EXHIBIT 10.5
REDEMPTION AND REGISTRATION RIGHTS AGREEMENT
REDEMPTION AND REGISTRATION RIGHTS AGREEMENT, dated as of December 3, 1996 by
and among BASIS PETROLEUM, INC., a Texas corporation ("Basis"), XXXXXX
CORPORATION, a Delaware corporation ("Xxxxxx"), XXXXXX CRUDE OIL COMPANY, a
Delaware corporation ("Xxxxxx Crude"), XXXXXX PIPELINE TEXAS, INC., a Delaware
corporation ("Xxxxxx Texas" and, collectively with Xxxxxx Crude, the "Xxxxxx
Subsidiaries"), GENESIS ENERGY, L.P., a Delaware limited partnership ("Genesis
MLP"), and GENESIS CRUDE OIL, L.P., a Delaware limited partnership ("Genesis
OLP").
W I T N E S S E T H:
WHEREAS, Basis and Xxxxxx have agreed pursuant to the Purchase & Sale and
Contribution & Conveyance Agreement (the "Conveyance Agreement") by and among
Basis, Xxxxxx, the Xxxxxx Subsidiaries, Genesis MLP, Genesis OLP and Genesis
Energy, L.L.C., a Delaware limited liability company, to transfer their
respective crude oil gathering, marketing, transportation and pipeline assets to
Genesis OLP in exchange for, among other things, the net proceeds of an offering
to the public of Common Units representing limited partner interests of Genesis
MLP and for the issuance to each of Basis and the Xxxxxx Subsidiaries of a
certain number of Subordinated OLP Units representing limited partner interests
in Genesis OLP; and
WHEREAS, pursuant to the Amended and Restated Agreement of Limited Partnership
of Genesis OLP (the "OLP Agreement"), upon the expiration of the Subordination
Period (as defined in the OLP Agreement), the Subordinated OLP Units will
convert on a one-for-one basis into Common OLP Units and, in addition, up to one
half of the Subordinated OLP Units may convert into Common OLP Units prior to
the end of the Subordination Period; and
WHEREAS, the parties desire that, upon the conversion of all or part of
Subordinated OLP Units into Common OLP Units, each of Basis and Xxxxxx (on
behalf of the Xxxxxx Subsidiaries) may, subject to the terms and conditions set
forth herein cause Genesis OLP to redeem the Common OLP Units held by either
Basis or the Xxxxxx Subsidiaries, in either case using the proceeds, net of
underwriting discounts and commissions or placement fees, if any, of a public
offering or private sale by Genesis MLP of a number of newly issued Common Units
equal to the number of Common OLP Units being redeemed.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms, as used herein, have the following meanings (all terms
defined herein in the singular to have the correlative meanings when used in the
plural and vice versa):
"Affiliate" shall have the meaning ascribed to such term in the OLP Agreement.
"Aggregate Redemption Number" has the meaning ascribed to it in Section 2.1(a)
of this Agreement.
"Agreement" means this Redemption and Registration Rights Agreement, as the same
shall be amended, modified or supplemented from time to time.
"Ancillary Agreement" means the Ancillary Agreement among Salomon Inc and the
Xxxxxx Entities.
"API" has the meaning set forth in the OLP Agreement.
"Assignee" has the meaning ascribed to it in Section 10 of this Agreement.
"Common OLP Unit" has the meaning assigned to the term "Common LP Unit" in the
OLP Agreement.
"Common Units" means the Common Units representing limited partner interests of
Genesis MLP.
"Demand Redemption" means any sale of Common Units effected in accordance with
Section 2.1 of this Agreement.
"Distribution Support Agreement" means the Distribution Support Agreement
between Genesis OLP and Salomon Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or any successor statute, and the rules and regulations promulgated
thereunder.
"General Partner" means Genesis Energy, L.L.C., a Delaware limited liability
company and the general partner of Genesis MLP and Genesis OLP.
"Holders" means the holders of record of Common OLP Units or the agent
designated by such holders of record (in the case of the Xxxxxx Subsidiaries,
Xxxxxx).
"Xxxxxx Entities" means Xxxxxx and the Xxxxxx Subsidiaries.
"Indemnified Party" has the meaning ascribed to it in Section 2.4(a) of this
Agreement.
"Individual Redemption Number" has the meaning ascribed to it in Section 2.1(a)
of this Agreement.
"Loss" has the meaning ascribed to it in Section 2.4(a) of this Agreement.
"Notice of Demand" has the meaning ascribed to it in Section 2.1(a) of this
Agreement.
"Offering Expenses" means all expenses incident to Genesis MLP's performance of
or compliance with this Agreement, including, without limitation, (a) all
registration, filing, securities exchange listing, rating agency and National
Association of Securities Dealers fees, (b) all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws of all jurisdictions in which the securities are to be registered and
any legal fees and expenses incurred in connection with the blue sky
qualifications of the Common Units and the determination of their eligibility
for investment under the laws of all such jurisdictions, (c) all word
processing, duplicating, printing, messenger and delivery expenses, (d) the fees
and disbursements of counsel for Genesis MLP and of its independent public
accountants, including, without limitation, the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, (e) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Common Units being
registered to the extent Genesis MLP elects to obtain such insurance, (f) the
fees of preparing a private placement memorandum, (g) any expenses and
disbursements of underwriters or placement agents customarily paid by issuers or
sellers of securities (but excluding underwriting discounts and commissions,
placement fees and transfer taxes, if any, relating to the Common Units being
registered) and (h) fees and expenses of other Persons retained or employed by
Genesis MLP. Offering Expenses, to the extent payable by Genesis MLP pursuant
to this Agreement, shall not include fees and disbursements of counsel for any
Participating Holder.
"Participating Holder" means a Holder who has provided a Notice of Demand or a
Participation Notice to Genesis MLP requesting the redemption of all or a part
of its Common OLP Units.
"Participation Notice" has the meaning ascribed to it in Section 2.1(c) of this
Agreement.
"Person" means a natural person, a corporation, a partnership, a limited
liability company, a trust, a joint venture, any regulatory authority or any
other entity or organization.
"Pledge Agreement" means the Pledge Agreement among Basis, the Xxxxxx Entities
and Genesis OLP.
"Reasonable Efforts," when used with respect to any obligation to be performed
or term or provision to be observed hereunder, means such efforts as a prudent
Person seeking the benefits of such performance or action would make, use, apply
or exercise to preserve, protect or advance its rights or interests, provided,
that such efforts do not require such Person to incur a material financial cost
or a substantial risk of material liability unless such cost or liability (i)
would customarily be incurred in the course of performance or observance of the
relevant obligation, term or provision, (ii) is caused by or results from the
wrongful act or negligence of the Person whose performance or observance is
required hereunder or (iii) is not excessive or unreasonable in view of the
rights or interests to be preserved, protected or advanced. Such efforts may
include, without limitation, the expenditure of such funds and retention by such
Person of such accountants, attorneys or other experts or advisors as may be
necessary or appropriate to effect the relevant action; and the commencement,
termination or settlement of any action, suit or proceeding involving such
Person to the extent necessary or appropriate to effect the relevant action.
"Redemption Notice" has the meaning ascribed to it in Section 2.1(e) of this
Agreement.
"Redemption Price" has the meaning ascribed to it in Section 2.1(a) of this
Agreement.
"SEC" means the United States Securities and Exchange Commission, or any
successor governmental agency or authority thereto.
"Securities Act" means the Securities Act of 1933, as amended from time to time,
or any successor statute, and the rules and regulations promulgated thereunder.
"Subordinated OLP Units" has the meaning assigned to the term "Subordinated LP
Units" in the OLP Agreement.
"Successor" means, with respect to any Person, a successor to such Person by
merger, consolidation, liquidation or other similar transaction.
ARTICLE II
SALE OF COMMON UNITS TO EFFECT
REDEMPTION OF COMMON OLP UNITS
Section 2.1. Right to Demand the Redemption of Common OLP Units.
(a) Request to Effect Redemption. At any time and from time to time after any
conversion of any of the Subordinated OLP Units held by Basis or any Xxxxxx
Subsidiary into Common OLP Units pursuant to Section 5.8 of the OLP Agreement,
either Basis or Xxxxxx (on behalf of the Xxxxxx Subsidiaries) may provide
Genesis MLP with a request ("Notice of Demand") (with a copy to the non-
requesting Holder of Common OLP Units) that Genesis MLP cause Genesis OLP to
redeem Common OLP Units held by such requesting Holder at a per unit redemption
price (the "Redemption Price") equal to the per unit proceeds, net of
underwriting discounts and commissions or placement fees, if any, of a sale by
Genesis MLP of a number of Common Units equal to the number (the "Aggregate
Redemption Number") of Common OLP Units the Participating Holders request at any
one time in the applicable Notice of Demand and, as the case may be, a
Participation Notice to have redeemed, as such requested number may be reduced
pursuant to Section 2.1(d) of this Agreement. Upon receipt of a Notice of
Demand and, as the case may be, a Participation Notice, Genesis MLP shall,
subject to Sections 2.1(b) and 2.1(d) of this Agreement, use Reasonable Efforts
(i) to sell a number of Common Units at least equal to the Aggregate Redemption
Number, (ii) if the sale of Common Units is to be effected pursuant to a
registered public offering, to effect at the earliest practicable date the
registration under the Securities Act of a number of Common Units at least equal
to the Aggregate Redemption Number, (iii) to complete the sale in accordance
with terms and conditions satisfactory to the Participating Holders (provided
that if such terms are not satisfactory to any Participating Holder, then such
Participating Holder may withdraw its participation at any time prior to Genesis
MLP's undertaking of any contractual obligations to any underwriter or other
purchaser in connection with such sale) and (iv) to apply, pursuant to Section
2.1(e) of this Agreement, the proceeds of such sale, net of underwriting
discounts and commissions or placement fees, if any, to the redemption by
Genesis OLP of the Common OLP Units with respect to which the Notice of Demand
or Participation Notice applies, as adjusted pursuant to Section 2.1(d) of this
Agreement. Upon completion of a sale with respect to a Notice of Demand or
Participation Notice, pursuant to Section 2.1(e) of this Agreement, each
Participating Holder that has not withdrawn in accordance with clause (ii) of
the foregoing sentence shall be obligated to transfer to Genesis OLP the number
of Common OLP Units (the "Individual Redemption Number") such Participating
Holder requested be redeemed in such Notice of Demand or Participation Notice,
as such number of Common OLP Units to be redeemed may have been reduced pursuant
to Section 2.1(d) of this Agreement. Genesis MLP shall not be obligated
pursuant to this Agreement to cause Genesis OLP to redeem Common OLP Units of
Holders other than from the proceeds of a sale of Common Units equal to the
Aggregate Redemption Number pursuant to this Agreement (net of underwriting
discounts and commissions or placement fees, if any, and excluding proceeds from
the simultaneous sale of Common Units in excess of the Aggregate Redemption
Number, including pursuant to any over-allotment option granted in connection
with a sale pursuant to this Agreement).
(b) Limitations on Demand Redemption. (i) In case of an underwritten public
offering and notwithstanding any of the foregoing, (A) Genesis MLP shall not be
obligated to file a registration statement at any time during the six-month
period immediately following the effective date of another registration
statement subject to this Agreement and (B) Genesis MLP may delay for a period
not to exceed 60 days after receipt of a Notice of Demand the filing of a
registration statement pursuant to this Section 2.1, and may for a period not to
exceed 60 days after receipt of a Notice of Demand withhold efforts to cause the
registration statement to become effective, if the General Partner determines in
good faith that such registration might (x) interfere with or affect the
negotiation or completion of any transaction that is being contemplated by
Genesis MLP (whether or not a final decision has been made to undertake such
transaction) at the time the right to delay is exercised, or (y) involve
disclosure obligations the timing of which is not in the best interests of
Genesis MLP, including, but not limited to, the obligation to conduct a special
audit prior to the regular audit conducted by Genesis MLP.
(ii) The right of a Holder to request Genesis MLP to cause redemption of Common
OLP Units shall be limited to one Notice of Demand and one Participation Notice
during any period of six (6) consecutive months.
(c) Notice to the Non-Requesting Holder. Upon receipt of any Notice of Demand,
Genesis MLP will give prompt (but in any event within ten (10) days after such
receipt) notice to the non-requesting Holder of the receipt of the Notice of
Demand. Upon the request of any such Holder to participate ("Participation
Notice") made within fifteen (15) days after the receipt by such Holder of any
such notice (which request shall specify the number of Common OLP Units to be
redeemed Genesis MLP will (subject to any priorities in redemption rights) use
Reasonable Efforts to effect the sale of a number of Common Units equal to at
least the number of Common OLP Units to be redeemed from the Participating
Holders.
(d) Priority in Demand Redemption. Notwithstanding Section 2.1(a) of this
Agreement, in the case of an underwritten offering, if the managing underwriter
of an underwritten offering of the Common Units being distributed pursuant to
this Agreement, or the placement agent in the case of a private sale, shall
inform Genesis MLP by letter of its belief that the amount of securities
requested to be included in such distribution or private placement exceeds the
amount which can be sold in such distribution or placement within a price range
acceptable to the Participating Holders, then Genesis MLP will include in such
distribution or placement such amount of Common Units which Genesis MLP is so
advised can be sold in such sale pro rata on the basis of the Participating
Holders' respective aggregate ownership of Subordinated OLP Units and Common OLP
Units or otherwise as the Participating Holders may agree.
(e) Redemption Mechanics. Prior to the undertaking by Genesis MLP of any
contractual obligations to any underwriter or other purchaser to complete any
sale of Common Units by Genesis MLP pursuant to this Agreement, the
Participating Holders shall transfer to a custodian, pursuant to custodial
arrangements satisfactory to Genesis MLP and the Participating Holders,
certificates representing Common OLP Units equal to the Aggregate Redemption
Number. After the completion of a sale of Common Units by Genesis MLP pursuant
to this Agreement, Genesis MLP shall transfer to Genesis OLP the proceeds of the
sale of a number of Common Units equal to the Aggregate Redemption Number, net
of underwriting discounts and commissions or placement fees, if any, with
respect to such sale. Genesis OLP shall thereafter send a notice (a "Redemption
Notice") to each Participating Holder that has not withdrawn in accordance with
clause (iii) of Section 2.1(a) of this Agreement specifying (i) that the sale is
complete and (ii) that Genesis OLP will redeem the Individual Redemption Number
of Common OLP Units of such Participating Holder. Within ten (10) days after
the date of the Redemption Notice, Genesis OLP shall submit payment of the
Redemption Price to the Participating Holders.
Section 2.2. Redemption Terms and Procedures.
(a) Underwritten Public Offering. If the sale of Common Units pursuant to this
Agreement is conducted through a registered underwritten public offering:
(i) Registration Statement Form. Registrations pursuant to this Agreement
shall be on such appropriate registration forms of the SEC as shall permit the
issuance and sale of Common Units. Genesis MLP agrees to include in any such
registration statement all information that any Participating Holder shall
reasonably request (to the extent such information relates to such Participating
Holder), and each Participating Holder shall be obligated to provide to Genesis
MLP information concerning such Participating Holder as Genesis MLP shall
reasonably request for inclusion in the registration statement.
(ii) Registration Procedures. In connection with Genesis MLP's obligations to
register Common Units pursuant to this Agreement, Genesis MLP will use
Reasonable Efforts to effect such registration so as to permit the sale of any
Common Units included in such registration, and pursuant thereto Genesis MLP
will as expeditiously as possible:
(A) as soon as reasonably practicable after receipt of a Notice of Demand and a
Participation Notice (or the expiration of the period for receipt thereof),
prepare and file with the SEC the requisite registration statement and
thereafter use Reasonable Efforts to cause such registration statement to be
declared effective by the SEC, provided that before filing such registration
statement or any amendment or supplement thereto, Genesis MLP will furnish to
the Participating Holders copies of drafts of all such documents proposed to be
filed (excluding exhibits, which shall be made available upon request by any
Participating Holder), and any Participating Holder shall have the opportunity
to timely object to any information relating to such Participating Holders
contained therein and Genesis MLP will make the corrections reasonably requested
with respect to information relating to such Participating Holder prior to
filing any such registration statement, amendment or supplement;
(B) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to complete the distribution of the securities
covered thereby and as may be required to comply with Section 4(3) of the
Securities Act and Rule 174 thereunder;
(C) furnish to each underwriter participating in the distribution of securities
under such registration statement, such number of conformed copies of such
registration statement and of each amendment thereto (in each case excluding all
exhibits and documents incorporated by reference, which exhibits and documents
shall be furnished upon request), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus)
and any other prospectus filed under Rule 424 under the Securities Act, as such
underwriter may reasonably request to facilitate the distribution of such Common
Units;
(D) use Reasonable Efforts to register or qualify all Common Units and other
securities covered by such registration statement under all applicable blue sky
and other securities laws, and to keep such registration or qualification in
effect for so long as such registration statement remains in effect, except
that Genesis MLP shall not for any such purpose be required to (a) qualify
generally to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this clause (D) be obligated to be so
qualified, (b) subject itself to taxation in any such jurisdiction or (c)
consent to general service of process in any jurisdiction;
(E) use Reasonable Efforts to cause all Common Units covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities applicable to Genesis MLP as may be
reasonably necessary to enable Genesis MLP (or underwriter or agent, if any) to
consummate the offering and sale of such Common Units pursuant to such
registration statement;
(F) use Reasonable Efforts to prevent the issuance by the SEC or any other
governmental agency or court of a stop order, injunction or other order
suspending the effectiveness of such registration statement and, if such an
order is issued, use Reasonable Efforts to cause such order to be lifted as
promptly as practicable;
(G) take such other actions as are reasonably necessary to expedite or
facilitate the disposition of such Common Units; and
(H) participate, to the extent reasonably requested by the managing underwriter
for the offering, in customary efforts to sell the securities under the
offering.
(b) Private Sale. In the case of a private placement, Genesis MLP will use
Reasonable Efforts to effect such private placement as to permit the sale of any
Common Units included in such private placement, and pursuant thereto, Genesis
MLP will as expeditiously as possible and as soon as reasonably practicable
after receipt of a Notice of Demand and a Participation Notice (or the
expiration of the period for receipt thereof), prepare and distribute the
requisite private placement memorandum, provided that before distributing such
private placement memorandum or any amendment or supplement thereto, Genesis MLP
will furnish to the Participating Holders copies of drafts of all such documents
proposed to be distributed (excluding exhibits, which shall be made available
upon request by any Participating Holder), and any Participating Holder shall
have the opportunity to timely object to any information relating to such
Participating Holders contained therein and Genesis MLP will make the
corrections reasonably requested with respect to information relating to such
Participating Holder prior to distribution of any such private placement
memorandum, amendment or supplement. Each Participating Holder shall be
obligated to provide to Genesis MLP information concerning such Participating
Holder as Genesis MLP shall reasonably request for inclusion in any such private
placement memorandum.
(c) General Redemption Terms.
(i) Offering Expenses. Genesis MLP will pay all Offering Expenses incurred in
connection with one Demand Redemption effected pursuant to a Notice of Demand by
Basis and one Demand Redemption effected pursuant to a Notice of Demand by
Xxxxxx on behalf of the Xxxxxx Subsidiaries (including any incremental expenses
resulting from the inclusion of additional Common Units by reason of a
Participation Notice being given); Offering Expenses associated with subsequent
sales effected pursuant to Section 2.1 shall be borne by the Participating
Holders.
(ii) Effectiveness of Demand Redemption. A Demand Redemption will not be deemed
to have been effected under Section 2.1 unless a sale of Common Units has been
effected pursuant thereto.
(iii) Selection of Underwriter or Placement Agent. The Participating
Holders shall select one or more nationally recognized firms of investment
bankers to act as the book-running managing underwriter or underwriters in the
case of an underwritten public offering, and, in the case of a private
placement, as placement agents, in connection with a distribution or private
placement effected pursuant to Section 2.1, provided that such selection shall
be subject to the consent of Genesis MLP, which consent shall not be
unreasonably withheld.
Section 2.3. Underwriting Agreement.
If the sale of Common Units pursuant to this Agreement is conducted through an
underwritten public offering, Genesis MLP hereby agrees to enter into an
underwriting agreement with the underwriters for such offering selected pursuant
to Section 2.2 (c)(iii), such agreement (a) to be reasonably satisfactory in
substance and form to the Participating Holders and (b) to contain such
representations and warranties by Genesis MLP and by each of the Participating
Holders and such other terms as are generally prevailing in agreements of such
type.
Section 2.4. Indemnification.
(a) Indemnification by Genesis MLP. Genesis MLP agrees to indemnify and hold
harmless, to the full extent permitted by law, the Participating Holders, their
directors, officers, shareholders, employees, investment advisers, agents and
Affiliates, either direct or indirect (and each such Affiliate's directors,
officers, shareholders, employees, investment advisers and agents), and each
other Person, if any, who controls such Persons within the meaning of the
Securities Act (each such Person, an "Indemnified Party"), from and against any
losses, claims, damages, liabilities or expenses, joint or several (each a
"Loss" and collectively, "Losses"), to which such Indemnified Party may become
subject under the Securities Act, to the extent that such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act (including all documents
incorporated therein by reference), any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto
(or in any private placement memorandum distributed by Genesis MLP to effect a
private placement of Common Units pursuant to this Agreement), or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and Genesis
MLP will reimburse such Indemnified Party for any legal or any other expenses
reasonably incurred by it in connection with investigating or defending against
any such Loss, action or proceeding; provided that in any such case Genesis MLP
shall not be liable to any particular Indemnified Party to the extent that such
Loss (or action or proceeding in respect thereof) arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, amendment or supplement (or in any private placement memorandum
distributed by Genesis MLP to effect a private placement of Common Units
pursuant to this Agreement), in reliance upon and in conformity with written
information furnished to Genesis MLP by such Indemnified Party specifically for
inclusion therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of such securities by such Indemnified Party.
Genesis MLP shall also indemnify each other Person who participates (including
as an underwriter) in the offering or sale of Common Units hereunder, its
officers and directors and each other Person, if any, who controls any such
participating Person within the meaning of the Securities Act to the same extent
as provided above with respect to Indemnified Parties.
(b) Indemnification by the Participating Holders. (i) Genesis MLP may require,
as a condition to filing any registration statement or distributing any private
placement memorandum for the issuance and sale of new Common Units pursuant to
this Agreement and as a condition to indemnifying the Participating Holders
pursuant to this Section 2.4, that Genesis MLP shall have received an
undertaking reasonably satisfactory to it from each Participating Holder in
which they agree to indemnify and hold harmless and reimburse (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.4)
Genesis MLP, Genesis OLP, each director, officer, employee and agent of Genesis
MLP and Genesis OLP, and each other Person, if any, who controls Genesis MLP and
Genesis OLP within the meaning of the Securities Act or the Exchange Act, from
and against any Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered under the
Securities Act (including all documents incorporated therein by reference), any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto (or in any private placement
memorandum distributed by Genesis MLP to effect a private placement of the
Common Units pursuant to this Agreement), or any omission or alleged omission
from such registration statement, preliminary prospectus, final prospectus or
summary prospectus, or any amendment or supplement thereto required to be stated
therein or necessary to make the statements therein not misleading, if (but only
if) such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to Genesis MLP by such Participating Holder specifically for inclusion
therein; provided, however, that no Participating Holder shall be obligated to
provide such indemnity to the extent that such Losses result, directly or
indirectly, from the failure of Genesis MLP to promptly amend or take action to
correct or supplement any such registration statement, prospectus, amendment or
supplement (or in any private placement memorandum distributed by Genesis MLP to
effect a private placement of Common Units pursuant to this Agreement), based on
corrected or supplemental information provided in writing by such Participating
Holder to Genesis MLP expressly for such purpose; and provided further, that the
obligation to provide indemnification pursuant to this Section 2.4(b) shall be
several, and not joint and several, among such indemnifying parties.
Notwithstanding anything in this Section 2.4(b) to the contrary, in no event
shall the liability of any Participating Holder under such indemnity be greater
in amount than the amount of the proceeds received by such Participating Holder
upon the redemption from such Participating Holder of Common OLP Units using
proceeds from the sale of Common Units to which the Losses relate. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of Genesis MLP or any such director, officer, employee,
agent or participating or controlling Person and shall survive the transfer of
such securities by such Participating Holder.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in paragraph (a) or (b) of this Section 2.4, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give prompt written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 2.4, except to the extent that the indemnifying party is actually and
materially prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, the indemnifying party shall be
entitled to participate in and to assume the defense thereof (such assumption to
constitute its acknowledgment of its agreement to indemnify the indemnified
party with respect to such matters), jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal fees or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in such indemnified party's
reasonable judgment, a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, such indemnified party
shall be entitled to separate counsel at the expense of the indemnifying party;
and provided further, that, unless there exists a conflict of interest among
indemnified parties, all indemnified parties in respect of such claim shall be
entitled to only one counsel or firm of counsel for all such indemnified
parties. In the event an indemnifying party shall not be entitled, or elects
not, to assume the defense of a claim, such indemnifying party shall not be
obligated to pay the fees and expenses of more than one counsel or firm of
counsel for all parties indemnified by such indemnifying party in respect of
such claim, unless in the reasonable judgment of any such indemnified party a
conflict of interest exists between such indemnified party and any other of such
indemnified parties in respect of such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of one additional counsel
or firm of counsel for such indemnified parties. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that (i) does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all Losses in respect of such claim or litigation or (ii) would
impose injunctive relief on such indemnified party. No indemnifying party shall
be subject to any Losses for any settlement made without its consent, which
consent shall not be unreasonably withheld.
(d) Other Indemnification. The provisions of this Section 2.4 shall be in
addition to any other rights to indemnification or contribution which an
indemnified party may have pursuant to law, equity, contract or otherwise.
(e) Indemnification Payments. The indemnification required by this Section
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, promptly after receipt by the Indemnifying Party
of invoices or other evidence of Losses incurred by the Indemnified Party.
(f) Contribution. If for any reason the foregoing indemnity and reimbursement
is unavailable or is insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 2.4, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any Loss (or actions or proceedings, whether commenced or threatened, in
respect thereof), including, without limitation, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Loss, action or proceeding, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and the indemnified
party on the other. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Notwithstanding anything
in this Section 2.4(f) to the contrary, no indemnifying party (other than
Genesis MLP) shall be required pursuant to this Section 2.4(f) to contribute any
amount in excess of the amount by which the net proceeds received by such
indemnifying party from the sale of Common Units in the offering to which the
Losses of the indemnified parties relate exceeds the amount of any damages which
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
Section 2.5. Term.
This Agreement shall be effective on the date hereof and shall continue in full
force and effect until all Subordinated OLP Units have converted into Common OLP
Units and all such Common OLP Units have been purchased or redeemed.
Section 2.6. Holdback Agreement.
If any sale hereunder shall be in connection with an underwritten public
offering, each Holder agrees not to sell or request any redemption of Common OLP
Units by Genesis OLP and thereby cause Genesis MLP to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the Securities Act,
of Common Units other than as part of such underwritten public offering within
seven (7) days before or 90 days (or such lesser period as the managing
underwriter may permit) after the effective date of such registration.
Section 2.7. Amendments and Waivers.
This Agreement may be amended, supplemented or modified at any time, provided
that each of (i) Basis and Xxxxxx, on behalf of the Xxxxxx Subsidiaries, and
(ii) Genesis MLP has provided its written consent to such amendment, supplement
or modification. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party
of any term or condition of this Agreement, in any one or more instances, shall
be deemed to be or construed as a waiver of the same term or condition of this
Agreement on any future occasion.
Section 2.8. Entire Agreement.
This Agreement supersedes all prior discussions and agreements between the
parties with respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof.
Section 2.9. No Third-Party Beneficiary.
The terms and provisions of this Agreement are intended solely for the benefit
of each party and their respective Successors and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person.
Section 2.10. Invalid Provisions.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
Section 2.11. Notices.
All notices, requests and other communications hereunder must be in writing and
will be deemed to have been duly given only (i) if delivered personally, (ii) by
facsimile transmission, (iii) by Federal Express or other nationally recognized
courier service or (iv) mailed (first class postage prepaid) to the parties at
the following addresses or facsimile numbers:
If to Genesis MLP to:
Genesis Energy, L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
with a copy to:
General Counsel
Fax No.: (000) 000-0000
If to Basis, to:
Basis Petroleum, Inc.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
with a copy to:
General Counsel
Fax No.: (000) 000-0000
If to Xxxxxx or any of the Xxxxxx Subsidiaries, to:
Xxxxxx Corporation
0000 Xxxxxx, Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Section 2.12. Assignment.
Basis and the Xxxxxx Subsidiaries may assign (by written instruments in form
reasonably acceptable to the parties) any of their rights hereunder (in whole or
in part) to one or more transferees of Subordinated OLP Units or Common OLP
Units ("Assignee"). Any such assignment may provide that each Assignee shall be
entitled (subject to priorities in registration rights) to participate in a sale
of Common Units pursuant to this Agreement and, with respect to any such
participation, to have all of the rights of its assignor provided in this
Agreement, provided that the assignment of rights by Basis or any Xxxxxx
Subsidiary shall not enlarge the rights of Basis or any Xxxxxx Subsidiary
hereunder, and any such assignment shall establish the procedures for the
exercise of the rights originally granted to Basis or such Xxxxxx Subsidiary
hereunder, as the case may be. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their successors
and assigns.
In case Basis transfers less than all of its Subordinated OLP Units and Common
OLP Units (collectively, the "OLP Units") to one or more transferees, Basis
shall retain the right to act on behalf of such transferees for purposes of this
Agreement. In case Basis transfers all of its OLP Units to one or more
transferees, Basis shall appoint an agent who shall act on behalf of such
transferees for purposes of this Agreement.
In case any Xxxxxx Subsidiary transfers its OLP Units, Xxxxxx shall act on
behalf of the transferee(s) for purposes of this Agreement. In case all of the
Xxxxxx Subsidiaries transfer their OLP Units to one or more transferees, Xxxxxx
shall appoint an agent who shall act on behalf of such transferee(s) for
purposes of this Agreement.
Section 2.13. Headings; References; Interpretation.
All Article or Section headings in this Agreement are for convenience only and
shall not be deemed to control or affect the meaning or construction of the
provisions hereof. The definitions in this Agreement shall apply equally to both
the singular and plural forms of the terms defined. All personal pronouns used
in this Agreement, whether used in the masculine, feminine or neuter gender,
shall include all other genders, and the singular shall include the plural and
vice versa. The use herein of the word "including" following any general
statement, term or matter shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation," "but not limited to," or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that could reasonably fall within the broadest possible scope
of such general statement, term or matter.
Section 2.14. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, TO THE EXTENT PERMITTED BY LAW, WITHOUT REFERENCE TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
Section 2.15. Attorneys' Fees.
In any action or proceeding brought to enforce any provision of this Agreement
or where any provision hereof is validly asserted as a defense, the successful
party shall, to the extent permitted by applicable law, be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
Section 2.16. No Inconsistent Agreements.
Genesis MLP will not hereafter enter into, modify, amend or waive any agreement
with respect to its securities if such agreement, modification or waiver would
conflict with the rights granted pursuant to this Agreement to Basis, Xxxxxx and
the Xxxxxx Subsidiaries.
Section 2.17. Pledge Agreement.
The rights of Basis and Xxxxxx or of their Assignees pursuant to this Agreement
shall be subject to their obligations under and to the terms of the Pledge
Agreement.
Section 2.18. Specific Performance.
The parties agree that, to the extent permitted by law, (i) the obligations
imposed on them in this Agreement are special, unique and of an extraordinary
character, and that in the event of a breach by any such party damages would not
be an adequate remedy and (ii) each of the other parties shall be entitled to
apply for specific performance and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled at law or in equity.
Section 2.19. Counterparts.
This Agreement may be executed simultaneously in any number of counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their respective officers thereunto duly authorized as of the date
first above written.
GENESIS ENERGY, L.P.
By: GENESIS ENERGY, L.L.C., its general partner
By: /s/ Xxxx X. xxxXxxx
-----------------------------------------------
Xxxx X. xxxXxxx
President and Chief Executive Officer
GENESIS CRUDE OIL, L.P.
By: GENESIS ENERGY, L.L.C., its general partner
By: /s/ Xxxx X. xxxXxxx
-----------------------------------------------
Xxxx X. xxxXxxx
President and Chief Executive Officer
BASIS PETROLEUM, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxx
Chairman of the Board, President and
Chief Executive Officer
XXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------
Xxxx X. Xxxxxx
President and Chief Executive Officer
XXXXXX CRUDE OIL COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------
Xxxx X. Xxxxxx
President
XXXXXX PIPELINE TEXAS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxxx
President
