Initial Public Offering

On October 30, 2017 (the “Completion Date”), the Partnership completed its initial public offering of 42,500,000 common units representing limited partner interests at a price to the public of $18.00 per unit. Subsequent to the closing of the IPO, the underwriters partially exercised their over-allotment option and purchased 5,294,358 additional common units at $18.00 per unit. A total of 47,794,358 common units were issued to the public unitholders in connection with the IPO. A registration statement on Form S-1, as amended through the time of its effectiveness, was filed by the Partnership with the SEC and was declared effective on October 25, 2017. On October 26, 2017, the Partnership's common units began trading on the New York Stock Exchange under the symbol “BPMP.”

Immediately prior to the consummation of the IPO on the Completion Date, BPPLNA contributed the following interests to the Partnership:


•	100.0% ownership interest in the Predecessor Assets;


•	28.5% ownership interest in Mars Oil Pipeline Company LLC; and

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20.0% managing member interest in Mardi Gras Transportation System Company LLC (“Mardi Gras”), pursuant to which the Partnership has the right to vote BPPLNA's and its affiliates’ retained ownership interest in each of Caesar Oil Pipeline Company LLC, Cleopatra Gas Gathering Company LLC, Proteus Oil Pipeline Company LLC and Endymion Oil Pipeline Company LLC (together, the “Mardi Gras Joint Ventures”).

In exchange for BPPLNA's contribution of such interests to the Partnership, BPPLNA, through its wholly owned subsidiary, BP Midstream Partners Holdings LLC (“BP Holdco”), and through BP Holdco's wholly owned subsidiary, BP Midstream Partners GP LLC (the “General Partner”), received:


•	4,581,177 common units and 52,375,535 subordinated units, representing an aggregate 54.4% limited partner interest;


•	all of the non-economic general partner interest and our incentive distribution rights; and


•	a cash distribution of $814.7 million.

The Partnership received net proceeds of $814.7 million from the sale of 47,794,358 common units in the IPO, after deducting underwriting discounts and commissions, structuring fees and other offering expenses. The Partnership made a cash distribution of $814.7 million to BPPLNA.

Revolving Credit Facility Agreement

On October 30, 2017, the Partnership entered into a $600.0 million revolving credit facility agreement (the “credit facility”) with an affiliate of BP. The credit facility provides for certain covenants, including the requirement to maintain a consolidated leverage ratio, which is calculated as total indebtedness to consolidated EBITDA (as defined in the credit facility), not to exceed 5.0 to 1.0, subject to a temporary increase in such ratio to 5.5 to 1.0 in connection with certain material acquisitions. In addition, the limited liability company agreement of the Partnership's General Partner requires the approval of BP Holdco prior to the incurrence of any indebtedness that would cause the Partnership's leverage ratio to exceed 4.5 to 1.0.

The credit facility also contains customary events of default, such as (i) nonpayment of principal when due, (ii) nonpayment of interest, fees or other amounts, (iii) breach of covenants, (iv) misrepresentation, (v) cross-payment default and cross-acceleration (in each case, to indebtedness in excess of $75.0 million) and (vi) insolvency. Additionally, the Partnership's revolving credit facility limits its ability to, among other things: (i) incur or guarantee additional debt, (ii) redeem or repurchase units or make distributions under certain circumstances; and (iii) incur certain liens or permit them to exist. Indebtedness under this facility bears interest at the 3-month LIBOR plus 0.85%. This facility includes customary fees, including a commitment fee of 0.10% and a utilization fee of 0.20%. As of September 30, 2017, there were no borrowings outstanding under the credit facility.

Omnibus Agreement

In connection with the IPO, the Partnership entered into an omnibus agreement with BPPLNA and certain of its affiliates, including the General Partner. This agreement addresses, among other things, (i) the Partnership's obligation to pay an annual fee, initially $13.3 million, for general and administrative services provided by BPPLNA and its affiliates, (ii) the Partnership's obligation to reimburse BPPLNA for personnel and other costs related to the direct operation, management and maintenance of the assets and (iii) the Partnership's obligation to reimburse BPPLNA for services and certain direct or allocated costs and expenses incurred by BPPLNA or its affiliates on behalf of the Partnership.

Pursuant to the omnibus agreement, BPPLNA will indemnify the Partnership and fund all of the costs of required remedial action for its known historical and legacy spills and releases and other environmental and litigation claims identified in the omnibus agreement. BPPLNA will also indemnify the Partnership with respect to subsidiaries for which it is the operator for certain title defects and for failures to obtain certain consents and permits necessary to conduct its business for one year following the closing of the IPO.

The omnibus agreement also addresses the Partnership's right of first offer to acquire BPPLNA's retained ownership interest in Mardi Gras and all of BPPLNA's interests in midstream pipeline systems and assets related thereto in the contiguous United States and offshore Gulf of Mexico that are owned by BPPLNA at the closing of the IPO.

Further, the omnibus agreement addresses the granting of a license from BPA to the Partnership with respect to use of certain BP trademarks and tradename.

Throughput and Deficiency Agreements

In connection with the IPO, the Partnership entered into throughput and deficiency agreements with BP Products North America Inc. (“BP Products”), an indirect wholly owned subsidiary of BP. These agreements include minimum volume commitments that initially support substantially all of the Partnership's aggregate revenue on BP2, River Rouge and Diamondback. Under these fee-based agreements, we will provide transportation services to BP Products, and BP Products will commit to pay the Partnership for minimum monthly volumes of crude oil, refined products and diluent, regardless of whether such volumes are physically shipped by BP Products through the Partnership pipelines during the term of the agreements. These agreements became effective on October 30, 2017, with an initial term ending December 31, 2020.

Long-Term Incentive Plan

Prior to the closing of the IPO, we adopted BP Midstream Partners LP 2017 Long Term Incentive Plan (the “Plan”). Awards under the Plan are available for eligible officers, directors, employees and consultants of the General Partner and its affiliates, who perform services for the Partnership. The Plan provides the Partnership with the flexibility to grant unit options, unit appreciation rights, restricted units, phantom units, unit awards, cash awards, performance awards, distribution equivalent rights, substitute awards and other unit-based awards. The maximum aggregate number of common units that may be issued pursuant to any and all awards under the Plan shall not exceed 5% of our common and subordinated units outstanding upon the completion of the IPO, subject to adjustment due to (i) a subdivision or consolidation of the common units (by reclassification, split or reverse split or otherwise), (ii) a recapitalization, reclassification, or other change in our capital structure or (iii) any other reorganization, merger, combination, exchange, or other relevant change in capitalization of our equity, as provided under the Plan. Following the closing of the IPO, we granted a total number of 8,468 phantom units with an aggregate value on the date of grant of approximately $150 to our independent directors. These phantom units will vest on the first anniversary of the date of grant but will not be settled until the second anniversary of the vesting date.