FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS CRUDE OIL, L.P.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1.1 Definitions...........................................................................................2
1.2 Construction.........................................................................................10
ARTICLE II ORGANIZATION
2.1 Continuation of Existence............................................................................10
2.2 Name.................................................................................................10
2.3 Registered Office; Registered Agent; Principal Office; Other Offices.................................11
2.4 Purpose and Business.................................................................................11
2.5 Powers...............................................................................................11
2.6 Power of Attorney....................................................................................11
2.7 Term.................................................................................................12
2.8 Title to Partnership Assets..........................................................................12
ARTICLE III RIGHTS OF LIMITED PARTNERS
3.1 Limitation of Liability..............................................................................13
3.2 Management of Business...............................................................................13
3.3 Outside Activities of Limited Partners...............................................................13
3.4 Rights of Limited Partners...........................................................................13
ARTICLE IV TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
4.1 Transfer Generally...................................................................................14
4.2 Transfer of General Partner's Partnership Interest...................................................14
4.3 Transfer of a Limited Partner Interest...............................................................14
4.4 Restrictions on Transfers............................................................................15
4.5 Elimination and Cancellation of Subordinated LP Units and APIs.......................................15
4.6 Conversion of General Partner Interests..............................................................15
ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
5.1 Previous Capital Contributions.......................................................................15
5.2 Additional Contributions by General Partner..........................................................15
5.3 Interest and Withdrawal..............................................................................15
5.4 Capital Accounts.....................................................................................16
5.5 Issuances of Additional Partnership Securities.......................................................17
5.6 Limited Preemptive Right.............................................................................18
5.7 Fully Paid and Non-Assessable Nature of Limited Partner Interests....................................18
ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS
6.1 Allocations for Capital Account Purposes.............................................................18
6.2 Allocations for Tax Purposes.........................................................................21
6.3 Requirement and Characterization of Distributions; Distributions to Record Holders...................23
6.4 Distributions of Available Cash from Operating Surplus...............................................23
6.5 Distributions of Available Cash from Capital Surplus.................................................23
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS
7.1 Management...........................................................................................24
7.2 Certificate of Limited Partnership...................................................................25
7.3 Restrictions on the General Partner's Authority......................................................25
7.4 Reimbursement of the General Partner.................................................................26
7.5 Outside Activities...................................................................................26
7.6 Loans from the General Partner; Loans or Contributions from the Partnership; Contracts with
Affiliates; Certain Restrictions on the General Partner..............................................27
7.7 Indemnification......................................................................................28
7.8 Liability of Indemnitees.............................................................................29
7.9 Resolution of Conflicts of Interest..................................................................30
7.10 Other Matters Concerning the General Partner.........................................................31
7.11 Reliance by Third Parties............................................................................31
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting...............................................................................32
8.2 Fiscal Year..........................................................................................32
ARTICLE IX TAX MATTERS
9.1 Tax Returns and Information..........................................................................32
9.2 Tax Elections........................................................................................32
9.3 Tax Controversies....................................................................................32
9.4 Withholding..........................................................................................32
ARTICLE X ADMISSION OF PARTNERS
10.1 Status of General Partner............................................................................33
10.2 Admission of Successor General Partner...............................................................33
10.3 Admission of Substituted Limited Partner.............................................................33
10.4 Admission of Additional Limited Partners.............................................................33
10.5 Amendment of Agreement and Certificate of Limited Partnership........................................34
ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS
11.1 Withdrawal of the General Partner....................................................................34
11.2 Removal of the General Partner.......................................................................35
11.3 Interest of Departing Partner........................................................................35
11.4 Withdrawal of Limited Partners.......................................................................35
ARTICLE XII DISSOLUTION AND LIQUIDATION
12.1 Dissolution..........................................................................................36
12.2 Continuation of the Business of the Partnership After Dissolution....................................36
12.3 Liquidator...........................................................................................37
12.4 Liquidation..........................................................................................37
12.5 Cancellation of Certificate of Limited Partnership...................................................38
12.6 Return of Contributions..............................................................................38
12.7 Waiver of Partition..................................................................................38
12.8 Capital Account Restoration..........................................................................38
ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
13.1 Amendment to be Adopted Solely by General Partner....................................................38
13.2 Amendment Procedures.................................................................................39
ARTICLE XIV MERGER
14.1 Authority............................................................................................39
14.2 Procedure for Merger or Consolidation................................................................40
14.3 Approval by Limited Partners of Merger or Consolidation..............................................40
14.4 Certificate of Merger................................................................................41
14.5 Effect of Merger.....................................................................................41
ARTICLE XV GENERAL PROVISIONS
15.1 Addresses and Notices................................................................................41
15.2 Further Action.......................................................................................42
15.3 Binding Effect.......................................................................................42
15.4 Integration..........................................................................................42
15.5 Creditors............................................................................................42
15.6 Waiver...............................................................................................42
15.7 Counterparts.........................................................................................42
15.8 Applicable Law.......................................................................................42
15.9 Invalidity of Provisions.............................................................................42
15.10 Consent of Partners..................................................................................42
FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS CRUDE OIL, L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of
Genesis Crude Oil, L.P., dated as of June 9, 2005, is entered into by and among
Genesis Energy, Inc., a Delaware corporation, as the General Partner, Genesis
Energy, L.P. ("Genesis MLP"), a Delaware limited partnership, as the Limited
Partner, together with any other Persons who become Partners in the Partnership
or parties hereto as provided herein. In consideration of the covenants,
conditions and agreements contained herein, the parties hereto hereby agree as
follows:
RECITALS
WHEREAS, the General Partner and certain other parties organized the
Partnership as a Delaware limited partnership pursuant to an Amended and
Restated Agreement of Limited Partnership of Genesis Crude Oil, L.P. dated as of
December 3, 1996 (the "First Amended Agreement"); and
WHEREAS, on December 7, 2000, the partners of the Partnership and of
Genesis MLP approved by requisite vote a restructuring (the "Restructuring") of
the Partnership and Genesis MLP pursuant to which (a) all outstanding
Subordinated LP Units and APIs were abandoned by their respective holders and
cancelled by the Partnership, (b) the First Amended Agreement and the First
Amended MLP Agreement were amended to, among other things, reduce the amounts of
Minimum Quarterly Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution (each as defined in the First
Amended Agreement) and provide that the Common Units would not accrue arrearages
if the Minimum Quarterly Distribution (as defined in the First Amended
Agreement) is not paid in full in any Quarter, (c) Salomon contributed to the
Partnership the remaining $3,802,000 of its distribution support obligation
under the Distribution Support Agreement (the "Remaining Distribution Support"),
(d) the Partnership made a special distribution of the Remaining Distribution
Support less the costs incurred in connection with the Restructuring to Genesis
MLP and Genesis MLP made a special distribution of such amount to the holders of
MLP Common Units, (e) the Distribution Support Agreement was terminated, (f)
Genesis MLP withdrew as a general partner of the Partnership and Genesis MLP's
80.01% general partner interest in the Partnership represented by 8,801,020
Subordinated GP Units was converted to a 99.99% limited partner interest, (g)
the General partner's 0.40% general partner interest in the Partnership
represented by 43,980 Subordinated GP Units was converted into a 0.01% general
partner interest and (h) Salomon's $300 million credit support obligation under
the Master Credit Support Agreement was extended until December 31, 2001 on the
current terms and conditions;
WHEREAS, on December 7, 2000, the General Partner and certain other parties
amended and restated the First Amended Agreement to enter into the Second
Amended and Restated Agreement of Limited Partnership of Genesis Crude Oil, L.P.
("Second Amended Agreement") to reflect the Restructuring and certain other
changes that, in the discretion of the General Partner, did not adversely affect
the Limited Partners in any material respect;
WHEREAS, on May 14, 2002, Genesis Energy, L.L.C., the sole general partner
was converted from a Delaware limited liability company to a Delaware
corporation pursuant to Delaware law and such corporation is incorporated in the
state of Delaware as Genesis Energy, Inc.;
WHEREAS, on July 31, 2002, Genesis Energy, Inc., as the sole general
partner, and Genesis MLP, as the sole limited partner amended and restated the
Second Amended Agreement (the "Third Amended Agreement") to reflect the change
in the General Partner's name and form as a Delaware corporation on May 14,
2002, and certain other conforming changes that, in the discretion of the
General Partner, did not adversely affect the Limited Partners in any material
respect; and
WHEREAS, the General Partner and Genesis MLP hereby amend and restate the
Third Amended Agreement as provided herein to reflect the consummation of the
transactions contemplated by the Conversion and Contribution Agreement,
including (a) the creation of Incentive Distribution Rights in Genesis MLP in
lieu of any incentive distribution rights in the Partnership resulting from the
conversion of the Incentive Compensation Payments pursuant to Section 7.13 of
the Third Amended Agreement and (b) certain other conforming changes related to
the
2
foregoing, each of which constitute changes that, in the discretion of the
General Partner, do not adversely affect the Limited Partners in any material
respect.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby amend and restate the Third Amended
Agreement in its entirety:
ARTICLE I
DEFINITIONS
1.1 Definitions
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Acquisition" means any transaction in which any Group Member acquires
(through an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of the assets, properties or business
of another Person for the purpose of increasing the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such transaction.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 10.4 and who is shown as such on the books
and records of the Partnership.
"Adjusted Capital Account" means the Capital Account maintained for each
Partner as of the end of each fiscal year of the Partnership (a) increased by
any amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii) and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably expected to be made to
such Partner in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i)
or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended
to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Section 5.4(d)(i) or 5.4(d)(ii).
"Affiliate" means, with respect to any Person, any other Person that (i)
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question or (ii)
owns, beneficially, directly or indirectly, 20% or more of the outstanding
capital stock, shares or other equity interests of the Person in question. As
used herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreed Allocation" means any allocation, other than a Required Allocation,
of an item of income, gain, loss or deduction pursuant to the provisions of
Section 6.1, including, without limitation, a Curative Allocation (if
appropriate to the context in which the term "Agreed Allocation" is used).
"Agreed Value" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution as determined
by the General Partner using such reasonable method of valuation as it may
adopt. The General Partner shall, in its discretion, use such method as it deems
reasonable and appropriate to allocate the aggregate Agreed Value of Contributed
Properties contributed to the Partnership in a single or integrated transaction
among each separate property on a basis proportional to the fair market value of
each Contributed Property.
3
"Agreement" means this Fourth Amended and Restated Agreement of Limited
Partnership of Genesis Crude Oil, L.P., as it may be amended, supplemented or
restated from time to time.
"APIs" mean the non-voting Limited Partner Interests issued to Salomon
pursuant to Section 5.6 of the First Amended Agreement and in accordance with
the Distribution Support Agreement.
"Assets" means all of the assets now owned or hereafter acquired by the
Partnership.
"Assignee" means a Person to whom one or more Limited Partner Interests
have been transferred in a manner permitted under this Agreement and who has
executed and delivered a Transfer Application as required by this Agreement, but
who has not been admitted as a Substituted Limited Partner.
"Audit Committee" means a committee of the Board of Directors of the
General Partner composed entirely of two or more directors who are neither
officers nor employees of the General Partner or officers, directors or
employees of any Affiliate of the General Partner.
"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the Partnership
Group on hand at the end of such Quarter and (ii) all additional cash and
cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Quarter resulting from
borrowings for working capital purposes, less
(b) the amount of any cash reserves that is necessary or appropriate in
the reasonable discretion of the General Partner to (i) provide for the
proper conduct of the business of the Partnership Group (including reserves
for future capital expenditures and for anticipated future credit needs of
the business of the Partnership Group) subsequent to such Quarter, (ii)
comply with applicable law or any loan agreement (including the Master
Credit Support Agreement), security agreement (including the Security
Agreement), mortgage, debt instrument or other agreement or obligation to
which any Group Member is a party or by which it is bound or its assets are
subject or (iii) provide funds for distributions under Section 6.4 or 6.5
in respect of any one or more of the next four Quarters; provided, however,
that the General Partner may not establish cash reserves pursuant to (iii)
above if the effect of such reserves would be that Genesis MLP is unable to
distribute an amount equal to the Minimum Quarterly Distribution on all MLP
Common Units and the MLP General Partner Interest with respect to such
Quarter; and, provided further, that disbursements made by a Group Member
or cash reserves established, increased or reduced after the end of such
Quarter but on or before the date of determination of Available Cash with
respect to such Quarter shall be deemed to have been made, established,
increased or reduced, for purposes of determining Available Cash, within
such Quarter if the General Partner so determines.
Notwithstanding the foregoing, "Available Cash" with respect to the Quarter
in which the Liquidation Date occurs and any subsequent Quarter shall equal
zero.
"Book-Tax Disparity" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 5.4 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the states of New York or Texas shall not be regarded as a Business
Day.
"Capital Account" means the capital account maintained for a Partner
pursuant to Section 5.4.
4
"Capital Contribution" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property that a Partner contributes to the Partnership.
"Capital Improvement" means any (a) addition or improvement to the capital
assets owned by any Group Member or (b) acquisition of existing or the
construction of new capital assets (including pipeline systems, storage
facilities and related assets), made to increase the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such addition, improvement,
acquisition or construction.
"Capital Surplus" has the meaning assigned to such term in Section 6.3(a).
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners' and
Assignees' Capital Accounts in respect of such Contributed Property and (b) with
respect to any other Partnership property, the adjusted basis of such property
for federal income tax purposes, all as of the time of determination. The
Carrying Value of any property shall be adjusted from time to time in accordance
with Sections 5.4(d)(i) and 5.4(d)(ii) and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"Certificate of Limited Partnership" means the Amended and Restated
Certificate of Limited Partnership of the Partnership filed with the Secretary
of State of the State of Delaware as referenced in Section 7.2, as such
Certificate of Limited Partnership may be amended, supplemented or restated from
time to time.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of
future law.
"Commission" means the United States Securities and Exchange Commission.
"Contributed Property" means each property or other asset, in such form as
may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 5.4(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.
"Conversion and Contribution Agreement" means the Conversion and
Contribution Agreement, dated May 26, 2005, among the Partnership, the General
Partner and Genesis MLP.
"Conveyance Agreement" means that certain Purchase & Sale and Contribution
& Conveyance Agreement, dated as of November 26, 1996, among the Partnership,
Genesis MLP, Genesis Energy, L.L.C., ▇▇▇▇▇▇ and a Subsidiary of Salomon,
together with the additional conveyance documents and instruments contemplated
or referenced thereunder.
"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(ix).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del C. 17-101, et seq., as amended, supplemented or restated from time to
time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.
"Distribution Support Agreement" means the Distribution Support Agreement,
dated as of December 3, 1996, between the Partnership and Salomon, which sets
forth the agreement of the Partnership and Salomon relating to the purchase of
APIs.
"Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752 2(a).
"Event of Withdrawal" has the meaning assigned to such term in Section
11.1(a).
5
"First Amended Agreement" has the meaning set forth in the recitals to
this Agreement.
"First Amended MLP Agreement" means the Amended and Restated Agreement of
Limited Partnership of Genesis MLP, dated as of December 3, 1996.
"Fourth Amended MLP Agreement" means the Fourth Amended and Restated
Agreement of Limited Partnership of Genesis MLP, dated as of the date of this
Agreement.
"General Partner" means Genesis Energy, Inc. and its successors and
permitted assigns as general partner of the Partnership.
"General Partner Interest" means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner without
reference to any Limited Partner Interest held by it), which may be evidenced by
Partnership Securities or a combination thereof or interest therein, and
includes any and all benefits to which the General Partner is entitled as
provided in this Agreement, together with all obligations of the General Partner
to comply with the terms and provisions of this Agreement.
"Genesis MLP" means Genesis Energy, L.P., a Delaware limited partnership,
and its successors.
"Group Member" means a member of the Partnership Group.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Corporation, a Delaware corporation, and its
Subsidiaries.
"Incentive Compensation Payment" means a payment made to the General
Partner pursuant to Section 7.12 of the Third Amended Agreement.
"Indemnitee" means (a) the General Partner, any Departing Partner and any
Person who is or was an Affiliate of the General Partner or any Departing
Partner, (b) any Person who is or was a director, officer, employee, agent or
trustee of a Group Member, (c) any Person who is or was a member, officer,
director, employee, agent, or trustee of the General Partner or any Departing
Partner or any Affiliate of the General Partner or any Departing Partner, or any
Affiliate of any such Person and (d) any Person who is or was serving at the
request of the General Partner or any Departing Partner or any such Affiliate as
a director, officer, employee, member, partner, agent, fiduciary or trustee of
another Person; provided, however, that a Person shall not be an Indemnitee by
reason of providing, on a fee-for-services basis, trustee, fiduciary or
custodial services.
"Initial Closing Date" means December 3, 1996.
"Initial Unit Price" means, with respect to any MLP Common Unit $20.625,
adjusted as appropriate to give effect to any distribution, subdivision or
combination of MLP Common Units.
"Interim Capital Transactions" means the following transactions if they
occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings
of indebtedness and sales of debt securities (other than for working capital
purposes and other than for items purchased on open account in the ordinary
course of business) by any Group Member; (b) sales of equity interests by any
Group Member; and (c) sales or other voluntary or involuntary dispositions of
any assets of any Group Member other than (i) sales or other dispositions of
inventory in the ordinary course of business, (ii) sales or other dispositions
of other current assets, including receivables and accounts in the ordinary
course of business and (iii) sales or other dispositions of assets as part of
normal retirements or replacements.
"Limited Partner" means, unless the context otherwise requires, (a) Genesis
MLP, each Substituted Limited Partner, each Additional Limited Partner and (b)
solely for purposes of Articles V, VI, VII and IX and Section 12.4, each
Assignee.
"Limited Partner Interest" means the ownership interest of a Limited
Partner or Assignee in the Partnership, which may be evidenced by Units or other
Partnership Securities or a combination thereof or interest therein, and
includes any and all benefits to which such Limited Partner or Assignee is
entitled as provided in this Agreement, together with all obligations of such
Limited Partner or Assignee to comply with the terms and provisions of this
Agreement.
6
"Liquidation Date" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the holders of Outstanding Units have the right to elect to
reconstitute the Partnership and continue its business has expired without such
an election being made and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the General Partner to
perform the functions described in Section 12.3 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.
"Majority Interest" means at least a majority in Voting Power of the
Limited Partner Interests.
"Master Credit Support Agreement" means the Master Credit Support Agreement
dated December 3, 1996, among the Partnership and Salomon which sets forth the
agreement of the Partnership and Salomon relating to the credit support to be
provided by Salomon to the Partnership.
"Merger Agreement" has the meaning assigned to such term in Section 14.1.
"Minimum Quarterly Distribution" has the meaning set forth in the Fourth
Amended MLP Agreement.
"MLP Common Unit" has the meaning assigned to the term "Common Unit" in the
Fourth Amended MLP Agreement.
"MLP General Partner Interest" has the meaning assigned to the term
"General Partner Interest" in the Fourth Amended MLP Agreement.
"MLP Partnership Security" has the meaning assigned to the term
"Partnership Security" in the Fourth Amended MLP Agreement.
"MLP Unit" has the meaning assigned to the term "Unit" in the Fourth
Amended MLP Agreement.
"Net Agreed Value" means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership, the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 5.4(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or
Assignee upon such distribution or to which such property is subject at the time
of distribution, in either case, as determined under Section 752 of the Code.
"Net Income" means, for any taxable year, the excess, if any, of the
Partnership's items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section 5.4(b) and shall
not include any items specially allocated under Section 6.1(d).
"Net Loss" means, for any taxable year, the excess, if any, of the
Partnership's items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.4(b) and shall not
include any items specially allocated under Section 6.1(d).
"Net Termination Gain" means, for any taxable year, the sum, if positive,
of all items of income, gain, loss or deduction recognized by the Partnership
after the Liquidation Date. The items included in the determination of Net
Termination Gain shall be determined in accordance with Section 5.4(b) and shall
not include any items of income, gain or loss specially allocated under Section
6.1(d).
7
"Net Termination Loss" means, for any taxable period, the sum, if negative,
of all items of income, gain, loss or deduction recognized by the Partnership
after the Liquidation Date. The items included in the determination of Net
Termination Loss shall be determined in accordance with Section 5.4(b) and shall
not include any items of income, gain or loss specially allocated under Section
6.1(d).
"Non-Competition Agreement" means the Non-Competition Agreement dated
December 3, 1996, among the Partnership, Genesis MLP, Salomon, Basis Petroleum,
Inc. and ▇▇▇▇▇▇.
"Nonrecourse Built-in Gain" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would be
allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.
"Nonrecourse Deductions" means any and all items of loss, deduction or
expenditures (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse
Liability.
"Nonrecourse Liability" has the meaning set forth in Treasury Regulation
Section 1.752-1(a)(2).
"Operating Expenditures" means all Partnership Group expenditures,
including, but not limited to, taxes, reimbursements of the General Partner,
debt service payments, guarantee fees and capital expenditures, subject to the
following:
(a) Payments (including prepayments) of principal of and premium on
indebtedness shall not be an Operating Expenditure if the payment is (i)
required in connection with the sale or other disposition of assets or (ii)
made in connection with the refinancing or refunding of indebtedness with
the proceeds from new indebtedness or from the sale of equity interests.
For purposes of the foregoing, at the election and in the reasonable
discretion of the General Partner, any payment of principal or premium
shall be deemed to be refunded or refinanced by any indebtedness incurred
or to be incurred by the Partnership Group within 180 days before or after
such payment to the extent of the principal amount of such indebtedness.
(b) Operating Expenditures shall not include (i) capital expenditures
made for Acquisitions or for Capital Improvements, (ii) payment of
transaction expenses relating to Interim Capital Transactions or (iii)
distributions to Partners. Where capital expenditures are made in part for
Acquisitions or for Capital Improvements and in part for other purposes,
the General Partner's good faith allocation between the amounts paid for
each shall be conclusive.
"Operating Surplus" means, with respect to any period ending prior to the
Liquidation Date, on a cumulative basis and without duplication,
(a) the sum of (i) $20 million plus all cash and cash equivalents of
the Partnership Group on hand as of the close of business on the Initial
Closing Date, (ii) all cash receipts of the Partnership Group for the
period beginning on the Initial Closing Date and ending with the last day
of such period, other than cash receipts from Interim Capital Transactions
(except to the extent specified in Section 6.5) and (iii) all cash receipts
of the Partnership Group after the end of such period but on or before the
date of determination of Operating Surplus with respect to such period
resulting from borrowings for working capital purposes, less
(b) the sum of (i) Operating Expenditures for the period beginning on
the Initial Closing Date and ending with the last day of such period and
(ii) the amount of cash reserves that is necessary or advisable in the
reasonable discretion of the General Partner to provide funds for future
Operating Expenditures provided, however, that disbursements made
(including contributions to a Group Member or disbursements on behalf of a
Group Member) or cash reserves established, increased or reduced after the
end of such period but on or before the date of determination of Available
Cash with respect to such period shall be deemed to have been made,
established, increased or reduced for purposes of determining Operating
Surplus, within such period if the General Partner so determines.
8
Notwithstanding the foregoing, "Operating Surplus" with respect to the
Quarter in which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner or any of its Affiliates)
acceptable to the General Partner in its reasonable discretion.
"Outstanding" means, with respect to Partnership Securities, all
Partnership Securities that are issued by the Partnership and reflected as
Outstanding on the Partnership's books and records as of the date of
determination.
"Partner" means the General Partner and each Limited Partner.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704--2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of loss, deduction
or expenditure (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(i), are attributable to a Partner
Nonrecourse Debt.
"Partnership" means Genesis Crude Oil, L.P., a Delaware limited
partnership, and any successors thereto.
"Partnership Group" means the Partnership and any Subsidiary of the
Partnership, treated as a single consolidated entity.
"Partnership Interest" means an ownership interest in the Partnership which
shall include General Partner Interests and Limited Partner Interests.
"Partnership Minimum Gain" means that amount determined in accordance with
the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Security" means any class or series of equity interest in the
Partnership.
"Percentage Interest" means (a) as to the General Partner, .01% and (b) as
to Genesis MLP, 99.99%, subject to adjustment to reflect the issuance of any
additional Partnership Securities in accordance with Section 5.5.
"Person" means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.
"Pro Rata" means (a) when modifying Units or any class thereof,
apportioned among all designated Units in accordance with their relative
Percentage Interests and (b) when modifying Partners and Assignees, apportioned
among all Partners and Assignees in accordance with their respective Percentage
Interests.
"Proxy Statement" means the definitive Proxy Statement filed by Genesis MLP
with the Commission under the Securities Exchange Act of 1934, as amended, for
the purpose of soliciting the votes of the holders of MLP Common Units with
respect to the Restructuring, as it has been or as it may be amended or
supplemented from time to time.
"Quarter" means, unless the context requires otherwise, a calendar quarter.
"Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or 743 of the Code)
upon the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-11545) as amended, filed by Genesis MLP with the
Commission under the Securities Act to register the initial offering and sale of
MLP Common Units to the public.
9
"Required Allocations" means (a) any limitation imposed on any allocation
of Net Loss or Net Termination Loss under Section 6.1(b) or Section 6.1(c) and
(b) any allocation of an item of income, gain, loss or deduction pursuant to
Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).
"Residual Gain" or "Residual Loss" means any item of gain or loss, as the
case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.
"Restructuring" has the meaning set forth in the recitals to this
Agreement.
"Restructuring Closing Date" means the date on which the Restructuring is
closed.
"Salomon" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Holdings, Inc., a Delaware
corporation, and Salomon Brothers Holdings, Inc., a Delaware corporation.
"Second Amended Agreement" has the meaning set forth in the recitals to
this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.
"Security Agreement" means the Security Agreement, dated as of December 3,
1996, among the Partnership, Salomon and the Secured Parties (as defined in the
Security Agreement) securing the obligations of the Partnership under the Master
Credit Support Agreement and creating a security interest in the Collateral (as
defined in the Security Agreement) in favor of the Collateral Agent (as defined
in the Security Agreement).
"Special Approval" means approval by a majority of the members of the Audit
Committee.
"Subordinated GP Units" means the Subordinated GP Units representing a
General Partner Interest held by the General Partner and Genesis MLP immediately
prior to the closing of the Restructuring.
"Subordinated LP Units" means the Subordinated LP Units representing a
Limited Partner Interest held by Salomon and ▇▇▇▇▇▇ immediately prior to the
closing of the Restructuring.
"Subsidiary" means, with respect to any Person, (a) a corporation of which
more than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of such partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 10.3 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).
"Third Amended Agreement" has the meaning set forth in the recitals to
this Agreement.
"Transfer" has the meaning assigned to such term in Section 4.1(a).
10
"Transfer Application" means an application and agreement for transfer of
Partnership Securities in the form set forth on the back of a Certificate or in
a form substantially to the same effect in a separate instrument.
"Unit" means a Partnership Security that is designated as a "Unit."
"Unitholder" means a holder of a Unit.
"Unrealized Gain" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the fair market
value of such property as of such date (as determined under Section 5.4(d)) over
(b) the Carrying Value of such property as of such date (prior to any adjustment
to be made pursuant to Section 5.4(d) as of such date).
"Unrealized Loss" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the Carrying Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section 5.4(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 5.4(d)).
"Unrecovered Capital" means at any time, with respect to a MLP Common Unit,
the Initial Unit Price less the sum of (i) all distributions constituting
Capital Surplus theretofore made in respect of an MLP Common Unit sold in the
initial offering and sale of MLP Common Units to the public, as described in the
Registration Statement and (ii) any distributions of cash (or the Net Agreed
Value of any distributions in kind) in connection with the dissolution and
liquidation of the Partnership theretofore made in respect of such a MLP Common
Unit, adjusted as the General Partner determines to be appropriate to give
effect to any distribution, subdivision or combination of such MLP Common Units.
"U.S. GAAP" means United States Generally Accepted Accounting Principles
consistently applied.
"Voting Power" means the right, if any, of the holder of a Partnership
Security to vote on Partnership matters. Each Common Unit shall entitle the
holder thereof to one vote. Each additional Partnership Security shall entitle
the holder thereof to such vote, if any, as shall be established at the time of
issuance of such Partnership Security.
1.2 Construction
Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) "include" or "includes" means includes,
without limitation, and "including" means including, without limitation.
ARTICLE II
ORGANIZATION
2.1 Continuation of Existence
The General Partner and the Limited Partner hereby amend and restate the
Third Amended Agreement in its entirety to continue the Partnership as a limited
partnership pursuant to the provisions of the Delaware Act and to set forth the
rights and obligations of the Partners and certain matters related thereto. This
amendment and restatement shall become effective on the date of this Agreement.
Except as expressly provided to the contrary in this Agreement, the rights,
duties (including fiduciary duties), liabilities and obligations of the Partners
and the administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act. All Partnership Interests shall constitute
personal property of the owner thereof for all purposes and a Partner has no
interest in specific Partnership property.
2.2 Name
The name of the Partnership shall be "Genesis Crude Oil, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner in its sole discretion,
including the name of the General Partner. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or
11
letters shall be included in the
Partnership's name where necessary for the purpose of complying with the laws of
any jurisdiction that so requires. The General Partner in its discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.
2.3 Registered Office; Registered Agent; Principal Office; Other Offices
Unless and until changed by the General Partner, the registered office of
the Partnership in the State of Delaware shall be located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office shall be CT Corporation System. The principal office of the
Partnership shall be located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or
such other place as the General Partner may from time to time designate by
notice to the Limited Partner. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner deems necessary or appropriate. The address of the General Partner shall
be ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or such other place as the
General Partner may from time to time designate by notice to the Limited
Partner.
2.4 Purpose and Business
The purpose and nature of the business to be conducted by the Partnership
shall be to (a) acquire, manage and operate the Assets and any similar assets or
properties, and to engage directly in, or to enter into or form any corporation,
partnership, joint venture, limited liability company or other arrangement to
engage indirectly in, any type of business or activity associated with, or
reasonably related to, the Assets and, in connection therewith, to exercise all
of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity, (b) engage directly in, or to
enter into or form any corporation, partnership, joint venture, limited
liability company or other arrangement to engage indirectly in, any business
activity that is approved by the General Partner and which lawfully may be
conducted by a limited partnership organized pursuant to the Delaware Act and,
in connection therewith, to exercise all of the rights and powers conferred upon
the Partnership pursuant to the agreements relating to such business activity,
and (c) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to a Group Member or Genesis MLP;
provided however, in the case of (b) above, that the General Partner reasonably
determines, as of the date of the acquisition or commencement of such activity,
that such activity (i) generates "qualifying income" (as such term is defined
pursuant to Section 7704 of the Code) or (ii) enhances the operations of an
activity of the Partnership that generates qualifying income. The General
Partner has no obligation or duty to the Partnership, the Partners, or the
Assignees to propose or approve, and in its discretion may decline to propose or
approve, the conduct by the Partnership of any business.
2.5 Powers
The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.
2.6 Power of Attorney
(a) The Limited Partner and each Assignee hereby constitutes and appoints
the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator, severally (and any successor
to the Liquidator by merger, transfer, assignment, election or
otherwise) and each of their authorized officers and attorneys-in-fact,
as the case may be, with full power of substitution, as his true and
lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including this Agreement and the Certificate of Limited
Partnership and all amendments or restatements hereof or thereof) that
the General Partner or the Liquidator deems necessary or appropriate to
form, qualify or continue the existence or qualification of the
Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) in
12
the State of Delaware and
in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all certificates, documents and other
instruments that the General Partner or the Liquidator deems necessary
or appropriate to reflect, in accordance with its terms, any amendment,
change, modification or restatement of this Agreement; (C) all
certificates, documents and other instruments (including conveyances
and a certificate of cancellation) that the General Partner or the
Liquidator deems necessary or appropriate to reflect the dissolution
and liquidation of the Partnership pursuant to the terms of this
Agreement; (D) all certificates, documents and other instruments
relating to the admission, withdrawal, removal or substitution of any
Partner pursuant to, or other events described in, Article IV, X, XI or
XII; (E) all certificates, documents and other instruments relating to
the determination of the rights, preferences and privileges of any
class or series of Partnership Securities issued pursuant to Section
5.5; and (F) all certificates, documents and other instruments
(including agreements and a certificate of merger) relating to a
merger or consolidation of the Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record all ballots,
consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the discretion of the General
Partner or the Liquidator, to make, evidence, give, confirm or ratify
any vote, consent, approval, agreement or other action that is made or
given by the Partners hereunder or is consistent with the terms of this
Agreement or is necessary or appropriate, in the discretion of
the General Partner or the Liquidator, to effectuate the terms or
intent of this Agreement; provided, that when required by
any provision of this Agreement that establishes a percentage of the
Limited Partners or of the Limited Partners of any class or series
required to take any action, the General Partner and the Liquidator may
exercise the power of attorney made in this Section 2.6(a)(ii) only
after the necessary vote, consent or approval of the Limited Partners
or of the Limited Partners of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing
the General Partner to amend this Agreement except in accordance with Article
XIII or as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a
power coupled with an interest, and it shall survive and, to the maximum
extent permitted by law, not be affected by the subsequent death,
incompetence, disability, incapacity, dissolution, bankruptcy or
termination of any Limited Partner or Assignee and the transfer of all or
any portion of such Limited Partner's or Assignee's Partnership Interest
and shall extend to such Limited Partner's or Assignee's heirs, successors,
assigns and personal representatives. Each such Limited Partner and
Assignee hereby agrees to be bound by any representation made by the
General Partner or the Liquidator acting in good faith pursuant to such
power of attorney; and each such Limited Partner and Assignee, to the
maximum extent permitted by law, hereby waives any and all defenses that
may be available to contest, negate or disaffirm the action of the General
Partner or the Liquidator taken in good faith under such power of attorney.
Each Limited Partner and Assignee shall execute and deliver to the General
Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other
instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
2.7 Term
The term of the Partnership shall continue until the close of Partnership
business on December 31, 2086 or until the earlier dissolution of the
Partnership in accordance with the provisions of Article XII. The existence of
the Partnership as a separate legal entity shall continue until the cancellation
of the Certificate of Limited Partnership as provided in the Delaware Act.
2.8 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner, one or more of the General Partner's Affiliates or one or
more nominees, as the General Partner may determine. The General Partner hereby
declares and warrants that any Partnership assets for which record title is held
in the name of the General Partner or one or more of its Affiliates or
13
one or
more nominees shall be held by the General Partner or such Affiliate or nominee
for the use and benefit of the Partnership in accordance with the provisions of
this Agreement; provided, however, that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership as soon as reasonably practicable; provided,
further, that, prior to the withdrawal or removal of the General Partner or as
soon thereafter as practicable, the General Partner shall use reasonable efforts
to effect the transfer of record title to the Partnership and, prior to any such
transfer, will provide for the use of such assets in a manner satisfactory to
the General Partner. All Partnership assets shall be recorded as the property of
the Partnership in its books and records, irrespective of the name in which
record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
3.1 Limitation of Liability
The Limited Partners and the Assignees shall have no liability under this
Agreement except as expressly provided in this Agreement or the Delaware Act.
3.2 Management of Business
No Limited Partner or Assignee, in its capacity as such, shall participate
in the operation, management or control (within the meaning of the Delaware Act)
of the Partnership's business, transact any business in the Partnership's name
or have the power to sign documents for or otherwise bind the Partnership. Any
action taken by any Affiliate of the General Partner or any officer, director,
employee, member, general partner, agent or trustee of the General Partner or
any of its Affiliates, or any officer, director, employee, member, general
partner, agent or trustee of a Group Member, in its capacity as such, shall not
be deemed to be participation in the control of the business of the Partnership
by a limited partner of the Partnership (within the meaning of Section 17-303(a)
of the Delaware Act) and shall not affect, impair or eliminate the limitations
on the liability of the Limited Partners or Assignees under this Agreement.
3.3 Outside Activities of Limited Partners
Subject to the provisions of Section 7.5, which shall continue to be
applicable to the Persons referred to therein, regardless of whether such
Persons shall also be Limited Partners or Assignees, any Limited Partner or
Assignee shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities in direct competition with the Partnership
Group. Neither the Partnership nor any of the other Partners or Assignees shall
have any rights by virtue of this Agreement in any business ventures of any
Limited Partner or Assignee.
3.4 Rights of Limited Partners
(a) In addition to other rights provided by this Agreement or by applicable
law, and except as limited by Section 3.4(b), each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon reasonable written
demand and at such Limited Partner's own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to him a current list of the name and last known
business, residence or mailing address of each Partner;
14
(iv) to have furnished to him a copy of this Agreement and the Certificate
of Limited Partnership and all amendments thereto, together with a
copy of the executed copies of all powers of attorney pursuant to which
this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of cash and a
description and statement of the Net Agreed Value of any other Capital
Contribution by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner;
and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) The General Partner may keep confidential from the Limited Partners and
Assignees, for such period of time as the General Partner deems reasonable,
(i) any information that the General Partner reasonably believes to be in
the nature of trade secrets or (ii) other information the disclosure of
which the General Partner in good faith believes (A) is not in the best
interests of Genesis MLP or the Partnership Group, (B) could damage Genesis
MLP or the Partnership Group or (C) that any Group Member is required by
law or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of which
is to circumvent the obligations set forth in this Section 3.4).
ARTICLE IV
TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS
4.1 Transfer Generally
(a) The term "transfer," when used in this Agreement with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which
the General Partner assigns its General Partner Interest to another Person
who becomes the General Partner (or an Assignee) or by which the holder of
a Limited Partner Interest assigns such Limited Partner Interest to another
Person who becomes a Limited Partner (or an Assignee), and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or
any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part, except
in accordance with the terms and conditions set forth in this Article IV.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a
disposition by any member of the General Partner of any or all of the
issued and outstanding membership interests of the General Partner.
4.2 Transfer of General Partner's Partnership Interest
If the General Partner transfers its interest as the general partner of
Genesis MLP to any Person in accordance with the provisions of the Fourth
Amended MLP Agreement, the General Partner shall contemporaneously therewith
transfer all, but not less than all, of its General Partner Interest herein to
such Person, and the Limited Partners and Assignees, if any, hereby expressly
consent to such transfer. Except as set forth in the immediately preceding
sentence and in Section 5.2, the General Partner may not transfer all or any
part of its General Partner Interest.
4.3 Transfer of a Limited Partner Interest
A Limited Partner may transfer all, but not less than all, of its Limited
Partner Interest in connection with the merger, consolidation or other
combination of such Limited Partner with or into any other Person or the
transfer by such Limited Partner of all or substantially all of its assets to
another Person, and following any such transfer such Person may become a
Substituted Limited Partner pursuant to Article X. Except as set forth in the
immediately preceding sentence, or in connection with any pledge of (or any
related foreclosure on) a Limited Partner Interest solely for the purpose of
securing, directly or indirectly, indebtedness of the Partnership or Genesis
MLP, and except
15
for the transfers contemplated by Section 10.3, a Limited
Partner may not transfer all or any part of its Limited Partner Interest or
withdraw from the Partnership.
4.4 Restrictions on Transfers
(a) Notwithstanding the other provisions of this Article IV, no transfer of any
Partnership Interest shall be made if such transfer would (i) violate the
then applicable federal or state securities laws or rules and regulations
of the Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer, (ii)
terminate the existence or qualification of the Partnership or Genesis MLP
under the laws of the jurisdiction of its formation, or (iii) cause the
Partnership or Genesis MLP to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of Partnership
Interests if a subsequent Opinion of Counsel determines that such
restrictions are necessary to avoid a significant risk of the Partnership
or Genesis MLP becoming taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes. The restrictions may be
imposed by making such amendments to this Agreement as the General Partner
may determine to be necessary or appropriate to impose such restrictions.
4.5 Elimination and Cancellation of Subordinated LP Units and APIs
At the closing of the Restructuring, the Outstanding Subordinated LP Units
and Outstanding APIs were eliminated and cancelled and all obligations
associated with either the Outstanding Subordinated LP Units or the Outstanding
APIs ceased and were no longer in effect.
4.6 Conversion of General Partner Interests
At the closing of the Restructuring, Genesis MLP's Subordinated GP Units
were converted into a 99.99% Limited Partner Interest and the General Partner's
Subordinated GP Units were converted into a .01% General Partner Interest.
ARTICLE V
CAPITAL CONTRIBUTIONS AND
ISSUANCE OF PARTNERSHIP INTERESTS
5.1 Previous Capital Contributions
The Partners (or their predecessors) have heretofore made Capital
Contributions to the Partnership as provided in the previous versions of the
partnership agreement superseded by this Agreement.
5.2 Additional Contributions by General Partner
Upon the issuance of any additional Limited Partner Interests, the General
Partner shall be required to make an additional Capital Contribution equal to
(i) .01 divided by 99.99 times (ii) the amount contributed to the Partnership by
the Limited Partners in exchange for such additional Limited Partner Interests.
Except as set forth in the immediately preceding sentence and Article XII, the
General Partner shall not be obligated to make any Capital Contributions to the
Partnership.
5.3 Interest and Withdrawal
No interest shall be paid by the Partnership on Capital Contributions. No
Partner or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made pursuant to
this Agreement or upon termination of the Partnership may be considered as such
by law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Partner or Assignee shall have
priority over any other Partner or Assignee either as to the return of Capital
Contributions or as to profits,
16
losses or distributions. Any such return shall
be a compromise to which all Partners and Assignees agree within the meaning of
Section 17-502(b) of the Delaware Act.
5.4 Capital Accounts
(a) The Partnership shall maintain for each Partner (or a beneficial owner
of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method
acceptable to the General Partner in its sole discretion) owning a
Partnership Interest a separate Capital Account with respect to such
Partnership Interest in accordance with the rules of Treasury
Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be
increased by (i) the amount of all Capital Contributions made to the
Partnership with respect to such Partnership Interest and (ii) all
items of Partnership income and gain (including, without limitation,
income and gain exempt from tax) computed in accordance with Section
5.4(b) and allocated with respect to such Partnership Interest pursuant
to Section 6.1, and decreased by (x) the amount of cash or Net Agreed
Value of all actual and deemed distributions of cash or property made
with respect to such Partnership Interest and (y) all items of
Partnership deduction and loss computed in accordance with Section
5.4(b) and allocated with respect to such Partnership Interest pursuant
to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain, loss
or deduction which is to be allocated pursuant to Article VI and is to
be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as
its determination, recognition and classification for federal income
tax purposes (including, without limitation, any method of
depreciation, cost recovery or amortization used for that purpose),
provided, that:
(i) All fees and other expenses incurred by the Partnership to promote the
sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code, if any, shall,
for purposes of Capital Account maintenance, be treated as an item of
deduction at the time such fees and other expenses are incurred and
shall be allocated among the Partners pursuant to Section 6.1.
(ii) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)
(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership and, as to those
items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code,
without regard to the fact that such items are not includable in gross
income or are neither currently deductible nor capitalized for federal
income tax purposes. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 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 in the
Capital Accounts shall be treated as an item of gain or
loss.
(iii) Any income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis of
such property as of such date of disposition were equal in amount to
the Partnership's Carrying Value with respect to such property as of
such date.
(iv) In accordance with the requirements of Section 704(b) of the Code, any
deductions for depreciation, cost recovery or amortization attributable
to any Contributed Property shall be determined as if the adjusted
basis of such property on the date it was acquired by the Partnership
were equal to the Agreed Value of such property. Upon an adjustment
pursuant to Section 5.4(d) to the Carrying Value of any Partnership
property subject to depreciation, cost recovery or amortization, any
further deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined
(A) as if the adjusted basis of such property were equal to the
Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life
(or, if applicable, the remaining useful life) as is applied for
federal income tax purposes; provided, however, that, if
the asset has a zero adjusted basis for federal income tax purposes,
depreciation, cost recovery or amortization deductions shall be
determined using any reasonable method that the General Partner may
adopt.
17
(v) If the Partnership's adjusted basis in a depreciable or cost recovery
property is reduced for federal income tax purposes pursuant to Section
48(q)(1) or 48(q)(3) of the Code, the amount of such reduction shall,
solely for purposes hereof, be deemed to be an additional depreciation
or cost recovery deduction in the year such property is placed in
service and shall be allocated among the Partners pursuant to Section
6.1. Any restoration of such basis pursuant to Section 48(q)(2) of the
Code shall, to the extent possible, be allocated in the same manner to
the Partners to whom such deemed deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)
(iv)(f), on an issuance of additional Partnership Interests for cash or
Contributed Property, the conversion of the General Partner's
Partnership Interest to MLP Common Units pursuant to Section 11.3(b) of
the Fourth Amended MLP Agreement, the Capital Account of all Partners
and the Carrying Value of each Partnership property immediately prior
to such issuance or conversion shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss
had been recognized on an actual sale of each such property immediately
prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 6.1(c) in the same manner as
any item of gain or loss actually recognized during
such period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss, the aggregate cash amount and
fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to
the issuance of additional Partnership Interests shall be determined by
the General Partner using such reasonable method of valuation as it may
adopt; provided, however, that the General Partner, in arriving at such
valuation, must take fully into account the fair market value of the
Partnership Interests of all Partners at such time. The General Partner
shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its discretion to be reasonable) to
arrive at a fair market value for individual properties.
(ii)In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Partner of any Partnership property (other than a
distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the
Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable
to such Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized in a sale of such property immediately prior
to such distribution for an amount equal to its fair market value, and
had been allocated to the Partners, at such time, pursuant to Section
6.1(c) in the same manner as any item of gain or loss actually
recognized during such period would have been allocated. In determining
such Unrealized Gain or Unrealized Loss the aggregate cash amount and
fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of an actual distribution which is
not made pursuant to Section 12.4 or in the case of a deemed
contribution and/or distribution occurring as a result of a termination
of the Partnership pursuant to Section 708 of the Code, be determined
and allocated in the same manner as that provided in Section 5.4(d)(i)
or (B) in the case of a liquidating distribution pursuant to Section
12.4, be determined and allocated by the Liquidator using such
reasonable method of valuation as it may adopt.
5.5 Issuances of Additional Partnership Securities
(a) The Partnership may issue additional Partnership Securities and options,
rights, warrants and appreciation rights relating to Partnership Securities
for any Partnership purpose at any time and from time to time to such
Persons for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole discretion, all without the
approval of any Limited Partners.
(b) Each additional Partnership Security authorized to be issued by the
Partnership pursuant to Section 5.5(a) may be issued in one or more
classes, or one or more series of any such classes, with such designations,
preferences, rights, powers and duties (which may be senior to existing
classes and series of Partnership Securities), as shall be fixed by the
General Partner in the exercise of its sole discretion, including
18
(i) the right to share Partnership profits and losses or items thereof;
(ii) the right to share in Partnership distributions; (iii) the rights upon
dissolution and liquidation of the Partnership; (iv) whether, and the terms
and conditions upon which, the Partnership may redeem such Partnership
Security; (v) whether such Partnership Security is issued with the
privilege of conversion or exchange and, if so, the terms and conditions of
such conversion or exchange; (vi) the terms and conditions upon which such
Partnership Security will be issued, evidenced by Certificates and assigned
or transferred; and (vii) the right, if any, of such Partnership Security
to vote on Partnership matters, including matters relating to the relative
rights, preferences and privileges of such Partnership Security.
(c) The General Partner is hereby authorized and directed to take all actions
that it deems necessary or appropriate in connection with (i) each issuance
of Partnership Securities pursuant to this Section 5.5, (ii) the admission
of Additional Limited Partners and (iii) all additional issuances of
Partnership Securities. The General Partner is further authorized and
directed to specify the relative rights, powers and duties of the holders
of Partnership Securities being so issued. The General Partner shall do all
things necessary to comply with the Delaware Act and is authorized and
directed to do all things it deems to be necessary or advisable in
connection with any future issuance of Partnership Securities pursuant to
the terms of this Agreement, including compliance with any statute, rule,
regulation or guideline of any federal, state or other governmental agency.
5.6 Limited Preemptive Right
Except as provided in this Section 5.6 and in Section 5.5, no Person shall
have any preemptive, preferential or other similar right with respect to (a)
additional Capital Contributions; (b) the issuance of any class or series of
Partnership Interests, whether unissued, held in the treasury or hereafter
created; (c) issuance of any obligations, evidences of indebtedness or other
securities of the Partnership convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase or subscribe to, any such
Partnership Interests; (d) issuance of any right of subscription to or right to
receive, or any warrant or option for the purchase of, any such Partnership
Interests; or (e) issuance or sale of any other securities that may be issued or
sold by the Partnership.
5.7 Fully Paid and Non-Assessable Nature of Limited Partner Interests
All Limited Partner Interests issued to Limited Partners pursuant to, and
in accordance with the requirements of, this Article V shall be fully paid and
non-assessable Limited Partner Interests in the Partnership, except as such
non-assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 Allocations for Capital Account Purposes
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.4(b)) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.
(a) Net Income. After giving effect to the special allocations set
forth in Section 6.1(d), Net Income for each taxable year and all
items of income, gain, loss and deduction taken into account in
computing Net Income for such taxable year shall be allocated as
follows:
(i) First, 100% to the General Partner until the aggregate Net Income
allocated to the General Partner pursuant to this Section
6.1(a)(i) for the current taxable year and all previous taxable
years is equal to the aggregate Net Loss allocated to the General
Partner pursuant to Section 6.1(b)(ii) for all previous taxable
years;
(ii) Second, 100% to the Partners in accordance with their respective
Percentage Interests, until the aggregate Net Income allocated to
the Partners pursuant to this Section 6.1(a)(ii) for the current
taxable
19
year and all previous taxable years is equal to the aggregate Net
Loss allocated to the Partners pursuant to Section 6.1(b)(ii) for
all previous taxable years; and
(iii) Third, the balance, if any, 100% to the Partners in accordance
with their respective Percentage Interests.
(b) Net Loss. After giving effect to the special allocations set forth
in Section 6.1(d), Net Loss for each taxable period and all items
of income, gain, loss and deduction taken into account in
computing Net Loss for such taxable period shall be allocated
among the Partners as follows:
(i) First, 100% to the Partners in accordance with their respective
Percentage Interests, until the aggregate Net Loss allocated
pursuant to this Section 6.1(b)(i) for the current taxable year
and all previous taxable years is equal to the aggregate Net
Income allocated to the Partners pursuant to Section 6.1(a)(iii)
for all previous taxable years; provided, however, that Net Loss
shall not be allocated to a Limited Partner pursuant to this
Section 6.1(b)(i) to the extent that such allocation would cause a
Limited Partner to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing
deficit balance in such Limited Partner's Adjusted Capital
Account);
(ii) Second, 100% to the Partners in accordance with their respective
Percentage Interests; provided that Net Loss shall not be
allocated pursuant to this Section 6.1(b)(ii) to the extent that
such allocation would cause any Limited Partner to have a deficit
balance in its Adjusted Capital Account at the end of such taxable
year (or increase any existing deficit balance in its Adjusted
Capital Account); and
(iii) Third, the balance, if any, 100% to the General Partner.
(c) Net Termination Gain and Loss. After giving effect to the special
allocations set forth in Section 6.1(d), all items of income,
gain, loss and deduction taken into account in computing Net
Termination Gain or Net Termination Loss for such taxable period
shall be allocated in the same manner as such Net Termination Gain
or Net Termination Loss is allocated hereunder. All allocations
under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided
under this Section 6.1 and after all distributions of Available
Cash provided under Sections 6.4 and 6.5 have been made with
respect to the taxable period ending on or before the Liquidation
Date; provided, however, that solely for purposes of this Section
6.1(c), Capital Accounts shall not be adjusted for distributions
made pursuant to Section 12.4.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 5.4(d)), such Net Termination Gain shall be
allocated among the Partners in the following manner (and the
Capital Accounts of the Partners shall be increased by the amount
so allocated in each of the following subclauses, in the order
listed, before an allocation is made pursuant to the next
succeeding subclause):
(A) First, to each Partner having a deficit balance in its Capital
Account, in the proportion that such deficit bears to the total
deficit balances in the Capital Accounts of all Partners, until
each Partner has been allocated Net Termination Gain equal to any
such deficit balance in its Capital Account; and
(B) Second, the balance, if any, 100% to the Partners in accordance
with their respective Percentage Interests.
(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 5.4(d)), such Net Termination Loss shall be
allocated to the Partners in the following manner:
(A) First, to the Partners in proportion to, and to the extent of, the
positive balances in their respective Capital Accounts; and
(B) Second, the balance, if any, 100% to the General Partner.
20
(d) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for
such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 6.1, if there is a net decrease in
Partnership Minimum Gain during any Partnership taxable period,
each Partner shall be allocated items of Partnership 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), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any
successor provision. For purposes of this Section 6.1(d), each
Partner's Adjusted Capital Account balance 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 6.1(d) with respect to such taxable
period (other than an allocation pursuant to Sections 6.1(d)(v)
and 6.1(d)(vi)). This Section 6.1(d)(i) is intended to comply
with the Partnership Minimum Gain chargeback requirement in
Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 6.1 (other
than Section 6.1(d)(i)), except as provided in Treasury Regulation
Section 1.704-2(i)(4), if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt
Minimum Gain at the beginning of such taxable period shall be
allocated items of Partnership income and gain for such period
(and, if necessary, subsequent periods) in the manner and amounts
provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704- 2(j)(2)(ii), or any successor provisions. For purposes of
this Section 6.1(d), each Partner's Adjusted Capital Account
balance 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 6.1(d), other than
Section 6.1(d)(i) and other than an allocation pursuant to
Sections 6.1(d)(v) and 6.1(d)(vi), with respect to such taxable
period. This Section 6.1(d)(ii) is intended to comply with the
chargeback of items of income and gain requirement in Treasury
Regulation Section 1.704-2(i)(4)and shall be interpreted
consistently therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described
in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations promulgated under
Section 704(b) of the Code, 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 Section 6.1(d)(i) or
6.1(d)(ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit
balance in its Capital Account at the end of any Partnership
taxable period in excess of the sum of (A) the amount such Partner
is required to restore pursuant to the provisions of this
Agreement and (B) the amount such Partner is deemed obligated to
restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of
Partnership gross income and gain in the amount of such excess as
quickly as possible; provided, that an allocation pursuant to this
Section 6.1(d)(iv) shall be made only if and to the extent that
such Partner would have a deficit balance in its Capital Account
as adjusted after all other allocations provided for in this
Section 6.1 have been tentatively made as if this Section 6.1(d)
(iv) were not in this Agreement.
(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable
period shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines
in its good faith discretion that the Partnership's Nonrecourse
Deductions must be allocated in a different ratio to satisfy the
safe harbor requirements of the Treasury Regulations promulgated
under Section 704(b) of the Code, the General Partner is
authorized, upon notice to the other Partners, to revise the
prescribed ratio to the numerically closest ratio that does
satisfy such requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for
any taxable period shall be allocated 100% to the Partner that
bears the Economic Risk of Loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury
21
Regulation Section 1.704-2(i). If more than one Partner bears the
Economic Risk of Loss with respect to a Partner Nonrecourse Debt,
such Partner Nonrecourse Deductions attributable thereto shall be
allocated between or among such Partners in accordance with the
ratios in which they share such Economic Risk of Loss.
(vii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752 3(a)(3), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the sum of (A) the
amount of Partnership Minimum Gain and (B) the total amount of
Nonrecourse Built-in Gain shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section
734(b) or 743(c) 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 Partners in a manner
consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Section of the Treasury
Regulations.
(ix) Curative Allocation. (A) Notwithstanding any other provision of
this Section 6.1, other than the Required Allocations, the
Required Allocations shall be taken into account in making the
Agreed Allocations so that, to the extent possible, the net
amount of items of income, gain, loss and deduction allocated to
each Partner pursuant to the Required Allocations and the
Agreed Allocations, together, shall be equal to the net amount of
such items that would have been allocated to each such
Partner under the Agreed Allocations had the Required Allocations
and the related Curative Allocation not otherwise been
provided in this Section 6.1. Notwithstanding the preceding
sentence, Required Allocations relating to (1) Nonrecourse
Deductions shall not be taken into account except to the extent
that there has been a decrease in Partnership Minimum Gain
and (2) Partner Nonrecourse Deductions shall not be taken into
account except to the extent that there has been a decrease
in Partner Nonrecourse Debt Minimum Gain. Allocations pursuant to
this Section 6.1(d)(ix)(A) shall only be made with respect
to Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this Section 6.1(d)(ix)(A)
shall be deferred with respect to allocations pursuant to clauses
(1) and (2) hereof to the extent the General Partner
reasonably determines that such allocations are likely to be
offset by subsequent Required Allocations.
(A) The General Partner shall have reasonable discretion,
with respect to each taxable period, to (1) apply the
provisions of Section 6.1(d)(ix)(A) in whatever order is most
likely to minimize the economic distortions that might
otherwise result from the Required Allocations, and (2)
divide all allocations pursuant to Section 6.1(d)(ix)(A)
among the Partners in a manner that is likely to
minimize such economic distortions.
6.2 Allocations for Tax Purposes
(a) Except as otherwise provided herein, for federal income tax purposes,
each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be
allocated for federal income tax purposes among the Partners as
follows:
(i) (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided
under Section 704(c) of the Code that takes into account the variation
between the Agreed Value of such property and its adjusted basis at the
time of contribution; and (B) any item of Residual Gain or Residual
Loss attributable to a Contributed Property shall be allocated among
the Partners in the same manner as its correlative item of "book" gain
or loss is allocated pursuant to Section 6.1.
21
(ii) (A) In the case of an Adjusted Property, such items shall (1) first, be
allocated among the Partners in a manner consistent with the principles
of Section 704(c) of the Code to take into account the Unrealized Gain
or Unrealized Loss attributable to such property and the allocations
thereof pursuant to Section 5.4(d)(i) or 5.4(d)(ii), and (2) second, in
the event such property was originally a Contributed Property, be
allocated among the Partners in a manner consistent with Section
6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain or
loss is allocated pursuant to Section 6.1.
(iii) The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the preservation
of uniformity of Partnership Interests (or any class or classes thereof),
the General Partner shall have sole discretion to (i) adopt such
conventions as it deems appropriate in determining the amount of
depreciation, amortization and cost recovery deductions; (ii) make special
allocations for federal income tax purposes of income (including, without
limitation, gross income) or deductions; and (iii) amend the provisions of
this Agreement as appropriate (x) to reflect the proposal or promulgation
of Treasury regulations under Section 704(b) or 704(c) of the Code or (y)
otherwise to preserve or achieve uniformity of Units or other limited
partner interests of Genesis MLP (or any class or classes thereof). The
General Partner may adopt such conventions, make such allocations and make
such amendments to this Agreement as provided in this Section 6.2(c) only
if such conventions, allocations or amendments would not have a material
adverse effect on the Partners, the holders of any class or classes of
Units or other limited partner interests of Genesis MLP issued and
outstanding or the Partnership, and if such allocations are consistent with
the principles of Section 704 of the Code.
(d) The General Partner in its discretion may determine to depreciate or
amortize the portion of an adjustment under Section 743(b) of the Code
attributable to unrealized appreciation in any Adjusted Property (to the
extent of the unamortized Book-Tax Disparity) using a predetermined rate
derived from the depreciation or amortization method and useful life
applied to the Partnership's common basis of such property, despite any
inconsistency of such approach with Treasury Regulation Section
1.167(c)-l(a)(6) or Treasury Regulation Section 1.197-2(g)(3). If the
General Partner determines that such reporting position cannot reasonably
be taken, the General Partner may adopt depreciation and amortization
conventions under which all purchasers acquiring limited partnership
interests of Genesis MLP in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they had
purchased a direct interest in the Partnership's property. If the General
Partner chooses not to utilize such aggregate method, the General Partner
may use any other reasonable depreciation and amortization conventions to
preserve the uniformity of the intrinsic tax characteristics of any limited
partnership interests of Genesis MLP that would not have a material adverse
effect on the Partners or the holders of any class or classes of limited
partnership interests of Genesis MLP.
(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after
taking into account other required allocations of gain pursuant to this
Section 6.2, be characterized as Recapture Income in the same proportions
and to the same extent as such Partners (or their predecessors in interest)
have been allocated any deductions directly or indirectly giving rise to
the treatment of such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard
to any election under Section 754 of the Code which may be made by the
Partnership; provided, however, that such allocations, once made, shall be
adjusted as necessary or appropriate to take into account those adjustments
permitted or required by Sections 734 and 743 of the Code.
(g) The General Partner may adopt such methods of allocation of income, gain,
loss or deduction between a transferor and a transferee of a Partnership
Interest as it determines necessary, to the extent permitted or required by
Section 706 of the Code and the regulations or rulings promulgated
thereunder.
23
(h) Allocations that would otherwise be made to a Partner under the provisions
of this Article VI shall instead be made to the beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee
has furnished the identity of such owner to the Partnership in accordance
with Section 6031(c) of the Code or any other method acceptable to the
General Partner in its sole discretion.
6.3 Requirement and Characterization of Distributions; Distributions to
Record Holders
(a) Within 45 days following the end of each Quarter, an amount equal to 100%
of Available Cash with respect to such Quarter shall, subject to Section
17-607 of the Delaware Act, be distributed in accordance with this Article
VI by the Partnership to the Partners in accordance with their respective
Percentage Interests. All amounts of Available Cash distributed by the
Partnership on any date from any source shall be deemed to be Operating
Surplus until the sum of all amounts of Available Cash theretofore
distributed by the Partnership to the Partners pursuant to Section 6.4
equals the Operating Surplus from the Initial Closing Date through the
close of the immediately preceding Quarter. Any remaining amounts of
Available Cash distributed by the Partnership on such date shall, except as
otherwise provided in Section 6.5, be deemed to be "Capital Surplus." All
distributions required to be made under this Agreement shall be made
subject to Section 17-607 of the Delaware Act.
(b) In the event of the dissolution and liquidation of the Partnership, all
receipts received during or after the Quarter in which the Liquidation Date
occurs, other than from borrowings described in (a)(ii) of the definition
of Available Cash, shall be applied and distributed solely in accordance
with, and subject to the terms and conditions of, Section 12.4.
(c) The General Partner shall have the discretion to treat taxes paid by the
Partnership on behalf of, or amounts withheld with respect to, all or less
than all of the Partners, as a distribution of Available Cash to such
Partners.
6.4 Distributions of Available Cash from Operating Surplus
Available Cash that is deemed to be Operating Surplus pursuant to the
provisions of Section 6.3 or 6.5 shall, subject to Section 17-607 of the
Delaware Act and except as otherwise required by Section 5.5(b) (in respect of
additional Partnership Securities issued pursuant thereto) or permitted by
Section 6.8, be distributed to all Partners, in accordance with their respective
Percentage Interests.
6.5 Distributions of Available Cash from Capital Surplus
Available Cash with respect to any Quarter that is deemed to be Capital
Surplus pursuant to the provisions of Section 6.3 shall, subject to Section
17-607 of the Delaware Act, be distributed as follows, unless the provisions of
Section 6.3 require otherwise:
(a) First, 100% to all Partners, in accordance with their respective Percentage
Interests, until there has been distributed to the Partners an amount such
that, after giving effect to the distribution of such amount by Genesis
MLP, a hypothetical holder of a MLP Common Unit acquired on the Initial
Closing Date has received with respect to such MLP Common Unit, during the
period since the Initial Closing Date through such date, distributions of
Available Cash that are deemed to be Capital Surplus in an aggregate amount
equal to the Initial Unit Price; and
(b) Thereafter, all Available Cash that is deemed to be Capital Surplus
pursuant to the provisions of Section 6.3 shall be distributed as if it
were Operating Surplus and shall be distributed in accordance with Section
6.4.
24
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
7.1 Management
(a) The General Partner shall conduct, direct and manage all activities of the
Partnership. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no Limited Partner or
Assignee shall have any management power over the business and affairs of
the Partnership. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this Agreement,
the General Partner, subject to Section 7.3, shall have full power and
authority to do all things and on such terms as it, in its sole discretion,
may deem necessary or appropriate to conduct the business of the
Partnership, to exercise all powers set forth in Section 2.5 and to
effectuate the purposes set forth in Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and
other liabilities, the issuance of evidences of indebtedness, including
indebtedness that is convertible into a Partnership Interest, and the
incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the
Partnership or the merger or other combination of the Partnership with
or into another Person (the matters described in this clause (iii)
being subject, however, to any prior approval that may be required by
Section 7.3);
(iv) the use of the assets of the Partnership (including cash on hand) for
any purpose consistent with the terms of this Agreement, including the
financing of the conduct of the operations of the Partnership Group,
subject to Section 7.6, the lending of funds to other Persons
(including Genesis MLP and any Group Member), the repayment of
obligations of Genesis MLP or any Group Member and the making of
capital contributions to any member of the Partnership Group;
(v) the negotiation, execution and performance of any contracts,
conveyances or other instruments (including instruments that limit the
liability of the Partnership under contractual arrangements to all or
particular assets of the Partnership, with the other party to the
contract to have no recourse against the General Partner or its assets
other than its interest in the Partnership, even if same results in the
terms of the transaction being less favorable to the Partnership than
would otherwise be the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including employees having
titles such as "president," "vice president," "secretary" and
"treasurer")and agents, outside attorneys, accountants, consultants and
contractors and the determination of their compensation and other terms
of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership
Group and the Partners as it deems necessary or appropriate;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further
limited or general partnerships, joint ventures, corporations or other
relationships subject, however, to the restrictions set forth in
Section 2.4;
25
(x) the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at law
or in equity and otherwise engaging in the conduct of litigation and
the incurring of legal expense and the settlement of claims and
litigation;
(xi) the indemnification of any Person against liabilities and contingencies
to the extent permitted by law; and
(xii) the purchase, sale or other acquisition or disposition of Partnership
Securities, or, unless restricted or prohibited by Section 5.5, the
issuance of additional Partnership Securities and options, rights,
warrants and appreciation rights relating to Partnership Securities.
(b) Notwithstanding any other provision of this Agreement, the Fourth Amended
MLP Partnership, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and Assignees and each other Person who
may acquire an interest in the Partnership hereby (i) approves, ratifies
and confirms the execution, delivery and performance by the parties thereto
of this Agreement, the Fourth Amended MLP Agreement, and the other
agreements described in or filed as part of the Proxy Statement; (ii)
agrees that the General Partner (on its own or through any officer of the
Partnership) is authorized to execute, deliver and perform the agreements
referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Proxy
Statement on behalf of the Partnership without any further act, approval or
vote of the Partners or the Assignees or the other Persons who may acquire
an interest in the Partnership; and (iii) agrees that the execution,
delivery or performance by the General Partner, Genesis MLP, any Group
Member or any Affiliate of any of them, of this Agreement or any agreement
authorized or permitted under this Agreement, shall not constitute a breach
by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this
Agreement (or any other agreements) or of any duty stated or implied by law
or equity.
7.2 Certificate of Limited Partnership
The General Partner has caused the Amended and Restated Certificate of
Limited Partnership to be filed with the Secretary of State of the State of
Delaware as required by the Delaware Act and shall use all reasonable efforts to
cause to be filed such other certificates or documents as may be determined by
the General Partner in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property. To the extent that such action is
determined by the General Partner in its sole discretion to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all things to
maintain the Partnership as a limited partnership (or a partnership or other
entity in which the limited partners have limited liability) under the laws of
the State of Delaware or of any other state in which the Partnership may elect
to do business or own property. Subject to the terms of Section 3.4(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner or Assignee.
7.3 Restrictions on the General Partner's Authority
(a) The General Partner may not, without written approval of the specific act
by the Limited Partners or by other written instrument executed and
delivered by the Limited Partners subsequent to the date of this Agreement,
take any action in contravention of this Agreement, including, except as
otherwise provided in this Agreement, (i) committing any act that would
make it impossible to carry on the ordinary business of the Partnership;
(ii) possessing Partnership property, or assigning any rights in specific
Partnership property, for other than a Partnership purpose; (iii) admitting
a Person as a Partner; (iv) amending this Agreement in any manner; or (v)
transferring its General Partner Interest.
(b) Except as provided in Articles XII and XIV, the General Partner may not
sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related
transactions (including by way of merger, consolidation or other
combination) or approve on behalf of the Partnership the sale, exchange or
other disposition of all or substantially all of the assets of the
Partnership,
26
without the approval of holders of a Majority Interest;
provided, however, that this provision shall not preclude or limit the
General Partner's ability to mortgage, pledge, hypothecate or grant a
security interest in all or substantially all of the assets of the
Partnership and shall not apply to any forced sale of any or all of the
assets of the Partnership pursuant to the foreclosure of, or other
realization upon, any such encumbrance.
7.4 Reimbursement of the General Partner
(a) Except as provided in this Section 7.4 and elsewhere in this Agreement or
the Fourth Amended MLP Agreement, the General Partner shall not be
compensated for its services as General Partner, general partner of Genesis
MLP or as general partner of any Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or such other
reasonable basis as the General Partner may determine in its sole
discretion, for (i) all direct and indirect expenses it incurs or payments
it makes on behalf of the Partnership (including salary, bonus, incentive
compensation and other amounts paid to any Person, including Affiliates of
the General Partner, to perform services for the Partnership or for the
General Partner in the discharge of its duties to the Partnership), and
(ii) all other necessary or appropriate expenses allocable to the
Partnership or otherwise reasonably incurred by the General Partner in
connection with operating the Partnership's business (including expenses
allocated to the General Partner by its Affiliates). The General Partner
shall determine the expenses that are allocable to the Partnership in any
reasonable manner determined by the General Partner in its sole discretion.
Reimbursements pursuant to this Section 7.4 shall be in addition to any
reimbursement to the General Partner as a result of indemnification
pursuant to Section 7.7.
(c) Expenses incurred by the General Partner in connection with any employee
benefit plans, employee programs and employee practices (including the net
cost to the General Partner or such Affiliate of MLP Units or other MLP
Partnership Securities purchased by the General Partner or such Affiliate
from the Partnership to fulfill options or awards under such plans,
programs and practices) shall be reimbursed in accordance with Section
7.4(b). Any and all obligations of the General Partner under any employee
benefit plans, employee programs or employee practices adopted by the
General Partner as permitted by this Section 7.4(c) shall constitute
obligations of the General Partner hereunder and shall be assumed by any
successor General Partner approved pursuant to Section 11.1 or 11.2 or the
transferee of or successor to all of the General Partner's General Partner
Interest pursuant to Section 4.2.
7.5 Outside Activities
(a) The General Partner, for so long as it is the General Partner of the
Partnership, (i) agrees that its sole business will be to act as a general
partner or managing member, as the case may be, of the Partnership, Genesis
MLP and any other partnership or limited liability company of which the
Partnership or Genesis MLP is, directly or indirectly, a partner or member,
and to undertake activities that are ancillary or related thereto
(including being a limited partner or member in the Genesis MLP or any
other such partnership or limited liability company) and (ii) shall not,
directly or indirectly, engage in any business or activity or incur any
debts or liabilities except in connection with or incidental to (A) its
performance as general partner or managing member, as the case may be, of
the Partnership, Genesis MLP or one or more Group Members or as described
in or contemplated by the Registration Statement or the Proxy Statement or
(B) the acquiring, owning or disposing of debt or equity securities in any
Group Member.
(b) Salomon, Basis Petroleum, Inc. and ▇▇▇▇▇▇ continue to be parties to the
Non-Competition Agreement, which agreement sets forth certain restrictions
on their ability to engage in the business of (i) crude oil gathering at
the wellhead in the states of Alabama, Florida, Kansas, Louisiana,
Mississippi, New Mexico, Oklahoma or Texas, or any states contiguous to
such states, and (ii) transporting for third parties crude oil by pipeline
along the routes of the Partnership's crude oil pipelines owned as of the
Initial Closing Date. The Non-Competition Agreement remains in effect in
accordance with its terms.
(c) Except as specifically restricted by Section 7.5(a) and the Non-Competition
Agreement, each Indemnitee (other than the General Partner) shall have the
right to engage in businesses of every type and description and other
activities for profit and to engage in and possess an interest in other
business ventures of any and every type or description, whether in
businesses engaged in or anticipated to be engaged in by Genesis
27
MLP or any Group Member, independently or with others, including business
interests and activities in direct competition with the business and
activities of Genesis MLP or any Group Member, and none of the same shall
constitute a breach of this Agreement or any duty express or implied by
law to Genesis MLP or any Group Member or any Partner or Assignee. Neither
Genesis MLP nor any Group Member, nor any Limited Partner nor any other
Person shall have any rights by virtue of this Agreement, the Fourth
Amended MLP Agreement or the partnership relationship established hereby in
any business ventures of any Indemnitee.
(d) Subject to the terms of Sections 7.5(a), 7.5(b) and 7.5(c) and the
Non-Competition Agreement, but otherwise notwithstanding anything to the
contrary in this Agreement, (i) the engaging in competitive activities by
any Indemnitees (other than the General Partner) in accordance with the
provisions of this Section 7.5 is hereby approved by the Partnership and
all Partners and (ii) it shall be deemed not to be a breach of the General
Partner's fiduciary duty or any other obligation of any type whatsoever of
the General Partner for the Indemnitees (other than the General Partner) to
engage in such business interests and activities in preference to or to the
exclusion of the Partnership, and the General Partner and the Indemnitees
shall have no obligation to present business opportunities to the
Partnership.
(e) The General Partner and any of its Affiliates may acquire Partnership
Securities in addition to those heretofore acquired and, except as
otherwise provided in this Agreement, shall be entitled to exercise all
rights relating to such Partnership Securities.
(f) The term "Affiliates" when used in this Section 7.5 with respect to the
General Partner shall not include any Group Member or any Subsidiary of
Genesis MLP or any Group Member.
7.6 Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on the General
Partner
(a) The General Partner or any of its Affiliates may lend to Genesis MLP or any
Group Member, and Genesis MLP or any Group Member may borrow from the
General Partner or any of its Affiliates, funds needed or desired by
Genesis MLP or the Group Member for such periods of time and in such
amounts as the General Partner may determine; provided, however, that in
any such case the lending party may not charge the borrowing party interest
at a rate greater than the rate that would be charged the borrowing party
or impose terms less favorable to the borrowing party than would be charged
or imposed on the borrowing party by unrelated lenders on comparable loans
made on an arm's-length basis (without reference to the lending party's
financial abilities or guarantees). The borrowing party shall reimburse the
lending party for any costs (other than any additional interest costs)
incurred by the lending party in connection with the borrowing of such
funds. For purposes of this Section 7.6(a) and Section 7.6(b), the term
"Group Member" shall include any Affiliate of a Group Member that is
controlled by the Group Member. No Group Member may lend funds to the
General Partner or any of its Affiliates (other than Genesis MLP or another
Group Member).
(b) The Partnership may lend or contribute to any Group Member, and any Group
Member may borrow from the Partnership, funds on terms and conditions
established in the sole discretion of the General Partner; provided,
however, that the Partnership may not charge the Group Member interest at a
rate less than the rate that would be charged to the Group Member (without
reference to the General Partner's financial abilities or guarantees) by
unrelated lenders on comparable loans. The foregoing authority shall be
exercised by the General Partner in its sole discretion and shall not
create any right or benefit in favor of any Group Member or any other
Person.
(c) The General Partner may itself, or may enter into an agreement with any of
its Affiliates to, render services to a Group Member or to the General
Partner in the discharge of its duties as general partner of the
Partnership. Any services rendered to a Group Member by the General Partner
or any of its Affiliates shall be on terms that are fair and reasonable to
the Partnership; provided, however, that the requirements of this Section
7.6(c) shall be deemed satisfied as to (i) any transaction approved by
Special Approval, (ii) any transaction, the terms of which are no less
favorable to the Partnership Group than those generally being provided to
or available from unrelated third parties or (iii) any transaction that,
taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable
28
or advantageous to the Partnership Group), is equitable to the Partnership
Group. The provisions of Section 7.4 shall apply to the rendering of
services described in this Section 7.6(c).
(d) The Partnership Group may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms
and subject to such conditions as are consistent with this Agreement and
applicable law.
(e) Neither the General Partner nor any of its Affiliates shall sell, transfer
or convey any property to, or purchase any property from the Partnership,
directly or indirectly, except pursuant to transactions that are fair and
reasonable to the Partnership; provided, however, that the requirements of
this Section 7.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to Sections 5.1, 5.2 and 5.3 of the First
Amended Agreement, the Conveyance Agreement and any other transactions
described in or contemplated by the Registration Statement or the Proxy
Statement, (ii) any transaction approved by Special Approval, (iii) any
transaction, the terms of which are no less favorable to the Partnership
than those generally being provided to or available from unrelated third
parties, or (iv) any transaction that, taking into account the totality of
the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership), is equitable to the Partnership. With respect to any
contribution of assets to the Partnership in exchange for Partnership
Securities, the Audit Committee, in determining whether the appropriate
number of Partnership Securities are being issued, may take into account,
among other things, the fair market value of the assets, the liquidated and
contingent liabilities assumed, the tax basis in the assets, the extent to
which tax-only allocations to the transferor will protect the existing
partners of the Partnership against a low tax basis, and such other factors
as the Audit Committee deems relevant under the circumstances.
(f) The General Partner and its Affiliates will have no obligation to permit
any Group Member to use any facilities or assets of the General Partner and
its Affiliates, except as may be provided in contracts entered into from
time to time specifically dealing with such use, nor shall there be any
obligation on the part of the General Partner or its Affiliates to enter
into such contracts.
(g) Without limitation of Sections 7.6(a) through 7.6(f), and notwithstanding
anything to the contrary in this Agreement, the existence of the conflicts
of interest described in the Registration Statement or the Proxy Statement
are hereby approved by all Partners.
7.7 Indemnification
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, all Indemnitees shall be indemnified
and held harmless by the Partnership from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including legal
fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in
which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, by reason of its status as an Indemnitee; provided,
that in each case the Indemnitee acted in good faith and in a manner that
such Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the Partnership and, with respect to any criminal proceeding,
had no reasonable cause to believe its conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that the Indemnitee acted in a
manner contrary to that specified above. Any indemnification pursuant to
this Section 7.7 shall be made only out of the assets of the Partnership,
it being agreed that the General Partner shall not be personally liable for
such indemnification and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate such
indemnification.
(b) To the fullest extent permitted by law, expenses (including legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to Section
7.7(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt
by the Partnership of any undertaking by or on behalf of the Indemnitee to
repay such amount if it shall be determined that the Indemnitee is not
entitled to be indemnified as authorized in this Section 7.7.
29
(c) The indemnification provided by this Section 7.7 shall be in addition to
any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee
and as to actions in any other capacity (including any capacity under the
Underwriting Agreement dated November 26, 1996 among the Partnership,
Genesis MLP, and the underwriters and other parties named therein), and
shall continue as to an Indemnitee who has ceased to serve in such capacity
and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse the General Partner
or its Affiliates for the cost of) insurance, on behalf of the General
Partner, its Affiliates and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expense
that may be incurred by such Person in connection with the Partnership's
activities or such Person's activities on behalf of the Partnership,
regardless of whether the Partnership would have the power to indemnify
such Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.7, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable
law shall constitute "fines" within the meaning of Section 7.7(a); and
action taken or omitted by it with respect to any employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be
in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is in, or not opposed to, the best
interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.7 because the Indemnitee 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.
(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed
to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.7 or any provision
hereof shall in any manner terminate, reduce or impair the right of any
past, present or future Indemnitee to be indemnified by the Partnership,
nor the obligations of the Partnership to indemnify any such Indemnitee
under and in accordance with the provisions of this Section 7.7 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.
7.8 Liability of Indemnitees
(a) Notwithstanding anything to the contrary set forth in this Agreement, no
Indemnitee shall be liable for monetary damages to the Partnership, the
Limited Partners, the Assignees or any other Persons who have acquired
interests in Partnership Securities or MLP Units, for losses sustained or
liabilities incurred as a result of any act or omission if such Indemnitee
acted in good faith.
(b) Subject to its obligations and duties as the General Partner set forth in
Section 7.1(a), the General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents, and the General
Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the General Partner in good faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the
Partnership or to the Limited Partners, the General Partner and any other
30
Indemnitee acting in connection with the Partnership's business or affairs
shall not be liable to the Partnership or to any Partner for its good faith
reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict or otherwise modify the duties
and liabilities of an Indemnitee otherwise existing at law or in equity,
are agreed by the Partners to replace such other duties and liabilities of
such Indemnitee.
(d) Any amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the Indemnitees under this Section 7.8 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.
7.9 Resolution of Conflicts of Interest
(a) Unless otherwise expressly provided in this Agreement or the Fourth Amended
MLP Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and
the Partnership, Genesis MLP, any Partner, or any Assignee on the other,
any resolution or course of action by the General Partner or its Affiliates
in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this
Agreement, of the Fourth Amended MLP Agreement, of any agreement
contemplated herein or therein, or of any duty stated or implied by law or
equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The
General Partner shall be authorized but not required in connection with its
resolution of such conflict of interest to seek Special Approval of such
resolution. Any conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the
Partnership if such conflict of interest or resolution is (i) approved by
Special Approval (as long as the material facts known to the General
Partner or any of its Affiliates regarding any proposed transaction were
disclosed to the Audit Committee at the time it gave its approval), (ii) on
terms no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iii) fair to the
Partnership, taking into account the totality of the relationships between
the parties involved (including other transactions that may be particularly
favorable or advantageous to the Partnership). The General Partner may also
adopt a resolution or course of action that has not received Special
Approval. The General Partner (including the Audit Committee in connection
with Special Approval) shall be authorized in connection with its
determination of what is "fair and reasonable" to the Partnership and in
connection with its resolution of any conflict of interest to consider (A)
the relative interests of any party to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interest; (B) any customary or accepted industry practices and any
customary or historical dealings with a particular Person; (C) any
applicable generally accepted accounting practices or principles; and (D)
such additional factors as the General Partner (including the Audit
Committee) determines in its sole discretion to be relevant, reasonable or
appropriate under the circumstances. Nothing contained in this Agreement,
however, is intended to nor shall it be construed to require the General
Partner (including the Audit Committee) to consider the interests of any
Person other than the Partnership. In the absence of bad faith by the
General Partner, the resolution, action or terms so made, taken or provided
by the General Partner with respect to such matter shall not constitute a
breach of this Agreement or any other agreement contemplated herein or a
breach of any standard of care or duty imposed herein or therein or, to the
extent permitted by law, under the Delaware Act or any other law, rule or
regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby provides
that the General Partner or any of its Affiliates is permitted or required
to make a decision (i) in its "sole discretion" or "discretion," that it
deems "necessary or appropriate" or "necessary or advisable" or under a
grant of similar authority or latitude, except as otherwise provided
herein, the General Partner or such Affiliate shall be entitled to consider
only such interests and factors as it desires and shall have no duty or
obligation to give any consideration to any interest of, or factors
affecting, Genesis MLP, the Partnership, any Limited Partner or any
Assignee, (ii) it may make such decision in its sole discretion (regardless
of whether there is a reference to "sole discretion" or "discretion")
unless another express standard is provided for, or (iii) in "good faith"
or under another express standard, the General Partner or such Affiliate
shall act under such express standard and shall not be subject to any other
or different standards imposed by this Agreement, any other agreement
contemplated hereby or under the Delaware Act or any other law, rule or
regulation. In addition, any actions taken by the
31
General Partner or such Affiliate consistent with the standards of
"reasonable discretion" set forth in the definitions of Available Cash or
Operating Surplus shall not constitute a breach of any duty of the General
Partner to the Partnership or the Limited Partner. The General Partner
shall have no duty, express or implied, to sell or otherwise dispose of any
asset of the Partnership Group other than in the ordinary course of
business.
(c) Whenever a particular transaction, arrangement or resolution of a conflict
of interest is required under this Agreement to be "fair and reasonable" to
any Person, the fair and reasonable nature of such transaction, arrangement
or resolution shall be considered in the context of all similar or related
transactions.
(d) The Limited Partner hereby authorizes the General Partner, on behalf of the
Partnership as a partner of a Group Member, to approve of actions by the
general partner of such Group Member similar to those actions permitted to
be taken by the General Partner pursuant to this Section 7.9.
7.10 Other Matters Concerning the General Partner
(a) The General Partner may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion (including an Opinion of Counsel) of
such Persons as to matters that the General Partner reasonably believes to
be within such Person's professional or expert competence shall be
conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its powers
or obligations hereunder, to act through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Partnership.
(d) Any standard of care and duty imposed by this Agreement or under the
Delaware Act or any applicable law, rule or regulation shall be modified,
waived or limited, to the extent permitted by law, as required to permit
the General Partner to act under this Agreement or any other agreement
contemplated by this Agreement and to make any decision pursuant to the
authority prescribed in this Agreement, so long as such action is
reasonably believed by the General Partner to be in, or not inconsistent
with, the best interests of the Partnership.
7.11 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner and any officer of the General Partner authorized by the General Partner
to act on behalf of and in the name of the Partnership has full power and
authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner
or any such officer as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or any such officer or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
32
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting
The General Partner shall keep or cause to be kept at the principal office
of the Partnership, appropriate books and records with respect to the
Partnership's business, including all books and records necessary to provide to
the Limited Partners any information required to be provided pursuant to Section
3.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including books of account and records of
Partnership proceedings, may be kept on, or be in the form of, computer disks,
hard drives, punch cards, magnetic tape, photographs, micrographics or any other
information storage device; provided, that the books and records so maintained
are convertible into clearly legible written form within a reasonable period of
time. The books of the Partnership shall be maintained, for financial reporting
purposes, on an accrual basis in accordance with U.S. GAAP.
8.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
ARTICLE IX
TAX MATTERS
9.1 Tax Returns and Information
The Partnership shall timely file all returns of the Partnership that are
required for federal, state and local income tax purposes on the basis of the
accrual method and a taxable year ending on December 31. The tax information
reasonably required by the Partners for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership's taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.
9.2 Tax Elections
(a) The Partnership has made the election under Section 754 of the Code in
accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke any such election upon the
General Partner's determination that such revocation is in the best
interests of the Limited Partners.
(b) The Partnership has elected to deduct expenses incurred in organizing the
Partnership ratably over a sixty-month period as provided in Section 709 of
the Code.
(c) Except as otherwise provided herein, the General Partner shall determine
whether the Partnership should make any other elections permitted by the
Code.
9.3 Tax Controversies
Subject to the provisions hereof, the General Partner is designated as the
Tax Matters Partner (as defined in the Code) and is authorized and required to
represent the Partnership (at the Partnership's expense) in connection with all
examinations of the Partnership's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.
9.4 Withholding
Notwithstanding any other provision of this Agreement, the General Partner
is authorized to take any action that it determines in its discretion to be
necessary or appropriate to cause the Partnership to comply with any withholding
33
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required or elects to withhold
and pay over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner or Assignee (including, without
limitation, by reason of Section 1446 of the Code), the amount withheld may at
the discretion of the General Partner be treated by the Partnership as a
distribution of cash pursuant to Section 6.3 in the amount of such withholding
from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
10.1 Status of General Partner
Upon the execution of this Agreement, the General Partner shall be the sole
general partner of the Partnership.
10.2 Admission of Successor General Partner
A successor General Partner approved pursuant to Section 11.1 or 11.2 or
the transferee of or successor to all of the General Partner's General Partner
Interest pursuant to Section 4.6 who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to the withdrawal or removal of the predecessor or
transferring General Partner pursuant to Section 11.1 or 11.2 or the transfer of
the General Partner Interest pursuant to Section 4.2; provided, however, that no
such successor shall be admitted to the Partnership until compliance with the
terms of Section 4.4(a) has occurred and such successor has executed and
delivered such other documents or instruments as may be required to effect such
admission. Any such successor shall, subject to the terms hereof, carry on the
business of the Group Members without dissolution.
10.3 Admission of Substituted Limited Partner
By transfer of a Limited Partner Interest in accordance with Article IV,
the transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and in
the manner permitted under, this Agreement. A transferor of a Limited Partner
Interest shall, however, only have the authority to convey to a purchaser or
other transferee (a) the right to negotiate such Limited Partner Interest to a
purchaser or other transferee and (b) the right to request admission as a
Substituted Limited Partner to such purchaser or other transferee in respect of
the transferred Limited Partner Interests. Each transferee of a Limited Partner
Interest shall be an Assignee and be deemed to have applied to become a
Substituted Limited Partner with respect to the Limited Partner Interest so
transferred to such Person. Such Assignee shall become a Substituted Limited
Partner (x) at such time as the General Partner consents thereto, which consent
may be given or withheld in the General Partner's discretion and (y) when any
such admission is shown on the books and records of the Partnership. If such
consent is withheld, such transferee shall be an Assignee. An Assignee shall
have an interest in the Partnership equivalent to that of a Limited Partner with
respect to allocations and distributions, including liquidating distributions,
of the Partnership. With respect to voting rights attributable to Limited
Partner Interests that are held by Assignees, the General Partner shall be
deemed to be the Limited Partner with respect thereto and shall, in exercising
the voting rights in respect of such Limited Partner Interests on any matter,
vote such Limited Partner Interests at the written direction of the Assignee. If
no such written direction is received, such Partnership Interests will not be
voted. An Assignee shall have no other rights of a Limited Partner.
10.4 Admission of Additional Limited Partners
(a) A Person (other than the General Partner, Genesis MLP or a Substituted
Limited Partner) who makes a Capital Contribution to the Partnership in
accordance with this Agreement in exchange for Limited Partner Interests
shall be admitted to the Partnership as an Additional Limited Partner only
upon furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of
this Agreement, including the power of attorney granted in Section 2.6, and
(ii) such other documents or instruments as may be required in the
discretion of the General Partner to effect such Person's admission as an
Additional Limited Partner.
34
(b) Notwithstanding anything to the contrary in this Section 10.4, no Person
shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such
Person is recorded as such in the books and records of the Partnership,
following the consent of the General Partner to such admission.
10.5 Amendment of Agreement and Certificate of Limited Partnership
To effect the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Delaware Act to
amend the records of the Partnership to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and,
if required by law, the General Partner shall prepare and file an amendment to
the Certificate of Limited Partnership, and the General Partner may for this
purpose, among others, exercise the power of attorney granted pursuant to
Section 2.6.
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
11.1 Withdrawal of the General Partner
(a) The General Partner shall be deemed to have withdrawn from the
Partnership upon the occurrence of any one of the following events
(each such event herein referred to as an "Event of Withdrawal");
(i) the General Partner voluntarily withdraws from the Partnership by
giving written notice to the other Partners (and it shall be deemed
that the General Partner has withdrawn pursuant to this Section
11.1(a)(i) if the General Partner voluntarily withdraws as the general
partner of Genesis MLP);
(ii) the General Partner transfers all of its General Partner Interest
pursuant to Section 4.2;
(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition for relief under
Chapter 7 of the United States Bankruptcy Code; (C) files a petition or
answer seeking for itself a liquidation, dissolution or similar relief
(but not a reorganization) under any law; (D) files an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against the General Partner in a proceeding of the type
described in clauses (A) - (C) of this Section 11.1(a)(iv); or (E)
seeks, consents to or acquiesces in the appointment of a trustee (but
not a debtor in possession), receiver or liquidator of the General
Partner or of all or any substantial part of its properties;
(v) a final and non-appealable order of relief under Chapter 7 of the
United States Bankruptcy Code is entered by a court with appropriate
jurisdiction pursuant to a voluntary or involuntary petition by or
against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, a certificate of
dissolution or its equivalent is filed for the General Partner, or 90
days expire after the date of notice to the General Partner of
revocation of its charter without a reinstatement of its charter, under
the laws of its state of incorporation; (B) in the event the General
Partner is a partnership or a limited liability company, the
dissolution and commencement of winding up of the General Partner; (C)
in the event the General Partner is acting in such capacity by virtue
of being a trustee of a trust, the termination of the trust; (D) in the
event the General Partner is a natural person, his death or
adjudication of incompetency; and (E) otherwise in the event of the
termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or
(vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner
shall give notice to the Partners within 30 days after such
occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 11.1 shall result in the
withdrawal of the General Partner from the Partnership.
35
(b) Withdrawal of the General Partner from the Partnership upon the occurrence
of an Event of Withdrawal shall not constitute a breach of this Agreement
under the following circumstances: (i) if the General Partner has
voluntarily withdrawn as the general partner of Genesis MLP and such
withdrawal was not in breach of the Fourth Amended MLP Agreement or (ii) at
any time that the General Partner ceases to be the General Partner pursuant
to Section 11.1(a)(ii) or is removed pursuant to Section 11.2. The
withdrawal of the General Partner from the Partnership upon the occurrence
of an Event of Withdrawal shall also constitute the withdrawal of the
General Partner as general partner or managing member of the other Group
Members. If the General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i), the Person elected as successor general partner of
Genesis MLP shall, upon admission as a successor general partner of Genesis
MLP, automatically become the successor General Partner and a successor
general partner or managing member of the other Group Members of which the
General Partner is a general partner. If, prior to the effective date of
the General Partner's withdrawal, a successor General Partner is not
selected as provided herein, the Partnership shall be dissolved in
accordance with Section 12.1. Any successor General Partner selected in
accordance with the terms of this Section 11.1 shall be subject to the
provisions of Section 10.3.
11.2 Removal of the General Partner
The General Partner may not be removed as the general partner of the
Partnership unless the General Partner is removed as the general partner of
Genesis MLP pursuant to Section 11.2 of the Fourth Amended MLP Agreement. If the
General Partner is removed as the general partner of Genesis MLP pursuant to
Section 11.2 of the Fourth Amended MLP Agreement, the General Partner shall be
removed as the general partner of the Partnership. Such removal shall be
effective concurrently with the effectiveness of the removal of the General
Partner as the general partner of Genesis MLP pursuant to the terms of the
Fourth Amended MLP Agreement. If a Person is elected as a successor general
partner of Genesis MLP in connection with the removal of the General Partner as
the general partner of Genesis MLP, such Person shall, upon admission as a
successor general partner of Genesis MLP, automatically become the successor
General Partner of the Partnership and a successor general partner of the other
Group Members of which the General Partner is the general partner.
11.3 Interest of Departing Partner
(a) The General Partner Interest of a Departing Partner departing as a result
of withdrawal or removal pursuant to Section 11.1 or 11.2 shall (unless it
is otherwise required to be converted into MLP Common Units pursuant to
Section 11.3(b) of the Fourth Amended MLP Agreement) be purchased by the
successor to the Departing Partner for cash in the manner specified in the
Fourth Amended MLP Agreement. Such purchase (or conversion into MLP Common
Units, as applicable) shall be a condition to the admission to the
Partnership of the successor as the General Partner. Any successor General
Partner shall indemnify the Departing General Partner as to all debts and
liabilities of the Partnership arising on or after the effective date of
the withdrawal or removal of the Departing Partner.
(b) The Departing Partner shall be entitled to receive all reimbursements due
such Departing Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by such Departing
Partner for the benefit of the Partnership.
11.4 Withdrawal of Limited Partners
Without the prior written consent of the General Partner, which may be
granted or withheld in its sole discretion, and except as provided in Section
10.1, no Limited Partner shall have the right to withdraw from the Partnership.
36
ARTICLE XII
DISSOLUTION AND LIQUIDATION
12.1 Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the removal or withdrawal of the General Partner, if a successor General Partner
is selected as provided in Section 11.1 or 11.2, the Partnership shall not be
dissolved and such successor General Partner shall continue the business of the
Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its
affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 2.7;
(b) an Event of Withdrawal of the General Partner as provided in Section
11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and
an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2
and such successor is admitted to the Partnership pursuant to Section 10.3;
(c) an election to dissolve the Partnership by the General Partner that is
approved by the holders of a Majority Interest;
(d) the entry of a decree of judicial dissolution of the Partnership pursuant
to the provisions of the Delaware Act;
(e) the dissolution of Genesis MLP; or
(f) the sale of all or substantially all of the assets and properties of the
Partnership Group.
12.2 Continuation of the Business of the Partnership After Dissolution
Upon (a) dissolution of the Partnership following an Event of Withdrawal
caused by the withdrawal or removal of the General Partner as provided in
Section 11.1(a)(i) or (iii) and the failure of the Partners to select a
successor to such Departing Partner pursuant to Section 11.1 or 11.2, then
within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or
(vi), then, to the maximum extent permitted by law, within 180 days thereafter,
the holders of a Majority Interest may elect to reconstitute the Partnership and
continue its business on the same terms and conditions set forth in this
Agreement by forming a new limited partnership on terms identical to those set
forth in this Agreement and having as the general partner a Person approved by
the holders of a Majority Interest. Unless such an election is made within the
applicable time period as set forth above, the Partnership shall conduct only
activities necessary to wind up its affairs. If such an election is so made,
then:
(i) the reconstituted Partnership shall continue until the end of the
term set forth in Section 2.7 unless earlier dissolved in accordance with
this Article XII;
(ii) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be treated
in the manner provided in Section 11.3; and
(iii) all necessary steps shall be taken to cancel this Agreement and
the Certificate of Limited Partnership and to enter into and, as necessary,
to file a new partnership agreement and certificate of limited partnership,
and the successor general partner may for this purpose exercise the powers
of attorney granted the General Partner pursuant to Section 2.6; provided,
that the right of the holders of a Majority Interest to approve a successor
General Partner and to reconstitute and to continue the business of the
Partnership shall not exist and may not be exercised unless the Partnership
has received an Opinion of Counsel that (x) the exercise of the right would
not result in the loss of limited liability of any Limited Partner or any
limited partner of Genesis MLP and (y) neither the Partnership, the
reconstituted limited partnership, Genesis MLP nor any Group Member
37
would be treated as an association taxable as a corporation or otherwise be
taxable as an entity for federal income tax purposes upon the exercise of
such right to continue.
12.3 Liquidator
Upon dissolution of the Partnership, unless the Partnership is continued
under an election to reconstitute and continue the Partnership pursuant to
Section 12.2, the General Partner shall select one or more Persons to act as
Liquidator. The Liquidator (if other than the General Partner) shall be entitled
to receive such compensation for its services as may be approved by the holders
of a Majority Interest. The Liquidator (if other than the General Partner) shall
agree not to resign at any time without 15 days' prior notice and may be removed
at any time, with or without cause, by notice of removal approved by the holders
of a Majority Interest. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by the holders of a Majority Interest. The right to
approve a successor or substitute Liquidator in the manner provided herein shall
be deemed to refer also to any such successor or substitute Liquidator approved
in the manner herein provided. Except as expressly provided in this Article XII,
the Liquidator approved in the manner provided herein shall have and may
exercise, without further authorization or consent of any of the parties hereto,
all of the powers conferred upon the General Partner under the terms of this
Agreement (but subject to all of the applicable limitations, contractual and
otherwise, upon the exercise of such powers, other than the limitation on sale
set forth in Section 7.3(b)) to the extent necessary or desirable in the good
faith judgment of the Liquidator to carry out the duties and functions of the
Liquidator hereunder for and during such period of time as shall be reasonably
required in the good faith judgment of the Liquidator to complete the winding up
and liquidation of the Partnership as provided for herein.
12.4 Liquidation
The Liquidator shall proceed to dispose of the assets of the Partnership,
discharge its liabilities, and otherwise wind up its affairs in such manner and
over such period as the Liquidator determines to be in the best interest of the
Partners, subject to Section 17-804 of the Delaware Act and the following:
(a) Disposition of Assets. The assets may be disposed of by public or private
sale or by distribution in kind to one or more Partners on such terms as
the Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must
be made to the other Partners. The Liquidator may, in its absolute
discretion, defer liquidation or distribution of the Partnership's assets
for a reasonable time if it determines that an immediate sale of all or
some of the Partnership's assets would be impractical or would cause undue
loss to the Partners. The Liquidator may, in its absolute discretion,
distribute the Partnership's assets, in whole or in part, in kind if it
determines that a sale would be impractical or would cause undue loss to
the Partners.
(b) Discharge of Liabilities. Liabilities of the Partnership include amounts
owed to Partners otherwise than in respect of their distribution rights
under Article VI. With respect to any liability that is contingent,
conditional or unmatured or is otherwise not yet due and payable, the
Liquidator shall either settle such claim for such amount as it thinks
appropriate or establish a reasonable reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of that
required to discharge liabilities as provided in Section 12.4(b) shall be
distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made
by reason of distributions pursuant to this Section 12.4(c)) for the
taxable year of the Partnership during which the liquidation of the
Partnership occurs (with such date of occurrence being determined pursuant
to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution
shall be made by the end of such taxable year (or, if later, within 90 days
after said date of such occurrence).
38
12.5 Cancellation of Certificate of Limited Partnership
Upon the completion of the distribution of Partnership cash and property as
provided in Section 12.4 in connection with the liquidation of the Partnership,
the Partnership shall be terminated and the Certificate of Limited Partnership,
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware, shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
12.6 Return of Contributions
The General Partner shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.
12.7 Waiver of Partition
To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.
12.8 Capital Account Restoration
No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The General
Partner shall be obligated to restore any negative balance in its Capital
Account upon liquidation of its interest in the Partnership by the end of the
taxable year of the Partnership during which such liquidation occurs, or, if
later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
13.1 Amendment to be Adopted Solely by General Partner
Each Partner agrees that the General Partner, without the approval of any
Partner or Assignee, may amend any provision of this Agreement and execute,
swear to, acknowledge, deliver, file and record whatever documents may be
required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the principal
place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;
(b) the admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is necessary
or advisable to qualify or continue the qualification of the Partnership as
a limited partnership or a partnership in which the Limited Partners have
limited liability under the laws of any state or to ensure that no Group
Member will be treated as an association taxable as a corporation or
otherwise taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the General Partner, (i) does not
adversely affect the Limited Partners in any material respect, (ii) is
necessary or advisable (A) to satisfy any requirements, conditions or
guidelines contained in any opinion, directive, order, ruling or regulation
of any federal or state agency or judicial authority or contained in any
federal or state statute (including the Delaware Act), (B) to facilitate
the trading of limited partner interests of Genesis MLP (including the
division of any class or classes of outstanding limited partner interests
of Genesis MLP into different classes to facilitate uniformity of tax
consequences within such classes of limited partner interests of Genesis
MLP), or comply with any rule, regulation, guideline or requirement of any
National Securities Exchange on which such limited partner interests are or
will be listed for trading, compliance with any of which the General
Partner determines in its discretion to be in the best interests of Genesis
MLP and the limited partners of Genesis MLP or (C) in connection with
action taken by the
39
General Partner pursuant to Section 5.7, or (iii) is
required to effect the intent expressed in the Registration Statement or
the Proxy Statement, or the intent of the provisions of this Agreement or
is otherwise contemplated by this Agreement or (iv) is required to conform
the provisions of this Agreement with the provisions of the Fourth Amended
MLP Agreement as the provisions of the Fourth Amended MLP Agreement may be
amended, supplemented or restated from time to time;
(e) a change in the fiscal year or taxable year of the Partnership and any
changes that, in the discretion of the General Partner, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Partnership including, if the General Partner shall so determine, a change
in the definition of "Quarter" and the dates on which distributions are to
be made by the Partnership;
(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership, or the General Partner or its directors, officers, trustees or
agents from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of
1940, as amended, or "plan asset" regulations adopted under the Employee
Retirement Income Security Act of 1974, as amended, regardless of whether
such are substantially similar to plan asset regulations currently applied
or proposed by the United States Department of Labor;
(g) an amendment that, in the discretion of the General Partner, is necessary
or advisable in connection with the authorization of issuance of any class
or series of Partnership Securities pursuant to Section 5.5;
(h) any amendment expressly permitted in this Agreement to be made by the
General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger Agreement
approved in accordance with Section 14.3;
(j) an amendment that, in the discretion of the General Partner, is necessary
or advisable to reflect, account for and deal with appropriately the
formation by the Partnership of, or investment by the Partnership in, any
corporation, partnership, joint venture, limited liability company or other
entity, in connection with the conduct by the Partnership of activities
permitted by the terms of Section 2.4;
(k) a merger or conveyance pursuant to Section 14.3(d); or
(l) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures
Except with respect to amendments of the type described in Section 13.1,
all amendments to this Agreement shall be made in accordance with the following
requirements: Amendments to this Agreement may be proposed only by or with the
consent of the General Partner which consent may be given or withheld in its
sole discretion. A proposed amendment shall be effective upon its approval by
the holders of a Majority Interest.
ARTICLE XIV
MERGER
14.1 Authority
The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article XIV.
40
14.2 Procedure for Merger or Consolidation
Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the General Partner. If the General Partner shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the General Partner shall approve the Merger Agreement, which
shall set forth:
(a) The names and jurisdictions of formation or organization of each of the
business entities proposing to merge or consolidate;
(b) The name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or general or
limited partner interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partner
interests, securities or rights of any constituent business entity are not
to be exchanged or converted solely for, or into, cash, property or general
or limited partner interests, rights, securities or obligations of the
Surviving Business Entity, the cash, property or general or limited partner
interests, rights, securities or obligations of any limited partnership,
corporation, trust or other entity (other than the Surviving Business
Entity) which the holders of such general or limited partner interests,
securities or rights are to receive in exchange for, or upon conversion of
their general or limited partner interests, securities or rights, and (ii)
in the case of securities represented by certificates, upon the surrender
of such certificates, which cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other
entity (other than the Surviving Business Entity), or evidences thereof,
are to be delivered;
(e) A statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation,
articles of trust, declaration of trust, certificate or agreement of
limited partnership, certificate of formation or limited liability company
agreement or other similar charter or governing document) of the Surviving
Business Entity to be effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of the filing of
the certificate of merger pursuant to Section 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement
(provided, that if the effective time of the merger is to be later than the
date of the filing of the certificate of merger, the effective time shall
be fixed no later than the time of the filing of the certificate of merger
and stated therein); and
(g) Such other provisions with respect to the proposed merger or consolidation
as are deemed necessary or appropriate by the General Partner.
14.3 Approval by Limited Partners of Merger or Consolidation
(a) Except as provided in Section 14.3(d), the General Partner, upon its
approval of the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of Limited Partners, whether at a special meeting or by
written consent, in either case in accordance with the requirements of
Article XIII. A copy or a summary of the Merger Agreement shall be included
in or enclosed with the notice of a special meeting or the written consent.
(b) Except as provided in Section 14.3(d), the Merger Agreement shall be
approved upon receiving the affirmative vote or consent of the holders of a
Majority Interest unless the Merger Agreement contains any provision that,
if contained in an amendment to this Agreement, the provisions of this
Agreement or the Delaware Act would require the vote or consent of a
greater percentage of the Outstanding Partnership Securities or of any
class of Partners in which case such greater percentage vote or consent
shall be required for approval of the Merger Agreement.
41
(c) Except as provided in Section 14.3(d), after such approval by vote or
consent of the Limited Partners, and at any time prior to the filing of the
certificate of merger pursuant to Section 14.4, the merger or consolidation
may be abandoned pursuant to provisions therefor, if any, set forth in the
Merger Agreement.
(d) Notwithstanding anything else contained in this Article XIV or in this
Agreement, the General Partner is permitted, in its discretion, without
Limited Partner approval, to merge the Partnership or any Group Member
into, or convey all of the Partnership's assets to, another limited
liability entity which shall be newly formed and shall have no assets,
liabilities or operations at the time of such Merger other than those it
receives from the Partnership or other Group Member if (i) the General
Partner has received an Opinion of Counsel that the merger or conveyance,
as the case may be, would not result in the loss of the limited liability
of any Limited Partner or cause the Partnership or Genesis MLP to be
treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes (to the extent not previously
treated as such), (ii) the sole purpose of such merger or conveyance is to
effect a mere change in the legal form of the Partnership into another
limited liability entity and (iii) the governing instruments of the new
entity provide the Limited Partners and the General Partner with the same
rights and obligations as are herein contained.
14.4 Certificate of Merger
Upon the required approval by the General Partner and the Limited Partners
of a Merger Agreement, a certificate of merger shall be executed and filed with
the Secretary of State of the State of Delaware in conformity with the
requirements of the Delaware Act.
14.5 Effect of Merger
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of
those constituent business entities shall not revert and is not in any way
impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests in
property of any of those constituent business entities shall be preserved
unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be enforced
against it to the same extent as if the debts, liabilities and duties had
been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall not be
deemed to result in a transfer or assignment of assets or liabilities from
one entity to another.
ARTICLE XV
GENERAL PROVISIONS
15.1 Addresses and Notices
Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner or Assignee under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address described below. Any
notice to the Partnership shall be deemed given if received by the General
Partner at the principal office of the Partnership designated pursuant to
Section 2.3. The General Partner may rely and shall
42
be protected in relying on any notice or other document from a Partner, Assignee
or other Person if believed by it to be genuine.
15.2 Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
15.3 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
15.4 Integration
This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
15.5 Creditors
None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Partnership.
15.6 Waiver
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
15.7 Counterparts
This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto, independently of the signature of any other party.
15.8 Applicable Law
This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.
15.9 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
15.10 Consent of Partners
Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Partners, such action may be so taken upon
the concurrence of less than all of the Partners and each Partner shall be bound
by the results of such action.
[Remainder of Page Intentionally Left Blank]
43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER
GENESIS ENERGY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
LIMITED PARTNER
GENESIS ENERGY, L.P.
By: GENESIS ENERGY, INC.,
As General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer