EXHIBIT 10.6
NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT, dated as of , 1996 (this
"Agreement"), is entered into by and among GENESIS ENERGY, L.P., a Delaware
limited partnership ("Genesis MLP"), GENESIS CRUDE OIL, L.P., a Delaware limited
partnership ("Genesis OLP"), SALOMON INC, a Delaware corporation ("Salomon"),
BASIS PETROLEUM, INC., a Texas corporation ("Basis"), and XXXXXX CORPORATION, a
Delaware corporation ("Xxxxxx").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and as an inducement to consummate the transactions
contemplated by the Genesis MLP Partnership Agreement (as hereinafter defined)
and the Genesis OLP Partnership Agreement (as hereinafter defined), the parties
hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
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SECTION 1.1. Terms Defined Herein. The following definitions shall be for
all purposes, unless otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, 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.
"Agreement" means this Non-Competition Agreement, as it may be amended,
supplemented or restated from time to time.
"General Partner" means Genesis Energy, LLC unless and until Genesis
Energy, LLC has transferred its general partner interests in Genesis MLP and
Genesis OLP in compliance with the requirements of the Genesis MLP Partnership
Agreement and the Genesis OLP Partnership Agreement, and thereafter shall mean
the transferee of such General Partner Interest.
"Genesis MLP Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Genesis Energy, L.P., dated as of _______,
1996, as it may be amended, supplemented or restated from time to time.
"Genesis OLP Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Genesis Crude Oil, L.P., dated as of
__________, 1996, as it may be amended, supplemented or restated from time to
time.
"Group Member" means a member of the Partnership Group.
"Partnership Group" means Genesis MLP, Genesis OLP and any other Subsidiary
of Genesis MLP, treated as a single consolidated entity.
"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.
"Restricted Party" has the meaning assigned to such term in Section 2.1(a).
"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.
ARTICLE 2
COVENANT NOT TO COMPETE
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SECTION 2.1. Outside Activities. (a) During the period commencing on the
Closing Date and ending on the tenth anniversary of the Closing Date, each of
Salomon, Basis and Xxxxxx and their respective Subsidiaries (other than a Group
Member) (each, a "Restricted Party") shall not 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 or (ii) transporting for third parties crude oil by pipeline
along the routes of the crude oil pipelines owned by the Partnership Group as of
the Closing Date; provided, however, that notwithstanding the foregoing, (A) a
Restricted Party will not be restricted from any activity incidental to its
refinery operations so long as such activities are not substantially in
competition with the lease gathering operations of the Partnership Group, (B)
the restrictions set forth in this Section 2.1(a) will not prevent a Restricted
Party from entering into joint ventures or strategic alliances with a Group
Member, (C) the restrictions set forth in this Section 2.1(a) will not apply to
purchases of crude oil for feedstock supply for Xxxxxx'x research and reference
fuels business, and
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(D) if Salomon, Basis or Howell sells or otherwise disposes of its entire
interest (direct and indirect) in the General Partner to a Person that is not an
Affiliate of the Person making such sale or disposition, the restrictions set
forth in this Section 2.1(a) shall no longer apply to the Person making such
sale or disposition or its Subsidiaries.
(b) Except as specifically provided in Section 2.1(a), it is
understood that there is no restriction upon any of the Restricted Parties with
respect to engaging in any of the activities conducted by the Partnership Group,
even if in direct competition with the Partnership Group, and none of the
Restricted Parties will have an obligation pursuant to this Agreement or
otherwise to present business opportunities to the Partnership Group.
ARTICLE 3
MISCELLANEOUS
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SECTION 3.1. Headings. 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 any of the provisions hereof.
SECTION 3.2. Integration. This Agreement supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This document is an integrated agreement which
contains the entire understanding of the parties. No understanding,
representation, promise or agreement, whether oral or written, is intended to be
or shall be included in or form part of this Agreement unless it is contained in
a written amendment hereto executed by the parties hereto after the date of this
Agreement.
SECTION 3.3. Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
SECTION 3.4. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law.
SECTION 3.5. Amendments and Waivers. The parties hereto, by mutual
agreement in writing, may amend, modify or supplement this Agreement; provided,
however, that Genesis MLP and Genesis OLP may not agree to any amendment,
modification or supplement of this Agreement unless such amendment, modification
or supplement is approved by the Audit Committee of the General Partner.
SECTION 3.6. Enforcement. The Restricted Parties agree and acknowledge
that the Partnership Group does not have an adequate remedy at law for the
breach by the Restricted Parties of the covenants and agreements set forth in
Section 2.1, and that any breach by the Restricted Parties of the covenants and
agreements set forth in Section 2.1 would result in irreparable injury
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to the Partnership Group. The Restricted Parties further agree and acknowledge
that any Group Member may, in addition to the other remedies which may be
available to the Partnership Group, file a suit in equity to enjoin the
Restricted Parties from such breach, and consent to the issuance of injunctive
relief hereunder.
SECTION 3.7. Severability. In the event that any provision contained in
this Agreement shall, for any reason, be judicially declared to be invalid,
illegal, unenforceable or void in any respect, such declaration shall not have
the effect of invalidating or voiding the remainder of this Agreement and the
parties hereto agree that the part or parts of this Agreement so declared to be
invalid, illegal, unenforceable or void in any respect will be deemed to have
been stricken herefrom and the remainder will have the same force and
effectiveness as if such part had never been included herein.
SECTION 3.9 Notices. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally or sent by
facsimile transmission or by registered or certified mail, postage prepaid,
return receipt requested, as follows:
If to Salomon:
Salomon Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director
Fax No.: (000) 000-0000
If to Basis:
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:
Xxxxxx Corporation
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
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If to the Partnership Group:
Genesis Energy L.P.
Genesis Crude Oil, L.P.
c/o Genesis Energy, L.L.C.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
with a copy to General Counsel
Fax No.:
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date so delivered or electronically transmitted or sent after mailing
thereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
GENESIS ENERGY, L.P.
By: GENESIS ENERGY, L.L.C., general partner
By:_________________________________________
Name:
Title:
GENESIS CRUDE OIL, L. P.
By: GENESIS ENERGY, L.L.C., general partner
By:_________________________________________
Name
Title:
SALOMON INC
By:_________________________________________
Name:
Title:
BASIS PETROLEUM, INC.
By:_________________________________________
Name:
Title:
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XXXXXX CORPORATION
By:_________________________________________
Name:
Title:
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