CLASS B AGREEMENT (Deere)
Exhibit
10.4
(Deere)
This Class B Agreement (Deere) (the
“Agreement”) made February 5, 2010 by and among Denbury Resources Inc.
(“Denbury”), Denbury Gathering & Marketing, Inc. (“DGM”), Xxxxxx X. Deere
(the “Subject Member”) and Genesis Energy, LLC (“Genesis GP”) (Denbury, DGM, the
Subject Member and Genesis GP are collectively referred to herein as the
“Parties,” and sometimes individually as a “Party”).
RECITALS
1.
DGM, as the
Class A Member, and Genesis GP entered into that certain Limited Liability
Company Agreement of Genesis Energy, LLC, effective December 29, 2008, which
agreement was amended by that certain First Amendment thereto entered into among
DGM, Genesis GP, the Subject Member, and Xxxxx X. Xxxx (“Xxxx”) and Xxxxxx X.
Xxxxxx, Xx. (“Xxxxxx” and together with Xxxx the “Other Class B Members”)
effective December 31, 2008, pursuant to which the Subject Member and the Other
Class B Members were admitted as the Class B Members of Genesis GP (such
agreement, as amended, the “GP LLC Agreement”).
2.
Among its other provisions,
Section 3.02(e)(2) of the GP LLC Agreement provides that “In the event of a
Change of Control, [Genesis GP] shall be required to
redeem each Class B Members’ Individual Class B Interest for the Redemption
Amount…and the Class B Members shall cease to be Members of [Genesis GP] as of
the effective date of the Change of Control… .”
3.
Pursuant to a Guaranty Agreement
(herein so called) dated as of December 31, 2008, Denbury guaranteed to the
Subject Member and to his permitted successors and assigns the payment by
Genesis GP of certain obligations (the “Guaranteed Obligations”). The
Guaranteed Obligations included the obligation of Genesis GP to pay any
Redemption Amount and certain ancillary obligations.
4.
Denbury and DGM, as the Selling Parties,
have entered into that certain Purchase Agreement dated December 17, 2009, as
the same has been or may be amended (the “Purchase Agreement”) with Q Genesis
Acquisition, LLC (“Buyer”) setting forth the terms and conditions of a
transaction (the “Sale Transaction”) pursuant to which DGM has agreed to sell to
Buyer, and Buyer has agreed to purchase from DGM, the Class A Interests (herein
so called and in the GP LLC Agreement called the “Class A Ownership Interests”)
in Genesis GP, on the terms and conditions therein provided.
5.
Buyer and the Subject
Member have agreed upon the terms and conditions of the merger of Buyer into
Genesis GP subsequent to the closing of the Sale Transaction (the “Merger”), and
that as part of the Merger any remaining equity interest held by the Subject
Member in Genesis GP will be converted into equity interests in the entity
surviving the Merger.
6.
The Parties enter into this Agreement to confirm the effect of
the Sale Transaction with respect to the Class A Interests, and the treatment of
the Subject Member, his Redemption Amount and the guaranty thereof, and the
termination of the Guaranty Agreement, in connection with the Sale Transaction
and the Merger.
7.
Capitalized terms used in this Agreement, and not
otherwise defined, will have the meaning as provided in the GP LLC
Agreement.
AGREEMENTS
In
consideration of the mutual terms, conditions and other agreements set forth
herein, the Parties agree as follows:
1.
Transfer of Class A
Interests. Effective simultaneously with the closing of the
Sale Transaction, the Class A Interests will be transferred to Buyer, Buyer will
be admitted as the Class A Member of Genesis GP in substitution of DGM with all
the rights and powers of the Class A Member under, and will be bound by the
terms and conditions of, the GP LLC Agreement, DGM will cease to be the Class A
Member, a Change of Control will have occurred, and DGM will cease to have or
exercise any right or power as a member of Genesis GP except for rights of
indemnification as contemplated by the GP LLC Agreement, the Partnership
Agreement and the Purchase Agreement.
2.
Redemption Amount, Amendment
of GP LLC Agreement.
(a) Notwithstanding
the Change of Control effected by the Sale Transaction, and notwithstanding the
provisions of Section 3.02(e)(2) of the GP LLC Agreement pursuant to which in
the event of a Change of Control Genesis GP is required to redeem each Class B
Members’ Individual Class B Interest for the Redemption Amount, and the Class B
Members cease to be Members of Genesis GP, the Parties desire and intend that
only a portion of the Redemption Amount shall be paid to the Subject Member as a
result of the Sale Transaction and that following closing of the Sale
Transaction the Subject Member shall continue to be a Member of Genesis
GP.
(b) To
give effect to the desire and intent expressed in Section 2(a) above, the
Parties agree that effective immediately prior to the closing of the Sale
Transaction, but subject to such closing occurring:
(i) notwithstanding
any provision of Section 3.02(e)(2) thereof to the contrary, the GP LLC
Agreement is hereby amended to provide that instead of the Subject Member’s
Individual Class B Interests being redeemed for the Redemption Amount and the
Subject Member ceasing to be a Member of Genesis GP as a result of the Change of
Control effected by the Sale Transaction, the Subject Member will not cease to
be a Member of Genesis GP as of the effective date of such Change of Control and
only a portion of the Redemption Amount shall be paid to the Subject Member, but
instead effective simultaneously with, and by virtue of, the Merger the Class B
Ownership Interests of the Subject Member that are not redeemed by Genesis GP
will be converted into equity interests in the entity surviving the Merger;
and
(ii) this
Section 2(b) will constitute part of the Genesis GP LLC Agreement.
(c) The
Subject Member agrees that effective simultaneously with, and by virtue of, the
Merger, and for the benefit of the Buyer, he will no longer be a Class B Member
of Genesis GP;
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(d) The
Subject Member agrees that effective simultaneously with, and by virtue of, the
payment of a portion of the Redemption Amount and the Merger, the Subject Member
will receive aggregate consideration for the Redemption Amount and all other
amounts to which he is entitled under the GP LLC Agreement by virtue of the Sale
Transaction, including consideration received upon the conversion of his
remaining Class B Ownership Interests into equity interests in the entity
surviving the Merger; and
(e) Effective
simultaneously with closing of the Sale Transaction, and without further action
on his part, the Subject Member hereby releases Genesis GP, Denbury, DGM, and
the Buyer and their respective Affiliates (as that term is defined in the
Purchase Agreement), from any and all liability or obligation for payment of the
Redemption Amount or any other amounts to which he is entitled under the GP LLC
Agreement by virtue of the Sale Transaction. The Subject Member
expressly agrees that the Buyer and its Affiliates are third party beneficiaries
of such release.
(f) The
Parties agree that the Subject Member’s Redemption Amount as of the closing of
the Sale Transaction is $2,431,683.65, and that such Redemption Amount will be
used in connection with determining the purchase price to be paid by Buyer to
DGM in connection with the Sale Transaction. The Parties also agree
that of such $2,431,863.65, $431,683.65 will be paid by Genesis GP to the
Subject Member upon closing of the Sale Transaction and only the portion of the
Class B Ownership Interest related to that amount will be redeemed by Genesis
GP.
3.
Guaranty Agreement,
Release. Effective simultaneously with the closing of the Sale
Transaction, and without further action on his part:
(a) the
Subject Member hereby agrees that Denbury is released and forever discharged
from any and all liability or obligation of any nature whatsoever to the Subject
Member under the Guaranty Agreement, and that the Guaranty Agreement, and any
and all liabilities and obligations of Denbury thereunder, are released, forever
discharged, cancelled, terminated, void and of no further force or effect
whatsoever. The Subject Member agrees that at the closing of the Sale
Transaction he will xxxx the original executed copy of the Guaranty Agreement
“Cancelled and Void,” sign and date beneath such marking, and return the same to
Denbury; and
(b) the
Subject Member hereby agrees that Denbury, DGM, and their respective officers,
directors, employees, agents and affiliated entities are released and forever
discharged from any and all liability, obligation, claim, or cause of action of
any nature whatsoever, to or of the Subject Member arising under, related to or
growing out of the Genesis GP LLC Agreement or the rights of the Subject Member
thereunder.
4.
Subject Member
Authority. The Subject Member acknowledges and agrees that he
has full power and authority to execute this Agreement and make and perform the
agreements herein contained without the joinder of any third party.
5.
Miscellaneous.
(a) This
Agreement shall inure to the benefit of, and be binding upon, the Parties hereto
and their respective successors and permitted assigns; provided, however, that
no Party shall assign or delegate any of the obligations created under this
Agreement without the prior written consent of the other
Parties. Except as expressly provided in this Agreement, nothing in
this Agreement will confer on any person not a Party, or the legal
representative of any such person, any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement.
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(b) All
legal, accounting and other fees, costs and expenses of a Party incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the Party incurring such fees, costs or expenses.
(c) All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made on receipt if
delivered personally or sent by overnight courier or sent by facsimile (with
evidence of confirmation of receipt) to the Parties at the following
addresses:
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(i)
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If
to Denbury or DGM, to:
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Denbury
Resources Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxx,
Xxxxx 00000
Facsimile:
000-000-0000
Attention:
Xxxx Xxxxxxx
with a
copy to:
Xxxxx
Xxxxxxxxx LLP
0000
Xxxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx
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(ii)
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If
to Genesis GP, to:
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Genesis
Energy, LLC
000
Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Facsimile:
000-000-0000
Attention:
Xxxx X. Xxxxxxxxx, its Secretary
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(iii)
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If
to Subject Member, to:
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Xxxxxx X.
Deere
000
Xxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxx 00000
Facsimile:
(000) 000-0000
or to
such other persons or at such other addresses as shall be furnished by any Party
by like notice to the other Parties. No change in any of such
addresses shall be effective insofar as notices under this Section 6(c) are
concerned unless such changed address is located in the United States of America
and notice of such change shall have been given to the other Parties as provided
in this Section 6(c).
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(d) This
Agreement represents the entire agreement and understanding of the Parties with
reference to the matters set forth herein. This Agreement supersedes
all prior negotiations, discussions, correspondence, communications,
understandings and agreements between the Parties relating to the subject matter
hereof or thereof and all prior drafts of such documents, all of which are
merged into this Agreement. No prior drafts of this Agreement and no
words or phrases from any such prior drafts shall be admissible into evidence in
any action or suit involving this Agreement.
(e) Any
Party to this Agreement may, by written notice to the other
Parties: (a) extend the time for the performance of any of the
obligations or other actions of the other Parties; (b) waive compliance with any
of the agreements of the other Parties contained in this Agreement; or (c) waive
performance of any of the obligations of the other Parties created under this
Agreement. The waiver by any Party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach, whether or not similar, unless such waiver specifically states that it
is to be construed as a continuing waiver. This Agreement may be
amended, modified or supplemented only by a written instrument executed by all
of the Parties.
(f) This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the Parties
intend that there shall be added as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable term or provision as may be
possible and be valid and enforceable.
(g) Facsimile
transmission of any signed original of this Agreement or retransmission of any
signed facsimile transmission of this Agreement shall be the same as delivery of
an original. At the request of any Party, another Party will confirm
facsimile transmission by signing and delivering a duplicate original of this
Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(h) This
Agreement shall be governed by and construed in accordance with the internal and
substantive laws of the State of Texas and without regard to any conflicts of
laws concepts that would apply the substantive law of some other
jurisdiction.
(i) To
the fullest extent permitted by applicable law, the Parties hereby irrevocably
submit to the jurisdiction of the courts of the State of Texas and the federal
courts of the United States of America, located in Xxxxxx County, Texas over any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby, and each Party irrevocably agrees that all claims in
respect of such dispute or proceeding shall be heard and determined in such
courts. The Parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the venue of any dispute arising out of or relating to this Agreement or any
of the transactions contemplated hereby brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each Party
agrees that a judgment in any dispute heard in the venue specified by this
section may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable law.
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(j) Each
of the Parties hereby irrevocably waives, to the fullest extent permitted by
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement.
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IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
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DENBURY
RESOURCES INC.
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By:
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/s/ Xxxx X.
Xxxxx
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Name:
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Xxxx
X. Xxxxx
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Title:
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Senior
Vice President and Chief Financial Officer
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DENBURY
GATHERING & MARKETING, INC.
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By:
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/s/ Xxxx X.
Xxxxx
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Name:
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Xxxx
X. Xxxxx
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Title:
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Senior
Vice President and Chief Financial Officer
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/s/ Xxxxxx X. Deere
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Xxxxxx
X. Deere
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GENESIS
ENERGY, LLC
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By:
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/s/ Xxxx X. Xxxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxxx
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Title:
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General
Counsel
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