CONVERSION AND CONTRIBUTION AGREEMENT
THIS CONVERSION AND CONTRIBUTION AGREEMENT (this "Agreement"), dated as
of June 9, 2005 is entered into by and among Genesis Energy, L.P., a Delaware
limited partnership (the "MLP"), Genesis Crude Oil, L.P., a Delaware limited
partnership (the "OLP") and Genesis Energy, Inc., a Delaware corporation (the
"GP").
RECITALS
WHEREAS, Section 7.12 of the Third Amended OLP Agreement provides for
the GP to receive Incentive Compensation Payments from the OLP in certain
circumstances;
WHEREAS, Section 7.13 of the Third Amended OLP Agreement, allows the GP
to convert the Incentive Compensation Payments set out in Section 7.12 into the
Converted OLP Incentive Distribution Rights;
WHEREAS, following such a conversion, the GP wishes to contribute the
Converted OLP Incentive Distribution Rights to the MLP in exchange for the
Incentive Distribution Rights in the MLP and the MLP wishes to issue the
Incentive Distribution Rights to the GP;
NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:
ARTICLE I
Definitions
1.1 Definitions. In addition to the capitalized terms defined in the opening
paragraph of this Agreement, the following capitalized terms shall have the
meanings given below.
"Agreement" means this Conversion and Contribution Agreement.
"Conversion Election" is defined in the Third Amended OLP Agreement.
"Converted OLP Incentive Distribution Rights" is defined in Section 2.1
of this Agreement.
"Fourth Amended MLP Agreement" is defined in Section 5.2 of this
Agreement.
"Fourth Amended OLP Agreement" is defined in Section 5.1 of this
Agreement.
"GP Unit" means an equity interest in the MLP representing a fractional
part of the MLP General Partner Interest and having the rights and obligations
specified with respect to GP Units in the Third Amended MLP Agreement.
"Incentive Compensation Payments" is defined in the Third Amended OLP
Agreement.
"Incentive Distribution Rights" is defined in the Fourth Amended MLP
Agreement.
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"Third Amended MLP Agreement" means the Third Amended and Restated
Agreement of Limited Partnership of Genesis Energy, L.P. dated as of July 31,
2002 as the same may be amended or restated pursuant to the terms of this
Agreement.
"Third Amended OLP Agreement" means the Third Amended and Restated
Agreement of Limited Partnership of Genesis Crude Oil, L.P. dated as of July 31,
2002, as the same may be amended or restated pursuant to the terms of this
Agreement.
ARTICLE II
Conversions, Contributions and Issuances
2.1 Conversion of Incentive Compensation Payments. Pursuant to Section 7.13 of
the Third Amended OLP Agreement, the GP hereby makes a Conversion Election with
respect to its Incentive Compensation Payments in the OLP and such Incentive
Compensation Payments are hereby converted thereunder into incentive
distribution rights in the OLP (the "Converted OLP Incentive Distribution
Rights").
2.2 Contribution and Exchange of Incentive Distribution Rights.
Effective immediately following the conversion contemplated by Section 2.1 of
this Agreement, and without any further action on the part of the GP, the GP
hereby contributes, transfers, assigns and conveys to the MLP, its successors
and assigns, all right, title and interest of the GP in and to the Converted OLP
Incentive Distribution Rights, and, in exchange therefor, the MLP hereby issues
to the GP the Incentive Distribution Rights in the MLP. Immediately following
such contribution of the Converted OLP Incentive Distribution Rights to the MLP,
the GP, in its capacity as general partner of the MLP, shall cause the MLP to
contribute the Converted OLP Incentive Distribution Rights in the OLP to the
OLP, and the GP, in its capacity as general partner of the OLP shall cause the
OLP to cancel the Converted OLP Incentive Distribution Rights in the OLP.
2.3 Conversion of GP Units. Simultaneously with the effectiveness of
the Fourth Amended MLP Agreement and the Fourth Amended OLP Agreement as
contemplated in Article III of this Agreement, the 190,077 GP Units representing
the MLP General Partner Interest held by the GP shall be converted automatically
into a general partner interest in the MLP so that immediately following such
conversion, the GP will have an aggregate 2.0% unfractionated general partner
interest in the MLP and a .01% general partner interest in the OLP, and such GP
Units shall cease to exist.
ARTICLE III
Amendment and Restatement of Partnership Agreements
3.1 Amendment and Restatement of Third Amended OLP Agreement. In order to
further the purposes of this Agreement, and contemporaneously with the
consummation of the transactions contemplated by Article II of this Agreement,
the GP, as general partner of OLP, having determined that the amendments
reflected in the form of agreement of limited partnership attached hereto as
Exhibit A (the "Fourth Amended OLP Agreement") would not materially adversely
affect the MLP as the sole limited partner of the OLP, hereby exercises its
rights and
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powers to amend the Third Amended OLP Agreement without the approval
of any limited partner or assignee pursuant to Section 13.1(d)(i) of the Third
Amended OLP Agreement and hereby approves and adopts the Fourth Amended OLP
Agreement.
3.2 Amendment and Restatement of Third Amended MLP Agreement. In order to
further the purposes of this Agreement, and contemporaneously with the
consummation of the transactions contemplated by Article II of this Agreement,
the GP, as the general partner of the MLP, having determined that the amendments
reflected in the form of agreement of limited partnership attached hereto as
Exhibit B (the "Fourth Amended MLP Agreement") would not materially adversely
affect the limited partners of the MLP, hereby exercises its rights and powers
to amend the Third Amended MLP Agreement without the approval of any limited
partner or assignee pursuant to Section 13.1(d)(i) of the Third Amended MLP
Agreement and hereby approves and adopts the Fourth Amended MLP Agreement.
3.3 Restatement of Partnership Agreements. Each of the partners of the MLP and
the OLP that is a party hereto hereby agrees to execute and deliver the Fourth
Amended OLP Agreement and the Fourth Amended MLP Agreement, as applicable, on
the date of this Agreement.
ARTICLE IV
Miscellaneous
4.1 Other Assurances. From time to time after the date hereof, and without any
further consideration, each of the parties to this Agreement shall execute,
acknowledge and deliver all such additional instruments, notices and other
documents, and will do all such other acts and things, all in accordance with
applicable law, as may be necessary or appropriate to more fully and effectively
carry out the purposes and intent of this Agreement.
4.2 Costs. The MLP shall pay all expenses arising out of the contributions,
assignments and deliveries to be made hereunder, including the expenses of
amending and restating the Third Amended MLP Agreement and the Third Amended OLP
Agreement as contemplated by Article III hereof.
4.3 Successors and Assigns. The Agreement shall be binding upon and inure to the
benefit of the parties signatory hereto and their respective successors and
assigns.
4.4 No Third Party Rights. The provisions of this Agreement are intended to bind
the parties signatory hereto as to each other and are not intended to and do not
create rights in any other person or confer upon any other person any benefits,
rights or remedies and no person is or is intended to be a third party
beneficiary of any of the provisions of this Agreement.
4.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
4.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
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4.7 Amendment or Modification. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
GENESIS ENERGY, L.P.
By: Genesis Energy, Inc., as general partner
By: \s\ Mark J. Gorman
------------------------------
Name: Mark J. Gorman
Title: President & Chief Executive Officer
GENESIS CRUDE OIL, L.P.
By: Genesis Energy, Inc., as general partner
By: \s\ Mark J. Gorman
--------------------------------
Name: Mark J. Gorman
Title: President & Chief Executive Officer
GENESIS ENERGY, INC.
By: \s\ Mark J. Gorman
---------------------------------
Name: Mark J. Gorman
Title: President & Chief Executive Officer
EXHIBIT A
FOURTH AMENDED OLP AGREEMENT
See Attached.
EXHIBIT B
FOURTH AMENDED MLP AGREEMENT
See attached.