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Exhibit 10.3  






OMNIBUS AGREEMENT  


 among  


 K-SEA INVESTORS L.P.,  


 K-SEA TRANSPORTATION LLC,  


 K-SEA ACQUISITION CORP.,  


 EW HOLDING CORP.,  


 K-SEA TRANSPORTATION CORP.,  


 K-SEA GENERAL PARTNER L.P.,  


 K-SEA GENERAL PARTNER GP LLC,  


 K-SEA TRANSPORTATION PARTNERS L.P.,  


 K-SEA OLP GP, LLC  


 and  


 K-SEA OPERATING PARTNERSHIP L.P.  










  



 
  TABLE OF CONTENTS    
    



	ARTICLE I DEFINITIONS	 	2
	 	Section 1.1	 	Definitions	 	2
	

ARTICLE II NONCOMPETITION	
 	

5
	 	Section 2.1	 	Restricted Businesses	 	5
	 	Section 2.2	 	Scope of Restricted Business Prohibition	 	5
	 	Section 2.3	 	Enforcement	 	5
	

ARTICLE III INDEMNIFICATION	
 	

6
	 	Section 3.1	 	Indemnification by K-Sea Entities	 	6
	 	Section 3.2	 	Indemnification by the Partnership Entities	 	7
	 	Section 3.3	 	Indemnification Procedures	 	7
	

ARTICLE IV REPRESENTATIONS AND WARRANTIES	
 	

8
	 	Section 4.1	 	Insurance	 	8
	 	Section 4.2	 	Preservation of Indemnification Claims	 	8
	 	Section 4.3	 	Sufficiency of Conveyance	 	9
	

ARTICLE V COVENANTS	
 	

10
	 	Section 5.1	 	Preservation of Indemnification Claims	 	10
	 	Section 5.2	 	Affirmative Covenants of the K-Sea Group	 	10
	 	Section 5.3	 	Negative Covenants of the K-Sea Group	 	10
	 	Section 5.4	 	Name Change	 	10
	 	Section 5.5	 	Ability to Merge	 	10
	

ARTICLE VI MISCELLANEOUS	
 	

10
	 	Section 6.1	 	Choice of Law; Submission to Jurisdiction	 	10
	 	Section 6.2	 	Notice	 	10
	 	Section 6.3	 	Entire Agreement; Supersedure	 	11
	 	Section 6.4	 	Effect of Waiver or Consent	 	11
	 	Section 6.5	 	Amendment or Modification	 	11
	 	Section 6.6	 	Assignment	 	12
	 	Section 6.7	 	Counterparts	 	12
	 	Section 6.8	 	Severability	 	12
	 	Section 6.9	 	Gender, Parts, Articles and Sections	 	12
	 	Section 6.10	 	Further Assurances	 	12
	 	Section 6.11	 	No Rights of Limited Partners, Assignees, and Third Parties	 	12




i






  



 
 

OMNIBUS AGREEMENT    
    


        THIS OMNIBUS AGREEMENT (this "Agreement") is entered into on, and effective as of, the Closing Date (as defined
herein) by and among K-Sea Investors L.P., a Delaware limited partnership ("K-Sea Investors"), K-Sea Transportation LLC, a Delaware limited liability company
("KST"), K-Sea Acquisition Corp., a Delaware corporation and wholly owned subsidiary of KST ("KSA"), EW Holding Corp., a Delaware corporation and wholly owned subsidiary of KSA ("EWH"),
K-Sea Transportation Corp., a Delaware corporation and wholly owned subsidiary of EWH ("K-Sea Corp." and, together with KST, KSA and EWH, the "K-Sea Group"),
K-Sea Transportation Partners L.P., a Delaware limited partnership (the "Partnership"), K-Sea General Partner L.P., a Delaware limited partnership (including any permitted
successors and assigns under the Partnership Agreement (as defined herein), the "General Partner"), for itself and on behalf of the Partnership in its capacity as general partner of the Partnership,
K-Sea General Partner GP LLC, a Delaware limited liability company ("K-Sea GP"), for itself and on behalf of the General Partner in its capacity as general partner of the
General Partner, K-Sea Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"), and K-Sea OLP GP, LLC, a Delaware limited liability company
(including any permitted successors and assigns under the OLP Agreement (as defined herein), the "OLP GP") for itself and on behalf of the Operating Partnership in its capacity as the general partner
of the Operating Partnership. 


 
 

PRELIMINARY STATEMENTS    
    


        1.     The
parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to certain
noncompetition obligations on the part of the K-Sea Entities (as defined herein). 


        2.     The
parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article III, with respect to certain
indemnification obligations of the parties to each other. 


        3.     The
members of the K-Sea Group and K-Sea Investors desire by their execution of this Agreement to make certain representations and warranties to
the Partnership Entities (as defined herein), as more fully set forth in Article IV, regarding insurance, indemnities and the sufficiency of the transfer of the Conveyed Assets (as defined
herein). 


        4.     The
members of the K-Sea Group and K-Sea Investors desire by their execution of this Agreement to covenant to take and refrain from taking certain
actions, as more fully set forth in Article V, to ensure the separate identity of the Partnership Entities from the K-Sea Group and K-Sea Investors. 


 
 

AGREEMENT    
    


        In consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 


 
 

ARTICLE I
  DEFINITIONS    
    


        Section
1.1    Definitions.    Capitalized terms used in this Agreement shall have the
respective meanings set forth below or elsewhere in this Agreement, as the case may be: 


        "Action"
means any action, suit, proceeding, condemnation, investigation, inquiry or audit by or before any court or other Governmental Authority, whether of a civil, criminal,
administrative, 


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investigative
or private nature, or any arbitration proceeding or alternative dispute resolution procedure. 


        "Affiliate"
shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Agreement"
means this Omnibus Agreement, as amended, modified or supplemented from time to time in accordance with the terms hereof. 


        "Assignee"
shall have the meaning ascribed to such term in the Partnership Agreement. 



        "Closing
Date" means                        , 2004. 


        "Contribution
Agreement" shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Common
Units" shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Conflicts
Committee" shall have the meaning ascribed to such term in the Partnership Agreement. 



        "control"
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise. 


        "Conveyed
Assets" shall have the meaning ascribed to such term in the Contribution Agreement. 


        "Covered
Injuries" means any injury caused or alleged to be caused by exposure to asbestos or secondary or passive smoke. 


        "Environmental
Laws" means all federal, state, and local laws, statutes, rules, regulations, orders, permits, judgments and ordinances, relating to protection of health, safety, natural
resources, or the environment including, without limitation, the Oil Pollution Act of 1990, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments
and Reauthorization Act of 1986, the Solid Waste Disposal Act, the Resource Conservation and Recovery Act of 1976, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances
Control Act, the Hazardous Materials Transportation Act, the Clean Water Act, the Safe Drinking Water Act of 1974, the Endangered Species Act of 1973, the Marine Mammal Protection Act of 1972, the
National Environmental Policy Act of 1969, the Emergency Planning and Community Right-to-Know Act of 1986, the Occupational Safety and Health Act of 1970, and 46 U.S.C.
§§ 3301, et seq., and regulations promulgated thereunder, each as in effect on the Closing Date. 



        "Environmental
and Toxic Tort Losses" means all Losses (other than Special Toxic Tort Losses) suffered or incurred by reason of or arising out of any violation or correction of violation
of Environmental Laws, including, without limitation, (i) the presence of Hazardous Substances on, under, about or migrating to or from the Conveyed Assets, (ii) the disposal or release
of Hazardous Substances generated by operation of the Conveyed Assets, (iii) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair,
restoration, remediation or other corrective action required or necessary under Environmental Laws, (iv) the cost or expense of the preparation and implementation of any closure, remedial or
corrective action or other plans required or necessary under Environmental Laws and (v) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal
or litigation support work. 


        "Governmental
Authority" means (i) the United States of America, (ii) any state, province, county, municipality or other governmental subdivision within the United States
of America, (iii) any court or any governmental department, commission, board, bureau, agency or other instrumentality of the United States of America, or of any state, province, county,
municipality or other governmental 


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subdivision
within the United States of America, and (iv) any arbitration tribunal having jurisdiction over any member of the K-Sea Entities or any of the Partnership Entities. 


        "Hazardous
Substance" means any substance that is designated, defined, or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant, or toxic or hazardous
substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, oil as defined under the Oil Pollution Act of 1990, natural gas, and asbestos-containing materials. 



        "Insurance
Policy" means the protection and indemnity insurance policies issued to any member of the K-Sea Group by The West of England Shipowners Mutual Insurance
Association (Luxembourg) prior to the Closing Date. 


        "K-Sea
Entities" means K-Sea Investors, each member of the K-Sea Group and their respective direct and indirect Subsidiaries, other than the
Partnership Entities. 


        "K-Sea
Entity" means any of the K-Sea Entities. 


        "Limited
Partner" shall have the meaning ascribed to such term in the Partnership Agreement. 



        "Losses"
means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court
costs and reasonable attorney's fees and expert's fees) of any and every kind or character. 


        "Offering"
means the issuance and sale of 3,500,000 Common Units (4,025,000 Common Units if the Over-Allotment Option is exercised) offered to the public by the Partnership
as described in the Registration Statement. 


        "OLP
Agreement" means the First Amended and Restated Agreement of Partnership of the Operating Partnership, dated as of the Closing Date, as such agreement is in effect on the Closing
Date, to which reference is hereby made for all purposes of this Agreement. No amendment or modifications to the OLP Agreement subsequent to the Closing Date shall be given effect for purpose of this
Agreement unless consented to by each of the parties to this Agreement. 


        "Over-Allotment
Option" shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Partnership
Agreement" means the First Amended and Restated Agreement of Partnership of the Partnership, dated as of the Closing Date, as such agreement is in effect on the Closing
Date, to which reference is hereby made for all purposes of this Agreement. No amendment or modification to the Partnership Agreement subsequent to the Closing Date shall be given effect for the
purposes of this Agreement unless consented to by each of the parties to this Agreement. 


        "Partnership
Entities" means K-Sea GP, the General Partner and each member of the Partnership Group. 


        "Partnership
Entity" means any of the Partnership Entities. 


        "Partnership
Group" means the Partnership, the OLP GP, the Operating Partnership and any Subsidiary of any such Person. 


        "Person"
shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Predecessor
Companies" means each member of the K-Sea Group and their respective predecessors, A & C Ship Fueling Corp., A & C Shipfueling Corp., Eklof Marine
Corp., Gowanus Marine Corp., Narrows Tanker Corp., South Bay Fuel Transportation and any controlled Affiliate of the foregoing. 


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        "Registration
Statement" shall have the meaning ascribed to such term in the Partnership Agreement. 


        "Retained
Assets" shall have the meaning ascribed to such term in the Contribution Agreement. 


        "Retained
Liabilities" means EWH Retained Liabilities, the KST Corp Retained Liabilities and the KST LLC Retained Liabilities, in each case as such terms are defined in the Contribution
Agreement. 


        "RFFA"
means the Restated Title XI Reserve Fund and Financial Agreement, No. MA-13784, by and among the Partnership, Operating Partnership and the United States of America,
represented by the Secretary of Transportation, acting by and through the Maritime Administrator pursuant to Title XI of the Merchant Marine Act of 1936, as such may be amended from time to
time. 


        "Section 7704(d)"
means Section 7704(d) of the Internal Revenue Code of 1986, as amended, and any successor provision thereto. 


        "Special
Toxic Tort Losses" means all Losses suffered or incurred by reason of or arising out of any past, current or future Action initiated by or on behalf of any Person, including,
without limitation, any current, retired or deceased seaman or contractor, seeking any damages for Covered Injuries attributable to events or conditions that occurred or existed, or that are alleged
to have occurred or existed, prior to the Closing Date aboard vessels or on any premises at any time owned, leased or otherwise operated by any of the Predecessor Companies. 


        "Special
Toxic Tort Matters" shall have the meaning ascribed to such term in the Contribution Agreement. 


        "Subsidiary"
shall have the meaning ascribed to such term in the Partnership Agreement. 


 
 

ARTICLE II
  NONCOMPETITION    
    


        Section
2.1    Restricted Businesses.    For as long as (i) K-Sea GP (or
any Affiliate of the K-Sea Entities) is the general partner of the General Partner and (ii) the General Partner (or any Affiliate of the K-Sea Entities) is the general
partner of the Partnership, each of the K-Sea Entities shall be prohibited from engaging (whether directly or through the acquisition of equity or debt interests in any Person) in the
business of providing refined petroleum product marine transportation, distribution and logistics services in any state or territory of the United States to the extent such business, at the time such
business is first proposed to be engaged in by any such K-Sea Entity, generates "qualifying income" within the meaning of Section 7704(d) (a "Restricted Business"). Notwithstanding
the foregoing, a K-Sea Entity may own and/or operate any of the Retained Assets (including replacements of and modifications or additions to the Retained Assets). 


        Section
2.2    Scope of Restricted Business Prohibition.    Except as provided in this
Article II and the Partnership Agreement, each K-Sea Entity shall be free to engage (whether directly or through the acquisition of equity or debt interests in any Person) in any
business activity whatsoever, including those that may be in direct competition with any of the Partnership Entities. 


        Section
2.3    Enforcement.    Each K-Sea Entity acknowledges and agrees that the
Partnership Entities do not have an adequate remedy at law for the breach by the K-Sea Entity of the covenants or agreements set forth in this Article II, and that any breach by any
K-Sea Entity of the covenants or agreements set forth in this Article II would result in irreparable injury to the Partnership Entities. Each K-Sea Entity further
acknowledges and agrees that any Partnership Entity may, in addition to the other remedies that may be available to the Partnership Entities, file a suit in equity to enjoin any
K-Sea Entity from such breach, and each K-Sea Entity consents to the issuance of injunctive relief under this Agreement. 


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ARTICLE III
  INDEMNIFICATION    
    


        Section
3.1    Indemnification by K-Sea Entities.    


        (a)   Subject
to the other provisions of this Section 3.1 and to the provisions of Sections 3.2 and 3.3, the K-Sea Entities shall, jointly and severally,
indemnify, defend and hold harmless the Partnership Entities: 



	(i)
	for
a period of ten years after the Closing Date, from and against any Special Toxic Tort Losses;



	(ii)
	for
a period of five years after the Closing Date, from and against any Environmental and Toxic Tort Losses attributable to, arising out of or relating to the ownership or operation
of the Conveyed Assets prior to the Closing Date;



	(iii)
	from
and against any Losses suffered or incurred by reason or arising out of or otherwise relating to: 





        (A)  the
failure of the Partnership Entities to be the owner of such valid leasehold interests or fee ownership interests in and to the Conveyed Assets as are necessary to
enable the Partnership Entities to continue to own and operate the Conveyed Assets in substantially the same manner that the Conveyed Assets were owned and operated by the K-Sea Entities
during the one-year period immediately prior to the Closing Date to the extent that the K-Sea Entities are notified of any of the foregoing within four years after the Closing
Date; and 


        (B)  the
failure of the Partnership Entities to have on the Closing Date any consent or governmental permit necessary to allow the Partnership Entities to own or operate the
Conveyed Assets in substantially the same manner that the Conveyed Assets were owned and operated by the K-Sea Entities during the one-year period immediately prior to the
Closing Date to the extent that the K-Sea Entities are notified of any of the foregoing within three years after the Closing Date; 



        (C)  any
events or conditions attributable to or associated with the ownership or operation of the Retained Assets, whether occurring before or after the Closing Date; 


        (D)  any
Retained Liabilities (excluding for purposes of this clause (D) any Special Toxic Tort Matters); and 


        (E)  all
federal, state and local income tax liabilities attributable to the operation of the Conveyed Assets prior to the Closing Date, including any such income tax
liabilities of the K-Sea Entities that may result from the consummation of the formation transactions contemplated by the Contribution Agreement. 





        (b)   The
aggregate liability of the K-Sea Entities under Section 3.1(a)(i) and 3.1(a)(ii), collectively, shall not exceed $10 million. 


        (c)   Notwithstanding
anything in this Agreement to the contrary, all liabilities and obligations of the K-Sea Entities hereunder shall be non-recourse
against any partner (including any limited partner or general partner), stockholder, member, other owner, officer, director or employee of any of the K-Sea Entities, other than the
K-Sea Entities in their capacities as such. In that connection, no such partner, stockholder, member, other owner, officer, director or employee shall be bound by this Agreement, or be
obligated by virtue of this Agreement or the obligations of any party created hereunder to: 



	(i)
	provide
funds to any of the K-Sea Entities, whether by contributions to capital, loans, return of monies, securities or other property; or 



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	(ii)
	assume
any liabilities of any of the K-Sea Entities. 






        (d)   Notwithstanding
anything in this Agreement to the contrary, none of K-Sea Entities or their respective Affiliates shall be liable to, or for any obligation
of, any Partnership Entity except as expressly set forth in Section 3.1(a) of this Agreement or in the Contribution Agreement. 


        Section
3.2    Indemnification by the Partnership Entities.    Subject to the limitations
contained in the RFFA, the Partnership Entities shall, jointly and severally, indemnify, defend and hold harmless the K-Sea Entities from and against all Losses suffered or incurred by any
of the K-Sea Entities arising out of or relating to the Conveyed Assets, except with respect to (i) matters for which the Partnership Entities are entitled to indemnification
therefor under Section 3.1 (without regard to any limitations as to time) and (ii) for purposes of clarification, any Losses relating to violations or alleged violations of securities laws in
connection with the Offering. Notwithstanding anything in this Agreement to the contrary, all liabilities and obligations of the Partnership Entities hereunder shall be non-recourse
against any partner of the Partnership in their capacities as such. 


        Section
3.3    Indemnification Procedures.    



        (a)   As
used in this Section 3.3: the term "Indemnifying Party" refers to the K-Sea Entities, in the case of any indemnification obligation arising under
Section 3.1, and to the Partnership Entities, in the case of any indemnification obligation arising under Section 3.2; and the term "Indemnified Party" refers to the Partnership
Entities, in the case of any indemnification obligation arising under Section 3.1, and to the K-Sea Entities, in the case of any indemnification obligation arising under
Section 3.2. 


        (b)   The
Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this
Article III, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim. 


        (c)   The
Indemnifying Party shall have the right to control, at its sole cost and expense, all aspects of the defense of (and any counterclaims with respect to) any claims
brought against the Indemnified Party that are covered by the indemnification under this Article III, including, without limitation, the selection of counsel, determination of whether to appeal
any decision of any Governmental Authority and the settling of any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent of the Indemnified Party (which consent shall not be unreasonably withheld) unless it includes a full release of the Indemnified Party from such
matter or issues, as the case may be. 


        (d)   The
Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to (i) its pursuit of insurance coverage or recoveries with respect to
the claims covered by the indemnification under this Article III and (ii) all aspects of the defense of any claims covered by the indemnification under this Article III,
including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the
Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the
Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided,
however,that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and
further agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.3. In no event shall the obligation of
the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for
counsel in connection with the defense of any claims covered by the indemnification set forth in this Article III; provided, however, that the
Indemnified Party may, at its 


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own
option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the
status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense. 



        (e)   In
determining the amount of any loss, cost, damage or expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of
the indemnification will be reduced by (i) any insurance proceeds realized or to be realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental
insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered or recoverable by the Indemnified Party under contractual
indemnities from third Persons (together, the "Collateral Sources"). Each Indemnified Party agrees to use its good faith, reasonable best efforts at all times to seek recovery from Collateral Sources.
If payment is not received by the Indemnified Party from Collateral Sources within 365 days after the commencement of the Indemnified Party's good faith, reasonable best efforts to obtain such
payment, then the Indemnified Party shall be entitled to seek indemnification from the Indemnifying Party; provided, the Indemnified Party shall be entitled to seek indemnification hereunder at any
time (i) to the extent any Loss is not reasonably likely after due investigation to be covered by a Collateral Source (whether due to a deductible, cap or otherwise) and (ii) if a Collateral Source is
not reasonably expected after due investigation to have sufficient available net assets to cover such Losses. If, after any advance or payment by an Indemnifying Party hereunder, the Indemnified Party
recovers any amounts from Collateral Sources with respect to the claim for which an Indemnifying Party has made payment, the Indemnified Party agrees to promptly refund and repay such amounts to the
Indemnified Party. 


        (f)    The
date on which written notification of a claim for indemnification is received by the Indemnifying Party shall determine whether such claim is timely made within the
limitations specified in Section 3.1. No claim for indemnification pursuant to Section 3.1(a) shall be brought or made unless, prior to thirty (30) days after the expiration of
the applicable time period set forth in Section 3.1(a)(i), (ii) or (iii), as the case may be, the Indemnified Party shall have delivered to the Indemnifying Party a good faith written
notice to the effect that the Indemnified Party has incurred Losses entitled to be indemnified against under Section 3.1(a), which notice specifies in reasonable detail the amount of such
Losses and the nature and basis of such claim. 


 
 

ARTICLE IV
  REPRESENTATIONS AND WARRANTIES    
    


        The K-Sea Entities, jointly and severally, represent and warrant as of the date of this Agreement as follows: 


        Section
4.1    Insurance.    The Insurance Policy is valid, outstanding and enforceable and is
in full force and effect. None of the members of the K-Sea Group has received any written notice that a defense will be afforded with reservation of rights or any written notice of
cancellation or any other indication from the issuer of the Insurance Policy that the Insurance Policy is no longer in full force and effect or that the issuer of the Insurance Policy is not willing
or able to perform its obligation thereunder. 


        Section
4.2    Preservation of Indemnification Claims.    To the extent that such rights exist
or are available to any of the members of the K-Sea Group with respect to Environmental and Toxic Tort Losses or Special Toxic Tort Losses, no K-Sea Entity has expressly waived
any material rights to indemnification and other relief under (a) the Purchase Agreement by and among KST, KSA, EWH and certain stockholders and subsidiaries of EWH, dated as of
March 18, 1999 (the "EW Holding Indemnity Agreement"), (b) the Contract of Sale and Purchase of Vessels by and between Maritrans Operating Partners L.P. and K-Sea
Transportation LLC, dated as of October 11, 1999 (the "Maritrans 


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Indemnity
Agreement"), and (c) any other agreement entered into in connection with the acquisition or disposition of assets of any member of the K-Sea Group. 



        Section
4.3    Sufficiency of Conveyance.    



        (a)   Each
of the members of the K-Sea Group is solvent on the date hereof, and, after diligent analysis of its business, its management reasonably believes that
after giving effect to the transfer of the Conveyed Assets in exchange for an aggregate of 665,000 Common Units and 4,165,000 Subordinated Units, (i) the fair value of its assets will exceed
its liabilities, (ii) the present fair value of its assets will be greater than the probable liability on its existing debts as such debts become absolute and mature, (iii) it will not
be rendered insolvent by the transactions contemplated by this Agreement, the Contribution Agreement and the Registration Statement, and (iv) it will not be left with an unreasonably small
amount of capital with which to engage in its business. 


        (b)   The
transfer of the Conveyed Assets as contemplated in the Contribution Agreement was for reasonably equivalent value and fair market value (satisfying in each case the
requirements under applicable law for "reasonably equivalent value" and "fair market value") and not with the intent of hindering, delaying or defrauding the creditors of the K-Sea Group. 



9







  




        (c)   As
of the date hereof, none of the members of the K-Sea Group contemplates the commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its respective assets. 



 
 

ARTICLE V
  COVENANTS    
    


        Section
5.1    Preservation of Indemnification Claims.    From the Closing Date for a period
of ten years, no member of the K-Sea Group shall expressly waive any material rights to indemnification and other relief under the EW Holding Indemnity Agreement or the Maritrans Indemnity
Agreement without the approval of the Conflicts Committee. 


        Section
5.2    Affirmative Covenants of the K-Sea Group.    From the Closing Date
for a period of ten years, each member of the K-Sea Group shall: 



        (a)   maintain
its assets in such a manner that it is not difficult to segregate, ascertain or identify such assets from those of any of the Partnership Entities; 



        (b)   maintain
its records and books of account separate from those of the Partnership Entities; 


        (c)   abide
by all requisite corporate, partnership or limited liability company, as applicable, formalities in dealings with the Partnership Entities; and 


        (d)   hold
itself out as a separate entity, distinct from each of the Partnership Entities. 




        Section
5.3    Negative Covenants of the K-Sea Group.    From the Closing Date for
a period of ten years, each member of the K-Sea Group shall ensure that no member of the K-Sea Group shall: 



        (a)   commingle
or pool its funds or other assets with those of any of the Partnership Entities; 


        (b)   refer
to any of the Partnership Entities as one of its divisions or departments; 


        (c)   mislead
others as to its separate identity from the Partnership Entities; or 


        (d)   merge
or consolidate or combine itself with any of the Partnership Entities. 




        Section
5.4    Name Change.    Within 60 days after the Closing Date, each
K-Sea Entity shall change its name to a name that does not include "K-Sea" or any similar phrase. 


        Section
5.5    Ability to Merge.    Nothing in this Agreement shall be interpreted so as to
prohibit, limit or otherwise restrict any of the K-Sea Entities from merging, consolidating or otherwise combining with any other K-Sea Entity. 


 
 

ARTICLE VI
  MISCELLANEOUS    
    


        Section
6.1    Choice of Law; Submission to Jurisdiction.    This Agreement shall be subject
to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to
the laws of another state. Each party hereby submits to the jurisdiction of the state and federal courts in the State of New York and to venue in New York, New York. 


        Section
6.2    Notice.    All notices or requests or consents provided for or permitted to be
given pursuant to this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with
return receipt requested or by delivering such notice in person or by telecopier or telegram to such party. 


10





 



Notice
given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient's
normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices to be sent to a party pursuant
to this Agreement shall be sent to or made at the address set forth below, or at such other address as such party may stipulate to the other parties in the manner provided in this Section 6.2: 



If to any K-Sea Entity, to: 


c/o
K-Sea Investors L.P.

Jefferies Capital Partners

520 Madison Avenue, 12th Floor

New York, New York 10022

Facsimile: (212) 284-1717

Attention: Brian P. Friedman 


with
a copy (which shall not constitute notice) to:

Dechert

4000 Bell Atlantic Tower

Philadelphia, Pennsylvania 19103

Facsimile: (215) 994-2222

Attention: Carmen J. Romano 


If to any Partnership Entity, to: 


c/o
K-Sea General Partner L.P.

3245 Richmond Terrace

Staten Island, New York 10303

Facsimile: (718) 815-4650

Attention: Timothy J. Casey 


with
a copy (which shall not constitute notice) to: 


Baker
Botts L.L.P.

910 Louisiana Street

Houston, Texas 77002

Facsimile: (713) 229-1522

Attention: Joshua Davidson 




        Section
6.3    Entire Agreement; Supersedure.    This Agreement constitutes the entire
agreement of the parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein. 


        Section
6.4    Effect of Waiver or Consent.    No waiver or consent, express or implied, by
any party to or of any breach or default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach
or default in the performance by such Person of the same or any other obligations of such Person hereunder. Failure on the part of a party to complain of any act of any Person or to declare any Person
in default, irrespective of how long such failure continues, shall not constitute a waiver by such party of its rights hereunder until the applicable statute of limitations period has run. 


        Section
6.5    Amendment or Modification.    This Agreement may be amended or modified from
time to time only by the written agreement of all the parties hereto; provided, however, that the Partnership may not, without the prior approval of the
Conflicts Committee, agree to any amendment or modification of this Agreement that, in the reasonable discretion of the General Partner, will adversely 


11





 



affect
the holders of Common Units. Each such instrument shall be reduced to writing and shall be designated on its face an "Amendment" or an "Addendum" to this Agreement. 


        Section
6.6    Assignment.    No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties hereto. Any assignment in contravention of this Section shall be null and void and of no force and effect. 


        Section
6.7    Counterparts.    This Agreement may be executed in any number of counterparts
with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. 


        Section
6.8    Severability.    If any provision of this Agreement or the application thereof
to any person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this agreement and
the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 


        Section
6.9    Gender, Parts, Articles and Sections.    Whenever the context requires, the
gender of all words used in this Agreement shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. All references to Article numbers and
Section numbers refer to Articles and Sections of this Agreement, unless the context otherwise requires. 


        Section
6.10    Further Assurances.    In connection with this Agreement and all transactions
contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions. 



        Section
6.11    No Rights of Limited Partners, Assignees, and Third Parties.    The provisions
of this Agreement are enforceable solely by the parties to this Agreement, and no Limited Partner, Assignee or other Person shall have the right, separate and apart from the parties hereto, to enforce
any provision of this Agreement or to compel any party to this Agreement to comply with the terms of this Agreement. 


[Signature
Pages Follow] 


12





 

        IN WITNESS WHEREOF, the parties have executed this Agreement on, and effective as of, the Closing Date. 



	 	 	K-SEA INVESTORS L.P.
	 	 	By:	 	PARK AVENUE TRANSPORTATION, INC.
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	
 [Name]

President
	

 	
 	
K-SEA TRANSPORTATION LLC
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	
 [Name]

President
	

 	
 	
K-SEA ACQUISITION CORP.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	
 [Name]

President
	

 	
 	
EW HOLDING CORP.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	
 [Name]

President
	

 	
 	
K-SEA TRANSPORTATION CORP.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	
 [Name]

President
	

 	
 	
K-SEA GENERAL PARTNER L.P.
	 	 	By:	 	K-SEA GENERAL PARTNER GP LLC,

its general partner
	 	 	 	 	By:	 	 
	 	 	 	 	 	 	
 Timothy J. Casey

President
	

 	
 	
K-SEA GENERAL PARTNER GP LLC
	 	 	By:	 	 	 	 
	 	 	 	 	
 Timothy J. Casey

President
	

 	
 	
K-SEA TRANSPORTATION PARTNERS L.P.
	

 	
 	

By:	
 	
K-SEA GENERAL PARTNER L.P., its general partner
	 	 	 	 	 	 	 






13





 

	

 	
 	

 	
 	

By:	
 	
K-SEA TRANSPORTATION L.P., LLC,





	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	
 Timothy J. Casey

President
	

 	
 	
K-SEA OLP GP, LLC
	 	 	By:	 	 	 	 	 	 
	 	 	 	 	
 Timothy J. Casey

President
	

 	
 	
K-SEA OPERATING PARTNERSHIP L.P.
	 	 	By:	 	K-SEA OLP GP LLC, its general partner
	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 Timothy J. Casey

President




14









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TABLE OF CONTENTS


OMNIBUS AGREEMENT

PRELIMINARY STATEMENTS

AGREEMENT

ARTICLE I DEFINITIONS

ARTICLE II NONCOMPETITION

ARTICLE III INDEMNIFICATION

ARTICLE IV REPRESENTATIONS AND WARRANTIES


ARTICLE V COVENANTS

ARTICLE VI MISCELLANEOUS