Tax Assumptions. Means the following assumptions with respect to the basis of taxation of Management and its capability to pay Taxes to which it may be subject relative to the cash which it has available to pay such Taxes: (1) The formation and capitalization of Management and all transactions related or incidental thereto (including, without limitation, this Agreement), its issuance of Listed Shares and Voting Shares and its acquisition of I-Units
in KMEP will be Non-Taxable to Management. (2)
Management's Any... receipt by Management of the Exchange Rights and Purchase Rights from KMI Enbridge will be Non-Taxable to Management. (3) Management's Any transfer by Management of the Exchange Rights and Purchase Rights to the holders of Listed Shares will be Non-Taxable to Management. (4) Management is treated as a corporation for United States federal, state and local income Tax purposes. (5) Each Listed Share and Voting Share is treated as an ownership interest in Management, and each owner of a Listed Share or a Voting Share is treated as a shareholder of Management, for United States federal, state and local income Tax purposes. (6) KMEP The MLP is treated as a partnership for United States federal, state and local income Tax purposes. (7) Management, by virtue of its ownership of I-Units in KMEP, I-Units, is treated as a partner in KMEP the MLP for United States federal, state and local income Tax purposes. 4 (8) The allocation of KMEP MLP Tax Items, as set forth in the KMEP MLP Partnership Agreement, is respected for United States federal, state and local income Tax purposes. -4- 5 (9) Distributions Management's ownership of additional I-Units following cash distributions to Management by KMEP made holders of Common Units, occurring pursuant to the KMEP MLP Partnership Agreement are Agreement, is Non-Taxable to Management. (10) Distributions of additional Listed Shares and Voting Shares by Management to holders of Listed Shares and Voting Shares, made pursuant to the Management LLC L.L.C. Agreement, are Non-Taxable to Management. (11) To the extent that Management engages in the management and control of, or provides services to, the MLP, any reimbursement of KMEP and receives reimbursement from KMEP Management by the MLP or KMGP EECI (or Affiliates of either) in respect of its services and other expenses incurred by Management, such reimbursement Management will, after the payment by Management of any fees or expenses incurred by Management in respect of the management and control of KMEP, of, or services provided to, the MLP, be adequate to pay all Taxes, if any, payable by Management by virtue of either (i) its management and control of KMEP, of, or services provided to, the MLP or (ii) the receipt of such reimbursement from KMEP the MLP or KMGP. EECI (or Affiliates of either), after taking into account all related deductions and credits. (12) The only Management does not own any assets other than I-Units, the Purchase Rights, its rights under this Agreement and agreements related to the management and control of or the provision of services to the MLP or its Affiliates, cash, deposits and short-term securities or evidences of indebtedness, and any other assets permitted to be owned by Management, other than cash, are I-Units in KMEP. it under the Management L.L.C. Agreement. (13) If there is a sale, exchange, redemption or other disposition of I-Units owned by Management or a complete or partial liquidation of KMEP resulting in distributions in respect of the I-Units held by Management, MLP, the cash received by Management pursuant thereto will be sufficient to satisfy any Tax payable by Management as a result of such sale, exchange, redemption, liquidation or other disposition.
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Tax Assumptions. Means the following assumptions with respect to the basis of taxation of Management and its capability to pay Taxes to which it may be subject relative to the cash which it has available to pay such Taxes: (1) The formation and capitalization of Management and all transactions related or incidental thereto (including, without limitation, this Agreement), its issuance of Listed Shares and Voting Shares and its acquisition of I-Units in
KMEP the MLP will be Non-Taxable to Management. (2)
... Management's receipt of the Exchange Rights and Purchase Rights from KMI Enbridge will be Non-Taxable to Management. (3) Management's transfer of the Exchange Rights and Purchase Rights to the holders of Listed Shares will be Non-Taxable to Management. (4) Management is treated as a corporation for United States federal, state and local income Tax purposes. (5) Each Listed Share and Voting Share is treated as an ownership interest in Management, and each owner of a Listed Share or a Voting Share is treated as a shareholder of Management, for United States federal, state and local income Tax purposes. (6) KMEP The MLP is treated as a partnership for United States federal, state and local income Tax purposes. (7) Management, by virtue of its ownership of I-Units in KMEP, the MLP, is treated as a partner in KMEP the MLP for United States federal, state and local income Tax purposes. (8) The allocation of KMEP MLP Tax Items, as set forth in the KMEP MLP Partnership Agreement, is respected for United States federal, state and local income Tax purposes. -4- 5 4 (9) Distributions Management's ownership of additional I-Units following cash distributions to Management by KMEP made holders of Common Units, occurring pursuant to the KMEP MLP Partnership Agreement are Agreement, is Non-Taxable to Management. (10) Distributions of additional Listed Shares and Voting Shares by Management to holders of Listed Shares and Voting Shares, made pursuant to the Management LLC L.L.C. Agreement, are Non-Taxable to Management. (11) To the extent that Management engages in the management and control of, or provides services to, the MLP, any reimbursement of KMEP and receives reimbursement from KMEP Management by the MLP or KMGP EECI (or Affiliates of either) in respect of its services and other expenses incurred by Management, such reimbursement Management will, after the payment by Management of any fees or expenses incurred by Management in respect of the management and control of KMEP, of, or services provided to, the MLP, be adequate to pay all Taxes, if any, payable by Management by virtue of either (i) its management and control of KMEP, of, or services provided to, the MLP, or (ii) the receipt of such reimbursement from KMEP the MLP or KMGP. EECI (or Affiliates of either). (12) The only assets owned by Management, Management for federal income Tax purposes, other than cash, are I-Units in KMEP. the MLP. (13) If there is a sale, exchange, redemption or other disposition of I-Units owned by Management or a complete or partial liquidation of KMEP resulting in distributions in respect of the I-Units held by Management, MLP, the cash received by Management pursuant thereto will be sufficient to satisfy any Tax payable by Management as a result of such sale, exchange, redemption, liquidation or other disposition.
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