Document:

Unassociated Document

    
      

    

    Exhibit
10.1

    
      PIPELINE
FINANCING LEASE AGREEMENT

       

      by
and between

       

      GENESIS
NEJD PIPELINE, LLC

       

      as
LESSOR

       

      and

       

      DENBURY
ONSHORE, LLC,

       

      as
LESSEE

       

      for
the North East Jackson Dome Pipeline System

       

      

       

      Dated:
May 30, 2008

       

      

       

      All
right, title and interest of Lessor under this Financing Lease, which includes
Lessor’s interest in the property subject to this Financing Lease, have been
collaterally assigned to and are subject to a security interest in favor of
Genesis SPE 1 (as defined below) pursuant to a Collateral Agreement (the “Collateral
Agreement”).  This Financing Lease has been executed in several
counterparts.  To the extent, if any, that this Financing Lease
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no lien on this Financing
Lease may be created through the transfer or possession of any counterpart other
than the original counterpart containing the receipt therefor executed by
Genesis SPE 1, on or following the signature page hereof.

       

      This
counterpart is an original counterpart.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE OF
CONTENTS

       

      
        	
                1.

              	
                Definitions

              	
                1

              
	
                2.

              	
                Demise
      and Quiet Enjoyment.

              	
                12

              
	
                3.

              	
                Lease
      Term and Repayment Obligations.

              	
                14

              
	
                4.

              	
                Consideration.

              	
                16

              
	
                5.

              	
                Use
      and Operation of Pipeline System.

              	
                20

              
	
                6.

              	
                Shipments

              	
                21

              
	
                7.

              	
                Alterations
      and Improvements

              	
                22

              
	
                8.

              	
                Maintenance
      and Repair

              	
                22

              
	
                9.

              	
                Representations
      and Warranties of Lessor

              	
                22

              
	
                10.

              	
                Representations
      and Warranties of Lessee

              	
                23

              
	
                11.

              	
                Special
      Covenants of Lessee

              	
                25

              
	
                12.

              	
                Indemnification

              	
                27

              
	
                13.

              	
                Risk
      of Loss

              	
                27

              
	
                14.

              	
                Sale
      or Assignment

              	
                27

              
	
                15.

              	
                Events
      of Default and Remedies.

              	
                28

              
	
                16.

              	
                Estoppels

              	
                35

              
	
                17.

              	
                Notices

              	
                36

              
	
                18.

              	
                Limitation
      of Liability

              	
                37

              
	
                19.

              	
                Casualty
      and Condemnation

              	
                37

              
	
                20.

              	
                Environmental
      Matters

              	
                39

              
	
                21.

              	
                Notice
      of Environmental Matters

              	
                40

              
	
                22.

              	
                Miscellaneous.

              	
                40

              

      

      

       

      Exhibits:

       

      
        	
                Exhibit
      A-1

              	
                Pipeline
      System

              

      

      
        	
                Exhibit
      A-2

              	
                Rights-of-Way

              

      

      
        	
                Exhibit
      B

              	
                Amortization
      Schedule

              

      

      
        	
                Exhibit
      C

              	
                Dispute
      Resolution Procedures

              

      

      
        	
                Exhibit
      D-1

              	
                Mississippi
      Conveyance

              

      

      
        	
                Exhibit
      D-2

              	
                Louisiana
      Conveyance

              

      

      
        	
                Exhibit
      E

              	
                Exchange
      Note

              

      

      
        	
                Exhibit
      F-1

              	
                Exchange
      Deed of Trust (MS)

              

      

      
        	
                Exhibit
      F-2

              	
                Exchange
      Mortgage (LA)

              

      

      
        	
                Exhibit
      G

              	
                Exchange
      Guaranty

              

      

      
        	
                Exhibit
      H-1

              	
                UCC
      Financing Statement (DE)

              

      

      
        	
                Exhibit
      H-2

              	
                UCC
      Financing Statement – Fixtures (LA)

              

      

      
        	
                Exhibit
      I-1

              	
                Memorandum
      of Lease, Deed of Trust, Security Agreement and UCC Fixture Filing
      (MS)

              

      

      
        	
                Exhibit
      I-2

              	
                Notice
      of Lease, Mortgage and Security Agreement
(LA)

              

      

      

      Schedules:

      

      
        
          	
                  Schedule
      1(i)

                	
                  Knowledge
      (Lessor)

                

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	
                  Schedule
      1(ii)

                	
                  Knowledge
      (Lessee)

                

        

        
          	
                  Schedule
      10.C

                	
                  Outstanding
      Consents and Violations

                

        

        
          	
                  Schedule
      10.D

                	
                  Litigation

                

        

        
          	
                  Schedule
      10.E

                	
                  Exceptions
      to Compliance with Applicable Laws

                

        

        
          	
                  Schedule
      10.F

                	
                  Exceptions
      to Condition of Pipeline System
Representation

                

        

        
          	
                  Schedule
      10.H

                	
                  Environmental
      Matters

                

        

        
          	
                  Schedule
      10.H

                	
                  Outstanding
      Environmental Permits

                

        

        
          	
                  Schedule
      10.I

                	
                  Unsatisfied
      Liabilities

                

        

        
          
             

          

          
            ii

            
              

            

          

          
             

          

        

      PIPELINE FINANCING LEASE
AGREEMENT

       

      THIS PIPELINE FINANCING LEASE
AGREEMENT (this “Financing Lease”)
dated this 30th day of
May, 2008 (the “Effective Date”), is
entered into by and between GENESIS NEJD PIPELINE, LLC a
Delaware limited liability company (“Lessor”) and DENBURY ONSHORE, LLC, a
Delaware limited liability company (“Lessee”).

       

      R E C I T A L
S:

       

      WHEREAS,
Lessor and Lessee desire to enter into this Financing Lease for the North East
Jackson Dome Pipeline System located in the State of Mississippi and the State
of Louisiana, pursuant to which Lessee leases the North East Jackson Dome
Pipeline System and 100% of its capacity on an exclusive basis from
Lessor.

       

      W I T N E S S E T
H:

       

      NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which being hereby acknowledged, Lessor and Lessee agree as
follows:

       

      1.       
     Definitions.  As
used in this Financing Lease, the following terms have the meanings specified
below:

       

      “Administrative Agent”
means Fortis Capital Corp. and any replacement or successor agent pursuant to
the Applicable Credit Agreement.

       

      “Affiliate”, (for
purposes of this Financing Lease only and without thereby altering the
determination of the existence of an affiliate relationship of Lessor and Lessee
for other circumstances, when used with reference to (i) Lessor, for only so
long as the MLP Entities would be considered Affiliates of Lessor pursuant to
the definition in clause (iii) below, “Affiliate” shall include MLP, its
subsidiaries and its general partner, Genesis Energy, Inc. (collectively, the
“MLP Entities”)
and (ii) Lessee, “Affiliate” shall include DRI and its subsidiaries (it being
understood that notwithstanding clauses (i) and (ii), the MLP Entities shall not
be considered Affiliates of DRI and its other subsidiaries, or vice versa),
(iii) any other Person, means and includes any Person which directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. The term “control” (including the
terms “controlling,” “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of any Person, whether through
ownership of voting securities, by contract or otherwise.

       

      “Airgas” means (a)
Airgas Carbonic Enterprises, Inc., and (b) its Affiliates and its and their
successors and assigns that have or claim rights under any Airgas
Document.

       

      “Airgas Documents”
means, collectively, and as may be amended, modified, or otherwise supplemented
from time to time, (a) the Purchase and Sale Agreement dated January 18, 2001
among NEJD Pipeline Company Inc., Airgas and DRI, (b) Pledge of Production
Proceeds and Trust Agreement made February 2, 2001 among DRI, Airgas, NEJD
Pipeline Company, Inc. and others (the “Airgas Pledge”), (c)
the Right of First Refusal and Option to Purchase Agreement dated February 2,
2001 by and between Airgas and DRI (the “Airgas ROFR”), (d)
the Amended and Restated Carbon Dioxide Sale and Purchase Contract dated January
1, 2001 by and between DRI and Airgas Carbonic Inc. as amended by (i) the
Amendments to Amended and Restated Carbon Dioxide Sale and Purchase Contract
effective respectively July 1, 2001 and September 19, 2001 by and between DRI
and Airgas Carbonic Inc. and (ii) the Addendum to Carbon Dioxide Sale and
Purchase Contract dated August 1, 2006 by and between Genesis Crude Oil, L.P.
and Airgas Carbonic Inc.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      “Airgas Pledge” has
the meaning provided in the definition of Airgas Documents.

       

      “Airgas Rights
Determination” means the issuance or entry of a judgment, order, finding,
award or other determination by a court of law, arbitrator or arbitration panel,
whether or not final or appealable, (a) that as a result of any of the Pledge
and Related Actions Airgas may enforce a right of first refusal, a right to
prior consent, or other compliance requirement or claim under any of the Airgas
Documents, or (b) that any of the Pledge and Related Actions be enjoined or
declared void because the provisions of any of the Airgas Documents were not
complied with in connection with any such Pledge and Related
Action.

       

      “Airgas ROFR” has the
meaning provided in the definition of Airgas Documents.

       

      “Applicable Credit
Agreement” has the meaning set forth in the C&A.

       

      “Applicable Laws”
means and includes any and all laws, ordinances, orders, rules, regulations and
other legal requirements of all governmental bodies (state, federal, tribal and
municipal) having jurisdiction over the ownership, financing, use, occupancy,
operation and maintenance of the Pipeline System, as such may be amended or
modified from time to time.

       

      “Bankruptcy Event”
means, with respect to any Person, the entry of a decree or order by a court of
competent jurisdiction adjudging such Person as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of such Person under the Federal
Bankruptcy Code or any other applicable law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of such
Person or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days; or the
consent by such Person to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or similar relief under the Federal Bankruptcy Code or
any other applicable law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of  or of any substantial
part of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due and its willingness to be adjudicated a
bankrupt.

       

      “Base Rent” has the
meaning set forth in Section 4.A hereof.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      “Board of Governors”
means the Board of Governors of the Federal Reserve System of the United States
of America.

       

      “Business Day” means a
day other than a Saturday, Sunday or other day on which commercial banks in New
York, New York and Houston, Texas are authorized or required by law to
close.

       

      “C&A” means the
Consent and Agreement, dated as of the date hereof, among Lessee, DRI, MLP,
Genesis SPE 1, Lessor and the Administrative Agent.

       

      “Carbon Dioxide” means
a substance primarily composed of molecules containing one atom of carbon and
two atoms of oxygen and containing at least 95 percent (dry basis) by volume of
such molecules.

       

      “Cash Prepayment Only
Default” has the meaning set forth in Section 15.B(1).

       

      “Cash Prepayment
Option” has the meaning set forth in Section 15.C.

       

      “Casualty” means any
damage or destruction of all or any portion of the Pipeline System as a result
of a fire, flood, earthquake or other casualty or catastrophe.

       

      “Charges” has the
meaning set forth in Section 22.O hereof.

       

      “Claims” means any and
all obligations, liabilities, losses, actions, suits, judgments, penalties,
fines, claims, demands, settlements, costs and expenses (including, without
limitation, reasonable legal fees and expenses) of any nature
whatsoever.

       

      “Closing Agreement”
means that certain Closing Agreement with respect to the Pipeline System, by and
between Lessor and Lessee, dated as of the Effective Date.

       

      “Collateral Agreement”
has the meaning set forth on the cover page hereto, as amended, restated,
supplemented or otherwise modified, refinanced or replaced, in each case from
time to time.

       

      “Collateral Lien”
means any Lien created by the Collateral Agreement or any exercise of rights
under the Collateral Agreement upon a Lease Event of Default.

       

      “Condemnation” means,
with respect to the Pipeline System, any condemnation, requisition,
confiscation, seizure or other taking or sale of the use, access, occupancy,
easement rights or title to the Pipeline System or any part thereof, wholly or
partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including an action by a Governmental Body
to change the grade of, or widen the streets adjacent to, the Pipeline System or
alter the pedestrian or vehicular traffic flow to the Pipeline System so as to
result in a change in access to the Pipeline System, or by or on account of an
eviction by paramount title or any transfer made in lieu of any such proceeding
or action (as a result of which, in all cases, there is a material adverse
effect on the operation of the Pipeline System).  A “Condemnation”
shall be deemed to have occurred on the earliest of the dates that use,
occupancy or title vests in the condemning authority.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      “Contingent Payments”
means amounts payable to Lessor pursuant to Section 12 and/or pursuant to
Section 5(g) of the C&A.

       

      “Conveyance” means
those certain conveyance documents in the forms attached hereto as Exhibit D-1 and D-2.

       

      “Default Interest” and
“Default Interest
Rate” have the meanings set forth in Section 15.E.

       

      “DRI Credit Agreement”
means the Sixth Amended and Restated Credit Agreement, dated as of September 14,
2006, by and among Lessee, DRI, JPMorgan Chase Bank, N.A., as Administrative
Agent and the lenders party thereto, as amended, restated, supplemented or
otherwise modified, refinanced or replaced, in each case from time to
time.

       

      “DRI” means Denbury
Resources Inc.

       

      “Effective Date” has
the meaning set forth in the introductory paragraph hereto.

       

      “Environmental Costs and
Liabilities” means, all liabilities, obligations, responsibilities,
Remedial Actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements
and expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any of the foregoing or in response to any violation of or liability
under any Environmental Law, to the extent based upon, related to, or arising
under or pursuant to any Environmental Law, Environmental Permit, order or
agreement with any Governmental Body or other Person, which relates to any
environmental condition, violation of Environmental Law or a Release or
threatened Release of Hazardous Materials, whether known or unknown, accrued or
contingent, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute.

       

      “Environmental Law”
means any foreign, federal, state or local statute, regulation, ordinance or
other legal requirement as now or hereafter in effect in any way relating to the
protection of or regulation of the environment or natural resources, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. § 5101 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean
Air Act (42 U.S.C. § 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), and the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), as those
laws have been amended, any analogous laws and the regulations promulgated
pursuant thereto.

       

      “Environmental Permit”
means any permit or approval required by Environmental Laws for the operation of
the Pipeline System.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      “Event of Loss” means
any of the following:

       

      (a)           a
Condemnation that involves a taking of Lessor’s entire interest in the Pipeline
System, or that, in the reasonable judgment of Lessor, is likely to have a
material adverse effect on the use of the residual value of the Pipeline System
(unless the Lessee replaces the portion of the Pipeline System that has been
taken so as to restore the Pipeline System to a condition in which the Pipeline
System is able to operate at substantially the same capacity as before such
Condemnation and, in the reasonable judgment of Lessor, such restoration could
reasonably be expected to be completed prior to the end of the Lease
Term),

       

      (b)           a
Casualty that, in the reasonable judgment of Lessor, is likely to have a
material adverse effect on the use or residual value of the Pipeline System
(unless the insurance proceeds received in connection with such event are
sufficient to repair and restore the Pipeline System to a condition in which the
Pipeline System is able to operate at substantially the same capacity as before
such Casualty and, in the reasonable judgment of Lessor, such repair and
restoration could reasonably be expected to be completed prior to end of the
Lease Term), or

       

      (c)           the
revocation of any permits or regulatory approvals from Governmental Bodies or
third parties, which permits or approvals, as the case may be, are necessary for
the ownership and operation of the Pipeline System.

       

      “Excess Casualty/Condemnation
Proceeds” means at any time the excess, if any, of (x) the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation minus (y) the Financing Lease Prepayment Amount then
outstanding.

       

      “Exchange Documents”
has the meaning set forth in Section 15.C hereof.

       

      “Exchange Guaranty”
has the meaning set forth in Section 15.C hereof.

       

      “Exchange Mortgages”
has the meaning set forth in Section 15.C hereof.

       

      “Exchange Note” has
the meaning set forth in Section 15.C hereof.

       

      “Exchange Note Option”
has the meaning set forth in Section 15.C.

       

      “Exchange or Prepayment
Option” means either the Cash Prepayment Option or the Exchange Note
Option.

       

      “Exclusive Right” has
the meaning set forth in Section 5.B hereof.

       

      “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York.

       

      “Financial Assurances”
means a letter of credit provided by DRI issued by a financial institution
satisfactory to Lessor in its reasonable discretion, made for the benefit of
Lessor or its designee or the Administrative Agent, payable upon certification
by Lessor or its designee that a Cash Prepayment Only Default has occurred and
is continuing, and otherwise in form and substance satisfactory to Lessor in its
reasonable discretion in an amount equal to the amount of Base Rent to be paid
under this Financing Lease (i) during four complete calendar quarters or (ii)
during eight complete calendar quarters if Financial Assurances are provided
pursuant to Section 11.B below, and the corporate credit rating of DRI drops
below B+ issued by Standard & Poor’s Rating Group, or below a credit rating
of B2 issued by Moody’s Investor Service, Inc. Following the date Financial
Assurances are required to be delivered hereunder until such time as the event
that triggered the requirement of DRI providing such Financial Assurances is no
longer in effect, a renewal or substitute letter of credit, upon the same terms
and subject to the same conditions as previously described in this sentence,
shall be provided by DRI no later than sixty (60) days prior to the scheduled
expiration date of any then existing Financial Assurance; provided, that if
such renewal or substitute letter of credit is not so provided within thirty
(30) days prior to the scheduled expiration date of any then existing letter of
credit, the beneficiary thereof shall be entitled to draw on the existing letter
of credit.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      “Financing Lease” has
the meaning set forth in the introductory paragraph hereto.

       

      “Financing Lease
Documents” means this Financing Lease, the Closing Agreement, the
Conveyance, the Financing Lease Guaranty, the Memorandum of Financing Lease, and
all other deeds, financing statements, documents or instruments called for in
the preceding named documents; it being understood that the C&A is expressly
not a Financing Lease Document.

       

      “Financing Lease
Guaranty” has the meaning set forth in Section 4.D hereof.

       

      “Financing Lease Prepayment
Amount” means, at any date of determination, the sum of (a) the unpaid
principal balance following the application of all quarterly installments of
Base Rent theretofore made by Lessee pursuant to this Financing Lease, as shown
in the column entitled “Balance” on Exhibit B, (b) any
interest earned but unpaid on such principal balance, including Default Interest
pursuant to Section 15.E, and (c) any other amounts owed by Lessee or DRI to
Lessor under the Financing Lease Documents and/or payable under
Section 5(g) of the C&A to the Lessor or the other parties thereto
(including Contingent Payments), in each case as of such date of
determination.

       

      “Financing Lease
Transaction” shall have the meaning set forth in Section 4.E
hereof.

       

      “GAAP” means generally
accepted accounting principles in the United States of America applicable at the
time of the event or occurrence of the condition to which GAAP
applies.

       

      “Genesis Event of
Default” has the meaning set forth in Section 3.C(4).

       

      “Genesis SPE 1” means
Genesis NEJD Holdings, LLC, a Delaware limited liability
company.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      “Governmental Body”
means any government or governmental or regulatory body thereof, or political
subdivision thereof, whether foreign, federal, state, tribal or local, or any
agency, instrumentality or authority thereof, or any court or arbitrator (public
or private).

       

      “Hazardous Material”
means any substance, material or waste which is regulated, classified, or
subject to liability under or pursuant to any Environmental Law, including,
without limitation, petroleum and its by-products, asbestos, polychlorinated
biphenyls, radon, mold or other fungi, and urea formaldehyde
insulation.

       

      “Income Termination
Date” shall mean, if either occurs, the earlier of (i) the date on which
Lessor accepts in writing a conveyance in lieu of foreclosure of the liens
created in this Financing Lease and the Memorandum of Financing Lease covering
Lessee's interest in the Pipeline System or (ii) the date on which a foreclosure
sale of such liens has been completed.

       

      “Intercompany Event of
Default” has the meaning set forth in Section 3.C(4) hereof.

       

      “Interest Lien” means
any Lien held by Lessor as a component of Lessor’s interest in the Pipeline
System.

       

      “IRS” has the meaning
set forth in Section 4.E hereof.

       

      “Knowledge” means as
follows: (i) with respect to Lessor, the individuals listed on Schedule 1(i), or
their respective successors in the same or similar officer positions, shall be
deemed to have knowledge of a particular fact or other matter if such individual
is consciously aware of such fact or other matter at the time of determination
after due inquiry; and (ii) with respect to Lessee, the individuals listed on
Schedule 1(ii),
or their respective successors in the same or similar officer positions, shall
be deemed to have knowledge of a particular fact or other matter if such
individual is consciously aware of such fact or other matter at the time of
determination after due inquiry.

       

      “Lease Event of
Default” has the meaning set forth in Section 15.A hereof.

       

      “Lease Term” shall
have the meaning set forth in Section 3.A hereof.

       

      “Lessee” means Denbury
Onshore, LLC, a Delaware limited liability company, together with its successors
and assigns permitted pursuant to Section 14 hereof.

       

      “Lessee Retained
Liabilities” has the meaning set forth in Section 2.A
hereof.

       

      “Lessor” means Genesis
NEJD Pipeline, LLC, a Delaware limited liability company, together with its
successors and assigns permitted pursuant to Section 14 hereof.

       

      “Lessor Debt” has the
meaning set forth in Section 3.C(4) hereof.

       

      “Lessor Financing
Statements” means UCC financing statements appropriately completed and
executed for filing in the applicable jurisdiction in order to perfect Lessor’s
security interest in the Pipeline System which secures Lessee’s performance
under the Financing Lease.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      “Lessor Lien” means
any Lien on the Pipeline System or the Financing Lease Documents arising on or
after the Effective Date that is either proven to have been created by Lessor or
proven to have arisen based on any action of or failure to act by Lessor, the
MLP, its subsidiaries, or its general partner, Genesis Energy, Inc., including
with respect to Lessor Taxes; provided that,
notwithstanding the foregoing, Lessor Liens shall not include (i) any Interest
Lien or other Lien that arises solely from Lessor’s interest in the Pipeline
System but is otherwise unrelated to any action of or failure to act by Lessor,
the MLP, its subsidiaries or such general partner, (ii) Permitted Encumbrances,
(iii) any Lien consented to or created or caused by Lessee or its Affiliates,
(iv) any Lien arising out of Lessee’s performance of, or failure to perform, its
responsibilities and obligations under the Financing Lease Documents, or
otherwise out of a matter for which Lessee is required to provide
indemnification pursuant to this Financing Lease, (v) any Lien related to
beneficial ownership, operation or maintenance of the Pipeline System, (vi) any
Lien created pursuant to the Collateral Agreement or the Financing Lease
Documents, (vii) any Lien created pursuant to an assignment permitted by Section
14, (viii) any Lien arising out of or related to Lessee Retained Liabilities,
(ix) any Collateral Lien, or (x) any Lien not created by Lessor existing
immediately prior to the execution and delivery of this Financing
Lease.

       

      “Lessor Release
Mechanics” means, subject to Sections 2(b) and (d) of the C&A, (a)
Lessor shall execute and deliver to Lessee (or to Lessee’s designee) at Lessee’s
cost and expense (including without limitation any Pipeline System Taxes, but
except as herein otherwise expressly provided with respect to Lessor Liens,
Collateral Liens or Interest Liens), a reassignment and release of Lessor’s
entire interest in the Pipeline System, as it then exists, free and clear of any
Lessor Liens, Collateral Liens and Interest Liens, but subject to Permitted
Encumbrances and without any representation or warranty, express or implied,
regarding title to, the condition of or other matters with respect to, the
Pipeline System, it being intended that all of the negations of representations
and warranties set forth in Section 2.E shall also expressly apply in the
context of the Lessor Release Mechanics; (b) Lessor’s interest in the Pipeline
System shall be reassigned and released to Lessee (or to Lessee’s designee)
“AS IS, WHERE IS” and in
its then present physical condition; (c) Lessor shall execute and deliver to
Lessee such releases as may be reasonably requested to release Lessor Liens and
shall execute and deliver to Lessee a statement of termination, as appropriate,
of this Financing Lease and the Memorandum of Financing Lease, and (d) all
future obligations of Lessor and Lessee under this Financing Lease and of DRI
under the Guaranty shall terminate and be released upon consummation of such
reassignment and release of Lessor’s interest in the Pipeline System to Lessee,
provided that
the parties hereto shall retain any and all rights to pursue remedies provided
herein against the other party pursuant to provisions that expressly survive
termination of this Financing Lease or for damages resulting from breaches by
such other party of obligations under this Financing Lease or the other
Financing Lease Documents and/or the C&A occurring prior to such
termination.  If the Lessor is complying with the Lessor Release
Mechanics in conjunction with the consummation of the Exchange Note Option,
then, notwithstanding anything to the contrary herein, it is understood and
agreed that the Liens granted pursuant to the Exchange Mortgages are granted in
renewal, extension and rearrangement of the Interest Lien reassigned and
released pursuant to clauses (b) and (c) above.  Notwithstanding
anything to the contrary contained in this Financing Lease, any other Financing
Lease Document or the C&A, in the case of a prepayment as a result of the
occurrence of an Airgas Rights Determination, the Lessor Release Mechanics shall
exclude, and Lessor shall not be obligated to perform or comply with, any of the
foregoing elements of the definition of Lessor Release Mechanics that would be
prohibited by or materially inconsistent with the Airgas Rights Determination,
and Lessor’s failure to perform or comply with such elements that would be
prohibited by or materially inconsistent with the Airgas Rights Determination
shall not excuse Lessee from, or permit Lessee to delay, paying the Financing
Lease Prepayment Amount.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      “Lessor Taxes” shall
have the meaning set forth in the definition of “Pipeline System Taxes”
below.

       

      “Lessor’s Inspection
Right” has the meaning set forth in Section 5.A hereof.

       

      “Lien” means any lien
(statutory or other), mortgage, pledge, hypothecation, assignment, security
interest, encumbrance or preference, priority or other security agreement or any
interest in Property to secure payment of a debt or performance of an obligation
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, capitalized lease or other title retention
agreement).

       

      “Margin Stock” has the
meaning assigned to such term in Regulation U.

       

      “Material
Indebtedness” means any indebtedness for borrowed money (or guaranty
thereof) (other than the obligations under the Financing Lease Documents or the
C&A) of either DRI, any of Lessee’s other Affiliates or Lessee (a) in an
aggregate principal amount exceeding $50,000,000 or (b) arising under the DRI
Credit Agreement.

       

      “Maximum Rate” has the
meaning set forth in Section 22.O hereof.

       

      “Memorandum of Financing
Lease” means, collectively those documents filed pursuant to Section 22.M
hereof.

       

      “MLP” means Genesis
Energy, L.P., a Delaware limited partnership

       

      “Outstanding Consents”
shall have the meaning set forth in the Closing Agreement.

       

      “Permitted
Encumbrances” means:  (a) any Liens for Pipeline System Taxes
that are not yet due and payable; (b) materialmen’s, mechanic’s, repairmen’s,
employees’, contractors’ and other similar Liens or charges arising in the
ordinary course of business, so long as, at any time, no enforcement action with
respect to any such Lien has progressed to the point where a judgment or decree
for foreclosure, or a foreclosure sale, could be entered or conducted within the
next ensuing thirty (30) day period; (c) all rights reserved to or vested in any
Governmental Body to control or regulate any of the real property interests
constituting a part of the Pipeline System; (d) easements, rights of way,
restrictions and other similar encumbrances incurred in the ordinary course of
business and which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the Pipeline System as it
is currently being used or materially interfere with the ordinary conduct of the
Pipeline System; (e) other Liens not created by, through or under the Lessee and
which do not secure indebtedness for borrowed money, which Liens are incurred in
the ordinary course of business and which, in the aggregate, are not substantial
in amount and which do not materially detract from the value of the Pipeline
System as it is currently being used or do not, and could not reasonably be
expected to, materially interfere with the ordinary conduct or transfer of the
Pipeline System; provided that any
such Lien shall be a Permitted Encumbrance for only so long as, at any time, no
enforcement action with respect thereto has progressed to the point where a
judgment or decree for foreclosure, or a foreclosure sale, could be entered or
conducted within the next ensuing thirty (30) day period; (f) the rights of
grantors and lessors to consent to a transfer of any Rights-of-Way; and (g) the
rights of Airgas with respect to the Pipeline System under the Airgas
Documents.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      “Person” means any
individual, corporation, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental authority
or other entity.

       

      “Pipeline System”
means the North East Jackson Dome Pipeline System in Mississippi and Louisiana
as shown on Exhibit
A-1 hereto, which is a pipeline that begins at the upstream flange of the
twenty-inch (20”) motor-operated mainline valve C-010 located downstream of
Lessee’s North East Jackson Dome meter station and has interim termination
points at the inlet flanges of the valves or connections upstream of all Lessee
meter facilities at the various delivery points along the pipeline, and a final
termination point of the pipeline at mile marker M-183 in Ascension Parish,
Louisiana, along with all in-line equipment, pipes, flanges, valves, fittings,
meters,  and  related improvements, fixtures and equipment
that are physically attached to and are a part of the pipe comprising the
pipeline  (collectively the “Pipeline Equipment”),
including those shown on Exhibit A 1 hereto,
and all rights, interests and estates created in the Rights-of-Way, and all
additions thereto and substitutions therefor.  However, the Pipeline
System does not and will not include (a) compressors, pump stations (such as the
Brandon pump station now being constructed), or any other equipment connected to
and used in conjunction with the pipeline but not an in-line or an attached part
of the pipe comprising the pipeline described above, nor (b) any additions
located outside of, or any Pipeline Equipment that is not physically attached to
the pipeline at points within, the beginning point and termination points
described above, except to the extent that such additions are substitutions for
any portion of the Pipeline System (including the Pipeline Equipment) as it
exists on the Effective Date.

       

      “Pipeline System
Taxes” means all Taxes specifically assessed against the Pipeline System,
including Taxes imposed on the ownership, financing, use, occupancy or
possession of the Pipeline System but specifically not including “Lessor Taxes” which
will shall mean all gross receipts, income or franchise taxes, or other taxes of
the nature of income taxes, to which Lessor is subject solely as a result of
receiving the payments provided to be paid to Lessor hereunder, but in no event
shall Lessor Taxes include amounts greater than those which would be owing by
Lessor had this Financing Lease been documented as a promissory note payable by
Lessee to Lessor in the principal balance, and payable at the times and in the
amounts, set forth on Exhibit B, and
secured by a deed of trust lien and security interest covering the Pipeline
System.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      “Pledge and Related
Actions” means (a) the execution and delivery of the Financing Lease
Documents, the C&A and the SRCA, (b) the pledge of the applicable Financing
Lease Documents, the C&A and/or the SRCA by Lessor to Genesis SPE 1 pursuant
to the Collateral Agreement, (c) the granting of Liens (the “Upstream Liens”) to
various secured parties directly or indirectly on the assets of Lessor or
Genesis SPE 1 or on the equity interests of Genesis SPE 1, (d) any change in the
Person that is the Lessor pursuant to an exercise of remedies under the
Collateral Agreement or in connection with the Upstream Liens, or (e) the
execution and delivery of the Exchange Documents by the parties
thereto.

       

      “Prepayment or Exchange
Terms” has the meaning set forth in Section 15.C hereof.

       

      “Property” of a Person
means any and all property, whether real, personal, tangible, intangible, or
mixed, of such Person, or other assets owned, leased or operated by such Person,
and includes, without limitation, stock, partnership and limited liability
company interests owned or held in any other Person by such Person.

       

      “Regulation T” means
Regulation T of the Board of Governors as from time to time in effect and all
official rulings and interpretations thereunder and thereof.

       

      “Regulation U” means
Regulation U of the Board of Governors as from time to time in effect and all
official rulings and interpretations thereunder and thereof.

       

      “Regulation X” means
Regulation X of the Board of Governors as from time to time in effect and all
official rulings and interpretations thereunder and thereof.

       

      “Release” means any
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, or leaching into the indoor or outdoor environment, or
into or out of any property.

       

      “Remedial Action”
means all actions to (i) clean up, remove, treat or in any other way address any
Hazardous Material; (ii) prevent the threatened Release of any Hazardous
Material so it does not endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies
and investigations or post-remedial monitoring and care; or (iv) to correct a
condition of non-compliance with Environmental Laws.

       

      “Rights-of-Way” means
all surface leases, easements, servitudes, rights-of-way, fee interests, full
ownership, leases, leasehold interests, crossing rights, licenses and other
interests in real property and/or immovable property associated therewith,
initially shown as Exhibit A-2 hereto,
and as the same may exist from time to time, and all additions thereto and
substitutions therefor, subject to the last sentence of the definition of
Pipeline System.

       

      “SEC” has the meaning
set forth in Section 11.C hereof.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      “SRCA” means that
certain Special Representations and Covenants Agreement, dated as of even date
herewith, by and between MLP and Lessee.

       

      “Survival Provisions”
means all provisions of this Financing Lease which are stated herein to survive
the expiration or termination of this Financing Lease, the application of the
Lessor Release Mechanics or the exercise of any rights or remedies by Lessor or
Lessee hereunder or under the other Financing Lease Documents or the
C&A.

       

      “Tax” or “Taxes” means, however
denominated, (x) any and all taxes, assessments, customs, duties, levies, fees,
tariffs, imposts, deficiencies and other governmental charges of any kind
whatsoever (including, but not limited to, taxes on or with respect to net or
gross income, franchise, profits, gross receipts, capital, sales, use, ad
valorem, value added, transfer, real property transfer, transfer gains, transfer
taxes, mortgage taxes, intangibles taxes, inventory, escheats, unclaimed
property, capital stock, license, payroll, employment, social security,
unemployment, severance, occupation, real or personal property, estimated taxes,
rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative
minimum, doing business, withholding and stamp), together with any interest
thereon, penalties, fines, damages costs, fees, additions to tax or additional
amounts with respect thereto, imposed by any federal, state or local taxing
authority of any jurisdiction; (y) any liability for the payment of any amounts
described in clause (x) as a result of being a member of an affiliated,
consolidated, combined, unitary or similar group or as a result of transferor or
successor liability; and (z) any liability for the payments of any amounts as a
result of being a party to any tax sharing agreement or as a result of any
express or implied obligation to indemnify any other person with respect to the
payment of any amounts of the type described in clause (x) or (y).

       

      “Tax Return” means any
report, return, document, declaration or other information or filing (including
any amendments, elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to any federal, state or local
taxing authority or jurisdiction with respect to Taxes, including, where
permitted or required, combined or consolidated returns for any group of
entities that includes any party to this Financing Lease or any subsidiary of
any such party, any documents with respect to or accompanying payments of
estimated taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information.

       

      2.       
     Demise and Quiet
Enjoyment.

       

      A.           Demise and
Lease.  Lessor, for and in consideration of the covenants and
agreements of Lessee set forth herein, does hereby demise and lease to Lessee
for the Lease Term the Pipeline System and 100% of its capacity for Lessee’s
exclusive use for transporting Carbon Dioxide, or any other substance Lessee may
determine in its sole discretion.  Lessee has retained the exclusive
right to use the Pipeline System in accordance with Applicable Laws (including
without limitation the right of ingress and egress to and use of all easements,
fee interests, rights-of-way and crossings comprising the Pipeline
System).  Lessee retains and assumes all liabilities and obligations
of any kind or nature with respect to the Pipeline System (including for
Environmental Costs and Liabilities), based upon or arising from or out of, any
condition existing or act, event or omission occurring, with respect to the
Pipeline System, or the use, occupancy, ownership, operation or maintenance
thereof arising, occurring or resulting (a) on or prior to the Effective Date,
and (b) from and after the Effective Date (collectively, the “Lessee Retained
Liabilities”), except for Lessor Taxes.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      B.           Further Assurances by
Lessor.  Upon the request of Lessee and all at Lessee’s
expense, and only if Lessee reasonably determines that it will only be able to
complete the given action described in clause (i) through (vi) below with
Lessor’s assistance, Lessor agrees to execute and deliver such agreements and
documentation and to perform, or cooperate with Lessee in performing, all
necessary acts with respect to effectuating Lessee’s use, operation and quiet
enjoyment of the Pipeline System and performing its obligations and exercising
its rights pursuant to the terms hereof including without limitation, documents
and acts related to (i) determining and contesting Tax liabilities, (ii)
enforcing, modifying, extending, renegotiating, replacing or obtaining consents
or approvals necessary in connection with the Pipeline System, (iii) entering
into contracts or other agreements not modifying or contravening the Financing
Lease Documents (other than modifications or contraventions pursuant to Section
5.B) or the C&A, (iv) obtaining, renewing, extending, making filings or
performing acts required by or necessary to comply with, government permits,
licenses, franchises, approvals and other authorities or Applicable Law, (v)
asserting or defending against claims against the Pipeline System; and (vi)
asserting or defending against condemnation proceedings against, and recovering
casualty loss relating to, the Pipeline System.

       

      C.           Quiet
Enjoyment.  Subject to Lessor’s Inspection Right and Section
2.D, and subject to the rights of Lessor contained in Section 15.B and the other
terms of the Financing Lease Documents and/or the C&A to which the Lessee is
a party, the Lessee shall peaceably and quietly have, hold and enjoy the
Pipeline System for the Lease Term, free of any claim or other action by Lessor
or anyone claiming by, through or under Lessor (other than Lessee or anyone
claiming by, through or under Lessee) with respect to any matters arising from
and after the Effective Date.  Such right of quiet enjoyment is
independent of, and shall not affect Lessor’s rights otherwise to initiate legal
action to enforce the obligations of Lessee under this Financing
Lease.

       

      D.           Title.  Lessor
makes no representation or warranty, express or implied, regarding the Pipeline
System.  The Pipeline System shall be subject to the rights of parties
in possession, the existing state of title (including, without limitation, all
Liens except for and excluding Lessor Liens) and all Applicable
Laws.  Lessee shall in no event have any recourse against Lessor for
any defect in or exception to title to the Pipeline System other than resulting
from Lessor Liens or from Lessor’s failure to comply with the Lessor Release
Mechanics.  Lessor’s interest in the Pipeline System is inferior and
subject to the pledge of a trust account (the “DRI Trust Account”)
and funds to be deposited by DRI therein and the obligation of DRI to make such
pledge and to make monthly payments, as provided in paragraph 4 of the Airgas
Pledge.  

       

      E.           Condition of the Pipeline
System.  Lessee acknowledges and agrees that Lessee is solely
responsible for the design, development, budgeting and construction of the
Pipeline System and any alterations or modifications thereto.  Lessee
further acknowledges and agrees that it is leasing the Pipeline System “AS IS, WHERE IS” without
representation, warranty or covenant (express or implied) by Lessor subject to
(a) the state of title as provided in Section 2.D above, (b) the rights of any
parties in possession thereof, (c) any state of facts which an accurate survey
or physical inspection might show, and (d) violations of Applicable Law which
may exist on the Effective Date (other than as a result of Lessor
Liens).  Lessor has not made nor shall be deemed to have made any
representation, warranty or covenant (express or implied) nor shall be deemed to
have any liability whatsoever as to the title (other than for Lessor Liens),
value, habitability, use, condition, design, operation, or fitness for use of
the Pipeline System (or any part thereof), or any other representation, warranty
or covenant (except Section 2.C hereof and the obligation to comply with the
Lessor Release Mechanics when required to do so) whatsoever, express or implied,
with respect to the Pipeline System (or any part thereof).  Lessor
shall not be liable for any latent, hidden, or patent defect therein or the
failure of the Pipeline System, or any part thereof, to comply with any
Applicable Law (other than as a result of Lessor Liens).  In addition
to the foregoing, Lessee agrees that Lessor does not warrant that the Pipeline
System is free from hidden, redhibitory or latent defects or vices or that the
Pipeline System is fit for the use intended by Lessee, and Lessee hereby
expressly waives (i) all rights in redhibition pursuant to Louisiana Civil Code
article 2520, et seq.; (ii) the warranties against hidden or redhibitory defects
in the Pipeline system; and (iii) the warranty that the Pipeline System is fit
for its intended use, each of which would otherwise be imposed upon Lessor by
Louisiana Civil Code article 2475, Lessee hereby releases Lessor from any
liability for hidden, redhibitory or latent defects or vices under Louisiana
Civil Code articles 2520 through 2548.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      F.           No Obligation of Lessor to
Repair, etc.  Lessor shall under no circumstances be required
to build any improvements on the Pipeline System, make any repairs,
replacements, alterations or renewals of any nature or description to the
Pipeline System, make any expenditure whatsoever in connection with this
Financing Lease (other than for the acquisition of its interest in the Pipeline
System in accordance with and pursuant to the terms of the Closing Agreement) or
maintain the Pipeline System in any way.  Lessee waives any right to
(i) require Lessor to maintain, repair, or rebuild all or any part of the
Pipeline System or (ii) make repairs at the expense of Lessor pursuant to any
Applicable Law, or pursuant to the terms and conditions of any insurance policy
maintained by Lessee, and all requirements of the issuer of any such policy,
contract, agreement, or covenant, condition or restriction in effect at any time
during the Lease Term.

       

      3.           Lease Term and Repayment
Obligations.

       

      A.           Term. The term of the
Financing Lease will commence at 7:00 a.m. Central Daylight Time on the
Effective Date and expire on the day that is the twentieth (20th) anniversary
thereof (the “Lease
Term”), unless earlier terminated as expressly provided
hereunder.

       

      B.           Mandatory Repayment.
Upon the expiration of the Lease Term as set forth in Section 3.A above, the
parties agree that Lessee will have the right and obligation to pay to Lessor
consideration in the amount of One Dollar ($1.00) plus the unpaid amount of the
Financing Lease Prepayment Amount, if any, and receive from Lessor, and Lessor
will reassign and release to Lessee, Lessor’s interest in the Pipeline System
pursuant to the Lessor Release Mechanics for such consideration with such
reassignment and release of Lessor’s interest in and to the Pipeline System to
Lessee to become effective as of 12:01 a.m. on the next succeeding day following
the expiration of the Lease Term and thereafter this Financing Lease and the
Financing Lease Guaranty (as defined in Section 4.D below) shall be deemed
terminated and released with no further obligations hereunder or thereunder,
except as provided in the succeeding sentence.  This Section 3.B and
the other Survival Provisions shall survive expiration of the Lease
Term.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      C.           Optional
Prepayment.  Upon the occurrence of any of the following events
or conditions:

       

      (1)           The
removal of the general partner of MLP, as a result of which no direct or
indirect majority-owned subsidiary of DRI is the general partner of MLP and such
removal of the general partner of MLP occurs without the direct approval of
DRI;

       

      (2)           Upon
a material breach of the terms of this Financing Lease by Lessor which remains
uncured thirty (30) days after written notice of such delivered by Lessee to
Lessor;

       

      (3)           Upon
the occurrence of a Bankruptcy Event with respect to Lessor, Genesis SPE 1, MLP
or any MLP Affiliate;

       

      (4)           Upon
the occurrence of an event of default by Lessor, MLP or any other MLP Affiliate,
under any credit facility, financing arrangement or other indebtedness for
borrowed money to which Lessor, MLP or any MLP Affiliate is a party, co-borrower
or guarantor in an aggregate principal amount exceeding
$10,000,000.  For avoidance of doubt, as used in this Section 3.C(4),
the term event of default includes, without limitation, an “Event of Default”
and an “Intercompany Event of Default” as those terms are defined in the
“Applicable Credit Agreement” (the terms in quotations having the same
definitions as provided in the C&A) (any event of default triggering this
clause (4), a “Genesis
Event of Default”);

       

      (5)           Upon
(a) a material breach by MLP of a representation, warranty, covenant or
agreement under the SRCA which does not provide MLP with a right to written
notice and opportunity to cure, or (b) upon a material breach by MLP of a
representation, warranty, covenant or agreement under the SRCA which provides
MLP with a right to written notice and opportunity to cure and which remains
uncured thirty (30) days after such written notice thereof is delivered by
Lessee to MLP; or

       

      (6)           Genesis
NEJD Pipeline, LLC is no longer the Lessor; or

       

      (7)           The
occurrence of an Airgas Rights Determination.

       

      the
parties agree that Lessee shall have the option, but not the obligation, to
elect to exercise its option to prepay its obligations hereunder in accordance
with Section 15.C hereof (provided that in the
event of an Airgas Rights Determination, Lessee shall be obligated to consummate
the Cash Prepayment Option).  Lessor agrees to promptly provide Lessee
with a copy of any notices received by Lessor related to any Genesis Event of
Default.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      4.           Consideration.

       

      A.           Base Rent. During the
Lease Term, Lessee agrees to pay base rent (“Base Rent”) to Lessor
for the Pipeline System in eighty (80) equal quarterly installments paid in
arrears, beginning on the same day of the month as the Effective Date of the 3rd
month following the Effective Date (or if there is no same day in that month
then the last day of that month) and continuing on the same day of each third
month thereafter, in the amount of $5,166,943 per quarter.  By way of
example, if the Effective Date is August 31st of any year, then the first
quarterly installment of Base Rent will be payable on November 30th of that
year, and the next quarterly installment of Base Rent will be payable on
February 28th (or if a leap year, February 29th) of the following year. Exhibit B sets forth
Lessee’s Base Rent payment schedule for the entire Lease Term.  For
the avoidance of doubt, the Base Rent payments made by Lessee during the Lease
Term reflect a full amortization of principal and interest such that the sum of
all equal quarterly installments of Base Rent will discharge a principal amount
totaling $175,000,000 plus interest earned thereon, over the Lease
Term.

       

      B.           Net
Lease.

       

      (1)           The
Base Rent set forth in this Section 4 shall be absolutely net to Lessor, and all
costs, expenses, and obligations of every kind and nature whatsoever relating to
the Pipeline System (other than Lessor Taxes) which may arise or become due
during the Lease Term of this Financing Lease shall be paid by
Lessee.  Lessee hereby agrees that it shall not be entitled to any
abatement of rents or of any other amounts payable hereunder by Lessee, and that
Lessee’s obligation to pay all Base Rent and any other amounts owing hereunder
shall be absolute and unconditional under all circumstances.

       

      (2)           Any
present or future law to the contrary notwithstanding, this Financing Lease
shall not terminate, nor shall Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Base
Rent, nor shall the obligations of Lessee hereunder be affected (except as
expressly herein permitted and by performance of the obligations in connection
therewith) by reason of: (i) any defect in the condition, merchantability,
design, construction, quality or fitness for use of the Pipeline System or any
part thereof, or the failure of the Pipeline System to comply with all
Applicable Law, including any inability to occupy or use the Pipeline System or
any part thereof by reason of such non-compliance; (ii) any damage to, removal,
abandonment, salvage, loss, contamination of or release from, scrapping or
destruction of or any requisition or taking of the Pipeline System or any part
thereof, (iii) any restriction, prevention or curtailment of or interference
with any use of the Pipeline System or any part thereof including eviction; (iv)
any defect in title to or rights to the Pipeline System or any Lien on such
title or rights or on the Pipeline System (other than Lessor Liens); (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessor or any other Person, or
any action taken with respect to this Financing Lease by any trustee or receiver
of Lessor or any other Person, or by any court, in any such proceeding; (vi) any
claim that Lessee has or might have against any Person, including without
limitation any vendor, manufacturer, contractor of or for the Pipeline System;
(vii) any failure on the part of Lessor to perform or comply with any of the
terms of this Financing Lease (other than performance by Lessor of its
obligations set forth in Section 2.C hereof), of any other Financing Lease
Document, of the C&A or of any other agreement; (viii) any invalidity or
unenforceability or illegality or disaffirmance of this Financing Lease against
or by Lessee or any provision hereof, (ix) the impossibility or illegality of
performance by Lessee, Lessor or both; (x) any action by any court,
administrative agency or other Governmental Body; (xi) the failure to obtain any
Outstanding Consents; (xii) any of those specific matters for which MLP has an
indemnification obligation under the SRCA; or (xiii) any other cause or
circumstances whether similar or dissimilar to the foregoing and whether or not
Lessee shall have notice or knowledge of any of the
foregoing.  Lessee’s agreement in the preceding sentence shall not
affect any claim, action or right Lessee may have against Lessor.  The
parties intend that the obligations of Lessee hereunder shall be covenants and
agreements that are separate and independent from any obligations of Lessor
hereunder and the obligations of Lessee shall continue unaffected unless such
obligations shall have been modified or terminated in accordance with an express
provision of this Financing Lease.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      C.           Taxes and Other
Costs.  Lessee shall pay and discharge all Pipeline System
Taxes, but Lessee shall have the right to reasonably contest the amount or
validity of any Pipeline System Taxes and at Lessee’s request, Lessor, shall
join in such contestation proceedings if requested by Lessee upon Lessee
reasonably determining that it will be unable to successfully contest such Taxes
without the participation of Lessor.  The immediately preceding
sentence shall survive expiration or termination of this Financing Lease with
respect to Pipeline System Taxes that accrue prior to, or during, the Lease Term
or that are triggered by the Lessor Release Mechanics.  In no event
shall Lessee be in breach under this Financing Lease due to non-payment of any
Pipeline System Taxes while Lessee is diligently contesting any such Pipeline
System Taxes and is maintaining reserves with respect thereto in accordance with
GAAP.  Lessee shall have the right to directly pay Pipeline System
Taxes to the appropriate government authority and to notify such authority to
send bills therefor directly to Lessee.  Lessor agrees to provide an
appointment of agent, if necessary, for all respective counties and parishes
assessing Pipeline System Taxes to cause such governmental authorities to send
such bills directly to Lessee.  In addition, Lessee will be
responsible for paying all power costs and other utilities associated with the
Pipeline System.   Any fees, taxes or other lawful charges paid
by Lessor upon failure of Lessee to make such payments shall, at Lessor’s
option, become immediately due from Lessee to Lessor.

       

      
        
           

        

        
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      D.           DRI
Guaranty.  Simultaneously with the execution of this Financing
Lease, DRI is executing and delivering, and during the Lease Term will maintain
in effect, a Guaranty Agreement (the “Financing Lease
Guaranty”) for the benefit of Lessor, that unconditionally and
irrevocably guarantees the payment obligations of Lessee under this Financing
Lease.

       

      E.           Financing Lease
Transaction.

       

      (1)           Lessor
and Lessee agree and acknowledge that it is their intention that this Financing
Lease (including payments made hereunder) together with Lessor’s acquisition of
its interest in the Pipeline System from Lessee pursuant to the Financing Lease
Documents (together, the “Financing Lease
Transaction”), be treated as a secured indebtedness of Lessee to Lessor
for U.S. federal income tax purposes and all other purposes.  Lessor
and Lessee agree to file all federal, state and local income Tax Returns
consistent with the characterization of the Financing Lease Transaction as
secured indebtedness and shall not make any inconsistent written statements or
take any inconsistent position on any such Tax Return, in any refund claim,
during the course of any Internal Revenue Service (“IRS”) audit or other
tax audit, for any financial or regulatory purpose, in any litigation or
investigation or otherwise. Each party shall notify the other party if it
receives notice that the IRS or other governmental agency proposes any treatment
different than the treatment of the Financing Lease Transaction as giving rise
to secured indebtedness.  In addition to the foregoing, Lessor and
Lessee acknowledge that it is the intent of each party that for all purposes
this Financing Lease be treated as a financing lease, that record title of the
Pipeline System be held by Lessor solely for security purposes in accordance
with such intent and that Lessee continues to be the beneficial owner of the
Pipeline System (to the extent located in the State of Mississippi) and that
Lessee shall continue to own and hold all of the benefits, and to bear all of
the burdens, of ownership of the Pipeline System (to the extent located in the
State of Louisiana).  Lessor and Lessee agree that neither will take
any position contrary to such intent.  Lessor and Lessee agree and
acknowledge that it is their intention that this Financing Lease and other
transactions contemplated will result in Lessee being recognized as the owner of
the Pipeline System for all purposes and all Applicable Laws, including for
purposes of all United States federal and all state and local income, franchise,
transfer and other taxes and for purposes of bankruptcy insolvency,
conservatorship and receivership law (including the substantive law upon which
bankruptcy, conservatorship and receivership proceedings are based),
and  the obligations of Lessee to pay Base Rent shall be treated as
payments of interest and principal in accordance with Exhibit B,
respectively, for purposes of all Applicable Laws, including without limitation
all United States federal and all state and local income, franchise, transfer
and other taxes and for purposes of bankruptcy insolvency, conservatorship and
receivership law (including the substantive law upon which bankruptcy,
conservatorship and receivership proceedings are based).  Lessor’s
interest in the Pipeline System shall be deemed to be, and limited to, a valid
and binding security interest in and Lien on Lessee’s interest in the Pipeline
System, free and clear of all Liens by, through or under Lessee other than
Permitted Encumbrances, as security for all obligations (monetary or otherwise)
of Lessee to Lessor arising under or in connection with any of the Financing
Lease Documents and/or Section 5(g) of the C&A (it being understood and
agreed that Lessee does hereby grant a Lien to Lessor, and its successors,
transferees and assigns, for the benefit of Lessor and its successors,
transferees and assigns, upon the Lessee’s interest in (i) the Pipeline System,
(ii) any proceeds received at any time resulting from the sale or other
disposition of all or a part of the Pipeline System, and (iii) all rents, income
or related fees or charges for transportation of Carbon Dioxide or any other
substance through the Pipeline System from and after the Income Termination
Date, to have and hold the same as collateral security for all obligations
(monetary or otherwise) of Lessee to Lessor arising under or in connection with
any of the Financing Lease Documents and/or Section 5(g) of the C&A); it
being further understood and agreed that Lessee does not hereby grant any Lien
on any Carbon Dioxide being transported in the Pipeline System at any time or on
any proceeds from the sale of such Carbon Dioxide.  Nothing contained
in this Section 4.E.(1) shall restrict Lessee’s right to operate the Pipeline
System, to enter into contracts for the sale or transportation of Carbon Dioxide
or other substances through the Pipeline System, to grant UCC security interests
in contract rights or accounts relating to income generated by the Pipeline
System, or to conduct its business, in accordance with the other provisions of
this Financing Lease.

       

      
        
           

        

        
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      (2)           Specifically,
without limiting the generality of clause (1) of this Section 4.E, the parties
hereto intend and agree that in the event of any insolvency or receivership
proceedings or a petition under the United States bankruptcy laws or any other
applicable insolvency laws or statute of the United States of America or any
State or Commonwealth thereof affecting Lessee or Lessor, or any of their
respective Affiliates or any enforcement actions, the transactions evidenced by
the Financing Lease Documents shall be regarded as a secured loan made by Lessor
to Lessee for purposes of all United States federal and all state and local
income, franchise, transfer and other taxes and for purposes of bankruptcy
insolvency, conservatorship and receivership law (including the substantive law
upon which bankruptcy, conservatorship and receivership proceedings are
based).

       

      (3)           Lessee
agrees that if it hereafter grants a real property interest (or for Louisiana,
an immovable property interest) that is an assignment of rents, income or
related fees or charges for transportation of Carbon Dioxide or any other
substance through the Pipeline System, any such real property interest (or
immovable property interest), including any memorandum or filing of same in the
real property records or other appropriate records of any county, parish or
other office in the State of Mississippi or the State of Louisiana, will make
such assignment expressly subordinate to the Liens granted to Lessor under this
Financing Lease and other Financing Lease Documents, and the Memorandum of Lease
will put all parties on notice of the subordination of any such assignment of
rents, income or related fees or charges to the Liens created under this
Financing Lease; and furthermore any assignment, pledge or real estate (or
immovable property) Lien created in violation of Lessee’s agreement in this
sentence shall be subordinate to the Liens granted to Lessor in this Financing
Lease and in the Memorandum of Lease, and shall terminate immediately upon the
Income Termination Date.

       

      
        
           

        

        
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      5.           Use and Operation of
Pipeline System.

       

      A.           Lessee
shall have the exclusive right to use, and the obligation to at all times
operate, the Pipeline System as a prudent operator in accordance with all
Applicable Laws and in accordance with prevailing industry
standards.  Lessee will utilize the Pipeline System for the
transportation of Carbon Dioxide, or any other substance as Lessee may determine
in its sole discretion.   Lessor shall at all times during the
Lease Term be permitted to observe, inspect and monitor Lessee’s operation of
the Pipeline System (“Lessor’s Inspection
Right”) to ensure Lessee’s compliance with its obligations under this
Financing Lease and the operation of the Pipeline System in accordance with
Applicable Laws and prevailing industry standards.

       

      B.           If
Lessee’s sole and exclusive right to use the entire capacity of the Pipeline
System to transport Carbon Dioxide, or any other substance (the “Exclusive Right”)
under the terms of this Financing Lease is reasonably believed by Lessee to be
threatened due to (a) an application of, or a change in, federal law or
regulations or interpretation thereof, applicable to Carbon Dioxide pipelines or
their operation or ownership, (b) an application of, or a change in, law or
regulations or  interpretation thereof, of any state in which the
Pipeline System, or any pipeline connected thereto, is located which is
similarly applicable, or (c) assertion by a third party of an actual or alleged
right to ship Carbon Dioxide on any part of the Pipeline System, or any pipeline
connected thereto, then on request of Lessee, the parties hereto shall negotiate
in good faith to modify and will modify the terms of this Financing Lease and
all documents collateral hereto in order to assure that Lessee will continue to
have the Exclusive Right, on terms substantially the same as those contained in
this Section 5, provided that such
modifications shall not affect Lessee’s obligation to pay Base Rent pursuant to
this Financing Lease in the amounts set forth on Exhibit B, the terms
of any such payment or the intention of the parties set forth in Section
4.E.  For clarification, in no event shall Lessor be required to agree
to any change or modification to any Financing Lease Document as the result of
the assertion of any claim by Airgas that the Pledge and Related Actions trigger
a right of first refusal, a right of prior consent, or other compliance
requirement in favor of Airgas under the Airgas Documents.

       

      C.           Lessee
shall maintain all operations and safety permits, make all necessary filings
with governmental and regulatory authorities, pay amounts and perform acts
necessary to maintain, repair and operate the Pipeline System, in good working
condition, in accordance with Applicable Laws and in accordance with prevailing
industry standards.  If Lessor is required to make any filings with or
obtain any approvals from any Governmental Body by reason of (i) the ownership
of its interest in the Pipeline System or (ii) the business conducted in a given
jurisdiction by Lessee, Lessee shall make (or cause to be made) all such filings
or obtain (or cause to be obtained) all such approvals, unless failure to do so
would not expose Lessor to either criminal liability or any other liability not
indemnified against by Lessee under the Financing Lease Documents and/or the
C&A.

       

      
        
           

        

        
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      D.           Lessor
shall grant Lessee any and all expropriation rights that Lessor has, by reason
of its interest in the Pipeline System, and Lessee shall have the right to
initiate any such proceedings to effectuate such rights in any jurisdiction in
which the Pipeline System is located.

       

      E.           Lessor
shall promptly provide Lessee with written notice to the extent that Lessor has
Knowledge of any of the following circumstances: (i) the Pipeline System not
being in compliance with Applicable Laws; (ii) the receipt of notice of any
change in Applicable Laws with respect to the Pipeline System, or any pending or
threatened judicial or administrative action which in any way limits or impedes
or could potentially limit or impede the operation of the Pipeline System; or
(iii) the receipt of notice of a condemnation, eminent domain or similar
proceedings, or any pending or threatened condemnation, eminent domain or
similar proceedings against the Pipeline System.

       

      6.           Shipments.  Lessee
shall, at all times during the Lease Term, be solely responsible for shipments
of Carbon Dioxide (or any other substance as Lessee may determine in its sole
discretion) in accordance with Applicable Laws with respect to the Pipeline
System.  Lessor shall not have any right, title or interest to the
Carbon Dioxide (or any other substance as Lessee may determine in its sole
discretion) in the Pipeline System and Lessee shall, at all times during the
Lease Term, have all right, title and interest to the Carbon Dioxide (or any
other substance as Lessee may determine in its sole discretion) in and
transported through the Pipeline System.  If Lessee transports Carbon
Dioxide (or any other substance) on behalf of third-parties through the Pipeline
System, Lessee shall be entitled to retain all income derived from such
transportation on behalf of such third-parties.  If, in the reasonable
opinion of Lessee’s counsel, the existence of this Financing Lease or the use of
the Pipeline System by Lessee subjects the Pipeline System to the jurisdiction
of, or regulation by, any federal or state authority as a common carrier, or
otherwise, then Lessee shall have the obligation to take such appropriate
measures as are reasonably necessary to mitigate or avoid such jurisdiction or
regulation.  Upon Lessee’s request, Lessor agrees to execute any
agreements or take all necessary action to effectuate Lessee’s efforts regarding
same, provided
that such agreements shall not affect Lessee’s obligation to pay Base Rent
pursuant to this Financing Lease in the amounts set forth on Exhibit B, the terms
of any such payment or the intention of the parties set forth in Section
4.E.

       

      7.           Alterations and
Improvements.  Lessee, at its sole cost and expense, may alter
or make modifications or improvements to the Pipeline System in accordance with
Applicable Laws without Lessor’s prior written consent, including adding or
deleting receipt points and delivery points in its sole
discretion.  Furthermore, Lessee may elect to undertake to increase
the capacity of the Pipeline System itself.  Except as otherwise
expressly provided in this Financing Lease, Lessor shall not make any
modifications, alteration, or additions to the Pipeline System without the prior
written approval of Lessee.

       

      8.           Maintenance and
Repair.  Lessee, at its sole cost and expense, shall at all
times maintain and keep all aspects of the Pipeline System in good condition and
repair, in accordance with Applicable Laws and in accordance with prevailing
industry standards, and shall promptly make all necessary and proper repairs,
structural and non-structural, ordinary and extraordinary, and all necessary and
proper replacements and substitutions thereto.  If any changes,
modifications, upgrades or alterations to the Pipeline System are required
during the Lease Term due to the enactment or amendment of Applicable Laws, then
Lessee shall promptly make such changes, modifications, upgrades or alterations
and will bear the cost thereof.  Lessor shall have no right to
maintain, repair, replace, change, modify or alter the Pipeline System during
the Lease Term.

       

      
        
           

        

        
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      Notwithstanding
anything to the contrary stated in this Section 8, Lessee shall have no
obligation to maintain, repair, replace, change, modify or alter the Pipeline
System during the final five (5) years of the Lease Term, provided that Lessee
continues to pay Base Rent in accordance with Section 4.A above and the
condition of the Pipeline System complies with Applicable Laws, and that the
parties comply with their respective obligations set forth in Section 3.B
above.

       

      Nothing
contained in this Financing Lease shall be construed as constituting the consent
or request of Lessor, expressed or implied, to or for the performance by any
contractor, mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Pipeline System or any
part thereof.  NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT
BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
LESSEE, OR TO ANYONE HOLDING ANY INTEREST IN THE PIPELINE SYSTEM OR ANY PART
THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY
SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LESSOR IN AND TO THE PIPELINE SYSTEM.

       

      9.           Representations and
Warranties of Lessor.  As of the Effective Date, Lessor
represents and warrants to Lessee that:

       

      A.           Organization.  Lessor
is duly organized, validly existing and in good standing under the laws of the
state of its organization, and is duly qualified to transact business in those
states in which the Pipeline System is situated.

       

      B.           Authority.  Lessor
has all requisite power and authority to execute, deliver and perform its
obligations under this Financing Lease and to consummate the transactions
contemplated in this Financing Lease.  The execution and delivery of
this Financing Lease and the performance of its obligations hereunder by Lessor
have been duly and validly authorized by all necessary action of
Lessor.

       

      C.           No
Violation.  Neither the execution of this Financing Lease nor
the performance by Lessor of its obligations hereunder violate Lessor’s Limited
Liability Company Agreement.  Furthermore, neither the execution of
this Financing Lease nor the performance by Lessor or any Lessor Affiliate of
its obligations hereunder will require consent from any third party under, or
violate the terms of, any other contract, commitment, understanding, arrangement
or restriction of any kind or character to which Lessor or any Lessor Affiliate
is a party or by which its assets are bound.

       

      
        
           

        

        
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      D.           Litigation
Proceedings.  There is no presently pending or, to Lessor’s
Knowledge threatened, litigation, arbitration or administrative proceeding
against Lessor that if adversely determined would adversely affect Lessor’s
interest in, or the operation of, the Pipeline System, or Lessor’s ability to
enter into and perform its obligations under this Financing Lease

       

      10.           Representations and
Warranties of Lessee.  As of the Effective Date, Lessee
represents and warrants to Lessor that:

       

      A.           Organization and
Authority.  Lessee is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to transact business in the State of Mississippi
and the State of Louisiana, and has full power and authority to enter into this
Financing Lease and perform its obligations hereunder.  The execution
and delivery of this Financing Lease and the performance of its obligations
hereunder by Lessee have been duly and validly authorized by all necessary
action of Lessee.

       

      B.           Execution and
Effect.  This Financing Lease has been duly and validly
executed and delivered by Lessee and assuming the due authorization, execution
and delivery of this Financing Lease by Lessor, constitutes a valid, binding and
enforceable obligation of Lessee; subject, however, to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
effect relating to the rights and remedies of creditors, as well as to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

       

      C.           No
Violation.  Except as disclosed in Schedule 10.C,
neither the execution and delivery of this Financing Lease by Lessee nor the
performance by Lessee of its obligations hereunder (a) violates any provision of
the organizational documents of Lessee, (b) subject to obtaining the Outstanding
Consents which are set forth on Schedule 10.C,
constitutes a breach of or default under (or an event that, with the giving of
notice or passage of time or both, would constitute a breach of or default
under), or will result in the termination of, or accelerate the performance
required by, or result in the creation or imposition of any security interest,
lien, charge or other encumbrance upon Lessee’s interest in the Pipeline System
under, any material contract, commitment, understanding, agreement, arrangement
or restriction of any kind or character to which Lessee is a party or by which
Lessee or any of its assets are bound (provided, however, that this
Section 10.C shall not be construed as constituting a representation or warranty
as to (i) whether or not any of the Outstanding Consents, which are set forth on
Schedule 10.C,
will be obtained, (ii) the effect of failing to obtain any such Outstanding
Consent, or (iii) the effect of the Airgas Documents, or (c) violates in any
material respect any statute, law, regulation or rule, or any judgment, decree,
writ or injunction or any Governmental Body applicable to Lessee or any of its
assets.

       

      D.           Litigation.  Except
as disclosed in Schedule 10.D, (a)
there are no judgments, orders, writs or injunctions of any Governmental Body,
presently in effect or pending or, to Lessee’s Knowledge threatened, against
Lessee with respect to its interest in the Pipeline System or the operation
thereof, or, which, if adversely determined, would impair or prohibit the
ability to perform its obligations hereunder, (b) there are no claims, actions,
suits or proceedings by or before any Governmental Body pending or, to Lessee’s
Knowledge, threatened by or against Lessee with respect to its interest in the
Pipeline System or the operation thereof, and (c) the Pipeline System is not the
subject of any pending or, to Lessee’s Knowledge, threatened claim, demand, or
notice of violation or liability from any Person.

       

      
        
           

        

        
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      E.           Compliance with Applicable
Law.  Except (a) as disclosed in Schedule 10.E, and
(b) with respect to Environmental Law, which are addressed in Section 10.H
below, Lessee has complied with all material provisions of all Applicable Laws,
judgments and decrees applicable to its operation and use of the Pipeline System
as presently conducted and Lessee has not received any written notification, and
is not aware of any planned written notification, that it is not presently in
compliance therewith.

       

      F.           Condition of Pipeline
System.  Except as disclosed in Schedule 10.F, the
Pipeline System is in good operating condition, complies with Applicable Laws
and meets prevailing industry standards for operation and use.

       

      G.           Taxes.  All
Tax Returns required to be filed by federal, state or local laws with respect to
the Pipeline System Taxes have been filed by Lessee, and all Pipeline System
Taxes imposed or assessed, whether federal, state or local, which are due or
payable for any period ended, have been paid or provided for.

       

      H.           Environmental
Matters.

       

      (a)           Except
as disclosed in Schedule 10.H, (i)
Lessee has not received any written notification that asserts (and does not have
any Knowledge) that any portion of the Pipeline System is not in compliance with
applicable Environmental Law and (ii) to Lessee’s Knowledge, no condition or
circumstance exists which would give rise to any material Environmental Costs
and Liabilities related to the Pipeline System.

       

      (b)           Except
as disclosed in Schedule 10.H, (i)
all of the Environmental Permits have been granted by the appropriate authority
and (ii) are valid and in full force and effect. There are no material actions
or proceedings for the revocation thereof or any other material action or
proceeding before any Governmental Body involving any Environmental
Permit.

       

      I.           No Unsatisfied
Liabilities.  Except as disclosed in Schedule 10.I, and
other than matters which arise out of Lessor’s interest in the Pipeline System,
there are no debts, liabilities or obligations of Lessee secured by or burdening
Lessee’s interest in the Pipeline System other than obligations that will be
satisfied, and obligations to be performed under the terms of the Rights of Way
or imposed by Applicable Law.

       

      J.           Investment Company
Act.  Lessee is not an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940 and Lessee is
not subject to regulation under any United States federal or State statute or
regulation which limits its ability to incur indebtedness.

       

      
        
           

        

        
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      K.           Solvency.  The
fair value of Lessee’s Properties exceeds the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise; (ii) the present
fair saleable value of Lessee’s Property is greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) Lessee is able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) Lessee does not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be
conducted.

       

      L.           Margin
Regulations.  Lessee is not engaged principally or as one of
its important activities in the business of extending credit for the purpose of
buying or carrying Margin Stock, and no part of the proceeds of this Financing
Lease have been or will be used directly or indirectly, whether used
immediately, incidentally or ultimately, for any purpose that entails a
violation of or that is inconsistent with the provisions of the regulations of
the Board of Governors, including Regulation T, Regulation U or Regulation
X.

       

      M.           DRI Trust
Account.  The DRI Trust Account is fully funded in compliance
with the requirements of the Airgas Pledge.

       

      11.           Special Covenants of
Lessee.  In addition to the other terms, conditions,
representations and warranties contained in this Financing Lease, and without in
any way modifying or diminishing the obligations under the Guaranty, as of the
Effective Date and throughout the Lease Term (as if remade on each day during
the Lease Term), Lessee covenants as follows:

       

      A.           Upon
the occurrence of a default(s) by Lessee and/or DRI or any of DRI’s Affiliates
on any Material Indebtedness to which it is a party having an aggregate
principal balance or other liability which, upon acceleration in accordance
thereof, is in excess of $50,000,000, owing to any Person, Lessee shall promptly
notify Lessor of such default(s) and shall cause DRI to provide Financial
Assurances to Lessor within 30 days following Lessor’s written notice to Lessee
that DRI do so.

       

      B.           If
at any time during the Lease Term the corporate credit rating of DRI drops below
BB- issued by Standard & Poor’s Ratings Group, or below B1 issued by Moody’s
Investors Service, Inc., Lessee shall promptly notify Lessor of such drop in
credit rating and shall cause DRI to provide Financial Assurances to Lessor
within 30 days following Lessor’s written notice to Lessee that DRI do
so.  Lessee shall also promptly notify Lessor of the drop in credit
rating described in the definition of “Financial Assurances.”  Any
draw made under Financial Assurances shall be applied first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the installments of Base Rent, in inverse order of
maturity.

       

      
        
           

        

        
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      C.           Unless
available through the electronic data gathering, analysis and retrieval system
of the Securities and Exchange Commission (“SEC”), or otherwise
publicly available as documents are filed with the SEC, Lessee shall furnish to
Lessor on or before 60 days after the end of each fiscal quarter and on or
before 120 days after the end of each fiscal year, a copy of all of DRI’s and
its subsidiaries’ and affiliates’ quarterly and annual financial statements
(prepared in accordance with generally accepted accounting
principles).

       

      D.           If
during the Lease Term, DRI is no longer a reporting entity under the Securities
Exchange Act of 1934, Lessee shall deliver annual reserve reports to Lessor,
within 90 days after the end of each fiscal year, with respect to (i) each
Carbon Dioxide field from which Carbon Dioxide is shipped on the Pipeline
System, and (ii) each hydrocarbon field to which Carbon Dioxide is shipped on
the Pipeline System.

       

      E.           Lessee
agrees that Lessee shall not directly or indirectly create or allow to remain,
and shall promptly discharge at its sole cost and expense, any Lien (other than
any Permitted Encumbrances, Lessor Liens, Collateral Liens and Interest Liens),
defect, attachment, levy, title retention agreement or claim upon the Pipeline
System or any Lien, attachment, levy or claim with respect to the Base Rent, the
Financing Lease Prepayment Amount or other amounts owing hereunder, other than
Permitted Encumbrances, Lessor Liens, Collateral Liens and Interest Liens, provided that with
respect to Outstanding Consents, Lessee’s sole obligation will be to comply with
Lessee’s agreements in Section 4 of the Closing
Agreement.  Lessee’s obligation to discharge any Lien, attachment,
levy or claim as set forth in this Section 11.E shall apply notwithstanding
the fact that such Lien, attachment, levy or claim does not breach any warranty
of or representation regarding title to the Pipeline System made by
Lessee.

       

      F.           Lessee
shall at all times cause DRI to satisfy its obligations under the Airgas Pledge
to cause the DRI Trust Account to be fully funded at all times.

       

      12.           Indemnification.  Lessee
shall indemnify, defend, protect and hold Lessor, MLP, and any MLP affiliates
and each of their respective officers, directors, employees, representatives and
agents, harmless from and against any and all claims, liabilities, obligations,
damages, actions, suits, proceedings, investigations, complaints, demands,
assessments, judgments, costs, penalties, forfeitures, losses, fees or expenses
(including attorneys’ fees) in any way relating to or arising out of (a) the
Pipeline System or any part thereof or interest therein or (b) Lessor’s
compliance with any further assurances covenant in this Financing Lease,
including, without limitation, Section 2.B; provided, however, Lessee shall
not be required to indemnify any Person under this Section 12 for any of the
following:  (1) any Claim to the extent resulting from the willful
misconduct or gross negligence of Lessor or other indemnitee (IT BEING
UNDERSTOOD THAT LESSEE SHALL BE REQUIRED TO INDEMNIFY AN INDEMNITEE EVEN IF THE
ORDINARY (BUT NOT GROSS) NEGLIGENCE OF LESSOR CAUSED OR CONTRIBUTED TO SUCH
CLAIM), (2) the breach of any representation, warranty or covenant of Lessor set
forth in any Financing Lease Document or the C&A, (3) any Claim resulting
from Lessor Liens which any indemnitee is responsible for discharging under (A)
the Financing Lease Documents, (B) the SRCA or (C) the C&A, (4) any
Claim to the extent resulting from Lessor’s failure to make timely payments to
Genesis SPE 1 as required under the NEJD Intercompany Note (as such term is
defined in the C&A) so long as Lessee has made timely payments of all Base
Rent hereunder, or (5) any matter arising out of or related to an Airgas Rights
Determination or any rights of Airgas with respect to the Pipeline System under
the Airgas Documents.  It is expressly understood and agreed that the
indemnity provided for herein and the other Survival Provisions shall survive
the expiration or termination of this Financing Lease, the consummation of the
reassignment and release of Lessor’s interest in the Pipeline System or the
exercise by Lessor of its remedies hereunder, and shall be separate and
independent from any remedy under the Financing Lease, any other Financing Lease
Document or the C&A.

       

      
        
           

        

        
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      13.           Risk of
Loss.  Lessee agrees to assume all risk of loss and damage to
the Pipeline System.  In the event of loss (including casualty loss)
or damage to the Pipeline System, (i) Lessee shall promptly repair, rebuild and
reconstruct the Pipeline System, and (ii) all of Lessee’s obligations (including
payment) shall continue in full force and effect.

       

      Notwithstanding
anything to the contrary stated above in this Section 13, Lessee shall have no
obligation to repair, rebuild or reconstruct the Pipeline System during the
final five (5) years of the Lease Term, provided that Lessee
continues to pay Base Rent in accordance with Section 4.A above and the
condition of the Pipeline System complies with Applicable Laws, and that the
parties comply with their respective obligations set forth in Section 3.B
above.

       

      14.           Sale or
Assignment.  From and after the Effective Date, neither Lessee
nor Lessor may assign, sell, convey, transfer, sublease or encumber (other than
Permitted Encumbrances) the Pipeline System, its interest in the Pipeline System
or this Financing Lease or their rights or obligations hereunder, either in
whole or in part without the prior consent of the other party; provided, however, that Lessor
may pledge or assign its interest in this Financing Lease pursuant to the
Collateral Agreement and any exercise of remedies pursuant
thereto.  Any purported assignment, sale, conveyance, other transfer,
sublease or encumbrance in contravention of the foregoing terms shall be null
and void.

       

      15.           Events of Default and
Remedies.

       

      A.           Events of
Default.  The occurrence of one or more of the following events
or conditions shall constitute a “Lease Event of
Default”:

       

      (1)           the
occurrence of a Bankruptcy Event with respect to Lessee or DRI;

       

      (2)           (i)
the failure of Lessee to make any payment of Base Rent to Lessor as and when due
hereunder; provided, however, that only in
the case of the first failure during any calendar year to make any payment of
Base Rent to Lessor as and when due hereunder, the failure to make such payment
as and when due shall not constitute a Lease Event of Default unless such
failure continues for ten (10) days after written notice from Lessor to Lessee
of such failure, but any subsequent failure during such calendar year to make
any payment of Base Rent as and when due hereunder shall automatically
constitute a Lease Event of Default without the requirement of any notice from
Lessor; provided further, that in
order to cure the failure to make any payment of Base Rent as and when due, in
addition to paying the full amount of such payment Lessee shall also pay all
Default Interest accrued during the period from the original due date of such
payment until such payment is made to Lessor hereunder; or (ii) the failure of
Lessee or DRI to make any payment (other than a payment of Base Rent) as and
when due hereunder, under the Financing Lease Guaranty or Section 5(g) of
the C&A, if such failure continues for ten (10) days after written notice
from Lessor to Lessee of such failure;

       

      
        
           

        

        
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      (3)           the
material breach (i) by Lessee of any representation, covenant or agreement set
forth in this Financing Lease, (ii) by DRI of any representation, covenant or
agreement in the Guaranty or (iii) by Lessee or DRI of any representation,
covenant or agreement in the C&A, where such material breach under (i), (ii)
or (iii) above continues for thirty (30) days after receipt by Lessee or DRI, as
applicable, of written notice thereof from Lessor; provided, however, that if the
matter which is the subject of the breach cannot by its nature, if diligently
pursued, be remedied by such party within said thirty (30) day period, and such
party shall have prepared a plan for remedying such failure that is reasonably
acceptable to Lessor and such party is proceeding with diligence to implement
such plan, such thirty (30) day period shall be extended by such additional time
period as may be reasonably agreed to by Lessor to implement such plan, and,
provided further, however, that the
remedying of such potential default shall not affect the right of Lessor under
this Financing Lease if other defaults occur before such potential default has
been remedied and provided further that the
notice and opportunity to cure provisions of this Section 15.A(3) shall not
apply to any other events of default under this Section 15.A;

       

      (4)           Lessee’s
failure to deliver Financial Assurances as and when required by Section 11.A or
11.B; and

       

      (5)           the
failure of DRI to satisfy any payment obligation as and when due under the
Guaranty.

       

      (6)           DRI
or Lessee shall fail to make any payment (whether of principal or interest) in
respect of the DRI Credit Agreement, when and as the same shall become due and
payable, after giving effect to any applicable cure period set forth
therein;

       

      (7)           Lessee
or DRI or any of DRI’s subsidiaries shall fail to observe or perform any term,
covenant, condition or agreement (other than a default referenced in Section
15.A(6) above) contained in any agreement or instrument evidencing or governing
Material Indebtedness, which failure, in any case, results in such Material
Indebtedness becoming due and payable prior to its scheduled
maturity;

       

      
        
           

        

        
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      (8)           any
Financing Lease Document or any material provision thereof after delivery
thereof (a) shall for any reason, except to the extent permitted by the terms
thereof (or as waived by Lessor in accordance with the terms hereof), be proven
to have ceased to be valid, binding and enforceable in accordance with its terms
against Lessee or DRI or any of them shall so state in writing, or (b) shall be
repudiated in writing by Lessee or DRI; or

       

      (9)           the
failure, after the occurrence of an Airgas Rights Determination, of Lessee to
consummate the Cash Prepayment Option as required by Section 3.C(7) in
accordance with Section 15.C.

       

      B.           Remedies.  Upon
the occurrence of any Lease Event of Default of the type described in Section
15.A(1), the Financing Lease Prepayment Amount shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Lessee and Lessee shall, all without
presentment, demand, protest or other notice of any kind, consummate the Cash
Prepayment Option in accordance with the Lessor Release Mechanics as if Lessor
had made demand pursuant to Section 15.B(1) below.  Upon the
occurrence of any Lease Event of Default other than a Lease Event of Default of
the type described in Section 15.A(1), and at any time thereafter during the
continuance of such Lease Event of Default, Lessor may, by notice to Lessee,
declare the Financing Lease Prepayment Amount as of such date, to be due and
payable in whole, and thereupon such amount, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Lessee.  Lessor agrees that it will
not pursue the remedies set forth in clauses 15.B(2), (3), (5), or (7) below,
unless and until either a Bankruptcy Event with respect to either Lessee or DRI
has occurred or Lessor has demanded that Lessee exercise either the Exchange or
Prepayment Option pursuant to clause 15.B(1) below and Lessee has failed to
comply with such demand within the period provided in clause 15.B(1) and
otherwise in accordance with Section 15.C.  In addition, but subject
to the immediately preceding sentence, upon the occurrence of any Lease Event of
Default and at any time thereafter so long as such Lease Event of Default is
continuing, Lessor may do one or more of the following as Lessor in its sole
discretion shall determine, without limiting any other right or remedy Lessor
may have on account of such Lease Event of Default (it being the intent of the
parties that such remedies shall be consistent with the intent of the parties
set forth in Section 4.E):

       

      (1)           Lessor
may, by written notice to Lessee, demand that Lessee exercise either the
Exchange or Prepayment Option (whichever one is selected by Lessee) in
accordance with Section 15.C hereof; provided that if such
notice is based on any Lease Event of Default other than as described in Section
15.A(3) (each such other Lease Event of Default, a “Cash Prepayment Only
Default”), the Exchange Note Option shall not be available to Lessee and
Lessee shall repay its obligations hereunder pursuant to  the Cash
Prepayment Option.  Until the earliest to occur of (a) a Bankruptcy
Event with respect to Lessee or DRI, (b) such prepayment not being consummated
within thirty (30) days of such notice (or sixty (60) days of such notice, if
throughout such sixty (60) day period Lessee is using its best efforts to
consummate the applicable option), and (c) receipt by Lessor of written
acknowledgement from Lessee that it does not intend to consummate such
applicable option within such thirty (30) or sixty (60) day period, Lessor
agrees not to pursue the remedies set forth in clauses 15.B(2), (3), (5), or (7)
below.  During the second thirty (30) day period, Lessor may commence
any action, deliver or file any notices or other documents or otherwise take
steps toward foreclosure of the liens and security interests created hereby, but
no order or decree may be entered authorizing any such foreclosure, and no
foreclosure sale or other transfer of beneficial ownership of the Pipeline
System may occur, during such sixty (60) day period.

       

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      (2)           Lessor
may, without prejudice to any other remedy which Lessor may have for possession
of the Pipeline System, and to the extent and in the manner permitted by
Applicable Law, enter upon the Pipeline System and take immediate possession of
(to the exclusion of Lessee) the Pipeline System and expel or remove Lessee and
any other Person who may be occupying the Pipeline System, by summary
proceedings or otherwise, all without liability to Lessee for or by reason of
such entry or taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise and, in addition to Lessor’s other
damages, Lessee shall be responsible for all costs and expenses incurred by
Lessor in connection with any and all costs of any alterations or repairs made
by Lessor;

       

      (3)           As
more fully set forth below in this Section and in the Memorandum of Financing
Lease, Lessor may foreclose the lien herein created or sell all of Lessee’s
interest in the Pipeline System at public or private sale, as Lessor may
determine;

       

      (4)           Lessor
may, at its option, elect to continue to collect Base Rent, in accordance with
Section 4.A hereof and all other amounts due to Lessor (together with all costs
of collection) and enforce Lessee’s obligations under this Financing Lease as
and when the same become due, or are to be performed, by suit or
otherwise;

       

      (5)           Lessor
may exercise any other right or remedy that may be available to it under
Applicable Law, including any and all rights or remedies under the Financing
Lease Documents, or proceed by appropriate court action (legal or equitable) to
enforce the terms hereof or to recover damages for the breach
hereof.  Separate suits may be brought to collect any such damages for
any period(s), and such suits shall not in any manner prejudice Lessor’s right
to collect any such damages for any subsequent period(s), or Lessor may defer
any such suit until after the expiration of the Lease Term, in which event such
suit shall be deemed not to have accrued until the expiration of the Lease
Term;

       

      (6)           Lessor
may retain and apply against the Financing Lease Prepayment Amount, all sums
which Lessor would, absent such Lease Event of Default, be required to pay to,
or turn over to, Lessee pursuant to the terms of this Financing
Lease;

       

      
        
           

        

        
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      (7)           Lessor,
to the extent permitted by Applicable Law, as a matter of right and with notice
to Lessee, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers of the Pipeline System, and Lessee hereby
irrevocably consents to any such appointment.  Any such receiver(s)
shall have all of the usual powers and duties of receivers in like or similar
cases and all of the powers and duties of Lessor in case of entry, and shall
continue as such and exercise such powers until the date of confirmation of the
sale of Lessee’s interest in the Pipeline System unless such receivership is
sooner terminated;

       

      Lessor
and Lessee agree that (i) to secure Lessee’s obligations to Lessor (monetary or
otherwise) hereunder for the benefit of Lessor and to secure payment of the
Financing Lease Prepayment Amount and all other amounts payable from Lessee to
Lessor under the Financing Lease Documents and Section 5(g) of the C&A
in connection therewith, but subject to the limitations set forth in Section
4.E(1) above, (A) Lessee has granted a Lien to Lessor against Lessee’s interest
in the portion of the Pipeline System located in the State of Mississippi, any
proceeds received at any time resulting from the sale or other disposition of
all or a part of the Pipeline System, and all rents, income or related fees or
charges for transportation of Carbon Dioxide or any other substance through the
Pipeline System from and after the Income Termination Date, WITH POWER OF SALE
as provided herein and in the Memorandum of Financing Lease to be recorded in
the State of Mississippi, to the extent permitted by law, and that, upon the
occurrence of any Lease Event of Default, Lessor shall have the power and
authority, to the extent provided by law, after proper notice and lapse of such
time as may be required by law, to sell all of Lessee’s interest in the Pipeline
System (and the proceeds, rents, income or related fees or charges described in
this clause (A)) at the time and place of sale fixed by Lessor in such notice of
sale, at auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale; accordingly, it its acknowledged that A
POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF SALE MAY ALLOW
LESSOR TO TAKE LESSEE’S INTEREST IN THE PIPELINE SYSTEM AND SELL IT WITHOUT
GOING TO COURT IN A FORECLOSURE ACTION, and may take such other actions as are
provided in the Memorandum of Financing Lease; and (B) Lessee has granted a Lien
to Lessor against Lessee's interest in the portion of the Pipeline System
located in the State of Louisiana, any proceeds received at any time resulting
from the sale or other disposition of all or a part of the Pipeline System, and
all rents, income or related fees or charges for transportation of Carbon
Dioxide or other substances through the Pipeline System from and after the
Income Termination Date pursuant to the terms of the Memorandum of Financing
Lease to be recorded in the State of Louisiana; and (ii) upon the occurrence of
any Lease Event of Default, Lessor, in lieu of or in addition to exercising any
power of sale hereinabove given or granted in the Memorandum of Financing Lease,
may proceed by a suit or suits in equity or at law, whether for a foreclosure
hereunder, or for the sale of Lessee’s interest in the Pipeline System, or
against Lessee on a recourse basis for the Financing Lease Prepayment Amount, or
for the specific performance of any covenant or agreement herein contained (in a
manner not inconsistent with the intent of the parties as set forth in Section
4.E) or in aid of the execution of any power herein granted, or for the
appointment of a receiver pending any foreclosure hereunder or the sale of
Lessee’s interest in the Pipeline System, or for the enforcement of any other
appropriate legal or equitable remedy.

       

      
        
           

        

        
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      The
security interest and lien created under the preceding paragraph secures all
obligations (whether monetary or otherwise) of Lessee and DRI to Lessor now or
hereafter existing under this Financing Lease and each other Financing Lease
Document and Section 5(g) of the C&A, whether for Base Rent, costs,
fees, expenses or otherwise, including the Financing Lease Prepayment
Amount.

       

      Upon
completion of any foreclosure sale, whether judicially or by power of sale, and
actual receipt by Lessor of the proceeds of the foreclosure sale, (i) the
proceeds actually received by Lessor from such foreclosure sale shall be
applied in accordance with Applicable Law, including payment of the cost of
sale, payment of the Financing Lease Prepayment Amount and payment of any
excess to Lessee or to whomever else may be entitled to such excess under
Applicable Law, (ii) Lessee shall remain obligated to pay any
deficiency (i.e., the amount by which the Financing Lease Prepayment Amount
exceeds the portion of the foreclosure proceeds applied toward the Financing
Lease Prepayment Amount), (iii) Lessee and Lessor shall each remain obligated
to pay and perform their respective obligations under the Survival
Provisions and (iv) except as otherwise provided in clauses (ii) and (iii) of
this paragraph, Lessee shall have no further rights or obligations under this
Financing Lease.

      

      Any
exercise of remedies by Lessor following the occurrence of any Lease Event of
Default will be conducted in compliance with the applicable provisions of the
Airgas ROFR and the Airgas Pledge.

       

      To the
maximum extent permitted by law, Lessee hereby waives the benefit of any
appraisement, valuation, stay, extension, reinstatement, re-entry, repossession
and redemption laws now or hereafter in force, the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt or
limiting Lessor with respect to the election of remedies, all rights of
marshaling in the event of any sale of Lessee’s interest in the Pipeline System
or any interest therein, and any other rights which might otherwise limit or
modify any of Lessor’s rights or remedies under this Section 15.B;

       

      Lessor
shall be entitled to enforce payment of the indebtedness from Lessee to Lessor
hereunder and performance of the obligations of Lessee for the benefit of Lessor
secured hereby and to exercise all rights and powers under this instrument or
under any of the other Financing Lease Documents or other agreement or any laws
now or hereafter in force, notwithstanding some or all of the obligations
secured hereby may now or hereafter be otherwise secured, whether by mortgage,
security agreement, pledge, lien, assignment or otherwise.  Neither
the acceptance of this instrument nor its enforcement, shall prejudice or in any
manner affect Lessor’s right to realize upon or enforce any other security now
or hereafter held by Lessor, it being agreed that Lessor shall be entitled to
enforce this instrument and any other security now or hereafter held by Lessor
in such order and manner as Lessor may determine in its absolute
discretion.  No remedy herein conferred upon or reserved to Lessor is
intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.  Every power or remedy given by any of the Financing Lease
Documents to Lessor or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Lessor.  In no event shall Lessor, in the exercise of the
remedies provided in this instrument (including, without limitation, the
appointment of a receiver and the entry of such receiver onto all or any part of
the Pipeline System), be deemed a “mortgagee in possession”, and Lessor shall
not in any way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies.

       

      
        
           

        

        
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      If,
pursuant to the exercise by Lessor of its remedies pursuant to this Section 15.B
(including acceleration), the Financing Lease Prepayment Amount has been paid in
full and Lessor receives proceeds greater than the Financing Lease Prepayment
Amount, then Lessor shall remit to Lessee any excess amounts actually received
by Lessor after application of the proceeds of any foreclosure sale in
accordance with Applicable Laws, including without limitation payment of the
costs of such foreclosure sale.  If, provided that Lessee
has complied with the provisions of Section 15.B(1), pursuant to the exercise by
Lessor of its remedies pursuant to this Section 15.B (including acceleration),
the Financing Lease Prepayment Amount has been paid in full, then, if the
Pipeline System has not been foreclosed upon or otherwise sold as permitted
pursuant to the permitted exercise by Lessor of it remedies described in Section
15.B, at the sole cost and expense of Lessee, Lessor shall reassign and release
to Lessee Lessor’s interest in the Pipeline System pursuant to the Lessor
Release Mechanics.

       

      Upon the
occurrence of a Lease Event of Default and the expiration of any applicable cure
or grace period provided herein with respect thereto, Lessor shall have the
option, but not the obligation, to perform a covenant on Lessee’s behalf and in
connection therewith, incur reasonable expenses for the account of Lessee, and
any and all such sums expended or obligations reasonably incurred by Lessor in
connection therewith shall be paid by Lessee to Lessor within thirty (30) days
following written invoice from Lessor.

       

      C.           Lessee Exchange or
Prepayment Options.  Upon the occurrence of any of the
circumstances set forth in Section 3.C(1) through 3.C(7), Lessee shall have the
option, but not the obligation, but only within thirty (30) days of the
occurrence of any such event, to notify Lessor of its intention to exercise
either the Cash Prepayment Option or Exchange Note Option.  Upon
Lessor’s delivery of the demand described in Section 15.B(1), Lessee shall have
the obligation to consummate either the Cash Prepayment Option or Exchange Note
Option, on and in accordance with, and within the time period prescribed by, the
Prepayment or Exchange Terms (as defined below), except that upon the occurrence
of an Airgas Rights Determination, Lessee shall be obligated to consummate the
Cash Prepayment Option in accordance with, and within the time period prescribed
by, the Prepayment or Exchange Terms.  Upon either an election by
Lessee as provided in the first sentence above or a demand by Lessor as provided
in the second sentence above, the applicable option, shall be consummated on and
in accordance with the Prepayment or Exchange Terms (as defined
below).  As used herein, “Prepayment or Exchange
Terms” shall mean the consummation of either the Cash Prepayment Option
or the Exchange Note Option whereby (i) the parties shall cooperate in good
faith to consummate the applicable option as soon as reasonably possible, and if
the parties are unable to consummate the applicable option within thirty (30)
days of any of Lessee’s notice, Lessor’s demand or the occurrence of an Airgas
Rights Determination, as applicable, the parties shall submit to an arbitration
proceeding conducted in accordance with Section 22.H below to resolve any
remaining issues related thereto; and (ii) the closing of such prepayment shall
occur in accordance with the Lessor Release Mechanics.  The applicable
option shall be consummated either (a) by the Lessee paying the Financing Lease
Prepayment Amount in immediately available funds (the “Cash Prepayment
Option”), or (b) if no Cash Prepayment Only Default has occurred and is
continuing, then at the Lessee’s election (the “Exchange Note
Option”), by Lessee executing and delivering to Lessor a promissory note
(the “Exchange
Note”) in the form attached hereto as Exhibit E, in an
original principal amount equal to the principal amount then outstanding under
this Financing Lease as of the date of such Exchange Note (and with the
amortization schedule to such Exchange Note matching exactly the remaining
amortization schedule set forth on Exhibit B hereto,
with any amount by which the Financing Lease Prepayment Amount exceeds the
principal amount then outstanding under this Financing Lease at such time being
required to be paid to Lessor contemporaneously with delivery of the Exchange
Note), secured by one or more deeds of trust and mortgages granting a lien on
the Pipeline System (the “Exchange Mortgages”)
in the forms attached hereto as Exhibit F-1 and Exhibit F-2, and the
payment of which is guaranteed by DRI pursuant to a guaranty agreement dated as
of the date of the Exchange Note executed and delivered by DRI  in the
form attached hereto as Exhibit G (the “Exchange Guaranty”),
the UCC financing statements in the forms attached hereto as Exhibit H-1 and
Exhibit H-2
(the “Exchange
Financing Statements” and together with the Exchange Note, the Exchange
Mortgages and the Exchange Guaranty, collectively the “Exchange
Documents”).  The Exchange Documents are in renewal, extension
and rearrangement of the indebtedness and the Liens created in and by this
Financing Lease.  Notwithstanding that Lessee has elected to exercise
the Exchange Note Option, at any time prior to consummation of such option,
Lessee may irrevocably elect to prepay the Financing Lease Prepayment Amount in
immediately available funds, in which case (a) such prepayment shall be due
within 3 Business Days of such election and (b) the Lessor shall substantially
contemporaneously comply with the Lessor Release Mechanics.  With
respect to any consummation of the Cash Prepayment Option, the Financing Lease
Prepayment Amount will be such amount calculated as of the date such prepayment
is made.

       

      
        
           

        

        
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      D.           Financial
Assurance.  In addition to the remedies provided in Section
15.B above, upon the occurrence of a Lease Event of Default pursuant to Section
15A(2), (5), (6) or (7) above, Lessor may require that Lessee deliver to Lessor
Financial Assurances within ten (10) days following such event.

       

      E.           Default
Interest.  While any Lease Event of Default has occurred and is
continuing, or while any payment of Base Rent hereunder has not been paid in
full as and when due hereunder (even if no Lease Event of Default then exists
due to the provisions of Section 15A(2)), all amounts outstanding hereunder
(including, without limitation, the full unpaid principal balance (as set forth
in Exhibit B))
shall bear additional interest (“Default Interest”) at
the rate of twelve and 25/100 percent (12.25%) per annum (“Default Interest
Rate”).  However, in determining the amount of Default Interest
required to be paid to cure a payment default pursuant to Section 15A(2),
Default Interest shall be an amount equal to an additional two percent (2%) per
annum on the full balance shown on Exhibit B after
the application of the previous non-defaulted payments made by
Lessee.  In addition, if any amount (other than as described in the
preceding sentences of this Section 15.E) is not paid in full to Lessor as
and when due hereunder, such amount shall bear interest at the Default Interest
Rate from the earlier of the two dates described in clause (ii) of
Section 15A(2) until paid in full.

       

      
        
           

        

        
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      F.           Successful Exchange or
Prepayment Option.  If Lessee consummates an Exchange or
Prepayment Option in accordance with the requirements of this Financing Lease
and Section 2(b) and (d) of the C&A, then, notwithstanding anything to the
contrary in the Financing Lease Documents, Lessor will comply with the Lessor
Release Mechanics.

       

      16.           Estoppels.  Each
party agrees, from time to time, within ten (10) days after request of the
other, to deliver to the requesting party, or its designee, an estoppel
certificate stating whether or not this Financing Lease is in full force and
effect, the date to which Base Rent has been paid, the unexpired term of this
Financing Lease and such other factual matters pertaining to this Financing
Lease as deemed reasonably necessary by the requesting party.

       

      17.           Notices.  Any
notice or communication required or permitted in this Financing Lease shall be
given in writing, sent by (a) personal delivery, or (b) expedited delivery
service with proof of delivery, or (c) United States mail, postage prepaid,
registered or certified mail, return receipt requested, addressed:

       

      if to Lessor, as
follows:

      

      c/o
Genesis Energy, L.P.

      500
Dallas, Suite 2500

      Houston,
Texas 77002

      Fax No.:
(713) 860-2640

      Attention:  Joseph
A. Blount, President and Chief Operations Officer

      

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

      

      c/o Akin
Gump Strauss Hauer & Feld LLP

      1111
Louisiana

      44th
Floor

      Houston,
Texas 77002

      Fax No.:
(713) 236-0822

      Attention:  J.
Vincent Kendrick, Esq.

      

      and, if to Lessee, as
follows:

      

      c/o
Denbury Onshore, LLC

      5100
Tennyson Parkway, Suite 1200

      Plano,
Texas 75024

      Fax No.:
(972) 673-2150

      Attention:
Phil Rykhoek, Chief Financial Officer

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

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

      

      c/o
Denbury Resources, Inc.

      5100
Tennyson Parkway

      Suite
1200

      Plano,
Texas 75024

      Attn: H.
Raymond Dubuisson, Vice President – Land

      

      Baker
& Hostetler LLP

      1000
Louisiana, Suite 2000

      Houston,
Texas 77002

      Fax No.:
(713) 276-1626

      Attention:
Donald W. Brodsky, Esq.

      

      or to
such other address or to the attention of such other person as shall be
designated by the applicable party and on fifteen (15) days notice from time to
time in writing and sent in accordance herewith. Any such notice or
communication shall be deemed to have been given either at the time of personal
delivery or, in the case of delivery service or mail, upon receipt.

       

      18.           Limitation of
Liability.  NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THE PERFORMANCE OF OR FAILURE TO PERFORM UNDER THIS
FINANCING LEASE, EXCEPT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR
PUNITIVE DAMAGES PAID BY AN INDEMNIFIED PARTY TO A THIRD PARTY WITH RESPECT FOR
WHICH INDEMNIFICATION IS PROVIDED TO THE INDEMNIFIED PARTY BY THE INDEMNIFYING
PARTY UNDER SECTION 12 ABOVE.

       

      19.           Casualty and
Condemnation.  Subject to the provisions of this Section 19, if
all or a portion of the Pipeline System is damaged or destroyed in whole or in
part by a Casualty or if the use, access, occupancy, easement rights or title to
the Pipeline System or any part thereof, is the subject of a Condemnation,
then

       

      (1)           in
the case of a Casualty affecting the Pipeline System that is not an Event of
Loss, any insurance proceeds payable with respect to such Casualty shall be paid
directly to Lessee (or if received by Lessor, shall be paid over to Lessee) for
the sole purpose of reconstruction, refurbishment and repair of the Pipeline
System; provided, however, that in the
event that either (x) such reconstruction, refurbishment or repair cannot be
completed prior to the end of the Lease Term or (y) Lessee shall elect not to
use such proceeds for the reconstruction, refurbishment or repair of the
Pipeline System, then all such insurance proceeds payable with respect to such
Casualty shall be paid to Lessor to be applied towards the payment of the
Financing Lease Prepayment Amount, first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the Base Rent in inverse order of maturity;

       

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      (2)           in
the case of a Condemnation of any part of the Pipeline System that is not an
Event of Loss, any award or compensation relating thereto shall be paid to
Lessee for the sole purpose of restoration of the Pipeline System; provided, however, that if such
restoration cannot be completed prior to the end of the Lease Term, then such
award or compensation shall be paid to Lessor to be applied towards the payment
of the Financing Lease Prepayment Amount, first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the Base Rent in inverse order of maturity;

       

      (3)           in
the case of any Casualty or Condemnation that is an Event of Loss, such award or
compensation shall be paid to Lessor to be applied (x) at the option of Lessee,
to the restoration of the Pipeline System where, in the reasonable opinion of
Lessee and Lessor, such amounts received are sufficient to complete such
restoration and such restoration may be completed prior to the end of the Lease
Term; provided,
however, that
such option may be exercised only by written notice from Lessee to Lessor
delivered no more than forty-five days following such Event of Loss, or (y)
toward the payment of the Financing Lease Prepayment Amount, first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the Base Rent in inverse order of maturity;

       

      provided, however, that, in
each case, if a Lease Event of Default shall have occurred and be continuing,
such award, compensation or insurance proceeds shall be paid directly to Lessor
or, if received by Lessee, shall be held in trust for Lessor, and shall be paid
by Lessee to Lessor.  All amounts held by Lessor when a Lease Event of
Default exists hereunder on account of any award, compensation or insurance
proceeds either paid directly to Lessor or any other Person pursuant to the
Financing Lease Documents and/or Section 5(g) of the C&A or turned over
to Lessor or to any other Person pursuant to the Financing Lease Documents
and/or Section 5(g) of the C&A shall at the option of Lessor either be
(i) paid to Lessee for the repair of damage caused by such Casualty or
Condemnation in accordance with clause (6) of this Section 19, or (ii) applied
to the repayment of the Financing Lease Prepayment Amount, first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the Base Rent in inverse order of maturity.

       

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      (4)           Lessee
may appear in any proceeding or action to negotiate, prosecute, adjust or appeal
any claim for any award, compensation or insurance payment on account of any
such Casualty or Condemnation and shall pay all expenses thereof.  At
Lessee’s reasonable request, and at Lessee’s sole cost and expense, Lessor shall
participate in any such proceeding, action, negotiation, prosecution or
adjustment.  Lessor and Lessee agree that this Financing Lease shall
control the rights of Lessor and Lessee in and to any such award, compensation
or insurance payment.

       

      (5)           If
Lessor or Lessee shall receive notice of a Casualty or of an actual, pending or
threatened Condemnation of the Pipeline System or any interest therein, Lessor
or Lessee, as the case may be, shall give notice thereof to the other promptly
after the receipt of such notice.

       

      (6)           If
pursuant to this Section 19, this Financing Lease shall continue in full force
and effect following a Casualty or Condemnation with respect to the Pipeline
System, Lessee shall, at its sole cost and expense (and, without limitation, if
any award, compensation or insurance payment is not sufficient to restore the
Pipeline System in accordance with this clause (6), Lessee shall pay the
shortfall), promptly and diligently repair any damage to the Pipeline System
caused by such Casualty or Condemnation in conformity with the prudent industry
practice, to restore the Pipeline System to substantially the same condition,
operative value and useful life as existed immediately prior to such Casualty or
Condemnation.  In such event, title to the Pipeline System shall
remain with Lessor subject to the terms of this Financing Lease.  Upon
completion of such restoration, Lessee shall furnish to Lessor a certificate
signed by an authorized officer of Lessee confirming that such restoration has
been completed pursuant to this Financing Lease.

       

      (7)           In
no event shall a Casualty or Condemnation affect Lessee’s obligations to pay
Base Rent or to perform its obligations and pay any amounts due at the
termination of the Lease Term or otherwise as required by this Financing
Lease.

       

      (8)           Any
Excess Casualty/Condemnation Proceeds received by Lessor in respect of a
Casualty or Condemnation shall be turned over to Lessee.

       

      (9)           Notwithstanding
anything to the contrary stated above in this Section 19, Lessee shall have no
obligation to repair or restore the Pipeline System during the final five (5)
years of the Lease Term, provided that Lessee
continues to pay Base Rent in accordance with Section 4.A above and the
condition of the Pipeline System complies with Applicable Laws, and that the
parties comply with their respective obligations set forth in Section 3.B
above.  In the event Lessee elects, by providing written notice to
Lessor, not to repair or restore the Pipeline System during such final five (5)
year period, any Casualty or Condemnation proceeds shall be applied first to expenses and
Claims (other than as set forth in second and third below) then
owing to Lessor under the Financing Lease Documents and/or Section 5(g) of
the C&A, second to unpaid
interest due and owing hereunder, and third to the
principal component of the Base Rent in inverse order of maturity.

       

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      20.           Environmental
Matters.  Promptly upon Lessee obtaining Knowledge of the
existence of a violation of Environmental Law with respect to the Pipeline
System for which the cost of remediation or of steps to comply with applicable
permits is then expected to exceed $500,000, Lessee shall notify Lessor in
writing of such violation.  Lessee shall, at its sole cost and
expense, promptly and diligently commence any response, clean up, remedial or
other action required by Applicable Law to remove, clean up or remediate each
such violation.  Lessee shall, upon completion of remedial action by
Lessee for any such violation described in the first sentence of this Section
20, cause to be prepared by a nationally recognized environmental consultant
acceptable to Lessor and Lessee (which acceptance shall not be unreasonably
withheld or delayed) a report describing such violation of Environmental Law and
the actions taken by Lessee (or its agents) in response to such violation, and a
statement by the consultant that such violation has been remedied in compliance
in all material respects with applicable Environmental Laws.  Nothing
in this Section 20 shall limit Lessee’s indemnification obligations set forth
elsewhere in this Financing Lease

       

      21.           Notice of Environmental
Matters.  Promptly, but in any event within thirty (30) days
from the date Lessee obtains Knowledge thereof pursuant to written notice from
any Governmental Body, Lessee shall provide to Lessor written notice of any
pending or threatened claim, action or proceeding involving any Environmental
Laws or any Release in connection with the Pipeline System for which the cost of
remediation or of steps to comply with applicable permits is then expected to
exceed $500,000.  All such notices shall describe in reasonable detail
the nature of the claim, action or proceeding and Lessee’s proposed response
thereto.  In addition, Lessee shall provide to Lessor, within thirty
(30) Business Days of receipt, copies of all material written communications
with any Governmental Body relating to any such violation of Environmental Law
or Release in connection with the Pipeline System.  In the event that
Lessor receives written notice of any pending or threatened claim, action or
proceeding involving any Environmental Laws or any Release on or in connection
with the Pipeline System, Lessor shall promptly give notice thereof to
Lessee.

       

      22.           Miscellaneous.

       

      A.           Headings/Gender.
Words of any gender used in this Financing Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Financing Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Financing Lease, or any provision
hereof, or in any way affect the interpretation of this Financing
Lease.

       

      B.           Successors and
Assigns.  Without limiting the terms of Section 14 above, the
terms, provisions and covenants and conditions contained in this Financing Lease
shall apply to, inure to the benefit of, and be binding upon, the parties hereto
and upon their respective heirs, executors, personal representatives, legal
representatives, successors and assigns, except as otherwise herein expressly
provided.  Except as provided in the preceding sentence, this
Financing Lease is not for the benefit, and shall not be enforceable by, any
third party.

       

      
        
           

        

        
          39

          
            

          

        

        
           

        

      

      C.           Entire
Agreement.  This Financing Lease and the Closing Agreement
constitute the entire understandings, covenants and agreements of Lessor and
Lessee with respect to the lease of the Pipeline System, and together with the
Financing Lease Documents and the C&A, constitutes the entirety of the
agreements of Lessor and Lessee with respect to the Pipeline
System.  In the event of any conflict between the terms of the C&A
and the Financing Lease Documents, the parties agree that the C&A shall
control.  Lessor and Lessee each acknowledge that with respect to this
Financing Lease, no representations, inducements, promises or agreements, oral
or written, have been made by Lessor or Lessee, or anyone acting on behalf of
Lessor or Lessee, which are not contained herein, and any prior agreements,
promises, negotiations, or representations not expressly set forth in this
Financing Lease are of no force or effect.

       

      D.           Severability. If any
clause or provision of this Financing Lease is illegal, invalid, or
unenforceable under present or future laws effective during the Lease Term, then
and in that event, it is the intention of the parties hereto that the remainder
of this Financing Lease shall not be affected thereby, and it is also the
intention of the parties to this Financing Lease that in lieu of each clause or
provision of this Financing Lease that is illegal, invalid or unenforceable,
there be added, as a part of this Financing Lease, a clause or provision as
similar in terms to such illegal, invalid or unenforceable clause or provision
as may be possible and be legal, valid and enforceable.

       

      E.           Counterparts. This
Financing Lease may be executed in counterparts, each being deemed an original,
but together constituting only one instrument.

       

      F.           Time for
Performance.  TIME IS OF THE ESSENCE WITH RESPECT TO ALL
PERFORMANCE OBLIGATIONS CONTAINED IN THIS FINANCING LEASE.

       

      G.           Governing Law. THIS
FINANCING LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MISSISSIPPI
WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES THAT WOULD DIRECT APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT IT IS MANDATORY THAT
THE LAW OF SOME OTHER JURISDICTION, WHEREIN THE PIPELINE SYSTEM IS LOCATED,
SHALL APPLY.

       

      H.           Arbitration.  In
the event of a dispute between the parties as to any matter arising under this
Financing Lease, such dispute shall be resolved in accordance with the dispute
resolution provisions described in Exhibit C attached
hereto and incorporated herein by reference for all purposes.

       

      I.           Waiver. No waiver by
either party of any provision of this Financing Lease or of any default, event
of default or breach hereunder shall be deemed to be a waiver of any other
provision of this Financing Lease, or of any subsequent default, event of
default or breach of the same or any other provision. Either party’s consent to
or approval of any act requiring consent or approval shall not be deemed to
render unnecessary the obtaining of consent to or approval of any subsequent act
requiring consent.

       

      
        
           

        

        
          40

          
            

          

        

        
           

        

      

      J.           Interpretation.  Neither
anything in this Financing Lease, nor any act of either party hereunder, shall
ever be construed as creating the relationship of principal and agent, or a
partnership, or a joint venture or enterprise between the parties
hereto.  References to agreements or other contractual instruments
shall include all amendments, restatements, modifications and supplements
thereto to the extent not prohibited by this Financing Lease, the C&A, or
the NEJD Intercompany Collateral Agreement, the NEJD Intercompany Note and the
Financing Agreements (as such terms are defined in the C&A).

       

      K.           Amendments.  This
Financing Lease may not be modified or amended, except by an agreement in
writing signed by Lessor and Lessee. The parties may waive any of the conditions
contained herein or any of the obligations of the other party hereunder, but any
such waiver shall be effective only if in writing and signed by the party
waiving such conditions or obligations, except as specifically set forth
herein.

       

      L.           Exhibits.  All
exhibits referenced herein as being attached hereto are hereby incorporated
herein by reference as if set forth in full in this Financing
Lease.

       

      M.           Recording.  A
memorandum of this Financing Lease will be recorded or filed by any party in or
with the appropriate records of each county in the State of Mississippi in which
any portion of the Pipeline System is located, substantially in the form
attached hereto as Exhibit I-1, and a
Notice of Lease will be recorded in the conveyance and mortgage records of each
Parish of the State of Louisiana in which any portion of the Pipeline System is
located, substantially in the form attached hereto as Exhibit
I-2.  If requested by the recording or filing party, the other
party shall cooperate with the recording or filing party’s efforts and
furthermore, the other party shall execute any documents or agreements necessary
to effectuate the recording or filing of a memorandum of this Financing
Lease.

       

      N.           Merger of
Title.  There shall be no merger of this Financing Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Financing Lease or the leasehold estate created hereby or any interest in this
Financing Lease or such leasehold estate, and (b) a beneficial interest in
Lessor.

       

      O.           Usury.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
the Financing Lease, together with all fees, charges and other amounts which are
treated as interest on such Financing Lease under Applicable Law (collectively
the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by Lessor in
accordance with Applicable Law, the rate of interest payable in respect of the
Financing Lease hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Financing Lease but were
not payable as a result of the operation of this Section shall be cumulated and
the interest and Charges payable to Lessor in respect of the Financing Lease
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by Lessor.

       

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

      P.           Specific
Performance.  The parties hereto agree that, if Lessor does not
comply with the Lessor Release Mechanics as and when required hereunder, Lessee
may enforce such obligations by specific performance.

       

      Q.           Supplements to Lease
Financing Documents.  Lessor and Lessee shall from time to time
enter into such supplements to the Financing Lease Documents as are necessary to
(i) provide additional and/or corrected property descriptions for the Pipeline
System and (ii) confirm the Liens created by this Financing Lease and the
Memorandum of Lease to include any such additional property.

       

      [Signatures
on following page]

       

      
        
           

        

        
          42

          
            

          

        

        
           

        

      

      EXECUTED
BY LESSOR AND LESSEE, as of the date first written above.

       

      
        	 
      	
                GENESIS
      NEJD PIPELINE, LLC

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Ross A. Benavides

              
	 
      	
                Name:

              	
                Ross
      A. Benavides

              
	 
      	
                Title:

              	
                Chief
      Financial Officer

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                DENBURY
      ONSHORE, LLC

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Phil Rykhoek

              
	 
      	
                Name:

              	
                Phil
      Rykhoek

              
	 
      	
                Title:

              	
                Senior
      Vice President and Chief Financial
Officerex10_2.htm

    
      
        

      

      Exhibit 10.2

       

      PIPELINE PURCHASE AND SALE
AGREEMENT

       

      BY
AND AMONG

       

      DENBURY
ONSHORE, LLC,

       

      AND

       

      GENESIS
FREE STATE PIPELINE, LLC

       

      for
the Free State Pipeline System in Eastern Mississippi

       

      Dated:
May 30, 2008

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

      
        	 
      	 
      	 
      	 
      	
                Page

              
	 
      	 
      	 
      	 
      	 
      
	
                ARTICLE
      I. DEFINITIONS

              	 
      	
                1

              
	 
      	 
      	 
      	 
      	 
      
	
                1.1

              	 
      	
                Defined
      Words and Terms

              	 
      	
                1

              
	 
      	 
      	 
      
	
                ARTICLE
      II. DESCRIPTION OF PIPELINE SYSTEM

              	 
      	
                4

              
	 
      	 
      	 
      	 
      	 
      
	
                2.1

              	 
      	
                Description
      of Pipeline System

              	 
      	
                4

              
	 
      	 
      	 
      	 
      	 
      
	
                2.2

              	 
      	
                Assumed
      Liabilities

              	 
      	
                5

              
	 
      	 
      	 
      	 
      	 
      
	
                2.3

              	 
      	
                Excluded
      Liabilities

              	 
      	
                5

              
	 
      	 
      	 
      
	
                ARTICLE
      III. PURCHASE AND SALE OF PIPELINE SYSTEM

              	 
      	
                6

              
	 
      	 
      	 
      	 
      	 
      
	
                3.1

              	 
      	
                Sale
      and Delivery of Pipeline System

              	 
      	
                6

              
	 
      	 
      	 
      	 
      	 
      
	
                3.2

              	 
      	
                Consideration

              	 
      	
                6

              
	 
      	 
      	 
      	 
      	 
      
	
                3.3

              	 
      	
                Closing

              	 
      	
                7

              
	 
      	 
      	 
      	 
      	 
      
	
                3.4

              	 
      	
                Allocation
      of Purchase Price

              	 
      	
                7

              
	 
      	 
      	 
      	 
      	 
      
	
                3.5

              	 
      	
                Deliverables
      at Closing

              	 
      	
                7

              
	 
      	 
      	 
      
	
                ARTICLE
      IV. REPRESENTATIONS AND WARRANTIES OF SELLER

              	 
      	
                9

              
	 
      	 
      	 
      	 
      	 
      
	
                4.1

              	 
      	
                Organization
      and Authority

              	 
      	
                9

              
	 
      	 
      	 
      	 
      	 
      
	
                4.2

              	 
      	
                Execution
      and Effect

              	 
      	
                10

              
	 
      	 
      	 
      	 
      	 
      
	
                4.3

              	 
      	
                No
      Violation

              	 
      	
                10

              
	 
      	 
      	 
      	 
      	 
      
	
                4.4

              	 
      	
                Title
      to Rights of Way

              	 
      	
                10

              
	 
      	 
      	 
      	 
      	 
      
	
                4.5

              	 
      	
                Title
      to Pipeline and Equipment

              	 
      	
                10

              
	 
      	 
      	 
      	 
      	 
      
	
                4.6

              	 
      	
                Litigation

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.7

              	 
      	
                Compliance
      with Applicable Law

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.8

              	 
      	
                Condition
      of Pipeline System

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.9

              	 
      	
                Taxes

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.10

              	 
      	
                Preferential
      Purchase Rights

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.11

              	 
      	
                Environmental
      Matters

              	 
      	
                11

              
	 
      	 
      	 
      	 
      	 
      
	
                4.12

              	 
      	
                Contracts
      and Rights of Way

              	 
      	
                12

              
	 
      	 
      	 
      	 
      	 
      
	
                4.13

              	 
      	
                Disclosure

              	 
      	
                12

              
	 
      	 
      	 
      	 
      	 
      
	
                4.14

              	 
      	
                No
      Unsatisfied Liabilities

              	 
      	
                12

              
	 
      	 
      	 
      
	
                ARTICLE
      V. REPRESENTATIONS AND WARRANTIES OF PURCHASER

              	 
      	
                13

              
	 
      	 
      	 
      	 
      	 
      
	
                5.1

              	 
      	
                Organization
      and Authority

              	 
      	
                13

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                5.2

              	 
      	
                Execution
      and Effect

              	 
      	
                13

              
	 
      	 
      	 
      	 
      	 
      
	
                5.3

              	 
      	
                No
      Violation

              	 
      	
                13

              
	 
      	 
      	 
      	 
      	 
      
	
                5.4

              	 
      	
                Sufficiency
      of Funds

              	 
      	
                14

              
	 
      	 
      	 
      	 
      	 
      
	
                5.5

              	 
      	
                Disclaimer

              	 
      	
                14

              
	 
      	 
      	 
      	 
      	 
      
	
                5.6

              	 
      	
                Evaluation
      by Purchaser

              	 
      	
                14

              
	 
      	 
      	 
      	 
      	 
      
	
                5.7

              	 
      	
                Fairness
      Opinion

              	 
      	
                14

              
	 
      	 
      	 
      	 
      	 
      
	
                5.8

              	 
      	
                Compliance
      with Laws

              	 
      	
                15

              
	 
      	 
      	 
      	 
      	 
      
	
                5.9

              	 
      	
                Disclosure

              	 
      	
                15

              
	 
      	 
      	 
      
	
                ARTICLE
      VI. OTHER AGREEMENTS AND OBLIGATIONS OF THE PARTIES

              	 
      	
                15

              
	 
      	 
      	 
      	 
      	 
      
	
                6.1

              	 
      	
                Assignments
      Requiring Consents, Preferential Purchase Rights

              	 
      	
                15

              
	 
      	 
      	 
      	 
      	 
      
	
                6.2

              	 
      	
                No
      Solicitation of Employees

              	 
      	
                16

              
	 
      	 
      	 
      	 
      	 
      
	
                6.3

              	 
      	
                Incidental
      Contamination

              	 
      	
                16

              
	 
      	 
      	 
      	 
      	 
      
	
                6.4

              	 
      	
                Document
      Retention

              	 
      	
                16

              
	 
      	 
      	 
      	 
      	 
      
	
                6.5

              	 
      	
                Further
      Assurances

              	 
      	
                17

              
	 
      	 
      	 
      
	
                ARTICLE
      VII. SURVIVAL OF OBLIGATIONS; INDEMNIFICATION

              	 
      	
                17

              
	 
      	 
      	 
      	 
      	 
      
	
                7.1

              	 
      	
                Survival
      of Obligations

              	 
      	
                17

              
	 
      	 
      	 
      	 
      	 
      
	
                7.2

              	 
      	
                Indemnification
      by Seller

              	 
      	
                17

              
	 
      	 
      	 
      	 
      	 
      
	
                7.3

              	 
      	
                Indemnification
      by Purchaser

              	 
      	
                18

              
	 
      	 
      	 
      	 
      	 
      
	
                7.4

              	 
      	
                Indemnification
      Procedures

              	 
      	
                19

              
	 
      	 
      	 
      	 
      	 
      
	
                7.5

              	 
      	
                Certain
      Limitations on Indemnification

              	 
      	
                19

              
	 
      	 
      	 
      	 
      	 
      
	
                7.6

              	 
      	
                Tax
      Treatment of Indemnity Payments

              	 
      	
                20

              
	 
      	 
      	 
      	 
      	 
      
	
                7.7

              	 
      	
                No
      Consequential Damages

              	 
      	
                20

              
	 
      	 
      	 
      	 
      	 
      
	
                7.8

              	 
      	
                Exclusive
      Remedy

              	 
      	
                21

              
	 
      	 
      	 
      
	
                ARTICLE
      VIII. TAXES -PRORATIONS AND ADJUSTMENTS

              	 
      	
                21

              
	 
      	 
      	 
      	 
      	 
      
	
                8.1

              	 
      	
                Proration

              	 
      	
                21

              
	 
      	 
      	 
      	 
      	 
      
	
                8.2

              	 
      	
                Sales
      Taxes

              	 
      	
                22

              
	 
      	 
      	 
      	 
      	 
      
	
                8.3

              	 
      	
                Cooperation

              	 
      	
                22

              
	 
      	 
      	 
      	 
      	 
      
	
                8.4

              	 
      	
                Payables

              	 
      	
                22

              
	 
      	 
      	 
      
	
                ARTICLE
      IX. DISPUTE RESOLUTION

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                9.1

              	 
      	
                Dispute
      Resolution

              	 
      	
                23

              
	 
      	 
      	 
      
	
                ARTICLE
      X. MISCELLANEOUS

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                10.1

              	 
      	
                No
      Brokers

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                10.2

              	 
      	
                Expenses

              	 
      	
                23

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                10.3

              	 
      	
                Further
      Assurances

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                10.4

              	 
      	
                Assignment;
      Parties in Interest

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                10.5

              	 
      	
                Entire
      Agreement; Amendments

              	 
      	
                23

              
	 
      	 
      	 
      	 
      	 
      
	
                10.6

              	 
      	
                Severability

              	 
      	
                24

              
	 
      	 
      	 
      	 
      	 
      
	
                10.7

              	 
      	
                Interpretation

              	 
      	
                24

              
	 
      	 
      	 
      	 
      	 
      
	
                10.8

              	 
      	
                Notices

              	 
      	
                24

              
	 
      	 
      	 
      	 
      	 
      
	
                10.9

              	 
      	
                Waiver
      of Rescission

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.10

              	 
      	
                Governing
      Law

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.11

              	 
      	
                Counterparts

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.12

              	 
      	
                Exhibits

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.13

              	 
      	
                No
      Third-Party Beneficiary

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.14

              	 
      	
                Use
      of Seller’s Name

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.15

              	 
      	
                Conflict
      with Conveyance Agreements

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.16

              	 
      	
                Denbury
      Guaranty

              	 
      	
                25

              
	 
      	 
      	 
      	 
      	 
      
	
                10.17

              	 
      	
                Tax
      Opinion to Genesis MLP and Genesis Energy, Inc.

              	 
      	
                26

              

      

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

      PIPELINE
PURCHASE AND SALE AGREEMENT

       

      THIS PIPELINE PURCHASE AND SALE
AGREEMENT (this “Agreement”) is made
and entered into on this 30th day of
May, 2008, by and between DENBURY ONSHORE, LLC (the
“Seller”), a
Delaware limited liability company, and GENESIS FREE STATE PIPELINE,
LLC (the “Purchaser”), a
Delaware limited liability company.  Seller and Purchaser are
sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

       

      RECITALS:

       

      Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the
Pipeline System (as hereinafter defined) and related assets on the terms and
conditions set forth in this Agreement.

       

      NOW,
THEREFORE, in consideration of the premises, the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:

       

      ARTICLE
I.

      DEFINITIONS

       

      1.1           Defined Words and
Terms. Except
where the context otherwise indicates another or different meaning or intent,
the following words and terms as used herein shall have the meanings
indicated:

       

      (a)           The
term “Affiliate” in
reference to any Person, means and includes any Person which directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person.  The term “control”
(including the terms “controlling,” “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of any Person, whether
through ownership of voting securities, by contract or otherwise. For purposes
of this Agreement only and without thereby altering the determination of the
existence of an affiliate relationship of Purchaser and Seller for other
circumstances, when used with reference to (i) Purchaser, “Affiliate” shall
include Genesis MLP, its subsidiaries and its general partner, Genesis Energy,
Inc., and (ii) Seller, “Affiliate” shall include Denbury and its subsidiaries
excluding those entities described in (i).

       

      (b)           The
term “Applicable
Laws” means and includes any and all laws, ordinances, orders, rules,
regulations and other legal requirements of all Governmental Bodies having
jurisdiction over the use, occupancy, operation and maintenance of the Pipeline
System, as such may be amended or modified from time to time.

       

      (c)           The
term “Effective
Time” shall have the meaning set forth in Section 3.1
below.

       

      (d)           The
term “Environmental
Costs and Liabilities” means, with respect to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any of the foregoing
by any other Person or in response to any violation of or liability under any
Environmental Law, to the extent based upon, related to, or arising under or
pursuant to any Environmental Law, Environmental Permit, order or agreement with
any Governmental Body or other Person, which relates to any environmental
condition, violation of Environmental Law or a Release or threatened Release of
Hazardous Materials, whether known or unknown, accrued or contingent, whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      (e)           The
term “Environmental
Law” means any foreign, federal, state or local statute, regulation,
ordinance or other legal requirement as now or hereafter in effect in any way
relating to the protection of or regulation of, the environment or natural
resources, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 5101 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), and the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), as those laws
have been amended, any analogous laws and the regulations promulgated pursuant
thereto.

       

      (f)           The
term “Environmental
Permit” means any Permit required by Environmental Laws for the operation
of the Pipeline System.

       

      (g)           The
term “Governmental
Body” means any government or governmental or regulatory body thereof, or
political subdivision thereof, whether foreign, federal, state, or local, or any
agency, instrumentality or authority thereof, or any court or arbitrator (public
or private).

       

      (h)           The
term “Hazardous
Material” means any substance, material or waste which is regulated,
classified, or subject to liability under or pursuant to any Environmental Law,
including, without limitation, petroleum and its by-products, asbestos,
polychlorinated biphenyls, radon, mold or other fungi, and urea formaldehyde
insulation.

       

      (i)           The
term “Knowledge” means as
follows: (i) with respect to Purchaser, the individuals listed on Exhibit 1.1(i)(1), or
their respective successors in the same or similar officer positions, shall be
deemed to have knowledge of a particular fact or other matter if such individual
is consciously aware of such fact or other matter at the time of determination
after due inquiry; and (ii) with respect to Seller, the individuals listed on
Exhibit
1.1(i)(2), or their respective successors in the same or similar officer
positions, shall be deemed to have knowledge of a particular fact or other
matter if such individual is consciously aware of such fact or other matter at
the time of determination after due inquiry.

       

      (j)           The
term “Permits”
means any approvals, authorizations, consents, licenses, permits or
certificates.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (k)           The
term “Permitted
Encumbrances” shall mean: (a) any liens for Pipeline System Taxes that
are not yet due and payable; (b) materialmen’s, mechanic’s, repairmen’s,
employees’, contractors’ and other similar liens or charges arising in the
ordinary course of business; (c) all rights reserved to or vested in any
governmental, statutorial or public authority to control or regulate any of the
real property interests constituting a part of the Pipeline System; and
(d) easements, rights of way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the Pipeline System as it is currently being used or materially
interfere with the ordinary conduct of the Pipeline System.

       

      (l)           The
term “Person”
means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.

       

      (m)           The
term “Pipeline
System” shall have the meaning set forth in Section 2.1
below.

       

      (n)           The
term “Pipeline System
Taxes” means all Taxes specifically assessed against the Pipeline System,
including Taxes imposed on the use, occupancy or possession of the Pipeline
System but specifically not including any gross receipts, income or franchise
taxes, or other taxes of the nature of income taxes that are imposed upon the
Pipeline System or the owner thereof.  

       

      (o)           The
term “Related
Agreements” means those three (3) Meter Station and Pipeline Lateral
Easement and Road Use Agreements (“Easement and Road Agreements”) between
Purchaser as Grantee and Seller as Grantor, dated as of the date hereof, made
with respect to the Eucutta Field, the Soso Field, and the Martinville Field,
and those two (2) Agreements to Provide Electrical Power (“Power Agreements”)
between Seller and Purchaser, dated as of the date hereof, made with respect to
the Eucutta Field and the Soso Field.

       

      (p)           The
term “Release”
means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into the indoor or outdoor
environment, or into or out of any property.

       

      (q)           The
term “Remedial
Action” means all actions to (i) clean up, remove, treat or in any other
way address any Hazardous Material; (ii) prevent the threatened Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; (iii) perform pre-remedial
studies and investigations or post-remedial monitoring and care; or (iv) to
correct a condition of non-compliance with Environmental Laws.

       

      (r)           The
term “Tax” or
“Taxes” means,
however denominated, (x) any and all taxes, assessments, customs, duties,
levies, fees, tariffs, imposts, deficiencies and other governmental charges of
any kind whatsoever (including, but not limited to, taxes on or with respect to
net or gross income, franchise, profits, gross receipts, capital, sales, use, ad
valorem, value added, transfer, real property transfer, transfer gains, transfer
taxes, inventory, escheats, unclaimed property, capital stock, license, payroll,
employment, social security, unemployment, severance, occupation, real or
personal property, estimated taxes, rent, excise, occupancy, recordation, bulk
transfer, intangibles, alternative minimum, doing business, withholding and
stamp), together with any interest thereon, penalties, fines, damages costs,
fees, additions to tax or additional amounts with respect thereto, imposed by
any federal, state or local taxing authority of any jurisdiction; (y) any
liability for the payment of any amounts described in clause (x) as a result of
being a member of an affiliated, consolidated, combined, unitary or similar
group or as a result of transferor or successor liability; and (z) any liability
for the payments of any amounts as a result of being a party to any tax sharing
agreement or as a result of any express or implied obligation to indemnify any
other person with respect to the payment of any amounts of the type described in
clause (x) or (y).

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (s)           The
term “Tax
Return” means any report, return, document, declaration or other
information or filing (including any amendments, elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to any federal, state or local taxing authority or jurisdiction with
respect to Taxes, including, where permitted or required, combined or
consolidated returns for any group of entities that includes either Party or any
subsidiary of any such Party, any documents with respect to or accompanying
payments of estimated taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
declaration or other information.

       

      ARTICLE
II.

      DESCRIPTION
OF PIPELINE SYSTEM

       

      2.1           Description of Pipeline
System.

       

      (a)           As
used herein, the term “Pipeline System”
shall mean the existing Free State pipeline system in Eastern Mississippi, which
extends from the upstream flange of the motor control valve which is downstream
of Seller’s Free State metering facilities at Seller’s Jackson Dome Field
dehydration facilities to the inlet valves which are downstream of all delivery
points on the pipeline, including the 4.4 mile lateral pipeline to the
Martinville Field, as more specifically described in Exhibit
A.

       

      (b)           The
specific assets and properties comprising the Pipeline System shall also include
the following:

       

      (i)           the
pipeline comprising the Free State pipeline system (the
“Pipeline”);

       

      (ii)          the
surface leases, easements, rights of way, Permits and other grants described in
Exhibit B
(collectively, the “Rights of Way”);

       

      (iii)         the
contracts, agreements and instruments listed in Exhibit C (the “Contracts”);

       

      (iv)         the
motor control valves, side valves, and meters, as shown on Exhibit A (the “Equipment”);

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (v)          as
they may exist on the Closing Date, copies of all studies, analyses, as-built
drawings, blueprints, plans, constructions, specifications, surveys, reports,
diagrams, and repair records related to the Pipeline System;

       

      (vi)         to
the extent transferable to Purchaser, all warranties, indemnities and guarantees
to Seller from Seller’s vendors and suppliers with respect to materials, goods
or services supplied to Seller in connection with the construction, operation,
repair and maintenance of the Pipeline System; and

       

      (vii)        all
rights, claims or causes of action pertaining to the Pipeline
System.

       

      (c)           Purchaser
acknowledges that portions of the Pipeline System (including lateral lines) are
located on fee property owned by Seller and Purchaser shall have access to such
portions pursuant to Easement and Road Agreements, as discussed hereunder, and
Purchaser shall have power supplied to such portions pursuant to Power
Agreements, as discussed hereunder.

       

      2.2           Assumed
Liabilities.  At
Closing, Purchaser shall assume and timely perform, perform and discharge in
accordance with their respective terms, the following liabilities and
obligations of Seller (collectively, the “Assumed
Liabilities”):

       

      (a)           all
liabilities and obligations of Seller with respect to the Rights of Way or under
the Contracts that are due or to be performed after the Closing
Date;

       

      (b)           any
transfer taxes applicable to the transfer of the Pipeline System;

       

      (c)           all
liabilities and obligations relating to prorated Pipeline System Taxes and other
prorated amounts required to be paid by Purchaser arising under Article VIII of, or arising
elsewhere under, this Agreement; and

       

      (d)           all
other liabilities and obligations with respect to the Pipeline System or the
use, occupancy, ownership, maintenance or operation thereof, including but not
limited to liabilities and obligations for Pipeline System Taxes not covered by
Section 2.2(c) above, that first exist and arise, or are due or to be performed,
from and after the Effective Time on the Closing Date, as those terms are
defined in Article
III below.

       

      2.3           Excluded
Liabilities

       

      .  Notwithstanding
anything hereinto the contrary, the Purchaser shall not and does not assume or
agree to pay, perform or discharge any Excluded Liabilities.  The
“Excluded
Liabilities” means:

       

      (a)           all
liabilities and obligations of Seller with respect to the Rights of Way or under
the Contracts that are due or to be performed on or prior to the Closing
Date;

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (b)           all
liabilities and obligations relating to prorated Pipeline System Taxes and other
prorated amounts required to be paid by Seller arising under Article VIII of, or arising
elsewhere under, this Agreement;

       

      (c)           all
other liabilities and obligations with respect to the Pipeline System or the
use, occupancy, ownership, maintenance or operation thereof that first exist and
arise, or are due to be performed prior to the Effective Time on the Closing
Date; 

       

      (d)           all
liabilities and obligations of Seller for Taxes (expressly excluding those
transfer taxes specifically assumed by Purchaser pursuant to Section 2.2(b)
above and those Pipeline System Taxes expressly assumed by Purchaser pursuant to
Section 2.2(c) and Section 2.2(d) above); and

       

      (e)           all
other obligations or liabilities of Seller or otherwise related to the Pipeline
System not included within the definition of Assumed Liabilities.

       

      ARTICLE
III.

      PURCHASE
AND SALE OF PIPELINE SYSTEM

       

      3.1           Sale and Delivery of
Pipeline System.  Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing provided for in Section 3.3, Seller shall sell, transfer, convey, assign
and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from
Seller, as of the Effective Time (as defined below) on the Closing Date (as
defined in Section 3.3 hereof), all of Seller’s right, title and interest in and
to the Pipeline System, free of all liens, charges, mortgages, security
interests, pledges or other encumbrances of any nature whatsoever, claimed by
any party claiming by, through or under Seller but not otherwise, except for
Permitted Encumbrances.  The “Effective Time” shall mean 7:00 a.m.
Central Standard Time on the Closing Date.

       

      3.2           Consideration.  Upon
the terms and subject to the conditions set forth in this Agreement, in
consideration of the aforesaid sale, conveyance, assignment, transfer and
delivery of all of Seller’s rights, title and interest in and to the Pipeline
System as provided in Section 3.1 above, Purchaser will assume all Assumed
Liabilities in connection with the Pipeline System from and after Closing, and
Purchaser shall pay to Seller consideration totaling Seventy-Five Million and
No/100 Dollars ($75,000,000) (the “Purchase Price”),
consisting of the following: (a) Fifty Million and No/100 Dollars
($50,000,000) in immediately available funds to be paid to Seller by Federal
Reserve wire transfer, plus (b) issuance to
Seller or its affiliates by Genesis Energy, L.P. (“Genesis MLP”) of that
number of Common Units of Genesis MLP representing limited partner interest in
Genesis MLP (“Genesis
Common Units”) determined by dividing Twenty-Five Million and No/100
Dollars ($25,000,000) by the average, closing price on the American Stock
Exchange of a Genesis Common Unit during the five consecutive trading days
ending on the date that is the second trading day immediately following the
Closing Date, and rounding such number of Genesis Common Units up to the nearest
whole number of Genesis Common Units.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      3.3           Closing.  The
closing of the sale and purchase contemplated by this Agreement (the “Closing”) shall take
place on the date of this Agreement as hereinabove stated.  The date
on which the Closing occurs is referred to herein as the “Closing
Date.”

       

      3.4           Allocation of Purchase
Price.  The
Purchase Price shall be allocated among the assets and properties comprising the
Pipeline System acquired by the Purchaser from Seller pursuant to this
Agreement, as shall mutually be agreed to by the Purchaser and Seller on or
before the Closing Date.  Such agreed allocation of the Purchase Price
shall be set forth on Exhibit 3.4 attached
hereto.  Purchaser and Seller agree that they shall use these
allocations to prepare, on a consistent basis, and file as required, Form 8594
under Section 1060 of the Internal Revenue Code and not to take any position
inconsistent therewith upon examination of any tax return, in any refund claim,
in any litigation, investigation or otherwise, unless required by Applicable
Laws or with the consent of the other Party.

       

      3.5           Deliverables at
Closing.

       

      (a)           Simultaneously
with the execution of this Agreement, at the Closing, Seller is conveying the
Pipeline System to Purchaser, and delivering to Purchaser the following (the
documents referred to in clauses (i) and (ii) below being herein referred to as
the “Conveyance
Agreements”, and together with the Transportation Services Agreement,
Right of First Refusal and Option to Purchase Agreement, Special Covenants and
Representations Agreement, Proration Agreement, Easement and Road Agreements and
Power Agreements shall be collectively the “Ancillary
Agreements”):

       

      (i)           a
Pipeline Deed, Bill of Sale and Assignment of Rights of Way Interest in
substantially the form attached hereto as Exhibit 3.5(a)(i)
conveying the Pipeline and Equipment and the Rights of Way to
Purchaser;

       

      (ii)          a
Assignment and Assumption of Contracts in substantially the form attached hereto
as Exhibit
3.5(a)(ii) assigning all Contracts comprising a part of the Pipeline
System to Purchaser;

       

      (iii)         a
certified copy of the resolutions of the Board of Managers of Seller by which
the disposition of the Pipeline System was authorized;

       

      (iv)         a
certificate of the Secretary or Assistant Secretary of Seller evidencing the
incumbency and specimen signature of the officer executing documents to be
delivered at the Closing on behalf of Seller;

       

      (v)          a
Transportation Services Agreement in substantially the form attached hereto as
Exhibit
3.5(a)(v) by and between Seller and Purchaser;

       

      (vi)         a
Right of First Refusal and Option to Purchase Agreement in substantially the
form attached hereto as Exhibit 3.5(a)(vi) by
and between Seller, Genesis Free State Holdings, LLC (“Genesis Holdings”) and
Purchaser;

       

      (vii)        a
Special Covenants and Representations Agreement in substantially the form
attached hereto as Exhibit 3.5(a)(vii)
by and between Seller, Genesis Holdings and Genesis MLP;

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (viii)       any
other agreements, documents, instruments and writings required to be delivered
by Seller to Purchaser at or prior to the Closing pursuant to this
Agreement;

       

      (ix)          a
legal opinion from counsel to the Seller in the form attached hereto as Exhibit 3.5(a)(ix)
(the “Seller’s
Legal Opinion”);

       

      (x)           a
certification to Purchaser in a form acceptable to Purchaser as required by
regulations under Section 1445 of the Internal Revenue Code, that Seller is not
a “foreign person” within the meaning of Treasury Regulations 1.1445-2(b)(2)(i)
(the “FIRPTA
Affidavit”);

       

      (xi)          all
Required Consents (as defined in Section 6.1 below) set forth in Exhibit
3.5(a)(xi)-(1), other than the Outstanding Consents (as defined in
Section 6.1 below) set forth in Exhibit
3.5(a)(xi)-(2) which will be subject to Section 6.1
below;

       

      (xii)         a
Proration Agreement in substantially the form attached hereto as Exhibit 3.5(a)(xii)
by and between Seller and Purchaser;

       

      (xiii)        all
Easement and Road Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xiii)
by and between Seller and Purchaser; 

       

      (xiv)        the
Guaranty in the form attached hereto as Exhibit 3.5(a)(xiv)
executed by Denbury Resources Inc., in favor of Purchaser; and

       

      (xv)         all
Power Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xv) by
and between Seller and Purchaser.

       

      (b)           Simultaneously
with the execution of this Agreement, at Closing, Purchaser is delivering to
Seller the following:

       

      (i)           the
cash portion of the Purchase Price;

       

      (ii)          a
certified copy of the resolutions of the sole Member of Purchaser and the Audit
Committee of Genesis MLP by which the acquisition of the Pipeline System was
authorized;

       

      (iii)         a
certificate of the Secretary or Assistant Secretary of Purchaser evidencing the
incumbency and specimen signature of the officer executing documents to be
delivered at the Closing on behalf of Purchaser;

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (iv)         a
Transportation Services Agreement in substantially the form attached hereto as
Exhibit
3.5(a)(v) by and between Seller and Purchaser;

       

      (v)         
a Right of First Refusal and Option to Purchase Agreement in substantially the
form attached hereto as Exhibit 3.5(a)(vi) by
and between Seller, Genesis Holdings and Purchaser;

       

      (vi)         a
Special Covenants and Representations Agreement in substantially the form
attached hereto as Exhibit 3.5(a)(vii)
by and between Seller, Genesis Holdings and Genesis MLP;

       

      (vii)        executed
counterparts of the Conveyance Agreements;

       

      (viii)       a
legal opinion from counsel to Purchaser in the form attached hereto as Exhibit 3.5(b)(viii)
(the “Purchaser’s
Legal Opinion”);

       

      (ix)          a
Proration Agreement in substantially the form attached hereto as Exhibit 3.5(a)(xiii)
by and between Seller and Purchaser;

       

      (x)           any
other agreements, documents, instruments and writings required to be delivered
by Purchaser to Seller at or prior to the Closing pursuant to this
Agreement;

       

      (xi)          all
Easement and Road Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xiv)
by and between Seller and Purchaser;

       

      (xii)         all
Power Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xvii)
by and between Seller and Purchaser; and

       

      (xiii)        a
copy of the tax opinion addressed to Genesis MLP and Genesis Energy, Inc.,
referenced in Section 10.17 below.

       

      (c)           On
the fifth (5th)
Business Day following the Closing, Purchaser will  deliver to Seller
the Genesis Common Units.

       

      ARTICLE
IV.

      REPRESENTATIONS
AND WARRANTIES OF SELLER

       

      Seller
hereby represents and warrants to Purchaser that as of the Closing
Date:

       

      4.1           Organization and
Authority.  Seller
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to
transact business in the State of Mississippi, and has full power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby.  Seller and its applicable Affiliates have full power and
authority to enter into the Ancillary Agreements and each other agreement,
instrument, certificate, exhibit, schedule or other document that is required by
this Agreement to be executed by Seller or its Affiliates at Closing and to
carry out the transactions contemplated thereby.  The execution and
delivery of this Agreement, the Ancillary Agreements and the Other Seller
Documents (as defined in Section 4.2 below), and the consummation of the
transactions contemplated hereby and thereby by Seller and its applicable
Affiliates have been duly and validly authorized by all necessary action of
Seller and its applicable Affiliates.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      4.2           Execution and
Effect.  This
Agreement and the Ancillary Agreements have been (and at Closing each other
agreement, instrument, certificate, exhibit, schedule or other document that is
required by this Agreement to be executed and delivered by Seller or its
Affiliates, which are herein called collectively the “Other Seller Documents”)
duly and validly executed and delivered by Seller and its applicable Affiliates
and assuming the due authorization, execution and delivery of this Agreement and
Ancillary Agreements and such other documents to which Purchaser is a party by
Purchaser, constitutes a valid, binding and enforceable obligation of Seller and
its applicable Affiliates; subject, however, to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
effect relating to the rights and remedies of creditors, as well as to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

       

      4.3           No
Violation.  Neither
the execution and delivery of this Agreement, the Ancillary Agreements or the
Other Seller Documents by Seller and its applicable Affiliates nor the
consummation by Seller and its applicable Affiliates of the transactions
contemplated hereby or thereby (a) violates any provision of the Limited
Liability Company Agreement of Seller or the formation documents of such
applicable Affiliates, (b) subject to obtaining the Outstanding Consents which
are set forth on Exhibit
3.5(a)(xi)-(2), constitutes a breach of or default under (or an event
that, with the giving of notice or passage of time or both, would constitute a
breach of or default under), or will result in the termination of, or accelerate
the performance required by, or result in the creation or imposition of any
security interest, lien, charge or other encumbrance upon Seller’s interest in
the Pipeline System under, any material contract, commitment, understanding,
agreement, arrangement or restriction of any kind or character to which Seller
is a party or by which Seller or any of its assets are bound ((provided,
however, that this Section 4.3 shall not be construed as constituting a
representation or warranty as to either (i) whether or not any of the
Outstanding Consents, which are set forth on Exhibit 3.5 (a)(xi)-(2), will be
obtained or (ii) the effect of failing to obtain any such Outstanding Consent),
or (c) violates in any material respect any statute, law, regulation or rule, or
any judgment, decree, writ or injunction or any Governmental Body applicable to
Seller or any of its assets.

       

      4.4           Title to Rights of
Way.  Except
as set forth on Schedule 4.4, the Rights of Way (including easements and other
non-fee property) identified in Exhibit B constitute
all material Rights of Way encompassing, relating to, or required for the proper
operation of, the Pipeline System, and Seller has title thereto, free and clear
of all liens, charges, mortgages, security interests, pledges or other
encumbrances of any nature whatsoever, claimed by any party claiming by, through
or under Seller but not otherwise, except for the Permitted
Encumbrances.

       

      4.5           Title to Pipeline and
Equipment.  The
Equipment shown on Exhibit A constitutes
all material motor control, side valves and meters relating to, or required for
the proper operation of, the Pipeline System, and Seller has title thereto, free
and clear of all liens, claims, charges, mortgages, security interests, pledges
or other encumbrances of any nature whatsoever, claimed by any party claiming
by, through or under Seller but not otherwise, except for the Permitted
Encumbrances (to the extent same pertain to or affect Equipment).

       

      
        
           

        

        
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      4.6           Litigation.  Except
as set forth in Schedule 4.6 and
to Seller’s Knowledge: (a) there are no judgments, orders, writs or
injunctions of any Governmental Body, presently in effect or pending or
threatened, against Seller with respect to its interest in the Pipeline System
or the operation thereof, or, which, if adversely determined, would impair or
prohibit the consummation of the transaction contemplated hereunder or under the
Ancillary Agreements, (b) there are no claims, actions, suits or
proceedings by or before any Governmental Body pending or threatened by or
against Seller with respect to its interest in the Pipeline System or the
operation thereof, and (c) the Pipeline System is not the subject of any pending
or threatened claim, demand, or notice of violation or liability from any
Person.

       

      4.7           Compliance with Applicable
Law.  Except
(a) as disclosed in Schedule 4.7 and
(b) with respect to Environmental Law, which are addressed in
Section 4.11(b) below, to Seller’s Knowledge, Seller has complied with all
material provisions
of all Applicable Laws, judgments and decrees applicable to its operation and
use of the Pipeline System as presently conducted and Seller has not received
any written notification, and is not aware of any planned written notification,
that it is not presently in compliance therewith.

       

      4.8           Condition of Pipeline
System.  Except
as disclosed in Schedule 4.8, the
Pipeline System is in good operating condition, complies with Applicable Laws
and meets prevailing industry standards for operation and use.

       

      4.9           Taxes.  All
Tax Returns required to be filed by federal, state or local laws with respect to
the Pipeline System Taxes prior to Closing have been filed by Seller prior to
Closing, and all Pipeline System Taxes imposed or assessed, whether federal,
state or local, which are due or payable for any period ending on or prior to
the Closing Date, have been paid or provided for prior to Closing.

       

      4.10           Preferential Purchase
Rights.  There
are no preferential purchase rights, options, or other rights in any Person not
a party to this Agreement, to purchase or acquire any interest in the Pipeline
System, in whole or in part.

       

      4.11           Environmental
Matters.

       

      (a)           Except
as disclosed in Schedule 4.11(a), (i)
Seller has not received any written notification that asserts (and does not have
any Knowledge) that any portion of the Pipeline System is not in compliance with
applicable Environmental Law and (ii) to Seller’s Knowledge, no condition or
circumstance exists which would give rise to any Environmental Costs and
Liabilities related to the Pipeline System.

       

      (b)           Except
as disclosed in Schedule 4.11(b), (i)
all of the Environmental Permits have been granted by the appropriate authority
and (ii) are valid and in full force and effect. There are no material actions
or proceedings for the revocation thereof or any other material action or
proceeding before any Governmental Body involving any Environmental
Permit.

      
        
           

        

        
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      4.12           Contracts and Rights of
Way.  Other
than the Rights of Way, Exhibit C contains a
list of the contracts, agreements and other documents and instruments to which
Seller or any of its Affiliates is a party or otherwise constituting part of the
Pipeline System, and each such Contract is in full force and
effect.  The Contracts, together with the Rights of Way and the
Ancillary Agreements constitute all of the material contracts, agreements,
rights of way, licenses, permits, and other documents and instruments required
for the operation and business of the Pipeline System.  Except for
obtaining the Outstanding Consents, Seller and its applicable Affiliates have
performed all material obligations required to be performed by them to date
under the Contracts and the Rights of Way, and are not in default under any
obligation of any such contract or Right of Way. To the Seller’s Knowledge, no
other party to any Contract or Right of Way is in default
thereunder.

       

      4.13           Disclosure.  The
representations and warranties contained in this Article IV do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements and information contained in this Article IV not
misleading.  To Seller’s Knowledge, there is no fact that has not been
disclosed in this Agreement or the Exhibits that has or could be reasonably
expected to impair the ability of Seller to perform this Agreement, any
undertaking herein or the transactions contemplated hereby or the Ancillary
Agreements.

       

      4.14           No Unsatisfied
Liabilities.  There
are no debts, liabilities or obligations of the Seller secured by or burdening
the Pipeline System other than (i) such debts, liabilities or obligations that
will be satisfied, or the security interest released, in full at or prior to
Closing and (ii) such obligations to be performed following the Closing Date
under the terms of the Rights of Way and Contracts or imposed by Applicable
Law.

       

      4.15   Fairness
Opinion.   Seller has received a fairness opinion
regarding the fairness from a financial point of view to Seller of the Purchase
Price to be received by Seller hereunder issued to Seller by Morgan Stanley Co.
Incorporated and a true, correct and complete copy of such fairness opinion has
been provided to Purchaser prior to the Closing Date.

       

      4.16           Investment Intent;
Investment Experience; Restricted Securities.  Seller is an
“accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act of 1933;
(ii) has sufficient knowledge and experience in investing so as to be able to
evaluate the risks and merits of its investment in Genesis MLP and it is able
financially to bear the risks thereof; (iii) has received or has had full access
to all the information it has requested and considers necessary or appropriate
to make an informed investment decision with respect to the Genesis Common Units
to be acquired by Seller; (iv) is acquiring such Genesis Common Units for its
own account for the purpose of investment and not with a view to, or for resale
in connection with, any distribution thereof within the meaning of the
Securities Act of 1933; (v) has made its own independent inquiry into and an
independent judgment concerning, Genesis MLP and such Genesis Common Units; (vi)
understands that such Genesis Common Units have not been registered under the
Securities Act of 1933; and (vii) understands and agrees that such Genesis
Common Units may not be sold, pledged, hypothecated or otherwise transferred
except pursuant to an applicable exemption from registration under the
Securities Act of 1933 and other applicable securities laws.

       

      
        
           

        

        
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      ARTICLE
V.

      REPRESENTATIONS
AND WARRANTIES OF PURCHASER

       

      Purchaser
hereby represents and warrants to Seller that as of the Closing
Date:

       

      5.1           Organization and
Authority.  Purchaser
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is (or on or prior to the
Closing will be) duly qualified to transact business in the State of
Mississippi, and has full power and authority to enter into this Agreement and
to carry out the transactions contemplated hereby. Purchaser and its applicable
Affiliates have full power and authority to enter into the Ancillary Agreements
and each other agreement, instrument, certificate, exhibit, schedule or other
document that is required by this Agreement to be executed by Purchaser or its
Affiliates at Closing and to carry out the transactions contemplated
thereby.  The execution and delivery of this Agreement, the Ancillary
Agreements and the Other Purchaser Documents (as defined in Section 5.2 below)
and the consummation of the transactions contemplated hereby and thereby by
Purchaser and its applicable Affiliates have been duly and validly authorized by
all necessary action of Purchaser and its applicable Affiliates.

       

      5.2           Execution and
Effect.  This
Agreement and the Ancillary Agreements have been (and at Closing each other
agreement, instrument, certificate, exhibit, schedule or other document that is
required by this Agreement to be executed and delivered by Purchaser or its
Affiliates, which are herein called collectively the “Other Purchaser
Documents”) duly and validly executed and delivered by Purchaser and its
applicable Affiliates and, assuming the due authorization, execution and
delivery of this Agreement, Ancillary Agreements and such other documents to
which Seller is a party by Seller, constitutes a valid, binding, and enforceable
obligation of Purchaser and its applicable Affiliates; subject, however, to the
effect of bankruptcy, insolvency, reorganization, moratorium and similar laws
from time to time in effect relating to the rights and remedies of creditors, as
well as to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

       

      5.3           No
Violation.  Neither
the execution and delivery of this Agreement, the Ancillary Agreements or the
Other Purchaser Documents by
Purchaser and its applicable Affiliates nor the consummation by Purchaser and
its applicable Affiliates of the transactions contemplated hereby or thereby
(a) violates any provision of the Limited Liability Company Agreement of
Purchaser or the formation documents of such applicable Affiliates; (b)
constitutes a material breach of or default under (or an event that, with the
giving of notice or passage of time or both, would constitute a material breach
of or default under), or will result in the termination of, or accelerate the
performance required by, or result in the creation or imposition of any security
interest, lien, charge or other encumbrance upon any of the assets of Purchaser
under, any material contract, commitment, understanding, agreement, arrangement
or restriction of any kind or character to which Purchaser is a party or by
which Purchaser or any of its assets are bound, or (c) violates in any material
respect any statute, law, regulation or rule, or any judgment, decree, order,
writ or injunction of any Governmental Body applicable to Purchaser or any of
its assets.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      5.4           Sufficiency of
Funds. At
Closing, Purchaser has funds sufficient to consummate the transactions
contemplated hereby.

       

      5.5           Disclaimer.
PURCHASER HAS MADE SUCH INDEPENDENT INSPECTIONS, ESTIMATES, COMPUTATIONS,
REPORTS, STUDIES, AND EVALUATIONS OF THE PIPELINE SYSTEM AS IT DESIRED AND HAS
SATISFIED ITSELF PRIOR TO THE CLOSING WITH RESPECT TO THE CONDITION OF THE
PIPELINE SYSTEM. PURCHASER FURTHER ACKNOWLEDGES THAT SELLER HAS NOT MADE AND IS
NOT MAKING ANY REPRESENTATION OR WARRANTY CONCERNING THE PRESENT OR FUTURE VALUE
OF THE POSSIBLE INCOME, COSTS OR PROFITS IF ANY, TO BE DERIVED FROM THE PIPELINE
SYSTEM.  

       

      FURTHERMORE,
PURCHASER ACKNOWLEDGES THAT THE PIPELINE SYSTEM HAS BEEN USED PRIOR TO THE
CLOSING FOR THE TRANSPORTATION OF CARBON DIOXIDE. PURCHASER ACKNOWLEDGES THAT
(A) IT HAS HAD ACCESS TO AND AN OPPORTUNITY TO INSPECT THE PIPELINE SYSTEM FOR
ALL PURPOSES, INCLUDING, WITHOUT LIMITATION, FOR THE PURPOSES OF DETECTING THE
PRESENCE OF HAZARDOUS OR TOXIC SUBSTANCES, ENVIRONMENTAL HAZARDS AS OTHER
CONTAMINATION OR POLLUTION, (B) IT HAS SATISFIED ITSELF AS TO THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF THE PIPELINE SYSTEM AND (C) IN MAKING THE DECISION TO
ENTER INTO THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY,
PURCHASER HAS RELIED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION OF THE PIPELINE
SYSTEM, THE RECORDS AND ENVIRONMENTAL REPORTS RELATED THERETO AND THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS AND AGREEMENTS OF SELLER IN THIS
AGREEMENT.

       

      NOTWITHSTANDING
THE FOREGOING, PURCHASER AND SELLER ACKNOWLEDGE AND AGREE THAT NOTHING CONTAINED
IN THIS SECTION 5.5 SHALL LIMIT THE SELLER’S INDEMNIFICATION OBLIGATIONS
PROVIDED IN ARTICLE VII OF THIS AGREEMENT OR THE ALLOCATION OF THE ASSUMED
LIABILITIES AND THE EXCLUDED LIABILITIES PROVIDED FOR UNDER THIS
AGREEMENT.

       

      5.6           Evaluation by
Purchaser.           By
reason of Purchaser’s Knowledge and experience in the evaluation, acquisition
and operation of similar properties, Purchaser has evaluated the merits and
risks of purchasing the Pipeline System and has formed an opinion based solely
upon Purchaser’s Knowledge and experience and upon Seller’s representations and
warranties set forth in Article
IV hereof and Seller’s and Purchaser’s other agreements
contained herein and not upon any other representations or warranties made by
Seller or any of its representatives.

       

      5.7           Fairness
Opinion.   Purchaser
represents that the Audit Committee of the Board of Directors of the general
partner of Genesis MLP has received the opinion of Credit Suisse Securities
(USA) LLC to the effect that, as of the date of such opinion, (i) the Purchase
Price provided for under this Agreement and (ii)
the  Consideration  as defined in and provided for under
the  Closing Agreement by and between Denbury Onshore, LLC and Genesis
NEJD Pipeline, LLC , in the aggregate, is fair, from a financial point of
view, to Genesis MLP.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      5.8           Compliance with
Laws.  Purchaser
shall promptly obtain, or have transferred to its name, and maintain all permits
or consents required by public or private parties in connection with the
Pipeline System purchased.

       

      5.9           Disclosure.  The
representations and warranties contained in this Article V do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article V not
misleading.  To the Purchaser’s Knowledge, there is no fact that has
not been disclosed in this Agreement, that has or could be reasonably expected
to impair the ability of Purchaser to perform this Agreement, any undertaking
herein or the transactions contemplated hereby.

       

      ARTICLE
VI.

      OTHER
AGREEMENTS AND OBLIGATIONS OF THE PARTIES

       

      6.1           Assignments Requiring
Consents, Preferential Purchase Rights.

       

      (a)           Exhibit
3.5(a)(xi)-(1) sets forth all consents of any third-party required in
connection with the assignment of any rights of Seller under Rights of Way,
including Environmental Permits or any occupational health or safety laws,
licenses, franchises or any other assets comprising a part of the Pipeline
System (the “Required
Consents”).  All Required Consents that have not been obtained
as of the Closing Date are set forth on Exhibit
3.5(a)(xi)-(2) (the “Outstanding
Consents”). Seller shall, subject to the terms of this Section 6.1, use
commercially reasonable efforts to obtain all Outstanding Consents within a
reasonable time following Closing. The refusal of any third-party (other than an
Affiliate of Seller) to give any Outstanding Consent or the fact or claim that
the attempted assignment of any rights by Seller is ineffective because of the
failure to obtain any Outstanding Consent shall not constitute a breach of any
of the representations, warranties or covenants of Seller hereunder, including,
without limitation, the representation and warranty in Section 4.3(b), provided
that Seller complies with this Section 6.1, and further assists Purchaser in
making or seeking alternative arrangements (including, but not limited to,
granting right-of-way licenses to Purchaser). Purchaser also agrees that it
shall have no claim against Seller based upon any failure to obtain any
Outstanding Consent (provided that Seller shall otherwise comply with the terms
of this Agreement, including this Section 6.1). 

       

      (b)           In
each instance where an Outstanding Consent has not been obtained as of the
Closing, Seller shall, for no additional consideration, to the extent permitted
by Applicable Law or the terms of the applicable contract, enter into such
alternative arrangements and agreements with Purchaser as may be appropriate in
order to permit Purchaser to realize, receive, and enjoy substantially similar
rights and benefits and to enable Purchaser to conduct the operation of the
Pipeline System until such consents are obtained.  If, after the
exercise of efforts consistent with the standard set forth in clause (a)
immediately above, any such Outstanding Consents are not obtained, to the extent
permitted by Applicable Law or the terms of the applicable contract, Seller
shall cooperate with Purchaser in any reasonable efforts of Purchaser to provide
for alternative arrangements (including, but not limited to, the obtaining by
Purchaser of new right-of-way licenses) designed to provide for the benefit of
Purchaser any and all rights of Seller in and to such right-of-way grant. To the
extent an assignment of a right-of-way grant is prohibited by law or otherwise,
nothing herein shall constitute or be construed as an attempt of an assignment
thereof.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      (c)           Notwithstanding
anything to the contrary stated in this Section 6.1, Purchaser assumes the risk
of any transfer restrictions or renegotiation requirements associated with, or
the expiration of, any Rights of Way, Permits, franchises, Contracts or other
agreements applicable to the Pipeline System.

       

      6.2           No Solicitation of
Employees.  For
a period of one (1) year following the Closing, Purchaser will not, without
Seller’s prior written consent, directly or indirectly, (i) cause or
attempt to cause any employee of Seller to terminate his or her employment
relationship with Seller, (ii) interfere or attempt to interfere with the
relationship between the Seller and any employee of Seller, or (iii) solicit or
attempt to solicit any employee of Seller; provided, however, that the
restrictions set forth in this Section 6.2 shall not be applicable with respect
to any employee who is terminated by Seller after the Closing or who is
solicited by Purchaser with the written consent of Seller.

       

      6.3           Incidental
Contamination.  Purchaser
acknowledges that the Pipeline System may contain Naturally Occurring
Radioactive Material ("NORM") in various potential forms.  Purchaser
also expressly understands that special procedures may be required for the
remediation, removal, transportation and disposal of NORM from the inside or
outside of the piping, equipment and other personal property included of the
Pipeline System.  Notwithstanding any contrary provision or definition
contained herein, in connection with these substances affixed to the inside or
outside of the piping, equipment and other personal property included of the
Pipeline System, Purchaser expressly assumes all liability for or in connection
with the future abandonment and removal of the pipelines, tanks, equipment and
other personal property included in the Pipeline System and the assessment,
remediation, removal, transportation and disposal of any such pipelines,
equipment and personal property and associated activities in accordance with all
relevant rules, regulation and requirements of governmental
authorities.

       

      6.4           Document
Retention.

       

      (a)           Within
60 days after Closing, Seller shall turn over to Purchaser at Seller’s offices
copies of the following types of records and information relating to the
Pipeline System, in each case to the extent same are reasonably necessary for
the ownership of the Pipeline System by Purchaser: studies, analyses, as-built
drawings, blueprints, plans, constructions, specifications, surveys, reports,
diagrams, and repair records related to the Pipeline System.  Seller
and Purchaser agree to cooperate with each other and act in good faith in
connection with the turnover of records and information pursuant to this Section
6.4.

       

      (b)           Seller
and Purchaser agree that documents and materials relating to the Pipeline System
held by either Party shall be open for inspection by the other Party at
reasonable times and upon reasonable notice during regular business hours for
such period following the Closing Date as may be required by law or governmental
regulation, and that the other Party may during such period at its expense make
such copies thereof as it may reasonably request.

       

      (c)           From
and after the Closing Date, Seller and Purchaser shall use their reasonable
efforts to afford the other access to its employees who are familiar with the
operations of the Pipeline System for proper corporate purposes, including,
without limitation, the defense of legal proceedings. Such access may include
interviews or attendance at depositions or legal proceedings; provided, however,
that in any event all expenses (including wages and salaries) reasonably
incurred by either Party in connection with this Section 6.4(c) shall be
paid or promptly reimbursed by the Party requesting such services.

       

      
        
           

        

        
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      6.5           Further
Assurances.  Upon
the request of Seller, Purchaser agrees to execute and deliver mutually
agreeable, specific assumption agreements with respect to the obligations and
liabilities assumed by Purchaser pursuant to this Agreement.  Each
Party agrees to comply with all notice or other requirements necessary or
required by Applicable Laws in connection with the transactions contemplated by
this Agreement and Purchaser’s assumption of obligations and liabilities
hereunder.

       

      ARTICLE
VII.

      SURVIVAL
OF OBLIGATIONS; INDEMNIFICATION

       

      7.1           Survival of
Obligations.  The
representations, warranties, covenants and agreements of the Parties contained
in this Agreement shall survive the Closing and claims may be asserted with
respect thereto to the extent permitted by this Article VII.

       

      7.2           Indemnification by
Seller.

       

      (a)           Subject
to Section 7.5 below, Seller hereby agrees to indemnify and hold Purchaser, its
Affiliates and each of their respective directors, officers, employees,
Affiliates, contractors, agents, attorneys, representatives, successors and
permitted assigns (collectively, the “Purchaser Indemnified
Parties”) harmless from and against:

       

      (i)           any
and all losses, liabilities, obligations, damages, actions, suits, proceedings,
investigations, complaints, claims, demands, assessments, judgments, penalties,
fines, costs, expenses and fees (including court costs and attorneys’ fees and
expenses), but subject to Section 7.7 below (individually, a “Loss” and,
collectively, “Losses”) to the
extent based upon or arising from or out of:

       

      (A)         any
breach of the representations, warranties, covenants or agreements made by
Seller or its Affiliates in this Agreement, the Ancillary Agreements or in the
Conveyance Agreements; or

       

      (B)          any
Excluded Liabilities.

       

      (ii)           any
and all Environmental Costs and Liabilities to the extent based upon or arising
from or out of any condition first existing prior to the Closing Date, or act or
omission by Seller or any of its Affiliates on or prior to the Closing Date with
respect to the Pipeline System, or Seller’s (or its Affiliates’) use, ownership,
occupancy, operation or maintenance thereof.  To the extent that any
Losses are also Environmental Costs and Liabilities, Seller’s only
indemnification obligation regarding such Losses will be under this Section
7.2(a)(ii).  

       

      
        
           

        

        
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      (iii)         
To the extent covered by an indemnification obligation in this Agreement, Losses
and Environmental Costs and Liabilities, are individually referred to herein as
a “Covered
Loss” and collectively referred to herein as “Covered
Losses.”

       

      (b)           Purchaser
acknowledges and agrees that Seller shall not have any liability under any
provision of this Agreement for any Covered Loss pursuant to Section 7.2 to
the extent that such Covered Loss results from action or omission by Purchaser
determined by final, non-appealable order to constitute gross negligence or
willful misconduct of Purchaser after the Closing Date.  Without in
any manner limiting Seller’s indemnification obligations in this Article VII, Purchaser shall
take and cause its Affiliates to take all reasonable steps to mitigate any
Covered Loss with respect to which indemnification is provided to Purchaser by
Seller under this Section 7.2 upon becoming aware of any condition or event
which would reasonably be expected to, or does, give rise thereto, including
incurring costs only to the minimum extent necessary to remedy the breach which
gives rise to any Covered Loss.

       

      7.3           Indemnification by
Purchaser.

       

      (a)           Subject
to Section 7.5, Purchaser hereby agrees to indemnify and hold Seller, its
Affiliates and each of their respective directors, officers, employees,
Affiliates, contractors, agents, attorneys, representatives, successors and
permitted assigns (collectively, the “Seller Indemnified
Parties”) harmless from and against:

       

      (i)           any
and all Losses to the extent based upon or arising from or out of:

       

      (A)         any
breach of the representations, warranties, covenants or agreements made by
Purchaser or its Affiliates in this Agreement, the Ancillary Agreements or the
Conveyance Agreements; or

       

      (B)          any
Assumed Liabilities.

       

      (ii)           any
and all Environmental Costs and Liabilities to the extent based upon or arising
from or out of any condition first existing after the Closing Date, or act or
omission by Purchaser or any of its Affiliates after the Closing Date with
respect to the Pipeline System, or Purchaser’s (or its Affiliates’) use,
ownership, occupancy, operation or maintenance thereof.  To the extent
that any Losses are also Environmental Costs and Liabilities, Purchaser’s only
indemnification obligation regarding such Losses will be under this Section
7.3(a)(ii).

       

      (b)           Seller
acknowledges and agrees that Purchaser shall not have any liability under any
provision of this Agreement for any Covered Loss pursuant to Section 0 to the
extent that such Covered Loss results from action or omission by Seller
determined by final, non-appealable order to constitute gross negligence or
willful misconduct of Seller after the Closing Date.  Without in any
manner limiting Purchaser’s indemnification obligations in this Article VII, Seller
shall take and cause its Affiliates to take all reasonable steps to mitigate any
Covered Loss with respect to which indemnification is provided to Seller by
Purchaser under this Section 7.3 upon becoming aware of any condition or event
which would reasonably be expected to, or does, give rise thereto, including
incurring costs only to the minimum extent necessary to remedy the breach which
gives rise to any such Covered Loss.

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      7.4           Indemnification
Procedures.

       

      (a)           In
the event that any claims shall be instituted or asserted by any Person in
respect of which indemnification may be sought under Section 7.2
or 7.3 hereof, regardless of the limitations set forth in Section 7.5 (an
“Indemnifiable
Claim”), the indemnified party shall reasonably and promptly cause notice
of such Indemnifiable Claim of which it has knowledge to be forwarded to the
indemnifying party, provided, however, that the omission to so notify such
indemnifying party shall not relieve such indemnifying party from any liability
which such indemnifying party may have to the indemnified party unless it is
determined by non-appealable, final order that such indemnifying party is
materially prejudiced in its defense by reason of such delay.  The
indemnifying party shall have the right, at its sole option and expense, and
using counsel of its choice, which must be reasonably satisfactory to the
indemnified party, to elect to defend against, negotiate, settle or otherwise
deal with any such Indemnifiable Claim, subject to the limitations set forth in
this Section 7.4.  The indemnifying party shall within thirty (30)
days (or sooner, if the nature of the Indemnifiable Claim so requires) of
receiving notice thereof from the indemnified party, notify the indemnified
party whether or not it elects to defend against, negotiate, settle or otherwise
deal with any such Indemnifiable Claim.  If the indemnifying party
elects not to defend against, negotiate, settle or otherwise deal with any
Indemnifiable Claim, or if the indemnifying party fails to notify the
indemnified party within thirty (30) days (or sooner, if the nature of the
Indemnifiable Claim so requires) whether or not it so elects, the indemnified
party may defend against, negotiate, settle or otherwise deal with such
Indemnifiable Claim.  If the indemnifying party does elect to defend
against, negotiate, settle or otherwise deal with any such Indemnifiable Claim,
the indemnified party may participate, at his or its own expense, in dealing
with such Indemnifiable Claim; provided, however, that such
indemnified party shall be entitled to so participate with separate counsel at
the expense of the indemnifying party, and further provided, that the
indemnifying party shall not be required to pay for more than one such counsel
for all indemnified parties in connection with any Indemnifiable Claim. The
parties hereto agree to cooperate fully with each other in connection with the
defense, negotiation or settlement, or otherwise dealing with, any such
Indemnifiable Claim.  Notwithstanding anything in this
Section 7.4 to the contrary, neither the indemnifying party nor the
indemnified party shall, without the written consent of the other party, settle
or compromise any Indemnifiable Claim, or permit a default judgment or consent
to entry of any judgment with respect to such Indemnifiable Claim, unless the
claimant and such party provide to such other party an unqualified release from
all liability in respect of the Indemnifiable Claim.  If the
indemnifying party makes any payment on any Indemnifiable Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
rights of the indemnified party with respect to such Indemnifiable
Claim.

       

      7.5           Certain Limitations on
Indemnification.

       

      (a)           Notwithstanding
anything herein to the contrary, in order to be entitled to indemnification (i)
under Sections 7.2(a)(i)(A) or 7.3(a)(i)(A), a Party must give written notice
(providing reasonable detail) to the other Party of any such Covered Loss with
respect to which it seeks indemnification prior to the expiration of the fifth
(5th)
anniversary of the Closing Date (the “Fifth Anniversary”),
(ii) with respect to all other Covered Losses, a Party must give written notice
(providing reasonable detail) to the other Party of any such Covered Loss with
respect to which it seeks indemnification at any time following the Closing
Date.  Except as provided above, any right to indemnification under
Sections 7.2(a)(i)(A) or 7.3(a)(i)(A) for a Covered Loss of which notice is not
given by a Party on or prior to the Fifth Anniversary will be irrevocably and
unconditionally released and waived.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      (b)           Notwithstanding
any other provision of this Article
VII, neither Seller nor Purchaser shall have any indemnification
obligations for Covered Losses under Sections 7.2(a)(i)(A) or 7.3(a)(i)(A), (i)
for any individual Covered Loss in an amount less than $50,000 and (ii) in
respect of each individual Covered Loss in an amount equal to or greater than
$50,000, unless the aggregate amount of all such Covered Losses exceeds
$250,000   In no event shall the aggregate indemnification to be
paid by Seller under Section 7.2(a)(i)(A) exceed $15,000,000.  In no
event shall the aggregate indemnification to be paid by Purchaser under Section
7.3(a)(i)(A) exceed $15,000,000.

       

      (c)           No
representation or warranty of Seller contained herein shall be deemed untrue or
incorrect, and Seller shall not be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact, circumstance or event
of which is disclosed in response to another representation or warranty
contained in this Agreement.

       

      (d)           ALL
RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY, AND INDEMNITIES IN THIS
AGREEMENT, INCLUDING THOSE IN THIS ARTICLE VII SHALL APPLY EVEN IN THE EVENT OF
THE SOLE, JOINT AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR FAULT OF THE
PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED OR
INDEMNIFIED.

       

      7.6           Tax Treatment of Indemnity
Payments. Seller
and Purchaser agree to treat any indemnity payment made pursuant to this Article
VII as an adjustment to the Purchase Price for federal, state
and local income tax purposes.

       

      7.7           No Consequential
Damages.  Notwithstanding
anything to the contrary elsewhere in this Agreement, no Party shall, in any
event, be liable to any other Party or such other Party’s Related Indemnified
Parties (the Seller’s Related Indemnified Parties are the Persons other than
Seller included in the Seller Indemnified Parties and the Purchaser’s Related
Indemnified Parties are the Person’s other that Purchaser included in the
Purchaser Indemnified Parties) for any consequential, incidental, indirect,
special or punitive damages of such other Party or such other Party’s Related
Indemnified Parties, including loss of future revenue, income or profits,
diminution of value or loss of business reputation or opportunity relating to
the breach or alleged breach hereof; provided, however,
that a Party may be liable to the other Party or such other Party’s Related
Indemnified Parties for consequential, incidental, indirect, special or punitive
damages (including loss of future revenue, income or profits, diminution in
value or loss of business reputation or opportunity relating to the breach or
alleged breach hereof) paid by such other Party or such other Party’s Related
Indemnified Parties to a third party which are part of a Covered Loss with
respect for which indemnification is provided under this Article
VII.

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      7.8           Exclusive
Remedy.  The
sole and exclusive remedy for any breach or inaccuracy, or alleged breach or
inaccuracy, of any representation or warranty in this Agreement or any covenant
or agreement to be performed on or after the Closing Date or otherwise related
to this transaction, shall be indemnification in accordance with this Article VII or any other express
indemnification provisions in this Agreement. In furtherance of the foregoing,
the parties hereby waive, to the fullest extent permitted by applicable law, any
and all other rights, claims and causes of action (including rights of
contribution under Environmental Laws or otherwise, if any) known or unknown,
foreseen or unforeseen, which exist or may arise in the future, that it may have
against Seller or Purchaser, as the case may be, arising under or based upon any
federal, state or local law (including any such Environmental Law relating to
environmental matters or arising under or based upon any securities law, common
law or otherwise).

       

      ARTICLE
VIII.

      TAXES
-PRORATIONS AND ADJUSTMENTS

       

      8.1           Proration.  At
Closing, Purchaser and Seller have entered into a Proration Agreement,
substantially the form attached hereto as Exhibit 3.5(a)(xiii)
which agreement includes without limitation, a mechanism to reconcile the
payment obligations for Pipeline System Taxes, fees and other costs relating to
the Pipeline System as follows:

       

      (a)           All
Pipeline System Taxes for a period that straddles (i.e. that begins before and
ends after) the Closing Date (hereinafter referred to as a “Straddle Period”)
shall be prorated between Purchaser and Seller as of the Closing Date based upon
the number of days during the applicable Straddle Period each party owned the
Pipeline System, with the Purchaser being treated as the owner on the Closing
Date.  For purposes of this Agreement, Pipeline System Taxes shall be
prorated between Purchaser and Seller as of the Closing Date regardless of when
such Pipeline System Taxes are actually billed and payable.  At
Closing, Seller’s pro rata portion of any unpaid Pipeline System Taxes for a
Straddle Period shall be deducted from the Purchase Price to be paid to
Seller.  At Closing, Purchaser’s pro rata portion of any Pipeline
System Taxes for a Straddle Period that have been previously paid by Seller
shall be added to the Purchase Price to be paid by Purchaser to
Seller.  Purchaser shall actually pay to the taxing authority all
Pipeline System Taxes for Straddle Periods which are payable after the Closing
Date.  Notwithstanding anything in this Agreement to the contrary, no
further adjustment shall be made for any Pipeline System Taxes for a Straddle
Period which are payable after the Closing Date, and Purchaser hereby agrees to
assume the payment of all such Pipeline System Taxes effective upon Closing
Date.

       

      (b)           All
refunds, credits, debits and liabilities for taxes attributable to the Seller’s
interest in the Pipeline System for periods prior to Closing Date shall be the
sole property and entitlement or detriment of Seller, and to the extent received
or incurred by Purchaser after the Closing Date, Purchaser shall fully disclose,
account for, and except as otherwise provided for herein, remit same to or
receive same from Seller promptly.  Seller and Purchaser shall furnish
each other with such documents and other records as shall be reasonably
requested in order to confirm all proration calculations.

       

      (c)           All
(i) amounts of rents and charges for water, sewer, telephone, electricity, and
other utilities and fuel, (ii) amounts of annual permits and/or annual
inspection fees, and (iii) other such amounts and charges that are normally
subject to pro ration between a purchaser and a seller of real or personal
property interests such as rents, fees and other amounts paid by or to a seller
under any lease, other contract or arrangement covering the Pipeline System,
that are applicable to a Straddle Period (collectively “Proratable Amounts”)
shall be prorated between Purchaser and Seller as of the Closing Date based on
the number of days of the applicable Straddle Period during which each party
owned the Pipeline System, with the Purchaser being treated as the owner on the
Closing Date.  Such Proratable Amounts shall be prorated between
Purchaser and Seller as of the Closing Date regardless of when such amounts are
actually billed and payable.  At Closing, Seller’s pro rata portion of
any such Proratable Amounts shall be deducted from the Purchase Price to be paid
to Seller.  At Closing Purchaser’s pro rata portion of any such
Proratable Amounts that have been previously paid by Seller shall be added to
the Purchase Price to be paid by Purchaser to Seller.  Purchaser shall
actually pay to the applicable party all such Proratable Amounts which are
payable after the Closing Date.  Notwithstanding anything in this
Agreement to the contrary, no further adjustment shall be made for any such
Proratable Amounts which are payable after the Closing Date, and Purchaser
hereby agrees to assume the payment of all such Proratable Amounts effective
upon the Closing Date.

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      8.2           Sales
Taxes.  The
Purchase Price provided for hereunder assumes that no sales, use, transfer or
similar taxes are required to be paid to any state or other taxing authority in
connection with the sale and transfer of property pursuant to this Agreement
(including without limitation documentary transfer taxes, realty transfer taxes
and charges or fees with respect to the transfer of real property or to the
recordation of the documents necessary for the transfer of real property that
may be required for the transfer of property from Seller to Purchaser). However,
in the event any Governmental Body deems any such tax, fee or levy imposed on or
assessed against the transfer of the Pipeline System to Purchaser under this
Agreement, Purchaser shall be liable and responsible for timely payment thereof
and shall indemnify and hold Seller harmless with respect to the payment of any
such taxes, fees or levies, including any interest or penalties assessed
thereon. 
Purchaser shall also pay all fees for recording all instruments of conveyance or
applications for permits or licenses or the transfer thereof relating to the
transfer of the interests included in the Pipeline System.

       

      8.3           Cooperation. Each
Party shall provide the other Party with reasonable access to all relevant
documents, data and other information which may be required by the other Party
for the purpose of preparing tax returns and responding to any audit by any
taxing jurisdiction. Each Party shall cooperate with all reasonable requests of
the other Party made in connection with determining or contesting tax
liabilities attributable to the Pipeline System.  Notwithstanding
anything to the contrary contained in this Agreement, neither Party to this
Agreement shall be required at any time to disclose to the other Party any tax
returns or other confidential tax information.

       

      8.4           Payables.  Notwithstanding
the Closing and except to the extent covered by Sections 8.1 through 8.2,
all of the accounts payable due to third parties by Seller based upon its
ownership or operation of the Pipeline System through the Closing Date shall be
paid and borne by Seller.

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      ARTICLE
IX.

      DISPUTE
RESOLUTION

       

      9.1           Dispute
Resolution.  In
the event of a dispute between the parties as to any matter arising under this
Agreement, such dispute shall be resolved in accordance with the dispute
resolution provisions described in Exhibit D attached
hereto and incorporated herein by reference for all purposes.

       

      ARTICLE
X.

      MISCELLANEOUS

       

      10.1           No
Brokers.  Each
Party represents and warrants to the other that there are no claims for
brokerage commissions or finders’ fees or other like payments owed by such Party
to another Person in connection with the transactions contemplated by this
Agreement. Each Party will pay or discharge, and will indemnify and hold
harmless the other from and against, any and all claims for brokerage
commissions or finders’ fees incurred by reason of any action taken by such
indemnifying Party.

       

      10.2           Expenses. Except
as otherwise provided herein, each Party will pay all fees and expenses incurred
by it in connection with this Agreement and the consummation of the transactions
contemplated hereby.

       

      10.3           Further
Assurances.  Each
Party will from time to time after the Closing and without further
consideration, upon the request of the other Party, execute and deliver such
documents and take such actions as the other Party may reasonably request in
order to consummate more effectively the transactions contemplated
hereby.

       

      10.4           Assignment; Parties in
Interest.  This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the respective successors and permitted assigns of the Parties; provided that
neither Party may transfer or assign any of its rights or obligations hereunder
or any interest herein without the prior written consent of the other Party; and
provided further that the assignment by Seller of its rights under this
Agreement in the circumstances provided below shall be a permitted assignment
for the purposes of this Section 10.4 provided that no such assignment will
relieve the assigning Party of its obligations hereunder: by Seller, to an
Affiliate of Seller provided that Denbury Resources Inc. executes and delivers
an unconditional guarantee of the payment obligations of such assignee relating
to this Agreement, in favor of Purchaser, in substantially the same form as the
Guaranty Agreement.

       

      10.5           Entire Agreement;
Amendments.  This
Agreement, including the exhibits and any agreements delivered pursuant hereto,
contains the entire understanding of the Parties with respect to the sale of the
Pipeline System. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth or referred to herein or therein. This Agreement and such
other agreements supersede all prior agreements and undertakings between the
Parties with respect to the sale of the Pipeline System, except to the extent
any such prior agreement is specifically referred to herein or therein. This
Agreement may be amended or modified only by a written instrument duly executed
by each of the Parties. Unless otherwise provided herein, any condition to a
Party’s obligations hereunder may be waived only in writing by such
Party.

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      10.6           Severability.  In
case any one or more of the provisions contained herein shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision(s) had never been contained herein.

       

      10.7           Interpretation.  The
article and section headings are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

       

      10.8           Notices.  Notices
and other communications provided for herein shall be in writing (which shall
include notice by telex or facsimile machine with answer back capability) and
shall be delivered or mailed (or if by telex, graphic scanning or other
facsimile communications equipment of the sending Party hereto, delivered by
such equipment provided that such delivery is made during normal business
hours), addressed as follows:

       

      (a)           If
to Purchaser:

       

      c/o
Genesis Energy, L.P.

      500
Dallas, Suite 2500

      Houston,
Texas 77002

      Fax No.:
(713) 860-2640

      Attention:  Joseph
A. Blount, President & Chief Operating Officer

       

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

       

      Akin Gump
Strauss Hauer & Feld LLP

      1111
Louisiana Street

      44th
Floor

      Fax No.:
(713) 236-0822

      Attention:  J.
Vincent Kendrick, Esq.

       

      (b)           If
to Seller:

       

      c/o
Denbury Resources Inc.

      5100
Tennyson Parkway, Suite 1200

      Plano,
Texas 75024

      Fax No.:
(972) 673-2150

      Attention:
Phil Rykhoek, Chief Financial Officer

       

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

       

      Baker
& Hostetler LLP

      1000
Louisiana, Suite 2000

      Houston,
Texas 77002

      Fax No.:
(713) 751-1717

      Attention:
Donald W. Brodsky, Esq.

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      or to
such other address as the Person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above. Any
notice shall not be deemed to have been given to any Party until actually
received by such Party.

       

      10.9           Waiver of
Rescission.  Anything
herein to the contrary notwithstanding, no breach of any representation,
warranty, covenant or agreement contained herein shall give rise to any right on
the part of either Party after the consummation of the Closing to rescind this
Agreement or any of the transactions contemplated hereby.

       

      10.10         Governing
Law. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas, without regard to any conflict of law rules that
would direct application of the laws of another jurisdiction, except to the
extent that it is mandatory that the law of some other jurisdiction, wherein the
Pipeline System is located, shall apply.

       

      10.11         Counterparts. This
Agreement may be executed in several counterparts, each of which will be deemed
to be an original, but all of which together will constitute one and the same
instrument.

       

      10.12         Exhibits. All
Exhibits attached hereto are hereby made a part of this Agreement and
incorporated herein by this reference. Any terms used but not defined in the
Exhibits shall have the meanings assigned to such terms in this
Agreement.

       

      10.13         No Third-Party
Beneficiary. Except
as expressly provided herein, this Agreement is not intended to create nor shall
it be construed to create, any rights in any third party
beneficiaries.

       

      10.14         Use of Seller’s
Name.  As
soon as practicable after Closing, Purchaser shall cease to use and shall remove
or cause to be removed the names and marks used by Seller and all variations and
derivatives thereof and logos relating thereto, and any information regarding
Seller, from the Pipeline System and shall not thereafter make any use
whatsoever of such names, marks and logos, or information regarding Seller,
whether as identification for the Pipeline System or in connection with
documentation and correspondence relating thereto, except as may be necessary to
complete the transfer of the Pipeline System and any consents related thereto.
In the event Purchaser has not completed such removal within 180 days after
Closing, Seller shall have the right but not the obligation to cause such
removal and Purchaser shall reimburse Seller for any costs or expenses incurred
by Seller in connection therewith.

       

      10.15         Conflict with Conveyance
Agreements. Seller
and Purchaser acknowledge and agree that in the event of any conflict or
inconsistency between the terms and provisions of this Agreement and the terms
and provisions of the Conveyance Agreements, the terms and provisions of this
Agreement shall control.

       

      10.16         Denbury
Guaranty.  Simultaneously
with the execution of this Agreement, Denbury Resources Inc. is executing and
delivering for the benefit of Purchaser a Guaranty Agreement that
unconditionally and irrevocably guarantees the payment obligations of Seller
under this Agreement.

       

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      10.17         Tax Opinion to Genesis MLP
and Genesis Energy, Inc.  Simultaneously
with the execution of this Agreement, tax counsel to Purchaser is rendering and
delivering a tax opinion to Genesis MLP and Genesis Energy, Inc. with respect to
certain tax matters, and furthermore, tax counsel to Purchaser shall deliver the
background memorandum to Genesis MLP and Genesis Energy, Inc. supporting such
tax opinion within thirty (30) days following the Closing Date.

       

      IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth in the first paragraph hereof.

       

      
        	 	
                SELLER:

              	 
      	 
      	 
      
	 	 
      	 
      	 
      	 
      
	 	 
      	
                DENBURY
      ONSHORE, LLC

              
	 	 
      	 
      	 
      	 
      
	 	 
      	
                By:

              	
                /s/  Phil Rykhoek

              	 
      
	 	 
      	
                Name:

              	
                Phil Rykhoek

              	 
      
	 	 
      	
                Title:

              	
                Senior
      Vice President and Chief Financial Officer

              	 
      
	 	 
      	 
      	 
      	 
      
	 	 
      	 
      	 
      	 
      
	 	
                PURCHASER:

              	 
      	 
      	 
      
	 	 
      	 
      	 
      	 
      
	 	 
      	
                GENESIS
      FREE STATE PIPELINE, LLC

              
	 	 
      	 
      	 
      	 
      
	 	 
      	
                By:

              	
                /s/ Ross A. Benavides

              	 
      
	 	 
      	
                Name:

              	
                Ross
      A. Benavides

              	 
      
	 	 
      	
                Title:

              	
                Chief
      Financial Officer

              	 
      

      

      

       

      26

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