken by either the EPA or the NYSDEC with regard to the Earthjustice allegations. At this time, there has been no further action taken by Earthjustice. Neither the EPA nor the NYSDEC has followed up on the 2017 NOI. The Albany Terminal is currently operating pursuant to its Title V Permit, which has been extended in accordance with the State Administrative Procedures Act. Additionally, the Partnership has submitted a Title V Permit renewal and a request for modifications to its existing Title V Permit. The Partnership believes that it has meritorious defenses against all allegations.

On March 26, 2015, the Partnership received a Notice of Non-Compliance (“NON”) from the Massachusetts Department of Environmental Protection (“DEP”) with respect to the Revere terminal (the “Revere Terminal”) located in Boston Harbor in Revere, Massachusetts, alleging certain violations of the National Pollutant Discharge Elimination System Permit (“NPDES Permit”) related to storm water discharges. The NON required the Partnership to submit a plan to remedy the reported violations of the NPDES Permit. The Partnership has responded to the NON with a plan and has implemented modifications to the storm water management system at the Revere Terminal in accordance with the plan. The Partnership has requested that the DEP acknowledge completion of the required modifications to the storm water management system in satisfaction of the NON. While no response has yet been received, the Partnership believes that compliance with the NON has been achieved, and implementation of the plan will have no material impact on its operations.

The Partnership received letters from the EPA dated November 2, 2011 and March 29, 2012, containing requirements and testing orders (collectively, the “Requests for Information”) for information under the CAA. The Requests for Information were part of an EPA investigation to determine whether the Partnership has violated sections of the CAA at certain of its terminal locations in New England with respect to residual oil and asphalt. On June 6, 2014, a NOV was received from the EPA, alleging certain violations of its Air Emissions License issued by the Maine Department of Environmental Protection, based upon the test results at the South Portland, Maine terminal. The Partnership met with and provided additional information to the EPA with respect to the alleged violations. On April 7, 2015, the EPA issued a Supplemental Notice of Violation modifying the allegations of violations of the terminal’s Air Emissions License. The Partnership has entered into a consent decree (the “Consent Decree”) with the EPA and the

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United States Department of Justice (the “Department of Justice”), which was filed in the U.S. District Court for the District of Maine (the “Court”) on March 25, 2019. The Consent Decree was entered by the Court on December 19, 2019. The Partnership believes that compliance with the Consent Decree and implementation of the requirements of the Consent Decree will have no material impact on its operations.

Note 19. New Accounting Standards

There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Partnership’s consolidated financial statements, from those disclosed in the Partnership’s 2019 Annual Report on Form 10-K, except for the following:

Accounting Standards or Updates Recently Adopted

In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs in a cloud computing arrangement with the requirements for capitalizing implementation costs incurred for an internal-use software license. The Partnership adopted this standard on January 1, 2020 with no material impact on the Partnership’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement,” which amends existing guidance on disclosure requirements for fair value measurements. This standard requires prospective application on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. The effects of other amendments must be applied retrospectively to all periods presented. The Partnership adopted this standard on January 1, 2020 with no material impact on the Partnership’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” and has modified the standard thereafter, now codified as ASC 326. ASC 326 requires that for most financial assets, losses be based on an expected loss approach, which includes estimates of losses over the life of exposure that considers historical, current and forecasted information. The Partnership adopted this standard on January 1, 2020 using the modified retrospective transition method. The adoption of this standard did not materially impact the measurement of the Partnership’s credit loss recognition and, therefore, did not have a material impact on the recognition of expected credit losses on the Partnership’s consolidated financial statements.

The Partnership is exposed to credit losses primarily through its sales of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane. Concentration of credit risk with respect to trade receivables are limited due to the Partnership’s customer base being large and diverse. The Partnership assesses each counterparty’s ability to pay for the products the Partnership sells by conducting a credit review. This credit review considers the Partnership’s expected billing exposure and timing for payment and the counterparty’s established credit rating or, in the case when a credit rating is not available, the Partnership’s assessment of the counterparty’s creditworthiness based on the Partnership’s analysis of the counterparty’s financial statements. The Partnership also considers contract terms and conditions and business strategy in its evaluation. A credit limit is established for each counterparty based on the outcome of this review. The Partnership may require collateralized asset support in the form of standby letters of credit, personal or corporate guarantees and/or a prepayment to mitigate credit risk.

The Partnership monitors its ongoing credit exposure through active reviews of counterparty balances against contract terms and due dates. The Partnership’s historical experience of collecting receivables, supported by the level of default, is that credit risk is low across classes of customers and locations and trade receivables are considered to be a single class of financial assets. Impairment for trade receivables are calculated for specific receivables with known or

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

anticipated issues affecting the likelihood of collectability and for balances past due with a probability of default based on historical data as well as relevant forward-looking information. The Partnership’s activities include timely account reconciliations, dispute resolutions and payment confirmations. The Partnership utilizes internal legal counsel or collection agencies and outside legal counsel to pursue recovery of defaulted receivables.

Based on an aging analysis at September 30, 2020, approximately 98% of the Partnership’s accounts receivable were outstanding less than 30 days.

The following table presents changes in the credit loss allowance included in accounts receivable, net in the accompanying balance sheet (in thousands):


	Credit Loss
	Allowance
Balance at December 31, 2019	$	2,729
Current period provision		375
Write-offs charged against allowance for credit losses		(63)
Recoveries collected		165
Balance at September 30, 2020	$	3,206

Accounting Standards or Updates Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Partnership does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Note 20. Subsequent Events

Distribution to Common Unitholders—On October 26, 2020, the board of directors of the General Partner declared a quarterly cash distribution of $0.50 per unit ($2.00 per unit on an annualized basis) for the period from July 1, 2020 through September 30, 2020. On November 13, 2020, the Partnership will pay this cash distribution to its common unitholders of record as of the close of business on November 9, 2020.

Distribution to Preferred Unitholders—On October 19, 2020, the board of directors of the General Partner declared a quarterly cash distribution of $0.609375 per unit ($2.4375 per unit on an annualized basis) on the Series A Preferred Units, covering the period from August 15, 2020 through November 14, 2020. This distribution will be payable on November 16, 2020 to holders of record as of the opening of business on November 2, 2020.

2029 Notes Offering and 2023 Notes Redemption— On October 7, 2020, the Issuers completed a private offering of $350.0 million aggregate principal amount of 6.875% senior notes due 2029. The Partnership used the net proceeds from the offering to fund the redemption of the 2023 Notes and to repay a portion of the borrowings outstanding under its credit agreement. See Note 8, “Debt and Financing Obligations—Senior Notes” for additional information on the 2029 Notes.

The Partnership expects the redemption of the 2023 Notes will result in a loss of approximately $7.2 million from the early extinguishment of debt in the fourth quarter of 2020 associated with the call premium paid as well as the write-off of remaining unamortized deferred financing fees.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 21. Supplemental Guarantor Condensed Consolidating Financial Statements

The Partnership’s wholly owned subsidiaries, other than GLP Finance, are guarantors of senior notes issued by the Partnership and GLP Finance. As such, the Partnership is subject to the requirements of Rule 3-10 of Regulation S-X of the SEC regarding financial statements of guarantors and issuers of registered guaranteed securities. The Partnership presents condensed consolidating financial information for its subsidiaries within the notes to consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(d).

The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of September 30, 2020 and December 31, 2019, the Condensed Consolidating Statements of Operations for the three and nine months ended September 30, 2020 and 2019 and the Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 of the Partnership’s 100% owned guarantor subsidiaries, the non-guarantor subsidiary and the eliminations necessary to arrive at the information for the Partnership on a consolidated basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet

September 30, 2020

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	3,581	$	1,280	$	—	$	4,861
Accounts receivable, net		239,167		229		—		239,396
Accounts receivable—affiliates		5,282		—		—		5,282
Inventories		328,706		—		—		328,706
Brokerage margin deposits		23,455		—		—		23,455
Derivative assets		43,159		—		—		43,159
Prepaid expenses and other current assets		92,126		169		—		92,295
Total current assets		735,476		1,678		—		737,154
Property and equipment, net		1,068,623		1,628		—		1,070,251
Right of use assets, net		287,727		60		—		287,787
Intangible assets, net		38,627		—		—		38,627
Goodwill		323,889		—		—		323,889
Other assets		28,596		—		—		28,596
Total assets	$	2,482,938	$	3,366	$	—	$	2,486,304

Liabilities and partners’ equity
Current liabilities:
Accounts payable	$	186,768	$	26	$	—	$	186,794
Accounts payable—affiliates		(396)		396		—		—
Working capital revolving credit facility—current portion		10,100		—		—		10,100
Lease liability—current portion		70,965		—		—		70,965
Environmental liabilities—current portion		5,009		—		—		5,009
Trustee taxes payable		30,077		—		—		30,077
Accrued expenses and other current liabilities		99,683		215		—		99,898
Derivative liabilities		6,589		—		—		6,589
Total current liabilities		408,795		637		—		409,432
Working capital revolving credit facility—less current portion		150,000		—		—		150,000
Revolving credit facility		188,000		—		—		188,000
Senior notes		691,765		—		—		691,765
Long-term lease liability—less current portion		229,266		41		—		229,307
Environmental liabilities—less current portion		50,416		—		—		50,416
Financing obligations		146,994		—		—		146,994
Deferred tax liabilities		56,399		—		—		56,399
Other long—term liabilities		54,926		—		—		54,926
Total liabilities		1,976,561		678		—		1,977,239

Partners' equity
Global Partners LP equity		506,377		2,688		—		509,065
Noncontrolling interest		—		—		—		—
Total partners' equity		506,377		2,688		—		509,065
Total liabilities and partners' equity	$	2,482,938	$	3,366	$	—	$	2,486,304

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet

December 31, 2019

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	11,591	$	451	$	—	$	12,042
Accounts receivable, net		412,853		339		3		413,195
Accounts receivable—affiliates		7,823		3		(3)		7,823
Inventories		450,482		—		—		450,482
Brokerage margin deposits		34,466		—		—		34,466
Derivative assets		4,564		—		—		4,564
Prepaid expenses and other current assets		81,845		95		—		81,940
Total current assets		1,003,624		888		—		1,004,512
Property and equipment, net		1,102,644		2,219		—		1,104,863
Right of use assets, net		296,672		74		—		296,746
Intangible assets, net		46,765		—		—		46,765
Goodwill		324,474		—		—		324,474
Other assets		31,067		—		—		31,067
Total assets	$	2,805,246	$	3,181	$	—	$	2,808,427

Liabilities and partners' equity
Current liabilities:
Accounts payable	$	373,355	$	31	$	—	$	373,386
Accounts payable—affiliates		(17)		17		—		—
Working capital revolving credit facility—current portion		148,900		—		—		148,900
Lease liability—current portion		68,143		17		—		68,160
Environmental liabilities—current portion		5,009		—		—		5,009
Trustee taxes payable		42,932		—		—		42,932
Accrued expenses and other current liabilities		102,737		65		—		102,802
Derivative liabilities		12,698		—		—		12,698
Total current liabilities		753,757		130		—		753,887
Working capital revolving credit facility—less current portion		175,000		—		—		175,000
Revolving credit facility		192,700		—		—		192,700
Senior notes		690,533		—		—		690,533
Long-term lease liability—less current portion		239,308		41		—		239,349
Environmental liabilities—less current portion		54,262		—		—		54,262
Financing obligations		148,127		—		—		148,127
Deferred tax liabilities		42,879		—		—		42,879
Other long—term liabilities		52,451		—		—		52,451
Total liabilities		2,349,017		171		—		2,349,188

Partners' equity
Global Partners LP equity		456,229		1,836		—		458,065
Noncontrolling interest		—		1,174		—		1,174
Total partners' equity		456,229		3,010		—		459,239
Total liabilities and partners' equity	$	2,805,246	$	3,181	$	—	$	2,808,427

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Operations

Three Months Ended September 30, 2020

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	2,061,152	$	718	$	(488)	$	2,061,382
Cost of sales		1,892,535		94		(488)		1,892,141
Gross profit		168,617		624		—		169,241
Costs and operating expenses:
Selling, general and administrative expenses		42,865		353		—		43,218
Operating expenses		81,869		366		—		82,235
Amortization expense		2,712		—		—		2,712
Net loss on sale and disposition of assets		691		—		—		691
Long-lived asset impairment		203		—		—		203
Total costs and operating expenses		128,340		719		—		129,059
Operating income (loss)		40,277		(95)		—		40,182
Interest expense		(19,854)		—		—		(19,854)
Income (loss) before income tax expense		20,423		(95)		—		20,328
Income tax expense		(2,136)		—		—		(2,136)
Net income (loss)		18,287		(95)		—		18,192
Net loss attributable to noncontrolling interest		—		38		—		38
Net income attributable to Global Partners LP		18,287		(57)		—		18,230
Less: General partners' interest in net income, including incentive distribution rights		324		—		—		324
Less: Series A preferred limited partner interest in net income		1,682		—		—		1,682
Net income attributable to common limited partners	$	16,281	$	(57)	$	—	$	16,224

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Operations

Three Months Ended September 30, 2019

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	3,245,348	$	313	$	(8)	$	3,245,653
Cost of sales		3,057,568		324		(8)		3,057,884
Gross profit (loss)		187,780		(11)		—		187,769
Costs and operating expenses:
Selling, general and administrative expenses		45,237		96		—		45,333
Operating expenses		87,465		362		—		87,827
Amortization expense		2,766		—		—		2,766
Net loss on sale and disposition of assets		323		—		—		323
Long-lived asset impairment		643		—		—		643
Total costs and operating expenses		136,434		458		—		136,892
Operating income (loss)		51,346		(469)		—		50,877
Interest expense		(22,091)		—		—		(22,091)
Loss on early extinguishment of debt		(13,080)		—		—		(13,080)
Income (loss) before income tax expense		16,175		(469)		—		15,706
Income tax expense		(813)		—		—		(813)
Net income (loss)		15,362		(469)		—		14,893
Net loss attributable to noncontrolling interest		—		187		—		187
Net income attributable to Global Partners LP		15,362		(282)		—		15,080
Less: General partners' interest in net income, including incentive distribution rights		395		—		—		395
Less: Series A preferred limited partner interest in net income		1,682		—		—		1,682
Net income attributable to common limited partners	$	13,285	$	(282)	$	—	$	13,003

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2020

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	6,124,977	$	1,829	$	(754)	$	6,126,052
Cost of sales		5,571,224		656		(754)		5,571,126
Gross profit		553,753		1,173		—		554,926
Costs and operating expenses:
Selling, general and administrative expenses		141,871		1,287		—		143,158
Operating expenses		240,295		1,207		—		241,502
Amortization expense		8,137		—		—		8,137
Net loss on sale and disposition of assets		623		—		—		623
Long-lived asset impairment		1,927		—		—		1,927
Total costs and operating expenses		392,853		2,494		—		395,347
Operating income		160,900		(1,321)		—		159,579
Interest expense		(62,544)		—		—		(62,544)
Income (loss) before income tax benefit		98,356		(1,321)		—		97,035
Income tax benefit		205		—		—		205
Net income (loss)		98,561		(1,321)		—		97,240
Net loss attributable to noncontrolling interest		—		528		—		528
Net income attributable to Global Partners LP		98,561		(793)		—		97,768
Less: General partners' interest in net income, including incentive distribution rights		857		—		—		857
Less: Series A preferred limited partner interest in net income		5,046		—		—		5,046
Net income attributable to common limited partners	$	92,658	$	(793)	$	—	$	91,865

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2019

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Eliminations		Consolidated
Sales	$	9,731,847	$	1,205	$	(233)	$	9,732,819
Cost of sales		9,219,952		1,344		(233)		9,221,063
Gross profit (loss)		511,895		(139)		—		511,756
Costs and operating expenses:
Selling, general and administrative expenses		127,096		295		—		127,391
Operating expenses		256,062		1,160		—		257,222
Lease exit and termination gain		(493)		—		—		(493)
Amortization expense		8,719		—		—		8,719
Net gain on sale and disposition of assets		(252)		—		—		(252)
Long-lived asset impairment		643		—		—		643
Total costs and operating expenses		391,775		1,455		—		393,230
Operating income (loss)		120,120		(1,594)		—		118,526
Interest expense		(68,113)		—		—		(68,113)
Loss on early extinguishment of debt		(13,080)		—		—		(13,080)
Income (loss) before income tax expense		38,927		(1,594)		—		37,333
Income tax expense		(1,275)		—		—		(1,275)
Net income (loss)		37,652		(1,594)		—		36,058
Net loss attributable to noncontrolling interest		—		637		—		637
Net income attributable to Global Partners LP		37,652		(957)		—		36,695
Less: General partners' interest in net income, including incentive distribution rights		1,065		—		—		1,065
Less: Series A preferred limited partner interest in net income		5,046		—		—		5,046
Net income attributable to common limited partners	$	31,541	$	(957)	$	—	$	30,584

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement Cash Flows

Nine Months Ended September 30, 2020

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Consolidated
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	250,460	$	(171)	$	250,289

Cash flows from investing activities
Capital expenditures		(39,644)		—		(39,644)
Seller note issuances		(1,188)		—		(1,188)
Proceeds from sale of property and equipment		6,060		—		6,060
Net cash used in investing activities		(34,772)		—		(34,772)

Cash flows from financing activities
Net payments on working capital revolving credit facility		(163,800)		—		(163,800)
Net payments on revolving credit facility		(4,700)		—		(4,700)
Repurchase of common units		(291)		—		(291)
LTIP units withheld for tax obligations		(273)		—		(273)
Noncontrolling interest capital contribution		(600)		1,000		400
Acquisition of noncontrolling interest		(1,650)		—		(1,650)
Distributions to limited partners and general partner		(52,384)		—		(52,384)
Net cash used in (provided by) financing activities		(223,698)		1,000		(222,698)

Cash and cash equivalents
(Decrease) increase in cash and cash equivalents		(8,010)		829		(7,181)
Cash and cash equivalents at beginning of period		11,591		451		12,042
Cash and cash equivalents at end of period	$	3,581	$	1,280	$	4,861

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GLOBAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement Cash Flows

Nine Months Ended September 30, 2019

(In thousands)


	(Issuer)		Non-
	Guarantor		Guarantor
	Subsidiaries		Subsidiary		Consolidated
Cash flows from operating activities
Net cash provided by (used in) operating activities	$	110,013	$	(488)	$	109,525

Cash flows from investing activities
Capital expenditures		(52,494)		—		(52,494)
Seller note issuances		(640)		—		(640)
Proceeds from sale of property and equipment		11,994		—		11,994
Net cash used in investing activities		(41,140)		—		(41,140)

Cash flows from financing activities
Net payments on working capital revolving credit facility		(400)		—		(400)
Net payments on revolving credit facility		(23,000)		—		(23,000)
Proceeds from senior notes, net		392,602		—		392,602
Repayment of senior notes		(381,886)		—		(381,886)
LTIP units withheld for tax obligations		(646)		—		(646)
Distributions to limited partners and general partner		(57,396)		—		(57,396)
Net cash used in financing activities		(70,726)		—		(70,726)

Cash and cash equivalents
Decrease in cash and cash equivalents		(1,853)		(488)		(2,341)
Cash and cash equivalents at beginning of period		7,050		1,071		8,121
Cash and cash equivalents at end of period	$	5,197	$	583	$	5,780

Table of Contents

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations of Global Partners LP should be read in conjunction with the historical consolidated financial statements of Global Partners LP and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Some of the information contained in this Quarterly Report on Form 10-Q may contain forward-looking statements. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words “may,” “believe,” “should,” “could,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “continue,” “will likely result,” or other similar expressions. In addition, any statement made by our management concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions by us are also forward-looking statements. Forward-looking statements are not guarantees of performance. Although we believe these forward-looking statements are based on reasonable assumptions, statements made regarding future results are subject to a number of assumptions, uncertainties and risks, many of which are beyond our control, which may cause future results to be materially different from the results stated or implied in this document. These risks and uncertainties include, among other things:

●	We may not have sufficient cash from operations to enable us to pay distributions on our Series A Preferred Units or maintain distributions on our common units at current levels following establishment of cash reserves and payment of fees and expenses, including payments to our general partner.

●	A significant decrease in price or demand for the products we sell or a significant decrease in the pricing of and demand for our logistics activities could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

●

The outbreak of COVID-19 and certain developments in global oil markets have had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition and results of operation and those of our customers, suppliers and other counterparties.

●We depend upon marine, pipeline, rail and truck transportation services for a substantial portion of our logistics activities in transporting the products we sell. Implementation of regulations and directives that adversely impact the market for transporting these products by rail or otherwise could adversely affect those activities. In addition, implementation of regulations and directives related to these aforementioned services as well as a disruption in any of these transportation services could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

●We have contractual obligations for certain transportation assets such as railcars, barges and pipelines. A decline in demand for (i) the products we sell or (ii) our logistics activities, which has resulted and could continue to result in a decrease in the utilization of our transportation assets, could negatively impact our financial condition, results of operations and cash available for distribution to our unitholders.

●

We may not be able to fully implement or capitalize upon planned growth projects. Even if we consummate acquisitions or expend capital in pursuit of growth projects that we believe will be accretive, they may in fact result in no increase or even a decrease in cash available for distribution to our unitholders.

●Erosion of the value of major gasoline brands could adversely affect our gasoline sales and customer traffic.

●Our gasoline sales could be significantly reduced by a reduction in demand due to higher prices and to new technologies and alternative fuel sources, such as electric, hybrid, battery powered, hydrogen or other alternative fuel-powered motor vehicles. Changing consumer preferences or driving habits could lead to new forms of

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fueling destinations or potentially fewer customer visits to our sites, resulting in a decrease in gasoline sales and/or sales of food, sundries and other on-site services. Any of these outcomes could negatively affect our financial condition, results of operations and cash available for distribution to our unitholders.

●Physical effects from climate change and impacts to areas prone to sea level rise or other extreme weather events could have the potential to adversely affect our assets and operations.

●Changes in government usage mandates and tax credits could adversely affect the availability and pricing of ethanol and renewable fuels, which could negatively impact our sales.

●Our petroleum and related products sales, logistics activities and results of operations have been and could continue to be adversely affected by, among other things, changes in the petroleum products market structure, product differentials and volatility (or lack thereof), implementation of regulations that adversely impact the market for transporting petroleum and related products by rail and other modes of transportation, severe weather conditions, significant changes in prices and interruptions in transportation services and other necessary services and equipment, such as railcars, barges, trucks, loading equipment and qualified drivers.

●Our risk management policies cannot eliminate all commodity risk, basis risk or the impact of unfavorable market conditions, each of which can adversely affect our financial condition, results of operations and cash available for distribution to our unitholders. In addition, noncompliance with our risk management policies could result in significant financial losses.

●Our results of operations are affected by the overall forward market for the products we sell, and pricing volatility may adversely impact our results.

●Our businesses could be affected by a range of issues, such as changes in commodity prices, energy conservation, competition, the global economic climate, movement of products between foreign locales and within the United States, changes in refiner demand, weekly and monthly refinery output levels, changes in local, domestic and worldwide inventory levels, changes in health, safety and environmental regulations, including, without limitation, those related to climate change, failure to obtain renewal permits on terms favorable to us, seasonality, supply, weather and logistics disruptions and other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of refined products, gasoline blendstocks, renewable fuels and crude oil.

●Increases and/or decreases in the prices of the products we sell could adversely impact the amount of availability for borrowing working capital under our credit agreement, which credit agreement has borrowing base limitations and advance rates.

●Warmer weather conditions could adversely affect our home heating oil and residual oil sales. Our sales of home heating oil and residual oil continue to be reduced by conversions to natural gas and by utilization of propane and/or natural gas (instead of heating oil) as primary fuel sources.

●We are exposed to trade credit risk and risk associated with our trade credit support in the ordinary course of our businesses.

●	The condition of credit markets may adversely affect our liquidity.

●

Our credit agreement and the indentures governing our senior notes contain operating and financial covenants, and our credit agreement contains borrowing base requirements. A failure to comply with the operating and financial covenants in our credit agreement, the indentures and any future financing agreements could impact our access to bank loans and other sources of financing as well as our ability to pursue our business activities.

●	A significant increase in interest rates could adversely affect our results of operations and cash available for distribution to our unitholders and our ability to service our indebtedness.

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●

Our gasoline station and convenience store business, including with the onset of the COVID-19 pandemic, could expose us to an increase in consumer litigation and result in an unfavorable outcome or settlement of one or more lawsuits where insurance proceeds are insufficient or otherwise unavailable.

●

Congress has given the Food and Drug Administration (“FDA”) broad authority to regulate tobacco and nicotine products, and the FDA and states have enacted and are pursuing enaction of numerous regulations restricting the sale of such products. These governmental actions, as well as national, state and municipal campaigns to discourage smoking, tax increases, and imposition of regulations restricting the sale of e-cigarettes and vapor products, have and could result in reduced consumption levels, higher costs which we may not be able to pass on to our customers, and reduced overall customer traffic. Also, increasing regulations related to and restricting the sale of vapor products and e-cigarettes may offset some of the gains we have experienced from selling these types of products. These factors could materially affect the sale of this product mix which in turn could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

●Our results can be adversely affected by unforeseen events, such as adverse weather, natural disasters, terrorism, pandemics, or other catastrophic events which could have an adverse effect on our financial condition, results of operations and cash available for distributions to our unitholders.

●	Our businesses could expose us to litigation and result in an unfavorable outcome or settlement of one or more lawsuits where insurance proceeds are insufficient or otherwise unavailable.

●Adverse developments in the areas where we conduct our businesses could have a material adverse effect on such businesses and could reduce our ability to make distributions to our unitholders.

●A serious disruption to our information technology systems could significantly limit our ability to manage and operate our businesses efficiently.

●We are exposed to performance risk in our supply chain.

●Our businesses are subject to federal, state and municipal environmental and non-environmental regulations which could have a material adverse effect on such businesses.

●Our general partner and its affiliates have conflicts of interest and limited fiduciary duties, which could permit them to favor their own interests to the detriment of our unitholders.

●Unitholders have limited voting rights and are not entitled to elect our general partner or its directors or remove our general partner without the consent of the holders of at least 66 2/3% of the outstanding common units (including common units held by our general partner and its affiliates), which could lower the trading price of our units.

●Our tax treatment depends on our status as a partnership for federal income tax purposes.

●Unitholders may be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.

Additional information about risks and uncertainties that could cause actual results to differ materially from forward-looking statements is contained in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, Item 1A, “Risk Factors,” in this Quarterly Report on Form 10-Q.

We expressly disclaim any obligation or undertaking to update these statements to reflect any change in our expectations or beliefs or any change in events, conditions or circumstances on which any forward-looking statement is based, other than as required by federal and state securities laws. All forward-looking statements included in this Quarterly Report on Form 10-Q and all subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

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Overview

General

We are a master limited partnership formed in March 2005. We own, control or have access to one of the largest terminal networks of refined petroleum products and renewable fuels in Massachusetts, Maine, Connecticut, Vermont, New Hampshire, Rhode Island, New York, New Jersey and Pennsylvania (collectively, the “Northeast”). We are one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. As of September 30, 2020, we had a portfolio of 1,542 owned, leased and/or supplied gasoline stations, including 278 directly operated convenience stores, primarily in the Northeast. We are also one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in the New England states and New York. We engage in the purchasing, selling, gathering, blending, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks (such as ethanol), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, crude oil and propane and in the transportation of petroleum products and renewable fuels by rail from the mid-continent region of the United States and Canada.

Collectively, we sold approximately $1.9 billion and $5.8 billion of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane for the three and nine months ended September 30, 2020, respectively. In addition, we had other revenues of approximately $0.1 billion and $0.3 billion for the three and nine months ended September 30, 2020, respectively, from convenience store sales at our directly operated stores, rental income from dealer leased and commissioned agent leased gasoline stations and from cobranding arrangements, and sundries.

We base our pricing on spot prices, fixed prices or indexed prices and routinely use the New York Mercantile Exchange (“NYMEX”), Chicago Mercantile Exchange (“CME”) and Intercontinental Exchange (“ICE”) or other counterparties to hedge the risk inherent in buying and selling commodities. Through the use of regulated exchanges or derivatives, we seek to maintain a position that is substantially balanced between purchased volumes and sales volumes or future delivery obligations.

Our Perspective on Global and the COVID-19 Pandemic

Overview

The COVID-19 pandemic has continued to make its presence felt at home, in the office workplace and at our retail sites and terminal locations. We have successfully executed our business continuity plans and at this time we continue to work remotely. We remain active in responding to the challenges posed by the COVID-19 pandemic and continue to provide essential products and services while prioritizing the safety of our employees, customers and vendors in the communities where we operate.

The COVID-19 pandemic has resulted in an economic downturn and restricted travel to, from and within the states in which we conduct our businesses. Federal, state and municipal “stay at home” or similar-like directives have resulted in decreases in the demand for gasoline and convenience store products. Social distancing guidelines and directives limiting food operations at our convenience stores have further contributed to a reduction in in-store traffic and sales. The demand for diesel fuel has similarly (but not as drastically) been impacted. We remain well positioned to pivot and address different (and, at times, conflicting) directives from federal, state and municipal authorities designed to mitigate the spread of the COVID-19 pandemic, permit the opening of businesses and promote an economic recovery. From mid-March into April, we saw reductions of more than 50% in gasoline volume and more than 20% in convenience store sales but have since seen increases in both gasoline volume and convenience store sales as some businesses reopened and directives from federal, state and municipal authorities became less restrictive. That said, uncertainties surrounding the duration of the COVID-19 pandemic and demand at the pump, inside our stores and at our terminals remain.

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Given the uncertainty in the early part of 2020 surrounding the short-term and long-term impacts of COVID-19, including the timing of an economic recovery, early in the second quarter we took certain steps to increase liquidity and create additional financial flexibility. Such steps included a 25% decrease to our quarterly distribution on our common units to $0.39375 per unit for the period from January 1, 2020 to March 31, 2020. In addition, we borrowed $50.0 million under our revolving credit facility which was included in cash on our balance sheet. We also reduced planned expenses and 2020 capital spending. We amended our credit agreement to provide temporary adjustments to certain covenants. Given the stronger-than-expected performance in the second quarter, we paid down our revolving credit facility with the $50.0 million cash on hand and increased our planned 2020 capital spending. In addition, we have increased our quarterly distribution on our common units for each of the last two quarters.

Moving Forward – Our Perspective

The extent to which the COVID-19 pandemic may affect our operating results remains uncertain. The outbreak of the COVID-19 pandemic has had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition and results of operations and those of our customers, suppliers and other counterparties.

Our inventory management is dependent on the use of hedging instruments which are managed based on the structure of the forward pricing curve. Daily market changes may impact periodic results due to the point-in-time valuation of these positions. Volatility in the oil markets resulting from COVID-19 and geopolitical events may impact our results.

Business operations today, as compared to how we conducted our business in early March, reflect changes which may well remain for an indefinite period of time. In these uncertain times and volatile markets, we believe that we are operationally nimble and that our portfolio of assets may continue to provide us with opportunities.

2020 Events

2029 Notes Offering and 2023 Notes Redemption—On October 7, 2020, we and GLP Finance Corp. (the “Issuers”) issued $350.0 million aggregate principal amount of 6.875% senior notes due 2029 (the “2029 Notes”) to several initial purchasers (the “2029 Notes Initial Purchasers”) in a private placement exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). We used the net proceeds from the offering to fund the redemption of our 7.00% senior notes due 2023 (the “2023 Notes”) and to repay a portion of the borrowings outstanding under our credit agreement. Please read “—Liquidity and Capital Resources—Senior Notes” for additional information on the 2029 Notes.

Amended Credit Agreement—On May 7, 2020, we and certain of our subsidiaries entered into the fourth amendment to third amended and restated credit agreement which, among other things, provides temporary adjustments to certain covenants and reduces the total aggregate commitment by $130.0 million. See “—Liquidity and Capital Resources—Credit Agreement.”

Operating Segments

We purchase refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane primarily from domestic and foreign refiners and ethanol producers, crude oil producers, major and independent oil companies and trading companies. We operate our businesses under three segments: (i) Wholesale, (ii) Gasoline Distribution and Station Operations (“GDSO”) and (iii) Commercial.

Wholesale

In our Wholesale segment, we engage in the logistics of selling, gathering, blending, storing and transporting refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane. We transport these products by railcars, barges, trucks and/or pipelines pursuant to spot or long-term contracts. From time to time, we aggregate crude oil by truck or pipeline in the mid-continent region of the United States and Canada, transport it by rail and ship it

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by barge to refiners. We sell home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene, residual oil and propane to home heating oil and propane retailers and wholesale distributors. Generally, customers use their own vehicles or contract carriers to take delivery of the gasoline, distillates and propane at bulk terminals and inland storage facilities that we own or control or at which we have throughput or exchange arrangements. Ethanol is shipped primarily by rail and by barge.

In our Wholesale segment, we obtain Renewable Identification Numbers (“RIN”) in connection with our purchase of ethanol which is used for bulk trading purposes or for blending with gasoline through our terminal system. A RIN is a renewable identification number associated with government-mandated renewable fuel standards. To evidence that the required volume of renewable fuel is blended with gasoline, obligated parties must retire sufficient RINs to cover their Renewable Volume Obligation (“RVO”). Our U.S. Environmental Protection Agency (“EPA”) obligations relative to renewable fuel reporting are comprised of foreign gasoline and diesel that we may import and blending operations at certain facilities.

Gasoline Distribution and Station Operations

In our GDSO segment, gasoline distribution includes sales of branded and unbranded gasoline to gasoline station operators and sub-jobbers. Station operations include (i) convenience stores, (ii) rental income from gasoline stations leased to dealers, from commissioned agents and from cobranding arrangements and (iii) sundries (such as car wash sales and lottery and ATM commissions).

As of September 30, 2020, we had a portfolio of owned, leased and/or supplied gasoline stations, primarily in the Northeast, that consisted of the following:


Company operated	278
Commissioned agents	272
Lessee dealers	209
Contract dealers	783
Total	1,542

At our company-operated stores, we operate the gasoline stations and convenience stores with our employees, and we set the retail price of gasoline at the station. At commissioned agent locations, we own the gasoline inventory, and we set the retail price of gasoline at the station and pay the commissioned agent a fee related to the gallons sold. We receive rental income from commissioned agent leased gasoline stations for the leasing of the convenience store premises, repair bays and other businesses that may be conducted by the commissioned agent. At dealer-leased locations, the dealer purchases gasoline from us, and the dealer sets the retail price of gasoline at the dealer’s station. We also receive rental income from (i) dealer-leased gasoline stations and (ii) cobranding arrangements. We also supply gasoline to locations owned and/or leased by independent contract dealers. Additionally, we have contractual relationships with distributors in certain New England states pursuant to which we source and supply these distributors’ gasoline stations with ExxonMobil-branded gasoline.

Commercial

In our Commercial segment, we include sales and deliveries to end user customers in the public sector and to large commercial and industrial end users of unbranded gasoline, home heating oil, diesel, kerosene, residual oil and bunker fuel. In the case of public sector commercial and industrial end user customers, we sell products primarily either through a competitive bidding process or through contracts of various terms. We respond to publicly issued requests for product proposals and quotes. We generally arrange for the delivery of the product to the customer’s designated location. Our Commercial segment also includes sales of custom blended fuels delivered by barges or from a terminal dock to ships through bunkering activity.

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Seasonality

Due to the nature of our businesses and our reliance, in part, on consumer travel and spending patterns, we may experience more demand for gasoline during the late spring and summer months than during the fall and winter. Travel and recreational activities are typically higher in these months in the geographic areas in which we operate, increasing the demand for gasoline. Therefore, our volumes in gasoline are typically higher in the second and third quarters of the calendar year. However, the COVID-19 pandemic has had a negative impact on gasoline demand and the extent and duration of that impact is uncertain. As demand for some of our refined petroleum products, specifically home heating oil and residual oil for space heating purposes, is generally greater during the winter months, heating oil and residual oil volumes are generally higher during the first and fourth quarters of the calendar year. These factors may result in fluctuations in our quarterly operating results.

Outlook

This section identifies certain risks and certain economic or industry-wide factors, in addition to those described under “—Our Perspective on Global and the COVID-19 Pandemic,” that may affect our financial performance and results of operations in the future, both in the short-term and in the long-term. Our results of operations and financial condition depend, in part, upon the following:

●

Our businesses are influenced by the overall markets for refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane and increases and/or decreases in the prices of these products may adversely impact our financial condition, results of operations and cash available for distribution to our unitholders and the amount of borrowing available for working capital under our credit agreement. Results from our purchasing, storing, terminalling, transporting, selling and blending operations are influenced by prices for refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane, price volatility and the market for such products. Prices in the overall markets for these products may affect our financial condition, results of operations and cash available for distribution to our unitholders. Our margins can be significantly impacted by the forward product pricing curve, often referred to as the futures market. We typically hedge our exposure to petroleum product and renewable fuel price moves with futures contracts and, to a lesser extent, swaps. In markets where future prices are higher than current prices, referred to as contango, we may use our storage capacity to improve our margins by storing products we have purchased at lower prices in the current market for delivery to customers at higher prices in the future. In markets where future prices are lower than current prices, referred to as backwardation, inventories can depreciate in value and hedging costs are more expensive. For this reason, in these backward markets, we attempt to reduce our inventories in order to minimize these effects. Our inventory management is dependent on the use of hedging instruments which are managed based on the structure of the forward pricing curve. Daily market changes may impact periodic results due to the point-in-time valuation of these positions. Volatility in oil markets may impact our results. When prices for the products we sell rise, some of our customers may have insufficient credit to purchase supply from us at their historical purchase volumes, and their customers, in turn, may adopt conservation measures which reduce consumption, thereby reducing demand for product. Furthermore, when prices increase rapidly and dramatically, we may be unable to promptly pass our additional costs on to our customers, resulting in lower margins which could adversely affect our results of operations. Higher prices for the products we sell may (1) diminish our access to trade credit support and/or cause it to become more expensive and (2) decrease the amount of borrowings available for working capital under our credit agreement as a result of total available commitments, borrowing base limitations and advance rates thereunder. When prices for the products we sell decline, our exposure to risk of loss in the event of nonperformance by our customers of our forward contracts may be increased as they and/or their customers may breach their contracts and purchase the products we sell at the then lower market price from a competitor.

●

We commit substantial resources to pursuing acquisitions and expending capital for growth projects, although there is no certainty that we will successfully complete any acquisitions or growth projects or receive the economic results we anticipate from completed acquisitions or growth projects. We are continuously engaged in discussions with potential sellers and lessors of existing (or suitable for development) terminalling, storage, logistics and/or marketing assets, including gasoline stations, convenience stores and related businesses. Our

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growth largely depends on our ability to make accretive acquisitions and/or accretive development projects. We may be unable to execute such accretive transactions for a number of reasons, including the following: (1) we are unable to identify attractive transaction candidates or negotiate acceptable terms; (2) we are unable to obtain financing for such transactions on economically acceptable terms; or (3) we are outbid by competitors. In addition, we may consummate transactions that at the time of consummation we believe will be accretive but that ultimately may not be accretive. If any of these events were to occur, our future growth and ability to increase or maintain distributions on our common units could be limited. We can give no assurance that our transaction efforts will be successful or that any such efforts will be completed on terms that are favorable to us.

●

The condition of credit markets may adversely affect our liquidity. In the past, world financial markets experienced a severe reduction in the availability of credit. Possible negative impacts in the future could include a decrease in the availability of borrowings under our credit agreement, increased counterparty credit risk on our derivatives contracts and our contractual counterparties requiring us to provide collateral. In addition, we could experience a tightening of trade credit from our suppliers.

●

We depend upon marine, pipeline, rail and truck transportation services for a substantial portion of our logistics activities in transporting the products we sell. Implementation of regulations and directives related to these aforementioned services as well as disruption in any of these transportation services could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders. Hurricanes, flooding and other severe weather conditions could cause a disruption in the transportation services we depend upon and could affect the flow of service. In addition, accidents, labor disputes between providers and their employees and labor renegotiations, including strikes, lockouts or a work stoppage, shortage of railcars, trucks and barges, mechanical difficulties or bottlenecks and disruptions in transportation logistics could also disrupt our business operations. These events could result in service disruptions and increased costs which could also adversely affect our financial condition, results of operations and cash available for distribution to our unitholders. Other disruptions, such as those due to an act of terrorism or war, could also adversely affect our businesses.

●

We have contractual obligations for certain transportation assets such as railcars, barges and pipelines. A decline in demand for (i) the products we sell or (ii) our logistics activities, could result in a decrease in the utilization of our transportation assets, which could negatively impact our financial condition, results of operations and cash available for distribution to our unitholders.

●

Our gasoline financial results, with particular impact to our GDSO segment, are seasonal and can be lower in the first and fourth quarters of the calendar year. Due to the nature of our businesses and our reliance, in part, on consumer travel and spending patterns, we may experience more demand for gasoline during the late spring and summer months than during the fall and winter. Travel and recreational activities are typically higher in these months in the geographic areas in which we operate, increasing the demand for gasoline that we sell. Therefore, our results of operations in gasoline can be lower in the first and fourth quarters of the calendar year. The COVID-19 pandemic has had a negative impact on gasoline demand and the extent and duration of that impact is uncertain.

●

Our heating oil and residual oil financial results are seasonal and can be lower in the second and third quarters of the calendar year. Demand for some refined petroleum products, specifically home heating oil and residual oil for space heating purposes, is generally higher during November through March than during April through October. We obtain a significant portion of these sales during the winter months. Therefore, our results of operations in heating oil and residual oil for the first and fourth calendar quarters can be better than for the second and third quarters.

●

Warmer weather conditions could adversely affect our results of operations and financial condition. Weather conditions generally have an impact on the demand for both home heating oil and residual oil. Because we supply distributors whose customers depend on home heating oil and residual oil for space heating purposes during the winter, warmer-than-normal temperatures during the first and fourth calendar quarters can decrease the total

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volume we sell and the gross profit realized on those sales. Therefore, our results of operations in heating oil and residual oil for the first and fourth calendar quarters can be better than for the second and third quarters.

●	Energy efficiency, higher prices, new technology and alternative fuels could reduce demand for our products.

Higher prices and new technologies and alternative fuel sources, such as electric, hybrid or battery powered motor vehicles, could reduce the demand for transportation fuels and adversely impact our sales of transportation fuels. A reduction in sales of transportation fuels could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders. In addition, increased conservation and technological advances have adversely affected the demand for home heating oil and residual oil. Consumption of residual oil has steadily declined over the last three decades. We could face additional competition from alternative energy sources as a result of future government-mandated controls or regulations further promoting the use of cleaner fuels. End users who are dual-fuel users have the ability to switch between residual oil and natural gas. Other end users may elect to convert to natural gas. During a period of increasing residual oil prices relative to the prices of natural gas, dual-fuel customers may switch and other end users may convert to natural gas. During periods of increasing home heating oil prices relative to the price of natural gas, residential users of home heating oil may also convert to natural gas. As described above, such switching or conversion could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

●

Changes in government usage mandates and tax credits could adversely affect the availability and pricing of ethanol and renewable fuels, which could negatively impact our sales. The EPA has implemented a Renewable Fuels Standard (“RFS”) pursuant to the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. The RFS program seeks to promote the incorporation of renewable fuels in the nation’s fuel supply and, to that end, sets annual quotas for the quantity of renewable fuels (such as ethanol) that must be blended into transportation fuels consumed in the United States. A RIN is assigned to each gallon of renewable fuel produced in or imported into the United States. We are exposed to volatility in the market price of RINs. We cannot predict the future prices of RINs. RIN prices are dependent upon a variety of factors, including EPA regulations related to the amount of RINs required and the total amounts that can be generated, the availability of RINs for purchase, the price at which RINs can be purchased, and levels of transportation fuels produced, all of which can vary significantly from quarter to quarter. If sufficient RINs are unavailable for purchase or if we have to pay a significantly higher price for RINs, or if we are otherwise unable to meet the EPA’s RFS mandates, our results of operations and cash flows could be adversely affected. Future demand for ethanol will be largely dependent upon the economic incentives to blend based upon the relative value of gasoline and ethanol, taking into consideration the EPA’s regulations on the RFS program and oxygenate blending requirements. A reduction or waiver of the RFS mandate or oxygenate blending requirements could adversely affect the availability and pricing of ethanol, which in turn could adversely affect our future gasoline and ethanol sales. In addition, changes in blending requirements or broadening the definition of what constitutes a renewable fuel could affect the price of RINs which could impact the magnitude of the mark-to-market liability recorded for the deficiency, if any, in our RIN position relative to our RVO at a point in time.

●

We may not be able to fully implement or capitalize upon planned growth projects. We could have a number of organic growth projects that may require the expenditure of significant amounts of capital in the aggregate. Many of these projects involve numerous regulatory, environmental, commercial and legal uncertainties beyond our control. As these projects are undertaken, required approvals, permits and licenses may not be obtained, may be delayed or may be obtained with conditions that materially alter the expected return associated with the underlying projects. Moreover, revenues associated with these organic growth projects may not increase immediately upon the expenditures of funds with respect to a particular project and these projects may be completed behind schedule or in excess of budgeted cost. We may pursue and complete projects in anticipation of market demand that dissipates or market growth that never materializes. As a result of these uncertainties, the anticipated benefits associated with our capital projects may not be achieved.

●

Governmental action and campaigns to discourage smoking and use of other products may have a material adverse effect on our revenues and gross profit. Congress has given the FDA broad authority to regulate tobacco and nicotine products, and the FDA and states have enacted and are pursuing enaction of numerous regulations

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restricting the sale of such products. These governmental actions, as well as national, state and municipal campaigns to discourage smoking, tax increases, and imposition of regulations restricting the sale of e-cigarettes and vapor products, have and could result in reduced consumption levels, higher costs which we may not be able to pass on to our customers, and reduced overall customer traffic. Also, increasing regulations related to and restricting the sale of vapor products and e-cigarettes may offset some of the gains we have experienced from selling these types of products. These factors could materially affect the sale of this product mix which in turn could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

●

New, stricter environmental laws and other industry-related regulations or environmental litigation could significantly impact our operations and/or increase our costs, which could adversely affect our results of operations and financial condition. Our operations are subject to federal, state and municipal laws and regulations regulating, among other matters, logistics activities, product quality specifications and other environmental matters. The trend in environmental regulation has been towards more restrictions and limitations on activities that may affect the environment over time. Our businesses may be adversely affected by increased costs and liabilities resulting from such stricter laws and regulations. We try to anticipate future regulatory requirements that might be imposed and plan accordingly to remain in compliance with changing environmental laws and regulations and to minimize the costs of such compliance. Risks related to our environmental permits, including the risk of noncompliance, permit interpretation, permit modification, renewal of permits on less favorable terms, judicial or administrative challenges to permits by citizens groups or federal, state or municipal entities or permit revocation are inherent in the operation of our businesses, as it is with other companies engaged in similar businesses. We may not be able to renew the permits necessary for our operations, or we may be forced to accept terms in future permits that limit our operations or result in additional compliance costs. In recent years, the transport of crude oil and ethanol has become subject to additional regulation. The establishment of more stringent design or construction standards, or other requirements for railroad tank cars that are used to transport crude oil and ethanol with too short of a timeframe for compliance may lead to shortages of compliant railcars available to transport crude oil and ethanol, which could adversely affect our businesses. Likewise, in recent years, efforts have commenced to seek to use federal, state and municipal laws to contest issuance of permits, contest renewal of permits and restrict the types of railroad tanks cars that can be used to deliver products, including, without limitation, crude oil and ethanol to bulk storage terminals. Were such laws to come into effect and were they to survive appeals and judicial review, they would potentially expose our operations to duplicative and possibly inconsistent regulation. There can be no assurances as to the timing and type of such changes in existing laws or the promulgation of new laws or the amount of any required expenditures associated therewith. Climate change continues to attract considerable public and scientific attention. In recent years environmental interest groups have filed suit against companies in the energy industry related to climate change. Should such suits succeed, we could face additional compliance costs or litigation risks.

Results of Operations

Evaluating Our Results of Operations

Our management uses a variety of financial and operational measurements to analyze our performance. These measurements include: (1) product margin, (2) gross profit, (3) earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA, (4) distributable cash flow, (5) selling, general and administrative expenses (“SG&A”), (6) operating expenses and (7) degree days.

Product Margin

We view product margin as an important performance measure of the core profitability of our operations. We review product margin monthly for consistency and trend analysis. We define product margin as our product sales minus product costs. Product sales primarily include sales of unbranded and branded gasoline, distillates, residual oil, renewable fuels, crude oil and propane, as well as convenience store sales, gasoline station rental income and revenue generated from our logistics activities when we engage in the storage, transloading and shipment of products owned by others. Product costs include the cost of acquiring products and all associated costs including shipping and handling

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costs to bring such products to the point of sale as well as product costs related to convenience store items and costs associated with our logistics activities. We also look at product margin on a per unit basis (product margin divided by volume). Product margin is a non-GAAP financial measure used by management and external users of our consolidated financial statements to assess our business. Product margin should not be considered an alternative to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, our product margin may not be comparable to product margin or a similarly titled measure of other companies.

Gross Profit

We define gross profit as our product margin minus terminal and gasoline station related depreciation expense allocated to cost of sales.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP financial measures used as supplemental financial measures by management and may be used by external users of our consolidated financial statements, such as investors, commercial banks and research analysts, to assess:

●	our compliance with certain financial covenants included in our debt agreements;

●	our financial performance without regard to financing methods, capital structure, income taxes or historical cost basis;

●	our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners;

●

our operating performance and return on invested capital as compared to those of other companies in the wholesale, marketing, storing and distribution of refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane, and in the gasoline stations and convenience stores business, without regard to financing methods and capital structure; and

●	the viability of acquisitions and capital expenditure projects and the overall rates of return of alternative investment opportunities.

Adjusted EBITDA is EBITDA further adjusted for gains or losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income, and these measures may vary among other companies. Therefore, EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Distributable Cash Flow

Distributable cash flow is an important non-GAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on their investment. Distributable cash flow as defined by our partnership agreement is net income plus depreciation and amortization minus maintenance capital expenditures, as well as adjustments to eliminate items approved by the audit committee of the board of directors of our general partner that are extraordinary or non-recurring in nature and that would otherwise increase distributable cash flow.

Distributable cash flow as used in our partnership agreement also determines our ability to make cash distributions on our incentive distribution rights. The investment community also uses a distributable cash flow metric similar to the metric used in our partnership agreement with respect to publicly traded partnerships to indicate whether or not such partnerships have generated sufficient earnings on a current or historic level that can sustain distributions on preferred or common units or support an increase in quarterly cash distributions on common units. Our partnership

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agreement does not permit adjustments for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges.

Distributable cash flow should not be considered as an alternative to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. In addition, our distributable cash flow may not be comparable to distributable cash flow or similarly titled measures of other companies.

Selling, General and Administrative Expenses

Our SG&A expenses include, among other things, marketing costs, corporate overhead, employee salaries and benefits, pension and 401(k) plan expenses, discretionary bonuses, non-interest financing costs, professional fees and information technology expenses. Employee-related expenses including employee salaries, discretionary bonuses and related payroll taxes, benefits, and pension and 401(k) plan expenses are paid by our general partner which, in turn, are reimbursed for these expenses by us.

Operating Expenses

Operating expenses are costs associated with the operation of the terminals, transload facilities and gasoline stations and convenience stores used in our businesses. Lease payments, maintenance and repair, property taxes, utilities, credit card fees, taxes, labor and labor-related expenses comprise the most significant portion of our operating expenses. While the majority of these expenses remains relatively stable, independent of the volumes through our system, they can fluctuate slightly depending on the activities performed during a specific period. In addition, they can be impacted by new directives issued by federal, state and local governments.

Degree Days

A “degree day” is an industry measurement of temperature designed to evaluate energy demand and consumption. Degree days are based on how far the average temperature departs from a human comfort level of 65°F. Each degree of temperature above 65°F is counted as one cooling degree day, and each degree of temperature below 65°F is counted as one heating degree day. Degree days are accumulated each day over the course of a year and can be compared to a monthly or a long-term (multi-year) average, or normal, to see if a month or a year was warmer or cooler than usual. Degree days are officially observed by the National Weather Service and officially archived by the National Climatic Data Center. For purposes of evaluating our results of operations, we use the normal heating degree day amount as reported by the National Weather Service at its Logan International Airport station in Boston, Massachusetts.

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Key Performance Indicators

The following table provides a summary of some of the key performance indicators that may be used to assess our results of operations. These comparisons are not necessarily indicative of future results (gallons and dollars in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income attributable to Global Partners LP	$	18,230	$	15,080	$	97,768	$	36,695
EBITDA (1)(2)	$	64,965	$	65,094	$	235,299	$	187,105
Adjusted EBITDA (1)(2)	$	65,859	$	66,060	$	237,849	$	187,496
Distributable cash flow (3)(4)(5)	$	31,333	$	30,405	$	149,134	$	86,281
Wholesale Segment:
Volume (gallons)		837,768		995,638		2,631,430		3,057,823
Sales
Gasoline and gasoline blendstocks	$	767,538	$	1,466,111	$	2,182,321	$	4,106,434
Crude oil (6)		57,518		13,646		73,010		56,174
Other oils and related products (7)		235,359		312,534		1,069,921		1,343,417
Total	$	1,060,415	$	1,792,291	$	3,325,252	$	5,506,025
Product margin
Gasoline and gasoline blendstocks	$	16,318	$	20,194	$	83,241	$	76,568
Crude oil (6)		(2,729)		(3,019)		2,004		(10,043)
Other oils and related products (7)		14,031		17,071		58,764		40,566
Total	$	27,620	$	34,246	$	144,009	$	107,091
Gasoline Distribution and Station Operations Segment:
Volume (gallons)		376,317		423,327		1,006,300		1,214,077
Sales
Gasoline	$	696,184	$	1,010,655	$	1,896,960	$	2,866,496
Station operations (8)		122,856		128,942		325,577		354,127
Total	$	819,040	$	1,139,597	$	2,222,537	$	3,220,623
Product margin
Gasoline	$	101,405	$	107,620	$	305,405	$	282,919
Station operations (8)		57,462		61,109		154,904		169,621
Total	$	158,867	$	168,729	$	460,309	$	452,540
Commercial Segment:
Volume (gallons)		139,925		171,505		428,418		546,261
Sales	$	181,927	$	313,765	$	578,263	$	1,006,171
Product margin	$	2,855	$	7,213	$	11,773	$	18,217
Combined sales and product margin:
Sales	$	2,061,382	$	3,245,653	$	6,126,052	$	9,732,819
Product margin (9)	$	189,342	$	210,188	$	616,091	$	577,848
Depreciation allocated to cost of sales		(20,101)		(22,419)		(61,165)		(66,092)
Combined gross profit	$	169,241	$	187,769	$	554,926	$	511,756

GDSO portfolio as of September 30, 2020 and 2019:		2020		2019
Company operated		278		295
Commissioned agents		272		253
Lessee dealers		209		221
Contract dealers		783		797
Total GDSO portfolio		1,542		1,566

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Weather conditions:
Normal heating degree days		96			96			3,750			3,750
Actual heating degree days		72			28			3,320			3,405
Variance from normal heating degree days		(25)	%		(71)	%		(11)	%		(9)	%
Variance from prior period actual heating degree days		157	%		(3)	%		(2)	%		(4)	%

(1)	EBITDA and Adjusted EBITDA are non-GAAP financial measures which are discussed above under “—Evaluating Our Results of Operations.” The table below presents reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measures.

(2)	EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2019 include a $13.1 million loss on the early extinguishment of debt related to our repurchase of our 6.25% senior notes due 2022.

(3)

Distributable cash flow is a non-GAAP financial measure which is discussed above under “—Evaluating Our Results of Operations.” As defined by our partnership agreement, distributable cash flow is not adjusted for certain non-cash items, such as net losses on the sale and disposition of assets and goodwill and long-lived asset impairment charges. The table below presents reconciliations of distributable cash flow to the most directly comparable GAAP financial measures.

(4)

Distributable cash flow includes a net loss (gain) on sale and disposition of assets and long-lived asset impairment of $0.9 million for each of the three months ended September 30, 2020 and 2019, and $2.5 million and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively. Excluding these charges, distributable cash flow would have been $32.2 million and $31.3 million for the three months ended September 30, 2020 and 2019, respectively, and $151.6 million and $86.6 million for the nine months ended September 30, 2020 and 2019, respectively.

(5)	Distributable cash flow for the three and nine months ended September 30, 2019 includes a $13.1 million loss on the early extinguishment of debt related to the repurchase of our 6.25% senior notes due 2022.

(6)	Crude oil consists of our crude oil sales and revenue from our logistics activities.

(7)	Other oils and related products primarily consist of distillates, residual oil and propane.

(8)	Station operations consist of convenience stores sales, rental income and sundries.

(9)	Product margin is a non-GAAP financial measure which is discussed above under “—Evaluating Our Results of Operations.” The table above includes a reconciliation of product margin on a combined basis to gross profit, a directly comparable GAAP measure.

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The following table presents reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measures on a historical basis for each period presented (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Reconciliation of net income to EBITDA and Adjusted EBITDA:
Net income	$	18,192	$	14,893	$	97,240	$	36,058
Net loss attributable to noncontrolling interest		38		187		528		637
Net income attributable to Global Partners LP		18,230		15,080		97,768		36,695
Depreciation and amortization, excluding the impact of noncontrolling interest		24,745		27,110		75,192		81,022
Interest expense, excluding the impact of noncontrolling interest		19,854		22,091		62,544		68,113
Income tax expense (benefit)		2,136		813		(205)		1,275
EBITDA (1)		64,965		65,094		235,299		187,105
Net loss (gain) on sale and disposition of assets		691		323		623		(252)
Long-lived asset impairment		203		643		1,927		643
Adjusted EBITDA (1)	$	65,859	$	66,060	$	237,849	$	187,496

Reconciliation of net cash provided by operating activities to EBITDA and Adjusted EBITDA:
Net cash provided by operating activities	$	88,286	$	143,017	$	250,289	$	109,525
Net changes in operating assets and liabilities and certain non-cash items		(45,321)		(100,890)		(77,621)		8,077
Net cash from operating activities and changes in operating assets and liabilities attributable to noncontrolling interest		10		63		292		115
Interest expense, excluding the impact of noncontrolling interest		19,854		22,091		62,544		68,113
Income tax expense (benefit)		2,136		813		(205)		1,275
EBITDA (1)		64,965		65,094		235,299		187,105
Net loss (gain) on sale and disposition of assets		691		323		623		(252)
Long-lived asset impairment		203		643		1,927		643
Adjusted EBITDA (1)	$	65,859	$	66,060	$	237,849	$	187,496

(1)	EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2019 include a $13.1 million loss on the early extinguishment of debt related to our repurchase of our 6.25% senior notes due 2022.

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The following table presents reconciliations of distributable cash flow to the most directly comparable GAAP financial measures on a historical basis for each period presented (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Reconciliation of net income to distributable cash flow:
Net income	$	18,192	$	14,893	$	97,240	$	36,058
Net loss attributable to noncontrolling interest		38		187		528		637
Net income attributable to Global Partners LP		18,230		15,080		97,768		36,695
Depreciation and amortization, excluding the impact of noncontrolling interest		24,745		27,110		75,192		81,022
Amortization of deferred financing fees and senior notes discount		1,329		1,352		3,896		4,679
Amortization of routine bank refinancing fees		(1,008)		(902)		(2,933)		(2,814)
Maintenance capital expenditures, excluding the impact of noncontrolling interest		(11,963)		(12,235)		(24,789)		(33,301)
Distributable cash flow (1)(2)		31,333		30,405		149,134		86,281
Distributions to Series A preferred unitholders (3)		(1,682)		(1,682)		(5,046)		(5,046)
Distributable cash flow after distributions to Series A preferred unitholders	$	29,651	$	28,723	$	144,088	$	81,235

Reconciliation of net cash provided by operating activities to distributable cash flow:
Net cash provided by operating activities	$	88,286	$	143,017	$	250,289	$	109,525
Net changes in operating assets and liabilities and certain non-cash items		(45,321)		(100,890)		(77,621)		8,077
Net cash from operating activities and changes in operating assets and liabilities attributable to noncontrolling interest		10		63		292		115
Amortization of deferred financing fees and senior notes discount		1,329		1,352		3,896		4,679
Amortization of routine bank refinancing fees		(1,008)		(902)		(2,933)		(2,814)
Maintenance capital expenditures, excluding the impact of noncontrolling interest		(11,963)		(12,235)		(24,789)		(33,301)
Distributable cash flow (1)(2)		31,333		30,405		149,134		86,281
Distributions to Series A preferred unitholders (3)		(1,682)		(1,682)		(5,046)		(5,046)
Distributable cash flow after distributions to Series A preferred unitholders	$	29,651	$	28,723	$	144,088	$	81,235

(1)

(2)

(3)	Distributable cash flow for the three and nine months ended September 30, 2019 includes a $13.1 million loss on the early extinguishment of debt related to the repurchase of our 6.25% senior notes due 2022.

(4)	Distributions to Series A preferred unitholders represent the distributions payable to the preferred unitholders during the period. Distributions on the Series A Preferred Units are cumulative and payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year.

Results of Operations

Consolidated Sales

Our total sales were $2.0 billion and $3.2 billion for the three months ended September 30, 2020 and 2019, respectively, a decrease of $1.2 billion, or 37%, due to decreases in prices and volume sold. Our aggregate volume of product sold was 1.4 billion gallons and 1.6 billion gallons for the three months ended September 30, 2020 and 2019, respectively, declining 236 million gallons including decreases of 158 million gallons in our Wholesale segment due to a decline in gasoline and gasoline blendstocks, partially offset by increased volume in crude oil and other oils and related products, 47 million gallons in our GDSO segment and 31 million gallons in our Commercial segment.

Our total sales were $6.1 billion and $9.7 billion for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $3.6 billion, or 37%, due to decreases in prices and volume sold. Our aggregate volume of

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product sold was 4.1 billion gallons and 4.8 billion gallons for the nine months ended September 30, 2020 and 2019, respectively, declining 752 million gallons including decreases of 426 million gallons in our Wholesale segment due to a decline in gasoline and gasoline blendstocks partially offset by increased volume in crude oil and other oils and related products, 208 million gallons in our GDSO segment and 118 million gallons in our Commercial segment.

Gross Profit

Our gross profit was $169.2 million and $187.8 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $18.6 million, or 10%, due to lower product margins in all three segments.

Our gross profit was $554.9 million and $511.8 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $43.1 million, or 8%, primarily due to more favorable market conditions in our Wholesale segment, largely in the second quarter. During the second quarter of 2020, there was a significant recovery in the supply/demand imbalance at the end of the first quarter. The forward product pricing curve flattened which positively impacted our Wholesale segment in the second quarter. Our gross profit also benefitted from higher fuel margins (cents per gallon) in gasoline distribution in our GDSO segment which offset a decrease in fuel volume and a decrease in our station operations product margin.

Results for Wholesale Segment

Gasoline and Gasoline Blendstocks. Sales from wholesale gasoline and gasoline blendstocks were $0.8 billion and $1.5 billion for the three months ended September 30, 2020 and 2019, respectively, a decrease of $0.7 billion, or 47%, due to decreases in prices and volume sold. Our gasoline and gasoline blendstocks product margin was $16.3 million and $20.2 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $3.9 million, or 19%, primarily due to less favorable market conditions in gasoline compared to the same period in 2019.

Sales from wholesale gasoline and gasoline blendstocks were $2.2 billion and $4.1 billion for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $1.9 billion, or 46%, due to decreases in prices and volume sold. Our gasoline and gasoline blendstocks product margin was $83.2 million and $76.5 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $6.7 million, or 9%, primarily due to more favorable market conditions, largely in the second quarter. During the second quarter of 2020, there was a significant recovery in the supply/demand imbalance at the end of the first quarter. The forward product pricing curve flattened which positively impacted our product margins. In the first quarter of 2020, the COVID-19 pandemic and the price war between Saudi Arabia and Russia caused a rapid decline in prices, steepening the forward product pricing curve which negatively impacted our product margin in gasoline for the first three months of 2020.

Crude Oil. Crude oil sales and logistics revenues were $57.5 million and $13.6 million for the three months ended September 30, 2020 and 2019, respectively, an increase of $43.9 million, or 322%, due to an increase in volume sold. Our crude oil product margin was ($2.7 million) and ($3.0 million) for the three months ended September 30, 2020 and 2019, respectively, an increase of $0.3 million.

Crude oil sales and logistics revenues were $73.0 million and $56.1 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $16.9 million, or 30%, due to an increase in volume sold. Our crude oil product margin was $2.0 million and ($10.0 million) for the nine months ended September 30, 2020 and 2019, respectively, an increase of $12.0 million, or 120%, primarily due to more favorable market conditions largely in the second quarter including the flattening of the forward product pricing curve.

Other Oils and Related Products. Sales from other oils and related products (primarily distillates and residual oil) were $235.3 million and $312.5 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $77.2 million, or 25%, due to a decrease in prices, partially offset by an increase in volume sold. Our product margin from other oils and related products was $14.0 million and $17.1 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $3.1 million, or 18%, due to less favorable market conditions largely in residual oil compared to the same period in 2019.

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Sales from other oils and related products were $1.0 billion and $1.3 billion for the nine months ended September 30, 2020 and 2019, respectively, decreasing $273.5 million, or 20%, due to a decrease in prices, partially offset by an increase in volume sold. Our product margin from other oils and related products was $58.8 million and $40.6 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $18.2 million, or 45%, primarily due to more favorable market conditions in distillates, largely in the second quarter. During the second quarter of 2020, there was a significant recovery in the supply/demand imbalance at the end of the first quarter. The forward product pricing curve flattened which positively impacted our product margins. In the first quarter of 2020, the COVID-19 pandemic and the price war between Saudi Arabia and Russia caused a rapid decline in prices, steepening the forward product pricing curve, which negatively impacted our product margins for the first three months of 2020.

Results for Gasoline Distribution and Station Operations Segment

Gasoline Distribution. Sales from gasoline distribution were $0.7 billion and $1.0 billion for the three months ended September 30, 2020 and 2019, respectively, a decrease of $0.3 billion, or 31%, due to decreases in prices and volume sold largely due to the impact of the COVID-19 pandemic. Our product margin from gasoline distribution was $101.4 million and $107.6 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $6.2 million, or 6%. While in the third quarter of 2020 our fuel margins (cents per gallon) were higher than the same period in 2019, in the third quarter of 2019 wholesale gasoline prices declined which favorably impacted our fuel margins (cents per gallon).

Sales from gasoline distribution were $1.9 billion and $2.9 billion for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $1.0 billion, or 34%, due to decreases in prices and volume sold largely due to the impact of the COVID-19 pandemic. Our product margin from gasoline distribution was $305.4 million and $282.9 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $22.5 million, or 8%, due to higher fuel margins (cents per gallon) which more than offset the decline in volume sold. Our product margin for the first nine months of 2020 benefitted from declining wholesale prices in the first quarter of 2020, primarily in March due to the COVID-19 pandemic and geopolitical events and to higher fuel margins (cents per gallon) in both the second and third quarters compared to the same periods in 2019. Declining wholesale gasoline prices can improve our gasoline product margin, the extent of which depends on the magnitude and duration of the decline.

Station Operations. Our station operations, which include (i) convenience stores sales at our directly operated stores, (ii) rental income from gasoline stations leased to dealers or from commissioned agents and from cobranding arrangements and (iii) sale of sundries, such as car wash sales and lottery and ATM commissions, collectively generated revenues of $122.8 million and $128.9 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $6.1 million, or 5%. Our product margin from station operations was $57.5 million and $61.1 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $3.6 million, or 6%. The decreases in sales and product margin are primarily due to less activity at our convenience stores, primarily due to the impact of the COVID-19 pandemic.

Sales from our station operations were $325.6 million and $354.1 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $28.5 million, or 8%. Our product margin from station operations was $154.9 million and $169.6 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $14.7 million, or 9%. The decreases in sales and product margin are primarily due to less activity at our convenience stores, primarily due to the impact of the COVID-19 pandemic.

Results for Commercial Segment

Our commercial sales were $181.9 million and $313.8 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $131.9 million, or 42%, due to decreases in prices and volume sold. Our commercial product margin was $2.8 million and $7.2 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $4.4 million, or 61%, primarily due to a decrease in bunkering activity.

Our commercial sales were $0.6 billion and $1.0 billion for the nine months ended September 30, 2020 and 2019, respectively, decreasing $427.9 million, or 42%, due to decreases in prices and volume sold. Our commercial product

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margin was $11.8 million and $18.2 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $6.4 million, or 35%, primarily due to a decrease in bunkering activity.

Selling, General and Administrative Expenses

SG&A expenses were $43.2 million and $45.3 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $2.1 million, or 5%, including decreases of $3.6 million in accrued discretionary incentive compensation and $0.6 million in various other SG&A expenses, offset by increases of $1.2 million in professional fees, $0.7 million in wages and benefits and $0.2 million in costs associated with the COVID-19 pandemic.

SG&A expenses were $143.2 million and 127.4 million for the nine months ended September 30, 2020 and 2019, respectively, an increase of $15.8 million, or 12%, including increases of $8.6 million in accrued discretionary incentive compensation, $2.8 million in wages and benefits, $2.0 million in professional fees, $1.2 million in costs associated with the COVID-19 pandemic, $1.0 million in advertising costs and $0.2 million in various other SG&A expenses.

Operating Expenses

Operating expenses were $82.2 million and $87.8 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $5.6 million, or 6%, including a decrease of $6.4 million associated with our GDSO operations, in part due to lower credit card fees due to the reduction in volume and price, lower salary expense primarily due to reduced store hours and lower maintenance and repair expenses, offset by an increase in expenses of $0.8 million associated with our terminal operations.

Operating expenses were $241.5 million and $257.2 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $15.7 million, or 6%, including a decrease of $14.7 million associated with our GDSO operations, in part due to lower credit card fees due to the reduction in volume and price, lower salary expense in part due to reduced store hours, lower maintenance and repair expenses and lower expenses due to the sale of sites. In addition, operating expenses at our terminals decreased $1.0 million, primarily due to lower maintenance and repair expenses.

Lease Exit and Termination Gain

During the nine months ended September 30, 2019, we were released from certain of our remaining obligations to provide future railcar storage, freight, insurance and other services for railcars under a fleet management services agreement associated with our 2016 voluntary termination of a railcar sublease. The release of certain obligations resulted in a $0.5 million reduction of the remaining accrued incremental costs, which benefit is included in lease exit and termination gain in the accompanying statement of operations for the nine months ended September 30, 2019.

Amortization Expense

Amortization expense related to intangible assets was $2.7 million and $2.8 million for the three months ended September 30, 2020 and 2019, respectively, and $8.1 million and $8.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Net (Loss) Gain on Sale and Disposition of Assets

Net (loss) gain on sale and disposition of assets was ($0.7 million) and ($0.3 million) for the three months ended September 30, 2020 and 2019, respectively, and ($0.6 million) and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively, primarily due to the sale of GDSO sites.

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Long-Lived Asset Impairment

We recognized an impairment charge relating to certain right of use assets allocated to the GDSO segment in the amount of $0.2 million for each of the three and nine months ended September 30, 2020 and to the Wholesale segment in the amount of $0 and $1.7 million for the three and nine months ended September 30, 2020, respectively.

We recognized an impairment charge relating to long-lived assets used at certain gasoline stations and convenience stores in the amount of $0.6 million for each of the three and nine months ended September 30, 2019. These assets are allocated to the GDSO segment.

Interest Expense

Interest expense was $19.9 million and $22.1 million for the three months ended September 30, 2020 and 2019, respectively, a decrease of $2.2 million, or 10%, due to lower average balances on our credit facilities and lower interest rates.

Interest expense was $62.5 million and $68.1 million for the nine months ended September 30, 2020 and 2019, respectively, a decrease of $5.6 million, or 8%, due to lower average balances on our credit facilities and lower interest rates, which more than offset the $0.7 million write-off of deferred financing fees associated with the amendment to our credit agreement in May 2020.

Loss on Early Extinguishment of Debt

As a result of the repurchase of our 6.25% senior notes due 2022 on July 31, 2019, we recorded a $13.1 million loss from early extinguishment of debt for each of the three and nine months ended September 30, 2019, consisting of a $6.9 million cash call premium and a $6.2 million non-cash write-off of remaining unamortized original issue discount and deferred financing fees.

Income Tax (Expense) Benefit

Income tax (expense) benefit was ($2.1 million) and ($0.8 million) for the three months ended September 30, 2020 and 2019, respectively, and $0.2 million and ($1.3 million) for the nine months ended September 30, 2020 and 2019, respectively, which reflects the income tax (expense) benefit from the operating results of GMG, which is a taxable entity for federal and state income tax purposes. For the nine months ended September 30, 2020, the income tax benefit consists of an income tax benefit of $6.3 million (discussed below) offset by an income tax expense of ($6.1 million).

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. The CARES Act provides certain tax changes in response to the COVID-19 pandemic, including the temporary removal of certain limitations on the utilization of net operating losses, permitting the carryback of net operating losses generated in 2018, 2019 or 2020 to the five preceding taxable years, increasing the ability to deduct interest expense, deferring the employer share of social security tax payments, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. As a result, we recognized a benefit of $6.3 million related to the CARES Act net operating loss carryback provisions which is included in income tax benefit in the accompanying statement of operations for the nine months ended September 30, 2020. We expect to receive cash refunds totaling $15.8 million associated with the carryback of losses generated in 2018 to the 2016 and 2017 tax years, and this income tax receivable is included in prepaid expenses and other current assets in the accompanying consolidated balance sheet as of September 30, 2020.

Net Loss Attributable to Noncontrolling Interest

In February 2013, we acquired a 60% membership interest in Basin Transload. The net loss attributable to the noncontrolling interest was immaterial for the three months ended September 30, 2020 and $0.2 million for the three

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months ended September 30, 2019. The loss attributable to the noncontrolling interest was $0.5 million and $0.6 million for the nine months ended September 30, 2020 and 2019, respectively. The net loss represents the 40% noncontrolling ownership of the net loss reported. In connection with the terms of an agreement between us and the minority members of Basin Transload, on September 29, 2020, we acquired the minority members’ collective 40% interest in Basin Transload (see Note 18, “Legal Proceedings” for additional information).

Liquidity and Capital Resources

Liquidity

Our primary liquidity needs are to fund our working capital requirements, capital expenditures and distributions and to service our indebtedness. Our primary sources of liquidity are cash generated from operations, amounts available under our working capital revolving credit facility and equity and debt offerings. Please read “—Credit Agreement” for more information on our working capital revolving credit facility.

Given the uncertainty surrounding the short-term and long-term impacts of COVID-19, including the timing of an economic recovery, early in the second quarter we took certain steps to increase liquidity and create additional financial flexibility. Such steps included a 25% decrease to our quarterly distribution on our common units for the period from January 1, 2020 to March 31, 2020. In addition, we borrowed $50.0 million under our revolving credit facility which was included in cash on our balance sheet. We also reduced planned expenses and 2020 capital spending. We amended our credit agreement to provide temporary adjustments to certain covenants. Given the stronger-than-expected performance in the second quarter, we paid down our revolving credit facility with the $50.0 million cash on hand and increased our planned 2020 capital spending. In addition, we increased our quarterly distribution on our common units for each of the second and third quarters. We believe that our current level of cash and borrowing capacity under our credit agreement will be sufficient to meet our liquidity needs.

Working capital was $327.7 million and $250.6 million at September 30, 2020 and December 31, 2019, respectively, an increase of $77.1 million. Changes in current assets and current liabilities increasing working capital include (i) decreases of $186.6 million in accounts payable and $138.8 million in the current portion of our working capital revolving credit facility, primarily due to lower prices, and (ii) an increase of $44.7 million in derivatives, for a total increase in working capital of $370.1 million. The increase in working capital was offset by decreases of $173.8 million in accounts receivable and $121.8 million in inventories, also primarily due to lower prices.

Cash Distributions

Common Units

During 2020, we paid the following cash distributions to our common unitholders and our general partner:


			Distribution Paid for the
Cash Distribution Payment Date	Total Paid		Quarterly Period Ended
February 14, 2020	$	18.3 million	Fourth quarter 2019
May 15, 2020	$	13.5 million	First quarter 2020
August 14, 2020	$	15.7 million	Second quarter 2020

In addition, on October 26, 2020, the board of directors of our general partner declared a quarterly cash distribution of $0.50 per unit ($2.00 per unit on an annualized basis) on all of our outstanding common units for the period from July 1, 2020 through September 30, 2020 to our common unitholders of record as of the close of business on November 9, 2020. We expect to pay the total cash distribution of approximately $17.3 million on November 13, 2020.

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Preferred Units

During 2020, we paid the following cash distributions to holders of the Series A Preferred Units:


			Distribution Paid for the
Cash Distribution Payment Date	Total Paid		Quarterly Period Covering
February 18, 2020	$	1.7 million	November 15, 2019 - February 14, 2020
May 15, 2020	$	1.7 million	February 15, 2020 - May 14, 2020
August 17, 2020	$	1.7 million	May 15, 2020 - August 14, 2020

In addition, on October 19, 2020, 2020, the board of directors of our general partner declared a quarterly cash distribution of $0.609375 per unit ($2.4375 per unit on an annualized basis) on our Series A Preferred Units for the period from August 15, 2020 through November 14, 2020 to our preferred unitholders of record as of the opening of business on November 2, 2020. We expect to pay the total cash distribution of approximately $1.7 million on November 16, 2020.

Contractual Obligations

We have contractual obligations that are required to be settled in cash. The amounts of our contractual obligations at September 30, 2020 were as follows (in thousands):


			Payments Due by Period
	Remainder of								2024 and
Contractual Obligations	2020		2021		2022		2023		Thereafter		Total
Credit facility obligations (1)	$	5,171	$	162,940	$	195,100	$	—	$	—	$	363,211
Senior notes obligations (2)		10,500		49,000		49,000		338,500		512,000		959,000
Operating lease obligations (3)		20,988		89,385		59,696		45,598		137,081		352,748
Other long-term liabilities (4)		8,722		26,901		22,091		13,259		50,808		121,781
Financing obligations (5)		3,707		15,023		15,268		15,518		97,932		147,448
Total	$	49,088	$	343,249	$	341,155	$	412,875	$	797,821	$	1,944,188

(1)

Includes principal and interest on our working capital revolving credit facility and our revolving credit facility at September 30, 2020 and assumes a ratable payment through the expiration date. Our credit agreement has a contractual maturity of April 29, 2022 and no principal payments are required prior to that date. However, we repay amounts outstanding and reborrow funds based on our working capital requirements. Therefore, the current portion of the working capital revolving credit facility included in the accompanying consolidated balance sheets is the amount we expect to pay down during the course of the year, and the long-term portion of the working capital revolving credit facility is the amount we expect to be outstanding during the entire year. Please read “—Credit Agreement” for more information on our working capital revolving credit facility.

(2)

Includes principal and interest on our senior notes. No principal payments are required prior to maturity. See Note 8 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on our senior notes. On October 7, 2020, we issued $350.0 million aggregate principal amount of 2029 Notes and used a portion of the proceeds from the offering to fund the redemption of the 2023 Notes. See “—Senior Notes” for additional information.

(3)	Includes operating lease obligations related to leases for office space and computer equipment, land, gasoline stations, railcars and barges.

(4)	Includes amounts related to our 15-year brand fee agreement entered into in 2010 with ExxonMobil and amounts related to our pipeline connection agreements, natural gas transportation and reservation agreements, access right agreements and our pension and deferred compensation obligations.

(5)

Includes lease rental payments in connection with (i) the acquisition of Capitol related to properties previously sold by Capitol within two sale-leaseback transactions; and (ii) the sale of real property assets at 30 gasoline stations and convenience stores. These transactions did not meet the criteria for sale accounting and the lease rental payments are classified as interest expense on the respective financing obligation and the pay-down of the related financing obligation. See Note 8 of Notes to Consolidated Financial Statement for additional information.

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Capital Expenditures

Our operations require investments to maintain, expand, upgrade and enhance existing operations and to meet environmental and operational regulations. We categorize our capital requirements as either maintenance capital expenditures or expansion capital expenditures. Maintenance capital expenditures represent capital expenditures to repair or replace partially or fully depreciated assets to maintain the operating capacity of, or revenues generated by, existing assets and extend their useful lives. Maintenance capital expenditures also include expenditures required to maintain equipment reliability, tank and pipeline integrity and safety and to address certain environmental regulations. We anticipate that maintenance capital expenditures will be funded with cash generated by operations. We had approximately $24.8 million and $33.3 million in maintenance capital expenditures for the nine months ended September 30, 2020 and 2019, respectively, which are included in capital expenditures in the accompanying consolidated statements of cash flows, of which approximately $20.0 million and $30.8 million for the nine months ended September 30, 2020 and 2019, respectively, are related to our investments in our gasoline station business. Repair and maintenance expenses associated with existing assets that are minor in nature and do not extend the useful life of existing assets are charged to operating expenses as incurred.

Expansion capital expenditures include expenditures to acquire assets to grow our businesses or expand our existing facilities, such as projects that increase our operating capacity or revenues by, for example, increasing dock capacity and tankage, diversifying product availability, investing in raze and rebuilds and new-to-industry gasoline stations and convenience stores, increasing storage flexibility at various terminals and by adding terminals to our storage network. We have the ability to fund our expansion capital expenditures through cash from operations or our credit agreement or by issuing debt securities or additional equity. We had approximately $14.8 million and $19.2 million in expansion capital expenditures for the nine months ended September 30, 2020 and 2019, respectively, primarily related to investments in our gasoline station business.

We currently expect maintenance capital expenditures of approximately $45.0 million to $55.0 million and expansion capital expenditures, excluding acquisitions, of approximately $30.0 million to $40.0 million in 2020, relating primarily to investments in our gasoline station business. These current estimates depend, in part, on the timing of completion of projects, availability of equipment and workforce, weather, the scope and duration of the COVID-19 pandemic and unanticipated events or opportunities requiring additional maintenance or investments.

We believe that we will have sufficient cash flow from operations, borrowing capacity under our credit agreement and the ability to issue additional equity and/or debt securities to meet our financial commitments, debt service obligations, contingencies and anticipated capital expenditures. However, we are subject to business and operational risks, including uncertainties related to the extent and duration of the COVID-19 pandemic and geopolitical events, each of which could adversely affect our cash flow. A material decrease in our cash flows would likely have an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities.

Cash Flow

The following table summarizes cash flow activity (in thousands):


	Nine Months Ended
	September 30,
	2020		2019
Net cash provided by operating activities	$	250,289	$	109,525
Net cash used in investing activities	$	(34,772)	$	(41,140)
Net cash used in financing activities	$	(222,698)	$	(70,726)

Operating Activities

Cash flow from operating activities generally reflects our net income, balance sheet changes arising from inventory purchasing patterns, the timing of collections on our accounts receivable, the seasonality of parts of our businesses, fluctuations in product prices, working capital requirements and general market conditions.

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Net cash provided by operating activities was $250.3 million and $109.5 million for the nine months ended September 30, 2020 and 2019, respectively, for a period-over-period increase in cash flow from operating activities of $140.8 million.

Except for net income, the primary drivers of the changes in operating activities include the following (in thousands):


	Nine Months Ended				Period over
	September 30,				Period
	2020		2019		Change
Decrease (increase) in accounts receivable	$	173,424	$	(1,492)	$	174,916
Decrease (increase) in inventories	$	121,462	$	(7,724)	$	129,186
(Decrease) increase in accounts payable	$	(186,592)	$	1,389	$	(187,981)
(Increase) decrease in change in derivatives	$	(44,704)	$	20,606	$	(65,310)

For the nine months ended September 30, 2020, the decreases in accounts receivable, inventories and accounts payable are largely due to the decrease in prices, primarily caused by the COVID-19 pandemic and geopolitical events. The increase in operating cash flow was also impacted by the year-over-year change in derivatives of $65.3 million in part due to the decrease in prices and an increase in the volume of physical forward contracts.

For the nine months ended September 30, 2019, the increases in accounts receivable and inventories were primarily due to an increase in prices.

Investing Activities

Net cash used in investing activities was $34.8 million for the nine months ended September 30, 2020 and included $24.8 million in maintenance capital expenditures, $14.8 million in expansion capital expenditures and $1.2 million in seller note issuances, offset by $6.0 million in proceeds from the sale of property and equipment. The seller note issuances represent notes we received from buyers in connection with the sale of certain of our gasoline stations.

Net cash used in investing activities was $41.1 million for the nine months ended September 30, 2019 and included $33.3 million in maintenance capital expenditures, $19.2 million in expansion capital expenditures and $0.6 million in seller note issuances, offset by $12.0 million in proceeds from the sale of property and equipment.

Please read “—Capital Expenditures” for a discussion of our capital expenditures for the nine months ended September 30, 2020 and 2019.

Financing Activities

Net cash used in financing activities was $222.7 million for the nine months ended September 30, 2020 and included $163.8 million in net payments on our working capital revolving credit facility due to lower prices and an increase in net income, $52.4 million in cash distributions to our limited partners (preferred and common unitholders) and our general partner, $4.7 million in net payments on our revolving credit facility, $1.6 million related to the acquisition of our noncontrolling interest at Basin Transload, $0.3 million in the repurchase of common units pursuant to our repurchase program for future satisfaction of our LTIP obligations, and $0.3 million in LTIP units withheld for tax obligations related to awards that vested in 2020. Net cash used in financing activities was offset by $0.4 million in capital contributions from our noncontrolling interest at Basin Transload.

Net cash used in financing activities was $70.7 million for the nine months ended September 30, 2019 and included $381.9 million in payments in connection with the repurchase of the 6.25% senior notes due 2022 and the issuance of the 7.00% senior notes due 2027, $57.4 million in cash distributions to our limited partners (preferred and common unitholders) and our general partner, $23.0 million in net payments on our revolving credit facility, $0.6 million in LTIP units withheld for tax obligations related to awards that vested in 2019 and $0.4 million in net payments on our

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working capital revolving credit facility. Net cash used in financing activities was offset by $392.6 million in proceeds in connection with the issuance of the 7.00% senior notes due 2027.

See Note 8 of Notes to Consolidated Financial Statements for supplemental cash flow information related to our working capital revolving credit facility and revolving credit facility.

Credit Agreement

Certain subsidiaries of ours, as borrowers, and we and certain of our subsidiaries, as guarantors, have a $1.17 billion senior secured credit facility which was amended on May 7, 2020 to, among other things, provide temporary adjustments to certain covenants and reduce the total aggregate commitment by $130.0 million from $1.3 billion (see “–Fourth Amendment to the Credit Agreement” below).

We repay amounts outstanding and reborrow funds based on our working capital requirements and, therefore, classify as a current liability the portion of the working capital revolving credit facility we expect to pay down during the course of the year. The long-term portion of the working capital revolving credit facility is the amount we expect to be outstanding during the entire year. The credit agreement matures on April 29, 2022.

There are two facilities under the credit agreement:

●

a working capital revolving credit facility to be used for working capital purposes and letters of credit in the principal amount equal to the lesser of our borrowing base and $770.0 million; and

●

a $400.0 million revolving credit facility to be used for general corporate purposes.

Availability under the working capital revolving credit facility is subject to a borrowing base which is redetermined from time to time and based on specific advance rates on eligible current assets. Availability under the borrowing base may be affected by events beyond our control, such as changes in petroleum product prices, collection cycles, counterparty performance, advance rates and limits and general economic conditions.

The average interest rates for the credit agreement were 2.8% and 4.3% for the three months ended September 30, 2020 and 2019, respectively, and 3.0% and 4.5% for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, we had total borrowings outstanding under the credit agreement of $348.1 million, including $188.0 million outstanding on the revolving credit facility. In addition, we had outstanding letters of credit of $48.5 million. Subject to borrowing base limitations, the total remaining availability for borrowings and letters of credit was $773.4 million and $660.2 million at September 30, 2020 and December 31, 2019, respectively.

The credit agreement imposes financial covenants that require us to maintain certain minimum working capital amounts, a minimum combined interest coverage ratio, a maximum senior secured leverage ratio and a maximum total leverage ratio. We were in compliance with the foregoing covenants at September 30, 2020. The credit agreement also contains a representation whereby there can be no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect (as defined in the credit agreement). In addition, the credit agreement limits distributions by us to our unitholders to the amount of Available Cash (as defined in the partnership agreement).

Please read Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Credit Agreement” in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on the credit agreement.

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Fourth Amendment to the Credit Agreement

On May 7, 2020, we and certain of our subsidiaries entered into the Fourth Amendment to Third Amended and Restated Credit Agreement (the “Fourth Amendment”), which further amends the credit agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the credit agreement.

The Fourth Amendment amends certain terms, provisions and covenants of the credit agreement, including, without limitation:

(i)

(ii)

adds two pricing levels under the revolving credit facility for borrowings of base rate loans, Eurocurrency rate loans and cost of funds rate loans and for issuances of letters of credit;

(iii)

adds a Eurocurrency rate floor of 0.75% and a cost of funds rate floor of 0.50%;

(iv)

(v)

All other material terms of the credit agreement remain substantially the same as disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Credit Agreement” in our Annual Report on Form 10-K for the year ended December 31, 2019.

Senior Notes

We had 7.00% senior notes due 2027 and 7.00% senior notes due 2023 outstanding at September 30, 2020. Please read Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Notes” in our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information on these senior notes. On October 7, 2020, the Issuers issued $350.0 million aggregate principal amount of 6.875% senior notes due 2029 to the 2029 Notes Initial Purchasers in a private placement exempt from the registration requirements under the Securities Act. We used the net proceeds from the offering to fund the redemption of our 2023 Notes and to repay a portion of the borrowings outstanding under our credit agreement.

2029 Notes Indenture

The 2029 Notes mature on January 15, 2029 with interest accruing at a rate of 6.875% per annum. Interest is payable beginning July 15, 2021 and thereafter semi-annually in arrears on January 15 and July 15 of each year. The 2029 Notes are guaranteed on a joint and several senior unsecured basis by each of the Issuers and the subsidiary guarantors to the extent set forth in the 2029 Notes Indenture. Upon a continuing event of default, the trustee or the holders of at least 25% in principal amount of the 2029 Notes may declare the 2029 Notes immediately due and payable, except that an event of default resulting from entry into a bankruptcy, insolvency or reorganization with respect to the Issuers, any restricted subsidiary of ours that is a significant subsidiary or any group of our restricted subsidiaries that, taken together, would constitute a significant subsidiary of ours, will automatically cause the 2029 Notes to become due and payable.

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The 2029 Notes Indenture contains covenants that limit our ability to, among other things, incur additional indebtedness and issue preferred securities, make certain dividends and distributions, make certain investments and other restricted payments, restrict distributions by our subsidiaries, create liens, sell assets or merge with other entities. Events of default under the 2029 Notes Indenture include (i) a default in payment of principal of, or interest or premium, if any, on, the 2029 Notes, (ii) breach of our covenants under the 2029 Notes Indenture, (iii) certain events of bankruptcy and insolvency, (iv) any payment default or acceleration of indebtedness of ours or certain subsidiaries if the total amount of such indebtedness unpaid or accelerated exceeds $50.0 million and (v) failure to pay within 60 days uninsured final judgments exceeding $50.0 million.

2029 Notes Registration Rights Agreement

Financing Obligations

Capitol Acquisition

On June 1, 2015, we acquired retail gasoline stations and dealer supply contracts from Capitol Petroleum Group (“Capitol”). In connection with the acquisition, we assumed a financing obligation of $89.6 million associated with two sale-leaseback transactions by Capitol for 53 leased sites that did not meet the criteria for sale accounting. During the terms of these leases, which expire in May 2028 and September 2029, in lieu of recognizing lease expense for the lease rental payments, we incur interest expense associated with the financing obligation. Interest expense of approximately $2.3 million was recorded for each of the three months ended September 30, 2020 and 2019, and $7.0 million was recorded for each of the nine months ended September 30, 2020 and 2019, which is included in interest expense in the accompanying consolidated statements of operations. The financing obligation will amortize through expiration of the leases based upon the lease rental payments which were $2.5 million for each of the three months ended September 30, 2020 and 2019, and $7.6 million and $7.4 million for the nine months ended September 30, 2020 and 2019, respectively. The financing obligation balance outstanding at September 30, 2020 was $86.4 million associated with the Capitol acquisition.

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Sale-Leaseback Transaction

On June 29, 2016, we sold to a premier institutional real estate investor (the “Buyer”) real property assets, including the buildings, improvements and appurtenances thereto, at 30 gasoline stations and convenience stores located in Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island (the “Sale-Leaseback Sites”) for a purchase price of approximately $63.5 million. In connection with the sale, we entered into a Master Unitary Lease Agreement with the Buyer to lease back the real property assets sold with respect to the Sale-Leaseback Sites (such Master Lease Agreement, together with the Sale-Leaseback Sites, the “Sale-Leaseback Transaction”).

As a result of not meeting the criteria for sale accounting for these sites, the Sale-Leaseback Transaction is accounted for as a financing arrangement. As such, the property and equipment sold and leased back by us has not been derecognized and continues to be depreciated. We recognized a corresponding financing obligation of $62.5 million equal to the $63.5 million cash proceeds received for the sale of these sites, net of $1.0 million financing fees. During the term of the lease, which expires in June 2031, in lieu of recognizing lease expense for the lease rental payments, we incur interest expense associated with the financing obligation. Lease rental payments are recognized as both interest expense and a reduction of the principal balance associated with the financing obligation. Lease rental payments are recognized as both interest expense and a reduction of the principal balance associated with the financing obligation. Interest expense was $1.1 million for each of the three months ended September 30, 2020 and 2019 and $3.3 million for each of the nine months ended September 30, 2020 and 2019. Lease rental payments were $1.2 million for each of the three months ended September 30, 2020 and 2019, and $3.5 million for each of the nine months ended September 30, 2020 and 2019. The financing obligation balance outstanding at September 30, 2020 was $62.1 million associated with the Sale-Leaseback Transaction.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The outbreak of COVID-19 across the United States and the responses of governmental bodies (federal, state and municipal), companies and individuals, including mandated and/or voluntary restrictions to mitigate the spread of the virus, have caused a significant economic downturn. The uncertainty surrounding the short and long-term impact of COVID-19, including the inability to project the timing of an economic recovery, may have an impact on our use of estimates. Actual results may differ from these estimates under different assumptions or conditions.

These estimates are based on our knowledge and understanding of current conditions and actions that we may take in the future. Changes in these estimates will occur as a result of the passage of time and the occurrence of future events. Subsequent changes in these estimates may have a significant impact on our financial condition and results of operations and are recorded in the period in which they become known. We have identified the following estimates that, in our opinion, are subjective in nature, require the exercise of judgment, and involve complex analysis: inventory, leases, revenue recognition, trustee taxes, derivative financial instruments, goodwill, evaluation of long-lived asset impairment and environmental and other liabilities.

The significant accounting policies and estimates that we have adopted and followed in the preparation of our consolidated financial statements are detailed in Note 2 of Notes to Consolidated Financial Statements, “Summary of Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no subsequent changes in these policies and estimates that had a significant impact on our financial condition and results of operations for the periods covered in this report, except as described in Note 19 of Notes to Consolidated Financial Statements herein for the adoption of ASU 2016-13, “Measurement of Credit Losses on

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Financial Instruments,” including modifications to that standard thereafter, and now codified as ASC 326 which we adopted on January 1, 2020.

Recent Accounting Pronouncements

A description and related impact expected from the adoption of certain new accounting pronouncements is provided in Note 19 of Notes to Consolidated Financial Statements included elsewhere in this report.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risks to which we are exposed are interest rate risk and commodity risk. We currently utilize various derivative instruments to manage exposure to commodity risk.

Interest Rate Risk

We utilize variable rate debt and are exposed to market risk due to the floating interest rates on our credit agreement. Therefore, from time to time, we utilize interest rate collars, swaps and caps to hedge interest obligations on specific and anticipated debt issuances.

As of September 30, 2020, we had total borrowings outstanding under our credit agreement of $348.1 million. Please read Part I, Item 2. “Management’s Discussion and Analysis—Liquidity and Capital Resources—Credit Agreement,” for information on interest rates related to our borrowings. The impact of a 1% increase in the interest rate on this amount of debt would have resulted in an increase in interest expense, and a corresponding decrease in our results of operations, of approximately $3.5 million annually, assuming, however, that our indebtedness remained constant throughout the year.

Commodity Risk

We hedge our exposure to price fluctuations with respect to refined petroleum products, renewable fuels, crude oil and gasoline blendstocks in storage and expected purchases and sales of these commodities. The derivative instruments utilized consist primarily of exchange-traded futures contracts traded on the NYMEX, CME and ICE and over-the-counter transactions, including swap agreements entered into with established financial institutions and other credit-approved energy companies. Our policy is generally to purchase only products for which we have a market and to structure our sales contracts so that price fluctuations do not materially affect our profit. While our policies are designed to minimize market risk, as well as inherent basis risk, exposure to fluctuations in market conditions remains. Except for the controlled trading program discussed below, we do not acquire and hold futures contracts or other derivative products for the purpose of speculating on price changes that might expose us to indeterminable losses.

While we seek to maintain a position that is substantially balanced within our commodity product purchase and sales activities, we may experience net unbalanced positions for short periods of time as a result of variances in daily purchases and sales and transportation and delivery schedules as well as other logistical issues inherent in our businesses, such as weather conditions. In connection with managing these positions, we are aided by maintaining a constant presence in the marketplace. We also engage in a controlled trading program for up to an aggregate of 250,000 barrels of commodity products at any one point in time. Changes in the fair value of these derivative instruments are recognized in the consolidated statements of operations through cost of sales. In addition, because a portion of our crude oil business may be conducted in Canadian dollars, we may use foreign currency derivatives to minimize the risks of unfavorable exchange rates. These instruments may include foreign currency exchange contracts and forwards. In conjunction with entering into the commodity derivative, we may enter into a foreign currency derivative to hedge the resulting foreign currency risk. These foreign currency derivatives are generally short-term in nature and not designated for hedge accounting.

We utilize exchange-traded futures contracts and other derivative instruments to minimize or hedge the impact of commodity price changes on our inventories, fuel purchases and forward fixed price commitments. Any hedge

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ineffectiveness is reflected in our results of operations. We utilize regulated exchanges, including the NYMEX, CME and ICE, which are exchanges for the respective commodities that each trades, thereby reducing potential delivery and supply risks. Generally, our practice is to close all exchange positions rather than to make or receive physical deliveries.

At September 30, 2020, the fair value of all of our commodity risk derivative instruments and the change in fair value that would be expected from a 10% price increase or decrease are shown in the table below (in thousands):


	Fair Value at		Gain (Loss)
	September 30,		Effect of 10%		Effect of 10%
	2020		Price Increase		Price Decrease
Exchange traded derivative contracts	$	(5,115)	$	(20,145)	$	20,145
Forward derivative contracts		36,570		(5,670)		5,670
Total	$	31,455	$	(25,815)	$	25,815

The fair values of the futures contracts are based on quoted market prices obtained from the NYMEX, CME and ICE. The fair value of the swaps and option contracts are estimated based on quoted prices from various sources such as independent reporting services, industry publications and brokers. These quotes are compared to the contract price of the swap, which approximates the gain or loss that would have been realized if the contracts had been closed out at September 30, 2020. For positions where independent quotations are not available, an estimate is provided, or the prevailing market price at which the positions could be liquidated is used. All hedge positions offset physical exposures to the physical market; none of these offsetting physical exposures are included in the above table. Price-risk sensitivities were calculated by assuming an across-the-board 10% increase or decrease in price regardless of term or historical relationships between the contractual price of the instruments and the underlying commodity price. In the event of an actual 10% change in prompt month prices, the fair value of our derivative portfolio would typically change less than that shown in the table due to lower volatility in out-month prices. We have a daily margin requirement to maintain a cash deposit with our brokers based on the prior day’s market results on open futures contracts. The balance of this deposit will fluctuate based on our open market positions and the commodity exchange’s requirements. The brokerage margin balance was $23.5 million at September 30, 2020.

We are exposed to credit loss in the event of nonperformance by counterparties to our exchange-traded derivative contracts, physical forward contracts, and swap agreements. We anticipate some nonperformance by some of these counterparties which, in the aggregate, we do not believe at this time will have a material adverse effect on our financial condition, results of operations or cash available for distribution to our unitholders. Exchange-traded derivative contracts, the primary derivative instrument utilized by us, are traded on regulated exchanges, greatly reducing potential credit risks. We utilize major financial institutions as our clearing brokers for all NYMEX, CME and ICE derivative transactions and the right of offset exists with these financial institutions. Accordingly, the fair value of our exchange-traded derivative instruments is presented on a net basis in the consolidated balance sheet. Exposure on physical forward contracts and swap agreements is limited to the amount of the recorded fair value as of the balance sheet dates.

Item 4.Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our principal executive officer and principal financial officer, management evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were operating and effective as of September 30, 2020.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

The information required by this item is included in Note 18 of Notes to Consolidated Financial Statements and is incorporated herein by reference.

Item 1A.Risk Factors

In addition to other information set forth in this report, you should carefully consider the factors discussed below and in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial condition or future results.

The outbreak of COVID-19 across the United States and the responses of governmental bodies (federal, state and municipal), companies and individuals, including mandated and/or voluntary restrictions to mitigate the spread of the virus, have caused a significant economic downturn. Because there are fewer people commuting to and from work and elsewhere, fewer people traveling, fewer people on the road to purchase goods or services, and fewer companies engaged in their traditional business activities who would otherwise seek such goods and/or services, there has been a decline in the demand for the products we sell and the services we provide. These declines are further impacted by world-wide events related to production of crude oil and the related steep decline in the pricing of that product.

There is continuing uncertainty surrounding the short-term and long-term impacts of COVID-19 to the national and state economies. The inability to project a timely economic recovery and/or the extent of same on each of a national, state and regional basis remain prevalent. Any prolonged period of economic distress and/or prolonged and disparate periods of economic recovery have had and could continue to have an adverse effect on our financial condition, results of operation and cash available for distribution to our unitholders. These events could also have or cause significant adverse effects on the financial condition of our counterparties, suppliers of goods and services we purchase, and purchasers of customers of the goods and services we sell, resulting in disruption to and a decline in our business activities resulting in an adverse impact to our financial condition and results of operations.

Any of the foregoing events or conditions, or other unforeseen consequences of COVID-19 and certain developments in global oil markets, could significantly adversely affect our business and financial condition and the business and financial condition of our customers, suppliers and counterparties. The ultimate extent of the impact of COVID-19 on our business, financial condition and results of operations depends in large part on future developments which are uncertain and cannot be predicted with any certainty at this time. That uncertainty includes the duration of the COVID-19 pandemic, the geographic regions so impacted, the extent of such impact within specific boundaries of those areas and the impact to the local, state and national economies.

To the extent COVID-19 and certain developments in global oil markets adversely affect our business activities, financial condition and results of operations, the COVID-19 pandemic and such developments in global oil markets may also have the effect of heightening many of the other risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

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Item 6.Exhibits

(a)

Exhibits


3.1	—	Certificate of Limited Partnership of Global Partners LP (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed on May 10, 2005).

3.2	—	Fourth Amended and Restated Agreement of Limited Partnership of Global Partners LP dated as of August 7, 2018 (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 7, 2018).

4.1	—	Indenture, dated July 31, 2019, among the Issuers, the Guarantors and Deutsche Bank Trust Company Americas, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on July 31, 2019).

4.2	—	Indenture, dated October 7, 2020, among the Issuers, the Guarantors and Regions Bank, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on October 8, 2020).

4.3	—	Registration Rights Agreement, dated October 7, 2020, among the Issuers, the Guarantors and the Initial Purchasers (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on October 8, 2020).

10.1	—	Purchase Agreement, dated September 23, 2020, among the Issuers, the Guarantors and the Initial Purchasers (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 24, 2020).

10.2*††	—	Brand Fee Agreement, dated September 3, 2010, between ExxonMobil Oil Corporation and Global Companies LLC.

31.1*	—	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of Global GP LLC, general partner of Global Partners LP.

31.2*	—	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of Global GP LLC, general partner of Global Partners LP.

32.1†	—	Section 1350 Certification of Chief Executive Officer of Global GP LLC, general partner of Global Partners LP.

32.2†	—	Section 1350 Certification of Chief Financial Officer of Global GP LLC, general partner of Global Partners LP.

101.INS*	—	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*	—	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	—	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	—	Inline XBRL Taxonomy Extension Definition Linkbase Document.
104*	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

† Not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section.

†† Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	GLOBAL PARTNERS LP
	By:	Global GP LLC,
		its general partner


Dated: November 5, 2020		By:	/s/ Eric Slifka
			Eric Slifka
			President and Chief Executive Officer
			(Principal Executive Officer)


Dated: November 5, 2020		By:	/s/ Daphne H. Foster
			Daphne H. Foster
			Chief Financial Officer
			(Principal Financial Officer)

Exhibit 10.2

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO ITEM 601(b)(10)(iv) WHEREBY CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED: (**)

BRAND FEE AGREEMENT

This BRAND FEE AGREEMENT (the “Agreement”) is made and entered into by and between ExxonMobil Oil Corporation, having an office and place of business at 3225 Gallows Road, Fairfax, Virginia 22037, hereinafter called ExxonMobil, and Global Companies LLC, having an office at 800 South Street, Suite 200, Waltham, Massachusetts, 02453, hereinafter called BFA Holder.

WHEREAS, BFA Holder acknowledges that ExxonMobil has established the following core values (“Core Values”) to build and maintain a lasting relationship with its customers, the motoring public:

(1) To deliver quality products that customers can trust.

(2) To employ friendly, helpful people.

(3) To provide speedy, reliable service.

(4) To provide clean and attractive retail facilities.

(5) To be a responsible, environmentally-conscious neighbor.

WHEREAS, BFA Holder does or in the future will either own, operate or supply certain retail motor fuel outlets at those locations identified on Exhibit 1 hereto and may, subject to ExxonMobil’s consent, own, operate or supply certain retail motor fuel outlets in those certain jurisdictions set out on Exhibit 2 (hereinafter referred to as the “Designated Geography(ies)”);

WHEREAS, BFA Holder wishes to sell Exxon and/or Mobil-branded motor fuel to or through these outlets and to receive certain services, and be eligible to participate in certain programs, related to the Exxon and Mobil brands, but currently does not wish to purchase the motor fuel product from ExxonMobil or its Affiliates;

WHEREAS, BFA Holder wishes to undertake full responsibility for the sourcing of motor fuel product at the retail motor fuel outlets that are subject to this Agreement;

WHEREAS, ExxonMobil is willing to furnish BFA Holder with certain services and programs, as more particularly defined herein, associated with the Exxon and Mobil brands;

WHEREAS, ExxonMobil is willing to allow BFA Holder to utilize the Proprietary Marks in accordance and subject to the terms of this Agreement in connection with the retail identification of the retail motor fuel outlets that are subject to this Agreement and to allow motor fuel sold from or through these outlets to be branded as Exxon or Mobil-branded motor fuel;

NOW THEREFORE, ExxonMobil and BFA Holder agree as follows:

1. PERIOD.

Unless sooner terminated as provided elsewhere herein, this Agreement shall be in full force and effect for the period of fifteen (15) years beginning on September 8, 2010 (“Effective Date”), and ending on September 7, 2025 (“Expiration Date”) (such period, the “Term”). By written notice furnished to BFA Holder, ExxonMobil may, at its sole discretion, grant temporary extensions of the Term for periods not exceeding one hundred and eighty (180) days for each extension. An extension shall not be construed as renewal of this Agreement or of the Franchise Relationship.

2. GRANT.

By this Agreement, ExxonMobil and BFA Holder establish a “Franchise” and a “Franchise Relationship” as defined by the Petroleum Marketing Practices Act, 15 U.S.C. Sections 2801-2806 (the “PMPA”). Subject to the terms and conditions of this Agreement:

(a) With respect to the Proprietary Marks (as defined below) to be used in connection with the retail sale of Exxon or Mobil-branded motor fuel (including both gasoline and diesel), as the case may be (“Products”), ExxonMobil grants BFA Holder the limited and non-exclusive right to:

(1) Use the Mobil Proprietary Marks (as defined below) at (i) those Mobil-branded retail outlets identified as CORS locations on Exhibit 1 hereto and (ii) such Mobil-branded retail outlets as may be approved under Section 2(e) and operated by BFA Holder (or a third party operator with experience in the operation of similar service station properties) (“Operated Mobil Branded Outlets”);

(2) Use the Exxon Proprietary Marks (as defined below) at such Exxon-branded retail outlets as may be approved under Section 2(e) and operated by BFA Holder (or a third party operator with experience in the operation of similar service station properties) (“Operated Exxon Branded Outlets”);

(3) Grant the use of the Mobil Proprietary Marks to BFA Holder’s franchised lessees or franchised independent dealers (collectively, “Mobil Franchise Dealers”) at (i) those Mobil-branded retail outlets identified as CODO or DOSS locations on Exhibit 1 hereto and (ii) such Mobil-branded retail outlets as may be approved under Section 2(e) and operated by a franchised lessee or franchised independent dealer (“Franchised Mobil Branded Outlets”); and

(4) Grant the use of the Exxon Proprietary Marks to BFA Holder’s franchised lessees or franchised independent dealers (collectively, “Exxon Franchise Dealers”) at such Exxon-branded retail outlets as may be approved under Section 2(e) and operated by a franchised lessee or franchised independent dealer (“Franchised Exxon Branded Outlets”).

In this Agreement, (i) the Operated Mobil Branded Outlets and Operated Exxon Branded Outlets may be collectively referred to as the “Operated Branded Outlets”, (ii) the Franchised Mobil Branded Outlets and Franchised Exxon Branded Outlets may be collectively referred to as the “Franchised Branded Outlets”, (iii) the Operated Branded Outlets and the Franchised Branded Outlets, whether they be BFA Holder Direct Served Outlets or BFA Holder Sub-Jobber Outlets may be collectively referred to as the “BFA Holder Branded Outlets”, and (iv) the Mobil Franchise Dealers and the Exxon Franchise Dealers may be collectively referred to as the “Franchise Dealers”.

For purposes of this Agreement, BFA Holder Branded Outlets can be supplied in one of two methods, (i) BFA Holder’s Direct Served Business, which are those BFA Holder Branded Outlets that are supplied Product for retail sale through an agreement directly with BFA Holder or any of its Affiliates (the “Direct Served Outlets”), or (ii) BFA Holder’s Sub-Jobber Business, which are those BFA Holder Branded Outlets that are supplied Product for retail sale through an agreement between BFA Holder or one of its Affiliates and any branded wholesaler that is not an Affiliate of BFA Holder (the “Sub-Jobber Outlets”). Note that for purposes of this Agreement, the term “branded wholesaler(s)” shall include “distributor(s)”, as may be applicable.

(b) Under this Agreement, “Mobil Proprietary Marks” shall mean (i) only those trademarks identified on Exhibits 13-A and 13-B hereto and (ii) related trade dress. “Exxon Proprietary Marks” shall mean (i) only those trademarks identified on Exhibits 14-A and 14-B hereto and (ii) related trade

dress. “Proprietary Marks” shall mean the Mobil Proprietary Marks and the Exxon Proprietary Marks, collectively or separately, as appropriate in context. The grants set forth in Section 2(a) and Section 2(d)(1) by ExxonMobil to BFA Holder for BFA Holder’s use of the Proprietary Marks, as to each Proprietary Mark, shall be limited to only the specific corresponding goods and services listed on Exhibits 13-A and 14-A (as to the retail motor fuels Business only), and 13-B and 14-B (as to the Related Businesses only) (the “Authorized Uses”). For the avoidance of doubt, BFA Holder hereby agrees and acknowledges that the Proprietary Marks may be used only during the Term and only at the BFA Holder Branded Outlets and that nothing set forth in this Agreement shall be interpreted to grant BFA Holder any rights in or to such Proprietary Marks for any offsite use unless expressly authorized by ExxonMobil in writing. BFA Holder further hereby acknowledges and agrees that notwithstanding anything to the contrary set forth herein, it shall not be permitted to use, or grant the use of, any of the Exxon Proprietary Marks prior to June 1, 2011. In addition, specifically excluded from any Authorized Use is BFA Holder’s use of any Proprietary Mark on or in connection with any auto repair services or any trucks, cars or other rolling stock of any nature. BFA Holder shall not have any authority under this Agreement to use any trademark or other intellectual property of ExxonMobil or its Affiliates not specifically identified on Exhibit 13-A, 13-B, 14-A or 14-B or any taglines or reward programs of ExxonMobil or its Affiliates. BFA Holder shall be permitted only to use or grant the use of either the Mobil Proprietary Marks, or the Exxon Proprietary Marks, at any one retail outlet and shall not use or permit the use of both Mobil Proprietary Marks and Exxon Proprietary Marks at any retail outlet. As used in this Agreement, the term “Affiliate” as it relates to ExxonMobil means, (1) ExxonMobil Oil Corporation or its successors-in-interest, (2) any parent corporation, partnership, or other entity of the ExxonMobil Oil Corporation or its successors-in-interest which now or hereafter owns or controls, directly or indirectly through one or more intermediaries, fifty percent or more of the ownership interest having the right to vote for or appoint directors of ExxonMobil Oil Corporation or its successors-in-interest (“Parent Company”), (3) any corporation, partnership, or other entity, regardless of where situated, at least fifty percent of whose ownership interest having the right to vote for or appoint directors is now or hereafter owned or controlled, directly or indirectly through one or more intermediaries, by ExxonMobil Oil Corporation or its successors-in-interest or by its Parent Company. As used in this Agreement, the term “Affiliate” as it relates to BFA Holder means, any person directly or indirectly controlling, controlled by, or under common control with BFA Holder, including any other person directly or indirectly controlling, controlled by, or under common control with such person. For purposes of this definition, the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any person, whether through the ownership of voting securities or by contract or otherwise. For the purposes of this Agreement, Alliance Energy LLC, a Massachusetts limited liability company (“Alliance”) and AE Holdings Corp., a Massachusetts corporation and the managing member of Alliance shall not be considered Affiliates of BFA Holder.

(c) BFA Holder will arrange for and be solely responsible for procuring an adequate supply of unbranded motor fuel (“Base Product”) that meets the requirements of Section 5 of this Agreement. After Base Product has been additized as provided in Section 5 hereof, it may be distributed by BFA Holder as Product to the BFA Holder Branded Outlets subject to all terms and conditions of this Agreement.

(d) (1) ExxonMobil acknowledges that BFA Holder may wish to operate additional businesses of the type described in the Authorized Uses set forth on Exhibit 13-B or 14-B (“Related Businesses”) during the Term utilizing Proprietary Marks at any or all of the BFA Holder Branded Outlets. Subject to the specific corresponding Authorized Uses(s) listed on Exhibit 13-B or 14-B, and other terms and conditions of this Agreement, ExxonMobil grants BFA Holder the right to utilize the Proprietary Marks set forth on Exhibit 13-B or 14-B in connection with Related Businesses and to grant to a Franchise Dealer the right to use such Proprietary Marks in connection with Related Businesses solely to the extent and in the manner specified by ExxonMobil from time to time. For the avoidance of doubt, ExxonMobil shall have the right to change, modify, amend, add or remove, in its

sole discretion, the Related Businesses permitted pursuant to this Section 2(d)(1) and the Authorized Use(s) set forth on Exhibit 13-B or 14-B.

(2) BFA Holder acknowledges, and shall require its Franchise Dealers to acknowledge, that the operation of a Related Business using any Proprietary Mark impacts customers’ perceptions and acceptance of the Products and Proprietary Marks. Accordingly, BFA Holder may operate, or authorize a Franchise Dealer to operate, a Related Business utilizing Proprietary Marks at a BFA Holder Branded Outlet only in compliance with ExxonMobil’s requirements as set out from time to time by ExxonMobil and at all times in compliance with this Agreement. If BFA Holder or any Franchise Dealer fails to comply with ExxonMobil’s requirements for such a Related Business at any BFA Holder Branded Outlet, without limiting ExxonMobil’s other rights or remedies under applicable laws or under this Agreement or any related or supplemental agreement, including termination or non-renewal of this Agreement and the Franchise Relationship, ExxonMobil may withdraw its approval for the use of any such Proprietary Mark for that Related Business.

(3) During the Term, BFA Holder shall operate and shall cause its Franchise Dealers to operate any Related Business utilizing any Proprietary Mark, as approved under Section 2(e), in compliance with this Agreement and shall not operate, and shall cause its Franchise Dealers not to operate, any other businesses or activities utilizing Proprietary Marks at any BFA Holder Branded Outlet unless agreed in writing by the parties hereto. During the Term, and except as expressly provided in this Agreement, BFA Holder (or any of its Franchise Dealers) may change, delete or add a Related Business at a BFA Holder Branded Outlet only with the prior written consent of ExxonMobil. Nothing contained in this Section 2 may be construed as limiting or preventing ExxonMobil from changing, deleting, adding or substituting any Proprietary Mark used in connection with a Related Business.

(4) The motor fuels business, under which BFA Holder distributes the Products hereunder for retail sale at the BFA Holder Branded Outlets, the retail sales of motor fuels at the BFA Holder Branded Outlets and the Related Businesses are herein collectively referred to as the “Businesses.”

(e) (1) BFA Holder may use or operate at an Operated Branded Outlet, or grant and allow the use or operation at a Franchised Branded Outlet of any Businesses or exercise any other rights under Sections 2(a) and (d), only if:

(i) ExxonMobil has expressly approved the Exxon or Mobil-branding, as the case may be, of that retail outlet and the operation of the Businesses at that retail outlet; and

(ii) ExxonMobil has not:

(A) Debranded that outlet; or

(B) Withdrawn ExxonMobil’s approval for the operation of any Business in question at that retail outlet.

For the purposes of Section 2(e)(1)(i) above, only those retail outlets set out on Exhibit 1 are expressly approved for Mobil-branding. In particular, BFA Holder acknowledges that, absent the express approval of ExxonMobil or assignment by ExxonMobil in accordance with the terms of this Agreement, no retail outlet or other operation that is Mobil or Exxon-branded and branded wholesaler-served as of the Effective Date is subject to operation under the terms of this Agreement. Approval of any outlets in

addition to those set out on Exhibit 1 will be on a site by site basis and shall be memorialized by a trademark authorization letter in a form to be specified by ExxonMobil from time to time. Notwithstanding the previous sentence, any Exxon or Mobil branded retail outlet to be added under this Agreement that is approved at that time for Exxon or Mobil-branding shall not require re-approval to be added under this Agreement; provided, however, that ExxonMobil shall be entitled to review the Exxon or Mobil branding of such outlet to ensure compliance with Section 2(g) hereof.

(2) In its sole discretion, ExxonMobil may approve or not approve the branding of any outlet or the use or operation of any Businesses proposed by BFA Holder or any Franchise Dealer. ExxonMobil is not obligated to furnish a reason for withholding approval. ExxonMobil’s furnishing of a reason does not in any way limit its rights to withhold for any reason any approval of that or any future branding proposal. BFA Holder shall comply, and cause its Franchise Dealers to comply, with any requirements and conditions imposed by ExxonMobil in giving its approval under this Section.

(3) By written notice to BFA Holder, ExxonMobil may withdraw its approval to:

(i) Brand any BFA Holder Branded Outlet (“debrand”); or

(ii) Use or operate any Business (including, for the avoidance of doubt, any Related Business) at any outlet

if, in ExxonMobil’s sole judgment:

(a) That outlet (or any Businesses thereat) fails to portray the image and standards ExxonMobil expects from its branded retail outlets;

(b) BFA Holder, or any Franchise Dealer, is in default of any material obligation, condition, representation or warranty under this Agreement or any related or supplemental agreement with respect to that retail outlet (or any Business); or

(c) Any actions by BFA Holder, any Franchise Dealer, any Affiliate of BFA Holder or any third party management company in connection with its operations on behalf of BFA Holder, whether in violation of its obligations under this Agreement or otherwise, cause harm to the value or reputation of the Proprietary Marks.

ExxonMobil shall provide prior written notice of its intention to withdraw its approval pursuant to Section 2(e)(3)(a) or (b) and BFA Holder shall have a time period, which shall in no event exceed thirty (30) days, in which to take corrective action with respect to the BFA Holder Branded Outlet at issue. In the event that BFA Holder has not satisfied ExxonMobil as to resolution of the issue within such thirty (30) day period, ExxonMobil may withdraw its approval.

(4) If ExxonMobil debrands any BFA Holder Branded Outlet, or withdraws its approval to use or operate any Businesses at any BFA Holder Branded Outlet, BFA Holder shall comply, and cause any Franchise Dealer at the retail outlet to comply, with the provisions of Section 3 with respect to the retail outlet in question. The debranding of one or more of the BFA Holder Branded Outlets does not constitute a termination or non-renewal of this Agreement.

(5) BFA Holder shall not permit and shall ensure that its Franchise Dealers do not permit the following activities or types of business to occur at any BFA Holder Branded Outlet:

(i) The sale or use of illegal drugs or drug paraphernalia or other illegal substances or activities,

(ii) The sale of any pornographic material or other material that ExxonMobil in its sole judgment determines may be offensive to the general public (examples include but are not limited to Playboy, Hustler, and Penthouse magazines),

(iii) Adult businesses (examples include but are not limited to massage parlors, strip clubs, and video stores),

(iv) Bars or establishments that allow for any consumption of intoxicating beverages or any sales or consumption of intoxicating beverages in violation of applicable federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders or permits, or

(v) The illegal sale of any tobacco products, including without limitation, sales in violation of any federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits relating to youth access to tobacco products. BFA Holder shall promptly advise ExxonMobil, and shall ensure that Franchise Dealers promptly advise BFA Holder, of any citations or notifications of violations received at any BFA Holder Branded Outlet from any regulatory authority resulting from any such tobacco sales and of the resolution of any such citations and notifications. BFA Holder agrees to comply with the requirements set forth in Exhibit 8.

(6) The terms and conditions of this Agreement and the Franchise Relationship are exclusively between ExxonMobil and BFA Holder. Nothing in this Agreement may be construed as creating any Franchise or Franchise Relationship with any other person, including without limitation, any Franchise Dealer, employee or contractor of BFA Holder.

(f) This Agreement does not give BFA Holder an exclusive right in any market or geographic area to sell Products or conduct any Related Business. BFA Holder acknowledges that ExxonMobil and its Affiliates may directly or indirectly compete with BFA Holder by using, or, subject to Section 2(g) authorizing the use of any trademark, trade names and trade dress owned by ExxonMobil (or any of its subsidiaries or Affiliates) from time to time including, without limitation, the Proprietary Marks, including in close proximity to, and notwithstanding any commercial impact on, any BFA Holder Branded Outlet.

(g) In order to protect the integrity of the Exxon and Mobil brands in the Designated Geographies, notwithstanding anything to the contrary herein, no retail outlet may become a BFA Holder Direct Served Outlet or Sub-Jobber Outlet pursuant to the terms of this Agreement if such site is located within two (2) miles of any then-existing Exxon or Mobil branded retail outlet, which then-existing Exxon or Mobil branded retail outlet is not also a BFA Holder Direct Served Outlet or Sub-Jobber Outlet. The distance between any two retail outlets shall be determined by the most geographically direct street route between the closest identification sign located at each retail outlet.

The foregoing provision shall not restrict the operation of any retail outlet that may be set forth on Exhibit 16 hereto from time to time. Exhibit 16 shall set forth all Exxon or Mobil branded retail outlets in the Designated Geographies existing as of the Effective Date. Any new Exxon or Mobil branded retail outlet that is added to an existing branded wholesaler agreement between ExxonMobil and any of its existing branded wholesalers in the Designated Geographies shall be

added to Exhibit 16 by ExxonMobil. Any Exxon or Mobil branded retail outlet that is debranded shall be deleted from Exhibit 16 by ExxonMobil.

3. TRADEMARKS

(a) BFA Holder is permitted to display the Proprietary Marks solely to designate the brand of the Products or other approved Businesses being operated at a BFA Holder Branded Outlet (which uses shall be limited to only the specific corresponding Authorized Use(s) as to each Proprietary Mark). BFA Holder agrees that no Product will be sold under any of the Proprietary Marks unless it meets the product quality specifications set forth in this Agreement and is additized as specified in this Agreement nor shall any Business be operated unless it meets the quality specification and other standards (including any brand identity standards or retail image standards) existing as of the Effective Date or modified or established by ExxonMobil from time to time, as such standards and specifications may be amended from time to time after the Effective Date. If there shall be posted, mounted, or otherwise displayed on or in connection with any BFA Holder Branded Outlet any sign, poster, placard, plate, device or form of advertising matter whether or not received from ExxonMobil, consisting in whole or in part of the name of ExxonMobil or any of the Proprietary Marks, BFA Holder agrees at all times to display same, or cause the Franchise Dealers to display same, properly and not to diminish, dilute, denigrate, or otherwise adversely affect same. BFA Holder further agrees to take no action that will diminish or dilute the value of any Proprietary Mark.

(b) Immediately upon termination (whether in full or as to any individual outlet) or expiration of this Agreement, or prior thereto upon demand by ExxonMobil, BFA Holder shall discontinue all uses of the Proprietary Marks, including the posting, mounting or display of any Proprietary Mark and all uses of Proprietary Marks in connection with business cards, advertisements and letterhead/stationary, and shall cause its Franchise Dealers to do the same. If BFA Holder or any Franchise Dealer ceases to do business at any BFA Holder Branded Outlet, BFA Holder shall, and shall cause its Franchise Dealer to, discontinue the posting, mounting or display of any Proprietary Marks immediately upon BFA Holder or its Franchise Dealer(s), as the case may be, ceasing to sell the Products or operate the Business, including, without limitation, in the event that the BFA Holder Branded Outlet in question is debranded by ExxonMobil under Section 2(e) or in any event upon demand by ExxonMobil. BFA Holder acknowledges ExxonMobil’s self-help rights set forth in this Agreement, including the rights of entry described in Sections 26(e) and 35, and agrees that BFA Holder shall be solely responsible for all fees, cost and expenses incurred by ExxonMobil or its Affiliates in exercising any such rights.

(c) BFA Holder agrees to notify ExxonMobil or its designee of any apparent or threatened infringement, dilution or other misuse (“Misuse”) of any Proprietary Mark promptly after becoming aware of such Misuse. ExxonMobil shall have the sole right, in its sole discretion, to take any action, legal or otherwise, against such Misuse, and notwithstanding any other provisions in this Agreement, BFA Holder agrees to provide ExxonMobil with any assistance which, in the opinion or judgment of ExxonMobil, is necessary to protect ExxonMobil’s right, title and interest in and to the Proprietary Marks. ExxonMobil shall be entitled in such event to retain all monetary recovery from any misusing third party by way of judgment, settlement or otherwise. BFA Holder shall have no right to, and hereby agrees that it will not (except as requested by ExxonMobil), take any action, with respect to any apparent or threatened Misuse of any Proprietary Mark. BFA Holder shall have no recourse against ExxonMobil, ExxonMobil’s agents, officers, directors, and employees or third parties under their control in the event ExxonMobil chooses not to act against any apparent or threatened Misuse of any of the Proprietary Marks or if any third party challenges the right of ExxonMobil or BFA Holder to use any of the Proprietary Marks.

(d) BFA Holder shall not, and shall cause its Franchise Dealers not to, sell non-Exxon or Mobil-branded motor fuels under any Proprietary Mark, including without limitation, any Exxon or Mobil-identified canopy or at any fueling island where BFA Holder or a Franchise Dealer is selling Products. As used in this Section, “non-Exxon or Mobil-branded motor fuels” shall not be construed to apply to gasohol or other synthetic motor fuels of similar usability, to the extent

provided for in the Gasohol Competition Act of 1980, Pub. L.96-493 or renewable fuels as defined in Section 2807 of the Petroleum Marketing Practices Act; provided however, that BFA Holder and its Franchise Dealers shall label such product so as to ensure that consumers are not confused that such product is an Exxon or Mobil-branded motor fuel.

(e) Without affecting BFA Holder’s obligations under Section 3(d), if BFA Holder or any Franchise Dealer offers non-Exxon or Mobil-branded motor fuels at a BFA Holder Branded Outlet, BFA Holder agrees to protect, and cause its Franchise Dealer(s) in question to protect, the identity of the Products and the Proprietary Marks by all reasonable methods, which would prevent customer confusion or misinformation. BFA Holder agrees to conform, and cause its Franchise Dealers to conform, to ExxonMobil’s de-branding requirements as outlined in Exhibits 9A and 9B, as same may be revised from time to time, including but not limited to posting of ExxonMobil approved signs which clearly distinguish the Products from non-Exxon or Mobil-branded motor fuels, disclaiming any product liability of ExxonMobil for damage resulting from use of non-Exxon or Mobil-branded motor fuels, and removing or covering any signs which may mislead, confuse, or misinform any customers or reduce their goodwill toward any Proprietary Mark. In addition, BFA Holder agrees to comply, and cause its Franchise Dealers to comply, with any additional steps beyond the ExxonMobil de-branding requirements set forth in any applicable law, ordinance or regulation regarding the labeling of petroleum products.

(f) In furtherance of its obligations as set forth in this Section, BFA Holder agrees that it will for itself, and as to any of its Franchise Dealers, require of such Franchise Dealers that they will, while identifying the source of the Products sold at any BFA Holder Branded Outlet, comply with the provisions of this Section. Such assistance includes, but is not limited to, the authorization to ExxonMobil to commence legal proceedings in BFA Holder’s name, and at BFA Holder’s expense, for the purposes of enforcing BFA Holder’s obligations in this Section.

(g) BFA Holder shall have neither the right to use or display at marinas, nor the right to authorize or permit the use or display at marinas by Franchise Dealers of, any Proprietary Mark and shall not sell, and shall cause its Franchise Dealers not to sell, Products at marinas.

(h) To permit ExxonMobil to carry out its rights to protect its Proprietary Marks from diminution, dilution, or destruction by misuse or failure by those to whom permission to display them has been granted under this Agreement, BFA Holder agrees that upon request by ExxonMobil it will provide ExxonMobil with a list of the names and addresses of Franchise Dealers to whom BFA Holder has provided any Proprietary Mark and where such BFA Holder Branded Outlets are displaying such Proprietary Marks.

(i) If BFA Holder, for whatever reason, ceases to display or authorize the display of Proprietary Marks at any BFA Holder Branded Outlet, then BFA Holder will notify ExxonMobil in writing within thirty (30) days of that event.

(j) Except as may be expressly permitted by ExxonMobil, BFA Holder shall not, and shall cause its Franchise Dealers not to, use the Proprietary Marks as part of BFA Holder’s or any Franchise Dealer’s corporate or other name or as part of or in conjunction with any domain name.

(k) BFA Holder shall, and shall cause its Franchise Dealers to, immediately stop using the Proprietary Marks relating to any Business at any BFA Holder Branded Outlet if:

(1) this Agreement is terminated or the Term expires and is not renewed or extended; or

(2) ExxonMobil withdraws its approval to use or operate that Business at that outlet under Section 2(e); or

(3) BFA Holder or its Franchise Dealer(s) stops operating that Business at that outlet;

and, in any such event, to follow any de-branding requirements that may then be applicable.

(l) BFA Holder’s use of any of the Proprietary Marks in conjunction with any uniforms, business cards or business stationary at all times shall be subject to and in accordance with the terms of this Agreement and all standards set forth by ExxonMobil or its Affiliates, as such standards may be amended by ExxonMobil or its Affiliates, in their sole discretion, from time to time. All uniforms used in connection with the Businesses bearing any of the Proprietary Marks shall be purchased solely and exclusively from an ExxonMobil approved vendor.

(m) BFA Holder acknowledges that ExxonMobil (or Exxon Mobil Corporation or any of its Affiliates as the case may be) is the exclusive owner of the Proprietary Marks, and no ExxonMobil act, or failure to act, will give BFA Holder or any Franchise Dealer any ownership interest or right in any of the Proprietary Marks. All goodwill resulting from the use of the Proprietary Marks by BFA Holder or its Franchise Dealers shall inure to the benefit, and is the property, of ExxonMobil (or its Affiliates as the case may be). ExxonMobil may, at any time or from time to time, change or substitute any Proprietary Marks used in connection with the Products or any Business. In case of any change or substitution, BFA Holder shall immediately use, and cause its Franchise Dealers to immediately use, the Proprietary Marks as changed.

(n) BFA Holder hereby acknowledges that failure on the part of BFA Holder or its Franchise Dealer(s) to use any Proprietary Mark in accordance with the provisions of this Agreement will cause irreparable injury to ExxonMobil and that any court of competent jurisdiction may, at the request of ExxonMobil, enforce the provisions of this Agreement by the entry of a temporary or permanent injunction against BFA Holder and in favor of ExxonMobil. BFA Holder agrees not to contest the appropriateness of injunctive relief but may contest whether it has failed to use the Proprietary Marks in accordance with the provisions of this Agreement. BFA Holder will incorporate in its agreements with each Franchise Dealer the undertakings and obligations provided in this Agreement (including this Section 3). BFA Holder agrees to immediately notify ExxonMobil of any Franchise Dealer failing to comply with any such undertaking or obligation and agrees to assist ExxonMobil in its enforcement thereof.

(o) In order to foster the continued public acceptance of the Proprietary Marks and to protect the brand reputation of the Products which are the subject of this Agreement, BFA Holder will use best efforts to promptly inform ExxonMobil of any event or condition which will significantly impact the operation of any BFA Holder Branded Outlet or which has resulted in or may result in significant media exposure related to any BFA Holder Branded Outlets.

4. QUALITY, GRADE, SPECIFICATION, OR NAME OF PRODUCT; QUALITY ASSURANCE PROCEDURES.

(a) ExxonMobil shall have the right, at its sole discretion and at any time during the Term, to change, alter, amend or eliminate any of the grades or brands of Products or any Proprietary Marks covered by this Agreement. ExxonMobil may also, in its sole discretion and from time to time, change or alter the quality or specification of any of the Products covered by this Agreement. In the event that a certain grade, quality or specification of motor fuels is offered in one of the states within the Designated Geographies by more than thirty-five percent (35%) of the then existing non-Exxon or Mobil branded retail outlets that is not covered by this Agreement at that time, BFA Holder shall have the right to request that ExxonMobil consent to a change or alteration in, or addition to, the grades, quality or specifications of the Products to offer such grade, quality or specification of motor fuel in the relevant state within the Designated Geographies, and ExxonMobil shall not unreasonably withhold its consent to any such request.

(b) ExxonMobil has provided BFA Holder a copy of “QUALITY CONTROL PROCEDURES FOR GASOLINES AND DIESEL FUEL” attached as Exhibit 10. This is the same document furnished to Traditional Wholesalers who are purchasing motor fuel product directly from ExxonMobil. BFA Holder agrees to store, handle, sell and dispense all fuel sold through BFA Holder Branded

Outlets in compliance with all the procedures and specifications set out in Exhibit 10 and to procure the compliance of its Franchise Dealers, notwithstanding the fact that BFA Holder is not purchasing motor fuel from ExxonMobil. ExxonMobil reserves the right to revise the procedures and specifications at any time and BFA Holder agrees that it will, upon written notice of such revision, immediately begin compliance with the revised procedures and specifications and will procure compliance of its Franchise Dealers. In the event BFA Holder fails to comply with this Section, ExxonMobil may, without limitation to any other remedies available to ExxonMobil, engage the services of an outside contract firm to perform sampling, testing and reporting. The fees, costs and expenses of such outside contract firm shall be borne solely by BFA Holder.

(c) Time is of the essence in complying with this Section 4. BFA Holder is obligated to take commercially reasonable steps to mitigate any potential losses or damage resulting from any product quality defects. BFA Holder’s notice of consumer quality claims should be sent to the ExxonMobil Business Support Centre Canada, ULC, Attn: Branded Wholesaler Contract Team Lead, P.O. Box 2245, Buffalo, NY 14240-2245.

5. PRODUCT DISTRIBUTION.

(a) ExxonMobil and BFA Holder acknowledge and agree that this is not a product sales or supply agreement. ExxonMobil has no obligation under this Agreement or otherwise to supply BFA Holder with either branded or unbranded motor fuel products or its proprietary additive package, including without limitation, gasoline and diesel. BFA Holder is solely responsible for securing and paying for Base Product and the additive package, which meet all federal, state, and local regulatory and product quality standards in effect for motor fuels offered for sale through retail outlets in the Designated Geographies. Base Product must also meet ExxonMobil quality specifications as more specifically set out in Exhibit 3 (as confirmed by testing as described in Exhibit 3). BFA Holder shall participate in ExxonMobil’s annual Marker Program in order to confirm compliance with the requirements of this Agreement and ExxonMobil’s standards.

(b) BFA Holder shall not (i) acquire any motor fuels from ExxonMobil or any of its Affiliates within the Designated Geographies, nor (ii) acquire any motor fuels from ExxonMobil or any of its Affiliates within the United States of America for resale as motor fuel in the Designated Geographies. Notwithstanding the previous sentence, BFA Holder shall be permitted to purchase motor fuels from ExxonMobil through in tank sales for a time period beginning on the Effective Date and ending upon the later of (A) one hundred and twenty (120) days following the Effective Date, and (B) December 31, 2010.

(c) BFA Holder shall procure the additives identified on Exhibit 4 from only those suppliers specified on Exhibit 4 (or such other supplier as may be subsequently identified by ExxonMobil). BFA Holder shall additize the Base Product in accordance with the specifications set forth in Exhibit 4, using industry standard computer controlled additive injection equipment, prior to distribution through any BFA Holder Branded Outlet as Product. In the event that BFA Holder desires a waiver from ExxonMobil with respect to the specified additive or suppliers, or the fuel quality specifications, BFA Holder shall contact the appropriate ExxonMobil fuels quality manager to discuss such a request, as provided on Exhibit 4.

(d) BFA Holder will bear full financial responsibility for the cost of installation and maintenance of additive racks at all terminals from which it distributes Products. If ExxonMobil desires that a third party(s) with whom it has a brand fee agreement or other license, distribution or wholeasaler agreement have access, BFA Holder agrees to allow that third party(ies) to use the additive system on a terminal by terminal basis and shall charge such third party(s) commercially reasonable rates for such access.

(e) ExxonMobil agrees to undertake reasonable efforts to cooperate with BFA Holder as BFA Holder attempts to negotiate supply and/or additive injection arrangements with potential supply partners, provided that ExxonMobil is not obligated hereby to waive or amend any rights it has under this Agreement or undertake any financial obligations not set forth in this Agreement.

6. EXXONMOBIL PROGRAMS.

(a) ExxonMobil and BFA Holder expressly acknowledge and agree that the arrangement contemplated by and set forth in this Agreement is materially different from the arrangement that ExxonMobil has with its branded wholesalers throughout the country who purchase motor fuel directly from ExxonMobil (hereinafter referred to as “Traditional Wholesalers”). BFA Holder acknowledges that it has been advised and understands that it will not be eligible for various types of financial assistance or support programs, including without limitation Brand Incentive Programs (BIP), Image Assistance Programs, Speedpass Rebate Program and Brand Standard Program, that are available to Traditional Wholesalers. BFA Holder specifically acknowledges and agrees that ExxonMobil has absolutely no obligation of any kind to offer BFA Holder any programs or services not expressly provided for in this Agreement and BFA Holder further acknowledges that this fact constitutes a material inducement for ExxonMobil to enter into this Agreement.

(b) BFA Holder shall participate in (i) ExxonMobil’s credit card program offerings through ExxonMobil’s approved third party provider; (ii) either ExxonMobil’s proprietary Mystery Shopper program or an ExxonMobil-approved third party Mystery Shopper program; and (iii) effective January 1, 2011, the ExxonMobil Point of Purchase signage program. Reasonable efforts should be used to post the current ExxonMobil Point of Purchase signage where applicable and allowable. Such participation shall be solely at BFA Holder’s expense.

(c) BFA Holder will be eligible to participate in the ExxonMobil programs listed immediately below on the same basis as Traditional Wholesalers:

(1) Retailer Promotional Marketing access, including Point-of-Purchase Signage

(2) Card marketing

(3) Education Alliance

(4) Training

(5) Uniform

(6) Station Locator

(7) Relevant portions of the ExxonMobil branded wholesaler website (as determined by ExxonMobil consistent with this Agreement).

BFA Holder will also be eligible to participate in those ExxonMobil programs offered from time to time to another “BFA Holder” under a separate brand fee agreement in the Designated Geographies.

(d) BFA Holder acknowledges and agrees that all programs referenced in Sections 6(b) and 6(c) hereof are subject to change or cancellation at ExxonMobil’s sole discretion and that ExxonMobil may, from time to time and in its discretion, add new or existing programs to the required programs list or the eligible programs list. BFA Holder further acknowledges that nothing set forth in this Agreement obligates ExxonMobil to provide (or continue to provide) support for any such program and that such support is provided at ExxonMobil’s discretion.

7. BRAND FEES.

BFA Holder shall pay to ExxonMobil the Brand Fees as described in this Section 7, such fees to be paid in equal monthly amounts in accordance with the terms of this Agreement, in consideration of the services that may be provided by ExxonMobil, BFA Holder’s participation in those ExxonMobil programs that may be offered to BFA Holder, and the use of the Proprietary Marks at the BFA Holder Branded Outlets during the fifteen (15) year Term, subject to the terms of this Agreement.

(a) BFA Holder’s Direct Served Business. With respect to the Direct Served Outlets, (i) the “Brand Fee” during the first ten (10) years of the Term of this Agreement shall equal the 10 Year Brand Fee, calculated under Section 7(a)(i); and (ii) the “Brand Fee” for the Direct Served Outlets during the final five (5) years of the Term of this Agreement shall equal an amount agreed to between the

parties or the Adjusted Brand Fee calculated pursuant to Section 7(a)(ii). In addition, BFA Holder shall pay to ExxonMobil the fees described in Section 7(a)(iii).

(i) For purposes of this Section 7(a)(i):

“10 Year Brand Fee” means the Initial Base Brand Fee for the first year of this Agreement. For each subsequent year during the first ten (10) years of the Term of this Agreement, “10 Year Brand Fee” means the sum of (i) the Initial Base Brand Fee plus (ii) an amount equal to (A) the number of Base Outlets minus the Initial Base Outlets times (B) the New Site Brand Fee.

“Annual Recalculation Date” means the date which is sixty days (60) days prior to each anniversary of the Effective Date.

“Base Outlets” means, for the first year of this Agreement, the Initial Base Outlets. For each subsequent year during the first ten (10) years of the Term of this Agreement, “Base Outlets” shall mean the greater of (i) the Base Outlets (under this definition) for the immediately prior year, and (ii) the Initial Base Outlets plus the cumulative number of Direct Served Outlets added under this Agreement from the Effective Date up to the Annual Recalculation Date, minus the cumulative number of Closed Direct Served Outlets from the Effective Date up to the Annual Recalculation Date.

Example calculation: **

Thirty (30) days prior to each anniversary of the Effective Date, BFA Holder shall deliver to ExxonMobil a statement showing the adjustment to the Base Outlets as of the Annual Recalculation Date along with supporting documentation. ExxonMobil shall have the right to review and approve the adjustment to the Base Outlets. Any dispute between the parties hereto relating to the adjustment shall be resolved in accordance with Section 39 of this Agreement, without regard to the amount in controversy limitation set forth in Section 39(b)(i).

“Closed Direct Served Outlets” means any Direct Served Outlet that has permanently ceased selling Exxon or Mobil-branded motor fuels, excluding Rebranded BFA Holder Outlets.

“Initial Base Brand Fee” means an amount equal to ** times the Initial Total Volume set forth in Exhibit 15 hereto.

“Initial Base Outlets” means 221.

“Initial Total Volume” means the total volume of Product set forth on Exhibit 15 hereto.

“New Site Brand Fee” means an amount equal to $**.

“Rebranded BFA Holder Outlets” means (i) any former Direct Served Outlet that is supplied motor fuel by BFA Holder for sale under any brand other than Exxon or Mobil (excluding in each case any such outlet that was debranded by ExxonMobil pursuant to Section 2(e)(3) hereof), and (ii) any former Direct Served Outlet sold by BFA Holder to a third party for continued petroleum use that sells motor fuel under any brand other than Exxon or Mobil.

(ii) Within six (6) months before the end of tenth (10th) year of the Term of this Agreement, ExxonMobil and BFA Holder agree to engage in good faith negotiations regarding an adjustment to the Brand Fee for the final five (5) years of the Term of this Agreement for BFA Holder’s Direct Served Outlets; provided, however, that such obligation shall not require either party to reach definitive agreement on such adjustment. In the event that the parties are unable to mutually agree on an adjustment to the Brand Fee for BFA Holder’s Direct Served Outlets, each year (whether partial or full) during the final five (5) years of the Term of this Agreement, BFA Holder

shall pay to ExxonMobil the Adjusted Brand Fee as described in this Section 7(a)(ii).

For purposes of this Section 7(a)(ii):

“Adjusted Brand Fee” means, for the 11th year of this Agreement, the Recalculated Base Brand Fee. For each subsequent year during the remainder of the Term of this Agreement, “Adjusted Brand Fee” means the sum of (i) the Recalculated Base Brand Fee plus (ii) an amount equal to (A) the number of Recalculated Base Outlets minus the Initial Recalculated Base Outlets times (B) the New Site Brand Fee.

“Annual Recalculation Date” means the date which is sixty days (60) days prior to each anniversary of the Effective Date.

“Closed Direct Served Outlets” means any Direct Served Outlet that has permanently ceased selling Exxon or Mobil-branded motor fuels, excluding Rebranded BFA Holder Outlets.

“Initial Base Brand Fee” means an amount equal to ** times the Initial Total Volume set forth in Exhibit 15 hereto.

“Initial Total Volume” means the total volume of Product set forth on Exhibit 15 hereto.

“Initial Recalculated Base Outlets” means the total number of Direct Served Outlets existing as of the Recalculation Date.

“New Site Brand Fee” means an amount equal to $**.

“Recalculated Base Brand Fee” means:

(a) in the event that the Recalculated Total Volume is less than the Initial Total Volume, the Initial Base Brand Fee plus an amount equal to the number of Rebranded BFA Holder Outlets as of the Recalculation Date times the New Site Brand Fee; or

(b) in the event that the Recalculated Total Volume is greater than the Initial Total Volume, the amount calculated pursuant to Paragraphs (1) through (5) below:

(1) Divide the total volume of Recalculated Total Volume by the Recalculated Base Outlets, in order to calculate the average gallons of Product sold per Recalculated Base Outlet. [For example, **]

(2) Divide the Initial Total Volume by the average gallons of Product sold per Recalculated Base Outlet determined pursuant to Paragraph (1) above, and round the resulting quotient up to the nearest whole number, in order to calculate the number of outlets necessary to sell the Initial Total Volume. [For example, **]

(3) Subtract the number of Direct Served Outlets determined pursuant to the calculation in (2) from the number of Initial Recalculated Base Outlets. [For example, **]

(4) Multiply the number, if any, of Direct Served Outlets determined pursuant to the

calculation in Paragraph (3) by the New Site Brand Fee. [For example, **]

(5) Add the product, if any, determined pursuant to Paragraph (4) to the Initial Base Brand Fee [For example, **]

(6) To the sum resulting from the calculation in Paragraph (5), add the product of the number of Rebranded BFA Holder Outlets as of the Recalculation Date, multiplied by the New Site Brand Fee, and the resulting sum shall be the Recalculated Base Brand Fee. [For example, **]

“Recalculated Base Outlets” means, for the 11th year of this Agreement, the Initial Recalculated Base Outlets. For each subsequent year during the remaining Term of this Agreement, “Recalculated Base Outlets” shall mean the greater of (i) the Recalculated Base Outlets (under this definition) for the immediately prior year, and (ii) the Initial Recalculated Base Outlets plus the cumulative number of Direct Served Outlets added under this Agreement from the Recalculation Date up to the Annual Recalculation Date, minus the cumulative number of Closed Direct Served Outlets from the Recalculation Date up to the Annual Recalculation Date.

Thirty (30) days prior to each anniversary of the Effective Date, BFA Holder shall deliver to ExxonMobil a statement showing the adjustment to the Recalculated Base Outlets as of the Annual Recalculation Date along with supporting documentation. ExxonMobil shall have the right to review and approve the adjustment to the Recalculated Base Outlets. Any dispute between the parties hereto relating to the adjustment shall be resolved in accordance with Section 39 of this Agreement, without regard to the amount in controversy limitation set forth in Section 39(b)(i).

“Recalculated Total Volume” means the total volume of Product sold in the aggregate by all Direct Served Outlets for the twelve (12) month period prior to the Recalculation Date.

“Recalculation Date” means the last day of the month in the month that is three months prior to the tenth (10th) anniversary of the Effective Date.

(iii) If a Direct Served Outlet that sold Products at any time within three (3) years (provided, however, that any sale of Exxon-branded motor fuels prior to June 1, 2011 shall be disregarded) prior to becoming a Direct Served Outlet has been added pursuant to the terms of this Agreement as of any Annual Recalculation Date, then in addition to the 10 Year Brand Fee or Adjusted Brand Fee, as may be applicable, BFA Holder shall pay to ExxonMobil an annual fee in an amount equal to $** for each such Direct Served Outlet during each of the first two (2) full years of the Term during which such site is subject to this Agreement, such amount to be paid in accordance with Section 8 below. Notwithstanding the foregoing, BFA Holder shall not be required to pay to ExxonMobil such additional fees for any Direct Served Outlet that became a Direct Served Outlet as a result of BFA Holder’s acquisition of a branded wholesaler that previously supplied Products to such Direct Served Outlet, whether by merger or by acquisition of all of the branded wholesaler’s stock or substantially all of its assets.

Thirty (30) days prior to each anniversary of the Effective Date, BFA Holder shall deliver to ExxonMobil a statement showing the adjustment to the number of Direct Served Outlets as of the Annual Recalculation Date. ExxonMobil shall have the right to review and approve the adjustment to the number of Direct Served Outlets. Any dispute between the parties hereto relating to the adjustment shall be resolved in accordance with Section 39 of this Agreement, without regard to the amount in controversy limitation set forth in Section 39(b)(i).

(b) BFA Holder’s Sub-Jobber Business. With respect to the Sub-Jobber Outlets, the “Brand Fee” during the Term of this Agreement shall equal the amount calculated under Section 7(b)(i). In addition, BFA Holder shall pay to ExxonMobil the fees described in Section 7(b)(ii) and Section 7(b)(iii).

For purposes of this Section 7(b), “Annual Recalculation Date” means the date which is sixty (60) days prior to each anniversary of the Effective Date.

(i) During the first full year of the Term of this Agreement, BFA Holder shall pay to ExxonMobil a fee for each Sub-Jobber Outlet added pursuant to the terms of this Agreement upon the addition of such Sub-Jobber Outlet equal to $** times the number of months (including any partial month) remaining in the first full year of the Term, divided by twelve (12). During the remaining fourteen (14) years of the Term of this Agreement, BFA Holder shall pay to ExxonMobil an annual fee on each anniversary of the Effective Date in an amount equal to $** times the number of Sub-Jobber Outlets existing as of the immediately preceding Annual Recalculation Date.

(ii) If a Sub-Jobber Outlet has been added pursuant to the terms of this Agreement as of any Annual Recalculation Date that resulted from the assignment by ExxonMobil to BFA Holder of an existing branded wholesaler agreement, then in addition to the Brand Fee calculated pursuant to Section 7(b)(i), BFA Holder shall pay to ExxonMobil on each anniversary of the Effective Date a one-time fee in amount equal to $** for each such Sub-Jobber Outlet added as of the immediately preceding Annual Recalculation Date.

(iii) If a Sub-Jobber Outlet that sold Products at any time within three (3) years (provided, however, that any sale of Exxon-branded motor fuels prior to June 1, 2011 shall be disregarded) prior to becoming a Sub-Jobber Outlet has been added pursuant to the terms of this Agreement as of any Annual Recalculation Date, then in addition to the Brand Fee calculated pursuant to Section 7(b)(i), BFA Holder shall pay to ExxonMobil an additional annual fee in an amount equal to $** for each such Sub-Jobber Outlet during each of the first two (2) full years of the Term during which such site is subject to this Agreement, such amount to be paid in accordance with Section 8 below. Notwithstanding the foregoing, BFA Holder shall not be required to pay to ExxonMobil such additional fees for any Sub-Jobber Outlet that (a) was assigned to BFA Holder by ExxonMobil, if the fee payable pursuant to Section 7(b)(ii) has already been paid to ExxonMobil or (b) became a Sub-Jobber Outlet as a result of BFA Holder’s acquisition of a branded wholesaler that indirectly supplied Products to such Sub-Jobber Outlet, whether by merger or by acquisition of all of the branded wholesaler’s stock or substantially all of its assets.

Thirty (30) days prior to each anniversary of the Effective Date, BFA Holder shall deliver to ExxonMobil a statement showing the adjustment to the number of Sub-Jobber Outlets as of the Annual Recalculation Date along with supporting documentation. ExxonMobil shall have the right to review and approve the adjustment to the number of Sub-Jobber Outlets. Any dispute between the parties hereto relating to the adjustment shall be resolved in accordance with Section 39 of this Agreement, without regard to the amount in controversy limitation set forth in Section 39(b)(i).

(c) On or before February 15 of each year, BFA Holder will provide ExxonMobil an annual summary that details the volume of Product sold by each BFA Holder Branded Outlet for the immediately preceding calendar year. The form, content, and supporting documentation shall be as specified by ExxonMobil from time to time. ExxonMobil, in its sole discretion, shall have the right to audit BFA Holder’s records (as well as any applicable Franchisee Dealer records) at any time for the purpose of verifying Product volume. BFA Holder agrees to fully cooperate, and to cause each Franchise Dealer to fully cooperate, with any audit request.

8. PAYMENT AND CREDIT.

(a) Unless ExxonMobil notifies BFA Holder otherwise, BFA Holder will pay ExxonMobil in United States dollars for any fee by electronic funds transfer at the time ExxonMobil designates and BFA Holder will execute the agreement attached as Exhibit 6. Each monthly brand fee payment described in Section 7 above shall be paid to ExxonMobil in advance. The first such payment shall be made on the Effective Date and shall be prorated to reflect the number of days remaining in the month during which the Effective Date occurs. Payments of brand fees relating to each

subsequent month during the Term shall be made on the 15th day of each month immediately preceding the month to which such brand fee applies (for example, brand fees for March 2010 operations shall be paid by BFA Holder to ExxonMobil no later than February 15, 2010). In the event any payment date is not a Business Day, then the payment shall be made on the prior Business Day. In addition, on the Effective Date, BFA Holder shall pay to ExxonMobil for each BFA Holder Branded Outlet that is participating (or has participated) in the BIP (as defined in Section 19(d)(1)) an amount equal to the lesser of (i) the total amount of financial assistance that ExxonMobil has paid under the BIP (whether through a direct payment, set-off, credit or other indirect payment) with respect to such retail outlet times (the number of days remaining in the branding obligation with respect to such retail outlet divided by the total number of days of the branding obligation with respect to such retail outlet) and (ii) the compensatory dollar amount collectable as of the Effective Date with respect to such retail outlet in the event of a default under the BIP. Notwithstanding the foregoing, BFA Holder agrees that ExxonMobil has the ongoing right to periodically give BFA Holder notice of a different method, time, or place of payment.

(b) In the event ExxonMobil does not receive payment on or before the due date, ExxonMobil may impose, and BFA Holder will pay, a late payment charge for each day that passes between the due date and the date ExxonMobil receives payment. This late payment charge will be in addition to ExxonMobil’s other remedies, and will not exceed the lesser of: (A) the maximum allowed by law, or (B) a fixed rate that may vary from state to state in ExxonMobil’s sole discretion, but that will not be less than eighteen percent (18%) per annum prorated over the period that credit is outstanding; and

(c) ExxonMobil has the right, but not the obligation, to offset any amounts owed by BFA Holder or any of its Affiliates to ExxonMobil or any of its Affiliates against any amounts owed by ExxonMobil or any of its Affiliates to BFA Holder or any of its Affiliates, whether arising from charges under this Agreement, or arising under any other agreement or business transaction between the BFA Holder or any of its Affiliates and ExxonMobil and/or any of its Affiliates.

(d) If requested by ExxonMobil, BFA Holder shall provide to ExxonMobil and maintain security in an amount not to exceed three (3) months of the Brand Fees calculated pursuant to Section 7 and in such forms, in either case as ExxonMobil may specify in its sole discretion (“Security”), including without limitation a letter of credit, cash deposit, or assignment, mortgage or pledge of cash, savings accounts or real estate or other collateral which is acceptable to ExxonMobil. ExxonMobil may use, without prior notice or demand, any or all of the Security to set off or satisfy all or any part of any indebtedness or obligation of BFA Holder to ExxonMobil or its Affiliates whether arising under this Agreement, any other agreement or from any other business transaction between the parties. If ExxonMobil uses any Security to satisfy all or any part of any such indebtedness or obligation, BFA Holder shall immediately provide ExxonMobil with additional security, as directed by ExxonMobil, to replace the Security used by ExxonMobil. Following non-renewal or termination of this Agreement and the Franchise Relationship, ExxonMobil shall return to BFA Holder, in accordance with ExxonMobil’s procedures then in effect, any remaining portion of the Security not required to satisfy all or any part of any indebtedness or other obligation of BFA Holder to ExxonMobil or its Affiliates howsoever arising. At ExxonMobil’s request at any time during the Term, BFA Holder shall execute and deliver to ExxonMobil a security agreement, financing statement, mortgage, deed of trust or other documentation as ExxonMobil may specify in such form and with such terms as ExxonMobil may specify, to establish or perfect ExxonMobil’s security interest in the Security.

9. CARD ADMINISTRATION.

(a) ExxonMobil may issue branded credit cards (“ExxonMobil Cards”) and process and pay for ExxonMobil Card sales tickets submitted to ExxonMobil in accordance with the terms of the applicable card guide. ExxonMobil may authorize third party issuers (“Third Party Issuer(s)”) to issue ExxonMobil Cards and other cards and process and pay BFA Holder for ExxonMobil Cards and other card sales tickets submitted to Third Party Issuer(s) in accordance with the terms of an applicable card guide or agreement. ExxonMobil has the right, but not the obligation, to change at

any time its methods or terms of issuing, or authorizing the issuance of, ExxonMobil Cards and other cards and its methods or terms of processing and paying, or authorizing the processing and payment of, ExxonMobil Cards and other card sales tickets. Nothing in this Agreement obligates ExxonMobil or Third Party Issuer(s) to issue ExxonMobil Cards and other cards or to process for payment ExxonMobil Cards and other card sales tickets.

(b) BFA Holder agrees to be bound by and comply with all terms and conditions of any card guide or agreement under which ExxonMobil or Third Party Issuer(s) agrees to process and pay for ExxonMobil Cards and other card sales tickets. The terms of such card guide or agreement may be amended and/or supplemented at any time by ExxonMobil or Third Party Issuer(s).

(c) If Third Party Issuer(s) agrees to pay BFA Holder for ExxonMobil Card or other card sales tickets submitted for payment in accordance with the terms of the applicable card guide or agreement, BFA Holder will look solely to Third Party Issuer(s) and not to ExxonMobil for such payment. Should ExxonMobil elect to (or otherwise) pay all or any portion of any card sales ticket charged back by Third Party Issuer(s) to BFA Holder, upon demand from ExxonMobil, BFA Holder shall immediately reimburse ExxonMobil for any such payments made by ExxonMobil.

(d) ExxonMobil has the right, but not the obligation, to offset any amounts owed by ExxonMobil or any of its Affiliates to BFA Holder or any of its Affiliates against any amounts owed by BFA Holder or any of its Affiliates to ExxonMobil or any of its Affiliates, whether arising under this Agreement, any other agreement or from any other business transaction between the parties or any of their Affiliates. ExxonMobil has the right, but not the obligation, to instruct a Third Party Issuer(s) to pay ExxonMobil rather than BFA Holder for ExxonMobil Card and other card sales tickets submitted by BFA Holder to Third Party Issuer(s), to apply against the payment of any amounts owed by BFA Holder to ExxonMobil whether arising under this Agreement, any other agreement or from any other business transaction between the parties.

(e) If BFA Holder requests ExxonMobil or Third Party Issuer(s) to accept assignment of credit or debit card tickets from and make return payment directly to any Franchise Dealers, and ExxonMobil or Third Party Issuer(s) agrees, in its sole discretion, to accept such assignments, BFA Holder agrees that such assignments shall be treated for all purposes as if assigned directly by BFA Holder, charge-backs of reassigned credit or debit sales tickets received from such Franchise Dealers shall be the responsibility of BFA Holder, and that such charge-backs may be deducted from sums owed by ExxonMobil or Third Party Issuer(s) to BFA Holder.

(f) If BFA Holder or a Franchised Dealer accepts credit or debit cards in payment for any sales of any goods or services, then BFA Holder shall comply with and shall require all such Franchised Dealers to comply with all industry standard card security procedures, specifically including but not limited to (i) the Payment Card Industry Data Security Standards (PCI), (ii) the security standards and requirements imposed on merchants by the VISA Operating Rules, (iii) the security standards and requirements imposed on merchants by the MasterCard Operating Rules, (iv) the security standards and requirements imposed on merchants by American Express Travel Related Services Company, Inc., and its parents, subsidiaries and affiliates, and (v) the security standards and requirements imposed on merchants by DFS Services LLC and its parents, subsidiaries and affiliates. The foregoing duty is in addition to any duties that BFA Holder may have under an applicable card guide or agreement pursuant to subsection (a) above. In addition to all other duties to indemnify, BFA Holder will indemnify, defend, and hold harmless ExxonMobil from and against all causes of action, costs, expenses, fees, assessments, reimbursements, fines, penalties and/or losses of whatsoever nature and howsoever arising that result directly or indirectly from BFA Holder’s failure or alleged failure to comply with the requirements of this subsection.

10. TAXES.

ExxonMobil is not responsible for payment of any taxes, fees or other charges, whether or not of the same class or kind as those listed below, whenever imposed or assessed, that any federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits (now in effect or hereafter amended

or enacted) directly or indirectly require to be collected or paid related in any manner to the Base Product or additives that BFA Holder acquires. These charges include, without limitation (a) duty taxes; (b) sales taxes; (c) excise taxes; (d) taxes on or measured by income, and (e) taxes on or measured by gross receipts.

11. FAILURE TO PERFORM.

(a) Any delays in or failure of performance of either party hereto shall not constitute default hereunder or give rise to any claims for damages if and to the extent that such delay or failure is caused by occurrences beyond the control of the party affected, including, but not limited to, acts of God or the public enemy; expropriation or confiscation of facilities; compliance with any order or request of any governmental authority; acts of war, terrorism, rebellion or sabotage or damage resulting therefrom; embargoes or other import or export restrictions; fires, floods, explosions, accidents, or breakdowns; riots; strikes or other concerted acts of workers, whether direct or indirect; inability to obtain necessary industrial supplies, energy, or equipment; or any other causes whether or not of the same class or kind as those specifically above named which are not within the control of the party affected and which, by the exercise of reasonable diligence, said party is unable to prevent or provide against; provided that such causes shall exclude specifically changes in the national or world economy or financial markets or changes in general economic conditions or the economic conditions of the party failing to perform. A party whose performance is affected by any of the causes set forth in the preceding sentence shall give prompt written notice thereof to the other party. Neither party hereto shall be obligated to settle strikes, differences with workmen or government claims by acceding to any demands when in the discretion of the party whose performance is interfered with, it would be inadvisable to accede to such demands.

(b) Nothing in this Section shall excuse BFA Holder from making payment when due for all charges under this Agreement.

(c) ExxonMobil shall be under no obligation to furnish additives hereunder at any time. BFA Holder accepts full responsibility for all death or injury to any person or loss or damage to any property in any way resulting from BFA Holder’s failure to provide premises and/or equipment, (including without limitation tanks and transportation equipment), safe and fit for the storage or handling of motor fuel products containing such additives, whether such failure is known or unknown to ExxonMobil or ExxonMobil’s representative, and BFA Holder indemnifies and holds ExxonMobil and any of its Affiliates harmless with respect to any such death, injury, loss and/or any cause of action arising therefrom.

12. NEW OR CHANGED REGULATIONS.

The parties are entering into this Agreement in reliance on the federal, state, county and local laws, statutes, ordinances, codes, regulations, rules, orders, permits and arrangements with governments or governmental instrumentalities (hereinafter called “Regulations”) in effect on the date of execution of this Agreement by ExxonMobil affecting the distribution of Product, provided for under this Agreement insofar as said Regulations affect BFA Holder, ExxonMobil or ExxonMobil’s Affiliates or suppliers. If the effect of any change in any Regulation or of any new Regulation (a) is not covered by any other provision of this Agreement, and (b) in the affected party’s judgment, either (1) has an adverse effect upon the party (or if ExxonMobil, upon ExxonMobil’s Affiliates or suppliers) or (2) increases the risk to the affected party of performance under this Agreement, the affected party may request re-negotiation of the terms of this Agreement. Such right to request re-negotiation or, upon failure to agree, to terminate, shall without limitation also be available to ExxonMobil if Regulations:

(a) Regulate the brand fee provided for in this Agreement; and/or

(b) Affect ExxonMobil’s liability.

ExxonMobil has the right, at its discretion, to terminate this Agreement on written notice, effective ninety (90) days after a request for re-negotiation, if the re-negotiation is not satisfactorily completed.

13. MARKET DEVELOPMENT AND REPRESENTATION.

(a) A primary business purpose of ExxonMobil is to optimize effective and efficient distribution and representation of Products through planned market and image development. In furtherance of this business purpose, BFA Holder and ExxonMobil agree as follows:

(1) While it is not a requirement of this Agreement, ExxonMobil believes that it is important for BFA Holder to have, and periodically update, a market development plan. The plan should provide for the selection and acquisition, or otherwise securing by BFA Holder for the purposes of branding under this Agreement, of “strategic sites” (as defined from time to time by ExxonMobil) as BFA Holder Branded Outlets, and should provide for the development of optimal facilities, effective operating practices, and the necessary financial and management resources necessary to comply with all provisions of this Agreement.

(2) Unless pursuant to specific prior written authorization from ExxonMobil, BFA Holder shall not, directly or indirectly, sell or supply, or cause to be sold or supplied, Products to any person or entity then currently having a PMPA Franchise Agreement directly with ExxonMobil or any of its Affiliates, which Franchise Agreement pertains to a specific retail outlet(s). The reference to “entity” in the preceding sentence shall be deemed to include any other entity owned or controlled by the person or entity having the aforementioned PMPA Franchise Agreement directly with ExxonMobil or any of its Affiliates. An example of an entity having a PMPA Franchise Agreement pertaining to a specific retail outlet is a “direct served dealer”.

(3) Unless pursuant to specific prior written authorization from ExxonMobil, BFA Holder shall not, directly or indirectly, sell or supply, or cause to be sold or supplied, any Products to any retail outlet(s) other than BFA Holder Branded Outlets.

(b) BFA Holder shall cause all BFA Holder Branded Outlets to meet the following minimum facility/product/service requirements (unless such compliance will result in the BFA Holder or Franchise Dealer, as the case may be, being in breach of any federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits) or BFA Holder shall lose the right to use or display Proprietary Marks or to grant to its Franchise Dealers the right to use or display Proprietary Marks at any BFA Holder Branded Outlet(s) failing to meet these requirements:

(1) Paved driveways with safe and good ingress and egress; and

(2) Permanent building which is structurally sound and complies with all fire, building and zoning codes and ordinances; and

(3) Clean premises free of debris, trash, and fire hazards; and

(4) Modern restrooms for men and women available to the general public; and

(5) Offer, at the Operated Mobil Branded Outlets and the Franchised Mobil Branded Outlets, all grades of Mobil-branded motor gasoline that may be in the Mobil product slate, and, at the Operated Exxon Branded Outlets and the Franchised Exxon Branded Outlets, all grades of Exxon-branded motor gasoline that may be in the Exxon product slate, each such slate as may be set by ExxonMobil and its Affiliates from time to time (consisting of three (3) grades each for the Mobil product slate and the Exxon product slate as of the Effective Date); and

(6) Posting, at all times, of actual motor fuel prices, in numerals, in price sign systems (approved by ExxonMobil in its sole discretion) located on the premises of the BFA Holder Branded Outlet(s); and

(7) Compliance, as to each site, no later than the earlier of (A) the completion of any Demolish and Rebuild or other site improvement work reasonably expected to require an investment by BFA Holder or any Franchise Dealer of $100,000 or more and (B) the fifth anniversary of the Effective Date, with all applicable standards as described in Exhibit 7 (“Facility Requirements”), which is incorporated herein and made a part of this Agreement.

14. SERVICES BY EXXONMOBIL.

(a) ExxonMobil may at its sole discretion, from time to time, make available to BFA Holder, or assist BFA Holder in obtaining, the following:

(1) Standard plans, specifications, equipment, decor and signs identified with Exxon or Mobil-branded, as the case may be, retail outlets as ExxonMobil makes available to Traditional Wholesalers from time to time; and

(2) Guidelines and materials to assist BFA Holder in providing its employees, contractors and Franchise Dealers and their employees and contractors franchise-management training as ExxonMobil makes available to Traditional Wholesalers from time to time; and

(3) Periodic individual or group advice, consultation, data and other services as ExxonMobil may deem necessary or appropriate.

(b) At any time or from time to time, ExxonMobil may add, discontinue or change any of the services under Section 14(a) and may impose conditions or criteria for the availability to BFA Holder of any of such services. ExxonMobil may have all or a portion of any services provided by persons designated by ExxonMobil. From time to time, ExxonMobil may charge BFA Holder fees, or require BFA Holder to pay fees to ExxonMobil’s third party designee(s) in consideration for providing the services set out in Section 14(a).

15. PROMOTION OF PRODUCTS.

(a) BFA Holder agrees to diligently promote and cause its Franchise Dealers to diligently promote the sale of Products, including through advertisements, all in accordance with the terms of this Agreement. BFA Holder hereby acknowledges and agrees that, notwithstanding anything set forth herein to the contrary, to insure the integrity of ExxonMobil trademarks, products and reputation, ExxonMobil shall have the authority to review and approve, in its sole discretion, all forms of advertising and sales promotions that will use media vehicles for the promotion and sale of any product, merchandise or services, in each case that (i) uses or incorporates any Proprietary Mark or (ii) relates to any Business operated at a BFA Holder Branded Outlet. Furthermore, for any significant advertising campaign, sponsorship and/or promotion, BFA Holder shall submit in advance to ExxonMobil or its designee, for its written approval, all materials prepared by or for BFA Holder. These materials may include, but are not limited to, any media (including TV, radio, internet or print), professional or collegiate sports affiliations, and cultural or civic sponsorships that would have regional or national reach and are associated with any ExxonMobil brand, whether directly or indirectly. Approval will be granted (or not) within ten (10) business days from ExxonMobil’s receipt of a request from BFA Holder. If no written approval is received from ExxonMobil within the applicable ten-business-day period, then the request shall be deemed denied. BFA Holder shall expressly require all Franchise Dealers to (a) agree to such review and control by ExxonMobil and (b) comply with the notice requirements set forth in this Section. BFA Holder shall be responsible for compliance (both by BFA Holder and by its Franchise

Dealers) with any and all applicable federal, state, county or local advertising laws, statutes, ordinances, codes, regulations, rules, orders, or permits.

(b) In promoting the Products and developing markets under this Agreement (including in the use of business cards and business stationary), (i) BFA Holder, in its role as branded wholesaler, shall identify itself appropriately as an “Exxon-authorized branded wholesaler” or a “Mobil-authorized branded wholesaler,” as the case may be, and only as such and (ii) BFA Holder, in its role as dealer, and each Franchise Dealer shall identify itself as an “Exxon-authorized dealer” or a “Mobil-authorized dealer,” as the case may be, and only as such.

16. CUSTOMER SERVICE AND COMPLAINTS.

(a) While using any Proprietary Marks, BFA Holder agrees:

(1) To render appropriate, prompt, efficient, and courteous service at each Operated Branded Outlet to BFA Holder’s customers, to respond expeditiously to all complaints of such customers, making fair adjustment when appropriate, and otherwise conduct BFA Holder’s business in a fair and ethical manner and maintain the Operated Branded Outlets in a manner which will foster customer acceptance of and desire for the Products sold hereunder; and

(2) To provide sufficiently qualified and neatly dressed personnel in ExxonMobil approved uniforms (e.g., standard ExxonMobil uniform or BFA Holder proprietary C-Store brand uniform) at all Operated Branded Outlets as appropriate to render first class service to customers; and

(3) To keep restrooms clean, orderly, sanitary and adequately furnished with restroom supplies; and

(4) To assist in maintaining a high level of customer acceptance of Proprietary Marks by keeping the Operated Branded Outlets’ premises open for dispensing of the Products during such hours each day and days a week as are reasonable considering customer convenience, competitive conditions and economic consequences to BFA Holder.

(b) BFA Holder also agrees that, as to any of its Franchise Dealers, BFA Holder will include in its arrangements with such Franchise Dealers the undertakings provided in this Section in respect of each Franchised Branded Outlet and will undertake the enforcement thereof. BFA Holder further agrees that ExxonMobil may revoke the right of BFA Holder to display Proprietary Marks at any Operated Branded Outlet(s), or to permit the display of Proprietary Marks at any Franchised Branded Outlet(s) which, after notice by ExxonMobil to BFA Holder to cure, continues to be in violation of this Section.

17. TRAINING.

During the Term, the BFA Holder, if an individual, or its designated Key Person (or a designee of such Key Person acceptable to ExxonMobil), shall attend and satisfactorily complete an initial franchise-management training program as may be designated by ExxonMobil. BFA Holder shall pay all expenses incurred, directly or indirectly, by BFA Holder in connection with attendance and participation in said training program, including, without limitation, costs and expenses of transportation, lodging, meals, wages and employee benefits. BFA Holder shall also pay to ExxonMobil, or any ExxonMobil designee, reasonable fees or charges that ExxonMobil, or such designee, may impose from time to time and relating to such training program.

18. TECHNOLOGY AND COMMUNICATIONS.

BFA Holder acknowledges that the use of current technology and communications systems in the operation of the Businesses is of critical importance. BFA Holder further acknowledges that technology and

communications systems are expected to change over time requiring periodic addition, replacement, or updating of equipment or systems used in the Businesses.

19. EXISTING FRANCHISE DEALER AGREEMENTS; NEW BFA HOLDER BRANDED OUTLETS.

(a) BFA Holder shall enter into a written agreement with each Franchise Dealer. The agreement must:

(1) Be consistent with this Agreement; and

(2) Require the Franchise Dealer’s commitment to the Core Values; and

(3) Impose on each Franchise Dealer the requirements and obligations as specified in this Agreement, including without limitation, complying with the minimum image requirements, complying with the insurance requirements, and allowing entry to its respective Franchised Branded Outlet(s) for the purposes specified in this Agreement.

(b) If on the Effective Date a Franchised Branded Outlet is covered by an existing agreement between the Franchise Dealer and BFA Holder that does not conform to Section 19(a) BFA Holder shall, in respect to that Franchise Dealer:

(1) Require compliance with the provisions of this Agreement to the full extent allowed by the existing agreement during its term; and

(2) Use best efforts to have that Franchise Dealer enter into an agreement in compliance with Section 19(a) as soon as reasonably possible; and

(3) In any event, upon the expiration or other termination of any such existing agreement, enter into a new agreement with that Franchise Dealer only in accordance with Section 19(a).

(c) BFA Holder shall cause each BFA Holder Branded Outlet to be operated in strict compliance with this Agreement upon the following timing:

(1) For all BFA Holder Branded Outlets previously approved by ExxonMobil, or any of its Affiliates, under a previous PMPA Franchise Agreement, within a reasonable time not to exceed ninety (90) days from the Effective Date unless:

(i) A written policy of ExxonMobil from time to time provides for an additional compliance period; or

(ii) Section 19(c)(3) applies.

(2) For all BFA Holder Branded Outlets approved by ExxonMobil under Section 2(e) on or after the Effective Date, a reasonable period, not to exceed ninety (90) days from the date of ExxonMobil’s approval of that retail outlet; and

(3) For all Franchised Branded Outlets covered by existing non-conforming agreements under Section 19(b), a reasonable period of time, not to exceed ninety (90) days, from the date of the expiration or other termination of that agreement.

(d)

(1) BFA Holder acknowledges and agrees that ExxonMobil shall be entitled, in its sole

discretion, to assign to BFA Holder existing branded wholesaler agreements between ExxonMobil and its branded wholesalers. In the event that ExxonMobil elects to assign an existing branded wholesaler agreement to BFA Holder, BFA Holder shall assume and accept all of ExxonMobil’s rights and obligations under any such branded wholesaler agreement arising after the assignment thereof to BFA Holder and all retail outlets subject to the branded wholesaler agreement shall thereafter become Sub-Jobber Outlets subject to the terms and conditions of this Agreement. BFA Holder acknowledges and agrees that certain retail outlets subject to branded wholesaler agreements with ExxonMobil that may be assigned to BFA Holder are participants in one or more of ExxonMobil’s imaging incentive programs, which includes, but is not limited to: Brand Incentive Program, Modernization Assistance Program, Image Enhancement Program, Brand Growth Program, and the Image Program of Mobil Oil Corporation (all hereby known as the “BIP”), and that Purchaser shall assume all of ExxonMobil’s obligations with respect to the BIP at any such retail outlet that participates in the BIP as of the date of assignment of the branded wholesaler agreement from ExxonMobil to BFA Holder. In addition, subject to Section 19(d)(2) below, for each retail outlet subject to a branded wholesaler agreement that ExxonMobil assigns to BFA Holder that is participating in the BIP, BFA Holder shall pay to ExxonMobil on the date of, and immediately prior to, the assignment an amount equal to **.

(2) In the event that ExxonMobil elects to assign an existing branded wholesaler agreement to BFA Holder and the average annual throughput volume for all of the retail sites subject to that branded wholesaler agreement are less than 600,000 gallons on a trailing twelve month basis, then ExxonMobil and BFA Holder shall discuss and come to mutually agreeable terms on the amount for which BFA Holder shall be required to pay ExxonMobil with respect to financial assistance that ExxonMobil has paid under the BIP.

20. INSURANCE REQUIREMENTS.

(a) During the Term, in addition to any other insurance or surety bonding required by applicable federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits, BFA Holder will carry and maintain in full force and effect, with companies satisfactory to ExxonMobil, solely at BFA Holder’s expense, and in a form satisfactory to ExxonMobil:

(1) Comprehensive/Commercial General Liability insurance including, but not limited to, coverage for the sale of motor fuel products and lubricants (including the Products), operation of the Businesses, retail motor fuel stores and the premises at each Operated Branded Outlet, garage liability (if applicable) completed operations and contractual liabilities, with minimum policy limits of two million dollars ($2,000,000) providing coverage for injury, death or property damage resulting from each occurrence. In the event BFA Holder has alcoholic beverages for sale at any Operated Branded Outlet, the insurance policy will be endorsed to include coverage with minimum policy limits of one million dollars ($1,000,000) for liabilities arising out of the dispensing or selling of alcoholic beverages including, without limitation, any liabilities imposed by a dram shop or alcoholic beverage control act.

(2) Business Auto Liability insurance coverage for operation of vehicles hired, owned or non-owned with minimum policy limits of two million dollars ($2,000,000), including the MCS-90 endorsement or other acceptable evidence of financial responsibility as required by the Motor Carrier Act of 1980 and the Pollution Liability Broadened Coverage endorsement, providing coverage for injury, death or property damage resulting from each occurrence. Business Auto coverage with appropriate endorsements is required if any motor vehicles, including, without limitation, fuel delivery vehicles and tow vehicles, are used in the operation of any of the Businesses.

(3) Garagekeepers Legal Liability insurance (if any of the Operated Branded Outlets include

service bays) including but not limited to, coverage for fire, theft, riot, vandalism and collision with limits of at least fifty thousand dollars ($50,000) for each occurrence.

(4) Workers Compensation and Employers Liability insurance for all BFA Holder’s employees engaged in performing services or similar social insurance, where required by federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits which may be applicable to BFA Holder’s employees with a waiver of subrogation and/or contribution against ExxonMobil where such waiver is permitted by federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits.

(5) Environmental impairment insurance coverage with policy limits of at least one million dollars ($1,000,000) on a continuous and uninterrupted basis insuring BFA Holder for environmental legal liabilities arising out of, but not limited to, the sale of motor fuel products and lubricants, ownership and operation of the Businesses, retail motor fuel stores and the premises at each Operated Branded Outlet.

(b) BFA Holder may meet its obligations under this Agreement for environmental impairment insurance coverage for underground storage tanks under Section 20(a)(5) by participation in an Environmental Protection Agency (“EPA”) approved state financial assurance fund or other EPA-approved method to demonstrate financial responsibility or by satisfying any of the other financial assurance test requirements of the EPA’s Financial Responsibility Regulations (40 CFR Part 280). Upon request by ExxonMobil, BFA Holder shall promptly furnish ExxonMobil with documentation satisfactory to ExxonMobil evidencing:

(1) BFA Holder’s participation in a state approved financial assurance fund or other EPA-approved method to demonstrate financial responsibility; or

(2) Compliance with the EPA’s financial assurance test requirements.

If at any time BFA Holder ceases participating in an approved state financial assurance fund or other EPA-approved method to demonstrate financial responsibility or stops meeting the EPA’s financial assurance test requirements, as the case may be, BFA Holder promptly shall obtain the insurance required under Section 20(a)(5) and provide ExxonMobil with evidence of insurance in accordance with Section 20(a)(5). The term “underground storage tank” includes all piping, lines and accessories connected to or made a part of a petroleum underground storage tank.

(c) ExxonMobil may from time to time require BFA Holder, and/or cause BFA Holder to require any of its Franchise Dealers, to carry additional types and amounts of insurance coverage, including modifications to existing insurance under this Section, as ExxonMobil considers reasonable in the circumstances.

(d) Each policy of insurance described in this Section 20 shall name ExxonMobil Oil Corporation as additional insured (except Workers Compensation and Employers Liability) and shall be primary as to all other policies that may provide coverage. BFA Holder shall pay, and shall cause its Franchise Dealers to pay, all premiums and assessments charged for the insurance policy or policies when due.

(e) BFA Holder shall comply, and cause its Franchise Dealers to comply, with all policy terms and conditions and the directions of the insurance carrier, its ratings bureau and the National Fire Protection Association. BFA Holder, or its Franchise Dealer(s) as the case may be, shall bear all claims, losses or damages that are not recoverable from BFA Holder’s, or the Franchise Dealer’s, as the case may be, insurers due to the application of a deductible clause or to BFA Holder’s, or

the Franchise Dealer’s, failure to observe the terms and conditions of the insurance coverage. BFA Holder shall indemnify and defend ExxonMobil for all these unrecoverable claims, losses or damages, including without limitation any arising from Franchise Dealers. Without limiting the general requirements of this Section 20, ExxonMobil may reject any policies which contain deductibility clauses, conditions or exclusions, or that are underwritten by insurance companies, that are unacceptable in ExxonMobil’s reasonable determination. Upon rejection of a policy, BFA Holder promptly shall procure, and cause its Franchise Dealer(s) to promptly procure, a policy with provisions and by an underwriter reasonably acceptable to ExxonMobil. ExxonMobil’s receipt or acceptance of any policy or evidence of insurance is not a waiver by ExxonMobil of any requirement under this Section 20 or of its right to reject the policy as unacceptable and does not affect BFA Holder’s, or its Franchise Dealer’s as the case may be, liability for claims, losses or damages that are or would have been covered by BFA Holder’s, or such Franchise Dealer’s, full compliance with this Section 20.

(f) During the Term, each insurance policy and certificate of insurance of BFA Holder must specify the insurance will not be terminated, canceled or materially changed without ten (10) days’ prior written notice to ExxonMobil. If a policy or policies is/are terminated, canceled or materially changed, BFA Holder shall promptly, prior to the termination, cancellation or change of that policy, procure a new or substitute policy containing at least the same coverage as the previous policy. The new policy must begin coverage prior to the expiration of the previous policy or prior to the effective date of the material change, as applicable. BFA Holder shall cause all of its Franchise Dealers to comply with this Section 20(f) with respect to each insurance policy and certificate of insurance.

(g) Prior to the Effective Date, and at any time upon request by ExxonMobil, BFA Holder shall furnish to ExxonMobil, or its representative, certificates of insurance, specifying the types and amounts of coverage in effect, expiration dates, confirmation that each policy complies with the requirements of this Section (or the relevant section of BFA Holder’s franchise agreement with the Franchise Dealer as the case may be), and specifying that no insurance shall be terminated, canceled or materially changed during the Term without ten (10) days’ prior written notice to ExxonMobil. Upon request by ExxonMobil, BFA Holder shall furnish to ExxonMobil or its representatives copies of the required insurance policies.

(h) Nothing in this Section 20 in any way limits or waives BFA Holder’s legal or contractual responsibilities to ExxonMobil or others.

(i) BFA Holder shall cause its Franchise Dealers, with respect to operations at Franchised Branded Outlets, to carry insurance of the types and in the amounts, as are necessary and customary for the operation of such Franchised Branded Outlets.

(j) Without limiting any other remedy available to ExxonMobil, including termination or non-renewal of this Agreement and the Franchise Relationship, ExxonMobil may debrand any BFA Holder Branded Outlet(s) that fails to comply with the provisions of this Section 20.

(k) If BFA Holder, for any reason, fails to procure and maintain required insurance satisfactory to ExxonMobil, ExxonMobil may, at ExxonMobil’s election and upon notice to BFA Holder, immediately procure the required insurance. Upon ExxonMobil’s request, BFA Holder promptly shall furnish ExxonMobil with all information relating to BFA Holder or the Businesses requested by ExxonMobil in connection with the procurement of any required insurance. Upon written demand, BFA Holder shall immediately reimburse ExxonMobil for the costs of procuring the insurance. ExxonMobil’s right to procure insurance under this Section 20 may not be construed as an obligation by ExxonMobil to procure any insurance and does not preclude ExxonMobil from exercising other rights or remedies it may have under this Agreement including debranding of the BFA Holder Branded Outlet(s) in question and termination or non-renewal of this Agreement and

the Franchise Relationship. ExxonMobil’s election not to procure any insurance under this Section 20 may not be construed as:

(1) A waiver of BFA Holder’s obligations under Sections 20 and 21; or

(2) Limiting ExxonMobil’s right to exercise any other right or remedy, including debranding of the BFA Holder Branded Outlet(s) in question and termination or non-renewal of this Agreement and the Franchise Relationship.

(l) ExxonMobil is entitled to the full coverage of any insurance procured by BFA Holder, its Franchise Dealers or ExxonMobil under this Section 20 but in no event less than the minimum coverage required by Section 20(a). The minimum limits specified in Section 20(a) do not limit or affect ExxonMobil’s right to full insurance coverage or ExxonMobil’s rights under Section 21. If BFA Holder does not own or lease transport to carry the Products, BFA Holder shall cause any person engaged by BFA Holder to carry the Products at all times to maintain insurance at levels required by the Hazardous Materials Transportation Act.

(m) The insurance coverages specified in this Agreement are required to the extent they are reasonably available as determined solely by ExxonMobil.

21. INDEMNIFICATION.

(a) BFA Holder assumes the risk of and sole responsibility for maintaining and operating, all real property, fixtures, tanks, equipment, and personal property used in connection with, or in any way related to, its operations, conduct or business or the operations, conduct or business of its Franchise Dealers, in a safe condition free of all hazards and risks and in compliance with all applicable federal, state, county and local laws, statutes, ordinances, codes, regulations, rules, orders, and permits. Such responsibility will include, but not be limited to, providing tanks safe and fit for the storage and handling of Products.

(b) BFA Holder assumes the risk of and sole responsibility for and agrees to defend (with counsel acceptable to ExxonMobil, unless such defense, but not ExxonMobil’s defense costs, is waived by ExxonMobil) indemnify, release and hold harmless (1) ExxonMobil; (2) its Affiliates and (3) ExxonMobil’s and any of its Affiliates’ officers, directors, control persons, employees, agents, representatives, successors and assigns ((2) and (3) together hereinafter “ExxonMobil’s Associates”) from and against any and all expenses, costs (including, without limitation, professional fees), penalties, fines (without regard to the amount of such fines), liabilities, claims, demands and causes of action, at law or in equity (including, without limitation, any arising out of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), the Clean Air Act, or any other federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits), which may be asserted against ExxonMobil or ExxonMobil’s Associates by any person for injuries, death, loss, or damage of any kind or character to person, property, or natural resources, by whomever suffered or asserted (including without limitation BFA Holder, its Franchise Dealers or their agents, contractors, employees, invitees, licensees, and/or trespassers), resulting from, related to or arising out of the operations, conduct or business of BFA Holder or its Franchise Dealers or the condition of any real property, fixtures, tanks, equipment or personal property of BFA Holder or its Franchise Dealers, which is used in connection with, or in anyway related to, the operations, conduct or business of BFA Holder or its Franchise Dealers, this Agreement or its breach by BFA Holder or its Franchise Dealers.

BFA Holder’s obligations under this Section 21 and under Sections 11(c) and 24(b) of this Agreement will fully apply and BFA Holder will fulfill its obligations thereunder EVEN IF EXXONMOBIL OR EXXONMOBIL’S ASSOCIATES ARE JOINTLY OR CONCURRENTLY NEGLIGENT, (WHETHER BY ACT OR OMISSION) OR JOINTLY OR CONCURRENTLY

GUILTY OF WILLFUL MISCONDUCT (WHETHER BY ACT OR OMISSION), but not if ExxonMobil or ExxonMobil’s Associates are solely negligent or solely guilty of willful misconduct. Likewise, BFA Holder’s obligations under this Section 21 and under Sections 11(c) and 24(b) of this Agreement shall be in addition to (and in no manner in limitation of) any indemnification or other similar obligation that BFA Holder or its Affiliates might have pursuant to any other agreement between BFA Holder or its Affiliates and ExxonMobil.

22. TRANSFER/ASSIGNMENT.

This Agreement shall not be transferred or assigned or sold by BFA Holder in whole or in part, directly or indirectly (including, without limitation, as a result of any change in control of BFA Holder or any of its Affiliates), except with the prior written consent of ExxonMobil, which consent (i) as to Massachusetts, shall be provided in accordance with M.G.L.A. 93E § 4A or any subsequent governing law, (ii) as to Rhode Island, will not be unreasonably withheld in accordance with Rhode Island Statute § 5-55-4 or any subsequent governing law; or (iii) as to New Hampshire, ExxonMobil may withhold or delay in its sole discretion. BFA Holder shall furnish to ExxonMobil such information as may be reasonably required for ExxonMobil to evaluate the character, financial ability, and business experience of any proposed assignee. Notwithstanding the foregoing, BFA Holder shall be permitted to assign or sublicense its rights under this Agreement in whole or in part to an Affiliate without the consent of ExxonMobil. Such information shall be provided in a timely fashion that allows ExxonMobil to determine whether it will consent to the proposed assignment within the time period, if any, specified in any applicable state law. ExxonMobil may assign this Agreement in whole or in part upon ten (10) days prior written notice to BFA Holder. Notwithstanding anything herein to the contrary, a change in control of BFA Holder or any of its Affiliates shall not include transfers of equity amongst the existing holders thereof or their respective heirs or trusts for estate planning purposes.

23. WAIVER.

No waiver by either party of any breach of any of the covenants or conditions herein contained to be performed by the other party shall be construed as a waiver of any succeeding breach of the same or any other covenant or condition. All waivers must be in writing.

24. LAWS.

(a) BFA Holder agrees that in receiving, storing, handling, offering for sale, selling, delivering for use or using itself Products under this Agreement, BFA Holder will comply, and cause its employees and Franchise Dealers to comply, with all applicable federal, state, county and local laws, statutes, ordinances, codes, regulations, rules, orders, and permits.

(b) BFA Holder will defend (with counsel acceptable to ExxonMobil, unless such defense, but not ExxonMobil’s defense costs, is waived by ExxonMobil) indemnify, release and hold harmless ExxonMobil and ExxonMobil’s Associates from and against any and all expenses, costs (including, without limitation, professional fees), penalties, fines (without regard to the amount of such fines), liabilities, claims, demands, and causes of action, at law or in equity (including, without limitation, any arising out of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), or the Clean Air Act) for BFA Holder’s failure to comply with Section 24(a), and such failure by BFA Holder to comply shall also entitle ExxonMobil to terminate this Agreement and the Franchise Relationship.

25. NOTICES.

All written notices required or permitted to be given by this Agreement shall be given only by personal delivery (to an officer or manager in the case of ExxonMobil), certified mail, express mail, air courier, telegram or facsimile transmission and shall be deemed given respectively when the notice is personally delivered or deposited in the mail or with the air courier service or telegraph company, postage or charges prepaid, with confirmation of delivery requested, or transmitted via facsimile machine with confirmation sheet confirming completed and proper transmission, and directed to the party for whom intended at the address set forth above or to such other address as may be furnished by either party to the other in writing

in accordance with the provisions of this Section; provided that notice of change of address must be received to be effective (and shall not be effective until actually received). All notices under this Section should be directed to:

If, to ExxonMobil:

ExxonMobil Branded Wholesale Implementation Manager

3225 Gallows Road

Fairfax, Virginia 22037

with a copy to:

ExxonMobil Fuels Marketing

Attn: Global Identity & Image Standards Advisor

3225 Gallows Road

Fairfax, Virginia 22037

If, to BFA Holder:

Global Companies LLC

800 South Street, Suite 200

Waltham, Massachusetts 02453

Attn: President and CEO

with a copy to:

Global Companies LLC

800 South Street, Suite 200

Waltham, Massachusetts 02453

Attn: General Counsel

26. TERMINATION.

(a) This Agreement and the Franchise Relationship shall terminate upon expiration of the Term.

(b) This Agreement and the Franchise Relationship may be terminated by BFA Holder in the event that ExxonMobil loses, or transfers to a third party (other than to an Affiliate of ExxonMobil), the right to grant BFA Holder the right to use either of the Proprietary Marks used to brand Branded Fuel that BFA Holder is using pursuant to this Agreement as of the date ExxonMobil loses or transfers such right.

(1) Upon transfer or assignment of this Agreement by BFA Holder contrary to Section 22; or

(2) If BFA Holder or any Key Person, manager, or stockholder makes any false or materially misleading statement or representation (by act or by omission) which induces ExxonMobil to enter into this Agreement, or which is relevant to the Franchise Relationship between the parties hereto; or

(3) If BFA Holder becomes insolvent; or

(4) If BFA Holder fails to pay in a timely manner any sums when due hereunder (other than any sums that are being contested by BFA Holder in good faith); or

(5) If BFA Holder defaults in any of its obligations under this Agreement; or

(6) If BFA Holder or any Key Person is declared incompetent to manage its property or affairs by any court, or if BFA Holder or any Key Person is mentally or physically disabled for three (3) months or more, to the extent that BFA Holder is unable to provide for the continued proper operation of the Businesses; or

(7) Under the circumstances described cause for termination by ExxonMobil in any Section of this Agreement; or

(8) If BFA Holder or any Key Person dies, to the extent that BFA Holder is unable to provide for the continued proper operation of the Businesses; or

(9) If BFA Holder or any Key Person, manager, or stockholder engages in fraud or criminal misconduct relevant to the operation of the Businesses; or

(10) If BFA Holder or any Key Person, manager, or stockholder is convicted of a felony or of a misdemeanor involving fraud, moral turpitude or commercial dishonesty, whether or not the crime arose from the operation of the Businesses; or

(11) If BFA Holder breaches Section 3 by willfully committing an act of misbranding of the Products or misuses the Proprietary Marks; or

(12) If there occurs any other circumstance under which termination of a Franchise is permitted under the provisions of the PMPA; or

(13) ExxonMobil loses the right to grant the right to use any of the Proprietary Marks.

For purposes of section (4) and (5) above, BFA Holder shall be entitled to notice of any such default from ExxonMobil and a reasonable time period in which to cure such default, before ExxonMobil exercises its right to terminate this Agreement. Notwithstanding the previous sentence, in the event of a recurring default by BFA Holder of an obligation under this Agreement, ExxonMobil shall have no obligation to provide further notice or opportunities for BFA Holder’s cure prior to exercising its right to terminate this Agreement.

(d) If ExxonMobil has cause to believe that BFA Holder has engaged in fraudulent, unscrupulous or unethical business practices (which shall include but not be limited to practices forbidden by federal, state, county or local laws, statutes, ordinances, codes, regulations, rules, orders, or permits), ExxonMobil may, at its sole discretion, give BFA Holder written notice of its belief. Following the receipt of such notice, BFA Holder shall be given reasonable opportunity to discuss the matter with ExxonMobil’s representatives. If following such discussions (or reasonable opportunity therefor) and after such investigation of the matter as is reasonable under the circumstances, ExxonMobil reaches a good faith conclusion that BFA Holder has engaged in one or more such practices, ExxonMobil shall have the right to terminate this Agreement.

(e) Any termination of this Agreement by ExxonMobil shall be preceded by such notice from ExxonMobil as may be required by law.

(f) Upon the expiration of the Term or upon termination hereof, ExxonMobil shall have the right, at its option, to enter, during normal operating hours, upon any premises at which the Proprietary Marks are displayed (including, without limitation all BFA Holder Branded Outlets), and to remove, paint out, or obliterate any signs, symbols or colors on said premises or on the buildings or equipment thereof which in ExxonMobil’s opinion would lead a purchaser to believe that the Products are being offered for sale at such premises. BFA Holder shall cause its Franchise Dealers to grant ExxonMobil such a right of entry.

(g) In the event this Agreement is terminated, ExxonMobil will suffer substantial damages which are anticipated to be difficult and time consuming to prove with exactitude. Furthermore, both parties are desirous of avoiding what they believe will be the disproportionate cost of possible litigation and legal fees which a future dispute over the magnitude of such damages would engender. The parties, therefore, have determined that if this Agreement is terminated, BFA Holder must pay to ExxonMobil as liquidated damages (in addition to any damages (liquidated or otherwise) payable to ExxonMobil under any other agreement between BFA Holder and ExxonMobil), and not as a penalty, an amount rounded to the nearest dollar, equal to ** times (the Initial Total Volume set forth on Exhibit 15) times (the number of years, including any partial year, remaining in the initial fifteen-year Term after such termination). Notwithstanding the foregoing, BFA Holder shall not pay to ExxonMobil any liquidated damages under this Section 26(g) in the event that this Agreement is terminated: (i) in connection with a market withdrawal under the provisions of the PMPA; (ii) by ExxonMobil pursuant to Section 12; (iii) by BFA Holder pursuant to Section 26(b); or (iv) by ExxonMobil pursuant to Section 26(c)(13) (except, in the case of this subsection (iv), in the event ExxonMobil’s loss of the right to grant the right to use any of the Proprietary Marks is attributable to BFA Holder or any of its Affiliates or franchisees).

(h) Termination of this Agreement by either party for any reason shall not relieve the parties of any obligation theretofore accrued under this Agreement.

27. ACCORD.

The parties to this Agreement have discussed the provisions herein and find them fair and mutually satisfactory, and further agree that in all respects the provisions are reasonable and of material significance to the relationship of the parties hereunder, and that any breach of a provision by either party hereto or a failure to carry out said provisions in good faith shall conclusively be deemed to be substantial.

28. NATURE AND MODIFICATION OF AGREEMENT.

(a) In consideration of the granting and execution of this Agreement, the parties understand and agree that they are not contractually obligated to extend or renew in any way the Term, and that this Agreement shall not be considered or deemed to be any form of “joint venture” or “partnership” at the premise(s) of BFA Holder or elsewhere (including without limitation any BFA Holder Branded Outlet).

(b) BFA Holder agrees to provide sixty (60) days’ prior written notice of any change in the name or legal form of BFA Holder.

(c) This Agreement may be modified only in writing signed by both parties or their duly authorized agents. ExxonMobil hereby agrees that if it enters into any material amendment of a brand fee agreement with any holder thereof operating in the Designated Geographies, ExxonMobil shall offer such amendment in substantially the same form to all of brand fee agreement holders then operating in the Designated Geographies.

29. SEVERABILITY OF PROVISIONS.

Both parties expressly agree that it is the intention of neither party to violate statutory or common law and that if any section, sentence, paragraph, clause or combination of same is in violation of any law, such

sentences, paragraphs, clauses or combination of same shall be inoperative and the remainder of this Agreement shall remain binding upon the parties hereto.

30. ENTIRE AGREEMENT.

This writing is intended by the parties to be the final, complete and exclusive statement of this Agreement about the matters covered herein.

31. DISCLAIMER; NO RELIANCE.

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT EXXONMOBIL MAKES NO REPRESENTATION, EXPRESSED OR IMPLIED, RELATING TO ITSELF OR ANY OF ITS AFFILIATES, OR ANY OTHER MATTER, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. BFA HOLDER ACKNOWLEDGES AND AGREES THAT (i) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EXXONMOBIL HAS NOT MADE ANY PROMISE, REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AND (ii) BFA HOLDER HAS NOT EXECUTED OR AUTHORIZED THE EXECUTION OF THIS AGREEMENT IN RELIANCE UPON ANY PROMISE, REPRESENTATION OR WARRANTY NOT EXPRESSLY SET FORTH HEREIN.

32. DAMAGES.

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXXONMOBIL (NOR ANY OF ITS AFFILIATES) WILL HAVE NO LIABILITY TO ANYONE FOR BUSINESS DISRUPTION, LOST PROFITS, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING FROM OR RELATED TO THIS AGREEMENT.

33. ATTORNEYS FEES.

If BFA Holder fails to pay any amount due under this Agreement or takes any action not requested in writing by ExxonMobil for which BFA Holder, its Franchise Dealers or their respective customers bring a claim or lawsuit against ExxonMobil or any of its Affiliates, BFA Holder agrees to pay ExxonMobil’s (or any of its Affiliates’) costs, fees and expenses (including reasonable attorneys fees) thereby expended in ExxonMobil’s (or its Affiliates’) pursuit or defense of such matters.

34. KEY PERSON CLAUSE.

If BFA Holder is a corporation, partnership or other entity form, it agrees to execute Exhibit 11 (“Key Person Clause”) attached hereto and incorporated as part of this Agreement.

35. RIGHT OF ENTRY.

In addition to any other rights of ExxonMobil under this Agreement, BFA Holder permits, and shall cause its Franchise Dealers to permit, ExxonMobil, it’s Affiliates and their respective employees, agents, vendors, contractors and representatives (a) to access, analyze and reproduce books, records, correspondence, receipts, and data of BFA Holder or its Franchise Dealers pertaining to activities undertaken pursuant to this Agreement, and (b) to enter, during normal operating hours, any BFA Holder Branded Outlet(s) and other places where BFA Holder or any of its Franchise Dealers conduct any Business to enforce ExxonMobil’s rights and remedies under this Agreement, including examining (to include video, photographic, digital, audio and other recordings), testing and sampling of all properties, tanks, containers, pumps and delivery truck tanks, and taking other action, for purposes of preserving the integrity of the Proprietary Marks, performing product quality inspections and determining BFA Holder’s compliance with this Agreement (including compliance with the terms of Sections 3 and 4). If, in the sole opinion of ExxonMobil, any samples thus taken are not Products or any document or record shows BFA Holder has failed to comply with its obligations hereunder (or failed to cause any Franchise Dealer to so comply), ExxonMobil may, at its sole option, debrand the BFA Holder Branded Outlet(s) in question or cancel and terminate this Agreement and the Franchise Relationship. ExxonMobil shall provide notice to BFA Holder of entry at an License Branded Outlet, except in the case of any such entry in connection with ExxonMobil’s product quality inspections. BFA Holder shall preserve and shall cause its Franchise Dealers to preserve all books, records, correspondence, receipts and data pertaining to activities undertaken pursuant to this Agreement for a period of three (3) years. BFA Holder agrees to include necessary provisions in its contracts with Franchise Dealers that shall assure access by ExxonMobil or its

representatives to the applicable records of the Franchise Dealers. BFA Holder’s obligation to preserve all books and records, and ExxonMobil’s right to access and reproduce such books and records shall extend for a period of three (3) years after the termination of this Agreement.

ExxonMobil shall not be liable to BFA Holder or any Franchise Dealer for any interference with any Business of BFA Holder or its Franchise Dealers as a result of ExxonMobil’s entry on any BFA Holder Branded Outlet(s) and other places where BFA Holder or any of its Franchise Dealers conduct any Business, including any entry pursuant to Section 26(f) hereof.

36. TERMS OF RENEWAL.

Nothing in this Agreement is to be construed as preventing ExxonMobil upon expiration of this Agreement or any renewal of the Franchise Relationship, from offering BFA Holder terms and conditions, in good faith and in normal course of business, which differ from or are in addition to those in this Agreement.

37. DRUG AND ALCOHOL.

(a) In the event BFA Holder takes delivery of Products from ExxonMobil at ExxonMobil’s (or its Affiliates’) facilities, the following provisions of this Section shall apply. BFA Holder and BFA Holder’s employees, agents and contractors shall not enter ExxonMobil’s (or its Affiliates’) facilities while under the influence of alcohol or any controlled substance. BFA Holder, its employees, agents and contractors shall not use, possess, distribute or sell illicit or unprescribed drugs in connection with any activity performed under this Agreement. BFA Holder, its employees, agents and contractors shall not use, possess, distribute or sell alcoholic beverages at any time while performing activities under this Agreement. BFA Holder has adopted or will adopt its own policy to assure a drug and alcohol free workplace while performing activities under this Agreement.

(b) BFA Holder will remove any of its employees, agents or contractors from performing activities hereunder any time there is suspicion of alcohol or drug use, possession or impairment involving such employee, agent or contractor, and at any time an incident occurs in performing activities hereunder where drug or alcohol use could have been a contributing factor. ExxonMobil has the right to require BFA Holder to remove BFA Holder’s employees, agents or contractors from ExxonMobil’s (or its Affiliates’) facilities at any time cause exists to suspect alcohol or drug use by such employees, agents or contractors. In such cases, BFA Holder’s employee, agent or contractor may be considered for return to ExxonMobil’s (or its Affiliates’) facilities only if the BFA Holder certifies as a result of a for cause test, conducted immediately after removal, that said employee, agent or contractor was in compliance with the provisions of this Section. BFA Holder will not use an employee, agent or contractor to perform activities hereunder who either refuses to take, or tests positive in, any alcohol or drug test.

(c) ExxonMobil may, without prior notice, search the person, possession and vehicles of BFA Holder’s employees, agents and contractors that are on the premises owned or controlled by ExxonMobil (or its Affiliates). Any person who refuses to cooperate with such search will be removed from the premises and will not be allowed to return. BFA Holder will replace any of its employees, agents or contractors at ExxonMobil’s request.

(d) BFA Holder will comply with all applicable drug and alcohol related federal, state, county and local laws, statutes, ordinances, codes, regulations, rules, orders, and permits (e.g., Department of Transportation Regulations, Department of Defense Drug-free Workplace Policy, Drug-free Workplace Act of 1988). ExxonMobil shall have the right, but not the obligation, to perform unannounced audits of BFA Holder’s alcohol and drug program to verify that BFA Holder’s policy and its enforcement are acceptable to ExxonMobil.

38. NO THIRD PARTY BENEFICIARY.

Other than with respect to any indemnified party, the parties agree that no third party beneficiary rights in favor of any person or entity are, nor are they intended to be, created by this Agreement.

39. CLAIMS AND DISPUTE RESOLUTION.

(a) Claims.

(1) As used in this Section, “claim(s)” shall be construed broadly and shall include but not be limited to a demand for money, property, equitable relief, or any interest, whether fixed or contingent, to which a party asserts a right.

(2) Except as otherwise provided in this Agreement, all claims by BFA Holder or by ExxonMobil arising out of or relating to this Agreement and the Franchise Relationship between the parties created hereunder are barred unless asserted within 12 months after the event, act or omission to which the claim relates and in accordance with the dispute resolution procedure set forth below.

(b) Dispute Resolution Procedure.

(1) All claims by BFA Holder or by ExxonMobil arising out of or relating to this Agreement and the Franchise Relationship between the parties created hereunder which cannot be settled through negotiation shall, unless the provisions of Section 39(b)(1)(vi) apply, first be submitted to mediation administered by the American Arbitration Association (“AAA”) under its Commercial Mediation Procedures before resorting to arbitration, or in the case of claims exclusively governed by the PMPA, litigation. The following principles shall apply in respect of any mediation hereunder:

(i) Mediation under this provision shall not be available unless the claim(s) in controversy exceeds the sum or value of $5,000.

(ii) Unless otherwise agreed to by the parties, the mediation shall last no longer than two days.

(iii) The mediator shall be appointed by the AAA keeping in mind the location and convenience of the parties and the location of the BFA Holder Branded Outlet(s) to which the claim relates. The parties prefer that any mediator appointed hereunder be either an individual with judicial experience or one who has been a member of the bar for at least 25 years.

(iv) Each party shall include among its representatives in the mediation proceeding an individual authorized to settle the claim(s).

(v) Irrespective of which party commences the mediation procedure, the filing fee required to be paid to the AAA shall be paid by ExxonMobil. All other costs of the mediation, including any fees to be paid to the mediator, shall be shared equally by the parties. Each party shall be responsible for all expenses incurred by it in presenting its case, including any attorney’s fees.

(vi) If either party believes it will be prejudiced or in any way adversely affected by the mediation procedure because of delay, expense incurred, time requirements or any other legitimate concern, that party may, by notice to the other, proceed directly to arbitration.

(2) All claims by BFA Holder or by ExxonMobil arising out of or relating to this Agreement and the Franchise Relationship between the parties created hereunder, except for claims exclusively governed by the PMPA and claims by ExxonMobil seeking relief when time

is of the essence, including but not limited to claims of trademark misuse, claims which relate to the existence of environmental concerns, claims relating to the conduct on the BFA Holder Branded Outlet(s) of illegal activities, or actions seeking to evict a dealer claimed to be in wrongful possession of the premises, which are not resolved by negotiation or mediation, may be asserted only in an arbitration proceeding to be conducted in accordance with the provisions of this Section 39(b).

(i) Any such claims by BFA Holder or by ExxonMobil shall be resolved exclusively by arbitration administered by the AAA under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The decision of the arbitrator shall be final and shall be binding on the parties.

(ii) In the event a claim by BFA Holder raises issues that are governed exclusively by the PMPA as well as issues that must be submitted to arbitration hereunder, the claims under the PMPA shall be severed and raised, if at all, in litigation. The remaining claims shall be resolved by arbitration, as provided herein.

(iii) The arbitration shall be held before a sole arbitrator who shall be selected by agreement of the parties. If after forty-five (45) days from the commencement of the arbitration the parties have been unable to agree on the selection of an arbitrator, either party may ask the AAA to appoint a sole arbitrator and the decision of the AAA in this respect shall be final and binding. The parties prefer that any arbitrator agreed to between them or appointed by the AAA hereunder be either an individual with judicial experience or one who has been a member of the bar for at least 25 years.

(iv) The arbitrator shall decide the matter before him or her in accordance with the terms of this agreement, the applicable substantive law of the state where the BFA Holder is located and any federal statutes which may be applicable. The Federal Arbitration Act shall govern any arbitration proceeding hereunder. All awards rendered hereunder shall be in writing and on the request of either party shall state the reasoning on which the award rests.

(v) No claim asserted hereunder may be consolidated or asserted jointly with the claim or claims of any other claimant or class of claimants and no arbitration proceeding commenced hereunder may be consolidated or joined with any other arbitration nor may any claim asserted hereunder be asserted as part of any class action litigation or class action arbitration proceeding. If, for any reason, an arbiter or a court determines that the parties’ agreement prohibiting class claims is not enforceable, the class claims must be brought as a class action litigation and not as a class action arbitration.

(vi) Irrespective of which party commences the arbitration procedure hereunder, the filing fee required to be paid to the AAA shall be paid by ExxonMobil. All other costs of the arbitration, including the fees to be paid to the arbitrator, shall be shared equally by the parties. Each party shall be responsible for all expenses incurred by it in presenting its case, including any attorney’s fees.

(c) Severability. It is agreed and understood that Section 39 of this Agreement shall apply in respect of construction of this Section 39 and that a finding of invalidity or unenforceability of any portion of this Section 39 shall not affect the validity or enforceability of any other portion.

40. MISCELLANEOUS.

(a) BFA Holder shall hold in confidence all business and technical information that is made available to BFA Holder, directly or indirectly, by ExxonMobil or acquired by BFA Holder during the Term of this Agreement, including any propriety information with respect to the additives and related mix rates, (collectively “Confidential Information”), except:

(1) information which is in or becomes, without fault of BFA Holder or any Franchise Dealer, part of the public domain;

(2) information which BFA Holder can show was received by BFA Holder from an independent third party that is under no obligation to ExxonMobil regarding the information;

(3) information which BFA Holder can show was already in BFA Holder’s possession at the time the information was made available to BFA Holder, directly or indirectly, from ExxonMobil;

(4) information required to be disclosed by Law (e.g., bills of lading or product transfer documentation) or valid legal or regulatory process, following notice by BFA Holder to ExxonMobil of the requirement to disclose and reasonable cooperation with any attempt by ExxonMobil to maintain the confidentiality of such Confidential Information, to the extent such advance notice and cooperation is possible without resulting in BFA Holder’s violation of applicable Law; and

(5) information required to be disclosed to government tax authorities on a tax return or other mandatory report filed with such authorities, but solely for the purpose of, and to the extent necessary for, complying with applicable federal, state or local excise or other tax laws.

BFA Holder also agrees that it shall not take any photographs, video or other recordings (including any digital or audio recording) of ExxonMobil Oil Corporation’s or any of its Affiliate’s property without ExxonMobil’s prior written consent.

(b) WITHOUT LIMITING THE SCOPE OF THE FOREGOING SECTION 40(a), BFA HOLDER SPECIFICALLY AGREES THAT IT WILL HOLD IN CONFIDENCE ALL INFORMATION RELATING TO THE SOURCING OF THE PRODUCT DISTRIBUTED PURSUANT TO THIS AGREEMENT EXCEPT FOR NECESSARY COMMUNICATION WITH BFA HOLDER’S SUPPLIERS OF BASE PRODUCT AS WELL AS ANY AND ALL INFORMATION RELATING TO THE BRAND FEE. VIOLATION OF THIS PROVISION SHALL CONSTITUTE GROUNDS FOR TERMINATION OF THE AGREEMENT.

(c) BFA Holder shall not, without the prior written approval of ExxonMobil use the Confidential Information which BFA Holder is required to keep confidential hereunder for any purpose other than the performance of BFA Holder’s obligations under this Agreement.

(d) ExxonMobil shall have no obligation of confidence with respect to any information disclosed to ExxonMobil by BFA Holder, and ExxonMobil shall be free to use or disclose any or all of the information contained in any drawing, record or other document to third parties without accounting to BFA Holder therefor; unless, however, information is specifically covered by a separate, written confidentiality agreement. In the absence of any such confidentiality agreement, BFA Holder shall not place any restrictive notices on any information, no matter the form of its recording, that BFA Holder provides to ExxonMobil hereunder. Should BFA Holder place any

notices on any drawing, record or other document, ExxonMobil is hereby authorized to nullify, obliterate, remove, or disregard those provisions.

(e) BFA Holder shall establish and maintain precautions to prevent its employees, agents or representatives and Franchise Dealers from making, receiving, providing, or offering substantial gifts, entertainment, payments, loans, or other consideration to employees, agents, or representatives of ExxonMobil for the purpose of influencing those persons to act contrary to the best interests of ExxonMobil. This obligation shall apply to BFA Holder’s activities in its relations with the employees of ExxonMobil and their families and/or third parties arising from this Agreement.

(f) BFA Holder agrees that all financial settlements, billings, and reports, if any, rendered to ExxonMobil shall reflect properly the facts about all activities and transactions handled for the account of ExxonMobil, which data may be relied upon as being complete and accurate in any further recordings and reportings made by ExxonMobil for whatever purpose.

(g) BFA Holder agrees to notify ExxonMobil promptly upon discovery of any instance where the BFA Holder or BFA Holder’s employees, agents, representatives or Franchise Dealer fails to comply with Sections 40(e) or (f).

(h) BFA Holder acknowledges its receipt of the notices attached hereto as Exhibit 12. BFA Holder has reviewed and understands the information set forth therein.

41. RHODE ISLAND - PRICE PROVISION.

The following provision is applicable only to those BFA Holder Branded Outlets located in the State of Rhode Island:

NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT A FRANCHISOR FROM SUGGESTING PRICES AND COUNSELING WITH FRANCHISEES CONCERNING PRICES. PRICE FIXING OR MANDATORY PRICES FOR ANY PRODUCTS COVERED IN THIS AGREEMENT IS PROHIBITED. A SERVICE STATION DEALER OR BRANDED WHOLESALER MAY SELL ANY PRODUCTS LISTED IN THIS AGREEMENT FOR A PRICE WHICH HE ALONE MAY DECIDE.

42. INDEPENDENT CONTRACTORS; INDEPENDENT ADVICE.

It is expressly agreed that the parties will carry on their respective business pursuant to this Agreement as independent contractors in pursuit of their independent callings and not as partners, fiduciaries, agents, or in any other capacity. Each party has had the opportunity to obtain independent legal advice respecting this Agreement and the business relations mentioned in this Agreement.

[Remainder of page intentionally left blank; signature page follows]

EXECUTED by BFA Holder and ExxonMobil on the date indicated for each signature.

		GLOBAL COMPANIES LLC

Date:	9/3/10	By:	Edward J. Faneuil
		Title:	Executive Vice President

	Sean T. Geary	Date:	9/3/10
	Witness


		EXXONMOBIL OIL CORPORATION (ExxonMobil)

Date:	9/3/10	By:	Jim E. Coleman
		Title:	Distributor Implementation Manager

	Frank J. Giampa	Date:	9/3/10
	Witness

EXHIBITS

BRAND FEE AGREEMENT

BETWEEN EXXONMOBIL OIL CORPORATION AND GLOBAL COMPANIES LLC

EFFECTIVE SEPTEMBER 8, 2010

Exhibit 1 - Initial BFA Holder Branded Outlets

Exhibit 2 - Designated Geographics

Exhibit 3 - Product Specifications

Exhibit 4 - Additives

Exhibit 5 - Intentionally Omitted

Exhibit 6 - ExxonMobil Oil Corporation Electronic Funds Transfer Authorization Agreement

Exhibit 7 - Facility Requirements

Exhibit 8 - Tobacco Assurance Letter

Exhibit 9 - De-branding Guidelines

A - Mobil

B - Exxon

Exhibit 10 - Quality Control Procedures for Gasolines and Diesel Fuel - Branded Wholesaler

Exhibit 11 - Key Person Clause

Exhibit 12 - Notices

Rhode Island State Notice

Revised Summary of Title I of the Petroleum Marketing Practices Act

Exhibit 13 - Mobil Proprietary Marks

A - Retail Motor Fuels Business

B - Related Businesses

Exhibit 14 - Exxon Proprietary Marks

A - Retail Motor Fuels Business

B - Related Businessses

Exhibit 15 - Initial Total Volume

Exhibit 16 - Exxon or Mobil Branded Retail Outlets in the Designated Geographies

EXHIBITS

BRAND FEE AGREEMENT

BETWEEN EXXONMOBIL OIL CORPORATION AND GLOBAL COMPANIES LLC

EFFECTIVE ,

Exhibit 1 - Initial BFA Holder Branded Outlets

Exhibit 2 - Designated Geographics

Exhibit 3 - Product Specifications

Exhibit 4 - Additives

Exhibit 5 - Intentionally Omitted

Exhibit 6 - ExxonMobil Oil Corporation Electronic Funds Transfer Authorization Agreement

Exhibit 7 - Facility Requirements

Exhibit 8 - Tobacco Assurance Letter

Exhibit 9 - De-branding Guidelines

A - Mobil

B - Exxon

Exhibit 10 - Quality Control Procedures for Gasolines and Diesel Fuel - Branded Wholesaler

Exhibit 11 - Key Person Clause

Exhibit 12 - Notices

Rhode Island State Notice

Revised Summary of Title I of the Petroleum Marketing Practices Act

Exhibit 13 - Mobil Proprietary Marks

A - Retail Motor Fuels Business

B - Related Businesses

Exhibit 14 - Exxon Proprietary Marks

A - Retail Motor Fuels Business

B - Related Businessses

Exhibit 15 - Initial Total Volume

Exhibit 16 - Exxon or Mobil Branded Retail Outlets in the Designated Geographies

EXHIBIT 1 - INITIAL BFA HOLDER BRANDED OUTLETS

SITE

ADDRESS

CITY

MOSO

LAND

BRAND

273 EAST BERKELEY ST

BOSTON

CODO

FEE

135 ISLINGTON ST

PORTSMOUTH

CORS

FEE

On the Run

30 CALEF HWY

EPPING

CORS

FEE

On the Run

54 PORTSMOUTH

EXETER

CORS

FEE

On the Run

519 SOUTH ST

BOW

CODO

FEE

Mobil Mart

107 STATE ST

NEWBURYPORT

CODO

FEE

Snack Shop

214 HAVERHILL ST

METHUEN

CODO

FEE

Snack Shop

14 NORTH MAIN STREET

ANDOVER

CODO

FEE

UNKNOWN

76 STOREY AVE

NEWBURYPORT

CODO

FEE

On the Run

DANIEL WEBSTER HWY

MERRIMACK

CODO

FEE

On the Run

S. MAIN ST

DERRY

CODO

FEE

Mobil Mart

82 DERRY RD AND RT 10

HUDSON

CORS

FEE

On the Run

760 S MAIN ST

MANCHESTER

CODO

FEE

On the Run

242 AMHERST ST

NASHUA

CODO

FEE

On the Run

96 BROAD ST

NASHUA

CODO

FEE

On the Run

137 ROUTE 101

BEDFORD

CODO

FEE

Snack Shop

12 MASSACHUSETTS AVE

NORTH ANDOVER

CODO

FEE

Mobil Mart

551 BROADWAY

METHUEN

CODO

FEE

Mobil Mart

139 RIVER RD #I-93

ANDOVER

CODO

FEE

Mobil Mart

350 WINTHROP AVE

NORTH ANDOVER

CODO

FEE

Mobil Mart

309 LOWELL ST

ANDOVER

CODO

FEE

Mobil Mart

1 CENTRAL ST

GEORGETOWN

CODO

FEE

UNKNOWN

767 MAIN ST

HAVERHILL

CODO

FEE

UNKNOWN

ANDOVER ST & I 495

TEWKSBURY

CODO

FEE

On the Run

789 S MAIN ST

HAVERHILL

CODO

FEE

Mobil Mart

940 ANDOVER ST

TEWKSBURY

CODO

FEE

Mobil Mart

1201 MAIN ST

HAVERHILL

CODO

FEE

Mobil Mart

1050 S WILLOW ST

MANCHESTER

CODO

FEE

On the Run

2391 BROWN AVE

MANCHESTER

CORS

FEE

On the Run

EAST HOLLIS ST

NASHUA

CORS

FEE

On the Run

ROUTE 101

EXETER

CORS

FEE

On the Run

1335 MAIN ST

WALTHAM

CODO

FEE

Mobil Mart

50 MIDDLESEX

BURLINGTON

CODO

FEE

Mobil Mart

178 MAIN ST

READING

CODO

FEE

On the Run

525 PARADISE RD

SWAMPSCOTT

CORS

FEE

On the Run

1123 BROADWAY

SAUGUS

CORS

FEE

On the Run

1330 MAIN ST

READING

CODO

FEE

On the Run

198 HARVARD ST

BROOKLINE

CODO

FEE

Snack Shop

1 MYSTIC AVE

MEDFORD

CODO

FEE

On the Run

264 NEPONSET VALLEY PKY

HYDE PARK

CODO

FEE

Snack Shop

512 CHESTNUT ST

LYNN

CODO

FEE

Mobil Mart

345 BOYLSTON ST

BROOKLINE

CODO

FEE

Snack Shop

1269 FURNACE BROOK PKY

QUINCY

CODO

FEE

Snack Shop

1-1

ENDICOTT ST

DANVERS

CODO

FEE

Snack Shop

1094 BEACON ST

NEWTON

CODO

FEE

UNKNOWN

431 NEWBURY ST

DANVERS

CODO

FEE

On the Run

277 BEDFORD ST

LEXINGTON

CODO

FEE

Snack Shop

250 MAIN ST

STONEHAM

CODO

FEE

On the Run

1556 BLUE HILL AVE

MATTAPAN

CODO

FEE

Snack Shop

97 MAPLE ST

DANVERS

CODO

FEE/LEASE

Snack Shop

350 SQUIRE RD

REVERE

CODO

FEE

Mobil Mart

2776 WASHINGTON ST

CANTON

CODO

FEE

Mobil Mart

660 MT AUBURN ST

WATERTOWN

CODO

FEE

UNKNOWN

386 MAIN ST

MELROSE

CODO

FEE

Mobil Mart

845 MOODY ST

WALTHAM

CODO

FEE

Snack Shop

96 MONTVALE AVE

STONEHAM

CODO

FEE

On the Run

2105 COMMONWEALTH AVE

NEWTON

CODO

FEE

Snack Shop

1181 BLUE HILL AVE

MATTAPAN

CODO

FEE

Mobil Mart

2 SOUTH ST

STONEHAM

CODO

FEE

On the Run

783 BLUE HILL AVE

DORCHESTER

CODO

FEE

Mobil Mart

470 MERIDIAN ST

EAST BOSTON

CODO

FEE

Mobil Mart

23 PLEASANT ST

WOBURN

CODO

FEE

Snack Shop

1033 TRAPELO RD

WALTHAM

CODO

FEE

On the Run

396 WALTHAM ST

LEXINGTON

CODO

FEE

On the Run

2 ESSEX ST

SAUGUS

CODO

FEE

Snack Shop

596 SALEM ST

LYNNFIELD

CODO

FEE

Snack Shop

797 BLUE HILL AVE

DORCHESTER

ADD LAND

30 CENTRAL SQ

CHELMSFORD

CODO

FEE/LEASE

Snack Shop

44 GREAT RD

ACTON

CODO

FEE

Mobil Mart

980 CHELMSFORD ST

LOWELL

CORS

FEE

On the Run

185 LITTLETON RD

WESTFORD

CORS

FEE

On the Run

BOSTON POST RD

SUDBURY

CODO

FEE

Snack Shop

22 MAPLE AVE

SHREWSBURY

CODO

FEE

Mobil Mart

1063 WORCESTER RD

FRAMINGHAM

CODO

FEE

On the Run

285 TURNPIKE RD

SHREWSBURY

CODO

FEE

Snack Shop

76 WORCESTER ROAD

SOUTHBOROUGH

CODO

FEE

Snack Shop

130 TURNPIKE RD

WESTBOROUGH

CORS

FEE

Snack Shop

441 BOSTON RD

BILLERICA

CODO

FEE

On the Run

270 W MAIN ST

MARLBOROUGH

CODO

FEE

Snack Shop

260 MAIN ST

MAYNARD

CODO

FEE

Snack Shop

1-2

10 MILL ST

WORCESTER

CODO

FEE

On the Run

22 CONCORD TPKE

CONCORD

CORS

FEE

On the Run

1175 MAIN ST

HOLDEN

CODO

FEE/LEASE

C-Store

36 W MAIN ST

NORTHBOROUGH

CODO

FEE

Mobil Mart

185 PARK AVENUE

WORCESTER

CODO

FEE

Other

334 GRAFTON ST

WORCESTER

CODO

FEE

Mobil Mart

635 CHANDLER ST

WORCESTER

CODO

FEE

Snack Shop

143 SUDBURY RD

CONCORD

CODO

FEE

Snack Shop

CHELMSFORD ST

CHELMSFORD

CODO

FEE

Mobil Mart

500 KING ST

LITTLETON

CODO

FEE

Mobil Mart

70 MAIN ST

AYER

CODO

FEE

Mobil Mart

129 WHALON ST

FITCHBURG

CODO

FEE

On the Run

E. MAIN ST

WESTBOROUGH

CODO

FEE

Snack Shop

656 BOSTON POST RD

MARLBOROUGH

CORS

FEE

On the Run

453 WASHINGTON ST

WELLESLEY

CORS

FEE

On the Run

272 POND ST

ASHLAND

CORS

FEE

On the Run

815 WASHINGTON ST

HOLLISTON

CODO

FEE

On the Run

11 TAUNTON ST

PLAINVILLE

CODO

FEE

Mobil Mart

140 MEDWAY RD

MILFORD

CODO

FEE

On the Run

MAIN & NORTH STS

MEDFIELD

CODO

FEE

Snack Shop

92 W MAIN ST

HOPKINTON

CODO

FEE

On the Run

123 CENTRAL ST

FOXBORO

CODO

FEE

On the Run

189 CHAUNCY ST

MANSFIELD

CODO

FEE

Mobil Mart

972 MAIN ST

MILLIS

CODO

FEE

On the Run

660 W CENTRAL ST

FRANKLIN

CODO

FEE

On the Run

499 WASHINGTON ST

NORWOOD

CODO

FEE

On the Run

270 N MAIN ST

BELLINGHAM

CODO

FEE

Mobil Mart

134 CEDAR ST

MILFORD

CODO

FEE

Other

2 WALPOLE ST

DOVER

CODO

FEE

Snack Shop

145 CHURCH ST

PEMBROKE

CODO

FEE

Other

109 COURT ST

PLYMOUTH

CODO

FEE

Mobil Mart

372 WASHINGTON

STOUGHTON

CODO

FEE

Mobil Mart

1451 WASHINGTON

HANOVER

CODO

FEE

Mobil Mart

193 WHITING ST

HINGHAM

CODO

FEE

UNKNOWN

303 N PEARL ST

BROCKTON

CODO

FEE

On the Run

1012 BELMONT ST

BROCKTON

CODO

FEE

On the Run

265 GRANITE ST

BRAINTREE

CORS

FEE

On the Run

491 FOUNDRY ST

EASTON

CORS

FEE

On the Run

575 W CENTER ST

WEST BRIDGEWATER

CODO

FEE

Mobil Mart

906 BEDFORD ST

ABINGTON

CORS

FEE

On the Run

190 KING ST

COHASSET

CODO

FEE

Mobil Mart

208 CHURCH ST

PEMBROKE

CODO

FEE

Mobil Mart

512 MAIN ST

WEYMOUTH

CODO

FEE

Snack Shop

158 MARKET ST

ROCKLAND

CODO

FEE

On the Run

145 SHARON ST

STOUGHTON

CODO

FEE

Mobil Mart

130 MAIN ST

KINGSTON

CODO

FEE

Mobil Mart

1266 BROADWAY

RAYNHAM

CORS

FEE

On the Run

1-3

1050 BALD HILL RD

WARWICK

CORS

FEE

On the Run

155 FAUNCE CRNR

NORTH DARTMOUTH

CODO

FEE

Mobil Mart

1095 COUNTY ST

TAUNTON

CODO

FEE

Mobil Mart

249 POST ROAD

WESTERLY

CODO

FEE

Mobil Mart

1776 POST RD

WARWICK

CODO

FEE

Snack Shop

900 WAMPANOAG TRL

EAST PROVIDENCE

CODO

FEE

On the Run

2900 CRANBERRY HIGHWAY

WAREHAM

CODO

FEE

Mobil Mart

37 COUNTY RD

MATTAPOISETT

CODO

FEE

Snack Shop

1249 NEWPORT AVE

ATTLEBORO

CODO

FEE

Mobil Mart

RT 28 & SPRING BARS ROAD

FALMOUTH

CODO

FEE

Snack Shop

1449 ROUTE 132

HYANNIS

CODO

FEE

Bay

1734 FALMOUTH RD ROUTE 28

CENTERVILLE

CORS

FEE

On the Run

285 STATE RD

NORTH DARTMOUTH

CODO

FEE

Mobil Mart

6228 POST RD

NORTH KINGSTOWN

CODO

FEE

Mobil Mart

354 PUTNAM PIKE

SMITHFIELD

CORS

FEE

On the Run

3079 TOWER HILL RD

SOUTH KINGSTOWN

CORS

FEE

Mobil Mart

1897 PLAINFIELD PIKE

JOHNSTON

CODO

FEE

Mobil Mart

EAST AVE

WESTERLY

CORS

FEE

On the Run

52 JAMES REYNOLDS RD

SWANSEA

CODO

FEE

On the Run

601 MAIN ST

WEST YARMOUTH

CODO

FEE

Mobil Mart

518 FALMOUTH RD

MASHPEE

CORS

FEE

On the Run

91 VET MEMORIAL DR

WARWICK

CORS

FEE

On the Run

MAIN STREET

WYOMING

CODO

FEE

On the Run

2683 ROUTE 6, BOX 1466

WELLFLEET

CODO

FEE

Snack Shop

2160 RT 6A

BREWSTER

CODO

FEE

Snack Shop

109 ROUTE 6A

ORLEANS

CORS

LEASE

On the Run

511 STATION AVE

YARMOUTH

CORS

FEE/LEASE

On the Run

280 LAFAYETTE RD

HAMPTON

CORS

LEASE

On the Run

48 CONCORD RD

LEE

CORS

LEASE

On the Run

210 EDDY RD

MANCHESTER

CODO

LEASE

C-Store

2 MAIN ST

TEWKSBURY

CODO

LEASE

Mobil Mart

9597 WESTFORD RD

TYNGSBORO

CORS

LEASE

On the Run

5A AYERS VILLAGE RD

METHEUN

CORS

LEASE

On the Run

816 MEMORIAL DR

CAMBRIDGE

CODO

LEASE

Snack Shop

2615 MASSACHUSETTS AVE

CAMBRIDGE

CODO

LEASE

Snack Shop

88 BOSTON POST RD

WESTON

CODO

LEASE

Snack Shop

85 SOUTHAMPTON ST

ROXBURY

CORS

LEASE

On the Run

343 FRESH POND PKY

CAMBRIDGE

CODO

LEASE

Snack Shop

553 MASSACHUSETTS AVE

ACTON

CODO

LEASE

Mobil Mart

696 COCHITUATE RD

FRAMINGHAM

CORS

LEASE

On the Run

1-4

173 BEDFORD ST

BURLINGTON

CODO

LEASE

On the Run

315 COMMONWEALTH RD

WAYLAND

CODO

LEASE

Snack Shop

1111 GREAT PLAIN AVE

NEEDHAM

CODO

LEASE

Mobil Mart

165 SOUTH ST

WRENTHAM

CODO

LEASE

Snack Shop

143 NAHATAN ST

NORWOOD

CODO

LEASE

Snack Shop

751 MAIN ST

WALPOLE

CODO

LEASE

Snack Shop

971 PROVIDENCE HWY

NORWOOD

CODO

LEASE

Mobil Mart

710 HIGH ST

WESTWOOD

CORS

LEASE

On the Run

107 MAIN ST

MEDWAY

CODO

LEASE

Snack Shop

980 PROVIDENCE HWY

WALPOLE

CODO

LEASE

On the Run

365 MAIN STREET

STURBRIDGE

CODO

LEASE

Mobil Mart

SOUTH ST

WRENTHAM

CORS

LEASE

On the Run

301 ELM ST

BRAINTREE

CODO

LEASE

On the Run

93 MAZZEO DR

RANDOLPH

CORS

LEASE

On the Run

250 GRANITE ST

BRAINTREE

CORS

LEASE

On the Run

I-495 & RT 24 SB

BRIDGEWATER

CORS

LEASE

Mobil Mart

I-495 & RT 24

BRIDGEWATER

CORS

LEASE

Mobil Mart

89 WASHINGTON ST

NORWELL

CODO

LEASE

Mobil Mart

960 FALL RIVER AVE

SEEKONK

CODO

LEASE

Mobil Mart

975 OAKLAWN AVE

CRANSTON

CODO

LEASE

Snack Shop

269 VALLEY ST

PROVIDENCE

CODO

LEASE

Mobil Mart

389 ELMWOOD AVE

PROVIDENCE

CODO

LEASE

Snack Shop

2336 PAWTUCKET AVE

EAST PROVIDENCE

CORS

LEASE

On the Run

452 ROUTE 134

SOUTH DENNIS

CODO

LEASE

Mobil Mart

1-5

1-6

EXHIBIT 2 - DESIGNATED GEOGRAPHIES

Commonwealth of Massachusetts

State of New Hampshire

State of Rhode Island

State of Maine

State of Vermont

2-1

EXHIBIT 3 - PRODUCT SPECIFICATIONS

Gasoline: The gasoline, as dispensed to consumer vehicles, shall meet all Federal, State and Local regulatory requirements.

In addition, the gasoline shall meet the specifications described in the Engine Fuels and Automotive Lubricants Regulation in the latest Edition of NIST Handbook 130. Handbook 130 is available at http://www.nist.gov/public_affairs/pubs.htm

Diesel: The diesel fuel, as dispensed to consumer vehicles, shall meet all Federal, State and Local regulatory requirements.

In addition, the diesel fuel shall meet the specifications described in the Engine Fuels and Automotive Lubricants Regulation in the latest Edition of NIST Handbook 130. Handbook 130 is available at http://www.nist.gov/public_affairs/pubs.htm

During the winter months, the low temperature fluidity of the diesel fuel, as dispensed to consumers shall meet the 10th percentile minimum temperatures as presented in Appendix V of the latest version of ASTM D975. The low temperature fluidity shall be measured by the Cloud Point (ASTM D2500, D5771, D5772 or D5773), the CFPP (ASTM D6371 or the LTFT (ASTM D4539). Low temperature fluidity may be improved through the use of LTFT or CFPP additives or by blending with ULSD No. 1 Diesel Fuel. Cloud point depressants are specifically prohibited from use.

Testing: Every month, during the Term, BFA Holder shall cause to be conducted testing of samples of Unleaded Regular, Unleaded Premium and Diesel Fuel taken at a retail site served by each terminal source pursuant to the Agreement to be sold under the Proprietary Marks. All such tests shall be conducted by independent third party laboratories using appropriate test methods to confirm compliance with the applicable standards described above (and such other tests as may be identified by ExxonMobil from time to time). BFA Holder shall cause each testing laboratory to deliver certified copies of the results of all such tests to both BFA Holder and ExxonMobil simultaneously and immediately upon completion.

The gasoline samples shall be tested for the following properties, using one of the designated ASTM test methods:

Octane		D2699 and D2700
Distillation		D86
RVP		D5191
T(v/l=20)		D5188
Oxygenates		D4815, D5599
Sulfur		D2622, D 5453, D6920, D3120, D7039
Silver Corrosion		D4814 Annex A
API Gravity		D287

The diesel fuel shall be tested for the following properties, using the designated ASTM test methods:

Cetane Index
API Gravity		D287
Distillation		D86
Flash Point		D93
Lubricity		D6079
CFPP (Winter Only)		D6371
Appearance		D4176 Procedure 2

3-1

EXHIBIT 4 - ADDITIVES

Additive type and treatment rates will be as specified by ExxonMobil from time to time and are subject to change in the sole discretion of ExxonMobil.

Initial additive treatment rates are as follows:

Additive and Treat Rates

Additive:	**
LAC:	**
Treat Rate, Premium:	**
Treat Rate, Regular and Midgrade:	**

Additive VAR

BFA HOLDER IS RESPONSIBLE FOR ENSURING THAT ADDITIVE TREAT RATE OR OTHER ADDITIVE RELATED REPORTING IS SUBMITTED ACCURATELY AND IN A TIMELY MANNER TO THE U.S. EPA OR OTHER STATE OR LOCAL AUTHORITIES AS REQUIRED. A grade-by-grade breakout for Mobil or Exxon Branded Sales is to be included. A copy of the monthly VAR (Volumetric Additive Reconciliation) reports for all terminals (whether proprietary to BFA Holder or a third-party) used by BFA Holder for the additization of Mobil or Exxon Branded Fuels, should be send to the following email address: ETA.AdditiveTFOI&W@Exxonmobil.com by the tenth day after the end of each month.

Supply Terminals

Licensee is responsible for ensuring that sufficient additive inventories are maintained by working with the additive supplier and providing them any additive inventory and usage data they require.

Waivers

Waivers of ANY EXXONMOBIL specified ADDITIVE OR FUEL QUALITY SPECIFICATION CAN BE REQUESTED THROUGH THE EXXONMOBIL FUELS QUALITY MANAGER. AS OF THE TIME OF CONTRACT SIGNING, THE FUELS QUALITY MANAGER CONTACT INFORMATION IS AS FOLLOWS:

4-1

EXHIBIT 5

INTENTIONALLY OMITTED

5-1

EXHIBIT 6 - EXXONMOBIL OIL CORPORATION ELECTRONIC

FUNDS TRANSFER AUTHORIZATION AGREEMENT

				( )
Customer		Branded Account Number		Telephone


Address		City, State, Zip


FAX #	Customer Accounting Contact		Invoice or Draft Limitation

The above-named Customer hereby authorizes ExxonMobil Oil Corporation (“ExxonMobil”) to initiate electronic funds transfers (“EFT”) from the Bank/Financial Institution named below for withdrawal of funds (“Debit Entries”) to effect payment by Customer.


Bank/Financial Institution/Branch		Bank Account Number


Street Address or P. O. Box		Transit Routing Number

		( )
City State Zip		Bank Contact Telephone

Customer agrees to maintain sufficient funds in the above-designated Commercial bank account to pay EFT Debit Entries when initiated. Should the Debit Entry be rejected by the Bank/Financial Institution for any reason, ExxonMobil reserves the right to immediately terminate this agreement and/or require, in ExxonMobil’s sole discretion, certified or cashier’s check, money order, pre-payment or other approved means of payment.

Customer represents and warrants that all funds used to pay for products via EFT shall be drawn or drafted from Customer’s commercial account, which account is not established or used as a personal family or household account or used for personal, family or household purposes and which will not be used for such purposes during the pendency of this Agreement. Customer agrees to indemnify, defend and hold ExxonMobil harmless for any misrepresentation relating to the above representation.

This Agreement supersedes any previously executed Agreement regarding EFT. All other terms and provisions of other agreements between Customer and ExxonMobil remain in effect, except as expressly provided herein.

Check One

☐ FIRST AGREEMENT	(attach voided check)	☐ OTHER

☐ BANK CHANGE	" " "

☐ BANK ACCOUNT CHANGE	" " "

(x)
BFA HOLDER	DATE		WITNESS	DATE

6-1

EXHIBIT 7 - FACILITY REQUIREMENTS


	ALL NEW PROJECTS (Approvals from Effective Date)		BFA HOLDER BRANDED OUTLETS EXISTING PRIOR TO EFFECTIVE DATE
	NTI’s(1) & D&R’s(2)	CONVERSIONS	FORMERLY CLASSIFIED KEY OR STRATEGIC SITES	FORMERLY CLASSIFIED MARGINAL SITES
Canopies	GEMINI 3D illuminated canopy over all pump islands	GEMINI canopy (3D illuminated, 3D non-illuminated or 2D non-illuminated) over all pump islands, including internally illuminated canopy fascia sign	GEMINI canopy (3D illuminated, 3D non-illuminated or 2D non-illuminated) over all pump islands, including internally illuminated canopy fascia sign	Same as Strategic Sites

Dispensers	Minimum of 4 MPDs with GEMINI graphics, Pay at the Pump	Same as NTI’s	Minimum of 4 MPDs with GEMINI graphics, Pay at the Pump	Minimum 2 MPDs with GEMINI graphics.

ID Sign	NTI’s, GEMINI ID/price sign system. D&R’s, GEMINI ID/price sign system, or prior approved ID/price sign system (If prior sign system, sign should have appropriate appearance and functionality)	GEMINI ID/price sign system, or approved existing ID/price sign system (If existing sign system, sign should have appropriate appearance and functionality)	GEMINI price sign system, or prior approved ID/price sign system (If prior sign system, sign should have appropriate appearance and functionality)	Same as Strategic Sites

Paint	GEMINI paint treatment to curbing, canopy columns, ID/price sign and lighting poles	Same as NTI’s	GEMINI paint treatment to curbing, canopy columns, ID/price sign and lighting poles	Same as Strategic Sites

POS	Operating retail automation system compatible with ExxonMobil’s card processing network	Same as NTI’s	Operating retail automation system compatible with XOM’s card processing network	Same as Strategic Sites

(1) NTI (New to Industry) project is a new to gasoline business retail store development

(2) D&R (Demolish and Rebuild) project is an existing retail gasoline outlet being demolished and a new facility being built on that site

*Please reference Retail Image Standards on Branded Wholesaler Portal for specific information.

7-1

EXHIBIT 8- TOBACCO ASSURANCE LETTER

	c/o ExxonMobil BSCC
		Suite 107
		95 Foundry St.
		Moncton, N.B.
		E1C5H7, Canada

Youth Access to Tobacco

Dear ExxonMobil Branded Wholesaler:

As you have probably heard, ExxonMobil announced that it is further enhancing measures to curb sales of tobacco products to minors at its company-operated stores. This is part of a mutual cooperation agreement that the company has entered into with the Attorneys General of 43 states.

While the agreement, for the most part, addresses tobacco sales at ExxonMobil company-operated stores, we also recognize that many of our branded wholesalers and dealers sell tobacco products and can benefit, should they so choose, from the practices and programs we will be putting in place at our company stores. Those practices will include, among others, access to signage, training, and compliance checks designed to limit sales to underage customers. The sale of tobacco products is an important part of the overall customer offering of many, if not most, of our branded wholesalers and dealers. We hope that our agreement and the information that we share with you will ensure that those sales are made responsibly.

The new ExxonMobil branded wholesaler and dealer motor fuels franchise agreements contain provisions that prohibit the sale of tobacco products to underage customers as prescribed in any local, state or federal regulation. The agreements also require that branded wholesalers and dealers comply with all tobacco sales laws and that they promptly inform us of any notices of violations received from authorities. These provisions are material and significant to our franchise relationship and will be treated as such by ExxonMobil. We regard compliance with tobacco sales laws as a matter of utmost importance. If you have executed a new ExxonMobil branded wholesaler franchise agreement and you receive a notice of violation concerning the sale of tobacco at one of your company operated facilities, please report receipt of that notice to:

ExxonMobil

Tobacco Sales Compliance - Branded Wholesaler Supervisor

c/o ExxonMobil BSCC

Suite 107

95 Foundry St.

Moncton, N.B.

E1C5H7, Canada

Recognizing the importance to your business of maintaining responsible sales of these products, we will work closely with you to provide access to the practices and programs we are employing. Enclosed with this communication is a copy of a booklet outlining ExxonMobil’s Tobacco Awareness Program for our company-operated retail stores (CORS) . You may find the CORS retailing practices outlined in that booklet helpful in your own efforts to prevent tobacco sales to minors. In the coming weeks, we will follow-up with more information concerning the availability of programs you may wish to employ at your sites. In the meantime, please contact your Territory Manager if you have any questions concerning the issue of youth access to tobacco products. We encourage you to work with your dealers, store managers and sales associates to maintain the highest level of compliance with tobacco sales regulations and that you support their efforts to prevent the sales of tobacco products to minors. We also request that you provide a copy of this letter to each of your dealers and confirm in writing that you have done so by signing this letter where indicated below. For your convenience we have included a sample cover letter you can use for this communication.

8-1

Thank you for your cooperation in this important matter.


	Sincerely,


	[ ]
	Branded Wholesaler Business Manager

Acknowledgement That BFA Holder

Has Provided A Copy of this Letter to

Each of Its Dealers

[BFA HOLDER NAME]

By____________________________

Printed Name:___________________

Title:__________________________

Date:__________________________

8-2

SAMPLE COVER LETTER

FROM BFA HOLDER TO BFA HOLDER SERVED DEALERS

, 2003

Dear Dealer:

As you may have heard, ExxonMobil announced that it is further enhancing measures to curb sales to tobacco products to minors at its company-operated stores. This is part of a mutual cooperation agreement that the company has entered into with the Attorneys General of 43 states.

Enclosed with this letter is recent correspondence we have received from ExxonMobil on this important issue, which you should review closely. Like ExxonMobil, we emphasize the importance of taking pro-active measures to ensure compliance with laws prohibiting the sale of tobacco products to minors and with laws governing tobacco sales generally. As we learn of programs and practices being used by ExxonMobil at its company-operated stores and as we develop programs at our own stores, we will share them with you to help you promote responsible tobacco sales at your location.

Thank you for your cooperation in this matter. If you have questions, please let us know.

	Sincerely,


	[BFA Holder]


Enclosure

8-3

EXHIBIT 9A - Mobil De-branding Guidelines

*For further information, please see the Mobil De-branding Guidelines attached hereto.

EXHIBIT 9A - MOBIL DE-BRANDING GUIDELINES *For further information, please see the Mobil De-branding Guidelines attached hereto. 9-1 ExxonMobil Retail Identity Debranding Checklist Site Name: Address: Site Number: City: State / Zip Code: # Element Removal Description (Minimum Requirements) Complete? Date Completed Yes No N/A I. Main ID/Price Sign, High Rise Sign, and Secondary Signs 1 Remove the ExxonMobil proprietary fuel logos (Mobil) from the Main ID/Price Sign, High Rise Sign, and any Secondary Signs. Also remove any panels containing ExxonMobil proprietary logos such as Mobil Mart, Mobil Wash, Wash n' Run, Mobil 1, Speedpass, etc. 2 Remove or change at least one of the names of the ExxonMobil proprietary fuel grade identifiers on the Main ID pricing panel. The new grade names may not appear in the proprietary Mobil font. II. Canopy/Canopy Fascia 3 Remove the ExxonMobil proprietary fuel logos (Mobil) and any other ExxonMobil proprietary logos from canopy fascia. There should be no other signage containing ExxonMobil proprietary logos or that refer to a ExxonMobil brand anywhere on the canopy fascia. Also remove any remaining "ghosted images" of ExxonMobil logos from canopy fascia. 4 Remove the 2/3 Mobil Blue canopy, panels, decals, or other material. The resulting appearance cannot have the 2/3 blue and 1/3 white appearance of the ExxonMobil proprietary tradedress associated wtih the Mobil brand. 5 Remove any ExxonMobil proprietary logos from spreader boxes and/or other canopy column fixtures. III. Fueling Area 6 Remove all ExxonMobil proprietary logos, advertising, and slogans, from the fuel islands and dispensers, including any Mobil, Pegasus, and Speedpass logos, any branded pump topper inserts, any Pegasus pump skirts, any dispenser valance/spreader box/pump header logos, any credit card decals and applications, and any ExxonMobil slogans (i.e. We're Drivers Too). 7 Remove or change at least two of the colors and one of the names of the ExxonMobil proprietary fuel grade identifiers on the dispensers. The new grade names may not appear in the proprietary Mobil font. IV. Site Building Exterior, Perimeter, Interior, and Other 8 Remove all exterior and interior signage containing ExxonMobil proprietary logos,such as Mobil, Mobil Mart, Mobil Wash, Wash n' Run, Mobil 1, Speedpass, etc., from the convenience store buildings, car wash, service bays, and any other ancillary buildings. There should be no signage containing ExxonMobil proprietary logos anywhere on the entire site. 9 Remove all signage containing ExxonMobil proprietary logos from the perimeter signs and equipment, such as pay phones, trash cans, vacuums, air/water machines, ATMs, etc. 10 Remove all ExxonMobil proprietary Pegasus logos from the interior and exterior of the buildings. 11 Remove all ExxonMobil Customer Service decals and other decals with ExxonMobil information posted on or near front entrance of the convenience store or shop. 12 Remove the 2/3 Mobil Blue building fascia so the resulting appearance cannot have the 2/3 blue and 1/3 white appearance of the ExxonMobil proprietary tradedress associated wtih the Mobil brand. 13 Remove all ExxonMobil sponsored credit card applications and decals from the interior and exterior of the buildings. 14 Ensure that electronic messaging on dispensers or any other forms of electronic broadcasts on the site do not contain any ExxonMobil proprietary logos, advertising, and/or slogans.

9-1

EXHIBIT 9B - EXXON DE-BRANDING GUIDELINES

*For further information, please see the Exxon De-branding Guidelines attached hereto.

EXHIBIT 9B - EXXON DE-BRANDING GUIDELINES *For further information, please see the Exxon De-branding Guidelines attached hereto. 9-2 ExxonMobil Retail Identity Debranding Checklist Site Name: Address: Site Number: City: State / Zip Code: # Element Removal Description (Minimum Requirements) Complete? Date Completed Yes No N/A I. Main ID/Price Sign, High Rise Sign, and Secondary Signs 1 Remove the ExxonMobil proprietary fuel logos (Exxon) from the Main ID/Price Sign, High Rise Sign, and any Secondary Signs. Also remove any panels containing ExxonMobil proprietary logos such as Tiger Mart, Tiger Shop, Tiger Market, Wash n' Run, Tiger Wash, Mobil 1, Speedpass, etc. 2 Remove or change at least one of the names of the ExxonMobil proprietary fuel grade identifiers on the Main ID pricing panel. II. Canopy/Canopy Fascia 3 Remove the ExxonMobil proprietary fuel logos (Exxon) and any other ExxonMobil proprietary logos from canopy fascia. There should be no other signage containing ExxonMobil proprietary logos or that refer to an ExxonMobil brand anywhere on the canopy fascia. Also remove any remaining "ghosted images" of ExxonMobil logos from canopy fascia. 4 Remove the 2/3 Exxon Red canopy panels, decals, or other material. Also, remove or paint over red or gray panels outlined in white. The resulting appearance cannot have the 2/3 red and 1/3 white appearance of the ExxonMobil proprietary tradedress nor the white outlined canopy design associated wtih the Exxon brand. 5 Remove any ExxonMobil proprietary logos from spreader boxes and/or other canopy column fixtures. Remove or paint over red, blue or gray panels outlined in white. III. Fueling Area 6 Remove all ExxonMobil proprietary logos, brand names, advertising, and slogans, from the fuel islands and dispensers, including any Exxon, Tiger, and Speedpass logos, any branded pump topper inserts, any Tiger pump skirts, any dispenser valance/spreader box/pump header logos, any credit card decals and applications, and any ExxonMobil slogans (i.e. We're Drivers Too). 7 Remove or change at least two of the colors and one of the names of the ExxonMobil proprietary fuel grade identifiers on the dispensers. IV. Site Building Exterior, Perimeter, Interior, and Other 8 Remove all exterior and interior signage containing ExxonMobil proprietary logos,such as Exxon, Tiger Mart, Tiger Shop, Tiger Market, Wash n' Run, Tiger Wash, Mobil 1, Speedpass, etc., from the convenience store buildings, car wash, service bays, and any other ancillary buildings. There should be no signage containing ExxonMobil proprietary logos or brands anywhere on the entire site. 9 Remove all signage containing ExxonMobil proprietary logos from the perimeter signs and equipment, such as pay phones, trash cans, vacuums, air/water machines, ATMs, etc. 10 Remove all ExxonMobil proprietary Tiger logos from the interior and exterior of the buildings. 11 Remove all ExxonMobil Customer Service decals and other decals with ExxonMobil information posted on or near front entrance of the convenience store or shop. 12 Remove or paint over any building fascia that contain Exxon Red panels outlined with white. 13 Remove all ExxonMobil sponsored credit card applications and decals from the interior and exterior of the buildings. 14 Ensure that electronic messaging on dispensers or any other forms of electronic broadcasts on the site do not contain any ExxonMobil proprietary logos, advertising, and/or slogans.

9-2

EXHIBIT 10

10-1

EXHIBIT 11

KEY PERSON CLAUSE

1. It is understood and agreed that the person holding the office of Chief Executive Officer, from time to time, is designated the “Key Person”. The Key Person shall personally operate on a daily basis the business of BFA Holder covered by this Brand Fee Agreement. The phrase “to operate on a daily basis the business covered by this Brand Fee Agreement” shall mean that the Key Person must manage the business and have authority to make all business decisions that an unincorporated branded wholesaler normally makes concerning operations of a branded wholesaler business. BFA Holder represents that the Key Person has the authority to buy and sell Products, to enter into financing agreements on behalf of BFA Holder, and to authorize merchandising and/or cooperative advertising programs.

(a) (This subsection shall be inoperative unless the blank herein has been completed.) In the event that the Key Person(s) named above in this Paragraph 2 does not personally operate on a daily basis the business covered by this Brand Fee Agreement or is replaced as provided in this Exhibit, the person holding the office of Chief Financial Officer (or) and Executive Vice President is designated as an acceptable Key Person (“alternate Key Person(s)”). When acting as the Key Person, the alternate Key Person shall be subject to all the terms and conditions of this Exhibit and the Brand Fee Agreement.

(b) Should the Key Person, or all of the Key Persons if an alternate Key Person is designated, cease to operate on a daily basis the business covered by the Brand Fee Agreement, the Brand Fee Agreement and the Franchise Relationship may be terminated or non-renewed by ExxonMobil.

2. The Brand Fee Agreement and Franchise Relationship may also be terminated or non-renewed by ExxonMobil if an act or event occurs concerning or involving any person acting as the Key Person or alternate Key Person, which would permit termination or non-renewal under the PMPA if such an act or event concerned or involved a franchisee as such is defined therein.

3. If any of the acts or events described above as grounds for termination or non-renewal of the Brand Fee Agreement and Franchise Relationship shall occur, BFA Holder may seek ExxonMobil’s agreement to change or delete, by amendment, one or more of the positions listed above by making a written request at least forty-five (45) days prior to any change. Such request shall include such information as ExxonMobil may designate as necessary to determine the qualifications of the new proposed position. ExxonMobil will consider and respond to BFA Holder’s request within thirty (30) days following receipt of BFA Holder’s written request. Such request for change may be denied at ExxonMobil’s reasonable discretion.

4. This Exhibit cancels and supersedes any pre-existing Key Person Clause of the Brand Fee Agreement.

ACCEPTED:			ACCEPTED:
BFA Holder: «CUSTOMER_NAME»			EXXONMOBIL OIL CORPORATION (ExxonMobil)


By: (X)			By:
BFA Holder

Title:			Date:

Date:

11-1

EXHIBIT 12 - NOTICES

NOTICES - RHODE ISLAND AND PMPA

RHODE ISLAND

Under Rhode Island law, ExxonMobil Oil Corporation is required to furnish you the following information in writing with respect to the Brand Fee Agreement offered to you:

1. Gallonage History:

Not applicable - no “location” involved.

2 ExxonMobil Oil Corporation does not make any gallonage projections but you are obligated to purchase certain minimum quantities of motor fuel as provided in the Brand Fee Agreement.

Not applicable — no minimum quantity requirement

3. Previous Dealers:

Not applicable - no “location” involved.

4 Legally binding commitment to sell, demolish, or dispose of this location.

Not applicable - no real estate involved.

5. ExxonMobil offers you the following training programs which have been explained to you: initial franchise-management training and other training as ExxonMobil makes available to all franchise branded wholesalers from time to time.

Motor fuels, motor oil and lubrication products, planned merchandising signs and equipment and certain other service station equipment can be purchased or leased from ExxonMobil or its designee. ExxonMobil will also make available to you other services that it develops and offers to all franchise branded wholesalers. While some of these other services may be provided without charge to you, ExxonMobil reserves the right to charge, or have its designated service provider charge, a fee to recoup costs and expenses involved in providing the services. These services are subject to change by ExxonMobil and are subject to other terms and conditions contained in the Brand Fee Agreement between ExxonMobil and the BFA Holder (the “Brand Fee Agreement”).

6. All agreements, addendums, riders, instruments, brochures, standards handbooks, operating manuals, etc. that will govern your relationship with ExxonMobil, if you become a ExxonMobil BFA Holder, have been enclosed or will be provided under separate cover. These include the obligations that will be required of you and, among others, include your obligation to use advertising meeting ExxonMobil’s requirements, to participate in ExxonMobil’s national promotional programs and, on or after January 1, 2001, to contribute to a third-party administered media-advertising program if established by ExxonMobil in a key market where you operate. They also include your obligations to meet the commitments in the Core Values provided in the Recitals of the Brand Fee Agreement and to comply with ExxonMobil’s National Standards as are in effect from time to time. As a BFA Holder, you will be obligated to cause your stations and your dealer stations to comply with ExxonMobil’s core values, standards, and other requirements. We suggest that you review these documents carefully in advance of signing any agreement with ExxonMobil.

7. Under the terms of these agreements with ExxonMobil, a BFA Holder has the right to sell, transfer or assign agreements only with the prior written consent of ExxonMobil. If the BFA Holder is not an individual, ExxonMobil’s prior written consent must also be obtained for the sale, transfer or assignment of an ownership interest in the BFA Holder. Any sale, transfer or assignment may also be subject to other terms and conditions as provided in the Brand Fee Agreement including, among others, a right of first refusal in favor of ExxonMobil. All restrictions affecting ExxonMobil and concerning renewal and termination of the franchise are set forth in the Brand Fee Agreement, in the General Laws of Rhode Island and in the Federal Petroleum Marketing Practices Act.

12-1

The information contained herein and in the attached documents is provided in compliance with applicable law. It does not constitute a representation or warranty on the part of ExxonMobil as to the potential of the service station nor the availability of products to achieve any such potential.

Please indicate your receipt of this notice in the place indicated below and return a copy to us for our files.

	Sincerely,

	EXXONMOBIL OIL CORPORATION


	By:

Received this day of
, 20 ,
in compliance with the
General Laws of Rhode Island



BFA Holder

12-2

Revised Summary of Title I of the Petroleum Marketing Practices Act

Tuesday, June 25, 1996

AGENCY: Department of Energy.

ACTION: Notice.

SUMMARY: This notice contains a summary of Title I of the Petroleum Marketing Practices Act, as amended (the Act). The Petroleum Marketing Practices Act was originally enacted on June 19, 1978, and was amended by the Petroleum Marketing Practices Act Amendments of 1994, enacted on October 19, 1994. On August 30, 1978, the Department of Energy published in the Federal Register a summary of the provisions of Title I of the 1978 law, as required by the Act. The Department is publishing this revised summary to reflect key changes made by the 1994 amendments.

The Act is intended to protect franchised distributors and retailers of gasoline and diesel motor fuel against arbitrary or discriminatory termination or nonrenewal of franchises. This summary describes the reasons for which a franchise may be terminated or not renewed under the law, the responsibilities of franchisors, and the remedies and relief available to franchisees. The Act requires franchisors to give franchisees copies of the summary contained in this notice whenever notification of termination or nonrenewal of a franchise is given.

FOR FURTHER INFORMATION CONTACT: Carmen Difiglio, Office of Energy Efficiency, Alternative Fuels, and Oil Analysis (PO-62), U.S. Department of Energy, Washington, D.C. 20585, Telephone (202) 586-4444; Lawrence Leiken, Office of General Counsel (GC-73), U.S. Department of Energy, Washington, D.C. 20585, Telephone (202) 586-6978.

SUPPLEMENTARY INFORMATION: Title I of the Petroleum Marketing Practices Act, as amended, 15 U.S.C. §§2801-2806, provides for the protection of franchised distributors and retailers of motor fuel by establishing minimum Federal standards governing the termination of franchises and the nonrenewal of franchise relationships by the franchisor or distributor of such fuel. Section 104(d) (1) of the Act required the Secretary of Energy to publish in the Federal Register a simple and concise summary of the provisions of Title I, including a statement of the respective responsibilities of, and the remedies and relief available to, franchisors and franchisees under that title. The Department published this summary in the Federal Register on August 30, 1978. 43 F.R. 38743 (1978).

In 1994 the Congress enacted the Petroleum Marketing Practices Act Amendments to affirm and clarify certain key provisions of the 1978 statute. Among the key issues addressed in the 1994 amendments are: (1) termination or nonrenewal of franchised dealers by their franchisors for purposes of conversion to “company” operation; (2) application of state law; (3) the rights and obligations of franchisors and franchisees in third-party lease situations; and (4) waiver of rights limitations. See H.R. REP. NO. 737, 103rd Cong., 2nd Sess. 2 (1994), reprinted in 1994 U.S.C.C.A.N. 2780. Congress intended to: (1) make explicit that upon renewal a franchisor may not insist on changes to a franchise agreement where the purpose of such changes is to prevent renewal in order to convert a franchisee-operated service station into a company-operated service station; (2) make clear that where the franchisor has an option to continue the lease or to purchase the premises but does not wish to do so, the franchisor must offer to assign the option to the franchisee; (3) make clear that no franchisor may require, as a condition of entering or renewing a franchise agreement, that a franchisee waive any rights under the Petroleum Marketing Practices Act, any other Federal law, or any state law; and (4) reconfirm the limited scope of Federal preemption under the Act. Id.

The summary which follows reflects key changes to the statute resulting from the 1994 amendments. The Act requires franchisors to give copies of this summary statement to their franchisees when entering into an agreement to terminate the franchise or not to renew the franchise relationship, and when giving notification of termination or nonrenewal. This summary does not purport to interpret the Act, as amended, or to create new legal rights.

In addition to the summary of the provisions of Title I, a more detailed description of the definitions contained in the Act and of the legal remedies available to franchisees is also included in this notice, following the summary statement.

12-3

Summary of Legal Rights of Motor Fuel Franchisees

This is a summary of the franchise protection provisions of the Federal Petroleum Marketing Practices Act, as amended in 1994 (the Act), 15 U.S.C. §§2801-2806. This summary must be given to you, as a person holding a franchise for the sale, consignment or distribution of gasoline or diesel motor fuel, in connection with any termination or nonrenewal of your franchise by your franchising company (referred to in this summary as your supplier).

You should read this summary carefully, and refer to the Act if necessary, to determine whether a proposed termination or nonrenewal of your franchise is lawful, and what legal remedies are available to you if you think the proposed termination or failure to renew is not lawful. In addition, if you think your supplier has failed to comply with the Act, you may wish to consult an attorney in order to enforce your legal rights.

The franchise protection provisions of the Act apply to a variety of franchise agreements. The term “franchise” is broadly defined as a license to use a motor fuel trademark which is owned or controlled by a refiner, and it includes secondary arrangements such as leases of real property and motor fuel supply agreements which have existed continuously since May 15, 1973, regardless of a subsequent withdrawal of a trademark. Thus, if you have lost the use of a trademark previously granted by your supplier but have continued to receive motor fuel supplies through a continuation of a supply agreement with your supplier, you are protected under the Act.

Any issue arising under your franchise which is not governed by this Act will be governed by the law of the State in which the principal place of business of your franchise is located.

Although a State may specify the terms and conditions under which your franchise may be transferred upon the death of the franchisee, it may not require a payment to you (the franchisee) for the goodwill of a franchise upon termination or nonrenewal.

The Act is intended to protect you, whether you are a distributor or a retailer, from arbitrary or discriminatory termination or nonrenewal of your franchise agreement. To accomplish this, the Act first lists the reasons for which termination or nonrenewal is permitted. Any notice of termination or nonrenewal must state the precise reason, as listed in the Act, for which the particular termination or nonrenewal is being made. These reasons are described below under the headings “Reasons for Termination” and “Reasons for Nonrenewal.”

The Act also requires your supplier to give you a written notice of termination or intention not to renew the franchise within certain time periods. These requirements are summarized below under the heading “Notice Requirements for Termination or Nonrenewal.”

The Act also provides certain special requirements with regard to trial and interim franchise agreements, which are described below under the heading “Trial and Interim Franchises.”

The Act gives you certain legal rights if your supplier terminates or does not renew your franchise in a way that is not permitted by the Act. These legal rights are described below under the heading “Your Legal Rights.”

The Act contains provisions pertaining to waiver of franchisee rights and applicable State law. These provisions are described under the heading “Waiver of Rights and Applicable State Law.”

This summary is intended as a simple and concise description of the general nature of your rights under the Act. For a more detailed description of these rights, you should read the text of the Petroleum Marketing Practices Act, as amended in 1994 (15 U.S.C. §§2801-2806). This summary does not purport to interpret the Act, as amended, or to create new legal rights.

I. Reasons for Termination

If your franchise was entered into on or after June 19, 1978, the Act bars termination of your franchise for any reasons other than those reasons discussed below. If your franchise was entered into before June 19, 1978, there is no statutory restriction on the reasons for which it may be terminated. If a franchise entered into before June 19, 1978, is terminated, however, the Act requires the supplier to reinstate the franchise relationship unless one of the reasons listed under this heading or one of the additional reasons for nonrenewal described below under the heading “Reasons for Nonrenewal” exists.

12-4

A. Non-Compliance with Franchise Agreement

Your supplier may terminate your franchise if you do not comply with a reasonable and important requirement of the franchise relationship. However, termination may not be based on a failure to comply with a provision of the franchise that is illegal or unenforceable under applicable Federal, for State or local law. In order to terminate for non-compliance with the franchise agreement, your supplier must have learned of this non-compliance recently. The Act limits the time period within which your supplier must have learned of your non-compliance to various periods, the longest of which is 120 days, before you receive notification of the termination.

B. Lack of Good Faith Efforts

Your supplier may terminate your franchise if you have not made good faith efforts to carry out the requirements of the franchise, provided you are first notified in writing that you are not meeting a requirement of the franchise and you are given an opportunity to make a good faith effort to carry out the requirement. This reason can be used by your supplier only if you fail to make good faith efforts to carry out the requirements of the franchise within the period which began not more than 180 days before you receive the notice of termination.

C. Mutual Agreement To Terminate the Franchise

A franchise can be terminated by an agreement in writing between you and your supplier if the agreement is entered into not more than 180 days before the effective date of the termination and you receive a copy of that agreement, together with this summary statement of your rights under the Act. You may cancel the agreement to terminate within 7 days after you receive a copy of the agreement, by mailing (by certified mail) a written statement to this effect to your supplier.

D. Withdrawal From the Market Area

Under certain conditions, the Act permits your supplier to terminate your franchise if your supplier is withdrawing from marketing activities in the entire geographic area in which you operate. You should read the Act for a more detailed description of the conditions under which market withdrawal terminations are permitted. See 15 U.S.C. §2802(b) (E).

E. Other Events Permitting a Termination

If your supplier learns within the time period specified in the Act (which in no case is more than 120 days prior to the termination notice) that one of the following events has occurred, your supplier may terminate your franchise agreement:

(1) Fraud or criminal misconduct by you that relates to the operation of your marketing premises.

(2) You declare bankruptcy or a court determines that you are insolvent.

(3) You have a severe physical or mental disability lasting at least 3 months which makes you unable to provide for the continued proper operation of the marketing premises.

(4) Expiration of your supplier’s underlying lease to the leased marketing premises, if: (a) your supplier gave you written notice before the beginning of the term of the franchise of the duration of the underlying lease and that the underlying lease might expire and not be renewed during the term of the franchise; (b) your franchisor offered to assign to you, during the 90-day period after notification of termination or nonrenewal was given, any option which the franchisor held to extend the underlying lease or to purchase the marketing premises (such an assignment may be conditioned on the franchisor receiving from both the landowner and the franchisee an unconditional release from liability for specified events occurring after the assignment); and (c) in a situation in which the franchisee acquires possession of the leased marketing premises effective immediately after the loss of the right of the franchisor to grant possession, the franchisor, upon the written request of the franchisee, made a bona fide offer to sell or assign to the franchisee the franchisor’s interest in any improvements or equipment located on the premises, or offered the franchisee a right of first refusal of any offer from another person to purchase the franchisor’s interest in the improvements and equipment.

(5) Condemnation or other taking by the government, in whole or in part, of the marketing premises pursuant to the power of eminent domain. If the termination is based on a condemnation or other taking, your supplier must give you a fair share of any compensation which he receives for any loss of business opportunity or good will.

(6) Loss of your supplier’s right to grant the use of the trademark that is the subject of the franchise, unless the loss was because of bad faith actions by your supplier relating to trademark abuse, violation of Federal or State law, or other fault or negligence.

(7) Destruction (other than by your supplier) of all or a substantial part of your marketing premises. If the termination is based on the destruction of the marketing premises and if the premises are rebuilt or replaced by your supplier and operated under a franchise, your supplier must give you a right of first refusal to this new franchise.

12-5

(8) Your failure to make payments to your supplier of any sums to which your supplier is legally entitled.

(9) Your failure to operate the marketing premises for 7 consecutive days, or any shorter period of time which, taking into account facts and circumstances, amounts to an unreasonable period of time not to operate.

(10) Your intentional adulteration, mislabeling or misbranding of motor fuels or other trademark violations.

(11) Your failure to comply with Federal, State, or local laws or regulations of which you have knowledge and that relate to the operation of the marketing premises.

(12) Your conviction of any felony involving moral turpitude.

(13) Any event that affects the franchise relationship and as a result of which termination is reasonable.

II. Reasons for Nonrenewal

If your supplier gives notice that he does not intend to renew any franchise agreement, the Act requires that the reason for nonrenewal must be either one of the reasons for termination listed immediately above, or one of the reasons for nonrenewal listed below.

A. Failure To Agree on Changes or Additions To Franchise

If you and your supplier fail to agree to changes in the franchise that your supplier in good faith has determined are required, and your supplier’s insistence on the changes is not for the purpose of converting the leased premises to a company operation or otherwise preventing the renewal of the franchise relationship, your supplier may decline to renew the franchise.

B. Customer Complaints

If your supplier has received numerous customer complaints relating to the condition of your marketing premises or to the conduct of any of your employees, and you have failed to take prompt corrective action after having been notified of these complaints, your supplier may decline to renew the franchise.

C. Unsafe or Unhealthful Operations

If you have failed repeatedly to operate your marketing premises in a clean, safe and healthful manner after repeated notices from your supplier, your supplier may decline to renew the franchise.

D. Operation of Franchise is Uneconomical

Under certain conditions specified in the Act, your supplier may decline to renew your franchise if he has determined that renewal of the franchise is likely to be uneconomical. Your supplier may also decline to renew your franchise if he has decided to convert your marketing premises to a use other than for the sale of motor fuel, to sell the premises, or to materially alter, add to, or replace the premises.

III. Notice Requirements for Termination or Nonrenewal

The following is a description of the requirements for the notice which your supplier must give you before he may terminate your franchise or decline to renew your franchise relationship. These notice requirements apply to all franchise terminations, including franchises entered into before June 19, 1978 and trial and interim franchises, as well as to all nonrenewals of franchise relationships.

A. How Much Notice Is Required

In most cases, your supplier must give you notice of termination or non-renewal at least 90 days before the termination or nonrenewal takes effect.

In circumstances where it would not be reasonable for your supplier to give you 90 days notice, he must give you notice as soon as he can do so. In addition, if the franchise involves leased marketing premises, your supplier may not establish a new franchise relationship involving the same premises until 30 days after notice was given to you or the date the termination or nonrenewal takes effect, whichever is later. If the franchise agreement permits, your supplier may repossess the premises and, in reasonable circumstances, operate them through his employees or agents.

If the termination or nonrenewal is based upon a determination to withdraw from the marketing of motor fuel in the area, your supplier must give you notice at least 180 days before the termination or nonrenewal takes effect.

12-6

B. Manner and Contents of Notice

To be valid, the notice must be in writing and must be sent by certified mail or personally delivered to you. It must contain:

(1) A statement of your supplier’s intention to terminate the franchise or not to renew the franchise relationship, together with his reasons for this action;

(2) The date the termination or non-renewal takes effect; and

(3) A copy of this summary.

IV. Trial Franchises and Interim Franchises

The following is a description of the special requirements that apply to trial and interim franchises.

A. Trial Franchises

A trial franchise is a franchise, entered into on or after June 19, 1978, in which the franchisee has not previously been a party to a franchise with the franchisor and which has an initial term of 1 year or less. A trial franchise must be in writing and must make certain disclosures, including that it is a trial franchise, and that the franchisor has the right not to renew the franchise relationship at the end of the initial term by giving the franchisee proper notice.

The unexpired portion of a transferred franchise (other than as a trial franchise, as described above) does not qualify as a trial franchise.

In exercising his right not to renew a trial franchise at the end of its initial term, your supplier must comply with the notice requirements described above under the heading “Notice Requirements for Termination or Nonrenewal.”

B. Interim Franchises

An interim franchise is a franchise, entered into on or after June 19, 1978, the duration of which, when combined with the terms of all prior interim franchises between the franchisor and the franchisee, does not exceed three years, and which begins immediately after the expiration of a prior franchise involving the same marketing premises which was not renewed, based on a lawful determination by the franchisor to withdraw from marketing activities in the geographic area in which the franchisee operates.

An interim franchise must be in writing and must make certain disclosures, including that it is an interim franchise and that the franchisor has the right not to renew the franchise at the end of the term based upon a lawful determination to withdraw from marketing activities in the geographic area in which the franchisee operates.

In exercising his right not to renew a franchise relationship under an interim franchise at the end of its term, your supplier must comply with the notice requirements described above under the heading “Notice Requirements for Termination or Nonrenewal.”

V. Your Legal Rights

Under the enforcement provisions of the Act, you have the right to sue your supplier if he fails to comply with the requirements of the Act. The courts are authorized to grant whatever equitable relief is necessary to remedy the effects of your supplier’s failure to comply with the requirements of the Act, including declaratory judgment, mandatory or prohibitive injunctive relief, and interim equitable relief. Actual damages, exemplary (punitive) damages under certain circumstances, and reasonable attorney and expert witness fees are also authorized. For a more detailed description of these legal remedies you should read the text of the Act. 15 U.S.C. §§2801-2806.

VI. Waiver of Rights and Applicable State Law

Your supplier may not require, as a condition of entering into or renewing the franchise relationship, that you relinquish or waive any right that you have under this or any other Federal law or applicable State law. In addition, no provision in a franchise agreement would be valid or enforceable if the provision specifies that the franchise would be governed by the law of any State other than the one in which the principal place of business for the franchise is located.

12-7

Further Discussion of Title I-Definitions and Legal Remedies

I. Definitions

Section 101 of the Petroleum Marketing Practices Act sets forth definitions of the key terms used throughout the franchise protection provisions of the Act. The definitions from the Act which are listed below are of those terms which are most essential for purposes of the summary statement. (You should consult section 101 of the Act for additional definitions not included here.)

A. Franchise

A “franchise” is any contract between a refiner and a distributor, between a refiner and a retailer, between a distributor and another distributor, or between a distributor and a retailer, under which a refiner or distributor (as the case may be) authorizes or permits a retailer or distributor to use, in connection with the sale, consignment, or distribution of motor fuel, a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such use.

The term “franchise” includes any contract under which a retailer or distributor (as the case may be) is authorized or permitted to occupy leased marketing premises, which premises are to be employed in connection with the sale, consignment, or distribution of motor fuel under a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such occupancy. The term also includes any contract pertaining to the supply of motor fuel which is to be sold, consigned or distributed under a trademark owned or controlled by a refiner, or under a contract which has existed continuously since May 15, 1973, and pursuant to which, on May 15, 1973, motor fuel was sold, consigned or distributed under a trademark owned or controlled on such date by a refiner. The unexpired portion of a transferred franchise is also included in the definition of the term.

B. Franchise Relationship

The term “franchise relationship” refers to the respective motor fuel marketing or distribution obligations and responsibilities of a franchisor and a franchisee which result from the marketing of motor fuel under a franchise.

C. Franchisee

A “franchisee” is a retailer or distributor who is authorized or permitted, under a franchise, to use a trademark in connection with the sale, consignment or distribution of motor fuel.

D. Franchisor

A “‘franchisor” is a refiner or distributor who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of motor fuel.

E. Marketing Premises

“Marketing premises” are the premises which, under a franchise, are to be employed by the franchisee in connection with the sale, consignment, or distribution of motor fuel.

F. Leased Marketing Premises

“‘Leased marketing premises” are marketing premises owned, leased or in any way controlled by a franchisor and which the franchisee is authorized or permitted under the franchise, to employ in connection with the sale, consignment, or distribution of motor fuel.

G. Fail to Renew and Nonrenewal

The terms “fail to renew” and “nonrenewal” refer to a failure to reinstate, continue, or extend a franchise relationship (1) at the conclusion of the term, or on the expiration date, stated in the relevant franchise, (2) at any time, in the case of the relevant franchise which does not state a term of duration or an expiration date, or (3) following a termination (on or after June 19, 1978) of the relevant franchise which was entered into prior to June 19, 1978 and has not been renewed after such date.

12-8

II. Legal Remedies Available to Franchisee

The following is a more detailed description of the remedies available to the franchisee if a franchise is terminated or not renewed in a way that fails to comply with the Act.

A. Franchisee’s Right to Sue

A franchisee may bring a civil action in United States District Court against a franchisor who does not comply with the requirements of the Act. The action must be brought within one year after the date of termination or nonrenewal or the date the franchisor fails to comply with the requirements of the law, whichever is later.

B. Equitable Relief

Courts are authorized to grant whatever equitable relief is necessary to remedy the effects of a violation of the law’s requirements. Courts are directed to grant a preliminary injunction if the franchisee shows that there are sufficiently serious questions, going to the merits of the case, to make them a fair ground for litigation, and if, on balance, the hardship which the franchisee would suffer if the preliminary injunction is not granted will be greater than the hardship which the franchisor would suffer if such relief is granted.

Courts are not required to order continuation or renewal of the franchise relationship if the action was brought after the expiration of the period during which the franchisee was on notice concerning the franchisor’s intention to terminate or not renew the franchise agreement.

C. Burden of Proof

In an action under the Act, the franchisee has the burden of proving that the franchise was terminated or not renewed. The franchisor has the burden of proving, as an affirmative defense, that the termination or nonrenewal was permitted under the Act and, if applicable, that the franchisor complied with certain other requirements relating to terminations and nonrenewals based on condemnation or destruction of the marketing premises.

D. Damages

A franchisee who prevails in an action under the Act is entitled to actual damages and reasonable attorney and expert witness fees. If the action was based upon conduct of the franchisor which was in willful disregard of the Act’s requirements or the franchisee’s rights under the Act, exemplary (punitive) damages may be awarded where appropriate. The court, and not the jury, will decide whether to award exemplary damages and, if so, in what amount.

On the other hand, if the court finds that the franchisee’s action is frivolous, it may order the franchisee to pay reasonable attorney and expert witness fees.

E. Franchisor’s Defense to Permanent Injunctive Relief

Courts may not order a continuation or renewal of a franchise relationship if the franchisor shows that the basis of the non-renewal of the franchise relationship was a determination made in good faith and in the normal course of business:

(1) To convert the leased marketing premises to a use other than the sale or distribution of motor fuel;

(2) To materially alter, add to, or replace such premises;

(3) To sell such premises;

(4) To withdraw from marketing activities in the geographic area in which such premises are located; or

(5) That the renewal of the franchise relationship is likely to be uneconomical to the franchisor despite any reasonable changes or additions to the franchise provisions which may be acceptable to the franchisee.

In making this defense, the franchisor also must show that he has complied with the notice provisions of the Act.

This defense to permanent injunctive relief, however, does not affect the franchisee’s right to recover actual damages and reasonable attorney and expert witness fees if the nonrenewal is otherwise prohibited under the Act.

Issued in Washington, D.C. on June 12, 1996.

Marc W. Chupka,

Acting Assistant Secretary for Policy.

12-9

EXHIBIT 13-A

MOBIL PROPRIETARY MARKS

Retail Motor Fuels Business


Mark	Class	Appl. Number	Reg. Number	Authorized Use

Canopy Design	4, 35	77/860266		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

Canopy Design with MOBIL in color	4, 35	77/860248		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

Forecourt Design MOBIL in color and Pegasus Design In Circle	4, 35	77/860286		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

13-1

Mark	Class	Appl. Number	Reg. Number	Authorized Use

Fuel Dispenser Design — MOBIL in color and Pegasus Design In Circle	4, 35	77/824668		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

MOBIL	4	71/408518	363312	Motor fuels, namely, gasoline and diesel fuels

MOBIL	25	73/436242	1302728	Uniforms

MOBIL	37	73/068179	1046513	Automotive service station services

MOBIL (in color)	25	73/391554	1263693	Uniforms

MOBIL (in color)	37	73/070138	1049824	Automotive service station services

MOBIL (in color)	4	77/862545	3787476	Motor fuels, namely gasoline and diesel fuels

Pegasus Design	4	77/685131	3654749	Motor fuels, namely, gasoline and diesel fuels

13-2

Pegasus Design

73/737516

1530962

Uniforms

13-2


Mark	Class	Appl. Number	Reg. Number	Authorized Use

Pegasus Design	37	73/646301	1461344	Automotive service station services

Pegasus Design	4	77/685117		Motor fuels, namely, gasoline and diesel fuels

SPEEDPASS	35	76/369844	2884731	Business services, namely facilitation of transaction authorization

13-3

EXHIBIT 13-B

MOBIL PROPRIETARY MARKS

Related Businesses

Mark	Class	Appl. Number	Reg. Number	Authorized Use

BENGAL TRADERS GOURMET COFFEE and Design	30, 43	78/366759	2933079	Coffee only at locations identified on Exhibit 1 that offer BENGAL TRADERS coffee on the Effective Date. Preparation and serving of coffee for consumption on or off the premises only at locations identified on Exhibit 1 that offer BENGAL TRADERS coffee on the Effective Date.

MOBIL	42	73/000277	1028163	Retail food store services

MOBIL (in color)	37	73/070138	1049824	Car wash services

MOBIL MART	42	73/506253	1338384	Retail food and convenience store services

Pegasus Design	21	75/103564	2078949	Containers, namely, cups and mugs

WASH N’ RUN	37	78/103355	2792917	Car wash services

WASH N’ RUN (design)	37	77/313540	3453272	Car wash services

13-4

EXHIBIT 14-A

EXXON PROPRIETARY MARKS

Retail Motor Fuels Business


Mark	Class	Appl. Number	Reg. Number	Authorized Use

Canopy Design	4, 35	77/859372		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

Canopy Design with EXXON in color	4, 35	77/859354		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

ESSO	4	71/181659	176408	Motor fuels, namely diesel fuels.

EXXON	4	72/296761	902044	Motor fuels, namely, gasoline and diesel fuels

EXXON	25	73/124656	1089259	Uniforms

EXXON	37	77/609708	3594892	Automotive service station services

EXXON (stylized)	4	77/748076	3736429	Motor fuels, namely, gasoline and diesel fuels

14-1


Mark	Class	Appl. Number	Reg. Number	Authorized Use

EXXON (stylized)	37	73/391554	1263693	Automotive service station services.

EXXON (stylized) and Design	4	72/407854	968512	Motor fuels, namely gasoline and diesel fuels

EXXON (stylized) and Design	37	77/609704	3594891	Automobile service station services

Forecourt Design EXXON in color and Running Live Tiger Design	4, 35	77/859402		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

Fuel Dispenser Design — EXXON in color and Running Live Tiger Design	4, 35	77/823527		Motor fuels, namely gasoline and diesel fuels Retail of fuels for vehicles

14-2


Mark	Class	Appl. Number	Reg. Number	Authorized Use

Interlocking X Design	4	75/474257	2305494	Motor fuels, namely, gasoline and diesel fuels

Running Live Tiger Design	4	77/560609	3594835	Motor fuels, namely, gasoline and diesel fuels

Running Live Tiger Design	37	77/560522	3594833	Automotive service station services

Running Live Tiger Design with Striped Background	4	77/585076	3594868	Motor fuels, namely, gasoline and diesel fuels

SPEEDPASS	35	76/369844	2884731	Business services, namely facilitation of transaction authorization

14-4

EXHIBIT 14-B

EXXON PROPRIETARY MARKS

Related Businesses


Mark	Class	Appl. Number	Reg. Number	Authorized Use

BENGAL TRADERS GOURMET COFFEE and Design	30, 43	78/366759	2933079	Coffee only at locations identified on Exhibit 1 that offer BENGAL TRADERS coffee on the Effective Date. Preparation and serving of coffee for consumption on or off the premises only at locations identified on Exhibit 1 that offer BENGAL TRADERS coffee on the Effective Date.

EXXON	37	77/609708	3594892	Car wash services

EXXON	42	73/659159	1471065	Retail food and convenience store services

EXXON SHOP	42	73/659160	1470218	Retail food and convenience store services

TIGER MART & Whimsical Tiger Design	35			Retail food and convenience store services

TIGER MART & Whimsical Tiger Design	35			Retail food and convenience store services

TIGER WASH	37	78/408223	3003997	Car wash services

14-4


Mark	Class	Appl. Number	Reg. Number	Authorized Use

TIGER WASH and Design	37	78/188466	2893891	Car wash services

WASH N’ RUN	37	78/103355	2792917	Car wash services

WASH N’ RUN (design)	37	77/313540	3453272	Car wash services

14-5

EXHIBIT 15

INITIAL TOTAL VOLUME

360,079,000 gallons

15-1

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES

16-1

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	960 FALL RIVER AVE	SEEKONK	MA
**	30 CENTRAL SQ	CHELMSFORD	MA
**	44 GREAT ROAD	ACTON	MA
**	980 CHELMSFORD ST	LOWELL	MA
**	185 LITTLETON ROAD	WESTFORD	MA
**	453 WASHINGTON ST	WELLESLEY	MA
**	1335 MAIN ST	WALTHAM	MA
**	50 MIDDLESEX TPK	BURLINGTON	MA
**	272 POND ST	ASHLAND	MA
**	815 WASHINGTON	HOLLISTON	MA
**	432 BOSTON POST ROAD	SUDBURY	MA
**	178 MAIN STREET	READING	MA
**	155 FAUNCE CRNR	NORTH DARTMOUTH	MA
**	553 MASSACHUSETTS AVE	ACTON	MA
**	978 HIGHLAND AVE	MEDFORD	MA
**	1095 COUNTY ST	TAUNTON	MA
**	145 CHURCH STREET	PEMBROKE	MA
**	525 PARADISE ROAD	SWAMPSCOTT	MA
**	1123 BROADWAY	SAUGUS	MA
**	1330 MAIN STREET	READING	MA
**	107 STATE ST	NEWBURYPORT	MA
**	214 HAVERHILL ST	METHUEN	MA
**	14 NORTH MAIN STREET	ANDOVER	MA
**	109 COURT ST	PLYMOUTH	MA
**	198 HARVARD ST	BROOKLINE	MA
**	11 TAUNTON ST	PLAINVILLE	MA
**	1 MYSTIC AVE	MEDFORD	MA
**	372 WASHINGTON	STOUGHTON	MA
**	140 MEDWAY ROAD	MILFORD	MA
**	76 STOREY AVENUE	NEWBURYPORT	MA
**	22 MAPLE AVE	SHREWSBURY	MA
**	MAIN & NORTH STS	MEDFIELD	MA
**	1451 WASHINGTON	HANOVER	MA
**	193 WHITING ST	HINGHAM	MA
**	92 W MAIN ST	HOPKINTON	MA
**	1063 WORCESTER ROAD	FRAMINGHAM	MA
**	264 NEPONSET VALLEY PKY	HYDE PARK	MA
**	2900 CRANBERRY HWY.	EAST WAREHAM	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	434 CAMBRIDGE ST	ALLSTON	MA
**	12 MASSACHUSETTS AVE	NORTH ANDOVER	MA
**	551 BROADWAY	METHUEN	MA
**	816 MEMORIAL DRIVE	CAMBRIDGE	MA
**	285 TURNPIKE ROAD	SHREWSBURY	MA
**	37 COUNTY ROAD	MATTAPOISETT	MA
**	76 WORCESTER ROAD	SOUTHBOROUGH	MA
**	512 CHESTNUT ST	LYNN	MA
**	345 BOYLSTON ST	BROOKLINE	MA
**	1269 FURNACE BROOK PKY	QUINCY	MA
**	1111 GREAT PLAIN AVE	NEEDHAM	MA
**	139 RIVER ROAD #I-93	ANDOVER	MA
**	154 ENDICOTT ST	DANVERS	MA
**	130 TURNPIKE ROAD	WESTBOROUGH	MA
**	1040 MAIN ST	TEWKSBURY	MA
**	350 WINTHROP AVE	NORTH ANDOVER	MA
**	2615 MASSACHUSETTS AVENUE	CAMBRIDGE	MA
**	303 N. PEARL STREET	BROCKTON	MA
**	1249 NEWPORT AVENUE	ATTLEBORO	MA
**	1012 BELMONT ST	BROCKTON	MA
**	RT 28 & SPRING BARS ROAD	FALMOUTH	MA
**	1094 BEACON ST	NEWTON	MA
**	431 NEWBURY ST	DANVERS	MA
**	165 SOUTH STREET	WRENTHAM	MA
**	277 BEDFORD ST	LEXINGTON	MA
**	1449 ROUTE 132	HYANNIS	MA
**	316 LOWELL ST	WILMINGTON	MA
**	309 LOWELL STREET	ANDOVER	MA
**	301 ELM STREET	BRAINTREE	MA
**	250 MAIN ST	STONEHAM	MA
**	441 BOSTON ROAD	BILLERICA	MA
**	1556 BLUE HILL	MATTAPAN	MA
**	91 LYNNFIELD ST	PEABODY	MA
**	270 W. MAIN STREET	MARLBOROUGH	MA
**	10 MILL ST	WORCESTER	MA
**	97 MAPLE ST	DANVERS	MA
**	350 SQUIRE ROAD	REVERE	MA
**	22 CONCORD TPKE EAST/WEST	CONCORD	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	696 COCHITUATE ROAD	FRAMINGHAM	MA
**	265 GRANITE ST	BRAINTREE	MA
**	1734 FALMOUTH ROAD	CENTERVILLE	MA
**	491 FOUNDRY ST	SOUTH EASTON	MA
**	1175 MAIN ST	HOLDEN	MA
**	143 NAHATAN STREET	NORWOOD	MA
**	285 STATE ROAD	NORTH DARTMOUTH	MA
**	36 W MAIN ST	NORTHBOROUGH	MA
**	2776 WASHINGTON ST	CANTON	MA
**	575 W CENTER ST	WEST BRIDGEWATER	MA
**	173 BEDFORD ST	BURLINGTON	MA
**	123 CENTRAL ST	FOXBORO	MA
**	1 CENTRAL ST	GEORGETOWN	MA
**	189 CHAUNCY ST	MANSFIELD	MA
**	185 PARK AVE	WORCESTER	MA
**	334 GRAFTON ST	WORCESTER	MA
**	635 CHANDLER ST	WORCESTER	MA
**	660 MT AUBURN ST	WATERTOWN	MA
**	71 ESSEX AVENUE	GLOUCESTER	MA
**	242 WASHINGTON STREET	HUDSON	MA
**	767 MAIN ST	HAVERHILL	MA
**	386 MAIN ST	MELROSE	MA
**	972 MAIN ST	MILLIS	MA
**	751 MAIN ST	WALPOLE	MA
**	143 SUDBURY ROAD	CONCORD	MA
**	88 BOSTON POST ROAD	WESTON	MA
**	971 PROVIDENCE HWY	NORWOOD	MA
**	647 LOWELL ST	LEXINGTON	MA
**	845 MOODY ST	WALTHAM	MA
**	95 CHELMSFORD ST	CHELMSFORD	MA
**	1785 ANDOVER STREET	TEWKSBURY	MA
**	96 MONTVALE AVE	STONEHAM	MA
**	93 MAZZEO DR	RANDOLPH	MA
**	660 W CENTRAL ST	FRANKLIN	MA
**	52 JAMES REYNOLDS RD	SWANSEA	MA
**	1112 MAIN ST	CONCORD	MA
**	9597 WESTFORD ROAD	TYNGSBORO	MA
**	2105 COMMONWEALTH AVE	NEWTON	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	601 MAIN STREET	WEST YARMOUTH	MA
**	789 S MAIN ST	HAVERHILL	MA
**	906 BEDFORD ST	ABINGTON	MA
**	1181 BLUE HILL AVE	MATTAPAN	MA
**	85 SOUTHAMPTON ST	ROXBURY	MA
**	2 SOUTH ST	STONEHAM	MA
**	250 GRANITE ST	BRAINTREE	MA
**	499 WASHINGTON ST	NORWOOD	MA
**	315 COMMONWEALTH ROAD	WAYLAND	MA
**	710 HIGH ST	WESTWOOD	MA
**	270 N MAIN ST	BELLINGHAM	MA
**	783 BLUE HILL AVE	DORCHESTER	MA
**	134 CEDAR ST	MILFORD	MA
**	190 KING ST	COHASSET	MA
**	208 CHURCH ST	PEMBROKE	MA
**	470 MERIDIAN ST	EAST BOSTON	MA
**	107 MAIN ST	MEDWAY	MA
**	980 PROVIDENCE HWY	WALPOLE	MA
**	548 FALMOUTH ROAD	MASHPEE	MA
**	512 MAIN STREET	WEYMOUTH	MA
**	158 MARKET ST	ROCKLAND	MA
**	940 ANDOVER STREET	TEWKSBURY	MA
**	23 PLEASANT ST	WOBURN	MA
**	273 E BERKELEY ST	BOSTON	MA
**	145 SHARON ST	STOUGHTON	MA
**	1033 TRAPELO ROAD	WALTHAM	MA
**	130 MAIN ST	KINGSTON	MA
**	396 WALTHAM ST	LEXINGTON	MA
**	2 ESSEX ST	SAUGUS	MA
**	500 KING ST	LITTLETON	MA
**	70 MAIN ST	AYER	MA
**	115 Whalon Street	FITCHBURG	MA
**	343 FRESH POND PKY	CAMBRIDGE	MA
**	596 SALEM ST	LYNNFIELD	MA
**	AIRPORT BUSINESS PK	EDGARTOWN	MA
**	RT 1 & 133	ROWLEY	MA
**	RT 3A AMD MEETINGHOUSE	SAGAMORE BEACH	MA
**	576 PLYMOUTH ST	HALIFAX	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	200 OLD MAIN ROAD	NORTH FALMOUTH	MA
**	1 MAIN ST	UXBRIDGE	MA
**	397 GREAT PLAIN AVE	NEEDHAM	MA
**	196 HIGH STREET	WALTHAM	MA
**	823 KEMPTON ST	NEW BEDFORD	MA
**	2235 STATE ROAD/RT 3A	PLYMOUTH	MA
**	300 COUNTY ST	ATTLEBORO	MA
**	UPPER MAIN STREET	EDGARTOWN	MA
**	460 MAIN ST	BOLTON	MA
**	134 WEST MAIN STREET (RT9)	EAST BROOKFIELD	MA
**	93 SOUTHBRIDGE ST	NORTH OXFORD	MA
**	272 MAIN ST	PLYMPTON	MA
**	2322 S MAIN ST	FALL RIVER	MA
**	63 MAIN ST	DOUGLAS	MA
**	141 MAIN ST	EDGARTOWN	MA
**	367 ASHLEY BLVD	NEW BEDFORD	MA
**	1348 NEW STATE HWY	RAYNHAM	MA
**	RT 146 AND BOSTON ROAD	SUTTON	MA
**	ROUTE 131	STURBRIDGE	MA
**	1266 BROADWAY	RAYNHAM	MA
**	612 MIDDLESEX TPKE	BILLERICA	MA
**	2 WALPOLE STREET	DOVER	MA
**	2683 ROUTE 6	WELLFLEET	MA
**	540 MASSASOIT ROAD	WORCESTER	MA
**	452 ROUTE 134	SOUTH DENNIS	MA
**	302 PALMER AVE	FALMOUTH	MA
**	110 MAIN ST	CARVER	MA
**	68 POND ST	SHARON	MA
**	2155 IYANOUGH ROAD	WEST BARNSTABLE	MA
**	P O BOX 310/80 RTE 130	FORESTDALE	MA
**	140 SAMOSET ST	PLYMOUTH	MA
**	2 MAINS ST	TEWKSBURY	MA
**	24 SUTTON AVE	OXFORD	MA
**	2160 RT 6A	BREWSTER	MA
**	I495 AND RT 24 SB	BRIDGEWATER	MA
**	I495 AND RT 24 NB	EAST TAUNTON	MA
**	238 MAIN ST	TOWNSEND	MA
**	3 BOSTON ROAD	GROTON	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	76 MAIN ST	LEOMINSTER	MA
**	280 NEW LANCASTER ROAD	LEOMINSTER	MA
**	94 BRIDGE ST	SALEM	MA
**	17 PEARSON BLVD	GARDNER	MA
**	6 GARDNER ROAD	ASHBURNHAM	MA
**	2143 MAIN ST	ATHOL	MA
**	240 SPRING ST	WINCHENDON	MA
**	131 MASSACHUSETTS AVE	LUNENBURG	MA
**	1274 MAIN ST	ASHBY	MA
**	109 ROUTE 6A	ORLEANS	MA
**	265 S MAIN ST	MIDDLETON	MA
**	233 MAIN ST	WENHAM	MA
**	793 MAIN ST	LYNNFIELD	MA
**	950 MAIN ST	WAKEFIELD	MA
**	66 N.MAIN ST.	SALISBURY	MA
**	24 E MAIN ST	WESTBOROUGH	MA
**	880 MAIN ST	WOBURN	MA
**	453 ESSEX ST	BEVERLY	MA
**	75 MAIN ST	WOBURN	MA
**	78 N MAIN ST	NATICK	MA
**	103 W UNION ST	ASHLAND	MA
**	133 W CENTRAL	NATICK	MA
**	1116 MASSACHUSETTS AVE	ARLINGTON	MA
**	SO ARTERY & CODDINGTON	QUINCY	MA
**	30A MAIN ST	WINTHROP	MA
**	MAIN ST	OSTERVILLE	MA
**	1010 CHESTNUT ST	NEWTON	MA
**	457 MAIN ST	HUDSON	MA
**	161 LINCOLN ROAD	LINCOLN	MA
**	177 WASHINGTON ST	PLAINVILLE	MA
**	79 NEEDHAM ST	NEWTON HIGHLANDS	MA
**	333 EASTERN AVE	MALDEN	MA
**	273 MIDDLESEX AVE	MEDFORD	MA
**	700 LYNNWAY	LYNN	MA
**	396 CHELSEA ST	EAST BOSTON	MA
**	89 WASHINGTON ST	NORWELL	MA
**	348 E WASHINGTON ST	NORTH ATTLEBORO	MA
**	10 AIRPORT ROAD.,	NANTUCKET	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	129 ORANGE ST	NANTUCKET	MA
**	20 N CAMBRIDGE ST	NANTUCKET	MA
**	SWAINS WHARF	NANTUCKET	MA
**	26 MACY LANE	NANTUCKET	MA
**	41 SPARKS AVE.	NANTUCKET	MA
**	96 WASHINGTON ST	NANTUCKET	MA
**	320 W HOUSATONIC ST	PITTSFIELD	MA
**	580 NORTH ST	PITTSFIELD	MA
**	246 STOCKBRIDGE ROAD	GREAT BARRINGTON	MA
**	1140 PLEASANT ST	LEE	MA
**	458 SOUTH ST	PITTSFIELD	MA
**	241 MAIN ST	LEE	MA
**	RTE 7	LANESBORO	MA
**	734 EAST ST	PITTSFIELD	MA
**	ROUTE 202	SOUTH HADLEY	MA
**	WEST & HOLYOKE	LUDLOW	MA
**	259 MAIN ST	WILLIAMSTOWN	MA
**	568 NEWTON ST	SOUTH HADLEY	MA
**	SOUTH STREET	STOCKBRIDGE	MA
**	ROUTE 8	HINSDALE	MA
**	143 MAIN ST	MONSON	MA
**	DALTON - BENEDICT	PITTSFIELD	MA
**	26 COMMERCIAL ST	ADAMS	MA
**	1201 MAIN ST	HAVERHILL	MA
**	401 AMESBURY ROAD	HAVERHILL	MA
**	ROUTE 2	SHELBURNE	MA
**	47 HARDING ST	MIDDLEBOROUGH	MA
**	RURAL ROUTE 02	GILL	MA
**	511 STATION AVE	SOUTH YARMOUTH	MA
**	365 MAIN STREET	STURBRIDGE	MA
**	490 COUNTY ST	NEW BEDFORD	MA
**	449 MECHANIC ST	FITCHBURG	MA
**	1460 MIDDLESEX ST	LOWELL	MA
**	4 CHACE ROAD	EAST FREETOWN	MA
**	696 S MAIN ST	GREAT BARRINGTON	MA
**	2012 MEMORIAL DR	CHICOPEE	MA
**	124 NORTHAMPTON ST	EASTHAMPTON	MA
**	2788 BOSTON ROAD	WILBRAHAM	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	1001 SOUTH ST	WRENTHAM	MA
**	188 ELM ST	PITTSFIELD	MA
**	68 S MAIN ST	ASSONET	MA
**	2505 CRANBERRY HWY	WAREHAM	MA
**	634 MAIN STREET	AGAWAM	MA
**	5A AYERS VILLAGE ROAD	METHUEN	MA
**	656 BOSTON POST ROAD	MARLBOROUGH	MA
**	44 DODGE ST	BEVERLY	MA
**	CIRCUMFERENTIAL HWY/RT 128	NEWTON	MA
**	690 MARRETT ROAD/RTE 128	LEXINGTON	MA
**	36-38 WORCESTER ROAD	CHARLTON	MA
**	853-855 WEST BOLYSTON ST	WORCESTER	MA
**	164 SOUTH STREET	PLYMOUTH	MA
**	1074 STATE ROAD	WEST TISBURY	MA
**	1245 NORTH MAIN STREET	RANDOLPH	MA
**	522 WEST STREET	READING	MA
**	1995 WINTHROP ST	NORTH DIGHTON	MA
**	LAKEVIEW AVE	DRACUT	MA
**	785 GORHAM STREET	LOWELL	MA
**	451 WAREHAM ST	MIDDLEBORO	MA
**	188 GORE ROAD.,	WEBSTER	MA
**	100-106 WASHINGTON ST	ATTLEBORO	MA
**	643 MAIN ST.	WINCHESTER	MA
**	426 PITTSFIELD ROAD.	LENOX	MA
**	83 NEW YORK AVE	OAK BLUFFS	MA
**	147 MAIN ST	SHEFFIELD	MA
**	399 NORTHAMPTON ST	AMHERST	MA
**	1635 NORTHAMPTON ST	HOLYOKE	MA
**	13 NORTH MAIN ST	EAST LONGMEADOW	MA
**	467 LONGMEADOW ST	LONGMEADOW	MA
**	600 COLLEGE HWY	SOUTHWICK	MA
**	3111 MAIN STREET	SPRINGFIELD	MA
**	1012 BEDFORD STREET	FALL RIVER	MA
**	773 MAPLE ROAD	LONGMEADOW	MA
**	1828 BOSTON ROAD	SPRINGFIELD	MA
**	562 WESTFIELD ST	WEST SPRINGFIELD	MA
**	161 N PLEASANT ST	AMHERST	MA
**	833 E COLUMBUS AVE	SPRINGFIELD	MA

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	12 SUGARLOAF ST	SOUTH DEERFIELD	MA
**	90 MAIN ST	LENOX	MA
**	1130 RIVERDALE ST	WEST SPRINGFIELD	MA
**	100 MAIN ST	FLORENCE	MA
**	1830 WILBRAHAM ROAD	SPRINGFIELD	MA
**	162 SOUTHAMPTON ROAD	WESTFIELD	MA
**	142 MOHAWK TRAIL	GREENFIELD	MA
**	181 ELM STREET	WESTFIELD	MA
**	236 ROUTE 15	STURBRIDGE	MA
**	242 CONWAY ROAD	SOUTH DEERFIELD	MA
**	137 BRADFORD ST.	PROVINCETOWN	MA
**	222 BARRE PASTON ROAD	RUTLAND	MA
**	2 ROCKWOOD ROAD	NORFOLK	MA
**	131 COMMERCE WAY	PLYMOUTH	MA
**	2 HEAD OF THE BAY ROAD	BOURNE	MA
**	360 MEDFORD STREET	SOMERVILLE	MA
**	23 ROCKY HILL ROAD	AMESBURY	MA
**	360 MACARTHUR BLVD	BUZZARDS BAY	MA
**	365 CONCORD AVE	BELMONT	MA
**	ROUTE 1	WELLS	ME
**	RT 196	LISBON FALLS	ME
**	118 MAPLE ST.,	CORNISH	ME
**	115 S MAIN ST	BREWER	ME
**	254 WILTON ROAD	FARMINGTON	ME
**	96 MAIN ST	MEXICO	ME
**	64 COTTAGE ST	BAR HARBOR	ME
**	364 UPPER MAIN ST	WATERVILLE	ME
**	248 MAIN ST	LEWISTON	ME
**	23 WESTERN AVE	AUGUSTA	ME
**	343 WILSON ST	BREWER	ME
**	LOWER VILLAGE WESTERN AV	KENNEBUNK	ME
**	51 MAIN ST	KENNEBUNK	ME
**	174 MAIN STREET	CUMBERLAND	ME
**	90 WESTERN AVE	SOUTH PORTLAND	ME
**	357 ROOSEVELT TRAIL	WINDHAM	ME
**	124 MAIN ST	FAIRFIELD	ME
**	MILE 57 NORTHBOUND	GRAY	ME
**	MILE56 SOUTHBOUND	GRAY	ME

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	MILE 24 NORTHBOUND	KENNEBUNK	ME
**	MILE 24 SOUTHBOUND	KENNEBUNK	ME
**	809 ROOSEVELT TRL	NORTH WINDHAM	ME
**	782 MAIN ST	WESTBROOK	ME
**	17 OLD POINT AVE	MADISON	ME
**	ROUTE 1	BATH	ME
**	SEARSPORT AVE/BOX 252	BELFAST	ME
**	34 STONE ST	AUGUSTA	ME
**	1519 ATLANTIC HWY	WALDOBORO	ME
**	57 MAIN ST	BRIDGTON	ME
**	7 MAIN ST	OAKLAND	ME
**	700 MAIN ST	ROCKLAND	ME
**	230 US RTE 1	SCARBOROUGH	ME
**	2 PARK AVE	PORTLAND	ME
**	RT 2	RUMFORD	ME
**	296 MAIN ST	AUBURN	ME
**	US RT 11 & 157	MEDWAY	ME
**	1340 ROOSEVELT TRL	RAYMOND	ME
**	JCT RTE 25 AND RTE 35	STANDISH	ME
**	191 PARK ST	ROCKLAND	ME
**	670 ROOSEVELT TRL	NORTH WINDHAM	ME
**	230 LINCOLN ST	BATH	ME
**	613 US ROUTE 1	SCARBOROUGH	ME
**	7 RT 236 & I95	KITTERY	ME
**	101 BATH ROAD	BRUNSWICK	ME
**	1 PORTLAND ROAD.	GRAY	ME
**	1196 CONGRESS ST	PORTLAND	ME
**	496 MAIN ST.,	FRYEBURG	ME
**	697 MAIN ST	SOUTH PORTLAND	ME
**	NORTH & PLEASANT	WATERVILLE	ME
**	BANGOR ST	AUGUSTA	ME
**	211 PLEASANT ST	BRUNSWICK	ME
**	RT 1 & RIPLEY ROAD	KITTERY	ME
**	99 MAIN ROAD S	HAMPDEN	ME
**	3 MOOSEHEAD TRAIL	NEWPORT	ME
**	ROUTE 1 EAST	PEMBROKE	ME
**	1215 STATE ST.	VEAZIE	ME
**	1510 MAIN ST	POLAND	ME

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	51 HIGH ST	ELLSWORTH	ME
**	1105 HAMMOND ST	BANGOR	ME
**	MAIN STREET	PRINCETON	ME
**	2 MAIN ST	MILFORD	ME
**	1187 UNION ST	BANGOR	ME
**	298 OCEAN HOUSE ROAD	CAPE ELIZABETH	ME
**	729 MAIN ROAD	HOLDEN	ME
**	U.S. ROUTE 1	GOULDSBORO	ME
**	700 MAIN ST	PRESQUE ISLE	ME
**	BOX 191 RIVER ROAD	ORRINGTON	ME
**	ROUTE 102	MOUNT DESERT	ME
**	368 HIGH ST.	ELLSWORTH	ME
**	US RT #1	MADAWASKA	ME
**	BROADWAY	BANGOR	ME
**	56 MAIN ST	MACHIAS	ME
**	BENNETT DR	CARIBOU	ME
**	RR 15	EAST CORINTH	ME
**	ROUTE 15	GREENVILLE	ME
**	S MAIN & ELM	GUILFORD	ME
**	100 SOMERSET AVE	PITTSFIELD	ME
**	65 NEWPORT ROAD	CORINNA	ME
**	1020 W MAIN STREET	DOVER FOXCROFT	ME
**	9 UNION SQ	DOVER FOXCROFT	ME
**	32 TENNY HILL	MONSON	ME
**	PLEASANT ST	SANGERVILLE	ME
**	74 CHURCH ST	DEXTER	ME
**	RTS 1 AND 1A	YORK	ME
**	MAIN ST	BROWNVILLE	ME
**	10 MECAW ROAD	HAMPDEN	ME
**	RTE 15	GLENBURN	ME
**	310 STILLWATER AVE	BANGOR	ME
**	10 STILLWATER AVE	ORONO	ME
**	396 NORTH MAIN STREET	BREWER	ME
**	161 EAST MAIN ST	SEARSPORT	ME
**	96 STATE ST	BANGOR	ME
**	264 MAIN STREET	WINTERPORT	ME
**	1498 CARL BROGGI HWY	LEBANON	ME
**	742 PORTLAND ROAD	SACO	ME

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	394 ELM ST	BIDDEFORD	ME
**	611 WILSON ST	BREWER	ME
**	12 US ROUTE 1	YARMOUTH	ME
**	1397 WASHINGTON AVE	PORTLAND	ME
**	47 MAIN STREET	WESTBROOK	ME
**	518 FOREST AVE	PORTLAND	ME
**	841 LISBON ST	LEWISTON	ME
**	345 CENTER STREET	AUBURN	ME
**	2019 WASHINGTON ST & KITTYHAWK AVE	AUBURN	ME
**	1930 LISBON ST.	LEWISTON	ME
**	90 TOWNSEND AVE	BOOTHBAY HARBOR	ME
**	15 ROCKWOOD ROAD	ROCKWOOD	ME
**	10D BRODY WAY & AUBURN ROAD	TURNER	ME
**	205 WESTERN AVE.	AUGUSTA	ME
**	157 MAIN ST	MADAWASKA	ME
**	311 NORTH ST	CALAIS	ME
**	227 RT 2 EAST	DRYDEN	ME
**	RTE. 126 LEWISTON ROAD	WEST GARDINER	ME
**	447 MAIN STREET	DAMARISCOTTA	ME
**	70 ELM ST	SACO	ME
**	280 LAFAYETTE ROAD	HAMPTON	NH
**	470 AMHERST ROAD	BEDFORD	NH
**	201 ISLINGTON ST	PORTSMOUTH	NH
**	30 CALEF HWY	EPPING	NH
**	54 PORTSMOUTH AVE	EXETER	NH
**	519 SOUTH STREET	BOW	NH
**	468 DANIEL WEBSTER HWY.	MERRIMACK	NH
**	2 S MAIN ST	DERRY	NH
**	82 DERRY ROAD #10	HUDSON	NH
**	1019 SECOND STREET	MANCHESTER	NH
**	242 AMHERST STREET	NASHUA	NH
**	96 BROAD STREET	NASHUA	NH
**	137 ROUTE 101	BEDFORD	NH
**	48 CONCORD ROAD	LEE	NH
**	62 MAIN STREET	EAST ROCHESTER	NH
**	685 LAFAYETTE ROAD	HAMPTON	NH
**	210 EDDY ROAD	MANCHESTER	NH
**	RT-4	ENFIELD	NH

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	ROUTE 10 & MAIN STREET	NORTH HAVERHILL	NH
**	RT-2 & 16	GORHAM	NH
**	ROUTE 302/I93	LITTLETON	NH
**	ROUTE 16	ALBANY	NH
**	312 LONDONDERRY TPKE	AUBURN	NH
**	179 RAYMOND ROAD	CANDIA	NH
**	S PARK ST	HANOVER	NH
**	WALLIS ROAD	RYE	NH
**	181 DOVER ROAD	CHICHESTER	NH
**	316 COURT ST	LACONIA	NH
**	162 MAIN STREET	ASHLAND	NH
**	786 METHODIST HILL ROAD	ENFIELD	NH
**	1400 LAKE SHORE ROAD	GILFORD	NH
**	134 N BROADWAY	SALEM	NH
**	ROUTE 103	NEWBURY	NH
**	MAIN ST	LINCOLN	NH
**	VILLAGE ROAD	FREEDOM	NH
**	120 PLEASANT ST	SALEM	NH
**	81 S MAIN ST	CONCORD	NH
**	231 ROCKINGHAM ROAD	LONDONDERRY	NH
**	530 PEMBROKE ST	PEMBROKE	NH
**	1 EASTMAN ST	CONCORD	NH
**	RTE 11 & RTE 153	FARMINGTON	NH
**	1095 HANOVER ST	MANCHESTER	NH
**	4 COUNTRY CLUB ROAD	GILFORD	NH
**	ROUTE 16	NORTH CONWAY	NH
**	RR 2 HOLDERNESS ROAD	PLYMOUTH	NH
**	798 CENTRAL ST	FRANKLIN	NH
**	70 LAFAYETTE ROAD	NORTH HAMPTON	NH
**	1980 WOODBURY AVE	PORTSMOUTH	NH
**	RT-16 & 109	SANBORNVILLE	NH
**	RTE 25 & 16	WEST OSSIPEE	NH
**	ROUTE 114	HENNIKER	NH
**	221 CENTRAL AVE	DOVER	NH
**	39 PORTSMOUTH AVE	STRATHAM	NH
**	RT 101	MILFORD	NH
**	ROUTE 12 & ROUTE 119	FITZWILLIAM	NH
**	22 HENNIKER STREET	HILLSBORO	NH

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	ROUTE 12	EAST SWANZEY	NH
**	MAIN ST # 111	KINGSTON	NH
**	546 FIRST NEW HAMPSHIRE TURNPIKE	NORTHWOOD	NH
**	113 GROVE ST	PETERBOROUGH	NH
**	RIVER-MICHIGAN ST	WINCHESTER	NH
**	10 BRIDGE ST (RT 38)	PELHAM	NH
**	354 MAIN ST	FRANCONIA	NH
**	ROUTE 3	PITTSBURG	NH
**	ROUTE 116	LITTLETON	NH
**	MAIN ST	COLEBROOK	NH
**	1050 S WILLOW ST	MANCHESTER	NH
**	RT 28	BARNSTEAD	NH
**	75 RT. 101 A	AMHERST	NH
**	RT 114	WEARE	NH
**	ROUTE 4	EPSOM	NH
**	140 DW HWY	MERRIMACK	NH
**	62 RIVER ST	JAFFREY	NH
**	MAIN STREET	CONTOOCOOK	NH
**	ROUTE 4	SALISBURY	NH
**	81 N MAST ROAD.	GOFFSTOWN	NH
**	24 ELM ST	MILFORD	NH
**	148 MAIN ST	WILTON	NH
**	626 GIBBONS HWY	WILTON	NH
**	TURNPIKE ROAD	NEW IPSWICH	NH
**	1602 ELM ST	MANCHESTER	NH
**	650 PARK AVE	KEENE	NH
**	472 OLD HOMESTEAD HWY	SWANZEY	NH
**	11 NASHUA ROAD	LONDONDERRY	NH
**	161 PORTLAND AVE	DOVER	NH
**	215 MAIN ST	LANCASTER	NH
**	2391 BROWN AVE	MANCHESTER	NH
**	1932 WELLINGTON ROAD.	MANCHESTER	NH
**	43 E HOLLIS ST	NASHUA	NH
**	191 EPPING ROAD RT 27	EXETER	NH
**	374 TENNY MTN HIGHWAY	PLYMOUTH	NH
**	124 INDIAN ROCK ROAD	WINDHAM	NH
**	803 LAFAYETTE ROAD	PORTSMOUTH	NH
**	114 PLEASANT STREET	CLAREMONT	NH

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	1275 ROUTE 9	STODDARD	NH
**	1 SUNCOOK VALLEY ROAD (RT 28)	BARNSTEAD	NH
**	312 DANIEL WEBSTER HWY	MEREDITH	NH
**	309 ROUTE 104	NEW HAMPTON	NH
**	110 LOUDON ROAD	CONCORD	NH
**	254 NH ROUTE 49	CAMPTON	NH
**	97 NORTH MAIN ST	WEST LEBANON	NH
**	219 WEST ST	KEENE	NH
**	16 JOHN STARK HWY	NEWPORT	NH
**	247 MAIN STREET	CLAREMONT	NH
**	96 HANOVER ST	LEBANON	NH
**	270 PINEWOOD ROAD	ALLENSTOWN	NH
**	510 HARVEY ROAD.	MANCHESTER	NH
**	1190 ROUTE 12A	PLAINFIELD	NH
**	566 MAST ROAD	GOFFSTOWN	NH
**	1050 BALD HILL ROAD	WARWICK	RI
**	1282 ELMWOOD	CRANSTON	RI
**	249 POST ROAD	WESTERLY	RI
**	1776 POST ROAD	WARWICK	RI
**	900 WAMPANOAG TRL	EAST PROVIDENCE	RI
**	208 GANSETT AVE	CRANSTON	RI
**	6228 POST ROAD	NORTH KINGSTOWN	RI
**	975 OAKLAWN AVENUE	CRANSTON	RI
**	354 PUTNAM PIKE	SMITHFIELD	RI
**	3079 TOWER HILL ROAD	SOUTH KINGSTOWN	RI
**	66 POINT JUDITH ROAD	NARRAGANSETT	RI
**	269 VALLEY ST	PROVIDENCE	RI
**	1897 PLAINFIELD PIKE	JOHNSTON	RI
**	10 EAST AVE	WESTERLY	RI
**	301 BRANCH AVE	PROVIDENCE	RI
**	119 GREENVILLE AVE	JOHNSTON	RI
**	91 VETERANS MEMORIAL DR	WARWICK	RI
**	389 ELMWOOD AVENUE	PROVIDENCE	RI
**	1214 MAIN STREET	WYOMING	RI
**	1055 SMITH ST	PROVIDENCE	RI
**	100 PRIVILEGE ST	WOONSOCKET	RI
**	935 SMITHFIELD AVE	LINCOLN	RI
**	168 LONSDALE AVE	PAWTUCKET	RI

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	356 WEST MAIN STREET	MIDDLETOWN	RI
**	890 DEXTER STREET	CENTRAL FALLS	RI
**	92 NEW LONDON TPKE	WEST GREENWICH	RI
**	2336 PAWTUCKET AVE	EAST PROVIDENCE	RI
**	3411 KINGSTON ROAD	WEST KINGSTON	RI
**	973 WILLETT AVE	RIVERSIDE	RI
**	1568 W MAIN	PORTSMOUTH	RI
**	272 MARKET ST	WARREN	RI
**	2291 FLAT RIVER ROAD	COVENTRY	RI
**	35 NARRAGANSETT AVE	JAMESTOWN	RI
**	851 TIOGUE AVE	COVENTRY	RI
**	830 HIGH	CUMBERLAND	RI
**	25 JEFFERSON BLVD	WARWICK	RI
**	200 CHARLES STREET	PROVIDENCE	RI
**	1892 KINGSTOWN ROAD	WAKEFIELD	RI
**	561 A SOUTH COUNTY TRAIL	EXETER	RI
**	RT 110	EAST BARRE	VT
**	RR 2	PLAINFIELD	VT
**	ROUTE 5	FAIRLEE	VT
**	213 PAINE TPK NORTH	MONTPELIER	VT
**	377 RIVER STREET	MONTPELIER	VT
**	MILL ST	HARDWICK	VT
**	RTE 5	LYNDONVILLE	VT
**	4167 VT RT 105	NEWPORT CENTER	VT
**	ROUTES 5 & 25	BRADFORD	VT
**	133 WASHINGTON ST	BARRE	VT
**	RT 5	EAST THETFORD	VT
**	59 N MAIN ST	NORTHFIELD	VT
**	RR 2 BOX 1645	DUXBURY	VT
**	US RT 2	EAST MONTPELIER	VT
**	FIVE CORNERS	ESSEX	VT
**	RT 7	MILTON	VT
**	93 S WINOOSKI AVE	BURLINGTON	VT
**	1314 WILLISTON ROAD	SOUTH BURLINGTON	VT
**	ROUTE 116	HINESBURG	VT
**	977 SHELBURNE ROAD	SOUTH BURLINGTON	VT
**	450 ESSEX ROAD	WILLISTON	VT
**	RT7 PO BOX 41	NORTH FERRISBURG	VT

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	341 RTE 15	JERICHO	VT
**	343 ROOSEVELT HWY	COLCHESTER	VT
**	1711 N MAIN ST RTE 18	MONTGOMERY	VT
**	1106 US ROUTE 2 NORTH	ALBURG	VT
**	ROUTE 7	MIDDLEBURY	VT
**	RT. 7	HIGHGATE SPRINGS	VT
**	446 MAIN ST (RT 108)	BAKERSFIELD	VT
**	23 N RIVER ST.	SWANTON	VT
**	682 MILL ST	SHELDON SPRINGS	VT
**	1097 US RTE 302	BERLIN	VT
**	2707 RTE 7	FERRISBURG	VT
**	42 PARK ST	BURLINGTON	VT
**	RT 100 B	MORETOWN	VT
**	ROUTE 105	EAST BERKSHIRE	VT
**	1830 SHELBURNE ROAD	SOUTH BURLINGTON	VT
**	308 SOUTH MAIN ST	RICHFORD	VT
**	996 NORTH AVE	BURLINGTON	VT
**	1555 NORTH AVE	BURLINGTON	VT
**	337 ROUTE 2	SOUTH HERO	VT
**	209 RIVER ST	SPRINGFIELD	VT
**	RT 12	NORTHFIELD	VT
**	DEPOT SQUARE	RANDOLPH	VT
**	RT. 5	HARTLAND	VT
**	5134 MAIN ST	WAITSFIELD	VT
**	475 N MAIN ST	BARRE	VT
**	446 WEST ST	RUTLAND	VT
**	205 US RT 4 EAST	RUTLAND	VT
**	38 MAIN ST	FAIR HAVEN	VT
**	118 S MAIN ST	RUTLAND	VT
**	169 MAIN ST	WEST RUTLAND	VT
**	91/2 CONANT SQ	BRANDON	VT
**	38 KILLINGTON ACCESS ROAD	KILLINGTON	VT
**	722 MAIN ST (RD 1)	WESTON	VT
**	906 HARTFORD AVE	WILDER	VT
**	5680 US RT. 4 & RT 100A	BRIDGEWATER CORNERS	VT
**	251 NORTH STREET	BENNINGTON	VT
**	12 NORTH MAIN ST (RT 100)	ROCHESTER	VT
**	301 MAIN ST	BENNINGTON	VT

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	172 MAIN ST	WALLINGFORD	VT
**	261 BENMOUNT AVE & HUNT	BENNINGTON	VT
**	557 DEPOT STREET	MANCHESTER	VT
**	5545 ROUTE 100	PLYMOUTH	VT
**	217 N MAIN ST	RUTLAND	VT
**	735 EAST MAIN ST	BENNINGTON	VT
**	10 EAST MAIN ST	POULTNEY	VT
**	195 MAIN ST	LUDLOW	VT
**	5 N MAIN ST	RUTLAND	VT
**	216 NORTH SIDE DRIVE	BENNINGTON	VT
**	16 RTE 106	NORTH SPRINGFIELD	VT
**	1250 US ROUTE 7A	SHAFTSBURY	VT
**	171 S MAIN ST	SAINT ALBANS	VT
**	138 LAKE ST	SAINT ALBANS	VT
**	625 RTE 30	TOWNSHEND	VT
**	143 LOWER MAIN ST	JOHNSON	VT
**	2949 ROUTE 22A	SHOREHAM	VT
**	134 JERICHO ROAD/US RT 15	ESSEX	VT
**	77 US RTE 7	COLCHESTER	VT
**	RT 2	ALBURG	VT
**	ROUTE 14	HARDWICK	VT
**	366 SWANTON ROAD. & RT 7	SAINT ALBANS	VT
**	3009 SIMMONSVILLE ROAD	CHESTER	VT
**	60 NORTH PLEASANT ST	MIDDLEBURY	VT
**	699 RTE 22A-WASHINGTON ST	FAIR HAVEN	VT
**	421 ROUTE 2 EAST	DANVILLE	VT
**	221 COLCHESTER ROAD	ESSEX JUNCTION	VT
**	BOX 58, 16 HEINSBURG DR	COLCHESTER	VT
**	4828 VT RT. 15 & 108	JEFFERSONVILLE	VT
**	6 RIVER ST	MILTON	VT
**	1207 ETHAN ALLEN HWY	FAIRFAX	VT
**	4828 ROUTE 2	NORTH HERO	VT
**	1 FERRY ROAD	SOUTH HERO	VT
**	ROUTE 44	BROWNSVILLE	VT
**	1301 MAIN ST	FAIRFAX	VT
**	14 S MAIN STREET	STOWE	VT
**	518 PEARL STREET	ENOSBURG FALLS	VT
**	5023 MAIN ST & DYER	MANCHESTER	VT

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	1908 ETHAN ALLEN HWY	NEW HAVEN	VT
**	1858 VT ROUTE 17	BRISTOL	VT
**	3108 ROUTE 78	HIGHGATE CENTER	VT
**	2 SOUTH WATER ST	VERGENNES	VT
**	ROUTE 7	PITTSFORD	VT
**	ROUTE 15 & ROUTE 100	MORRISVILLE	VT
**	66 PLEASANT ST	WOODSTOCK	VT
**	1ST ST	SWANTON	VT
**	70 UPPER MAIN ST	ESSEX JUNCTION	VT
**	414 THEODORE ROOSEVELT HWY	COLCHESTER	VT
**	87 E MAIN ST	WILMINGTON	VT
**	583 MAIN ST	CASTLETON	VT
**	1110 SHELBURNE ROAD	SOUTH BURLINGTON	VT
**	RT. 7 & EXECUTIVE DRIVE	SHELBURNE	VT
**	4486 ROUTE 5	DERBY	VT
**	189 RAILROAD ST (RR & ALLEN CT)	SAINT JOHNSBURY	VT
**	461 RTE 114	EAST BURKE	VT
**	ROUTES 5 & 25	BRADFORD	VT
**	1 US RTE 4 & RTE 100	WEST BRIDGEWATER	VT
**	5252 SHELBURNE ROAD	SHELBURNE	VT
**	756 WATERBURY-STOWE ROAD	WATERBURY	VT
**	811 WILLISTON ROAD	SOUTH BURLINGTON	VT
**	281 PEARL ST	BURLINGTON	VT
**	298 E ALLEN ST	WINOOSKI	VT
**	1801 WILLISTON ROAD	SOUTH BURLINGTON	VT
**	1436 W MAIN ST	RICHMOND	VT
**	1917 VT ROUTE 66	RANDOLPH	VT
**	18 SYKES MOUNTAIN AVE	WHITE RIVER JUNCTION	VT
**	3 BERLIN ST	MONTPELIER	VT
**	RT 4 EXIT 1 OFF I-89	QUECHEE	VT
**	1114 PUTNEY ROAD	BRATTLEBORO	VT
**	FAIRFAX ROAD.,	SAINT ALBANS	VT
**	2886 ROUTE 302	WELLS RIVER	VT
**	2 BARBER ROAD	SAINT GEORGE	VT
**	2194 MAIN ST.	CASTLETON	VT
**	469 CANAL ST.	BRATTLEBORO	VT
**	6023 ROUTE 5	WESTMINSTER	VT
**	250 RT. 7 REDWOOD PLAZA	MILTON	VT

(REDACTED)

EXHIBIT 16

EXXON OR MOBIL BRANDED RETAIL OUTLETS

IN THE DESIGNATED GEOGRAPHIES


Site	Address	City	State

**	36 NORTH MAIN STREET	ALBURG	VT
**	462 VT ROUTE 107	SOUTH ROYALTON	VT
**	883/865 COLLEGE PARKWAY	COLCHESTER	VT

Exhibit 31.1

CERTIFICATION

I, Eric Slifka, President and Chief Executive Officer of Global GP LLC, the general partner of Global Partners LP, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2020 of Global Partners LP;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: November 5, 2020	By:	/s/ Eric Slifka
		Eric Slifka
		President and Chief Executive Officer
		of Global GP LLC, general partner
		of Global Partners LP

Exhibit 31.2

CERTIFICATION

I, Daphne H. Foster, Chief Financial Officer of Global GP LLC, the general partner of Global Partners LP, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2020 of Global Partners LP;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: November 5, 2020	By:	/s/ Daphne H. Foster

		Daphne H. Foster
		Chief Financial Officer
		of Global GP LLC, general partner
		of Global Partners LP

Exhibit 32.1

CERTIFICATION OF THE
CHIEF EXECUTIVE OFFICER OF
GLOBAL PARTNERS LP
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying report on Form 10-Q for the period ended September 30, 2020 of Global Partners LP (the “Partnership”) and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric Slifka, President and Chief Executive Officer of Global GP LLC, the general partner of the Partnership, hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.


Dated: November 5, 2020	By:	/s/ Eric Slifka
		Eric Slifka
		President and Chief Executive Officer
		of Global GP LLC, general partner
		of Global Partners LP

Exhibit 32.2

CERTIFICATION OF THE
CHIEF FINANCIAL OFFICER OF
GLOBAL PARTNERS LP
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying report on Form 10-Q for the period ended September 30, 2020 of Global Partners LP (the “Partnership”) and filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daphne H. Foster, Chief Financial Officer of Global GP LLC, the general partner of the Partnership, hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.


Dated: November 5, 2020	By:	/s/ Daphne H. Foster
		Daphne H. Foster
		Chief Financial Officer
		of Global GP LLC, general partner
		of Global Partners LP