AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF GENESIS ENERGY, LLC a Delaware limited liability company FEBRUARY 5, 2010
Exhibit 3.1
EXECUTION
VERSION
AMENDED AND RESTATED
OF
GENESIS
ENERGY, LLC
a
Delaware limited liability company
FEBRUARY
5, 2010
AMENDED
AND RESTATED
OF
GENESIS
ENERGY, LLC
a
Delaware limited liability company
TABLE
OF CONTENTS
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ARTICLE 1 DEFINITIONS AND
CONSTRUCTION
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2
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1.1
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Definitions
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2
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1.2
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Construction
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2
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ARTICLE 2 ORGANIZATION
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2
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2.1
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Formation and Continuation of the
Company
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2
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2.2
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Name
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2
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2.3
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Registered Office; Registered Agent; Principal
Office; Other Offices
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2
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2.4
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Purposes
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3
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2.5
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Term
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3
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2.6
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No State Law Partnership
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3
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2.7
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Title to Company Assets
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3
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ARTICLE 3 MEMBERSHIP INTERESTS; UNITS;
MEMBERS
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3
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3.1
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Membership Interests
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3
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3.2
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Issuance of Series A Units
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4
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3.3
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Issuance of Series B Units
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4
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3.4
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Members
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4
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3.5
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No Other Persons Deemed
Members
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5
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3.6
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No Resignation
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5
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3.7
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Admission of Additional Members and Substituted
Members and Creation of Additional Units
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5
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3.8
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No Liability of Members
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6
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3.9
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Spouses of Members
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7
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ARTICLE 4 REPRESENTATIONS AND
WARRANTIES
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7
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4.1
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Representations and Warranties of
Members
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7
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ARTICLE 5 CAPITAL
CONTRIBUTIONS
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9
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5.1
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Capital Contributions; Initial
Contributions
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9
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5.2
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Additional Contributions
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9
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5.3
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Defaulting Members
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9
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5.4
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Return of Contributions
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10
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5.5
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Capital Account
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10
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5.6
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Advances by Members
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10
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ARTICLE 6 DISTRIBUTIONS AND
ALLOCATIONS
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11
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6.1
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Distributions
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11
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6.2
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Allocations of Profits and
Losses
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18
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-i-
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6.3
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Income Tax Allocations
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21
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6.4
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Other Allocation Rules
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22
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ARTICLE 7 DISPOSITION OF UNITS; PREEMPTIVE RIGHTS;
IPO CONVERSION
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22
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7.1
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Restrictions On
Dispositions
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22
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7.2
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Restrictions on Series A Units and Series B
Units
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24
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7.3
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Permitted Dispositions
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24
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7.4
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Right of First Refusal
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25
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7.5
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Drag-Along Rights
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27
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7.6
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Tag-Along Rights
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30
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7.7
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Conversion of Series B
Units
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32
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7.8
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Conversion to IPO
Corporation
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32
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7.9
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Grant of Preemptive Rights
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34
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7.10
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Preemptive Right Procedures
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34
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7.11
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Specific Performance
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35
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7.12
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Termination Following Qualified Public
Offering
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35
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ARTICLE 8 MANAGEMENT
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36
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8.1
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Management Under Direction of the
Board
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36
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8.2
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Board of Directors
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37
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8.3
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Officers
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41
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8.4
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Members
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44
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8.5
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Decisions Requiring Board
Approval
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45
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8.6
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Acknowledgement Regarding Outside Businesses and
Opportunities
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47
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8.7
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No Fiduciary Duties
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49
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8.8
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Amendment, Modification or
Repeal
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50
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ARTICLE 9 PRE-EFFECTIVE TIME LIMITATION OF
LIABILITY AND INDEMNIFICATION
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50
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9.1
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Exculpation
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50
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9.2
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Right to Indemnification
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50
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9.3
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Limitations
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51
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9.4
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Advance Payment
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51
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9.5
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Pre-Effective Time Indemnification of Officers,
Employees and Agents
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52
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9.6
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Appearance as a Witness
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52
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9.7
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Nonexclusivity of Rights
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52
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9.8
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Insurance
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52
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9.9
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Member Notification
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52
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9.10
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Savings Clause
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53
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ARTICLE 10 POST-EFFECTIVE TIME LImitation OF
LIABILITY AND INDEMNIFICATION
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53
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10.1
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Limitation of Liability and Indemnification of the
Covered Persons
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53
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10.2
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Indemnification of the Management Covered
Persons
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56
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10.3
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Advance of Expenses
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57
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10.4
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Procedure for
Indemnification
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57
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10.5
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Contract Right; Non-Exclusivity;
Survival
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57
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-ii-
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10.6
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Insurance
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58
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10.7
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Interpretation;
Severability
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58
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ARTICLE 11 CERTAIN AGREEMENTS OF THE COMPANY AND
MEMBERS
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58
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11.1
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Financial Reports and Access to
Information.
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58
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11.2
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Annual Budget
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59
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11.3
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Maintenance of Books
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60
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11.4
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Accounts
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60
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11.5
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Information
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60
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ARTICLE 12 TAXES
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61
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12.1
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Tax Returns
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61
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12.2
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Tax Partnership
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61
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12.3
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Tax Elections
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61
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12.4
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Tax Matters Member
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62
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12.5
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Section 83(b) Election
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63
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12.6
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Section 83 Safe Harbor
Election
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63
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ARTICLE 13 DISSOLUTION, WINDING-UP AND
TERMINATION
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63
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13.1
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Dissolution
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63
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13.2
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Winding-Up and Termination
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64
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13.3
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Deficit Capital Accounts
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65
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13.4
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Certificate of Cancellation
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65
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ARTICLE 14 GENERAL
PROVISIONS
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65
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14.1
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Offset
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65
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14.2
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Notices
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65
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14.3
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Entire Agreement;
Supersedure
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66
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14.4
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Effect of Waiver or Consent
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66
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14.5
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Amendment or Restatement; Power of
Attorney
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66
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14.6
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Binding Effect
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67
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14.7
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Governing Law; Severability; Limitation of
Liability
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68
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14.8
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Further Assurances
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69
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14.9
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Counterparts
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69
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14.10
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Fees and Expenses
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69
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14.11
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Termination of Employment
Arrangements
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69
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-iii-
EXHIBITS:
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A
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Defined
Terms
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B
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Certificate
of Formation
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C
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Spousal
Agreement
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D
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Addendum
Agreement
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E
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Sample
Distribution Scenario
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SCHEDULES:
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I
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Series
A Unitholders
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II
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Series
B Unitholders
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III
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Initial
Directors
|
-i-
AMENDED
AND RESTATED
OF
GENESIS
ENERGY, LLC
a
Delaware limited liability company
This
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF GENESIS ENERGY, LLC,
a Delaware limited liability company, dated as of February 5, 2010 (the “Effective
Date”), is adopted, executed and agreed to, for good and valuable
consideration, by the Members (as defined below).
RECITALS
WHEREAS, Genesis Energy, LLC
was formed as a Delaware limited liability company under the Act upon the
conversion of Genesis Energy, Inc., a Delaware corporation, into a Delaware
limited liability company (the “Conversion”),
effective on December 29, 2008. In connection with the Conversion, the Company
and Denbury Gathering & Marketing, Inc. (“DGM”)
entered into that certain Limited Liability Company Agreement of the Company,
effective as of December 29, 2008;
WHEREAS, on February ___,
2010, the Limited Liability Company Agreement of the Company was amended (as
amended, the “Original LLC
Agreement”);
WHEREAS, pursuant to that
certain Purchase Agreement by and among Denbury Resources, Inc., DG&M, and Q
Genesis Acquisition, LLC, a Delaware limited liability company (“QGA”),
QGA, purchased all of the outstanding Class A Ownership Interests of the
Company, QGA was admitted as a member of the Company and DG&M ceased to be a
member of the Company (the “Acquisition”);
WHEREAS, in connection with
the Acquisition, certain of the Class B Ownership Interests of the Company were
redeemed by the Company for cash;
WHEREAS, pursuant to that
certain Agreement and Plan of Merger dated as of the date hereof, between QGA
and the Company, QGA was merged with and into the Company, with the separate
existence of QGA ceasing, and the Company continued as the surviving entity
under the laws of the State of Delaware (the “Surviving
Entity”) (the “Merger”);
WHEREAS, pursuant to the
Merger, (i) all Class A Units of QGA outstanding immediately prior to the Merger
were converted into Series A Units of the Surviving Entity, (ii) all Class B
Ownership Interests of the Company outstanding immediately prior to the Merger
were converted into Series A Units of the Surviving Entity, (iii) all Class A
Ownership Interests of the Company outstanding immediately prior to the Merger
were cancelled for no consideration, and (iv) the members of QGA became members
of the Company;
WHEREAS, the parties to this
Agreement now wish to execute this Agreement, thereby amending and restating the
Original LLC Agreement in its entirety.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
1
NOW, THEREFORE, for good and
valuable consideration, the parties to this Agreement hereby amend and restate
the Original LLC Agreement as follows:
ARTICLE
1
DEFINITIONS
AND CONSTRUCTION
1.1 Definitions. Capitalized
terms used in this Agreement (including the Exhibits and Schedules hereto) but
not defined in the body hereof are defined in Exhibit
A.
1.2 Construction. Unless
the context requires otherwise: (a) pronouns in the masculine,
feminine and neuter genders shall be construed to include any other gender, and
words in the singular form shall be construed to include the plural and vice
versa; (b) the term “including” shall be construed to be expansive rather than
limiting in nature and to mean “including, without limitation;” (c) references
to Articles and Sections refer to Articles and Sections of this Agreement; (d)
the words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words
of similar import refer to this Agreement as a whole, including the Exhibits and
Schedules attached hereto, and not to any particular subdivision unless
expressly so limited; and (e) references to Exhibits and Schedules are to the
items identified separately in writing by the parties hereto as the described
Exhibits or Schedules attached to this Agreement, each of which is hereby
incorporated herein and made a part hereof for all purposes as if set forth in
full herein.
ARTICLE
2
ORGANIZATION
2.1 Formation
and Continuation of the Company. The
Company is a limited liability company organized under the Act. The
Company became a limited liability company upon the Conversion which was
effective on December 29, 2008. Effective upon the execution of this
Agreement, the Original LLC Agreement shall be amended and restated by this
Agreement, and the rights, duties and liabilities of the Members shall be
provided in this Agreement. The Members hereby agree to continue the
Company as a limited liability company under this Agreement and pursuant to the
Act without dissolution.
2.2 Name. The
name of the Company is “GENESIS ENERGY,
LLC” and all Company business must be conducted in that name or such
other name or names that comply with Law and as the Board may
select.
2.3 Registered
Office; Registered Agent; Principal Office; Other Offices. The
Company’s registered agent is Corporation Trust Company, or such other Person or
Persons as the Board may designate in the manner provided by Law. The
office of the registered agent is at Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or such other office
(which need not be a place of business of the Company) as the Board may
designate in the manner provided by Law. The principal office of the
Company shall be ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ or at such other place or
places as the Board may designate. The Company may have such other
offices as the Board may designate.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
2
2.4 Purposes. The
Company’s purposes are (i) if the Company holds any of the Common Units of
Genesis to act as a limited partner of Genesis, (ii) for so long as it is the
general partner of Genesis, to act as a general partner or managing member, as
the case may be, of Genesis and, if applicable, Genesis Crude Oil, L.P., and any
other partnership or limited liability company of which Genesis or Genesis Crude
Oil, L.P. is, directly or indirectly, a partner or member, and (iii) to
undertake activities that are ancillary to the above (including being a limited
partner or member in Genesis or any such other partnership or limited liability
company), and in connection therewith to engage in any lawful act, activity
and/or business for which limited liability companies may be organized under the
Act.
2.5 Term. The
Company was formed as a result of the Conversion. Pursuant to the
Act, the Company commenced its existence on September 4, 1996, which is the date
that Genesis Energy, LLC, the Company’s original predecessor entity, commenced
its existence. The Company shall have perpetual existence, unless and
until it is dissolved and terminated in accordance with Article
13.
2.6 No
State Law Partnership. The
Members intend that the Company not be a partnership (including a limited
partnership) or joint venture, and that no Member be a partner or joint venturer
of any other Member, for any purposes other than federal and state tax purposes,
and this Agreement may not be construed to suggest otherwise.
2.7 Title
to Company Assets. Title
to the Company’s assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Company as an
entity. Title to any or all of the Company assets may be held in the
name of the Company or one or more of its Affiliates or one or more nominees, as
the Board may determine. All Company assets shall be recorded as the
property of the Company in its books and records, irrespective of the name in
which record title to such Company assets is held.
ARTICLE
3
MEMBERSHIP
INTERESTS; UNITS; MEMBERS
3.1 Membership
Interests.
(a)
The Membership Interests shall initially be
divided into two series of units referred to as “Series A
Units” and “Series B
Units.” The Company is authorized to issue up to an unlimited
number of Series A
Units and 1,000 Series B Units.
(b)
The Company may issue, from time to time, an
aggregate of up to an unlimited number of Series A Units.
(c)
The Company may issue an aggregate of up to 1,000
Series B Units pursuant to Restricted Unit Agreements. The Series B
Units may be vested (the “Vested Series B
Units”) or unvested (the “Unvested Series B
Units”). Unvested Series B Units shall vest or remain unvested
in the manner and subject to the conditions set forth in the applicable
Restricted Unit Agreement. The Company shall not issue Series B Units
to any Person who has not executed and delivered to the Company the applicable
Restricted Unit Agreement; the terms and conditions of each Restricted Unit
Agreement may be determined by the Board in its sole discretion and upon an
individual basis. The Company may also, in its sole discretion,
require any Person to execute and deliver a non-competition and confidentiality
agreement or an employment agreement, each substantially in the form approved by
the Board.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
3
(d)
The Series B Units and each series thereof
are intended to constitute solely a “profits
interest” (as such term is defined in Revenue Procedure 93-27,
1993-2 C.B. 343, and clarified by Revenue Procedure 2001-43, 2001-2 C.B. 191) in
the Company, and the Company and the holders of Series B Units shall file all
federal income tax returns consistent with such characterization.
(e)
Of the aggregate authorized number of Series
B ▇▇▇▇▇, ▇▇▇ Series B Units are hereby designated as “Series B-1
Units.” The Company may from time to time designate and issue
additional series of Series B Units (up to the number of authorized Series B
Units), each of which shall be designated by a sequential number (Series B-2,
Series B-3, etc.). The Board shall designate a “Threshold
Value” applicable to each such additional series of Series B Units to the
extent necessary to cause such Series B Units to constitute “profits
interests” as provided in Section 3.1(d) above,
but not less than zero. The Series B-1 Units have a Threshold Value
of zero. The “Threshold
Value” for each additional series of Series B Units shall equal the
amount that would, in the reasonable determination of the Board, be distributed
with respect to each outstanding series of Series B Units if, immediately prior
to the issuance of such additional series, the assets of the Company were sold
for their Fair Market Value and the proceeds (net of any liabilities of the
Company) were distributed pursuant to Section
6.1(c). Authorized but unissued Series B Units are referred to
as “Unallotted Series
B Units.”
(f)
Units shall constitute “securities”
governed by Article 8 of the applicable version of the Uniform Commercial Code,
as amended from time to time after the date hereof.
(g)
Units that have been redeemed by or forfeited to
the Company may be reissued subject to the requisite approvals and other terms
and conditions of this Agreement.
3.2 Issuance
of Series A Units. Upon
the effectiveness of the Merger, (i) each Class A Unit of QGA was converted into
one Series A Unit, and (ii) each Class B Ownership Interest in the Company was
converted into Series A Units on the basis of one Series A Unit for each dollar
of Redemption Amount associated with such Class B Ownership Interest, and upon
such conversion each of the Members listed on Schedule I was issued
the number of Series A Units opposite such Member’s name on Schedule
I.
3.3 Issuance
of Series B Units. On
the date hereof, in each case in accordance with a Restricted Unit Agreement,
the Company is issuing to each Person listed on Schedule II the
number of Series B-1 Units set forth opposite such Person’s name on Schedule
II.
3.4 Members. Each
of the Persons listed on Schedule I or II is hereby admitted
to the Company as a Member (each, an “Initial
Member”). The Officers shall amend and revise Schedule I or II from time to time
to properly reflect any changes to the information set forth therein, including
to reflect the admission or withdrawal of Members. Any amendment or
revision to Schedule
I or II
or to the Company’s records to reflect information regarding Members shall not
be deemed to be an amendment to this Agreement. The rights and
obligations of the Members shall be as provided in the Act, except as may be
expressly provided in this Agreement.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
4
3.5 No
Other Persons Deemed Members. Unless
admitted to the Company as a Member as provided in this Agreement, no Person
shall be, or shall be considered, a Member. The Company may elect to
deal only with Persons so admitted as Members (including their duly authorized
representatives). Any distribution by the Company to the Person shown
on the Company’s records as a Member or to its legal representatives shall
relieve the Company of all liability to any other Person who may have an
interest in such distribution by reason of any Disposition by the Member or for
any other reason.
3.6 No
Resignation. A
Member may not take any action to Resign as a Member voluntarily, and a Member
may not be removed involuntarily, prior to the dissolution and winding up of the
Company, other than as a result of a permitted Disposition of all of such
Member’s Units in accordance with Article 7 and each of
the transferees of such Units being admitted as a Substituted
Member. If a Member Resigns in violation of this Agreement, (a) such
Members shall be liable to the Company and its Affiliates for all monetary
damages suffered by them as a result of such Resignation and (b) such Member
shall not have any rights under Section 18-604 of the Act.
3.7 Admission
of Additional Members and Substituted Members and Creation of Additional
Unit.
(a)
Authority. Subject
to the limitations set forth in this Article 3 and in
Article 7 and
subject to Section
8.5, the Company may admit Additional Members and Substituted Members to
the Company, issue additional Units or create and issue such additional classes
or series of Units or Membership Interests (or securities convertible into or
exercisable or exchangeable for a Unit or other Membership Interest), having
such designations, preferences and relative, participating or other special
rights, powers and duties as the Board shall determine,
including: (i) the right of any such class or series of Units or
Membership Interests to share in the Company’s distributions; (ii) the
allocation to any such class or series of Units or Membership Interests of
Profits (and all items included in the computation thereof) or Losses (and all
items included in the computation thereof); (iii) the rights of any such class
or series of Units or Membership Interests upon dissolution or liquidation of
the Company; and (iv) the right of any such class or series of Units or
Membership Interests to vote on matters relating to the Company and this
Agreement. Upon the issuance pursuant to and in accordance with this
Article 3 of
any class or series of Units or Membership Interests, the Board may, subject to
Section 14.5,
amend any provision of this Agreement, and authorize any Person to execute,
acknowledge, deliver, file and record, if required, such documents, to the
extent necessary or desirable to reflect the admission of any additional Member
to the Company or the authorization and issuance of such class or series of
Units or Membership Interests (or securities convertible into or exercisable or
exchangeable for a Unit or other Membership Interest), and the related rights
and preferences thereof.
(b)
Conditions. No
Additional Member or Substituted Member shall be admitted to the Company unless
and until the applicable conditions of this Section 3.7, Article 7 and Section 8.5 are
satisfied. Without limiting the generality of the foregoing, no
Disposition or issuance of Units otherwise permitted or required by this
Agreement shall be effective, no Member shall have the right to substitute a
transferee as a Member in its place with respect to any Units acquired by such
transferee in any Disposition and no purchaser of newly issued Units from the
Company shall be deemed to be a Member, in each case unless and until (i) any
such transferee or purchaser who is not already a party to this Agreement (and
such transferee’s or such purchaser’s spouse, if applicable) shall execute and
deliver to the Company an Addendum Agreement in the form attached as Exhibit D (an “Addendum
Agreement”) and such other documents or instruments as may be required in
the Company’s reasonable judgment to effect the admission, and (ii) the
admission of such Person has been approved by the Board; provided, however, that the Board shall
be deemed to have approved the admission of any Permitted Transferee as, and the
Permitted Transferee shall automatically become, a Substituted Member if the
Permitted Transferee has entered into an Addendum Agreement and acquired its
Units or Membership Interests in compliance with the provisions of Article
7.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
5
(c)
Rights and Obligations of
Additional Members and Substituted Members. A transferee of
Units or Membership Interests who has been admitted as a Substituted Member or a
purchaser of newly issued Units or Membership Interests from the Company who has
been admitted as an Additional Member in accordance with this Section 3.7 shall
have all the rights and powers and be subject to all the restrictions and
liabilities under this Agreement relating to a Member holding Units of the same
class or series. Unless admitted as a Substituted Member or an
Additional Member, no such transferee (whether by a voluntary transfer, by
operation of law or otherwise) or purchaser shall have the rights of a Member
under this Agreement.
(d)
Date of Admission as
Additional or Substituted Member. Admission of an Additional
Member or Substituted Member shall become effective on the date such Person’s
name is recorded on the books and records of the Company. Upon the
admission of an Additional Member or Substituted Member, (i) the Company shall
amend Schedule
I or Schedule
II, as applicable, to reflect the name and address of, and number and
class or series of Units held by, such Additional Member or Substituted Member
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Member (such revisions to be presented to the
Board no later than at the next regular meeting of the Board) and (ii) to the
extent of the Disposition to such Substituted Member, the Disposing Member shall
be relieved of its obligations under this Agreement. Any Member who
shall Dispose of all of such Member’s Units or Membership Interests in one or
more Dispositions permitted pursuant to this Section 3.7 and Article 7 (where each
transferee was admitted as a Substituted Member) shall cease to be a Member as
of the last date on which all transferees are admitted as Substituted Members,
provided, that, notwithstanding anything to the contrary herein, such Member
shall not be relieved of any liabilities incurred by such Member pursuant to the
terms and conditions of this Agreement prior to the time such Member Disposes of
any Units or Membership Interests or ceases to be a Member
hereunder.
3.8 No
Liability of Members. Except
as otherwise provided under the Act, the debts, liabilities, contracts and other
obligations of the Company (whether arising in contract, tort or otherwise)
shall be solely the debts, liabilities, contracts and other obligations of the
Company, and no Member shall be liable personally (a) for any debts,
liabilities, contracts or any other obligations of the Company, except to the
extent and under the circumstances set forth in the Act, or (b) for any debts,
liabilities, contracts or other obligations of any other
Member. Except as otherwise provided in the Act, this Agreement or in
any separate written instrument signed by the applicable Member, no Member shall
be obligated personally for any debt, obligation or liability of the Company or
of any other Member solely by reason of being a Member. No Member
shall have any responsibility to restore any negative balance in its Capital
Account or to contribute to or in respect of the liabilities or obligations of
the Company or to return distributions made by the Company, expect as expressly
provided herein or required by the Act. The agreement set forth in
the immediately preceding sentence shall be deemed to be a compromise with the
consent of all of the Members for purposes of Section 18-502(b)
of the Act. However, if any court of competent jurisdiction orders,
holds or determines that, notwithstanding the provisions of this Agreement, any
Member is obligated to restore any such negative balance, make any such
contribution or make any such return, such obligation shall be the obligation of
such Member and not of any other Person.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
6
3.9 Spouses
of Members. Spouses
of the Members who are natural persons do not become Members as a result of such
marital relationship. Each spouse of a Member (including the Initial
Members) shall be required to execute a Spousal Agreement in the form of Exhibit C to evidence
his or her agreement and consent to be bound by the terms and conditions of this
Agreement as to his or her interest, whether as community property or otherwise,
if any, in the Units owned by such Member.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
4.1 Representations
and Warranties of Members. Each
Member severally, but not jointly, represents and warrants as of the Effective
Date to the Company and the other Members that:
(a)
Authority. Each
such Member that is a corporation or a limited liability company or a
partnership is an entity duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation and the execution, delivery
and performance by such Member of this Agreement have been duly authorized by
all necessary corporate, limited liability company or partnership action, as
applicable. Each such Member that is an individual is an individual
with full legal capacity under the laws of his jurisdiction of domicile and has
the capacity to execute, deliver, and perform this Agreement, and this Agreement
has been duly executed and delivered by such Member.
(b)
Binding
Obligations. This Agreement and the other Transaction
Documents to which such Member is a party have been duly and validly executed
and delivered by such Member and constitute the binding obligations of such
Member, enforceable against such Member in accordance with their respective
terms, subject to Creditors’ Rights.
(c)
No
Conflict. The execution, delivery and performance by such
Member of this Agreement and the other Transaction Documents to which it is a
party will not, with or without the giving of notice or the lapse of time, or
both, (i) violate any provision of Law to which such Member is subject, (ii)
violate any order, judgment or decree applicable to such Member, or (iii)
conflict with, or result in a breach or default under, any term or condition of
its certificate of incorporation or by-laws, certificate of limited partnership
or partnership agreement, certificate of formation or limited liability company
agreement, as applicable, or, except where such conflict, breach or default
would not reasonably be expected to, individually or in the aggregate, have an
adverse effect on such Member’s ability to satisfy its obligations hereunder,
any agreement or other instrument to which such Member is a party.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
7
(d)
Purchase Entirely For Own
Account. The Units to be acquired by such Member will be
acquired for investment for such Member’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof;
such Member has no present intention of selling, granting any participation in,
or otherwise distributing the same; and such Member does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
Units.
(e)
No
Registration. Such Member understands that the Units, at the
time of issuance, will not be registered under the Securities Act on the ground
that the issuance of Units hereunder is exempt from registration under the
Securities Act pursuant to Section 4(2) thereof and Rule 506 promulgated
thereunder.
(f)
Investment
Experience. Such Member confirms that it or he has such
knowledge and experience in financial and business matters that such Member is
capable of evaluating the merits and risks of an investment in Units and of
making an informed investment decision and understands that (i) this investment
is suitable only for an investor which is able to bear the economic consequences
of losing its entire investment, (ii) the acquisition of Units hereunder is a
speculative investment which involves a high degree of risk of loss of the
entire investment, and (iii) there are substantial restrictions on the
transferability of, and there will be no public market for, the Units, and
accordingly, it may not be possible for such Member to liquidate such Member’s
investment in case of emergency.
(g)
Accredited
Investor. Such Member is an Accredited Investor.
(h)
Restricted
Securities. Such Member understands that the Units may not be
sold, transferred or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of either an
effective registration statement covering such Units or an available exemption
from registration under the Securities Act, the Units must be held
indefinitely. In particular, such Member is aware that the Units may
not be sold pursuant to Rule 144 promulgated under the Securities Act unless all
of the conditions of that Rule are met. Among the conditions for use
of Rule 144 may be availability of current information to the public about the
Company. Such information is not now available and the Company has no
present plans to make such information available.
(i)
Non-Reliance. No
promise, agreement, statement or representation that is not expressly set forth
in this Agreement or in any other agreement by and among any of the Company, the
Members or their respective Affiliates has been made to such Member by any other
Member or any other Member’s Affiliates, counsel, agent, or any other interested
Person with respect to the terms set forth in this Agreement, and such Member is
not relying upon any such promise, agreement, statement, or representation of
any other Member or any other Member’s Affiliates, counsel, agent, or any other
interested Person. Such Member is relying upon its own judgment and
due diligence and has been represented by legal counsel in this
matter.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
8
ARTICLE
5
CAPITAL
CONTRIBUTIONS
5.1 Capital
Contributions; Initial Contributions. The
Initial Members (or their respective transferor) have heretofore made
contributions or are deemed to have made contributions to the capital of QGC as
set forth on Schedule
I and upon the effectiveness of the Merger shall be treated as having
contributed such amounts to the Company. All Capital Contributions
shall be made in cash except as otherwise approved by the Board. No
Member shall be obligated to make any Capital Contributions except as provided
in this Article
5.
5.2 Additional
Contributions. Subject
to the terms and conditions hereof, each Series A Member agrees to make, upon
the issuance of a capital call from time to time by the Board (a “Capital
Call”), additional cash Capital Contributions to the Company for the
purposes of the Company (i) making additional capital contributions to Genesis
pursuant to Section 5.2 or Article XII of the Genesis Agreement or (ii)
maintaining its Percentage Interest (as defined in the Genesis Agreement) in
Genesis of the General Partner. Each Capital Call shall be
apportioned ratably among the Series A Members based on the number of Series A
Units held by each Series A Member. Each Capital Call shall be made
pursuant to a call notice executed by the President and/or Chief Executive
Officer and so long as such Officer has been appointed, either the Chief
Financial Officer or another Officer authorized by the Board to execute a call
notice (each, a “Call
Notice”) and approved by the Board. Each Call Notice shall
specify (i) in reasonable detail the purpose of such Capital Call, and (ii) the
amount of the Capital Contribution to be made by each Series A Member pursuant
to such Capital Call (which amount shall equal such Series A Member’s pro rata
portion of the Capital Call based on the number of Series A Units held by such
Series A Member);
provided, that
the Series A Members shall be entitled to allocate among each other the Capital
Contributions required by each Capital Call, and shall provide notice to the
Company of any such Capital Contribution that the Series A Members intend to so
reallocate, which notice shall be irrevocable and shall be deemed to amend such
Call Notice for all purposes hereunder to require Capital Contributions by the
Series A Members of such reallocated amounts). Subject to Section 8.5, the
Board shall have the authority to withdraw any Call Notice at any time prior to
the time that funding is required thereunder. Each Series A Member
shall make the Capital Contribution required by it pursuant to a Call Notice
(subject to reallocation of such Capital Contribution by the Series A Members as
contemplated by this Section 5.2) within
ten (10) days after delivered of the Call Notice.
5.3 Defaulting
Members. Notwithstanding
any other provision of this Agreement, if any Series A Member fails to make a
Capital Contribution as prescribed in Section 5.2 and does
not cure such failure within three (3) business days after written notice from
the Company of such failure (a “Defaulting
Member”), one or more of the following actions will be taken at the
direction of the Board: (1) offer the non-Defaulting Members the right to
purchase the Defaulting Member’s Series A Units at the lesser of (A) fifty
percent (50%) of the Defaulting Member’s cost basis in such Series A Units and
(B) fifty percent (50%) of the fair market value of such Units; (2) specially
allocate future distributions due the Defaulting Member to the non-Defaulting
Members until an amount has been distributed that is equal to four hundred
percent (400%) of the amount of the defaulted Capital Contribution; (3) pursue
any remedy that may exist under applicable Law; and (4) take any other action
agreed to by the Board. Any amounts that would be distributed to the
Defaulting Member but for this Section 5.3 shall be
distributed to the non-Defaulting Members. Whenever the vote, consent
or decision of the Members is required or permitted pursuant to this Agreement,
no Defaulting Member shall be entitled to participate in such vote, to offer or
withhold its consent, or to make such decision, and such vote, consent or
decision shall be made as if such Defaulting Member were not a
Member. Any such vote, consent or decision shall be binding on such
Defaulting Member.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
9
5.4 Return
of Contributions. A
Member is not entitled to the return of any part of its Capital Contributions or
to be paid interest in respect of either its Capital Account or its Capital
Contributions. An unrepaid Capital Contribution is not a liability of
the Company or of any Member. A Member is not required to contribute
or to lend any cash or property to the Company to enable the Company to return
any Member’s Capital Contributions.
5.5 Capital
Account. A
Capital Account shall be established and maintained for each Member in
accordance with the provisions of Treasury Regulation Section
1.704-1(b). Each Member’s Capital Account (a) shall be increased by
(i) the amount of money contributed by such Member to the Company, (ii) the Book
Value of property contributed (or deemed to have been contributed) by such
Member to the Company (net of liabilities secured by the contributed property
that the Company is considered to assume or take subject to under Code Section
752) and (iii) allocations to such Member of Profits and any other items of
income or gain allocated to such Member, and (b) shall be decreased by (i) the
amount of money distributed to such Member by the Company, (ii) the Book Value
of property distributed to such Member by the Company (net of liabilities
secured by the distributed property that such Member is considered to assume or
take subject to under Code Section 752), and (iii) allocations to such Member of
Losses and any other items of loss or deduction allocated to such
Member. The Capital Accounts shall also be increased or decreased to
reflect a revaluation of Company property pursuant to paragraph (b) of the
definition of Book Value. On the transfer of all or part of a
Member’s Units, the Capital Account of the transferor that is attributable to
the transferred Units shall carry over to the transferee Member in accordance
with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(l). A Member that has more than one class of Units
shall have a single Capital Account that reflects all such Units; provided, however, that the
Capital Accounts shall be maintained in such manner as will facilitate a
determination of the portion of each Capital Account attributable to each series
of Units. The Capital Account balances of each Member as of the
Effective Date are agreed to be the amounts equal to each Member’s respective
initial Capital Contributions as reflected on Schedule
I.
5.6 Advances
by Members. If
the Company does not have sufficient cash to pay its obligations, then with the
approval of the Board, any or all of the Members may (but will have no
obligation to) advance all or part of the needed funds to or on behalf of the
Company, which advances (a) will constitute a loan from such Member to the
Company, (b) will bear commercially reasonable interest and be subject to such
other commercially reasonable terms and conditions as agreed between such Member
and the Company and (c) will not be deemed to be a Capital Contribution by such
Member to the Company.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
10
ARTICLE
6
DISTRIBUTIONS
AND ALLOCATIONS
6.1 Distributions.
(a)
Each distribution made by the Company, regardless of the
source or character of the assets to be distributed, shall be made in accordance
with this Article
6 and applicable Law.
(b)
Prior to making distributions pursuant to Section 6.1(c), on
each Tax Distribution Date, the Company shall, subject to the availability of
funds, distribute to each Member in cash an amount equal to such Member’s
Assumed Tax Liability, if any. “Tax Distribution
Date” means any date that is five business days prior to the date on
which estimated U.S. federal income tax payments are required to be made by
calendar year individual taxpayers and each due date for the U.S. federal income
tax return of an individual calendar year taxpayer (without regard to
extensions). “Assumed Tax
Liability” of any Member means an amount equal to (a) the cumulative
amount of federal income taxes (including any applicable estimated taxes) that
would be due from such Member from the Effective Date to the Tax Distribution
Date, assuming such Member to be an individual subject to tax at the highest
marginal tax rate for an individual (the “Tax Rate”)
and such Member earned solely the items of income, gain, deduction, loss, and/or
credit allocated to such Member pursuant to Section 6.3 and after
taking proper account of loss carryforwards available to individual taxpayers
resulting from losses allocated to the Members by the Company, reduced by (b)
all previous distributions made pursuant to Section
6.1. Notwithstanding the foregoing, in the event distributions
are retained pursuant to Section 6.1(d), the
holders of Series A Units shall be distributed, pro rata based
on their ownership of Series A Units, as a tax distribution on any
Tax Distribution Date, an amount equal to the product of (i) the amount retained
pursuant to Section 6.1(d) during the period covered by the Tax Distribution
Date and (ii) the Tax Rate. Distributions made pursuant to this Section 6.1(b) shall
reduce distributions required to be made pursuant to Section
6.1(c). If on a Tax Distribution Date there are not sufficient
funds on hand to distribute to each Member the full amount of such Member’s
Assumed Tax Liability, distributions pursuant to this Section 6.1(b) shall
be made to the Members to the extent of the available funds in proportion to
each Member’s Assumed Tax Liability, and the Company shall make future
distributions as soon as funds become available to pay the remaining portion of
such Member’s Assumed Tax Liability. Notwithstanding the foregoing
and for the avoidance of doubt, the Members agree that the Company shall not be
required to make distributions to a Member pursuant to this Section 6.1(b) to the
extent that such Member realizes income in connection with the issuance of
Series B Units to such Member, the allocation of income to a holder of Series B
Units pursuant to Section 6.2(b)(i)
unless the distribution is withheld pursuant to Section 6.1(i), the
forfeiture of Series B Units by such Member in accordance with the applicable
Restricted Unit Agreement or the repurchase of Series B Units from such Member
in accordance with the applicable Restricted Unit Agreement.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
11
(c)
An amount equal to 100% of Available Cash with respect to each
fiscal quarter of the Company shall be distributed simultaneously to the Members
in accordance with this Section 6.1(c) within
sixty (60) days after the end of each such quarter. Each distribution
made by the Company to the Members, regardless of the source or character of the
assets to be distributed, shall be made in the following order of
priority:
(i)
First, subject to
Section 6.1(d),
to the holders of the Series A Units (and among such holders pro rata based on
their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)(i) for the
current and all prior periods equal to the product of (A) 3.0 multiplied by (B) the
Aggregate Series A Capital Contributions (the “First
Threshold”); provided, however, that if and when the
holders of Series A Units were to receive cumulative distributions pursuant to
this Section
6.1(c)(i) equal to the First Threshold, an amount equal to the product of
(A) 0.05 multiplied
by (B) the difference between (x) the First Threshold less (y) the
Aggregate Series A Capital Contributions, shall be distributed to the holders of
Series B Units (and among such holders pro rata based on their ownership of
Series B Units) in lieu of distributing such amount to the holders Series A
Units pursuant to this Section
6.2(c)(i);
(ii)
Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Section 6.2(c)(i) was
distributed to the holders of the Series A Units) for the current and all prior
periods equal to the product of (A) 3.25 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Second
Threshold”); provided, however, that if and when the
holders of Series A Units were to receive cumulative distributions pursuant to
this Section
6.1(c) equal to the Second Threshold, an amount equal to the difference
between (A) the product of (x) 0.0583 multiplied by (y) the
difference between (i) the Second Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distributions pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(ii);
(iii) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections 6.2(c)(i)
and 6.2(c)(ii)
was distributed to the holders of the Series A Units) for the current and all
prior periods equal to the product of (A) 3.50 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Third
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Third Threshold, an amount equal to the difference between (A) the
product of (x) 0.0667 multiplied by (y) the
difference between (i) the Third Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distributions pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(iii);
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
12
(iv) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(iii) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 3.75 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Fourth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Fourth Threshold, an amount equal to the difference between (A) the
product of (x) 0.0750 multiplied by (y) the
difference between (i) the Fourth Threshold less (ii) Aggregate
Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(iv);
(v)
Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(iv) was distributed to the holders of the Series A Units) for
the current and all prior periods per Series A Unit outstanding equal to the
product of (A) 4.0 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Fifth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Fifth Threshold, an amount equal to the difference between (A) the
product of (x) 0.0833 multiplied by (y) the
difference between (i) the Fifth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(v);
(vi) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(v) was distributed to the holders of the Series A Units) for
the current and all prior periods per Series A Unit outstanding equal to the
product of (A) 4.25 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Sixth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Sixth Threshold, an amount equal to the difference between (A) the
product of (x) 0.0917 multiplied by (y) the
difference between (i) the Sixth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(vi);
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
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(vii) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(vi) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 4.50 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Seventh
Threshold”; provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Seventh Threshold, an amount equal to the difference between (A) the
product of (x) 0.10 multiplied by (y) the
difference between (i) the Seventh Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(vii);
(viii) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(vii) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 4.75 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Eighth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Eighth Threshold, an amount equal to the difference between (A) the
product of (x) 0.1083 multiplied by (y) the
difference between (i) the Eighth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(viii);
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
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(ix)
Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(viii) was distributed to the holders of the Series A Units)
for the current and all prior periods equal to the product of (A) 5.0 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Ninth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Ninth Threshold, an amount equal to the difference between (A) the
product of (x) 0.1167 multiplied by (y) the
difference between (i) the Ninth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(ix);
(x)
Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(ix) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 5.25 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Tenth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Tenth Threshold, an amount equal to the difference between (A) the
product of (x) 0.1250 multiplied by (y) the
difference between (i) the Tenth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(x);
(xi)
Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(x) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 5.50 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Eleventh
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Eleventh Threshold, an amount equal to the difference between (A) the
product of (x) 0.1333 multiplied by (y) the
difference between (i) the Eleventh Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(xi);
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
15
(xii) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(xi) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 5.75 multiplied by (B) the
Aggregate Series A Capital Contributions (the “Twelfth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Twelfth Threshold, an amount equal to the difference between (A) the
product of (x) 0.1417 multiplied by (y) the
difference between (i) the Twelfth Threshold less (ii) the
Aggregate Series A Capital Contributions, less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(xii);
(xiii) Next, subject to
Section 6.1(d),
100% to the holders of the Series A Units (and among such holders pro rata based
on their ownership of Series A Units) until the holders of Series A Units have
received cumulative distributions pursuant to this Section 6.1(c)
(assuming, for this purpose, that the sum of all distributions received by the
holders of Series B Units pursuant to Sections
6.2(c)(i)-(xii) was distributed to the holders of the Series A Units) for
the current and all prior periods equal to the product of (A) 6.0 multiplied by
(B) the Aggregate Series A Capital Contributions (the “Thirteenth
Threshold”); provided,
however, that if and when the holders of Series A Units were to receive
cumulative distributions pursuant to this Section 6.1(c) equal
to the Thirteenth Threshold, an amount equal to the difference between (A) the
product of (x) 0.15 multiplied by (y) the
difference between (i) the Thirteenth Threshold less (ii) the
Aggregate Series A Capital Contributions less (B) the sum of
all distribution pursuant to this Section 6.1(c)
received by the holders of Series B Units for the current and prior periods,
shall be distributed to the holders of Series B Units (and among such holders
pro rata based on their ownership of Series B Units) in lieu of distributing
such amount to the holders of the Series A Units pursuant to this Section
6.2(c)(xiii);
(xiv) Thereafter, 85% to
the holders of the Series A Units (and among such holders pro rata based on
their ownership of Series A Units) and 15% to the holders of the Series B Units
(and among such holders pro rata based on their ownership of Series B
Units).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
16
(d)
Notwithstanding the foregoing
provisions of Section
6.1, after the holders of Series A Units have received aggregate
distributions pursuant to each of Sections 6.1(c)(i)-
(xiv) equal to the amounts set forth on Exhibit E, the
Company shall retain all subsequent amounts distributable to the holders of
Series A Units pursuant to each such Section, and such retained amounts shall be
distributed to the holders of Series B Units if and when the holders of Series B
Units are entitled to a distribution pursuant to such Section. If a
distribution is to be made pursuant to Section 13.2 and the
holders of Series B Units would not be entitled to a distribution pursuant to
the applicable Section under which amounts are then being retained by the
Company pursuant to this Section 6.1(d), such
retained amounts shall be distributed to the holders of Series A Units pursuant
to Section
13.2.
(e)
For purposes of clarity, and by way of
example only, attached hereto as Exhibit E is a sample
calculation of distribution payments based on a hypothetical distribution
scenario with the assumptions specified in such Exhibit.
(f)
For purposes of Sections
6.1(c)(ii)-(xiv), if one or more series of Series B Units are issued with
a Threshold Value greater than zero, each such series of Series B Units shall be
treated as not outstanding (and such series will not be entitled to receive
distributions) until distributions (other than tax distributions pursuant to
Section 6.1(b))
have been made following the issuance of such series of Series B Units to the
holders of the previously issued series of Series B Units (on a per Unit basis)
equal to the Threshold Value of such previously issued series of Series B
Units.
(g)
If any Series B Units are redeemed or
otherwise purchased by the Company or converted into Converted Series A Units as
provided in Section
7.7, prior to making any distributions pursuant to Sections
6.1(c)(i)-(xiv), distributions shall be made solely to the holders of
outstanding Series A Units (other than holders of Converted Series A Units with
respect to such Converted Series A Units), pro rata based upon the number of
such Series A Units held (other than Converted Series A Units), until the
aggregate amount paid to the holders of Series A Units (other than Converted
Series A Units with respect to such Converted Series A Units) pursuant to Sections
6.1(c)(i)-(xiv) and this Section 6.1(g) during
the current and all prior periods equals the aggregate amount the holders of
Series A Units (other than holders of Converted Series A Units with respect to
such Converted Series A Units) would have been entitled to receive pursuant to
Sections
6.1(c)(i)-(xiv) had the sum of (A) all amounts distributed to the
Unitholders pursuant to Sections
6.1(c)(i)-(xiv) and this Section 6.1(g), (B)
all amounts paid to holders of Series B Units with respect to any redemption or
purchase of such Units by the Company, and (C) the fair market value of the
Converted Series A Units issued upon the conversion provided in Section 7.7, as
determined as the date of such redemption, purchase been distributed to the
Unitholders pursuant to Sections
6.1(c)(i)-(xiv).
(h)
All distributions of Available Cash to
Members for a fiscal quarter pursuant to Section 6.1(c) shall
be made to the Members shown on the records of the Company to be entitled
thereto as of the last day of such quarter, unless the transferor and transferee
of any Membership Interest otherwise agree in writing to a different
distribution and such distribution is consented to in writing by the
Board. All other distributions made under this Section 6.1 shall be
made to the holders of record of the applicable Units on the record date
established by the Board or, in the absence of any such record date, to the
holders of the applicable Units on the date of the distribution.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
17
(i)
Except for distributions pursuant to Section 6.1(b), the
Company may distribute securities in-kind in accordance with this Section
6.1(i). Except in the case of the dissolution and winding-up
of the Company, securities distributed in-kind shall be traded on a recognized
national securities exchange in the United States or the Nasdaq Global Market
and be immediately available for sale (without regard to volume limitations)
pursuant to a registration statement or otherwise. The fair market
value of securities distributed in-kind shall be the average of the closing
values of such securities over the twenty (20) trading days immediately
preceding such distribution made in accordance with this Section
6.1(i).
(j)
The Company is authorized to withhold from
distributions, or with respect to allocations, to the holders of Units and to
pay over to any federal, state, local or foreign government any amounts required
to be so withheld pursuant to the Code or any provisions of any applicable
Law. For all purposes under this Agreement, any amount so withheld
shall be treated as actually distributed to the holder with respect to which
such amount was withheld.
(k)
Notwithstanding the foregoing
provisions of Section
6.1(c), all amounts otherwise distributable pursuant to this Agreement
(other than Section
6.1(b)) with respect to each Unvested Series B Unit shall be retained by
the Company (collectively, the “Withheld
Amounts”). Prior to making any distribution pursuant to Section 6.1(c) or
Section
13.2(c), the Company will distribute (i) the Withheld Amounts with
respect to each Series B Unit that has become a Vested Series B Unit to the
holder of such Unit, and (ii) the Withheld Amounts with respect to each Series B
Unit that has been forfeited or cancelled to the holders of outstanding Series B
Units pro rata based on their ownership of Series B Units taking into account
the Threshold Values of such Series B Units in a manner consistent with the
provisions of Section
6.1(f).
(l)
The Board may authorize the Company to reserve up
to five percent (5%) of the distributions received by the Company from the
Partnership for payment to members of management or other key employees of
Genesis or any of its Subsidiaries designated by the Board after consultation
with senior management of the Company. Such amounts shall be paid at
least once per twelve month period as determined by the Board to such designated
members of management or key employees who remain employed by the Company or any
of its Subsidiaries as of the date of payment.
6.2 Allocations
of Profits and Losses.
(a)
General
Profit and Loss Allocations. Except as provided in Section 6.2(b), for
each taxable year of the Company, Profits and Losses (and all items included in
the computations thereof) shall be allocated 100% to the holders of Series A
Units pro rata based on their ownership of Series A Units.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
18
(b)
Other Profit and Loss
Allocations.
(i)
If cash or property is distributed to any
holder of Series B Units with respect to its Series B Units for a taxable year
(other than cash or property with respect to which the Series B Unitholder
receiving the distribution has been allocated items of gross income or gain
pursuant to Section
6.2(b)(ii)), then each holder of Series B Units receiving such cash or
property distribution shall be allocated items of gross income and gain
(proportionate to the amount of such items recognized by the Company for such
taxable year or any succeeding taxable year) in an amount equal to the
distribution.
(ii)
If cash or property is retained by the Company with
respect to any Unvested Series B Units pursuant to Section 6.1(k) for a
taxable year, then each holder of Unvested Series B Units shall be allocated
items of gross income and gain (proportionate to the amount of such items
recognized by the Company for such taxable year or any succeeding taxable year)
in an amount equal to the amount retained with respect to such Unvested Series B
Units.
(iii) In
the event Withheld Amounts with respect to a Series B Unit that has been
forfeited or cancelled are distributed pursuant to the second clause of Section 6.1(k), the
holder of such forfeited or cancelled Series B Unit shall be allocated items of
loss or deduction in an amount equal to the amount distributed to holders of
outstanding Series B Units with respect to such forfeited or cancelled Series B
Unit.
(iv) The
Losses allocated pursuant to Section 6.2(a) shall
not exceed the maximum amount of Losses that can be so allocated without causing
any holder of a Unit to have a negative Adjusted Capital Account balance at the
end of any taxable period. In the event that some but not all of the
Members would have negative Adjusted Capital Account balances as a consequence
of an allocation of Losses pursuant to Section 6.2(a), the
limitation set forth in this Section 6.2(b) shall
be applied on a Member by Member basis so as to allocate the maximum permissible
Losses to each Member under Treasury Regulation Section
1.704-1(b)(2)(ii)(d). All Losses in excess of the limitation set
forth in this Section
6.2(b) shall be allocated to the Member that bears the Economic Risk of
Loss for such Losses, as determined by the Board.
(c)
Special
Allocations. Notwithstanding any other provisions of this
Section 6.2,
the following special allocations shall be made for each taxable
period:
(i)
Notwithstanding any other provision of this Section 6.2, if there
is a net decrease in Minimum Gain during any taxable period, each Member shall
be allocated items of Company income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided in Treasury
Regulation Sections 1.704-2(f)(6), (g)(2) and (j)(2)(i). For purposes
of this Section
6.2(c), each Member’s Capital Account shall be determined and the
allocation of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 6.2 with
respect to such taxable period. This Section 6.2(c)(i) is
intended to comply with the Membership minimum gain chargeback requirement in
Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
19
(ii)
Notwithstanding the other provisions of this
Section 6.2
(other than Section
6.2(c)(i) above), if there is a net decrease in Member Nonrecourse Debt
Minimum Gain during any taxable period, any Member with a share of Member
Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be
allocated items of Company income and gain for such period (and, if necessary,
subsequent periods) in the manner and amounts provided in Treasury Regulation
Section 1.704-2(i)(4) and (j)(2)(ii). For purposes of this Section 6.2(c) each
Member’s Adjusted Capital Account balance shall be determined, and the
allocation of income and gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 6.2, other
than Section
6.2(c)(i) above, with respect to such taxable period. This
Section
6.2(c)(ii) is intended to comply with the Member nonrecourse debt minimum
gain chargeback requirement in Treasury Regulation Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.
(iii) Except
as provided in Sections 6.2(c)(i)
and 6.2(c)(ii)
above, in the event any Member unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate, to the extent required by such Treasury Regulation, the deficit
balance, if any, in its Adjusted Capital Account created by such adjustments,
allocations or distributions as quickly as possible unless such deficit balance
is otherwise eliminated pursuant to Sections 6.2(c)(i)
and 6.2(c)(ii).
(iv) In
the event any Member has a deficit balance in its Adjusted Capital Account at
the end of any taxable period, such Member shall be specially allocated items of
Company gross income and gain in the amount of such excess as quickly as
possible; provided,
however, that an allocation pursuant to this Section 6.2(c)(iv)
shall be made only if and to the extent that such Member would have a deficit
balance in its Adjusted Capital Account after all other allocations provided in
this Section
6.2(c) have been tentatively made as if this Section 6.2(c)(iv)
were not in this Agreement.
(v)
Nonrecourse Deductions for any taxable period shall be
allocated to the holders of Series A Units pro rata based on their ownership of
Series A Units.
(vi) Member
Nonrecourse Deductions for any taxable period shall be allocated 100% to the
Member that bears the Economic Risk of Loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in
accordance with Treasury Regulation Section 1.704-2(i). If more than
one Member bears the Economic Risk of Loss with respect to a Member Nonrecourse
Debt, Member Nonrecourse Deductions attributable thereto shall be allocated
between or among such Members in accordance with the ratios in which they share
such Economic Risk of Loss.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
20
(vii) If
any holder of Series B Units forfeits all or a portion of such Units, such
holder shall be allocated items of loss and deduction in the year of such
forfeiture in an amount equal to the portion of such holder’s Capital Account
attributable to such forfeited Units.
(viii) To
the extent an adjustment to the adjusted tax basis of any Company asset pursuant
to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such item of gain or loss
shall be specially allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to
such provisions.
(d)
Curative
Allocation. The allocations set forth in Section 6.2(c) (other
than Section
6.2(c)(vii)) (the “Regulatory
Allocations”) are intended to comply with certain requirements of the
Treasury Regulations. It is the intent of the Members that, to the extent
possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company
income, gain, loss or deduction pursuant to this Section 6.2(d).
Therefore, notwithstanding any other provision of this Article 6 (other than
the Regulatory Allocations), but subject to the Code and the Treasury
Regulations, the Board shall make such offsetting special allocations of Company
income, gain, loss or deduction in whatever manner it determines appropriate so
that, after such offsetting allocations are made, each Member’s Capital Account
balance is, to the extent possible, equal to the Capital Account balance such
Member would have had if the Regulatory Allocations were not part of the
Agreement. In exercising its discretion under this Section 6.2(d), the
Board shall take into account future Regulatory Allocations that, although not
yet made, are likely to offset other Regulatory Allocations previously
made.
(e)
Notwithstanding any other provisions of this Section 6.2 (other
than the Regulatory Allocations), in the year in which a Liquidation Event
occurs and all subsequent years (and for any prior years with respect to which
the due date (without regard to extensions) for the filing of the Company’s
federal income tax return has not passed as of the date of the Liquidation
Event), all items of income, gain, loss and deduction of the Company, including
gross items, shall be allocated among the Members in a manner reasonably
determined by the Board as shall cause to the nearest extent possible the
Capital Account of each Member to equal the amount to be distributed to such
Member pursuant to Section
13.2(c).
6.3 Income
Tax Allocations.
(a)
Except as provided in this Section 6.3, each
item of income, gain, loss and deduction of the Company for federal income tax
purposes shall be allocated among the Members in the same manner as such items
are allocated for book purposes under Section
6.2.
(b)
The Members recognize that there may be a difference between
the Book Value of a Company asset and the asset’s adjusted tax basis at the time
of the property’s contribution or revaluation pursuant to this
Agreement. In such a case, all items of tax depreciation, cost
recovery, amortization and gain or loss with respect to such asset shall be
allocated among the Members to take into account the disparities between the
Book Values and the adjusted tax basis with respect to such properties in
accordance with the provisions of Sections 704(b) and 704(c) of the Code and the
Treasury Regulations under those sections; provided, however, that any
tax items not required to be allocated under Sections 704(b) or 704(c) of the
Code shall be allocated in the same manner as such gain or loss would be
allocated for book purposes under Section
6.2. The Board shall make any elections or other decisions
relating to such allocations.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
21
(c)
All items of income, gain, loss, deduction and
credit allocated to the Members in accordance with the provisions hereof and
basis allocations recognized by the Company for federal income tax purposes
shall be determined without regard to any election under Section 754 of the Code
which may be made by the Company; provided, however, such
allocations, once made, shall be adjusted as necessary or appropriate to take
into account the adjustments permitted by Sections 734 and 743 of the
Code.
(d)
If any deductions for depreciation, cost recovery
or depletion are recaptured as ordinary income upon the sale or other
disposition of Company properties, the ordinary income character of the gain
from such sale or disposition shall be allocated among the Members in the same
ratio as the deductions giving rise to such ordinary income character were
allocated.
6.4 Other
Allocation Rules. All
items of income, gain, loss, deduction and credit allocable to Units that may
have been transferred shall be allocated between the transferor and the
transferee based on the portion of the calendar year during which each was
recognized as the owner of such Units, without regard to the results of Company
operations during any particular portion of that calendar year and without
regard to whether cash distributions were made to the transferor or the
transferee during that calendar year; provided, however, that this
allocation must be made in accordance with a method permissible under Section
706 of the Code and the Treasury Regulations thereunder. If any Units
are Disposed of or redeemed in compliance with the provisions of this Agreement,
all distributions with respect to which the record date is before the date of
such Disposition or redemption shall be made to the Disposing Member, and all
distributions with respect to which the record date is after the date of such
Disposition, in the case of a Disposition other than a redemption, shall be made
to the transferee.
ARTICLE
7
DISPOSITION
OF UNITS; PREEMPTIVE RIGHTS; IPO CONVERSION
7.1 Restrictions
On Dispositions.
(a)
Disposition of Units otherwise
permitted or required by this Agreement may only be made in compliance with
federal and state securities laws, including the Securities Act and the rules
and regulations thereunder, and the Act.
(b)
For so long as the Company is a partnership for U.S.
federal income tax purposes, in no event may any Disposition of any Units by any
Member be made if such Disposition is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code or if such Disposition
would otherwise result in the Company being treated as a “publicly traded
partnership,” as such term is defined in Section 7704(b) of the Code and the
regulations promulgated thereunder.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
22
(c)
For as long as the Company is a partnership for U.S. federal
income tax purposes, the Company shall monitor Dispositions of Units in the
Company to determine (i) if such Units are being traded on an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code, and (ii) whether
additional Dispositions of Units would result in the Company being unable to
qualify for at least one of the “safe harbors” set forth in Treasury Regulations
Section 1.7704-1 (or such other guidance subsequently published by the Internal
Revenue Service setting forth safe harbors under which Units will not be treated
as “readily tradable on a secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code) (the “Trading
Safe
Harbors”). The Officers shall take all steps as instructed by
the Board to prevent any trading of Units or any recognition by the Company of
Dispositions made on such markets and, except as otherwise provided herein, to
ensure that at least one of the Trading Safe Harbors is met.
(d)
Dispositions of Units may only be made in strict
compliance with all applicable terms of this Agreement and any applicable
Restricted Unit Agreements, and any purported Disposition of Units that does not
so comply with all applicable provisions of this Agreement and any applicable
Restricted Unit Agreements shall be null and void and of no force or effect, and
the Company shall not recognize or be bound by any such purported Disposition
and shall not effect any such purported Disposition on the transfer books of the
Company or Capital Accounts of the Members. The Members agree that
the restrictions contained in this Article 7 are fair
and reasonable and in the best interests of the Company and the
Members.
(e)
Any Disposition of Units shall be subject to
execution by the transferee (and, if the transferee is a natural person, the
transferee’s spouse) of an Addendum Agreement and payment of all reasonable
expenses incurred by the Company in connection with such Disposition, including
any necessary amendments to this Agreement to reflect such Disposition and
payment by the transferee of all unpaid Capital Contribution obligations of its
transferor attributable to the transferred Membership
Interests. Transferees of a Membership Interest who do not become
Substituted Members shall have only the rights of an assignee of a Membership
Interest and, therefore, no right to participate in the management of the
business and affairs of the Company. An assignee shall have only the
right to receive allocations and distributions attributable to the Membership
Interests acquired by such assignee, which Membership Interests shall be subject
to the same restrictions on transfer as contained in this
Agreement. An assignee shall have the same obligations to the Company
and the Members as a Member holding the same Membership Interest would have,
including any obligation to make Capital Contributions.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
23
7.2 Restrictions
on Series A Units and Series B Units.
(a)
Without the consent of the Board, no Disposition of
Management Series A Units may be made except (i) to a Permitted Transferee in
accordance with Section 7.3, (ii) in
accordance with Section 7.4, (iii) in
connection with an IPO Merger or (iv) in connection with a Drag-Along
Transaction pursuant to Section
7.5.
(b)
No Disposition of Series B Units may be made except
(i) in connection with an IPO Merger, (ii) in connection with a
Drag-Along Transaction pursuant to Section 7.5 or (iii)
in accordance with the redemption or repurchase provisions of the applicable
Restricted Unit Agreement.
(c)
Without the consent of the Board, no Disposition of Series A
Units (other than Management Series A Units, the Disposition of which is subject
to Section
7.2(a)) may be made except (i) to a Permitted Transferee in accordance
with Section
7.3, (ii) in connection with an IPO Merger, (iii) in connection with a
Drag-Along Transaction pursuant to Section 7.5 or (iv)
in connection with a Tag-Along Transaction pursuant to Section
7.6.
(d)
Notwithstanding anything contained herein, no
Disposition of Management Series A Units may be made to any Person that is a
Potential Competitor of, or an adverse party to, the Company, as reasonably
determined by the Board.
7.3 Permitted
Dispositions.
(a)
Any holder of Series A Units may Dispose of such
Units to a Permitted Transferee of such holder; provided, however, that (i)
such Permitted Transferee shall not be entitled to make any further Dispositions
in reliance upon this Section 7.3(a),
except for a Disposition of such acquired Series A Units back to such original
holder or a Permitted Transferee of such original holder, and (ii) such
Permitted Transferee must assume all of the obligations of the original holder
of such Series A Units and agree to comply with the provisions of this
Agreement.
(b)
Notwithstanding the provisions of this Section 7.3, a Member
may not make a Disposition of Units to a Permitted Transferee if the purpose of
such Disposition is the avoidance of or is otherwise undertaken in contemplation
of avoiding the restrictions on Dispositions in this Agreement (it being
understood that the purpose of this Section 7.3(b) is to
prohibit the Disposition of Units to a Permitted Transferee followed by a change
in the relationship between the transferor and the Permitted Transferee (or a
change of control of such transferor or Permitted Transferee) after the
Disposition with the result and effect that the transferor has indirectly made a
Disposition of Units by using a Permitted Transferee, which Disposition would
not have been directly permitted under this Section 7.3 had such
change in such relationship occurred prior to such Disposition).
(c)
A holder of Management Series A Units may pledge their Series
A Units security for a loan to such Management Member; provided, it shall be a
condition precedent to a any pledge of Management Series A Units that the terms
and conditions therefor shall have been approved by the Board. In the
event any pledge of Management Series A Units is approved by the Board, any
transferee following foreclosure shall receive an economic interest in such
Units only and will not be entitled to vote such Units or otherwise influence
the Company’s course of action or conduct of business.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
24
(d)
Each direct or indirect holder of Management Series A
Units or Series B Units that is an entity agrees that no shares of its common
stock or other equity interests may be Disposed of to any Person other than a
Permitted Transferee in accordance with the terms and provisions of this
Agreement.
7.4 Right
of First Refusal.
(a)
If any holder of any Management Series A Units
(each, an “Offeror”)
proposes to Dispose of all or any portion of such Offeror’s Management Series A
Units in a bona fide Disposition to one or more Third Parties (other than to a
Permitted Transferee) pursuant to a bona fide, non-collusive offer from such
Third Party or Parties (a “Third Party
Offer”) and such Offeror is permitted to effect such proposed Disposition
pursuant to Sections
7.1 and 7.2, then such
Offeror shall first deliver written notice of such Third Party Offer (the “Notice of Right
of First Refusal”) to the Company no less than 45 days prior to the date
of the proposed Disposition. The date that the Notice of Right of
First Refusal is received by the Company shall constitute the “First Refusal
Notice Date.” Within five days after receipt of the Notice of
Right of First Refusal by the Company, the Company shall send a copy of the
Notice of Right of First Refusal along with a letter indicating the First
Refusal Notice Date to each of the Investors (each, an “Offeree”). The
Notice of Right of First Refusal shall set forth the name of the Third Party
(including, if such information is not publicly available, information about the
identity of the Third Party), the number of Management Series A Units proposed
by the Offeror to be Disposed of (the “Offered
Units”), the price per Unit for the Offered Units (the “Offer
Price”), all details of the payment terms and all other terms and
conditions of the proposed Disposition. A Third Party Offer may not
contain provisions related to any property of the Offeror other than the
Management Series A Units held by such Offeror, and the Offer Price shall be
expressed only in terms of cash (in U.S. dollars). Any proposed
Disposition of Management Series A Units not satisfying the terms of this Section 7.4 may not
be made unless otherwise expressly permitted pursuant to the provisions of this
Article
7. Notwithstanding the foregoing, this Section 7.4 shall not
be applicable to, and the Offerors may make a Disposition without complying with
the provisions of this Section 7.4 in
connection with, a Disposition to a Permitted Transferee; provided the Permitted
Transferee shall not be authorized to further dispose of any Units except upon
compliance with this Section
7.4.
(b)
Each Offeree shall have the right to purchase up to that
number of the Offered Units equal to the product of (i) the number of Offered
Units and (ii) a fraction (the “Proportionate
Share”), the numerator of which shall be the number of Series A Units of
such Offeree and the denominator of which shall be all of the Series A Units
held by all Offerees. Within 30 days after the First Refusal Notice
Date, each Offeree may deliver a written irrevocable notice to the Offeror, the
President of the Company and each other Offeree of its election to purchase such
Offered Units (each Offeree who so elects to purchase, a “Purchasing
Investor”). To the extent any such Purchasing Investor does
not elect to purchase its full Proportionate Share of such Offered Units or
fails to deliver a notice within the applicable period, each Purchasing Investor
that has elected to purchase its full Proportionate Share shall be entitled, by
delivering written notice to the Offeror and the President of the Company within
five days following the end of such 30 day period (such fifth day, the “Offer Expiration
Date”), to purchase up to all of the remaining Offered
Units. If there is an oversubscription, the oversubscribed amount
shall be allocated among the Purchasing Investors fully exercising their rights
to purchase such remaining Offered Units pro rata based on the number of Series
A Units owned by each fully-electing Purchasing Investor. The
delivery of a notice of election under this Section 7.4 shall
constitute an irrevocable commitment to purchase such Offered
Units. If the Purchasing Investors shall have elected to purchase all
but not less than all of the Offered Units, the Company shall thereafter set a
reasonable place and time for the closing of the purchase and sale of the
Offered Units, which shall be not less than 45 days nor more than 90 days after
the First Refusal Notice Date (subject to extension to the extent necessary to
pursue any required regulatory approvals, including to allow for the expiration
or termination of all waiting periods under the HSR Act) and, at that time, the
Purchasing Investors shall pay to the Offeror the Offer Price, paid by wiring
same day funds upon the instructions of the Offeror against delivery to such
Purchasing Investors of the Offered Units, as applicable.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
25
(c)
The purchase price and terms and conditions
for the purchase of the Offered Units by the Purchasing Investor pursuant to
this Section
7.4 shall be the price and terms and conditions set forth in the
applicable Third Party Offer as described or attached to the Notice of Right of
First Refusal; provided, that the Offeror shall at a minimum make customary
representations and warranties concerning (i) such Offeror’s valid ownership of
the Offered Units, free and clear of all liens, claims and encumbrances
(excluding those arising under applicable securities laws), (ii) such Offeror’s
authority, power and right to enter into and consummate the sale of the Offered
Units, (iii) the absence of any violation, default or acceleration of any
agreement to which such Offeror is subject or by which its assets are bound as a
result of the agreement to sell and the sale of the Offered Units, (iv) the
absence of, or compliance with, any governmental or Third Party consents,
approvals, filings or notifications required to be obtained or made by such
Offeror in connection with the sale of the Offered Units and (v) compliance by
such Offeror with applicable laws. The Offeror also agrees to execute
and deliver such instruments and documents and take such actions, including
obtaining all applicable approvals and consents and making all applicable
notifications and filings, as the Purchasing Investors may reasonably request in
order to more effectively implement the purchase and sale of the Offered Units
hereunder.
(d)
Notwithstanding the foregoing, if the Offerees
shall not have elected to purchase all of the Offered Units on or prior to the
Offer Expiration Date, such Offerees shall not have the right to purchase any of
the Offered Units and all but not less than all of the Offered Units may be sold
by the Offeror at any time within ninety (90) days after the Offer Expiration
Date (subject to extension to the extent necessary to pursue any required
regulatory approvals, including to allow for the expiration or termination of
all waiting periods under the HSR Act), subject to compliance with the
provisions of Sections
7.1 and 7.6
hereof. Any such sale shall not be at less than the price or upon
terms and conditions more favorable, individually or in the aggregate, to the
purchaser than those specified in the applicable Third Party Offer as described
or attached to the Notice of Right of First Refusal. If any such
Offered Units are not so transferred within such 90 day period, the Offeror may
not sell any of the Offered Units without again complying in full with the
provisions of Section
7.4.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
26
(e)
Notwithstanding anything to the contrary in this
Agreement, at any time after the six-month anniversary of the First Refusal
Notice Date with respect to a proposed Disposition, the Board shall be entitled
to waive, on behalf of each Member, each former Member and each of their
respective Affiliates, successors and assigns and the members, partners,
stockholders, directors, managers, officers, liquidators and employees of each
of the foregoing (collectively, the “ROFR
Persons”) any and all claims such ROFR Persons have, had or may have or
had with respect to any non-compliance or violation of this Section 7.4 by any
Person with respect to such proposed Disposition (whether or not any Units were
Disposed of pursuant to this Section 7.4), other
than any such claim that has been made in writing and delivered to the Company
prior to the expiration of such six-month anniversary.
7.5 Drag-Along
Rights.
(a)
If the ▇▇▇▇▇▇▇▇ Entity approves a Sale
of the Business to unaffiliated Third Party or Third Parties, all Series A
Members entitled to consent thereto shall consent to and raise no objections
against the Sale of the Business (such a transaction, a “Drag-Along
Transaction”). If the Drag-Along Transaction is structured as (i) a
merger, conversion, Unit exchange or consolidation of the Company, or a sale of
all or substantially all of the assets of the Company, each Series A Member
entitled to vote thereon shall vote in favor of the Drag-Along Transaction and
shall waive any appraisal rights or similar rights in connection with such
merger, conversion, Unit exchange, consolidation or asset sale, or (ii) a sale
of all the Series A Units, each Series A Member shall agree to sell all of his
or its Series A Units on the terms and conditions of such Drag-Along
Transaction; provided,
however, that the Drag-Along Transaction may only be structured as a sale
of all the Series A Units if the ▇▇▇▇▇▇▇▇ Entity holds a majority of the Series
A Units outstanding immediately prior to such Drag-Along Transaction, or (iii) a
sale of a majority of the Series A Units, each Series A Member shall agree to
sell on the terms and conditions of such Drag-Along Transaction a portion of his
or its Series A Units equal to the Pro Rata Portion of the Units to be Disposed
of in such Drag-Along Transaction other than the Series A Units to be Disposed
of by the ▇▇▇▇▇▇▇▇ Entity. The Series A Members shall promptly take
all necessary and desirable actions requested by the ▇▇▇▇▇▇▇▇ Entity in
connection with the consummation of the Drag-Along Transaction, including the
execution of such agreements and such instruments and other actions reasonably
necessary to (A) provide customary representations, warranties, indemnities, and
escrow/holdback arrangements relating to such Drag-Along Transaction (subject to
Sections
7.5(c)(iv) and 7.5(c)(v) below), in
each case to the extent that each other Member is similarly obligated, and (B)
effectuate the allocation and distribution of the aggregate consideration upon
the Drag-Along Transaction as set forth in Section 7.5(c)
below. Without limiting the foregoing, each holder of Series A Units
and Series B Units entitled to proceeds from such Drag-Along Transaction shall
be obligated to join on a several basis, in proportion of the proceeds received,
in any indemnification or other obligations that the ▇▇▇▇▇▇▇▇ Entity agrees to
provide or undertake in connection with such Sale of the Business (other than
any such obligations that relate specifically to a particular Member, such as
indemnification with respect to representations and warranties given by a Member
regarding such Member’s title to and ownership of Series A
Units). The Series A Members shall be permitted to sell their Series
A Units pursuant to any Drag-Along Transaction without complying with any other
provisions of this Article
7. A Series A Member’s “Pro Rata Portion” shall be based upon
such Series A Member’s proportionate ownership of all Series A Units owned by
the Series A Members other than the ▇▇▇▇▇▇▇▇ Entity.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
27
(b)
The obligations of the Series A Members
pursuant to this Section 7.5 are
subject to the satisfaction of the following conditions:
(i)
upon the consummation of the Drag-Along Transaction,
each Series A Member shall receive such consideration from such Drag-Along
Transaction as contemplated by Section
7.5(e);
(ii)
subject to Section 7.5(c), if
any holder of a Series A Units is given an option as to the form and amount of
consideration to be received, all Series A Members shall be given the same
option;
(iii) the
Company shall bear the reasonable, documented costs incurred in connection with
any Drag-Along Transaction (costs incurred by or on behalf of any Member for its
sole benefit will not be considered costs of the transaction hereunder) unless
otherwise agreed by the Company and the acquiror, in which case no Member shall
be obligated to make any out-of-pocket expenditure prior to the consummation of
the Drag-Along Transaction (excluding modest expenditures for postage, copies
and the like) and no Member shall be obligated to pay any portion (or, if paid,
shall be entitled to be reimbursed by the Company for that portion paid) that is
more than its pro rata share (based upon the amount of consideration received)
of reasonable expenses incurred in connection with a consummated Drag-Along
Transaction;
(iv) no
Series A Member shall be required to provide any representations, warranties or
indemnities (other than pursuant to an escrow or holdback of consideration
proportionate to the amount receivable under this Section 7.5) in
connection with the Drag-Along Transaction, other than customary (including with
respect to qualifications) representations, warranties and indemnities
concerning (A) each Series A Member’s valid ownership of the Series A Units,
free and clear of all liens, claims and encumbrances (excluding those arising
under this Agreement and applicable securities laws), (B) each Series A Member’s
authority, power and right to enter into and consummate such Drag-Along
Transaction without violating any other agreement to which such Member is a
party or its assets are bound, and (C) each Series A Member’s execution and
delivery of, and performance of its obligations under, the underlying
transaction agreements are (will be) in compliance with applicable
Laws;
(v)
no Series A Member shall be obligated in respect
of any indemnity obligations in such Drag-Along Transaction for an aggregate
amount in excess of the total consideration payable to such Series A Member in
such Drag-Along Transaction; and
(vi) if
some or all of the consideration received in connection with the Drag-Along
Transaction is other than cash, then such consideration shall be deemed to have
a dollar value equal to the fair market value of such consideration as
determined by the Board in its reasonable judgment.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
28
(c)
Notwithstanding anything to the contrary in this
Section 7.5, if
the consideration proposed to be paid to the Members in a Drag-Along Transaction
includes securities with respect to which no registration statement covering the
issuance of such securities has been declared effective under the Securities
Act, then each of the Members that is not then an Accredited Investor (without
regard to Rule 501(a)(4)) may be required (notwithstanding Section 7.5(c)(ii)),
at the request and election of the Members that are pursuing a Drag-Along
Transaction, to (i) appoint a purchaser representative (as such term is defined
in Rule 501 under the Securities Act) reasonably acceptable to such Members or
(ii) accept cash in lieu of any securities such Member would otherwise receive
in an amount equal to the fair market value of such securities as determined in
the manner set forth in Section
7.5(c)(v).
(d)
The ▇▇▇▇▇▇▇▇ Entity shall have the right in
connection with any such transaction (or in connection with the investigation or
consideration of any such potential transaction) to require the Company to
cooperate fully with potential acquirors in such prospective Drag-Along
Transaction by taking all customary and other actions reasonably requested by
the ▇▇▇▇▇▇▇▇ Entity or such potential acquirors, including making the Company’s
properties, books and records, and other assets reasonably available for
inspection by such potential acquirors, establishing a data room including
materials customarily made available to potential acquirors in connection with
such processes and making its employees reasonably available for interviews and
other diligence activities, in each case subject to reasonable and customary
confidentiality provisions. In addition, the ▇▇▇▇▇▇▇▇ Entity shall be
entitled to take all steps reasonably necessary to carry out an auction of the
Company, including selecting an investment bank, providing confidential
information (pursuant to confidentiality agreements), selecting the winning
bidder and negotiating the requisite documentation. The Company and
each Member shall provide assistance with respect to these actions as reasonably
requested by the ▇▇▇▇▇▇▇▇ Entity.
(e)
In connection with the occurrence of each
Drag-Along Transaction, the aggregate proceeds from such Drag-Along Transaction
(other than the proceeds of a Prior Drag-Along Transferee) shall be allocated
and then paid as set forth in this Section
7.5(e). First, and subject to the remaining provisions of this
Section 7.5(e),
the aggregate proceeds from such Drag-Along Transaction (other than the proceeds
of a Prior Drag-Along Transferee) shall be allocated to the Series A Members and
Series B Members as though such proceeds had been distributed by the Company
pursuant to the rights and preferences set forth in Section 6.1 as in
effect immediately prior to the consummation of such Drag-Along Transaction
(and, for this purpose only, any Prior Drag-Along Transferees shall be
disregarded and there shall be assumed that no such Prior Drag-Along Transferee
exists). Then, the aggregate proceeds that would be allocated to the
Series A Members based on the immediately preceding sentence shall be further
allocated to the Series A Members selling Series A Units in such Drag-Along
Transaction, based on their pro rata participation in such Drag-Along
Transaction based on Series A Units Disposed of. If a Member receives
consideration from such Drag-Along Transaction in a manner other than as
contemplated by this Section 7.5(e), then
such Member shall take such action as is necessary so that such consideration
shall be immediately reallocated among and distributed to the Members in
accordance with this Section
7.5(e). After application of this Section 7.5(e) such
that Series A Members as of the date hereof no longer own any Series A Units
that have not been subject to the calculation set forth in this Section 7.5(e), all
Series B Units shall automatically terminate and no longer be in force or
effect.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
29
7.6 Tag-Along
Rights.
(a)
If any holder of Series A Units (each,
a “Tag
Offeror”) desires to Dispose of all or any portion of its Series A Units
in a bona fide Disposition to one or more Third Parties (each, a “Tag
Transferee,” and the transaction, a “Tag-Along
Transaction”) pursuant to an offer from such Tag Transferee(s) (a “Third Party Tag
Offer”) and such Tag Offeror is permitted to effect such proposed
Disposition pursuant to Sections 7.1 and
7.2, then such
Tag Offeror(s) shall offer to include in such proposed Disposition a number of
Series A Units held by each other holder of Series A Units (each, a “Tag
Offeree”) in each case in accordance with the terms of this Section
7.6. A Third Party Tag Offer may not contain provisions
related to any property of the Tag Offeror other than Series A Units held by
such Offeror, and the offer price set forth in such Third Party Tag Offer shall
be expressed only in terms of cash (in U.S. dollars). Any proposed
Disposition of Series A Units not satisfying the terms of this Section 7.6 may not
be made unless otherwise expressly permitted pursuant to the provisions of this
Article
7. Notwithstanding the foregoing, this Section 7.6 shall not
be applicable to, and the Tag Offerors may Dispose of Series A Units without
complying with, any of the provisions of this Section 7.6 in
connection with, any Disposition of Series A Units (i) to Permitted Transferees,
(ii) made pursuant to a Drag-Along Transaction or (iii) made pursuant to Section
7.7. Further for the avoidance of doubt, a proposed
Disposition by the Tag Offeror described above may constitute a Disposition
covered by Section
7.4 and the waiver or failure of a Tag Offeree to exercise its rights
under Section
7.4, if applicable, shall not preclude such Tag Offeree from exercising
its rights under this Section
7.6.
(b)
The Tag Offeror(s) shall cause the Third
Party Tag Offer to be reduced to writing (which writing shall include an offer
to purchase or otherwise acquire Series A Units from the Tag Offerees as
required by this Section 7.6 and a
time and place designated for the closing of such purchase, which time shall not
be less than twenty (20) days after delivery of such notice and no more than
sixty (60) days after such delivery date) and shall send written notice of such
Third Party Tag Offer (the “Inclusion
Notice”) to each of the Tag Offerees.
(c)
Each Tag Offeree shall have the right (an
“Inclusion
Right”), exercisable by delivery of notice to the Tag Offerors at any
time prior to the later of (i) 10 days after the Offer Expiration Date under
Section 7.4 or
after the date that any purchase rights under Section 7.4 are
waived if Section
7.4 is applicable or (ii) 10 days after receipt of the Inclusion Notice
to sell pursuant to such Third Party Tag Offer and upon the terms and conditions
set forth in the Inclusion Notice, that number of Series A Units requested to be
included by such Tag Offeree; provided, however, that if the proposed Tag
Transferee is unwilling to purchase all of the Series A Units requested to be
included by all exercising Tag Offerees and Series A Units held by the Tag
Offerors desiring to Dispose of Series A Units pursuant to this Section 7.6, then
each Tag Offeree shall have the right to sell pursuant to such Third Party Tag
Offer, at the offer price and upon the terms and conditions set forth in the
Third Party Tag Offer, a number of such Tag Offeree’s Series A Units as provided
in the next succeeding sentence. If any Tag Offeree has exercised its
Inclusion Rights and the proposed Tag Transferee is unwilling to purchase all of
the Series A Units proposed to be transferred by the Tag Offeror(s) and all
exercising Tag Offerees (determined in accordance with the first sentence of
this Section
7.6(c)) then the Tag Offeror(s) and each exercising Tag Offeree shall
reduce, on a pro rata basis, based on their respective Proportionate
Percentages, the amount of such Units that each otherwise would have sold so as
to permit the Tag Offeror(s) and each exercising Tag Offeree to sell the number
of Units (determined in accordance with such reduced Proportionate Percentages)
that the proposed Tag Transferee is willing to purchase.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
30
(d)
The Tag Offerees and the Tag Offeror(s) shall sell to
the proposed transferee all, or at the option of the proposed transferee, any
part of the Series A Units proposed to be transferred by them, at not less than
the price and upon terms and conditions, if any, not more favorable,
individually and in the aggregate, to the proposed transferee than those in the
Inclusion Notice at the time and place provided for the closing in the Inclusion
Notice, or at such other time and place as the Tag Offerees, such Tag
Offeror(s), and the proposed transferee shall agree.
(e)
Notwithstanding anything to the contrary in this Section 7.6, if the
consideration proposed to be paid to the Tag Offeror(s) and the exercising Tag
Offerees includes securities with respect to which no registration statement
covering the issuance of such securities has been declared effective under the
Securities Act, then each Tag Offeror and exercising Tag Offeree that is not
then an Accredited Investor may be required, at the request and election of the
Tag Offeror(s) that are Accredited Investors, to appoint a purchaser
representative (as such term is defined in Rule 501 under the Securities
Act).
(f)
The Tag Offeror(s) shall have the right in
connection with any proposed transaction pursuant to this Section 7.6 (or in
connection with the investigation or consideration of any such potential
transaction) to require the Company to cooperate fully with potential acquirors
in such prospective transaction by taking all customary and other actions
reasonably requested by such Tag Offeror(s) or such potential acquirors,
including making the Company’s properties, books and records, and other assets
reasonably available for inspection by such potential acquirors, establishing a
data room including materials customarily made available to potential acquirors
in connection with such processes and making its employees reasonably available
for interviews and other diligence activities, in each case subject to
reasonable and customary confidentiality provisions. The Company and
each holder of Units shall provide assistance with respect to these actions as
reasonably requested.
(g)
Notwithstanding anything to the
contrary in this Agreement, at any time after the six-month anniversary of the
date of the Inclusion Notice with respect to each proposed sale pursuant to this
Section 7.6,
the Company shall be entitled to waive, on behalf of each Tag Offeree, each
former Tag Offeree and each of their respective Affiliates, successors and
assigns and the members, partners, stockholders, directors, managers, officers,
liquidators and employees of each of the foregoing (collectively, the “Eligible Tag
Offerees”) any and all claims such Eligible Tag Offerees have,
had or may have or had with respect to any non-compliance or violation of this
Section 7.6 by
any Person with respect to such sale (whether or not any Units were Disposed of
pursuant to this Section 7.6), other
than any such claim that has been made in writing and delivered to the Company
prior to the expiration of such six-month anniversary.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
31
7.7 Conversion
of Series B Units.
(a)
Any and all Vested Series B Units and
Unvested Series B Units outstanding as of the seventh anniversary of the
Effective Date shall be converted automatically into Series A Units as provided
in this Section
7.7. Each Unvested Series B Unit outstanding immediately prior
to such conversion shall vest simultaneously with such
conversion. Each such Series B Unit shall be converted into the
number of Series A Units whose fair market value equal the fair market value of
such Series B Unit. In each case, “fair market value” shall equal the
amount that would, in the reasonable determination of the Board, be distributed
with respect to each such Series B Unit to be converted and each Series A Unit
if the assets of the Company were sold for their Fair Market Value as of the
seventh anniversary of the Effective Date and there was a hypothetical complete
liquidation of the Company and the proceeds were distributed, after payment or
other satisfaction of all liabilities and other obligations of the Company, by
the Company pursuant to the rights and preferences set forth in Section 6.1(c), all
as of the seventh anniversary of the Effective Date. Each such Series
A Unit issued upon the conversion is referred to herein as a “Converted Series
A Unit”).
(b)
Each conversion of Series B Units shall be
deemed to have been effected as of the close of business on the seventh
anniversary of the Effective Date. At the time any such conversion
has been effected, the rights of the holder of the Series B Units converted as a
holder of Series B Units (including the right to receive distributions with
respect to such Series B Units) shall cease and the Person or Persons in whose
name or names Series A Units are to be issued upon such conversion shall be
deemed to have become the holder or holders of record of the Converted Series A
Units upon such conversion. Upon such conversion the Officers shall
amend and revise Schedule I and II to properly
reflect the conversion of such outstanding Series B Units to Series A
Units. Such amendments shall not be deemed to be an amendment to this
Agreement.
7.8 Conversion
to IPO Corporation.
(a)
In connection with any proposed Qualified Public
Offering approved in accordance with this Agreement, the Company may, in one or
a series of transactions, merge with or convert into a corporation that is an
Affiliate of the Company, or a subsidiary thereof, pursuant to an agreement and
plan of merger or conversion that provides for the exchange of Units for common
stock of such corporation (in any such case, the “IPO
Corporation”), in accordance with applicable provisions of the Act for
the express purpose of effecting a Qualified Public Offering (an “IPO
Merger”). In connection therewith, each Unit outstanding immediately
prior to the IPO Merger shall be converted into or exchanged for shares of
common stock of the IPO Corporation in a manner that gives effect to the
provisions of Section
6.1(c) such that each Member will receive shares of common stock having a
value equal to the same proportion of the aggregate Pre-IPO Value that such
holder would have received if all of the Company’s cash and other property had
been distributed by the Company in complete liquidation pursuant to the rights
and preferences set forth in Section 6.1 as in
effect immediately prior to such distribution assuming the value of the IPO
Corporation immediately prior to such liquidation distribution was equal to the
Pre-IPO Value and that all Unvested Series B Units were Vested Series B Units;
provided, however, that
the shares of common stock issued with respect to Unvested Series B Units shall
remain subject to vesting in accordance with, and to the extent provided in, the
applicable Restricted Unit Agreement; provided further, however,
that if the foregoing provisions would result in the holders of Series B Units
receiving either no shares or only a nominal number of shares of the IPO
Corporation in the IPO Merger, then the Board, acting in good faith, shall grant
to each of such holders of Series B Units options to purchase shares of common
stock of the IPO Corporation that are at the time of such grant reasonably
equivalent in value in the aggregate to the Series B Units held by such holders
and thereupon such Series B Units shall be automatically canceled. In
connection with the IPO Merger, the IPO Corporation and the Members shall enter
into or adopt such agreements and documents as shall be necessary and
appropriate to preserve the substance of the agreements of the Members provided
in this Agreement. If, in connection with any proposed Qualified
Public Offering approved in accordance with this Agreement, the Board determines
that it is advisable to have all of the Units contributed by the Members to an
IPO Corporation in exchange for stock therein (with the number of shares to be
received by each Member being determined in the same manner as described above
for an IPO Merger), each Member agrees to participate in such an
exchange.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
32
(b)
Notwithstanding anything to the contrary in this
Agreement, at any time after the approval of a Qualified Public Offering in
accordance with this Agreement, the Board shall be entitled to approve the IPO
Merger without the consent or approval of any other Person (including any
Member). If the Company elects to exercise its rights under this
Section 7.8,
each of the Members shall (i) take such actions as may be reasonably necessary
or required in connection with consummating the IPO Merger and (ii) use
commercially reasonable efforts to (x) cooperate with the other Members so that
the IPO Merger is undertaken in a tax-efficient manner and (y) if any Investor
or its limited partners or investors has a structure involving ownership of all
or a portion of its interests in the Company, directly or indirectly, through
one or more single purpose entities (a “Blocker
Corporation”), at the request of any such Investor, merge its Blocker
Corporation into the IPO Corporation in a tax-free reorganization, utilize such
Blocker Corporation as the IPO Corporation or otherwise structure the
transaction so that the Blocker Corporation is not subject to a level of
corporate tax on the Qualified Public Offering or subsequent dividend payments
or sales of stock, so long as, with respect to each of clauses (x) and (y), the
foregoing could not reasonably be expected to result in any costs or liabilities
that are not indemnified or reimbursed by the stockholders or Affiliates of the
Blocker Corporation or other adverse effects (other than de minimis adverse effects)
to the Company or any of the Members (other than to (A) the Blocker Corporation
in the event that the Blocker Corporation is neither merged nor otherwise
combined with the Company or the IPO Corporation nor utilized as the IPO
Corporation and (B) the Investor or its Affiliates which directly or indirectly
holds its interest in the Company through such Blocker
Corporation).
(c)
Each Member shall sell any fractional shares of the IPO
Corporation owned by such party (after taking into account all shares of the IPO
Corporation held by such party) to the IPO Corporation, upon the request of the
Company in connection with or in anticipation of the consummation of a Qualified
Public Offering, for cash consideration equal to the fair value of such
fractional shares, as determined by the Board.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
33
(d)
The issuance of shares of common stock of the IPO
Corporation to each Member shall be conditioned on such Member’s execution and
delivery of a Registration Rights Agreement in a form reasonably satisfactory to
the Investors.
(e)
Notwithstanding anything to the contrary in this Section 7.8, if no
registration statement covering the issuance of the common stock of the IPO
Corporation to the Members in the IPO Merger has been declared effective under
the Securities Act, then each of the Members that is not then an Accredited
Investor (without regard to Rule 501(a)(4)) may be required, at the request and
election of the Company, to (i) appoint a purchaser representative (as such term
is defined in Rule 501 under the Securities Act) reasonably acceptable to the
Company or (ii) agree to accept cash in lieu of any common stock of the IPO
Corporation such Member would otherwise receive in an amount equal to the fair
value of such common stock, as determined by the Board in its reasonable
judgment.
(f)
If so requested by any member of the
Investor Group, the certificate of incorporation of the IPO Corporation shall
include a provision substantially the same as Section 8.6(b)
hereof.
7.9 Grant
of Preemptive Rights.
Except
for any Excluded Unit Issuance, prior to the Company issuing any Units or
options or other rights to acquire Units, whether through exchange, conversion
or otherwise (collectively, the “New
Units”) to a proposed purchaser (the “Proposed
Purchaser”), each Eligible Purchaser shall have the right to purchase the
number of New Units as provided below in Section
7.10.
7.10 Preemptive
Right Procedures.
(a)
The Company shall
give each Eligible Purchaser at least fifteen (15) days’ prior written notice
(the “First
Notice”) of any proposed issuance of New Units, which notice shall set
forth in reasonable detail the proposed terms and conditions thereof and shall
offer to each Eligible Purchaser the opportunity to purchase its Pro Rata Share
(which Pro Rata Share shall be calculated as of the date of such notice) of the
New Units at the same price, on the same terms and conditions and at the same
time as the New Units are proposed to be issued by the Company. If
any Eligible Purchaser wishes to exercise its preemptive rights, it must do so
by delivering an irrevocable written notice to the Company within fifteen (15)
days after delivery by the Company of the First Notice (the “Election
Period”), which notice shall state the dollar amount of New Units such
Eligible Purchaser (each a “Requesting
Purchaser”) would like to purchase up to a maximum amount equal to such
Eligible Purchaser’s Pro Rata Share of the total offering amount plus the
additional dollar amount of New Units such Requesting Purchaser would like to
purchase in excess of its Pro Rata Share (the “Over-Allotment
Amount”), if any, if other Eligible Purchasers do not elect to purchase
their full Pro Rata Share of the New Units. The rights of each
Requesting Purchaser to purchase a dollar amount of New Units in excess of each
such Requesting Purchaser’s Pro Rata Share of the New Units shall be based on
the relative Pro Rata Share of the New Units of those Requesting Purchasers
desiring Over-Allotment Amounts and not based on the Requesting Purchasers’
relative Over-Allotment Amounts.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
34
(b)
If not all of the New Units are subscribed for by the
Eligible Purchasers, the Company shall have the right, but shall not be
required, to issue and sell the unsubscribed portion of the New Units to the
Proposed Purchaser at any time during the ninety (90) days following the
termination of the Election Period pursuant to the terms and conditions set
forth in the First Notice. The Board may, in its reasonable
discretion, impose such other reasonable and customary terms and procedures such
as setting a closing date, rounding the number of Units covered by this Section 7.10 to the
nearest whole Unit and requiring customary closing deliveries in connection with
any preemptive rights offering. In the event any Eligible Purchaser
refuses to purchase offered Units for which it subscribed pursuant to the
exercise of preemptive rights granted thereto under Section 7.9 and this
Section 7.10,
in addition to any other rights the Company may be permitted to enforce at law
or in equity, such Eligible Purchaser and any Permitted Transferee of such
Eligible Purchaser shall not be considered an Eligible Purchaser for any future
rights granted under Section 7.9 and this
Section 7.10
unless the Board expressly designates such Person as an Eligible Purchaser
(which the Board, in its sole discretion, may do on an offer-by-offer basis or
not at all).
(c)
Notwithstanding anything to the contrary in this Agreement, at
any time after the six-month anniversary of the First Notice with respect to
each proposed issuance of New Units pursuant to this Section 7.10, the
Company shall be entitled to waive, on behalf of each Eligible Purchaser, each
former Eligible Purchaser and each of their respective Affiliates, successors
and assigns and the members, partners, stockholders, directors, managers,
officers, liquidators and employees of each of the foregoing (collectively, the
“Eligible
Purchaser Persons”) any and all claims such Eligible Purchaser Persons
have, had or may have or had with respect to any non-compliance or violation of
this Section
7.10 by any Person with respect to such proposed issuance of New Units
(whether or not any Units were issued or sold pursuant to this Section 7.10), other
than any such claim that has been made in writing and delivered to the Company
prior to the expiration of such six-month anniversary.
7.11 Specific
Performance. Each
Member acknowledges that it shall be impossible to measure in money the damage
to the Company or the Members, if any of them or any transferee or any legal
representative of any party hereto fails to comply with any of the restrictions
or obligations imposed by this Article 7, that every
such restriction and obligation is material, and that in the event of any such
failure, the Company or the Members shall not have an adequate remedy at law or
in damages. Therefore, each Member consents to the issuance of an
injunction or the enforcement of other equitable remedies against him or it at
the suit of an aggrieved party without the posting of any bond or other
security, to compel specific performance of all of the terms of this Article 7 and to
prevent any Disposition of Units in contravention of any terms of this Article 7, and waives
any defenses thereto, including the defenses of: (i) failure of consideration;
(ii) breach of any other provision of this Agreement; and (iii) availability of
relief in damages.
7.12 Termination
Following Qualified Public Offering. Notwithstanding
anything to the contrary in this Article 7, the
provisions of this Article 7 shall
terminate and be of no further force or effect upon the consummation of a
Qualified Public Offering.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
35
ARTICLE
8
MANAGEMENT
8.1 Management
Under Direction of the Board.
(a)
General
Scope. The business and affairs of the Company shall be
managed and controlled by a board of managers (the “Board,”
and each member of the Board, a “Director”),
and, subject to the terms and conditions of this Agreement, the Board shall have
full and complete discretion to manage and control the business and affairs of
the Company, to make all decisions affecting the business and affairs of the
Company and to take all such actions as it deems necessary or appropriate to
accomplish the purposes of the Company as set forth
herein. Notwithstanding the foregoing, no Director in his or her
individual capacity shall have the authority to manage the Company or approve
matters relating to, or otherwise to bind the Company, such powers being
reserved to all of the Directors acting pursuant to Section 8.2(e)
through the Board and to such agents of the Company as designated by the
Board. Neither the Directors nor the officers of the Company have
authority to take any action in contravention of the Genesis
Agreement.
(b)
Specific Powers;
Delegation.
(i)
The Directors are authorized on the Company’s
behalf, and in all cases subject to the restrictions imposed on the Company as
the general partner of Genesis by the Genesis Agreement, to make all decisions
as to the acquisition, financing, maintenance, holding and disposition of the
Company’s assets (the “Company
Property”), and in connection therewith are authorized on the Company’s
behalf, and subject to the terms of this Agreement, to make all decisions as to
(A) the development, sale, lease or other disposition of the Company Property;
(B) the purchase or other acquisition of other assets of all kinds; (C) the
management of all or any part of the Company Property and
the business of the Company; (D) the borrowing of money and the
granting of security interests in the Company Property (including loans from
Members); (E) the prepayment, refinancing or extension of any security interest
affecting the Company Property; (F) the compromise or release of any of the
Company’s claims or debts; (G) the employment of persons, firms or corporations
for the operation and management of the Company’s business; and (H)
determination of the amount of Available Cash and the amount and timing of
Distributions to Members.
(ii)
The Directors are authorized on the
Company’s behalf in its capacity as the general partner of Genesis, to make all
decisions regarding the conduct, direction and management of all activities of
Genesis, and regarding the exercise of all management powers over the business
and affairs of Genesis, in accordance with the terms of the Genesis
Agreement. In this regard, the Directors are authorized on the
Company’s behalf, in its capacity as general partner of Genesis, and subject to
any restrictions contained in the Genesis Agreement, to make all decisions
regarding exercise of the powers now or hereafter granted a general partner of a
limited partnership under applicable Law or that are granted to the general
partner of Genesis under the various provision of the Genesis Agreement, and to
make all decisions related to the exercise of full power and authority to do all
things, on such terms as the Directors in their sole discretion deem necessary
or appropriate, to conduct the business of Genesis, including decisions related
to (A) exercise of all powers set forth in Section 2.5 of the Genesis Agreement,
(B) effectuating the purposes set forth in Section 2.4 of the Genesis Agreement
and (C) the matters specifically listed in Section 7.2 of the Genesis
Agreement.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
36
(iii) The
Directors may delegate to the officers of the Company the authority to conduct
the day to day business and operations of the Company and Genesis, including the
authority, on behalf of the Company acting both in its own capacity and in the
capacity of the general partner of Genesis, to execute and deliver (A) all
contracts, conveyances, assignments, leases, subleases, franchise agreements,
licensing agreements, management contracts and maintenance contracts covering or
affecting the Company Property and the assets of Genesis (“Genesis
Property”); (B) all checks, drafts and other orders for the payment of
the Company’s funds and Genesis’ funds; (C) all promissory notes, mortgages,
deeds of trust, security agreements and other similar documents; (D) all
articles, certificates and reports pertaining to the Company’s or Genesis’
organization, qualification and dissolution; (E) all tax returns and reports;
(F) all documents necessary to acquire Company Property and Genesis Property;
and (G) all other instruments of any kind or character relating to the conduct
of the Company’s or Genesis’ day to day business and operations.
8.2 Board
of Directors.
(a)
Composition; Initial
Directors. The Board shall consist of eleven (11) Directors,
designated as follows:
(i)
six (6) designees of the
▇▇▇▇▇▇▇▇ Entity (each, a “▇▇▇▇▇▇▇▇
Designee”), two (2) of whom must be Independent Directors;
(ii)
subject to Section 8.2(b)(i),
three (3) designees of the ▇▇▇▇▇▇▇ Group (each, a “▇▇▇▇▇▇▇
Designee”), one of whom must be an Independent Director;
(iii) subject
to Section
8.2(b)(ii), one (1) designee of the EIV Entity (the “EIV
Designee”), who must be an Independent Director; and
(iv) subject
to Section
8.2(e), the Chief Executive Officer of the Company.
At least
four (4) of the Directors will be Independent Directors. The ▇▇▇▇▇▇▇▇
Entity shall be entitled to assign its right to designate Directors to any
Person in connection with the Disposition by the ▇▇▇▇▇▇▇▇ Entity of any Series A
Units held by the ▇▇▇▇▇▇▇▇ Entity to such Person. Each Director shall
serve in such capacity until his successor has been elected and qualified or
until such person’s death, resignation or removal. The initial Board
shall consist of the persons listed on Schedule
III. The members of the Board shall be “Managers” within the
meaning of the Act.
(b)
Reduction in
Designees.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
37
(i)
The ▇▇▇▇▇▇▇ Group shall have the right
to (A) designate three Directors pursuant to Section 8.2(a)(ii)
above only so long as the ▇▇▇▇▇▇▇ Group holds in the aggregate at least 75% of
the Series A Units held by the ▇▇▇▇▇▇▇ Group as of the Effective Date, (B) if
the ▇▇▇▇▇▇▇ Group’s holdings fall below the 75% threshold, the ▇▇▇▇▇▇▇ Group
shall continue to have the right to designate two Directors only so long as the
▇▇▇▇▇▇▇ Group holds in the aggregate at least 50% of the Series A Units held by
the ▇▇▇▇▇▇▇ Group as of the Effective Date, and (C) if the ▇▇▇▇▇▇▇ Group’s
holdings fall below the 50% threshold, the ▇▇▇▇▇▇▇ Group shall continue to have
the right to designate one Director only so long as the ▇▇▇▇▇▇▇ Group holds in
the aggregate at least 25% of the Series A Units held by the ▇▇▇▇▇▇▇ Group as of
the Effective Date; provided,
however, that the number of Directors the ▇▇▇▇▇▇▇ Group has a right to
designate hereunder will not be less than the number of Directors the ▇▇▇▇▇▇▇
Group or any of its affiliates has a right to Designate under the ▇▇▇▇▇▇▇
Unitholder Rights Agreement. Any Directors designated by the ▇▇▇▇▇▇▇
Group or any of its affiliates pursuant to the ▇▇▇▇▇▇▇ Unitholder Rights
Agreement shall count toward the number of Directors the ▇▇▇▇▇▇▇ Group has the
right to designate pursuant to Section
8.2(a)(ii). In the event the right of the ▇▇▇▇▇▇▇ Group to
designate Directors is reduced, the ▇▇▇▇▇▇▇ Group shall immediately remove a
▇▇▇▇▇▇▇ Designee and the ▇▇▇▇▇▇▇▇ Entity shall have the right to designate the
number of Directors the ▇▇▇▇▇▇▇ Group is no longer entitled to
designate.
(ii)
The EIV Entity shall have the right to designate one
Director pursuant to Section 8.2(a)(iii)
above only so long as the EIV Entity holds in the aggregate at least 75% of the
Series A Units held by the EIV Entity as of the Effective Date. In
the event the EIV Entity no longer has the right to designate one Director, the
removal of the EIV Designee shall be deemed to occur simultaneously with the EIV
Entity losing such right and the ▇▇▇▇▇▇▇▇ Entity shall have right to designate
such Director.
(c)
Chairman of the
Board. The ▇▇▇▇▇▇▇▇ Entity, acting in its sole discretion,
will have the authority to appoint the Chairman of the Board of Directors, which
will be a position held as a Director, and will not be deemed an officer of the
Company. The Chairman of the Board will preside at all meetings of
the Members or of the Directors at which he may be present, and will have such
other duties, powers and authority as may be prescribed by this Agreement, or by
resolutions adopted by the Directors and which he accepts.
(d)
Time Devoted to
Business. The Directors shall devote only the amount of time
to the Company’s activities as is reasonably necessary to discharge the
Directors’ responsibilities.
(e)
Removal. Subject
to the disqualification of a Director to serve in accordance with Section 8.2(a) above,
any Director designated by a Member may be removed with or without cause only by
vote or consent of the Member entitled to designate such
Director. Any Director not designated by a Member may be removed with
or without cause by a vote or consent of at least a majority of the
Directors. The removal from the Board (with or without cause) of any
director designated under Section 8.2(a)(iv)
above shall be deemed to occur simultaneously with the cessation of his or her
employment as Chief Executive Officer.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
38
(f)
Resignations. A
Director may resign at any time. Such resignation shall be in writing
and shall take effect at the time specified therein or, if no time is specified,
at the time of its receipt by the Company. The acceptance of a
resignation shall not be necessary to make it effective unless expressly so
provided in the resignation.
(g)
Vacancies. In
the event that a vacancy is created on the Board by the death, disability,
retirement, resignation or removal of any Director, such vacancy shall be filled
only by consent of the Member entitled to designate such Director. A
Member or group of Members entitled to designate a Director may do so at any
time by written notice to the Company. Any vacancy created by the
increase in the authorized number of Directors on the Board shall be filled by
the ▇▇▇▇▇▇▇▇ Entity.
(h)
Quorum; Required Vote for
Board Action. Unless otherwise required or permitted by this
Agreement, six (6) Directors, either present (in person or by teleconference) or
represented by proxy, shall constitute a quorum for the transaction of business
at a meeting of the Board, and actions by the Board shall require the vote or
consent of at least six (6) Directors. Each Director shall have one
vote; provided, that the Director
or Directors (other than Independent Directors) designated by a particular
Member shall be entitled to cast in the aggregate a number of votes at a meeting
equal to the number of Directors (other than Independent Directors) such Member
is entitled to designate if (i) any of the Directors (other than Independent
Directors) designated by such Member is not present at such meeting (and such
absent Director shall be deemed to have given a proxy to vote at such meeting to
the other Director or Directors (other than Independent Directors) designated by
such Member) or (ii) if there are any vacancies (other than vacancies to be
filled by Independent Directors) on the Board which such Member is entitled to
fill with its designees (for example, if the ▇▇▇▇▇▇▇▇ Entity is entitled to
designate four (4) non-Independent Directors and have designated only three (3)
non-Independent Directors, then those three (3) non-Independent Directors or
either of them may cast a total of four (4) votes on matters presented to the
Board). A Director entitled to cast multiple votes in accordance with
the foregoing shall, for quorum purposes, count as a number of Directors equal
to such number of votes.
(i)
Place of Meetings; Order of
Business. The Board may hold its meetings and may have an
office and keep the books of the Company, except as otherwise provided by Law,
in such place or places, within or without the State of Delaware, as the Board
may from time to time determine by resolution. At all meetings of the
Board, business shall be transacted in such order as shall from time to time be
determined by the by resolution of the Board.
(j)
Regular
Meetings. The Board shall hold regular meetings of the Board
at least four (4) times each calendar year, at such times and places as shall be
designated from time to time by resolution of the Board. Notice of
such regular meetings shall not be required.
(k)
Special
Meetings. Special meetings of the Board may be called by the
Chairman of the Board, the Chief Executive Officer or any two (2) Directors, on
at least forty-eight (48) hours personal, written, telegraphic, cable, wireless
or electronic notice to each Director, which notice must include appropriate
dial-in information to permit each Director to participate in such meeting by
means of telephone conference. Such notice need not state the purpose
or purposes of, or business to be transacted at, such meeting, except as may
otherwise be required by Law.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
39
(l)
Compensation. The
Directors not employed by the Company may receive compensation for serving on
the Board as approved by the Board. All of the Directors shall be
entitled to reimbursement for reasonable out-of-pocket expenses in attending
meetings of the Board.
(m) Action Without a
Meeting. Any action required or permitted to be taken at any
meeting of the Board may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by Directors having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all Directors entitled to vote thereon were
present and voted. The Board shall deliver a copy of the written
consent to all of the Directors prior to such action being
taken. Prompt notice of the taking of the action without a meeting by
less than a unanimous written consent shall be given by the Company to those
Directors who have not consented in writing, and the writing or writings shall
be filed with the minutes of proceedings of the Board.
(n)
Telephonic Conference
Meeting. Subject to the requirement for notice of meetings,
members of the Board shall have a right to participate in any meeting by means
of a conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in such a meeting shall constitute presence in person at such meeting, except
where a person participates in the meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
(o)
Waiver of Notice Through
Attendance. Attendance of a Director at any meeting of the
Board (including by telephone) shall constitute a waiver of notice of such
meeting, except where such Director attends the meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened and notifies the other Directors at such
meeting of such purpose.
(p)
Reliance on Books, Reports
and Records. Each Director shall, in the performance of his or
her duties, be fully protected in relying in good faith upon the books of
account, opinions reports or statements made to the Company by any of its
Officers or by an independent certified public accountant or by an appraiser
selected with reasonable care by the Board or any other Person pertaining to
matters the Directors reasonably believe to be within the Person’s expertise or
competence, or in relying in good faith upon other records of the
Company.
(q)
Committees of Directors;
Delegation of Authority to Individual Director. The Directors
may designate one or more committees, each of which shall be comprised of one or
more Directors, and may designate one or more of the Directors as alternate
members of any committee. Except for matters that cannot be delegated
to such a committee according to this Agreement, any such committee, to the
extent provided in the resolution establishing it, shall have and may exercise
all of the authority that may be exercised by the Directors. Regular
and special meetings of such committee shall be held in the manner designated by
the Directors or, if not so designated, by such committee. The
Directors may dissolve any committee at any time. In addition, the
Directors may delegate to one or more Directors such authority and duties, and
assign to them such titles, as the Directors may deem advisable. Any
such delegation may be revoked at any time by the Directors. A
majority of the members of a committee will constitute a quorum at a meeting of
the committee. No action may be taken absent a quorum. At
any meeting of a committee the act of a majority of the members who are present
at such meeting at which a quorum is present will be the act of the
committee.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
40
(r)
Audit
Committee. The Directors will designate an Audit Committee
composed entirely of three or more Independent Directors. The Audit
Committee shall perform such functions as may be appropriate, including meeting
for the purpose of deciding on whether or not to grant a Special Approval
pursuant to the terms of the Genesis Agreement, at the request of any
Member.
8.3 Officers.
(a)
Generally.
(i)
The Company may have such officers (the
“Officers”)
as the Board in its discretion may appoint including a Chief Executive Officer,
a President, one or more Vice Presidents, a Secretary, a Treasurer, one or more
Assistant Secretaries, and on or more Assistant Treasurers. The
Directors may, if they desire, elect or appoint additional officers as may be
deemed necessary, and may further identify or describe the rights and duties of
any one or more of the officers of the Company. The Board shall not
be responsible for any misconduct or negligence on the part of any such Officer
appointed in good faith. Any such Officers may, subject to the
general direction of the Board, have responsibility for the management of the
normal and customary day-to-day operations of the Company, and act as “agents” of
the Company in carrying out such activities. Any Officer may resign
at any time. Such resignation shall be in writing and shall take
effect at the time specified therein or, if no time is specified, at the time of
its receipt by the Board. The acceptance of a resignation shall not
be necessary to make it effective unless expressly so provided in the
resignation.
(ii)
The Officers need not be Members,
Directors or residents of the State of Delaware. Any two or more
offices may be held by the same person. An officer shall be deemed
qualified when he enters upon the duties of the office to which he has been
elected or appointed and furnishes any bond required by the Directors; but the
Directors also may require his written acceptance and promise faithfully to
discharge the duties of such office.
(iii) Subject
to the rights and obligations contained in any employment or similar agreement
between the Company and an Officer, each Officer shall hold his office at the
pleasure of the Directors or for such other period as the Directors may specify
by agreement or otherwise at the time of his election or appointment, or until
his death, resignation, replacement or removal by the Directors, whichever first
occurs.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
41
(iv) The
Directors from time to time also may appoint such other agents for the Company
as they shall deem necessary or advisable, each of whom shall serve at the
pleasure of the Directors or for such period as the Directors may specify, and
shall exercise such powers, have such titles and perform such duties as shall be
determined from time to time by the Directors or by an officer empowered by the
Directors to make such determinations.
(b)
Removal. The
Board may remove any Officer or agent or member of a committee, and any
employee, with or without cause at any time; provided, however, that such
removal shall be without prejudice to the contractual rights, if any, of the
Officer so removed. Election or appointment of an Officer shall not
of itself create contract rights.
(c)
Compensation. The
Officers shall receive compensation for their services as approved by the
Directors. To the extent the officers shall incur out-of-pocket costs
and expenses in the course of their service hereunder, including the portion of
their overhead reasonably allocable to Company activities, the officers shall be
reimbursed for such costs and expenses by the Company.
(d)
Delegation of Authority to
Hire, Discharge and Designate Duties. The Directors from time
to time may delegate to the Chief Executive Officer or other officer or
executive employee of the Company, authority to hire, discharge, and fix and
modify the duties, salary or other compensation of, employees of the Company
under their jurisdiction, and the Directors may delegate to such officer or
executive employee similar authority with respect to obtaining and retaining for
the Company the services of attorneys, accountants, and other
experts.
(e)
Chief Executive
Officer. In the absence of the Chairman of the Board, the
Chief Executive Officer shall preside at all meetings of the Members or of the
Directors at which he may be present. The Chief Executive Officer
shall have such other duties, powers, and authority as may be prescribed in this
Agreement or by resolutions adopted by the Directors. The Directors
may delegate such other authority and assign such additional duties to the Chief
Executive Officer, other than those conferred by law exclusively upon the
President, as they may from time to time determine, and, to the extent
permissible by law, the Directors may confer on the Chief Executive Officer all
of the powers otherwise conferred upon the President of the Company under Section 8.3(f) of
this Agreement, or they may, from time to time, divide the responsibilities,
duties, and authority for the general control and management of the Company’s
business and affairs between the Chief Executive Officer and the
President.
(f)
President. Subject
to any resolutions adopted by the Directors regarding the duties, powers and
authority of the President, the President shall have such general executive
powers and duties of supervision and management as usually are vested in the
office of the president of a corporation, and he shall carry into effect all
directions and resolutions of the Directors. The President, in the
absence of the Chairman of the Directors and the Chief Executive Officer, shall
preside at all meetings of the Members or of the Directors.
The
President may execute all bonds, notes, debentures, mortgages, and other
contracts requiring a seal, under the seal of the Company, may cause the seal to
be affixed thereto, and may execute all other instruments for and in the name of
the Company.
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Unless
the Directors otherwise provide, the President, or any person designated in
writing by him, may (i) attend meetings of shareholders, partners or members of
other companies to represent this Company thereat and to vote or take action
with respect to interests of any such company owned by this Company in such
manner as he or his designee may determine, and (ii) execute and deliver waivers
of notice and proxies for and in the name of this Company with respect to
interests of any such company owned by this Company.
He shall,
unless the Directors otherwise provide, be an ex officio member of all standing
committees.
He shall
have such other or further duties and authority as may be prescribed elsewhere
in this Agreement or from time to time or by resolutions adopted by the
Directors.
(g)
Vice
Presidents. In the absence, disability, or inability or
refusal to act of the President, any Vice President may perform the duties and
exercise the powers of the President, until the Directors otherwise
provide. Vice Presidents shall perform such other duties and have
such other power and authority as shall from time to time be prescribed by
resolutions adopted by the Directors.
(h)
The Secretary and Assistant
Secretaries. The Secretary shall attend all sessions of the
Directors and all meetings of the Members, shall prepare minutes of all
proceedings at such meetings, and shall preserve them in a minute book of the
Company. He shall perform similar duties for the executive and other
standing committees when requested by the Directors or any such
committee. He shall see that all books, records, lists, and
information, or duplicates, required to be maintained at the registered or other
office of the Company in Delaware, or elsewhere, are so
maintained. He shall perform such other duties and have such other
responsibility and authority as may be prescribed elsewhere in this Agreement or
shall from time to time be prescribed by resolutions adopted by the Directors or
by the Chief Executive Officer or President of the Company, under whose direct
supervision he shall be.
Any
Assistant Secretary, in the absence, disability, or inability or refusal to act
of the Secretary, may perform the duties and exercise the powers of the
Secretary until the Directors otherwise provide. Assistant
Secretaries shall perform such other duties and have such other authority as the
Directors may from time to time prescribe.
(i)
The Treasurer and Assistant
Treasurers. The Treasurer shall have responsibility for the
safekeeping of the funds and securities of the Company, shall keep or cause to
be kept full and accurate accounts of receipts and disbursements in books
belonging to the Company, and shall keep, or cause to be kept, all other books
of account and accounting records of the Company. He shall deposit or
cause to be deposited all moneys and other valuable effects in the name and to
the credit of the Company in such depositories as may be designated by the
Directors or by any officer of the Company to whom such authority has been
granted by the Directors. He shall disburse, or permit to be
disbursed, the funds of the Company as may be ordered, or authorized generally,
by the Directors, and shall render to the Chief Executive Officer and President
of the Company and the Directors, whenever they may require it, an account of
all his transactions as Treasurer and of those under his jurisdiction, and of
the financial condition of the Company. He shall perform such other
duties and shall have such other responsibility and authority as may be
prescribed elsewhere in this Agreement or from time to time by resolutions
adopted by the Directors.
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He shall,
unless otherwise provided by the Directors, be the chief financial and
accounting officer of the Company.
If
required by the Directors, he shall give the Company a bond in a sum and with
one or more sureties satisfactory to the Directors for the faithful performance
of the duties of his office and for the restoration to the Company, in the case
of his death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in his possession
or under his control which belong to the Company.
Any
Assistant Treasurer, in the absence, disability, or inability or refusal to act
of the Treasurer, may perform the duties and exercise the powers of the
Treasurer until the Directors otherwise provide. Assistant Treasurers
shall perform such other duties and have such other authority as the Directors
may from time to time prescribe.
(j)
Duties of Officers May be
Delegated. If any Officer be absent or unable to act, or for
any other reason that the Directors may deem sufficient, the Directors may
delegate, for the time being, some or all of the functions, duties, powers, and
responsibilities of any officer to any other officer, or to any other agent or
employee of the Company or other responsible person, provided a majority of all
the Directors concurs.
8.4 Members. The
Members in their capacity as such shall not have any power or authority to
manage the business or affairs of the Company or to bind the Company or enter
into agreements on behalf of the Company. To the fullest extent
permitted by Law and notwithstanding any provision of this Agreement or any
Transaction Document, no Member shall have any duty, fiduciary or otherwise, to
the Company or any other Member in connection with the business and affairs of
the Company or any consent or approval given or withheld pursuant to this
Agreement or any Transaction Document. Except as otherwise expressly
provided in this Agreement, Members shall have no voting rights or rights of
approval, veto or consent or similar rights over any actions of the
Company. Any matter requiring the consent or approval of any of the
Members pursuant to this Agreement shall be taken without a meeting, without
prior notice and without a vote, by a consent in writing, setting forth such
consent or approval, and signed by the holders of not less than the number of
outstanding Units necessary to consent to or approve such
action. Prompt notice of such consent or approval shall be given by
the Company to those Members who have not joined in such consent or
approval.
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8.5 Decisions
Requiring Board Approval.
(a)
Notwithstanding anything in this Agreement to the contrary,
the following actions by the Company or any of its Subsidiaries shall require
approval by the Board in accordance with Section 8.2(h), and
the ▇▇▇▇▇▇▇▇ Entity, in its capacity as a Member:
(i)
any distribution to the holders of Units or any
redemption, acquisition or repurchase of any Units or other Membership Interests
(including any securities convertible into or exercisable or exchangeable for a
Unit or other Membership Interest);
(ii)
the election or removal of Officers;
(iii) entering
into or amending any employment or severance agreement with any Officer or
employee of the Company, and all compensation programs (including base salaries,
bonuses and allocation of amounts reserved by the Company pursuant to Section 6.1(j)) for
officers and key employees;
(iv) the
creation, authorization or issuance of any Units (including the establishment of
Threshold Values for Series B Units) or other Membership Interests (including
any equity-based compensation program, or any securities convertible into or
exercisable or exchangeable for a Unit or other Membership Interest), or the
admission of a Member;
(v)
the adoption of the Annual Budget, any modification to the
Annual Budget, or the taking of any action that is or would be reasonably likely
to be in variance therefrom (including any change in the actual proposed
expenditure or revised expenditure projections of the Annual Budget of more than
$1,000,000 individually or in the aggregate);
(vi) entering
into or amending any joint venture, partnership or material operating
alliance;
(vii) entering
into or amending a note, credit agreement, credit facility, letter of credit or
other instrument of indebtedness in an aggregate amount of $1,000,000 or more in
any transaction or series of related transactions (unless previously included in
an Annual Budget that has been approved by the Board); otherwise incurring
indebtedness or agreeing to furnish a guarantee or other credit support in an
amount in excess of $1,000,000 in any transaction or series of related
transactions; or the purchase, redemption, cancellation, prepayment or other
complete or partial discharge in advance of a scheduled payment or mandatory
redemption date of any such obligation in any transaction or series of related
transactions;
(viii) the
purchase, sale, lease, transfer or other acquisition or disposition of assets
(including the disposition of equity securities) in any transaction or series of
related transactions for consideration (including assumed indebtedness) in
excess of $1,000,000 (unless previously included in an Annual Budget that has
been approved by the Board);
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(ix) any
real estate lease or purchase;
(x) any
agreement outside of the ordinary course of business;
(xi) any
commencement or settlement of any litigation, investigation or
proceeding;
(xii) except
as specified in the Annual Budget, entering into any agreement or series of
related agreements (A) involving expenditures in excess of $1,000,000, or (B)
which contain material restrictions on the operation of the business of the
Company and its Subsidiaries or their Affiliates;
(xiii) any
sale of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole;
(xiv) any
consolidation, merger or other business combination or any conversion to another
type or form of business entity;
(xv) any
Liquidation Event;
(xvi) the
registration of any securities under the Securities Act or any public offering
of securities (including any Qualified Public Offering);
(xvii) the
adoption of a plan or proposal for a complete or partial liquidation,
reorganization or recapitalization or commencement of any case, proceeding or
action seeking relief under any laws relating to bankruptcy, insolvency,
conservatorship or relief of debtors, or applying for or consenting to the
appointment of a receiver, trustee, custodian, conservator or similar official,
or filing an answer admitting the material allegations of a petition filed
against the Company or any of its Subsidiaries in any such proceeding, or making
a general assignment for the benefit of creditors, or admitting in writing its
inability or failing generally to pay its debts as they become due;
(xviii) making,
modifying or withdrawing any Capital Call;
(xix) any
transaction with any Officers (other than in their capacity as such), Directors
or Affiliates of the Company;
(xx) the
adoption of any voluntary change in the tax classification for federal income
tax purposes of the Company or any of its Subsidiaries;
(xxi) selection
of the Company’s independent public accountants;
(xxii) any
change in the principal line of business of the Company and its Subsidiaries
taken as a whole or in the Company’s purpose as set forth in Section
2.4;
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(xxiii) approval
of any other item specifically required elsewhere in this Agreement to be
approved by the Board;
(xxiv) any
acquisition of another business or entity or assets for which the consideration
consists, all or in part, of Units or options or other rights to acquire
Units;
(xxv)
make or acquire any investments in (including the purchase or other acquisition
of equity securities), or purchase or otherwise acquire all or substantially all
of the assets of, or make any loans to, any Person; and
(xxvi) entering
into any agreement or otherwise committing to do any of the
foregoing.
8.6 Acknowledgement
Regarding Outside Businesses and Opportunities.
(a)
Notwithstanding anything in this Agreement or any
other Transaction Document to the contrary, each of the Company and the Members
acknowledges and agrees that the Investors and their respective Affiliates (i)
have made, prior to the date hereof, and are expected to make, on and after the
date hereof, investments (by way of capital contributions, loans or otherwise),
and (ii) have engaged, prior to the date hereof, and are expected to engage, on
and after the date hereof, in other transactions with and with respect to, in
each case, Persons engaged in businesses that directly or indirectly compete
with the business of the Company and its Subsidiaries as conducted from time to
time. The Company and the Members agree that any involvement,
engagement or participation of such Investors and their respective Affiliates
(including any Investor Designee) in such investments, transactions and
businesses, even if competitive with the Company, shall not be deemed wrongful
or improper or to violate any duty express or implied under applicable
Law.
(b)
The Company and each Member hereby renounces any interest or
expectancy in any business opportunity, transaction or other matter in which any
member of the Investor Group participates or desires or seeks to participate and
that involves any aspect of the energy business or any other industry or
business (each, a “Business
Opportunity”) other than a Business Opportunity that (i) is related to
the business of the Company and is presented to an Investor Designee solely in
such individual’s capacity as a Director and with respect to which no member of
the Investor Group (other than an Investor Designee solely in such individual’s
capacity as a Director) independently receives notice or otherwise identifies
such Business Opportunity or (ii) is identified by the Investor Designee solely
through the disclosure of information by or on behalf of the Company to such
Investor Designee (solely in such individual’s capacity as a Director) and with
respect to which no other member of the Investor Group independently receives
notice or otherwise identifies, unless with respect to each of clauses (i) and
(ii), the Investor Designee reasonably believes the Company does not have the
financial or organizational resources to pursue such Business Opportunity (each
Business Opportunity other than those referred to in clauses (i) or (ii),
subject to satisfying the qualifications above relating thereto, are referred to
as a “Renounced
Business Opportunity”). No member of the Investor Group,
including any Investor Designee, shall have any obligation to communicate or
offer any Renounced Business Opportunity to the Company, and any member of the
Investor Group may pursue for itself or direct, sell, assign or transfer to a
Person other than the Company any Renounced Business Opportunity.
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(c)
Each of the Company and the Members hereby agrees
that any claims against, actions, rights to ▇▇▇, other remedies or other
recourse to or against the Investors, any Covered Person or any of their
respective Affiliates for or in connection with any such investment activity or
other transaction activity or other matters described in Section 8.6(a) or
(b), or activities related to any of the foregoing, whether arising in common
law or equity or created by rule of law, statute, constitution, contract
(including this Agreement or any other Transaction Document) or otherwise, are
expressly released and waived by the Company and each Member, in each case to
the fullest extent permitted by Law.
(d)
Notwithstanding anything in this Agreement or any
other Transaction Document to the contrary, each of the Company and the Members
acknowledges and agrees that the Investors and their respective Affiliates
(including the Investor Designees) have obtained, prior to the date hereof, and
are expected to obtain, on and after the date hereof, confidential information
from other entities in connection with the activities and transactions described
in Section
8.6(a) or otherwise. Each of the Company and the Members
hereby agrees that (i) none of the Investors or any of their respective
Affiliates (including the Investor Designees) has any obligation to use in
connection with the business, operations, management or other activities of the
Company or to furnish to the Company or any Member any such confidential
information, and (ii) that any claims against, actions, rights to ▇▇▇, other
remedies or other recourse to or against the Investors, any Covered Person or
any of their respective Affiliates (including the Investor Designees) for or in
connection with any such failure to use or to furnish such confidential
information, whether arising in common law or equity or created by rule of law,
statute, constitution, contract (including this Agreement or any other
Transaction Document) or otherwise, are expressly released and waived by the
Company and each Member, to the fullest extent permitted by Law.
(e)
The parties to this Agreement acknowledge that the
▇▇▇▇▇▇▇▇ Entity is affiliated with several funds controlled, directly or
indirectly, by ▇▇▇▇▇▇▇▇ Capital Group GP, Ltd., a Cayman Islands exempted
company (“QCG”) and
that QCG or an affiliate thereof, directly or indirectly manages other funds and
may form additional funds in the future (such other funds, and such other funds’
respective parallel, alternative and related investment funds are collectively
referred to as the “Related
Funds”). The ▇▇▇▇▇▇▇▇ Entity and the Related Funds have or may
have certain common investors and similar or overlapping investment
objectives. Moreover, certain individuals who perform services on
behalf of QCG or the ▇▇▇▇▇▇▇▇ Entity (including those who make investment
decisions on behalf thereof), its general partner or its management company also
perform or may perform services on behalf of one or more of the Related Funds
(each such individual is referred to herein as a “Fund
Participant”). Neither any Related Funds nor any Fund
Participant to which Confidential Information is not disclosed shall be
restricted by the terms of this agreement. Given the related nature
of the ▇▇▇▇▇▇▇▇ Entity, the Related Funds and the Fund Participants, the parties
recognize that the Related Funds and Fund Participants may be aware of the
relationship or the transaction contemplated hereby, but no breach of this
agreement will arise by reason of such knowledge. The ▇▇▇▇▇▇▇▇ Entity
and the Related Funds currently have and will likely acquire in the future
investments in numerous energy-related companies (collectively, the “Portfolio
Companies”). As such, the Company understands that the
Portfolio Companies, or any of them, may have lines of business similar to or in
competition with those of the Company, may have some of the same customers,
suppliers, vendors, contractors and service providers as the Company and may
have operating, financial and other attributes similar to those of the
Company. Nevertheless, no breach of this Agreement shall exist merely
because of these competing businesses, common third-party relationships or
similar business attributes. In addition, if Confidential Information
is actually disclosed to a Fund Participant, but such Fund Participant does not
actually disclose such information to any Portfolio Company for which such Fund
Participant serves as a director, manager or officer, or any other director,
manager, officer or employee of such Portfolio, neither such Portfolio Company
nor any of its directors, managers, officers or employees shall be considered a
Restricted Person under this Agreement and therefore shall not be restricted by
the terms hereof.
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8.7 No
Fiduciary Duties.
(a)
TO THE FULLEST EXTENT PERMITTED
BY LAW, AND NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT, THERE SHALL NOT BE
ANY DUTY, FIDUCIARY OR OTHERWISE, OWED BETWEEN THE MEMBERS (OR BY A MEMBER TO
THE COMPANY), OR BY ANY OF THE DIRECTORS (OTHER THAN INDEPENDENT DIRECTORS) TO
THE MEMBERS OR TO THE COMPANY THAT MAY BE IMPOSED BY LAW UPON A DIRECTOR OR
MEMBER BY VIRTUE OF SUCH PERSON’S STATUS AS A “MANAGER” OR “MEMBER” (AS SUCH
TERMS ARE USED IN THE ACT) OF A DELAWARE LIMITED LIABILITY
COMPANY. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
EACH OF THE MEMBERS ACKNOWLEDGES AND AGREES THAT EACH MEMBER, IN ITS CAPACITY AS
A MEMBER, AND EACH DIRECTOR (OTHER THAN INDEPENDENT DIRECTORS) MAY DECIDE OR
DETERMINE ANY MATTER SUBJECT TO THE APPROVAL OF SUCH MEMBER OR ANY SUCH DIRECTOR
PURSUANT TO ANY PROVISION OF THIS AGREEMENT IN THE SOLE AND ABSOLUTE DISCRETION
OF SUCH MEMBER OR ANY SUCH DIRECTOR, AND IN MAKING SUCH DECISION OR
DETERMINATION SUCH MEMBER OR ANY SUCH DIRECTOR SHALL HAVE NO DUTY, FIDUCIARY OR
OTHERWISE, TO ANY OTHER MEMBER OR TO THE COMPANY, IT BEING THE INTENT OF ALL
MEMBERS THAT SUCH MEMBER, IN ITS CAPACITY AS A MEMBER, AND EACH DIRECTOR (OTHER
THAN INDEPENDENT DIRECTORS) HAVE THE RIGHT TO MAKE SUCH DETERMINATION SOLELY ON
THE BASIS OF ITS OWN INTERESTS OR THE INTERESTS OF THE MEMBER(S) THAT DESIGNATED
SUCH DIRECTOR. EACH OF THE COMPANY AND THE MEMBERS HEREBY AGREES THAT
ANY CLAIMS AGAINST, ACTIONS, RIGHTS TO ▇▇▇, OTHER REMEDIES OR OTHER RECOURSE TO
OR AGAINST THE MEMBERS OR ANY OF THEIR RESPECTIVE AFFILIATES, AND EACH DIRECTOR,
FOR OR IN CONNECTION WITH ANY SUCH DECISION OR DETERMINATION, IN EACH CASE
WHETHER ARISING IN COMMON LAW OR EQUITY OR CREATED BY RULE OF LAW, STATUTE,
CONSTITUTION, CONTRACT (INCLUDING THIS AGREEMENT) OR OTHERWISE, ARE IN EACH CASE
EXPRESSLY RELEASED AND WAIVED BY THE COMPANY AND EACH MEMBER, TO THE FULLEST
EXTENT PERMITTED BY LAW, AS A CONDITION OF, AND AS PART OF THE CONSIDERATION
FOR, THE EXECUTION OF THIS AGREEMENT AND ANY RELATED AGREEMENT, AND THE
INCURRING BY THE MEMBERS OF THE OBLIGATIONS PROVIDED IN SUCH
AGREEMENTS. NOTHING HEREIN SHALL BE DEEMED TO ALTER THE CONTRACTUAL
OBLIGATIONS OF A MEMBER TO ANOTHER MEMBER OR TO THE COMPANY PURSUANT TO THIS
AGREEMENT. THE PROVISIONS OF THIS AGREEMENT, TO THE EXTENT THAT THEY
RESTRICT OR ELIMINATE THE DUTIES OR LIABILITIES OF A PARTICULAR PERSON OTHERWISE
EXISTING AT LAW OR IN EQUITY, ARE AGREED BY THE MEMBERS TO REPLACE SUCH DUTIES
AND LIABILITIES EXISTING AT LAW OR IN EQUITY OF SUCH PERSON. NOTHING
IN THIS SECTION
8.7 SHALL CREATE ANY DUTY OR LIABILITY THAT DOES NOT EXIST AT LAW OR IN
EQUITY.
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8.8 Amendment,
Modification or Repeal. Any
amendment, modification or repeal of the second sentence of Section 8.4 or Section 8.6 or Section 8.7 or any
provision thereof shall be prospective only and shall not in any way affect the
limitations on the liability under such provisions as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
ARTICLE
9
PRE-EFFECTIVE
TIME LIMITATION OF LIABILITY AND INDEMNIFICATION
9.1 Exculpation. Directors
and officers of the Company shall not be liable to the Company or its Members
for monetary damages for an act or omission in the Director’s capacity as a
Director or the officer’s capacity as an officer, as the case may be, relating
to any action or omission occurring prior to the Effective Time except that this
Section does not eliminate or limit the liability of a Director or officer to
the extent the Director or officer is found liable for (i) an act or omission
occurring prior to the Effective Time not in good faith that involves
intentional misconduct or a knowing violation of the law; (ii) a transaction
occurring prior to the Effective Time from which the Director or officer
received an improper benefit, whether or not the benefit resulted from an action
taken within the scope of the respective Director’s or officer’s office; or
(iii) an act or omission occurring prior to the Effective Time for which the
liability of a Director or officer is expressly provided by an applicable
statute. Any repeal or amendment of this Section 9.1 by the
Members shall be prospective only and shall not adversely affect any limitation
on the liability of a Director or officer under this Article 9 existing at
the time of such repeal or amendment. In addition to the
circumstances in which a Director or officer is not liable as set forth in the
preceding sentences, a Director or officer shall not be liable for any act or
omission occurring prior to the Effective Time to the fullest extent permitted
by any provision of the statutes of Delaware hereafter enacted that further
limits the liability of a manager or officer of a limited liability
company.
9.2 Right
to Indemnification. Subject
to the limitations and conditions as provided in this Article 9, each
Person who was or is made a party or is threatened to be made a party to or is
involved in any threatened, pending, or completed action, suit or proceeding
relating to any action or alleged action or failure to act or alleged failure to
act occurring prior to the Effective Time, whether civil, criminal,
administrative, arbitrative or investigative (hereinafter a “Pre-Effective
Time Proceeding”), or any appeal in such a Pre-Effective Time Proceeding
or any inquiry or investigation that could lead to such a Pre-Effective Time
Proceeding, by reason of the fact that such Person, or another Person of whom
such Person is the legal representative, is or was a Member and/or Director of
the Company or while a Member and/or Director of the Company is or was serving
at the request of the Company prior to the Effective Time as a member, manager,
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise, shall be indemnified by the Company to the
fullest extent permitted by the Act, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than the
Act permitted the Company to provide prior to such amendment) against losses,
damages, claims, demands, judgments, penalties (including excise and similar
taxes and punitive damages), fines, amounts paid in settlement and reasonable
expenses (including attorneys’ fees) actually incurred by such Person in
connection with such Pre-Effective Time Proceeding (collectively “Pre-Effective
Time Indemnified Damages”), and indemnification under this Article 9 shall
continue as to a Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder. The rights granted pursuant to this
Article 9 shall
be deemed contract rights, and no amendment, modification or repeal of this
Article 9 shall
have the effect of limiting or denying any such rights with respect to actions
taken or Pre-Effective Time Proceedings arising prior to any such amendment,
modification, or repeal. It is expressly acknowledged that the indemnification
provided in this Article 9 could
involve indemnification for negligence or under theories of strict
liability.
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9.3 Limitations. No
Member, Director or other Person (“Pre-Effective
Time Covered Person”) shall be entitled to be indemnified in respect of
any Pre-Effective Time Indemnified Damages incurred by such Pre-Effective Time
Covered Person by reason of (i) an act or omission of such Pre-Effective Time
Covered Person that involves intentional misconduct or a knowing violation of
the law, (ii) a transaction from which the Pre-Effective Time Covered Person
received an improper benefit, whether or not the benefit resulted from an action
taken within the scope of such Pre-Effective Time Covered Person’s office, or
(iii) an act or omission for which the liability of such Pre-Effective Time
Covered Person is expressly provided by an applicable statute. Any
indemnity under this Article 9 by the
Company shall be provided out of and to the extent of Company assets only, and
no Member shall have personal liability on account thereof.
9.4 Advance
Payment. The
right to indemnification conferred in this Article 9 shall
include the right to be paid or reimbursed by the Company the reasonable
expenses incurred by a Person of the type entitled to be indemnified under this
Article 9 who
was, is or is threatened to be made a named defendant or respondent in a
Pre-Effective Time Proceeding in advance of the final disposition of the
Pre-Effective Time Proceeding and without any determination as to the Person’s
ultimate entitlement to indemnification; provided, however, that the payment of
such expenses incurred by any such Person in advance of the final disposition of
a Pre-Effective Time Proceeding, shall be made only upon delivery to the Company
of a written affirmation by such Person of its good faith belief that it has met
the standard of conduct necessary for indemnification under this Article 9 and a
written undertaking, by or on behalf of such Person, to repay all amounts so
advanced if it shall ultimately be determined that such indemnified Person is
not entitled to be indemnified under this Article 9 or
otherwise.
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9.5 Pre-Effective
Time Indemnification of Officers, Employees and Agents. The
Company shall indemnify and advance expenses to an Officer of the Company for
any matters relating to any action or alleged action or failure to act or
alleged faliure to act occurring prior to the Effective Time or a Pre-Effective
Time Proceeding to the extent required to do so by the Act or other applicable
Law, or any employment agreement with such Officer. The Company, by adoption of
a resolution by the Board, may indemnify and advance expenses to such an
Officer, employee or agent of the Company to the same extent and subject to the
same conditions under which it may indemnify and advance expenses to Members
and/or Directors under this Article 9 or to such
other extent as the Board of Directors deem advisable; and, the Company may
indemnify and advance expenses to Persons who are not or were not Members and/or
Directors, Officers, employees, or agents of the Company but who are or were
serving at the request of the Company prior to the Effective Time as a member,
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic limited liability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise against any liability asserted
against such Person and incurred by such Person in such a capacity or arising
out of its status as such a Person to the same extent that the Company may
indemnify and advance expenses to Members and/or Directors under this Article
9.
9.6 Appearance
as a Witness. Notwithstanding
any other provision of this Article 9, the
Company may pay or reimburse expenses incurred by a Member, Director or other
Person indemnified pursuant to this Article 9 in
connection with its appearance as a witness or other participation in a
Pre-Effective Time Proceeding at a time when it is not a named defendant or
respondent in the Pre-Effective Time Proceeding.
9.7 Nonexclusivity
of Rights. The
right to indemnification and the advancement and payment of expenses conferred
in this Article
9 shall not be exclusive of any other right which a Member or Director,
or other Person indemnified pursuant to this Article 9 may have or
hereafter acquire under any Law, provision of this Article 9 or this
Agreement, agreement, vote of Members, or otherwise.
9.8 Insurance. The
Company may maintain insurance to protect itself and any Pre-Effective Time
Covered Person against any liability asserted against such Person and incurred
by such Person or on such Person’s behalf whether or not the Company would have
the power to indemnify such Person against such liability under the provisions
of this Article
9.
9.9 Member
Notification. To
the extent required by Law, any indemnification of or advance of expenses to a
Member in accordance with this Article 9 shall be
reported in writing to the other Members with or before the notice or waiver of
notice of the next Members’ meeting or with or before the next submission to
Members of a consent to action without a meeting and, in any case, within the 12
month period immediately following the date of the indemnification or
advance.
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9.10 Savings
Clause. If
this Article 9
or any portion hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Company shall nevertheless indemnify and hold
harmless each Member, Director, or any other Person indemnified pursuant to this
Article 9 as to
Pre-Effective Time Indemnified Damages, to the fullest extent permitted by any
applicable portion of this Article 9 that shall
not have been invalidated and to the fullest extent permitted by
Law.
ARTICLE
10
POST-EFFECTIVE
TIME LIMITATION OF LIABILITY AND INDEMNIFICATION
10.1 Limitation
of Liability and Indemnification of the Covered Persons.
(a)
Notwithstanding any
other terms of this Agreement or any Transaction Document, whether express or
implied, or any obligation or duty at Law or in equity, and, to the fullest
extent permitted by Law, none of the Covered Persons shall be liable to the
Company or to any Member for losses sustained or liabilities incurred as a
result of any act or omission in connection with the Company’s business (in
relation to the Company, any transaction, any investment or any business
decision or action, including for breach of contract or breach of duties) taken
or omitted by a Covered Person on or after the Effective Time, unless there has
been a final and non-appealable judgment entered by a court of competent
jurisdiction determining that, in respect of such act or omission, and taking
into account the acknowledgments and agreements set forth in this Agreement
(including Section
8.6 and Section
8.7), such Covered Person acted in bad faith, engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with knowledge that such
Covered Person’s conduct was unlawful.
(b)
Any Covered Person acting
for, on behalf of or in relation to, the Company in respect of any transaction,
any investment or any business decision or action or otherwise on or after the
Effective Time shall be entitled to rely on the provisions of the Transaction
Documents and on the advice of counsel, accountants and other professionals that
is provided to the Company or such Covered Person, and such Covered Person shall
not be liable to the Company or to any Member for such Covered Person’s reliance
on any Transaction Document or such advice, provided, that there has not
been a final and non-appealable judgment entered by a court of competent
jurisdiction determining that, in respect of such reliance, and taking into
account the acknowledgments and agreements set forth in this Agreement
(including Section
8.6 and Section
8.7), such
Covered Person acted in bad faith, engaged in fraud or willful misconduct or, in
the case of a criminal matter, acted with knowledge that such Covered Person’s
conduct was unlawful. The provisions of any Transaction Document, to
the extent that they restrict or eliminate the duties and liabilities of a
Covered Person otherwise existing at Law or in equity, are agreed by the Members
to replace, to the fullest extent permitted by applicable Law, such duties and
liabilities existing at Law or in equity of such Covered Person. This
Section 10.1(b)
does not create any duty or liability of a Covered Person that does not
otherwise exist at Law or in equity. Notwithstanding any provisions
of Law or in equity to the contrary, whenever a Covered Person (other than a
Independent Director) is permitted or required to make a decision on or after
the Effective Time in its “sole discretion” or “discretion” or under a grant of
similar authority or latitude, such Covered Person shall be entitled to consider
only such interests (including its own interests) and factors as it desires, and
shall have no duty or obligation to give any consideration to any interest of or
factors affecting the Company, the Members or any other person to the fullest
extent permitted by applicable Law. Each Member agrees that each
▇▇▇▇▇▇▇▇ Designee serves as a Director in order to represent the interests of
the ▇▇▇▇▇▇▇▇-Related Entities and that each ▇▇▇▇▇▇▇▇ Designee shall be entitled
to consider only the interests of the ▇▇▇▇▇▇▇▇-Related Entities in such Person’s
capacity and actions as a Director and shall not owe any duty, fiduciary or
otherwise, at Law or in Equity to the Company, any Member other than the QEP
Entity or to any creditor of the Company (whether or not the Company is
insolvent or near insolvency).
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(c)
Each Covered Person (regardless of such person’s
capacity and regardless of whether another Covered Person is entitled to
indemnification) shall be indemnified and held harmless by the Company (but only
to the extent of the Company’s assets), to the fullest extent permitted under
applicable Law, from and against any and all loss, liability and expense
(including taxes; penalties; judgments; fines; amounts paid or to be paid in
settlement; costs of investigation and preparations; and fees, expenses and
disbursements of attorneys, whether or not the dispute or proceeding involves
the Company or any Manager or Member) reasonably incurred or suffered by any
such Covered Person on or after the Effective Time in connection with the
activities of the Company on or after the Effective Time, provided, that such Covered
Person shall not be so indemnified and held harmless if there has been a final
and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which such Covered Person is
seeking indemnification or seeking to be held harmless hereunder, and taking
into account the acknowledgments and agreements set forth in this Agreement
(including Section
8.6 and Section
8.7), such Covered Person acted in bad faith, engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with knowledge that such
Covered Person’s conduct was unlawful. A Covered Person shall not be
denied indemnification in whole or in part under this Section 10.1 because
such Covered Person had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms
of this Agreement.
(d)
Each Covered Person may rely, and shall
incur no liability in acting or refraining from acting, upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, paper, document, signature or writing reasonably
believed by it to be genuine, and may rely on a certificate signed by an
officer, agent or representative of any Person in order to ascertain any fact
with respect to such person or within such Person’s knowledge, in each case
unless there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of such reliance, action or
inaction, such Covered Person acted in bad faith, engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with knowledge that such
Covered Person’s conduct was unlawful.
(e)
NOTWITHSTANDING ANYTHING IN ANY TRANSACTION DOCUMENT TO
THE CONTRARY, TO THE FULLEST EXTENT PERMITTED BY LAW, NEITHER THE COMPANY NOR
ANY COVERED PERSON SHALL BE LIABLE TO THE COMPANY, TO ANY MEMBER OR TO ANY OTHER
PERSON MAKING CLAIMS ON BEHALF OF THE FOREGOING FOR CONSEQUENTIAL, EXEMPLARY,
PUNITIVE, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF
PROFITS, LOSS OF USE OR REVENUE OR LOSSES BY REASON OF COST OF CAPITAL, ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, THE
BUSINESS OF THE COMPANY, THE GRANTING OR WITHHOLDING OF ANY APPROVAL REQUIRED
HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHETHER BASED
ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, VIOLATION OF ANY
APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR SIMILAR LAW OR ANY OTHER LEGAL OR
EQUITABLE DUTY OR PRINCIPLE, AND THE COMPANY AND EACH COVERED PERSON RELEASE
EACH OF THE OTHER SUCH PERSONS FROM LIABILITY FOR ANY SUCH DAMAGES.
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(f)
The obligations of the Company to the Covered Persons provided
in the Transaction Documents or arising under Law are solely the obligations of
the Company, and no personal liability whatsoever shall attach to, or be
incurred by, any Member or other Covered Person for such obligations, to the
fullest extent permitted by Law. The obligations of each Investor
which is a Member provided in the Transaction Documents or arising under Law are
solely the obligations of such Investor, and no personal liability whatsoever
shall attach to, or be incurred by, any other Covered Person for such
obligations, to the fullest extent permitted by Law. Where the
foregoing provides that no personal liability shall attach to or be incurred by
a Covered Person, any claims against or recourse to such Covered Person for or
in connection with such liability, whether arising in common law or equity or
created by rule of law, statute, constitution, contract or otherwise, are
expressly released and waived under the Transaction Documents, to the fullest
extent permitted by Law, as a condition of, and as part of the consideration
for, the execution of the Transaction Documents and any related agreement, and
the incurring by the Company or such Member of the obligations provided in such
agreements.
(g)
Unless otherwise expressly provided in this
Agreement, whenever a conflict of interest exists or arises between a Covered
Person or any of its Affiliates, on the one hand, and the Company or another
Member, on the other, any resolution or course of action by such Covered Person
or its Affiliates in respect of such conflict of interest shall be permitted and
deemed approved by all Members, and shall not constitute a breach of this
Agreement, of any other Transaction Document or of any duty stated or implied by
law or equity, if the resolution or course of action in respect of such conflict
of interest is (i) approved by the disinterested holders of a majority of the
Series A Units then outstanding, (ii)) determined by such Covered Person in
accordance with the provisions of Section 10.1(b) above
to be on terms no less favorable to the Company than those generally being
provided to or available from unrelated third parties or (iii) determined by
such Covered Person in accordance with the provisions of Section 10.1(b) above
to be fair and reasonable to the Company, taking into account the totality of
the relationships among the parties involved (including other transactions that
may be particularly favorable or advantageous to the Company). If the
resolution or course of action taken with respect to a conflict of interest is
determined by the Board to satisfy either of the standards set forth in clauses
(ii) or (iii) above, then it shall be presumed that, in making such decision,
the Board acted in good faith, and in any proceeding brought by any Member or by
or on behalf of such Member or any other Member or the Company challenging such
approval, the Person bringing or prosecuting such proceeding shall have the
burden of overcoming such presumption.
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and Restated Limited Liability Company Agreement
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(h)
Nothing in this Section 10.1 shall be
deemed to limit or waive any rights that any Person has for breach of contract
under the terms of the Transaction Documents; provided, however, that each
Member acknowledges that it is not relying upon any other Member or any of such
other Member’s Affiliates, or any of such other Member’s or such other Member’s
Affiliates’ respective stockholders, partners, members, directors, officers or
employees, in making its investment or decision to invest in the Company or in
monitoring such investment.
(i)
The Members hereby acknowledge that certain of the Covered
Persons may have certain rights to indemnification, advancement of expenses
and/or insurance provided by the ▇▇▇▇▇▇▇▇ Entity and/or certain of its
Affiliates. The Members hereby agree that (i) the Company is the
indemnitor of first resort (i.e., its obligations to any Covered Person are
primary and any obligation of the ▇▇▇▇▇▇▇▇ Entity and its Affiliates to advance
expenses or to provide indemnification for the same expenses or liabilities
incurred by a particular Covered Person are secondary), (ii) the Company shall
be required to advance the full amount of expenses incurred by a Covered Person
and shall be liable for the full amount of all expenses, judgments, penalties,
fines and amounts paid in settlement to the extent legally permitted and as
required by the terms of this Agreement or the Certificate of Formation (or any
other applicable agreement between the Company and a Covered Person), without
regard to any rights a Covered Person may have against the ▇▇▇▇▇▇▇▇ Entity and
its Affiliates, and (iii) the Company irrevocably waives, relinquishes and
releases the ▇▇▇▇▇▇▇▇ Entity and its Affiliates from any and all claims against
the ▇▇▇▇▇▇▇▇ Entity and its Affiliates for contribution, subrogation or any
other recovery of any kind in respect of claims against the Company under Section
10.01. The Members further agree that no advancement or
payment by the ▇▇▇▇▇▇▇▇ Entity and its Affiliates on behalf of a Covered Person
with respect to any claim for which such Covered Person has sought
indemnification from the Company shall affect the foregoing and the ▇▇▇▇▇▇▇▇
Entity and its Affiliates shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of the rights of
recovery of such Indemnitee against the Company. The ▇▇▇▇▇▇▇▇ Entity
and its Affiliates are express third party beneficiaries of the terms of this
Section
10.01(i).
10.2 Indemnification
of the Management Covered Persons.
(a)
The Company shall
indemnify, to the full extent permitted by applicable Law, any Management
Covered Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding relating to an
action or alleged action or failure to act or alleged failure to act occurring
on or after the Effective Time, whether civil, criminal, administrative or
investigative (each, a “Post-Effective
Time Proceeding”) by reason of the fact that (x) such person is or was
serving or has agreed to serve as a Manager or Officer of the Company on or
after the Effective Time or (y) such person, while serving as a Manager or
Officer of the Company, is or was serving or has agreed to serve at the request
of the Company on or after the Effective Time as a director, officer, employee,
manager or agent of another company, partnership, limited liability company,
joint venture, trust or other enterprise or (z) such person is or was serving or
has agreed to serve at the request of the Company on or after the Effective Time
as a director, officer or manager of another company, partnership, limited
liability company, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted by such person in such capacity on
or after the Effective Time, and who satisfies the applicable standard of
conduct set forth for the indemnification of an officer or director of a
Delaware corporation under Section 145(a) or (b), as applicable, of the
DGCL:
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(i)
in a Post-Effective Time Proceeding other
than a Post-Effective Time Proceeding by or in the right of the Company, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such Person or on such Person’s
behalf in connection with such Post-Effective Time Proceeding and any appeal
therefrom, or
(ii)
in a Post Effective Time Proceeding by or in the right of the
Company to procure a judgment in its favor, against expenses (including
attorneys’ fees) actually and reasonably incurred by such Person or on such
Person’s behalf in connection with the defense or settlement of such
Post-Effective Time Proceeding and any appeal therefrom.
(b)
Section 10.2(a) does
not require the Company to indemnify a Management Covered Person in respect of a
Post-Effective Time Proceeding (or part thereof) instituted by such Person on
his or her own behalf, unless such Post-Effective Time Proceeding (or part
thereof) has been authorized by the Board or the indemnification requested is
pursuant to the last sentence of Section
10.3.
10.3 Advance
of Expenses. The
Company shall advance all expenses (including reasonable attorneys’ fees)
incurred by a Covered Person or a Management Covered Person in defending any
Post-Effective Time Proceeding prior to the final disposition of such
Post-Effective Time Proceeding upon written request of such Person and delivery
of an undertaking (which may be unsecured) by such Person to repay such amount
if it shall ultimately be determined that such Person is not entitled to be
indemnified by the Company; provided, however, that the
Company shall not be obligated to advance expenses under this Section 10.3 to any
Management Covered Person if the Board determines that such Management Covered
Person has not satisfied the applicable standard of conduct set forth for the
indemnification of an officer or director of a Delaware corporation under
Section 145(a) or (b), as applicable, of the DGCL, as such may be amended from
time to time. The Company may authorize any counsel for the Company
to represent (subject to applicable conflict of interest considerations) such
Covered Person or Management Covered Person in any Post-Effective Time
Proceeding, whether or not the Company is a party to such Post-Effective Time
Proceeding.
10.4 Procedure
for Indemnification. Any
indemnification or advance of expenses under this Article 10 shall be
made only against a written request therefor submitted by or on behalf of the
person seeking such indemnification or advance. All expenses
(including reasonable attorneys’ fees) incurred by such person in connection
with successfully establishing such person’s right to indemnification or advance
of expenses under this Article 10, in whole
or in part, shall also be indemnified by the Company.
10.5 Contract
Right; Non-Exclusivity; Survival.
(a)
The rights to indemnification and
advance of expenses provided by this Article 10 shall be
deemed to be separate contract rights between the Company and each Covered
Person and Management Covered Person who serves in any such capacity at any time
while these provisions are in effect, and no repeal or modification of any of
these provisions shall adversely affect any right or obligation of such Covered
Person or Management Covered Person existing at the time of such repeal or
modification with respect to any state of facts then or previously existing or
any proceeding previously or thereafter brought or threatened based in whole or
in part upon any such state of facts.
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(b)
The rights to indemnification and advance of expenses
provided by this Article 10 shall not
be deemed exclusive of any other indemnification or advance of expenses to which
a Covered Person or Management Covered Person seeking indemnification or advance
of expenses may be entitled.
(c)
The rights to indemnification and advance of expenses
provided by this Article 10 to any
Covered Person or Management Covered Person shall inure to the benefit of the
heirs, executors and administrators of such person.
10.6 Insurance. The
Company may maintain insurance to protect itself and any Covered Person against
any liability asserted against such Person and incurred by such Person or on
such Person’s behalf whether or not the Company would have the power to
indemnify such Person against such liability under the provisions of Section
10.1. The Company may purchase and maintain insurance on
behalf of any Management Covered Person, or any Management Covered Person who is
or was serving at the request of the Company as a director or officer of another
company, partnership, joint venture, trust or other enterprise against any
liability asserted against such Person and incurred by such Person or on such
Person’s behalf in any such capacity, or arising out of such Person’s status as
such, whether or not the Company would have the power to indemnify such Person
against such liability under the provisions of Section
10.2(a).
10.7 Interpretation;
Severability. References
to the Company in this Article 10 shall be
deemed to be references to the Company and its Subsidiaries. If this
Article 10 or
any portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify each Covered Person
or Management Covered Person of the Company as to costs, charges and expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the right of the
Company, to the fullest extent permitted by any applicable portion of this Article 10 that shall
not have been invalidated.
ARTICLE
11
CERTAIN
AGREEMENTS OF THE COMPANY AND MEMBERS
11.1 Financial
Reports and Access to Information.
(a)
Each holder of Series A
Units holding at least twenty-five percent (25%) of its Series A Units Threshold
shall receive the following information from the Company:
(i)
Within thirty (30) days after the end of each month, an unaudited
balance sheet as of the end of such month and, if prepared, an unaudited related
income statement and statement of cash flows for such month prepared in
accordance with GAAP (with the exception of normal year end adjustments and
absence of footnotes), consistently applied;
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(ii)
Within forty-five (45) days after the end of each fiscal
quarter, an unaudited balance sheet as of the end of such quarter and, if
prepared, an unaudited related income statement and statement of cash flows for
such quarter prepared in accordance with GAAP (with the exception of normal year
end adjustments and absence of footnotes), consistently applied;
(iii) Within
ninety (90) days after the end of each fiscal year (or such longer period of
time not in excess of one hundred eighty (180) days after the end of the fiscal
year as is approved by the Board), an audited balance sheet as of the end of
such fiscal year and, if prepared, the related income statement and statement of
cash flows for such fiscal year prepared in accordance with GAAP, consistently
applied and a signed audit letter from the Company’s auditors;
(iv) Promptly
after the occurrence of any material event, notice of such event together with a
summary describing the nature of the event and its impact on the Company;
and
(v)
Such other information as the Members entitled to receive
information pursuant to this Section 11.1 or their
advisors may reasonably request.
(b)
The Company shall permit each Member entitled to receive
information pursuant to Section 11.1(a) or
their respective representatives, at the sole risk of such Persons, to visit and
inspect any of the properties of the Company and its Subsidiaries, including its
books of account and other records (and make copies of and take extracts from
such books and records), and to discuss all aspects of its business, affairs,
finances and accounts with the Company’s and its Subsidiaries’ officers and its
independent public accountants, all at such reasonable times during the
Company’s and such Subsidiaries’ usual business hours and as often as any such
person may reasonably request, and to consult with and advise management of the
Company and its Subsidiaries, upon reasonable notice at reasonable times from
time to time, on all matters relating to the operation of the Company and its
Subsidiaries.
(c)
Notwithstanding anything to the contrary in this Section 11.1, the
Company shall have no obligation to provide the information contemplated by
Section 11.1(a)
or to make available the properties, books of account and other records,
officers or independent public accountants of the Company and its Subsidiaries
as contemplated by Section 11.1(b), in
each case to any holder of Units to the extent doing so would reasonably be
expected to result in the disclosure to such Unitholder of sensitive business
information, competitive information or other confidential information, the
disclosure of which to such holder is determined by the Board in good faith to
be inappropriate in such circumstances.
11.2 Annual
Budget. The
Officers of the Company shall present to the Board, at least sixty (60) days
before the beginning of each fiscal year of the Company, a reasonably detailed
consolidated annual budget, including a consolidated annual capital expenditure
forecast. Such budget shall be subject to approval in accordance with
Section
8.5. The budget for any fiscal year, as so approved, is
referred to as the “Annual
Budget.”
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11.3 Maintenance
of Books. The
Company shall keep or cause to be kept at the principal office of the Company or
at such other location approved by the Board of Directors complete and accurate
books and records of the Company, supporting documentation of the transactions
with respect to the conduct of the Company’s business and minutes of the
proceedings of the Board of Directors and any other books and records that are
required to be maintained by applicable Law.
11.4 Accounts. The
Company shall establish one or more separate bank and investment accounts and
arrangements for the Company, which shall be maintained in the Company’s name
with financial institutions and firms that the Board may
determine. The Company may not commingle the Company’s funds with the
funds of any Member or any Affiliate of a Member.
11.5 Information.
(a)
Each Member shall be entitled to obtain all
information relating to the Company to which a member of a limited liability
company is entitled to have access pursuant to the Act; and to the extent a
Member is so entitled to such information, such Member shall be subject to the
provisions of Section
11.5(b). The Members agree, however, that the Board may
determine, due to contractual obligations, business concerns, or other
considerations, that certain information regarding the business, affairs,
properties, and financial condition of the Company, and the assets and business
of the Company, should be kept confidential and not provided to some or all of
the Members, and that it is not reasonable for those Members (or representatives
thereof) to examine or copy that information.
(b)
Each Member agrees that all
Confidential Information shall be kept confidential by such Member and shall not
be disclosed by such Member in any manner whatsoever; provided, however, that (i)
any of such Confidential Information may be disclosed to such Member’s
Affiliates and to partners; members; stockholders; prospective partners,
members, and stockholders; managers; directors; officers; employees; and
authorized representatives (including attorneys, accountants, consultants,
bankers and financial advisors) of such Member and of such Member’s Affiliates
(collectively, for purposes of this Section 11.5(b),
“Representatives”),
each of which Representatives shall be made aware that such information is
confidential and the terms of this Section 11.5(b), and
any potential purchasers of Units and their Representatives, each of whom shall
be bound by the provisions of this Section 11.5(b) or
substantially similar terms; (ii) any disclosure of Confidential Information may
be made to the extent to which the Company consents in writing; (iii) any
disclosure may be made of the terms of a Member’s investment in the Company
pursuant to this Agreement and the performance of that investment to the extent
in compliance with applicable Law (whether in the Member’s fundraising materials
or otherwise); (iv) Confidential Information may be disclosed by a Member or
Representative to the extent reasonably necessary in connection with such
Member’s enforcement of its rights under this Agreement; and (v) Confidential
Information may be disclosed by any Member or Representative to the extent that
the Member or Representative has received advice from its counsel that it is
reasonably likely to be legally compelled to do so; provided, that, prior to
making such disclosure, the Member or Representative, as the case may be, uses
reasonable efforts to preserve the confidentiality of the Confidential
Information, including consulting with the Company regarding such disclosure
and, if reasonably requested by the Company, assisting the Company, at the
Company’s expense, in seeking a protective order to prevent the requested
disclosure, and provided,
further, that the Member or Representative, as the case may be, discloses
only that portion of the Confidential Information as is, based on the advice of
its counsel, legally required.
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(c)
Each Member shall reimburse the Company, upon request at the
direction of the Board, for all reasonable out-of-pocket costs and expenses
incurred by the Company in connection with the Member’s inspection and copying
of the Company’s books and records. No Member shall be required to
reimburse the Company for any time spent by regular employees of the Company in
connection with such inspection and copying.
ARTICLE
12
TAXES
12.1 Tax
Returns. The
Company shall prepare and timely file all U.S. federal, state and local and
foreign tax returns required to be filed by the Company. Unless
otherwise agreed by the Board, any income tax return of the Company shall be
prepared by an independent public accounting firm of recognized standing
selected by the Board. Each Member shall furnish to the Company all
pertinent information in its possession relating to the Company’s operations
that is necessary to enable the Company’s tax returns to be timely prepared and
filed. The Company shall deliver to each Member as soon as
practicable after the end of the applicable fiscal year, a Schedule K-1 together
with such additional information as may be required by the Members in order to
file their individual returns reflecting the Company’s
operations. The Company shall bear the costs of the preparation and
filing of its tax returns.
12.2 Tax
Partnership. It
is the intention of the Members that the Company be classified as a partnership
for U.S. federal income tax purposes. Neither the Company nor any
Member shall make an election for the Partnership to be excluded from the
application of the provisions of subchapter K of chapter 1 of subtitle A of the
Code or any similar provisions of applicable state law or to be classified as
other than a partnership pursuant to Treasury Regulation Section
301.7701-3.
12.3 Tax
Elections. The
Company shall make the following elections on the appropriate forms or tax
returns:
(a)
to adopt the calendar year as the Company’s
fiscal year, if permitted under the Code;
(b)
to adopt the accrual method of accounting and to
keep the Company’s books and records on the U.S. federal income tax
method;
(c)
to elect to deduct or amortize the organizational
expenses of the Company as permitted by Code Section 709(b); and
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
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(d)
any other election the Board may deem appropriate and in
the best interests of the Members.
12.4 Tax
Matters Member.
(a)
The tax matters partner of the Company pursuant to
Code Section 6231(a)(7) shall be a Member designated from time to time by the
Board subject to replacement by the Board. Any Member who is
designated as the tax matters partner is referred to herein as the “Tax Matters
Member”. The initial Tax Matters Member will be the ▇▇▇▇▇▇▇▇
Entity. The Tax Matters Member shall take such action as may be
necessary to cause to the extent possible each other Member to become a notice
partner within the meaning of Code Section 6231(a)(8). The Tax
Matters Member shall inform each other Member of all significant matters that
may come to its attention in its capacity as Tax Matters Member by giving notice
thereof on or before the fifth day after becoming aware thereof and, within that
time, shall forward to each other Member copies of all significant written
communications it may receive in that capacity.
(b)
The Tax Matters Member shall take no action without the
authorization of the Board, other than such action as may be required by
Law. Any cost or expense incurred by the Tax Matters Member in
connection with its duties, including the preparation for or pursuance of
administrative or judicial proceedings, shall be paid by the
Company.
(c)
The Tax Matters Member shall not enter into any extension of the
period of limitations for making assessments on behalf of the Members without
first obtaining the consent of the Board. The Tax Matters Member
shall not bind any Member to a settlement agreement without obtaining the
consent of such Member. Any Member that enters into a settlement
agreement with respect to any Company item (within the meaning of Code Section
6231(a)(3)) shall notify the other Members of such settlement agreement and its
terms within ninety (90) days from the date of the settlement.
(d)
No Member shall file a request pursuant to Code Section 6227 for an
administrative adjustment of Company items for any taxable year without first
notifying the other Members. If the Board consents to the requested
adjustment, the Tax Matters Member shall file the request for the administrative
adjustment on behalf of the Members. If such consent is not obtained
within thirty (30) days from such notice, or within the period required to
timely file the request for administrative adjustment, if shorter, any Member,
including the Tax Matters Member, may file a request for administrative
adjustment on its own behalf. Any Member intending to file a petition
under Code Sections 6226 or 6228 or other Code Section with respect to any item
involving the Company shall notify the other Members of such intention and the
nature of the contemplated proceeding. In the case where the Tax
Matters Member is the Member intending to file such petition on behalf of the
Company, such notice shall be given within a reasonable period of time to allow
the other Members to participate in the choosing of the forum in which such
petition will be filed.
(e)
If any Member intends to file a notice of inconsistent treatment under Code
Section 6222(b), such Member shall give reasonable notice under the
circumstances to the other Members of such intent and the manner in which the
Member’s intended treatment of an item is (or may be) inconsistent with the
treatment of that item by the other Members.
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Energy, LLC
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and Restated Limited Liability Company Agreement
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12.5 Section
83(b) Election. Each
Member who acquires Series B Units acknowledges and agrees to make an election
under Code Section 83(b) within thirty (30) days after the date of the
acquisition and to consult with such Member’s tax advisor to determine the tax
consequences of such acquisition and of filing an election under Code Section
83(b). Each such Member acknowledges that it is the sole
responsibility of such Member, and not the Company, to file the election under
Code Section 83(b) even if such Member requests the Company or its
Representatives to assist in making such filing.
12.6 Section
83 Safe Harbor Election. By
executing this Agreement, each Member authorizes and directs the Company to
elect to have the “Safe
Harbor” described in the proposed Revenue Procedure set forth in Internal
Revenue Service Notice 2005-43 (the “IRS
Notice”), including any similar safe harbor in any finalized Revenue
Procedure, Revenue Ruling or Treasury Regulation, apply to any interest in the
Company transferred to a service provider by the Company on or after the
effective date of such final pronouncement in connection with services provided
to the Company. For purposes of making such Safe Harbor election, the
Tax Matters Partner is hereby designated as the “partner who has responsibility
for Federal income tax reporting” by the Company and, accordingly, execution of
such Safe Harbor election by the Tax Matters Partner constitutes execution of a
“Safe
Harbor Election” in accordance with the IRS Notice or any similar
provision of any final pronouncement. The Company and each Member
hereby agree to comply with all requirements of any such Safe Harbor, including
any requirement that a Member prepare and file all Federal income tax returns
reporting the income tax effects of each Interest issued by the Company in
connection with services in a manner consistent with the requirements of the IRS
Notice or other final pronouncement. A Member’s obligations to comply with the
requirements of this Section shall survive such Member’s ceasing to be a member
of the Company and the termination, dissolution, liquidation and winding up of
the Company.
ARTICLE
13
DISSOLUTION,
WINDING-UP AND TERMINATION
13.1 Dissolution.
(a)
Subject to Section 13.1(b), the
Company shall be liquidated and its affairs shall be wound up on the first to
occur of the following events (each a “Liquidation
Event”) and no other event shall cause the Company’s
dissolution:
(i)
the consent of
the Board in accordance with Article
8;
(ii)
at any time when
there are no Members; and
(iii) entry
of a decree of judicial dissolution of the Company under Section 18-802 of the
Act.
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Energy, LLC
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and Restated Limited Liability Company Agreement
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(b)
If the Liquidation Event
described in Section
13.1(a)(ii) shall occur, the Company shall not be dissolved, and the
business of the Company shall be continued, if the requirements of Section
18-801 of the Act for the avoidance of dissolution are satisfied (a “Continuation
Election”).
(c)
Except as otherwise provided in
this Section
13.1, to the maximum extent permitted by the Act, the death, retirement,
Resignation, Expulsion, Bankruptcy or dissolution of a Member or the
commencement or consummation of separation proceedings shall not constitute a
Liquidation Event and, notwithstanding the occurrence of any such event or
circumstance, the business of the Company shall be continued without
dissolution.
13.2 Winding-Up
and Termination. On
the occurrence of a Liquidation Event, unless a Continuation Election is made,
the Board may select one or more Persons to act as liquidator or may itself act
as liquidator. The liquidator shall proceed diligently to wind up the
affairs of the Company and make final distributions as provided herein and in
the Act. The costs of winding up shall be borne as a Company expense,
including reasonable compensation to the liquidator if approved by the
Board. Until final distribution, the liquidator shall continue to
operate the Company properties with all of the power and authority of the
Board. The steps to be accomplished by the liquidator are as
follows:
(a)
as promptly as possible after dissolution and
again after final winding up, the liquidator shall cause a proper accounting to
be made by a recognized firm of certified public accountants of the Company’s
assets, liabilities and operations;
(b)
the liquidator shall pay, satisfy or discharge
from Company funds all of the debts, liabilities and obligations of the Company
(including all expenses incurred in winding up) or otherwise make adequate
provision for payment and discharge thereof (including the establishment of a
cash escrow fund for contingent liabilities in such amount and for such term as
the liquidator may reasonably determine); and
(c)
all remaining assets of the Company shall be
distributed to the Members as follows:
(i)
the liquidator may sell any or all Company property, including
to Members, and any resulting gain or loss from each sale shall be computed and
allocated to the Capital Accounts of the Members in accordance with the
provisions of Article
6;
(ii)
with respect to all Company property that has not been
sold, the fair market value of that property shall be determined and the Capital
Accounts of the Members shall be adjusted to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in property that has not
been reflected in the Capital Accounts previously would be allocated among the
Members if there were a taxable disposition of that property for the fair market
value of that property on the date of distribution; and
(iii) Company
property shall be distributed among the Members in accordance with Section 6.1, and
those distributions shall be made by the end of the taxable year of the Company
during which the liquidation of the Company occurs (or, if later, ninety (90)
days after the date of the liquidation).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
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All
distributions in kind to the Members shall be made subject to the liability of
each distributee for costs, expenses and liabilities theretofore incurred or for
which the Company has committed prior to the date of termination and those
costs, expenses and liabilities shall be allocated to the distributee pursuant
to this Section
13.2. The distribution of cash or property to the Members in
accordance with the provisions of this Section 13.2
constitutes a complete return to such Member of its Capital Contributions and a
complete distribution to the Members of its Membership Interests (including
Units) and all the Company’s property and constitutes a compromise to which all
Members have consented within the meaning of Section 18-502(b) of the
Act. To the extent that a Member returns funds to the Company, it has
no claim against any other Member for those funds.
13.3 Deficit
Capital Accounts. No
Member shall be required to pay to the Company, to any other Member or to any
third party any deficit balance which may exist from time to time in the
Member’s Capital Account.
13.4 Certificate
of Cancellation. On
completion of the distribution of Company assets as provided herein, the Board
(or such other Person or Persons as the Act may require or permit) shall file a
Certificate of Cancellation with the Secretary of State of Delaware, and take
such other actions as may be necessary to terminate the existence of the
Company. Upon the effectiveness of the Certificate of Cancellation,
the existence of the Company shall cease, except as may be otherwise provided by
the Act or other applicable Law.
ARTICLE
14
GENERAL
PROVISIONS
14.1 Offset. Whenever
the Company is to pay any sum to any Member, any amounts that such Member, in
its capacity as a Member, owes the Company, whether pursuant to this Agreement
or another Transaction Document, may be deducted from that sum before
payment.
14.2 Notices.
(a)
Except as expressly set forth to the contrary in this Agreement, all
notices, requests or consents provided for or required to be given hereunder
shall be in writing and shall be deemed to be duly given if personally
delivered, telecopied and confirmed, or mailed by certified mail, return receipt
requested, or nationally recognized overnight delivery service with proof of
receipt maintained, at the following addresses (or any other address that any
such party may designate by written notice to the other parties):
(i)
if to the Company, at the address of its principal
executive offices; and
(ii)
if to an Initial Member, to the address given for
the Member on Schedule
I hereto; and
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Energy, LLC
Amended
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(iii) if
to an additional Member or a holder of Membership Interests or Units that has
not been admitted as a Member, to the address given for such Member or holder in
an Addendum Agreement.
Any such
notice shall, if delivered personally, be deemed received upon delivery; shall,
if delivered by telecopy, be deemed received on the first business day following
confirmation; shall, if delivered by certified mail, be deemed received upon the
earlier of actual receipt thereof or five (5) business days after the date of
deposit in the United States mail, as the case may be; and shall, if delivered
by nationally recognized overnight delivery service, be deemed received the
first (1st)
business day after the date of deposit with the delivery service.
(b)
Whenever any notice is required to be given by
Law, the Certificate or this Agreement, a written waiver thereof, signed by the
Person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
14.3 Entire
Agreement; Supersedure. This
Agreement (including the Exhibits and Schedules) constitutes the entire
agreement of the Members relating to the Company and supersedes all prior
contracts or agreements with respect to the Company, whether oral or
written.
14.4 Effect
of Waiver or Consent. A
waiver or consent, express or implied, to or of any breach or default by any
Person in the performance by that Person of its obligations with respect to the
Company is not a consent or waiver to or of any other breach or default in the
performance by that Person of the same or any other obligations of that Person
with respect to the Company. Failure on the part of a Person to
complain of any act of any Person or to declare any Person in default with
respect to the Company, irrespective of how long that failure continues, does
not constitute a waiver by that Person of its rights with respect to that
default until the applicable statute-of-limitations period has run.
14.5 Amendment
or Restatement; Power of Attorney.
(a)
In addition to any approvals which may be
required under Section
8.5, neither this Agreement (including any Exhibit or Schedule hereto)
nor the Certificate may be amended, modified, supplemented or restated, nor may
any provisions of this Agreement or the Certificate be waived, without the
approval of the Members holding a majority of the outstanding Series A Units;
provided, however, that
(i) any such amendment, modification, supplement, restatement or waiver that by
its explicit terms would alter or change the rights, obligations, powers or
preferences specific to any series of Units in a disproportionate and adverse
manner compared to the rights, obligations, powers and preferences specific to
other series of Units shall require the prior written consent of Members holding
a majority of the series of Units so disproportionately and adversely affected,
(ii) any such amendment, modification, supplement, restatement or waiver that by
its explicit terms would alter or change the rights, obligations, powers or
preferences of any Member in its capacity as a holder of a specific series of
Units in a disproportionate and adverse manner compared to other Members in
their capacities as holders of the same series of Units shall require the prior
written consent of such Member so disproportionately and adversely affected, and
(iii) any such amendment, modification, supplement, restatement or waiver that
would by its explicit terms increase the Additional Commitment of any Member or
require a Capital Contribution to the Company by any Member that has not made an
Additional Commitment to the Company shall require the prior written consent of
such Member. The execution of an Addendum Agreement in connection
with an issuance or transfer of Units made in accordance with the terms of this
Agreement and changes to Schedule I or Schedule II hereof to
reflect such transfers or issuances shall not be considered amendments to this
Agreement and shall not require approval hereunder. Notwithstanding
anything to the contrary in this Section 14.5, if (i)
the provisions of Proposed Treasury Regulation Section 1.83-3 and related
sections and the proposed Revenue Procedure described in IRS Notice 2005-43, as
proposed by the Internal Revenue Service on May 24, 2005, or provisions similar
thereto, or (ii) the amendments to Treasury Regulations §§ 1.704-1 and 1.704-3
proposed on January 22, 2003 (and corrected on March 28, 2003) are adopted as
final (or temporary) rules (the “New
Rules”), the Directors are authorized to make such amendments to this
Agreement (including provision for any safe harbor election authorized by the
New Rules) as the Directors may determine to be necessary or advisable to comply
with or reflect the New Rules; provided, that such
amendments do not materially alter the economic rights of the Members under this
Agreement other than the timing of distributions pursuant to Section
6.1(b). Except as required by Law, no amendment, modification,
supplement, discharge or waiver of or under this Agreement shall require the
consent of any person not a party to this Agreement.
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Amended
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(b)
Each Member irrevocably makes, constitutes and
appoints each Director of the Company designated by the ▇▇▇▇▇▇▇▇ Entity, acting
individually or collectively, as its true and lawful agent and attorney-in-fact,
with full power of substitution and full power and authority in its name, place
and stead, to make, execute, sign, acknowledge, swear to, record and
file: (i) any amendment or waiver of any provision of this Agreement
that has been approved in accordance with this Agreement; and (ii) all other
instruments or papers not inconsistent with the terms of this Agreement which
may be necessary or advisable in the determination of the Board to evidence an
amendment or waiver of this Agreement or to effect or carry out another
provision of this Agreement or which may be required by law to be filed on
behalf of the Company. With respect to each Member, the foregoing power of
attorney: (i) is coupled with an interest, shall be irrevocable and
shall survive the incapacity or bankruptcy of such Member; and (ii) shall
survive the Disposition by such Member of all or any portion of the Series A
Units or Series B Units, as applicable, held by such Member.
14.6 Binding
Effect. Subject
to the restrictions on Dispositions set forth in this Agreement, this Agreement
shall be binding upon and shall inure to the benefit of the Company and each
Member and their respective heirs, permitted successors, permitted assigns,
permitted distributees and legal representatives; and by their signatures
hereto, the Company and each Member intends to and does hereby become
bound. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any Person other than the parties hereto and their
respective permitted successors and assigns any legal or equitable right, remedy
or claim under, in or in respect of this Agreement or any provision herein
contained. The rights under this Agreement may be assigned by a
Member to a transferee of all or a portion of such Member’s Units transferred in
accordance with this Agreement (and shall be assigned to the extent this
Agreement requires such assignment), but only to the extent of such Units so
transferred; it being understood that the assignment of any rights under this
Agreement shall not constitute admission to the Company as a Member unless and
until such transferee is duly admitted as a Member in accordance with this
Agreement.
Genesis
Energy, LLC
Amended
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PAGE
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14.7 Governing
Law; Severability; Limitation of Liability.
(a)
THIS AGREEMENT IS
GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH
STATE.
(b)
The parties hereto hereby
irrevocably submit to the exclusive jurisdiction of the courts of the State of
Texas and the federal courts of the United States of America located in Houston,
Texas, and appropriate appellate courts therefrom, over any dispute arising out
of or relating to this Agreement or any of the transactions contemplated hereby
(except as otherwise expressly provided in any Employment Agreement or
Non-Competition and Confidentiality Agreement), and each party hereby
irrevocably agrees that all claims in respect of such dispute or proceeding may
be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable Law, any
objection which they may now or hereafter have to the laying of venue of any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
Law. This consent to jurisdiction is being given solely for purposes
of this Agreement and is not intended to, and shall not, confer consent to
jurisdiction with respect to any other dispute in which a party to this
Agreement may become involved. Each of the parties hereto hereby
consents to process being served by any party to this Agreement in any suit,
action or proceeding of the nature specified in this subsection (b) by the
mailing of a copy thereof in the manner specified by the provisions of Section
14.2. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT.
(c)
In the event of a direct conflict
between the provisions of this Agreement and (i) any provision of the
Certificate or (ii) any mandatory, non-waivable provision of the Act, such
provision of the Certificate or the Act shall control. If any
provision of the Act provides that it may be varied or superseded in the
agreement of a limited liability company (or otherwise by agreement of the
members or managers of a limited liability company), such provision shall be
deemed superseded and waived in its entirety if this Agreement contains a
provision addressing the same issue or subject matter.
(d)
If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future Laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such
illegal, invalid or unenforceable provision, there shall be added automatically
as a part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
PAGE
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14.8 Further
Assurances. In
connection with this Agreement and the transactions contemplated hereby, the
Company and each Member shall execute and deliver all such future instruments
and take such other and further action as may be reasonably necessary or
appropriate to carry out the provisions of this Agreement and the intention of
the parties as expressed herein.
14.9 Counterparts. This
Agreement may be executed in any number of counterparts (including facsimile
counterparts), all of which together shall constitute a single
instrument.
14.10 Fees
and Expenses. The
Company shall pay the reasonable documented legal fees and expenses of counsel
to, and the reasonable documented out-of-pocket expenses incurred by, each of
the Investors in connection with this Agreement and the transactions
contemplated herein.
14.11 Termination
of Employment Arrangements. Each
holder of Series B Units acknowledges and agrees that this Agreement, and the
legal relationships created hereby, will not prevent the termination of any
employment agreement or similar arrangement between such holder of Series B
Units and the Company or any of its Affiliates. Each holder of Series
B Units agrees that the termination by the Company or any of its Affiliates of
any employment, consulting or independent contractor relationship with such
holder of Series B Units for any reason at any time will not be construed for
any purpose to violate any duty or obligation of any other Member or Director
under this Agreement.
IN
WITNESS WHEREOF, the Members have executed this Agreement as of the date first
set forth above.
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SIGNATURE
PAGE
TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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Q
GEI HOLDINGS, LLC
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By:
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/s/
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ III
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Title:
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President
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SIGNATURE
PAGE
TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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EIV
CAPITAL FUND LP
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By:
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EIV
Fund Advisors LP,
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its
General Partner
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By:
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EIV
Capital GP LLC,
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its
General Partner
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By:
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/s/
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title:
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Manager
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SIGNATURE
PAGE
TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
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SIGNATURE
PAGE
TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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SIGNATURE
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TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Jr.
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▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
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SIGNATURE
PAGE
TO
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AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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A MEMBER:
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SIGNATURE
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TO
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AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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SIGNATURE
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TO
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AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
A MEMBER:
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/s/ ▇▇▇▇▇▇ ▇. Deere
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▇▇▇▇▇▇
▇. Deere
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SIGNATURE
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AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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A MEMBER:
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SIGNATURE
PAGE
TO
THE
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
GENESIS
ENERGY, LLC
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SERIES
B MEMBERS:
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EXHIBIT
A
DEFINED
TERMS
“Accredited Investor”
has the meaning ascribed to such term in the regulations promulgated under the
Securities Act.
“Act” means the
Delaware Limited Liability Company Act and any successor statute, as amended
from time to time.
“Addendum Agreement”
is defined in Section
3.7(b).
“Additional Member”
means any Person who acquires newly issued Units from the Company and is
admitted to the Company as a Member pursuant to the provisions of Section
3.7.
“Adjusted Capital
Account” means the Capital Account maintained for each Unitholder, (a)
increased by any amounts that such Unitholder is obligated to restore or is
treated as obligated to restore under Treasury Regulation Sections
1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5) and (b) decreased by any
amounts described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5)
and (6) with respect to such Unitholder. The Adjusted Capital
Accounts shall be maintained in a manner that facilitates the determination of
that portion of each Adjusted Capital Account attributable to each series of
Units.
“Affiliate” means,
when used with respect to a specified Person, any Person which (a) directly or
indirectly Controls, is Controlled by or is Under Common Control with such
specified Person, (b) is an officer, director, general partner, trustee or
manager of such specified Person, or of a Person described in clause (a), or (c)
is a Relative of such specified Person or of an individual described in clauses
(a) or (b).
“Aggregate Series A Capital
Contributions” means the aggregate amount of all Capital Contributions
made by the Series A Members (including their predecessors in
interest).
“Agreement” means the
Amended and Restated Limited Liability Company Agreement of the Company, as
amended and restated from time to time.
“Annual Budget” is
defined in Section
11.2.
“Assumed Tax
Liability” is defined in Section
6.1(b).
“Available Cash”
means, with respect to any fiscal quarter, (a) all cash and cash equivalents of
the Company at the end of such quarter, less (b) the amount of any cash reserves
that are necessary or appropriate in the reasonable discretion of the Board to
(i) provide for the proper conduct of the business of the Company subsequent to
such quarter, (ii) comply with applicable law or any agreement or obligation,
including reserves for: (1) payments of principal, interest, charges and fees
pertaining to the Company’s indebtedness; (2) expenditures incurred incident to
the usual conduct of the Company’s business; and (3) amounts reserved to meet
the reasonable needs of the Company’s business, less (c) any amounts reserved
pursuant to Section
6.1(l).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-1
“Bankruptcy” or “Bankrupt” means with
respect to any Person, that (a) such Person (i) makes a general assignment for
the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii)
becomes the subject of an order for relief or is declared insolvent in any
federal or state bankruptcy or insolvency proceedings; (iv) files a petition or
answer seeking for such Person a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any Law; (v)
files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against such Person in a proceeding of the type
described in subclauses (i) through (iv) of this clause (a); or (vi) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of such Person or of all or any substantial part of such Person’s
properties; or (b) against such Person, a proceeding seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any Law has been commenced and one hundred twenty (120) days have
expired without dismissal thereof or with respect to which, without such
Person’s consent or acquiescence, a trustee, receiver or liquidator of such
Person or of all or any substantial part of such Person’s properties has been
appointed and ninety (90) days have expired without the appointment’s having
been vacated or stayed, or ninety (90) days have expired after the date of
expiration of a stay, if the appointment has not previously been
vacated.
“Board” is defined in
Section
8.1.
“Book Value” means,
with respect to any property, such property’s adjusted basis for federal income
tax purposes, except as follows:
(a)
The initial Book Value of any property contributed
by a Member to the Company shall be the fair market value of such property as
reasonably determined by the Board;
(b)
The Book Values of all properties shall be adjusted to
equal their respective fair market values as determined by the Board in
connection with (i) the acquisition of an interest in the Company by any new or
existing Member in exchange for more than a de minimis capital
contribution to the Company (other than acquisitions of Series A Units pursuant
to Capital Calls), (ii) the issuance of a new series of Series B Units, (iii)
the conversion of Series B Units to Series A Units pursuant to Section 7.7 hereof,
(iv) the distribution by the Company to a Member of more than a de minimis amount of property
as consideration for an interest in the Company, or (v) the liquidation of the
Company within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(g)(1) (other than pursuant to Section 708(b)(1)(B) of the
Code);
(c)
The Book Value of property distributed to a Member shall be the fair
market value of such property as determined by the Board; and
(d)
The Book Value of all property shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such property
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and clause (f) of
the definition of Profits and Losses; provided, however, Book Value
shall not be adjusted pursuant to this clause (d) to the extent the Board
determines that an adjustment pursuant to clause (b) hereof is necessary or
appropriate in connection with the transaction that would otherwise result in an
adjustment pursuant to this clause (d).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-2
If the
Book Value of property has been determined or adjusted pursuant to clauses (b)
or (d) hereof, such Book Value shall thereafter be adjusted by the Depreciation
taken into account with respect to such property for purposes of computing
Profits and Losses and other items allocated pursuant to Article
6.
“Business Opportunity”
is defined in Section
8.6(b).
“Capital Account”
means the account to be maintained by the Company for each
Member pursuant to Section
5.5.
“Capital Contribution”
means with respect to any Member, the amount of money and the initial Book Value
of any property (other than money) contributed to the Company by such
Member. Any reference in this Agreement to the Capital Contribution
of a Member shall include a Capital Contribution of his predecessors in
interest.
“Capital Stock” means
any and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all ownership interests
in a limited liability company, partnership or other Person (other than a
corporation), and any and all warrants, options or other rights to purchase or
acquire any of the foregoing.
“Certificate” means
the Certificate of Formation of the Company, as amended from time to
time.
“Code” means the
United States Internal Revenue Code of 1986, as amended from time to
time. All references herein to sections of the Code shall include any
corresponding provision or provisions of succeeding Law.
“Company” means
Genesis Energy, LLC, a Delaware limited liability company.
“Confidential
Information” means all confidential and proprietary information
(irrespective of the form of communication) obtained by or on behalf of a Member
from the Company or its representatives, other than information which (a) was or
becomes generally available to the public other than as a result of a breach of
this Agreement by such Member, (b) was or becomes available to such Member on a
nonconfidential basis prior to disclosure to the Member by the Company or its
representatives, (c) was or becomes available to the Member from a source other
than the Company and its representatives, provided, that such source is
not known by such Member to be bound by a confidentiality agreement with the
Company, or (d) is independently developed by such Member without the use of any
such information received under this Agreement.
“Continuation
Election” is defined in Section
13.1(b).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-3
“Continuing Directors”
means, as of any date of determination, any member of the Board who: (i) was a
member of the Board on the date of the consummation of a Qualified Public
Offering; or (ii) was nominated for election or elected to the Board with the
approval of a majority of the Continuing Directors who were members of the Board
at the time of such nomination or election.
“Control,” including
the correlative terms “Controlling,” “Controlled by” and
“Under Common Control
with” means possession, directly or indirectly (through one or more
intermediaries), of the power to direct or cause the direction of management or
policies (whether through ownership of securities or any partnership or other
ownership interest, by contract or otherwise) of a Person.
“Creditors’ Rights”
means applicable bankruptcy, insolvency or other similar laws relating to or
affecting the enforcement of creditors’ rights generally and to general
principles of equity.
“▇▇▇▇▇▇▇ Group” means
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and
each of their transferees, successors and assigns, in each case only if such
Person is a Member.
“▇▇▇▇▇▇▇ Group Unitholder
Rights Agreement” means that certain Unitholder Rights Agreement dated as
of July 25, 2007 by and between ▇▇▇▇▇▇▇ Petroleum Products, L.L.C., a Louisiana
limited liability company, ▇▇▇▇▇▇▇ Transport, Inc., a Louisiana corporation,
Transport Company, an Arkansas corporation, ▇▇▇▇▇▇▇ Terminal Service, Inc., a
Louisiana corporation and Sunshine Oil and Storage, Inc., a Louisiana
corporation, Genesis, the Company, and Denbury Gathering & Marketing, Inc.,
a Delaware corporation.
“Defaulting Member” is
defined in Section
5.3.
“Depreciation” means,
for each taxable year, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable for Federal income tax purposes with
respect to property for such taxable year, except that (a) with respect to any
property the Book Value of which differs from its adjusted tax basis for Federal
income tax purposes and which difference is being eliminated by use of the
remedial allocation method pursuant to Treasury Regulation Section 1.704-3(d),
Depreciation for such taxable year shall be the amount of book basis recovered
for such taxable year under the rules prescribed by Treasury Regulation Section
1.704-3(d)(2), and (b) with respect to any other property the Book Value of
which differs from its adjusted tax basis at the beginning of such taxable year,
Depreciation shall be an amount which bears the same ratio to such beginning
Book Value as the Federal income tax depreciation, amortization or other cost
recovery deduction for such taxable year bears to such beginning adjusted tax
basis; provided, that
if the adjusted tax basis of any property at the beginning of such taxable year
is zero, Depreciation with respect to such property shall be determined with
reference to such beginning value using any reasonable method selected by the
Board.
“Disposition,”
including the correlative terms “Dispose” or “Disposed,” means any
direct or indirect transfer, assignment, sale, gift, inter vivos transfer, pledge,
hypothecation, mortgage, or other encumbrance, or any other disposition (whether
voluntary or involuntary or by operation of law) of Units (or any interest
(pecuniary or otherwise) therein or right thereto), including derivative or
similar transactions or arrangements whereby a portion or all of the economic
interest in, or risk of loss or opportunity for gain with respect to, Units is
transferred or shifted to another Person.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-4
“Economic Risk of
Loss” has the meaning assigned to that term in Treasury Regulation
Section 1.752-2(a).
“Effective Date” is
defined in the preamble.
“EIV Entity” means EIV
Capital Fund LP, a Delaware limited partnership and its transferees, successors
and assigns, in each case only if such Person is a Member.
“Election Period” is
defined in Section
7.10(a).
“Eligible Purchaser”
means any Member holding Series A Units that certifies to the Company’s
reasonable satisfaction that such holder is an Accredited Investor or, if not,
that appoints a purchaser representative (as such term is defined in Rule 501
under the Securities Act).
“Eligible Purchaser
Persons” is defined in Section
7.10(c).
“Eligible Tag
Offerees” is defined in Section
7.9(f).
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Excluded Unit
Issuances” means issuances of (a) additional Series A Units to a Series A
Member pursuant to funding by such Member of a Capital Contribution pursuant to
Section 5.2,
(b) Series B Units, (c) options to purchase Units or other awards of Units
pursuant to incentive equity plans approved by the Board, (d) Units issued to
any Person that is not a Member or an Affiliate thereof as consideration in any
acquisition, merger or similar business combination approved in accordance with
this Agreement (e) Units issued in connection with any split, distribution or
recapitalization of the Company, (f) any Capital Stock issued by the Company
pursuant to a registration statement filed under the Securities Act and approved
in accordance with this Agreement (g) Capital Stock issued in connection with
the IPO Merger pursuant to this Agreement, and (h) Series A Units issued
pursuant to the conversion of Series B Units pursuant to Section
7.7.
“Fair Market Value”
means the value of any specified interest or property, which shall not in any
event be less than zero, that would be obtained in an arm’s length transaction
for cash between an informed and willing buyer and an informed and willing
seller, neither of whom is under any compulsion to purchase or sell,
respectively, and without regard to the particular circumstances of the buyer or
seller.
“First Notice” is
defined in Section
7.10(a).
“Fund Participant” is
defined in Section
8.6(e).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-5
“GAAP” means U.S.
generally accepted accounting principles.
“Genesis” means
Genesis Energy, L.P., a Delaware limited partnership and any successor
thereto.
“Genesis Agreement”
means the Fourth Amended and Restated Agreement of Limited Partnership of
Genesis dated June 9, 2005, as amended or restated.
“HSR Act” is defined
in Section
5.3(d).
“Investor Designee”
means any officer, director, partner, employee or other agent of an Investor who
serves as a Director, including each of the ▇▇▇▇▇▇▇▇ Designees.
“Independent Director”
means a non-employee Director who is independent of the Members and the
management and operating executives of the Company, free from any relationship
that would interfere with the exercise of his or her independent judgment, and
who is “independent” under the rules or listing standards established by the
American Stock Exchange (or any other national securities exchange upon which
the Company’s or Genesis’ equity or common units, respectively, are
traded).
“Initial Member” is
defined in Section
3.4.
“Investor Group” means
the Investors, each of their respective Affiliates (other than the Company and
its Subsidiaries), any Investor Designee, and any portfolio company in which the
Investor or any of their Affiliates has an equity investment (other than the
Company and its Subsidiaries).
“Investors” means the
▇▇▇▇▇▇▇▇-Related Entities, the ▇▇▇▇▇▇▇ Group, the EIV Entity and each of
their respective Affiliates (other than the Company and its Subsidiaries) and
any Person who becomes a holder of Series A Units after the Effective Date and
is designated an Investor by the Board, but excluding in each case any holder of
Management Series A Units.
“IPO Corporation” is
defined in Section
7.8(a).
“IPO Merger” is
defined in Section
7.8(a).
“Law” means any
applicable constitutional provision, statute, act, code (including the Code),
law, regulation, rule, ordinance, order, decree, ruling, proclamation,
resolution, judgment, decision, declaration, or interpretative or advisory
opinion or letter of a domestic, foreign or international governmental authority
or any political subdivision thereof and shall include, for the avoidance of
doubt, the Act.
“Liquidation Event” is
defined in Section
13.1(a).
“Management Member”
means each Member holding who is a current or former Officer or employee of the
Company or a Subsidiary of the Company.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-6
“Management Series A
Units” means Series A Units held by (i) any current or former Officer of
the Company or (ii) any current or former employee of the Company or a
Subsidiary of the Company.
“Director” is defined
in Section
8.1.
“Member” means any
Person (but not any Affiliate or entity in which such Person has an equity
interest) executing this Agreement as of the date of this Agreement as a member
or hereafter admitted to the Company as a member as provided in this Agreement,
but such term does not include any Person who has ceased to be a member in the
Company as of the date hereof.
“Member Nonrecourse
Debt” has the meaning assigned to the term “partner nonrecourse
debt” in Treasury Regulation Section 1.704-2(b)(4).
“Member Nonrecourse Debt
Minimum Gain” has the meaning assigned to the term “partner nonrecourse debt
minimum gain” in Treasury Regulation Section 1.704-2(i)(2).
“Member Nonrecourse
Deductions” has the meaning assigned to the term “partner nonrecourse
deductions” in Treasury Regulation Section 1.704-2(i)(1).
“Membership Interest”
means the interest of a Member in the Company, including rights to distributions
(liquidating or otherwise), allocations, notices and information, and all other
rights, benefits and privileges enjoyed by that Member (under the Act, the
Certificate, this Agreement or otherwise) in its capacity as a Member; and all
obligations, duties and liabilities imposed on that Member (under the Act, the
Certificate, this Agreement, or otherwise) in its capacity as a
Member.
“Minimum Gain” has the
meaning assigned to that term in Treasury Regulation Section 1.704
2(d).
“New Units” is defined
in Section
7.9.
“Nonrecourse
Deductions” has the meaning assigned that term in Treasury Regulation
Section 1.704-2(b).
“Nonrecourse
Liability” has the meaning assigned that term in Treasury Regulation
Section 1.752-1(a)(2).
“Notice of Right of First
Refusal” is defined in Section
7.4(a).
“Officer” means any
Person designated as an officer of the Company as provided in Section 8.3, but such
term does not include any Person who has ceased to be an officer of the
Company.
“Over-Allotment
Amount” is defined in Section
7.10(a).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-7
“Permitted Transferee”
with respect to any Member shall mean (i) the spouse of such Member, (ii) any
trust, or family partnership or family limited liability company, the sole
beneficiary of which is such Member or a Relative of such Member, (iii) an
Affiliate of such Member, (iv) in the case of a ▇▇▇▇▇▇▇▇-Related Entity, any
other ▇▇▇▇▇▇▇▇-Related Entity, and (v) in the context of a distribution by such
Member to its direct or indirect equity owners, the partners, members or
stockholders of such Member, or the partners, members or stockholders of such
partners, members or stockholders.
“Person” means any
natural person, corporation, limited partnership, general partnership, limited
liability company, joint stock company, joint venture, association, company,
estate, trust, bank trust company, land trust, business trust, or other
organization, whether or not a legal entity, custodian, trustee-executor,
administrator, nominee or entity in a representative capacity and any government
or agency or political subdivision thereof.
“Portfolio Companies”
is defined in Section
8.6(e).
“Potential Competitor”
means any Person whose business is or relates to the upstream, midstream or
downstream oil & gas industry or the natural resource industry.
“Pre-IPO Value” means
the product of (a) the quotient obtained by dividing (i) the proceeds to the IPO
Corporation from a Qualified Public Offering (less the reasonably estimated
expenses of such Qualified Public Offering required to be paid by the IPO
Corporation) by (ii) a fraction (expressed as a percentage), the numerator of
which is the number of shares of common stock to be sold to the public in the
Qualified Public Offering and the denominator of which is the total number of
shares of common stock of the IPO Corporation that will be outstanding
immediately after the Qualified Public Offering and (b) the difference between
100% and the fraction described in clause (a)(ii) of this definition expressed
as a percentage.
“Prior Drag-Along
Transferee” means a transferee of Series A Units in a Disposition
pursuant to a Drag-Along Transaction, provided that the proceeds of such
Disposition were subject to the calculation and allocation proceeds set forth in
Section
7.5(e).
“Profits” or “Losses” means, for
each taxable year, an amount equal to the Company’s taxable income or loss for
such taxable year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments (without
duplication):
(a)
Any income of the Company that is exempt from federal income
tax and not otherwise taken into account in computing Profits and Losses
pursuant to this definition of “Profits” and “Losses” shall be
added to such taxable income or loss;
(b)
Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be
subtracted from such taxable income or loss;
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-8
(c)
In the event the Book Value of
any asset is adjusted pursuant to clause (b) or clause (c) of the definition of
Book Value, the amount of such adjustment shall be treated as an item of gain
(if the adjustment increases the Book Value of the asset) or an item of loss (if
the adjustment decreases the Book Value of the asset) from the disposition of
such asset and shall be taken into account for purposes of computing Profits or
Losses;
(d)
Gain or loss resulting from any disposition
of property with respect to which gain or loss is recognized for federal income
tax purposes shall be computed by reference to the Book Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Book Value;
(e)
In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such taxable
year;
(f)
To the extent an adjustment to the adjusted tax basis of
any asset pursuant to Code Section 734(b) is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Account balances as a result of a distribution other than in
liquidation of a Member’s interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or an item of loss (if the adjustment decreases such basis) from the
disposition of such asset and shall be taken into account for purposes of
computing Profits or Losses; and
(g)
Any items that are allocated
pursuant to Section
6.2(c)-(e) shall be determined by applying rules analogous to those set
forth in clauses (a) through (f) hereof but shall not be taken into account in
computing Profits and Losses.
“Proportionate
Percentage” means, with respect to any Tag Offeree, a fraction (expressed
as a percentage), the numerator of which equals the number of issued and
outstanding Series A Units held of record by such Tag Offeree and the
denominator of which equals the number of issued and outstanding Series A Units
held of record by all Tag Offerees.
“Proposed Purchaser”
is defined in Section
7.8.
“Pro Rata Share”
means, with respect to any Eligible Purchaser, a fraction (expressed as a
percentage), the numerator of which equals the number of Series A Units held of
record by such Eligible Purchaser and the denominator of which equals the total
number of outstanding Series A Units held by all Eligible
Purchasers.
“QCG” is defined in
Section
8.6(e).
“Qualified Public
Offering” means any firm commitment underwritten initial public offering
by the IPO Corporation of common stock or by the Company of common units
representing limited liability company interests pursuant to an effective
registration statement under the Securities Act (a) for which aggregate cash
proceeds to be received by the IPO Corporation or the Company from such offering
(without deducting underwriting discounts, expenses and commissions) are at
least $250 million, and (b) pursuant to which such shares of common stock or
common units are authorized and approved for listing on a national securities
exchange or authorized to be quoted on an inter-dealer quotation system of a
registered national securities association.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-9
“▇▇▇▇▇▇▇▇ Designee” is
defined in Section
8.2(a).
“▇▇▇▇▇▇▇▇ Entity”
means Q GEI Holdings, LLC, and it transferees, successors and assigns, in each
case only if such Person is a Member.
“▇▇▇▇▇▇▇▇-Related
Entity” means the ▇▇▇▇▇▇▇▇ Entity, ▇▇▇▇▇▇▇▇ Energy Partners I, L.P.,
▇▇▇▇▇▇▇▇ Energy Partners II, L.P., QEP Management Co., L.P., QEP Management Co.
GP, LLC, and any entity directly or indirectly Affiliated with such entities,
including subsidiaries of such entities directly or indirectly controlled by the
QCG, or such entities; investment vehicles to which investment management
services are provided by any of them.
“Refinance” is defined
in Section
8.8.
“Regulatory
Allocations” is defined in Section
6.2(d).
“Related Funds” is
defined in Section
8.6(e).
“Relative” means, with
respect to any individual, (a) such individual’s spouse, (b) any direct
descendant, parent, grandparent, great grandparent or sibling (in each case
whether by blood or adoption), and (c) the spouse of an individual described in
clause (b).
“Renounced Business
Opportunity” is defined in Section
8.6(b).
“Representatives” is
defined in Section
10.5(b).
“Requesting Purchaser”
is defined in Section
7.9(a).
“Resign, Resigning or
Resignation” means the resignation, withdrawal or retirement of a Member
from the Company as a Member.
“Restricted Person”
means, with respect to a Member or an Affiliate of such Member, any
Representative of such Member or Affiliate who has received Confidential
Information, provided,
however, that (a) any such Representative who has not received
Confidential Information shall not be deemed to be a Restricted Person; (b) no
such Representative shall be deemed to be a Restricted Person solely because he
or she possesses knowledge of the fact that Confidential Information has been
provided to any other Representative of such Member or Affiliate; and (c) any
such Representative who has received Confidential Information shall only be
deemed a Restricted Person for the purposes of such Confidential Information
actually received (and not, for the avoidance of doubt, with respect to
Confidential Information received by other Representatives).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-10
“Restricted Unit
Agreement” means the Restricted Unit Agreement to be entered into between
the Company and each recipient of Series B Units, whether issued on or after the
Effective Date in a form approved by the Board.
“Sale of the Business”
means (a) any consolidation, conversion, merger or other business combination
involving the Company in which all of the Units are exchanged for or converted
into cash, securities of a corporation or other business organization or other
property (other than the IPO Merger), (b) a Disposition of all or substantially
all of the assets of the Company to be followed promptly by a liquidation of the
Company or a distribution to the Members of all or substantially all of the net
proceeds of such Disposition after payment or other satisfaction of liabilities
and other obligations of the Company, (c) the sale of a majority of the outstanding
Series A Units; (d) a Disposition of all or substantially all of the equity
interests of Genesis Energy.
“Securities Act” means
the Securities Act of 1933, as amended, and any successor statute thereto and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
“Series A Units” is
defined in Section
3.1(a).
“Series A Units
Threshold” means with respect to each Member holding Series A Units, the
highest number of Series A Units owned by such Member at any time on or prior to
the applicable date of determination.
“Series B Units” is
defined in Section
3.1(a).
“Subsidiary” means (a)
any corporation, partnership, limited liability company or other entity a
majority of the Capital Stock of which having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
is at the time owned, directly or indirectly, with power to vote, by the Company
or any direct or indirect Subsidiary of the Company, (b) a partnership in which
the Company or any direct or indirect Subsidiary is a general partner or (c) a
limited liability company in which the Company or any director or indirect
Subsidiary is a managing member or manager.
“Substituted Member”
means any Person who acquires Units from a Member and is admitted to the Company
as a Member pursuant to the provisions of Section
7.6.
“Tag-Offeree” is
defined in Section
7.6(a).
“Tax Distribution
Date” is defined in Section
6.1(b).
“Tax Matters Member”
has the meaning assigned to the term “tax matters partner”
in Code Section 6231(a)(7) and the meaning set forth in Section
11.4(a).
“Third Party” with
respect to any Member means any Person, including any other Member, that is not
a Permitted Transferee with respect to such first Member or the original holder
of the related interest.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-11
“Threshold Value” is
defined in Section
3.1(e).
“Trading Safe Harbors”
is defined in Section
7.1(c).
“Transaction
Documents” means this Agreement and each agreement attached as an Exhibit
(including any exhibit to any Exhibit).
“Transferors” is
defined in Section
7.6(a).
“Treasury Regulations”
means the regulations promulgated by the United States Department of the
Treasury pursuant to and in respect of provisions of the Code.
“Unallotted Series B
Units” is defined in Section
3.1(e).
“Units” means the
Series A Units and Series B Units collectively, and any “Unit” shall refer to
any one of the foregoing.
“Unvested Series B
Units” is defined in Section
3.1(c).
“Vested Series B
Units” is defined in Section
3.1(c).
“Withheld Amount” is
defined in Section
6.1(i).
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
A-12
EXHIBIT
B
CERTIFICATE
OF FORMATION
See
Attached
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
B-1
EXHIBIT
C
SPOUSAL
AGREEMENT
The
spouse of the Member executing the foregoing Amended and Restated Limited
Liability Company Agreement of Genesis Energy, LLC (or the counterpart signature
page above) is aware of, understands and consents to the provisions of the
foregoing Agreement and its binding effect upon any community property interest
or marital settlement awards he or she may now or hereafter own or receive, and
agrees that the termination of his or her marital relationship with such Member
for any reason shall not have the effect of removing any Units subject to the
foregoing Agreement from the coverage thereof and that his or her awareness,
understanding, consent and agreement is evidenced by his or her signature
below.
|
[Spouse’s
Name]
|
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
C-1
EXHIBIT
D
ADDENDUM
AGREEMENT
This
Addendum Agreement is made this ___ day of ______________, _____, by and between
______________________ (the “Transferee”)
and GENESIS ENERGY, LLC, a Delaware limited liability company (the “Company”),
pursuant to the terms of the Amended and Restated Limited Liability Company
Agreement of the Company dated as of [______________], 2009, including all
exhibits and schedules thereto (the “Agreement”). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Agreement.
WITNESSETH:
WHEREAS,
the Company and the Members entered into the Agreement to impose certain
restrictions and obligations upon themselves, and to provide certain rights,
with respect to the Company and its Units; and
WHEREAS,
the Company and the Members have required in the Agreement that all Persons to
whom Units of the Company are transferred and all other Persons acquiring Units
must enter into an Addendum Agreement binding the Transferee and the
Transferee’s spouse to the Agreement to the same extent as if they were original
parties thereto and imposing the same restrictions and obligations on the
Transferee, the Transferee’s spouse and the Units to be acquired by the
Transferee as are imposed upon the Members under the Agreement;
NOW,
THEREFORE, in consideration of the mutual promises of the parties and as a
condition of the purchase or receipt by the Transferee of the Units, the
Transferee acknowledges and agrees as follows:
1.
The Transferee has
received and read the Agreement and acknowledges that the Transferee is
acquiring Units subject to the terms and conditions of the
Agreement.
2.
The Transferee agrees that the Units
acquired or to be acquired by the Transferee are bound by and subject to all of
the terms and conditions of the Agreement, and hereby joins in, and agrees to be
bound by, and shall have the benefit of, all of the terms and conditions of the
Agreement to the same extent as if the Transferee were an original party to the
Agreement; provided,
however, that the Transferee’s joinder in the Agreement shall not
constitute admission of the Transferee or the Transferee’s spouse as a Member
unless and until the Transferee is duly admitted in accordance with the terms of
the Agreement. This Addendum Agreement shall be attached to and
become a part of the Agreement.
3.
Any notice required as permitted by the Agreement shall be given to
Transferee at the address listed beneath the Transferee’s signature
below.
4.
The Transferee is acquiring Series A Units.
5.
The spouse of the Transferee is aware of, understands and consents to the
provisions of the Agreement and its binding effect upon any community property
interest or marital settlement awards he or she may now or hereafter own or
receive, and agrees that the termination of his or her marital relationship with
such Member for any reason shall not have the effect of removing any Units
subject to the Agreement from the coverage thereof and that his or her
awareness, understanding, consent and agreement is evidenced by his or her
signature below.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
D-1
|
Transferee
|
Transferee’s
Spouse
|
|
|
Address:
|
||
AGREED TO
on behalf of the Members of the Company pursuant to Section 7.9 of the
Agreement.
|
GENESIS
ENERGY, LLC
|
||
|
By:
|
||
|
Name:
|
||
|
Its:
|
||
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
D-2
EXHIBIT E
SAMPLE
DISTRIBUTION SCENARIO
The
calculation of distribution payments provided below is based on a hypothetical
distribution scenario:
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
EXHIBIT
D-1
SCHEDULE
I
SERIES
A UNITHOLDERS
|
Members
|
Initial
Series A Units
|
Initial
Series A Contribution
|
|
Q
GEI Holdings, LLC
|
56,766,790.79
|
$56,766,790.79
|
|
EIV
Capital Fund LP
|
10,047,219.61
|
$10,047,219.61
|
|
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
6,028,331.77
|
$6,028,331.77
|
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
6,028,331.77
|
$6,028,331.77
|
|
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
|
6,028,331.77
|
$6,028,331.77
|
|
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
|
6,028,331.77
|
$6,028,331.77
|
|
▇▇▇▇▇
▇. ▇▇▇▇
|
6,530,692.75
|
$6,530,692.75
|
|
▇▇▇▇▇▇
▇. Deere
|
2,009,443.92
|
$2,009,443.92
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
1,004,721.96
|
$1,004,721.96
|
|
Total
|
100,472,196.10
|
$100,472,196.10
|
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
SCHEDULE
I
SCHEDULE
II
SERIES
B UNITHOLDERS
|
Name
|
Series B-1 Units
|
|
|
▇▇▇▇▇
▇▇▇▇
|
367
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
200
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
100
|
|
|
▇▇▇▇▇▇
▇. Deere
|
67
|
|
|
▇▇▇▇▇
▇▇▇▇
|
33
|
|
|
TOTAL
|
767
|
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
SCHEDULE
II
SCHEDULE
III
INITIAL
DIRECTORS
▇▇▇▇▇▇▇▇
Designees:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ III
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Designees:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ *
EIV
Designee:
▇▇▇▇
▇▇▇▇▇▇▇▇ *
Chief
Executive Officer:
▇▇▇▇▇ ▇.
▇▇▇▇
* The EIV
Entity and the ▇▇▇▇▇▇▇ Group have waived their rights under this Agreement
affording them the ability to appoint one Independent Director each on the
Effective Date until such time a position on the Board becomes
available. The EIV Entity and the ▇▇▇▇▇▇▇ Group have agreed that the
EIV Designee and the ▇▇▇▇▇▇▇ Designee noted above shall not appointed to the
Board on the Effective Date, but will, if eligible, become Independent Directors
at such time as a position on the Board is available.
Genesis
Energy, LLC
Amended
and Restated Limited Liability Company Agreement
SCHEDULE
III