Document:

EXHIBIT
10.2

 

 

CONTRIBUTION
AGREEMENT

 

By
and Among

 

KSP
INVESTORS A L.P.,

 

KSP
INVESTORS B L.P.,

 

KSP
INVESTORS C L.P.,

 

THE
INDIVIDUALS NAMED ON SCHEDULE I HERETO,

 

TIMOTHY J.
CASEY,

 

JAMES J.
DOWLING,

 

BRIAN P.
FRIEDMAN,

 

EW
TRANSPORTATION LLC,

 

K-SEA GP
HOLDINGS LP

 

and

 

EW MERGERCO
LLC

 

 

Dated
as of [Closing Date], 2008

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  3

  
	
   

  	
   

  
	
  ARTICLE II CONTRIBUTION AND
  DISTRIBUTION TRANSACTIONS

  	
  4

  
	
  Section 2.1

  	
  Merger of
  KSP GP and KSP GP of GP

  	
  4

  
	
  Section 2.2

  	
  Contribution
  of Interest in KSP GP by the Contributing Parties

  	
  4

  
	
  Section 2.3

  	
  EW LLC
  Subsidiary Transactions

  	
  4

  
	
  Section 2.4

  	
  Contribution
  of Interests in EW LLC by the Contributing Parties

  	
  4

  
	
  Section 2.5

  	
  Distribution
  of Common Units by C LP

  	
  5

  
	
  Section 2.6

  	
  Public Cash
  Contribution

  	
  5

  
	
  Section 2.7

  	
  Payment of Transaction Expenses by Holdings

  	
  5

  
	
  Section 2.8

  	
  Reimbursement
  for MLP Distribution

  	
  5

  
	
  Section 2.9

  	
  Issuance of
  New Certificates

  	
  5

  
	
  Section 2.10

  	
  Certificate
  Legend

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND
  WARRANTIES

  	
  6

  
	
  Section 3.1

  	
  Representations
  and Warranties of the Investors

  	
  6

  
	
  Section 3.2

  	
  Representations
  and Warranties of the Contributing Parties

  	
  6

  
	
  Section 3.3

  	
  Representations
  and Warranties of Casey, Dowling and Friedman

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV FURTHER ASSURANCES; COVENANTS

  	
  8

  
	
  Section 4.1

  	
  Further
  Assurances

  	
  8

  
	
  Section 4.2

  	
  Covenants by
  Casey, Dowling and Friedman

  	
  9

  
	
   

  	
   

  
	
  ARTICLE V INDEMNIFICATION

  	
  9

  
	
  Section 5.1

  	
  Indemnification
  by the Contributing Parties

  	
  9

  
	
  Section 5.2

  	
  Indemnification
  by Holdings

  	
  9

  
	
  Section 5.3

  	
  Indemnification
  Procedure

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI MISCELLANEOUS

  	
  11

  
	
  Section 6.1

  	
  Order of
  Completion of Transactions

  	
  11

  
	
  Section 6.2

  	
  Costs

  	
  11

  
	
  Section 6.3

  	
  Headings;
  References; Interpretation

  	
  11

  
	
  Section 6.4

  	
  Successors
  and Assigns

  	
  12

  
	
  Section 6.5

  	
  No Third
  Party Rights

  	
  12

  
	
  Section 6.6

  	
  Counterparts

  	
  12

  
	
  Section 6.7

  	
  Governing
  Law

  	
  12

  
	
  Section 6.8

  	
  Severability

  	
  12

  
	
  Section 6.9

  	
  Amendment or
  Modification

  	
  12

  
	
  Section 6.10

  	
  Integration

  	
  12

  
	
  Section 6.11

  	
  Deed; Bill
  of Sale; Assignment

  	
  12

  

 

i

 

CONTRIBUTION
AGREEMENT

 

This
Contribution Agreement, dated as of
[             ],
2008 (this “Contribution Agreement”), is by and among KSP Investors A
L.P., a Delaware limited partnership (“A LP”), KSP Investors B L.P., a
Delaware limited partnership (“B LP”), KSP Investors C L.P., a Delaware
limited partnership (“C LP” and, together with A LP and B LP, the “Investors”),
the individuals listed on Schedule I hereto (collectively, the “Executives”
and, together with the Investors, the “Contributing Parties”), Timothy
J. Casey (“Casey”),  James J.
Dowling (“Dowling”),  Brian P.
Friedman (“Friedman”),  EW
Transportation LLC, a Delaware limited liability company (“EW LLC”),
K-Sea GP Holdings LP, a Delaware limited partnership (“Holdings”), and
EW MergerCo LLC, a Delaware limited liability company and a wholly owned
subsidiary of Holdings (“MergerCo”). 
The above-named entities are sometimes referred to in this Contribution
Agreement each as a “Party” and collectively as the “Parties.”
Capitalized terms used herein shall have the meanings assigned to such terms in
Section 1.1.

 

W I T N E S S
E T H:

 

WHEREAS, the
Contributing Parties, directly and indirectly, own certain interests in K-Sea
Transportation Partners L.P., a Delaware limited partnership (the “MLP”),
consisting of:

 

a.             a 100% interest in
K-Sea General Partner GP LLC, a Delaware limited liability company and the
general partner of K-Sea General Partner L.P. (“KSP GP of GP”), a
Delaware limited partnership and the general partner of the MLP (“KSP GP”),
and a 99.99% limited partner interest in KSP GP, which owns all of the 1.5%
general partner interest and 100% of the incentive distribution rights in the
MLP;

 

b.             (i) 2,082,500
common units representing limited partner interests in the MLP (“KSP Common
Units”) and (ii) 900,682 subordinated units representing limited
partner interests in the MLP (“KSP Subordinated Units”) indirectly owned
through the Contributing Parties’ 100% membership interest in EW LLC;

 

c.             727,273 KSP
Subordinated Units indirectly owned through EW Holding Corp., a Delaware
corporation and a wholly owned subsidiary of EW LLC (“EWH Corp”);

 

d.             454,545 KSP
Subordinated Units indirectly owned through EW Transportation Corp., a Delaware
corporation and a wholly owned subsidiary of EWH Corp (“EWT Corp”);

 

WHEREAS, the
Contributing Parties desire to transfer the economic benefits of their existing
ownership interests in KSP GP and the MLP to Holdings in order to
facilitate the Offering (as defined below) and promote the long-term growth
opportunities of the Parties;

 

WHEREAS, in
order to accomplish the objectives and purposes in the preceding recital, each
of the following actions has been taken prior to the date hereof:

 

1

 

1.             Timothy
J. Casey (“Casey”), James J. Dowling and Brian P. Friedman have formed
K-Sea GP LLC (the “General Partner”) pursuant to the terms of the
Delaware LLC Act and contributed $1,000 to the General Partner in exchange for
all of the membership interests in the General Partner.

 

2.             The
General Partner and Casey have formed Holdings pursuant to the terms of the
Delaware LP Act and the General Partner received a non-economic general partner
interest in Holdings and Casey contributed $1,000 to Holdings in exchange for a
100% limited partner interest in Holdings.

 

3.             Holdings
has formed MergerCo pursuant to the Delaware LLC Act and contributed $1,000 to
MergerCo in exchange for all of the membership interests in MergerCo.

 

WHEREAS, in
connection with the closing of the Offering, each of the following shall occur
as more fully set forth in Article II:

 

1.             KSP
GP will merge with and into KSP GP of GP (with the surviving entity of such
merger being referred to herein as the “Consolidated GP”).

 

2.             The
Contributing Parties will contribute 100% of their respective interests in the
Consolidated GP to Holdings in exchange for
                          
Common Units, and Casey’s limited partner interest in Holdings will be redeemed
for $1,000.

 

3.             EWT
Corp will merge with and into EWH Corp, and EWH Corp will merge with and into
EW LLC.

 

4.             MergerCo
will merge with and into EW LLC, whereby the Contributing Parties interests in
EW LLC will be converted into
                        
Common Units.

 

5.             C
LP will distribute the Common Units that it owns to its investors.

 

6.             The
public, through the Underwriters, will purchase from certain of the
Contributing Parties named in the Registration Statement (the “Selling
Unitholders”) for
$                          
in cash less the Underwriters’ discounts and commissions of
$                          
[4,826,000] Common Units, representing a [32.2]% limited partner interest in
Holdings.

 

7.                                       The
public, through the Underwriters, will contribute
$                  
in cash less the Underwriters’ discounts and commissions of
$              
to Holdings in exchange for [1,424,000] Common Units, representing a [9.5]%
limited partner interest in Holdings.

 

8.             Holdings
will (a) pay Offering and related transaction expenses of approximately
$       million (exclusive of the Underwriters’
discounts and commissions), (b) use $22.7 million of the net proceeds of
the Offering to fund the retirement of the Assumed EW Liabilities (as defined
below), (c) use $     million to repay in full the
loan from EW LLC to Holdings referred to in Section 2.7(a) and (d) retain
the balance of the net proceeds of the Offering (exclusive of the proceeds to
the Selling Unitholders described above) for general partnership purposes.

 

2

 

NOW,
THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties hereto agree as
follows:

 

ARTICLE I

DEFINITIONS

 

The terms set
forth below in this Article I shall have the meanings ascribed to them
below or in the part of this Contribution Agreement referred to below:

 

“Assumed EW
Liabilities” means $15.5 million of EW LLC’s debt and $7.2 million of federal
and state income tax liabilities assumed by operation of law in the mergers
effected in accordance with Section 2.2.

 

“Business
Day” means any day other than a Saturday, a Sunday or any other day when
banks are not open for business generally in the State of Delaware.

 

“Commission”
means the U.S. Securities and Exchange Commission.

 

“Common Units”
means the common units representing limited partner interests in Holdings.

 

“Closing”
means the closing of the transactions contemplated pursuant to this
Contribution Agreement.

 

“Closing
Date” means the date on which the Offering is consummated (ignoring for
this purpose, the option granted by the Contributing Parties to the
Underwriters to purchase up to 937,500 additional Common Units as provided in
the Underwriting Agreement).

 

“Delaware
LLC Act” means the Limited Liability Company Act of the State of Delaware,
as amended and any successor to such act.

 

“Delaware
LP Act” means the Delaware Revised Uniform Limited Partnership Act, as
amended and any successor to such act.

 

“First
Delivery Date” has the same meaning as given to such term in the Underwriting
Agreement.

 

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

 

“Offering”
means the initial public offering of the Common Units contemplated by the
Registration Statement.

 

“Person”
means an individual, corporation, partnership (limited or general), limited
liability company, trust, joint stock company, Governmental Authority,
unincorporated association or other legal entity.

 

3

 

“Registration
Statement” means the Registration Statement on Form S-1 (Registration No. 333-149541),
as amended, initially filed with the Commission on March 5, 2008.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Underwriters”
means those underwriters listed in the Underwriting Agreement (the “Underwriting
Agreement”) between Lehman Brothers Inc. and Citigroup Global Markets Inc.,
as representatives of the Underwriters, the General Partner, Holdings and the
Selling Unitholders dated as of
                ,
2008.

 

ARTICLE II

CONTRIBUTION AND
DISTRIBUTION TRANSACTIONS

 

Section 2.1             Merger of KSP GP and KSP GP of GP.
KSP GP shall merge with and into KSP GP of GP, with KSP GP of GP being the
surviving entity (hereinafter being referred to herein as the “Consolidated
GP”), pursuant to the agreement and plan of merger attached hereto as Exhibit 2.1.

 

Section 2.2             Contribution of
Interest in KSP GP by the Contributing Parties.

 

(a)           The
Contributing Parties hereby grant, contribute, bargain, assign, transfer, set
over and deliver to Holdings, its successors and assigns, for its and their own
use forever, a 100% membership interest in the Consolidated GP (the “Transferred
MLP GP Interest”, and together with the limited partner interests in the
MLP owned by EW LLC immediately following the effective time of the EW LLC
Merger, the “Transferred Assets”) in exchange for
                
Common Units, representing a       % limited
partner interest in Holdings.

 

(b)           Holdings
shall redeem the limited partner interests issued to Casey in connection with
the formation of Holdings for $1,000 in cash.

 

Section 2.3             EW LLC Subsidiary
Transactions.

 

(a)           EWT
Corp shall merge with and into EWH Corp, with EWH Corp being the surviving
entity, pursuant to the agreement and plan of merger attached hereto as Exhibit 2.3(a).

 

(b)           EWH
Corp shall merge with and into EW LLC, with EW LLC being the surviving entity,
pursuant to the agreement and plan of merger attached hereto as Exhibit 2.3(b).

 

Section 2.4             Contribution
of Interests in EW LLC by the Contributing Parties.

 

(a)           MergerCo
shall merge with and into EW LLC, with EW LLC being the surviving entity
(the “EW LLC Merger”), pursuant to the agreement and plan of merger
attached hereto as Exhibit 2.4(a)(the “EW LLC Merger Agreement”).  As a result of this merger, EW LLC will
become a wholly owned subsidiary of Holdings.

 

4

 

(b)           As
more fully described in the EW LLC Merger Agreement, in consideration for the
merger described in Section 2.4(a) above, Holdings will issue to the
Contributing Parties
                        
Common Units, representing a     % limited partner interest
in Holdings.

 

Section 2.5             Distribution
of Common Units by C LP. C LP shall distribute the Common Units
received by it in consideration for the transactions described in Sections 2.2
and 2.4.

 

Section 2.6             Public Cash
Contribution.

 

(a)           The Parties
acknowledge receipt of payment by the public, through the Underwriters, to the
Selling Unitholders of
$                
in cash,
($                
after the Underwriters’ discounts and commissions of
$              )
in exchange for [4,826,000] Common Units representing a [32.2]% limited partner
interest in Holdings.  Delivery of the
Common Units to be delivered to the Underwriters on the First Delivery Date
shall be completed by the issuance and delivery in [eight] consecutive
deliveries, each equal to [12.5%] of the total number of Firm Units (as such
term is defined in the Underwriting Agreement)

 

(b)           The Parties
acknowledge a capital contribution by the public, through the Underwriters, to
Holdings of
$                
in cash, ($                
after the Underwriters’ discounts and commissions of
$              )
in exchange for [1,424,000] Common Units representing a [9.5]% limited partner
interest in Holdings.

 

(c)           Delivery of the
Common Units to be delivered to the Underwriters on the First Delivery Date
shall be completed by the issuance and delivery in [eight] consecutive
deliveries (each, a “Delivery”), each equal to [12.5%] of the total
number of Firm Units (as such term is defined in the Underwriting Agreement)
set forth opposite each Underwriter’s name on Schedule 1 to the Underwriting
Agreement; provided, however, that the Common Units
sold by B LP pursuant to the Underwriting Agreement shall be sold in the first
Delivery and any remaining Common Units to be sold by B LP pursuant to the
Underwriting Agreement shall be sold in the second Delivery.

 

Section 2.7             Payment of
Transaction Expenses by Holdings. The Parties acknowledge that in
connection with the Offering, EW LLC has loaned Holdings
$                        
to pay for certain expenses of the Offering or related thereto.  In addition, the Parties acknowledge (a) the
payment by Holdings, in connection with the transactions contemplated hereby,
of estimated transaction expenses in the amount of approximately
$       million (exclusive of the Underwriters’
discounts and commissions), (b) the use by Holdings of $22.7 million to
retire the Assumed EW Liabilities, (c) the use by Holdings of
$                      
to repay in full the loan from EW LLC to Holdings referred to in the
immediately preceding sentence and (d) the retention of the balance of the
net proceeds of the Offering (exclusive of the proceeds to the Selling
Unitholders described in Section 2.6(b)) for general partnership purposes.

 

Section 2.8            Reimbursement for MLP Distribution. With respect
to the distributions paid by the MLP for the quarter ending [September 30],
2008 and received by (i) EW LLC relating to the 2,082,500 KSP Common Units
and the 2,082,500 KSP Subordinated Units to be owned by EW LLC after the merger
described in Section 2.4(a) (the “EW LLC Distribution”) and (ii) the
Consolidated GP relating to the 1.5% general partner interest and 100% of the
incentive distribution rights in the MLP to be owned by the Consolidated GP at
the Closing (the “Consolidated GP Distribution,” and together with the
EW LLC Distribution, the “Stub Period Distribution”), Holdings shall
promptly pay after receipt of the Stub Period Distribution to the Contributing
Parties pro rata based upon such Contributing Parties ownership interests in
KSP GP of GP and EW LLC an amount in cash equal to the Stub Period Distribution
multiplied by a fraction the numerator of which is the number of days in the
period from [July 1], 2008 to and including the Closing Date and the
denominator of which is [92].

 

Section 2.9             Issuance
of New Certificates. At the Closing, Holdings shall issue to each of the
Contributing Parties a certificate or certificates, which may be held in book
entry form, representing the respective number of Common Units to be issued to
such Contributing Parties pursuant to Sections 2.2 and 2.4 less any Common
Units sold by such Contributing Parties described in Section 2.6(b).  Each such certificate shall be registered in
the name of the Person or Persons specified by the recipient thereof to
Holdings in writing at least two Business Days prior to the Closing Date.

 

5

 

Section 2.10           Certificate Legend.
The certificates evidencing the Common Units delivered pursuant to Section 2.9
shall bear a legend substantially in the form set forth below and containing
such other information as Holdings may deem necessary or appropriate:

 

THE HOLDER OF THIS SECURITY
ACKNOWLEDGES FOR THE BENEFIT OF THE PARTNERSHIP THAT THIS SECURITY MAY NOT
BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER
WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR
RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY WITH JURISDICTION
OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF THE
PARTNERSHIP UNDER THE LAWS OF THE STATE OF DELAWARE, (C) CAUSE THE
PARTNERSHIP TO BE TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR
OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO THE
EXTENT NOT ALREADY SO TREATED OR TAXED), OR (D) CAUSE THE PARTNERSHIP OR
K-SEA TRANSPORTATION PARTNERS L.P. TO FAIL TO QUALIFY TO OWN/OPERATE VESSELS IN
THE U.S. COASTWISE TRADE DUE TO NOT MEETING THE CITIZENSHIP REQUIREMENTS OF THE
MARITIME LAWS.  K-SEA GP LLC, THE GENERAL
PARTNER OF THE PARTNERSHIP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE
TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF THE PARTNERSHIP
BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY
FOR FEDERAL INCOME TAX PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT
PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED
INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS
SECURITY IS LISTED OR ADMITTED TO TRADING.

 

ARTICLE III

REPRESENTATIONS AND
WARRANTIES

 

Section 3.1             Representations
and Warranties of the Investors. Each of the Investors hereby represents
and warrants to Holdings as of the date of this Contribution Agreement that
such Investor has been duly organized and is validly existing in good standing
under the laws of the State of Delaware, with all requisite power and authority
necessary to own or hold each such Investor’s properties and conduct the
businesses in which each such Investor is engaged.

 

Section 3.2             Representations
and Warranties of the Contributing Parties. Each of the Contributing
Parties hereby represents and warrants to Holdings as follows as of the date of
this Contribution Agreement that:

 

(a)           Such
Contributing Party has all requisite power and authority necessary to execute
and deliver this Contribution Agreement and to consummate the transactions
contemplated hereby.

 

(b)           As
of the date of this Contribution Agreement, following the consummation of the
transactions described in Section 2.2, Holdings owns 100% of the issued
and outstanding member interests in Consolidated GP; such member interests
have been duly authorized and validly issued in accordance with the limited
liability company agreement of KSP GP of GP, as amended, restated,
supplemented or otherwise modified on or prior to the Closing Date or any
settlement date, and Holdings owns such member interests free and clear of all
liens, encumbrances, security interests, equities, charges or claims.

 

6

 

(c)           As of the date of this
Contribution Agreement, following the consummation of the transactions
described in Section 2.4, Holdings owns 100% of the issued and outstanding
member interests in EW LLC; such member interests have been duly
authorized and validly issued in accordance with the limited liability company
agreement of EW LLC, as amended, restated, supplemented or otherwise
modified on or prior to the Closing Date or any settlement date, and Holdings
owns such member interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims.

 

(d)           As of the date of this
Contribution Agreement, following the consummation of the transactions
described in Section 2.3, EW LLC owns 2,082,500 KSP Common Units and
2,082,500 KSP Subordinated Units; such limited partner interests have been duly
authorized and validly issued in accordance with the agreement of limited
partnership of the MLP, as amended, restated, supplemented or otherwise
modified on or prior to the Closing Date or any settlement date, and EW LLC
owns such limited partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims.

 

(e)           All requisite corporate or
partnership action required to be taken by such Contributing Party or any of
their securityholders for the authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement has been validly taken.

 

(f)            None of the (i) execution,
delivery and performance of this Agreement by such Contributing Party, or (ii) consummation
of the transactions contemplated hereby by such Contributing Party (A) conflicts
or will conflict with or constitutes or will constitute a violation of the
governing documents of such Contributing Party, (B) conflicts or will
conflict with or constitutes or will constitute a breach or violation of, or a
default (or an event that, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which such Contributing
Party is a party or by which such Contributing Party or any of its respective
properties may be bound, (C) violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any Governmental
Authority or body having jurisdiction over such Contributing Party, or any of
its respective properties or assets, or (D) results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of such Contributing Party, which conflicts, breaches, violations,
defaults or liens, in the case of clauses (B) or (D), would, individually
or in the aggregate, have a material adverse effect on (i) the
transactions contemplated by this Agreement or (ii) the ownership and use
by Holdings of the Transferred Assets at or after the Closing (a “Material
Adverse  Effect”).

 

(g)           No permit, consent,
approval, authorization, order, registration, filing or qualification (a “Consent”)
of or with any Governmental Authority or body having jurisdiction over such
Contributing Party or any of its respective properties is required in
connection with (i) the execution, delivery and performance of this
Agreement by such Contributing Party, or (ii) the consummation by such
Contributing Party of the

 

7

 

transactions contemplated by this Agreement,
except for such Consents that have been obtained.

 

Section 3.3             Representations
and Warranties of Casey, Dowling and Friedman. Each of Casey, Dowling and
Friedman hereby represents and warrants to Holdings as follows as of the date
of this Contribution Agreement that:

 

(a)           Such Party has all requisite
power and authority necessary to execute and deliver this Contribution
Agreement and to consummate the transactions contemplated hereby.

 

(b)           None of the (i) execution,
delivery and performance of this Agreement by such Party, or (ii) consummation
of the transactions contemplated hereby by such Party (A) conflicts or
will conflict with or constitutes or will constitute a breach or violation of,
or a default (or an event that, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which such Party is a
party or by which such Party or any of its respective properties may be bound, (B) violates
or will violate any statute, law or regulation or any order, judgment, decree
or injunction of any Governmental Authority or body having jurisdiction over
such Party, or any of its respective properties or assets, or (C) results
or will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of such Party, which conflicts, breaches,
violations, defaults or liens, in the case of clauses (A) or (C), would,
individually or in the aggregate, have a Material Adverse Effect.

 

(c)           No Consent of or with any
Governmental Authority or body having jurisdiction over such Party or any of
its respective properties is required in connection with (i) the
execution, delivery and performance of this Agreement by such Party, or (ii) the
consummation by such Party of the transactions contemplated by this Agreement,
except for such Consents that have been obtained.

 

ARTICLE IV

FURTHER ASSURANCES; COVENANTS

 

Section 4.1             Further
Assurances. From time to time after the Closing, and without
any further consideration, the Parties agree to execute, acknowledge and
deliver all such additional deeds, assignments, bills of sale, conveyances,
instruments, notices, releases, acquittances and other documents, and will do
all such other acts and things, all in accordance with applicable law, as may
be necessary or appropriate (a) more fully to assure that the applicable
Parties own all of the properties, rights, titles, interests, estates,
remedies, powers and privileges granted by this Contribution Agreement, or
which are intended to be so granted, or (b) more fully and effectively to
vest in the applicable Parties and their respective successors and assigns
beneficial and record title to the interests contributed and assigned by this
Contribution

 

8

 

Agreement
or intended so to be and to more fully and effectively carry out the purposes
and intent of this Contribution Agreement.

 

Section 4.2             Covenants by
Casey, Dowling and Friedman. Each of Casey, Dowling and
Friedman hereby agree, for themselves and any successor member of the General
Partner to such Party, that (i) other than reimbursement of out-of pocket
expenses incurred in maintaining their membership interest in the General
Partner and in managing the General Partner, such Party (solely in his capacity
as a member of the General Partner) shall not receive any personal economic
benefit from his ownership of a membership interest in the General Partner and (ii) such
Party shall promptly deliver to Holdings any value received by such Party or
any Affiliate (as defined in the Amended and Restated Agreement of Limited
Partnership of Holdings) of such Party upon the sale by such Party of all or
any portion of his membership interest in the General Partner or the sale of
any assets of the General Partner to a third party in excess of such Party’s
capital contribution to the General Partner and reasonable out-of-pocket
expenses related to such sale.

 

ARTICLE V

INDEMNIFICATION

 

Section 5.1             Indemnification
by the Contributing Parties. Subject to the other
provisions of this Article V, each the Contributing Parties, jointly and
severally, shall indemnify, defend and hold harmless Holdings from and against
any losses, damages, liabilities, claims, demands, causes of action, judgments,
settlements, fines, penalties, costs and expenses (including, without limitation,
court costs and reasonable attorney’s fees and expert fees) of any and every
kind and character (“Losses”), insofar as such Losses arise out of or
are based upon:

 

(a)           the failure of any
Contributing Party to be the owner of the respective assets transferred to
Holdings pursuant to the terms of this Contribution Agreement as is necessary
for Holdings to continue to own all of the Transferred Assets and to derive the
benefits therefrom in accordance with the terms of such equity interests; and

 

(b)           the failure of any
Contributing Party to have at the Closing any consent or approval of a
Governmental Authority necessary to allow transfer by such Contributing Party
of any of the Transferred Assets.

 

Section 5.2             Indemnification
by Holdings. Holdings shall indemnify, defend and hold harmless
each of the other Parties from and against all Losses suffered or incurred by such
Party arising out of or relating to the Transferred Assets, except with respect
to matters for which Holdings is

 

9

 

entitled
to indemnification therefor under Section 5.1.  In addition, Holdings shall indemnify, defend
and hold harmless each of Casey, Dowling and Friedman (and each successor
member of the General Partner to such Party) from and against all taxes, if
any, incurred by such Party in connection with any transfer referred to in Section 4.2.

 

Section 5.3             Indemnification
Procedure.

 

(a)           As used in this Section 5.3,
the term “Indemnifying Party” refers to the Contributing Parties, jointly and
severally, in the case of any indemnification obligation arising under Section 5.1,
and to Holdings, in the case of any indemnification obligation arising under Section 5.2;
and the term “Indemnified Party” refers to Holdings, in the case of any indemnification
obligation arising under Section 5.1, and to the Contributing Parties, in
the case of any indemnification obligation arising under Section 5.2.

 

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

 

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

 

(d)           The Indemnified Party agrees
to cooperate fully with the Indemnifying Party, with respect to (i) its
pursuit of insurance coverage or recoveries with respect to the claims covered
by the indemnification under this Article V and (ii) all aspects of
the defense of any claims covered by the indemnification under this Article V,
including, without limitation, the prompt furnishing to the Indemnifying Party
of any correspondence or other notice relating thereto that the Indemnified
Party may receive, permitting the name of the Indemnified Party to be utilized
in connection with such defense, the making available to the Indemnifying Party
of any files, records or other information of the Indemnified Party that the
Indemnifying Party considers relevant to such defense and the making available
to the Indemnifying Party of any employees of the Indemnified Party; provided,
however, that in connection therewith the Indemnifying Party agrees to use
reasonable efforts to minimize the impact thereof on the operations of the
Indemnified Party and further agrees to maintain the confidentiality of all
files, records, and other information furnished by the Indemnified Party
pursuant to this Section 5.3. In no event shall the obligation of the
Indemnified Party to cooperate with the Indemnifying Party as set forth in the
immediately preceding sentence be construed as imposing upon the Indemnified
Party an obligation to hire and pay for counsel in connection with the defense
of any claims covered by the indemnification set forth in this

 

10

 

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

 

(e)           The date on which written
notification of a claim for indemnification is received by the Indemnifying
Party shall determine whether such claim is timely made within the limitations
specified in Section 5.1. No claim for indemnification pursuant to Section 5.1(a) shall
be brought or made unless, prior to thirty (30) days after the actual knowledge
by the Indemnified Party of the Losses set forth in Section 5.1(a), the
Indemnified Party shall have delivered to the Indemnifying Party a good faith
written notice to the effect that the Indemnified Party has incurred Losses
entitled to be indemnified against under Section 5.1(a), which notice
specifies in reasonable detail the amount of such Losses and the nature and
basis of such claim.

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1             Order of
Completion of Transactions. The transactions provided
for in Article II of this Contribution Agreement shall be completed on the
Closing Date in the order set forth therein.

 

Section 6.2             Costs. Holdings
shall pay all expenses, fees and costs, including but not limited to, all
sales, use and similar taxes arising out of the contributions, conveyances and
deliveries to be made hereunder and shall pay all documentary, filing,
recording, transfer, deed, and conveyance taxes and fees required in connection
therewith. In addition, Holdings shall be responsible for all costs,
liabilities and expenses (including court costs and reasonable attorneys’ fees)
incurred in connection with the implementation of any conveyance or delivery
pursuant to the provisions of this Contribution Agreement.

 

Section 6.3             Headings;
References; Interpretation. All Article and Section headings
in this Contribution Agreement are for convenience only and shall not be deemed
to control or affect the meaning or construction of any of the provisions
hereof. The words “hereof,” “herein” and “hereunder” and words of similar
import, when used in this Contribution Agreement, shall refer to this
Contribution Agreement as a whole, including, without limitation, all Schedules
and Exhibits attached hereto, and not to any particular provision of this
Contribution Agreement. All personal pronouns used in this Contribution
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders, and the singular shall include the plural and vice versa.
The use herein of the word “including” following any general statement, term or
matter shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not non-limiting language (such as “without
limitation”, “but not limited to”, or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of such
general statement, term or matter.

 

11

 

Section 6.4             Successors and
Assigns. The Contribution Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and assigns.

 

Section 6.5             No Third Party
Rights. The provisions of this Contribution Agreement are intended to bind
the Parties as to each other and are not intended to and do not create rights
in any other person or confer upon any other person any benefits, rights or
remedies and no person is or is intended to be a third party beneficiary of any
of the provisions of this Contribution Agreement.

 

Section 6.6             Counterparts. This
Contribution Agreement may be executed in any number of counterparts, all of
which together shall constitute one agreement binding on the parties hereto.

 

Section 6.7             Governing Law. This
Contribution Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts made and to be
performed wholly within such state without giving effect to conflict of law
principles thereof.

 

Section 6.8             Severability. If any of the
provisions of this Contribution Agreement are held by any court of competent
jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or
invalidity shall not invalidate the entire Contribution Agreement. Instead,
this Contribution Agreement shall be construed as if it did not contain the
particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the Parties as expressed in this Contribution Agreement at the
time of execution of this Contribution Agreement.

 

Section 6.9             Amendment or
Modification. This Contribution Agreement may be amended or
modified from time to time only by the written agreement of all the Parties.
Each such instrument shall be reduced to writing and shall be designated on its
face as an Amendment to this Contribution Agreement.

 

Section 6.10           Integration. This
Contribution Agreement and the instruments referenced herein supersede all
previous understandings or agreements among the Parties, whether oral or
written, with respect to their subject matter. This document and such instruments
contain the entire understanding of the Parties with respect to the subject
matter hereof and thereof. No understanding, representation, promise or
agreement, whether oral or written, is intended to be or shall be included in
or form part of this Contribution Agreement unless it is contained in a written
amendment hereto executed by the parties hereto after the date of this
Contribution Agreement.

 

Section 6.11           Deed; Bill of
Sale; Assignment. To the extent required and permitted by applicable
law, this Contribution Agreement shall also constitute a “deed,” “bill of sale”
or “assignment” of the assets and interests referenced herein.

 

 

12

 

IN WITNESS WHEREOF, the
parties to this Contribution Agreement have caused it to be duly executed as of
the date first above written.

 

	
   

  	
  KSP INVESTORS A L.P.

  
	
   

  	
   

  
	
   

  	
  By:   PARK
  AVENUE TRANSPORTATION INC.,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
           By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  KSP INVESTORS B L.P.

  
	
   

  	
   

  
	
   

  	
  By:   PARK
  AVENUE TRANSPORTATION INC.,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
           By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  KSP INVESTORS C L.P.

  
	
   

  	
   

  
	
   

  	
  By:   PARK
  AVENUE TRANSPORTATION INC.,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
           By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  THE INDIVIDUALS NAMED ON
  SCHEDULE I

  HERETO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:
  Attorney-in-Fact

  
					

 

Signature
Page to Contribution Agreement

 

 

	
   

  	
  EW TRANSPORTATION LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  K-SEA GP HOLDINGS LP

  
	
   

  	
   

  
	
   

  	
  By:   K-SEA
  GP LLC, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
            By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  Timothy J. Casey

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  James J. Dowling

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Brian P. Friedman

  
				

 

Signature
Page to Contribution Agreement

 

 

SCHEDULE I

 

Timothy
J. Casey

John
J. Nicola

Thomas
M. Sullivan

Richard
P. Falcinelli

Chris
Palo

Greg
Haslinsky

Terry
Gill

Richard
Pittner

Carl
Eklof

 

S-1

 

Exhibit 2.1

 

Agreement and Plan of
Merger

between

KSP GP and KSP GP of GP

 

E-1

 

Exhibit 2.3(a)

 

Agreement and Plan of
Merger

between

EWT Corp and EWH Corp

 

E-2

 

Exhibit 2.3(b)

 

Agreement and Plan of
Merger

between

EWH Corp and EW LLC

 

E-3

 

Exhibit 2.4(a)

 

Agreement and Plan of
Merger

between

MergerCo and EW LLC

 

E-4EXHIBIT 10.3

 

ADMINISTRATIVE SERVICES
AGREEMENT

 

AMONG

 

K-SEA GP LLC,

 

K-SEA GP HOLDINGS LP

 

AND

 

K-SEA TRANSPORTATION INC.

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Construction

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE II RETENTION OF KTI; SCOPE OF SERVICES

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Retention of KTI

  	
  4

  
	
  Section 2.2

  	
  Scope of Services

  	
  4

  
	
  Section 2.3

  	
  Exclusion of Services

  	
  5

  
	
  Section 2.4

  	
  Performance of Services by
  Affiliates and Third Parties

  	
  5

  
	
  Section 2.5

  	
  Intellectual Property

  	
  5

  
	
  Section 2.6

  	
  Appointment of Independent
  Accounting Firm

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III BOOKS, RECORDS AND REPORTING

  	
  5

  
	
   

  	
   

  
	
  Section 3.1

  	
  Books and Records

  	
  5

  
	
  Section 3.2

  	
  Audits

  	
  6

  
	
  Section 3.3

  	
  Reports

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV PAYMENT AMOUNT

  	
  6

  
	
   

  	
   

  
	
  Section 4.1

  	
  Payment Amount

  	
  6

  
	
  Section 4.2

  	
  Payment of Payment Amount

  	
  7

  
	
  Section 4.3

  	
  Disputed Charges

  	
  7

  
	
  Section 4.4

  	
  Set Off

  	
  7

  
	
  Section 4.5

  	
  KTI’s Employees

  	
  7

  
	
  Section 4.6

  	
  Approval of Expenses

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE V FORCE MAJEURE

  	
  8

  
	
   

  	
   

  
	
  ARTICLE VI ASSIGNMENTS AND SUBCONTRACTS

  	
  8

  
	
   

  	
   

  
	
  Section 6.1

  	
  Assignments

  	
  8

  
	
  Section 6.2

  	
  Other Requirements

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII TERMINATION

  	
  9

  
	
   

  	
   

  
	
  Section 7.1

  	
  Termination by the
  Partnership on behalf of the Partnership Group

  	
  9

  
	
  Section 7.2

  	
  Termination by KTI

  	
  10

  
	
  Section 7.3

  	
  Effect of Termination

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII CONFIDENTIAL INFORMATION

  	
  10

  
	
   

  	
   

  
	
  Section 8.1

  	
  Nondisclosure

  	
  10

  
	
  Section 8.2

  	
  Permitted Disclosure

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX LIMITATION OF LIABILITY; INDEMNIFICATION

  	
  11

  
	
   

  	
   

  
	
  Section 9.1

  	
  Limitation of KTI’s
  Liability

  	
  11

  

 

i

 

	
  Section 9.2

  	
  Partnership’s Indemnity

  	
  11

  
	
  Section 9.3

  	
  Limitation of Damages

  	
  11

  
	
  Section 9.4

  	
  Affiliate; Third Parties

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE X DISPUTE RESOLUTION

  	
  12

  
	
   

  	
   

  
	
  ARTICLE XI GENERAL PROVISIONS

  	
  12

  
	
   

  	
   

  
	
  Section 11.1

  	
  Notices

  	
  12

  
	
  Section 11.2

  	
  Further Action

  	
  12

  
	
  Section 11.3

  	
  Binding Effect

  	
  12

  
	
  Section 11.4

  	
  Integration

  	
  13

  
	
  Section 11.5

  	
  Creditors

  	
  13

  
	
  Section 11.6

  	
  Waiver

  	
  13

  
	
  Section 11.7

  	
  Counterparts

  	
  13

  
	
  Section 11.8

  	
  Applicable Law

  	
  13

  
	
  Section 11.9

  	
  Invalidity of Provisions

  	
  13

  
	
  Section 11.10

  	
  Amendment or Restatement

  	
  13

  
	
  Section 11.11

  	
  Directly or Indirectly

  	
  13

  

 

ii

 

ADMINISTRATIVE SERVICES
AGREEMENT

 

THIS ADMINISTRATIVE SERVICES
AGREEMENT is entered into on
              ,
2008 among K-Sea GP LLC, a Delaware limited liability company (the “General
Partner”), K-Sea GP Holdings LP, a Delaware limited partnership (the “Partnership”),
and K-Sea Transportation Inc., a Delaware corporation (“KTI” and collectively
with the General Partner and the Partnership, the “Parties” and each, a “Party”).

 

RECITALS

 

A.            The Partnership is the
owner, directly or indirectly, of interests in the Business (as hereinafter
defined);

 

B.            The Partnership Group (as
hereinafter defined) requires certain services to operate the Business and to
fulfill other general and administrative functions relating to the Business;
and

 

C.            The Partnership Group
desires that KTI provide such services, and KTI is willing to undertake such
engagement, subject to the terms and conditions of this Agreement;

 

NOW, THEREFORE, the General
Partner, the Partnership and KTI agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1             Definitions.  The following definitions shall be for all
purposes, unless otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.

 

“Administrative
Fee” is defined in Section 4.1.

 

“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under
common control with, the Person in question. As used herein, the term “control”
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

 

“Agreement”
means this Administrative Services Agreement, as it may be amended,
supplemented or restated from time to time.

 

“Bankrupt”
with respect to any Person means such Person shall generally be unable to pay
its debts as such debts become due, or shall so admit in writing or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted

 

 

against
it (but not instituted by it), shall remain undismissed or unstayed for a
period of 30 days; or such Person shall take any action to authorize any of the
actions set forth above.

 

“Business”
means the business of the Partnership Group.

 

“Confidential
Information” means non-public information about the disclosing Party’s
or any of its Affiliates’ business or activities that is proprietary and
confidential, which shall include, without limitation, all business, financial,
technical and other information, including software (source and object code)
and programming code, of a Party or its Affiliates marked or designated “confidential”
or “proprietary” or by its nature or the circumstances surrounding its
disclosure it should reasonably be regarded as confidential. Confidential
Information includes not only written or other tangible information, but also
information transferred orally, visually, electronically or by any other means.
Confidential Information does not include information that (i) is in or
enters the public domain without breach of this Agreement, or (ii) the
receiving Party lawfully receives from a third party without restriction on disclosure
and to the receiving Party’s knowledge without breach of a nondisclosure
obligation.

 

“Damages”
is defined in Section 9.1.

 

“Default Rate”
means an interest rate (which shall in no event be higher than the rate
permitted by applicable law) equal to the prime interest rate of the MLP’s
principal lender.

 

“Environmental
Law” means current local, county, state, federal, and/or foreign law
(including common law), statute, code, ordinance, rule, order, judgment,
decree, regulation or other legal obligation relating to the protection of
health, safety or the environment or natural resources, including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act (42 U.S.C. section 9601 et seq.), as amended, the Resource Conservation and
Recovery Act (42 U.S.C. section 6901 et seq.), as amended, the Federal Water
Pollution Control Act (33 U.S.C. section 1251 et seq.), as amended, the Clean
Air Act (42 U.S.C. section 7401 et seq.), as amended, the Toxic Substances
Control Act (15 U.S.C. section 2601 et seq.), as amended, the Occupational
Safety and Health Act (29 U.S.C. section 651 et seq.), as amended, the Safe
Drinking Water Act (42 U.S.C. section 300(f) et seq.), as amended,
analogous state, tribal or local laws, and any similar, implementing or
successor law, and any amendment, rule, regulation, or directive issued
thereunder, including any determination by, or interpretation of any of the
foregoing by any Governmental Authority that has the force of law.

 

“Force
Majeure” means any cause beyond the reasonable control of a Party,
including the following causes (unless they are within such Party’s reasonable
control): acts of God, strikes, lockouts, acts of the public enemy, wars or
warlike action (whether actual or impending), arrests and other restraints of
government (civil or military), blockades, embargoes, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, sabotage, tornadoes,
named tropical storms and hurricanes, floods, civil disturbances, terrorism,
mechanical breakdown of machinery or equipment, explosions, confiscation or
seizure by any government or other public authority and any order of any court
of competent jurisdiction, regulatory agency or governmental body having
jurisdiction.

 

2

 

“G&A
Services” means those general and administrative services necessary
or useful for the conduct of the business of the Partnership Group, including
accounting, corporate development, finance, marketing and legal.

 

“General
Partner” is defined in the introductory paragraph.

 

“Governmental
Approval” means any material consent, authorization, certificate,
permit, right-of-way grant or approval of any Governmental Authority that is
necessary for the construction, ownership and operation of the Business in
accordance with applicable Laws.

 

“Governmental
Authority” means any court or tribunal in any jurisdiction or any
federal, state, tribal, municipal or local government or other governmental
body, agency, authority, department, commission, board, bureau,
instrumentality, arbitrator or arbitral body or any quasi-governmental or
private body lawfully exercising any regulatory or taxing authority.

 

“KSP GP”
means K-Sea General Partner GP LLC, a Delaware limited liability company and
wholly owned subsidiary of the Partnership and the general partner of the MLP.

 

“KTI”
is defined in the introductory paragraph.

 

“KTI Party”
is defined in Section 9.1.

 

“Laws”
means any applicable statute, Environmental Law, common law, rule, regulation,
judgment, order, ordinance, writ, injunction or decree issued or promulgated by
any Governmental Authority.

 

“MLP”
means K-Sea Transportation Partners L.P., a Delaware limited partnership.

 

“MLP Group”
means the MLP or KSP GP and their respective Subsidiaries.

 

“Parties”
is defined in the introductory paragraph.

 

“Partnership”
is defined in the introductory paragraph.

 

“Partnership
Agreement” means the Amended and Restated Agreement of Limited
Partnership of the Partnership, as may be amended or restated from time to
time.

 

“Partnership
Group” means the General Partner, the Partnership and all of their
respective Subsidiaries other than the MLP Group.

 

“Payment
Amount” is defined in Section 4.1.

 

“Person”
means an individual or a corporation, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government
agency or political subdivision thereof or other entity.

 

“PPI”
means the Producer Price Index (PPI), Management Consulting Services — North
American Industry Classification System (NAICS) 541610, published by the Bureau
of Labor Statistics as printed in the PPI Detailed Report,
or if such industry data is no longer published by the Bureau of Labor
Statistics, then the industry data published by the Bureau of Labor Statistics
agreed to in good faith by KTI and the General Partner to be the most analogous
to the Producer Price Index (PPI), Management Consulting Services  — North American Industry Classification
System (NAICS) 541610.

 

“Services”
is defined in Section 2.2.

 

3

 

“Subsidiary”
means, with respect to any Person, (a) a corporation of which more than
50% of the voting power of shares entitled (without regard to the occurrence of
any contingency) to vote in the election of directors or other governing body
of such corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such Person or a
combination thereof, (b) a partnership (whether general or limited) in
which such Person or a Subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership, but only if
more than 50% of the partnership interests of such partnership (considering all
of the partnership interests of the partnership as a single class) is owned,
directly or indirectly, at the date of determination, by such Person, by one or
more Subsidiaries of such Person, or a combination thereof, or (c) any
other Person (other than a corporation or a partnership) in which such Person,
one or more Subsidiaries of such Person, or a combination thereof, directly or
indirectly, at the date of determination, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.

 

Other terms defined herein
have the meanings so given them.

 

Section 1.2             Construction.

 

Unless the context requires
otherwise: (a) any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa; (b) references
to Articles and Sections refer to Articles and Sections of this Agreement; (c) references
to Exhibits refer to the Exhibits attached to this Agreement, each of which is
made a part hereof for all purposes; (d) the terms “include”, “includes”, “including”
and words of like import shall be deemed to be followed by the words “without
limitation”; (e) the terms “hereof,” “herein” and “hereunder” refer to
this Agreement as a whole and not to any particular provision of this
Agreement; and (f) references to money refer to legal currency of the
United States of America. The table of contents and headings contained in this
Agreement are for reference purposes only, and shall not affect in any way the
meaning or interpretation of this Agreement.

 

ARTICLE II

 

RETENTION OF KTI; SCOPE OF
SERVICES

 

Section 2.1             Retention
of KTI.  The Partnership hereby engages
KTI to perform the Services, as directed by the General Partner, and to provide
all personnel and any facilities, goods and equipment not otherwise provided by
the Partnership Group necessary to perform the Services.  KTI hereby accepts such engagement and agrees
to perform the Services requested by the General Partner and to provide any
personnel, facilities, goods and equipment not otherwise provided by the
Partnership Group, and to provide all employees as may be reasonable and
necessary to perform the Services.

 

Section 2.2             Scope
of Services.  The “Services”
shall consist of such services the General Partner determines may be reasonable
and necessary to operate the Business, including, without limitation, any
G&A Services and those services described on Schedule I hereto.  KTI

 

4

 

hereby
covenants and agrees that the Services will be performed in accordance with (i) applicable
material Governmental Approvals and Laws and (ii) industry standards.

 

Section 2.3             Exclusion
of Services.  The General
Partner may temporarily or permanently exclude any particular service from the
scope of the Services upon 90 days’ notice to KTI.

 

Section 2.4             Performance
of Services by Affiliates and Third Parties.  The Parties hereby agree that in discharging
its obligations hereunder, KTI may engage any of its Affiliates or any
qualified third party to perform the Services (or any part of the Services) on
its behalf and that the performance of the Services (or any part of the Services)
by any such Affiliate or third party shall be treated as if KTI performed such
Services itself. Notwithstanding the foregoing, nothing contained herein shall
relieve KTI of its obligations hereunder.

 

Section 2.5             Intellectual
Property.

 

(a)           Any (i) inventions, whether patentable or not,
developed or invented, or (ii) copyrightable material (and the intangible
rights of copyright therein) developed, by KTI, its Affiliates or its or their
employees in connection with the performance of the Services shall be the
property of KTI; provided, however, that the
Partnership Group shall be granted an irrevocable, royalty-free, non-exclusive
and non-transferable right and license to use such inventions or material; and
further provided, however, that the Partnership
Group shall only be granted such a right and license to the extent such grant
does not conflict with, or result in a breach, default, or violation of a right
or license to use such inventions or material granted to KTI by any Person
other than an Affiliate of KTI. 
Notwithstanding the foregoing, KTI will use all commercially reasonable
efforts to grant such right and license to the Partnership Group.

 

(b)           The General Partner and the Partnership hereby grant to KTI
and its Affiliates an irrevocable, royalty-free, non-exclusive and
non-transferable right and license to use, during the term of this Agreement,
any intellectual property provided by the Partnership Group to KTI or its
Affiliates, but only to the extent such use is necessary for the performance of
the Services.  KTI agrees that it and its
Affiliates will utilize such intellectual property solely in connection with
the performance of the Services.

 

Section 2.6             Appointment
of Independent Accounting Firm.  Notwithstanding anything to the contrary in
this Agreement, the Parties hereby acknowledge and agree that the General
Partner shall have the exclusive authority to appoint an independent registered
public accounting firm to audit the financial statements of the Partnership and
the General Partner.

 

ARTICLE III

 

BOOKS, RECORDS AND REPORTING

 

Section 3.1             Books
and Records.  KTI shall
maintain accurate books and records regarding the performance of the Services
and its calculation of the Payment Amount, and shall maintain such books and
records for the period required by applicable accounting practices or Law.

 

5

 

Section 3.2             Audits.  The Partnership shall have the right, upon
reasonable notice, and at all reasonable times during usual business hours, to
audit, examine and make copies of the books and records referred to in Section 3.1.  Such right may be exercised through any agent
or employee of the Partnership Group designated in writing by it or by an
independent public accountant, attorney or other agent so designated.  The Partnership shall bear all costs and
expenses incurred in any inspection, examination or audit.  KTI shall review and respond in a timely
manner to any claims or inquiries made by the Partnership regarding matters
revealed by any such inspection, examination or audit.

 

Section 3.3             Reports.  KTI shall prepare and deliver to the
Partnership any reports provided for in this Agreement and such other reports
as the Partnership may reasonably request from time to time regarding the performance
of the Services.

 

ARTICLE IV

 

PAYMENT AMOUNT

 

Section 4.1             Payment
Amount.

 

(a)           The Partnership shall on a quarterly basis (i) pay KTI
a fixed fee of $87,500 for the then-completed quarter (as may be adjusted from
time to time as provided below, the “Administrative Fee”) and (ii) reimburse
KTI for all reasonable third-party expenses that KTI incurs on behalf of the
Partnership Group (collectively with the Administrative Fee, the “Payment
Amount”).

 

(b)           The Administrative Fee shall increase (or decrease) in the
following circumstances:

 

(i)            Beginning on the first day of April in each year
beginning with April 1, 2010, the Administrative Fee shall be adjusted so
that the new Administrative Fee for such year shall equal the product of the
then-current Administrative Fee multiplied by a fraction the numerator of which
is the PPI for the immediately preceding year and the denominator of which is
the PPI for the immediately preceding year to such year; provided,
however, that KTI shall have the right to decline any such increase
in the Administrative Fee in its sole discretion. By way of example, the
quarterly Administrative Fee for the twelve-month period beginning on
April 1, 2010 shall be equal to $87,500 times a fraction the numerator of
which is the PPI for 2009 and the denominator of which is the PPI for 2008. If
the PPI for a given year is revised after April 1 of the year in question,
then the Administrative Fee shall be adjusted accordingly.

 

(ii)           If the Partnership or any
other member of the Partnership Group acquires additional assets, then KTI may
propose a revised Administrative Fee that covers the provision of Services for
such additional assets.  If the General
Partner, on behalf of the Partnership Group and with the concurrence of the
conflicts committee of the board of directors of the General Partner, agrees to
such revised Administrative Fee, KTI shall provide Services for the additional
assets pursuant to the terms set forth herein.

 

(iii)          If the Partnership and KTI
otherwise agree to increase the Administrative Fee; provided, however, that any
such increase shall be approved

 

6

 

by the board of directors of the General Partner
with the concurrence of the conflicts committee of such board.

 

Section 4.2             Payment
of Payment Amount.  KTI shall
invoice the Partnership within 25 days after the close of each quarter for the
estimated Payment Amount, plus or minus any adjustment necessary to correct
prior estimated billings to actual billings. 
Subject to Section 4.3, all invoices shall be due and payable, in
immediately available funds, within thirty days after receipt of each
invoice.  Upon the request of the
Partnership, KTI shall furnish a reasonable detail of the Services provided and
charges assessed during any quarter.

 

Section 4.3             Disputed
Charges.  THE PARTNERSHIP MAY, WITHIN
120 DAYS AFTER RECEIPT OF A CHARGE FROM KTI, TAKE WRITTEN EXCEPTION TO SUCH
CHARGE, ON THE GROUND THAT THE SAME WAS NOT A CORRECT CALCULATION OF THE
ADMINISTRATIVE FEE AND/OR A REASONABLE COST INCURRED BY KTI OR ITS AFFILIATES
IN CONNECTION WITH THE SERVICES. THE PARTNERSHIP SHALL NEVERTHELESS PAY KTI IN
FULL WHEN DUE THE FULL PAYMENT AMOUNT OWED TO KTI.  SUCH PAYMENT SHALL NOT BE DEEMED A WAIVER OF
THE RIGHT OF THE PARTNERSHIP TO RECOUP ANY CONTESTED PORTION OF ANY AMOUNT SO
PAID. HOWEVER, IF THE AMOUNT AS TO WHICH SUCH WRITTEN EXCEPTION IS TAKEN, OR
ANY PART THEREOF, IS ULTIMATELY DETERMINED NOT TO BE A CORRECT CALCULATION
OF THE ADMINISTRATIVE FEE AND/OR A REASONABLE COST INCURRED BY KTI OR ITS
AFFILIATES IN CONNECTION WITH ITS PROVIDING THE SERVICES HEREUNDER, SUCH AMOUNT
OR PORTION THEREOF (AS THE CASE MAY BE) SHALL BE REFUNDED BY KTI TO THE
PARTNERSHIP TOGETHER WITH INTEREST THEREON AT THE DEFAULT RATE DURING THE
PERIOD FROM THE DATE OF PAYMENT BY THE PARTNERSHIP TO THE DATE OF REFUND BY
KTI.

 

Section 4.4             Set Off.  In the event that KTI owes the Partnership a
sum certain in an uncontested amount under any other agreement, then any such
amounts may be aggregated and the Partnership and KTI may discharge their
obligations by netting those amounts against any amounts owed by the
Partnership to KTI under this Agreement. If the Partnership or KTI owes the
other party a greater aggregate amount, that Party may pay to the other Party
the difference between the amounts owed.

 

Section 4.5             KTI’s
Employees.  The
obligations under Sections 4.1 and 4.2, to the extent they relate to Services
provided by employees of KTI or its Affiliates, shall be limited to payment to
KTI for expenses in connection with its or its Affiliates’ employees engaged in
the provision of Services hereunder, and the Partnership shall not be obligated
to pay to KTI’s or its Affiliates’ employees directly any compensation,
salaries, wages, bonuses, benefits, social security taxes, workers’
compensation insurance, retirement and insurance benefits, training and other
such expenses; provided, however, that the
Partnership may, at its option, compensate such employees under one or more
equity-based incentive compensation plans for the provision of Services
hereunder; and provided further, however, that
if KTI fails to pay any employee, with the exception of employee claims for
amounts owed that KTI disputes in good faith, within 30 days of the date such
employee’s payment is due:

 

7

 

(a)           The Partnership may (i) pay such employee directly, (ii) employ
such employee directly, (iii) notify KTI and begin to pay all employees
providing service to the Partnership directly, or (iv) notify KTI that
this Agreement is terminated and employ all employees directly; and

 

(b)           KTI shall reimburse the Partnership, as the case may be, the
amount the Partnership paid to KTI for employee services that KTI did not pay
to any such employee.

 

Section 4.6             Approval
of Expenses.  KTI
acknowledges that all charges for Services assessed by KTI and included in the
Payment Amount must be approved by the persons authorized to approve such
Payment Amount pursuant to the Partnership’s governance and
delegation-of-authority process. Additionally, KTI acknowledges that the Audit
Committee of the Board of Directors of the General Partner, or if there is no
Audit Committee, the entire Board of Directors of the General Partner, may at
any time review the Payment Amounts and the levels of Services and, as a
result, may direct the Partnership to decrease the level of Services or to
dispute a prior invoice pursuant to Section 4.3.  In addition to the information KTI is
obligated to provide pursuant to Section 4.2, KTI shall provide such other
information as reasonably necessary to determine the veracity or
appropriateness of any Payment Amount hereunder.

 

ARTICLE V

 

FORCE MAJEURE

 

A
Party’s obligation under this Agreement shall be excused when and to the extent
its performance of that obligation is prevented due to Force Majeure; provided, however, that a Party shall not be excused by
Force Majeure from any obligation to pay money. The Party that is prevented
from performing its obligation by reason of Force Majeure shall promptly notify
the other Parties of that fact and shall exercise due diligence to end its
inability to perform as promptly as practicable. Notwithstanding the foregoing,
a Party is not required to settle any strike, lockout or other labor dispute in
which it may be involved; provided, however,
that, in the event of a strike, lockout or other labor dispute affecting KTI,
KTI shall use reasonable efforts to continue to perform all obligations
hereunder by utilizing its management personnel and that of its Affiliates.

 

ARTICLE VI

 

ASSIGNMENTS AND SUBCONTRACTS

 

Section 6.1             Assignments.

 

(a)           Without the prior consent of KTI, none of the Partnership or
the other members or the Partnership Group may sell, assign, transfer or convey
any of its rights, or delegate any of its obligations, under this Agreement to
any Person.

 

(b)           Without the prior consent of the Partnership, KTI may not
sell, assign, transfer or convey any of its rights, or delegate any of its
obligations, under this Agreement to any Person, other than the delegation or
performance of Services to an

 

8

 

Affiliate of
KTI or a qualified third party as permitted by Section 2.4 and the sale,
assignment, transfer or conveyance of its rights hereunder to any such
Affiliate.

 

Section 6.2             Other
Requirements.  Subject to
the other provisions hereof:

 

(a)           All materials and workmanship used or provided in performing
the Services shall be in accordance with applicable specifications and
standards.

 

(b)           KTI shall exercise reasonable diligence to obtain the most
favorable terms or warranties available from vendors, suppliers and other third
parties, and where appropriate, KTI shall assign such warranties to the
Partnership.

 

(c)           In rendering the Services, KTI shall not discriminate
against any employee or applicant for employment because of race, creed, color,
religion, sex, national origin, age or handicap, and shall comply with all
applicable provisions of Executive Order 11246 of September 24, 1965, and
any successor order thereto.

 

(d)           KTI agrees to exercise reasonable diligence to ensure that,
during the term of this Agreement, it shall not employ unauthorized aliens as
defined in the Immigration Reform and Control Act of 1986, or any successor
law.

 

ARTICLE VII

 

TERMINATION

 

Section 7.1             Termination
by the Partnership on behalf of the Partnership Group.

 

(a)           Upon the occurrence of any of the following events, the
Partnership, on behalf of the Partnership Group, may terminate this Agreement
by giving written notice of such termination to KTI:

 

(i)            the Partnership and its Affiliates
cease to maintain a direct or indirect controlling interest in KSP GP or KTI;
or

 

(ii)           KTI’s failure to pay any
employee within thirty (30) days of the date such employee’s payment is due,
subject to the limitations described in Section 4.5.

 

Any termination under this Section 7.1(a) shall
become effective immediately upon delivery of the notice first described in
this Section 7.1(a), or such later time (not to exceed the first
anniversary of the delivery of such notice) as may be specified by the Partnership.

 

(b)           In addition to its rights under Section 7.1(a), the
Partnership may terminate this Agreement at any time by giving notice of such
termination to KTI. Any termination under this Section 7.1(b) shall
become effective 90 days after delivery of such notice, or such later time (not
to exceed the first anniversary of the delivery of such notice) as may be
specified by the Partnership.

 

9

 

(c)           In the event that KTI becomes Bankrupt or dissolves and commences
liquidation or winding-up, this Agreement shall automatically terminate without
notice to KTI.

 

Section 7.2             Termination
by KTI.

 

(a)           KTI may terminate this Agreement by giving written notice of
such termination to the Partnership in the event that the Partnership and its
Affiliates cease to maintain a direct or indirect controlling interest in KSP
GP or KTI.  Any termination under this Section 7.2(a) shall
become effective immediately upon delivery of the notice first described in
this Section 7.2(a).

 

(b)           In addition to its rights under Section 7.2(a), KTI may
terminate this Agreement at any time by giving notice of such termination to
the Partnership. Any termination under this Section 7.2(b) shall
become effective 90 days after delivery of such notice, or such later time (not
to exceed the first anniversary of the delivery of such notice) as may be
specified by KTI.

 

Section 7.3             Effect
of Termination.  If this
Agreement is terminated in accordance with Section 7.1 or 7.2, all rights
and obligations under this Agreement shall cease except for (a) obligations
that expressly survive termination of this Agreement; (b) liabilities and
obligations that have accrued prior to such termination, including the
obligation to pay any amounts that have become due and payable prior to such
termination, and (c) the obligation to pay any portion of the Payment
Amount that has accrued prior to such termination, even if such portion has not
become due and payable at that time.

 

ARTICLE VIII

 

CONFIDENTIAL INFORMATION

 

Section 8.1             Nondisclosure.  Each of KTI and the Partnership Group agrees
that (i) it will not disclose to any third party or use any Confidential
Information disclosed to it by the other except as expressly permitted in this
Agreement, and (ii) it will take all reasonable measures to maintain the
confidentiality of all Confidential Information of the other Party in its
possession or control, which will in no event be less than the measures it uses
to maintain the confidentiality of its own information of similar type and
importance.

 

Section 8.2             Permitted
Disclosure. 
Notwithstanding the foregoing, each Party may disclose Confidential
Information (i) to the extent required by a court of competent
jurisdiction or other Governmental Authority or otherwise as required by law,
including without limitation disclosure obligations imposed under the federal
securities laws, provided that such Party has given the other Party prior
notice of such requirement when legally permissible to permit the other Party
to take such legal action to prevent the disclosure as it deems reasonable,
appropriate or necessary, or (ii) to its consultants, legal counsel,
Affiliates, accountants, banks and other financing sources and their advisors.

 

10

 

ARTICLE IX

 

LIMITATION OF LIABILITY;
INDEMNIFICATION

 

Section 9.1             Limitation
of KTI’s Liability.  Neither KTI
nor any of its controlling persons, directors, officers, employees, agents and
permitted assigns (each, a “KTI Party”) shall have any liability to the
Partnership Group for any losses, damages (including, but not limited to,
special, indirect, punitive and/or consequential damages), claims, injury,
liability, cost or expense (“Damages”) arising out of this Agreement, whether
such Damages arise on account of the furnishing of Services hereunder, the
failure to furnish Services hereunder, or otherwise, and whether or not such
Damages were caused by the negligence of the KTI Party, including the KTI Party’s
sole negligence; provided, however, that the
foregoing limitation shall not apply to Damages caused by the KTI Party’s gross
negligence or willful, intentional misconduct.

 

Section 9.2             Partnership’s
Indemnity.  The
Partnership agrees to indemnify, defend and hold harmless each KTI Party from
and against any and all Damages arising out of this Agreement, whether such
Damages arise on account of the furnishing of Services hereunder, the failure
to furnish Services hereunder, or otherwise, and whether or not such Damages
were caused by the negligence of any KTI Party, including the KTI Party’s sole
negligence; provided, however, that the foregoing
limitation shall not apply to Damages caused by the KTI Party’s gross
negligence or willful, intentional misconduct.

 

Section 9.3             Limitation
of Damages.  If the
Partnership Group suffers Damages arising out of this Agreement, which Damages
were caused by the gross negligence or willful, intentional misconduct of any
KTI Party, KTI’s sole liability to the Partnership Group shall be to properly
perform the Services in question at no additional cost to the Partnership Group
and to pay the Partnership Group for any and all direct damages suffered by the
Partnership Group.  Notwithstanding
anything to the contrary contained herein or at Law and in equity, in no event
shall any KTI Party be liable for punitive, special, indirect, incidental or
consequential damages (including, without limitation, damages for loss of
business profits, business interruption or any other loss) arising from or
relating to any claim made under this Agreement or regarding the provision of
or the failure to provide Services, even if KTI had been advised or was aware
of the possibility of such damages.

 

Section 9.4             Affiliate;
Third Parties.  If KTI uses
the personnel of its Affiliates or third parties to provide Services, KTI shall
be responsible for the acts and omissions of such personnel and third parties
to the extent provided in this Agreement, and no Affiliate of KTI or third
party shall have any liability to the Partnership Group on account of any
Damages suffered by the Partnership Group arising out of this Agreement,
whether or not such Damages were caused by their negligence and/or gross
negligence, including their sole negligence and/or sole gross negligence, or
their willful, intentional misconduct.

 

11

 

ARTICLE X

 

DISPUTE RESOLUTION

 

If the Parties are unable to
resolve any dispute regarding the validity or terms of this Agreement or its
termination, service or performance issues, there is a material breach of this
Agreement that has not been corrected within thirty (30) days of receipt of
notice of such breach or any other dispute between the Parties related to this
Agreement, either Party hereto may refer the matter to an arbitrator selected
in accordance with the rules of JAMS in Middlesex County, New Jersey as
the exclusive remedy for any such dispute, and in lieu of any court action,
which is hereby waived. The only exception shall be a claim by either Party for
injunctive relief pending arbitration.

 

ARTICLE XI

 

GENERAL PROVISIONS

 

Section 11.1           Notices.  All notices or other communications required
or permitted under, or otherwise in connection with, this Agreement must be in
writing and must be given by (1) depositing same in the mail, addressed to
the Person to be notified, postpaid and registered or certified with return
receipt requested, (2) transmitting by national overnight courier, (3) delivery
in person or (4) facsimile to such Party. 
Notice given by mail, national overnight courier or personal delivery
shall be effective upon actual receipt. 
Notice given by facsimile shall be effective upon confirmation of a
successful transmission.  All notices to
be sent to a Party pursuant to this Agreement shall be sent to or made at the
address, in each case as follows:

 

if to the General Partner or the Partnership:

 

K-Sea GP LLC

One Tower Center Boulevard

17th Floor

East Brunswick, NJ 08816

Attention:  President

Fax: (732) 339-6140

 

if to KTI:

 

K-Sea Transportation Inc.

One Tower Center Boulevard

17th Floor

East Brunswick, NJ 08816

Attention:  President

Fax: (732) 339-6140

 

Section 11.2           Further
Action.  The Parties shall execute and
deliver all documents, provide all information and take or refrain from taking
action as may be necessary or appropriate to achieve the purposes of this
Agreement.

 

Section 11.3           Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their heirs,
executors, administrators, successors, legal representatives and permitted
assigns.

 

12

 

Section 11.4           Integration.  This Agreement constitutes the entire
Agreement among the Parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

 

Section 11.5           Creditors.  None of the provisions of this Agreement
shall be for the benefit of, or shall be enforceable by, any creditor of any
Party.

 

Section 11.6           Waiver.  No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach of any other covenant, duty, agreement or
condition.

 

Section 11.7           Counterparts.  This Agreement may be executed in
counterparts, all of which together shall constitute an agreement binding on
all the Parties hereto, notwithstanding that all such Parties are not
signatories to the original or the same counterpart. Each Party shall become
bound by this Agreement immediately upon affixing its signature hereto.

 

Section 11.8           Applicable
Law.  This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflicts of law.

 

Section 11.9           Invalidity
of Provisions.  If any
provision of this Agreement is or becomes invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.

 

Section 11.10         Amendment
or Restatement.  This
Agreement may be amended or restated only by a written instrument executed by
each of the Parties; provided, however,
that after the completion of the Partnership’s initial public offering of
common units representing limited partner interests, the Partnership may not,
without the prior approval of the conflicts committee of the board of directors
of the General Partner or, if there is no such committee, the independent
members of such board of directors, agree to any amendment or modification of
this Agreement that the General Partner determines will adversely affect the
holders of such common units.  The
Parties hereto agree that, for purposes of this Section 11.10, any
material change in the nature, quantity or duration of the Services to be
provided under this Agreement shall constitute a modification of this
Agreement.

 

Section 11.11         Directly
or Indirectly.  Where any
provision of this Agreement refers to action to be taken by any Party, or which
such Party is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Party, including
actions taken by or on behalf of any Affiliate of such Party.

 

13

 

IN WITNESS WHEREOF, the
Parties have executed this Agreement on the date first written above.

 

	
   

  	
  K-SEA GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K-SEA GP HOLDINGS LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea GP LLC, its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Administrative Services
Agreement

 

 

SCHEDULE I

 

SERVICES PROVIDED BY KTI

TO THE PARTNERSHIP GROUP

 

1.             Accounting

 

2.             Information Technology

 

3.             Real Property

 

4.             Legal

 

5.             Securities and Exchange
Commission Reporting

 

6.             Administrative Services

 

7.             Financial Services

 

8.             Insurance Services

 

9.             Risk Management

 

10.           Corporate Development

 

11.           Commercial and Marketing

 

12.           Treasury

 

13.           Tax

 

14.           Audit

 

15.           Sarbanes-Oxley Compliance

 

16.           Investor Relations

 

I-1

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