Genesis Energy LP S-3ASR, filed Apr 19, 2021
Genesis Energy LP (GEL)
Table of Contents
As filed with the Securities and Exchange Commission on April 19, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Genesis Energy, L.P.
Genesis Energy Finance Corporation
(and the subsidiaries identified below in the Table of Subsidiary Guarantor Registrants)
(Exact name of registrant as specified in its charter)
| Delaware | 76-0513049 | |
| Delaware | 20-5948137 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) |
919 Milam, Suite 2100
Houston, Texas 77002
(713) 860-2500
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Kristen O. Jesulaitis
919 Milam, Suite 2100
Houston, Texas 77002
Telephone: (713) 860-2500
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copy to:
Christopher Centrich
Patrick Hurley
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana Street, 44th Floor
Houston, Texas 77002
Telephone: (713) 220-2100
Approximate Date of Commencement of Proposed Sale to the Public: From time to time after the registration statement becomes effective.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
| Emerging growth company | ☐ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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| Title of Each Class of Securities to be Registered |
Amount to be Registered / Proposed Maximum Offering Price | |
| Common Units |
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| Preferred Securities |
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| Subordinated Securities |
||
| Options |
||
| Warrants |
||
| Rights |
||
| Debt Securities |
||
| Guarantees of Debt Securities(2) |
||
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| (1) | An indeterminate initial offering price, principal amount or number of securities of each identified class is being registered as may from time to time be issued at indeterminate prices or upon conversion, exchange or exercise of securities registered hereunder to the extent any such securities are, by their terms, convertible into or exchangeable or exercisable for, such securities. Separate consideration may or may not be received for securities that are being registered that are issued in exchange for, or upon conversion or exercise of, the securities being registered hereunder. In accordance with Rules 456(b) and 457(r), the registrant is deferring payment of all of the registration fee, except for $115,900 that is being offset with respect to unsold securities under its registration statement on Form S-3 (File No. 333-219710) initially filed with the Securities and Exchange Commission on August 4, 2017, as amended by the registration statement on Form S-3/A (File No. 333-219710) filed with the Securities and Exchange Commission on October 5, 2017. Pursuant to Rule 457(p), the registrant hereby offsets $115,900 of such previously paid filing fee with respect to unsold securities against the total amount of the filing fee due for this registration statement. |
| (2) | One or more existing or future subsidiaries of Genesis Energy, L.P. may guarantee the debt securities of Genesis Energy, L.P. and Genesis Energy Finance Corporation. Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees of the debt securities being registered. |
Table of Contents
TABLE OF SUBSIDIARY GUARANTOR REGISTRANTS
| Exact Name of Registrant as Specified in its Charter* | State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. |
||||
| AP Marine, LLC |
Delaware | 76-0513049 | ||||
| BR Port Services, LLC |
Delaware | 76-0513049 | ||||
| Cameron Highway Oil Pipeline Company, LLC |
Delaware | 76-0513049 | ||||
| Cameron Highway Pipeline GP, L.L.C. |
Delaware | 76-0513049 | ||||
| Cameron Highway Pipeline I, L.P. |
Delaware | 76-0513049 | ||||
| Casper Express Pipeline, LLC |
Delaware | 76-0513049 | ||||
| Davison Petroleum Supply, LLC |
Delaware | 76-0513049 | ||||
| Davison Transportation Services, Inc. |
Delaware | 26-0614522 | ||||
| Davison Transportation Services, LLC |
Delaware | 76-0513049 | ||||
| Deepwater Gateway, L.L.C. |
Delaware | 76-0513049 | ||||
| Flextrend Development Company, L.L.C. |
Delaware | 76-0513049 | ||||
| GEL CHOPS GP, LLC |
Delaware | 76-0513049 | ||||
| GEL CHOPS I, L.P. |
Delaware | 76-0513049 | ||||
| GEL CHOPS II, L.P. |
Delaware | 76-0513049 | ||||
| GEL Deepwater, LLC |
Delaware | 76-0513049 | ||||
| GEL IHUB, LLC |
Delaware | 76-0513049 | ||||
| GEL Louisiana Fuels, LLC |
Delaware | 76-0513049 | ||||
| GEL Odyssey, LLC |
Delaware | 76-0513049 | ||||
| GEL Offshore Pipeline, LLC |
Delaware | 76-0513049 | ||||
| GEL Offshore, LLC |
Delaware | 76-0513049 | ||||
| GEL Paloma, LLC |
Delaware | 76-0513049 | ||||
| GEL Pipeline Offshore, LLC |
Delaware | 76-0513049 | ||||
| GEL Poseidon, LLC |
Delaware | 76-0513049 | ||||
| GEL Sekco, LLC |
Delaware | 76-0513049 | ||||
| GEL Tex Marketing, LLC |
Delaware | 76-0513049 | ||||
| GEL Texas Pipeline, LLC |
Delaware | 76-0513049 | ||||
| GEL Wyoming, LLC |
Delaware | 76-0513049 | ||||
| Genesis BR, LLC |
Delaware | 76-0513049 | ||||
| Genesis CHOPS I, LLC |
Delaware | 76-0513049 | ||||
| Genesis CHOPS II, LLC |
Delaware | 76-0513049 | ||||
| Genesis Crude Oil, L.P. |
Delaware | 76-0513049 | ||||
| Genesis Davison, LLC |
Delaware | 76-0513049 | ||||
| Genesis Deepwater Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Energy, LLC |
Delaware | 76-0513049 | ||||
| Genesis Free State Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis GTM Offshore Operating Company, LLC |
Delaware | 76-0513049 | ||||
| Genesis IHUB Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Marine, LLC |
Delaware | 76-0513049 | ||||
| Genesis NEJD Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Odyssey, LLC |
Delaware | 76-0513049 | ||||
| Genesis Offshore, LLC |
Delaware | 76-0513049 | ||||
| Genesis Offshore Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Pipeline Alabama, LLC |
Alabama | 76-0513049 | ||||
| Genesis Pipeline Texas, L.P. |
Delaware | 76-0513049 | ||||
| Genesis Pipeline USA, L.P. |
Delaware | 76-0513049 | ||||
| Genesis Poseidon, LLC |
Delaware | 76-0513049 | ||||
| Genesis Poseidon Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Rail Services, LLC |
Delaware | 76-0513049 | ||||
| Genesis Sailfish Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Sekco, LLC |
Delaware | 76-0513049 | ||||
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| Exact Name of Registrant as Specified in its Charter* | State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. |
||||
| Genesis SMR Holdings, LLC |
Delaware | 76-0513049 | ||||
| Genesis Syngas Investments, L.P. |
Delaware | 76-0513049 | ||||
| Genesis Texas City Terminal, LLC |
Delaware | 76-0513049 | ||||
| High Island Offshore System, L.L.C. |
Delaware | 76-0513049 | ||||
| Manta Ray Gathering Company, L.L.C. |
Texas | 76-0513049 | ||||
| Matagorda Offshore, LLC |
Texas | 76-0513049 | ||||
| Milam Services, Inc. |
Delaware | 36-4704817 | ||||
| Poseidon Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||||
| Red River Terminals, L.L.C. |
Louisiana | 76-0513049 | ||||
| Sailfish Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||||
| Seahawk Shoreline System, LLC |
Texas | 76-0513049 | ||||
| Southeast Keathley Canyon Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||||
| TDC Services, LLC |
Delaware | 26-0614359 | ||||
| TDC, L.L.C. |
Louisiana | 76-0513049 | ||||
| Texas City Crude Oil Terminal, LLC |
Delaware | 76-0513049 | ||||
| Thunder Basin Holdings, LLC |
Delaware | 76-0513049 | ||||
| * | The address for each registrant’s principal executive office is 919 Milam, Suite 2100 Houston, Texas 77002 and the telephone number for each registrant’s principal executive office is (713) 860-2500. |
Table of Contents
Prospectus
GENESIS ENERGY, L.P.
Common Units
Preferred Securities
Subordinated Securities
Options
Warrants
Rights
Debt Securities
GENESIS ENERGY FINANCE CORPORATION
Debt Securities
We may from time to time offer one or more classes or series of the following securities as described in this prospectus, in one or more separate offerings under this prospectus:
| • | common units, preferred securities, subordinated securities, options, warrants and rights; and |
| • | debt securities, which may be either senior debt securities or subordinated debt securities. |
Genesis Energy Finance Corporation may act as co-issuer of the debt securities and other direct or indirect subsidiaries of Genesis Energy, L.P. may guarantee the debt securities.
This prospectus provides you with the general terms of these securities and the general manner in which we will offer these securities. We may offer and sell securities using this prospectus only if it is accompanied by a prospectus supplement. We will include the specific terms of any securities we offer in a prospectus supplement. The prospectus supplement will also describe the specific manner in which we will offer the securities. You should read this prospectus and the prospectus supplement carefully.
We may sell these securities to underwriters or dealers, or we may sell them directly to other purchasers. See “Plan of Distribution.” The prospectus supplement will list any underwriters and the compensation they will receive. The prospectus supplement will also show you the total amount of money that we will receive from selling these securities, after we pay certain expenses of the offering.
Our common units are listed on the New York Stock Exchange under the symbol “GEL.” We will provide information in any applicable prospectus supplement regarding the trading market, if any, for any debt securities we may offer.
Investing in our securities involves risks. Limited partnerships are inherently different from corporations. You should carefully consider the Risk Factors beginning on page 2 of this prospectus and contained in any applicable prospectus supplement and in the documents incorporated by reference herein and therein before you make an investment in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is April 19, 2021.
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This prospectus, including any information incorporated by reference herein, is part of a registration statement on Form S-3 that we have filed with the Securities and Exchange Commission, or the Commission, using a “shelf” registration or continuous offering process. Under this shelf registration process, we may, from time to time, offer and sell any combination of the securities described in this prospectus in one or more offerings. This prospectus generally describes Genesis Energy, L.P. and the securities. Each time we sell securities with this prospectus, we will provide a prospectus supplement containing specific information about the terms of a particular offering. A prospectus supplement may also add to, update or change information in this prospectus. You should read carefully the section entitled “Information Regarding Forward-Looking Statements” beginning on page 51. If the description of the offering varies between the prospectus supplement and this prospectus, you should rely on the information in the prospectus supplement. Therefore, you should carefully read both this prospectus and any prospectus supplement, together with additional information described under the heading “Where You Can Find More Information” before you invest in our securities.
You should rely only on the information contained in this prospectus, any prospectus supplement and the documents we have incorporated by reference. We have not authorized anyone else to provide you different information. We are not making an offer of these securities in any state where the offer is not permitted. We will disclose any material changes in our affairs in an amendment to this prospectus, a prospectus supplement or a future filing with the Commission incorporated by reference in this prospectus and any prospectus supplement. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents.
Unless the context otherwise requires, references in this prospectus to (i) “Genesis Energy, L.P.,” “Genesis,” “we,” “our,” “us” or like terms refer to Genesis Energy, L.P. and its operating subsidiaries, including Genesis Energy Finance Corporation; (ii) “our general partner” refers to Genesis Energy, LLC, the general partner of Genesis; and (iii) “Finance Corp.” or “co-issuer” refer to Genesis Energy Finance Corporation.
We are a growth-oriented master limited partnership formed in Delaware in 1996. Our common units are traded on the New York Stock Exchange, or NYSE, under the ticker symbol “GEL.” Our principal executive offices are located at 919 Milam, Suite 2100, Houston, Texas 77002 and our telephone number is (713) 860-2500. Genesis Energy, LLC, our general partner, is a wholly-owned subsidiary. Our general partner has sole responsibility for conducting our business and managing our operations. We conduct our operations and own our operating assets through our subsidiaries and joint ventures. We manage our businesses through divisions that constitute our reportable segments, which change from time to time as we further integrate our suite of services and/or acquire additional businesses.
We are (i) a provider of an integrated suite of midstream services–primarily transportation, storage, sulfur removal, blending, terminalling and processing–for a large area of the Gulf of Mexico and the Gulf Coast region of the crude oil and natural gas industry and (ii) one of the leading producers in the world of natural soda ash. We have a diverse portfolio of customers, operations and assets, including pipelines, refinery-related plants, soda ash production facilities, related equipment and trona reserves (our “Alkali Business”), storage tanks and terminals, railcars, rail unloading facilities, barges and other vessels, and trucks. Substantially all of our revenues are derived from providing services to refiners, integrated and large independent crude oil and natural gas companies, and large industrial and commercial enterprises, including those that use natural soda ash, sodium hydrosulfide and caustic soda.
For additional information regarding our business properties and financial condition, please refer to the documents referenced in the section entitled “Where You Can Find More Information.”
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An investment in our securities involves risks. In evaluating an investment in our securities, you should consider carefully the risk factors and other information included in or incorporated by reference into this prospectus and additional information which may be incorporated by reference into this prospectus or any prospectus supplement in the future, in each case as provided under “Where You Can Find More Information,” including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including the risk factors described under “Risk Factors” in such reports. In addition, when we offer and sell any securities pursuant to a prospectus supplement, we may include additional risk factors relevant to such securities in the prospectus supplement. This prospectus also contains forward-looking statements that involve risks and uncertainties. If any of these risks occur, our business, financial condition or results of operation could be adversely affected. Please read “Information Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors.
Unless otherwise specified in an accompanying prospectus supplement, we will use the net proceeds we receive from the sale of the securities described in this prospectus for general partnership purposes, which may include, among other things, repayment of indebtedness, the acquisition of businesses and other capital expenditures, payment of distributions and additions to working capital. The exact amounts to be used and when the net proceeds will be applied will depend on a number of factors, including our funding requirements and the availability of alternative funding sources.
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DESCRIPTION OF OUR EQUITY SECURITIES
As of the date of this prospectus, we have outstanding common units and preferred units. In the future, we may issue one or more series or classes of additional units as well as the following other types of equity securities — preferred securities, subordinated securities, options securities, warrant securities or rights securities. Those equity securities may have rights to distributions and allocations junior, equal or superior to our common units or preferred units.
Subject to certain approval rights of holders of our Class A Convertible Preferred Units (our “Convertible” preferred units), our partnership agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities for the consideration and with the designations, rights, preferences and privileges established by our general partner without the approval of any of our limited partners. In accordance with Delaware law and the provisions of our partnership agreement, and subject to such approval rights, we may issue additional partnership interests that have certain preferential rights to which our common units are not entitled, including, without limitation, preferences regarding voting and distributions. Should we offer equity securities under this prospectus, a prospectus supplement relating to the particular class of securities offered will include the specific terms of those securities, including, among other things, the following:
| • | the designation, stated value, and liquidation preference of the securities and the number of securities offered; |
| • | the initial public offering price at which the securities will be issued; |
| • | the conversion or exchange provisions of the securities; |
| • | any redemption or sinking fund provisions of the securities; |
| • | the distribution rights of the securities, if any; |
| • | a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the securities; and |
| • | any additional rights, preferences, privileges, limitations and restrictions of the securities. |
The transfer agent, registrar and distributions disbursement agent for the securities will be designated in the applicable prospectus supplement.
Our general partner can determine the voting powers, designations, preferences and relative, participating, optional or other special rights, duties and qualifications, limitations or restrictions of any series or class and the number constituting any series or class of equity securities.
For a summary of the important provisions of our partnership agreement, many of which apply to holders of our equity securities, see “Description of Our Partnership Agreement” in this prospectus.
Our common units and Class B Units represent limited partner interests in Genesis Energy, L.P. that entitle the holders to participate in our cash distributions and to exercise the rights or privileges available to limited partners under our partnership agreement subject to the rights and privileges of any of our outstanding securities that may be senior to the rights and privileges of our common unitholders.
Our outstanding common units are listed on the New York Stock Exchange under the symbol “GEL.”
The transfer agent and registrar for our common units is American Stock Transfer & Trust Company.
Status as Limited Partner or Assignee. Except as described under “— Limited Liability,” the common units will be fully paid, and the unitholders will not be required to make additional capital contributions to us.
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Transfer of Common Units. Each purchaser of common units offered by this prospectus must execute a transfer application. By executing and delivering a transfer application, the purchaser of common units:
| • | becomes the record holder of the common units and is an assignee until admitted into our partnership as a substituted limited partner; |
| • | automatically requests admission as a substituted limited partner in our partnership; |
| • | agrees to be bound by the terms and conditions of, and executes, our partnership agreement; |
| • | represents that he has the capacity, power and authority to enter into the partnership agreement; |
| • | grants powers of attorney to officers of our general partner and any liquidator of our partnership as specified in the partnership agreement; and |
| • | makes the consents and waivers contained in the partnership agreement. |
An assignee will become a substituted limited partner of our partnership for the transferred common units upon the consent of our general partner and the recording of the name of the assignee on our books and records. Our general partner may withhold its consent in its sole discretion.
Transfer applications may be completed, executed and delivered by a purchaser’s broker, agent or nominee. We are entitled to treat the nominee holder of a common unit as the absolute owner. In that case, the beneficial holders’ rights are limited solely to those that it has against the nominee holder as a result of any agreement between the beneficial owner and the nominee holder.
Common units are securities and are transferable according to the laws governing transfer of securities. In addition to other rights acquired, the purchaser has the right to request admission as a substituted limited partner in our partnership for the purchased common units. A purchaser of common units who does not execute and deliver a transfer application obtains only:
| • | the right to assign the common unit to a purchaser or transferee; and |
| • | the right to transfer the right to seek admission as a substituted limited partner in our partnership for the purchased common units. |
Thus, a purchaser of common units who does not execute and deliver a transfer application:
| • | will not receive cash distributions or U.S. federal income tax allocations, unless the common units are held in a nominee or “street name” account and the nominee or broker has executed and delivered a transfer application; and |
| • | may not receive some U.S. federal income tax information or reports furnished to record holders of common units. |
Until a common unit has been transferred on our books, we and the transfer agent, notwithstanding any notice to the contrary, may treat the record holder of the unit as the absolute owner for all purposes, except as otherwise required by law or stock exchange regulations.
Limited Liability. Assuming that a limited partner does not participate in the control of our business within the meaning of the Delaware Revised Uniform Limited Partnership Act, or the Delaware Act, and that he otherwise acts in conformity with the provisions of our partnership agreement, his liability under the Delaware Act will be limited, subject to possible exceptions, to the amount of capital he is obligated to contribute to us for his common units plus his share of any undistributed profits and assets. If it were determined, however, that the right or exercise of the right by the limited partners as a group:
| • | to remove or replace our general partner; |
| • | to approve some amendments to our partnership agreement; or |
| • | to take other action under our partnership agreement |
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constituted “participation in the control” of our business for the purposes of the Delaware Act, then the limited partners could be held personally liable for our obligations under Delaware law, to the same extent as our general partner. This liability would extend to persons who transact business with us and who reasonably believe that the limited partner is a general partner. Neither our partnership agreement nor the Delaware Act specifically provides for legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our general partner. While this does not mean that a limited partner could not seek legal recourse, we have found no precedent for this type of a claim in Delaware case law.
Under the Delaware Act, a limited partnership may not make a distribution to a partner if, after the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specific property of our partnership, exceed the fair value of the assets of the limited partnership. For the purpose of determining the fair value of the assets of a limited partnership, the Delaware Act provides that the fair value of property subject to liability for which recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds the nonrecourse liability. The Delaware Act provides that a limited partner who receives a distribution and knew at the time of the distribution that the distribution was in violation of the Delaware Act shall be liable to the limited partnership for the amount of the distribution for three years. Under the Delaware Act, an assignee who becomes a substituted limited partner of a limited partnership is liable for the obligations of his assignor to make contributions to our partnership, except the assignee is not obligated for liabilities unknown to him at the time he became a limited partner and which could not be ascertained from our partnership agreement.
Meetings; Voting. Except as described below regarding a person or group owning 20% or more of any class of units then outstanding, unitholders or assignees who are record holders of units on the record date will be entitled to notice of, and to vote at, meetings of our limited partners and to act upon matters for which approvals may be solicited. Common units that are owned by an assignee who is a record holder, but who has not yet been admitted as a limited partner, will be voted by our general partner at the written direction of the record holder. Absent direction of this kind, the common units will not be voted, except that, in the case of common units held by our general partner on behalf of non-citizen assignees, our general partner will distribute the votes on those common units in the same ratios as the votes of limited partners on other units are cast.
Our general partner does not anticipate that any meeting of unitholders will be called in the foreseeable future. Any action that is required or permitted to be taken by the unitholders may be taken either at a meeting of the unitholders or without a meeting if consents in writing describing the action so taken are signed by holders of the number of units as would be necessary to authorize or take that action at a meeting. Meetings of the unitholders may be called by our general partner or by unitholders owning at least 20% of the outstanding units of the class for which a meeting is proposed and which are entitled to vote thereat. Unitholders may vote either in person or by proxy at meetings. The holders of a majority of the outstanding units of the class or classes for which a meeting has been called represented in person or by proxy shall constitute a quorum unless any action by the unitholders requires approval by holders of a greater percentage of the units, in which case the quorum shall be the greater percentage.
Each record holder of a unit has a vote according to his percentage interest in our partnership, although additional limited partner interests having special voting rights could be issued. However, if at any time any person or group, other than our general partner and its affiliates (or, in the case of the Convertible preferred units or common units received upon conversion thereof, the initial purchasers thereof and certain permitted transferees), acquires, in the aggregate, beneficial ownership of 20% or more of any class of units then outstanding, the person or group will lose voting rights on any matter relating to the succession, election, removal, withdrawal, replacement or substitution of our general partner and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating required votes, determining the presence of a quorum or for other similar purposes if the matter to be voted on relates to the succession, election, removal, withdrawal, replacement or substitution of our general partner. Common units held in nominee or street
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name account will be voted by the broker or other nominee in accordance with the instruction of the beneficial owner unless the arrangement between the beneficial owner and his nominee provides otherwise.
Any notice, demand, request, report or proxy material required or permitted to be given or made to record holders of common units under our partnership agreement will be delivered to the record holder by us or by the transfer agent.
Books and Reports. Our general partner is required to keep appropriate books of our business at our principal office. The books will be maintained for both tax and financial reporting purposes on an accrual basis. For tax and fiscal reporting purposes, our fiscal year is the calendar year.
We will furnish or make available to record holders of common units, within 75 days after the close of each fiscal year (or such shorter period as the Commission may prescribe), an annual report containing audited financial statements and a report on those financial statements by our registered independent public accountants. Except for our fourth quarter, we will also furnish or make available unaudited financial information within 40 days after the close of each quarter (or such shorter period as the Commission may prescribe).
We will furnish each record holder of a unit with information reasonably required for tax reporting purposes within 90 days after the close of each calendar year. This information is expected to be furnished in summary form so that some complex calculations normally required of partners can be avoided. Our ability to furnish this summary information to unitholders will depend on the cooperation of unitholders in supplying us with specific information. Every unitholder will receive information to assist such unitholder in determining such unitholder’s federal and state tax liability and filing such unitholder’s federal and state income tax returns, regardless of whether such unitholder supplies us with information.
Our partnership agreement provides that a limited partner can, for a purpose reasonably related to his interest as a limited partner, upon reasonable demand and at his own expense, have furnished to him:
| • | a current list of the name and last known address of each partner; |
| • | a copy of our tax returns; |
| • | information as to the amount of cash, and a description and statement of the agreed value of any other property or services, contributed or to be contributed by each partner and the date on which each became a partner; |
| • | copies of our partnership agreement, the certificate of limited partnership of the partnership, related amendments and powers of attorney under which they have been executed; |
| • | information regarding the status of our business and financial condition; and |
| • | any other information regarding our affairs as is just and reasonable. |
Our general partner may, and intends to, keep confidential from the limited partners trade secrets or other information the disclosure of which our general partner believes in good faith is not in our best interests or which we are required by law or by agreements with third parties to keep confidential.
Class B Units. Unless the context otherwise requires, references to common units in this prospectus refer to “Common Units – Class A” under our partnership agreement, which are traditional common units. Our partnership agreement also provides for common units designated “Common Units – Class B,” or Class B Units. The Class B Units are identical to the Class A Units and, accordingly, have voting and distribution rights equivalent to those of the Class A Units, except, in addition, Class B Units have the right to elect all of our board of directors (subject to the right of members of the Davison family, including James E. Davison, James E. Davison, Jr., Steven K. Davison and Todd A. Davison, and their affiliates to elect up to three directors under certain terms pursuant to a unitholders rights agreement). If members of the Davison family and their affiliates
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own (i) 15% or more of our common units, they have the right to appoint three directors, (ii) less than 15% but more than 10%, they have the right to appoint two directors, and (iii) less than 10%, they have the right to appoint one director. The Class B Units are convertible into Class A Units at the option of the holders or in the event that the holders of at least a majority of the common units (excluding such units held by affiliates of our general partner) replace the existing general partner with a successor general partner or otherwise remove the Class B Units’ right to elect our board of directors. The transfer agent for the Class B Units is our general partner.
As of the date of this prospectus, we have 25,336,778 Convertible preferred units outstanding and no other preferred units outstanding. Should we offer additional preferred securities under this prospectus, a prospectus supplement relating to the particular class of preferred securities offered will include the specific terms of those preferred securities, including, among other things, the following:
| • | the designation, stated value, and liquidation preference of the preferred securities and the number of preferred securities offered; |
| • | the initial public offering price at which the preferred securities will be issued; |
| • | the conversion or exchange provisions of the preferred securities; |
| • | any redemption or sinking fund provisions of the preferred securities; |
| • | the distribution rights of the preferred securities, if any; |
| • | a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the preferred securities; and |
| • | any additional rights, preferences, privileges, limitations, and restrictions of the preferred securities. |
The transfer agent, registrar, and distributions disbursement agent for the preferred securities will be designated in the applicable prospectus supplement.
Our Convertible preferred units rank senior to all of our classes or series of limited partner interests with respect to distribution and/or liquidation rights. The Convertible preferred units vote on an as-converted basis with our common units and have certain other class voting rights, including with respect to (i) any amendment to our partnership agreement that would be adverse to any of the rights, preferences or privileges, or otherwise modifies the terms, of the Convertible preferred units; (ii) making an election to be treated as a corporation for U.S. federal tax law purposes; (iii) entering into any agreement that restricts our ability to pay distributions on the Convertible preferred units, subject to certain exceptions; (iv) paying aggregate distributions in excess of $20 million on any of our limited partner interests that rank junior to the Convertible preferred units with respect to rights upon distribution and/or liquidation (including the common units) to the extent funded with proceeds of indebtedness, sales of partnership securities or asset sales, subject to certain exceptions; (v) incurring any indebtedness for borrowed money to the extent such incurrence would result in our consolidated indebtedness exceeding 7.0x our trailing four-quarters Adjusted Consolidated EBITDA (as defined in our credit agreement in effect at the time the Convertible preferred units were initially issued), unless less than $200 million of the Convertible preferred units are then outstanding; (vi) issuing any additional Convertible preferred units or any other limited partner interests that rank pari passu to the Convertible preferred units with respect to rights upon distribution and/or liquidation, subject to certain exceptions; or (vii) issuing any limited partner interests that rank senior to the Convertible preferred units with respect to rights upon distribution and/or liquidation.
Each holder of the Convertible preferred units may elect to convert all or any portion of its Convertible preferred units into common units initially on a one-for-one basis, subject to customary adjustments and an adjustment for any distributions on such Convertible preferred units that have accrued and accumulated but are
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unpaid (which is referred to herein as the “conversion rate”), at any time (but not more often than once per quarter), provided that any conversion is for at least $50 million or such lesser amount if such conversion relates to all of a holder’s remaining Convertible preferred units or has otherwise been approved by us. If at any time certain creditors or counterparties of the initial investors exercise certain rights or remedies in respect of any pledged Convertible preferred units, then such pledged Convertible preferred units may be immediately converted into common units by such creditors or counterparties at the conversion rate.
We have the right to cause the conversion of all or a portion of outstanding Convertible preferred units (such conversion, a “Forced Conversion”) into our common units from time to time after September 1, 2020, subject to certain conditions, including with respect to the closing price and average daily trading volume of the common units during the period preceding notice of any such Forced Conversion; provided, however, that we will not be permitted to convert a number of Convertible preferred units representing in the aggregate more than one-third of the originally issued Convertible preferred units in any consecutive twelve-month period and each such conversion must be for an aggregate amount of Convertible preferred units convertible into common units with a value of at least $100 million. In addition, if there are fewer than $20 million of Convertible preferred units outstanding, we will have the right, at any time after September 1, 2020, at our option, to cause each outstanding Convertible preferred unit to be converted into our common units at a conversion rate equal to the greater of (i) the then-applicable conversion rate and (ii) the quotient of (a) $33.71 (the “Issue Price”), divided by (b) 95% of the volume-weighted average price of our common units for the 30-trading day period ending prior to the date that we notify the holders of outstanding Convertible preferred units of such conversion.
Immediately prior to the consummation of a change of control event in which more than 90% of the consideration payable to the holders of our common units is payable in cash, the Convertible preferred units will automatically convert into common units at a conversion ratio equal to the greater of (a) the then applicable conversion rate and (b) the quotient of (i) the sum of (x) the product of (A) the sum of (1) the Issue Price and (2) any accrued and accumulated but unpaid distributions on the Convertible preferred units, and (B) a premium factor (ranging from 115% to 101% depending on when such transaction occurs) and (y) any unpaid partial period distributions (as defined below) and (ii) the volume weighted average price of the common units for the 30-trading days prior to the execution of definitive documentation relating to such change of control.
In connection with all other change of control events, each holder of the Convertible preferred units may elect to (a) convert all of its Convertible preferred units to our common units at the then applicable conversion rate, (b) if we are not the surviving entity (or if we are the surviving entity, but our common units will cease to be listed), require us to use commercially reasonable efforts to cause the surviving entity in any such transaction to issue a substantially equivalent security (or if we are unable to cause such substantially equivalent securities to be issued, to convert its Convertible preferred units into common units in accordance with clause (a) above or exchanged in accordance with clause (d) below or convert at a specified conversion rate), (c) if we are the surviving entity, continue to hold the Convertible preferred units or (d) require us to exchange the Convertible preferred units for cash or, if we so elect, common units valued at 95% of the volume-weighted average price of the common units for the 30 consecutive trading days ending on the fifth trading day immediately preceding the closing date of such change of control, at a price per unit equal to the sum of (i) the product of (x) 101% and (y) the Issue Price plus (ii) accrued and accumulated but unpaid distributions plus (iii) any unpaid partial period distributions.
Upon the occurrence of a Rate Reset Election (as defined under “Cash Distribution Policy—Class A Convertible Preferred Unit Distributions” below), we may redeem the Convertible preferred units for cash, in whole or in part (but not less than an aggregate of $200 million Convertible preferred units (or such lesser amount, if for all outstanding Convertible preferred units) and allocated on a pro rata basis (unless agreed otherwise by the holders thereof)), for an amount per Convertible preferred unit equal to such Convertible preferred unit’s liquidation value (as defined below) multiplied by (a) 110%, prior to September 1, 2024, and (b) 105% thereafter. The liquidation value of a Convertible preferred unit is an amount equal to the sum of (i) the Issue Price, (ii) any accrued and accumulated but unpaid distributions on such preferred unit, (iii) a prorated
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Preferred Distribution (as defined under “Cash Distribution Policy—Class A Convertible Preferred Unit Distributions” below) in respect of the current quarter, and (iv) if the payment date for the Preferred Distribution payable with respect of the immediately preceding quarter has not yet occurred, then the unpaid Preferred Distribution with respect to the immediately preceding quarter (clauses (iii) and (iv), together, the “unpaid partial period distributions”).
For a summary of the important provisions of our partnership agreement, many of which apply to holders of our Convertible preferred units, see “Description of Our Partnership Agreement” in this prospectus.
Our partnership agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities for the consideration and with the designations, rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. In accordance with Delaware law and the provisions of our partnership agreement, we may issue additional partnership interests that have certain rights, including, without limitation, rights regarding voting and distributions, subordinate to the rights of our common units or preferred securities. As of the date of this prospectus, we have no subordinated securities outstanding.
Should we offer subordinated securities under this prospectus, a prospectus supplement relating to the particular series of subordinated securities offered will include the specific terms of those subordinated securities, including, among other things, the following:
| • | the designation, stated value, and liquidation rights of the subordinated securities and the number of subordinated securities offered; |
| • | the initial public offering price at which the subordinated securities will be issued; |
| • | the conversion or exchange provisions of the subordinated securities; |
| • | any redemption or sinking fund provisions of the subordinated securities; |
| • | the distribution rights of the subordinated securities, if any; |
| • | a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the subordinated securities; and |
| • | any additional rights, limitations, and restrictions of the subordinated securities. |
The transfer agent, registrar and distributions disbursement agent for the subordinated securities will be designated in the applicable prospectus supplement.
We may issue options for the purchase of common units, preferred securities, subordinated securities or any combination of the foregoing. Our partnership agreement authorizes us to issue an unlimited number of options to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences and privileges established by our general partner without the approval of any of our limited partners. Options may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of options will be issued under a separate option agreement to be entered into between us and a bank or trust company, as option agent. The option agent will act solely as our agent in connection with the options and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of options. A copy of the option agreement will be filed with the Commission in connection with the offering of options.
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The prospectus supplement relating to a particular issue of options to purchase common units, preferred securities, subordinated securities or any combination of the foregoing will describe the terms of such options, including, among other things, the following:
| • | the title of the options; |
| • | the offering price for the options, if any; |
| • | the aggregate number of the options; |
| • | the designation and terms of the common units, preferred securities, or subordinated securities that may be purchased upon exercise of the options; |
| • | if applicable, the designation and terms of the securities that the options are issued with and the number of options issued with each security; |
| • | if applicable, the date from and after which the options and any securities issued with the options will be separately transferable; |
| • | the number of common units, preferred securities, or subordinated securities that may be purchased upon exercise of the options and the price at which such securities may be purchased upon exercise; |
| • | the dates on which the right to exercise the options commence and expire; |
| • | if applicable, the minimum or maximum amount of the options that may be exercised at any one time; |
| • | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| • | if applicable, a discussion of material federal income tax considerations; |
| • | anti-dilution provisions of the options, if any; |
| • | redemption or call provisions, if any, applicable to the options; |
| • | any additional terms of the options, including terms, procedures, and limitations relating to the exchange and exercise of the options; and |
| • | any other information we think is important about the options. |
Each option will entitle the holder of the option to purchase at the exercise price set forth in the applicable prospectus supplement the number of common units, preferred securities, or subordinated securities being offered. Holders may exercise options at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised options are void. Holders may exercise options as set forth in the prospectus supplement relating to the options being offered.
Until you exercise your options to purchase our common units, preferred securities or subordinated securities, you will not have any rights as a holder of common units, preferred securities or subordinated securities, as the case may be, by virtue of your ownership of options.
We may issue warrants for the purchase of common units, preferred securities, subordinated securities or any combination of the foregoing. Our partnership agreement authorizes us to issue an unlimited number of warrants to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. Warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. A copy of the warrant agreement will be filed with the Commission in connection with the offering of warrants.
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The prospectus supplement relating to a particular issue of warrants to purchase common units, preferred securities, subordinated securities or any combination of the foregoing will describe the terms of such warrants, including, among other things, the following:
| • | the title of the warrants; |
| • | the offering price for the warrants, if any; |
| • | the aggregate number of the warrants; |
| • | the designation and terms of the common units, preferred securities or subordinated securities that may be purchased upon exercise of the warrants; |
| • | if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each security; |
| • | if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable; |
| • | the number of common units, preferred securities or subordinated securities that may be purchased upon exercise of a warrant and the price at which such securities may be purchased upon exercise; |
| • | the dates on which the right to exercise the warrants commence and expire; |
| • | if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time; |
| • | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| • | if applicable, a discussion of material federal income tax considerations; |
| • | anti-dilution provisions of the warrants, if any; |
| • | redemption or call provisions, if any, applicable to the warrants; |
| • | any additional terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants; and |
| • | any other information we think is important about the warrants. |
Each warrant will entitle the holder of the warrant to purchase the number of common units, preferred securities or subordinated securities being offered at the exercise price set forth in the applicable prospectus supplement. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants are void. Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered.
Until you exercise your warrants to purchase our common units, preferred securities or subordinated securities, you will not have any rights as a holder of common units, preferred securities or subordinated securities, as the case may be, by virtue of your ownership of warrants.
We may issue rights to purchase common units, preferred securities, subordinated securities or any combination of the foregoing. Our partnership agreement authorizes us to issue an unlimited number of rights to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. These rights may be issued independently or together with any other security offered hereby and may or may not be transferable by the holder receiving the rights in such offering. In connection with any offering of such rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
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Each series of rights will be issued under a separate rights agreement, which we will enter into with a bank or trust company, as rights agent, all as set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights and will not assume any obligation or relationship of agency or trust with any holders of rights certificates or beneficial owners of rights. We will file the rights agreement and the rights certificates relating to each series of rights with the Commission, and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of rights.
The applicable prospectus supplement will describe the specific terms of any offering of rights for which this prospectus is being delivered, including, among other things, the following:
| • | the date of determining the unitholders entitled to the rights distribution; |
| • | the number of rights issued or to be issued to each unitholder; |
| • | the exercise price payable for each common unit, preferred security or subordinated security upon the exercise of the rights; |
| • | the number and terms of the common units, preferred securities or subordinated securities, which may be purchased per each right; |
| • | the extent to which the rights are transferable; |
| • | the date on which the holder’s ability to exercise the rights shall commence, and the date on which the rights shall expire; |
| • | the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities; |
| • | if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of such rights; |
| • | any other terms of the rights, including the terms, procedures, conditions, and limitations relating to the exchange and exercise of the rights; and |
| • | any other information we think is important about the rights. |
The description in the applicable prospectus supplement of any rights that we may offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable rights agreement and rights certificate, which will be filed with the Commission.
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Distribution of Available Cash
General. Within approximately 45 days after the end of each quarter, Genesis Energy, L.P. will distribute all available cash to unitholders of record on the applicable record date. However, there is no guarantee that we will pay a distribution on our units in any quarter, and we will be prohibited from making any distributions to unitholders if it would cause an event of default, or if an event of default then exists, under our credit agreement.
Definition of Available Cash. Available cash generally means, for each fiscal quarter, all cash of Genesis Energy, L.P. on hand at the end of the quarter:
| • | less the amount of cash reserves that our general partner determines in its reasonable discretion is necessary or appropriate to: |
| • | provide for the proper conduct of our business; |
| • | comply with applicable law, any of our debt instruments, or other agreements; or |
| • | provide funds for distributions to our unitholders for any one or more of the next four quarters; |
| • | plus all cash of Genesis Energy, L.P. on hand on the date of determination of available cash for the quarter resulting from working capital borrowings. Working capital borrowings are generally borrowings that are made under our credit agreement and in all cases are used solely for working capital purposes or to pay distributions to partners. |
Class A Convertible Preferred Unit Distributions
With respect to each quarter ending on or prior to March 1, 2019 (the “PIK Period”), we paid to holders of Convertible preferred units a cumulative, quarterly distribution (a “Preferred Distribution”) in arrears at an annual rate of 8.75% ($0.7374 per Convertible preferred unit per quarter) (the “Distribution Amount”) on all Convertible preferred units then outstanding, in the form of additional Convertible preferred units (“PIK Units”) or in a combination of PIK Units and cash. The number of PIK Units paid in respect of each such Preferred Distribution equaled the quotient of (i) the Distribution Amount and (ii) the Issue Price. After the PIK Period, we began paying holders of Convertible preferred units cash distributions and we are currently required to pay to the holders of Convertible preferred units in cash a cumulative, quarterly distribution equal to the Distribution Amount.
If we fail to pay in full in cash a Preferred Distribution (a “Distribution Default”) in respect of any quarter, then until such Distribution Default is cured we will not be permitted to (a) declare or make any distributions (subject to a limited exceptions for pro rata distributions on the Convertible preferred units and parity securities), redemptions or repurchases of any of our limited partner interests that rank junior to or pari passu with the Convertible preferred units with respect to rights upon distribution and/or liquidation (including our common units), or (b) issue any such parity securities. If there is a Distribution Default in respect of any two quarters, whether or not consecutive, then the Distribution Amount will be reset to a cash amount per Convertible preferred unit equal to the amount that would be payable per quarter if a Convertible preferred unit accrued interest on the Issue Price at an annualized rate equal to the then-current annualized distribution rate plus 200 basis points until such default is cured. In addition, if there is a Distribution Default in respect of any three quarters, whether or not consecutive, then until the default is cured the initial investors will each have the right to appoint a director to our general partner’s board of directors.
For a period of 30 days following (i) September 1, 2022 and (ii) each subsequent anniversary thereafter, the holders of a majority of the outstanding Convertible preferred units (together with each initial purchaser so long as such initial purchaser owns at least 25% of the outstanding Convertible preferred units) may make a one-time election to reset the Distribution Amount (a “Rate Reset Election”) to a cash amount per Convertible preferred unit equal to the amount that would be payable per quarter if a Convertible preferred unit accrued interest on the Issue Price at an annualized rate equal to the greater of (a) 10.75%, if our common units are trading at a price that is less than 110% of the Issue Price, or (b) three-month LIBOR plus 750 basis points.
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Adjustment of Quarterly Distribution Amounts
If we combine our units into fewer units or subdivide our units into a greater number of units, we will proportionately adjust the amount of our quarterly distribution.
For example, if a two-for-one split of the common units should occur, the quarterly distribution and the unrecovered initial unit price would each be reduced to 50% of its initial level. We will not make any adjustment by reason of the issuance of additional units for cash or property.
Distributions of Cash Upon Liquidation
If we dissolve in accordance with our partnership agreement, we will sell or otherwise dispose of our assets in a process called a liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will distribute any remaining proceeds to the unitholders, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation; provided, that any cash or cash equivalents for distributions shall be distributed with respect to the Convertible preferred units (up to the positive balance in the associated capital accounts), prior to any distribution of cash or cash equivalents with respect to our common units or other junior securities.
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DESCRIPTION OF OUR PARTNERSHIP AGREEMENT
The following is a summary of the material provisions of our partnership agreement. Our partnership agreement has been filed with the Commission, and is incorporated by reference in this prospectus. The following provisions of our partnership agreement are summarized elsewhere in this prospectus:
| • | allocations of taxable income and other tax matters are described under “Material Income Tax Consequences”; |
| • | rights of holders of our common units and preferred units are described under “Description of Our Equity Securities—Our Common Units” and “Description of Our Equity Securities—Our Preferred Securities”; and |
| • | rights of holders of our common units and Convertible preferred units with respect to distributions as described under “Cash Distribution Policy.” |
Our purpose under our partnership agreement is to engage directly or indirectly in any business activity that is approved by our general partner and that may be lawfully conducted by a limited partnership under the Delaware Act. All of our operations are conducted through our subsidiaries and joint ventures.
Each limited partner, and each person who acquires a unit from a unitholder and executes and delivers a transfer application, grants to our general partner and, if appointed, a liquidator, a power of attorney to, among other things, execute and file documents required for our qualification, continuance or dissolution. The power of attorney also grants our general partner the authority to amend, and to make consents and waivers under, our partnership agreement.
Reimbursements of Our General Partner
Our general partner does not receive any compensation for its services as our general partner. It is, however, entitled to be reimbursed for all of its costs incurred in managing and operating our business. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us in any reasonable manner determined by our general partner in its sole discretion.
Issuance of Additional Securities; Preemptive Rights
Our partnership agreement authorizes us to issue an unlimited number of additional partner securities and rights to buy partnership securities that are senior to, equal in rank with or junior to our common units on terms and conditions established by our general partner in its sole discretion without the approval of our common unitholders; certain issuances require approval of Convertible preferred unitholders holding not less than 75% of the Convertible preferred units. Our partnership agreement restricts our ability to issue any partnership interest senior to or, subject to certain exceptions, on parity with our Convertible preferred units with respect to distributions and/or liquidation without the affirmative vote of the unitholders holding not less than 75% of the Convertible preferred units.
As long as the initial purchasers of the Convertible preferred units and their affiliates collectively own 50% or more of the total number of Convertible preferred units originally issued, if we propose to issue, offer or sell any parity securities, then we are required to first offer the initial purchasers the opportunity to purchase up to 50% of such parity securities on substantially the same terms as will be offered to the other purchasers thereof.
It is possible that we will fund acquisitions through the issuance of additional common units or other equity securities. Holders of any additional common units we issue will be entitled to share equally with the then-
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existing holders of common units in our distributions of available cash. In addition, the issuance of additional equity securities may dilute the value of the interests of the then-existing holders of common units in our net assets.
In accordance with Delaware law and the provisions of our partnership agreement, we may also issue additional equity securities that, in the sole discretion of our general partner, may have special voting rights to which common units are not entitled.
Amendments to Our Partnership Agreement
Amendments to our partnership agreement may be proposed only by or with the consent of our general partner. Any amendment that materially and adversely affects the rights or preferences of any type or class of limited partner interests in relation to other types or classes of limited partner interests or our general partner interest will require the approval of at least a majority of the type or class of limited partner interests or general partner interests so affected; certain amendments that adversely affect the Convertible preferred unitholders require approval of the Convertible preferred unitholders holding not less than 75% of the Convertible preferred units.
However, in some circumstances, more particularly described in our partnership agreement, our general partner may make amendments to our partnership agreement without the approval of our limited partners or assignees.
Withdrawal or Removal of Our General Partner
Our general partner may withdraw as general partner without first obtaining approval of any unitholder by giving 90 days’ written notice, and that withdrawal will not constitute a violation of our partnership agreement.
Upon the voluntary withdrawal of our general partner, the holders of a majority of our outstanding common units may elect a successor to the withdrawing general partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability and tax matters cannot be obtained, we will be dissolved, wound up and liquidated, unless within 180 days after that withdrawal, the holders of a majority of our outstanding common units agree in writing to continue our business and to appoint a successor general partner.
Our general partner may be removed with or without cause. “Cause” means that a court of competent jurisdiction has entered a final, non-appealable judgment finding our general partner liable for actual fraud, gross negligence or willful or wanton misconduct in its capacity as our general partner. If cause exists, our general partner may not be removed unless that removal is approved by the vote of the holders of not less than two-thirds of our outstanding units, including common units (and Convertible preferred units on an as-converted basis with holders of our common units) and units held by our general partner and its affiliates. The removal of our general partner for cause is also subject to the approval of a successor general partner by a vote of the holders of not less than two-thirds of our outstanding units, including common units (and Convertible preferred units on an as-converted basis with holders of our common units) and units held by our general partner and its affiliates. If no cause exists, our general partner may not be removed unless that removal is approved by the vote of the holders of not less than a majority of our outstanding units, including common units (and Convertible preferred units on an as-converted basis with holders of our common units) but excluding units held by our general partner and its affiliates. Any removal of our general partner by the unitholders without cause is also subject to the approval of a successor general partner by the vote of the holders of a majority of our outstanding common units (and Convertible preferred units on an as-converted basis with holders of our common units) and the receipt of an opinion of counsel regarding limited liability and tax matters. Additionally, upon removal of our general partner without cause, our general partner will have the option to convert its interest in us (other than its common units) into common units or to require our replacement general partner to purchase such interest for cash at its then fair market value.
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While our partnership agreement limits the ability of our general partner to withdraw, it allows our general partner interest to be transferred to an affiliate or to a third party in conjunction with a merger or sale of all or substantially all of the assets of our general partner. In addition, our partnership agreement does not prohibit the sale, in whole or in part, of the ownership of our general partner. Our general partner may also transfer, in whole or in part, the common units and any other partnership securities it owns.
Liquidation and Distribution of Proceeds
Upon our dissolution, unless we are reconstituted and continued as a new limited partnership, the person authorized to wind up our affairs (the liquidator) will, acting with all the powers of our general partner that the liquidator deems necessary or desirable in its judgment, liquidate our assets. The proceeds of the liquidation will be applied as follows:
| • | first, towards the payment of all of our creditors; and |
| • | then, to our unitholders in accordance with the positive balance in their respective capital accounts; provided, that any cash or cash equivalents for distributions shall be distributed with respect to the Convertible preferred units (up to the positive balance in the associated capital accounts), prior to any distribution of cash or cash equivalents with respect to our common units or other junior securities. |
The liquidator may defer liquidation of our assets for a reasonable period or distribute assets to our partners in kind if it determines that a sale would be impractical or would cause undue loss to our partners.
Change of Management Provisions
Our partnership agreement contains the following specific provisions that are intended to discourage a person or group from attempting to remove our general partner or otherwise change management:
| • | any units held by any person or group, other than our general partner and its affiliates (or, in the case of the Convertible preferred units or common units received upon conversion thereof, the initial purchasers thereof and certain permitted transferees), that owns, in the aggregate, beneficial ownership of 20% or more of any class of units then outstanding, cannot be voted on any matters pertaining to the succession, election, removal, withdrawal, replacement or substitution of our general partner; and |
| • | the partnership agreement contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management. |
If at any time our general partner, Genesis and their respective subsidiaries own more than 80% of the issued and outstanding limited partner interests of any class (other than the Convertible preferred units), our general partner will have the right to acquire all, but not less than all, of the outstanding limited partner interests of that class that are held by persons other than our general partner, Genesis and their respective subsidiaries. The record date for determining ownership of the limited partner interests would be selected by our general partner on at least ten but not more than 60 days’ notice. The purchase price in the event of a purchase under these provisions would be the greater of (1) the current market price (as defined in our partnership agreement) of the limited partner interests of the class as of the date three days prior to the date that notice is mailed to the limited partners as provided in the partnership agreement and (2) the highest cash price paid by our general partner, Genesis or any of their respective subsidiaries for any partnership securities of the class purchased within the 90 days preceding the date our general partner first mails notice of its election to purchase those partnership securities.
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Under our partnership agreement, in most circumstances, we will indemnify persons who are or were our general partner, or its members or other affiliates and their officers and directors to the fullest extent permitted by law, from and against all losses, claims or damages any of them may suffer because they are or were our general partner, officer or director, as long as the person seeking indemnity acted in good faith and in a manner believed to be in or not opposed to our best interest. Any indemnification under these provisions will only be out of our assets. Our general partner and its affiliates shall not be personally liable for, or have any obligation to contribute or loan funds or assets to us to enable us to effectuate any indemnification. We are authorized to purchase insurance against liabilities asserted against and expenses incurred by persons for our activities, regardless of whether we would have the power to indemnify the person against liabilities under our partnership agreement. In addition, we typically enter into indemnification agreements with each director of our general partner covering any costs, claims or expenses such director incurs in connection with serving in her/his capacity as a director or any other capacity at the request of our general partner or us.
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DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
Genesis Energy, L.P. may issue debt securities in one or more series, as to any of which Genesis Energy Finance Corporation (“Finance Corp.”) may be a co-issuer on one or more series of such debt securities. Finance Corp. was incorporated under the laws of the State of Delaware in November 2006, is wholly owned by Genesis Energy, L.P., and has no material assets or any liabilities other than as a co-issuer of debt securities. When used in this section, references to “we,” “us” and “our” refer to Genesis Energy, L.P. and, if Finance Corp. is co-issuer as to any series of debt securities, Genesis Energy Finance Corporation.
We may issue senior or subordinated debt securities. Neither the senior debt securities nor the subordinated debt securities will be secured by any of our property or assets. Thus, by owning a debt security, you are one of our unsecured creditors.
The senior debt securities will constitute part of our senior debt, will be issued under our senior debt indenture described below and will rank equally with all of our other unsecured and unsubordinated debt.
The subordinated debt securities will constitute part of our subordinated debt, will be issued under our subordinated debt indenture described below and will be subordinate in right of payment to all of our “senior debt,” as defined in the indenture with respect to subordinated debt securities. The prospectus supplement for any series of subordinated debt securities or the information incorporated in this prospectus by reference will indicate the approximate amount of senior debt outstanding as of the end of our most recent fiscal quarter. Neither indenture limits our ability to incur additional senior debt or other indebtedness.
When we refer to “debt securities” in this prospectus, we mean both the senior debt securities and the subordinated debt securities.
The debt securities may have the benefit of guarantees (each, a “guarantee”) by one or more existing or future subsidiaries of Genesis Energy, L.P. (each, a “guarantor”) specified in the prospectus supplement for that series. If a guarantor issues guarantees, the guarantees will be the unsecured and, if guaranteeing senior debt securities, unsubordinated or, if guaranteeing subordinated debt securities, subordinated obligations of the respective guarantors. Unless otherwise expressly stated or the context otherwise requires, as used in this section, the term “guaranteed debt securities” means debt securities that, as described in the prospectus supplement relating thereto, are guaranteed by one or more guarantors pursuant to the applicable indenture.
The debt indentures and their associated documents, including your debt security, contain the full legal text of the matters described in this section and your prospectus supplement. We have filed the senior debt indenture dated May 21, 2015 between us and Regions Bank (as successor to U.S. Bank National Association), as trustee, as amended or supplemented from time to time, and form of subordinated debt indenture with the Commission as exhibits to our registration statement, of which this prospectus is a part. See “Where You Can Find More Information” below for information on how to obtain copies of them.
This section and your prospectus supplement summarize material terms of the indentures and your debt security. They do not, however, describe every aspect of the indentures and your debt security. For example, in this section and your prospectus supplement, we use terms that have been given special meaning in the indentures, but we describe the meaning for only the more important of those terms. Your prospectus supplement will have a more detailed description of the specific terms of your debt security and any applicable guarantees.
The senior debt securities and subordinated debt securities are each governed by a document each called an indenture. Each indenture is a contract between us and the trustee. The indentures are substantially identical, except for certain provisions including those relating to subordination, which are included only in the indenture related to subordinated debt securities.
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The trustee under each indenture has two main roles:
| • | First, the trustee can enforce your rights against us if we default. There are some limitations on the extent to which the trustee acts on your behalf, which we describe later under “— Default, Remedies and Waiver of Default.” |
| • | Second, the trustee performs administrative duties for us, such as sending you interest payments and notices. |
When we refer to the indenture or the trustee with respect to any debt securities, we mean the indenture under which those debt securities are issued and the trustee under that indenture.
We may issue as many distinct debt securities or series of debt securities under either indenture as we wish. This section summarizes terms of the securities that apply generally to all debt securities and series of debt securities. The provisions of each indenture allow us not only to issue debt securities with terms different from those of debt securities previously issued under that indenture, but also to “reopen” a previously issued series of debt securities and issue additional debt securities of that series. We will describe most of the financial and other specific terms of your series, whether it be a series of the senior debt securities or subordinated debt securities, in the prospectus supplement for that series. Those terms may vary from the terms described herein.
As you read this section, please remember that the specific terms of your debt security as described in your prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in this section. If there are any differences between your prospectus supplement and this prospectus, your prospectus supplement will control. Thus, the statements we make in this section may not apply to your debt security.
When we refer to “debt securities” or a “series of debt securities,” we mean, respectively, debt securities or a series of debt securities issued under the applicable indenture. When we refer to your prospectus supplement, we mean the prospectus supplement describing the specific terms of the debt security you purchase. The terms used in your prospectus supplement will have the meanings described in this prospectus, unless otherwise specified.
Neither indenture limits the aggregate amount of debt securities that we may issue or the number of series or the aggregate amount of any particular series. We may issue debt securities and other securities at any time without your consent and without notifying you.
The indentures and the debt securities do not limit our ability to incur other indebtedness or to issue other securities. Also, unless otherwise specified below or in your prospectus supplement, we are not subject to financial or similar restrictions by the terms of the debt securities.
Principal Amount, Stated Maturity and Maturity
Unless otherwise stated, the principal amount of a debt security means the principal amount payable at its stated maturity, unless that amount is not determinable, in which case the principal amount of a debt security is its face amount.
The term “stated maturity” with respect to any debt security means the fixed date stated in such debt security on which the principal amount of such debt security is scheduled to become due. The principal may become due sooner, by reason of redemption or acceleration after a default or otherwise in accordance with the terms of the debt security. The day on which the principal actually becomes due, whether at the stated maturity or earlier, is called the “maturity” of the principal.
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We also use the terms “stated maturity” and “maturity” to refer to the days when other payments become due. For example, we may refer to a regular interest payment date when an installment of interest is scheduled to become due as the “stated maturity” of that installment. When we refer to the “stated maturity” or the “maturity” of a debt security without specifying a particular payment, we mean the stated maturity or maturity, as the case may be, of the principal.
Specific Terms of Debt Securities
Your prospectus supplement will describe the specific terms of your debt security, which will include some or all of the following:
| • | whether Finance Corp. will be a co-issuer of your debt security; |
| • | the title of the series of your debt security and whether it is a senior debt security or a subordinated debt security; |
| • | any limit on the total principal amount of the debt securities of the same series; |
| • | the stated maturity; |
| • | the currency or currencies for principal and interest, if not United States, or U.S., dollars; |
| • | the price at which we originally issue your debt security, expressed as a percentage of the principal amount, and the original issue date; |
| • | whether your debt security is a fixed rate debt security, a floating rate debt security or an indexed debt security; |
| • | if your debt security is a fixed rate debt security, the yearly rate at which your debt security will bear interest, if any, and the interest payment dates; |
| • | if your debt security is a floating rate debt security, the interest rate basis; any applicable index currency or index maturity, spread or spread multiplier or initial base rate, maximum rate or minimum rate; the interest reset, determination, calculation and payment dates; the day count convention used to calculate interest payments for any period; the business day convention; and the calculation agent; |
| • | if your debt security is an indexed debt security, the principal amount, if any, we will pay you at maturity, interest payment dates, the amount of interest, if any, we will pay you on an interest payment date or the formula we will use to calculate these amounts, if any, and the terms on which your debt security will be exchangeable for or payable in cash, securities or other property; |
| • | if your debt security may be converted into or exercised or exchanged for common units, preferred securities or other securities of Genesis Energy, L.P. or debt or equity securities of one or more third parties, the terms on which conversion, exercise or exchange may occur, including whether conversion, exercise or exchange is mandatory, at the option of the holder or at our option, the period during which conversion, exercise or exchange may occur, the initial conversion, exercise or exchange price or rate and the circumstances or manner in which the amount of common or preferred securities or other securities issuable upon conversion, exercise or exchange may be adjusted; |
| • | if your debt security is also an original issue discount debt security, the yield to maturity; |
| • | if applicable, the circumstances under which your debt security may be redeemed at our option or repaid at the holder’s option before the stated maturity, including any redemption commencement date, repayment date(s), redemption price(s) and redemption period(s); |
| • | the authorized denominations, if other than $2,000 and integral multiples of $1,000; |
| • | the depositary for your debt security, if other than The Depository Trust Company (“DTC”), and any circumstances under which the holder may request securities in non-global form, if we choose not to issue your debt security in book-entry form only; |
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| • | if applicable, the circumstances under which we will pay additional amounts on any debt securities held by a person who is not a U.S. person for tax purposes and under which we can redeem the debt securities if we have to pay additional amounts; |
| • | whether your debt security will be guaranteed by any guarantors and, if so, the identity of the guarantors and, to the extent the terms thereof differ from those described in this prospectus, a description of the terms of the guarantees; |
| • | the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents or registrars for your debt security, as applicable; and |
| • | any other terms of your debt security and any guarantees of your debt security, which could be different from those described in this prospectus. |
The indentures and the debt securities (and any guarantees thereof) will be governed by New York law.
We will issue each debt security only in registered form, without coupons, unless we specify otherwise in the applicable prospectus supplement. In addition, we will issue each debt security in global — i.e., book-entry — form only, unless we specify otherwise in the applicable prospectus supplement. Debt securities in book-entry form will be represented by a global security registered in the name of a depositary, which will be the holder of all the debt securities represented by the global security. Those who own beneficial interests in a global debt security will do so through participants in the depositary’s securities clearance system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depositary and its participants. References to “holders” in this section mean those who own debt securities registered in their own names, on the books that we or the trustee maintain for this purpose, and not those who own beneficial interests in debt securities registered in street name or in debt securities issued in book-entry form through one or more depositaries.
Unless otherwise indicated in the prospectus supplement, the following is a summary of the depositary arrangements applicable to debt securities issued in global form and for which DTC acts as depositary.
Each global debt security will be deposited with, or on behalf of, DTC, as depositary, or its nominee, and registered in the name of a nominee of DTC. Except under the limited circumstances described below, global debt securities are not exchangeable for definitive certificated debt securities.
Ownership of beneficial interests in a global debt security is limited to institutions that have accounts with DTC or its nominee, or persons that may hold interests through those participants. In addition, ownership of beneficial interests by participants in a global debt security will be evidenced only by, and the transfer of that ownership interest will be effected only through, records maintained by DTC or its nominee for a global debt security. Ownership of beneficial interests in a global debt security by persons that hold those interests through participants will be evidenced only by, and the transfer of that ownership interest within that participant will be effected only through, records maintained by that participant. DTC has no knowledge of the actual beneficial owners of the debt securities. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the participants through which the beneficial owners entered the transaction. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities they purchase in definitive form. These laws may impair your ability to transfer beneficial interests in a global debt security.
We will make payment of principal of, and interest on, debt securities represented by a global debt security registered in the name of or held by DTC or its nominee to DTC or its nominee, as the case may be, as the
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registered owner and holder of the global debt security representing those debt securities. DTC has advised us that upon receipt of any payment of principal of, or interest on, a global debt security, DTC immediately will credit accounts of participants on its book-entry registration and transfer system with payments in amounts proportionate to their respective interests in the principal amount of that global debt security, as shown in the records of DTC. Payments by participants to owners of beneficial interests in a global debt security held through those participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the sole responsibility of those participants, subject to any statutory or regulatory requirements that may be in effect from time to time.
Neither we, any trustee nor any of our respective agents will be responsible for any aspect of the records of DTC, any nominee or any participant relating to, or payments made on account of, beneficial interests in a permanent global debt security or for maintaining, supervising or reviewing any of the records of DTC, any nominee or any participant relating to such beneficial interests.
A global debt security is exchangeable for definitive debt securities registered in the name of, and a transfer of a global debt security may be registered to, any person other than DTC or its nominee, only if:
| • | DTC notifies us that it is unwilling or unable to continue as depositary for that global security or has ceased to be a registered clearing agency and we do not appoint another institution to act as depositary within 90 days; or |
| • | we notify the trustee that we wish to terminate that global security. |
Any global debt security that is exchangeable pursuant to the preceding sentence will be exchangeable in whole for definitive debt securities in registered form, of like tenor and of an equal aggregate principal amount as the global debt security, in denominations specified in the applicable prospectus supplement, if other than $2,000 and multiples of $1,000. The definitive debt securities will be registered by the registrar in the name or names instructed by DTC. We expect that these instructions may be based upon directions received by DTC from its participants with respect to ownership of beneficial interests in the global debt security.
Except as provided above, owners of the beneficial interests in a global debt security will not be entitled to receive physical delivery of debt securities in definitive form and will not be considered the holders of debt securities for any purpose under the indentures. No global debt security shall be exchangeable except for another global debt security of like denomination and tenor to be registered in the name of DTC or its nominee. Accordingly, each person owning a beneficial interest in a global debt security must rely on the procedures of DTC and, if that person is not a participant, on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder under the global debt security or the indentures.
We understand that, under existing industry practices, in the event that we request any action of holders, or an owner of a beneficial interest in a global debt security desires to give or take any action that a holder is entitled to give or take under the debt securities or the indentures, DTC would authorize the participants holding the relevant beneficial interests to give or take that action. Additionally, those participants would authorize beneficial owners owning through those participants to give or take that action or would otherwise act upon the instructions of beneficial owners owning through them.
DTC has advised us that it is a limited-purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). DTC was created to hold securities of its participants and to facilitate the clearance and settlement of transactions among its participants in securities through electronic book-entry changes in accounts of the participants. By doing so, DTC eliminates the need for physical movement of securities certificates. DTC’s participants include
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securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., NYSE Amex Equities. Access to DTC’s book-entry system is also available to others, such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the Commission.
Investors may hold interests in the debt securities outside the U.S. through the Euroclear System (“Euroclear”) or Clearstream Banking (“Clearstream”) if they are participants in those systems, or indirectly through organizations which are participants in those systems. Euroclear and Clearstream will hold interests on behalf of their participants through customers’ securities accounts in Euroclear’s and Clearstream’s names on the books of their respective depositaries, which in turn will hold such interests in customers’ securities accounts in the depositaries’ names on the books of DTC.
Euroclear advises that it was created in 1968 to hold securities for participants of Euroclear (“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries. Euroclear is operated by the Euroclear S.A./N.V. (the “Euroclear Operator”), under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the “Cooperative”). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative establishes policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants include banks (including central banks), securities brokers and dealers, and other professional financial intermediaries and may include any agents. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear, the related Operating Procedures of the Euroclear System, and applicable Belgian law (collectively, the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants and has no record of or relationship with persons holding through Euroclear Participants.
Distributions with respect to debt securities held beneficially through Euroclear will be credited to the cash accounts of Euroclear Participants in accordance with the Terms and Conditions, to the extent received by the U.S. depositary for Euroclear.
Clearstream advises that it is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for its participating organizations (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to Clearstream Participants, among other things, services for safekeeping, administration, clearance, and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Monetary Institute. Clearstream Participants are recognized financial institutions around the world, including agents, securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations and may include any agents. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a Clearstream Participant either directly or indirectly.
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Distributions with respect to debt securities held beneficially through Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its rules and procedures, to the extent received by the U.S. depositary for Clearstream.
We have provided the descriptions herein of the operations and procedures of DTC, Euroclear and Clearstream solely as a matter of convenience. These operations and procedures are solely within the control of DTC, Euroclear and Clearstream and are subject to change by them from time to time. We believe that the sources from which the information in this section and elsewhere in this prospectus concerning DTC, Euroclear, the Euroclear Operator, the Cooperative, Euroclear’s system, Clearstream and Clearstream’s system has been obtained are reliable, but neither we, any underwriters nor the trustee takes any responsibility for the accuracy of the information.
Initial settlement for the securities will be made in immediately available funds. Secondary market trading between DTC participants will occur in the ordinary way in accordance with DTC’s rules and will be settled in immediately available funds. Secondary market trading between Euroclear Participants and/or Clearstream Participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Euroclear and Clearstream, as applicable, and will be settled using the procedures applicable to conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Euroclear Participants or Clearstream Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its U.S. depositary; however, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depositary to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear Participants and Clearstream Participants may not deliver instructions directly to their respective U.S. depositaries.
Because of time-zone differences, credits of securities received in Euroclear or Clearstream as a result of a transaction with a DTC participant will be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Credits or any transactions in securities settled during this processing will be reported to the relevant Euroclear or Clearstream Participants on that following business day. Cash received in Euroclear or Clearstream as a result of sales of debt securities by or through a Euroclear Participant or a Clearstream Participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account only as of the business day following settlement in DTC.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of securities among participants of DTC, Euroclear and Clearstream, they are under no obligation to perform or continue to perform these procedures and these procedures may be discontinued at any time.
If there are any provisions regarding redemption or repayment applicable to your debt security, we will describe them in your prospectus supplement.
We or our affiliates may purchase debt securities from investors who are willing to sell from time to time, either in the open market at prevailing prices or in private transactions at negotiated prices. Debt securities that we or they purchase may, at our discretion, be held, resold or canceled.
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Mergers and Similar Transactions
Each of Genesis Energy, L.P. and Finance Corp. (each, an “issuer”) is generally permitted under the indenture for the relevant series to merge or consolidate with another corporation or other entity. Each issuer is also permitted under the indenture for the relevant series to sell all or substantially all of its assets to another corporation or other entity. With regard to any series of debt securities, however, no issuer may take any of these actions unless all the following conditions, among other things, are met:
| • | If the successor entity in the transaction is not such issuer, (a) the successor entity must be organized as a corporation, partnership or trust, and must expressly assume such issuer’s obligations under the debt securities of that series and the indenture with respect to that series and (b) if Finance Corp. initially was a co-issuer as to that series, immediately after such transaction, an issuer as to that series must be a corporation. The successor entity may be organized under the laws of the U.S., any state thereof or the District of Columbia. |
| • | Immediately after the transaction, no default under the debt securities of that series has occurred and is continuing. For this purpose, “default under the debt securities of that series” means an event of default with respect to that series or any event that would be an event of default with respect to that series if the requirements for giving us default notice and for our default having to continue for a specific period of time were disregarded. We describe these matters below under “— Default, Remedies and Waiver of Default.” |
| • | Such issuer has delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this covenant and that all conditions precedent in the indenture provided for relating to such transaction have been complied with. |
If the conditions described above are satisfied with respect to the debt securities of any series, an issuer will not need to obtain the approval of the holders of those debt securities in order to merge or consolidate or to sell its assets. Also, these conditions will apply only if an issuer wishes to merge or consolidate with another entity or sell all or substantially all of our assets to another entity. We will not need to satisfy these conditions if we enter into other types of transactions, including any transaction in which we acquire the stock or assets of another entity, any transaction that involves a change of control of us but in which we do not merge or consolidate and any transaction in which we sell less than substantially all our assets.
The successor entity will be substituted for an issuer of the debt securities of any series and under the indenture with the same effect as if it had been an original party to the indenture, and, except in the case of a lease, such issuer will be relieved from any further obligations and covenants under the indenture.
Holders of subordinated debt securities should recognize that contractual provisions in the subordinated debt indenture may prohibit us from making payments on those securities. Subordinated debt securities are subordinate and junior in right of payment, to the extent and in the manner stated in the subordinated debt indenture, to all of our senior debt, as defined in the subordinated debt indenture, including all debt securities we have issued and will issue under the senior debt indenture.
The subordinated debt indenture defines “senior debt” as:
| • | our indebtedness under or in respect of our credit agreement, whether for principal, interest (including interest accruing after the filing of a petition initiating any proceeding pursuant to any bankruptcy law, whether or not the claim for such interest is allowed as a claim in such proceeding), reimbursement obligations, fees, commissions, expenses, indemnities or other amounts; and |
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| • | any other indebtedness permitted under the terms of that indenture, unless the instrument under which such indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the subordinated debt securities. |
Notwithstanding the foregoing, “senior debt” will not include: (i) equity interests; (ii) any liability for taxes; (iii) any indebtedness to any of our subsidiaries or affiliates; (iv) any trade payables; or (v) any indebtedness incurred in violation of the subordinated debt indenture.
We may modify the subordination provisions, including the definition of senior debt, with respect to one or more series of subordinated debt securities. Such modifications will be set forth in the applicable prospectus supplement.
The subordinated debt indenture provides that, unless all principal of and any premium or interest on the senior debt has been paid in full, no payment or other distribution may be made in respect of any subordinated debt securities in the following circumstances:
| • | in the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization, assignment for creditors or other similar proceedings or events involving us or our assets; |
| • | (a) in the event and during the continuation of any default in the payment of principal, premium or interest on any senior debt beyond any applicable grace period or (b) in the event that any event of default with respect to any senior debt has occurred and is continuing, permitting the holders of that senior debt (or a trustee) to accelerate the maturity of that senior debt, whether or not the maturity is in fact accelerated (unless, in the case of (a) or (b), the payment default or event of default has been cured or waived or ceased to exist and any related acceleration has been rescinded) or (c) in the event that any judicial proceeding is pending with respect to a payment default or event of default described in (a) or (b); or |
| • | in the event that any subordinated debt securities have been declared due and payable before their stated maturity. |
If the trustee under the subordinated debt indenture or any holders of the subordinated debt securities receive any payment or distribution that is prohibited under the subordination provisions, then the trustee or the holders will have to repay that money to the holders of the senior debt.
Even if the subordination provisions prevent us from making any payment when due on the subordinated debt securities of any series, we will be in default on our obligations under that series if we do not make the payment when due. This means that the trustee under the subordinated debt indenture and the holders of that series can take action against us, but they will not receive any money until the claims of the holders of senior debt have been fully satisfied.
The subordinated debt indenture allows the holders of senior debt to obtain a court order requiring us and any holder of subordinated debt securities to comply with the subordination provisions.
Defeasance, Covenant Defeasance and Satisfaction and Discharge
When we use the term defeasance, we mean discharge from some or all of our obligations under the indenture. If we deposit with the trustee funds or government securities, or if so provided in your prospectus supplement, obligations other than government securities, sufficient to make payments on any series of debt securities on the dates those payments are due and payable and other specified conditions are satisfied, then, at our option, either of the following will occur:
| • | we will be discharged from our obligations with respect to the debt securities of such series and all obligations of any guarantors of such debt securities will also be discharged with respect to the guarantees of such debt securities (“legal defeasance”); or |
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| • | we will be discharged from any covenants we make in the applicable indenture for the benefit of such series and the related events of default will no longer apply to us (“covenant defeasance”). |
If we defease any series of debt securities, the holders of such securities will not be entitled to the benefits of the indenture, except for our obligations to deliver temporary and definitive securities, register the transfer or exchange of such securities, replace stolen, lost or mutilated securities or maintain paying agencies, hold moneys for payment in trust and make payments from such trust of principal, premium and interest on the applicable series of debt securities when due. In case of covenant defeasance, our obligation to pay principal, premium and interest on the applicable series of debt securities will also survive.
We will be required to deliver to the trustee an opinion of counsel that the deposit and related defeasance would not cause the holders of the applicable series of debt securities to recognize gain or loss for federal income tax purposes. If we elect legal defeasance, that opinion of counsel must be based upon a ruling from the U.S. Internal Revenue Service, or IRS, or a change in law to that effect.
Upon the effectiveness of defeasance with respect to any series of guaranteed debt securities, each guarantor of the debt securities of such series shall be automatically and unconditionally released and discharged from all of its obligations under its guarantee of the debt securities of such series and all of its other obligations under the applicable indenture in respect of the debt securities of that series, without any action by us, any guarantor or the trustee and without the consent of the holders of any debt securities.
In addition, we may satisfy and discharge all our obligations under the indenture with respect to debt securities of any series, other than our surviving obligations to convert, register the transfer of and exchange debt securities of that series, provided that either:
| • | we deliver all outstanding debt securities of that series to the trustee for cancellation; or |
| • | all such debt securities not so delivered for cancellation have become due and payable, will become due and payable at their stated maturity within one year or are to be called for redemption within one year, and in the case of this bullet point, we have deposited with the trustee in trust an amount of cash sufficient to pay the entire indebtedness of such debt securities, including interest to the date of deposit (in the case of debt securities which have become due and payable), stated maturity or applicable redemption date. |
No past, present or future director, officer, employee, incorporator, member, manager, partner (whether general or limited), unitholder or securityholder of us, the general partner of Genesis Energy, L.P. or any guarantor, as such, will have any liability for any obligations of us, the general partner of Genesis Energy, L.P. or any guarantor, respectively, under the debt securities or the indentures or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of debt securities by accepting a debt security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the debt securities and any guarantees. The waiver may not be effective to waive liabilities under the federal securities laws.
Default, Remedies and Waiver of Default
You will have special rights if an event of default with respect to your series of debt securities occurs and is continuing, as described in this subsection.
Unless your prospectus supplement says otherwise, when we refer to an event of default with respect to any series of debt securities, we mean any of the following:
| • | we do not pay the principal or any premium on any debt security of that series on the due date; |
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| • | we do not pay interest on any debt security of that series within 30 days after the due date; |
| • | we do not deposit a sinking fund payment with regard to any debt security of that series within 60 days after the due date, but only if the payment is required under provisions described in the applicable prospectus supplement; |
| • | we remain in breach of our covenants regarding mergers or sales of substantially all of our assets or any other covenant we make in the indenture for the benefit of the relevant series, for 90 days after we receive a notice of default stating that we are in breach and requiring us to remedy the breach. The notice must be sent by the trustee or the holders of at least 25% in principal amount of the relevant series of debt securities; |
| • | we file for bankruptcy or other events of bankruptcy, insolvency or reorganization relating to us occur; |
| • | if the debt securities of that series are guaranteed debt securities, the guarantee of the debt securities of that series by any guarantor shall for any reason cease to be, or shall for any reason be asserted in writing by such guarantor or us, not to be, in full force and effect and enforceable in accordance with its terms, except to the extent contemplated or permitted by the indenture or the debt securities of that series; or |
| • | if the applicable prospectus supplement states that any additional event of default applies to the series, that event of default occurs. |
We may change, eliminate, or add to the events of default with respect to any particular series or any particular debt security or debt securities within a series, as indicated in the applicable prospectus supplement.
Remedies if an Event of Default Occurs. If you are the holder of a subordinated debt security, all the remedies available upon the occurrence of an event of default under the subordinated debt indenture will be subject to the restrictions on the subordinated debt securities described above under “— Subordination Provisions.”
Except as otherwise specified in the applicable prospectus supplement, if an event of default has occurred with respect to any series of debt securities and has not been cured or waived, the trustee or the holders of not less than 25% in principal amount of all debt securities of that series then outstanding may declare the entire principal amount of the debt securities of that series to be due immediately. Except as otherwise specified in the applicable prospectus supplement, if the event of default occurs because of events in bankruptcy, insolvency or reorganization relating to us, the entire principal amount of the debt securities of that series will be automatically accelerated, without any action by the trustee or any holder.
Each of the situations described above is called an acceleration of the stated maturity of the affected series of debt securities. Except as otherwise specified in the applicable prospectus supplement, if the stated maturity of any series is accelerated and a judgment for payment has not yet been obtained, the holders of a majority in principal amount of the debt securities of that series may cancel the acceleration for the entire series, upon satisfaction of certain conditions.
If an event of default occurs, the trustee will have special duties. In that situation, the trustee will be obligated to use those of its rights and powers under the relevant indenture, and to use the same degree of care and skill in doing so, that a prudent person would use in that situation in conducting his or her own affairs.
Except as described in the prior paragraph, the trustee is not required to take any action under the relevant indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This is called an indemnity. If the trustee is provided with an indemnity reasonably satisfactory to it, the holders of a majority in principal amount of all debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee with respect to that series. These majority holders may also direct the trustee in performing any other action under the relevant indenture with respect to the debt securities of that series.
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Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to any debt security, all of the following must occur:
| • | the holder of your debt security must give the trustee written notice that an event of default has occurred with respect to the debt securities of your series, and the event of default must not have been cured or waived; |
| • | the holders of not less than 25% in principal amount of all debt securities of your series must make a written request that the trustee take action because of the default, and they or other holders must offer to the trustee indemnity reasonably satisfactory to the trustee against the cost and other liabilities of taking that action; |
| • | the trustee must not have taken action for 60 days after the above steps have been taken; and |
| • | during those 60 days, the holders of a majority in principal amount of the debt securities of your series must not have given the trustee directions that are inconsistent with the written request of the holders of not less than 25% in principal amount of the debt securities of your series. |
You are entitled at any time, however, to bring a lawsuit for the payment of money due on your debt security on or after its stated maturity (or, if your debt security is redeemable, on or after its redemption date).
Book-entry and other indirect owners should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and how to declare or cancel an acceleration of the maturity.
Waiver of Default. The holders of not less than a majority in principal amount of the debt securities of any series may waive a default for all debt securities of that series. If this happens, the default will be treated as if it has not occurred. No one can waive a payment default on your debt security, however, without the approval of the particular holder of that debt security.
Annual Information about Defaults to the Trustee. We will furnish each trustee every year a written statement of two of our officers certifying that to their knowledge we are in compliance with the applicable indenture and the debt securities issued under it, or else specifying any default under the applicable indenture.
There are four types of changes we can make to either indenture and the debt securities or series of debt securities or any guarantees thereof issued under that indenture.
Changes Requiring Each Holder’s Approval. First, there are changes that cannot be made without the approval of each holder of a debt security affected by the change under the applicable debt indenture, including, among others:
| • | changing the stated maturity for any principal or interest payment on a debt security; |
| • | reducing the principal amount, the amount payable on acceleration of the maturity after a default, the interest rate or the redemption price for a debt security; |
| • | permitting redemption of a debt security if not previously permitted; |
| • | impairing any right a holder may have to require purchase of its debt security; |
| • | impairing any right that a holder of convertible debt security may have to convert the debt security; |
| • | changing the currency of any payment on a debt security; |
| • | changing the place of payment on a debt security; |
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| • | impair a holder’s right to sue for payment of any amount due on its debt security; |
| • | release of any guarantor of a debt security from any of its obligations under its guarantee thereof, except in accordance with the terms of the indenture; |
| • | reducing the percentage in principal amount of the debt securities of any one or more affected series, taken separately or together, as applicable, and whether comprising the same or different series or less than all of the debt securities of a series, the approval of whose holders is needed to change the indenture or those debt securities or waive our compliance with the applicable indenture or to waive defaults; and |
| • | changing the provisions of the applicable indenture dealing with modification and waiver in any other respect, except to increase any required percentage referred to above or to add to the provisions that cannot be changed or waived without approval of the holder of each affected debt security. |
Changes Not Requiring Approval. The second type of change does not require any approval by holders of the debt securities affected. These changes are limited to clarifications and changes that would not adversely affect any debt securities of any series in any material respect. Nor do we need any approval to make changes that affect only debt securities to be issued under the applicable indenture after the changes take effect. We may also make changes or obtain waivers that do not adversely affect a particular debt security, even if they affect other debt securities. In those cases, we do not need to obtain the approval of the holder of the unaffected debt security; we need only obtain any required approvals from the holders of the affected debt securities. We may also make changes to reflect the addition of, succession to or release of any guarantor of guaranteed debt securities otherwise permitted under the indenture. We may also make changes to conform the text of the applicable indenture or any debt securities or guarantees to any provision of the “Description of Debt Securities and Guarantees” in this prospectus or the comparable section in your prospectus supplement, to the extent such provision was intended to be a verbatim recitation of a provision of such indenture or debt securities or guarantees.
Modification of Subordination Provisions. We may not amend the indenture related to subordinated debt securities to alter the subordination of any outstanding subordinated debt securities without the written consent of each holder of senior debt then outstanding who would be adversely affected (or the group or representative thereof authorized or required to consent thereto pursuant to the instrument creating or evidencing, or pursuant to which there is outstanding, such senior debt). In addition, we may not modify the subordination provisions of the indenture related to subordinated debt securities in a manner that would adversely affect the subordinated debt securities of any one or more series then outstanding in any material respect, without the consent of the holders of a majority in aggregate principal amount of all affected series then outstanding, voting together as one class (and also of any affected series that by its terms is entitled to vote separately as a series, as described below).
Changes Requiring Majority Approval. Any other change to a particular indenture and the debt securities issued under that indenture would require the following approval:
| • | If the change affects only particular debt securities within a series issued under the applicable indenture, it must be approved by the holders of a majority in principal amount of such particular debt securities; or |
| • | If the change affects debt securities of more than one series issued under the applicable indenture, it must be approved by the holders of a majority in principal amount of all debt securities of all such series affected by the change, with all such affected debt securities voting together as one class for this purpose and such affected debt securities of any series potentially comprising fewer than all debt securities of such series, |
in each case, except as may otherwise be provided pursuant to such indenture for all or any particular debt securities of any series. This means that modification of terms with respect to certain securities of a series could be effectuated without obtaining the consent of the holders of a majority in principal amount of other securities of such series that are not affected by such modification.
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The same majority approval would be required for us to obtain a waiver of any of our covenants in either indenture. Our covenants include the promises we make about merging or selling substantially all of our assets, which we describe above under “— Mergers and Similar Transactions.” If the holders approve a waiver of a covenant, we will not have to comply with it. The holders, however, cannot approve a waiver of any provision in a particular debt security, or in the applicable indenture as it affects that debt security, that we cannot change without the approval of the holder of that debt security as described above in “— Changes Requiring Each Holder’s Approval,” unless that holder approves the waiver.
We may issue particular debt securities or a particular series of debt securities, as applicable, that are entitled, by their terms, to separately approve matters (for example, modification or waiver of provisions in the applicable indenture) that would also, or otherwise, require approval of holders of a majority in principal amount of all affected debt securities of all affected series issued under such indenture voting together as a single class. Any such affected debt securities or series of debt securities would be entitled to approve such matters (a) pursuant to such special rights by consent of holders of a majority in principal amount of such affected debt securities or series of debt securities voting separately as a class and (b) in addition, as described above, except as may otherwise be provided pursuant to the applicable indenture for such debt securities or series of debt securities, by consent of holders of a majority in principal amount of such affected debt securities or series of debt securities and all other affected debt securities of all series issued under such indenture voting together as one class for this purpose. We may issue series or debt securities of a series having these or other special voting rights without obtaining the consent of or giving notice to holders of outstanding debt securities or series.
Book-entry and other indirect owners should consult their banks or brokers for information on how approval may be granted or denied if we seek to change an indenture or any debt securities or request a waiver.
Special Rules for Action by Holders
Only holders of outstanding debt securities of the applicable series will be eligible to take any action under the applicable indenture, such as giving a notice of default, declaring an acceleration, approving any change or waiver or giving the trustee an instruction with respect to debt securities of that series. Also, we will count only outstanding debt securities in determining whether the various percentage requirements for taking action have been met. Any debt securities owned by us or any of our affiliates or surrendered for cancellation or for payment or redemption of which money has been set aside in trust are not deemed to be outstanding. Any required approval or waiver must be given by written consent.
In some situations, we may follow special rules in calculating the principal amount of debt securities that are to be treated as outstanding for the purposes described above. This may happen, for example, if the principal amount is payable in a non-U.S. dollar currency, increases over time or is not to be fixed until maturity.
We will generally be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take action under either indenture. In certain limited circumstances, only the trustee will be entitled to set a record date for action by holders. If we or the trustee sets a record date for an approval or other action to be taken by holders, that vote or action may be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for this purpose, or that the trustee specifies if it sets the record date. We or the trustee, as applicable, may shorten or lengthen this period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In addition, record dates for any global debt security may be set in accordance with procedures established by the depositary from time to time. Accordingly, record dates for global debt securities may differ from those for other debt securities.
If any debt securities cease to be issued in registered global form, they will be issued:
| • | only in fully registered form; |
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| • | without interest coupons; and |
| • | unless we indicate otherwise in your prospectus supplement, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. |
Holders may exchange their debt securities for debt securities of smaller denominations or combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. You may not exchange your debt securities for securities of a different series or having different terms, unless your prospectus supplement says you may.
Holders may exchange or transfer their debt securities at the office of the trustee. They may also replace lost, stolen, destroyed or mutilated debt securities at that office. We have appointed the trustee to act as our agent for registering debt securities in the names of holders and transferring and replacing debt securities. We may appoint another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or exchange their debt securities, but they may be required to pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange, and any replacement, will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership. The transfer agent may require an indemnity before replacing any debt securities.
If we have designated additional transfer agents for your debt security, they will be named in your prospectus supplement. We may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a change in the office through which any transfer agent acts.
If the debt securities of any series are redeemable and we redeem less than all those debt securities, we may block the transfer or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to freeze the list of holders to prepare the mailing. We may also refuse to register transfers of or exchange any debt security selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt security being partially redeemed.
If a debt security is issued as a global debt security, only DTC or other depositary will be entitled to transfer and exchange the debt security as described in this subsection, since the depositary will be the sole holder of the debt security.
The rules for exchange described above apply to exchange of debt securities for other debt securities of the same series and kind. If a debt security is convertible, exercisable or exchangeable into or for a different kind of security, such as one that we have not issued, or for other property, the rules governing that type of conversion, exercise or exchange will be described in the applicable prospectus supplement.
We will pay interest, principal and other amounts payable with respect to the debt securities of any series to the holders of record of those debt securities as of the record dates and otherwise in the manner specified below or in the prospectus supplement for that series.
We will make payments on a global debt security in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will pay directly to the depositary, or its nominee, and not to any indirect owners who own beneficial interests in the global debt security. An indirect owner’s right to receive those payments will be governed by the rules and practices of the depositary and its participants.
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We will make payments on a debt security in non-global, registered form as follows. We will pay interest that is due on an interest payment date by check mailed on the interest payment date to the holder at his or her address shown on the trustee’s records as of the close of business on the regular record date. We will make all other payments by check at the paying agent described below, against surrender of the debt security. All payments by check will be made in next-day funds — i.e., funds that become available on the day after the check is cashed.
Alternatively, if a non-global debt security has a face amount of at least $1,000,000 and the holder asks us to do so, we will pay any amount that becomes due on the debt security by wire transfer of immediately available funds to an account at a bank in New York City, on the due date. To request wire payment, the holder must give the paying agent appropriate wire transfer instructions at least five business days before the requested wire payment is due. In the case of any interest payment due on an interest payment date, the instructions must be given by the person or entity who is the holder on the relevant regular record date. In the case of any other payment, payment will be made only after the debt security is surrendered to the paying agent. Any wire instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described above.
Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive payments on their debt securities.
Regardless of who acts as paying agent, all money paid by us to a paying agent that remains unclaimed at the end of two years after the amount is due to a holder will be repaid to us. After that two-year period, the holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
The debt securities of any series may be guaranteed by one or more of our subsidiaries. However, the applicable indenture governing the debt securities will not require that any of our subsidiaries be a guarantor of any series of debt securities and will permit the guarantors for any series of guaranteed debt securities to be different from any of the subsidiaries listed above under “— General.” As a result, a series of debt securities may not have any guarantors and the guarantors of any series of guaranteed debt securities may differ from the guarantors of any other series of guaranteed debt securities. If we issue a series of guaranteed debt securities, the identity of the specific guarantors of the debt securities of that series will be identified in the applicable prospectus supplement.
If we issue a series of guaranteed debt securities, a description of some of the terms of guarantees of those debt securities will be set forth in the applicable prospectus supplement. Unless otherwise provided in the prospectus supplement relating to a series of guaranteed debt securities, each guarantor of the debt securities of such series will unconditionally guarantee the due and punctual payment of the principal of, and premium, if any, and interest, if any, on each debt security of such series, all in accordance with the terms of such debt securities and the applicable indenture.
Notwithstanding the foregoing, unless otherwise provided in the prospectus supplement relating to a series of guaranteed debt securities, the applicable indenture will contain provisions to the effect that the obligations of each guarantor under its guarantees and such indenture shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such guarantor, result in the obligations of such guarantor under such guarantees and such indenture not constituting a fraudulent conveyance or fraudulent transfer under applicable law. However, there can be no assurance that, notwithstanding such limitation, a court would not determine that a guarantee constituted a fraudulent conveyance or fraudulent transfer under applicable law. If that were to occur, the court could void the applicable guarantor’s obligations under that guarantee, subordinate that guarantee to other debt and other liabilities of that guarantor or take other action detrimental to holders of the debt securities of the applicable series, including directing the holders to return any payments received from the applicable guarantor.
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Unless otherwise provided in the prospectus supplement relating to a series of guaranteed debt securities, the applicable indenture will (i) provide that, upon the sale or disposition (by merger or otherwise) of any guarantor, (x) if the transferee is not an affiliate of us, such guarantor will automatically be released from all obligations under its guarantee of such debt securities or (y) otherwise, the transferee (if other than us or another guarantor) will assume the guarantor’s obligations under its guarantee of such debt securities and (ii) permit us to cause the guarantee of any guarantor of such debt securities to be released at any time if we satisfy such conditions, if any, as are specified in the prospectus supplement for such debt securities.
The applicable prospectus supplement relating to any series of guaranteed debt securities will specify other terms of the applicable guarantees.
If the applicable prospectus supplement relating to a series of our senior debt securities provides that those senior debt securities will have the benefit of a guarantee by any or all of our subsidiaries, unless otherwise provided in the applicable prospectus supplement, each such guarantee will be the unsubordinated and unsecured obligation of the applicable guarantor and will rank equally in right of payment with all of the unsecured and unsubordinated indebtedness of such guarantor.
Any guarantee of any debt securities will be effectively subordinated to all existing and future secured indebtedness of the applicable guarantor, including any secured guarantees of other Company debt, to the extent of the value of the collateral securing that indebtedness. Consequently, in the event of a bankruptcy, or similar proceeding with respect to any guarantor that has provided a guarantee of any debt securities, the holders of that guarantor’s secured indebtedness will be entitled to proceed directly against the collateral that secures that secured indebtedness and such collateral will not be available for satisfaction of any amount owed by such guarantor under its unsecured indebtedness, including its guarantees of any debt securities, until that secured debt is satisfied in full. Unless otherwise provided in the applicable prospectus supplement, the indenture will not limit the ability of any guarantor to incur secured indebtedness.
If the applicable prospectus supplement relating to a series of our subordinated debt securities provides that those subordinated debt securities will have the benefit of a guarantee by any or all of our subsidiaries, unless otherwise provided in the applicable prospectus supplement, each such guarantee will be the subordinated and unsecured obligation of the applicable guarantor and, in addition to being effectively subordinated to secured debt of such guarantor, will be subordinated in right of payment to all of such guarantor’s existing and future senior indebtedness, including any guarantee of the senior debt securities, to the same extent and in the same manner as the subordinated debt securities are subordinated to our senior debt. See “— Subordination Provisions” above.
We may appoint one or more financial institutions to act as our paying agents, at whose designated offices debt securities in non-global entry form may be surrendered for payment at their maturity. We call each of those offices a paying agent. We may add, replace or terminate paying agents from time to time. We may also choose to act as our own paying agent. We will specify in the prospectus supplement for your debt security the initial location of each paying agent for that debt security. We must notify the trustee of changes in the paying agents.
Notices to be given to holders of a global debt security will be sufficiently given if given to the depositary, in accordance with its applicable policies as in effect from time to time. Notices to be given to holders of debt securities not in global form will be sent by mail to the respective addresses of the holders as they appear in the trustee’s records, and will be deemed given when mailed. Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will affect the sufficiency of any notice given to another holder.
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Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive notices.
Our Relationship With the Trustee
The prospectus supplement for your debt security will describe any material relationships we may have with the trustee with respect to that debt security.
The same financial institution may initially serve as the trustee for our senior debt securities and subordinated debt securities. Consequently, if an actual or potential event of default occurs with respect to any of these securities, the trustee may be considered to have a conflicting interest for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign under one or more of the indentures, and we would be required to appoint a successor trustee. For this purpose, a “potential” event of default means an event that would be an event of default if the requirements for giving us default notice or for the default having to exist for a specific period of time were disregarded.
Warrants to Purchase Debt Securities
We may issue warrants for the purchase of the debt securities. Such warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants for the purchase of debt securities will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. A copy of the warrant agreement will be filed with the Commission in connection with the offering of warrants.
The prospectus supplement relating to a particular issue of warrants to purchase debt securities will describe the terms of such warrants, including, among other things, the following:
| • | the title of the warrants to purchase debt securities; |
| • | the offering price for the warrants to purchase debt securities, if any; |
| • | the aggregate number of the warrants to purchase debt securities; |
| • | the designation, aggregate principal amount, currencies, denominations and other terms of the series of debt securities purchasable upon exercise of the warrants to purchase debt securities and the price at which such debt securities may be purchased upon such exercise; |
| • | if applicable, the designation and terms of the securities that the warrants to purchase debt securities are issued with and the number of warrants to purchase debt securities issued with each such security; |
| • | if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable; |
| • | the dates on which the right to exercise the warrants to purchase debt securities commence and expire; |
| • | if applicable, the minimum or maximum amount of the warrants to purchase debt securities that may be exercised at any one time; |
| • | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| • | if applicable, a discussion of material federal income tax considerations; |
| • | redemption or call provisions, if any, applicable to the warrants to purchase debt securities; |
| • | any additional terms of the warrants to purchase debt securities, including terms, procedures, and limitations relating to the exercise of the warrants to purchase debt securities; and |
| • | any other information we think is important about the warrants to purchase debt securities. |
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Each warrant will entitle the holder of the warrant to purchase such principal amount of debt securities being offered at the exercise price set forth in the applicable prospectus supplement. Holders may exercise warrants to purchase debt securities at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants to purchase debt securities are void. Holders may exercise warrants to purchase debt securities as set forth in the prospectus supplement relating to the warrants to purchase debt securities being offered.
Until you exercise your warrants to purchase debt securities, you will not have any rights as a holder of debt securities, including the right to receive payments of principal of, premium, if any, or interest, if any, on the debt securities purchasable upon such exercise or to enforce covenants in the applicable indenture, by virtue of your ownership of such warrants.
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MATERIAL INCOME TAX CONSEQUENCES
This section is a discussion of the material income tax consequences that may be relevant to prospective unitholders who are individual citizens or residents of the United States and, unless otherwise noted in the following discussion, expresses the opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to our general partner and us, insofar as it relates to legal conclusions with respect to matters of United States federal income tax law. This section is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), existing and proposed Treasury Regulations promulgated under the Internal Revenue Code (the “Treasury Regulations”), and current administrative rulings and court decisions, all of which are subject to change. Later changes in these authorities may cause the tax consequences to vary substantially from the consequences described below. Unless the context otherwise requires, references in this section to “Genesis,” “us,” “we,” “our,” or “ours” are references to Genesis Energy, L.P. and its subsidiaries.
The following discussion does not comment on all federal income tax matters affecting us or our unitholders, such as the application of the alternative minimum tax. Moreover, the discussion focuses on unitholders who are individual citizens or residents of the United States and has only limited application to corporations, partnerships, estates, trusts, partnerships and entities treated as partnerships for federal income tax purposes, nonresident aliens, U.S. expatriates and former citizens or long-term residents of the United States or other unitholders subject to specialized tax treatment, such as banks, insurance companies and other financial institutions, tax-exempt institutions, foreign persons (including, without limitation, controlled foreign corporations, passive foreign investment companies and non-U.S. persons eligible for the benefits of an applicable income tax treaty with the United States), individual retirement accounts (“IRAs”), employee benefit plans, real estate investment trusts (“REITs”), or mutual funds, dealers in securities or currencies, traders in securities, U.S. persons whose “functional currency” is not the U.S. dollar, persons holding their common units as part of a “straddle,” “hedge,” “conversion transaction” or other risk reduction transaction, persons subject to special tax accounting rules as a result of any item of gross income with respect to our common units being taken into account in an applicable financial statement and persons deemed to sell their common units under the constructive sale provisions of the Internal Revenue Code. In addition, the discussion only comments to a limited extent on state, and does not comment on local or foreign, tax consequences. Accordingly, we urge each prospective unitholder to consult his own tax advisor in analyzing the federal, state, local and foreign tax consequences particular to him of the ownership or disposition of common units and potential changes in applicable laws, including the impact of any recently enacted U.S. tax legislation.
All statements as to matters of law and legal conclusions, but not as to factual matters, contained in this section, unless otherwise noted, are the opinion of Akin Gump Strauss Hauer & Feld LLP and are based on the accuracy of the representations made by us and our general partner. No ruling has been or will be requested from the Internal Revenue Service (the “IRS”) regarding any matter affecting us or prospective unitholders. Instead, we will rely on opinions and advice of Akin Gump Strauss Hauer & Feld LLP. Unlike a ruling, an opinion of counsel represents only that counsel’s best legal judgment and does not bind the IRS or the courts. Accordingly, the opinions and statements made herein may not be sustained by a court if contested by the IRS. Any contest of this sort with the IRS may materially and adversely impact the market for our common units and the prices at which common units trade. In addition, the costs of any contest with the IRS, principally legal, accounting and related fees, will result in a reduction in cash available for distribution to our unitholders and thus will be borne directly or indirectly by our unitholders. Furthermore, the tax treatment of us, or of an investment in us, may be significantly modified by future legislative or administrative changes or court decisions. Any modifications may or may not be retroactively applied.
For the reasons described below, Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion with respect to the following specific federal income tax issues:
| (1) | the treatment of a unitholder whose common units are loaned to a short seller to cover a short sale of common units (please see “— Tax Consequences of Unit Ownership — Treatment of Short Sales”); |
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| (2) | whether our monthly convention for allocating taxable income and losses is permitted by existing Treasury Regulations (please see “— Disposition of Common Units — Allocations Between Transferors and Transferees”); and |
| (3) | whether our method for depreciating Section 743 adjustments is sustainable in certain cases (please see “— Tax Consequences of Unit Ownership — Section 754 Election”). |
We expect to be treated as a partnership for federal income tax purposes and, therefore, subject to the discussion below under “— Administrative Matters — Information Returns and Audit Procedures,” generally will not be liable for entity-level federal income taxes. Instead, each partner of a partnership is required to take into account his share of items of income, gain, loss and deduction of the partnership in computing his federal income tax liability, regardless of whether cash distributions are made to him by the partnership. Distributions by a partnership to a partner are generally not taxable to the partnership or to the partner unless the amount of cash distributed to him is in excess of the partner’s adjusted basis in his partnership interest.
Section 7704 of the Internal Revenue Code provides that publicly traded partnerships will, as a general rule, be taxed as corporations. However, an exception, referred to as the “Qualifying Income Exception,” exists with respect to publicly traded partnerships of which 90% or more of the gross income for every taxable year consists of “qualifying income.” Qualifying income includes income and gains derived from the exploration, development, mining or production, processing and refining, transportation, and marketing of mineral or natural resources, including minerals and ores, crude oil, natural gas and other products thereof, and certain activities that are intrinsic to other qualifying activities. Other types of qualifying income include interest (other than from a financial business), dividends, gains from the sale of real property and gains from the sale or other disposition of capital assets (or other property described in Section 1231(b) of the Internal Revenue Code) held for the production of income that otherwise constitutes qualifying income. We estimate that at least 90% of our current gross income is qualifying income. Based upon and subject to this estimate, the factual representations made by us and our general partner and a review of the applicable legal authorities, Akin Gump Strauss Hauer & Feld LLP is of the opinion that at least 90% of our current gross income should constitute qualifying income.
No ruling has been or will be sought from the IRS and the IRS has made no determination as to our status as a partnership for federal income tax purposes or whether our operations generate “qualifying income” under Section 7704 of the Internal Revenue Code. Instead, we will rely on the opinion of Akin Gump Strauss Hauer & Feld LLP. It is the opinion of Akin Gump Strauss Hauer & Feld LLP that, based upon the Internal Revenue Code, the Treasury Regulations, published revenue rulings and court decisions and the representations described below, we should be classified as a partnership for federal income tax purposes.
In rendering its opinion, Akin Gump Strauss Hauer & Feld LLP has relied on factual representations made by us and our general partner. The representations made by us and our general partner upon which counsel has relied include:
| (a) | Neither we nor the operating company has elected or will elect to be treated, or is otherwise treated, as a corporation for federal income tax purposes; |
| (b) | For each taxable year, more than 90% of our gross income has been and will be income from sources that Akin Gump Strauss Hauer & Feld LLP has opined or will opine is “qualifying income” within the meaning of Section 7704(d) of the Internal Revenue Code; and |
| (c) | Each hedging transaction that we treat as resulting in qualifying income has been and will be appropriately identified as a hedging transaction pursuant to applicable Treasury Regulations, and has been and will be associated with oil, gas or products thereof that are held or are to be held by us in activities that Akin Gump Strauss Hauer & Feld LLP has opined or will opine result in qualifying income. |
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We believe that these representations are true and expect that these representations will continue to be true in the future.
If we fail to meet the Qualifying Income Exception, other than a failure that is determined by the IRS to be inadvertent and that is cured within a reasonable time after discovery (in which case the IRS may also require us to make adjustments with respect to our unitholders or pay other amounts), we will be treated as if we had transferred all of our assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which we fail to meet the Qualifying Income Exception, in return for stock in that corporation, and then distributed that stock to our unitholders in liquidation of their interests in us. This deemed contribution and liquidation should be tax-free to unitholders and us so long as we, at that time, do not have liabilities in excess of the adjusted tax basis of our assets. Thereafter, we would be treated as an association taxable as a corporation for federal income tax purposes.
If we were treated as an association taxable as a corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, our items of income, gain, loss and deduction would be reflected only on our tax return rather than being passed through to our unitholders, and our net income would be taxed to us at corporate rates. In addition, any distribution made to a unitholder would be treated as either taxable dividend income, to the extent of our current or accumulated earnings and profits, or, in the absence of earnings and profits, a nontaxable return of capital, to the extent of the unitholder’s tax basis in his common units, or taxable capital gain, after the unitholder’s tax basis in his common units is reduced to zero. Accordingly, taxation as a corporation would result in a material reduction in a unitholder’s cash flow and after-tax return and thus would likely result in a substantial reduction of the value of the units.
Additionally, on January 24, 2017, final regulations that provide industry-specific guidance regarding whether income earned from certain activities will constitute qualifying income were published in the Federal Register by the IRS and the U.S. Department of the Treasury. We believe we will continue to be able to meet the Qualifying Income Exception under the new rules. However, any modifications to the U.S. federal income tax laws and interpretations thereof could make it more difficult or impossible to meet such exception. We are unable to predict whether any such changes or other proposals will ultimately be enacted, but it is possible that a change in law could affect us and may, if enacted, be applied retroactively. Any such changes could affect our ability to meet the Qualifying Income Exception and could negatively impact the value of an investment in our common units.
Because of widespread state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation. For example, we are currently paying Texas franchise tax at an effective rate of 0.75% of our gross income apportioned to Texas in the prior year. Imposition of a similar tax on us in the jurisdictions in which we operate or in other jurisdictions to which we may expand could substantially reduce our cash available for distribution to our unitholders.
The remainder of the discussion below is based on Akin Gump Strauss Hauer & Feld LLP’s opinion that we will be classified as a partnership for federal income tax purposes.
Unitholders who have become limited partners of Genesis will be treated as partners of Genesis for federal income tax purposes. Also:
| (a) | assignees who have executed and delivered transfer applications, and are awaiting admission as limited partners, and |
| (b) | unitholders whose common units are held in street name or by a nominee and who have the right to direct the nominee in the exercise of all substantive rights attendant to the ownership of their common units, |
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will be treated as partners of Genesis for federal income tax purposes. As there is no direct authority addressing assignees of common units who are entitled to execute and deliver transfer applications and become entitled to direct the exercise of attendant rights, but who fail to execute and deliver transfer applications, the opinion of Akin Gump Strauss Hauer & Feld LLP does not extend to these persons. Furthermore, a purchaser or other transferee of common units who does not execute and deliver a transfer application may not receive some federal income tax information or reports furnished to record holders of common units unless the common units are held in a nominee or street name account and the nominee or broker has executed and delivered a transfer application for those common units.
A beneficial owner of common units whose units have been transferred to a short seller to complete a short sale would appear to lose his status as a partner with respect to those units for federal income tax purposes. Please see “— Tax Consequences of Unit Ownership — Treatment of Short Sales.”
Income, gain, deductions or losses would not appear to be reportable by a unitholder who is not a partner for federal income tax purposes, and any cash distributions received by a unitholder who is not a partner for federal income tax purposes would therefore appear to be fully taxable as ordinary income. These holders are urged to consult their own tax advisors with respect to the tax consequences applicable to such partners in Genesis.
The references to “unitholders” in the discussion that follows are to persons who are treated as partners in Genesis for federal income tax purposes.
Tax Consequences of Unit Ownership
Flow-Through of Taxable Income. Subject to the discussion below under “— Entity-Level Collections” and “— Administrative Matters — Information Returns and Audit Procedures,” with respect to payments we may be required to make on behalf of our unitholders, we will not pay any federal income tax. Instead, each unitholder will be required to report on his income tax return his share of our income, gains, losses and deductions without regard to whether corresponding cash distributions are received by him. Consequently, we may allocate income to a unitholder even if he has not received a cash distribution. Each unitholder will be required to include in income his allocable share of our income, gains, losses and deductions for our taxable year ending with or within his taxable year. Our taxable year ends on December 31.
Treatment of Distributions. Distributions by us to a unitholder generally will not be taxable to the unitholder for federal income tax purposes, except to the extent the amount of any such cash distribution exceeds his tax basis in his common units immediately before the distribution. Our cash distributions in excess of a unitholder’s tax basis generally will be considered to be gain from the sale or exchange of our common units, taxable in accordance with the rules described under “— Disposition of Common Units” below. Any reduction in a unitholder’s share of our liabilities for which no partner bears the economic risk of loss, known as “nonrecourse liabilities,” will be treated as a distribution by us of cash to that unitholder. To the extent our distributions cause a unitholder’s “at risk” amount to be less than zero at the end of any taxable year, he must recapture any losses deducted in previous years. Please see “— Limitations on Deductibility of Losses.”
A decrease in a unitholder’s percentage interest in us because of our issuance of additional common units will decrease his share of our nonrecourse liabilities, and thus will result in a corresponding deemed distribution of cash. This deemed distribution may constitute a non-pro rata distribution. A non-pro rata distribution of money or property may result in ordinary income to a unitholder, regardless of his tax basis in his common units, if the distribution reduces the unitholder’s share of our “unrealized receivables,” including depreciation, depletion and certain other expense recapture, and/or substantially appreciated “inventory items,” both as defined in Section 751 of the Internal Revenue Code, and collectively, “Section 751 Assets.” To that extent, he will be treated as having been distributed his proportionate share of the Section 751 Assets and then having exchanged those assets with us in return for the non-pro rata portion of the actual distribution made to him. This latter deemed exchange will generally result in the unitholder’s realization of ordinary income, which will equal the excess of (1) the non-pro rata portion of that distribution over (2) the unitholder’s tax basis (generally zero) for the share of Section 751 Assets deemed relinquished in the exchange.
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Basis of Common Units. A unitholder’s initial tax basis for his common units will be the amount of cash he pays for our common units and his adjusted basis in any assets he exchanges for common units plus his share of our nonrecourse liabilities, and on disposition of a common unit, by his share of certain items related to business interest not yet deductible by him due to applicable limitations. Please see “— Limitations on Interest Deductions.” That basis will be increased by his share of our income and by any increases in his share of our nonrecourse liabilities. That basis will be decreased, but not below zero, by distributions from us, by the unitholder’s share of our losses, by any decreases in his share of our nonrecourse liabilities, by the amount of any excess business interest allocated to the unitholder and by his share of our expenditures that are not deductible in computing taxable income and are not required to be capitalized. A unitholder will have a share, generally based on his share of profits, of our nonrecourse liabilities. Please see “— Disposition of Common Units — Recognition of Gain or Loss.”
Limitations on Deductibility of Losses. The deduction by a unitholder of his share of our losses will be limited to the tax basis in his units and, in the case of an individual unitholder, estate, trust or corporate unitholder (if more than 50% of the value of the corporate unitholder’s stock is owned directly or indirectly by or for five or fewer individuals or some tax-exempt organizations), to the amount for which the unitholder is considered to be “at risk” with respect to our activities, if that is less than his tax basis. A unitholder subject to these limitations must recapture losses deducted in previous years to the extent that distributions (including distributions deemed to result from a reduction in a unitholder’s share of nonrecourse liabilities) cause his at-risk amount to be less than zero at the end of any taxable year. Losses disallowed to a unitholder or recaptured as a result of these limitations will carry forward and will be allowable as a deduction to the extent that his at-risk amount is subsequently increased, provided such losses do not exceed such common unitholders’ tax basis in his common units. Upon the taxable disposition of a unit, any gain recognized by a unitholder can be offset by losses that were previously suspended by the at-risk limitation but may not be offset by losses suspended by the basis limitation. Any loss previously suspended by the at-risk limitation in excess of that gain would no longer be utilizable.
In general, a unitholder will be at risk to the extent of the tax basis of his units, excluding any portion of that basis attributable to his share of our nonrecourse liabilities, reduced by (i) any portion of that basis representing amounts otherwise protected against loss because of a guarantee, stop loss agreement or other similar arrangement and (ii) any amount of money he borrows to acquire or hold his units, if the lender of those borrowed funds owns an interest in us, is related to the unitholder or can look only to the units for repayment. A unitholder’s at-risk amount will increase or decrease as the tax basis of the unitholder’s units increases or decreases, other than tax basis increases or decreases attributable to increases or decreases in his share of our nonrecourse liabilities.
In addition to the basis and at-risk limitations on the deductibility of losses, the passive loss limitations generally provide that individuals, estates, trusts and some closely-held corporations and personal service corporations can deduct losses from passive activities, which are generally trade or business activities in which the taxpayer does not materially participate, only to the extent of the taxpayer’s income from those passive activities. The passive loss limitations are applied separately with respect to each publicly traded partnership. Consequently, any passive losses we generate will only be available to offset passive income generated by us. Passive losses that are not deductible because they exceed a unitholder’s share of income we generate may be deducted in full when he disposes of his entire investment in us in a fully taxable transaction with an unrelated party. The passive loss limitations are applied after other applicable limitations on deductions, including the at-risk rules and the basis limitation.
A unitholder’s share of our net income may be offset by any of our suspended passive losses, but it may not be offset by any other current or carryover losses from other passive activities, including those attributable to other publicly traded partnerships.
An additional loss limitation may apply to certain unitholders for taxable years beginning after December 31, 2017, and before January 1, 2026. Under this limitation, a non-corporate unitholder is not allowed
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to take a deduction for certain excess business losses in such taxable years. An excess business loss is the excess (if any) of a taxpayer’s aggregate deductions for the taxable year that are attributable to the trades or businesses of such taxpayer (determined without regard to the excess business loss limitation) over the aggregate gross income or gain of such taxpayer for the taxable year that is attributable to such trades or businesses plus a threshold amount. The threshold amount is equal to $250,000, or $500,000 for taxpayers filing a joint return. Any losses disallowed in a taxable year due to the excess business loss limitation may be used by the applicable unitholder in the following taxable year if certain conditions are met. Unitholders to which this excess business loss limitation applies will take their allocable share of our items of income, gain, loss and deduction into account in determining this limitation. This excess business loss limitation will be applied to a non-corporate unitholder after the passive loss limitations and may limit such unitholder’s ability to utilize any losses we generate allocable to such unitholder that are not otherwise limited by the basis, at-risk and passive loss limitations described above.
Limitations on Interest Deductions. In general, we are entitled to a deduction for interest paid or accrued on indebtedness properly allocable to our trade or business during our taxable year. However, our deduction for this “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest or business interest income, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization, or depletion. This limitation is first applied at the partnership level and any deduction for business interest is taken into account in determining our non-separately stated taxable income or loss. Then, in applying this business interest limitation at the partner level, the adjusted taxable income of each of our unitholders is determined without regard to such unitholder’s distributive share of any of our items of income, gain, deduction, or loss and is increased by such unitholder’s distributive share of our excess taxable income, which is generally equal to the excess of 30% of our adjusted taxable income over the amount of our deduction for business interest for a taxable year.
To the extent our deduction for business interest is not limited, we will allocate the full amount of our deduction for business interest among our unitholders in accordance with their percentage interests in us. To the extent our deduction for business interest is limited, the amount of any disallowed deduction for business interest will also be allocated to each unitholder in accordance with their percentage interest in us, but such amount of “excess business interest” will not be currently deductible. Subject to certain limitations and adjustments to a unitholder’s basis in its common units, this excess business interest may be carried forward and deducted by a unitholder in a future taxable year.
In addition to this limitation on the deductibility of a partnership’s business interest, the deductibility of a non-corporate taxpayer’s “investment interest expense” is generally limited to the amount of that taxpayer’s “net investment income.” Investment interest expense includes:
| • | interest on indebtedness properly allocable to property held for investment; |
| • | our interest expense attributed to portfolio income; and |
| • | the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent attributable to portfolio income. |
The computation of a unitholder’s investment interest expense will take into account interest on any margin account borrowing or other loan incurred to purchase or carry a unit. Net investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less deductible expenses, other than interest, directly connected with the production of investment income, but generally does not include gains attributable to the disposition of property held for investment or qualified dividend income. The IRS has indicated that the net passive income earned by a publicly traded partnership will be treated as investment income to its unitholders. In addition, the unitholder’s share of our portfolio income will be treated as investment income.
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Entity-Level Collections. If we are required or elect under applicable law to pay any federal, state, local or foreign income tax on behalf of any current or former unitholder, we are authorized to pay those taxes from our funds. That payment, if made, will be treated as a distribution of cash to the partner on whose behalf the payment was made. If the payment is made on behalf of a person whose identity cannot be determined or on behalf of all unitholders, we are authorized to treat the payment as a distribution to all current unitholders. We are authorized to amend our partnership agreement in the manner necessary to maintain uniformity of intrinsic tax characteristics of units and to adjust later distributions, so that after giving effect to these distributions, the priority and characterization of distributions otherwise applicable under our partnership agreement is maintained as nearly as is practicable. Payments by us as described above could give rise to an overpayment of tax on behalf of an individual partner in which event the partner would be required to file a claim in order to obtain a credit or refund. Please see “ — Administrative Matters — Information Returns and Audit Procedures.” Prospective unitholders are urged to consult their tax advisors to determine the consequences to them of any tax payment we make on its behalf.
Allocation of Income, Gain, Loss and Deduction. In general, if we have a net profit, our items of income, gain, loss and deduction will be allocated among our unitholders in accordance with their percentage interests in us. If we have a net loss, that loss will be allocated to our unitholders in accordance with their percentage interests in us to the extent of their positive capital accounts.
Specified items of our income, gain, loss and deduction will be allocated to account for (i) any difference between the tax basis and fair market value of our assets at the time of an offering and (ii) any difference between the tax basis and fair market value of any property contributed to us that exists at the time of such contribution, together, referred to in this discussion as the “Contributed Property.” The effect of these allocations, referred to as Section 704(c) Allocations, to a unitholder purchasing common units from us in an offering will be essentially the same as if the tax bases of our assets were equal to their fair market value at the time of such offering. In the event we issue additional common units or engage in certain other transactions in the future, we will make “reverse Section 704(c) Allocations,” similar to the Section 704(c) Allocations described above, to all holders of partnership interests immediately prior to such issuance or other transactions to account for the difference between the “book” basis for purposes of maintaining capital accounts and the fair market value of all property held by us at the time of such issuance or future transaction. In addition, items of recapture income will be allocated to the extent possible to the partner who was allocated the deduction giving rise to the treatment of that gain as recapture income in order to minimize the recognition of ordinary income by some unitholders. Finally, although we do not expect that our operations will result in the creation of negative capital accounts, if negative capital accounts nevertheless result, items of our income and gain will be allocated in an amount and manner as is needed to eliminate the negative balance as quickly as possible.
An allocation of items of our income, gain, loss or deduction, other than an allocation required by the Internal Revenue Code to eliminate the difference between a partner’s “book” capital account, credited with the fair market value of Contributed Property, and “tax” capital account, credited with the tax basis of Contributed Property will generally be given effect for federal income tax purposes in determining a partner’s share of an item of income, gain, loss or deduction only if the allocation has substantial economic effect. In any other case, a partner’s share of an item will be determined on the basis of his interest in us, which will be determined by taking into account all the facts and circumstances, including:
| • | his relative contributions to us; |
| • | the interests of all the partners in profits and losses; |
| • | the interest of all the partners in cash flow; and |
| • | the rights of all the partners to distributions of capital upon liquidation. |
Akin Gump Strauss Hauer & Feld LLP is of the opinion that, with the exception of the issues described in “— Section 754 Election” and “— Disposition of Common Units — Allocations Between Transferors and
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Transferees,” allocations under our partnership agreement will be given effect for federal income tax purposes in determining a partner’s share of an item of income, gain, loss or deduction.
Treatment of Short Sales. A unitholder whose units are loaned to a “short seller” to cover a short sale of units may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition. As a result, during this period:
| • | any of our income, gain, loss or deduction with respect to those units would not be reportable by the unitholder; |
| • | any cash distributions received by the unitholder as to those units would be fully taxable; and |
| • | all of these distributions would appear to be ordinary income. |
Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion regarding the tax treatment of a unitholder whose common units are loaned to a short seller to cover a short sale of common units because there is no controlling authority on the issue related to partnership interests and without such authority a legal opinion cannot be issued; therefore, unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to modify any applicable brokerage account agreements to prohibit their brokers from borrowing and loaning their units. The IRS has previously announced that it is studying issues relating to the tax treatment of short sales of partnership interests. Please also read “— Disposition of Common Units — Recognition of Gain or Loss.”
Tax Rates. Under current law, the highest marginal U.S. federal income tax rate applicable to ordinary income of individuals is 37% and the highest marginal U.S. federal income tax rate applicable to long-term capital gains (generally, capital gains on certain assets held for more than 12 months) of individuals is 20%. These rates are subject to change by new legislation at any time.
In addition, a 3.8% Medicare tax, or net investment income tax (“NIIT”), is imposed on certain net investment income earned by individuals, estates and trusts. For these purposes, net investment income generally includes a unitholder’s allocable share of our income and gain realized by a unitholder from a sale of units (without taking into account the 20% deduction discussed below). In the case of an individual, the tax will be imposed on the lesser of (i) the unitholder’s net investment income from all investments, or (ii) the amount by which the unitholder’s modified adjusted gross income exceeds $250,000 (if the unitholder is married and filing jointly or a surviving spouse), $125,000 (if the unitholder is married and filing separately) or $200,000 (in any other case). In the case of an estate or trust, the tax will be imposed on the lesser of (i) undistributed net investment income and (ii) the excess adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins. The U.S. Department of the Treasury and the IRS have issued Treasury Regulations that provide guidance regarding the NIIT. Prospective common unitholders are urged to consult with their tax advisors as to the impact of the NIIT on an investment in our units.
For taxable years beginning after December 31, 2017, and ending on or before December 31, 2025, a non-corporate unitholder is entitled to a deduction equal to 20% of its “qualified business income” attributable to us, subject to certain limitations. For purposes of this deduction, a unitholder’s “qualified business income” attributable to us is equal to the sum of:
| • | the net amount of our U.S. items of income, gain, deduction, and loss to the extent such items are included or allowed in the determination of taxable income for the year, excluding, however, certain specified types of passive investment income (such as capital gains and dividends) and certain payments made to the unitholder for services rendered to the Partnership; and |
| • | any gain recognized by such unitholder on the disposition of its units to the extent such gain is attributable to certain Section 751 Assets, including depreciation recapture and “inventory items” we own. |
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Prospective unitholders should consult their tax advisors regarding the application of this deduction and its interaction with the overall deduction for qualified business income.
Section 754 Election. We have made the election permitted by Section 754 of the Internal Revenue Code that permits us to adjust the tax basis in our assets as to specific purchasers of our units under Section 743(b) of the Internal Revenue Code to reflect the unit purchase price. That election is irrevocable without the consent of the IRS. The Section 743(b) adjustment separately applies to each purchaser of common units based upon the values and bases of our assets at the time of the relevant purchase, and the adjustment will reflect the purchase price paid. The Section 743(b) adjustment does not apply to a person who purchases units directly from us. For purposes of this discussion, a unitholder’s basis in our assets will be considered to have two components: (1) its share of the tax basis in our assets as to all unitholders and (2) its Section 743(b) adjustment to that tax basis (which may be positive or negative).
Under Treasury Regulations, a Section 743(b) adjustment attributable to property depreciable under Section 168 of the Internal Revenue Code may be amortizable over the remaining cost recovery period for such property, while a Section 743(b) adjustment attributable to properties subject to depreciation under Section 167 of the Internal Revenue Code, must be amortized straight-line or using the 150% declining balance method. As a result, if we own any assets subject to depreciation under Section 167 of the Internal Revenue Code, the amortization rates could give rise to differences in the taxation of unitholders purchasing units from us and unitholders purchasing from other unitholders.
Under our partnership agreement, we are authorized to take a position to preserve the uniformity of units even if that position is not consistent with applicable Treasury Regulations. Consistent with our partnership agreement, we intend to treat properties depreciable under Section 167 of the Internal Revenue Code, if any, in the same manner as properties depreciable under Section 168 of the Internal Revenue Code for this purpose. These positions are consistent with the methods employed by other publicly traded partnerships to preserve the uniformity of units, but are inconsistent with existing Treasury Regulations, and Akin Gump Strauss Hauer & Feld LLP has not opined on the validity of this approach. Please read “— Uniformity of Units.”
The IRS may challenge the positions we adopt with respect to depreciating or amortizing the Section 743(b) adjustment we take to preserve the uniformity of units due to lack of controlling authority. Because a unitholder’s tax basis in its units is reduced by its share of our items of deduction or loss, any position we take that understates deductions will overstate a unitholder’s basis in its units and may cause the unitholder to understate gain or overstate loss on any sale of such units. Please read “— Disposition of Common Units — Recognition of Gain or Loss.” If a challenge to such treatment were sustained, the gain from the sale of units may be increased without the benefit of additional deductions.
The calculations involved in the Section 754 election are complex and are made on the basis of assumptions as to the value of our assets and other matters. The IRS could seek to reallocate some or all of any Section 743(b) adjustment we have allocated to our assets subject to depreciation to goodwill or nondepreciable assets.
Goodwill, as an intangible asset, is generally amortizable over a longer period of time or under a less accelerated method than certain of our tangible assets. We cannot assure any unitholder that the determinations we make will not be successfully challenged by the IRS or that the resulting deductions will not be reduced or disallowed altogether. Should the IRS require a different tax basis adjustment to be made, and should, in our opinion, the expense of compliance exceed the benefit of the election, we may seek permission from the IRS to revoke our Section 754 election. If permission is granted, a subsequent purchaser of units may be allocated more income than it would have been allocated had the election not been revoked.
Accounting Method and Taxable Year. We use the year ending December 31 as our taxable year and the accrual method of accounting for federal income tax purposes. Each unitholder will be required to include in
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income his share of our income, gain, loss and deduction for our taxable year ending within or with his taxable year. In addition, a unitholder who has a taxable year ending on a date other than December 31 and who disposes of all of his units following the close of our taxable year but before the close of his taxable year must include his share of our income, gain, loss and deduction in income for his taxable year, with the result that he will be required to include in income for his taxable year his share of more than one year of our income, gain, loss and deduction. Please see “— Disposition of Common Units — Allocations Between Transferors and Transferees.”
Trona Depletion. In general, we are entitled to depletion deductions with respect to trona mined by our subsidiaries from the underlying mineral property. Subject to the limitations on the deductibility of losses discussed above, we are generally entitled to the greater of cost depletion limited to the basis of the property or percentage depletion. The percentage depletion rate for trona is 14%.
Depletion deductions we claim generally will reduce the tax basis of the underlying mineral property. Depletion deductions can, however, exceed the total tax basis of the mineral property. Upon the disposition of the mineral property, a portion of the gain, if any, equal to the lesser of the deductions for depletion which reduce the adjusted tax basis of the mineral property plus deductible development and mining exploration expenses, or the amount of gain realized upon the disposition, will be treated as ordinary income to us.
Tax Basis, Depreciation and Amortization. The tax basis of each of our assets will be used for purposes of computing depreciation and cost recovery deductions and, ultimately, gain or loss on the disposition of these assets. The federal income tax burden associated with the difference between the fair market value of our assets and their tax basis immediately prior to an offering will be borne by our unitholders holding interests in us prior to any such offering. Please see “— Tax Consequences of Unit Ownership — Allocation of Income, Gain, Loss and Deduction.”
To the extent allowable, we may elect to use the depreciation and cost recovery methods, including bonus depreciation to the extent available, that will result in the largest deductions being taken in the early years after assets subject to these allowances are placed in service. We may not be entitled to amortization deductions with respect to certain goodwill conveyed to us in future transactions or held at the time of any future offering. Property we subsequently acquire or construct may be depreciated using accelerated methods permitted by the Internal Revenue Code.
If we dispose of depreciable property by sale, foreclosure or otherwise, all or a portion of any gain, determined by reference to the amount of depreciation and depletion previously deducted and the nature of the property, may be subject to the recapture rules and taxed as ordinary income rather than capital gain. Similarly, a unitholder who has taken cost recovery or depreciation deductions with respect to property we own will likely be required to recapture some or all of those deductions as ordinary income upon a sale of his interest in us. Please see “— Tax Consequences of Unit Ownership — Allocation of Income, Gain, Loss and Deduction” and “— Disposition of Common Units — Recognition of Gain or Loss.”
The costs we incur in offering and selling our units (called “syndication expenses”) must be capitalized and cannot be deducted currently, ratably or upon our termination. There are uncertainties regarding the classification of costs as organization expenses, which may be amortized by us, and as syndication expenses, which may not be amortized by us. The underwriting discounts and commissions we incur will be treated as syndication expenses.
Valuation and Tax Basis of Our Properties. The federal income tax consequences of the ownership and disposition of units will depend in part on our estimates of the relative fair market values, and the initial tax bases, of our assets. Although we may from time to time consult with professional appraisers regarding valuation matters, we will make many of the relative fair market value estimates ourselves. These estimates and determinations of tax basis are subject to challenge and will not be binding on the IRS or the courts. If the estimates of fair market value or tax basis are later found to be incorrect, the character and amount of items of income, gain, loss or deductions previously reported by unitholders might change, and unitholders might be required to adjust their tax liability for prior years and incur interest and penalties with respect to those adjustments.
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Recognition of Gain or Loss. Gain or loss will be recognized on a sale or exchange of units equal to the difference between the amount realized and the unitholder’s tax basis for the units sold or exchanged. A unitholder’s amount realized will be measured by the sum of the cash or the fair market value of other property received by him plus his share of our nonrecourse liabilities. Because the amount realized includes a unitholder’s share of our nonrecourse liabilities, the gain recognized on the sale of units could result in a tax liability in excess of any cash received from the sale or exchange.
Prior distributions from us in excess of cumulative net taxable income for a common unit that decreased a unitholder’s tax basis in that common unit will, in effect, become taxable income if the common unit is sold at a price greater than the unitholder’s tax basis in that common unit, even if the price received is less than his original cost.
Except as noted below, gain or loss recognized by a unitholder, other than a “dealer” in units, on the sale or exchange of a unit will generally be taxable as capital gain or loss. However, a portion, which will likely be substantial, of this gain or loss will be separately computed and taxed as ordinary income or loss under Section 751 of the Internal Revenue Code to the extent attributable to Section 751 Assets, such as assets giving rise to depreciation recapture or other “unrealized receivables” or to “inventory items” we own. The term “unrealized receivables” includes potential recapture items, including depreciation recapture. Ordinary income attributable to Section 751 Assets may exceed net taxable gain realized upon the sale of a unit and may be recognized even if there is a net taxable loss realized on the sale of a unit. Thus, a unitholder may recognize both ordinary income and a capital loss upon a sale of units. Net capital losses may offset capital gains and no more than $3,000 of ordinary income, in the case of individuals, and may only be used to offset capital gains in the case of corporations.
The IRS has ruled that a partner who acquires interests in a partnership in separate transactions must combine those interests and maintain a single adjusted tax basis for all those interests. Upon a sale or other disposition of less than all of those interests, a portion of that tax basis must be allocated to the interests sold using an “equitable apportionment” method, which generally means that the tax basis allocated to the interest sold equals an amount that bears the same relation to the partner’s tax basis in his entire interest in the partnership as the value of the interest sold bears to the value of the partner’s entire interest in the partnership. Treasury Regulations under Section 1223 of the Internal Revenue Code allow a selling unitholder who can identify common units transferred with an ascertainable holding period to elect to use the actual holding period of the common units transferred. Thus, according to the ruling discussed above, a common unitholder will be unable to select high or low basis common units to sell or exchange as would be the case with corporate stock, but, according to the Treasury Regulations, he may designate specific common units sold for purposes of determining the holding period of units transferred. A unitholder electing to use the actual holding period of common units transferred must consistently use that identification method for all subsequent sales or exchanges of common units. A unitholder considering the purchase of additional units or a sale or exchange of common units purchased in separate transactions is urged to consult his tax advisor as to the possible consequences of this ruling and application of the Treasury Regulations.
Specific provisions of the Internal Revenue Code affect the taxation of some financial products and securities, including partnership interests, by treating a taxpayer as having sold an “appreciated” financial position, including a partnership interest, with respect to which gain would be recognized if it were sold, assigned or terminated at its fair market value, if the taxpayer or related persons enter(s) into:
| • | a short sale; |
| • | an offsetting notional principal contract; or |
| • | a futures or forward contract with respect to the partnership interest or substantially identical property. |
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Moreover, if a taxpayer has previously entered into a short sale, an offsetting notional principal contract or a futures or forward contract with respect to the partnership interest, the taxpayer will be treated as having sold that position if the taxpayer or a related person then acquires the partnership interest or substantially identical property. The Secretary of the Treasury is also authorized to issue regulations that treat a taxpayer that enters into transactions or positions that have substantially the same effect as the preceding transactions as having constructively sold the financial position.
Allocations Between Transferors and Transferees. In general, our taxable income and losses will be determined annually, will be prorated on a monthly basis and will be subsequently apportioned among our unitholders in proportion to the number of units owned by each of them as of the opening of the applicable exchange on the first business day of the month, which we refer to as the “Allocation Date.” However, gain or loss realized on a sale or other disposition of our assets other than in the ordinary course of business will be allocated among our unitholders on the Allocation Date in the month in which that gain or loss is recognized. As a result, a unitholder transferring units may be allocated income, gain, loss and deduction realized after the date of transfer.
The U.S. Department of the Treasury and the IRS have issued Treasury Regulations that permit publicly traded partnerships to use a monthly simplifying convention that is similar to ours, but they do not specifically authorize all aspects of the proration method we have adopted. Accordingly, Akin Gump Strauss Hauer & Feld LLP is unable to opine on the validity of this method of allocating income and deductions between transferor and transferee unitholders. If the IRS determines that this method is not allowed under the Treasury Regulations, or only applies to transfers of less than all of the unitholder’s interest, our taxable income or losses might be reallocated among the unitholders. We are authorized to revise our method of allocation between transferor and transferee unitholders, as well as unitholders whose interests vary during a taxable year, to conform to a method permitted under future Treasury Regulations.
A unitholder who owns units at any time during a quarter and who disposes of them prior to the record date set for a cash distribution for that quarter will be allocated items of our income, gain, loss and deductions through the month of disposition but will not be entitled to receive that cash distribution.
Notification Requirements. A unitholder who sells any of his units is generally required to notify us in writing of that sale within 30 days after the sale (or, if earlier, January 15 of the year following the sale). A purchaser of units who purchases units from another unitholder is also generally required to notify us in writing of that purchase within 30 days after the purchase. Upon receiving such notifications, we are required to notify the IRS of that transaction and to furnish specified information to the transferor and transferee. Failure to notify us of a purchase or sale of units may, in some cases, lead to the imposition of penalties. However, these reporting requirements do not apply to a sale by an individual who is a citizen of the United States and who effects the sale or exchange through a broker who will satisfy such requirements.
Because we cannot match transferors and transferees of units and for other reasons, we must maintain uniformity of the economic and tax characteristics of the units to a purchaser of these units. As a result of the need to preserve of uniformity, we may be unable to completely comply with a number of federal income tax requirements. Any non-uniformity could have a negative impact on the value of the units. Please read “— Tax Consequences of Unit Ownership — Section 754 Election.”
Our partnership agreement permits our general partner to take positions in filing our tax returns that preserve the uniformity of our units. These positions may include reducing the depreciation, depletion, amortization or loss deductions to which a unitholder would otherwise be entitled or reporting a slower amortization of Section 743(b) adjustments for some unitholders than that to which they would otherwise be entitled. Akin Gump Strauss Hauer & Feld LLP is unable to opine as to the validity of such filing positions.
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A common unitholder’s adjusted tax basis in units is reduced by its share of our deductions (whether or not such deductions were claimed on an individual income tax return) so that any position that we take that understates deductions will overstate the unitholder’s basis in its units, and may cause the unitholder to understate gain or overstate loss on any sale of such units. Please read “— Disposition of Common Units — Recognition of Gain or Loss” above and “— Tax Consequences of Unit Ownership — Section 754 Election” above. The IRS may challenge one or more of any positions we take to preserve the uniformity of units. If such a challenge were sustained, the uniformity of units might be affected, and, under some circumstances, the gain from the sale of units might be increased without the benefit of additional deductions.
Tax-Exempt Organizations and Other Investors
Ownership of units by employee benefit plans, other tax-exempt organizations, non-resident aliens, foreign corporations and other foreign persons raises issues unique to those investors and, as described below, may have substantially adverse tax consequences to them. If you are a tax-exempt entity or a foreign person, you should consult your tax advisor before investing in our common units.
Employee benefit plans and most other organizations exempt from federal income tax, including IRAs and other retirement plans, are subject to federal income tax on unrelated business taxable income. Virtually all of our income allocated to a unitholder that is a tax-exempt organization will be unrelated business taxable income and will be taxable to it.
Non-resident aliens and foreign corporations are taxed by the United States on income effectively connected with a U.S. trade or business (“effectively connected income”) and on certain types of U.S.-source non-effectively connected income (such as dividends), unless exempted or further limited by an income tax treaty. Non-resident aliens and foreign corporations, trusts or estates that own units will be considered to be engaged in business in the United States because of the ownership of units. As a consequence, they will be required to file federal tax returns to report their share of our income, gain, loss or deduction and pay federal income tax at regular rates on their share of our net income or gain. Moreover, under rules applicable to publicly traded partnerships, we will withhold at the highest applicable effective tax rate from cash distributions made quarterly to foreign unitholders. Each foreign unitholder must obtain a taxpayer identification number from the IRS and submit that number to our transfer agent on a Form W-8BEN, W-8BEN-E (or other applicable or successor form) in order to obtain credit for these withholding taxes. A change in applicable law may require us to change these procedures.
In addition, because a foreign corporation that owns units will be treated as engaged in a United States trade or business, that corporation may be subject to the United States branch profits tax at a rate of 30%, in addition to regular federal income tax, on its share of our income and gain, as adjusted for changes in the foreign corporation’s “U.S. net equity,” which are effectively connected with the conduct of a United States trade or business. That tax may be reduced or eliminated by an income tax treaty between the United States and the country in which the foreign corporate unitholder is a “qualified resident.” In addition, this type of unitholder is subject to special information reporting requirements under Section 6038C of the Internal Revenue Code.
A foreign unitholder who sells or otherwise disposes of a unit will be subject to U.S. federal income tax on gain realized from the sale or disposition of that unit to the extent the gain is effectively connected with a U.S. trade or business of the foreign unitholder. Gain realized by a foreign unitholder from the sale of its interest in a partnership that is engaged in a trade or business in the United States will be considered to be “effectively connected” with a U.S. trade or business to the extent that gain that would be recognized upon a sale by the partnership of all of its assets would be “effectively connected” with a U.S. trade or business. Thus, all of a foreign unitholder’s gain from the sale or other disposition of our common units would be treated as effectively connected with such unitholder’s indirect U.S. trade or business constituted by its investment in us and would be subject to U.S. federal income tax. As a result of the effectively connected income rules described above, the exclusion from U.S. taxation under the Foreign Investment in Real Property Tax Act for gain from the sale of
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partnership common units regularly traded on an established securities market will not prevent a Non-U.S. Unitholder from being subject to U.S. federal income tax on gain from the sale or disposition of its common units to the extent such gain is effectively connected with a U.S. trade or business.
Moreover, the transferee of an interest in a partnership that is engaged in a U.S. trade or business is generally required to withhold 10% of the amount realized by the transferor unless the transferor certifies that it is not a foreign person. While the determination of a partner’s “amount realized” generally includes any decrease of a partner’s share of the partnership’s liabilities, recently issued Treasury Regulations provide that the “amount realized” on a transfer of an interest in a publicly traded partnership, such as our common units, will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and thus will be determined without regard to any decrease in that partner’s share of a publicly traded partnership’s liabilities. The Treasury Regulations further provide that withholding on a transfer of an interest in a publicly traded partnership will not be imposed on a transfer that occurs prior to January 1, 2022. For a transfer of interests in a publicly traded partnership that is effected through a broker on or after January 1, 2022, the obligation to withhold is imposed on the transferor’s broker. Prospective foreign unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units.
Additional withholding requirements may also affect certain foreign unitholders. Please see “— Administrative Matters — Additional Withholding Requirements.”
Information Returns and Audit Procedures. We intend to furnish to each unitholder, within 90 days after the close of each calendar year, specific tax information, including a Schedule K-1, which describes his share of our income, gain, loss and deduction for our preceding taxable year. In preparing this information, which will not be reviewed by counsel, we will take various accounting and reporting positions, some of which have been mentioned earlier, to determine each unitholder’s share of income, gain, loss and deduction. We cannot assure you that those positions will in all cases yield a result that conforms to the requirements of the Internal Revenue Code, Treasury Regulations or administrative interpretations of the IRS. Neither we nor Akin Gump Strauss Hauer & Feld LLP can assure prospective unitholders that the IRS will not successfully contend in court that those positions are impermissible. Any challenge by the IRS could negatively affect the value of the units.
If the IRS makes audit adjustments to our income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, unless we elect to have our general partner, unitholders and former unitholders take any audit adjustment into account in accordance with their interests in us during the taxable year under audit. Similarly, for such taxable years, if the IRS makes audit adjustments to income tax returns filed by an entity in which we are a member or partner, it may assess and collect any taxes (including penalties and interest) resulting from such audit adjustment directly from such entity. Generally, we expect to elect to have our general partner, unitholders and former unitholders take any such audit adjustment into account in accordance with their interests in us during the taxable year under audit, but there can be no assurance that such election will be effective in all circumstances. If we are unable or if it is not economical to have our general partner, unitholders and former unitholders take such audit adjustment into account in accordance with their interests in us during the taxable year under audit, our then current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such unitholders did not own our units during the taxable year under audit. If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties, or interest, our cash available for distribution to our unitholders might be substantially reduced.
The Code requires us to designate a partner, or other person, with a substantial presence in the United States as the partnership representative (“Partnership Representative”). The Partnership Representative will have the sole authority to act on our behalf for purposes of, among other things, federal income tax audits and judicial review of administrative adjustments by the IRS. We have designated our general partner as the Partnership
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Representative. Any actions taken by us or by the Partnership Representative on our behalf with respect to, among other things, federal income tax audits and judicial review of administrative adjustments by the IRS, will be binding on us and all of the unitholders.
Additional Withholding Requirements. Withholding taxes may apply to certain types of payments made to “foreign financial institutions” (as specially defined in the Internal Revenue Code) and certain other foreign entities. Specifically, a 30% withholding tax may be imposed on interest, dividends and other fixed or determinable annual or periodical gains, profits and income from sources within the United States (“FDAP Income”) paid to a foreign financial institution or to a “non-financial foreign entity” (as specially defined in the Internal Revenue Code), unless (i) the foreign financial institution undertakes certain diligence and reporting, (ii) the non-financial foreign entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (i) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to noncompliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing these requirements may be subject to different rules.
These rules generally apply to payments of FDAP Income currently and, while these rules generally would have applied to payments of relevant gross proceeds from the sales or other disposition of any property of a type that can produce interest or dividends from sources within the United States (“Gross Proceeds”) made on or after January 1, 2019, proposed Treasury Regulations eliminate these withholding taxes on payments of Gross Proceeds entirely. Unitholders generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. Thus, to the extent we have FDAP Income that is not treated as effectively connected with a U.S. trade or business (please see “—Tax-Exempt Organizations and Other Investors”), unitholders who are foreign financial institutions or certain other foreign entities, or persons that hold their units through such foreign entities, may be subject to withholding on distributions they receive from us, or their distributive share of our income, pursuant to the rules described above.
Prospective unitholders should consult their own tax advisors regarding the potential application of these withholding provisions to their investment in our units.
Nominee Reporting. Persons who hold an interest in us as a nominee for another person are required to furnish to us:
| (a) | the name, address and taxpayer identification number of the beneficial owner and the nominee; |
| (b) | a statement regarding whether the beneficial owner is |
| (1) | a person that is not a United States person, |
| (2) | a foreign government, an international organization or any wholly owned agency or instrumentality of either of the foregoing, or |
| (3) | a tax-exempt entity; |
| (c) | the amount and description of units held, acquired or transferred for the beneficial owner; and |
| (d) | specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales. |
Brokers and financial institutions are required to furnish additional information, including whether they are United States persons and specific information on units they acquire, hold or transfer for their own account. A
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penalty per failure, with a significant penalty per calendar year, is imposed by the Internal Revenue Code for failure to report that information to us. The nominee is required to supply the beneficial owner of the units with the information furnished to us.
Accuracy-Related Penalties. Certain penalties may be imposed as a result of an underpayment of tax that is attributable to one or more specified causes, including negligence or disregard of rules or regulations, substantial understatements of income tax and substantial valuation misstatements. No penalty will be imposed, however, for any portion of an underpayment if it is shown that there was a reasonable cause for that portion and that the taxpayer acted in good faith regarding that portion.
The present federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time. For example, from time to time, members of Congress and the President propose and consider substantive changes to the existing federal income tax laws that affect publicly traded partnerships, including the elimination of partnership tax treatment for publicly traded partnerships.
Any modifications to the federal income tax laws and interpretations thereof may or may not be retroactively applied and could make it more difficult or impossible to meet the exception for us to be treated as a partnership for U.S. federal income tax purposes. Please read “—Partnership Status.” We are unable to predict whether any such changes will ultimately be enacted. However, it is possible that a change in law could affect us, and any such changes could negatively impact the value of an investment in our common units.
State, Local, Foreign and Other Tax Considerations
In addition to federal income taxes, you may be subject to other taxes, such as state, local, and foreign income taxes, unincorporated business taxes, and estate, inheritance or intangible taxes that may be imposed by the various jurisdictions in which we do business or own property or in which you are a resident. We own assets and do business in more than 25 states including Texas, Louisiana, Mississippi, Alabama, Florida, Arkansas and Oklahoma. Many of the states we currently do business in currently impose a personal income tax. We may also own property or do business in other states in the future. Although an analysis of those various taxes is not presented here, each prospective unitholder is urged to consider their potential impact on his investment in us. You may be required to file state income tax returns and to pay state income taxes in certain states in which we do business or own property, and you may be subject to penalties for failure to comply with those requirements. In some jurisdictions, tax losses may not produce a tax benefit in the year incurred and may not be available to offset income in subsequent taxable years. Some jurisdictions may require us, or we may elect, to withhold a percentage of income from amounts to be distributed to a unitholder who is not a resident of the jurisdiction. Withholding, the amount of which may be greater or less than a particular unitholder’s income tax liability to the jurisdiction, generally does not relieve a nonresident unitholder from the obligation to file an income tax return. Amounts withheld will be treated as if distributed to unitholders for purposes of determining the amounts distributed by us. Please see “— Tax Consequences of Unit Ownership — Entity-Level Collections.”
It is the responsibility of each unitholder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, of his investment in us. Accordingly, each prospective unitholder is urged to consult, and depend upon, his tax counsel or other advisor with regard to those matters. Further, it is the responsibility of each unitholder to file all state, local and foreign, as well as United States federal tax returns, that may be required of him. Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion on the state, local or foreign tax consequences of an investment in us.
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INVESTMENT IN GENESIS BY EMPLOYEE BENEFIT PLANS AND IRAS
The following is a summary of certain considerations associated with the investment in our securities by any employee benefit plan that is subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any plan, IRA or other arrangement that is subject to Section 4975 of the Internal Revenue Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Internal Revenue Code (collectively, “Similar Laws”), and any entity whose underlying assets are considered to include “plan assets” by reason of any such plan’s, account’s or arrangement’s investment in such entity (each of the foregoing, a “Plan”).
This summary is based on the provisions of ERISA and the Internal Revenue Code, and the related regulations and administrative and judicial interpretations, as of the date hereof. This summary does not purport to be complete, and no assurance can be given that future legislation, court decisions or administrative regulations, rulings or pronouncements will not significantly modify the requirements summarized herein. Any such changes may be retroactive and thereby apply to transactions entered into before the date of their enactment or release. This discussion is general in nature and is not intended to be all inclusive, nor should it be construed as investment or legal advice.
ERISA and the Internal Revenue Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Internal Revenue Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Internal Revenue Code, any person who exercises any discretionary authority or control over the administration of an ERISA Plan or the management or disposition of the assets of an ERISA Plan, or who renders investment advice for a fee or other compensation to an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.
In considering an investment in our securities of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Internal Revenue Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control, unrelated business taxable income and prohibited transaction provisions of ERISA, the Internal Revenue Code and any other applicable Similar Laws.
Governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as defined in Section 4(b)(4) of ERISA), while generally not subject to the fiduciary responsibility provisions of ERISA or the provisions of Section 4975 of the Internal Revenue Code, may nevertheless be subject to Similar Laws. Fiduciaries of any such plans should consult with their counsel before acquiring any of our securities.
Section 406 of ERISA and Section 4975 of the Internal Revenue Code (which also applies to IRAs of individuals) prohibit ERISA Plans from engaging in specified transactions involving “plan assets” with persons or entities who are “parties in interest” under ERISA or “disqualified persons” under Section 4975 of the Internal Revenue Code, unless an exemption is available. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Internal Revenue Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Internal Revenue Code.
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The acquisition, holding or disposition of our securities by an ERISA Plan with respect to which either we, our general partner, selling unitholders or any of their respective affiliates is considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the United States Department of Labor (the “DOL”) has issued prohibited transaction class exemptions, or “PTCEs,” that may apply to the acquisition and holding of the securities. These class exemptions include, without limitation, PTCE 75-1, which exempts certain transactions between an ERISA Plan and certain broker-dealers, reporting dealers and banks, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers, although there can be no assurance that all of the conditions of any such exemptions will be satisfied. In addition, the statutory service provider exemption provided by Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Internal Revenue Code, which exempts certain transactions between ERISA Plans and parties in interest or disqualified persons that are not fiduciaries with respect to the transaction, could apply.
Because of the foregoing, none of our securities should be purchased or held by any person investing “plan assets” of any Plan, unless such purchase, holding and subsequent disposition will not constitute or result in a non-exempt prohibited transaction under ERISA and the Internal Revenue Code or violation of any applicable Similar Laws. Each person investing in any of our securities will be deemed to represent that its acquisition, holding and disposition of such investment will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code or a violation of any applicable Similar Law.
DOL regulations, as modified by Section 3(42) of ERISA, (the “Plan Asset Regulations”) generally provide that when an ERISA Plan acquires an equity interest in an entity that is not an investment company registered under the Investment Company Act of 1940, the ERISA Plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity (the “look-through rule”), unless it is established that:
| • | the equity interests acquired by ERISA Plans are “publicly offered securities,” meaning they are part of a class of securities that is widely held by 100 or more investors independent of the issuer and each other, are freely transferable, and are either registered under certain provisions of the federal securities laws or sold to the ERISA Plan as part of a public offering under certain conditions; or |
| • | the entity is an “operating company,” meaning that it is primarily engaged in the production or sale of a product or service (other than the investment of capital), either directly or through one or more majority-owned subsidiaries; or |
| • | equity participation in the entity by “benefit plan investors” is not significant, such that immediately after the most recent acquisition (including any redemption) of any equity interest in the entity, less than 25% of the total value of each class of equity interest in the entity (disregarding interests held by certain persons with discretionary authority over the entity’s assets or their affiliates) is held by ERISA Plans, including IRAs and certain other Plans (but not including governmental plans, church plans and non-U.S. plans) and entities whose underlying assets are deemed to include plan assets by reason of a Plan’s investment in such entity. |
If our assets were deemed to be “plan assets” under ERISA, it would result, among other things, in (i) the application of the prudence and other fiduciary responsibility standards of ERISA to investments made by us and (ii) the possibility that certain transactions in which we might seek to engage could constitute “prohibited transactions” under ERISA and the Internal Revenue Code.
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However, it is not anticipated that our assets will be considered plan assets because we are primarily engaged in business activities that we believe qualify us as an “operating company” under the Plan Assets Regulations (although no assurance can be given in this regard). In addition, our common units are “publicly-offered securities” and we believe that our debt securities are not “equity interests” for purposes of the Plan Asset Regulations, so that significant investment by benefit plan investors in those securities would not result in our assets being treated as plan assets under ERISA. Investment in each class of our securities by benefit plan investors also may not be “significant” for purposes of the Plan Asset Regulations, although it is unlikely that we will be in a position to monitor whether or not investment in any class of our securities by benefit plan investors is or may become significant.
The foregoing discussion is general in nature and is not intended to be all-inclusive nor should it be construed as legal advice. Due to the complexity of these rules and the excise tax and other penalties and liabilities that may be imposed on persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the any of our securities on behalf of, or with the assets of, any Plan, consult with their own counsel regarding the potential applicability of ERISA, Section 4975 of the Internal Revenue Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the securities and the subsequent disposition thereof.
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We may offer and sell the securities described in this prospectus from time to time directly, through agents, or to or through underwriters or dealers. To the extent required, the prospectus supplement relating to any particular offering will contain the terms of the securities sold in that offering, including:
| • | the names of any underwriters, dealers or agents (if any); |
| • | the offering price; |
| • | underwriting discounts; |
| • | sales agents’ commissions; |
| • | other forms of underwriter or agent compensation; |
| • | discounts, concessions or commissions that underwriters may pass on to other dealers; and |
| • | any exchange on which the securities are listed. |
We may change the offering price, underwriting discounts or concessions, or the price to dealers when necessary. Discounts or commissions received by underwriters or agents and any profits on the resale of securities by them may constitute underwriting discounts and commissions under the Securities Act of 1933, as amended (the “Securities Act”).
Unless we state otherwise in a prospectus supplement, underwriters will need to meet certain requirements before purchasing securities. Agents may act on a “best efforts” basis during their appointment. To the extent required, we will also state the net proceeds from the sale in a prospectus supplement.
Any brokers or dealers that participate in the distribution of the securities may be “underwriters” within the meaning of the Securities Act for such sales. Profits, commissions, discounts or concessions received by such broker or dealer may be underwriting discounts and commissions under the Securities Act. Brokers or dealers may act as agent or may purchase securities as principal and thereafter resell the securities from time to time in or through one or more transactions or distributions.
Offers to purchase securities may be solicited directly by us and the sale thereof may be made by us directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. To the extent required, the terms of any such sales will be described in the prospectus supplement relating thereto. We may use electronic media, including the Internet, to sell offered securities directly.
When necessary, we may fix securities distributions using changeable, fixed prices, market prices at the time of sale, prices related to market prices, or negotiated prices.
We may, through agreements, indemnify underwriters, dealers or agents that participate in the distribution of the securities against certain liabilities including liabilities under the Securities Act. We may also provide funds for payments that the underwriters, dealers or agents may be required to make. Underwriters, dealers and agents, and their affiliates may transact with us and our affiliates in the ordinary course of their business.
We may offer our equity securities described in this prospectus into an existing trading market on the terms described in the prospectus supplement thereto. Underwriters and dealers who may participate in any at-the-market offerings will be described in the prospectus supplement relating thereto.
The aggregate maximum compensation the underwriters will receive in connection with the sale of any securities under this prospectus and the registration statement of which it forms a part will not exceed 10% of the gross proceeds from the sale.
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Because the Financial Industry Regulatory Authority (FINRA) views our common units as interests in a direct participation program, any offering of common units under the registration statement of which this prospectus forms a part will be made in compliance with Rule 2310 of the FINRA Rules.
To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. The place and time of delivery for the equity securities in respect of which this prospectus is delivered will be set forth in the accompanying prospectus supplement.
To facilitate an offering of a series of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
Any offering and sale under this prospectus may be made on one or more national securities exchanges or in the over-the-counter market, or otherwise at prices and on terms then prevailing or at prices related to the then-current market price, or in negotiated transactions.
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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
The statements in this prospectus or incorporated by reference into this prospectus that are not historical information may be “forward-looking statements” as defined under federal law.
All statements, other than historical facts, included in this prospectus and the documents incorporated in this prospectus by reference that address activities, events or developments that we expect or anticipate will or may occur in the future, including things such as plans for growth of the business, future capital expenditures, competitive strengths, goals, references to future goals or intentions, estimated or projected future financial performance, and other such references are forward-looking statements, and historical performance is not necessarily indicative of future performance. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. They use words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “could,” “plan,” “position,” “projection,” “strategy,” “should” or “will,” or the negative of those terms or other variations of them or by comparable terminology. In particular, statements, expressed or implied, concerning future actions, conditions or events or future operating results or the ability to generate sales, income or cash flow are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond our ability or the ability of our affiliates to control or predict. Specific factors that could cause actual results to differ from those in the forward-looking statements include, among others:
| • | demand for, the supply of, our assumptions about, changes in forecast data for, and price trends related to crude oil, liquid petroleum, natural gas, sodium hydrosulfide, soda ash (also known as sodium carbonate), caustic soda and carbon dioxide, all of which may be affected by economic activity, capital expenditures by energy producers, weather, alternative energy sources, international events, pandemics (including Covid-19), the actions of the Organization of the Petroleum Exporting Countries and other oil exporting nations, conservation and technological advances; |
| • | our ability to successfully execute our business and financial strategies; |
| • | our ability to realize cost savings from our recent cost saving measures; |
| • | the realized benefits of the preferred equity investment in our Alkali Business by affiliates of GSO Capital Partners LP or our ability to comply with the agreements entered into in connection with such transaction and maintain control over and ownership of our Alkali Business; |
| • | throughput levels and rates; |
| • | changes in, or challenges to, our tariff rates; |
| • | our ability to successfully identify and close strategic acquisitions on acceptable terms (including obtaining third-party consents and waivers of preferential rights), develop or construct infrastructure assets, make cost saving changes in operations and integrate acquired assets or businesses into our existing operations; |
| • | service interruptions in our pipeline transportation systems, processing operations or mining facilities; |
| • | shutdowns or cutbacks at refineries, petrochemical plants, utilities, individual plants or other businesses for which we transport crude oil, petroleum, natural gas or other products or to whom we sell soda ash, petroleum or other products; |
| • | risks inherent in marine transportation and vessel operation, including accidents and discharge of pollutants; |
| • | changes in laws and regulations to which we are subject, including tax withholding issues, regulations regarding qualifying income, accounting pronouncements, and safety, environmental and employment laws and regulations; |
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| • | the effects of production declines resulting from a suspension of drilling in the Gulf of Mexico or otherwise; |
| • | the effects of future laws and regulations; |
| • | planned capital expenditures and availability of capital resources to fund capital expenditures, and our ability to access the credit and capital markets to obtain financing on terms we deem acceptable; |
| • | our inability to borrow or otherwise access funds needed for operations, expansions or capital expenditures as a result of our credit agreement and the indentures governing our notes, which contain various affirmative and negative covenants; |
| • | loss of key personnel; |
| • | cash from operations that we generate could decrease or fail to meet expectations, either of which could reduce our ability to pay quarterly cash distributions at the current level, pay our quarterly distributions on our Convertible preferred units, or to increase quarterly cash distributions in the future; |
| • | an increase in the competition that our operations encounter; |
| • | cost and availability of insurance; |
| • | hazards and operating risks that may not be covered fully by insurance; |
| • | our financial and commodity hedging arrangements, which may reduce our earnings, profitability and cash flow; |
| • | changes in global economic conditions, including capital and credit markets conditions, inflation and interest rates; |
| • | the impact of natural disasters, pandemics (including Covid-19), epidemics, accidents or terrorism, and actions taken by governmental authorities and other third parties in response thereto, on our business financial condition and results of operations; |
| • | reduction in demand for our services resulting in impairments of our assets; |
| • | changes in the financial condition of customers or counterparties; |
| • | adverse rulings, judgments, or settlements in litigation or other legal or tax matters; |
| • | the treatment of us as a corporation for U.S. federal income tax purposes or if we become subject to entity-level taxation for state tax purposes; |
| • | the potential that our internal controls may not be adequate, weaknesses may be discovered or remediation of any identified weaknesses may not be successful and the impact these could have on our unit price; and |
| • | a cyberattack involving our information systems and related infrastructure, or that of our business associates. |
You should not put undue reliance on any forward-looking statements. When considering forward-looking statements, please review the risk factors identified in this prospectus under “Risk Factors,” as well as the section entitled “Risk Factors” included in our most recent Annual Report on Form 10-K, our subsequently filed Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Form 8-K/A and any other prospectus supplement we may file from time to time with the Commission with respect to this offering. Except as required by applicable securities laws, we do not intend to update these forward-looking statements and information.
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The validity of the securities offered in this prospectus as well as the legal matters described under “Material Income Tax Consequences” will be passed upon for us by Akin Gump Strauss Hauer & Feld LLP. Certain legal matters arising under Alabama and Louisiana law will be passed upon by Law Office of John Foster Tyra, PC and Liskow & Lewis, a Professional Law Corporation, respectively. Any underwriter will be advised about other issues relating to any offering by its own legal counsel.
The consolidated financial statements of Genesis Energy, L.P appearing in Genesis Energy, L.P.’s Annual Report (Form 10-K) for the year ended December 31, 2020, and the effectiveness of Genesis Energy, L.P.’s internal control over financial reporting as of December 31, 2020, have been audited by Ernst & Young LLP, an independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and Genesis Energy, L.P. management’s assessment of internal control over financial reporting as of December 31, 2020 have been incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The financial statements of Poseidon Oil Pipeline Company, L.L.C. appearing in Genesis Energy, L.P.’s Annual Report (Form 10-K) for the year ended December 31, 2020, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon, included therein, and incorporated herein by reference. Such financial statements have been incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports and other information with the Commission. You may read and copy documents we file at the Commission’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for information on the public reference room. You can also find our filings at the Commission’s website at http://www.sec.gov and on our website at http://www.genesisenergy.com. We make our website content available for information purposes only. Information contained on our website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.
The Commission allows us to “incorporate by reference” the information we have filed with the Commission, which means that we can disclose important information to you without actually including the specific information in this prospectus by referring you to those documents. The information incorporated by reference is an important part of this prospectus and later information that we file with the Commission will automatically update and supersede this information. Therefore, before you decide to invest in a particular offering under this shelf registration, you should always check for reports we may have filed with the Commission after the date of this prospectus. We incorporate by reference the documents listed below and any future filings we make with the Commission under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act (excluding information deemed to be furnished and not filed with the Commission) until we sell all of the securities offered by this prospectus:
| • | Annual Report on Form 10-K for the fiscal year ended December 31, 2020; and |
| • | Current Report on Form 8-K (File No. 001-12295) filed with the Commission on April 15, 2021; and |
| • | the description of our common units in our registration statements on Form 8-A (File No. 001-12295) filed on January 30, 2001 and September 13, 2010, and any subsequent amendment thereto filed for the purpose of updating such description. |
We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, a copy of any document incorporated by reference in this prospectus, other than exhibits to any such document not specifically described above. Requests for such documents should be directed to:
Investor Relations
Genesis Energy, L.P.
919 Milam, Suite 2100
Houston, Texas 77002
(713) 860-2500 or (800) 284-3365
We intend to furnish or make available to our unitholders within 75 days (or such shorter period as the Commission may prescribe) following the close of our fiscal year end annual reports containing audited financial statements prepared in accordance with generally accepted accounting principles and furnish or make available within 40 days (or such shorter period as the Commission may prescribe) following the close of each fiscal quarter quarterly reports containing unaudited interim financial information, including the information required by Form 10-Q for the first three fiscal quarters of each of our fiscal years. Our annual report will include a description of any transactions with our general partner or its affiliates, and of fees, commissions, compensation and other benefits paid, or accrued to our general partner or its affiliates for the fiscal year completed, including the amount paid or accrued to each recipient and the services performed.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| ITEM 14. | OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION |
The following table sets forth the costs and expenses, other than selling or underwriting discounts and commissions, we expect to incur in connection with the issuance and distribution of the securities being registered. All amounts shown are estimated except the Commission registration fee. Genesis Energy, L.P. will bear all such costs and expenses.
| Securities and Exchange Commission registration fee |
$ | * | ||
| Accounting fees and expenses |
** | |||
| Legal fees and expenses |
** | |||
| Printing and engraving expenses |
** | |||
| Transfer agent and registrar fees |
** | |||
| Trustee fees and expenses |
** | |||
| Listing fees |
** | |||
| Miscellaneous |
** | |||
|
|
|
|||
| Total |
$ | ** | ||
|
|
|
| * | Under Rules 456(b) and 457(r), the Commission registration fee will be paid at the time of any particular offering of securities under the registration statement, and is therefore not currently determinable. |
| ** | These fees are calculated based on the number of issuances and amount of securities offered and accordingly cannot be estimated at this time. |
| ITEM 15. | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
Genesis Energy, L.P.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act provides that, subject to such standards and restrictions, if any, as are set forth in its limited partnership agreement, a Delaware limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against all claims and demands whatsoever. The partnership agreement of Genesis Energy, L.P. provides that Genesis Energy, L.P. will indemnify (to the fullest extent permitted by applicable law) certain persons (each, an “Indemnitee”) 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 incurred by such Indemnitee in connection with any claim, demand, action, suit or proceeding to which the Indemnitee is or was an actual or threatened party by reason or its status as an Indemnitee. This indemnity is available only if the Indemnitee acted in good faith, in a manner in which such Indemnitee believed to be in, or not opposed to, the best interests of Genesis and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful. Indemnitees include our general partner, any Departing Partner (as defined in the partnership agreement of Genesis Energy, L.P.), any affiliate of our general partner or any Departing Partner, any person who is or was a director (including any Class A Board Observer (as defined in the partnership agreement of Genesis Energy, L.P.)), officer, employee, agent or trustee of our general partner or any Departing Partner or any affiliate of either (including Genesis Energy, L.P. and its subsidiaries), or any person who is or was serving at the request of our general partner, any Departing Partner, or any such affiliate as a director, officer, employee, member, partner, agent fiduciary or trustee of another person. Expenses subject to indemnity will be paid by the partnership to the Indemnitee in advance, subject to receipt of an undertaking by or on behalf of the Indemnitee to repay such amount if it is ultimately determined that the Indemnitee is not entitled to indemnification. Genesis Energy, L.P. will, to the extent commercially reasonable, purchase and maintain insurance on behalf of the Indemnitees, whether or not Genesis Energy, L.P. would have the power to indemnify such Indemnitees against liability under the partnership agreement.
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Genesis Energy, L.P. has entered into indemnification agreements with the directors of its general partner. Those agreements provide, among other things, that Genesis Energy, L.P. will indemnify each director in the event that such director becomes a party or otherwise a participant in any action or proceeding on account of such director’s service as a director (or service for another entity in any capacity at the request of our general partner or Genesis Energy, L.P.) to the fullest extent permitted by applicable law. Under each indemnification agreement, Genesis Energy, L.P. has agreed to pay, in advance of the final disposition of any such action or proceeding, expenses (including attorneys’ fees) incurred by each director in defending or otherwise responding to such action or proceeding. The contractual rights to indemnification provided by the indemnification agreements are subject to the limitations and conditions specified in those agreements, and are in addition to any other rights the directors may have under our general partner’s limited liability company agreement and the partnership agreement of Genesis Energy, L.P. (each as amended from time to time) and applicable law. Our general partner is party to each of those indemnification agreements. Genesis Energy, L.P. has joint and several liability with our general partner for all obligations owed to those directors under those indemnification agreements. Under the partnership agreement of Genesis Energy, L.P., it has agreed to reimburse and indemnify our general partner for all costs and expenses it incurs in connection with being general partner of Genesis Energy, L.P., including any costs and expenses related to indemnifying its directors.
Reference is made to Exhibit 1.1 hereto, which will contain provisions for indemnification of Genesis Energy, L.P., our general partner and its directors, officers, and any controlling persons, against certain liabilities for information furnished by the underwriters and/or agents, as applicable, expressly for use in a prospectus supplement.
Genesis Energy Finance Corporation
Section 145 of the Delaware General Corporation Law empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Similar indemnity is authorized for such persons against expenses (including attorneys’ fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145. Also, Article VIII of the certificate of incorporation and Article VIII of the bylaws of Genesis Energy Finance Corporation provide for the indemnification of directors and officers of the company and such directors and officers who serve at the request of the company as directors, officers, employees or agents of any other enterprise against certain liabilities under certain circumstances.
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Subsidiary Guarantor Registrants
AP Marine, LLC, BR Port Services, LLC, Cameron Highway Oil Pipeline Company, LLC, Cameron Highway Pipeline GP, L.L.C., Casper Express Pipeline, LLC, Davison Petroleum Supply, LLC, Davison Transportation Services, LLC, Deepwater Gateway, L.L.C., Flextrend Development Company, L.L.C., GEL CHOPS GP, LLC, GEL Deepwater, LLC, GEL IHUB, LLC, GEL Louisiana Fuels, LLC, GEL Odyssey, LLC, GEL Offshore Pipeline, LLC, GEL Offshore, LLC, GEL Paloma, LLC, GEL Pipeline Offshore, LLC, GEL Poseidon, LLC, GEL Sekco, LLC, GEL Tex Marketing, LLC, GEL Texas Pipeline, LLC, GEL Wyoming, LLC, Genesis BR, LLC, Genesis CHOPS I, LLC, Genesis CHOPS II, LLC, Genesis Davison, LLC, Genesis Deepwater Holdings, LLC, Genesis Energy, LLC, Genesis Free State Holdings, LLC, Genesis GTM Offshore Operating Company, LLC, Genesis IHUB Holdings, LLC, Genesis Marine, LLC, Genesis NEJD Holdings, LLC, Genesis Odyssey, LLC, Genesis Offshore, LLC, Genesis Offshore Holdings, LLC, Genesis Poseidon, LLC, Genesis Poseidon Holdings, LLC, Genesis Rail Services, LLC, Genesis Sailfish Holdings, LLC, Genesis Sekco, LLC, Genesis SMR Holdings, LLC, Genesis Texas City Terminal, LLC, High Island Offshore System, L.L.C., Poseidon Pipeline Company, L.L.C., Sailfish Pipeline Company, L.L.C., Southeast Keathley Canyon Pipeline Company, L.L.C., TDC Services, LLC, Texas City Crude Oil Terminal, LLC and Thunder Basin Holdings, LLC are all Delaware limited liability companies. Section 18-108 of the Delaware Limited Liability Company Act provides that, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a Delaware limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. The limited liability company agreement of each Delaware subsidiary guarantor registrant provides for the indemnification of its member, officers and managers to the fullest extent permitted by Delaware law against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings (civil, criminal, administrative or investigative) in which such person may be involved, or is threatened to be involved, as a party or otherwise, arising out of any act or omission of any of such person in connection with the operations of the company, unless such act or omission was committed in bad faith or was the result of active and deliberate dishonesty, such person did not reasonably believe that such person was acting in the best interests of the company, such person actually received an improper personal benefit in money, property or services, or in the case of a criminal proceeding, such person had reasonable cause to believe that the act or omission was unlawful.
Cameron Highway Pipeline I, L.P., GEL CHOPS I, L.P., GEL CHOPS II, L.P., Genesis Crude Oil, L.P., Genesis Pipeline Texas, L.P., Genesis Pipeline USA, L.P. and Genesis Syngas Investments, L.P. are all Delaware limited partnerships. Section 17-108 of the Delaware Revised Uniform Limited Partnership Act provides that, subject to such standards and restrictions, if any, as are set forth in its limited partnership agreement, a Delaware limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against all claims and demands whatsoever.
Red River Terminals, L.L.C. and TDC, L.L.C. are Louisiana limited liability companies. Section 12:1315(2) of the Louisiana Limited Liability Company Act provides that the articles of organization or a written operating agreement may provide for indemnification of a member or members, or a manager or managers, for judgments, settlements, penalties, fines, or expenses incurred because he is or was a member or manager. The Articles of Organization of TDC, L.L.C., as amended, provides for the most complete elimination of liability and the fullest rights to indemnification of its members and managers possible under Louisiana law.
Genesis Pipeline Alabama, LLC is an Alabama limited liability company. Section 10A-5A-4.10 of the Code of Alabama permits a limited liability company to indemnify and hold harmless a member or other person, pay in advance or reimburse expenses incurred by a member or other person, and purchase and maintain insurance on behalf of a member or other person.
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Manta Ray Gathering Company, L.L.C., Matagorda Offshore, LLC and Seahawk Shoreline System, LLC are Texas limited liability companies. Section 101.402 of the Texas Business Organizations Code provides that a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.
Davison Transportation Services, Inc. and Milam Services, Inc. are Delaware corporations. Section 145 of the Delaware General Corporation Law empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Similar indemnity is authorized for such persons against expenses (including attorneys’ fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct.
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| ITEM 16. | EXHIBITS |
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| * | To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Exchange Act or in a post-effective amendment to this registration statement. |
| ** | Filed herewith. |
| ITEM 17. | UNDERTAKINGS |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total |
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| dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if information required to be included in a post-effective amendment by those paragraphs is contained in the reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
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| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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Pursuant to the requirements of the Securities Act of 1933, the undersigned registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| GENESIS ENERGY, L.P. | ||
| By: | GENESIS ENERGY, LLC, its general partner | |
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE |
|||
| (OF GENESIS ENERGY, LLC)* | ||||
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director (Principal Executive Officer) |
|||
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer (Principal Financial Officer) |
|||
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller (Principal Accounting Officer) |
|||
| /s/ Conrad P. Albert Conrad P. Albert |
Director | |||
| /s/ James E. Davison James E. Davison |
Director | |||
| /s/ James E. Davison, Jr. James E. Davison, Jr. |
Director | |||
| /s/ Sharilyn S. Gasaway Sharilyn S. Gasaway |
Director | |||
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| SIGNATURE |
TITLE |
|||
| (OF GENESIS ENERGY, LLC)* | ||||
| /s/ Kenneth M. Jastrow, II Kenneth M. Jastrow, II |
Director | |||
| /s/ Jack T. Taylor Jack T. Taylor |
Director |
| * | Genesis Energy, LLC is the sole general partner of Genesis Energy, L.P. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| GENESIS ENERGY FINANCE CORPORATION | ||
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE |
|||
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director (Principal Executive Officer) |
|||
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer and Director (Principal Financial Officer) |
|||
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller and Director (Principal Accounting Officer) |
|||
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the undersigned registrants certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| GENESIS CRUDE OIL, L.P. GENESIS PIPELINE TEXAS, L.P. GENESIS PIPELINE USA, L.P. GENESIS SYNGAS INVESTMENTS, L.P. | ||
| By: | GENESIS ENERGY, LLC, its general partner | |
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE |
|||
| (OF GENESIS ENERGY, LLC)* | ||||
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director (Principal Executive Officer) |
|||
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer (Principal Financial Officer) |
|||
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller (Principal Accounting Officer) |
|||
| /s/ Conrad P. Albert Conrad P. Albert |
Director | |||
| /s/ James E. Davison James E. Davison |
Director | |||
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| SIGNATURE |
TITLE |
|||
| (OF GENESIS ENERGY, LLC)* | ||||
|
/s/ James E. Davison, Jr. James E. Davison, Jr. |
Director |
|||
| /s/ Sharilyn S. Gasaway Sharilyn S. Gasaway |
Director | |||
| /s/ Kenneth M. Jastrow, II Kenneth M. Jastrow, II |
Director | |||
| /s/ Jack T. Taylor Jack T. Taylor |
Director | |||
| * | Genesis Energy, LLC is the sole general partner of Genesis Crude Oil, L.P., Genesis Pipeline Texas, L.P., Genesis Pipeline USA, L.P., and Genesis Syngas Investments, L.P. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the undersigned registrants certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| DAVISON TRANSPORTATION SERVICES, INC. MILAM SERVICES, INC. | ||
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE |
|||
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director (Principal Executive Officer) |
|||
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer and Director (Principal Financial Officer) |
|||
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller and Director (Principal Accounting Officer) |
|||
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the undersigned registrants certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
AP MARINE, LLC
| BR PORT SERVICES, LLC CAMERON HIGHWAY OIL PIPELINE COMPANY, LLC CAMERON HIGHWAY PIPELINE GP, L.L.C. CASPER EXPRESS PIPELINE, LLC DAVISON PETROLEUM SUPPLY, LLC DAVISON TRANSPORTATION SERVICES, LLC DEEPWATER GATEWAY, L.L.C. FLEXTREND DEVELOPMENT COMPANY, L.L.C. GEL CHOPS GP, LLC GEL DEEPWATER, LLC GEL IHUB, LLC GEL LOUISIANA FUELS, LLC GEL ODYSSEY, LLC GEL OFFSHORE, LLC GEL OFFSHORE PIPELINE, LLC GEL PALOMA, LLC GEL PIPELINE OFFSHORE, LLC GEL POSEIDON, LLC GEL SEKCO, LLC GEL TEX MARKETING, LLC GEL TEXAS PIPELINE, LLC GEL WYOMING, LLC GENESIS BR, LLC GENESIS CHOPS I, LLC GENESIS CHOPS II, LLC GENESIS DAVISON, LLC GENESIS DEEPWATER HOLDINGS, LLC GENESIS FREE STATE HOLDINGS, LLC GENESIS GTM OFFSHORE OPERATING COMPANY, LLC GENESIS IHUB HOLDINGS, LLC GENESIS MARINE, LLC GENESIS NEJD HOLDINGS, LLC GENESIS ODYSSEY, LLC GENESIS OFFSHORE, LLC GENESIS OFFSHORE HOLDINGS, LLC GENESIS PIPELINE ALABAMA, LLC GENESIS POSEIDON, LLC GENESIS POSEIDON HOLDINGS, LLC GENESIS RAIL SERVICES, LLC GENESIS SAILFISH HOLDINGS, LLC GENESIS SEKCO, LLC | ||
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| GENESIS SMR HOLDINGS, LLC GENESIS TEXAS CITY TERMINAL, LLC HIGH ISLAND OFFSHORE SYSTEM, L.L.C. MANTA RAY GATHERING COMPANY, L.L.C. MATAGORDA OFFSHORE, LLC POSEIDON PIPELINE COMPANY, L.L.C. RED RIVER TERMINALS, L.L.C. SAILFISH PIPELINE COMPANY, L.L.C. SEAHAWK SHORELINE SYSTEM, LLC SOUTHEAST KEATHLEY CANYON PIPELINE COMPANY, L.L.C. TDC, L.L.C. TDC SERVICES, LLC TEXAS CITY CRUDE OIL TERMINAL, LLC THUNDER BASIN HOLDINGS, LLC | ||
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE | |
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer* (Principal Executive Officer) | |
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer* (Principal Financial Officer) | |
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller* (Principal Accounting Officer) | |
| * | Of the Registrant and of (i) Genesis Energy, LLC, in its capacity as the general partner of Genesis Crude Oil, L.P., in its capacity as the sole member of Genesis Offshore Holdings, LLC, BR Port Services, LLC, Casper Express Pipeline, LLC, Genesis BR, LLC, Genesis CHOPS I, LLC, Genesis CHOPS II, LLC, Genesis Davison, LLC, Genesis Free State Holdings, LLC, Genesis Marine, LLC, Genesis Odyssey, LLC, Genesis Offshore, LLC, Genesis Pipeline Alabama, LLC, Genesis Poseidon, LLC, Genesis Rail Services, LLC, Genesis Sekco, LLC, GEL Wyoming, LLC, GEL Texas Pipeline, LLC and Genesis Texas City Terminal, LLC; (ii) Genesis Davison, LLC, in its capacity as the sole member of Davison Petroleum Supply, LLC, Davison Transportation Services, LLC, Red River Terminals, L.L.C. and Texas City Crude Oil Terminal, LLC; (iii) Genesis Energy, LLC, in its capacity as the general partner of Genesis Energy, L.P., in its capacity as the sole member of Genesis NEJD Holdings, LLC; (iv) Davison Petroleum Supply, LLC, in its capacity as the sole member of GEL Louisiana Fuels, LLC, GEL Tex Marketing, LLC and TDC, L.L.C.; (v) Genesis CHOPS II, LLC, in its capacity as the sole member of GEL CHOPS GP, LLC; (vi) Genesis Sekco, LLC, in its capacity as the sole member of GEL Sekco, LLC; (vii) Genesis Offshore, LLC, in its capacity as the sole member of GEL Offshore, LLC; (viii) GEL Offshore, LLC, in its capacity as the sole member of GEL Offshore Pipeline, LLC and GEL Pipeline Offshore, LLC; (ix) Genesis Poseidon, LLC, in its capacity as the sole member of GEL Poseidon, LLC; (x) Genesis Odyssey, LLC, in its capacity as the sole member of GEL Odyssey, LLC; (xi) Davison Transportation Services, Inc., in its capacity as the sole member of TDC Services, LLC; (xii) Genesis Marine, LLC, in its capacity as sole member of AP Marine, LLC; (xiii) GEL Wyoming, LLC, in its capacity as the sole member of Thunder Basin Holdings, LLC,; (xiv) Manta Ray Gathering Company, L.L.C. and GEL Sekco, LLC, each in their capacity as 50% member of Southeast Keathley Canyon Pipeline Company, L.L.C.; (xv) GEL CHOPS I, L.P., GEL CHOPS II, L.P. and Cameron Highway Pipeline I, L.P., each in their capacity as a member of Cameron Highway Oil Pipeline Company, LLC; (xvi) Genesis Offshore Holdings, LLC, in its capacity as the sole member of Cameron Highway Pipeline GP, L.L.C., GEL Paloma, LLC, Genesis Poseidon Holdings, LLC, Genesis Sailfish Holdings, LLC, Flextrend Development Company, L.L.C., Genesis SMR Holdings, LLC, Genesis GTM Offshore Operating Company, LLC, High Island Offshore System, L.L.C., Matagorda Offshore, LLC, and Seahawk Shoreline System, LLC; (xvii) Manta Ray Gathering Company, L.L.C., in its capacity as the sole member of Deepwater Gateway, L.L.C., Genesis IHUB Holdings, LLC and Genesis Deepwater Holdings, LLC; (xiii) Genesis Deepwater Holdings, LLC, in its capacity as the sole member of GEL Deepwater, LLC; (xix) Genesis IHUB Holdings, LLC, in its capacity as the sole member of GEL IHUB, LLC; (xx) Genesis SMR Holdings, LLC, in its capacity as the sole member of Manta Ray Gathering Company, L.L.C. and Sailfish Pipeline Company, L.L.C.; and (xxi) Genesis Poseidon Holdings, LLC; in its capacity as the sole member of Poseidon Pipeline Company, L.L.C. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| GENESIS ENERGY, LLC | ||
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE | |
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director (Principal Executive Officer) | |
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer (Principal Financial Officer) | |
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller (Principal Accounting Officer) | |
| /s/ Conrad P. Albert Conrad P. Albert |
Director | |
| /s/ James E. Davison James E. Davison |
Director | |
| /s/ James E. Davison, Jr. James E. Davison, Jr. |
Director | |
| /s/ Sharilyn S. Gasaway Sharilyn S. Gasaway |
Director | |
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| SIGNATURE |
TITLE | |
| /s/ Kenneth M. Jastrow, II Kenneth M. Jastrow, II |
Director | |
| /s/ Jack T. Taylor Jack T. Taylor |
Director | |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the undersigned registrants certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| GEL CHOPS I, L.P. GEL CHOPS II, L.P.
| ||
| By: | GEL CHOPS GP, LLC, its general partner | |
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE | |
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer* (Principal Executive Officer) | |
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer* (Principal Financial Officer) | |
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller* (Principal Accounting Officer) | |
| * | Of GEL CHOPS GP, LLC, in its capacity as the sole general partner of GEL CHOPS I, L.P. and GEL CHOPS II, L.P. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas, on April 19, 2021.
| CAMERON HIGHWAY PIPELINE I, L.P. | ||
| By: | CAMERON HIGHWAY PIPELINE GP, L.L.C., its general partner | |
| By: | /s/ Robert V. Deere | |
| Robert V. Deere | ||
| Chief Financial Officer | ||
Each person whose signature appears below hereby constitutes and appoints Grant E. Sims, Robert V. Deere, Kristen O. Jesulaitis and Karen N. Pape, and each of them, any of whom may act without the joinder of the other, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including, without limitation, any supplements or post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them of their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities set forth below on April 19, 2021.
| SIGNATURE |
TITLE | |
| /s/ Grant E. Sims Grant E. Sims |
Chief Executive Officer and Director* (Principal Executive Officer) | |
| /s/ Robert V. Deere Robert V. Deere |
Chief Financial Officer* (Principal Financial Officer) | |
| /s/ Karen N. Pape Karen N. Pape |
Senior Vice President and Controller* (Principal Accounting Officer) | |
| * | Of Cameron Highway Pipeline GP, L.L.C., in its capacity as the sole general partner of Cameron Highway Pipeline I, L.P. |
II-21
Exhibit 5.1
April 19, 2021
Genesis Energy, L.P.
919 Milam, Suite 2100
Houston, Texas 77002
| Re: | Genesis Energy, L.P. |
Registration Statement Form S-3
Ladies and Gentlemen:
We have acted as counsel to Genesis Energy, L.P., a Delaware limited partnership (the “Partnership”), in connection with the registration, pursuant to a registration statement on Form S-3 (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), relating to the offering and sale from time to time, as set forth in the Registration Statement, the form of prospectus contained therein (the “Prospectus”), and one or more supplements to the Prospectus (each, a “Prospectus Supplement”), of an indeterminate aggregate amount of securities (the “Securities”) consisting of (a) common units (the “Common Units”) representing limited partnership interests in the Partnership, (b) preferred securities (the “Preferred Securities”) representing limited partnership interests in the Partnership, (c) subordinated securities (the “Subordinated Securities” and, together with the Common Units and the Preferred Securities, the “LP Equity Securities”) representing limited partnership interests in the Partnership, (d) the Partnership’s options to purchase LP Equity Securities (the “Options”), (e) the Partnership’s warrants to purchase LP Equity Securities or Debt Securities (defined below) (the “Warrants”), (f) the Partnership’s rights to purchase LP Equity Securities (the “Rights”), (g) the Partnership’s senior debt securities, as to which the Partnership’s subsidiary, Genesis Energy Finance Corporation, a Delaware corporation (“Genesis Finance”), may be co-issuer, in one or more series (the “Senior Debt Securities”), and the Partnership’s subordinated debt securities, as to which Genesis Finance may be co-issuer, in one or more series (the “Subordinated Debt Securities” and, together with the Senior Debt Securities, the “Partnership Debt Securities”) and (h) guarantees (the “Guarantees”) of Partnership Debt Securities by the subsidiaries (the “Subsidiary Guarantors”) listed on Schedule I hereto and named in the Registration Statement (the Partnership Debt Securities, together with (if such Partnership Debt Securities have been guaranteed by Subsidiary Guarantors) the related Guarantees of such Subsidiary Guarantors, being referred to herein as the “Debt Securities”) or any combination of the foregoing, each on terms to be determined at the time of each offering. For purposes of this opinion, the term “Specified Subsidiary Guarantors” means the Subsidiary Guarantors other than (i) Genesis Pipeline Alabama, LLC (the “Alabama Subsidiary Guarantor”), (ii) Red River Terminals, L.L.C. (“Red River”) and (iii) TDC, L.L.C. (“TDC,” along with Red River, collectively, the “Louisiana Subsidiary Guarantors” and each a “Louisiana Subsidiary Guarantor”); and the term “Other Subsidiary Guarantors” means the Subsidiary Guarantors other than the Specified Subsidiary Guarantors. This opinion is being furnished at the request of the Partnership and in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
Genesis Energy, L.P.
April 19, 2021
Page 2
We have examined originals or certified copies of (i) the Indenture with respect to the Senior Debt Securities, dated as of May 21, 2015, among the Partnership, Genesis Finance, the Subsidiary Guarantors named therein and Regions Bank, as successor trustee, filed as Exhibit 4.12 to the to the Registration Statement, the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Partnership Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or supplemental indenture to such Indenture, (ii) a form of the Indenture for the Subordinated Debt Securities filed as Exhibit 4.13 to the Registration Statement to be entered into by the Partnership, Genesis Finance, the Subsidiary Guarantors and Regions Bank, as trustee (together with the trustee referred to in (i), each a “Trustee”) (the indentures in (i) and (ii) are each referred to herein as an “Indenture”), the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Partnership Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or a supplemental indenture to such Indenture, (iii) the agreement of limited partnership of the Partnership as in effect on the date hereof (the “Partnership Agreement”) and (iv) such other partnership, corporate or limited liability company records of the Partnership, Genesis Finance and the Specified Subsidiary Guarantors and other certificates and documents of officials of the Partnership, Genesis Finance and the Specified Subsidiary Guarantors and public officials and others as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all copies submitted to us as conformed and certified or reproduced copies. We have also assumed the existence and entity power of each party to the Indenture other than the Partnership, Genesis Finance and the Specified Subsidiary Guarantors. As to various questions of fact relevant to this letter, we have relied, without independent investigation, upon certificates of public officials and certificates of officers of the general partner of the Partnership, Genesis Finance and the Specified Subsidiary Guarantors, all of which we assume to be true, correct and complete.
Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth hereinafter, we are of the opinion that:
| 1. | With respect to Securities constituting Common Units, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Common Units, the terms of the offering thereof and related matters and (ii) such Common Units have been duly issued and delivered, with certificates representing such Common Units having been duly executed, countersigned, registered and delivered or, if uncertificated, valid book-entry notations for the issuance thereof in uncertificated form having been duly made in the register of Common Units of the Partnership, in accordance with the terms of any applicable definitive purchase, underwriting or similar agreement or, if such Common Units are |
Genesis Energy, L.P.
April 19, 2021
Page 3
| issuable upon exchange, conversion or exercise of Preferred Securities or Subordinated Securities, the applicable amendment to the Partnership Agreement or certificate of designations therefor to the extent required under the Delaware LP Act (defined below) or the Partnership Agreement, or if such Common Units are issuable upon the exercise of Securities constituting Options, the applicable Option Agreement (defined below) therefor, or if such Common Units are issuable upon exercise of Securities constituting Warrants, the applicable Warrant Agreement (defined below) therefor, or if such Common Units are issuable pursuant to Rights, the applicable Rights Agreement (defined below) therefor, against payment (or delivery) of the consideration therefor provided for therein, or if such Common Units are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable officers’ certificate, supplemental indenture or Indenture therefor, against payment (or delivery) of the consideration therefor provided for therein, such Common Units (including any Common Units duly issued (a) upon exchange or conversion of any Securities constituting Preferred Securities or Subordinated Securities that are exchangeable for or convertible into Common Units, (b) upon exercise of any Securities constituting Options or Warrants that are exercisable for Common Units, (c) pursuant to any Securities constituting Rights providing for the purchase of Common Units or (d) upon exchange or conversion of any Securities constituting Debt Securities that are exchangeable for or convertible into Common Units), will have been duly authorized in accordance with the Partnership Agreement and validly issued and will be fully paid and non-assessable. |
| 2. | With respect to Securities constituting Preferred Securities, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Preferred Securities, the terms of the offering thereof and related matters, (ii) the Partnership has taken all necessary action to designate and establish the terms of such Preferred Securities and has amended the Partnership Agreement and caused a certificate of designations with respect to such Preferred Securities to be prepared and filed with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement, and (iii) such Preferred Securities have been duly issued and delivered, with certificates representing such Preferred Securities having been duly executed, countersigned, registered and delivered or, if uncertificated, valid book-entry notations for the issuance thereof in uncertificated form having been duly made in the register of Preferred Securities of the Partnership, in accordance with the terms of any applicable definitive purchase, underwriting or similar agreement or, if such Preferred Securities are issuable upon the exercise of Securities constituting Options, the applicable Option Agreement therefor, or if such Preferred Securities are issuable upon exercise of Securities constituting Warrants, the applicable Warrant Agreement therefor, or if such Preferred |
Genesis Energy, L.P.
April 19, 2021
Page 4
| Securities are issuable pursuant to Rights, the applicable Rights Agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, or if such Preferred Securities are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable officers’ certificate, supplemental indenture or Indenture therefor, against payment (or delivery) of the consideration therefor provided for therein, such Preferred Securities (including any Preferred Securities duly issued (a) upon exercise of any Securities constituting Options or Warrants that are exercisable for Preferred Securities, (b) pursuant to any Securities constituting Rights providing for the purchase of Preferred Securities, or (c) upon exchange or conversion of any Securities constituting Debt Securities that are exchangeable for or convertible into Preferred Securities), will have been duly authorized in accordance with the Partnership Agreement and validly issued and will be fully paid and non-assessable. |
| 3. | With respect to Securities constituting Subordinated Securities, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Subordinated Securities, the terms of the offering thereof and related matters, (ii) the Partnership has taken all necessary action to designate and establish the terms of such Subordinated Securities and has amended the Partnership Agreement and caused a certificate of designations with respect to such Subordinated Securities to be prepared and filed with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement, and (iii) such Subordinated Securities have been duly issued and delivered, with certificates representing such Subordinated Securities having been duly executed, countersigned, registered and delivered or, if uncertificated, valid book-entry notations for the issuance thereof in uncertificated form having been duly made in the register of Subordinated Securities of the Partnership, in accordance with the terms of any applicable definitive purchase, underwriting or similar agreement or, if such Subordinated Securities are issuable upon the exercise of Securities constituting Options, the applicable Option Agreement therefor, or if such Subordinated Securities are issuable upon exercise of Securities constituting Warrants, the applicable Warrant Agreement therefor, or if such Subordinated Securities are issuable pursuant to Rights, the applicable Rights Agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, or if such Subordinated Securities are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable officers’ certificate, supplemental indenture or Indenture therefor, against payment (or delivery) of the consideration therefor provided for therein, such Subordinated Securities (including any Subordinated Securities duly issued (a) upon exercise of any Securities constituting Options or Warrants that are exercisable for Subordinated Securities, (b) pursuant to any Securities constituting |
Genesis Energy, L.P.
April 19, 2021
Page 5
| Rights providing for the purchase of Subordinated Securities or (c) upon exchange or conversion of any Securities constituting Debt Securities that are exchangeable for or convertible into Subordinated Securities), will have been duly authorized in accordance with the Partnership Agreement and validly issued and will be fully paid and non-assessable. |
| 4. | With respect to Securities constituting Options, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Options, the terms of the offering thereof and related matters and (ii) such Options have been duly executed, countersigned, issued and delivered in accordance with the terms of the applicable Option Agreement and such authorization and approval related to such Options and the terms of the applicable definitive purchase, underwriting or similar agreement, against payment (or delivery) of the consideration therefor provided for therein, such Options will have been duly authorized in accordance with the Partnership Agreement and will be valid and binding obligations of the Partnership. |
| 5. | With respect to Securities constituting Warrants, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Warrants, the terms of the offering thereof and related matters and (ii) such Warrants have been duly executed, countersigned, issued and delivered in accordance with the terms of the applicable Warrant Agreement and such authorization and approval related to such Warrants and the terms of the applicable definitive purchase, underwriting or similar agreement, against payment (or delivery) of the consideration therefor provided for therein, such Warrants will have been duly authorized in accordance with the Partnership Agreement and will be valid and binding obligations of the Partnership. |
| 6. | With respect to Securities constituting Rights, when (i) the Partnership has taken all necessary action to authorize and approve the issuance of such Rights, the terms of the offering thereof and related matters and (ii) such Rights have been duly executed, countersigned, issued and delivered in accordance with the terms of the applicable Rights Agreement and such authorization and approval related to such Rights and the terms of the applicable definitive purchase, underwriting or similar agreement, against payment (or delivery) of the consideration therefor provided for therein, such Rights will have been duly authorized in accordance with the Partnership Agreement and will be valid and binding obligations of the Partnership. |
| 7. | With respect to Securities constituting Debt Securities (including, if Partnership Debt Securities are guaranteed by Guarantees, such Partnership Debt Securities and such Guarantees), when (i) the Partnership and, if the Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, |
Genesis Energy, L.P.
April 19, 2021
Page 6
| Genesis Finance, and if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, the Subsidiary Guarantors (together with the Partnership and Genesis Finance, the “Obligors”) have taken all necessary action to establish the form and terms of such Debt Securities and to authorize and approve the issuance of such Debt Securities, the terms of the offering thereof and related matters, (ii) any officers’ certificate or supplemental indenture to the applicable Indenture relating to such Debt Securities and, if such Debt Securities constitute Subordinated Debt Securities, the applicable Indenture in substantially the form filed as an exhibit to the Registration Statement have been duly authorized, executed and delivered by the parties thereto (including, if such Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance, and if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, the applicable Subsidiary Guarantors) with the terms of such Debt Securities (including whether Genesis Finance is co-issuer thereof) and, if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, such Guarantees having been set forth in the applicable Indenture or such a supplemental indenture or such an officers’ certificate delivered pursuant thereto, (iii) the Trustee under the applicable Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the “TIA”), (iv) such Debt Securities (including, if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, any notations of such Guarantees thereon) have been duly executed, authenticated, issued and delivered in accordance with the terms of the applicable Indenture and the applicable resolution of the Board of Directors of the general partner of the Partnership or duly authorized committee thereof (the “GP Board”) and, if such Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, the applicable resolution of the Board of Directors of Genesis Finance or duly authorized committee thereof (the “Finance Board”) or supplemental indenture relating to such Debt Securities and the applicable definitive purchase, underwriting or similar agreement against payment (or delivery) of the consideration therefor provided for therein, or, if such Debt Securities are issuable upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, the amendment to the Partnership Agreement or certificate of designations therefor, or if such Debt Securities are issuable upon exercise of Securities constituting Warrants, the applicable Warrant Agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, and (v) if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees of Other Subsidiary Guarantors, such Guarantees (including any Guarantees of Debt Securities duly issued upon (a) exchange or conversion of Securities constituting any Preferred Stock or Subordinated Securities that are exchangeable for or convertible into Debt Securities, or (b) exercise of Securities constituting any Warrants that are exercisable for Debt |
Genesis Energy, L.P.
April 19, 2021
Page 7
| Securities) have been duly authorized by all necessary corporate, limited liability company or limited partnership action on the part of each of the applicable Other Subsidiary Guarantors, such Debt Securities (including, if Partnership Debt Securities are guaranteed by Guarantees, such Partnership Debt Securities and such Guarantees and including any Debt Securities duly issued upon (a) exchange or conversion of Securities constituting any Preferred Securities or Subordinated Securities that are exchangeable for or convertible into Debt Securities, or (b) exercise of Securities constituting any Warrants that are exercisable for Debt Securities) (x) will have been duly authorized by all necessary corporate, limited liability company or limited partnership action on the part of the Partnership and, if such Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance and, if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, each of the applicable Specified Subsidiary Guarantors and (y) will be valid and binding obligations of the Partnership and, if such Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance and, if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, each of the applicable Subsidiary Guarantors, enforceable against each such Obligor in accordance with their terms. |
The opinions and other matters in this letter are qualified in their entirety and subject to the following:
| (A) | We have assumed that, in the case of each offering and sale of Securities, (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective under the Act and, if such Securities constitute Debt Securities, the Indenture will have been qualified under the TIA and such effectiveness or qualification shall not have been terminated or rescinded; (ii) a Prospectus Supplement will have been prepared and filed with the Commission describing such Securities; (iii) such Securities will have been issued and sold in compliance with applicable United States federal and state securities Laws (hereinafter defined) and pursuant to and in the manner stated in the Registration Statement and the applicable Prospectus Supplement; (iv) unless such Securities constitute (a) Common Units issuable upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, (b) LP Equity Securities issuable upon exercise of Securities constituting Warrants or Options, (c) LP Equity Securities issuable upon purchase pursuant to Securities constituting Rights, (d) LP Equity Securities issuable upon exchange or conversion of Securities constituting Debt Securities, or (e) Debt Securities issuable upon exercise of Securities constituting Warrants or upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, a definitive purchase, underwriting or similar agreement |
Genesis Energy, L.P.
April 19, 2021
Page 8
| with respect to the issuance and sale of such Securities will have been duly authorized, executed and delivered by the Partnership and the other parties thereto; (v) at the time of the issuance of such Securities, the Partnership and, if such Securities constitute Debt Securities that constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance and, if such Securities constitute Debt Securities that constitute Partnership Debt Securities guaranteed by Guarantees, each of the other Obligors (a) will continue to be validly existing and continue to be duly qualified and in good standing under the laws of its jurisdiction of incorporation, formation or organization and (b) will continue to have the necessary corporate, limited liability company or partnership power and due authorization, and the Partnership Agreement and other organizational or charter documents of the Partnership, Genesis Finance and each of the other Obligors will continue to be in full force and effect and will not have been amended, restated, supplemented or otherwise altered, and there will have been no authorization of any such amendment, restatement, supplement or other alteration, since the date hereof; (vi) the terms of such Securities and of their issuance and sale will have been established in conformity with and so as not to violate, or result in a default under or breach of, the Partnership Agreement or other organizational document of the Partnership, and, if such Securities constitute Debt Securities that constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance and, if such Securities constitute Debt Securities that constitute Partnership Debt Securities guaranteed by Guarantees, each of the other Obligors, and the terms of such Securities and of their issuance and sale will have been established in conformity with and so as not to violate, or result in a default under or breach of any applicable law, regulation or administrative order or any agreement or instrument binding upon any such Obligor and so as to comply with any requirement or restriction imposed by any court or governmental or regulatory body (including any securities exchange on which the Partnership’s securities are listed for trading) having jurisdiction over any such Obligor and, if such Securities constitute Options, in conformity with the applicable Option Agreement therefor and the applicable authorization and approval of the Partnership relating to such Options and, if such Securities constitute Warrants, in conformity with the applicable Warrant Agreement therefor and the applicable authorization and approval of the Partnership relating to such Warrants and, if such Securities constitute Rights, in conformity with the applicable Rights Agreement therefor and the applicable authorization and approval of the Partnership related to such Rights and, if such Securities constitute Debt Securities, in conformity with the applicable Indenture, supplemental indenture or officers’ certificate and the applicable resolution of the GP Board and, if such Debt Securities constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, the applicable Indenture, supplemental indenture or officers’ certificate and the applicable resolution of the Finance |
Genesis Energy, L.P.
April 19, 2021
Page 9
| Board; (vii) if such Securities constitute LP Equity Securities in respect of underlying Preferred Securities or Subordinated Securities, (a) sufficient LP Equity Securities, as applicable, will be authorized for issuance under the Partnership Agreement that have not otherwise been issued or reserved for issuance and (b) the consideration for the issuance and sale of such LP Equity Securities established by the GP Board and provided for in the applicable definitive purchase, underwriting or similar agreement (or, if (A) such Common Units are issuable upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, the amendment to the Partnership Agreement or certificate of designations therefor to the extent required under the Delaware LP Act and the Partnership Agreement; (B) such LP Equity Securities are issuable upon exercise of Securities constituting Options, the applicable Option Agreement therefor; (C) such LP Equity Securities are issuable upon exercise of Securities constituting Warrants, the applicable Warrant Agreement therefor; (D) such LP Equity Securities are issuable upon purchase pursuant to Securities constituting Rights, the applicable Rights Agreement therefor; or (E) such LP Equity Securities are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable Indenture therefor) will not violate the terms of the Partnership Agreement or the Delaware LP Act; (viii) if (a) such Securities constitute Common Units issuable upon exchange or conversion of Securities constituting Preferred Securities, the action with respect to such Preferred Securities referred to in paragraph 2 above will have been taken, (b) such Securities constitute Common Units issuable upon exchange or conversion of Securities constituting Subordinated Securities, the action with respect to such Subordinated Securities referred to in paragraph 3 above will have been taken, (c) such Securities constitute LP Equity Securities issuable upon exercise of Securities constituting Options, the action with respect to such Options referred to in paragraph 4 above will have been taken, (d) such Securities constitute LP Equity Securities issuable upon exercise of Securities constituting Warrants, the action with respect to such Warrants referred to in paragraph 5 above will have been taken, (e) such Securities constitute LP Equity Securities issuable under Securities constituting Rights, the action with respect to such Rights referred to in paragraph 6 above will have been taken, (f) if such Securities constitute LP Equity Securities issuable upon exchange or conversion of Securities constituting Debt Securities, the action with respect to such Debt Securities referred to in paragraph 7 above will have been taken or (g) if such Securities constitute Debt Securities issuable upon exercise of Securities constituting Warrants or upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, the action with respect to such Warrants, Preferred Securities or Subordinated Securities referred to in paragraph 5, paragraph 2 or paragraph 3, respectively, above will have been taken; (ix) if (a) such Securities constitute Preferred Securities or Subordinated |
Genesis Energy, L.P.
April 19, 2021
Page 10
| Securities that are exchangeable for or convertible into Securities constituting Common Units or Debt Securities, the Partnership will have taken all necessary action to authorize and approve the issuance of such Common Units or Debt Securities upon exchange or conversion of such Preferred Securities or Subordinated Securities, as applicable, the terms of such exchange or conversion and related matters and to reserve such Common Units for issuance upon such exchange or conversion, (b) such Securities constitute Options that are exercisable for Securities constituting LP Equity Securities, the Partnership will have taken all necessary action to authorize and approve the issuance of such LP Equity Securities, as applicable, upon the exercise of such Options (including, in the case of Preferred Securities or Subordinated Securities, an amendment to the Partnership Agreement and the filing of a certificate of designations with respect to such Preferred Securities or Subordinated Securities with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement), the terms of such exercise and related matters and to reserve such LP Equity Securities for issuance upon exercise, (c) such Securities constitute Warrants that are exercisable for Securities constituting LP Equity Securities or Debt Securities, the Partnership will have taken all necessary action to authorize and approve the issuance of such LP Equity Securities or Debt Securities, as applicable, upon the exercise of such Warrants (including, in the case of Preferred Securities or Subordinated Securities, an amendment to the Partnership Agreement and the filing of a certificate of designations with respect to such Preferred Securities or Subordinated Securities with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement), the terms of such exercise and related matters and to reserve such LP Equity Securities for issuance upon exercise, (d) such Securities constitute Rights providing for the purchase of Securities constituting LP Equity Securities, the Partnership will have taken all necessary action to authorize and approve the issuance of such LP Equity Securities, as applicable, upon the exercise of such Rights (including, in the case of Preferred Securities or Subordinated Securities, an amendment to the Partnership Agreement and the filing of a certificate of designations with respect to such Preferred Securities or Subordinated Securities with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement), the terms of such exercise and related matters and to reserve such LP Equity Securities for issuance upon purchase or (e) such Securities constitute Debt Securities that are exchangeable for or convertible into Securities constituting LP Equity Securities, the Partnership will have then taken all necessary action to authorize and approve the issuance of such LP Equity Securities upon exchange or conversion of such Debt Securities (including, in the case of Preferred Securities or Subordinated Securities, an amendment to the Partnership Agreement and the filing of a certificate of designations with respect to such |
Genesis Energy, L.P.
April 19, 2021
Page 11
| Preferred Securities or Subordinated Securities with the Secretary of State of the State of Delaware to the extent required under the Delaware LP Act and the Partnership Agreement), the terms of such exchange or conversion and related matters and to reserve such LP Equity Securities for issuance upon such exchange or conversion; (x) if such Securities constitute Options, an option agreement (the “Option Agreement”) related to such Options and not including any provision that is unenforceable against the Partnership will have been duly authorized, executed and delivered by the Partnership and a bank or trust company to be selected by the Partnership, as option agent; (xi) if such Securities constitute Warrants, a warrant agreement (the “Warrant Agreement”) related to such Warrants and not including any provision that is unenforceable against the Partnership will have been duly authorized, executed and delivered by the Partnership and a bank or trust company to be selected by the Partnership, as warrant agent; (xii) if such Securities constitute Rights, a rights agreement (the “Rights Agreement” and, together with the Option Agreement, the Warrant Agreement and the Indenture, an “Instrument”) related to such Rights and not including any provision that is unenforceable against the Partnership will have been duly authorized, executed and delivered by the Partnership and a bank or trust company to be selected by the Partnership, as rights agent; (xiii) if such Securities constitute Partnership Debt Securities, the officers’ certificate or supplemental indenture to the related Indenture establishing any terms different from those in such Indenture shall not include any provision that is unenforceable against the Partnership or, if Genesis Finance is co-issuer thereof, Genesis Finance; (xiv) if such Securities constitute Partnership Debt Securities guaranteed by Guarantees, the officers’ certificate or supplemental indenture to the related Indenture establishing any terms different from those in such Indenture shall not include any provision that is unenforceable against the applicable Subsidiary Guarantors; and (xv) if such Securities constitute Options, Warrants, Rights or Debt Securities, the applicable Instrument will constitute the legal, valid and binding obligation of each party thereto other than the Partnership (and if such Securities constitute Debt Securities that constitute Partnership Debt Securities as to which Genesis Finance is co-issuer, Genesis Finance, and if such Debt Securities constitute Partnership Debt Securities guaranteed by Guarantees, each of the applicable Subsidiary Guarantors), enforceable against such party in accordance with its terms. |
| (B) | We express no opinion as to the laws of any jurisdiction other than any published constitutions, treaties, laws, rules or regulations or judicial or administrative decisions (“Laws”) of (i) the federal Laws of the United States; (ii) the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”); (iii) the Limited Liability Company Act of the State of Delaware (the “Delaware LLC Act”); (iv) the Delaware General Corporation Law (the “DGCL”); (v) the Laws of |
Genesis Energy, L.P.
April 19, 2021
Page 12
| the State of Texas; and (vi) the Laws of the State of New York. As used herein, the terms “Delaware LP Act,” “Delaware LLC Act” and “DGCL” include the statutory provisions contained therein and all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting these laws. In addition, we have considered (i) solely with respect to paragraph 7 in respect to the Alabama Law Matters specified below, the Laws of the State of Alabama and (ii) solely with respect to paragraph 7 in respect to the Louisiana Law Matters specified below, the Laws of the State of Louisiana. The Alabama Law Matters are addressed in the opinion of the Law Office of John Foster Tyra, PC attached to the Registration Statement as Exhibit 5.2, and the Louisiana Law Matters are addressed in the opinion of Liskow & Lewis, a Professional Law Corporation, attached to the Registration Statement as Exhibit 5.3. |
| (C) | With respect to the Alabama Subsidiary Guarantor, we have assumed that the Alabama Subsidiary Guarantor is validly existing, has the entity power to create the Guarantees thereof and will have taken the required steps to authorize entering into such Guarantees under the Laws of the State of Alabama, which matters (the “Alabama Law Matters”) are addressed in the opinion of the Law Office of John Foster Tyra, PC attached to the Registration Statement as Exhibit 5.2, special Alabama counsel. With respect to the Louisiana Subsidiary Guarantors, we have assumed that each Louisiana Subsidiary Guarantor is validly existing, has the entity power to create the Guarantees thereof and will have taken the required steps to authorize entering into such Guarantees under the Laws of the State of Louisiana, which matters (the “Louisiana Law Matters”) are addressed in the opinion of Liskow & Lewis, a Professional Law Corporation, attached to the Registration Statement as Exhibit 5.3, special Louisiana counsel. |
| (D) | The matters expressed in this letter are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (ii) general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether considered in a proceeding in equity or at law); and (iii) securities Laws and public policy underlying such Laws with respect to rights to indemnification and contribution. |
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Genesis Energy, L.P.
April 19, 2021
Page 13
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Prospectus under the caption “Legal Matters.” In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and regulations thereunder.
| Very truly yours, |
| /s/ Akin Gump Strauss Hauer & Feld LLP |
| AKIN GUMP STRAUSS HAUER & FELD LLP |
SCHEDULE I
Subsidiary Guarantors
| Jurisdiction of Formation or Organization | ||
| AP Marine, LLC | Delaware | |
| BR Port Services, LLC | Delaware | |
| Cameron Highway Oil Pipeline Company, LLC | Delaware | |
| Cameron Highway Pipeline GP, L.L.C. | Delaware | |
| Cameron Highway Pipeline I, L.P. | Delaware | |
| Casper Express Pipeline, LLC | Delaware | |
| Davison Petroleum Supply, LLC | Delaware | |
| Davison Transportation Services, Inc. | Delaware | |
| Davison Transportation Services, LLC | Delaware | |
| Deepwater Gateway, L.L.C. | Delaware | |
| Flextrend Development Company, L.L.C. | Delaware | |
| GEL CHOPS GP, LLC | Delaware | |
| GEL CHOPS I, L.P. | Delaware | |
| GEL CHOPS II, L.P. | Delaware | |
| GEL Deepwater, LLC | Delaware | |
| GEL IHUB, LLC | Delaware | |
| GEL Louisiana Fuels, LLC | Delaware | |
| GEL Odyssey, LLC | Delaware | |
| GEL Offshore, LLC | Delaware | |
| GEL Offshore Pipeline, LLC | Delaware | |
| GEL Paloma, LLC | Delaware | |
| GEL Pipeline Offshore, LLC | Delaware | |
| GEL Poseidon, LLC | Delaware | |
| GEL Sekco, LLC | Delaware | |
| GEL Texas Pipeline, LLC | Delaware | |
| GEL Tex Marketing, LLC | Delaware | |
| GEL Wyoming, LLC | Delaware | |
| Genesis BR, LLC | Delaware | |
| Genesis CHOPS I, LLC | Delaware | |
| Genesis CHOPS II, LLC | Delaware | |
| Genesis Crude Oil, L.P. | Delaware | |
| Genesis Davison, LLC | Delaware | |
| Genesis Deepwater Holdings, LLC | Delaware | |
| Genesis Energy, LLC | Delaware | |
| Genesis Free State Holdings, LLC | Delaware | |
| Genesis GTM Offshore Operating Company, LLC | Delaware | |
| Genesis IHUB Holdings, LLC | Delaware | |
| Genesis Marine, LLC | Delaware | |
| Genesis NEJD Holdings, LLC | Delaware | |
| Genesis Odyssey, LLC | Delaware | |
| Genesis Offshore, LLC | Delaware | |
| Genesis Offshore Holdings, LLC | Delaware | |
| Genesis Pipeline Alabama, LLC | Alabama |
| Jurisdiction of Formation or Organization | ||
| Genesis Pipeline Texas, L.P. | Delaware | |
| Genesis Pipeline USA, L.P. | Delaware | |
| Genesis Poseidon, LLC | Delaware | |
| Genesis Poseidon Holdings, LLC | Delaware | |
| Genesis Rail Services, LLC | Delaware | |
| Genesis Sailfish Holdings, LLC | Delaware | |
| Genesis Sekco, LLC | Delaware | |
| Genesis SMR Holdings, LLC | Delaware | |
| Genesis Syngas Investments, L.P. | Delaware | |
| Genesis Texas City Terminal, LLC | Delaware | |
| High Island Offshore System, L.L.C. | Delaware | |
| Manta Ray Gathering Company, L.L.C. | Texas | |
| Matagorda Offshore, LLC | Texas | |
| Milam Services, Inc. | Delaware | |
| Poseidon Pipeline Company, L.L.C. | Delaware | |
| Red River Terminals, L.L.C. | Louisiana | |
| Sailfish Pipeline Company, L.L.C. | Delaware | |
| Seahawk Shoreline System, LLC | Texas | |
| Southeast Keathley Canyon Pipeline Company, L.L.C. | Delaware | |
| TDC, L.L.C. | Louisiana | |
| TDC Services, LLC | Delaware | |
| Texas City Crude Oil Terminal, LLC | Delaware | |
| Thunder Basin Holdings, LLC | Delaware |
Exhibit 5.2
LAW OFFICE OF JOHN FOSTER TYRA, PC
3496 Firehorn Drive
Tuscaloosa, Alabama 35405
| John Foster Tyra | Telephone (205) 366-0166 Email: jtyra@tyralaw.com |
April 19, 2021
Genesis Energy, L.P.
Genesis Energy Finance Corporation
919 Milam, Suite 2100
Houston, TX 77002
| RE: | Genesis Energy, L.P. |
Registration Statement Form S-3
Ladies and Gentlemen:
We have acted as special Alabama counsel to Genesis Pipeline Alabama, LLC, an Alabama limited liability company (the “Company”), in connection with the registration, pursuant to a Registration Statement on Form S-3 (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), of the proposed offer by Genesis Energy, L.P., a Delaware limited partnership (the “Partnership”), and Genesis Energy Finance Corporation, a Delaware corporation (“Genesis Finance”), relating to the offering and sale from time to time, as set forth in the Registration Statement, the form of prospectus contained therein (the “Prospectus”), and one or more supplements to the Prospectus (each, a “Prospectus Supplement”), of an indeterminate aggregate amount of securities (the “Securities”) consisting of (a) common units (the “Common Units”) representing limited partnership interests in the Partnership, (b) preferred securities (the “Preferred Securities”) representing limited partnership interests in the Partnership, (c) subordinated securities (the “Subordinated Securities” and, together with the Common Units and the Preferred Securities, the “LP Equity Securities”) representing limited partnership interests in the Partnership, (d) the Partnership’s options to purchase LP Equity Securities, (e) the Partnership’s warrants to purchase LP Equity Securities or Debt Securities (defined below) (the “Warrants”), (f) the Partnership’s rights to purchase LP Equity Securities, (g) the Partnership’s senior debt securities, as to which the Partnership’s subsidiary, Genesis Finance may be co-issuer, in one or more series (the “Senior Debt Securities”), and the Partnership’s subordinated debt securities, as to which Genesis Finance may be co-issuer, in one or more series (the “Subordinated Debt Securities” and, together with the Senior Debt Securities, the “Partnership Debt Securities”) and (h) guarantees (the “Guarantees”) of Partnership Debt Securities by the subsidiaries (the “Subsidiary Guarantors”) named in the Registration Statement (the Partnership Debt Securities, together with (if such Partnership Debt Securities have been guaranteed by Subsidiary Guarantors) the related Guarantees of such Subsidiary Guarantors, being referred to herein as the “Debt Securities”) or any combination of the
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Genesis Energy Finance Corporation
April 19, 2021
Page 2
foregoing, each on terms to be determined at the time of each offering. For purposes of this opinion, the term “Other Subsidiary Guarantors” means the Subsidiary Guarantors other than the Company. This opinion is being furnished at the request of the Partnership and in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
We have examined originals or certified copies of (i) the Indenture with respect to the Senior Debt Securities (and any related Guarantees), dated as of May 21, 2015, among the Partnership, Genesis Finance, the Subsidiary Guarantors named therein and Regions Bank, as successor trustee, filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K dated May 21, 2015, the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Partnership Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or supplemental indenture to such Indenture, (ii) a form of the Indenture for the Subordinated Debt Securities filed as Exhibit 4.13 to the Registration Statement to be entered into by the Partnership, Genesis Finance, the Subsidiary Guarantors and Regions Bank, as trustee (together with the trustee referred to in (i), each a “Trustee”) (the indentures in (i) and (ii) are each referred to herein as an “Indenture”), the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Partnership Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or a supplemental indenture to such Indenture and (iii) the limited liability company agreement and such other limited liability company records of the Company as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all copies submitted to us as conformed and certified or reproduced copies. We have also assumed the existence and entity power of each party to the Indenture other than the Company. As to various questions of fact relevant to this letter, we have relied, without independent investigation, upon certificates of public officials and certificates of officers of the general partner of the Partnership, Genesis Finance and the Company, all of which we assume to be true, correct and complete.
Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth hereinafter, we are of the opinion with respect to the Company, “Genesis Pipeline Alabama, LLC”, that:
| (i) | the Company is duly organized or formed, validly existing and in good standing as a limited liability company under the laws of the State of Alabama; |
| (ii) | the Company has the entity power to execute and deliver the Indenture as a Subsidiary Guarantor and perform its obligations under the Indenture (including its Guarantee pursuant thereto); and |
Genesis Energy, L.P.
Genesis Energy Finance Corporation
April 19, 2021
Page 3
| (iii) | with respect to Debt Securities guaranteed by the Company, when: |
(A) the Partnership, and, if such Genesis Finance is a co-issuer, Genesis Finance, the Company and the Other Subsidiary Guarantors (together with the Partnership, the Company and Genesis Finance, the “Obligors”) have taken all necessary action to establish the form and terms of such Debt Securities and to authorize and approve the issuance of such Debt Securities, the terms of the offering thereof and related matters;
(B) any officers’ certificate or supplemental indenture to the applicable Indenture relating to such Debt Securities and, if such Debt Securities constitute Subordinated Debt Securities, the applicable Indenture in substantially the form filed as an exhibit to the Registration Statement have been duly authorized, executed and delivered by the Obligors and the other parties thereto with the terms of such Debt Securities (including whether Genesis Finance is co-issuer thereof) and such Guarantees having been set forth in the applicable Indenture or a supplemental indenture or an officers’ certificate delivered pursuant thereto;
(C) the Trustee under the applicable Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; and
(D) such Debt Securities (including notations of such Guarantee thereon) have been duly executed, authenticated, issued and delivered in accordance with the terms of the applicable Indenture or supplemental indenture relating to such Debt Securities and the applicable resolutions of the respective governing bodies of the applicable Obligors and the applicable definitive purchase, underwriting or similar agreement against payment (or delivery) of the consideration therefor provided for therein, or, if such Debt Securities are issuable upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, the amendment to the organizational or charter documents of the Partnership or certificate of designations therefor, or if such Debt Securities are issuable upon exercise of Securities constituting Warrants, the applicable warrant agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, such Guarantees by the Company will have been duly authorized by all necessary limited liability company action on the part of the Company.
This opinion is limited to the three specific matters set out above relating to the Company and the laws of the state of Alabama. This opinion may be relied upon by Akin Gump Strauss Hauer & Feld LLP in connection with the opinion it is delivering to you as filed as an exhibit to the Registration Statement. We hereby consent to the filing of copies of this opinion as an exhibit to the Registration Statement and to the use of our name in the prospectus forming a part of the Registration Statement under the caption “Legal Matters.” In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and
Genesis Energy, L.P.
Genesis Energy Finance Corporation
April 19, 2021
Page 4
regulations thereunder. The opinions expressed herein are rendered as of the date hereof. We do not undertake to advise you on matters that may come to our attention subsequent to the date hereof and that may affect the opinions expressed herein, including without limitations, future changes in applicable law.
Sincerely,
/s/ Law Office of John Foster Tyra, PC
John Foster Tyra
Exhibit 5.3
April 19, 2021
Genesis Energy, L.P.
919 Milam, Suite 2100
Houston, Texas 77002
| Re: | Genesis Energy, L.P. | |
| Registration Statement Form S-3 |
Ladies and Gentlemen:
We have acted as local Louisiana counsel to Red River Terminals, L.L.C. and TDC, L.L.C., each a Louisiana limited liability company (the “Companies” and each, a “Company”) in order to render this opinion in connection with the registration, pursuant to a registration statement on Form S-3 (the “Registration Statement”), filed by Genesis Energy, L.P., a Delaware limited partnership (the “Partnership”), with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), relating to the offering and sale from time to time, as set forth in the Registration Statement, the form of prospectus contained therein (the “Prospectus”), and one or more supplements to the Prospectus (each, a “Prospectus Supplement”), of an indeterminate aggregate amount of securities (the “Securities”) consisting of (a) common units (the “Common Units”) representing limited partnership interests in the Partnership, (b) preferred securities (the “Preferred Securities”) representing limited partnership interests in the Partnership, (c) subordinated securities (the “Subordinated Securities” and, together with the Common Units and the Preferred Securities, the “LP Equity Securities”) representing limited partnership interests in the Partnership, (d) the Partnership’s options to purchase LP Equity Securities (the “Options”), (e) the Partnership’s warrants to purchase LP Equity Securities or Debt Securities (defined below) (the “Warrants”), (f) the Partnership’s rights to purchase LP Equity Securities (the “Rights”), (g) the Partnership’s senior debt securities, as to which the Partnership’s subsidiary, Genesis Energy Finance Corporation, a Delaware corporation (“Genesis Finance”), may be co-issuer, in one or more series (the “Senior Debt Securities”), and the Partnership’s subordinated debt securities, as to which Genesis Finance may be co-issuer, in one or more series (the “Subordinated Debt Securities” and, together with the Senior Debt Securities, the “Partnership Debt Securities”) and (h) guarantees (the “Guarantees”) of Partnership Debt Securities by certain subsidiaries of the Partnership, including the Companies (the “Subsidiary Guarantors”), named in the Registration Statement (the Partnership Debt Securities, together with (if such Partnership Debt Securities have been guaranteed by Subsidiary Guarantors) the related Guarantees of such Subsidiary Guarantors, being referred to herein as the
NEW ORLEANS | LAFAYETTE | HOUSTON | BATON ROUGE
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“Debt Securities”) or any combination of the foregoing, each on terms to be determined at the time of each offering. As used herein, “Other Subsidiary Guarantors” means the Subsidiary Guarantors other than the Companies. This opinion is being furnished at the request of the Partnership.
We have examined originals or certified copies of (i) the Indenture for the Senior Debt Securities dated as of May 21, 2015, filed as Exhibit 4.12 to the Registration Statement, among the Partnership, Genesis Finance, the Companies, the Other Subsidiary Guarantors, and U.S. Bank National Association, as trustee, the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or supplemental indenture to such Indenture, (ii) a form of the Indenture for the Subordinated Debt Securities filed as Exhibit 4.13 to the Registration Statement to be entered into by the Partnership, Genesis Finance, the Companies, the Other Subsidiary Guarantors, and U.S. Bank National Association, as trustee (together with the trustee referred to in (i), each a “Trustee”) (the indentures in (i) and (ii) are each referred to herein as an “Indenture”), the form and terms (including whether Genesis Finance is co-issuer thereof and any Guarantees) of any series of Debt Securities issued under such Indenture to be established by and set forth in an officers’ certificate or a supplemental indenture to such Indenture, (iii) photostatic copies of each of the articles of organization of Red River Terminals, L.L.C. and TDC, L.L.C., the Operating Agreement, dated July 25, 2007, of TDC, L.L.C. and the Amended and Restated Operating Agreement, dated July 11, 2007, of Red River Terminals, L.L.C., and (iv) such other certificates and documents of officials of the Companies and public officials and others as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all copies submitted to us as conformed and certified or reproduced copies. We have assumed the existence and entity power of each party to the Indenture other than the Companies. We have assumed that each member of the Companies (and each member or owner, of any tier, thereof) is validly existing and in good standing under the law of the jurisdiction of its formation; and has taken all action necessary or received all necessary authorizations under any applicable organizational documents and applicable law to authorize the execution and delivery of the articles of organization and operating agreements and resolutions and authorizations governing the Companies and the execution and delivery by the Companies and the performance by the Companies of their respective obligations under each Indenture, Registration Statement, Prospectus, Guarantee, and Debt Security, as applicable. As to various questions of fact relevant to this letter, we have relied, without independent investigation, upon certificates of public officials and certificates of officers of the Companies or of a general partner of the Partnership, all of which we assume to be true, correct and complete. We have further assumed that each Indenture, Registration Statement, Prospectus, and each Debt Security has been or will hereafter be duly authorized, executed and delivered by the Partnership, the Other Subsidiary Guarantors, and Genesis Finance (as applicable) pursuant to all partnership, limited liability, and corporate actions.
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Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth hereinafter, we are of the opinion that:
| 1. | Each Company is validly existing and in good standing as a limited liability company under the laws of the State of Louisiana. |
| 2. | Each Company has the entity power to execute and deliver the Indenture as a Subsidiary Guarantor and perform its obligations under the Indenture (including its Guarantee pursuant thereto). |
| 3. | With respect to Debt Securities guaranteed by a Company, when: |
(i) the Partnership, and, if such Genesis Finance is a co-issuer, Genesis Finance, each Company and the Other Subsidiary Guarantors (together with the Partnership, the Companies and Genesis Finance, the “Obligors”) have taken all necessary action to establish the form and terms of such Debt Securities and to authorize and approve the issuance of such Debt Securities, the terms of the offering thereof and related matters,
(ii) the applicable Indenture in substantially the form filed as an exhibit to the Registration Statement and any officers’ certificate or supplemental indenture thereto relating to such Debt Securities have been duly authorized, executed and delivered by the Obligors and the other parties thereto with the terms of such Debt Securities (including Genesis Finance if Genesis Finance is co-issuer thereof) and such Guarantees having been set forth in such Indenture or a supplemental indenture or an officers’ certificate delivered pursuant thereto,
(iii) the Trustee under the applicable Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the “TIA”), and
(iv) such Debt Securities (including notations of such Guarantee thereon) have been duly executed, authenticated, issued and delivered in accordance with the terms of the applicable Indenture or supplemental indenture relating to such Debt Securities and the applicable resolutions of the respective governing bodies of the applicable Obligors and the applicable definitive purchase, underwriting or similar agreement against payment (or delivery) of the consideration therefor provided for therein, or, if such Debt Securities are issuable upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, the amendment to the organizational or charter documents of the Partnership or certificate of designations therefor, or if such Debt Securities are issuable upon exercise of Securities constituting Warrants, the applicable warrant agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, such Guarantee by such Company will have been duly authorized by all necessary limited liability company action on the part of such Company.
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The opinions and other matters in this letter are qualified in their entirety and subject to the following:
| (A) | We have assumed that in the case of any offering of Debt Securities guaranteed by a Company: (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective under the Act and the Indenture will have been qualified under the TIA and such effectiveness or qualification shall not have been terminated or rescinded; (ii) a Prospectus Supplement will have been prepared and filed with the Commission describing such Debt Securities; (iii) such Debt Securities will have been issued and sold in compliance with applicable United States federal and state securities Laws (hereinafter defined) and pursuant to and in the manner stated in the Registration Statement and the applicable Prospectus Supplement; (iv) unless such Debt Securities are issuable upon exercise of Securities constituting Warrants or upon exchange or conversion of Securities constituting Preferred Securities or Subordinated Securities, a definitive purchase, underwriting or similar agreement with respect to the issuance and sale of such Debt Securities will have been duly authorized, executed and delivered by the Partnership and the other parties thereto; (v) at the time of the issuance of such Securities, such Company and each of the other Obligors (a) will continue to be validly existing and will continue to be duly qualified and in good standing under the laws of its jurisdiction of incorporation, formation or organization and (b) will continue to have the necessary corporate, limited liability company or partnership power and due authorization, and the organizational or charter documents of such Company and each of the other Obligors will continue to be in full force and effect and will not have been amended, restated, supplemented or otherwise altered, and there will have been no authorization of any such amendment, restatement, supplement or other alteration, since the date hereof; (vi) the terms of such Debt Securities and of their issuance and sale will have been established in conformity with and so as not to violate, or result in a default under or breach of, the organizational or charter documents of such Company and each of the other Obligors, and the terms of such Debt Securities and of their issuance and sale will have been established in conformity with and so as not to violate, or result in a default under or breach of any applicable law, regulation or administrative order or any agreement or instrument binding upon such Company and each of the other Obligors and so as to comply with any requirement or restriction imposed by any court or governmental or regulatory body (including any securities exchange on which the Partnership’s securities are listed for trading) having jurisdiction over each such Company and each of the other Obligors and in conformity with the applicable Indenture, supplemental indenture or officers’ certificate and the applicable resolution of the governing body of such Company and each of the other Obligors, the applicable Indenture, supplemental indenture or officers’ certificate; (vii) if (a) such Debt Securities constitute Debt Securities issuable (x) upon exercise of Securities constituting Warrants, (A) the Partnership will have taken all necessary action to authorize and approve the issuance of such Warrants, the terms of the offering thereof and related matters and (B) such Warrants have been duly executed, countersigned, issued and delivered in |
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| accordance with the terms of the applicable warrant agreement therefor and such authorization and approval related to such Warrants and the terms of the applicable definitive purchase, underwriting or similar agreement, against payment (or delivery) of the consideration therefor provided for therein, (y) upon exchange or conversion of Securities constituting Preferred Securities, (A) the Partnership will have taken all necessary action to authorize and approve the issuance of such Preferred Securities, the terms of the offering thereof and related matters, (B) the Partnership will have taken all necessary action to designate and establish the terms of such Preferred Securities and will have amended and filed such amendments and designations to or with respect to its organizational or charter documents as required under applicable law and such organizational or charter documents, and (C) such Preferred Securities will have been duly issued and delivered, with certificates representing such Preferred Securities having been duly executed, countersigned, registered and delivered or, if uncertificated, valid book-entry notations for the issuance thereof in uncertificated form having been duly made in the register of Preferred Securities of the Partnership, in accordance with the terms of any applicable definitive purchase, underwriting or similar agreement or, if such Preferred Securities are issuable upon the exercise of Securities constituting Options, the applicable option agreement therefor, or if such Preferred Securities are issuable upon exercise of Securities constituting Warrants, the applicable warrant agreement therefor, or if such Preferred Securities are issuable pursuant to Rights, the applicable rights agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, or if such Preferred Securities are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable officers’ certificate, supplemental indenture or Indenture therefor, against payment (or delivery) of the consideration therefor provided for therein, or (z) upon exchange or conversion of Securities constituting Subordinated Securities, (A) the Partnership will have taken all necessary action to authorize and approve the issuance of such Subordinated Securities, the terms of the offering thereof and related matters, (B) the Partnership will have taken all necessary action to designate and establish the terms of such Subordinated Securities and will have amended and filed such amendments and designations to or with respect to its organizational or charter documents as required under applicable law and such organizational or charter documents, and (C) such Subordinated Securities will have been duly issued and delivered, with certificates representing such Subordinated Securities having been duly executed, countersigned, registered and delivered or, if uncertificated, valid book-entry notations for the issuance thereof in uncertificated form having been duly made in the register of Subordinated Securities of the Partnership, in accordance with the terms of any applicable definitive purchase, underwriting or similar agreement or, if such Subordinated Securities are issuable upon the exercise of Securities constituting Options, the applicable option agreement therefor, or if such Subordinated Securities are issuable upon exercise of Securities constituting Warrants, the applicable warrant agreement therefor, or if such Subordinated |
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| Securities are issuable pursuant to Rights, the applicable rights agreement therefor, against payment (or delivery) of the consideration therefor provided for therein, or if such Subordinated Securities are issuable upon exchange or conversion of Securities constituting Debt Securities, the applicable officers’ certificate, supplemental indenture or Indenture therefor, against payment (or delivery) of the consideration therefor provided for therein, or (b) such Securities constitute Debt Securities that are exchangeable for or convertible into Securities constituting LP Equity Securities, the Partnership will have then taken all necessary action to authorize and approve the issuance of such LP Equity Securities upon exchange or conversion of such Debt Securities (including, in the case of Preferred Securities or Subordinated Securities, shall have amended and filed such amendments and designations to or with respect to its organizational or charter documents as required under applicable law and such organizational or charter documents), the terms of such exchange or conversion and related matters and to reserve such LP Equity Securities for issuance upon such exchange or conversion; (viii) the officers’ certificate or supplemental indenture to the related Indenture establishing any terms different from those in such Indenture shall not include any provision that is unenforceable against the Partnership or, if Genesis Finance is co-issuer thereof, Genesis Finance; (ix) the officers’ certificate or supplemental indenture to the related Indenture establishing any terms different from those in such Indenture shall not include any provision that is unenforceable against such Company or any Other Subsidiary Guarantor; and (x) the applicable Indenture will constitute the legal, valid and binding obligation of each party thereto, enforceable against such party in accordance with its terms. |
| (B) | Our opinions with respect to the existence, good standing and qualification to do business set forth in Paragraph (1) above are based solely upon the articles of organization of Red River Terminals, L.L.C. and TDC, L.L.C. and upon certificates from the Secretary of State of the State of Louisiana. |
| (C) | You are advised that our engagement has been limited to specific matters; consequently, there may exist matters of a legal nature involving the Companies about which we have not advised and of which we have no knowledge. |
| (D) | We express no opinion regarding any Blue Sky laws or any tax or securities laws. |
| (E) | We express no opinion as to the laws of any jurisdiction other than any published constitutions, treaties, laws, rules or regulations or judicial or administrative decisions (“Laws”) of the Laws of the State of Louisiana. |
| (F) | We express no opinion regarding the issuance of any Common Units, Preferred Securities, Subordinated Securities, Options, Warrants, Rights, Senior Debt Securities, or Subordinated Debt Securities. |
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| (G) | The matters expressed in this letter are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (ii) general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether considered in a proceeding in equity or at law); and (iii) securities Laws and public policy underlying such Laws with respect to rights to indemnification and contribution. |
| (H) | The opinions expressed herein are written as of and relate solely to the date hereof, and we disclaim any obligation to update this Opinion in any manner or for any reason. |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Prospectus under the caption “Legal Matters.” In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and regulations thereunder.
| Very truly yours, |
| /s/ Liskow & Lewis |
| LISKOW & LEWIS |
| A Professional Law Corporation |
Exhibit 8.1
April 19, 2021
Genesis Energy, L.P.
919 Milam, Suite 2100
Houston, Texas 77002
| Re: | Genesis Energy, L.P. |
| Registration Statement Form S-3 |
Ladies and Gentlemen:
We have acted as special counsel to Genesis Energy, L.P., a Delaware limited partnership (the “Partnership”), in connection with the registration, pursuant to a registration statement on Form S-3 (the “Registration Statement”), filed by the Partnership with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Act”), relating to the offering and sale from time to time, as set forth in the Registration Statement, the form of prospectus contained therein (the “Prospectus”), and one or more supplements to the Prospectus, of an indeterminate aggregate amount of securities consisting of (a) common units (the “Common Units”) representing limited partnership interests in the Partnership, (b) preferred securities (the “Preferred Securities”) representing limited partnership interests in the Partnership, (c) subordinated securities (the “Subordinated Securities” and, together with the Common Units and the Preferred Securities, the “LP Equity Securities”) representing limited partnership interests in the Partnership, (d) the Partnership’s options to purchase LP Equity Securities, (e) the Partnership’s warrants to purchase LP Equity Securities or Debt Securities (defined below), (f) the Partnership’s rights to purchase LP Equity Securities, (g) the Partnership’s senior debt securities, as to which the Partnership’s subsidiary, Genesis Energy Finance Corporation, a Delaware corporation (“Genesis Finance”), may be co-issuer, in one or more series (the “Senior Debt Securities”), and the Partnership’s subordinated debt securities, as to which Genesis Finance may be co-issuer, in one or more series (the “Subordinated Debt Securities” and, together with the Senior Debt Securities, the “Partnership Debt Securities”) and (h) guarantees (the “Guarantees”) of Partnership Debt Securities by the subsidiaries (the “Subsidiary Guarantors”) named in the Registration Statement (the Partnership Debt Securities, together with (if such Partnership Debt Securities have been guaranteed by Subsidiary Guarantors) the related Guarantees of such Subsidiary Guarantors, being referred to herein as the “Debt Securities”) or any combination of the foregoing, each on terms to be determined at the time of each offering. In connection therewith, we have participated in the preparation of the discussion set forth under the caption “Material Income Tax Consequences” (the “Discussion”) in the Prospectus.
The Discussion, subject to the qualifications and assumptions stated in the Discussion and the limitations and qualifications set forth herein, constitutes our opinion as to the material United States federal income tax consequences with respect to the matters set forth therein.
Genesis Energy, L.P.
April 19, 2021
Page 2
This opinion letter is limited to the matters set forth herein, and no opinions are intended to be implied or may be inferred beyond those expressly stated herein. Our opinion is rendered as of the date hereof and we assume no obligation to update or supplement this opinion or any matter related to this opinion to reflect any change of fact, circumstances, or law after the date hereof. In addition, our opinion is based on the assumption that the matter will be properly presented to the applicable court.
Furthermore, our opinion is not binding on the Internal Revenue Service or a court. In addition, we must note that our opinion represents merely our best legal judgment on the matters presented and that others may disagree with our conclusion. There can be no assurance that the Internal Revenue Service will not take a contrary position or that a court would agree with our opinion if litigated.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Prospectus under the caption “Material Income Tax Consequences.” In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and regulations thereunder.
| Very truly yours, |
| /s/ Akin Gump Strauss Hauer & Feld LLP |
| AKIN GUMP STRAUSS HAUER & FELD LLP |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” in the Registration Statement and related Prospectus of Genesis Energy, L.P. for the registration of common units, preferred securities, subordinated securities, options, warrants, rights, debt securities and guarantees of debt securities; and to the incorporation by reference therein of our reports dated March 1, 2021, with respect to the consolidated financial statements of Genesis Energy, L.P., and the effectiveness of internal control over financial reporting of Genesis Energy, L.P., included in its Annual Report (Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Houston, Texas
April 19, 2021
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption “Experts” in the Registration Statement and related Prospectus of Genesis Energy, L.P. for the registration of common units, preferred securities, subordinated securities, options, warrants, rights, debt securities and guarantees of debt securities; and to the incorporation by reference therein of our report dated February 22, 2021, with respect to the financial statements of Poseidon Oil Pipeline Company, L.L.C., included in Genesis Energy, L.P.’s Annual Report (Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Houston, Texas
April 19, 2021
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
| ☐ | CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b) (2) |
REGIONS BANK
(Exact name of trustee as specified in its charter)
| Alabama | 63-0371391 | |
| (Jurisdiction of incorporation or organization if not a U.S. national bank) |
(I.R.S. Employer Identification No.) | |
| 1900 Fifth Avenue North Birmingham, Alabama | 35203 | |
| (Address of principal executive offices) | (Zip code) | |
Doug Milner
Senior Vice President
Regions Bank
Corporate Trust
3773 Richmond Avenue, Suite 1100
Houston, Texas 77046
Phone: (713) 244-8041
(Name, address and telephone number of agent for service)
Genesis Energy, L.P.
Genesis Energy Finance Corporation
(and the subsidiaries identified below in the Table of Subsidiary Guarantor Registrants)
(Exact name of obligor as specified in its charter)
| Delaware | 76-0513049 | |
| Delaware | 20-5948137 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
919 Milam, Suite 2100
Houston, Texas 77002
(713) 860-2500
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Senior Debt Securities
Subordinate Debt Securities
TABLE OF SUBSIDIARY GUARANTOR REGISTRANTS
| Exact Name of Registrant as Specified in its Charter* | State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. | ||
| AP Marine, LLC |
Delaware | 76-0513049 | ||
| BR Port Services, LLC |
Delaware | 76-0513049 | ||
| Cameron Highway Oil Pipeline Company, LLC |
Delaware | 76-0513049 | ||
| Cameron Highway Pipeline GP, L.L.C. |
Delaware | 76-0513049 | ||
| Cameron Highway Pipeline I, L.P. |
Delaware | 76-0513049 | ||
| Casper Express Pipeline, LLC |
Delaware | 76-0513049 | ||
| Davison Petroleum Supply, LLC |
Delaware | 76-0513049 | ||
| Davison Transportation Services, Inc. |
Delaware | 26-0614522 | ||
| Davison Transportation Services, LLC |
Delaware | 76-0513049 | ||
| Deepwater Gateway, L.L.C. |
Delaware | 76-0513049 | ||
| Flextrend Development Company, L.L.C. |
Delaware | 76-0513049 | ||
| GEL CHOPS GP, LLC |
Delaware | 76-0513049 | ||
| GEL CHOPS I, L.P. |
Delaware | 76-0513049 | ||
| GEL CHOPS II, L.P. |
Delaware | 76-0513049 | ||
| GEL Deepwater, LLC |
Delaware | 76-0513049 | ||
| GEL IHUB, LLC |
Delaware | 76-0513049 | ||
| GEL Louisiana Fuels, LLC |
Delaware | 76-0513049 | ||
| GEL Odyssey, LLC |
Delaware | 76-0513049 | ||
| GEL Offshore Pipeline, LLC |
Delaware | 76-0513049 | ||
| GEL Offshore, LLC |
Delaware | 76-0513049 | ||
| GEL Paloma, LLC |
Delaware | 76-0513049 | ||
| GEL Pipeline Offshore, LLC |
Delaware | 76-0513049 | ||
| GEL Poseidon, LLC |
Delaware | 76-0513049 | ||
| GEL Sekco, LLC |
Delaware | 76-0513049 | ||
| GEL Tex Marketing, LLC |
Delaware | 76-0513049 | ||
| GEL Texas Pipeline, LLC |
Delaware | 76-0513049 | ||
| GEL Wyoming, LLC |
Delaware | 76-0513049 | ||
| Genesis BR, LLC |
Delaware | 76-0513049 | ||
| Genesis CHOPS I, LLC |
Delaware | 76-0513049 | ||
| Genesis CHOPS II, LLC |
Delaware | 76-0513049 | ||
| Genesis Crude Oil, L.P. |
Delaware | 76-0513049 | ||
| Genesis Davison, LLC |
Delaware | 76-0513049 | ||
| Genesis Deepwater Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Energy, LLC |
Delaware | 76-0513049 | ||
| Genesis Free State Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis GTM Offshore Operating Company, LLC |
Delaware | 76-0513049 | ||
| Genesis IHUB Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Marine, LLC |
Delaware | 76-0513049 | ||
| Genesis NEJD Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Odyssey, LLC |
Delaware | 76-0513049 | ||
| Genesis Offshore, LLC |
Delaware | 76-0513049 | ||
| Genesis Offshore Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Pipeline Alabama, LLC |
Alabama | 76-0513049 | ||
| Genesis Pipeline Texas, L.P. |
Delaware | 76-0513049 | ||
| Genesis Pipeline USA, L.P. |
Delaware | 76-0513049 |
| Genesis Poseidon, LLC |
Delaware | 76-0513049 | ||
| Genesis Poseidon Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Rail Services, LLC |
Delaware | 76-0513049 | ||
| Genesis Sailfish Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Sekco, LLC |
Delaware | 76-0513049 | ||
| Genesis SMR Holdings, LLC |
Delaware | 76-0513049 | ||
| Genesis Syngas Investments, L.P. |
Delaware | 76-0513049 | ||
| Genesis Texas City Terminal, LLC |
Delaware | 76-0513049 | ||
| High Island Offshore System, L.L.C. |
Delaware | 76-0513049 | ||
| Manta Ray Gathering Company, L.L.C. |
Texas | 76-0513049 | ||
| Matagorda Offshore, LLC |
Texas | 76-0513049 | ||
| Milam Services, Inc. |
Delaware | 36-4704817 | ||
| Poseidon Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||
| Red River Terminals, L.L.C. |
Louisiana | 76-0513049 | ||
| Sailfish Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||
| Seahawk Shoreline System, LLC |
Texas | 76-0513049 | ||
| Southeast Keathley Canyon Pipeline Company, L.L.C. |
Delaware | 76-0513049 | ||
| TDC Services, LLC |
Delaware | 26-0614359 | ||
| TDC, L.L.C. |
Louisiana | 76-0513049 | ||
| Texas City Crude Oil Terminal, LLC |
Delaware | 76-0513049 | ||
| Thunder Basin Holdings, LLC |
Delaware | 76-0513049 |
| * | The address for each registrant’s principal executive office is 919 Milam, Suite 2100 Houston, Texas 77002 and the telephone number for each registrant’s principal executive office is (713) 860-2500. |
| Item 1. | General Information. Furnish the following information as to the trustee: |
| (a) | Name and address of each examining or supervising authority to which it is subject. |
Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, Georgia 30309
Alabama State Banking Department, 401 Adams Ave., Montgomery, Alabama 36104
| (b) | Whether it is authorized to exercise corporate trust powers. |
The trustee is authorized to exercise corporate trust powers.
| Item 2. | Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. |
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor is not in default as provided under Item 13.
| Item 15. | Foreign Trustee. Not applicable. |
| Item 16. | List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. |
| Exhibit 1. | Articles of Amendment to Articles of Incorporation, including Restated Articles of Incorporation of the Trustee (incorporated by reference to Exhibit 1 to the Trustee’s Form T-1 filed as Exhibit 25.1 to the Registration Statement on Form S-3 (File No. 333-223626) filed with the Securities and Exchange Commission). | |
| Exhibit 2. | Not applicable | |
| Exhibit 3. | Authorization of the Trustee to exercise corporate trust powers (incorporated by reference to Exhibit 3 to the Trustee’s Form T-1 filed as Exhibit 25.1 to the Registration Statement on Form S-3 (File No. 333-202769) filed with the Securities and Exchange Commission). | |
| Exhibit 4. | A copy of the bylaws of the trustee as now in effect (incorporated by reference to Exhibit 4 to the Trustee’s Form T-1 filed as Exhibit 25.1 to the Registration Statement on Form S-4 (File No. 333-227903) filed with the Securities and Exchange Commission). | |
| Exhibit 5. | Not applicable. | |
| Exhibit 6. | The consent of the trustee required by Section 321(b) of the Act. | |
| Exhibit 7. | A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. | |
| Exhibit 8. | Not applicable. | |
| Exhibit 9. | Not applicable. | |
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Regions Bank, a state-chartered bank organized under the laws of the state of Alabama, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Baton Rouge and the State of Texas on the 19th day of April 2021.
| REGIONS BANK |
| /s/ Doug Milner |
| Doug Milner |
| Senior Vice President |
EXHIBIT 6
April 19, 2021
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen
In accordance with Section 321(b) of the Trust Indenture Act of 1939, Regions Bank hereby consents that reports of examination of Regions Bank by Federal, State, Territorial or District regulatory authorities may be furnished by such regulatory authorities to the Securities and Exchange Commission upon request therefor.
Dated: April 19, 2021
| Very truly yours, |
| REGIONS BANK |
| /s/ Doug Milner |
| Doug Milner |
| Senior Vice President |
Exhibit 7
REGIONS BANK
Consolidated Report of Condition of
Regions Bank
As of the close of business on December 31, 2020
| Regions Bank |
FFIEC 031 | |||
| Legal Title of Bank | Page 17 of 91 | |||
| Birmingham |
RC-1 | |||
| City | ||||
|
AL 35203 |
||||
| State Zip Code | ||||
| FDIC Certificate Number: 12368 |
Consolidated Report of Condition for Insured Banks and Savings Associations for December 31, 2020
All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter.
Schedule RC—Balance Sheet
| Dollar Amounts in Thousands | RCFD | Amount | ||||||||||||||||||
| Assets |
||||||||||||||||||||
| 1. Cash and balances due from depository institutions (from Schedule RC-A): |
||||||||||||||||||||
| a. Noninterest-bearing balances and currency and coin (1) |
0081 | 1,702,000 | 1.a | |||||||||||||||||
| b. Interest-bearing balances (2) |
0071 | 16,335,000 | 1.b | |||||||||||||||||
| 2. Securities: |
||||||||||||||||||||
| a. Held-to-maturity securities (from Schedule RC-B, column A)(3) |
JJ34 | 1,122,000 | 2.a | |||||||||||||||||
| b. Available-for-sale debt securities (from Schedule RC-B, column D) |
1773 | 27,132,000 | 2.b | |||||||||||||||||
| c. Equity securities with readily determinable fair values not held for trading (4) |
JA22 | 282,000 | 2.c | |||||||||||||||||
| 3. Federal funds sold and securities purchased under agreements to resell: |
RCON | |||||||||||||||||||
| a. Federal funds sold in domestic offices |
B987 | 0 | 3.a | |||||||||||||||||
| RCFD | ||||||||||||||||||||
| b. Securities purchased under agreements to resell (5,6) |
B989 | 0 | 3.b | |||||||||||||||||
| 4. Loans and lease financing receivables (from Schedule RC-C): |
||||||||||||||||||||
| a. Loans and leases held for sale |
5369 | 1,898,000 | 4.a | |||||||||||||||||
| b. Loans and leases held for investment |
B528 | 85,266,000 | 4.b | |||||||||||||||||
| c. LESS: Allowance for loan and lease losses(7) |
3123 | 2,167,000 | 4.c | |||||||||||||||||
| d. Loans and leases held for investment, net of allowance (item 4.b minus 4.c) |
B529 | 83,099,000 | 4.d | |||||||||||||||||
| 5. Trading assets (from Schedule RC-D) |
3545 | 854,000 | 5 | |||||||||||||||||
| 6. Premises and fixed assets (including capitalized leases) |
2145 | 2,373,000 | 6 | |||||||||||||||||
| 7. Other real estate owned (from Schedule RC-M) |
2150 | 31,000 | 7 | |||||||||||||||||
| 8. Investments in unconsolidated subsidiaries and associated companies |
2130 | 97,000 | 8 | |||||||||||||||||
| 9. Direct and indirect investments in real estate ventures |
3656 | 0 | 9 | |||||||||||||||||
| 10. Intangible assets (from Schedule RC-M) |
2143 | 5,117,000 | 10 | |||||||||||||||||
| 11. Other assets (from Schedule RC-F)(6) |
2160 | 6,434,000 | 11 | |||||||||||||||||
| 12. Total assets (sum of items 1 through 11) |
2170 | 146,476,000 | 12 | |||||||||||||||||
| (1) | Includes cash items in process of collection and unposted debits. |
| (2) | Includes time certificates of deposit not held for trading. |
| (3) | Institutions that have adopted ASU 2016-13 should report in item 2.a amounts net of any applicable allowance for credit losses, and item 2.a should equal Schedule RC-B, item 8, column A, less Schedule RI-B, Part II, item 7, column B. |
| (4) | Item 2.c is to be completed by all institutions. See the instructions for this item and the Glossary entry for “Securities Activities” for further detail on accounting for investments in equity securities. |
| (5) | Includes all securities resale agreements, regardless of maturity. |
| (6) | Institutions that have adopted ASU 2016-13 should report in items 3.b and 11 amounts net of any applicable allowance for credit losses. |
| (7) | Institutions that have adopted ASU 2016-13 should report in item 4.c the allowance for credit losses on loans and leases. |
| Regions Bank | FFIEC 031 | |
| Legal Title of Bank | Page 18 of 91 | |
| FDIC Certificate Number: 12368 | RC-2 |
Schedule RC—Continued
| Dollar Amounts in Thousands | RCON | Amount | ||||||||||||||||||
| Liabilities |
||||||||||||||||||||
| 13. Deposits: |
||||||||||||||||||||
| a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, Part I) |
2200 | 124,229,000 | 13.a | |||||||||||||||||
| (1) Noninterest-bearing (1) |
6631 | 53,014,000 | 13.a.1 | |||||||||||||||||
| (2) Interest-bearing |
6636 | 71,215,000 | 13.a.2 | |||||||||||||||||
| b. In foreign offices, Edge and Agreement subsidiaries, and IBFs |
RCFN | |||||||||||||||||||
| (from Schedule RC-E, Part II) |
2200 | 0 | 13.b | |||||||||||||||||
| (1) Noninterest-bearing |
6631 | 0 | 13.b.1 | |||||||||||||||||
| (2) Interest-bearing |
6636 | 0 | 13.b.2 | |||||||||||||||||
| 14. Federal funds purchased and securities sold under agreements to repurchase: |
RCON | |||||||||||||||||||
| a. Federal funds purchased in domestic offices (2) |
B993 | 0 | 14.a | |||||||||||||||||
| RCFD | ||||||||||||||||||||
| b. Securities sold under agreements to repurchase (3) |
B995 | 0 | 14.b | |||||||||||||||||
| 15. Trading liabilities (from Schedule RC-D) |
3548 | 23,000 | 15 | |||||||||||||||||
| 16. Other borrowed money (includes mortgage indebtedness)(from Schedule RC-M) |
3190 | 356,000 | 16 | |||||||||||||||||
| 17. and 18. Not applicable |
RCFD | |||||||||||||||||||
| 19. Subordinated notes and debentures (4) |
3200 | 496,000 | 19 | |||||||||||||||||
| 20. Other liabilities (from Schedule RC-G) |
2930 | 3,018,000 | 20 | |||||||||||||||||
| 21. Total liabilities (sum of items 13 through 20) |
2948 | 128,122,000 | 21 | |||||||||||||||||
| 22. Not applicable |
||||||||||||||||||||
| Equity Capital |
||||||||||||||||||||
| Bank Equity Capital |
||||||||||||||||||||
| 23. Perpetual preferred stock and related surplus |
3838 | 0 | 23 | |||||||||||||||||
| 24. Common stock |
3230 | 0 | 24 | |||||||||||||||||
| 25. Surplus (exclude all surplus related to preferred stock) |
3839 | 16,399,000 | 25 | |||||||||||||||||
| 26. a. Retained earnings |
3632 | 640,000 | 26.a | |||||||||||||||||
| b. Accumulated other comprehensive income (5) |
B530 | 1,315,000 | 26.b | |||||||||||||||||
| c. Other equity capital components (6) |
A130 | 0 | 26.c | |||||||||||||||||
| 27. a. Total bank equity capital (sum of items 23 through 26.c) |
3210 | 18,354,000 | 27.a | |||||||||||||||||
| b. Noncontrolling (minority) interests in consolidated subsidiaries |
3000 | 0 | 27.b | |||||||||||||||||
| 28. Total equity capital (sum of items 27.a and 27.b) |
G105 | 18,354,000 | 28 | |||||||||||||||||
| 29. Total liabilities and equity capital (sum of items 21 and 28) |
3300 | 146,476,000 | 29 | |||||||||||||||||
| (1) | Includes noninterest-bearing demand, time, and savings deposits. |
| (2) | Report overnight Federal Home Loan Bank advances in Schedule RC, item 16, “Other borrowed money.” |
| (3) | Includes all securities repurchase agreements, regardless of maturity. |
| (4) | Includes limited-life preferred stock and related surplus. |
| (5) | Includes, but is not limited to, net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and accumulated defined benefit pension and other postretirement plan adjustments. |
| (6) | Includes treasury stock and unearned Employee Stock Ownership Plan shares. |
| Regions Bank | FFIEC 031 | |
| Legal Title of Bank | Page 19 of 91 | |
| FDIC Certificate Number: 12368 | RC-3 |
Schedule RC—Continued
Memoranda
To be reported with the March Report of Condition.
| 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external auditors as of any date during 2019 |
RCFD | Number | ||||
| 6724 | N/A | M.1 | ||||
| To be reported with the March Report of Condition. | RCON | MMDD | ||||
| 2. Bank’s fiscal year-end date(report the date in MMDD format) | 8678 | N/A | M.2 |