UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 2006
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
         
DELAWARE
(State or other jurisdiction
of incorporation)
  000-51734
(Commission File Number)
  37-1516132
(IRS Employer
Identification No.)
2780 Waterfront Pkwy E. Drive
Suite 200
Indianapolis, Indiana 46214

(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (317) 328-5660


(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 1.01    Entry into a Material Definitive Agreement.
General . As described in its final prospectus (the “Prospectus”) dated January 25, 2006 (File No. 333-128880) and filed on January 26, 2006 with the Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), on January 25, 2006, Calumet Specialty Products Partners, L.P. (the “Partnership”) entered into an underwriting agreement (the “Underwriting Agreement”) with Calumet LP GP, LLC (“LP GP”), Calumet GP, LLC (the “General Partner”), Calumet Lubricants Co., Limited Partnership (“Old Calumet”), Calumet Operating, LLC (“OLLC”) and the underwriters named therein providing for the offer and sale in a firm commitment underwritten offering of 5,699,900 common units (“Common Units”) representing limited partner interests in the Partnership (the “Firm Units”) at a price to the public of $21.50 per Common Unit. Pursuant to the Underwriting Agreement, the Partnership granted the Underwriters a 30-day option (the "Option") to purchase up to an additional 854,985 Common Units (the “Option Units”) to cover over-allotments on the same terms as those Firm Units sold by the Partnership. In addition, on January 25, 2006 as described in the Prospectus, 750,100 Common Units were offered directly by us, pursuant to a common unit purchase agreement (the “Purchase Agreement”), with three individuals related to the chairman of the board of directors of the General Partner (the “Fehsenfeld Units”) at a price of $19.995 per Common Unit.
The transactions contemplated by the Underwriting Agreement were consummated on January 31, 2006, and the Option was exercised in full by the Underwriters on February 6, 2006 and closed on February 8, 2006. The proceeds received by the Partnership (net of underwriting discounts and structuring fees and before expenses) from the sale of 7,304,985 units (consisting of the Firm Units, the Option Units and the Fehsenfeld Units) were approximately $144 million. As described in the Prospectus, the Partnership will use the net proceeds of the offering to: (i) repay indebtedness under its first lien term loan facility in the amount of approximately $125 million, (ii) repay indebtedness under its secured revolving credit facility in the amount of approximately $15 million and (iii) pay transaction fees and expenses in the amount of approximately $4 million dollars.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Form 8-K and is incorporated herein by reference. A copy of the Purchase Agreement is filed as Exhibit 1.2 to this Form 8-K and is incorporated herein by reference.
Omnibus Agreement . On January 31, 2006, in connection with the closing of the transactions contemplated by the Underwriting Agreement, The Heritage Group (“Heritage”), the General Partner, LP GP, Old Calumet, the Partnership and OLLC entered into an omnibus agreement (the “Omnibus Agreement”). As more fully described in the Prospectus, the Omnibus Agreement governs the Partnership’s relationship with Heritage and its affiliates with respect to the restrictions on the ability of Heritage and its affiliates to compete in certain lines of business in which the Partnership operates.
A copy of the Omnibus Agreement is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.

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Long-Term Incentive Plan. On January 24, 2006, the board of directors of the General Partner adopted the Long-Term Incentive Plan (the “Plan”), effective as of that date, for employees, consultants and directors of the General Partner and employees and consultants of its affiliates who perform services for the General Partner or its affiliates. As described in the Prospectus, the Plan provides for the grant of restricted units, phantom units, unit options and substitute awards and, with respect to unit options and phantom units, the grant of distribution equivalent rights. Subject to adjustment for certain events, an aggregate of 783,960 Common Units may be delivered pursuant to awards under the Plan. The Plan will be administered by the compensation committee of the General Partner’s board of directors. The General Partner’s board of directors will also have the right to alter or amend the Plan or any part of it from time to time and the compensation committee may amend any award; provided, however, that no change in any outstanding award may be made that would materially impair the rights of the participant without the consent of the affected participant. Subject to unitholder approval, if required by the rules of the principal national securities exchange upon which the common units are traded, the board of directors of the General Partner may increase the number of common units that may be delivered with respect to awards under the Plan.
A copy of the Plan is filed as Exhibit 10.2 to this Form 8-K and is incorporated herein by reference.
Grube Employment Agreement . On January 31, 2006, F. William Grube, the president, chief executive officer and a director of the General Partner, entered into an employment agreement with the General Partner. Pursuant to the employment agreement, Mr. Grube will continue to serve as president and chief executive officer of the General Partner as well as a member of the board of directors of the General Partner. The employment agreement provides that Mr. Grube will have powers and duties and responsibilities that are customary to this position and that are assigned to him by the board of directors of the General Partner in connection with his general management and supervision of the operations of the General Partner.
The employment agreement has an initial term of five years, with automatic annual extensions beginning on the third anniversary of its effective date. The agreement provides for an annual base salary of approximately $333,000, subject to annual adjustment by the compensation committee of the board of directors of the General Partner, as well as the right to participate in the Plan and other bonus plans. Mr. Grube will generally be entitled to receive a payout or distribution of at least 150% of the amount of any cash, equity or other payout or distribution that may be made to any other executive officer under the terms of these plans. The employment agreement also contains non-competition provisions.
Mr. Grube’s employment agreement may be terminated at any time by either party with proper notice. If Mr. Grube’s employment is terminated without cause, as defined in the agreement, or by Mr. Grube for good reason, as defined in the agreement, then the General Partner will be required to pay Mr. Grube a lump sum equal to three times his current base salary as well as a lump sum cash payment for amounts accrued under our various incentive and benefit plans. In addition, all equity based awards will vest in full in the event of such a termination.
A copy of this employment agreement is filed as Exhibit 10.3 to this Form 8-K and is incorporated herein by reference.

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Other Agreements . The description of the Contribution Agreement described below under Item 2.01 is incorporated in this Item 1.01 by reference. A copy of the Contribution Agreement is filed as Exhibit 10.4 to this Form 8-K and is incorporated herein by reference.
Relationships . Each of LP GP, OLLC and Old Calumet are direct or indirect subsidiaries of the Partnership. As a result, certain individuals, including officers and directors of the General Partner, serve as officers and/or directors of more than one of such entities. As described above, each of the General Partner, LP GP, the Partnership, OLLC and Old Calumet were parties to the Underwriting Agreement. Heritage, the General Partner, LP GP, Old Calumet, the Partnership and OLLC were parties to the Omnibus Agreement. As described in Item 2.01 below, each of Heritage, the General Partner, LP GP, the Partnership, OLLC, Old Calumet and several of their affiliates were also parties to the Contribution Agreement. The General Partner serves as the general partner of the Partnership, holding a 2% general partner interest and incentive distribution rights in the Partnership.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Contribution Agreement . In connection with the consummation of the transactions contemplated by the Underwriting Agreement, on January 31, 2006, F. William Grube , Janet Krampe Grube, the Janet Krampe Grube Grantor Retained Annuity Trust Dated January 31, 2002 (“Grube Trust I”), the Janet Krampe Grube Grantor Retained Annuity Trust Dated March 18, 2004 (“Grube Trust II”), Fred M. Fehsenfeld, Jr., the Mildred L. Fehsenfeld Irrevocable Intervivos Trust for the Benefit of Fred Mehlert Fehsenfeld, Jr. and his Issue (“Fehsenfeld Trust I”), the Maggie Fehsenfeld Trust Number 106 for the Benefit of Fred Mehlert Fehsenfeld, Jr. and his Issue (“Fehsenfeld Trust II”), Calumet, Incorporated (“Calumet Inc.”), Heritage, the General Partner, the Partnership, OLLC, Old Calumet, LP GP, Calumet Sales Company Incorporated, Calumet Holding, LLC, Calumet Pennsylvania, LLC and Calumet Shreveport Packaging, LLC entered into a Contribution, Conveyance and Assumption Agreement (the “Contribution Agreement”). The Contribution Agreement provided for (i) the transfer of businesses and related assets and liabilities to the Partnership and its subsidiaries in exchange for limited partner interests in the Partnership (as more fully described in Item 3.02 below) and (ii) the distribution of cash by the Partnership to Old Calumet for the repayment of indebtedness under its revolving and term loan credit agreements. These transfers and distributions were made in a series of steps outlined in the Contribution Agreement.
A copy of the Contribution Agreement is filed as Exhibit 10.4 to this Form 8-K and is incorporated herein by reference. As noted in Item 1.01 above, the Partnership has certain relationships with certain parties to the Contribution Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
In connection with the consummation of the transactions contemplated by the Contribution Agreement, on January 31, 2006: (i) the General Partner contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) a 2% general partner interest and (B) the incentive distribution rights (which represent the right to receive increasing percentages of quarterly distributions in excess of specified amounts); (ii) Heritage contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 3,269,033 Common

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Units and (B) 7,414,176 subordinated units representing limited partner interests in the Partnership (the “Subordinated Units”); (iii) Calumet Inc. contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 591,886 Common Units and (B) 1,342,401 Subordinated Units; (iv) Fred M. Fehsenfeld, Jr. contributed to the Partnership all of his ownership interests in Old Calumet in exchange for (A) 147,973 Common Units and (B) 335,600 Subordinated Units; (v) Fehsenfeld Trust I contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 286,077 Common Units and (B) 648,825 Subordinated Units; (vi) Fehsenfeld Trust II contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 286,077 Common Units and (B) 648,825 Subordinated Units; (vii) Grube Trust I contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 1,020,456 Common Units and (B) 2,314,396 Subordinated Units; (viii) Grube Trust II contributed to the Partnership all of its ownership interests in Old Calumet in exchange for (A) 147,853 Common Units and (B) 335,332 Subordinated Units; and (ix) Janet Krampe Grube contributed to the Partnership all of her ownership interests in Old Calumet in exchange for (A) 11,660 Common Units and (B) 26,445 Subordinated Units.
Each Subordinated Unit will convert into one Common Unit at the end of the subordination period. Unless earlier terminated pursuant to the terms of the partnership agreement of the Partnership, the subordination period will extend until the first day of any quarter beginning after December 31, 2010 that the Partnership meets the financial tests set forth in the partnership agreement of the Partnership.
The foregoing transactions were undertaken in reliance upon the exemption from the registration requirements of the Securities Act afforded by Section 4(2) thereof. The Partnership believes that exemptions other than the foregoing exemption may exist for these transactions.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Effective January 26, 2006, James S. Carter, William S. Fehsenfeld, Robert C. Funk, Nicholas J. Rutigliano and Michael L. Smith were elected to serve as directors of the General Partner in addition to Messrs. F. William Grube and Fred M. Fehsenfeld, who were elected to serve as directors on September 29, 2005. Messrs. Carter, Funk and Smith are the initial members of the audit committee of the board of directors of the General Partner.
There is no arrangement or understanding between Messrs. Carter, W. Fehsenfeld, Funk, Rutigliano and Smith and any other persons pursuant to which they were selected as directors. There are no relationships between Messrs. Carter, W. Fehsenfeld, Funk, Rutigliano and Smith and the General Partner, the Partnership or its subsidiaries that would require disclosure pursuant to Item 404(a) of Regulation S-K, except that Mr. Rutigliano is the president of Tobias Insurance Group, Inc., a commercial insurance brokerage business that has historically placed a portion of the Partnership’s insurance underwriting requirements. The total premiums paid by the Partnership through Mr. Rutigliano’s firm for 2003, 2004 and 2005 were approximately $567,000, $581,000 and $788,000, respectively. It is anticipated that Mr. Rutigliano’s firm will continue to provide these services in the future on substantially similar terms and the Partnership believes that these premiums are comparable to the premiums it would pay for such insurance from a non-affiliated third party.

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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.
On January 31, 2006, the Partnership amended and restated its Agreement of Limited Partnership in connection with the closing of the initial public offering. A description of the First Amended and Restated Partnership Agreement is contained in the section entitled “The Partnership Agreement” of the Prospectus and is incorporated herein by reference. A copy of the First Amended and Restated Partnership Agreement as adopted is filed as Exhibit 3.1 to this Form 8-K and is incorporated herein by reference.
On January 31, 2006, the General Partner amended and restated its Limited Liability Company Agreement. A copy of the Amended and Restated Limited Liability Company Agreement of the General Partner as adopted is filed as Exhibit 3.2 to this Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c)      Exhibits.
     
Exhibit
Number
   
Description
 
 
 
 
   
Exhibit 1.1
  Underwriting Agreement, dated January 25, 2006 among Calumet Specialty Products Partners, L.P., Calumet LP GP, LLC, Calumet GP, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Operating, LLC and Goldman, Sachs & Co. as representative of the several underwriters named therein.
 
   
Exhibit 1.2
  Purchase Agreement, dated January 25, 2006, among Fred M. Fehsenfeld Sr., Mac Fehsenfeld, Frank B. Fehsenfeld, Calumet Specialty Products Partners, L.P. and Calumet GP, LLC.
 
   
Exhibit 3.1
  First Amended and Restated Limited Partnership Agreement of Calumet Specialty Products Partners, L.P.
 
   
Exhibit 3.2
  Amended and Restated Limited Liability Company Agreement of Calumet GP, LLC.
 
   
Exhibit 10.1
  Omnibus Agreement, dated January 31, 2006, among The Heritage Group, Calumet GP, LLC, Calumet LP GP, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Specialty Products Partners, L.P. and Calumet Operating, LLC.
 
   
Exhibit 10.2
  Calumet Specialty Products Partners, L.P. Long-Term Incentive Plan.
 
   
Exhibit 10.3
  F. William Grube Employment Agreement, dated January 31, 2006.

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Exhibit
Number
   
Description
 
 
 
 
   
Exhibit 10.4
  Contribution, Conveyance and Assumption Agreement, dated January 31, 2006, among F. William Grube , Janet Krampe Grube, Janet Krampe Grube Grantor Retained Annuity Trust Dated January 31, 2002, Janet Krampe Grube Grantor Retained Annuity Trust Dated March 18, 2004, Fred M. Fehsenfeld, Jr., Mildred L. Fehsenfeld Irrevocable Intervivos Trust for the Benefit of Fred Mehlert Fehsenfeld, Jr. and His Issue, Maggie Fehsenfeld Trust Number 106 for the Benefit of Fred Mehlert Fehsenfeld, Jr. and His Issue, Calumet, Incorporated, The Heritage Group, Calumet GP, LLC, Calumet Specialty Products Partners, L.P., Calumet Operating, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Sales Company Incorporated, Calumet Holding, LLC, Calumet Pennsylvania, LLC, Calumet LP GP, LLC and Calumet Shreveport Packaging, LLC.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  CALUMET SPECIALTY PRODUCTS
PARTNERS, L.P.

 
 
  By:   CALUMET GP, LLC,    
    its General Partner   
       
 
     
  By:   /s/ R. Patrick Murray, II    
    Name:   R. Patrick Murray, II   
    Title:   Vice President, Chief Financial Officer
and Secretary 
 
 
February 13, 2006

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EXHIBIT INDEX
     
Exhibit
Number
   
Description
 
 
 
 
   
Exhibit 1.1
  Underwriting Agreement, dated January 25, 2006 among Calumet Specialty Products Partners, L.P., Calumet LP GP, LLC, Calumet GP, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Operating, LLC and Goldman, Sachs & Co. as representative of the several underwriters named therein.
 
   
Exhibit 1.2
  Purchase Agreement, dated January 25, 2006, among Fred M. Fehsenfeld Sr., Mac Fehsenfeld, Frank B. Fehsenfeld, Calumet Specialty Products Partners, L.P. and Calumet GP, LLC.
 
   
Exhibit 3.1
  First Amended and Restated Limited Partnership Agreement of Calumet Specialty Products Partners, L.P.
 
   
Exhibit 3.2
  Amended and Restated Limited Liability Company Agreement of Calumet GP, LLC.
 
   
Exhibit 10.1
  Omnibus Agreement, dated January 31, 2006, among The Heritage Group, Calumet GP, LLC, Calumet LP GP, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Specialty Products Partners, L.P. and Calumet Operating, LLC.
 
   
Exhibit 10.2
  Calumet Specialty Products Partners, L.P. Long-Term Incentive Plan.
 
   
Exhibit 10.3
  F. William Grube Employment Agreement, dated January 31, 2006.
 
   
Exhibit 10.4
  Contribution, Conveyance and Assumption Agreement, dated January 31, 2006, among F. William Grube , Janet Krampe Grube, Janet Krampe Grube Grantor Retained Annuity Trust Dated January 31, 2002, Janet Krampe Grube Grantor Retained Annuity Trust Dated March 18, 2004, Fred M. Fehsenfeld, Jr., Mildred L. Fehsenfeld Irrevocable Intervivos Trust for the Benefit of Fred Mehlert Fehsenfeld, Jr. and His Issue, Maggie Fehsenfeld Trust Number 106 for the Benefit of Fred Mehlert Fehsenfeld, Jr. and His Issue, Calumet, Incorporated, The Heritage Group, Calumet GP, LLC, Calumet Specialty Products Partners, L.P., Calumet Operating, LLC, Calumet Lubricants Co., Limited Partnership, Calumet Sales Company Incorporated, Calumet Holding, LLC, Calumet Pennsylvania, LLC, Calumet LP GP, LLC and Calumet Shreveport Packaging, LLC.

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EXHIBIT 1.1
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
5,699,900 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
 
Underwriting Agreement
January 25, 2006
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
Raymond James & Associates, Inc.
Petrie Parkman & Co., Inc.
     c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
     Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “ Partnership ” or the “ MLP ”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”) an aggregate of 5,699,900 common units representing limited partner interests in the Partnership (“ Common Units ”) and, at the election of the Underwriters, up to 854,985 additional Common Units. The aggregate of 5,699,900 Common Units is herein called the “ Firm Units ” and the aggregate of 854,985 additional Common Units is herein called the “ Optional Units .” The Firm Units and the Optional Units that the Underwriters elect to purchase pursuant to Section 2 hereof are herein collectively called the “ Units. ” As part of the public offering of the Units contemplated hereby (the “ Offering ”), the Underwriters have agreed to reserve out of the Firm Units up to 645,000 Common Units for sale to certain officers, employees and directors of the MLP and the General Partner (as defined below) and their affiliates and certain family members (collectively, the “ Participants ”), as set forth in the Prospectus (as defined in Section 1) under the caption “Underwriting” (the “ Directed Unit Program ”).
     The Partnership was formed to acquire, own and operate certain refineries, a terminal and certain storage facilities for specialty hydrocarbon and fuel products in Louisiana and Illinois held by Calumet Lubricants Co., Limited Partnership, an Indiana limited partnership (“ Calumet ”), and certain of its subsidiaries, as described more particularly in the Prospectus. At each Time of Delivery (as defined in Section 4), the Partnership will operate its business through Calumet and its subsidiaries. Calumet LP GP, LLC, a Delaware limited liability company (the “ OLP GP ”), will be the general partner of Calumet. Calumet Operating, LLC, a Delaware limited liability company (the “ Operating Company ” or the “ OLLC ”), will be the sole member of the OLP GP and the sole limited partner of Calumet. Calumet GP, LLC, a Delaware limited liability company (the “ General Partner ”), is the general partner of the Partnership. Calumet, the OLP GP, the General Partner, the Partnership and the Operating Company are hereinafter referred to collectively as the “ Calumet Parties .” The General

 


 

Partner, the Partnership, the Operating Company, Calumet, the OLP GP and the Operating Subsidiaries (as defined below) are hereinafter referred to collectively as the “ Partnership Entities .”
     Furthermore, as of the date hereof:
     (a) The Heritage Group, an Indiana general partnership (“ Heritage ”), owns a 56.7% limited partner interest in Calumet, and affiliates of Heritage own an 85% interest in Calumet, Incorporated, an Indiana corporation (“ Calumet Inc. ”);
     (b) Fred M. Fehsenfeld, Jr. and certain associated trusts (collectively, “ Fehsenfeld ”), own a 12.5% limited partner interest in Calumet;
     (c) The Grube Family, Indiana residents, and certain of their affiliates and associated trusts (collectively, “ Grube ”), own a 20.8% limited partner interest in Calumet and a 15% interest in Calumet Inc.;
     (d) Calumet Inc. owns a 10% general partner interest in Calumet;
     (e) Calumet holds all assets related to its refineries located in Princeton, Louisiana and Cotton Valley, Louisiana, its terminal located in Burnham, Illinois and certain distribution-related assets (the “ Contributed Assets ”); and
     (f) Calumet Shreveport, LLC, an Indiana limited liability company (“ Calumet Shreveport ”), through its ownership of Calumet Shreveport Lubricants & Waxes, LLC, an Indiana limited liability company (“ Shreveport Lubes ”), and Calumet Shreveport Fuels, LLC, an Indiana limited liability company (“ Shreveport Fuels ”), holds all assets related to Calumet’s refinery in Shreveport, Louisiana (the “ Shreveport Assets ”). Shreveport Lubes, Shreveport Fuels, Calumet Pennsylvania LLC, a Delaware limited liability company (“ Newco ”), Calumet Holding, LLC, a Delaware limited liability company (“ Holding ”), and Calumet Sales Company Incorporated, a Delaware corporation (“ Reseller ”), are wholly owned subsidiaries of Calumet.
     Prior to the date hereof, Calumet and its subsidiaries entered into Credit Agreements dated as of December 9, 2005 and related documents (collectively, the “ Credit Agreements ”) providing for two $225 million credit facilities.
     On or prior to the First Time of Delivery (as defined herein), the parties thereto will enter into a Contribution, Conveyance and Assumption Agreement (the “ Contribution Agreement ”) pursuant to which the following transactions will occur:
  a)   Calumet will convey its non-MLP Pennsylvania assets to Newco as a capital contribution;
 
  b)   Calumet will convey (a) its interest in Newco and (b) its interest in Calumet Shreveport Packaging, LLC to Holding as a capital contribution and distribute the interest in Holding to the owners of Calumet in proportion to their ownership in Calumet;

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  c)   Calumet Inc. will convey its general partner interest in Calumet to the OLP GP as a capital contribution;
 
  d)   Heritage, Fehsenfeld and Grube and (collectively, the “GP Owners ”) will convey a limited partner interest in Calumet (the “ Interest ”) to the General Partner equal in value to 2% of the equity value of the Partnership immediately after closing as a capital contribution in the following proportion:
         
The Heritage Group
    55.1 %
Fehsenfeld
    12.5 %
Grube
    32.4 %
      and Fehsenfeld will contribute an amount of cash to the General Partner to increase its interest in the General Partner to 19%.
  e)   The General Partner will contribute the Interest to the Partnership in exchange for (a) a continuation of its 2% general partner interest in the Partnership and (b) all of the Incentive Distribution Rights (as defined in the Partnership Agreement (as defined herein)) (the “ Incentive Distribution Rights ”);
 
  f)   Heritage, Grube and Fehsenfeld will contribute their remaining limited partner interests in Calumet to the Partnership in exchange for an aggregate of (a) 5,169,129 Common Units, and (b) 11,723,599 subordinated units representing subordinated limited partner interests in the Partnership (“ Subordinated Units ”);
 
  g)   Calumet Inc. will contribute its interest in the OLP GP to the Partnership in exchange for (a) 591,886 Common Units and (b) 1,342,401 Subordinated Units; and
 
  h)   The public offering of the Firm Units contemplated hereby (the “ Offering ”) will be consummated;
 
  i)   The Partnership will convey its limited partner interest in Calumet and its interest in the OLP GP to the Operating Company as a capital contribution;
 
  j)   The Partnership will use the proceeds of the Offering to (a) pay expenses associated with the transactions contemplated by this Agreement and (b) repay borrowings under the Credit Agreements; and
 
  k)   Messrs. Fred M. Fehsenfeld, Sr., Mac Fehsenfeld and Frank Fehsenfeld (the “ Fehsenfeld Investors ”) will purchase an aggregate 750,100 Common Units (the “ Fehsenfeld Units” ) directly from the Partnership pursuant to the Registration Statement (as defined in Section 1(a) hereof) and a purchase and sale agreement by and between the Fehsenfeld Investors, the Partnership and the General Partner (the “ Fehsenfeld Purchase Agreement ”).
     The Fehsenfeld Units sold directly by the Partnership referenced in clause (k) above are sometimes herein referred to as the “ Non-Underwritten Units .” None of the Underwriters are acting

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as underwriter, placement agent or otherwise in connection with the sale of the Fehsenfeld Units by the Partnership, and the Fehsenfeld Units are not part of the underwritten Offering. The sale of such Non-Underwritten Units directly by the Partnership is herein referred to as the “ Non-Underwritten Sale .” The Underwriters will receive no commission or discount on, and shall not participate in the offer, sale or distribution of, the Non-Underwritten Units.
     The transactions described directly above in clauses (a)-(k) are referred to as the “ Transactions .” In connection with the Transactions, the parties to the Transactions entered or will enter into various bills of sale, assignments, conveyances, articles of conversion, contribution agreements and related documents (collectively with the Contribution Agreement, the “ Contribution Documents ”). Calumet Shreveport, Shreveport Fuels and Shreveport Lubes are hereinafter referred to collectively as the “ Operating LLCs. ” Calumet, the Operating LLCs and Reseller are hereinafter referred to collectively as the “ Operating Subsidiaries .”
     1.  Representations, Warranties and Agreements of the Calumet Parties . The Calumet Parties, jointly and severally, represent and warrant to, and agree with, each of the Underwriters that:
     (a)  Registration . A registration statement on Form S-1 (File No. 333-128880) (the “ Initial Registration Statement ”) in respect of the Units has been filed with the Securities and Exchange Commission (the “ Commission ” or the “ SEC ”); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto, to you for each of the other Underwriters, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “ Rule  462(b) Registration Statement ”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “ Act ”), which became effective upon filing, no other document with respect to the Initial Registration Statement has heretofore been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a “ Preliminary Prospectus ”; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “ Registration Statement ”; the Preliminary Prospectus dated January 13, 2006 relating to the Units that was included in the Registration Statement immediately prior to the Applicable Time (as defined below) is hereinafter called the “ Pricing Prospectus ”; the final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “ Prospectus ”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Units is hereinafter called an “ Issuer Free Writing Prospectus ”). For purposes of this Agreement, “ Applicable Time ” means 5:40 p.m. (New York City time) on the date of this Agreement.

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     (b)  No Stop Order. No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued and no proceeding for that purpose has been initiated or threatened by the Commission.
     (c)  No Material Misstatements or Omissions in Registration Statement or Prospectus . The Registration Statement conforms, and any further amendments or supplements to the Registration Statement will, when they become effective, conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any supplement or amendment thereto will conform, when filed with the Commission under Rule 424(b), in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the representation and warranty in this Section 1(c) shall not apply to any statements or omissions made in reliance upon and in conformity with written information furnished to the Partnership by an Underwriter through Goldman, Sachs & Co. expressly for use therein.
     (d)  No Material Misstatements or Omissions in Pricing Disclosure Package. The Pricing Prospectus, as supplemented by those Issuer Free Writing Prospectuses and other documents, if any, listed in Schedule II(A) hereto, taken together (collectively, the “ Pricing Disclosure Package ”), as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed in Schedule II(A) or Schedule II(B) hereto does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of the statements made by the Partnership in the Pricing Prospectus, and to be made in the Prospectus and any further amendments or supplements to the Registration Statement or Prospectus within the coverage of Rule 175(b) of the rules and regulations under the Act, including (but not limited to) any projections of results of operations or statements with respect to future available cash or future cash distributions of the Partnership or the anticipated ratio of taxable income to distributions, was made or will be made with a reasonable basis and in good faith. Notwithstanding the foregoing, the representation and warranty in this Section 1(d) shall not apply to any statements or omissions made in the Registration Statement, the Prospectus or the Pricing Prospectus or any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Partnership by an Underwriter through Goldman, Sachs & Co. expressly for use therein.
     (e)  Formation and Qualification of the Partnership, Calumet, the General Partner, the OLP GP, the Operating Company, the Operating LLCs and Reseller . At or before the First Time of Delivery:

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          (i) Each of the Partnership and Calumet has been duly formed and is validly existing in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”) and the Indiana Uniform Limited Partnership Act (the “ Indiana Act ”), respectively, with full partnership power and authority necessary to enter into this Agreement, to own or lease its properties to be owned or leased at the First Time of Delivery, to assume the liabilities assumed by it pursuant to the Contribution Documents and to conduct its business to be conducted at the First Time of Delivery, in each case in all material respects as described in the Registration Statement and the Pricing Prospectus.
          (ii) Each of the General Partner, the OLP GP and the Operating Company has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”) with full limited liability company power and authority to enter into this Agreement, to own or lease its properties to be owned or leased at the First Time of Delivery, to assume the liabilities assumed by it pursuant to the Contribution Documents and to conduct its business to be conducted at the First Time of Delivery, and in the case of the General Partner and the OLP GP, to act as the general partner of the Partnership and Calumet, respectively, in each case in all material respects as described in the Pricing Prospectus.
          (iii) Each of the Operating LLCs has been duly formed and is validly existing in good standing as a limited liability company under the Indiana Business Flexibility Act (the “ Indiana LLC Act ”) with full limited liability company power and authority to own or lease its properties to be owned or leased at the First Time of Delivery, to assume the liabilities assumed by it pursuant to the Contribution Documents and to conduct its business to be conducted at the First Time of Delivery, in each case in all material respects as described in the Pricing Prospectus.
          (iv) Reseller has been duly incorporated and is validly existing in good standing under the Delaware General Corporation Law (the “ DGCL ”) with full corporate power and authority to own or lease its properties to be owned or leased at the First Time of Delivery, to assume the liabilities assumed by it pursuant to the Contribution Documents, and to conduct its business to be conducted at the First Time of Delivery, in each case in all material respects as described in the Pricing Prospectus.
     (f)  Foreign Qualifications of the Partnership Entities. Each of the Partnership Entities is, or at the First Time of Delivery will be, duly registered or qualified as a foreign limited partnership, limited liability company or corporation, as the case may be, for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure so to register or qualify would not (i) have a material adverse effect on the condition (financial or otherwise), business, prospects or results of operations of the Partnership Entities taken as a whole (a “ Material Adverse Effect ”), or (ii) subject the limited partners of the Partnership to any material liability or disability.
     (g)  Ownership of the General Partner Interest in the Partnership . At each Time of Delivery, after giving effect to the Transactions, the General Partner will be the sole general partner of the Partnership with a 2.0% general partner interest in the Partnership; such general partner interest will be duly authorized and validly issued in accordance with the partnership agreement of the Partnership (as the same may be amended or restated at or prior to any Time of Delivery, the “ Partnership

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Agreement ”); and the General Partner will own such general partner interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Prospectus), security interests, charges or claims.
     (h)  Ownership of Sponsor Units, Fehsenfeld Units and Incentive Distribution Rights . At the First Time of Delivery, after giving effect to the Transactions, (i) Heritage will own 3,269,033 Common Units and 7,414,176 Subordinated Units; (ii) Fehsenfeld will own 720,127 Common Units and 1,633,250 Subordinated Units; (iii) Grube will own 1,179,969 Common Units and 2,676,173 Subordinated Units, and (iv) Calumet Inc. will own 591,886 Common Units and 1,342,401 Subordinated Units (collectively, the “ Sponsor Units ”); (v) the Fehsenfeld Investors will own the Fehsenfeld Units; and (vi) the General Partner will own all of the Incentive Distribution Rights; and all of such Sponsor Units, the Fehsenfeld Units and Incentive Distribution Rights and the limited partner interests represented thereby will be duly authorized and validly issued in accordance with the Partnership Agreement, and will be fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Pricing Prospectus under the caption “The Partnership Agreement – Limited Liability”); and each of Heritage, Fehsenfeld, Grube and Calumet Inc. will own such Sponsor Units, and the General Partner will own the Incentive Distribution Rights, free and clear of all liens, encumbrances (except restrictions on transferability as described in the Prospectus), security interests, charges or claims.
     (i)  Valid Issuance of the Units . At the First Time of Delivery, there will be issued to the Underwriters the Firm Units (assuming no purchase by the Underwriters of Optional Units); at the First Time of Delivery or the Second Time of Delivery, as the case may be, the Firm Units or the Optional Units, as the case may be, and the limited partner interests represented thereby will be duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Pricing Prospectus under the caption “The Partnership Agreement – Limited Liability”); and other than the Sponsor Units, the Fehsenfeld Units and the Incentive Distribution Rights, the Units will be the only limited partner interests of the Partnership issued and outstanding at either Time of Delivery.
     (j)  Ownership of the Membership Interest in Operating Company . At each Time of Delivery, after giving effect to the Transactions, the Partnership will own a 100% membership interest in the Operating Company; such membership interest will have been duly authorized and validly issued in accordance with the limited liability company agreement of the Operating Company (as the same may be amended or restated at or prior to each Time of Delivery, the “ Operating Company Agreement ”) and will be fully paid (to the extent required under the Operating Company Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Partnership will own such membership interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Pricing Prospectus), security interests, charges or claims, other than those arising under the Credit Agreements.
     (k)  Ownership of the Membership Interests in the OLP GP . At each Time of Delivery, after giving effect to the Transactions, the Operating Company will own a 100% membership interest in the OLP GP; such membership interest will have been duly authorized and validly issued in accordance

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with the limited liability company agreement of the OLP GP (as the same may be amended or restated at or prior to each Time of Delivery, the “ OLP GP Agreement ”) and will be fully paid (to the extent required under the OLP GP Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Operating Company will own such membership interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Pricing Prospectus), security interests, charges or claims, other than those arising under the Credit Agreements.
     (l)  Ownership of the General Partner Interest in Calumet. At each Time of Delivery, after giving effect to the Transactions, the OLP GP will be the sole general partner of Calumet with a 10% general partner interest in Calumet; such general partner interest will be duly authorized and validly issued in accordance with the partnership agreement of Calumet (as the same may be amended or restated at or prior to each Time of Delivery, the “ Calumet Agreement ”); and the OLP GP will own such general partner interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Pricing Prospectus), security interests, charges or claims, other than those arising under the Credit Agreements.
     (m)  Ownership of the Limited Partner Interest in Calumet. At each Time of Delivery, after giving effect to the Transactions, the Operating Company will be the sole limited partner of Calumet with a 90% limited partner interest in Calumet; such limited partner interest will have been duly authorized and validly issued in accordance with the Calumet Agreement and will be fully paid (to the extent required under the Calumet Agreement) and nonassessable (except as such nonassessability may be affected by IC 23-16-2-2 in the Indiana Act); and the Operating Company will own such limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims, other than those arising under the Credit Agreements.
     (n)  Ownership of the Membership Interests in the General Partner . At each Time of Delivery, after giving effect to the Transactions, Heritage, Grube and Fehsenfeld will own a 51%, 30% and 19% membership interest in the General Partner, respectively; such membership interests will have been duly authorized and validly issued in accordance with the limited liability company agreement of the General Partner (as the same may be amended or restated at or prior to each Time of Delivery, the “ General Partner Agreement ”) and will be fully paid (to the extent required under the General Partner Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and Heritage, Grube and Fehsenfeld will own such membership interests free and clear of all liens, encumbrances (except restrictions on transferability contained in the General Partner Agreement), security interests, charges or claims.
     (o)  Ownership of Calumet Shreveport. At each Time of Delivery, after giving effect to the Transactions, Calumet will own a 100% membership interest in Calumet Shreveport; such membership interests will be duly authorized and validly issued in accordance with the respective limited liability company agreements of Calumet Shreveport (as the same may be amended or restated at or prior to each Time of Delivery, the “ Calumet Shreveport Agreement ”) and will be fully paid (to the extent required under the Calumet Shreveport Agreement) and nonassessable (except as such nonassessability may be affected by IC 23-18-5-1(c) in the Indiana LLC Act); and Calumet will own such membership interests free and clear of all liens, encumbrances, security interests, charges or claims, other than those arising under the Credit Agreements.

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     (p)  Ownership of Shreveport Lubes and Shreveport Fuels. At each Time of Delivery, after giving effect to the Transactions, Calumet Shreveport will own a 100% membership interest in each of Shreveport Lubes and Shreveport Fuels; such membership interests will be duly authorized and validly issued in accordance with the respective limited liability company agreements of Shreveport Lubes and Shreveport Fuels (as the same may be amended or restated at or prior to each Time of Delivery, the “ Shreveport Subsidiary Agreements ”) and will be fully paid (to the extent required under the Shreveport Subsidiary Agreements) and nonassessable (except as such nonassessability may be affected by IC 23-18-5-1(c) in the Indiana LLC Act); and Calumet Shreveport will own such membership interests free and clear of all liens, encumbrances, security interests, charges or claims, other than those arising under the Credit Agreements.
     (q)  Ownership of Reseller . At each Time of Delivery, after giving effect to the Transactions, Calumet will own 100% of the capital stock of Reseller; such capital stock will be duly authorized and validly issued in accordance with the charter and bylaws of Reseller (as the same may be amended or restated at or prior to each Time of Delivery, the “ Reseller Charter Documents ”) and will be fully paid and nonassessable; and Calumet will own such capital stock free and clear of all liens, encumbrances, security interests, charges or claims, other than those arising under the Credit Agreements.
     (r)  No Other Subsidiaries . At each Time of Delivery, after giving effect to the Transactions, other than the Partnership’s ownership of its 100% membership interest in the Operating Company, the Operating Company’s ownership of its 90% limited partner interest in Calumet and 100% membership interest in the OLP GP, the OLP GP’s ownership of its 10% general partner interest in Calumet, Calumet’s ownership of its 100% equity interest in Reseller and its 100% membership in Calumet Shreveport, and Calumet Shreveport’s 100% membership interest in each of the Shreveport Subsidiaries, none of the Partnership, the Operating Company, the OLP GP or the Operating Subsidiaries will own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
     (s)  No Preemptive Rights, Registration Rights or Options . Except as described in the Pricing Prospectus, and except for restrictions on transfer of units of the General Partner contained in the General Partner Agreement, there are no options, warrants, preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or membership interests in any Partnership Entity, in each case pursuant to the Partnership Agreement, the Operating Company Agreement, the General Partner Agreement, the OLP GP Agreement, the Calumet Agreement, the Calumet Shreveport Agreement, the Shreveport Subsidiary Agreements and the Reseller Charter Documents (all such agreements, collectively, the “ Organizational Agreements ”) or the certificates of limited partnership or formation and other organizational documents of the Partnership Entities (collectively with the Organizational Agreements, the “ Organizational Documents ”) or any other agreement or instrument to which any of such entities is a party or by which any one of them may be bound. Neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Units or other securities of the Partnership, other than (i) as described in the Pricing Prospectus and the Partnership Agreement and (ii) as have been waived.

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     (t)  Authority and Authorization . The Partnership has all requisite power and authority to issue, sell and deliver (i) the Units, in accordance with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement, (ii) the Fehsenfeld Units, in accordance with an upon the terms and conditions set forth in the Fehsenfeld Purchase Agreement and the Partnership Agreement, and (iii) the Sponsor Units and Incentive Distribution Rights, in accordance with and upon the terms and conditions set forth in the Contribution Agreement and the Partnership Agreement. At each Time of Delivery, all corporate, partnership and limited liability company action, as the case may be, required to be taken by the Partnership Entities or any of their stockholders, members or partners for the authorization, issuance, sale and delivery of the Units, the Fehsenfeld Units, the Sponsor Units and Incentive Distribution Rights, the execution and delivery by the Partnership Entities of the Operative Agreements (as defined in Section 1(v) hereof) and the consummation of the transactions (including the Transactions) contemplated by this Agreement and the Operative Agreements, shall have been validly taken.
     (u)  Due Execution and Delivery of Underwriting Agreement . This Agreement has been duly executed and delivered by each of the Calumet Parties.
     (v)  Enforceability of Other Agreements . At or before the First Time of Delivery:
          (i) The Partnership Agreement will have been duly authorized, executed and delivered by the General Partner, Heritage, Calumet Inc., Fehsenfeld and Grube as the “Organizational Limited Partners” and will be a valid and legally binding agreement of the General Partner, Heritage, Calumet Inc., Fehsenfeld and Grube as the Organizational Limited Partners, enforceable against the General Partner, Heritage, Calumet Inc., Fehsenfeld and Grube as the Organizational Limited Partners in accordance with its terms;
          (ii) The Operating Company Agreement will have been duly authorized, executed and delivered by the Partnership and will be a valid and legally binding agreement of the Partnership, enforceable against the Partnership in accordance with its terms;
          (iii) The OLP GP Agreement will have been duly authorized, executed and delivered by the Operating Company and will be a valid and legally binding agreement of the Operating Company, enforceable against the Operating Company in accordance with its terms;
          (iv) The General Partner Agreement will have been duly authorized, executed and delivered by Heritage, Grube and Fehsenfeld and will be a valid and legally binding agreement of Heritage, Grube and Fehsenfeld, enforceable against Heritage, Grube and Fehsenfeld in accordance with its terms;
          (v) Each of the Shreveport Subsidiary Agreements will be duly authorized, executed and delivered by Calumet Shreveport and will be a valid and legally binding agreement of Calumet Shreveport, enforceable against Calumet Shreveport in accordance with its terms;
          (vi) The Calumet Shreveport Agreement will be duly authorized, executed and delivered by Calumet and will be valid and legally binding agreements of Calumet, enforceable against Calumet in accordance with its terms;

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          (vii) The Calumet Agreement will be duly authorized, executed and delivered by the OLP GP and the Partnership and will be a valid and legally binding agreement of the OLP GP and the Partnership, enforceable against the OLP GP and the Partnership in accordance with its terms;
          (viii) Each of the Contribution Documents will have been duly authorized, executed and delivered by the parties thereto and will be valid and legally binding agreements of the parties thereto enforceable against such parties in accordance with their respective terms;
          (ix) An omnibus agreement dated as of the First Time of Delivery (the “ Omnibus Agreement ”) will have been duly authorized, executed and delivered by each of the parties thereto and will be a valid and legally binding agreement of each of them enforceable against each of them in accordance with its terms;
          (x) The Fehsenfeld Purchase Agreement will have been duly authorized, executed and delivered by the Partnership, the General Partner and the Fehsenfeld Investors and will be a valid and legally binding agreement of the parties thereto enforceable against each of them in accordance with its terms; and
          (xi) The Credit Agreements will have been duly authorized, executed and delivered by each of the parties thereto and will be valid and legally binding agreements of each of them enforceable against each of them in accordance with its terms;
provided that, with respect to each agreement described in this Section 1(v), the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); provided, further, that the indemnity and contribution provisions contained therein may be limited by applicable laws or public policy. The Organizational Agreements, the Contribution Documents, the Omnibus Agreement, the Fehsenfeld Purchase Agreement and the Credit Agreements are herein collectively referred to as the “ Operative Agreements .”
     (w)  No Conflicts . None of the offering, issuance and sale by the Partnership of the Units, the execution, delivery and performance of this Agreement or the Operative Agreements by the Partnership Entities which are parties hereto or thereto, or the consummation of the transactions contemplated hereby and thereby (including the Transactions) (i) conflicts or will conflict with or constitutes or will constitute a violation of the Organizational Documents, (ii) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a default), any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Partnership Entities is a party or by which any of them or any of their respective properties may be bound or subject, (iii) violates or will violate any statute, law or regulation or any order, rule, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over any of the Partnership Entities or any of their properties or (iv) results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the Partnership Entities, which conflicts, breaches, violations or defaults, in the case of clauses (ii), (iii) or (iv), would, individually or in the

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aggregate, have a Material Adverse Effect or would materially impair the ability of any of the Partnership Entities to perform their obligations under this Agreement or the Operative Documents.
     (x)  No Consents . No consent, approval, authorization, order, registration, filing or qualification (“ consent ”) of or with any court, governmental agency or body having jurisdiction over the Partnership Entities or their respective properties or assets is required for the offering, issuance and sale by the Partnership of the Units, the execution, delivery and performance of this Agreement and the Operative Agreements by the Partnership Entities party thereto, or the consummation by the Partnership Entities of the transactions contemplated by this Agreement and the Operative Agreements (including the Transactions), except (i) for such consents required under the Securities Act, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), (ii) for such consents required under state securities or “Blue Sky” laws in connection with the purchase and distribution of the Units by the Underwriters, (iii) for such consents which have been, or prior to the First Time of Delivery will be, obtained, (iv) for such consents which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect and (v) as disclosed in the Pricing Prospectus.
     (y)  No Default . None of the Partnership Entities is in (i) violation of its certificate or agreement of limited partnership, limited liability company agreement, certificate or articles of incorporation or bylaws or other organizational documents, (ii) violation of any law, statute, ordinance, administrative or governmental rule or regulation applicable to it or of any decree of any court or governmental agency or body having jurisdiction over it or (iii) breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any material obligation, agreement, covenant or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of its properties may be bound, which breach, default or violation, in the case of clauses (ii) and (iii), would, if continued, have a Material Adverse Effect, or could materially impair the ability of any of the Partnership Entities to perform their obligations under this Agreement or the Operative Agreements. To the knowledge of the Calumet Parties, no third party to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the Partnership Entities is a party or by which any of them is bound or to which any of their properties is subject, is in default under any such agreement, which breach, default or violation would, if continued, have a Material Adverse Effect.
     (z)  Conformity of Securities to Description in the Pricing Prospectus and the Prospectus . The Units, when issued and delivered in accordance with the terms of the Partnership Agreement against payment therefor as provided herein, and the Sponsor Units, the Fehsenfeld Units and the Incentive Distribution Rights, when issued and delivered in accordance with the terms of the Partnership Agreement, will conform in all material respects to the descriptions thereof contained in the Prospectus.
     (aa)  Investment Company . None of the Partnership Entities is now, and after giving effect to the offering and sale of the Units and the application of the proceeds thereof will be, an “investment company” or a company “controlled by” an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”).

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     (bb)  Independent Public Accountants . Ernst & Young LLP, who have certified certain audited financial statements of Calumet, the Partnership and the General Partner included in the Registration Statement, the Pricing Prospectus and the Prospectus (or any amendment or supplement thereto) is an independent registered public accounting firm with respect to such entities as required by the Act and the rules and regulations of the Commission thereunder.
     (cc)  Financial Statements . At September 30, 2005, the Partnership would have had, on the consolidated pro forma basis indicated in the Prospectus (and any amendment or supplement thereto), a capitalization as set forth therein. The historical financial statements (including the related notes and supporting schedules) included in the Registration Statement, the Pricing Prospectus or the Prospectus (and any amendment or supplement thereto) present fairly in all material respects the financial position, results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein at the respective dates or for the respective periods to which they apply and have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except to the extent disclosed therein. The selected historical and pro forma financial information set forth in the Registration Statement, the Pricing Prospectus and the Prospectus (and any amendment or supplement thereto) under the caption “Selected Historical and Pro Forma Financial and Operating Data” is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements and pro forma financial statements from which it has been derived. The pro forma financial statements of the Partnership included in the Registration Statement, the Pricing Prospectus and the Prospectus (and any amendment or supplement thereto) have been prepared in all material respects in accordance with the applicable accounting requirements of Article 11 of Regulation S-X of the Commission; the assumptions used in the preparation of such pro forma financial statements are, in the opinion of the management of the Calumet Parties, reasonable; and the pro forma adjustments reflected in such pro forma financial statements have been properly applied to the historical amounts in compilation of such pro forma financial statements.
     (dd)  Sarbanes-Oxley Act of 2002 . The Partnership is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002, the Rules and Regulations thereunder and the rules of the National Association of Securities Dealers Automated Quotations National Market System (“ NASDAQ ”) that are effective and applicable to the Partnership.
     (ee)  Sufficiency of Transferred Assets Under the Contribution Documents . The Contribution Documents will be legally sufficient to transfer or convey to the Operating Subsidiaries all properties not already held by them that are, individually or in the aggregate, required to enable the Operating Subsidiaries to conduct their operations in all material respects as contemplated by the Pricing Prospectus, subject to the conditions, reservations, encumbrances and limitations contained in the Contribution Documents and those set forth in the Pricing Prospectus. The Operating Subsidiaries, as the case may be, upon execution and delivery of the Contribution Documents, will succeed in all material respects to the business, assets, properties, liabilities and operations reflected by the pro forma financial statements of the Partnership, except as disclosed in the Pricing Prospectus and the Contribution Documents.
     (ff)  No Material Changes . None of the Partnership Entities has sustained since the date of the latest audited financial statements included in the Pricing Prospectus any material loss or

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interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, investigation, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Pricing Prospectus, there has not been any change in the capitalization or long-term debt of any of the Partnership Entities or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, partners’ capital, members’ equity, or results of operations of any of the Partnership Entities, taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus.
     (gg)  Title to Real Property . At each Time of Delivery, the Operating Company and the Operating Subsidiaries, as the case may be, will have good and indefeasible title to all real property (save and except “rights-of-way” (as defined in subsection (hh) below)) and good title to all personal property owned by them, in each case free and clear of all (i) liens and security interests except liens or security interests securing indebtedness incurred, assumed or agreed to by the Operating Company, Calumet or any of the Operating Subsidiaries specifically listed in any of the Contribution Documents or (ii) other claims and other encumbrances (other than liens or security interests) except, in each case, (1) as described, and subject to the limitations contained, in the Pricing Prospectus or (2) such as do not materially affect the value of such property and do not materially interfere with the use of such properties taken as a whole as they have been used in the past and are proposed to be used in the future, provided that, with respect to any real property and buildings held under lease by the Operating Company, Calumet and the Operating Subsidiaries, such real property and buildings are held under valid and subsisting and enforceable leases with such exceptions as do not materially interfere with the use of the properties of the Partnership Entities taken as a whole as they have been used in the past and are proposed to be used in the future.
     (hh)  Rights-of-Way . At each Time of Delivery, each of the Partnership Entities will have such consents, easements, rights-of-way, permits or licenses from each person (collectively, “rights-of-way”) as are necessary to conduct its business in the manner described, and subject to the limitations contained, in the Pricing Prospectus, except for (i) qualifications, reservations and encumbrances as may be set forth in the Pricing Prospectus which are not reasonably expected to have a material adverse effect upon the ability of the Partnership Entities, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Prospectus to be conducted and (ii) such rights-of-way that, if not obtained, would not have, individually or in the aggregate, a material adverse effect upon the ability of the Partnership Entities, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Pricing Prospectus to be conducted; other than as set forth, and subject to the limitations contained, in the Pricing Prospectus, each of the Partnership Entities has, or at each Time of Delivery will have, fulfilled and performed all its material obligations with respect to such rights-of-way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such rights-of-way, except for such revocations, terminations and impairments that would not have a Material Adverse Effect upon the ability of the Partnership Entities, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Prospectus to be conducted; and, except as described in the Pricing Prospectus, none of such rights-of-way contains any restriction that is materially burdensome to the Partnership Entities, taken as a whole.

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     (ii)  Permits . Each of the Partnership Entities has, or at each Time of Delivery, will have such permits, consents, licenses, franchises, certificates and authorizations of governmental or regulatory authorities (“ permits ”) as are necessary to own its properties and to conduct its business in the manner described in the Pricing Prospectus, subject to such qualifications as may be set forth in the Pricing Prospectus and except for such permits which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect; each of the Partnership Entities has, or at each Time of Delivery will have, fulfilled and performed all its material obligations with respect to such permits which are due to have been fulfilled and performed by such date and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any impairment of the rights of the holder of any such permit, except for such revocations, terminations and impairments that would not, individually or in the aggregate, have a Material Adverse Effect.
     (jj)  Books and Records . The Partnership (i) makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets and (ii) maintains systems of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
     (kk)  Tax Returns . Each of the Partnership Entities has filed (or has obtained extensions with respect to) all material federal, state and foreign income and franchise tax returns required to be filed through the date hereof, which returns are complete and correct in all material respects, and has timely paid all taxes shown to be due pursuant to such returns, other than those (i) which, if not paid, would not have a Material Adverse Effect, or (ii) which are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles.
     (ll)  Environmental Matters . Except as described in the Pricing Prospectus, the Partnership Entities (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety and the environment or imposing liability or standards of conduct concerning any Hazardous Material (as hereinafter defined) (“ Environmental Laws ”), (ii) have received all permits required of them under applicable Environmental Laws to conduct their respective businesses as they are currently being operated, (iii) are in compliance with all terms and conditions of any such permits, and (iv) to the knowledge of the Calumet Parties, do not have any liability in connection with the release into the environment of any Hazardous Material, except where such noncompliance with Environmental Laws, failure to receive required permits, failure to comply with the terms and conditions of such permits or liability in connection with such releases, would not, individually or in the aggregate, have a Material Adverse Effect. The term “ Hazardous Material ” means (A) any “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (B) any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law.

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     (mm)  No Labor Dispute. No labor dispute with the employees of the Partnership Entities exists, or, to the knowledge of the Calumet Parties, is imminent that is reasonably likely to result in a Material Adverse Effect.
     (nn)  Insurance . The Partnership Entities maintain, or are entitled to the benefits of, insurance covering their properties, operations, personnel and businesses against such losses and risks as are reasonably adequate to protect them and their businesses. None of the Partnership Entities has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force on each Time of Delivery.
     (oo)  Legal Proceedings or Contracts Required to be Described or Filed. Other than as set forth in the Registration Statement and the Pricing Prospectus, there are no legal or governmental proceedings pending or, to the knowledge of the Calumet Parties, threatened against any of the Calumet Parties or to which any of the Partnership Entities is a party or of which any property of any of the Partnership Entities is the subject that is required to be described in the Registration Statement or the Pricing Prospectus but are not described as required; and there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required by the Act.
     (pp)  Private Placement . The sale and issuance of the Sponsor Units to Calumet Inc., Heritage, Fehsenfeld and Grube and the Incentive Distribution Rights to the General Partner pursuant to the Partnership Agreement are exempt from the registration requirements of the Act and the securities laws of any state having jurisdiction with respect thereto, and none of the Partnership Entities has taken or will take any action that would cause the loss of such exemption.
     (qq)  Trading . The Units have been approved for trading and quotation on the NASDAQ National Market.
     (rr)  Directed Unit Sales. None of the Units distributed in connection with the Directed Unit Program will be offered or sold outside of the United States. None of the Partnership Entities has offered, or caused the Underwriters to offer, Units to any person pursuant to the Directed Unit Program with the specific intent to unlawfully influence (i) a customer or supplier of the Partnership Entities to alter the customer’s or supplier’s level or type of business with the Partnership Entities, or (ii) a trade journalist or publication to write or publish favorable information about the Partnership Entities or their products or services.
     (ss)  Not Ineligible Issuer. At the time of filing the Initial Registration Statement, the Partnership was not and is not an “ineligible issuer,” as defined in Rule 405 under the Act.
     2. Subject to the terms and conditions herein set forth, (a) the Partnership agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Partnership, at a purchase price per unit of $20.1025, the number of Firm Units set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent

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that the Underwriters shall exercise the election to purchase Optional Units as provided below, the Partnership agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Partnership, at the purchase price per unit set forth in clause (a) of this Section 2, that portion of the number of Optional Units as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional units) determined by multiplying such number of Optional Units by a fraction, the numerator of which is the maximum number of Optional Units which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Units that all of the Underwriters are entitled to purchase hereunder.
     The Partnership hereby grants to the Underwriters the right to purchase at their election up to an aggregate of 854,985 Optional Units, at the purchase price per unit set forth in the paragraph above, for the sole purpose of covering sales of units in excess of the number of Firm Units. Any such election to purchase Optional Units may be exercised only by written notice from you to the Partnership, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Units to be purchased and the date on which such Optional Units are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Partnership otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.
     3.  Offering of Units by the Underwriters. Upon the authorization by you of the release of the Firm Units, the several Underwriters propose to offer the Firm Units for sale upon the terms and conditions set forth in the Prospectus.
     4.  Delivery and Payment for the Units. (a) The Units to be purchased by each Underwriter hereunder, in book entry form, and in such authorized denominations and registered in such names as Goldman, Sachs & Co. may request upon at least forty-eight hours’ prior notice to the Partnership, shall be delivered by or on behalf of the Partnership to Goldman, Sachs & Co., through the facilities of The Depository Trust Company (“ DTC ”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Partnership to Goldman, Sachs & Co. at least forty-eight hours in advance. The Partnership will cause the certificates representing the Units to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the “ Designated Office ”). The time and date of such delivery and payment shall be, with respect to the Firm Units, 9:30 a.m., New York City time, on January 31, 2006 or such other time and date as Goldman, Sachs & Co. and the Partnership may agree upon in writing, and, with respect to the Optional Units, 9:30 a.m., New York time, on the date specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters’ election to purchase such Optional Units, or such other time and date as Goldman, Sachs & Co. and the Partnership may agree upon in writing. Such time and date for delivery of the Firm Units is herein called the “ First Time of Delivery ,” such time and date for delivery of the Optional Units, if not the First Time of Delivery, is herein called the “ Second Time of Delivery ,” and each such time and date for delivery is herein called a “ Time of Delivery .”
     (b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Units and any additional

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documents requested by the Underwriters pursuant to Section 8(n) hereof, will be delivered at the offices of Vinson & Elkins L.L.P., 1001 Fannin, Houston, Texas 77002 (the “ Closing Location ”), and the Units will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 2:00 p.m., Houston time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “ New York Business Day ” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.
     5.  Further Agreements of the Calumet Parties . Each of the Calumet Parties agrees with each of the Underwriters:
     (a)  Preparation of Prospectus and Registration Statement . To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or Prospectus which shall be disapproved by you promptly after reasonable notice thereof; to file promptly all material required to be filed by the Partnership with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish you with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the rules and regulations of the Commission thereunder, subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with the offering of the Units; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Units, of the suspension of the qualification of the Units for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order;
     (b)  Qualification of Securities. Promptly from time to time to take such action as you may reasonably request to qualify the Units for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Units, provided that in connection therewith the Partnership shall not be required to qualify as a foreign limited partnership or to file a general consent to service of process in any jurisdiction;
     (c)  Copies of Documents to Underwriters. Prior to 10:00 A.M., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to

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furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Units and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Units at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
     (d)  Reports to Unitholders. To make generally available to its unitholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Partnership and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations thereunder (including, at the option of the Partnership, Rule 158);
     (e)  Lock-Up Period. During the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus (the “ Lock-Up Period ”), not to offer, sell, hedge, contract to sell, pledge, grant an option to purchase, make any short sale or otherwise dispose of, except as provided hereunder, any Common Units or any securities of the Partnership that are substantially similar to the Common Units, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Units or any such substantially similar securities (other than pursuant to employee benefit plans, qualified unit option plans or other employee compensation plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement), without your prior written consent; provided , however , that if (1) during the last 17 days of the Lock-Up Period, the Partnership releases earnings results or announces material news or a material event or (2) prior to the expiration of the Lock-Up Period, the Partnership announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then in each case the Lock-Up Period will be automatically extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the announcement of the material news or material event, as applicable, unless Goldman, Sachs & Co. waives, in writing, such extension; the Partnership will provide the representatives and any co-managers and each unitholder subject to the Lock-Up Period pursuant to the lockup letters described in Section 8(l) with prior notice of any such announcement that gives rise to an extension of the Lock-up Period;

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     (f)  Copies of Public Documents. During a period of two years from the effective date of the Registration Statement, to furnish or make available to its unitholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, partnership equity and cash flows of the Partnership and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), to make available to its unitholders a consolidated summary financial information of the Partnership and its subsidiaries for such quarter in reasonable detail;
     (g)  Copies of Reports. During a period of two years from the effective date of the Registration Statement, to furnish or make available to you copies of all reports or other communications (financial or other) furnished to its unitholders, and to deliver to you as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Partnership is listed;
     (h)  Use of Proceeds. To use the net proceeds received by it from the sale of the Units pursuant to this Agreement in the manner specified in the Pricing Prospectus and the Prospectus under the caption “Use of Proceeds”;
     (i)  Rule 463 . To file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;
     (j)  Rule  462(b) Registration Statement. If the Partnership elects to rely upon Rule 462(b), the Partnership shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Partnership shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
     (k)  License . Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Partnership’s trademarks, servicemarks and logo for use on the website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering of the Units (the “ License ”); provided, however , that the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred; and
     (l)  No Fiduciary Duty. That (i) the purchase and sale of the Units pursuant to this Agreement is an arm’s-length commercial transaction between the Partnership, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Partnership or any of the other Partnership Entities, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Partnership or any of the other Partnership Entities with respect to the offering contemplated hereby or (except as provided in (i) the letter agreement dated as of January 19, 2006 between Goldman Sachs & Co. and Calumet and (ii) the letter agreement dated as of January 19, 2006 between Petrie Parkman & Co., Inc. and Calumet) the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Partnership or any of the other Partnership Entities on other matters) or any other obligation to the Partnership except the

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obligations expressly set forth in this Agreement and (iv) each of the Partnership Entities has consulted its own legal and financial advisors to the extent it deemed appropriate. Each of the Calumet Parties agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Partnership or any of the other Partnership Entities, in connection with such transaction or (except as provided in (i) the letter agreement dated as of January 19, 2006 between Goldman Sachs & Co. and Calumet and (ii) the letter agreement dated as of January 19, 2006 between Petrie Parkman & Co., Inc. and Calumet) the process leading thereto.
     6.  Use of Free Writing Prospectus.
     (a)  Free Writing Prospectus. Each of the Calumet Parties represents and agrees that, without the prior consent of Goldman, Sachs & Co., it has not made and will not make any offer relating to the Units that would constitute a “free writing prospectus,” as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of the Partnership and Goldman, Sachs & Co., it has not made and will not make any offer relating to the Units that would constitute a free writing prospectus; each of the Calumet Parties and the Underwriters each represent and agree that any such free writing prospectus the use of which has been consented to by the Partnership and Goldman, Sachs & Co. is listed on Schedule II(A) or Schedule II(B) hereto.
     (b)  Use of Issuer Free Writing Prospectus. Each of the Calumet Parties represents and agrees that it has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and that it has satisfied and will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic road show.
     (c)  Information in Issuer Free Writing Prospectus. Each of the Calumet Parties represents and agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, to give prompt notice thereof to Goldman, Sachs & Co. and, if requested by Goldman, Sachs & Co., to prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document that will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Partnership by an Underwriter through Goldman, Sachs & Co. expressly for use therein.
     7.  Expenses . Each of the Calumet Parties covenants and agrees with one another and with the several Underwriters that the Partnership will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Partnership’s counsel and accountants in connection with the registration of the Units under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents

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(including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Units; (iii) all expenses in connection with the qualification of the Units for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) all fees and expenses in connection with listing the Units on NASDAQ; (v) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Units; (vi) the cost of preparing certificates for the Units; (vii) the cost and charges of any transfer agent or registrar; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 7. It is understood, however, that, except as provided in this Section 7 and Sections 9 and 12 hereof, the Underwriters (i) will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Units by them, and any advertising expenses connected with any offers they may make, and (ii) will reimburse the Partnership for one-third of the itemized air charter expenses incurred by the Calumet Parties in connection with the Offering.
     8.  Conditions of Underwriters’ Obligations . The obligations of the Underwriters hereunder, as to the Units to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Calumet Parties herein are, at and as of such Time of Delivery, true and correct, the condition that the Calumet Parties shall have performed all of their obligations hereunder theretofore to be performed, and the following additional conditions:
     (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433 under the Act; if the Partnership has elected to rely upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no stop order suspending or preventing the use of a Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;
     (b) Baker Botts L.L.P., counsel for the Underwriters, shall have furnished to you such written opinion or opinions, dated such Time of Delivery, with respect to the issuance and sale of the Units, the Registration Statement and the Prospectus and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

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     (c) Vinson & Elkins L.L.P., counsel for the Partnership, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:
          (i) The Partnership has been duly formed and is validly existing in good standing as a limited partnership under the Delaware LP Act with all necessary limited partnership power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Contribution Documents and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. The Partnership is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of the jurisdictions set forth under its name on Annex I to this Agreement.
          (ii) Each of the General Partner, the Operating Company and the OLP GP has been duly formed and is validly existing in good standing as a limited liability company under the Delaware LLC Act with all necessary limited liability company power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Contribution Documents and to conduct its business, and, in the case of the General Partner and the OLP GP, to serve as the general partner of the Partnership and Calumet, respectively, in each case in all material respects as described in the Registration Statement and the Prospectus. Each of the General Partner, the Operating Company and the OLP GP is duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of the jurisdictions set forth under its name on Annex I to this Agreement.
          (iii) Reseller has been duly formed and is validly existing in good standing as a corporation under the DGCL with all necessary corporate power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Contribution Documents and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. Reseller is duly registered or qualified as a foreign corporation for the transaction of business under the laws of the jurisdictions set forth under its name on Annex I to this Agreement.
          (iv) The General Partner is the sole general partner of the Partnership with a 2.0% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and the General Partner owns its general partner interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Prospectus), security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the General Partner as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LP Act.
          (v) The Sponsor Units, the Fehsenfeld Units, the Incentive Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption “The Partnership Agreement – Limited Liability”). After giving effect to the Transactions, Heritage will own 3,269,033 Common Units and 7,414,176 Subordinated Units; Fehsenfeld will own 720,127 Common Units and 1,633,250 Subordinated Units;

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Grube will own 1,179,969 Common Units and 2,676,173 Subordinated Units, Calumet Inc. will own 591,886 Common Units and 1,342,401 Subordinated Units and the General Partner will own the Incentive Distribution Rights, in each case free and clear of all liens, encumbrances (except restrictions on transferability described in the Prospectus), security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming Heritage, Fehsenfeld, Grube, Calumet Inc. or the General Partner as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LP Act.
          (vi) The Units to be issued and sold to the Underwriters by the Partnership pursuant to this Agreement and the limited partner interests represented thereby have been duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption “The Partnership Agreement – Limited Liability”) and other than the Sponsor Units, the Fehsenfeld Units and the Incentive Distribution Rights, the Units will be the only limited partner interests of the Partnership issued and outstanding at the First Time of Delivery.
          (vii) The Operating Company owns a 100% membership interest in the OLP GP; such membership interest has been duly authorized and validly issued in accordance with the OLP GP Agreement, and is fully paid (to the extent required under the OLP GP Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Operating Company owns such membership interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the Operating Company as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LLC Act and those arising in connection with the Credit Agreements.
          (viii) The Partnership owns a 100% membership interest in the Operating Company; such membership interest has been duly authorized and validly issued in accordance with the Operating Company Agreement, and is fully paid (to the extent required under the Operating Company Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Partnership owns such membership interest free and clear of all liens, encumbrances (except restrictions on transferability as described in the Prospectus), security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the Partnership as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LLC Act and those arising in connection with the Credit Agreements.
          (ix) Heritage, Grube and Fehsenfeld own a 51%, 30% and 19% membership interest in the General Partner, respectively; such membership interests have been duly authorized and validly issued in accordance with the General Partner Agreement, and are fully paid (to the extent required under the General Partner Agreement) and nonassessable (except as such nonassessability may be

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affected by Section 18-607 of the Delaware LLC Act); and Heritage, Grube and Fehsenfeld own such membership interests free and clear of all liens, encumbrances (except restrictions on transferability set forth in the General Partner Agreement), security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming Heritage, Grube or Fehsenfeld, as the case may be, as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LLC Act.
          (x) Calumet owns 100% of the capital stock of Reseller; such capital stock has been duly authorized and validly issued in accordance with the Reseller Charter Documents and is fully paid and nonassessable; and Calumet owns such capital stock free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming Calumet as debtor is on file in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the DGCL and those arising in connection with the Credit Agreements.
          (xi) Except as described in the Prospectus, there are no options, warrants, preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or membership interests in any of the Partnership, the Operating Company, the OLP GP or Reseller (the “ Delaware Partnership Entities ”), in each case pursuant to the Partnership Agreement, the Operating Company Agreement, the OLP GP Agreement and the Reseller Charter Documents or, to the knowledge of such counsel, any other agreement or instrument listed as an exhibit to the Registration Statement to which the Delaware Partnership Entities are a party or by which any of them may be bound. To the knowledge of such counsel, neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Units or other securities of the Partnership other than (i) as described in the Prospectus and Partnership Agreement and (ii) as have been waived.
          (xii) The Partnership has all necessary partnership power and authority to issue, sell and deliver (i) the Units, in accordance with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement and (ii) the Sponsor Units and Incentive Distribution Rights, in accordance with and upon the terms and conditions set forth in the Contribution Agreement and the Partnership Agreement.
          (xiii) This Agreement has been duly authorized, executed and delivered by each of the Calumet Parties.
          (xiv) Each of the Operative Agreements to which any of the Delaware Partnership Entities is a party has been duly authorized and validly executed and delivered by each of the Delaware Partnership Entities party thereto. Assuming due authorization, execution and delivery by each Partnership Entity other than a Delaware Partnership Entity, each of the Operative Agreements governed by Delaware law constitutes a valid and legally binding agreement of the Partnership Entities party thereto, enforceable against each such Partnership Entity in accordance with its respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity

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(regardless of whether such enforceability is considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and contribution and an implied covenant of good faith and fair dealing.
          (xv) None of the offering, issuance and sale by the Partnership of the Units being delivered at such Time of Delivery, the execution, delivery and performance of this Agreement or the Operative Agreements (other than any Operative Agreement governed by law other than Delaware law) by the Partnership Entities which are parties thereto, or the consummation of the transactions contemplated hereby and thereby (including the Transactions) (i) constitutes or will constitute a violation of the certificate of limited partnership, agreement of limited partnership, certificate of formation, limited liability company agreement certificate of incorporation or bylaws, as the case may be, of any of the Delaware Partnership Entities, (ii) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default), or result in a lien, under any Operative Agreement (other than the Credit Agreements) or any other agreement filed as an exhibit to the Registration Statement or any other agreement that the Partnership certifies is material as listed on an exhibit to such counsel’s opinion, or (iii) violates or will violate the Delaware LP Act, the Delaware LLC Act, the DGCL, federal law, or any order, judgment, decree or injunction known to such counsel of any Delaware or federal court to which any of the Partnership Entities or any of their properties is subject, which breach, violation, lien or default in the case of clause (ii) or (iii), would reasonably be expected to have a Material Adverse Effect.
          (xvi) No permit, consent, approval, authorization, order, registration, filing or qualification (“ consent ”) under the Delaware LP Act, the Delaware LLC Act, the DGCL or federal law is required for the offering, issuance and sale by the Partnership of the Units, the execution, delivery and performance of this Agreement and the Operative Agreements by the Partnership Entities party thereto or the consummation by the Partnership Entities of the transactions contemplated by this Agreement or the Operative Agreements (including the Transactions), except (i) for such consents required under the Act, the Exchange Act and state securities or “Blue Sky” laws, as to which such counsel need not express any opinion, (ii) for such consents which have been obtained or made, (iii) for such consents which (A) are of a routine or administrative nature, (B) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (C) are expected in the reasonable judgment of the General Partner to be obtained or made in the ordinary course of business subsequent to the consummation of the Transactions, (iv) for such consents which, if not obtained, would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, and (v) as disclosed in the Prospectus.
          (xvii) The statements set forth in the Registration Statement and the Prospectus under the captions “How We Make Cash Distributions,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt and Credit Facilities,” “Certain Relationships and Related Party Transactions,” “Conflicts of Interest and Fiduciary Duties,” “Description of the Common Units” and “The Partnership Agreement” fairly describe in all material respects the portions of the documents addressed thereby and, insofar as they purport to constitute summaries of law or legal conclusions, are accurate in all material respects; the description of the statutes and regulations set forth in the Registration Statement and the Prospectus under the captions “Business—Environmental Matters” and “Investment in Calumet Specialty Products Partners, L.P. by Employee Benefit Plans” fairly describe in all material respects the portions of the

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statutes and regulations addressed thereby; and the Common Units, the Subordinated Units and the Incentive Distribution Rights conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus under the captions “Summary—The Offering,” “How We Make Cash Distributions,” “Description of the Common Units,” and “The Partnership Agreement.”
          (xviii) The opinion of Vinson & Elkins L.L.P. that is filed as Exhibit 8.1 to the Registration Statement is confirmed, and the Underwriters may rely upon such opinion as if it were addressed to them.
          (xix) The Registration Statement was declared effective under the Act on January 25, 2006; to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened by the Commission; and any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required by such Rule.
          (xx) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Partnership prior to such Time of Delivery (other than the financial statements, notes or schedules included in the Registration Statement or Prospectus or other financial data included in the Registration Statement or the Prospectus, as to which such counsel need not express any opinion) comply as to form in all material respects with the requirements of the Act and the rules and regulations promulgated thereunder.
          (xxi) None of the Partnership Entities is an “investment company” as such term is defined in the Investment Company Act.
          (xxii) To the knowledge of such counsel, (i) there are no legal or governmental proceedings pending or threatened against any of the Partnership Entities or to which any of the Partnership Entities is a party or to which any of their respective properties is subject that are required to be described in the Registration Statement but are not so described as required and (ii) there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or to be filed as exhibits to the Registration Statement that are not described or filed as required by the Act.
          In addition, such counsel shall state that they have participated in conferences with officers and other representatives of the Partnership Entities and the independent public accountants of the Partnership and your representatives, at which the contents of the Registration Statement, the Pricing Disclosure Package and the Prospectus and related matters were discussed, and although such counsel has not independently verified, is not passing upon, and is not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in, the Registration Statement, the Pricing Disclosure Package and the Prospectus (except to the extent specified in the foregoing opinion), based on the foregoing, no facts have come to such counsel’s attention that lead such counsel to believe that (A) the Registration Statement (other than (i) the financial statements and related schedules, including the notes thereto and auditor’s report thereon, and (ii) the other information of a financial nature included in the Registration Statement as to which such counsel need not comment), as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact

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required to be stated therein or necessary to make the statements therein not misleading, (B) that the Pricing Disclosure Package, if any (other than (i) the financial statements and related schedules, including the notes thereto and auditor’s report thereon, and (ii) the other information of a financial nature included in the Pricing Disclosure Package as to which such counsel need not comment), as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the price of the Units and disclosures directly relating thereto and derived therefrom are included on the cover page of the Prospectus or under the captions “Use of Proceeds,” “Capitalization,” “Underwriting,” “Our Cash Distribution Policy and Restrictions on Distributions-Unaudited Pro Formal Cash Available for Distribution,” or “Our Cash Distribution Policy and Restrictions on Distributions-Estimated Cash Available for Distribution” in the Prospectus or in the unaudited pro forma financial information included therein, or (C) that the Prospectus (other than (i) the financial statements and related schedules, including the notes thereto and auditor’s report thereon, and (ii) the other information of a financial nature included in the Prospectus as to which such counsel need not comment), as of its issue date and as of such Time of Delivery contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
          In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Partnership Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, (C) state that their opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act and the DGCL, (D) with respect to the opinions expressed in paragraphs (i), (ii) and (iii) above as to the due qualification or registration as a foreign limited partnership, corporation or limited liability company, as the case may be, of the Partnership, the Operating Company, the General Partner, the OLP GP and Reseller, state that such opinions are based upon the opinions of counsel provided pursuant to (d) and (e) below and upon certificates of foreign qualification or registration provided by the Secretary of State of the States listed on Annex I to such opinion (each of which shall be dated as of a date not more than fourteen days prior to such Time of Delivery and shall be provided to you), (E) state that they express no opinion with respect to the title of any of the Partnership Entities to any of their respective real or personal property purported to be transferred by the Contribution Documents nor with respect to the accuracy of descriptions of real or personal property or permits to own or operate any real or personal property, and assume that the descriptions of interests in property described in the Contribution Documents are accurate and describe the interests intended to be conveyed thereby (and that references in the Contribution Documents to other instruments of record are correct and that such recorded instruments contain legally sufficient property descriptions), and (F) state that they express no opinion with respect to state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the Partnership Entities may be subject;

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     (d) Barnes & Thornburg LLP, with respect to the State of Indiana, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:
          (i) Calumet has been duly formed and is validly existing as a limited partnership under the Indiana Act, with full partnership power and authority to own or lease its properties, to assume the liabilities assumed by it pursuant to the Contribution Documents and to conduct its business, in each case in all respects as described in the Registration Statement and the Prospectus. Calumet is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of the jurisdictions set forth under its name on Annex I to this Agreement.
          (ii) Each of Calumet Shreveport and the Shreveport Subsidiaries has been duly formed and is validly existing as a limited liability company under the Indiana LLC Act with all necessary limited liability company power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Contribution Documents and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. Each of Calumet Shreveport and the Shreveport Subsidiaries is duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of the jurisdictions set forth under its name on Annex I to this Agreement.
          (iii) The OLP GP is the sole general partner of Calumet with a 10% general partner interest in Calumet; such general partner interest is duly authorized and validly issued in accordance with the Calumet Agreement; and the OLP GP owns such general partner interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Indiana naming the OLP GP as debtor is on file in the office of the Secretary of State of the State of Indiana or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Indiana Act and other than those arising under the Credit Agreements.
          (iv) The Operating Company is the sole limited partner of Calumet with a 90% limited partner interest in Calumet; such limited partner interest has been duly authorized and validly issued in accordance with the Calumet Agreement and is fully paid (to the extent required under the Calumet Agreement) and nonassessable (except as such nonassessability may be affected by IC 23-16-6-2 in the Indiana Act); and the Operating Company owns such limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Indiana naming the Operating Company as debtor is on file in the office of the Secretary of State of the State of Indiana or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Indiana Act and other than those arising under the Credit Agreements.
          (v) Calumet owns a 100% membership interest in Calumet Shreveport; such membership interest has been duly authorized and validly issued in accordance with the Shreveport Agreement and is fully paid (to the extent required under the Shreveport Agreement) and nonassessable (except as such nonassessability may be affected by IC 23-18-5-1(c) in the Indiana LLC Act); and Calumet owns such membership interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of

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the State of Indiana naming Calumet as debtor is on file in the office of the Secretary of State of the State of Indiana or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Indiana LLC Act and other than those arising under the Credit Agreements.
          (vi) Calumet Shreveport owns a 100% membership interest in each of the Shreveport Subsidiaries; such membership interests have been duly authorized and validly issued in accordance with the Shreveport Subsidiary Agreements and are fully paid (to the extent required under the Shreveport Subsidiary Agreements) and nonassessable (except as such nonassessability may be affected by IC 23-18-5-1(c) in the Indiana LLC Act); and Calumet Shreveport owns such membership interests free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Indiana naming Calumet Shreveport as debtor is on file in the office of the Secretary of State of the State of Indiana or (ii) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Indiana LLC Act and other than those arising under the Credit Agreements.
          (vii) The Partnership has been duly qualified or registered as a foreign limited partnership for the transaction of business under the laws of the State of Indiana. Each of the General Partner, the Operating Company, the OLP GP and the Operating LLCs has been duly qualified or registered as a foreign limited liability company for the transaction of business under the laws of the State of Indiana.
          (viii) Except as described in the Prospectus, there are no options, warrants, preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or membership interests in any of Calumet, Calumet Shreveport or the Shreveport Subsidiaries (collectively, the “ Indiana Partnership Entities ”), in each case pursuant to Calumet Agreement, the Calumet Shreveport Agreement and the Shreveport Subsidiary Agreements or, to the knowledge of such counsel, any other agreement or instrument to which such entities are a party or by which any of them may be bound.
          (ix) Each of the Operative Agreements to which any of the Indiana Partnership Entities is a party has been duly authorized and validly executed and delivered by each of the Indiana Partnership Entities party thereto. Each of the Operative Agreements governed by Indiana law constitutes a valid and legally binding agreement of the Partnership Entities party thereto, enforceable against each such Partnership Entity in accordance with its respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and an implied covenant of good faith and fair dealing.
          (x) None of the offering, issuance and sale by the Partnership of the Units being delivered at such Time of Delivery, the execution, delivery and performance of this Agreement or the Operative Agreements by the Partnership Entities which are parties thereto, or the consummation of the transactions contemplated hereby and thereby (including the Transactions) (i) constitutes or will constitute a violation of the organizational documents of any of the Indiana Partnership Entities, (ii) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or

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lapse of time or both, would constitute such a default), or result in a lien, under any mortgage, deed of trust, loan agreement, lease or other agreement or instrument known to such counsel to which any of the Partnership Entities or their properties may be bound (other than the any Operative Agreement or any other agreement filed as an exhibit to the Registration Statement), or (iii) results or will result in any violation of the Indiana Act, the Indiana LLC Act or the laws of the State of Indiana, or any order, judgment, decree or injunction known to such counsel of any Indiana court or governmental agency or body to which any of the Partnership Entities or any of their properties is subject, which breach, violation, lien or default in the case of clause (ii) or (iii) would reasonably be expected to have a material adverse effect on the financial condition, business or results of operations of the Partnership Entities taken as a whole.
          (xi) Upon the consummation of the Transactions, (i) the liability of the Partnership for the liabilities of Calumet arising solely from the status of the Partnership as the sole member of the limited partner of Calumet will not be governed by the laws of the State of Indiana and (ii) the liability of the Partnership’s unitholders for the liabilities of the Partnership or the Operating Subsidiaries arising solely from the status of the Partnership’s unitholders as limited partners of the Partnership will not be governed by the laws of the State of Indiana.
          (xii) No permit, consent, approval, authorization, order, registration, filing or qualification (“consent”) of or with any court, governmental agency or body of the State of Indiana having jurisdiction over the Partnership Entities or any of their respective properties is required for the issuance and sale of the Units by the Partnership, or for the conveyance of the properties located in the State of Indiana purported to be conveyed to the Operating Subsidiaries pursuant to the Contribution Documents, except (A) for such consents required under the Act, the Exchange Act and state securities or “Blue Sky” laws, as to which such counsel need not express any opinion, (B) for such consents which have been obtained or made, (C) for such consents which (i) are of a routine or administrative nature, (ii) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (iii) are expected in the reasonable judgment of the General Partner to be obtained or made in the ordinary course of business subsequent to the consummation of the Transactions, (D) for such consents which, if not obtained or made, would not, individually or in the aggregate, have a material adverse effect upon the operations conducted or to be conducted as described in the Prospectus in the State of Indiana by the Partnership Entities or (E) as disclosed in the Prospectus.
          (xiii) The execution, delivery and performance of the Contribution Documents relating to the transfer of property in the State of Indiana has not violated and will not violate any statute of the State of Indiana or any rule, regulation or, to the knowledge of such counsel, any order of any agency of the State of Indiana having jurisdiction over any of the Partnership Entities or any of their respective properties, except for any such violations which, individually or in the aggregate, would not have a material adverse effect on the holders of Units or the operations conducted in the State of Indiana by the Partnership Entities, taken as a whole.
          In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Partnership Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, and all copies submitted to them conform to the originals thereof, and that the signatures on all documents

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examined by them are genuine, (C) state that such opinions are limited to the laws of the State of Indiana, excepting therefrom municipal and local ordinances and regulations, (D) state that they express no opinion with respect to (i) state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the Partnership Entities may be subject, (ii) title to any real or personal property, (iii) the accuracy of descriptions or references to real or personal property or (iv) permits to own or operate any real or personal property, and (E) with respect to the opinion in paragraph (i) rely upon certificates of foreign qualification provided by the Secretary of State of Indiana (each of which shall be dated as of the date not more than fourteen days prior to such Time of Delivery and provided to you.)
          In rendering such opinion, such counsel shall state that (A) Vinson & Elkins L.L.P. and Baker Botts L.L.P. are each authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon only by the Underwriters and its counsel in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel’s prior written consent;
     (e) Cook, Yancey, King & Galloway APLC, with respect to the State of Louisiana, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:
          (i) Calumet has been duly qualified or registered as a foreign limited partnership for the transaction of business under the laws of the State of Louisiana. Each of the Operating LLCs has been duly qualified or registered as a foreign limited liability company for the transaction of business under the laws of the State of Louisiana. Reseller has been duly qualified or registered as a foreign corporation for the transaction of business under the laws of the State of Louisiana.
          (ii) Upon the consummation of the Transactions, (i) the liability of the Partnership for the liabilities of Calumet arising solely from the status of the Partnership as the sole member of the limited partner of Calumet will not be governed by the laws of the State of Louisiana and (ii) the liability of the Partnership’s unitholders for the liabilities of the Partnership or the Operating Subsidiaries arising solely from the status of the Partnership’s unitholders as limited partners of the Partnership will not be governed by the laws of the State of Louisiana.
          (iii) No permit, consent, approval, authorization, order, registration, filing or qualification (“consent”) of or with any court, governmental agency or body of the State of Louisiana having jurisdiction over the Partnership Entities or any of their respective properties is required for the issuance and sale of the Units by the Partnership, except (A) for such consents required under the Act, the Exchange Act and state securities or “Blue Sky” laws, as to which such counsel need not express any opinion, (B) for such consents which have been obtained or made, (C) for such consents which (i) are of a routine or administrative nature, (ii) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (iii) are expected in the reasonable judgment of the General Partner to be obtained or made in the ordinary course of business subsequent to the consummation of the Transactions, (D) for such consents which, if not obtained or made, would not, individually or in the aggregate, have a

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material adverse effect upon the operations conducted or to be conducted as described in the Prospectus in the State of Louisiana by the Partnership Entities or (E) as disclosed in the Prospectus.
          In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Partnership Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, and all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, (C) state that such opinions are limited to the laws of the State of Louisiana, excepting therefrom municipal and local ordinances and regulations, (D) state that they express no opinion with respect to (i) state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the Partnership Entities may be subject, (ii) title to any real or personal property, (iii) the accuracy of descriptions or references to real or personal property or (iv) permits to own or operate any real or personal property, and (E) with respect to the opinion in paragraph (i) rely upon certificates of foreign qualification provided by the Secretary of State of Louisiana (each of which shall be dated as of the date not more than fourteen days prior to such Time of Delivery and provided to you.)
          In rendering such opinion, such counsel shall state that (A) Vinson & Elkins L.L.P. and Baker Botts L.L.P. are each authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon only by the Underwriters and its counsel in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel’s prior written consent.
     (f) Fulbright & Jaworski L.L.P., special counsel for the Calumet Parties, shall have furnished to you their written opinion, dated such Time of Delivery, in form and substance satisfactory to you, to the effect that:
          (i) The execution and delivery of this Agreement by the Calumet Parties and the performance by the Calumet Parties of their obligations under this Agreement and the offering, issuance or sale by the Partnership of the Units does not violate or constitute a default (or an event which, with notice or lapse of time or both, would constitute such an event) under the provisions of the Credit Agreements.
          (ii) Each of the Credit Agreements constitutes the legal, valid and binding obligation of the Partnership Entities party thereto, enforceable against each such Partnership Entity in accordance with its respective terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and an implied covenant of good faith and fair dealing.
          In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Calumet Parties and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents

33


 

examined by them are genuine and (C) state that such opinions are limited to the laws of the State of New York, excepting therefrom municipal and local ordinances and regulations.
          In rendering such opinion, such counsel shall state that (A) Vinson & Elkins L.L.P. and Baker Botts L.L.P. are each authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon only by the Underwriters and its counsel in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel’s prior written consent.
     (g) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, Ernst & Young LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex II hereto (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Annex II(a) hereto and a draft of the form of letter to be delivered on the effective date of any post-effective amendment to the Registration Statement and as of each Time of Delivery is attached as Annex II(b) hereto);
     (h) (i) None of the Partnership Entities shall have sustained since the date of the latest audited financial statements included in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus there shall not have been any change in the capitalization or long-term debt of any of the Partnership Entities or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, partners’ equity, members’ equity or results of operations of any of the Partnership Entities otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Underwriters so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Units being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;
     (i) On or after the Applicable Time, (i) no downgrading shall have occurred in the rating accorded the debt securities of any Partnership Entity by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 463(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the debt securities of any Partnership Entity;
     (j) On or after the Applicable Time, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or NASDAQ; (ii) a suspension or material limitation in trading in the Partnership’s securities on NASDAQ; (iii) a general moratorium on commercial banking activities declared by Federal, New York State or Indiana State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war; or

34


 

(v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of Goldman, Sachs & Co. makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Units being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus;
     (k) The Units to be sold at such Time of Delivery shall have been duly admitted for trading and quotation on NASDAQ;
     (l) The Partnership has obtained and delivered to the Underwriters executed copies of a letter agreement from each officer and director of the General Partner and from each of the Directed Unit Participants, substantially to the effect set forth in Subsection 5(e) hereof in form and substance satisfactory to you;
     (m) The Partnership shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement;
     (n) The Partnership shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Calumet Parties satisfactory to you as to the accuracy of the representations and warranties of the Calumet Parties herein at and as of such Time of Delivery, as to the performance by the Calumet Parties all of their obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (h) of this Section and as to such other matters as you may reasonably request;
     (o) The Transactions shall have been consummated.
     9.  Indemnification .
     (a) The Calumet Parties, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or “any issuer information” filed or required to be filed by Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that each of the Calumet Parties shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Partnership by any Underwriter through Goldman, Sachs & Co. expressly for use therein.

35


 

     (b) Each Underwriter will indemnify and hold harmless the Calumet Parties against any losses, claims, damages or liabilities to which any of the Calumet Parties may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Partnership by such Underwriter through Goldman, Sachs & Co. expressly for use therein; and will reimburse the Calumet Parties for any legal or other expenses reasonably incurred by the Calumet Parties in connection with investigating or defending any such action or claim as such expenses are incurred.
     (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
     (d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses,

36


 

claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Calumet Parties on the one hand and the Underwriters on the other from the offering of the Units. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Calumet Parties on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Calumet Parties on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Partnership bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Calumet Parties on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Each of the Calumet Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Units underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
     (e) The obligations of the Calumet Parties under this Section 9 shall be in addition to any liability which they may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the General Partner (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the General Partner) and to each person, if any, who controls any of the Calumet Parties within the meaning of the Act.

37


 

     10.  Underwriters .
     (a) If any Underwriter shall default in its obligation to purchase the Units which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Units on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Units, then the Partnership shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Units on such terms. In the event that, within the respective prescribed periods, you notify the Partnership that you have so arranged for the purchase of such Units, or the Partnership notifies you that it has so arranged for the purchase of such Units, you or the Partnership shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Partnership agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term “ Underwriter ” as used in this Agreement shall include any person substituted under this Section 10 with like effect as if such person had originally been a party to this Agreement with respect to such Units.
     (b) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by you and the Partnership as provided in subsection (a) above, the aggregate number of such Units which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Units to be purchased at such Time of Delivery, then the Partnership shall have the right to require each non-defaulting Underwriter to purchase the number of Units which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Units which such Underwriter agreed to purchase hereunder) of the Units of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
     (c) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by you and the Partnership as provided in subsection (a) above, the aggregate number of such Units which remains unpurchased exceeds one-eleventh of the aggregate number of all the Units to be purchased at such Time of Delivery, or if the Partnership shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Units of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Partnership to sell the Optional Units) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Partnership, except for the expenses to be borne by the Partnership and the Underwriters as provided in Sections 7 and 12 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
     11. The respective indemnities, agreements, representations, warranties and other statements of the Partnership and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any

38


 

Underwriter or any controlling person of any Underwriter, or the Partnership, or any officer or director or controlling person of the General Partner, and shall survive delivery of and payment for the Units.
     12. If this Agreement shall be terminated pursuant to Section 10 hereof, the Partnership shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Units are not delivered by or on behalf of the Partnership as provided herein, the Partnership will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Units not so delivered, but the Partnership shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.
     13. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the representatives of the several Underwriters.
     All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives of the several Underwriters in care of Goldman, Sachs & Co., One New York Plaza, 42nd Floor, New York, New York 10004, Attention: Registration Department; and if to the Partnership shall be delivered or sent by mail, telex or facsimile transmission to the address of the Partnership set forth in the Registration Statement, Attention: Secretary; and if to a party to the lockup letters described in Section 8(l) shall be delivered or sent by mail, telex or facsimile transmission to the address set forth in such party’s lockup letter; provided, however, that notices under Section 9(c) shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Partnership by you upon request; provided, however, that notices under Section 5(e) shall be in writing, and, if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives at Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Control Room. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
     14. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Calumet Parties and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the General Partner and each person who controls the Partnership or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Units from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
     15. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Partnership and the Underwriters, or any of them, with respect to the subject matter hereof; provided that each of (i) the letter agreement dated as of January 19, 2006 between Goldman Sachs & Co. and Calumet and (ii) the letter agreement dated as of January 19, 2006 between Petrie Parkman & Co., Inc. and Calumet shall remain in full force and effect in accordance with its terms.

39


 

     16. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
     17. Each of the Calumet Parties and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
     18. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
     19. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
     20. Notwithstanding anything herein to the contrary, the Partnership is authorized, subject to applicable law, to disclose to any persons any and all aspects of this potential transaction that are necessary to support any U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) relating to such treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with applicable securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.
     If the foregoing is in accordance with your understanding, please sign and return to us seven counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters and each of the Calumet Parties. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Partnership for examination upon request, but without warranty on your part as to the authority of the signers thereof.

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[Signature page follows.]

41


 

             
    Very truly yours,
 
           
    CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
 
           
    By:   Calumet GP, LLC, its general partner
 
           
 
      By:   /s/ R. Patrick Murray, II
 
           
        Name: R. Patrick Murray, II
        Title: Vice President and Chief Financial Officer
 
           
    CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP
 
           
    By: Calumet, Incorporated, its general partner
 
           
 
      By:   /s/ R. Patrick Murray, II
 
           
        Name: R. Patrick Murray, II
        Title: Vice President and Chief Financial Officer
 
           
    CALUMET GP, LLC
 
           
 
      By:   /s/ R. Patrick Murray, II
 
           
        Name: R. Patrick Murray, II
        Title: Vice President and Chief Financial Officer
 
           
    CALUMET OPERATING, LLC
 
           
    By: Calumet Specialty Products Partners, L.P., its sole member
 
           
        By: Calumet GP, LLC, its general partner
 
           
 
      By:   /s/ R. Patrick Murray, II
 
           
        Name: R. Patrick Murray, II
        Title: Vice President and Chief Financial Officer

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    CALUMET LP GP, LLC
 
           
    By:   Calumet, Incorporated, its sole member
 
 
      By:   /s/ R. Patrick Murray, II
 
           
        Name: R. Patrick Murray, II
        Title: Vice President and Chief Financial Officer

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Accepted as of the date hereof:    
 
       
Goldman, Sachs & Co.    
Deutsche Bank Securities Inc.    
Raymond James & Associates, Inc.    
Petrie Parkman & Co., Inc.    
 
       
/s/ Goldman, Sachs & Co.    
     
 
  (Goldman, Sachs & Co.)    
On behalf of each of the Underwriters    

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SCHEDULE I
                 
            Number of Optional
            Units to be
    Total Number of   Purchased if
    Firm Units   Maximum Option
Underwriter   to be Purchased   Exercised
Goldman, Sachs & Co.
    3,599,936       539,990  
Deutsche Bank Securities Inc.
    959,983       143,997  
Raymond James & Associates, Inc.
    959,983       143,997  
Petrie Parkman & Co., Inc.
    179,998       27,001  
 
               
Total
    5,699,900       854,985  
 
               

 


 

SCHEDULE II(A)
Materials Other Than the Pricing Prospectus
That Comprise the Pricing Disclosure Package
None.

 


 

SCHEDULE II(B)
Issuer Free Writing Prospectuses Not Included
in the Pricing Disclosure Package
1. The Calumet Specialty Products Partners, L.P. Institutional Electronic Roadshow made available via Netroadshow at www.netroadshow.com/custom/gsc .
2. The Electronic Retail Roadshow for Calumet Specialty Products Partners, L.P. made available via Netroadshow at http://www.retailroadshow.com/links/show.asp?c=CLMT5CZ3AR .

 


 

ANNEX I
FOREIGN QUALIFICATIONS
     
 
  Calumet Specialty Products Partners, L.P.
Indiana
 
   
 
  Calumet Operating, LLC
Indiana
 
   
 
  Calumet LP GP, LLC
Arkansas
California
Florida
Georgia
Illinois
Indiana
Massachusetts
Mississippi
Ohio
South Carolina
Texas
 
   
 
  Calumet Lubricants Co., Limited Partnership
Arkansas
California
Connecticut
Florida
Georgia
Illinois
Indiana
Kentucky
Louisiana
Massachusetts
Mississippi
Missouri
New Jersey
New York
Ohio
Pennsylvania
South Carolina
Texas
Utah

 


 

     
 
  Calumet Shreveport, LLC
Louisiana
 
   
 
  Calumet Shreveport Lubricants & Waxes, LLC
Arkansas
California
Connecticut
Florida
Georgia
Illinois
Indiana
Kentucky
Louisiana
Mississippi
Missouri
New Jersey
Ohio
Texas
Virginia
 
   
 
  Calumet Shreveport Fuels, LLC
Arkansas
Connecticut
Georgia
Illinois
Indiana
Kentucky
Louisiana
Mississippi
Missouri
Ohio
Texas
Virginia
 
   
 
  Calumet Sales Company Incorporated
Louisiana
 
   
 
  Calumet GP, LLC
Indiana

 


 

ANNEX II(a)
[Comfort Letter of Ernst & Young LLP]

 


 

ANNEX II(b)
[Bring-down Comfort Letter of Ernst & Young LLP]

 

 

EXHIBIT 1.2
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
750,100 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
 
Common Unit Purchase Agreement
January 25, 2006
Mr. Fred M. Fehsenfeld Sr.
149 Willowgate Lane
Indianapolis, Indiana
46260
Mr. Mac Fehsenfeld
7418 West 96 St.
Zionsville, Indiana
46077
Mr. Frank B. Fehsenfeld
3604 East Fulton St. #248
Grand Rapids, Michigan
49546
Ladies and Gentlemen:
     Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “ Partnership ” or the “ MLP ”), proposes, subject to the terms and conditions stated herein, to issue and sell to the investors named in Schedule I hereto (the “ Fehsenfeld Investors ”) an aggregate of 750,100 common units (the “ Fehsenfeld Units ”) representing limited partner interests in the Partnership (the “ Common Units ”). Certain terms used but not defined herein have the meanings assigned to them in the underwriting agreement (the “ Underwriting Agreement ”), dated as of even date herewith, by and among the Partnership, certain subsidiaries of the Partnership, Calumet GP, LLC, a Delaware limited liability company and general partner of the Partnership (the “ General Partner ,” and together with the Partnership, the “ Calumet Parties ”), and the underwriters named therein (the “ Underwriters ”), relating to the Partnership’s proposed sale of an aggregate 5,699,900 common units (the “ Underwritten Units ”), to the Underwriters.
     This is to confirm the agreement among the Calumet Parties and the Fehsenfeld Investors concerning the purchase of the Fehsenfeld Units from the Partnership by the Fehsenfeld Investors.

 


 

     1.  Representations, Warranties and Agreements of the Calumet Parties . The Calumet Parties, jointly and severally, represent and warrant to, and agree with, each of the Fehsenfeld Investors that:
     (a)  Registration . A registration statement on Form S-1 (File No. 333-128880) (the “ Initial Registration Statement ”) in respect of the Units has been filed with the Securities and Exchange Commission (the “ Commission ” or the “ SEC ”); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “ Rule  462(b) Registration Statement ”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “ Act ”), which became effective upon filing, no other document with respect to the Initial Registration Statement has heretofore been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a “ Preliminary Prospectus ”; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “ Registration Statement ”; the Preliminary Prospectus dated January 13, 2006 relating to the Units that was included in the Registration Statement immediately prior to the Applicable Time (as defined below) is hereinafter called the “ Pricing Prospectus ”; the final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the “ Prospectus ”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Units is hereinafter called an “ Issuer Free Writing Prospectus ”). For purposes of this Agreement, “ Applicable Time ” means 5:40 p.m. (New York City time) on the date of this Agreement.
     (b)  No Stop Order. No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued and no proceeding for that purpose has been initiated or threatened by the Commission.
     (c)  No Material Misstatements or Omissions in Registration Statement or Prospectus . The Registration Statement conforms, and any further amendments or supplements to the Registration Statement will, when they become effective, conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any supplement or amendment thereto will conform when filed with the Commission under Rule 424(b), in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which

2


 

they were made, not misleading. Notwithstanding the foregoing, the representation and warranty in this Section 1(c) shall not apply to any statements or omissions made in reliance upon and in conformity with written information furnished to the Partnership by an Underwriter through Goldman, Sachs & Co. expressly for use therein.
     (d)  No Material Misstatements or Omissions in Pricing Disclosure Package. The Pricing Prospectus, as supplemented by those Issuer Free Writing Prospectuses and other documents, if any, listed in Schedule II(a) hereto, taken together (collectively, the “ Pricing Disclosure Package ”), as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed in Schedule II(a) or Schedule II(b) hereto does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of the statements made by the Partnership in the Pricing Prospectus, and to be made in the Prospectus and any further amendments or supplements to the Registration Statement or Prospectus within the coverage of Rule 175(b) of the rules and regulations under the Act, including (but not limited to) any projections of results of operations or statements with respect to future available cash or future cash distributions of the Partnership or the anticipated ratio of taxable income to distributions, was made or will be made with a reasonable basis and in good faith. Notwithstanding the foregoing, the representation and warranty in this Section 1(d) shall not apply to any statements or omissions made in the Registration Statement, the Prospectus or the Pricing Prospectus or any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Partnership by an Underwriter through Goldman, Sachs & Co. expressly for use therein.
     (e)  Formation and Qualification of the Partnership and the General Partner . The Partnership has been duly formed and is validly existing in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”) with full partnership power and authority necessary to enter into this Agreement, to own or lease its properties, to assume the liabilities assumed by it pursuant to the Contribution Documents and to conduct its business, in each case in all material respects as described in the Registration Statement and the Pricing Prospectus. The General Partner has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”) with full limited liability company power and authority to enter into this Agreement, to own or lease its properties, to assume the liabilities assumed by it pursuant to the Contribution Documents, to conduct its business and to act as the general partner of the Partnership, in each case in all material respects as described in the Registration Statement and the Pricing Prospectus. Each of the Calumet Parties is duly registered or qualified as a foreign limited partnership or limited liability company, as the case may be, for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure so to register or qualify would not (i) have a material adverse effect on the general affairs, management, the current or future consolidated financial position, business prospects, partners’ equity, members’ equity or results of

3


 

operations of the Partnership Entities taken as a whole (a “ Material Adverse Effect ”), or (ii) subject the limited partners of the Partnership to any material liability or disability.
     (f)  Valid Issuance of the Units . The Fehsenfeld Units, and the limited partner interests represented thereby, will be duly authorized by the Partnership Agreement and, when issued and delivered to the Fehsenfeld Investors against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Pricing Prospectus under the caption “The Partnership Agreement – Limited Liability”).
     (g)  Authority and Authorization . The Partnership has all requisite power and authority to issue, sell and deliver the Fehsenfeld Units, in accordance with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement.
     (h)  Due Execution and Delivery of Purchase Agreement and Underwriting Agreement . This Agreement and the Underwriting Agreement have been duly executed and delivered by each of the Calumet Parties.
     (i)  Enforceability of Other Agreements . At or before the Closing Date:
          (i) The Partnership Agreement will have been duly authorized, executed and delivered by the General Partner, The Heritage Group, an Indiana general partnership (“ Heritage ”), Calumet, Incorporated, an Indiana corporation (“ Calumet Inc. ”), Fred M. Fehsenfeld, Jr. or certain associated trusts (collectively, “ Fehsenfeld ”) and the Grube Family, Indiana residents, certain of their affiliates or associated trusts (collectively, “ Grube ”) as the “Organizational Limited Partners” and will be a valid and legally binding agreement of the General Partner, Heritage, Calumet Inc., Fehsenfeld and Grube as the Organizational Limited Partners, enforceable against the General Partner, Heritage, Calumet Inc., Fehsenfeld and Grube as the Organizational Limited Partners in accordance with its terms;
          (ii) The General Partner Agreement will have been duly authorized, executed and delivered by Heritage, Grube and Fehsenfeld and will be a valid and legally binding agreement of Heritage, Grube and Fehsenfeld, enforceable against Heritage, Grube and Fehsenfeld in accordance with its terms;
          (iii) Each of the Contribution Documents will have been duly authorized, executed and delivered by the parties thereto and will be valid and legally binding agreements of the Calumet Entities party thereto enforceable against such parties in accordance with its respective terms;
          (iv) The Omnibus Agreement will have been duly authorized, executed and delivered by each of the parties thereto and will be a valid and legally binding agreement of each of them enforceable against each of them in accordance with its terms; and
provided that, with respect to each agreement described in this Section 1(i), the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); provided, further, that

4


 

the indemnity and contribution provisions contained therein may be limited by applicable laws or public policy.
     (j)  No Conflicts . None of the offering, issuance and sale by the Partnership of the Fehsenfeld Units, the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby (i) conflicts or will conflict with or constitutes or will constitute a violation of the Partnership Agreement or the General Partner Agreement, (ii) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a default), any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Calumet Entities is a party or by which any of them or any of their respective properties may be bound or subject, (iii) violates or will violate any statute, law or regulation or any order, rule, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over any of the Calumet Entities or any of their properties or (iv) results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the Calumet Entities, which conflicts, breaches, violations or defaults, in the case of clauses (ii), (iii) or (iv), would, individually or in the aggregate, have a Material Adverse Effect or would materially impair the ability of any of the Calumet Entities to perform their obligations under this Agreement.
     (k)  Investment Company . None of the Partnership Entities is now, and after giving effect to the offering and sale of the Units and the application of the proceeds thereof, will be an “investment company” or a company “controlled by” an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”).
     (l)  Trading . The Units have been approved for trading and quotation on the NASDAQ National Market.
     (m)  Not Ineligible Issuer. At the time of filing the Initial Registration Statement, the Partnership was not and is not an “ineligible issuer,” as defined in Rule 405 under the Act.
     2.  Purchase and Sale . Subject to the terms and conditions herein set forth, the Partnership agrees to sell to each of the Fehsenfeld Investors, and each of the Fehsenfeld Investors hereby agrees, severally and not jointly, to purchase from the Partnership, at a purchase price of $19.995 per unit, the number of Fehsenfeld Units set forth opposite such Fehsenfeld Investor’s name in Schedule I hereto.
     3.  Delivery and Payment for the Fehsenfeld Units . Delivery of and payment for the Fehsenfeld Units shall be made at 9:30 a.m., New York City time, on January 31, 2006 (such date and time of delivery and payment for the Fehsenfeld Units being herein called the “ Closing Date ”). Delivery of the Fehsenfeld Units shall be made to the Fehsenfeld Investors against payment by the Fehsenfeld Investors of the purchase price thereof to or upon the order of the Partnership by wire transfer payable in same-day funds to an account specified by the Partnership.
     4.  Conditions of Fehsenfeld Investors’ Obligations . The obligations of the Fehsenfeld Investors hereunder, as to the Fehsenfeld Units, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Calumet Parties herein are, at and as of the Closing Date, true and correct, the condition that the Calumet Parties shall have performed all of

5


 

their obligations hereunder theretofore to be performed, and the closing of the purchase and sale of the Underwritten Units shall have occurred.
     5. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Fehsenfeld Investors shall be delivered or sent by mail, telex or facsimile transmission to The Heritage Group, 5400 West 86th Street, P.O. Box 68123, Indianapolis, IN 46268, Attention, Tom Mattix; and if to the Partnership shall be delivered or sent by mail to the address of the Partnership set forth in the Registration Statement, Attention: R. Patrick Murray, II. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
     6. This Agreement shall be binding upon, and inure solely to the benefit of, the Fehsenfeld Investors and the Calumet Parties, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.
     7. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Partnership and the Fehsenfeld Investors, or any of them, with respect to the subject matter hereof.
     8. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana.
     9. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
     If the foregoing is in accordance with your understanding, please sign and return to us three (3) counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Fehsenfeld Investors, this letter and such acceptance hereof shall constitute a binding agreement among each of the Fehsenfeld Investors and each of the Calumet Parties.
[ Signature pages follow ]

6


 

                 
    Very truly yours,    
 
               
    CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.    
 
               
    By:   Calumet GP, LLC, its general partner    
 
               
 
      By:   /s/ R. Patrick Murray, II    
 
      Name:  
 
R. Patrick Murray, II
   
 
      Title:   Vice President and Chief Financial
Officer
   
 
               
    CALUMET GP, LLC    
 
               
 
  By:   /s/ R. Patrick Murray, II     
       
  
   
    Name:   R. Patrick Murray, II    
    Title:   Vice President and Chief Financial Officer    

7


 

Accepted as of the date hereof:
     
/s/ Fred M. Fehsenfeld Sr.
   
 
Mr. Fred M. Fehsenfeld Sr.
   
 
   
/s/ Mac Fehsenfeld
   
 
Mr. Mac Fehsenfeld
   
 
   
/s/ Frank B. Fehsenfeld
   
 
Mr. Frank B. Fehsenfeld
   

8


 

SCHEDULE I
         
    Total Number of  
    Common Units  
Fehsenfeld Investors   to be Purchased  
Fred M. Fehsenfeld Sr.
    250,034  
Mac Fehsenfeld
    250,033  
Frank B. Fehsenfeld
    250,033  
 
     
Total
    750,100  
 
     

 


 

Schedule II(a)
Materials Other Than the Pricing Prospectus
That Comprise the Pricing Disclosure Package
None.

 


 

Schedule II(b)
Issuer Free Writing Prospectuses Not Included
in the Pricing Disclosure Package
Issuer Free Writing Prospectuses Not Included
in the Pricing Disclosure Package
1. The Calumet Specialty Products Partners, L.P. Institutional Electronic Roadshow made available via Netroadshow at www.netroadshow.com/custom/gsc .
2. The Electronic Retail Roadshow for Calumet Specialty Products Partners, L.P. made available via Netroadshow at http://www.retailroadshow.com/links/show.asp?c=CLMT5CZ3AR .

 

 

Exhibit 3.1
 
 
 
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
 
 

 


 

         
TABLE OF CONTENTS
       
 
       
ARTICLE I
       
 
       
DEFINITIONS
       
 
       
Section 1.1 Definitions
    1  
Section 1.2 Construction
    21  
 
       
ARTICLE II
       
 
       
ORGANIZATION
       
 
       
Section 2.1 Formation
    21  
Section 2.2 Name
    22  
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices
    22  
Section 2.4 Purpose and Business
    22  
Section 2.5 Powers
    23  
Section 2.6 Power of Attorney
    23  
Section 2.7 Term
    24  
Section 2.8 Title to Partnership Assets
    24  
 
       
ARTICLE III
       
 
       
RIGHTS OF LIMITED PARTNERS
       
 
       
Section 3.1 Limitation of Liability
    25  
Section 3.2 Management of Business
    25  
Section 3.3 Outside Activities of the Limited Partners
    25  
Section 3.4 Rights of Limited Partners
    25  
 
       
ARTICLE IV
       
 
       
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
       
 
       
Section 4.1 Certificates
    26  
Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates
    27  
Section 4.3 Record Holders
    28  
Section 4.4 Transfer Generally
    28  
Section 4.5 Registration and Transfer of Limited Partner Interests
    28  
Section 4.6 Transfer of the General Partner’s General Partner Interest
    29  
Section 4.7 Transfer of Incentive Distribution Rights
    30  
Section 4.8 Restrictions on Transfers
    30  
Section 4.9 Citizenship Certificates; Non-citizen Assignees
    32  
Section 4.10 Redemption of Partnership Interests of Non-citizen Assignees
    33  
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

 


 

         
ARTICLE V
       
 
       
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
       
 
       
Section 5.1 Organizational Contributions
    35  
Section 5.2 Contributions by the General Partner and its Affiliates
    35  
Section 5.3 Contributions by Initial Limited Partners
    36  
Section 5.4 Interest and Withdrawal
    36  
Section 5.5 Capital Accounts
    37  
Section 5.6 Issuances of Additional Partnership Securities
    40  
Section 5.7 Limitations on Issuance of Additional Partnership Securities
    41  
Section 5.8 Conversion of Subordinated Units
    45  
Section 5.9 Limited Preemptive Right
    45  
Section 5.10 Splits and Combinations
    45  
Section 5.11 Fully Paid and Non-Assessable Nature of Limited Partner Interests
    46  
 
       
ARTICLE VI
       
 
       
ALLOCATIONS AND DISTRIBUTIONS
       
 
       
Section 6.1 Allocations for Capital Account Purposes
    46  
Section 6.2 Allocations for Tax Purposes
    55  
Section 6.3 Requirement and Characterization of Distributions; Distributions to Record Holders
    57  
Section 6.4 Distributions of Available Cash from Operating Surplus
    57  
Section 6.5 Distributions of Available Cash from Capital Surplus
    60  
Section 6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
    60  
Section 6.7 Special Provisions Relating to the Holders of Subordinated Units
    60  
Section 6.8 Special Provisions Relating to the Holders of Incentive Distribution Rights
    61  
Section 6.9 Special Provisions Relating to the Fehsenfeld Investors
    61  
Section 6.10 Entity-Level Taxation
    62  
 
       
ARTICLE VII
       
 
       
MANAGEMENT AND OPERATION OF BUSINESS
       
 
       
Section 7.1 Management
    62  
Section 7.2 Certificate of Limited Partnership
    64  
Section 7.3 Restrictions on the General Partner’s Authority
    65  
Section 7.4 Reimbursement of the General Partner
    65  
Section 7.5 Outside Activities
    66  
Section 7.6 Loans from the General Partner; Loans or Contributions from the Partnership or Group Members
    67  
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

ii


 

         
Section 7.7 Indemnification
    68  
Section 7.8 Liability of Indemnitees
    69  
Section 7.9 Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties
    70  
Section 7.10 Other Matters Concerning the General Partner
    72  
Section 7.11 Purchase or Sale of Partnership Securities
    72  
Section 7.12 Registration Rights of the General Partner and its Affiliates
    72  
Section 7.13 Reliance by Third Parties
    76  
 
       
ARTICLE VIII
       
 
       
BOOKS, RECORDS, ACCOUNTING AND REPORTS
       
 
       
Section 8.1 Records and Accounting
    76  
Section 8.2 Fiscal Year
    77  
Section 8.3 Reports
    77  
 
       
ARTICLE IX
       
 
       
TAX MATTERS
       
 
       
Section 9.1 Tax Returns and Information
    77  
Section 9.2 Tax Elections
    77  
Section 9.3 Tax Controversies
    78  
Section 9.4 Withholding
    78  
 
       
ARTICLE X
       
 
       
ADMISSION OF PARTNERS
       
 
       
Section 10.1 Admission of Limited Partners
    78  
Section 10.2 Admission of Successor General Partner
    79  
Section 10.3 Amendment of Agreement and Certificate of Limited Partnership
    79  
 
       
ARTICLE XI
       
 
       
WITHDRAWAL OR REMOVAL OF PARTNERS
       
 
       
Section 11.1 Withdrawal of the General Partner
    80  
Section 11.2 Removal of the General Partner
    81  
Section 11.3 Interest of Departing General Partner and Successor General Partner
    82  
Section 11.4 Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages
    83  
Section 11.5 Withdrawal of Limited Partners
    84  
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

iii


 

         
ARTICLE XII
       
 
       
DISSOLUTION AND LIQUIDATION
       
 
       
Section 12.1 Dissolution
    84  
Section 12.2 Continuation of the Business of the Partnership After Dissolution
    84  
Section 12.3 Liquidator
    85  
Section 12.4 Liquidation
    86  
Section 12.5 Cancellation of Certificate of Limited Partnership
    86  
Section 12.6 Return of Contributions
    86  
Section 12.7 Waiver of Partition
    87  
Section 12.8 Capital Account Restoration
    87  
 
       
ARTICLE XIII
       
 
       
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
       
 
       
Section 13.1 Amendments to be Adopted Solely by the General Partner
    87  
Section 13.2 Amendment Procedures
    88  
Section 13.3 Amendment Requirements
    89  
Section 13.4 Special Meetings
    90  
Section 13.5 Notice of a Meeting
    90  
Section 13.6 Record Date
    90  
Section 13.7 Adjournment
    91  
Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes
    91  
Section 13.9 Quorum and Voting
    91  
Section 13.10 Conduct of a Meeting
    92  
Section 13.11 Action Without a Meeting
    92  
Section 13.12 Right to Vote and Related Matters
    93  
 
       
ARTICLE XIV
       
 
       
MERGER
       
 
       
Section 14.1 Authority
    93  
Section 14.2 Procedure for Merger or Consolidation
    93  
Section 14.3 Approval by Limited Partners of Merger or Consolidation
    94  
Section 14.4 Certificate of Merger
    95  
Section 14.5 Amendment of Partnership Agreement
    95  
Section 14.6 Effect of Merger
    96  
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

iv


 

         
ARTICLE XV
       
 
       
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
       
 
       
Section 15.1 Right to Acquire Limited Partner Interests
    96  
 
       
ARTICLE XVI
       
 
       
GENERAL PROVISIONS
       
 
       
Section 16.1 Addresses and Notices
    98  
Section 16.2 Further Action
    99  
Section 16.3 Binding Effect
    99  
Section 16.4 Integration
    99  
Section 16.5 Creditors
    99  
Section 16.6 Waiver
    99  
Section 16.7 Counterparts
    99  
Section 16.8 Applicable Law
    99  
Section 16.9 Invalidity of Provisions
    100  
Section 16.10 Consent of Partners
    100  
Section 16.11 Facsimile Signatures
    100  
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP


 

FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CALUMET SPECIALTY
PRODUCTS PARTNERS, L.P.
     THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CALUMET SPECIALTY PRODUCTS PARTNERS, L.P., dated as of January 31, 2006, is entered into by and between Calumet GP, LLC, a Delaware limited liability company, as the General Partner, and The Heritage Group, an Indiana general partnership, Calumet, Incorporated, an Indiana corporation, F. William Grube, Fred M. Fehsenfeld, Jr., Mildred L. Fehsenfeld Irrevocable Intervivos Trust for the benefit of Fred Mehlert Fehsenfeld, Jr. and his issue, and Maggie Fehsenfeld Trust Number 106 for the benefit of Fred Mehlert Fehsenfeld, Jr. and his issue, as the Organizational Limited Partners, together with any other Persons who become Partners in the Partnership or parties hereto as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby 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.
     “ Accretion Test ” has the meaning assigned to such term in Section 5.7(g).
     “ Acquisition ” means any transaction in which any Group Member acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such transaction.
     “ Additional Book Basis ” means the portion of any remaining Carrying Value of an Adjusted Property that is attributable to positive adjustments made to such Carrying Value as a result of Book-Up Events. For purposes of determining the extent that Carrying Value constitutes Additional Book Basis:
          (a) Any negative adjustment made to the Carrying Value of an Adjusted Property as a result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that portion of the Carrying Value of such Adjusted Property that is attributable to any prior positive adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.
          (b) If Carrying Value that constitutes Additional Book Basis is reduced as a result of a Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional Book Basis; provided , that the amount treated as Additional Book Basis
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pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds the remaining Additional Book Basis attributable to all of the Partnership’s Adjusted Property after such Book-Down Event (determined without regard to the application of this clause (b) to such Book-Down Event).
     “ Additional Book Basis Derivative Items ” means any Book Basis Derivative Items that are computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership’s Adjusted Property as of the beginning of any taxable period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such period (the “Excess Additional Book Basis”), the Additional Book Basis Derivative Items for such period shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis Derivative Items determined without regard to this sentence as the Excess Additional Book Basis bears to the Additional Book Basis as of the beginning of such period.
     “ Adjusted Capital Account ” means the Capital Account maintained for each Partner as of the end of each fiscal year of the Partnership, (a) increased by any amounts that such Partner is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Partner in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted Capital Account” of a Partner in respect of a General Partner Unit, a Common Unit, a Subordinated Unit or an Incentive Distribution Right or any other Partnership Interest shall be the amount that such Adjusted Capital Account would be if such General Partner Unit, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Unit, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest was first issued.
     “ Adjusted Operating Surplus ” means, with respect to any period, Operating Surplus generated with respect to such period (a) less (i) any net increase in Working Capital Borrowings with respect to such period and (ii) any net decrease in cash reserves for Operating Expenditures with respect to such period not relating to an Operating Expenditure made with respect to such period, and (b) plus (i) any net decrease in Working Capital Borrowings with respect to such period, and (ii) any net increase in cash reserves for Operating Expenditures with respect to such period required by any debt instrument for the repayment of principal, interest or premium.
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Adjusted Operating Surplus does not include that portion of Operating Surplus included in clauses (a)(i) and (a)(ii) of the definition of Operating Surplus.
     “ Adjusted Property ” means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).
     “ 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.
     “ Aggregate Remaining Net Positive Adjustments ” means, as of the end of any taxable period, the sum of the Remaining Net Positive Adjustments of all the Partners.
     “ Agreed Allocation ” means any allocation, other than a Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of Section 6.1, including a Curative Allocation (if appropriate to the context in which the term “Agreed Allocation” is used).
     “ Agreed Value ” of any Contributed Property means the fair market value of such property or other consideration at the time of contribution as determined by the General Partner. The General Partner shall use such method as it determines to be appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each Contributed Property.
     “ Agreement ” means this First Amended and Restated Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P., as it may be amended, supplemented or restated from time to time.
     “ Associate ” means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as such Person.
     “ Available Cash ” means, with respect to any Quarter ending prior to the Liquidation Date:
          (a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand at the end of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership Group on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less
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          (b) the amount of any cash reserves established by the General Partner to (i) provide for the proper conduct of the business of the Partnership Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject or (iii) provide funds for distributions under Section 6.4 or 6.5 in respect of any one or more of the next four Quarters; provided , however , that the General Partner may not establish cash reserves pursuant to (iii) above if the effect of such reserves would be that the Partnership is unable to distribute the Minimum Quarterly Distribution on all Common Units, plus any Cumulative Common Unit Arrearage on all Common Units, with respect to such Quarter; and, provided further, that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if the General Partner so determines.
     Notwithstanding the foregoing, “ Available Cash ” with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
     “ Board of Directors ” means, with respect to the Board of Directors of the General Partner, its board of directors or managers, as applicable, if a corporation or limited liability company, or if a limited partnership, the board of directors or board of managers of the general partner of the General Partner.
     “ Book Basis Derivative Items ” means any item of income, deduction, gain or loss included in the determination of Net Income or Net Loss that is computed with reference to the Carrying Value of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted Property).
     “ Book-Down Event ” means an event that triggers a negative adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).
     “ Book-Tax Disparity ” means with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such Partner’s Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.
     “ Book-Up Event ” means an event that triggers a positive adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).
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     “ Business Day ” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Indiana shall not be regarded as a Business Day.
     “ Capital Account ” means the capital account maintained for a Partner pursuant to Section 5.5. The “ Capital Account ” of a Partner in respect of a General Partner Unit, a Common Unit, a Subordinated Unit, an Incentive Distribution Right or any other Partnership Interest shall be the amount that such Capital Account would be if such General Partner Unit, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Unit, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest was first issued.
     “ Capital Contribution ” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership.
     “ Capital Improvement ” means any (a) addition or improvement to the capital assets owned by any Group Member or (b) acquisition of existing, or the construction of new, capital assets (including refineries, pipelines, terminals, docks, truck racks, tankage and other refining, storage and distribution facilities and related assets), in each case if such addition, improvement, acquisition or construction is made to increase the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such addition, improvement, acquisition or construction.
     “ Capital Surplus ” has the meaning assigned to such term in Section 6.3(a).
     “ Carrying Value ” means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners’ Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.
     “ Cause ” means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General Partner liable for actual fraud or willful misconduct in its capacity as a general partner of the Partnership.
     “ Certificate ” means (a) a certificate (i) substantially in the form of Exhibit A to this Agreement, (ii) issued in global form in accordance with the rules and regulations of the Depositary or (iii) in such other form as may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or more Common Units or (b) a certificate, in such form as may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or more other Partnership Securities.
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     “ Certificate of Limited Partnership ” means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as referenced in Section 7.2, as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.
     “ Citizenship Certification ” means a properly completed certificate in such form as may be specified by the General Partner by which a Limited Partner certifies that he (and if he is a nominee holding for the account of another Person, that to the best of his knowledge such other Person) is an Eligible Citizen.
     “ claim ” (as used in Section 7.12(d)) has the meaning assigned to such term in Section 7.12(d).
     “ Closing Date ” means the first date on which Common Units are sold by the Partnership to the Underwriters pursuant to the provisions of the Underwriting Agreement.
     “ Closing Price ” has the meaning assigned to such term in Section 15.1(a).
     “ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
     “ Combined Interest ” has the meaning assigned to such term in Section 11.3(a).
     “ Commenced Commercial Service ” and “ Commencement of Commercial Service ” shall mean the date a Capital Improvement is first put into service following completion of construction and testing.
     “ Commission ” means the United States Securities and Exchange Commission.
     “ Common Unit ” means a Unit representing a fractional part of the Partnership Interests of all Limited Partners, and having the rights and obligations specified with respect to Common Units in this Agreement. The term “Common Unit” does not include a Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.
     “ Common Unit Arrearage ” means, with respect to any Common Unit, whenever issued, as to any Quarter within the Subordination Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to Section 6.4(a)(i).
     “ Common Unit Purchase Agreement ” means that certain Common Unit Purchase Agreement dated as of January 25, 2006 among the Fehsenfeld Investors, the General Partner and the Partnership, providing for the purchase of Fehsenfeld Common Units by the Fehsenfeld Investors.
     “ Conflicts Committee ” means a committee of the Board of Directors of the General Partner composed entirely of two or more directors who are not (a) security holders, officers or
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employees of the General Partner, (b) officers, directors or employees of any Affiliate of the General Partner or (c) holders of any ownership interest in the Partnership Group other than Common Units and who also meet the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act and the rules and regulations of the Commission thereunder and by the National Securities Exchange on which the Common Units are listed or admitted to trading.
     “ Contributed Property ” means each property or other asset, in such form as may be permitted by the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.
     “ Contribution Agreement ” means that certain Contribution and Conveyance Agreement, dated as of the Closing Date, among the General Partner, the Partnership, the Operating Company and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder, as such may be amended, supplemented or restated from time to time.
     “ Cumulative Common Unit Arrearage ” means, with respect to any Common Unit, whenever issued, and as of the end of any Quarter, the excess, if any, of (a) the sum resulting from adding together the Common Unit Arrearage as to an Initial Common Unit for each of the Quarters within the Subordination Period ending on or before the last day of such Quarter over (b) the sum of any distributions theretofore made pursuant to Section 6.4(a)(ii) and the second sentence of Section 6.5 with respect to an Initial Common Unit (including any distributions to be made in respect of the last of such Quarters).
     “ Curative Allocation ” means any allocation of an item of income, gain, deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).
     “ Current Market Price ” has the meaning assigned to such term in Section 15.1(a).
     “ Delaware Act ” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.
     “ Departing General Partner ” means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.
     “ Depositary ” means, with respect to any Units issued in global form, The Depository Trust Company and its successors and permitted assigns.
     “ Economic Risk of Loss ” has the meaning set forth in Treasury Regulation Section 1.752-2(a).
     “ Eligible Citizen ” means a Person qualified to own interests in real property in jurisdictions in which any Group Member does business or proposes to do business from time to
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time, and whose status as a Limited Partner the General Partner determines does not or would not subject such Group Member to a significant risk of cancellation or forfeiture of any of its properties or any interest therein.
     “ Estimated Incremental Quarterly Tax Amount ” has the meaning assigned to such term in Section 6.10.
     “ Event of Withdrawal ” has the meaning assigned to such term in Section 11.1(a).
     “ Fehsenfeld Common Units ” has the meaning assigned to such term in Section 5.3(b).
     “ Fehsenfeld Investors ” means Fred M. Fehsenfeld Sr., Mac Fehsenfeld and Frank B. Fehsenfeld.
     “ Fehsenfeld Trust I ” means the Mildred L. Fehsenfeld irrevocable intervivos trust for the benefit of Fred Mehlert Fehsenfeld, Jr. and his issue, an Indiana trust.
     “ Fehsenfeld Trust II ” means the Maggie Fehsenfeld Trust Number 106 for the benefit of Fred Mehlert Fehsenfeld, Jr. and his issue, an Indiana trust.
     “ Final Fehsenfeld Common Units ” has the meaning assigned to such term in Section 6.1(d)(x)(A).
     “ Final Subordinated Units ” has the meaning assigned to such term in Section 6.1(d)(x).
     “ First Liquidation Target Amount ” has the meaning assigned to such term in Section 6.1(c)(i)(D).
     “ First Target Distribution ” means $0.495 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on March 31, 2006, it means the product of $0.495 multiplied by a fraction of which the numerator is the number of days in such period, and of which the denominator is 90), subject to adjustment in accordance with Sections 6.6 and 6.10.
     “ Fully Diluted Basis ” means, when calculating the number of Outstanding Units for any period, a basis that includes, in addition to the Outstanding Units, all Partnership Securities, options, rights, warrants and appreciation rights relating to an equity interest in the Partnership (a) that are convertible into or exercisable or exchangeable for Units that are senior to or pari passu with the Subordinated Units, (b) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation, (c) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter immediately following the end of the period for which the calculation is being made without the satisfaction of any contingency beyond the control of the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion, exercise or exchange and (d) that were not converted into or exercised or exchanged for such Units during the period for which the calculation is being made; provided , however, that for purposes of determining the number of Outstanding Units on a Fully Diluted Basis when calculating whether the Subordination Period has ended or the Subordinated Units are entitled to convert into Common
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Units pursuant to Section 5.8, such Partnership Securities, options, rights, warrants and appreciation rights shall be deemed to have been Outstanding Units only for the four Quarters that comprise the last four Quarters of the measurement period; provided , further, that if consideration will be paid to any Group Member in connection with such conversion, exercise or exchange, the number of Units to be included in such calculation shall be that number equal to the difference between (i) the number of Units issuable upon such conversion, exercise or exchange and (ii) the number of Units that such consideration would purchase at the Current Market Price.
     “ General Partner ” means Calumet GP, LLC, a Delaware limited liability company, and its successors and permitted assigns that are admitted to the Partnership as general partner of the Partnership, in its capacity as general partner of the Partnership (except as the context otherwise requires).
     “ General Partner Interest ” means the ownership interest of the General Partner in the Partnership (in its capacity as a general partner without reference to any Limited Partner Interest held by it), which is evidenced by General Partner Units, and includes any and all benefits to which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement.
     “ General Partner Unit ” means a fractional part of the General Partner Interest having the rights and obligations specified with respect to the General Partner Interest. A General Partner Unit is not a Unit.
     “ Group ” means a Person that with or through any of its Affiliates or Associates has any contract, arrangement, understanding or relationship for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons), exercising investment power or disposing of any Partnership Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Interests.
     “ Group Member ” means a member of the Partnership Group.
     “ Group Member Agreement ” means the partnership agreement of any Group Member, other than the Partnership, that is a limited or general partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate of incorporation and bylaws or similar organizational documents of any Group Member that is a corporation, the joint venture agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar documents of any other Group Member that is a Person other than a limited or general partnership, limited liability company, corporation or joint venture, as such may be amended, supplemented or restated from time to time.
     “ Grube Trust I ” means the Janet Krampe Grube grantor retained annuity trust dated January 31, 2002, an Indiana trust.
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     “ Grube Trust II ” means the Janet Krampe Grube grantor retained annuity trust dated March 18, 2004, an Indiana trust.
     “ Holder ” as used in Section 7.12, has the meaning assigned to such term in Section 7.12(a).
     “ Incentive Distribution Right ” means a non-voting Limited Partner Interest issued to the General Partner in connection with the transfer of all of its interests in Calumet Lubricants Co., Limited Partnership to the Partnership pursuant to the Contribution Agreement, which Limited Partner Interest will confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights (and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution Right on any Partnership matter except as may otherwise be required by law.
     “ Incentive Distributions ” means any amount of cash distributed to the holders of the Incentive Distribution Rights pursuant to Sections 6.4(a)(v), (vi) and (vii) and 6.4(b)(iii), (iv) and (v).
     “ Indemnified Persons ” has the meaning assigned to such term in Section 7.12(d).
     “ Indemnitee ” means (a) the General Partner, (b) any Departing General Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing General Partner, (d) any Person who is or was a member, partner, director, officer, fiduciary or trustee of any Group Member, the General Partner or any Departing General Partner or any Affiliate of any Group Member, the General Partner or any Departing General Partner, (e) any Person who is or was serving at the request of the General Partner or any Departing General Partner or any Affiliate of the General Partner or any Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another Person; provided that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services, and (f) any Person the General Partner designates as an “Indemnitee” for purposes of this Agreement.
     “ Initial Common Units ” means the Common Units sold in the Initial Offering.
     “ Initial Limited Partners ” means The Heritage Group, Calumet, Incorporated, Fehsenfeld Trust I, Fehsenfeld Trust II, Fred M. Fehsenfeld, Jr., Janet Krampe Grube, Grube Trust I, Grube Trust II, the Fehsenfeld Investors, the General Partner (with respect to the Incentive Distribution Rights received by it pursuant to Section 5.2), and the Underwriters upon the issuance by the Partnership of Common Units as described in Section 5.3 in connection with the Initial Offering.
     “ Initial Offering ” means the initial offering and sale of Common Units to the public, as described in the Registration Statement.
     “ Initial Unit Price ” means (a) with respect to the Common Units and the Subordinated Units, the initial public offering price per Common Unit at which the Underwriters offered the Common Units to the public for sale as set forth on the cover page of the prospectus included as
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part of the Registration Statement and first issued at or after the time the Registration Statement first became effective or (b) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially sold by the Partnership, as determined by the General Partner, in each case adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of Units.
     “ Interim Capital Transactions ” means the following transactions if they occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness (other than Working Capital Borrowings and other than for items purchased on open account in the ordinary course of business) by any Group Member and sales of debt securities of any Group Member; (b) sales of equity interests of any Group Member (including the Common Units sold to the Underwriters pursuant to the exercise of the Over-Allotment Option); and (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member other than (i) sales or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business, and (ii) sales or other dispositions of assets as part of normal retirements or replacements.
     “ Issue Price ” means the price at which a Unit is purchased from the Partnership, after taking into account any sales commission or underwriting discount charged to the Partnership.
     “ Limited Partner ” means, unless the context otherwise requires, the Organizational Limited Partners prior to their withdrawal from the Partnership, each Initial Limited Partner, each additional Person that becomes a Limited Partner pursuant to the terms of this Agreement and any Departing General Partner upon the change of its status from General Partner to Limited Partner pursuant to Section 11.3, in each case, in such Person’s capacity as a limited partner of the Partnership; provided , however , that when the term “Limited Partner” is used herein in the context of any vote or other approval, including Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right (solely with respect to its Incentive Distribution Rights and not with respect to any other Limited Partner Interest held by such Person) except as may otherwise be required by law.
     “ Limited Partner Interest ” means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by Common Units, Subordinated Units, Incentive Distribution Rights or other Partnership Securities or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement; provided , however , that when the term “Limited Partner Interest” is used herein in the context of any vote or other approval, including Articles XIII and XIV, such term shall not, solely for such purpose, include any Incentive Distribution Right except as may otherwise be required by law.
     “ Liquidation Date ” means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to continue the business of the Partnership has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.
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     “ Liquidator ” means one or more Persons selected by the General Partner to perform the functions described in Section 12.4 as liquidating trustee of the Partnership within the meaning of the Delaware Act.
     “ Merger Agreement ” has the meaning assigned to such term in Section 14.1.
     “ Minimum Quarterly Distribution ” means $0.45 per Unit per Quarter (or with respect to the period commencing on the Closing Date and ending on March 31, 2006, it means the product of $0.45 multiplied by a fraction of which the numerator is the number of days in such period and of which the denominator is 90), subject to adjustment in accordance with Sections 6.6 and 6.10.
     “ National Securities Exchange ” means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act, and any successor to such statute, or the Nasdaq National Market or any successor thereto.
     “ Net Agreed Value ” means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner by the Partnership, the Partnership’s Carrying Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.
     “ Net Income ” means, for any taxable year, the excess, if any, of the Partnership’s items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership’s items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided , that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
     “ Net Loss ” means, for any taxable year, the excess, if any, of the Partnership’s items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership’s items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided , that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
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     “ Net Positive Adjustments ” means, with respect to any Partner, the excess, if any, of the total positive adjustments over the total negative adjustments made to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down Events.
     “ Net Termination Gain ” means, for any taxable year, the sum, if positive, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Gain shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
     “ Net Termination Loss ” means, for any taxable year, the sum, if negative, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Loss shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
     “ Non-citizen Assignee ” means a Person whom the General Partner has determined does not constitute an Eligible Citizen and as to whose Partnership Interest the General Partner has become the Limited Partner, pursuant to Section 4.9.
     “ Nonrecourse Built-in Gain ” means with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.
     “ Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.
     “ Nonrecourse Liability ” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
     “ Notice of Election to Purchase ” has the meaning assigned to such term in Section 15.1(b).
     “ Omnibus Agreement ” means that certain Omnibus Agreement, dated as of the Closing Date, among the General Partner, the Partnership, the Operating Company, The Heritage Group and certain other parties thereto, as such may be amended, supplemented or restated from time to time.
     “ Operating Company ” means Calumet Operating, LLC, a Delaware limited liability company, and any successors thereto.
     “ Operating Expenditures ” means all Partnership Group expenditures, including, but not limited to, taxes, reimbursements of the General Partner, non-Pro Rata repurchases of Units
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(other than those made with proceeds of an Interim Capital Transaction), repayment of Working Capital Borrowings, debt service payments and capital expenditures, subject to the following:
          (a) payments (including prepayments) of principal of and premium on indebtedness other than Working Capital Borrowings shall not constitute Operating Expenditures; and
          (b) Operating Expenditures shall not include (i) capital expenditures made for Acquisitions or for Capital Improvements, (ii) payment of transaction expenses (including taxes) relating to Interim Capital Transactions or (iii) distributions to Partners. Where capital expenditures are made in part for Acquisitions or for Capital Improvements and in part for other purposes, the General Partner, with the concurrence of the Conflicts Committee, shall determine the allocation between the amounts paid for each.
     “ Operating Surplus ” means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without duplication,
          (a) the sum of (i) $10.0 million, (ii) all cash and cash equivalents of the Partnership Group on hand as of the close of business on the Closing Date, (iii) all cash receipts of the Partnership Group for the period beginning on the Closing Date and ending on the last day of such period, but excluding cash receipts from Interim Capital Transactions (except to the extent specified in Section 6.5) and (iv) all cash receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case of Subsidiaries that are not wholly owned) after the end of such period but on or before the date of determination of Operating Surplus with respect to such period resulting from Working Capital Borrowings, less
          (b) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and ending on the last day of such period and (ii) the amount of cash reserves established by the General Partner to provide funds for future Operating Expenditures; provided , however , that disbursements made (including contributions to a Group Member or disbursements on behalf of a Group Member) or cash reserves established, increased or reduced after the end of such period but on or before the date of determination of Available Cash with respect to such period shall be deemed to have been made, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the General Partner so determines.
     Notwithstanding the foregoing, “ Operating Surplus ” with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
     “ Opinion of Counsel ” means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner.
     “ Option Closing Date ” means the date or dates on which any Common Units are sold by the Partnership to the Underwriters upon exercise of the Over-Allotment Option.
     “ Organizational Limited Partners ” means The Heritage Group, Calumet, Incorporated, F. William Grube, Fred M. Fehsenfeld, Jr., Fehsenfeld Trust I and Fehsenfeld Trust II, in their capacity as the organizational limited partners of the Partnership pursuant to this Agreement.
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     “ Outstanding ” means, with respect to Partnership Securities, all Partnership Securities that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination; provided , however , that if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of the Outstanding Partnership Securities of any class then Outstanding, all Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Units so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Units shall not, however, be treated as a separate class of Partnership Securities for purposes of this Agreement); provided , further, that the foregoing limitation shall not apply to (i) any Person or Group who acquired 20% or more of the Outstanding Partnership Securities of any class then Outstanding directly from the General Partner or its Affiliates, (ii) any Person or Group who acquired 20% or more of the Outstanding Partnership Securities of any class then Outstanding directly or indirectly from a Person or Group described in clause (i) provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) any Person or Group who acquired 20% or more of any Partnership Securities issued by the Partnership with the prior approval of the Board of Directors.
     “ Over-Allotment Option ” means the over-allotment option granted to the Underwriters by the Partnership pursuant to the Underwriting Agreement.
     “ Parity Units ” means Common Units and all other Units of any other class or series that have the right (i) to receive distributions of Available Cash from Operating Surplus pursuant to each of subclauses (a)(i) and (a)(ii) of Section 6.4 in the same order of priority with respect to the participation of Common Units in such distributions or (ii) to participate in allocations of Net Termination Gain pursuant to Section 6.1(c)(i)(B) in the same order of priority with the Common Units, in each case regardless of whether the amounts or value so distributed or allocated on each Parity Unit equals the amount or value so distributed or allocated on each Common Unit. Units whose participation in such (i) distributions of Available Cash from Operating Surplus and (ii) allocations of Net Termination Gain are subordinate in order of priority to such distributions and allocations on Common Units shall not constitute Parity Units even if such Units are convertible under certain circumstances into Common Units or Parity Units.
     “ Partner Nonrecourse Debt ” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).
     “ Partner Nonrecourse Debt Minimum Gain ” has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).
     “ Partner Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.
     “ Partners ” means the General Partner and the Limited Partners.
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     “ Partnership ” means Calumet Specialty Products Partners, L.P., a Delaware limited partnership.
     “ Partnership Group ” means the Partnership and its Subsidiaries treated as a single consolidated entity.
     “ Partnership Interest ” means an interest in the Partnership, which shall include the General Partner Interest and Limited Partner Interests.
     “ Partnership Minimum Gain ” means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).
     “ Partnership Security ” means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including Common Units, Subordinated Units, General Partner Units and Incentive Distribution Rights.
     “ Percentage Interest ” means as of any date of determination (a) as to the General Partner with respect to General Partner Units and as to any Unitholder with respect to Units, the product obtained by multiplying (i) 100% less the percentage applicable to clause (b) by (ii) the quotient obtained by dividing (A) the number of General Partner Units held by the General Partner or the number of Units held by such Unitholder, as the case may be, by (B) the total number of all Outstanding Units and all General Partner Units, and (b) as to the holders of other Partnership Securities issued by the Partnership in accordance with Section 5.6, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right shall at all times be zero.
     “ 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.
     “ Per Unit Capital Amount ” means, as of any date of determination, the Capital Account, stated on a per Unit basis, underlying any Unit held by a Person other than the General Partner or any Affiliate of the General Partner who holds Units.
     “ Pro Rata ” means (a) when used with respect to Units or any class thereof, apportioned equally among all designated Units in accordance with their relative Percentage Interests, (b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders, as the case may be, in accordance with their relative Percentage Interests and (c) when used with respect to holders of Incentive Distribution Rights, apportioned equally among all holders of Incentive Distribution Rights in accordance with the relative number or percentage of Incentive Distribution Rights held by each such holder.
     “ Purchase Date ” means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner Interests of a certain class (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant to Article XV.
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     “ Quarter ” means, unless the context requires otherwise, a fiscal quarter of the Partnership, or, with respect to the first fiscal quarter of the Partnership after the Closing Date, the period commencing on the Closing Date and ending on March 31, 2006.
     “ Recapture Income ” means any gain recognized by the Partnership (computed without regard to any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized as ordinary income because it represents the recapture of deductions previously taken with respect to such property or asset.
     “ Record Date ” means the date established by the General Partner or otherwise in accordance with this Agreement for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer.
     “ Record Holder ” means the Person in whose name a Common Unit is registered on the books of the Transfer Agent as of the opening of business on a particular Business Day, or with respect to other Partnership Interests, the Person in whose name any such other Partnership Interest is registered on the books that the General Partner has caused to be kept as of the opening of business on such Business Day.
     “ Redeemable Interests ” means any Partnership Interests for which a redemption notice has been given, and has not been withdrawn, pursuant to Section 4.10.
     “ Registration Statement ” means the Registration Statement on Form S-1 (Registration No. 333-128880) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the offering and sale of the Common Units in the Initial Offering.
     “ Remaining Basket Amount ” has the meaning assigned to such term in Section 5.7(g).
     “ Remaining Net Positive Adjustments ” means as of the end of any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding Common Units or Subordinated Units as of the end of such period over (b) the sum of those Partners’ Share of Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as holder of the General Partner Units), the excess of (a) the Net Positive Adjustments of the General Partner as of the end of such period over (b) the sum of the General Partner’s Share of Additional Book Basis Derivative Items with respect to the General Partner Units for each prior taxable period, and (iii) with respect to the holders of Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.
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     “ Required Allocations ” means (a) any limitation imposed on any allocation of Net Losses or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).
     “ Residual Gain” or “Residual Loss ” means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.
     “ Restricted Business ” has the meaning assigned to such term in the Omnibus Agreement.
      “Retained Converted Subordinated Unit” has the meaning assigned to such term in Section 5.5(c)(ii).
     “ Retained Fehsenfeld Common Units ” has the meaning assigned to such term in Section 5.5(c)(iii).
     “ Second Liquidation Target Amount ” has the meaning assigned to such term in Section 6.1(c)(i)(E).
     “ Second Target Distribution ” means $0.563 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on March 31, 2006, it means the product of $0.563 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 90), subject to adjustment in accordance with Sections 6.6 and 6.10.
     “ Securities Act ” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.
     “ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute.
     “ Share of Additional Book Basis Derivative Items ” means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the General Partner (as holder of the General Partner Units), the amount that bears the same ratio to such Additional Book Basis Derivative Items as the General Partner’s Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with respect to the Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive Distribution Rights as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.
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     “ Special Approval ” means approval by a majority of the members of the Conflicts Committee.
     “ Subordinated Unit ” means a Unit representing a fractional part of the Partnership Interests of all Limited Partners and having the rights and obligations specified with respect to Subordinated Units in this Agreement. The term “Subordinated Unit” does not include a Common Unit or Parity Unit. A Subordinated Unit that is convertible into a Common Unit or Parity Unit shall not constitute a Common Unit or Parity Unit until such conversion occurs.
     “ Subordination Period ” means the period commencing on the Closing Date and ending on the first to occur of the following dates:
          (a) the first day of any Quarter beginning after December 31, 2010 in respect of which (i) (A) distributions of Available Cash from Operating Surplus on each of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units and the General Partner Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units and the General Partner Units during such periods and (B) the Adjusted Operating Surplus for each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, and the General Partner Units, with respect to each such period and (ii) there are no Cumulative Common Unit Arrearages; and
          (b) the date on which the General Partner is removed as general partner of the Partnership upon the requisite vote by holders of Outstanding Units under circumstances where Cause does not exist and Units held by the General Partner and its Affiliates are not voted in favor of such removal.
     “ 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.
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     “ Surviving Business Entity ” has the meaning assigned to such term in Section 14.2(b).
     “ Third Liquidation Target Amount ” has the meaning assigned to such term in Section 6.1(c)(i)(F).
     “ Third Target Distribution ” means $0.675 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on March 31, 2006, it means the product of $0.675 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 90), subject to adjustment in accordance with Sections 6.6 and 6.10.
     “ Trading Day ” has the meaning assigned to such term in Section 15.1(a).
     “ transfer ” has the meaning assigned to such term in Section 4.4(a).
     “ Transfer Agent ” means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as shall be appointed from time to time by the General Partner to act as registrar and transfer agent for the Common Units; provided , that if no Transfer Agent is specifically designated for any other Partnership Securities, the General Partner shall act in such capacity.
     “ Underwriter ” means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchases Common Units pursuant thereto.
     “ Underwriting Agreement ” means that certain Underwriting Agreement dated as of January 25, 2006 among the Underwriters, the Partnership, the General Partner, the Operating Company and other parties thereto, providing for the purchase of Common Units by the Underwriters.
     “ Unit ” means a Partnership Security that is designated as a “Unit” and shall include Common Units and Subordinated Units but shall not include (i) General Partner Units (or the General Partner Interest represented thereby) or (ii) Incentive Distribution Rights.
     “ Unitholders ” means the holders of Units.
     “ Unit Majority ” means, during the Subordination Period, at least a majority of the Outstanding Common Units (excluding Common Units owned by the General Partner and its Affiliates) voting as a class and at least a majority of the Outstanding Subordinated Units voting as a class, and after the end of the Subordination Period, at least a majority of the Outstanding Common Units.
     “ Unpaid MQD ” has the meaning assigned to such term in Section 6.1(c)(i)(B).
     “ Unrealized Gain ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the fair market value of such property as of such date (as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).
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     “ Unrealized Loss ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair market value of such property as of such date (as determined under Section 5.5(d)).
     “ Unrecovered Initial Unit Price ” means at any time, with respect to a Unit, the Initial Unit Price less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in connection with the dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of such Units.
     “ U.S. GAAP ” means United States generally accepted accounting principles consistently applied.
     “ Withdrawal Opinion of Counsel ” has the meaning assigned to such term in Section 11.1(b).
     “ Working Capital Borrowings ” means borrowings used solely for working capital purposes or to pay distributions to Partners made pursuant to a credit facility or other arrangement to the extent such borrowings are required to be reduced to a relatively small amount each year (or for the year in which the Initial Offering is consummated, the 12-month period beginning on the Closing Date) for an economically meaningful period of time.
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) the terms “include”, “includes”, “including” and words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof”, “herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. 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
ORGANIZATION
Section 2.1 Formation.
     The General Partner and the Organizational Limited Partners have previously formed the Partnership as a limited partnership pursuant to the provisions of the Delaware Act and hereby amend and restate the original Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P. in its entirety. This amendment and restatement shall become effective on the date
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of this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes.
Section 2.2 Name.
     The name of the Partnership shall be “Calumet Specialty Products Partners, L.P.” The Partnership’s business may be conducted under any other name or names as determined by the General Partner, including the name of the General Partner. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices
     Unless and until changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the Partnership shall be located at 2780 Waterfront Parkway E. Drive, Suite 200, Indianapolis, Indiana 46214 or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner shall determine necessary or appropriate. The address of the General Partner shall be 2780 Waterfront Parkway E. Drive, Suite 200, Indianapolis, Indiana 46214 or such other place as the General Partner may from time to time designate by notice to the Limited Partners.
Section 2.4 Purpose and Business.
     The purpose and nature of the business to be conducted by the Partnership shall be to engage directly in, or enter into or form, hold and dispose of any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, and do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member; provided, however , that the General Partner shall not cause the Partnership to engage, directly or indirectly, in any business activity that the General Partner determines would cause the Partnership to be treated as an association taxable as a corporation or otherwise taxable as an entity for federal income tax purposes. To the fullest extent permitted by law, the General Partner shall have no duty or obligation to propose or approve, and may decline to propose or approve, the conduct by the Partnership of any business free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner and,
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in declining to so propose or approve, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity.
Section 2.5 Powers.
     The Partnership shall be empowered to do any and all acts and things necessary or appropriate for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.
Section 2.6 Power of Attorney.
     (a) Each Limited Partner hereby constitutes and appoints the General Partner and, if a Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of their authorized officers and attorneys-in-fact, as the case may be, with full power of substitution, as his true and lawful agent and attorney-in-fact, with full power and authority in his name, place and stead, to:
     (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the Liquidator determines to be necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the Liquidator determines to be necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the Liquidator determines to be necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article IV, X, XI or XII; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of Partnership Securities issued pursuant to Section 5.6; and (F) all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger, consolidation or conversion of the Partnership pursuant to Article XIV; and
     (ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments that the General Partner or the Liquidator determines to be necessary or appropriate to (A) make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or (B) effectuate the terms or intent of this Agreement; provided , that when
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required by Section 13.3 or any other provision of this Agreement that establishes a percentage of the Limited Partners or of the Limited Partners of any class or series required to take any action, the General Partner and the Liquidator may exercise the power of attorney made in this Section 2.6(a)(ii) only after the necessary vote, consent or approval of the Limited Partners or of the Limited Partners of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XIII or as may be otherwise expressly provided for in this Agreement.
     (b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner and the transfer of all or any portion of such Limited Partner’s Limited Partner Interest and shall extend to such Limited Partner’s heirs, successors, assigns and personal representatives. Each such Limited Partner hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each such Limited Partner, to the maximum extent permitted by law, hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator may request in order to effectuate this Agreement and the purposes of the Partnership.
Section 2.7 Term.
     The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act.
Section 2.8 Title to Partnership Assets.
     Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided , however , that the General Partner shall use reasonable efforts to cause record title to such assets (other than those assets in respect of which the General Partner
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determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; provided , further, that, prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
Section 3.1 Limitation of Liability.
     The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement or the Delaware Act.
Section 3.2 Management of Business.
     No Limited Partner, in its capacity as such, shall participate in the operation, management or control (within the meaning of the Delaware Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the General Partner or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be participation in the control of the business of the Partnership by a limited partner of the Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate the limitations on the liability of the Limited Partners under this Agreement.
Section 3.3 Outside Activities of the Limited Partners.
     Subject to the provisions of Section 7.5 and the Omnibus Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners, any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner.
Section 3.4 Rights of Limited Partners.
     (a) In addition to other rights provided by this Agreement or by applicable law, and except as limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a Limited Partner in the Partnership,
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upon reasonable written demand stating the purpose of such demand, and at such Limited Partner’s own expense:
     (i) to obtain true and full information regarding the status of the business and financial condition of the Partnership;
     (ii) promptly after its becoming available, to obtain a copy of the Partnership’s federal, state and local income tax returns for each year;
     (iii) to obtain a current list of the name and last known business, residence or mailing address of each Partner;
     (iv) to obtain a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with copies of the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed;
     (v) to obtain true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital Contribution by each Partner and that each Partner has agreed to contribute in the future, and the date on which each became a Partner; and
     (vi) to obtain such other information regarding the affairs of the Partnership as is just and reasonable.
     (b) The General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner deems reasonable, (i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General Partner in good faith believes (A) is not in the best interests of the Partnership Group, (B) could damage the Partnership Group or its business or (C) that any Group Member is required by law or by agreement with any third party to keep confidential (other than agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the obligations set forth in this Section 3.4).
ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
Section 4.1 Certificates.
     Upon the Partnership’s issuance of Common Units or Subordinated Units to any Person, the Partnership shall issue, upon the request of such Person, one or more Certificates in the name of such Person evidencing the number of such Units being so issued. In addition, (a) upon the General Partner’s request, the Partnership shall issue to it one or more Certificates in the name of the General Partner evidencing its General Partner Units and (b) upon the request of any Person owning Incentive Distribution Rights or any other Partnership Securities other than Common
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Units or Subordinated Units, the Partnership shall issue to such Person one or more certificates evidencing such Incentive Distribution Rights or other Partnership Securities other than Common Units or Subordinated Units. Certificates shall be executed on behalf of the Partnership by the Chairman of the Board, President or any Executive Vice President, Senior Vice President or Vice President and the Secretary or any Assistant Secretary of the General Partner. No Common Unit Certificate shall be valid for any purpose until it has been countersigned by the Transfer Agent; provided , however , that if the General Partner elects to issue Common Units in global form, the Common Unit Certificates shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Common Units have been duly registered in accordance with the directions of the Partnership. Subject to the requirements of Section 6.7(b), the Partners holding Certificates evidencing Subordinated Units may exchange such Certificates for Certificates evidencing Common Units on or after the date on which such Subordinated Units are converted into Common Units pursuant to the terms of Section 5.8.
Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.
     (a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Securities as the Certificate so surrendered.
     (b) The appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall countersign, a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:
     (i) makes proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;
     (ii) requests the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
     (iii) if requested by the General Partner, delivers to the General Partner a bond, in form and substance satisfactory to the General Partner, with surety or sureties and with fixed or open penalty as the General Partner may direct to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and
     (iv) satisfies any other reasonable requirements imposed by the General Partner.
     If a Limited Partner fails to notify the General Partner within a reasonable period of time after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate.
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     (c) As a condition to the issuance of any new Certificate under this Section 4.2, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith.
Section 4.3 Record Holders.
     The Partnership shall be entitled to recognize the Record Holder as the Partner with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person shall be the Record Holder of such Partnership Interest.
Section 4.4 Transfer Generally.
     (a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a transaction (i) by which the General Partner assigns its General Partner Units to another Person or by which a holder of Incentive Distribution Rights assigns its Incentive Distribution Rights to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii) by which the holder of a Limited Partner Interest (other than an Incentive Distribution Right) assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.
     (b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be null and void.
     (c) Nothing contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of the General Partner of any or all of the shares of stock, membership interests, partnership interests or other ownership interests in the General Partner.
Section 4.5 Registration and Transfer of Limited Partner Interests.
     (a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of
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Limited Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the purpose of registering Common Units and transfers of such Common Units as herein provided. The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of Section 4.5(b), the appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and in the case of Common Units, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.
     (b) Except as otherwise provided in Section 4.9, the General Partner shall not recognize any transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer. No charge shall be imposed by the General Partner for such transfer; provided , that as a condition to the issuance of any new Certificate under this Section 4.5, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.
     (c) Subject to the (i) foregoing provisions of this Section 4.5, (ii) Section 4.3, (iii) Section 4.8, (iv) with respect to any class or series of Limited Partner Interests, the provisions of any statement of designations or an amendment to this Agreement establishing such class or series, (v) any contractual provisions binding on any Limited Partner and (vi) provisions of applicable law including the Securities Act, Limited Partner Interests (other than the Incentive Distribution Rights) shall be freely transferable.
     (d) The General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units and Common Units (whether issued upon conversion of the Subordinated Units or otherwise) to one or more Persons.
Section 4.6 Transfer of the General Partner’s General Partner Interest.
     (a) Subject to Section 4.6(c) below, prior to December 31, 2015, the General Partner shall not transfer all or any part of its General Partner Interest (represented by General Partner Units) to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner (other than an individual) or (B) another Person (other than an individual) in connection with the merger or consolidation of the General Partner with or into such other Person or the transfer by the General Partner of all or substantially all of its assets to such other Person.
     (b) Subject to Section 4.6(c) below, on or after December 31, 2015, the General Partner may at its option transfer all or any of its General Partner Interest without Unitholder approval.
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     (c) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner Interest to another Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of Counsel that such transfer would not result in the loss of limited liability under Delaware law of any Limited Partner or 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) and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest of the General Partner as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject to compliance with the terms of Section 10.2, be admitted to the Partnership as the General Partner immediately prior to the transfer of the General Partner Interest, and the business of the Partnership shall continue without dissolution.
Section 4.7 Transfer of Incentive Distribution Rights.
     Prior to December 31, 2015, a holder of Incentive Distribution Rights may transfer any or all of the Incentive Distribution Rights held by such holder without any consent of the Unitholders to (a) an Affiliate of such holder (other than an individual) or (b) another Person (other than an individual) in connection with (i) the merger or consolidation of such holder of Incentive Distribution Rights with or into such other Person, (ii) the transfer by such holder of all or substantially all of its assets to such other Person or (iii) the sale of all the ownership interests in such holder. Any other transfer of the Incentive Distribution Rights prior to December 31, 2015 shall require the prior approval of holders of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates). On or after December 31, 2015, the General Partner or any other holder of Incentive Distribution Rights may transfer any or all of its Incentive Distribution Rights without Unitholder approval. Notwithstanding anything herein to the contrary, no transfer of Incentive Distribution Rights to another Person shall be permitted unless the transferee agrees to be bound by the provisions of this Agreement. The General Partner and any transferee or transferees of the Incentive Distribution Rights may agree in a separate instrument as to the General Partner’s exercise of its rights with respect to the Incentive Distribution Rights under Section 11.3 hereof.
Section 4.8 Restrictions on Transfers.
     (a) Except as provided in Section 4.8(e) below, but notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the existence or qualification of the Partnership under the laws of the jurisdiction of its formation, or (iii) 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).
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     (b) The General Partner may impose restrictions on the transfer of Partnership Interests 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 General Partner may impose such restrictions by amending this Agreement; provided , however , that any amendment that would result in the delisting or suspension of trading of any class of Limited Partner Interests on the principal National Securities Exchange on which such class of Limited Partner Interests is then listed or admitted to trading must be approved, prior to such amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner Interests of such class.
     (c) The transfer of a Subordinated Unit that has converted into a Common Unit shall be subject to the restrictions imposed by Section 6.7(b).
     (d) The transfer of a Fehsenfeld Common Unit shall be subject to the restrictions imposed by Section 6.9.
     (e) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading.
     (f) In the event any Partnership Interest (other than a Fehsenfeld Common Unit) is evidenced in certificated form, each certificate evidencing Partnership Interests shall bear a conspicuous legend in substantially the following form:
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, OR (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). CALUMET 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.
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     (g) In the event any Fehsenfeld Common Unit is evidenced in certificated form, each certificate evidencing such Fehsenfeld Common Units shall bear a conspicuous legend in substantially the following form:
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, OR (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). THE HOLDER FURTHER ACKNOWLEDGES THAT THIS SECURITY MAY NOT BE TRANSFERRED TO A PERSON THAT IS NOT AN AFFILIATE (AS DEFINED IN THE PARTNERSHIP AGREEMENT OF THE PARTNERSHIP) OF THE HOLDER UNTIL SUCH TIME AS CALUMET GP, LLC, THE GENERAL PARTNER OF THE PARTNERSHIP, DETERMINES, BASED ON ADVICE OF COUNSEL, THAT THE COMMON UNIT REPRESENTED BY THIS CERTIFICATE SHOULD HAVE, AS A SUBSTANTIVE MATTER, LIKE INTRINSIC ECONOMIC AND FEDERAL INCOME TAX CHARACTERISTICS, IN ALL MATERIAL RESPECTS, TO THE INTRINSIC ECONOMIC AND FEDERAL INCOME TAX CHARACTERISTICS OF A COMMON UNIT ISSUED IN THE INITIAL OFFERING AND SALE OF COMMON UNITS TO THE PUBLIC, AS DESCRIBED IN THE PARTNERSHIP’S REGISTRATION STATEMENT ON FORM S-1. CALUMET 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.
Section 4.9 Citizenship Certificates; Non-citizen Assignees.
     (a) If any Group Member is or becomes subject to any federal, state or local law or regulation that the General Partner determines would create a substantial risk of cancellation or
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forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner, the General Partner may request any Limited Partner to furnish to the General Partner, within 30 days after receipt of such request, an executed Citizenship Certification or such other information concerning his nationality, citizenship or other related status (or, if the Limited Partner is a nominee holding for the account of another Person, the nationality, citizenship or other related status of such Person) as the General Partner may request. If a Limited Partner fails to furnish to the General Partner within the aforementioned 30-day period such Citizenship Certification or other requested information or if upon receipt of such Citizenship Certification or other requested information the General Partner determines that a Limited Partner is not an Eligible Citizen, the Limited Partner Interests owned by such Limited Partner shall be subject to redemption in accordance with the provisions of Section 4.10. In addition, the General Partner may require that the status of any such Limited Partner be changed to that of a Non-citizen Assignee and, thereupon, the General Partner shall be substituted for such Non-citizen Assignee as the Limited Partner in respect of the Non-citizen Assignee’s Limited Partner Interests.
     (b) The General Partner shall, in exercising voting rights in respect of Limited Partner Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the same ratios as the votes of Partners (including the General Partner) in respect of Limited Partner Interests other than those of Non-citizen Assignees are cast, either for, against or abstaining as to the matter.
     (c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Non-citizen Assignee’s share of any distribution in kind. Such payment and assignment shall be treated for Partnership purposes as a purchase by the Partnership from the Non-citizen Assignee of his Limited Partner Interest (representing his right to receive his share of such distribution in kind).
     (d) At any time after he can and does certify that he has become an Eligible Citizen, a Non-citizen Assignee may, upon application to the General Partner, request that with respect to any Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to Section 4.10, such Non-citizen Assignee be admitted as a Limited Partner, and upon approval of the General Partner, such Non-citizen Assignee shall be admitted as a Limited Partner and shall no longer constitute a Non-citizen Assignee and the General Partner shall cease to be deemed to be the Limited Partner in respect of the Non-citizen Assignee’s Limited Partner Interests.
Section 4.10 Redemption of Partnership Interests of Non-citizen Assignees.
     (a) If at any time a Limited Partner fails to furnish a Citizenship Certification or other information requested within the 30-day period specified in Section 4.9(a), or if upon receipt of such Citizenship Certification or other information the General Partner determines, with the advice of counsel, that a Limited Partner is not an Eligible Citizen, the Partnership may, unless the Limited Partner establishes to the satisfaction of the General Partner that such Limited Partner is an Eligible Citizen or has transferred his Partnership Interests to a Person who is an Eligible Citizen and who furnishes a Citizenship Certification to the General Partner prior to the date fixed for redemption as provided below, redeem the Limited Partner Interest of such Limited Partner as follows:
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     (i) The General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Limited Partner, at his last address designated on the records of the Partnership or the Transfer Agent, by registered or certified mail, postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made upon surrender of the Certificate evidencing the Redeemable Interests and that on and after the date fixed for redemption no further allocations or distributions to which the Limited Partner would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.
     (ii) The aggregate redemption price for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed for redemption) of Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited Partner Interests of each such class included among the Redeemable Interests. The redemption price shall be paid, as determined by the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption price, bearing interest at the rate of 10% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.
     (iii) Upon surrender by or on behalf of the Limited Partner, at the place specified in the notice of redemption, of the Certificate evidencing the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank, the Limited Partner or his duly authorized representative shall be entitled to receive the payment therefor.
     (iv) After the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner Interests.
     (b) The provisions of this Section 4.10 shall also be applicable to Limited Partner Interests held by a Limited Partner as nominee of a Person determined to be other than an Eligible Citizen.
     (c) Nothing in this Section 4.10 shall prevent the recipient of a notice of redemption from transferring his Limited Partner Interest before the redemption date if such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption, provided the transferee of such Limited Partner Interest certifies to the satisfaction of the General Partner that he is an Eligible Citizen. If the transferee fails to make such certification, such redemption shall be effected from the transferee on the original redemption date.
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ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1 Organizational Contributions.
     In connection with the formation of the Partnership under the Delaware Act, the General Partner made an initial Capital Contribution to the Partnership in the amount of $20.00, for a 2% General Partner Interest in the Partnership and has been admitted as the General Partner of the Partnership, and the Organizational Limited Partners made an aggregate initial Capital Contribution to the Partnership in the amount of $980.00 for a 98% Limited Partner Interest in the Partnership and have been admitted as Limited Partners of the Partnership. As of the Closing Date, the interest of the Organizational Limited Partners shall be redeemed and the initial Capital Contribution of the Organizational Limited Partners shall thereupon be refunded. Ninety-eight percent of any interest or other profit that may have resulted from the investment or other use of such initial Capital Contributions shall be allocated and distributed to the Organizational Limited Partners, and the balance thereof shall be allocated and distributed to the General Partner.
Section 5.2 Contributions by the General Partner and its Affiliates.
     (a) On the Closing Date and pursuant to the Contribution Agreement: (i) the General Partner shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) the 2% General Partner Interest, subject to all of the rights, privileges and duties of the General Partner under this Agreement and (B) the Incentive Distribution Rights; (ii) The Heritage Group shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 3,269,033 Common Units and (B) 7,414,176 Subordinated Units; (iii) Calumet, Incorporated shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 591,886 Common Units and (B) 1,342,401 Subordinated Units; (iv) Fred M. Fehsenfeld, Jr. shall contribute to the Partnership, as a Capital Contribution, all of his ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 147,973 Common Units and (B) 335,600 Subordinated Units; (v) Fehsenfeld Trust I shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 286,077 Common Units and (B) 648,825 Subordinated Units; (vi) Fehsenfeld Trust II shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 286,077 Common Units and (B) 648,825 Subordinated Units; (vii) Grube Trust I shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 1,020,456 Common Units and (B) 2,314,396 Subordinated Units; (viii) Grube Trust II shall contribute to the Partnership, as a Capital Contribution, all of its ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 147,853 Common Units and (B) 335,332 Subordinated Units; and (ix) Janet Krampe Grube shall contribute to the Partnership, as a Capital Contribution, all of her ownership interests in Calumet Lubricants Co., Limited Partnership in exchange for (A) 11,660 Common Units and (B) 26,445 Subordinated Units.
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     (b) Upon the issuance of any additional Limited Partner Interests by the Partnership (other than the Common Units issued in the Initial Offering, the Fehsenfeld Common Units, the Common Units issued pursuant to the Over-Allotment Option and the Common Units and Subordinated Units issued pursuant to Section 5.2(a)), the General Partner may, in exchange for a proportionate number of General Partner Units, make additional Capital Contributions in an amount equal to the product obtained by multiplying (i) the quotient determined by dividing (A) the General Partner’s Percentage Interest by (B) 100 less the General Partner’s Percentage Interest times (ii) the amount contributed to the Partnership by the Limited Partners in exchange for such additional Limited Partner Interests. Except as set forth in Article XII, the General Partner shall not be obligated to make any additional Capital Contributions to the Partnership.
Section 5.3 Contributions by Initial Limited Partners.
     (a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall contribute to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit, multiplied by the number of Common Units specified in the Underwriting Agreement to be purchased by such Underwriter at the Closing Date. In exchange for such Capital Contributions by the Underwriters, the Partnership shall issue Common Units to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash contribution to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Common Unit.
     (b) On the Closing Date and pursuant to the Common Unit Purchase Agreement, the Fehsenfeld Investors shall contribute to the Partnership cash in an amount equal to $14,998,249. In exchange for such Capital Contribution by the Fehsenfeld Investors, the Partnership shall issue 750,100 Common Units to the Fehsenfeld Investors (the “Fehsenfeld Common Units”).
     (c) Upon the exercise of the Over-Allotment Option, each Underwriter shall contribute to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit, multiplied by the number of Common Units to be purchased by such Underwriter at the Option Closing Date. In exchange for such Capital Contributions by the Underwriters, the Partnership shall issue Common Units to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash contributions to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Common Unit.
     (d) No Limited Partner Interests will be issued or issuable as of or at the Closing Date other than (i) the Common Units issuable pursuant to subparagraphs (a) and (b) hereof in aggregate number equal to 6,450,000, (ii) the “Option Units” as such term is used in the Underwriting Agreement in an aggregate number up to 854,985 issuable upon exercise of the Over-Allotment Option pursuant to subparagraph (c) hereof, (iii) the 13,066,000 Subordinated Units issuable to pursuant to Section 5.2 hereof, (iv) the 5,761,015 Common Units issuable pursuant to Section 5.2 hereof, and (v) the Incentive Distribution Rights.
Section 5.4 Interest and Withdrawal.
     No interest shall be paid by the Partnership on Capital Contributions. No Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that
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distributions made pursuant to this Agreement or upon termination of the Partnership may be considered as such by law and then only to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or distributions. Any such return shall be a compromise to which all Partners agree within the meaning of Section 17-502(b) of the Delaware Act.
Section 5.5 Capital Accounts.
     (a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner) owning a Partnership Interest a separate Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made to the Partnership with respect to such Partnership Interest and (ii) all items of Partnership income and gain (including income and gain exempt from tax) computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made with respect to such Partnership Interest and (y) all items of Partnership deduction and loss computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1. For this purpose, the Capital Contributions of any Partner pursuant to Sections 5.2(a) and 5.3 shall be equal to the sum of (aa) the product of the Initial Unit Price and the number of Common Units (other than Fehsenfeld Common Units), Subordinated Units and General Partner Units received by the Partner on the Closing Date and (bb) the amount, if any, of cash contributed by the Partner on the Closing Date pursuant to Section 5.3(b) with respect to the Fehsenfeld Common Units
     (b) For purposes of computing the amount of any item of income, gain, loss or deduction which is to be allocated pursuant to Article VI and is to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including any method of depreciation, cost recovery or amortization used for that purpose), provided, that:
     (i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share (as determined by the General Partner based upon the provisions of the applicable Group Member Agreement) of all property owned by any other Group Member that is classified as a partnership for federal income tax purposes.
     (ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership Interest that can neither be deducted nor amortized under Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be allocated among the Partners pursuant to Section 6.1.
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     (iii) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.
     (iv) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date.
     (v) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived from the same method and useful life (or, if applicable, the remaining useful life) as is applied for federal income tax purposes; provided , however , that, if the asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery or amortization deductions shall be determined using any method that the General Partner may adopt.
     (vi) If the Partnership’s adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is placed in service and shall be allocated among the Partners pursuant to Section 6.1. Any restoration of such basis pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be allocated in the same manner to the Partners to whom such deemed deduction was allocated.
(c) (i) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.
     (ii) Subject to Section 6.7(c), immediately prior to the transfer of a Subordinated Unit or of a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.8 by a holder thereof (other than a transfer to an Affiliate unless the
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General Partner elects to have this subparagraph 5.5(c)(ii) apply), the Capital Account maintained for such Person with respect to its Subordinated Units or converted Subordinated Units will (A) first, be allocated to the Subordinated Units or converted Subordinated Units to be transferred in an amount equal to the product of (x) the number of such Subordinated Units or converted Subordinated Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit (other than a Fehsenfeld Common Unit), and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any Subordinated Units or converted Subordinated Units (“ Retained Converted Subordinated Units ”). Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the retained Subordinated Units or Retained Converted Subordinated Units, if any, will have a balance equal to the amount allocated under clause (B) hereinabove, and the transferee’s Capital Account established with respect to the transferred Subordinated Units or converted Subordinated Units will have a balance equal to the amount allocated under clause (A) hereinabove.
     (iii) Subject to Section 6.9, immediately prior to the transfer of a Fehsenfeld Common Unit (other than a transfer to an Affiliate unless the transferring Unitholder notifies the General Partner it elects to have this subparagraph 5.5(c)(iii) apply), the Capital Account maintained for such Person with respect to its Fehsenfeld Common Units will (A) first, be allocated to the Fehsenfeld Common Units to be transferred in an amount equal to the product of (x) the number of such Fehsenfeld Common Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit (other than a Fehsenfeld Common Unit), and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any Fehsenfeld Common Units (“ Retained Fehsenfeld Common Units ”). Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the Retained Fehsenfeld Common Units, if any, will have a balance equal to the amount allocated under clause (B) hereinabove, and the transferee’s Capital Account established with respect to the transferred Fehsenfeld Common Units will have a balance equal to the amount allocated under clause (A) hereinabove.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property, the issuance of Partnership Interests as consideration for the provision of services or the conversion of the General Partner’s Combined Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance and had been allocated to the Partners at such time pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets (including cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests shall be determined
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by the General Partner using such method of valuation as it may adopt; provided , however , that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time. The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines) to arrive at a fair market value for individual properties.
     (ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution to a Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a Partnership Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized in a sale of such property immediately prior to such distribution for an amount equal to its fair market value, and had been allocated to the Partners, at such time, pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market value of all Partnership assets (including cash or cash equivalents) immediately prior to a distribution shall (A) in the case of an actual distribution that is not made pursuant to Section 12.4 or in the case of a deemed distribution, be determined and allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution pursuant to Section 12.4, be determined and allocated by the Liquidator using such method of valuation as it may adopt.
     Section 5.6 Issuances of Additional Partnership Securities.
     (a) Subject to Section 5.7, the Partnership may issue additional Partnership Securities and options, rights, warrants and appreciation rights relating to the Partnership Securities for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the General Partner shall determine, all without the approval of any Limited Partners.
     (b) Each additional Partnership Security authorized to be issued by the Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of Partnership Securities), as shall be fixed by the General Partner, including (i) the right to share in Partnership profits and losses or items thereof; (ii) the right to share in Partnership distributions; (iii) the rights upon dissolution and liquidation of the Partnership; (iv) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership Security (including sinking fund provisions); (v) whether such Partnership Security is issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (vi) the terms and conditions upon which each Partnership Security will be issued, evidenced by certificates and assigned or transferred; (vii) the method for determining the Percentage Interest as to such Partnership Security; and (viii) the right, if any, of each such Partnership Security to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership Security.
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     (c) The General Partner shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance of Partnership Securities and options, rights, warrants and appreciation rights relating to Partnership Securities pursuant to this Section 5.6, (ii) the conversion of the General Partner Interest (represented by General Partner Units) or any Incentive Distribution Rights into Units pursuant to the terms of this Agreement, (iii) reflecting the admission of such additional Limited Partners in the books and records of the Partnership as the Record Holders of such Limited Partner Interests and (iv) all additional issuances of Partnership Securities. The General Partner shall determine the relative rights, powers and duties of the holders of the Units or other Partnership Securities being so issued. The General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things that it determines to be necessary or appropriate in connection with any future issuance of Partnership Securities or in connection with the conversion of the General Partner Interest or any Incentive Distribution Rights into Units pursuant to the terms of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any National Securities Exchange on which the Units or other Partnership Securities are listed or admitted to trading.
Section 5.7 Limitations on Issuance of Additional Partnership Securities.
     Except as otherwise specified in this Section 5.7, the issuance of Partnership Securities pursuant to Section 5.6 shall be subject to the following restrictions and limitations:
     (a) Unless approved by the holders of a Unit Majority, during the Subordination Period, the Partnership shall not issue (and shall not issue any options, rights, warrants or appreciation rights relating to) an aggregate of more than 6,533,000 additional Parity Units. In applying this limitation, there shall be excluded Common Units and other Parity Units issued (i) pursuant to Sections 5.2(a), 5.2(b) and 5.3(a), (ii) in accordance with Sections 5.7(b), 5.7(d), 5.7(e), 5.7(f) or 5.7(g), (iii) upon conversion of Subordinated Units pursuant to Section 5.8, (iv) upon conversion of the General Partner Interest or any Incentive Distribution Rights pursuant to Section 11.3(b), (v) pursuant to the employee benefit plans of the General Partner, the Partnership or any other Group Member, (vi) upon a conversion or exchange of Parity Units issued after the date hereof into Common Units or other Parity Units; provided that the total amount of Available Cash required to pay the aggregate Minimum Quarterly Distribution on all Common Units and all Parity Units does not increase as a result of this conversion or exchange, and (vii) in the event of a combination or subdivision of Common Units.
     (b) Without the prior approval of the Limited Partners, during the Subordination Period, the Partnership may issue an unlimited number of Parity Units if such issuance occurs (i) in connection with an Acquisition or Capital Improvement or (ii) within 365 days of, and the net proceeds from such issuance are used to repay debt incurred in connection with, or to replenish cash reserves to the extent drawn down in connection with, an Acquisition or Capital Improvement, in each case where such Acquisition or Capital Improvement involves assets that, if acquired (or in the case of a Capital Improvement, put into commercial service) by the Partnership as of the date that is one year prior to the first day of the Quarter in which such Acquisition was consummated or such Capital Improvement was put into commercial service (“One Year Test Period”), would have resulted, in the General Partner’s determination, in an increase in:
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     (A) the amount of Adjusted Operating Surplus generated by the Partnership on a per-Unit basis (for all Outstanding Units) with respect to the One Year Test Period, on an estimated pro forma basis (as described below), as compared to
     (B) the actual amount of Adjusted Operating Surplus generated by the Partnership on a per-Unit basis (for all Outstanding Units) with respect to the One Year Test Period, as adjusted as provided below.
The General Partner shall determine the amount in clause (A) above using such assumptions as it believes are reasonable. There shall be excluded from the amount in clause (B) above any Operating Surplus attributable to such Acquisition or Capital Improvement (regardless of whether such Operating Surplus is positive or negative). The number of Units deemed to be Outstanding for the purpose of calculating the amount in clause (B) above shall be the weighted average number of Units Outstanding during the One Year Test Period and shall exclude the Units issued or to be issued in connection with such Acquisition or Capital Improvement or within 365 days of such Acquisition or Capital Improvement where the net proceeds from such issuance are used to repay debt incurred, or to replenish cash reserves to the extent drawn down, in connection with such Acquisition or Capital Improvement. For the purposes of this Section 5.7(b), the term “debt” shall be deemed to include the indebtedness used to extend, refinance, renew, replace or defease debt originally incurred in connection with an Acquisition or Capital Improvement; provided , that, the amount of such indebtedness does not exceed the principal sum of, plus accrued interest on and any prepayment penalty with respect to, the indebtedness so extended, refinanced, renewed, replaced or defeased.
     (c) Unless approved by the holders of a Unit Majority, during the Subordination Period the Partnership shall not issue any additional Partnership Securities (or options, rights, warrants or appreciation rights related thereto) (i) that are entitled in any Quarter to receive in respect of the Subordination Period any distribution of Available Cash from Operating Surplus before the Common Units and any Parity Units have received (or amounts have been set aside for payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage for such Quarter or (ii) that are entitled to allocations in respect of the Subordination Period of Net Termination Gain before the Common Units and any Parity Units have been allocated Net Termination Gain pursuant to Section 6.1(c)(i)(B).
     (d) Without the prior approval of the Limited Partners, during the Subordination Period the Partnership may issue additional Partnership Securities (or options, rights, warrants or appreciation rights related thereto) (i) that are not entitled in any Quarter during the Subordination Period to receive any distributions of Available Cash from Operating Surplus until after the Common Units and any Parity Units have received (or amounts have been set aside for payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage for such Quarter and (ii) that are not entitled to allocations in respect of the Subordination Period of Net Termination Gain until after the Common Units and Parity Units have been allocated Net Termination Gain pursuant to Section 6.1(c)(i)(B), even if (A) the amount of Available Cash from Operating Surplus to which each such Partnership Security is entitled to receive after the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage have been paid or set aside for payment on the Common Units exceeds the Minimum Quarterly Distribution or
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(B) the amount of Net Termination Gain to be allocated to such Partnership Security after Net Termination Gain has been allocated to any Common Units and Parity Units pursuant to Section 6.1(c)(i)(B) exceeds the amount of such Net Termination Gain to be allocated to each Common Unit or Parity Unit.
     (e) Without the prior approval of the Limited Partners, during the Subordination Period the Partnership may issue an unlimited number of Parity Units if the proceeds from such issuance are used exclusively to repay indebtedness of a Group Member where the aggregate amount of distributions that would have been paid with respect to such newly issued Parity Units, plus the related distributions on the General Partner Interest in the Partnership in respect of the four-Quarter period ending prior to the first day of the Quarter in which the issuance is to be consummated (assuming such newly issued Parity Units had been Outstanding throughout such period and that distributions equal to the distributions that were actually paid on the Outstanding Units during the period were paid on such newly issued Parity Units) would not have exceeded the interest costs actually incurred during such period on the indebtedness that is to be repaid (or, if such indebtedness was not outstanding throughout the entire period, would have been incurred had such indebtedness been outstanding for the entire period). In the event that the Partnership is required to pay a prepayment penalty in connection with the repayment of such indebtedness, for purposes of the foregoing test, the number of Parity Units issued to repay such indebtedness shall be deemed increased by the number of Parity Units that would need to be issued to pay such penalty.
     (f) Without the prior approval of the Limited Partners, during the Subordination Period the Partnership may issue an unlimited number of Parity Units if the net proceeds of such issuance are used to redeem an equal number of Parity Units at a price per unit equal to the net proceeds per unit, before expenses, that the Partnership receives from such issuance.
     (g) Without the prior approval of the Limited Partners, during the Subordination Period the Partnership may issue, in connection with Acquisitions that have not been completed or Capital Improvements that have not Commenced Commercial Service, or both, an amount of Parity Units not to exceed the number of Parity Units then available for issuance without Unitholder approval pursuant to Section 5.7(a) (such number of Parity Units then available for issuance, the “Remaining Basket Amount”).
     The following shall apply with respect to issuances of Parity Units pursuant to this Section 5.7(g):
     (i) With respect to such issuance, the aggregate number of Parity Units to be issued (including Parity Units to be issued upon the exercise of an underwriters’ over-allotment or other similar option) shall be deemed to have been issued from, and charged against, the Remaining Basket Amount; provided, however, that in considering the Parity Units to be issued upon the exercise of an underwriters’ over-allotment or other similar option, only the number of Parity Units actually issued pursuant to such option on or prior to the expiration of such option will be deemed to have been issued from, and charged against, the Remaining Basket Amount.
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     (ii) With respect to Parity Units to be issued (including Parity Units to be issued upon the exercise of an underwriters’ over-allotment or other similar option) in connection with an Acquisition that has not been completed:
  (1)   Such Acquisition shall have been specifically identified in the prospectus or prospectus supplement filed, or other offering document used, in connection with the offer and sale of such Parity Units as a proposed Acquisition for which the net proceeds from the sale of such Parity Units will be used if such Acquisition is completed.
 
  (2)   Upon completion of such Acquisition and application of the net proceeds received from the sale of such Parity Units to finance such Acquisition, the provisions of clause (i) above shall not apply and the Parity Units issued (including Parity Units issued upon the exercise of an underwriters’ over-allotment or other similar option) in connection with such Acquisition shall not be deemed to have been issued from, and charged against, the Remaining Basket Amount; provided, however, that such Acquisition would have resulted, on an estimated pro forma basis, in an increase in the amount of Adjusted Operating Surplus per Unit (such amount shall be calculated as set forth in Section 5.7(b) and such calculation is referred to in this Section 5.7(g) as the “Accretion Test" ).
 
  (3)   The Accretion Test in subclause (2) above shall be performed immediately following completion of such Acquisition and in accordance with Section 5.7(b).
     (iii) With respect to Parity Units to be issued (including Parity Units to be issued upon the exercise of an underwriters’ over-allotment or other similar option) in connection with a Capital Improvement that has not Commenced Commercial Service:
  (1)   Such Capital Improvement shall have been specifically identified in the prospectus or prospectus supplement filed, or other offering document used, in connection with the offer and sale of such Parity Units as a Capital Improvement for which the net proceeds from the sale of such Parity Units will used to finance such Capital Improvement.
 
  (2)   Upon such Capital Improvement having Commenced Commercial Service and provided the net proceeds from the sale of such Parity Units have been used to finance such Capital Improvement, the provisions of clause (i) above shall not apply and the Parity Units issued (including Parity Units issued upon the exercise of an underwriters’ over-allotment or other similar option) in connection with such Capital Improvement shall not be deemed to have been issued from, and charged against, the Remaining Basket Amount; provided, however, that such Capital Improvement meets the Accretion Test.
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  (3)   The Accretion Test in clause (2) above shall be performed immediately following Commencement of Commercial Service and in accordance with Section 5.7(b).
     (h) No fractional Units shall be issued by the Partnership.
Section 5.8   Conversion of Subordinated Units.
     (a) All Subordinated Units shall convert into Common Units on a one-for-one basis on the second Business Day following the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of the final Quarter of the Subordination Period.
     (b) Notwithstanding any other provision of this Agreement, all the Subordinated Units will automatically convert into Common Units on a one-for-one basis as set forth in, and pursuant to the terms of, Section 11.4.
     (c) A Subordinated Unit that has converted into a Common Unit shall be subject to the provisions of Section 6.7(b).
Section 5.9   Limited Preemptive Right.
     Except as provided in this Section 5.9 and in Section 5.2, no Person shall have any preemptive, preferential or other similar right with respect to the issuance of any Partnership Security, whether unissued, held in the treasury or hereafter created. The General Partner shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership Securities from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Securities to Persons other than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner and its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Securities.
Section 5.10   Splits and Combinations.
     (a) Subject to Sections 5.10(d), 6.6 and 6.10 (dealing with adjustments of distribution levels), the Partnership may make a Pro Rata distribution of Partnership Securities to all Record Holders or may effect a subdivision or combination of Partnership Securities so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units (including the number of additional Parity Units remaining to be issued pursuant to Section 5.7 without a Unitholder vote) are proportionately adjusted.
     (b) Whenever such a distribution, subdivision or combination of Partnership Securities is declared, the General Partner shall select a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The General Partner also may cause a firm of independent public accountants
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selected by it to calculate the number of Partnership Securities to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The General Partner shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.
     (c) Promptly following any such distribution, subdivision or combination, the Partnership may issue Certificates to the Record Holders of Partnership Securities as of the applicable Record Date representing the new number of Partnership Securities held by such Record Holders, or the General Partner may adopt such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results in a smaller total number of Partnership Securities Outstanding, the Partnership shall require, as a condition to the delivery to a Record Holder of such new Certificate, the surrender of any Certificate held by such Record Holder immediately prior to such Record Date.
     (d) The Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision or combination of Units would result in the issuance of fractional Units but for the provisions of Section 5.7(h) and this Section 5.10(d), each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).
Section 5.11   Fully Paid and Non-Assessable Nature of Limited Partner Interests.
     All Limited Partner Interests issued pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1   Allocations for Capital Account Purposes.
     For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.
     (a)  Net Income . After giving effect to the special allocations set forth in Section 6.1(d), Net Income for each taxable year and all items of income, gain, loss and deduction taken into account in computing Net Income for such taxable year shall be allocated as follows:
     (i) First, 100% to the General Partner, in an amount equal to the aggregate Net Losses allocated to the General Partner pursuant to Section 6.1(b)(iii) for all previous taxable years until the aggregate Net Income allocated to the General Partner pursuant to this Section 6.1(a)(i) for the current taxable year and all previous taxable years is equal to
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the aggregate Net Losses allocated to the General Partner pursuant to Section 6.1(b)(iii) for all previous taxable years;
     (ii) Second, 100% to the General Partner and the Unitholders, in accordance with their respective Percentage Interests, until the aggregate Net Income allocated to such Partners pursuant to this Section 6.1(a)(ii) for the current taxable year and all previous taxable years is equal to the aggregate Net Losses allocated to such Partners pursuant to Section 6.1(b)(ii) for all previous taxable years; and
     (iii) Third, the balance, if any, 100% to the General Partner and to the Unitholders, in accordance with their respective Percentage Interests.
     (b)  Net Losses . After giving effect to the special allocations set forth in Section 6.1(d), Net Losses for each taxable period and all items of income, gain, loss and deduction taken into account in computing Net Losses for such taxable period shall be allocated as follows:
     (i) First, 100% to the General Partner and the Unitholders, in accordance with their respective Percentage Interests, until the aggregate Net Losses allocated pursuant to this Section 6.1(b)(i) for the current taxable year and all previous taxable years is equal to the aggregate Net Income allocated to such Partners pursuant to Section 6.1(a)(iii) for all previous taxable years, provided that the Net Losses shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account);
     (ii) Second, 100% to the General Partner and the Unitholders, in accordance with their respective Percentage Interests; provided , that Net Losses shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account); and
     (iii) Third, the balance, if any, 100% to the General Partner.
     (c)  Net Termination Gains and Losses . After giving effect to the special allocations set forth in Section 6.1(d), all items of income, gain, loss and deduction taken into account in computing Net Termination Gain or Net Termination Loss for such taxable period shall be allocated in the same manner as such Net Termination Gain or Net Termination Loss is allocated hereunder. All allocations under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations provided under this Section 6.1 and after all distributions of Available Cash provided under Sections 6.4 and 6.5 have been made; provided , however , that solely for purposes of this Section 6.1(c), Capital Accounts shall not be adjusted for distributions made pursuant to Section 12.4.
     (i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following manner (and the Capital Accounts of the Partners shall be increased by the
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amount so allocated in each of the following subclauses, in the order listed, before an allocation is made pursuant to the next succeeding subclause):
     (A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account;
     (B) Second, (x) to the General Partner in accordance with its Percentage Interest and (y) to all Unitholders holding Common Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(i) or (b)(i) with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter defined as the “Unpaid MQD”) and (3) any then existing Cumulative Common Unit Arrearage;
     (C) Third, if such Net Termination Gain is recognized (or is deemed to be recognized) prior to the conversion of the last Outstanding Subordinated Unit, (x) to the General Partner in accordance with its Percentage Interest and (y) all Unitholders holding Subordinated Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until the Capital Account in respect of each Subordinated Unit then Outstanding equals the sum of (1) its Unrecovered Initial Unit Price, determined for the taxable year (or portion thereof) to which this allocation of gain relates, and (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(iii) with respect to such Subordinated Unit for such Quarter;
     (D) Fourth, 100% to the General Partner and all Unitholders in accordance with their respective Percentage Interests, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Unpaid MQD, (3) any then existing Cumulative Common Unit Arrearage, and (4) the excess of (aa) the First Target Distribution less the Minimum Quarterly Distribution for each Quarter of the Partnership’s existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(iv) and 6.4(b)(ii) (the sum of (1), (2), (3) and (4) is hereinafter defined as the “First Liquidation Target Amount”);
     (E) Fifth, (x) to the General Partner in accordance with its Percentage Interest, (y) 13% to the holders of the Incentive Distribution Rights, Pro Rata, and (z) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclause (x) and (y) of this clause (E), until
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the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the First Liquidation Target Amount, and (2) the excess of (aa) the Second Target Distribution less the First Target Distribution for each Quarter of the Partnership’s existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(v) and 6.4(b)(iii) (the sum of (1) and (2) is hereinafter defined as the “Second Liquidation Target Amount”);
     (F) Sixth, (x) to the General Partner in accordance with its Percentage Interest, (y) 23% to the holders of the Incentive Distribution Rights, Pro Rata, and (z) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclause (x) and (y) of this clause (F), until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target Amount, and (2) the excess of (aa) the Third Target Distribution less the Second Target Distribution for each Quarter of the Partnership’s existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(vi) and 6.4(b)(iv) (the sum of (1) and (2) is hereinafter defined as the “Third Liquidation Target Amount”); and
     (G) Finally, (x) to the General Partner in accordance with its Percentage Interest, (y) 48% to the holders of the Incentive Distribution Rights, Pro Rata, and (z) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclause (x) and (y) of this clause (G).
     (ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following manner:
     (A) First, if such Net Termination Loss is recognized (or is deemed to be recognized) prior to the conversion of the last Outstanding Subordinated Unit, (x) to the General Partner in accordance with its Percentage Interest and (y) to all Unitholders holding Subordinated Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until the Capital Account in respect of each Subordinated Unit then Outstanding has been reduced to zero;
     (B) Second, (x) to the General Partner in accordance with its Percentage Interest and (y) to all Unitholders holding Common Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until the Capital Account in respect of each Common Unit then Outstanding has been reduced to zero; and
     (C) Third, the balance, if any, 100% to the General Partner.
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     (d)  Special Allocations . Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
     (i)  Partnership Minimum Gain Chargeback . Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
     (ii)  Chargeback of Partner Nonrecourse Debt Minimum Gain . Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
     (iii)  Priority Allocations .
     (A) If the amount of cash or the Net Agreed Value of any property distributed (except cash or property distributed pursuant to Section 12.4) to any Unitholder with respect to its Units for a taxable year is greater (on a per Unit basis) than the amount of cash or the Net Agreed Value of property distributed to the other Unitholders with respect to their Units (on a per Unit basis), then (1) each Unitholder receiving such greater cash or property distribution shall be allocated gross income in an amount equal to the product of (aa) the amount by which the distribution (on a per Unit basis) to such Unitholder exceeds the distribution (on a per Unit basis) to the Unitholders receiving the smallest distribution and (bb) the number of Units owned by the Unitholder receiving the greater distribution; and (2) the General Partner shall be allocated gross income in an aggregate amount equal to the product obtained by multiplying (aa) the
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quotient determined by dividing (x) the General Partner’s Percentage Interest at the time in which the greater cash or property distribution occurs by (y) the sum of 100 less the General Partner’s Percentage Interest at the time in which the greater cash or property distribution occurs times (bb) the sum of the amounts allocated in clause (1) above.
     (B) After the application of Section 6.1(d)(iii)(A), all or any portion of the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated (1) to the holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount of such items allocated to the holders of Incentive Distribution Rights pursuant to this paragraph 6.1(d)(iii)(B) for the current taxable year and all previous taxable years is equal to the cumulative amount of all Incentive Distributions made to the holders of Incentive Distribution Rights from the Closing Date to a date 45 days after the end of the current taxable year; and (2) to the General Partner an amount equal to the product of (aa) an amount equal to the quotient determined by dividing (x) the General Partner’s Percentage Interest by (y) the sum of 100 less the General Partner’s Percentage Interest times (bb) the sum of the amounts allocated in clause (1) above.
     (iv)  Qualified Income Offset . In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i) or (ii).
     (v)  Gross Income Allocations . In the event any Partner has a deficit balance in its Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided , that an allocation pursuant to this Section 6.1(d)(v) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 6.1 have been tentatively made as if this Section 6.1(d)(v) were not in this Agreement.
     (vi)  Nonrecourse Deductions . Nonrecourse Deductions for any taxable period shall be allocated to the Partners in accordance with their respective Percentage Interests. If the General Partner determines that the Partnership’s Nonrecourse Deductions should be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is
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authorized, upon notice to the other Partners, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.
     (vii)  Partner Nonrecourse Deductions . Partner Nonrecourse Deductions for any taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which they share such Economic Risk of Loss.
     (viii)  Nonrecourse Liabilities . For purposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their respective Percentage Interests.
     (ix)  Code Section 754 Adjustments . To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
     (x)  Economic Uniformity .
     (A) At the election of the General Partner with respect to any taxable period prior to the transfer of a Common Unit by a Fehsenfeld Investor, all or a portion of the remaining items of Partnership gross income or gain for such taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii), shall be allocated 100% to each such Partner holding Fehsenfeld Common Units (“ Final Fehsenfeld Common Units ”) until each such Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such Final Fehsenfeld Common Units to an amount equal to the product of (A) the number of Final Fehsenfeld Common Units held by such Partner and (B) the Per Unit Capital Amount for a Common Unit (other than a Fehsenfeld Common Unit). The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Final Fehsenfeld Common Units and the Capital Accounts underlying Common Units held by Persons other than the General Partner and its Affiliates immediately prior to the transfer of such Final Fehsenfeld Common Units. This allocation method for establishing such economic uniformity will be available to the General Partner only if the method for allocating the Capital Account maintained with respect to the
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transferred and retained Fehsenfeld Common Units pursuant to Section 5.5(c)(iii) does not otherwise provide such economic uniformity to the Final Fehsenfeld Common Units. For purposes of this Section 6.1(d)(x)(A), the term “Fehsenfeld Investor” shall include any transferee of a Fehsenfeld Common Unit that is an Affiliate of the transferor unless the transferor elected to have Section 5.5(c)(iii) apply.
     (B) At the election of the General Partner with respect to any taxable period ending upon, or after, the termination of the Subordination Period, all or a portion of the remaining items of Partnership gross income or gain for such taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii) and Section 6.1(d)(x)(A), shall be allocated 100% to each Partner holding Subordinated Units that are Outstanding as of the termination of the Subordination Period (“ Final Subordinated Units ”) in the proportion of the number of Final Subordinated Units held by such Partner to the total number of Final Subordinated Units then Outstanding, until each such Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such Final Subordinated Units to an amount equal to the product of (x) the number of Final Subordinated Units held by such Partner and (y) the Per Unit Capital Amount for a Common Unit (other than a Fehsenfeld Common Unit). The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Final Subordinated Units and the Capital Accounts underlying Common Units held by Persons other than the General Partner and its Affiliates immediately prior to the conversion of such Final Subordinated Units into Common Units. This allocation method for establishing such economic uniformity will be available to the General Partner only if the method for allocating the Capital Account maintained with respect to the Subordinated Units between the transferred and retained Subordinated Units pursuant to Section 5.5(c)(ii) does not otherwise provide such economic uniformity to the Final Subordinated Units.
     (xi)  Curative Allocation .
     (A) Notwithstanding any other provision of this Section 6.1, other than the Required Allocations, the Required Allocations shall be taken into account in making the Agreed Allocations so that, to the extent possible, the net amount of items of income, gain, loss and deduction allocated to each Partner pursuant to the Required Allocations and the Agreed Allocations, together, shall be equal to the net amount of such items that would have been allocated to each such Partner under the Agreed Allocations had the Required Allocations and the related Curative Allocation not otherwise been provided in this Section 6.1. Notwithstanding the preceding sentence, Required Allocations relating to (1) Nonrecourse Deductions shall not be taken into account except to the extent that there has been a decrease in Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall not be taken into account except to the extent that there has been a decrease in Partner Nonrecourse Debt Minimum Gain.
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Allocations pursuant to this Section 6.1(d)(xi)(A) shall only be made with respect to Required Allocations to the extent the General Partner determines that such allocations will otherwise be inconsistent with the economic agreement among the Partners. Further, allocations pursuant to this Section 6.1(d)(xi)(A) shall be deferred with respect to allocations pursuant to clauses (1) and (2) hereof to the extent the General Partner determines that such allocations are likely to be offset by subsequent Required Allocations.
     (B) The General Partner shall, with respect to each taxable period, (1) apply the provisions of Section 6.1(d)(xi)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A) among the Partners in a manner that is likely to minimize such economic distortions.
     (xii)  Corrective Allocations . In the event of any allocation of Additional Book Basis Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the following rules shall apply:
     (A) In the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof), the General Partner shall allocate additional items of gross income and gain away from the holders of Incentive Distribution Rights to the Unitholders and the General Partner, or additional items of deduction and loss away from the Unitholders and the General Partner to the holders of Incentive Distribution Rights, to the extent that the Additional Book Basis Derivative Items allocated to the Unitholders or the General Partner exceed their Share of Additional Book Basis Derivative Items. For this purpose, the Unitholders and the General Partner shall be treated as being allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders or the General Partner under the Partnership Agreement (e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this Section 6.1(d)(xii)(A) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xii) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.
     (B) In the case of any negative adjustments to the Capital Accounts of the Partners resulting from a Book-Down Event or from the recognition of a Net Termination Loss, such negative adjustment (1) shall first be allocated, to the extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as determined by the General Partner, that to the extent possible the aggregate Capital Accounts of the Partners will equal the amount that would have been the Capital Account balance of the Partners if no prior Book-Up Events had occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.
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     (C) In making the allocations required under this Section 6.1(d)(xii), the General Partner may apply whatever conventions or other methodology it determines will satisfy the purpose of this Section 6.1(d)(xii).
Section 6.2   Allocations for Tax Purposes.
     (a) Except as otherwise provided herein, for federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.
     (b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Partners as follows:
     (i) (A) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Partners in the manner provided under Section 704(c) of the Code that takes into account the variation between the Agreed Value of such property and its adjusted basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the Partners in the same manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.
     (ii) (A) In the case of an Adjusted Property, such items shall (1) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.
     (iii) The General Partner shall apply the principles of Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
     (c) For the proper administration of the Partnership and for the preservation of uniformity of the Limited Partner Interests (or any class or classes thereof), the General Partner shall (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal income tax purposes of income (including gross income) or deductions; and (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the Limited Partner Interests (or any class or classes thereof).
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The General Partner may adopt such conventions, make such allocations and make such amendments to this Agreement as provided in this Section 6.2(c) only if such conventions, allocations or amendments would not have a material adverse effect on the Partners, the holders of any class or classes of Limited Partner Interests issued and Outstanding or the Partnership, and if such allocations are consistent with the principles of Section 704 of the Code.
     (d) The General Partner may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the Partnership’s common basis of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring Limited Partner Interests in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership’s property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests, so long as such conventions would not have a material adverse effect on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.
     (e) Any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same proportions and to the same extent as such Partners (or their predecessors in interest) have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.
     (f) All items of income, gain, loss, deduction and credit recognized by the Partnership for federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership; provided , however , that such allocations, once made, shall be adjusted (in the manner determined by the General Partner) to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.
     (g) Each item of Partnership income, gain, loss and deduction, for federal income tax purposes, shall be determined on an annual basis and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the New York Stock Exchange on the first Business Day of each month; provided , however , such items for the period beginning on the Closing Date and ending on the last day of the month in which the Option Closing Date or the expiration of the Over-Allotment Option occurs shall be allocated to the Partners as of the opening of the New York Stock Exchange on the first Business Day of the next succeeding month; and provided, further, that gain or loss on a sale or other disposition of any assets of the Partnership or any other extraordinary item of income or loss realized and recognized other than in the ordinary course of business, as determined by the General Partner, shall be allocated to the Partners as of the opening of the New York Stock Exchange on the first Business Day of the month in which
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such gain or loss is recognized for federal income tax purposes. The General Partner may revise, alter or otherwise modify such methods of allocation to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.
     (h) Allocations that would otherwise be made to a Limited Partner under the provisions of this Article VI shall instead be made to the beneficial owner of Limited Partner Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method determined by the General Partner.
Section 6.3   Requirement and Characterization of Distributions; Distributions to Record Holders.
     (a) Within 45 days following the end of each Quarter commencing with the Quarter ending on March 31, 2006, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by the Partnership to the Unitholders and the General Partner as of the Record Date selected by the General Partner. All amounts of Available Cash distributed by the Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore distributed by the Partnership to the Unitholders and the General Partner pursuant to Section 6.4 equals the Operating Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed by the Partnership on such date shall, except as otherwise provided in Section 6.5, be deemed to be “Capital Surplus.” All distributions required to be made under this Agreement shall be made subject to Section 17-607 of the Delaware Act.
     (b) Notwithstanding Section 6.3(a), in the event of the dissolution and liquidation of the Partnership, all receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in (a)(ii) of the definition of Available Cash, shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.
     (c) The General Partner may treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Unitholders and the General Partner, as a distribution of Available Cash to such Unitholders and the General Partner.
     (d) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through the Transfer Agent or through any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.
     Section 6.4 Distributions of Available Cash from Operating Surplus.
     (a)  During Subordination Period . Available Cash with respect to any Quarter within the Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of
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Section 6.3 or 6.5 shall, subject to Section 17-607 of the Delaware Act, be distributed as follows, except as otherwise contemplated by Section 5.6 in respect of other Partnership Securities issued pursuant thereto:
     (i) First, (A) to the General Partner in accordance with its Percentage Interest and (B) to all Unitholders holding Common Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
     (ii) Second, (A) to the General Partner in accordance with its Percentage Interest and (B) to all Unitholders holding Common Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;
     (iii) Third, (A) to the General Partner in accordance with its Percentage Interest and (B) to all Unitholders holding Subordinated Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been distributed in respect of each Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
     (iv) Fourth, to the General Partner and all Unitholders, in accordance with their respective Percentage Interests, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
     (v) Fifth, (A) to the General Partner in accordance with its Percentage Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclauses (A) and (B) of this clause (v) until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
     (vi) Sixth, (A) to the General Partner in accordance with its Percentage Interest, (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclauses (A) and (B) of this subclause (vi), until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
     (vii) Thereafter, (A) to the General Partner in accordance with its Percentage Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclauses (A) and (B) of this clause (vii);
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provided, however , if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(a)(vii).
     (b)  After Subordination Period. Available Cash with respect to any Quarter after the Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5, subject to Section 17-607 of the Delaware Act, shall be distributed as follows, except as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued pursuant thereto:
     (i) First, 100% to the General Partner and the Unitholders in accordance with their respective Percentage Interests, until there has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
     (ii) Second, 100% to the General Partner and the Unitholders in accordance with their respective Percentage Interests, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
     (iii) Third, (A) to the General Partner in accordance with its Percentage Interest; (B) 13% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclauses (A) and (B) of this clause (iii), until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
     (iv) Fourth, (A) to the General Partner in accordance with its Percentage Interest; (B) 23% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclause (A) and (B) of this clause (iv), until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
     (v) Thereafter, (A) to the General Partner in accordance with its Percentage Interest; (B) 48% to the holders of the Incentive Distribution Rights, Pro Rata; and (C) to all Unitholders, their Pro Rata share of a percentage equal to 100% less the sum of the percentages applicable to subclauses (A) and (B) of this clause (v);
provided, however , if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).
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Section 6.5 Distributions of Available Cash from Capital Surplus.
     Available Cash that is deemed to be Capital Surplus pursuant to the provisions of Section 6.3(a) shall, subject to Section 17-607 of the Delaware Act, be distributed, unless the provisions of Section 6.3 require otherwise, 100% to the General Partner and the Unitholders in accordance with their respective Percentage Interests, until a hypothetical holder of a Common Unit acquired on the Closing Date has received with respect to such Common Unit, during the period since the Closing Date through such date, distributions of Available Cash that are deemed to be Capital Surplus in an aggregate amount equal to the Initial Unit Price. Available Cash that is deemed to be Capital Surplus shall then be distributed (a) to the General Partner in accordance with its Percentage Interest and (b) to all Unitholders holding Common Units, their Pro Rata share of a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage. Thereafter, all Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.4.
Section 6.6   Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.
     (a) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative Common Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Partnership Securities in accordance with Section 5.10. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be adjusted proportionately downward to equal the product obtained by multiplying the otherwise applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, as the case may be, by a fraction of which the numerator is the Unrecovered Initial Unit Price of the Common Units immediately after giving effect to such distribution and of which the denominator is the Unrecovered Initial Unit Price of the Common Units immediately prior to giving effect to such distribution.
     (b) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall also be subject to adjustment pursuant to Section 6.10.
Section 6.7   Special Provisions Relating to the Holders of Subordinated Units.
     (a) Except with respect to the right to vote on or approve matters requiring the vote or approval of a percentage of the holders of Outstanding Common Units and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights and obligations of a Unitholder holding Common Units hereunder; provided , however , that immediately upon the conversion of Subordinated Units into Common Units pursuant to Section 5.8, the Unitholder holding a Subordinated Unit shall possess all of the rights and obligations of a Unitholder holding Common Units hereunder, including the right to vote as a Common Unitholder and the
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right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units; provided , however , that such converted Subordinated Units shall remain subject to the provisions of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(c).
     (b) A Unitholder shall not be permitted to transfer a Subordinated Unit or a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.8 (other than a transfer to an Affiliate) if the remaining balance in the transferring Unitholder’s Capital Account with respect to the retained Subordinated Units or Retained Converted Subordinated Units would be negative after giving effect to the allocation under Section 5.5(c)(ii)(B).
     (c) A Unitholder holding a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.8 shall not be issued a Common Unit Certificate pursuant to Section 4.1, and shall not be permitted to transfer its converted Subordinated Units to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that a converted Subordinated Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material respects, to the intrinsic economic and federal income tax characteristics of an Initial Common Unit. In connection with the condition imposed by this Section 6.7(c), the General Partner may take whatever steps are required to provide economic uniformity to the converted Subordinated Units in preparation for a transfer of such converted Subordinated Units, including the application of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(b); provided , however , that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units (other than a Fehsenfeld Common Unit).
Section 6.8   Special Provisions Relating to the Holders of Incentive Distribution Rights.
     Notwithstanding anything to the contrary set forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall (i) possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to Articles III and VII and (ii) have a Capital Account as a Partner pursuant to Section 5.5 and all other provisions related thereto and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, except as provided by law, (ii) be entitled to any distributions other than as provided in Sections 6.4(a)(v), (vi) and (vii), 6.4(b)(iii), (iv) and (v), and 12.4 or (iii) be allocated items of income, gain, loss or deduction other than as specified in this Article VI.
Section 6.9   Special Provisions Relating to the Fehsenfeld Investors.
     A Unitholder holding a Fehsenfeld Common Unit shall not be issued a Common Unit Certificate pursuant to Section 4.1, and shall not be permitted to transfer its Fehsenfeld Common Units to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that such Fehsenfeld Common Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material respects, to the intrinsic economic and federal income tax characteristics of an Initial Common Unit (other than a Fehsenfeld Common Unit). In connection with the condition imposed by this Section 6.9, the General Partner may take whatever steps are required to provide economic uniformity to the Fehsenfeld Common Units in preparation for a transfer of such Fehsenfeld Common Units, including the application of Sections 5.5(c)(iii) and 6.1(d)(x)(A); provided , however , that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units (other than a Fehsenfeld Common Unit).
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Section 2.10   Entity-Level Taxation.
     If legislation is enacted or the interpretation of existing language is modified by a governmental taxing authority so that a Group Member is treated as an association taxable as a corporation or is otherwise subject to an entity-level tax for federal, state or local income tax purposes, then the General Partner shall estimate for each Quarter the Partnership Group’s aggregate liability (the “Estimated Incremental Quarterly Tax Amount”) for all such income taxes that are payable by reason of any such new legislation or interpretation; provided that any difference between such estimate and the actual tax liability for such Quarter that is owed by reason of any such new legislation or interpretation shall be taken into account in determining the Estimated Incremental Quarterly Tax Amount with respect to each Quarter in which any such difference can be determined. For each such Quarter, the Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be the product obtained by multiplying (a) the amounts therefor that are set out herein prior to the application of this Section 6.10 times (b) the quotient obtained by dividing (i) Available Cash with respect to such Quarter by (ii) the sum of Available Cash with respect to such Quarter and the Estimated Incremental Quarterly Tax Amount for such Quarter, as determined by the General Partner. For purposes of the foregoing, Available Cash with respect to a Quarter will be deemed reduced by the Estimated Incremental Quarterly Tax Amount for that Quarter.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1   Management.
     (a) The General Partner shall conduct, direct and manage all activities of the Partnership. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited Partner shall have any management power over the business and affairs of the Partnership. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or that are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to Section 7.3, shall have full power and authority to do all things and on such terms as it determines to be necessary or appropriate to conduct the business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:
     (i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into Partnership Securities, and the incurring of any other obligations;
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     (ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;
     (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership or the merger or other combination of the Partnership with or into another Person (the matters described in this clause (iii) being subject, however, to any prior approval that may be required by Section 7.3 and Article XIV);
     (iv) the use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this Agreement, including the financing of the conduct of the operations of the Partnership Group; subject to Section 7.6(a), the lending of funds to other Persons (including other Group Members); the repayment or guarantee of obligations of any Group Member; and the making of capital contributions to any Group Member;
     (v) the negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Partnership under contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner or its assets other than its interest in the Partnership, even if same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);
     (vi) the distribution of Partnership cash;
     (vii) the selection and dismissal of employees (including employees having titles such as “president,” “vice president,” “secretary” and “treasurer”) and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring;
     (viii) the maintenance of insurance for the benefit of the Partnership Group, the Partners and Indemnitees;
     (ix) the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint ventures, corporations, limited liability companies or other relationships (including the acquisition of interests in, and the contributions of property to, any Group Member from time to time) subject to the restrictions set forth in Section 2.4;
     (x) the control of any matters affecting the rights and obligations of the Partnership, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation;
     (xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
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     (xii) the entering into of listing agreements with any National Securities Exchange and the delisting of some or all of the Limited Partner Interests from, or requesting that trading be suspended on, any such exchange (subject to any prior approval that may be required under Section 4.8);
     (xiii) unless restricted or prohibited by Section 5.7, the purchase, sale or other acquisition or disposition of Partnership Securities, or the issuance of additional options, rights, warrants and appreciation rights relating to Partnership Securities;
     (xiv) the undertaking of any action in connection with the Partnership’s participation in any Group Member; and
     (xv) the entering into of agreements with any of its Affiliates to render services to a Group Member or to itself in the discharge of its duties as General Partner of the Partnership.
     (b) Notwithstanding any other provision of this Agreement, any Group Member Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners and each other Person who may acquire an interest in Partnership Securities hereby (i) approves, ratifies and confirms the execution, delivery and performance by the parties thereto of this Agreement and the Group Member Agreement of each other Group Member, the Underwriting Agreement, the Omnibus Agreement, the Contribution Agreement and the other agreements described in or filed as exhibits to the Registration Statement that are related to the transactions contemplated by the Registration Statement; (ii) agrees that the General Partner (on its own or through any officer of the Partnership) is authorized to execute, deliver and perform the agreements referred to in clause (i) of this sentence and the other agreements, acts, transactions and matters described in or contemplated by the Registration Statement on behalf of the Partnership without any further act, approval or vote of the Partners or the other Persons who may acquire an interest in Partnership Securities; and (iii) agrees that the execution, delivery or performance by the General Partner, any Group Member or any Affiliate of any of them of this Agreement or any agreement authorized or permitted under this Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of the rights accorded pursuant to Article XV) shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or equity.
Section 7.2   Certificate of Limited Partnership.
     The General Partner has caused the Certificate of Limited Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents that the General Partner determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do business or own property. To the extent the General Partner determines such action to be necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited
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partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification document or any amendment thereto to any Limited Partner.
Section 7.3   Restrictions on the General Partner’s Authority.
     Except as provided in Articles XII and XIV, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (including by way of merger, consolidation, other combination or sale of ownership interests of the Partnership’s Subsidiaries) without the approval of holders of a Unit Majority; provided , however , that this provision shall not preclude or limit the General Partner’s ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Partnership Group and shall not apply to any forced sale of any or all of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance. Without the approval of holders of a Unit Majority, the General Partner shall not, on behalf of the Partnership, except as permitted under Sections 4.6, 11.1 and 11.2, elect or cause the Partnership to elect a successor general partner of the Partnership.
Section 7.4   Reimbursement of the General Partner.
     (a) Except as provided in this Section 7.4 and elsewhere in this Agreement, the General Partner shall not be compensated for its services as a general partner or managing member of any Group Member.
     (b) The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine, for (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership Group (including salary, bonus, incentive compensation and other amounts paid to any Person, including Affiliates of the General Partner to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group), and (ii) all other expenses allocable to the Partnership Group or otherwise incurred by the General Partner in connection with operating the Partnership Group’s business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to the Partnership Group. Reimbursements pursuant to this Section 7.4 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7.
     (c) Subject to Section 5.7, the General Partner, without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit plans, employee programs and employee practices (including plans, programs and practices involving the issuance of Partnership Securities or options to purchase or rights, warrants or appreciation rights relating to Partnership Securities), or cause the Partnership to issue Partnership Securities in connection with, or pursuant to, any employee benefit plan, employee program or employee practice maintained or sponsored by the General Partner or any of its Affiliates, in each case for the benefit of employees of the General Partner
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or its Affiliates, or any Group Member or its Affiliates, or any of them, in respect of services performed, directly or indirectly, for the benefit of the Partnership Group. The Partnership agrees to issue and sell to the General Partner or any of its Affiliates any Partnership Securities that the General Partner or such Affiliates are obligated to provide to any employees pursuant to any such employee benefit plans, employee programs or employee practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Securities purchased by the General Partner or such Affiliates from the Partnership to fulfill options or awards under such plans, programs and practices) shall be reimbursed in accordance with Section 7.4(b). Any and all obligations of the General Partner under any employee benefit plans, employee programs or employee practices adopted by the General Partner as permitted by this Section 7.4(c) shall constitute obligations of the General Partner hereunder and shall be assumed by any successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the General Partner’s General Partner Interest (represented by General Partner Units) pursuant to Section 4.6.
Section 7.5   Outside Activities.
     (a) After the Closing Date, the General Partner, for so long as it is the General Partner of the Partnership (i) agrees that its sole business will be to act as a general partner or managing member, as the case may be, of the Partnership and any other partnership or limited liability company of which the Partnership is, directly or indirectly, a partner or member and to undertake activities that are ancillary or related thereto (including being a limited partner in the Partnership) and (ii) shall not engage in any business or activity or incur any debts or liabilities except in connection with or incidental to (A) its performance as general partner or managing member, if any, of one or more Group Members or as described in or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.
     (b) Except as specifically restricted by the Omnibus Agreement, each Indemnitee (other than the General Partner) shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member, and none of the same shall constitute a breach of this Agreement or any duty expressed or implied by law to any Group Member or any Partner. None of any Group Member, any Limited Partner or any other Person shall have any rights by virtue of this Agreement, any Group Member Agreement, or the partnership relationship established hereby in any business ventures of any Indemnitee.
     (c) Subject to the terms of Section 7.5(a), Section 7.5(b) and the Omnibus Agreement, but otherwise notwithstanding anything to the contrary in this Agreement, (i) the engaging in competitive activities by any Indemnitees (other than the General Partner) in accordance with the provisions of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii) it shall be deemed not to be a breach of any fiduciary duty or any other obligation of any type whatsoever of the General Partner or of any Indemnitee for the Indemnitees (other than
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the General Partner) to engage in such business interests and activities in preference to or to the exclusion of the Partnership and (iii) except as set forth in the Omnibus Agreement, the Indemnitees shall have no obligation hereunder or as a result of any duty expressed or implied by law to present business opportunities to the Partnership.
     (d) The General Partner and each of its Affiliates may acquire Units or other Partnership Securities in addition to those acquired on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise, at their option, all rights relating to all Units or other Partnership Securities acquired by them. The term “Affiliates” when used in this Section 7.5(d) with respect to the General Partner shall not include any Group Member.
     (e) Notwithstanding anything to the contrary in this Agreement, to the extent that any provision of this Agreement purports or is interpreted to have the effect of restricting the fiduciary duties that might otherwise, as a result of Delaware or other applicable law, be owed by the General Partner to the Partnership and its Limited Partners, or to constitute a waiver or consent by the Limited Partners to any such restriction, such provisions shall be inapplicable and have no effect in determining whether the General Partner has complied with its fiduciary duties in connection with determinations made by it under this Section 7.5.
Section 7.6   Loans from the General Partner; Loans or Contributions from the Partnership or Group Members.
     (a) The General Partner or any of its Affiliates may lend to any Group Member, and any Group Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the Group Member for such periods of time and in such amounts as the General Partner may determine; provided , however , that in any such case the lending party may not charge the borrowing party interest at a rate greater than the rate that would be charged the borrowing party or impose terms less favorable to the borrowing party than would be charged or imposed on the borrowing party by unrelated lenders on comparable loans made on an arm’s-length basis (without reference to the lending party’s financial abilities or guarantees), all as determined by the General Partner. The borrowing party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this Section 7.6(a) and Section 7.6(b), the term “Group Member” shall include any Affiliate of a Group Member that is controlled by the Group Member.
     (b) The Partnership may lend or contribute to any Group Member, and any Group Member may borrow from the Partnership, funds on terms and conditions determined by the General Partner. No Group Member may lend funds to the General Partner or any of its Affiliates (other than another Group Member).
     (c) No borrowing by any Group Member or the approval thereof by the General Partner shall be deemed to constitute a breach of any duty, expressed or implied, of the General Partner or its Affiliates to the Partnership or the Limited Partners by reason of the fact that the purpose or effect of such borrowing is directly or indirectly to (i) enable distributions to the General Partner or its Affiliates (including in their capacities as Limited Partners) to exceed the General Partner’s Percentage Interest of the total amount distributed to all partners or (ii) hasten the expiration of the Subordination Period or the conversion of any Subordinated Units into Common Units.
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Section 7.7   Indemnification.
     (a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided , that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.7, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful; provided , further, no indemnification pursuant to this Section 7.7 shall be available to the General Partner or its Affiliates (other than a Group Member) with respect to its or their obligations incurred pursuant to the Underwriting Agreement, the Omnibus Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on behalf of the Partnership). Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.
     (b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 7.7.
     (c) The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity (including any capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
     (d) The Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such other Persons as the General Partner shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Partnership’s activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
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     (e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 7.7(a); and action taken or omitted by it with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Partnership.
     (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
     (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
     (h) The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.
     (i) No amendment, modification or repeal of this Section 7.7 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.8   Liability of Indemnitees.
     (a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Limited Partners or any other Persons who have acquired interests in the Partnership Securities, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.
     (b) Subject to its obligations and duties as General Partner set forth in Section 7.1(a), the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the General Partner in good faith.
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     (c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement.
     (d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9   Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties.
     (a) Unless otherwise expressly provided in this Agreement or any Group Member Agreement, whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership, any Group Member or any Partner, on the other, any resolution or course of action by the General Partner or its Affiliates in respect of such conflict of interest shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of any Group Member Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii) approved by the vote of a majority of the Common Units (excluding Common Units owned by the General Partner and its Affiliates), (iii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or (iv) fair and reasonable to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner shall be authorized but not required in connection with its resolution of such conflict of interest to seek Special Approval of such resolution, and the General Partner may also adopt a resolution or course of action that has not received Special Approval. If Special Approval is not sought and the Board of Directors of the General Partner determines that the resolution or course of action taken with respect to a conflict of interest satisfies either of the standards set forth in clauses (iii) or (iv) above, then it shall be presumed that, in making its decision, the Board of Directors acted in good faith, and in any proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Notwithstanding anything to the contrary in this Agreement or any duty otherwise existing at law or equity, the existence of the conflicts of interest described in the Registration Statement are hereby approved by all Partners and shall not constitute a breach of this Agreement.
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     (b) Whenever the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its capacity as the general partner of the Partnership as opposed to in its individual capacity, whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for in this Agreement, the General Partner, or such Affiliates causing it to do so, shall make such determination or take or decline to take such other action in good faith and shall not be subject to any other or different standards imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such determination or taking or declining to take such other action must believe that the determination or other action is in the best interests of the Partnership.
     (c) Whenever the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as the general partner of the Partnership, whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then the General Partner, or such Affiliates causing it to do so, are entitled to make such determination or to take or decline to take such other action free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner, and the General Partner, or such Affiliates causing it to do so, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. By way of illustration and not of limitation, whenever the phrase, “at the option of the General Partner,” or some variation of that phrase, is used in this Agreement, it indicates that the General Partner is acting in its individual capacity. For the avoidance of doubt, whenever the General Partner votes or transfers its Units, or refrains from voting or transferring its Units, it shall be acting in its individual capacity.
     (d) Notwithstanding anything to the contrary in this Agreement, the General Partner and its Affiliates shall have no duty or obligation, express or implied, to (i) sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business or (ii) permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the General Partner or any of its Affiliates to enter into such contracts shall be at its option.
     (e) Except as expressly set forth in this Agreement, neither the General Partner nor any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to the Partnership or any Limited Partner and the provisions of this Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties, of the General Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the General Partner or such other Indemnitee.
     (f) The Unitholders hereby authorize the General Partner, on behalf of the Partnership as a partner or member of a Group Member, to approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken by the General Partner pursuant to this Section 7.9.
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Section 7.10   Other Matters Concerning the General Partner.
     (a) The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
     (b) The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
     (c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership.
Section 7.11   Purchase or Sale of Partnership Securities.
     The General Partner may cause the Partnership to purchase or otherwise acquire Partnership Securities; provided that, except as permitted pursuant to Section 4.10, the General Partner may not cause any Group Member to purchase Subordinated Units during the Subordination Period. As long as Partnership Securities are held by any Group Member, such Partnership Securities shall not be considered Outstanding for any purpose, except as otherwise provided herein. The General Partner or any Affiliate of the General Partner may also purchase or otherwise acquire and sell or otherwise dispose of Partnership Securities for its own account, subject to the provisions of Articles IV and X.
Section 7.12   Registration Rights of the General Partner and its Affiliates.
     (a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes of this Section 7.12, any Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate of the General Partner) holds Partnership Securities that it desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder of Partnership Securities (the “Holder”) to dispose of the number of Partnership Securities it desires to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use all reasonable efforts to cause to become effective and remain effective for a period of not less than six months following its effective date or such shorter period as shall terminate when all Partnership Securities covered by such registration statement have been sold, a registration statement under the Securities Act registering the offering and sale of the number of Partnership
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Securities specified by the Holder; provided , however , that the Partnership shall not be required to effect more than three registrations pursuant to Sections 7.12(a) and 7.12(b); and provided further, however, that if the Conflicts Committee determines in good faith that the requested registration would be materially detrimental to the Partnership and its Partners because such registration would (x) materially interfere with a significant acquisition, reorganization or other similar transaction involving the Partnership, (y) require premature disclosure of material information that the Partnership has a bona fide business purpose for preserving as confidential or (z) render the Partnership unable to comply with requirements under applicable securities laws, then the Partnership shall have the right to postpone such requested registration for a period of not more than six months after receipt of the Holder’s request, such right pursuant to this Section 7.12(a) or Section 7.12(b) not to be utilized more than once in any twelve-month period. Except as provided in the preceding sentence, the Partnership shall be deemed not to have used all reasonable efforts to keep the registration statement effective during the applicable period if it voluntarily takes any action that would result in Holders of Partnership Securities covered thereby not being able to offer and sell such Partnership Securities at any time during such period, unless such action is required by applicable law. In connection with any registration pursuant to the immediately preceding sentence, the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such registration under the securities laws of such states as the Holder shall reasonably request; provided , however , that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such registration, and (B) such documents as may be necessary to apply for listing or to list the Partnership Securities subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such Partnership Securities in such states. Except as set forth in Section 7.12(d), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.
     (b) If any Holder holds Partnership Securities that it desires to sell and Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such Holder to dispose of the number of Partnership Securities it desires to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use all reasonable efforts to cause to become effective and remain effective for a period of not less than six months following its effective date or such shorter period as shall terminate when all Partnership Securities covered by such shelf registration statement have been sold, a “shelf” registration statement covering the Partnership Securities specified by the Holder on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission; provided, however, that the Partnership shall not be required to effect more than three registrations pursuant to Section 7.12(a) and this Section 7.12(b); and provided further, however, that if the Conflicts Committee determines in good faith that any offering under, or the use of any prospectus forming a part of, the shelf registration statement would be materially detrimental to the Partnership and its Partners because such offering or use would (x) materially
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interfere with a significant acquisition, reorganization or other similar transaction involving the Partnership, (y) require premature disclosure of material information that the Partnership has a bona fide business purpose for preserving as confidential or (z) render the Partnership unable to comply with requirements under applicable securities laws, then the Partnership shall have the right to suspend such offering or use for a period of not more than six months after receipt of the Holder’s request, such right pursuant to Section 7.12(a) or this Section 7.12(b) not to be utilized more than once in any twelve-month period. Except as provided in the preceding sentence, the Partnership shall be deemed not to have used all reasonable efforts to keep the shelf registration statement effective during the applicable period if it voluntarily takes any action that would result in Holders of Partnership Securities covered thereby not being able to offer and sell such Partnership Securities at any time during such period, unless such action is required by applicable law. In connection with any shelf registration pursuant to this Section 7.12(b), the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such shelf registration under the securities laws of such states as the Holder shall reasonably request; provided, however, that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such shelf registration, and (B) such documents as may be necessary to apply for listing or to list the Partnership Securities subject to such shelf registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such Partnership Securities in such states. Except as set forth in Section 7.12(d), all costs and expenses of any such shelf registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.
     (c) If the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of equity securities of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use all reasonable efforts to include such number or amount of securities held by the Holder in such registration statement as the Holder shall request; provided, that the Partnership is not required to make any effort or take an action to so include the securities of the Holder once the registration statement is declared effective by the Commission, including any registration statement providing for the offering from time to time of securities pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant to this Section 7.12(c) shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership Securities would adversely and materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if any, of securities held by the Holder that, in the opinion of the managing underwriter or managing underwriters, will not so adversely and materially affect the offering. Except as set forth in Section 7.12(d), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.
     (d) If underwriters are engaged in connection with any registration referred to in this Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions
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and other assurance to the underwriters in form and substance reasonably satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and each Person who controls the Holder (within the meaning of the Securities Act) and any agent thereof (collectively, “Indemnified Persons”) from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (hereinafter referred to in this Section 7.12(d) as a “claim” and in the plural as “claims”) based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which any Partnership Securities were registered under the Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus (if used prior to the effective date of such registration statement), or in any summary or final prospectus or in any amendment or supplement thereto (if used during the period the Partnership is required to keep the registration statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading; provided , however , that the Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary, summary or final prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.
     (e) The provisions of Section 7.12(a), 7.12(b) and 7.12(c) shall continue to be applicable with respect to the General Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during a period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder to sell all of the Partnership Securities with respect to which it has requested during such two-year period inclusion in a registration statement otherwise filed or that a registration statement be filed; provided , however , that the Partnership shall not be required to file successive registration statements covering the same Partnership Securities for which registration was demanded during such two-year period. The provisions of Section 7.12(d) shall continue in effect thereafter.
     (f) The rights to cause the Partnership to register Partnership Securities pursuant to this Section 7.12 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such Partnership Securities, provided (i) the Partnership is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the Partnership Securities with respect to which such registration rights are being assigned; and (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this Section 7.12.
     (g) Any request to register Partnership Securities pursuant to this Section 7.12 shall (i) specify the Partnership Securities intended to be offered and sold by the Person making the
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request, (ii) express such Person’s present intent to offer such Partnership Securities for distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership Securities, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action as may be required in order to permit the Partnership to comply with all applicable requirements in connection with the registration of such Partnership Securities.
Section 7.13 Reliance by Third Parties.
     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner and any officer of the General Partner authorized by the General Partner to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner or any such officer as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the General Partner or any such officer in connection with any such dealing. In no event shall any Person dealing with the General Partner or any such officer or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or any such officer or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 8.1 Records and Accounting.
     The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including all books and records necessary to provide to the Limited Partners any information required to be provided pursuant to Section 3.4(a). Any books and records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record Holders of Units or other Partnership Securities, books of account and records of Partnership proceedings, may be kept on, or be in the form of, computer disks, hard drives, punch cards, magnetic tape, photographs, micrographics or any other information storage device; provided , that the books and records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S. GAAP.
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Section 8.2 Fiscal Year.
     The fiscal year of the Partnership shall be a fiscal year ending December 31.
Section 8.3 Reports.
     (a) As soon as practicable, but in no event later than 120 days after the close of each fiscal year of the Partnership, the General Partner shall cause to be mailed or made available to each Record Holder of a Unit as of a date selected by the General Partner, an annual report containing financial statements of the Partnership for such fiscal year of the Partnership, presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited by a firm of independent public accountants selected by the General Partner.
     (b) As soon as practicable, but in no event later than 90 days after the close of each Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed or made available to each Record Holder of a Unit, as of a date selected by the General Partner, a report containing unaudited financial statements of the Partnership and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed or admitted to trading, or as the General Partner determines to be necessary or appropriate.
ARTICLE IX
TAX MATTERS
Section 9.1 Tax Returns and Information.
     The Partnership shall timely file all returns of the Partnership that are required for federal, state and local income tax purposes on the basis of the accrual method and a taxable year ending December 31 or such other taxable year or years that it is required by law to adopt, from time to time, as determined by the General Partner. The tax information reasonably required by Record Holders for federal and state income tax reporting purposes with respect to a taxable year shall be furnished to them within 90 days of the close of the calendar year in which the Partnership’s taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for federal income tax purposes.
Section 9.2 Tax Elections.
     (a) The Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner’s determination that such revocation is in the best interests of the Limited Partners. Notwithstanding any other provision herein contained, for the purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a Limited Partner Interest will be deemed to be the lowest quoted closing price of
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the Limited Partner Interests on any National Securities Exchange on which such Limited Partner Interests are listed or admitted to trading during the calendar month in which such transfer is deemed to occur pursuant to Section 6.2(g) without regard to the actual price paid by such transferee.
     (b) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.
Section 9.3 Tax Controversies.
     Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner (as defined in the Code) and is authorized and required to represent the Partnership (at the Partnership’s expense) in connection with all examinations of the Partnership’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to cooperate with the General Partner and to do or refrain from doing any or all things reasonably required by the General Partner to conduct such proceedings.
Section 9.4 Withholding.
     Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that may be required to cause the Partnership and other Group Members to comply with any withholding requirements established under the Code or any other federal, state or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is required or elects to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income to any Partner (including by reason of Section 1446 of the Code), the General Partner may, but is not required to, treat the amount withheld as a distribution of cash pursuant to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
Section 10.1 Admission of Limited Partners.
     (a) By acceptance of the transfer of any Limited Partner Interests in accordance with Article IV or the acceptance of any Limited Partner Interests issued pursuant to Article V or pursuant to a merger or consolidation pursuant to Article XIV, and except as provided in Section 4.9, each transferee of, or other such Person acquiring, a Limited Partner Interest (including any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred or issued to such Person when any such transfer, issuance or admission is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound by the terms of this Agreement, (iii) represents that the transferee has the capacity, power and authority to enter into this Agreement, (iv) grants the
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powers of attorney set forth in this Agreement and (v) makes the consents and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement. A Person may become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or approval of any of the Partners. A Person may not become a Limited Partner without acquiring a Limited Partner Interest and until such Person is reflected in the books and records of the Partnership as the Record Holder of such Limited Partner Interest. The rights and obligations of a Person who is a Non-citizen Assignee shall be determined in accordance with Section 4.9 hereof.
     (b) The name and mailing address of each Limited Partner shall be listed on the books and records of the Partnership maintained for such purpose by the Partnership or the Transfer Agent. The General Partner shall update the books and records of the Partnership from time to time as necessary to reflect accurately the information therein (or shall cause the Transfer Agent to do so, as applicable). A Limited Partner Interest may be represented by a Certificate, as provided in Section 4.1 hereof.
     (c) Any transfer of a Limited Partner Interest shall not entitle the transferee to share in the profits and losses, to receive distributions, to receive allocations of income, gain, loss, deduction or credit or any similar item or to any other rights to which the transferor was entitled until the transferee becomes a Limited Partner pursuant to Section 10.1(a).
Section 10.2 Admission of Successor General Partner.
     A successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the General Partner Interest (represented by General Partner Units) pursuant to Section 4.6 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately prior to the withdrawal or removal of the predecessor or transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General Partner Interest (represented by General Partner Units) pursuant to Section 4.6, provided, however, that no such successor shall be admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such successor has executed and delivered such other documents or instruments as may be required to effect such admission. Any such successor shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without dissolution.
Section 10.3 Amendment of Agreement and Certificate of Limited Partnership.
     To effect the admission to the Partnership of any Partner, the General Partner shall take all steps necessary or appropriate under the Delaware Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by law, the General Partner shall prepare and file an amendment to the Certificate of Limited Partnership, and the General Partner may for this purpose, among others, exercise the power of attorney granted pursuant to Section 2.6.
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ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
Section 11.1 Withdrawal of the General Partner.
     (a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each such event herein referred to as an “Event of Withdrawal”);
     (i) The General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;
     (ii) The General Partner transfers all of its rights as General Partner pursuant to Section 4.6;
     (iii) The General Partner is removed pursuant to Section 11.2;
     (iv) The General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;
     (v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or
     (vi) (A) in the event the General Partner is a corporation, a certificate of dissolution or its equivalent is filed for the General Partner, or 90 days expire after the date of notice to the General Partner of revocation of its charter without a reinstatement of its charter, under the laws of its state of incorporation; (B) in the event the General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the event the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise in the event of the termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section 11.1 shall result in the withdrawal of the General Partner from the Partnership.
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     (b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i) at any time during the period beginning on the Closing Date and ending at 12:00 midnight, prevailing Eastern Time, on December 31, 2015, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners; provided , that prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership an Opinion of Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member or cause any Group Member 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); (ii) at any time after 12:00 midnight, prevailing Eastern Time, on December 31, 2015, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date specified in such notice; (iii) at any time that the General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at the time such notice is given one Person and its Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of the General Partner as general partner or managing member, if any, to the extent applicable, of the other Group Members. If the General Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a Unit Majority, may, prior to the effective date of such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall automatically become the successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner’s withdrawal, a successor is not selected by the Unitholders as provided herein or the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1. Any successor General Partner elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.2.
Section 11.2 Removal of the General Partner.
     The General Partner may be removed if such removal is approved by the Unitholders holding at least 66 2/3% of the Outstanding Units (including Units held by the General Partner and its Affiliates) voting as a single class. Any such action by such holders for removal of the General Partner must also provide for the election of a successor General Partner by the Unitholders holding a majority of the outstanding Common Units voting as a class and a majority of the outstanding Subordinated Units voting as a class (including Units held by the General Partner and its Affiliates). Such removal shall be effective immediately following the admission of a successor General Partner pursuant to Section 10.2. The removal of the General Partner shall also automatically constitute the removal of the General Partner as general partner
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or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a successor General Partner in accordance with the terms of this Section 11.2, such Person shall, upon admission pursuant to Section 10.2, automatically become a successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. The right of the holders of Outstanding Units to remove the General Partner shall not exist or be exercised unless the Partnership has received an opinion opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner elected in accordance with the terms of this Section 11.2 shall be subject to the provisions of Section 10.2.
Section 11.3 Interest of Departing General Partner and Successor General Partner.
     (a) In the event of (i) withdrawal of the General Partner under circumstances where such withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of Outstanding Units under circumstances where Cause does not exist, if the successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2, the Departing General Partner shall have the option, exercisable prior to the effective date of the departure of such Departing General Partner, to require its successor to purchase its General Partner Interest (represented by General Partner Units) and its general partner interest (or equivalent interest), if any, in the other Group Members and all of the Incentive Distribution Rights (collectively, the “Combined Interest”) in exchange for an amount in cash equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of its departure. If the General Partner is removed by the Unitholders under circumstances where Cause exists or if the General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner), such successor shall have the option, exercisable prior to the effective date of the departure of such Departing General Partner (or, in the event the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the Combined Interest for such fair market value of such Combined Interest of the Departing General Partner. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing General Partner pursuant to Section 7.4, including any employee-related liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other than any Group Member) for the benefit of the Partnership or the other Group Members.
     For purposes of this Section 11.3(a), the fair market value of the Departing General Partner’s Combined Interest shall be determined by agreement between the Departing General Partner and its successor or, failing agreement within 30 days after the effective date of such Departing General Partner’s departure, by an independent investment banking firm or other independent expert selected by the Departing General Partner and its successor, which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of such departure, then the Departing General
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Partner shall designate an independent investment banking firm or other independent expert, the Departing General Partner’s successor shall designate an independent investment banking firm or other independent expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest of the Departing General Partner. In making its determination, such third independent investment banking firm or other independent expert may consider the then current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value of the Partnership’s assets, the rights and obligations of the Departing General Partner and other factors it may deem relevant.
     (b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing General Partner (or its transferee) shall become a Limited Partner and its Combined Interest shall be converted into Common Units pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to Section 11.3(a), without reduction in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor General Partner shall indemnify the Departing General Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest of the Departing General Partner to Common Units will be characterized as if the Departing General Partner (or its transferee) contributed its Combined Interest to the Partnership in exchange for the newly issued Common Units.
     (c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner) and the option described in Section 11.3(a) is not exercised by the party entitled to do so, the successor General Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to the product of the Percentage Interest of the Departing General Partner and the Net Agreed Value of the Partnership’s assets on such date. In such event, such successor General Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all Partnership allocations and distributions to which the Departing General Partner was entitled. In addition, the successor General Partner shall cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner’s admission, the successor General Partner’s interest in all Partnership distributions and allocations shall be its Percentage Interest.
Section 11.4 Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages.
     Notwithstanding any provision of this Agreement, if the General Partner is removed as general partner of the Partnership under circumstances where Cause does not exist and Units held by the General Partner and its Affiliates are not voted in favor of such removal, (i) the Subordination Period will end and all Outstanding Subordinated Units will immediately and automatically convert into Common Units on a one-for-one basis, (ii) all Cumulative Common Unit Arrearages on the Common Units will be extinguished and (iii) the General Partner will have the right to convert its General Partner Interest (represented by General Partner Units) and its Incentive Distribution Rights into Common Units or to receive cash in exchange therefor.
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Section 11.5 Withdrawal of Limited Partners.
     No Limited Partner shall have any right to withdraw from the Partnership; provided , however, that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner shall cease to be a Limited Partner with respect to the Limited Partner Interest so transferred.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
Section 12.1 Dissolution.
     The Partnership shall not be dissolved by the admission of additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be dissolved and such successor General Partner shall continue the business of the Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon:
     (a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to Section 10.2;
     (b) an election to dissolve the Partnership by the General Partner that is approved by the holders of a Unit Majority;
     (c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act; or
     (d) at any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the Delaware Act.
Section 12.2 Continuation of the Business of the Partnership After Dissolution.
     Upon (a) dissolution of the Partnership following an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a successor to such Departing General Partner pursuant to Section 11.1 or 11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon an event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by law, within 180 days thereafter, the holders of a Unit Majority may elect to continue the business of the Partnership on the same terms and conditions set forth in this Agreement by appointing as a successor General Partner a Person approved by the holders
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of a Unit Majority. Unless such an election is made within the applicable time period as set forth above, the Partnership shall conduct only activities necessary to wind up its affairs. If such an election is so made, then:
     (i) the Partnership shall continue without dissolution unless earlier dissolved in accordance with this Article XII;
     (ii) if the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be treated in the manner provided in Section 11.3; and
     (iii) the successor General Partner shall be admitted to the Partnership as General Partner, effective as of the Event of Withdrawal, by agreeing in writing to be bound by this Agreement; provided , that the right of the holders of a Unit Majority to approve a successor General Partner and to continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise of the right would not result in the loss of limited liability of any Limited Partner and (y) neither the Partnership nor any Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue (to the extent not already so treated or taxed).
Section 12.3 Liquidator.
     Upon dissolution of the Partnership, unless the business of the Partnership is continued pursuant to Section 12.2, the General Partner shall select one or more Persons to act as Liquidator. The Liquidator (if other than the General Partner) shall be entitled to receive such compensation for its services as may be approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. The Liquidator (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice and may be removed at any time, with or without cause, by notice of removal approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Article XII, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the General Partner under the terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in Section 7.3) necessary or appropriate to carry out the duties and functions of the Liquidator hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided for herein.
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Section 12.4 Liquidation.
     The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its liabilities, and otherwise wind up its affairs in such manner and over such period as determined by the Liquidator, subject to Section 17-804 of the Delaware Act and the following:
     (a) The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may defer liquidation or distribution of the Partnership’s assets for a reasonable time if it determines that an immediate sale or distribution of all or some of the Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidator may distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the Partners.
     (b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise than in respect of their distribution rights under Article VI. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.
     (c) All property and all cash in excess of that required to discharge liabilities as provided in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year (or, if later, within 90 days after said date of such occurrence).
Section 12.5 Cancellation of Certificate of Limited Partnership.
     Upon the completion of the distribution of Partnership cash and property as provided in Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
Section 12.6 Return of Contributions.
     The General Partner shall not be personally liable for, and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets.
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Section 12.7 Waiver of Partition.
     To the maximum extent permitted by law, each Partner hereby waives any right to partition of the Partnership property.
Section 12.8 Capital Account Restoration.
     No Limited Partner shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any negative balance in its Capital Account upon liquidation of its interest in the Partnership by the end of the taxable year of the Partnership during which such liquidation occurs, or, if later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 13.1 Amendments to be Adopted Solely by the General Partner.
     Each Partner agrees that the General Partner, without the approval of any Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect:
     (a) a change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent of the Partnership or the registered office of the Partnership;
     (b) admission, substitution, withdrawal or removal of Partners in accordance with this Agreement;
     (c) a change that the General Partner determines to be necessary or appropriate to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that the Group Members will not be treated as associations taxable as corporations or otherwise taxed as entities for federal income tax purposes;
     (d) a change that the General Partner determines, (i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute (including the Delaware Act) or (B) facilitate the trading of the Units (including the division of any class or classes of Outstanding Units into different classes to facilitate uniformity of tax consequences within such classes of Units) or comply with any rule, regulation,
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guideline or requirement of any National Securities Exchange on which the Units are or will be listed or admitted to trading, (iii) to be necessary or appropriate in connection with action taken by the General Partner pursuant to Section 5.10 or (iv) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement;
     (e) a change in the fiscal year or taxable year of the Partnership and any other changes that the General Partner determines to be necessary or appropriate as a result of a change in the fiscal year or taxable year of the Partnership including, if the General Partner shall so determine, a change in the definition of “Quarter” and the dates on which distributions are to be made by the Partnership;
     (f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or the General Partner or its directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;
     (g) subject to the terms of Section 5.7, an amendment that the General Partner determines to be necessary or appropriate in connection with the authorization of issuance of any class or series of Partnership Securities pursuant to Section 5.6;
     (h) any amendment expressly permitted in this Agreement to be made by the General Partner acting alone;
     (i) an amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;
     (j) an amendment that the General Partner determines to be necessary or appropriate to reflect and account for the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Partnership of activities permitted by the terms of Section 2.4;
     (k) a merger or conveyance pursuant to Section 14.3(d); or
     (l) any other amendments substantially similar to the foregoing.
Section 13.2 Amendment Procedures.
     Except as provided in Sections 13.1 and 13.3, all amendments to this Agreement shall be made in accordance with the following requirements. Amendments to this Agreement may be proposed only by the General Partner; provided, however, that the General Partner shall have no duty or obligation to propose any amendment to this Agreement and may decline to do so free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner and, in
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declining to propose an amendment, to the fullest extent permitted by law shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. A proposed amendment shall be effective upon its approval by the General Partner and the holders of a Unit Majority, unless a greater or different percentage is required under this Agreement or by Delaware law. Each proposed amendment that requires the approval of the holders of a specified percentage of Outstanding Units shall be set forth in a writing that contains the text of the proposed amendment. If such an amendment is proposed, the General Partner shall seek the written approval of the requisite percentage of Outstanding Units or call a meeting of the Unitholders to consider and vote on such proposed amendment. The General Partner shall notify all Record Holders upon final adoption of any such proposed amendments.
Section 13.3 Amendment Requirements.
     (a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this Agreement that establishes a percentage of Outstanding Units (including Units deemed owned by the General Partner) required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing such voting percentage unless such amendment is approved by the written consent or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced.
     (b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this Agreement may (i) enlarge the obligations of any Limited Partner without its consent, unless such shall be deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c) or (ii) enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its Affiliates without its consent, which consent may be given or withheld at its option.
     (c) Except as provided in Section 14.3, and without limitation of the General Partner’s authority to adopt amendments to this Agreement without the approval of any Partners as contemplated in Section 13.1, any amendment that would have a material adverse effect on the rights or preferences of any class of Partnership Interests in relation to other classes of Partnership Interests must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class affected.
     (d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise provided by Section 14.3(b), no amendments shall become effective without the approval of the holders of at least 90% of the Outstanding Units voting as a single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment will not affect the limited liability of any Limited Partner under applicable law.
     (e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the approval of the holders of at least 90% of the Outstanding Units.
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Section 13.4 Special Meetings.
     All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the manner provided in this Article XIII. Special meetings of the Limited Partners may be called by the General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the class or classes for which a meeting is proposed. Limited Partners shall call a special meeting by delivering to the General Partner one or more requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the general or specific purposes for which the special meeting is to be called. Within 60 days after receipt of such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with any statutes, rules, regulations, listing agreements or similar requirements governing the holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner shall send a notice of the meeting to the Limited Partners either directly or indirectly through the Transfer Agent. A meeting shall be held at a time and place determined by the General Partner on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the Delaware Act or the law of any other state in which the Partnership is qualified to do business.
Section 13.5 Notice of a Meeting.
     Notice of a meeting called pursuant to Section 13.4 shall be given to the Record Holders of the class or classes of Units for which a meeting is proposed in writing by mail or other means of written communication in accordance with Section 16.1. The notice shall be deemed to have been given at the time when deposited in the mail or sent by other means of written communication.
Section 13.6 Record Date.
     For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners or to give approvals without a meeting as provided in Section 13.11 the General Partner may set a Record Date, which shall not be less than 10 nor more than 60 days before (a) the date of the meeting (unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities Exchange shall govern) or (b) in the event that approvals are sought without a meeting, the date by which Limited Partners are requested in writing by the General Partner to give such approvals. If the General Partner does not set a Record Date, then (a) the Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners shall be the close of business on the day next preceding the day on which notice is given, and (b) the Record Date for determining the Limited Partners entitled to give approvals without a meeting shall be the date the first written approval is deposited with the Partnership in care of the General Partner in accordance with Section 13.11.
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Section 13.7 Adjournment.
     When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment shall be for more than 45 days. At the adjourned meeting, the Partnership may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if a new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given in accordance with this Article XIII.
Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes.
     The transactions of any meeting of Limited Partners, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy. Attendance of a Limited Partner at a meeting shall constitute a waiver of notice of the meeting, except when the Limited Partner attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened; and except that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in the notice of the meeting, but not so included, if the disapproval is expressly made at the meeting.
Section 13.9 Quorum and Voting.
     The holders of a majority of the Outstanding Units of the class or classes for which a meeting has been called (including Outstanding Units deemed owned by the General Partner) represented in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class or classes unless any such action by the Limited Partners requires approval by holders of a greater percentage of such Units, in which case the quorum shall be such greater percentage. At any meeting of the Limited Partners duly called and held in accordance with this Agreement at which a quorum is present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a majority of the Outstanding Units entitled to vote and be present in person or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners, unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which case the act of the Limited Partners holding Outstanding Units that in the aggregate represent at least such greater or different percentage shall be required. The Limited Partners present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners to leave less than a quorum, if any action taken (other than adjournment) is approved by the required percentage of Outstanding Units specified in this Agreement (including Outstanding Units deemed owned by the General Partner). In the absence of a quorum any meeting of Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least a majority of the Outstanding Units entitled to vote at such meeting (including Outstanding Units deemed owned by the General Partner) represented either in person or by proxy, but no other business may be transacted, except as provided in Section 13.7.
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Section 13.10 Conduct of a Meeting.
     The General Partner shall have full power and authority concerning the manner of conducting any meeting of the Limited Partners or solicitation of approvals in writing, including the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with or during the meeting or voting. The General Partner shall designate a Person to serve as chairman of any meeting and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Partnership maintained by the General Partner. The General Partner may make such other regulations consistent with applicable law and this Agreement as it may deem advisable concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in writing, including regulations in regard to the appointment of proxies, the appointment and duties of inspectors of votes and approvals, the submission and examination of proxies and other evidence of the right to vote, and the revocation of approvals in writing.
Section 13.11 Action Without a Meeting.
     If authorized by the General Partner, any action that may be taken at a meeting of the Limited Partners may be taken without a meeting if an approval in writing setting forth the action so taken is signed by Limited Partners owning not less than the minimum percentage of the Outstanding Units (including Units deemed owned by the General Partner) that would be necessary to authorize or take such action at a meeting at which all the Limited Partners were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the Limited Partners who have not approved in writing. The General Partner may specify that any written ballot submitted to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time period, which shall be not less than 20 days, specified by the General Partner. If a ballot returned to the Partnership does not vote all of the Units held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot for the Units that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other than by or on behalf of the General Partner, the written approvals shall have no force and effect unless and until (a) they are deposited with the Partnership in care of the General Partner, (b) approvals sufficient to take the action proposed are dated as of a date not more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an Opinion of Counsel is delivered to the General Partner to the effect that the exercise of such right and the action proposed to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability, and (ii) is otherwise permissible under the state statutes then governing the rights, duties and liabilities of the Partnership and the Partners.
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Section 13.12 Right to Vote and Related Matters.
     (a) Only those Record Holders of the Units on the Record Date set pursuant to Section 13.6 (and also subject to the limitations contained in the definition of “Outstanding”) shall be entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to act. All references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Units.
     (b) With respect to Units that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing), in whose name such Units are registered, such other Person shall, in exercising the voting rights in respect of such Units on any matter, and unless the arrangement between such Persons provides otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The provisions of this Section 13.12(b) (as well as all other provisions of this Agreement) are subject to the provisions of Section 4.3.
ARTICLE XIV
MERGER
Section 14.1 Authority.
     The Partnership may merge or consolidate with or into one or more corporations, limited liability companies, statutory trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general or limited (including a limited liability partnership)), formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a written agreement of merger or consolidation (“Merger Agreement”) in accordance with this Article XIV.
Section 14.2 Procedure for Merger or Consolidation.
     Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior consent of the General Partner; provided, however , that, to the fullest extent permitted by law, the General Partner shall have no duty or obligation to consent to any merger or consolidation of the Partnership and may decline to do so free of any fiduciary duty or obligation whatsoever to the Partnership, any Limited Partner and, in declining to consent to a merger or consolidation, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. If the General Partner shall determine to consent to the merger or consolidation, the General Partner shall approve the Merger Agreement, which shall set forth:
     (a) the names and jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate;
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     (b) the name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation (the “Surviving Business Entity”);
     (c) the terms and conditions of the proposed merger or consolidation;
     (d) the manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property or interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or general or limited partner interests, rights, securities or obligations of any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other entity (other than the Surviving Business Entity) which the holders of such interests, securities or rights are to receive in exchange for, or upon conversion of their interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;
     (e) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership or other similar charter or governing document) of the Surviving Business Entity to be effected by such merger or consolidation;
     (f) the effective time of the merger, which may be the date of the filing of the certificate of merger pursuant to Section 14.4 or a later date specified in or determinable in accordance with the Merger Agreement (provided, that if the effective time of the merger is to be later than the date of the filing of such certificate of merger, the effective time shall be fixed at a date or time certain at or prior to the time of the filing of such certificate of merger and stated therein); and
     (g) such other provisions with respect to the proposed merger or consolidation that the General Partner determines to be necessary or appropriate.
Section 14.3 Approval by Limited Partners of Merger or Consolidation.
     (a) Except as provided in Sections 14.3(d) and 14.3(e), the General Partner, upon its approval of the Merger Agreement, shall direct that the Merger Agreement be submitted to a vote of Limited Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of Article XIII. A copy or a summary of the Merger Agreement shall be included in or enclosed with the notice of a special meeting or the written consent.
     (b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority.
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     (c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or consent of the Limited Partners, and at any time prior to the filing of the certificate of merger pursuant to Section 14.4, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement.
     (d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, without Limited Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity which shall be newly formed and shall have no assets, liabilities or operations at the time of such conversion, merger or conveyance other than those it receives from the Partnership or other Group Member if (i) the General Partner has received an Opinion of Counsel that the conversion, merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited Partner or 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 previously treated as such), (ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in the legal form of the Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited Partners and the General Partner with the same rights and obligations as are herein contained.
     (e) Additionally, notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, without Limited Partner approval, to merge or consolidate the Partnership with or into another entity if (A) the General Partner has received an Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the loss of the limited liability of any Limited Partner or 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 previously treated as such), (B) the merger or consolidation would not result in an amendment to the Partnership Agreement, other than any amendments that could be adopted pursuant to Section 13.1, (C) the Partnership is the Surviving Business Entity in such merger or consolidation, (D) each Unit outstanding immediately prior to the effective date of the merger or consolidation is to be an identical Unit of the Partnership after the effective date of the merger or consolidation, and (E) the number of Partnership Securities to be issued by the Partnership in such merger or consolidation do not exceed 20% of the Partnership Securities Outstanding immediately prior to the effective date of such merger or consolidation.
Section 14.4 Certificate of Merger.
     Upon the required approval by the General Partner and the Unitholders of a Merger Agreement, a certificate of merger shall be executed and filed with the Secretary of State of the State of Delaware in conformity with the requirements of the Delaware Act.
Section 14.5 Amendment of Partnership Agreement.
     Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or consolidation approved in accordance with this Article XIV may (a) effect any amendment to this Agreement or (b) effect the adoption of a new partnership agreement for the Partnership if it
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is the Surviving Business Entity. Any such amendment or adoption made pursuant to this Section 14.5 shall be effective at the effective time or date of the merger or consolidation.
Section 14.6 Effect of Merger.
     (a) At the effective time of the certificate of merger:
     (i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;
     (ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;
     (iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and
     (iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
     (b) A merger or consolidation effected pursuant to this Article shall not be deemed to result in a transfer or assignment of assets or liabilities from one entity to another.
ARTICLE XV
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
Section 15.1 Right to Acquire Limited Partner Interests.
     (a) Notwithstanding any other provision of this Agreement, if at any time the General Partner and its Affiliates hold more than 80% of the total Limited Partner Interests of any class then Outstanding, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership or any Affiliate of the General Partner, exercisable at its option, to purchase all, but not less than all, of such Limited Partner Interests of such class then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater of (x) the Current Market Price as of the date three days prior to the date that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest of such class purchased during the 90-day period preceding the date that the notice described in Section 15.1(b) is mailed. As used in this Agreement, (i) “Current Market Price” as of any date of any class of Limited Partner Interests means the average of the daily Closing Prices (as hereinafter defined) per Limited Partner Interest of such class for the 20 consecutive Trading Days (as hereinafter defined) immediately
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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prior to such date; (ii) “Closing Price” for any day means the last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices on such day, regular way, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal National Securities Exchange (other than the Nasdaq National Market) on which such Limited Partner Interests are listed or admitted to trading or, if such Limited Partner Interests are not listed or admitted to trading on any National Securities Exchange (other than the Nasdaq National Market), the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day in the over-the-counter market, as reported by the Nasdaq National Market or such other system then in use, or, if on any such day such Limited Partner Interests of such class are not quoted by any such organization, the average of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner Interests of such class selected by the General Partner, or if on any such day no market maker is making a market in such Limited Partner Interests of such class, the fair value of such Limited Partner Interests on such day as determined by the General Partner; and (iii) “Trading Day” means a day on which the principal National Securities Exchange on which such Limited Partner Interests of any class are listed is open for the transaction of business or, if Limited Partner Interests of a class are not listed on any National Securities Exchange, a day on which banking institutions in New York City generally are open.
     (b) If the General Partner, any Affiliate of the General Partner or the Partnership elects to exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to the Transfer Agent notice of such election to purchase (the “Notice of Election to Purchase”) and shall cause the Transfer Agent to mail a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class (as of a Record Date selected by the General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice of Election to Purchase shall also be published for a period of at least three consecutive days in at least two daily newspapers of general circulation printed in the English language and published in the Borough of Manhattan, New York. The Notice of Election to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 15.1(a)) at which Limited Partner Interests will be purchased and state that the General Partner, its Affiliate or the Partnership, as the case may be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner Interests in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be required by any National Securities Exchange on which such Limited Partner Interests are listed. Any such Notice of Election to Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent shall be conclusively presumed to have been given regardless of whether the owner receives such notice. On or prior to the Purchase Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase price of all of such Limited Partner Interests to be purchased in accordance with this Section 15.1. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding sentence has been made for the benefit of the holders of Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase Date, notwithstanding that any Certificate shall not have been surrendered for
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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purchase, all rights of the holders of such Limited Partner Interests (including any rights pursuant to Articles IV, V, VI, and XII) shall thereupon cease, except the right to receive the purchase price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor, without interest, upon surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests, and such Limited Partner Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the Partnership, as the case may be, on the record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner, or the Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the Purchase Date and shall have all rights as the owner of such Limited Partner Interests (including all rights as owner of such Limited Partner Interests pursuant to Articles IV, V, VI and XII).
     (c) At any time from and after the Purchase Date, a holder of an Outstanding Limited Partner Interest subject to purchase as provided in this Section 15.1 may surrender his Certificate evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the amount described in Section 15.1(a), therefor, without interest thereon.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices.
     Any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the Partner at the address described below. Any notice, payment or report to be given or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such notice, payment or report to the Record Holder of such Partnership Securities at his address as shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an interest in such Partnership Securities by reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 16.1 executed by the General Partner, the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it, such notice, payment or report and any subsequent notices, payments and reports shall be deemed to have been duly given or made without further mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change in his address) if they are available for the Partner at the principal office of the Partnership for a period of one year from the date of the giving or making of such notice, payment or report to the other Partners. Any notice to the Partnership shall be deemed given if received by the General Partner at the principal office of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be protected in relying on any notice or other document from a Partner or other Person if believed by it to be genuine.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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Section 16.2 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 16.3 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.
Section 16.4 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 16.5 Creditors.
     None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 16.6 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 16.7 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 or, in the case of a Person acquiring a Limited Partner Interest, pursuant to Section 10.1(a) without execution hereof.
Section 16.8 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.
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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Section 16.9 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 16.10 Consent of Partners.
     Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Partners, such action may be so taken upon the concurrence of less than all of the Partners and each Partner shall be bound by the results of such action.
Section 16.11 Facsimile Signatures.
     The use of facsimile signatures affixed in the name and on behalf of the transfer agent and registrar of the Partnership on certificates representing Common Units is expressly permitted by this Agreement.
[ REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. ]
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
             
    GENERAL PARTNER:    
 
           
    CALUMET GP, LLC    
 
           
 
  By:   /s/ R. Patrick Murray, II     
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
 
           
    ORGANIZATIONAL LIMITED PARTNERS:    
 
           
 
  /s/ F. WILLIAM GRUBE         
         
    F. WILLIAM GRUBE    
 
           
 
  /s/ FRED M. FEHSENFELD, JR.         
         
    FRED M. FEHSENFELD, JR.    
 
           
 
           
    THE HERITAGE GROUP    
 
           
 
  By:   /s/ Fred M. Fehsenfeld, Jr.     
 
           
 
      Fred M. Fehsenfeld, Jr.    
 
      Chief Executive Officer    
 
           
    CALUMET, INCORPORATED    
 
           
 
  By:   /s/ R. Patrick Murray, II     
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
 
           
    MILDRED L. FEHSENFELD IRREVOCABLE INTERVIVOS TRUST FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE    
 
           
 
  By:   /s/ James C. Fehsenfeld     
 
           
 
      James C. Fehsenfeld    
 
      Trustee    
Signature Page
First Amended and Restated Agreement of Limited Partnership of
Calumet Specialty Products Partners, L.P.

 


 

             
    MAGGIE FEHSENFLED TRUST NUMBER 106 FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE    
 
           
 
  By:   /s/ James C. Fehsenfeld     
 
           
 
      James C. Fehsenfeld    
 
      Trustee    
 
           
    LIMITED PARTNERS:    
 
           
    All Limited Partners now and hereafter admitted as Limited Partners of the Partnership, pursuant to powers of attorney now and hereafter executed in favor of, and granted and delivered to the General Partner or without execution hereof pursuant to Section 10.1(a) hereof.    
 
           
    CALUMET GP, LLC    
 
           
 
  By:   /s/ R. Patrick Murray, II     
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
Signature Page
First Amended and Restated Agreement of Limited Partnership of
Calumet Specialty Products Partners, L.P.

 


 

EXHIBIT A
to the First Amended and Restated
Agreement of Limited Partnership of
Calumet Specialty Products Partners, L.P.
Certificate Evidencing Common Units
Representing Limited Partner Interests in
Calumet Specialty Products Partners, L.P.
     
No.                     
                       Common Units
     In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P., as amended, supplemented or restated from time to time (the “ Partnership Agreement ”), Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “ Partnership ”), hereby certifies that                                           (the “ Holder ”) is the registered owner of Common Units representing limited partner interests in the Partnership (the “ Common Units ”) transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. The rights, preferences and limitations of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the Partnership located at 2780 Waterfront Parkway E. Drive, Suite 200, Indianapolis, Indiana 46214. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement.
     The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and (iv) made the waivers and given the consents and approvals contained in the Partnership Agreement.
     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, OR (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

1


 

ALREADY SO TREATED OR TAXED). CALUMET 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.
     This Certificate shall not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar.
                 
Dated:                                                 Calumet Specialty Products Partners, L.P.    
 
               
Countersigned and Registered by:
      By:   Calumet GP, LLC,
its General Partner
   
 
               
 
      By:        
 
               
 
as Transfer Agent and Registrar
       Name:        
 
               
 
               
By:
      By:        
 
 
               
          Authorized Signature
               Secretary    
[ Reverse of Certificate ]
ABBREVIATIONS
     The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations:
         
TEN COM -
  as tenants in common   UNIF GIFT MIN ACT
TEN ENT -
  as tenants by the entireties                        Custodian                     
 
           (Cust)                 (Minor)
JT TEN -
  as joint tenants with right of   under Uniform Gifts to
 
  survivorship and not as   Minors Act                                          
 
  tenants in common                       (State)
Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF COMMON UNITS
IN
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
     FOR VALUE RECEIVED,                      hereby assigns, conveys, sells and transfers unto
         
 
(Please print or typewrite name
 
 
(Please insert Social Security or other
   
and address of Assignee)
  identifying number of Assignee)    

2


 

                     Common Units representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint                      as its attorney-in-fact with full power of substitution to transfer the same on the books of Calumet Specialty Products Partners, L.P.
             
Date:                                             NOTE:   The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change.
 
           
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15
     
 
(Signature)




 
(Signature)
   
 
           
             
     No transfer of the Common Units evidenced hereby will be registered on the books of the Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered for registration or transfer.

3

 

EXHIBIT 3.2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CALUMET GP, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
DATED AS OF
January 31, 2006

 


 

TABLE OF CONTENTS
                 
            Page
       
 
       
       
ARTICLE 1
       
       
DEFINITIONS AND CONSTRUCTION
       
       
 
       
  1.1    
Definitions
    1  
  1.2    
Rules of Construction
    7  
       
 
       
       
ARTICLE 2
       
       
ORGANIZATION
       
       
 
       
  2.1    
Formation of the Company
    8  
  2.2    
Company Name
    8  
  2.3    
Term
    8  
  2.4    
Purposes and Powers
    8  
  2.5    
Place of Business, Agent and Office of the Company
    8  
  2.6    
Title to Company Assets
    9  
       
 
       
       
ARTICLE 3
       
       
CAPITAL AND CAPITAL ACCOUNTS
       
       
 
       
  3.1    
Membership Interests and Units
    9  
  3.2    
Initial Capital Contributions
    9  
  3.3    
Members of the Company at the Effective Date
    9  
  3.4    
Transfer of Units and Admission of Substitute Members
    10  
  3.5    
Issuance of Additional Units
    10  
  3.6    
Subsequent Capital Contributions
    10  
  3.7    
Loans to the Company
    10  
  3.8    
Capital Accounts
    10  
  3.9    
General Provisions Regarding Capital Contributions
    11  
  3.10    
Limitation on Liability
    11  
       
 
       
       
ARTICLE 4
       
       
DISTRIBUTIONS
       
       
 
       
  4.1    
Distributions of Available Cash
    12  
  4.2    
Persons Entitled to Distributions
    12  
  4.3    
Limitations on Distributions
    12  
  4.4    
Distributions on Dissolution and Winding Up
    12  
  4.5    
Withholding of Taxes
    12  
       
 
       
       
ARTICLE 5
       
       
ALLOCATIONS
       
       
 
       
  5.1    
Allocations of Profit and Loss
    12  
  5.2    
Allocations of Liquidating Gain and Loss
    12  
  5.3    
Transfers
    12  
  5.4    
Additional Allocations
    13  
  5.5    
Income Tax Allocations
    14  
  5.6    
Negative Capital Accounts
    15  
       
 
       
       
ARTICLE 6
       
       
MEETINGS OF MEMBERS
       
       
 
       
  6.1    
Time and Place
    15  

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  6.2    
Annual Meeting
    15  
  6.3    
Special Meeting
    15  
  6.4    
Record Date for Determination of Membership
    15  
  6.5    
Notice to Members
    16  
  6.6    
Waiver
    16  
  6.7    
Quorum
    16  
  6.8    
Matters Requiring Member Approval
    16  
  6.9    
Voting and Proxies
    17  
  6.10    
Action by Consent of the Members
    17  
  6.11    
Telephonic Meetings
    18  
       
 
       
       
ARTICLE 7
       
       
MANAGEMENT
       
       
 
       
  7.1    
Management of the Company’s Affairs
    18  
  7.2    
Number; Qualification; Election; Tenure
    18  
  7.3    
Notice
    20  
  7.4    
Regular Meetings
    20  
  7.5    
Special Meetings
    20  
  7.6    
Action by Consent of the Board
    20  
  7.7    
Telephonic Meetings
    20  
  7.8    
Quorum; Voting Requirement
    20  
  7.9    
Committees
    20  
  7.10    
Vacancies; Increases in the Number of Directors
    21  
  7.11    
Removal
    22  
  7.12    
Compensation of Directors
    22  
       
 
       
       
ARTICLE 8
       
       
OFFICERS
       
       
 
       
  8.1    
Elected Officers
    22  
  8.2    
Election and Term of Office
    22  
  8.3    
Chairman of the Board
    23  
  8.4    
President and Chief Executive Officer
    23  
  8.5    
Vice Presidents
    23  
  8.6    
Chief Financial Officer and Assistant Treasurers
    23  
  8.7    
Secretary and Assistant Secretaries
    23  
  8.8    
Removal
    24  
  8.9    
Vacancies
    24  
  8.10    
Compensation
    24  
  8.11    
Powers of Attorney
    24  
  8.12    
Delegation of Authority
    24  
       
 
       
       
ARTICLE 9
       
       
STANDARDS OF CONDUCT, LIABILITY AND INDEMNIFICATION
       
       
 
       
  9.1    
Standards of Conduct and Fiduciary Duties
    24  
  9.2    
Liability and Exculpation
    25  
  9.3    
Indemnification
    25  
       
 
       

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ARTICLE 10
       
       
TAXES
       
       
 
       
  10.1    
Tax Returns
    26  
  10.2    
Tax Elections
    26  
  10.3    
Tax Matters Member
    27  
       
 
       
       
ARTICLE 11
       
       
TRANSFERS OF MEMBERSHIP INTERESTS
       
       
 
       
  11.1    
General Restrictions
    28  
  11.2    
Permitted Transferees
    28  
  11.3    
Substitute Members
    28  
  11.4    
Effect of Admission as a Substitute Member
    29  
  11.5    
Consent
    29  
  11.6    
Additional Members
    29  
  11.7    
Right of Sale
    29  
       
 
       
       
ARTICLE 12
       
       
NO PREEMPTIVE RIGHTS
       
       
 
       
  12.1    
No Preemptive Rights
    29  
       
 
       
       
ARTICLE 13
       
       
BOOKS OF ACCOUNT, RECORDS AND REPORTS
       
       
 
       
  13.1    
Preparation and Maintenance of Books and Records
    29  
  13.2    
Company Documentation Requirements
    30  
  13.3    
Fiscal Year
    30  
  13.4    
Company Funds
    30  
  13.5    
Statements
    30  
       
 
       
       
ARTICLE 14
       
       
DISSOLUTION AND TERMINATION OF THE COMPANY
       
       
 
       
  14.1    
Dissolution
    31  
  14.2    
Winding Up and Liquidation
    31  
  14.3    
No Recourse
    31  
  14.4    
No Deficit Contribution Obligation
    32  
       
 
       
       
ARTICLE 15
       
       
AMENDMENTS; POWER OF ATTORNEY
       
       
 
       
  15.1    
Amendments Generally
    32  
  15.2    
Power of Attorney
    32  
       
 
       
       
ARTICLE 16
       
       
MISCELLANEOUS
       
       
 
       
  16.1    
No Registration of Units
    32  
  16.2    
Exhibits
    33  
  16.3    
Severability
    33  
  16.4    
Successors and Assigns
    33  
  16.5    
Governing Law
    33  
  16.6    
Counterparts
    33  
  16.7    
No Third Party Beneficiaries
    33  
  16.8    
Notices
    33  
  16.9    
Entire Agreement; Interpretation
    34  

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Schedules and Exhibits :
SCHEDULE A — Schedule of Members
EXHIBIT A — Form of Unit Certificate

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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CALUMET GP, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
     This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “ Agreement ”) of CALUMET GP, LLC (the “ Company ”) is made and entered into as of January 31, 2006 (the “ Effective Date ”), by and among each Person listed as a member of the Company on the Schedule of Members attached hereto as Schedule A (together with such other holders of Units who may hereafter become members as provided herein, referred to collectively as the “Members,” or individually as a “Member”).
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
     1.1 Definitions . The following definitions shall be applicable to the terms set forth below as used in this Agreement:
     “ Act ” means the Delaware Limited Liability Company Act (Delaware General Corporations Code Sections 18-101, et seq.), as it may be amended from time to time, and any corresponding provisions of succeeding law. All references in this Agreement to provisions of the Act shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.
     “ Adjusted Capital Account ” means the Capital Account maintained for each Member as of the end of each fiscal year of the Company, adjusted as follows:
     (a) increased by any amounts that such Member is obligated to restore under the standards set by Treasury Regulations Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5)); and
     (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Member in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulations Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Member in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Member’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Sections 5.4(a) or 5.4(b).

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     The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith
     “ Affiliate ” means, with respect to any person or entity, any other person or entity that directly or indirectly controls, or is controlled by, or is under common control with, such first Person. For the purposes of this definition, “ Control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
     “ Agreed Allocations ” means any allocation, other than a Required Allocation, of an item of income, gain, deduction or loss pursuant to Article V.
     “ Agreement ” has the meaning set forth in the preamble hereof, as the same may be amended from time to time in accordance with the terms hereof.
     “ Audit Committee ” has the meaning set forth in Section 7.9(b).
     “ Available Cash ” means, with respect to a fiscal quarter, all cash and cash equivalents of the Company at the end of such quarter less the amount of cash reserves that is necessary or appropriate in the reasonable discretion of the Board to (a) provide for the proper conduct of the business of the Company (including reserves for future capital expenditures and for anticipated future credit needs of the Company) subsequent to such quarter or (b) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which the Company is a party or by which it is bound or its assets or property is subject; provided , however , that disbursements made by the Partnership to the Company or cash reserves established, increased or reduced after the expiration of such quarter but on or before the date of determination of Available Cash with respect to such quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, during such quarter if the Board so determines in its reasonable discretion .
     “ Board ” has the meaning set forth in Section 7.1(a).
     “ Business Day ” means any day, other than a Saturday, Sunday, or federal or Indiana legal holiday.
     “ Calumet LP ” means Calumet Lubricants Co., Limited Partnership, an Indiana limited partnership.
     “ Capital Account ” means the capital account maintained by the Company with respect to each Member in accordance with the capital accounting rules described in Article 3.
     “ Capital Account Gross Income ” and “ Capital Account Deduction ” means, respectively, items of gross income and deduction of the Company determined in accordance with Section 703(a) of the Code (including all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code), with the following adjustments:

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          (a) Any income of the Company that is exempt from federal income tax shall be taken into account as Capital Account Gross Income;
          (b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code shall be taken into account as Capital Account Deductions;
          (c) In the event the book value of any Company asset as determined for Capital Account purposes is adjusted pursuant to Section 3.8(b) or Section 3.8(c), the amount of such adjustment shall be taken into account as an item of Capital Account Gross Income or Capital Account Deduction; and
          (d) With respect to property reflected in the Capital Accounts at a book value different from its adjusted basis, items of depreciation, amortization and gain or loss shall be computed in the same manner as such items are computed for federal income tax purposes, except that the computation shall be made with reference to such property’s book value as determined for purposes of maintaining the Capital Accounts instead of its adjusted tax basis, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g).
     “ Capital Contribution ” means the amount of money and/or the fair market value of any property (net of any liabilities encumbering such property that the Company is considered to assume or take subject to under Code Section 752) contributed to the capital of the Company by any Member.
     “ Certificate of Formation ” means the certificate of formation for the Company as originally filed in the Office of the Secretary of State of the State of Delaware, as such certificate may be amended from time to time.
     “ Code ” means the Internal Revenue Code of 1986, as amended. All references in this Agreement to provisions of the Code shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.
     “ Common Units ” has the meaning set forth in the Partnership Agreement.
     “ Company ” has the meaning set forth in the preamble hereof.
     “ Company Minimum Gain ” means the amount determined in accordance with the principles of Treasury Regulations Section 1.704-2(d).
     “ Compensation Committee ” has the meaning set forth in Section 7.9(c).
     “ Conflicts Committee ” has the meaning set forth in Section 7.9(d).
     “ Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, of even date herewith, among the Company, the Partnership, the Operating Company, Calumet LP, the OLP GP and certain other parties named therein.
     “ Director ” or “ Directors ” has the meaning set forth in Section 7.2(a).

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     “ Dissolution Event ” has the meaning set forth in Section 14.1.
     “ Economic Risk of Loss ” has the meaning set forth in Treasury Regulations Section 1.752-2(a).
     “ Effective Date ” has the meaning set forth in the preamble to this Agreement.
     “ Excess Nonrecourse Liabilities ” has the meaning set forth in Section 5.4(g).
     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor statute.
     “ General Partner Interest ” has the meaning set forth in the Partnership Agreement.
     “ Group Member ” has the meaning set forth in the Partnership Agreement.
     “ Grube Family Group ” has the meaning set forth in Section 7.2(c).
     “ Grube Family Group Transferee ” has the meaning set forth in Section 7.2(c).
     “ Incentive Plans ” means any plan or arrangement pursuant to which the Company or the Partnership may compensate its directors, officers, employees, consultants or service providers.
     “ Indemnitee ” means (a) any Person who is or was an Affiliate of the Company, (b) any Person who is or was an officer, Director, fiduciary or trustee of the Company or any Affiliate of the Company, (c) any Person who is or was serving at the request of the Board as an officer, director, member, partner, fiduciary or trustee of another Person; provided , that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services; and (d) any Person the Board designates as an “Indemnitee” for purposes of this Agreement.
     “ Independent Director ” means a Director who is not (a) a security holder, officer or employee of the Company, (b) an officer, director or employee of any Affiliate of the Company or (c) a holder of any ownership interest in the Partnership Group other than Common Units and who also meets the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder and by the Nasdaq Stock Market or any National Securities Exchange on which the Common Units are listed.
     “ Limited Partnership Interest ” means a limited partnership interest in the Partnership which refers to all of a limited partner’s rights and interests in the Partnership in such Person’s capacity as a limited partner thereof, all as provided in the Partnership Agreement and the Delaware Revised Uniform Limited Partnership Act.
     “ Liquidating Gains ” and “ Liquidating Losses ” means taxable income or loss of the Company as determined by taking into account only items of Capital Account Gross Income and Capital Account Deduction that arise from the sale or deemed sale of all or substantially all of the assets of the Company.

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     “ Liquidator ” has the meaning set forth in Section 14.2.
     “ Member Nonrecourse Debt ” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(4).
     “ Member Nonrecourse Debt Minimum Gain ” has the meaning set forth in Treasury Regulations Section 1.704-2(i)(2).
     “ Member Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulations Section 1.704-2(i), are attributable to a Member Nonrecourse Debt.
     “ Member ” or “ Members ” shall have the meaning set forth in the preamble hereof.
     “ Membership Interest ” means the property interest, as opposed to the personal interest, of a Member in the Company and as a holder of Units, including rights to distributions (liquidating or otherwise), allocations, information, all other rights, benefits and privileges enjoyed by that Member (under the Act, this Agreement or otherwise) by virtue of the Units held by such Member; and all obligations, duties and liabilities imposed on that Member (under the Act, this Agreement, or otherwise) by virtue of the Units held by such Member.
     “ Nonrecourse Deductions ” means any and all items of loss, deduction or expenditures (described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.
     “ Non-Selling Members ” is defined in Section 11.7(b).
     “ Nonrecourse Liability ” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
     “ Officers ” has the meaning set forth in Section 8.1.
     “ OLP GP ” means Calumet LP GP, LLC, a Delaware limited liability company.
     “ Operating Company ” means Calumet Operating, LLC, a Delaware limited liability company, and any successor thereto.
     “ Partnership ” means Calumet Specialty Products Partners, LP, a Delaware limited partnership, of which the Company is the general partner.
     “ Partnership Agreement ” means the Amended and Restated Agreement of Limited Partnership of the Partnership, as the same may be amended, supplemented or restated from time to time.
     “ Percentage Interest ” means, as of any date of determination as to any Member the quotient obtained by dividing the number of Units held by such Member by the total number of all outstanding Units, expressed as a percentage.

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     “ Permitted Transfer ” means:
          (a) a Transfer of all or any of its Units by any Member who is a natural person to (i) such Member’s spouse, children (including legally adopted children and stepchildren), spouses of children or grandchildren or spouses of grandchildren; (ii) a trust for the benefit of the Member and/or any of the Persons described in clause (i); or (iii) a limited partnership or limited liability company whose sole partners or members, as case may be, are the Member and/or any of the Persons described in clause (i) or clause (ii); provided , that in any of clauses (i), (ii) or (iii), the Member transferring such Units retains exclusive power to exercise all rights under this Agreement;
          (b) a Transfer of all or any of its Units by any Member to the Company; or
          (c) a Transfer of all or any of its Units by a Member to any Affiliate of such Member; provided, however , that such transfer shall be a Permitted Transfer only so long as such Units are held by such Affiliate or are otherwise transferred in another Permitted Transfer.
      Provided, however , that except in the case of a Permitted Transfer pursuant to clause (b) above, from and after the date on which a Permitted Transfer becomes effective, the Permitted Transferee of the Units so transferred shall have the same rights, and shall be bound by the same obligations, under this Agreement as the transferor of such Units and shall be deemed for all purposes hereunder a Member and such Permitted Transferee shall, as a condition to such Transfer, agree in writing to be bound by the terms of this Agreement. No Permitted Transfer shall conflict with or result in any violation of any judgment, order, decree, statute, law, ordinance, rule or regulation or require the Company, if not currently subject, to become subject, or if currently subject, to become subject to a greater extent, to any statute, law, ordinance, rule or regulation, excluding matters of a ministerial nature that are not materially burdensome to the Company.
     “ Permitted Transferee ” means any Person who shall have acquired and who shall hold Units pursuant to a Permitted Transfer.
     “ 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.
     “ Pro Rata ” means apportioned among all holders of Units in accordance with their relative Percentage Interests.
     “ Profits ” and “ Losses ” means, for each fiscal year or other period, an amount equal to the Company’s net income or loss for such year or period, determined by taking into account only items of Capital Account Gross Income and Capital Account Deduction, and excluding Liquidating Gain and Liquidating Loss.
     “ Required Allocations” means any allocation (or limitation imposed on any allocation) of an item of income, gain, deduction or loss pursuant to Sections 5.4(a)-(h), such allocations being directly or indirectly required by the Treasury Regulations promulgated under section 704(b) of the Code.

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     “ Securities Act ” has the meaning set forth in Section 16.
     “ Selling Member ” is defined in Section 11.7(a).
     “ Subordinated Units ” has the meaning set forth in the Partnership Agreement.
     “ Tax Matters Member ” has the meaning set forth in Section 10.3(a).
     “ The Heritage Group ” means The Heritage Group, an Indiana general partnership.
     “ Transfer ” (and related words) means any sale, assignment, gift (outright or in trust), hypothecation, pledge, encumbrance, mortgage, exchange or other disposition, whether voluntary or involuntary, by operation of law or otherwise, of any Units.
     “ Transferee ” means a person who receives Units by means of a Transfer.
     “ Transferor ” means a Member whose Units are the subject of a Transfer in whole or in part.
     “ Treasury Regulations ” means the federal income tax regulations as promulgated by the U.S. Treasury Department, as such regulations may be in effect from time to time. All references in this Agreement to provisions of the Treasury Regulations shall be deemed to refer, if applicable, to their successor regulatory provisions to the extent appropriate in light of the context herein in which such references are used.
     “ Unit ” has the meaning set forth in Section 3.1
     1.2 Rules of Construction . The following provisions shall be applied wherever appropriate herein:
     (a) terms defined in Section 1.1 have the meanings assigned to them in that Section for purposes of this Agreement;
     (b) “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and other equivalent words shall refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used;
     (c) “including” means “including without limitation” and is a term of illustration and not of limitation;
     (d) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;
     (e) unless otherwise expressly provided, any term defined herein by reference to any other document shall be deemed to be amended herein to the extent that such term is subsequently amended in such document;
     (f) references herein to other documents and agreements means such documents and agreements as amended and restated from time to time;

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     (g) wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders;
     (h) neither this Agreement nor any other agreement, document or instrument referred to herein or executed and delivered in connection herewith shall be construed against any Person as the principal draftsperson hereof or thereof;
     (i) the section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such Section, or in any way affect this Agreement; and
     (j) any references herein to a particular Section, Article, Exhibit or Schedule (other than in connection with the Code, the Regulations or the Act) means a Section or Article of, or an Exhibit or Schedule to, this Agreement unless another agreement is specified.
ARTICLE 2
ORGANIZATION
     2.1 Formation of the Company . Pursuant to and under the Act, the Company was formed as a Delaware limited liability company under the laws of the State of Delaware by the filing of the Certificate of Formation with the Office of the Secretary of State of Delaware. The rights and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.
     2.2 Company Name . The name of the Company shall be “ Calumet GP, LLC .” The business of the Company shall be conducted under such name or under such other name or names as the Board may determine from time to time.
     2.3 Term . The term of the Company commenced on September 27, 2005, which was the date of filing of the Certificate of Formation and, unless and until the Company is dissolved or merged out of existence, shall continue indefinitely.
     2.4 Purposes and Powers . The purposes of the Company are to act as the general partner of the Partnership as described in the Partnership Agreement and to engage in any lawful business or activity related to the foregoing as the Board shall determine. The Company shall possess and may exercise all the powers and privileges granted by the Act, by any other law or by this Agreement, together with any powers incidental thereto, including such powers and privileges as are necessary or appropriate to the conduct, promotion or attainment of the business, purposes or activities of the Company.
     2.5 Place of Business, Agent and Office of the Company . The principal business office of the Company shall be at 2780 Waterfront Parkway E. Drive, Suite 200, Indianapolis, Indiana 46214. The Board may at any time and from time to time (i) establish a different principal business office for the Company within or outside of the State of Indiana and (ii) establish such additional offices of the Company within or outside the State of Indiana as it may from time to time determine to be necessary or appropriate for the conduct of the

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Company’s or the Partnership’s business and affairs. The Company shall establish a registered office in the State of Delaware, and shall register as a foreign limited liability company and take such other actions as the Board determines to be necessary or appropriate to allow the Company to conduct business in such jurisdictions as the Board determines to be necessary or appropriate. The Company shall designate initial agents for the service of process in the State of Delaware and such other jurisdictions as the Board determines to be necessary or appropriate, and shall maintain the names and business addresses of such agents in the books and records of the Company. The Company may from time to time change the designation of any such party who is to serve as such agent and may provide for additional agents for service in such other jurisdictions as the Board determines to be necessary or appropriate.
     2.6 Title to Company Assets . Title to the Company’s assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, individually or collectively, shall have any ownership interest in such Company assets or any portion thereof. Title to any or all of the Company’s assets may be held in the name of the Company or one or more of its Affiliates or one or more nominees, as the Board may determine. All Company assets shall be recorded as the property of the Company in its books and records, regardless of the name in which record title to such Company assets is held.
ARTICLE 3
CAPITAL AND CAPITAL ACCOUNTS
     3.1 Membership Interests and Units . The Membership Interests in the Company shall be represented by, a single class of units (“ Units ”) having the rights, powers and privileges as set forth in this Agreement. Ownership of Units shall be evidenced by one or more Unit certificates in the form of Exhibit A attached hereto, but the status of a holder of Units as a Member of the Company shall be exclusively evidenced and determined by entry in the books and records of the Company.
     3.2 Initial Capital Contributions . On September 29, 2005 in connection with the formation of the Company, The Heritage Group made an initial Capital Contribution to the Company of $510.00, Fred M. Fehsenfeld, Jr. made an initial Capital Contribution to the Company of $190.00 and F. William Grube made an initial Capital Contribution to the Company of $300.00. Following such initial Capital Contributions and as described in and set forth in the Contribution Agreement:
     (a) the initial cash Capital Contributions of Fred M. Fehsenfeld, Jr., F. William Grube and The Heritage Group were refunded to each of them; and
     (b) The Heritage Group and the other Members set forth on Schedule A hereto made additional capital contributions to the Company.
     3.3 Members of the Company at the Effective Date . Schedule A reflects the Members’ ownership of the Units as of the Effective Date.

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     3.4 Transfer of Units and Admission of Substitute Members . Units may be Transferred and substitute Members may be admitted to the Company only in accordance with Article 11.
     3.5 Issuance of Additional Units .
     (a) Subject to the approval of the holders of at least 75% of the outstanding Units as set forth in Section 6.8, the Company may issue an unlimited number of additional Units to any Person at any time for such consideration as the Board deems appropriate.
     (b) If any additional Units are issued hereunder to any Person who is not already a Member, any such Person (and such Person’s spouse, as applicable) shall, as a condition to admission as an additional Member, execute and acknowledge such instruments as the Board determines to be necessary or appropriate to effect the admission of such Person as an additional Member, including, without limitation, the written agreement by such Person (and such Person’s spouse, as applicable) to become a party to, and be bound by, the provisions of this Agreement. Upon the admission of any additional Member, the Schedule of Members attached hereto as Schedule A shall be amended to reflect the admission of such additional Member.
     3.6 Subsequent Capital Contributions . Except as may be required under applicable law, no Member shall be required to make any subsequent Capital Contribution to the Company.
     3.7 Loans to the Company . Any Member, directly or through an Affiliate, may at any time or from time to time lend funds to the Company with the consent of the Board. Any such loan shall be repayable by the Company to the Member (or its Affiliate, if applicable) at such date or dates as they may agree, and shall bear interest and carry such other terms as they may agree at a fair market interest rate and terms for similar loans between unaffiliated parties. The Members expressly agree and acknowledge that nothing in this Section 3.7 shall be deemed to require or otherwise obligate any Member to make any such loan to the Company. A loan by a Member to the Company shall not increase the interest of the lending Member in the capital of the Company and shall not entitle such Member to any increased share in the Company’s capital, Profits or Losses.
     3.8 Capital Accounts .
     (a) A Capital Account shall be established for each Member and shall be determined and maintained in accordance with the provisions of Code Section 704 and the Treasury Regulations thereunder. In addition to such other adjustments as may be required under this Agreement or pursuant to such Treasury Regulations, each Member’s Capital Account shall be (a) increased by (i) such Member’s Capital Contribution to the Company, plus (ii) the amount of any Profits and Liquidating Gains allocated to such Member and items of Capital Account Gross Income specially allocated to such Member pursuant to Article 5, and (b) decreased by (i) the amount of any Losses and Liquidating Losses allocated to such Member and items of Capital Account Deduction specially allocated to such Member pursuant to Article 5, (ii) the amount of any cash or other assets distributed to such Member by the Company, and (iii) the fair market value, as determined by the Board, of any property distributed, or deemed hereunder to be distributed, to such Member by the Company (net of any liabilities that such Member is considered to assume or take subject to under Code Section 752 upon any such distribution of property).

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     (b) In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e), immediately prior to the actual or deemed distribution of any Company asset in kind, the Capital Accounts of all Members and the Company’s book carrying value of such Company asset shall be adjusted upward or downward to reflect any unrealized gain or unrealized loss attributable to such Company asset as if such unrealized gain or unrealized loss had been recognized upon an actual sale of such Company asset immediately prior to such distribution and had been allocated to the Members at such time pursuant to Article 5. For purposes of determining such unrealized gain or unrealized loss, the fair market value, as determined by the Board, of Company assets shall be used.
     (c) Upon any event described in Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(5), the Board may determine to restate the Capital Accounts in connection with a revaluation of the assets of the Company in order to reflect the manner in which the unrealized income, gain, loss, or deduction inherent in such property (that has not been reflected in the Capital Accounts previously) would be allocated among the Members if there were a taxable sale of such assets for their fair market value as determined by the Board.
     (d) Upon any Transfer of Units, the Transferee shall be credited on the Company’s books with the portion of the Transferor’s Capital Account that corresponds to the Transferred Units.
     3.9 General Provisions Regarding Capital Contributions . Except as otherwise expressly provided in this Agreement (a) no Member shall have the right to demand or receive a return of its Capital Contribution, (b) under circumstances requiring hereunder a return of any Capital Contribution, no Member shall have the right to demand or receive property other than cash, and (c) no Member shall receive any interest, salary or draw with respect to its Capital Contribution or its Capital Account. An unrepaid Capital Contribution is not a liability of the Company or of any Member. No Member shall be required to contribute or to lend any cash or property to the Company to enable the Company to return the Capital Contribution of any Member.
     3.10 Limitation on Liability . Except as otherwise required under the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member or Assignee shall be personally liable for or otherwise obligated with respect to any such debt, obligation or liability of the Company by reason of being a Member or Assignee. The Members and Assignees agree that the rights, duties and obligations of the Members and Assignees in their capacities as such are only as set forth in this Agreement and as otherwise arise under the Act. Furthermore, the Members and Assignees agree that the existence of any rights of a Member or Assignee, or the exercise or forbearance from exercise of any such rights shall not create any duties or obligations of the Member or Assignees in their capacities as such, nor shall such rights be construed to enlarge or otherwise alter in any manner the duties and obligations of the Members or Assignees.

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ARTICLE 4
DISTRIBUTIONS
     4.1 Distributions of Available Cash . An amount equal to 100% of Available Cash with respect to each fiscal quarter of the Partnership shall be distributed simultaneously to the Members in proportion to their relative Percentage Interests within forty-five days after the end of such quarter.
     4.2 Persons Entitled to Distributions . All distributions of Available Cash to Members for a fiscal quarter pursuant to Section 4.1 shall be made to the Members shown on the records of the Company to be entitled thereto as of the last day of such quarter, unless the transferor and transferee of any Units otherwise agree in writing to a different distribution and such distribution is consented to in writing by the Board.
     4.3 Limitations on Distributions .
     (a) Notwithstanding any provision of this Agreement to the contrary, no distributions shall be made except pursuant to this Article 4 or Article 14.
     (b) Notwithstanding any provision of this Agreement to the contrary, no distribution hereunder shall be permitted if such distribution would violate Section 18-607 of the Act or other applicable law.
     4.4 Distributions on Dissolution and Winding Up . Upon the dissolution and winding up of the Company, the proceeds of liquidation after the payment of creditors as specified in Article 14 shall be distributed to all of the Members in accordance with their positive Capital Account balances as properly adjusted through the time of such distribution.
     4.5 Withholding of Taxes . The Company will withhold taxes from distributions to the extent required to do so by applicable law. Any amounts so withheld and paid or required to be paid to a taxing authority will be treated as if they had been distributed to the Member from whose distribution the amount was withheld.
ARTICLE 5
ALLOCATIONS
     5.1 Allocations of Profit and Loss . Profit and Loss for a taxable year of the Company, and each item thereof, shall be allocated among the Members, Pro Rata.
     5.2 Allocations of Liquidating Gain and Loss . Liquidating Gains and Liquidating Losses shall be allocated among the Members, Pro Rata.
     5.3 Transfers . In the event of a Transfer of Units during a taxable year, the Company shall make an interim closing of its books (or, at the election of the applicable Transferor and Transferee and with the consent of the Board, utilize any other method permitted under Section 706 of the Code) for purposes of determining the allocations and distributions required under this Agreement.

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     5.4 Additional Allocations . Notwithstanding any other provisions of this Section 5.4, the following special allocations shall be made for each taxable period:
     (a) Notwithstanding any other provision of this Section 5.4, if there is a net decrease in Company Minimum Gain during any Company taxable period, each Member shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6),(g)(2), and (j)(2)(i). For purposes of this Section 5.4(a), each Member’s Capital Account shall be determined and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.4 with respect to such taxable period. This Section 5.4(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
     (b) Notwithstanding the other provisions of this Section 5.4 (other than (a) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Company taxable period, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and (j)(2)(ii). For purposes of this Section 5.4(b) each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.4, other than Section 5.4(a) above, with respect to such taxable period. This Section 5.4(b) is intended to comply with the Member Nonrecourse Debt Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
     (c) Except as provided in (a) and (b) above, in the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to (a) or (b) above.
     (d) In the event any Member has a deficit balance in its Adjusted Capital Account at the end of any Company taxable period, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.4(d) shall be made only if and to the extent that such Member would have a deficit balance in its Adjusted Capital Account after all other allocations provided in this Section 5.4 have been tentatively made as if this Section 5.4(d) were not in this Agreement.
     (e) Nonrecourse Deductions for any taxable period shall be allocated to the Members, Pro Rata .

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     (f) Member Nonrecourse Deductions for any taxable period shall be allocated 100% to the Member that bears the Economic Risk of Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the Economic Risk of Loss with respect to a Member Nonrecourse Debt, Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such Economic Risk of Loss.
     (g) Nonrecourse Liabilities. For purposes of Treasury Regulations Section 1.752-3(a)(3), the Members agree that “ Excess Nonrecourse Liabilities ” of the Company, as defined in Treasury Regulations Section 1.752-3(a)(3), shall be allocated 100% to the Members, Pro Rata.
     (h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such provisions.
     (i) Notwithstanding any other provision of this Section 5.4 other than the Required Allocations, the Required Allocations shall be taken into account in making the Agreed Allocations so that, to the extent possible, the net amount of items of income, gain, loss and deduction allocated to each Member pursuant to the Required Allocations and Agreed Allocations, together, shall be equal to the net amount of such items that would have been allocated to each such Member under the Agreed Allocations if the Required Allocations had not otherwise been provided for in this Section 5.4.
     5.5 Income Tax Allocations .
     (a) Except as provided in this Section 5.5, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the Members in the same manner as such items are allocated for book purposes under Sections 5.1 and 5.2.
     (b) The Members recognize that with respect to any property contributed to the Company, there may be a difference between the basis of the property to the Company for federal income tax purposes and its fair market value at the time of the contribution. In such case, all items of tax depreciation, cost recovery, amortization, and gain or loss with respect to such properties shall be allocated among the Members to take into account such disparities in accordance with the provisions of sections 704(b) and 704(c) of the Code and the Treasury Regulations under those sections.
     (c) For tax purposes, recapture of tax deductions arising out of a disposition of property shall, to the extent consistent with the allocations for tax purposes of the gain or amount realized giving rise to such recapture, be allocated to the Members in the same proportions as the recaptured deduction was originally allocated.

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     (d) All items of income, gain, loss, deduction and credit allocated to the Members in accordance with the provisions hereof and basis allocations recognized by the Company for federal income tax purposes shall be determined without regard to any election under Section 754 of the Code which may be made by the Company; provided, however , such allocations, once made, shall be adjusted as necessary or appropriate to take into account the adjustments permitted by Sections 734 and 743 of the Code.
     5.6 Negative Capital Accounts . In no event shall any Member be obligated to pay to the Company, any other Member or any creditor of the Company any deficit balance in its Capital Account.
ARTICLE 6
MEETINGS OF MEMBERS
     6.1 Time and Place . Any meeting of the Members may be held at such time and place, within or outside the State of Indiana, as may be fixed by the Board or as shall be specified in the notice or waiver of notice of the meeting. If the place for a meeting is not fixed by the Board, such meeting shall be held at the Company’s principal office.
     6.2 Annual Meeting . The annual meeting shall be held on the date and at the time and place fixed from time to time by the Board. The annual meeting shall be for the purpose of electing a board of directors and transacting such other business as may properly be brought before the meeting.
     6.3 Special Meeting . A special meeting for any purpose or purposes may be called by the Board and shall be called by the Board upon the written request of any Member holding at least 15% of the outstanding Units.
     6.4 Record Date for Determination of Membership . In order that the Board may determine the Members (i) entitled to notice of or to vote at any meeting of Members, (ii) entitled to express consent to action in writing without a meeting, (iii) entitled to exercise any rights in respect of any change, conversion, or exchange of Units, (iv) entitled to receive a distribution with respect to any Units, or (v) for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board. The record date for determining the Members entitled to notice of or to vote at any meeting of the Members or any adjournment thereof shall not be more than 60 nor less than 10 days before the date of such meeting. The record date for determining the Members entitled to consent to action in writing without a meeting pursuant to Section 6.10 shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. The record date for any other action shall not be more than 60 days prior to such action. If no record date is fixed, (a) the record date for determining Members entitled to notice of or to vote at any meeting shall be at the close of business on the day immediately preceding the day on which notice is given or, if notice is waived by all Members, at the close of business on the day immediately preceding the day on

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which the meeting is held, (b) the record date for determining Members entitled to express consent to action in writing without a meeting, when no prior action by the Board is required, shall be the first date on which a signed written consent setting forth the action taken or to be taken is delivered to the Company and, when prior action by the Board is required, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action, and (c) the record date for determining Members for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating to such other purpose. A determination of the Members of record entitled to notice of or to vote at a meeting of Members is effective for any adjournment of the meeting unless the Board fixes a new record date, which the Board shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
     6.5 Notice to Members . Written notice stating the place, date, and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of the meeting, except as otherwise required by the Act. If an annual or special meeting of Members is adjourned to a different date, time, or place, notice need not be given of the new date, time or place if the new date, time or place is announced at the meeting before adjournment; provided, however , that, if a new record date for the adjourned meeting is fixed pursuant to Section 6.4, notice of the adjourned meeting shall be given to persons who are Members as of the new record date.
     6.6 Waiver . Attendance of a Member, either in person or by proxy, at any meeting, whether annual or special, shall constitute a waiver of notice of such meeting, except where a Member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice of any such meeting signed by a Member or Members entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting need be specified in any written waiver of notice.
     6.7 Quorum . The holders of a majority of the outstanding Units entitled to vote at a meeting, present in person or represented by proxy, shall constitute a quorum at all meetings of the Members for the transaction of business, except as otherwise provided by the Act. If, however, such a quorum shall not be present at any meeting of Members, the Chairman of the Board or a majority of the Members entitled to vote, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice if the time and place are announced at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.
     6.8 Matters Requiring Member Approval .
     (a) Without the prior written consent of Members holding at least 75% of the outstanding Units, the Company shall not, and shall not permit any of its Subsidiaries to, effect any:

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     (i) Merger, consolidation or share exchange into or with any other Person, or any other similar business combination transaction (other than any such transaction entered into solely between the Company and any of its subsidiaries or among any of them) involving the Company or any of its Significant Subsidiaries (as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission, as amended) or financial restructuring of the Company or the Partnership; provided , however , that in the event not all Members receive identical consideration, whether in their capacity as a Member or as a limited partner of the Partnership, both in form and amount (in proportion to their Units or Limited Partner Interests, as the case may be) in such transaction, such transaction shall require the prior written consent of any Member receiving consideration that differs from the consideration to be received by Members holding at least 50% of the outstanding Units;
     (ii) voluntary filing for bankruptcy, liquidation, dissolution or winding up of the Company or any of its subsidiaries or any event that would cause a dissolution or winding up of the Company or any of it subsidiaries or any consent by the Company or any of its subsidiaries to any action brought by any other Person relating to any of the foregoing;
     (iii) sale, lease, transfer, pledge or other disposition of all or substantially all of the properties or assets of the Company or the Company and any of its subsidiaries taken as a whole;
     (iv) withdrawal of the Company as general partner of the Partnership;
     (v) material tax decisions or elections on behalf of the Company;
     (vi) conversion of the Company from a limited liability company into another form of entity; or
     (vii) other than equity securities subsequently approved pursuant to this Section 6.8, authorization, sale and/or issuance by the Company of its Units, or other equity securities of the Company, whether in a private or public offering, including an initial public offering, or the grant, sale or issuance of other securities (including rights, warrants and options) convertible into, exchangeable for or exercisable for any Units or other equity securities.
     6.9 Voting and Proxies . At every meeting of the Members, each Member that is entitled to vote at such meeting shall be entitled to vote in person or by proxy, but no proxy shall be voted after three years from its date unless the proxy provides for a longer period. When a quorum is present at any meeting, the vote of the holders of a majority of the outstanding Units of each class present in person or represented by proxy that are entitled to vote on a question shall decide any such question brought before such meeting, unless the question is one upon which, by express provision of the Act or this Agreement, a different vote is required, in which case such express provision shall govern.
     6.10 Action by Consent of the Members . Any action required or permitted to be taken at a meeting of the Members, including at the annual meeting, may be taken without a meeting if

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a written consent setting forth the action so taken is signed by Members holding the number of Units, as applicable, as is required by the Act or this Agreement for approval of the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Members at a meeting duly called and held.
     6.11 Telephonic Meetings . Members may participate in any meeting of the Members through the use of any means of conference telephones or similar communications equipment as long as all persons participating can hear one another. A Member so participating shall be deemed to be present in person at the meeting.
ARTICLE 7
MANAGEMENT
     7.1 Management of the Company’s Affairs .
     (a) Except as otherwise provided in this Agreement, all management powers over the business and affairs of the Company shall be vested in a board of directors (the “ Board ”) and, subject to the direction of the Board, the Officers. The Directors shall constitute “managers” of the Company within the meaning of the Act.
     (b) Except as otherwise specifically provided in this Agreement, the authority and functions of the Board on the one hand and of the Officers on the other shall be identical to the authority and functions of the board of directors and officers, respectively, of a corporation organized under the General Corporation Law of the State of Delaware. Thus, except as otherwise specifically provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board, and the day-to-day activities of the Company shall be conducted on the Company’s behalf by the Officers, who shall be agents of the Company.
     7.2 Number; Qualification; Election; Tenure .
     (a) The number of directors (each a “ Director ” and collectively, the “ Directors ”) constituting the Board shall be fixed from time to time pursuant to a resolution adopted by Members holding a majority of the outstanding Units then entitled to vote at an election of Directors. A Director need not be a Member. Each Director shall serve as a member of the Board until the earlier of his resignation, death or removal from office or until his or her successor is duly elected and qualified. The number of Directors constituting the initial Board shall be seven and the initial Directors shall be the following individuals:
Fred M. Fehsenfeld, Jr.
F. William Grube
James S. Carter
William S. Fehsenfeld
Robert E. Funk
Nicholas J. Rutigliano
Michael L. Smith
     (b) Except as set forth in Section 7.2(c), at each annual meeting of the Members, the successor to each Director shall be elected to hold office for a term expiring at the next annual

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meeting of Members. To be elected as a Director, a natural person must (i) be chosen in accordance with Section 7.10, (ii) be chosen in accordance with Section 7.2(c) or (iii)(A) have been properly nominated for a position as a Director in accordance with Section 7.2(d) and (B) receive a plurality of the votes cast for the position at a meeting of Members held for such purpose at which a quorum is present in Person or by proxy.
     (c) So long as (i) F. William Grube is the Chief Executive Officer of the Company and (ii) F. William Grube or trusts established for the benefit of his family members (or Permitted Transferees of Mr. Grube or of such trusts other than the Company) (Mr. Grube, such trusts, and such Permitted Transferees other than the Company being hereafter referred to as the “Grube Family Group”) continue to own at least 300 Units (the aggregate number of Units that were owned by the Grube Family Group on the date that this Agreement was first amended and restated in connection with the initial public offering of the Partnership), Mr. Grube will be entitled to serve as a director of the Company. In the event Mr. Grube is no longer the Chief Executive Officer of the Company, Mr. Grube may continue to serve as a director, or, at his option (or, in the event of his death, at the option of the executor of his estate), Mr. Grube (or such executor) may appoint a member of Mr. Grube’s family to serve as a director in his place, in each case so long as the Grube Family Group continues to own at least 300 Units. In the event that (i) any Member who is part of the Grube Family Group Transfers any of such Member’s Units pursuant to Section 11.7 hereof to one or more Transferee(s) (each, a “Grube Family Group Transferee”) other than in connection with a Permitted Transfer and (ii) in connection with such Transfer, Mr. Grube (or the executor of his estate) shall agree to assign Mr. Grube’s (or such executor’s) rights to designate himself or a family member as a director to a Grube Family Group Transferee, then the Grube Family Group Transferee that is the assignee of such designation rights shall (upon completion of such Transfer and the resignation of any Grube family member who may then be serving as a director) be entitled to appoint one person of its choosing to serve as a director of the Company in accordance with the terms of the assignment of such rights, so long as the Grube Family Group Transferee and the Grube Family Group continue to own, in the aggregate, at least 300 Units. In no event will the Grube Family Group and the Grube Family Group Transferees in the aggregate be entitled to designate or appoint more than one director. At every election of directors held while the Grube Family Group (or, if applicable, the Grube Family Group and the Grube Family Group Transferee(s) in the aggregate) owns at least 300 Units, each Member shall cast all of such Member’s votes for the election as a director of Mr. Grube, or of the family member appointed by Mr. Grube (or by the executor of his estate), or of the person appointed by the Grube Family Group Transferee (as the case may be), and the Board of Directors in connection with each such election shall include Mr. Grube or such appointed person (as the case may be) in its slate of nominees.
     (d) Before a meeting of the Members at which an election of Directors is to be held, the Board shall nominate its slate of persons to be presented for election at such meeting. Other nominations for Directors may be made by any Member that holds more than 10% of the outstanding Units, but any Member nominations must be in writing, in proper form and delivered to the Secretary of the Company not less than ten days prior to the meeting of Members at which the nominee is to be elected. To be in proper form, such Member nomination must set forth in writing as to each person whom such Member proposes to nominate for election or re-election as a Director all information relating to such person as is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule 14a-11 thereunder (or any successor rule promulgated thereunder).

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     7.3 Notice . Written notice of all regular meetings of the Board must be given to all Directors at least five calendar days prior to the regular meeting of the Board and two business days prior to any special meeting of the Board. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting. A meeting may be held at any time without notice if all the Directors are present or if those not present waive notice of the meeting either before or after such meeting.
     7.4 Regular Meetings . The board shall meet at least quarterly, and a regular meeting of the Board shall be held without notice other than this Section 7.4 immediately after, and at the same place as, the annual meeting of the Members. The Board may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution.
     7.5 Special Meetings . Special Meetings of the Board may be called at any time at a request of the Chairman or by any Director.
     7.6 Action by Consent of the Board . Any action required or permitted to be taken at a meeting of the Board, including at the annual meeting, may be taken without a meeting if a written consent setting forth the action so taken is signed by the number of Directors as is required by this Agreement for approval of the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Directors at a meeting duly called and held.
     7.7 Telephonic Meetings . Directors may participate in any meeting of the Board through the use of any means of conference telephones or similar communications equipment as long as all persons participating can hear one another. A Director so participating shall be deemed to be present in person at the meeting.
     7.8 Quorum; Voting Requirement         . A majority of the Directors, present in person or participating in accordance with Section 7.7, shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the Directors present may adjourn the meeting from time to time without further notice. Except as otherwise provided in this Agreement, an act by the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board. The Directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.
     7.9 Committees .
     (a) The Board may establish committees of the Board. Any such committee, to the extent provided in the resolution of the Board or in this Agreement, shall have and may exercise all powers and authority of the Board in the management of the business and affairs of the Company; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the Members, any action or matter expressly required by this Agreement or the Act to be submitted to the Members for approval; or (ii) adopting, amending or repealing any provision of this Agreement.

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     (b) The Board shall have an audit committee (the “ Audit Committee ”) comprised of Independent Directors. The Audit Committee shall establish a written audit committee charter in accordance with the rules and regulations of the NASDAQ National Market or any National Securities Exchange on which the Common Units are listed from time to time, and the Securities and Exchange Commission, as amended from time to time. The Audit Committee shall review the financial statements of the Company and the Partnership, review the external financial reporting of the Partnership, recommend engagement of the Partnership’s independent auditors, review procedures for internal auditing and the adequacy of the Partnership’s internal accounting controls and perform such other related functions as may be directed by the Board from time to time. Each member of the Audit Committee shall satisfy the rules and regulations of the NASDAQ National Market or any National Securities Exchange on which the Common Units are listed from time to time and the Securities and Exchange Commission, as amended from time to time, pertaining to qualification for service on an audit committee.
     (c) The Board shall have a compensation committee (the “ Compensation Committee ”). The Compensation Committee shall be charged with such matters pertaining to the compensation of Directors, Officers and other personnel of the Company, the review, approval and administration of any Incentive Plans put in place by the Company or the Partnership and such other related matters as may be directed by the Board from time to time.
     (d) The Board may have a conflicts committee comprised of no fewer than two Directors (the " Conflicts Committee ”), all of whom shall be Independent Directors. The Conflicts Committee may review, and approve or disapprove, transactions in which a potential conflict of interest exists or arises between the Company, or any of its Affiliates (other than a Group Member), on the one hand, and any Group Member, any Partner (as defined in the Partnership Agreement, all in accordance with the applicable provisions of the Partnership Agreement. Any matter approved by the Conflicts Committee in accordance with the provisions, and subject to the limitations, of the Partnership Agreement, shall not be deemed to be a breach of any fiduciary or other duties owed by the Board or any Director to the Company or the Members.
     (e) At every meeting of a committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by the committee of any resolution. The chairman of the committee or a majority of the members of the committee may fix the time and place of its meetings unless the Board shall otherwise provide. Notice of such meetings shall be given to each member of the committee in the manner provided for in Section 7.3. The Board shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any committee. Nothing herein shall be deemed to prevent the Board from appointing one or more committees consisting in whole or in part of persons who are not Directors; provided , however , that no such committee shall have or may exercise any authority of the Board.
     7.10 Vacancies; Increases in the Number of Directors . Unless otherwise provided by this Agreement, vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by the holders of a majority of the outstanding Units then entitled to vote at an election of Directors and any Director so chosen shall hold office until their successor shall be duly elected and qualified or until their earlier death, resignation or removal.

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     7.11 Removal . Any Director may be removed, with or without cause, at any time by the holders of a majority of the outstanding Units then entitled to vote at an election of Directors; provided , however , that Mr. Grube, or any individual appointed to be a Director by Mr. Grube (or by the executor of his estate) or by a Grube Family Group Transferee pursuant to Section 7.2(c) may be removed only by Mr. Grube or by the executor of his estate, or by such Grube Family Group Transferee, as the case may be.
     7.12 Compensation of Directors . Except as expressly provided in any written agreement between the Company and a Director or by resolution of the Board, no Director shall receive any compensation from the Company for services provided to the Company in its capacity as a Director, except that each Director shall be compensated for attendance at Board meetings at rates of compensation as from time to time established by the Board; provided, however , that the Directors who are also employees of the Company shall receive no compensation for their services as Directors or committee members. In addition to the foregoing, the members of the Conflicts Committee shall receive such additional compensation as from time to time established by the Board. All the Directors shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service as Directors.
ARTICLE 8
OFFICERS
     8.1 Elected Officers . The officers of the Company (the “ Officers ”) shall be selected by, and serve at the pleasure of, the Board. The Officers shall carry on the day to day activities of the Company and shall have such other authority and duties delegated to each of them, respectively, by the Board from time to time. The Officers shall be a Chairman of the Board, a President and Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including Executive Vice Presidents, Senior Vice Presidents and Vice Presidents) as the Board from time to time may elect in accordance with this Article 8. The Chairman of the Board shall be chosen from among the Directors. All Officers shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article 8. Any Person may be selected by the Board to hold multiple offices. The Board may from time to time elect such other officers (including one or more Vice Presidents, Controllers, Assistant Secretaries and Assistant Treasurers) as it determines to be necessary or appropriate for the conduct of the business of the Company. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in this Agreement or as may be prescribed by the Board.
     8.2 Election and Term of Office . The Officers of the Company shall be elected annually by the Board at the regular meeting of the Board held after the annual meeting of the Members. If the election of Officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each Officer shall hold office until such person’s successor shall have been duly elected and shall have qualified or until such person’s death or until he shall resign or be removed pursuant to Section 8.8.

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     8.3 Chairman of the Board . The Chairman of the Board shall preside at all meetings of the Members and of the Board. The Board may also elect a Vice Chairman to act in the place of the Chairman upon his absence or inability to act.
     8.4 President and Chief Executive Officer . The President and Chief Executive Officer shall be responsible for the general management of the affairs of the Company and shall perform all duties incidental to such person’s office that may be required by law and all such other duties as are properly required of him by the Board. He shall make reports to the Board and the Members and shall use his best efforts to see that all orders and resolutions of the Board and of any committee thereof are carried into effect. The President and Chief Executive Officer, if he is also a Director, shall, in the absence of or because of the inability to act of the Chairman of the Board or any Vice Chairman elected by the Board, perform all duties of the Chairman of the Board and preside at all meetings of Members and of the Board.
     8.5 Vice Presidents . Each Executive Vice President and Senior Vice President and any other Vice President shall have such powers and shall perform such duties as shall be assigned to him by the Board.
     8.6 Chief Financial Officer and Assistant Treasurers . The Chief Financial Officer shall act as the Chief Financial Officer of the Company and shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Chief Financial Officer shall cause the funds of the Company to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositories in the manner provided by resolution of the Board. The Chief Financial Officer shall, in general, perform all duties incident to the office of the Chief Financial Officer and shall have such further powers and duties and shall be subject to such directions as may be granted or imposed from time to time by the Board. Assistant Treasurers shall have such of the authority and perform such of the duties of the Chief Financial Officer as may be provided in this Agreement or assigned to them by the Board or the Chief Financial Officer. Assistant Treasurers shall assist the Chief Financial Officer in the performance of the duties assigned to the Chief Financial Officer, and in assisting the Chief Financial Officer, each Assistant Treasurer shall for such purpose have the powers of the Chief Financial Officer. During the Chief Financial Officer’s absence or inability to act, the Chief Financial Officer’s authority and duties shall be possessed by such Assistant Treasurer or Assistant Treasurers as the Board may designate.
     8.7 Secretary and Assistant Secretaries . The Secretary shall keep or cause to be kept, in one or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and the Members. The Secretary shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law; shall be custodian of the records and the seal of the Company and affix and attest the seal to all documents to be executed on behalf of the Company under its seal; and shall see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and in general, shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the

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Board. Assistant Secretaries shall have such of the authority and perform such of the duties of the Secretary as may be provided in this Agreement or assigned to them by the Board or the Secretary. Assistant Secretaries shall assist the Secretary in the performance of the duties assigned to the Secretary, and in assisting the Secretary, each Assistant Secretary shall for such purpose have the powers of the Secretary. During the Secretary’s absence or inability to act, the Secretary’s authority and duties shall be possessed by such Assistant Secretary or Assistant Secretaries as the Board may designate.
     8.8 Removal . Any Officer elected by the Board may be removed by the affirmative vote of a majority of the Board. No elected Officer shall have any contractual rights against the Company for compensation by virtue of such election beyond the date of the election of such person’s successor, such person’s death, such person’s resignation or such person’s removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan.
     8.9 Vacancies . A newly created elected office and a vacancy in any elected office because of death, resignation or removal may be filled by the Board for the unexpired portion of the term at any meeting of the Board.
     8.10 Compensation . The Officers shall receive such compensation for their services as may be designated by the Compensation Committee. In addition, the Officers shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service hereunder.
     8.11 Powers of Attorney . The Company may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers and other Persons.
     8.12 Delegation of Authority . Unless otherwise provided by this Agreement or by resolution of the Board, no Officer shall have the power or authority to delegate to any Person such Officer’s rights and powers as an Officer to manage the business and affairs of the Company.
ARTICLE 9
STANDARDS OF CONDUCT, LIABILITY AND INDEMNIFICATION
     9.1 Standards of Conduct and Fiduciary Duties .
     (a) In causing the Company to make a determination or take or decline to take any action in its capacity as the general partner of the Partnership as opposed to in its individual capacity, an Indemnitee shall act in accordance with Article VII of the Partnership Agreement and shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated hereby or under the Act or any other law, rule or regulation.
     (b) In causing the Company to make a determination or take or decline to take any action in its individual capacity as opposed to in its capacity as the general partner of the Partnership, then, unless another express standard is provided for in this Agreement, an Indemnitee shall act in good faith and shall not be subject to any other or different standards imposed by this Agreement, any other agreement contemplated hereby or under the Act or any other law, rule or regulation. In order for a determination or other action affecting the Company to be in “good faith” for purposes of this Agreement, an Indemnitee must reasonably believe that the determination or other action is in the best interests of the Company, unless the context otherwise requires.

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     (c)      To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Company, to the Partnership, or to any Member, an Indemnitee acting under this Agreement shall not be liable to the Company, the Partnership or to any Member for its good faith reliance on the provisions this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnitee.
     9.2      Liability and Exculpation .
     (a)      Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Partnership, the Members or any Assignee, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.
     (b)      An Indemnitee shall be fully protected in relying in good faith upon the books and records of the Company, the books and records of the Partnership, and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Indemnitee believes are within such other Person’s professional or expert competence, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.
     9.3      Indemnification .
     (a)      To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided , that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 9.3, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

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     (b)      To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to this Section 9.3 in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 9.3.
     (c)      The Company may purchase and maintain insurance, to the extent and in such amounts as the Company determines to be reasonable, on behalf of Indemnitees and such other Persons as the Company shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Indemnitees or other Persons in connection with the activities of the Company or such Indemnitees. The Company may enter into indemnity contracts with Indemnitees or other Persons and adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations and containing such other procedures regarding indemnification as the Board determines are necessary or appropriate.
     (d)      The indemnification provided by this Section 9.3 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the Members, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
ARTICLE 10
TAXES
     10.1      Tax Returns . The Tax Matters Member shall prepare and timely file (on behalf of the Company) all federal, state and local tax returns required to be filed by the Company. Each Member shall furnish to the Company all pertinent information in its possession relating to the Company’s operations that is necessary to enable the Company’s tax returns to be timely prepared and filed. The Company shall bear the costs of the preparation and filing of its tax returns.
     10.2      Tax Elections .
     (a)      The Company shall make the following elections on the appropriate tax returns:
  (i)   to adopt the calendar year as the Company’s fiscal year;
 
  (ii)   to adopt the accrual method of accounting;
     (iii)    to make the election under Section 754 of the Code in accordance with applicable Treasury Regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the Tax Matters Member’s determination that such revocation is in the best interests of the Members;

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     (iv)      to elect the remedial method under Treasury Regulations Section 1.704-3(d) for purposes of Section 704(d) of the Code; and
     (v)      any other election the Board determines to be necessary or appropriate.
     (b)      Neither the Company nor any Member shall make an election for the Company to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state law and no provision of this Agreement shall be construed to sanction or approve such an election.
     10.3      Tax Matters Member .
     (a)      The Heritage Group, or such other Member selected by the Board, shall act as the “ tax matters partner ” of the Company pursuant to Section 6231(a)(7) of the Code (the “ Tax Matters Member ”). The Tax Matters Member shall take such action as may be necessary to cause to the extent possible each Member to become a “ notice partner ” within the meaning of Section 6223 of the Code. The Tax Matters Member shall inform each Member of all significant matters that may come to its attention in its capacity as Tax Matters Member by giving notice thereof on or before the fifth business day after becoming aware thereof and, within that time, shall forward to each Member copies of all significant written communications it may receive in that capacity.
     (b)      The Tax Matters Member shall take no action without the authorization of the Board, other than such action as may be required by applicable law. Any cost or expense incurred by the Tax Matters Member in connection with its duties, including the preparation for or pursuance of administrative or judicial proceedings, shall be paid by the Company.
     (c)      The Tax Matters Member shall not enter into any extension of the period of limitations for making assessments on behalf of the Members without first obtaining the consent of the Board. The Tax Matters Member shall not bind any Member to a settlement agreement without obtaining the consent of such Member. Any Member that enters into a settlement agreement with respect to any Company item (as described in Section 6231(a)(3) of the Code) shall notify the other Members of such settlement agreement and its terms within 90 days from the date of the settlement.
     (d)      No Member shall file a request pursuant to Section 6227 of the Code for an administrative adjustment of Company items for any taxable year without first notifying the other Members. If the Board consents to the requested adjustment, the Tax Matters Member shall file the request for the administrative adjustment on behalf of the Members. If such consent is not obtained within 30 days from such notice, or within the period required to timely file the request for administrative adjustment, if shorter, any Member may file a request for administrative adjustment on its own behalf. Any Member intending to file a petition under Sections 6226, 6228 or other Section of the Code with respect to any item involving the Company shall notify the other Members of such intention and the nature of the contemplated proceeding. In the case where the Tax Matters Member is intending to file such petition on behalf of the Company, such notice shall be given within a reasonable period of time to allow the Members to participate in the choosing of the forum in which such petition will be filed.

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     (e)      If any Member intends to file a notice of inconsistent treatment under Section 6222(b) of the Code, such Member shall give reasonable notice under the circumstances to the other Members of such intent and the manner in which the Member’s intended treatment of an item is (or may be) inconsistent with the treatment of that item by the other Members.
ARTICLE 11
TRANSFERS OF MEMBERSHIP INTERESTS
     11.1      General Restrictions .
     (a)      A Member may Transfer its Units (i) to a Permitted Transferee pursuant to Section 11.2, or (ii) pursuant to the terms of Section 11.7. Any purported Transfer of a Membership Interest in violation of the terms of this Agreement shall be null and void and of no force and effect. Except upon a Transfer of all of a Member’s Units in accordance with this Section 11.1, no Member shall have the right to withdraw as a Member of the Company.
     (b)      Notwithstanding any other provision of this Agreement, no Member may pledge, mortgage or otherwise subject its Units to any Encumbrance.
     11.2      Permitted Transferees .
     (a) Notwithstanding the provisions of Section 11.7, each Member shall have the right to Transfer (but not to substitute the transferee as a substitute Member in such Member’s place, except in accordance with Section 11.3), by a written instrument, all or any of its Units to a Permitted Transferee.
     (b) Unless and until admitted as a substitute Member pursuant to Section 11.3, a transferee of a Member’s Units in whole or in part shall be an assignee with respect to such Transferred Units and shall not be entitled to participate in the management of the business and affairs of the Company or to become, or to exercise the rights of, a Member, including the right to vote, the right to require any information or accounting of the Company’s business, or the right to inspect the Company’s books and records. Such transferee shall only be entitled to receive, to the extent of the Transferred Units, the share of distributions and profits, including distributions representing the return of Capital Contributions, to which the transferor would otherwise be entitled with respect to the Transferred Units. The transferor shall have the right to vote such Transferred Units until the transferee is admitted to the Company as a substitute Member with respect to the Transferred Units.
     11.3      Substitute Members . No transferee of all or part of a Member’s Units shall become a substitute Member in place of the transferor unless and until:
     (a)      Such Transfer is in compliance with the terms of Section 11.1; and
     (b)      the transferee has executed an instrument in form and substance reasonably satisfactory to the Board accepting and adopting, and agreeing to be bound by, the terms and provisions of the Certificate and this Agreement.

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Upon satisfaction of all the foregoing conditions with respect to a particular transferee, the appropriate officers shall cause the books and records of the Company to reflect the admission of the transferee as a substitute Member to the extent of the Transferred Units held by such transferee.
     11.4      Effect of Admission as a Substitute Member . A transferee who has become a substitute Member has, to the extent of the Transferred Units, all the rights, powers and benefits of, and is subject to the obligations, restrictions and liabilities of a Member under, the Certificate, this Agreement and the Act. Upon admission of a transferee as a substitute Member, the transferor of the Units so held by the substitute Member shall cease to be a Member of the Company to the extent of such Transferred Units.
     11.5       Consent . Each Member hereby agrees that upon satisfaction of the terms and conditions of this Article 11 with respect to any proposed Transfer, the transferee may be admitted as a Member without any further action by a Member hereunder.
     11.6      Additional Members . Subject to Section 6.8, any Person may become an additional Member of the Company for such consideration as the Board shall determine, provided that such additional Member complies with all the requirements of a transferee under Section 11.3(a) and (b).
     11.7      Right of Sale . Each Member shall have the right to sell its Units other than to a Permitted Transferee in the following manner:
     (a)      If at any time any of the Members (a “ Selling Member ”) wishes to sell such Selling Member’s Units, such Selling Member shall give Notice thereof to each of the other Members and the Company. The Notice shall state the amount of the Selling Member’s Units that the Selling Member wishes to sell.
     (b)      Each of the Members other than the Selling Member (the “ Non-Selling Members ”) shall have the right to negotiate with the Selling Member for the sale of its Units for a period of 90 days. If the Selling Member does not reach an agreement to sell its Units to one or more Non-Selling Members, the Selling Member will be free to sell its Units to a third party on whatever terms the Selling Member chooses, subject to Section 11.3.
ARTICLE 12
     12.1      No Preemptive Rights . No Member shall have preemptive rights to purchase Units.
ARTICLE 13
BOOKS OF ACCOUNT, RECORDS AND REPORTS
     13.1      Preparation and Maintenance of Books and Records . The Company shall prepare and maintain records and books of account covering such matters relative to the Company’s business as are usually entered into records and books of account maintained by limited liability companies engaged in businesses of like character. The Company’s books and records shall be

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maintained in accordance with partnership accounting practices and procedures and shall incorporate such method of tax accounting as the Board determines is permissible and would be in the best interests of the Company.
     13.2      Company Documentation Requirements . The Company shall keep at its principal office the following:
     (a)      A current list of the full name and last known business or residence address of each Member and Assignee (if any) set forth in alphabetical order together with the capital contribution of each Member and Assignee;
     (b)      Copies of the Company’s federal, state and local income tax or information returns and reports, if any, for the six most recent taxable years;
     (c)      A copy of the Certificate of Formation and all amendments thereto;
     (d)      Copies of this Agreement and all amendments thereto;
     (e)      The books and records of the Company as they relate to the business affairs and operations of the Company for the current and the four most recent fiscal years; and
     (f)      Any other books and records that the Company is required to maintain under the Act or other applicable law.
     13.3      Fiscal Year . The Fiscal Year of the Company shall be the calendar year.
     13.4       Company Funds . The funds of the Company shall be deposited in such bank account or accounts, or invested in such interest-bearing or non-interest-bearing investments, as shall be designated by the Board. All withdrawals from any such bank accounts shall be made by the duly authorized agent or agents of the Company.
     13.5      Statements .
     (a)      The Company shall cause to be prepared at least annually, at Company expense, the information related to the Company’s business activities necessary for the preparation of each Members’ federal and state income tax returns, and upon the written request of a Member, the Company shall send or cause to be sent such information relevant for such Member to each requesting Member within 90 days after the end of each taxable year, unless the Company reasonably determines there is good reason to defer the sending of such information, but in no event shall such information be sent to such Member later than 180 days after the end of the taxable year. If the Company deems it required or desirable, a copy of the Company’s federal, state and/or local income tax or information returns for that year shall also be sent to such Member along with such information.
     (b)      The Company shall provide to the Members such annual or other periodic reports on its business and financial affairs as may be required under the Act, other applicable law, or as otherwise deemed appropriate by the Board.

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     (c)      In addition to the information, reports and statements furnished to the Members pursuant to subsections 13.5(a) and (b), the Company shall obtain an annual audit of the Company certified to by an independent certified public accountant, which shall be transmitted by the Company to each requesting Member within three months after the close of each fiscal year, containing, at a minimum:
  (i)   a balance sheet of the Company as of the beginning and close of such fiscal year;
 
  (ii)   a statement of Company Profits and Losses for such fiscal year; and
 
  (iii)   a statement of such Member’s Capital Account as of the close of such fiscal year, and changes therein during such fiscal year.
ARTICLE 14
DISSOLUTION AND TERMINATION OF THE COMPANY
     14.1      Dissolution . The death, dissolution, bankruptcy, expulsion or removal of a Member shall not cause the dissolution of the Company, and upon any such event the business of the Company shall continue to be conducted pursuant to the terms of this Agreement. The Company shall be dissolved and its affairs wound up on the happening of any of the following events (herein each a “ Dissolution Event ”):
     (a)      By an election by the Members holding at least 75% of the outstanding Units to dissolve the Company;
     (b)      The entry of a decree of judicial dissolution of the Company pursuant to Section 18-802 of the Act; or
     (c)      The occurrence of any event that makes it unlawful for the business of the Company to be carried on or for the Members to carry on such business in a limited liability company form.
     14.2      Winding Up and Liquidation . Upon the occurrence of a Dissolution Event, the Member holding the greatest number of Units (the “ Liquidator ”) shall cause a full accounting of the assets and liabilities of the Company to be taken and shall cause the assets to be liquidated and the business of the Company to be wound up as promptly as possible. To the extent permitted by the Act, the proceeds of such liquidation shall be applied, first, to creditors in satisfaction of liabilities of the Company (whether by payment or by making of reasonable provision for payment), including any loans to the Company by Members, and any remaining assets of the Company shall be distributed in accordance with Section 4.4. The holders of Units shall continue to share distributions, profits, losses and allocations during the period of liquidation in accordance with Articles 3, 4 and 5. Except as otherwise authorized by the Board, the Liquidator shall not be entitled to any special compensation for serving as the liquidator of the Company.
     14.3      No Recourse . A Member shall look solely to the assets of the Company for the return of its Capital Contributions, and if the assets remaining after the payment and discharge of

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Company debts and liabilities are insufficient to provide for the return of its Capital Contributions, a Member shall have no recourse against any other Member. No holder of an interest in the Company shall have any right to demand or receive property other than cash upon dissolution, winding up and termination of the Company.
     14.4      No Deficit Contribution Obligation . No Member shall have any obligation, upon a liquidation, to make any Capital Contribution for purposes of eliminating or diminishing any negative balance in such Member’s Capital Account.
ARTICLE 15
AMENDMENTS; POWER OF ATTORNEY
     15.1      Amendments Generally . Except as otherwise provided in this Agreement, any provision of this Agreement may be amended pursuant to any amendment that is approved by Members holding at least 75% of the total Units then outstanding; provided, however , that no modification of the terms of this Agreement that (i) increases or extends any financial obligation or liability of a Member, (ii) alters the method of division of profits and losses or a method of distributions made to a Member, (iii) adversely affects a Member’s ability to designate Directors or (iv) otherwise adversely affects the obligations or rights of a Member (as a Member under this Agreement) in a manner disproportionately different than the other Member(s) shall be effective without the prior written consent of such Member.
     15.2      Power of Attorney . Each Member hereby irrevocably appoints the Member holding the greatest number of Units as its true and lawful attorney-in-fact, with full power and authority, on behalf and in the name of such Member, to execute, acknowledge, swear to and file pertinent instruments (a) in connection with any amendment to this Agreement approved in accordance with this Article 15, (i) to admit additional or substitute Members as authorized by this Agreement, and (ii) in any other respect, provided there has been compliance with this Agreement with respect to the amendment in question, and (b) required of the Company by applicable law.
ARTICLE 16
MISCELLANEOUS
     16.1      No Registration of Units . Each Member agrees that the Units being issued hereunder to the Members may be securities and that such Units have been issued without registration under the Securities Act of 1933, as amended (the “ Securities Act ”), or registration or qualification under any state securities or “ Blue Sky ” laws, in reliance on exemptions from those registration and qualification provisions. Each Member represents and warrants to the Company that it has acquired or is acquiring its Units for investment purposes only and without any view toward or intent to dispose of or distribute such Units or any interest therein. Each Member also agrees that, in the absence of an applicable exemption from registration and qualification, neither the Units, nor any interest therein may be transferred without registration under the Securities Act and registration or qualification under applicable state securities or “ Blue Sky ” laws.

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     16.2      Exhibits . Each of the Exhibits attached to this Agreement are incorporated herein by reference and expressly made a part of this Agreement for all purposes. References to any Exhibit in this Agreement shall be deemed to include this reference and incorporation.
     16.3      Severability . If any provision of this Agreement or portion thereof, or the application of such provision or portion thereof to any Person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision or portion thereof to Persons or circumstances other than those to which it is held invalid, shall not be affected thereby.
     16.4      Successors and Assigns . Except as otherwise herein provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs executors, administrators and successors, and all other persons hereafter having or holding an interest in this Company, whether as Assignees, Transferees, Substitute Members, Additional Members or otherwise.
     16.5      Governing Law . This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws, and not the laws pertaining to choice or conflict of laws, of the State of Delaware. Each Member consents to the exclusive jurisdiction of the federal and state courts located in Wilmington, Delaware with respect to any litigation arising under or related to this Agreement.
     16.6      Counterparts . This Agreement may be executed by original or facsimile signature in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.
     16.7      No Third Party Beneficiaries . The provisions of this Agreement shall not be for the benefit of, nor shall they be enforceable by, any Person who is not an Assignee or a party to this Agreement.
     16.8      Notices . Except as expressly provided otherwise in this Agreement, all notices, requests, or consents provided for or permitted to be given under this Agreement must be in writing and must be given either by depositing that writing in the United States mail, addressed to the Person, postage prepaid, and registered or certified with return receipt requested, or by delivering that writing to the Person in person, by courier, or by facsimile transmission. If mailed or delivered by courier, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, or when deposited with a reputable overnight courier, addressed to the Person at its address as it appears in the records of the Company. If given by facsimile transmission, such notice shall be deemed to be given when upon receipt of confirmation of a successful facsimile transmission to the facsimile number of the Person as it appears in the records of the Company. If given personally or otherwise than by mail, courier or facsimile transmission, such notice shall be deemed to be given when either handed to the Person or delivered to the Person’s address as it appears in the records of the Company. All notices, requests, and consents to be given to a Member must be sent or delivered to the address given for that Member as reflected in this Agreement or such other address as that Member may specify by written notice to the Company and to the other Members. Whenever any notice is required to be given by law or this Agreement, a written waiver thereof, signed by the Person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

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     16.9      Entire Agreement; Interpretation . This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes any prior understandings between them with respect to said subject matter, and specifically, but without limiting the foregoing, supercedes and replaces that certain Limited Liability Company Agreement of Calumet GP, LLC dated as of September 29, 2005. There are no representations, agreements, arrangements or understandings, oral or written, between and among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. This Agreement is not to be interpreted for or against any Member or the Company, and no Person will be deemed the draftsperson of this Agreement.
(SIGNATURE PAGES FOLLOW)

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     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Limited Liability Company Agreement effective as of the Effective Date.
         
    CALUMET GP, LLC
 
       
 
  By:   /s/ R. Patrick Murray, II
 
       
 
      R. Patrick Murray, II
Vice President and Chief Financial Officer
 
       
    THE HERITAGE GROUP
 
       
 
  By:   /s/ Fred M. Fehsenfeld, Jr.
 
       
 
      Fred M. Fehsenfeld, Jr.
 
      Chief Executive Officer

[Signature Page to the GP LLC Agreement]

 


 

         
    JANET KRAMPE GRUBE GRANTOR
RETAINED ANNUITY TRUST DATED
JANUARY 31, 2002
 
       
 
  By:   /s/ Janet K. Grube
 
       
 
      Janet K. Grube
Trustee
 
       
    MILDRED L. FEHSENFELD IRREVOCABLE
INTERVIVOS TRUST FOR THE BENEFIT OF
FRED MEHLERT FEHSENFELD, JR. AND
HIS ISSUE

 
       
 
  By:   /s/ James C. Fehsenfeld
 
       
 
      James C. Fehsenfeld
Trustee
 
       
    MAGGIE FEHSENFELD TRUST NUMBER
106 FOR THE BENEFIT OF FRED MEHLERT
FEHSENFELD, JR. AND HIS ISSUE

 
       
 
  By:   /s/ James C. Fehsenfeld
 
       
 
      James C. Fehsenfeld
Trustee

[Signature Page to the GP LLC Agreement]

 


 

SCHEDULE A
SCHEDULE OF MEMBERS
         
    Number of
Name & Address   Units
The Heritage Group
       
5400 W. 86th Street
       
Indianapolis, IN 46268-0123
    510  
 
       
Janet Krampe Grube Grantor
       
Retained Annuity Trust
       
dated January 31, 2002
       
2780 Waterfront Parkway E. Drive
       
Suite 200
       
Indianapolis, IN 46214
    300  
 
       
Mildred L. Fehsenfeld Irrevocable
       
Intervivos Trust for the Benefit of
       
Fred Mehlert Fehsenfeld, Jr.
       
and his issue
       
5400 W. 86th Street
       
Indianapolis, IN 46268-0123
    95  
 
       
Maggie Fehsenfeld Trust
       
Number 106 for the Benefit of
       
Fred Mehlert Fehsenfeld, Jr.
       
and his issue
       
5400 W. 86th Street
       
Indianapolis, IN 46268-0123
    95  

 


 

EXHIBIT A
NON-NEGOTIABLE UNIT CERTIFICATE FOR
UNITS IN CALUMET GP, LLC
“This Certificate and the Units represented hereby are subject to a certain Amended and Restated Limited Liability Company Agreement dated as of January 31, 2006, and any amendment thereto, a copy of which agreement is on file at the principal place of business of the Company, and, except as otherwise provided in said agreement, any sale, gift, pledge, assignment, bequest, transfer, transfer in trust, mortgage, alienation, hypothecation, encumbering or disposition of Units in any manner whatsoever, voluntarily or involuntarily, including, without limitation, any attachment, assignment for the benefit of creditors or transfer by operation of law or otherwise, or any transfer as a result of any voluntary or involuntary legal proceedings, execution, sale, bankruptcy, insolvency, or otherwise of this Certificate or the Units represented hereby in violation of said agreement shall be invalid.”
         
Certificate No.
      Units
 
       
Calumet GP, LLC, a Delaware limited liability company (the “Company”), hereby certifies that                                           (the “Holder”) is the registered owner of the above referenced Units in the Company. This Certificate is issued pursuant to the Amended and Restated Limited Liability Company Agreement of the Company, dated as of January 31, 2006, as the same may be amended, modified or supplemented from time to time (the “Limited Liability Company Agreement”). The rights, powers, preferences, restrictions and limitations of the Units represented hereby are set forth in, and the Certificate and the Units represented hereby are issued and shall in all respects be subject to, the terms and provisions of, the Limited Liability Company Agreement. THE UNITS REPRESENTED BY THIS CERTIFICATE ARE NONTRANSFERABLE EXCEPT AS EXPRESSLY PROVIDED IN THE LIMITED LIABILITY COMPANY AGREEMENT. By acceptance of this Certificate for the above referenced Units, and as a condition to being entitled to any rights and/or benefits with respect to the Units evidenced hereby, the Holder hereof (including any transferee hereof) is deemed to have agreed, whether or not such Holder is admitted to the Company as a Member of the Company with respect to the Units evidenced hereby, to comply with and be bound by all the terms and conditions of the Limited Liability Company Agreement.
             
Date:______________   Calumet GP, LLC    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
  Title:        
 
           
 
  By:        
 
           
 
  Name:        
 
  Title:        

 

 

EXHIBIT 10.1
 
OMNIBUS AGREEMENT

among
THE HERITAGE GROUP
CALUMET GP, LLC
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CALUMET OPERATING, LLC
CALUMET LP GP, LLC
and
CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP
 

 


 

OMNIBUS AGREEMENT
     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date (as defined herein), and is by and among The Heritage Group, an Indiana general partnership (“THG”), Calumet GP, LLC, a Delaware limited liability company (the “General Partner”), Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “Partnership”), Calumet Operating, LLC, a Delaware limited liability company (the “OLLC”), Calumet LP GP, LLC, a Delaware limited liability company (“Calumet LP GP”), and Calumet Lubricants Co., Limited Partnership, an Indiana limited partnership (“Calumet LP”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”
R E C I T A L S:
     The Parties desire by their execution of this Agreement to evidence their agreement, as more fully set forth in Article II, with respect to those business opportunities that the THG Entities (as defined herein) will not engage in during the term of this Agreement unless the Partnership Entities have declined to engage in any such business opportunity for their own account.
     In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:
ARTICLE I
Definitions
                1.1 Definitions.
     As used in this Agreement, the following terms shall have the respective meanings set forth below:
      “Affiliate” is defined in the Partnership Agreement.
      “Closing Date” means the date of the closing of the Partnership’s initial public offering of Common Units.
     “ Code ” means Internal Revenue Code of 1986, as amended.
      “Common Units” is defined in the Partnership Agreement.
      “Conflicts Committee” is defined in the Partnership Agreement.
      “Contribution Agreement” means that certain Contribution, Conveyance and Assumption Agreement, dated as of the Closing Date, among THG, the General Partner, the Partnership, the OLLC, Calumet LP GP, Calumet LP and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder.
   

 


 

      “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
      “Exchange Act” means the Securities Exchange Act of 1934, as amended.
      “General Partner” is defined in the introduction to this Agreement.
      “Limited Partner” is defined in the Partnership Agreement.
      “Offer” is defined in Section 2.3(a).
      “Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of Calumet Specialty Products Partners, L.P., dated as of the Closing Date, as such agreement is in effect on the Closing Date, to which reference is hereby made for all purposes of this Agreement. No amendment or modification to the Partnership Agreement subsequent to the Closing Date shall be given effect for the purposes of this Agreement unless consented to in writing by each of the Parties to this Agreement.
      “Partnership Entities” means the General Partner and each member of the Partnership Group.
      “Partnership Entity” means any of the Partnership Entities.
      “Partnership Group” means the Partnership, the OLLC, Calumet LP GP, Calumet LP and any Subsidiary of any such Person, treated as a single consolidated entity.
      “Partnership Group Member” means any member of the Partnership Group.
      “Party” and “Parties” are defined in the introduction to this Agreement.
      “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.
      “Restricted Businesses” is defined in Section 2.1.
      “Retained Assets” means any assets and investments owned or operated by any of the THG Entities as of the Closing Date that were not conveyed, contributed or otherwise transferred to the Partnership Group prior to or on the Closing Date pursuant to the Contribution Agreement or otherwise.
      “Subject Assets” is defined in Section 2.2(e).

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      “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.
      “THG Entities” means THG and any Person controlled, directly or indirectly, by THG other than the Partnership Entities.
      “THG Entity” means any of the THG Entities.
      “transfer” including the correlative terms “transferring” or “transferred” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition (whether voluntary, involuntary or by operation of law) of any assets, properties or rights.
      “Units” is defined in the Partnership Agreement.
ARTICLE II
Business Opportunities
                2.1 Restricted Businesses . For so long as a THG Entity controls the Partnership, and except as permitted by Section 2.2, each of the THG Entities shall be prohibited from engaging in, whether by acquisition, construction, investment in debt or equity securities of any Person or otherwise, any business having assets engaged in the following businesses (the “Restricted Businesses”): the refining or marketing of specialty lubricating oils, solvents, wax products, gasoline, diesel or jet fuel products in the continental United States.
                2.2 Permitted Exceptions . Notwithstanding any provision of Section 2.1 to the contrary, the THG Entities may engage in the following activities under the following circumstances:
     (a) the ownership and/or operation of any of the Retained Assets (including replacements and natural extensions of the Retained Assets);
     (b) the refining and/or marketing of asphalt and asphalt-related products and related product development activities;

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     (c) the refining and/or marketing of products that do not produce “qualifying income” as defined in the Code;
     (d) the purchase and ownership of up to 9.9% of any class of securities of any entity engaged in any Restricted Business;
     (e) the acquisition of, construction of or investment in any Restricted Business or any asset or group of related assets used in any Restricted Business by a THG Entity after the Closing Date (the “Subject Assets”) if, in the case of an acquisition, the fair market value of the Subject Assets, or, in the case of an investment, the amount of the investment, or in the case of construction, the estimated construction cost of the Subject Assets, is less than $5 million at the time of such acquisition, investment or construction, as the case may be;
     (f) the acquisition of, construction of or investment in any Subject Assets involving a fair market value, investment or construction cost, as the case may be, greater than that permitted by Section 2.2(d) or Section 2.2(e); provided the Partnership Group has been offered the opportunity to acquire, construct or invest in such Subject Assets in accordance with Section 2.3 and the General Partner (with the approval of the Conflicts Committee) has elected not to purchase such Subject Assets; and
     (g) any Restricted Business conducted by a THG Entity with the approval of the Conflicts Committee.
                2.3 Procedures.
               (a) In the event that a THG Entity becomes aware of an opportunity to acquire, construct or invest in Subject Assets described in Section 2.2(f), then, subject to Section 2.3(b), as soon as practicable, such THG Entity shall notify the General Partner in writing of such opportunity and deliver to the General Partner all information in the possession of any THG Entity relating to the Subject Assets and such potential transaction. As soon as practicable but in any event within 30 days after receipt of such notification and information, the General Partner, on behalf of the Partnership, shall notify the THG Entity in writing that either (i) the General Partner, on behalf of the Partnership, has elected (with the concurrence of the Conflicts Committee) not to cause a member of the Partnership Group to pursue the opportunity to acquire, construct or invest in the Subject Assets, in which case the THG Entities may acquire, construct or invest in such Subject Assets without any further obligation to offer such opportunity to the Partnership, or (ii) the General Partner, on behalf of the Partnership, has elected (with the concurrence of the Conflicts Committee) to cause a member of the Partnership Group to pursue the opportunity to acquire, construct or invest in the Subject Assets. Failure by the General Partner to provide such notice within such 30-day period shall be deemed to constitute a decision not to pursue such opportunity. If, at any time, the General Partner abandons such opportunity with the approval of the Conflicts Committee (as evidenced in writing by the General Partner following the request of the THG Entity), the THG Entity may pursue such opportunity. Any Subject Assets which are permitted to be acquired, constructed or invested in by a THG Entity must be so acquired, constructed or invested

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in (i) within 12 months of the later to occur of (A) the date that the THG Entity is permitted pursuant to this Section 2.3(a) to pursue such acquisition, construction project or investment and (B) the date upon which all required governmental approvals to consummate such acquisition, construction project or investment have been obtained, and (ii) on terms not materially more favorable to the THG Entity than were offered to the Partnership. If either of these conditions are not satisfied, such opportunity must be reoffered to the Partnership in accordance with this Section 2.3(a).
               (b) Notwithstanding Section 2.3(a), in the event that a THG Entity becomes aware of an opportunity to make an acquisition or investment that includes both Subject Assets and assets that are not Subject Assets and such Subject Assets have a fair market value (as determined in good faith by the Board of Trustees of THG) equal to or greater than $5 million but comprise less than half of the fair market value (as determined in good faith by the Board of Trustees of THG) of the total assets being considered for acquisition or investment, then the THG Entity may make such acquisition or investment without first offering the opportunity to the Partnership or notifying the General Partner provided that the THG Entities comply with the following procedures:
               (i) Within 90 days after the consummation of the acquisition or investment, as the case may be, by a THG Entity of the Subject Assets, as the case may be, the THG Entity shall notify the General Partner in writing of such acquisition or investment and offer the Partnership Group the opportunity to purchase such Subject Assets in accordance with this Section 2.3(b) (the “Offer”). The Offer shall set forth the proposed terms by which a Partnership Group Member may purchase the Subject Assets and, if any THG Entity desires to utilize the Subject Assets, the proposed commercially reasonable terms on which the Partnership Group will enable the THG Entity to utilize the Subject Assets. As soon as practicable, but in any event within 30 days after receipt of such written notification, the General Partner shall notify the THG Entity in writing that either (x) the General Partner has elected (with the concurrence of the Conflicts Committee) not to cause any Partnership Group Member to purchase the Subject Assets, in which event the THG Entity shall be forever free to continue to own or operate such Subject Assets, or (y) the General Partner has elected (with the concurrence of the Conflicts Committee) to cause a Partnership Group Member to purchase the Subject Assets, in which event the following procedures in subsections (ii) and (iii) shall apply.
               (ii) If the THG Entity and the General Partner (with the approval of the Conflicts Committee) are able, within 60 days after receipt by the General Partner of the Offer, to agree on the fair market value of the Subject Assets that are subject to the Offer and any other terms of the Offer including, without limitation, the terms, if any, on which the Partnership Group will enable the THG Entity to utilize the Subject Assets, a Partnership Group Member shall purchase the Subject Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached and, if applicable, enter into an agreement with the THG Entity to provide services in a manner consistent with the Offer.

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               (iii) If the THG Entity and the General Partner (with the concurrence of the Conflicts Committee) are unable, within 60 days after receipt by the General Partner of the Offer, to agree on the fair market value of the Subject Assets that are subject to the Offer or the other terms of the Offer including, if applicable, the terms on which the Partnership Group will enable the THG Entity to utilize the Subject Assets, the THG Entity and the General Partner will engage a mutually agreed upon investment banking firm to determine the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and the THG Entity are unable to agree. Such investment banking firm will determine the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and the THG Entity are unable to agree within 30 days of its engagement and furnish the THG Entity and the General Partner its determination. The fees of the investment banking firm will be split equally between the THG Entity and the Partnership Group. Once the investment banking firm has submitted its determination of the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and the THG Entity are unable to agree, the General Partner will have the right, but not the obligation, subject to the approval of the Conflicts Committee, to cause a Partnership Group Member to purchase the Subject Assets pursuant to the Offer as modified by the determination of the investment banking firm. The Partnership Group will provide written notice of its decision to the THG Entity within 30 days after the investment banking firm has submitted its determination. Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Subject Assets. If the General Partner elects to cause a Partnership Group Member to purchase the Subject Assets, then the Partnership Group Member shall purchase the Subject Assets pursuant to the Offer as modified by the determination of the investment banking firm as soon as commercially practicable after such determination and, if applicable, enter into an agreement with the THG Entity to provide services in a manner consistent with the Offer, as modified by the determination of the investment banking firm, if applicable.
                2.4 Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, each THG Entity shall be free to engage in any business activity, including those that may be in direct competition with any Partnership Group Member.
                2.5 Enforcement . The THG Entities agree and acknowledge that the Partnership Group does not have an adequate remedy at law for the breach by any THG Entity of the covenants and agreements set forth in this Article II, and that any breach by any THG Entity of the covenants and agreements set forth in this Article II would result in irreparable injury to the Partnership Group. The THG Entities further agree and acknowledge that any Partnership Group Member may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the THG Entities from such breach, and consent to the issuance of injunctive relief relating to this Agreement. No Person, directly or indirectly controlled thereby shall be liable for the failure of any other Person, directly or indirectly, controlled thereby to comply with this Article II.

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ARTICLE III
Miscellaneous
                3.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Indiana and to venue in Indianapolis, Indiana.
                3.2 Notice . 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 depositing same in the U.S. mail, addressed to the Person to be notified, postpaid and registered or certified with return receipt requested or by transmitting by national overnight courier or by delivering such notice in person or by 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 receipt when transmitted by facsimile if transmitted during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not transmitted during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to all other Parties in the manner provided in this Section 3.2.
               if to the THG Entities:
The Heritage Group
5400 West 86th Street
Indianapolis, Indiana 46268
Attention: Fred M. Fehsenfeld, Jr.
Fax: 317-879-8145
with a copy to:
The Heritage Group
5400 West 86th Street
Indianapolis, Indiana 46268
Attention: Tom Mattix
Fax: 317-872-6327

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               if to the Partnership Entities
Calumet Specialty Products Partners, L.P.
2780 Waterfront Parkway East Drive, Suite 200
Indianapolis, Indiana 46214
Attention: R. Patrick Murray, II
Fax: 317-328-5676
with a copy to:
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2300
Houston, Texas 77002
Attention: David Oelman
Fax: 713-758-2346
                3.3 Entire Agreement . This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.
                3.4 Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided, however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement that the General Partner determines will adversely affect the holders of Common Units. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.
                3.5 Assignment . No Party shall have the right to assign any of its rights or obligations under this Agreement without the consent of the other Parties hereto.
                3.6 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.
                3.7 Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.
                3.8 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

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                3.9 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Closing Date.
             
    THE HERITAGE GROUP
 
           
 
  By:   /s/ Fred M. Fehsenfeld, Jr.    
 
           
 
      Fred M. Fehsenfeld, Jr.    
 
      Chief Executive Officer    
 
           
    CALUMET GP, LLC
 
           
 
  By:   /s/ R. Patrick Murray, II    
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
 
           
    CALUMET SPECIALTY PRODUCTS
    PARTNERS, L.P.
 
           
 
  By:   CALUMET GP, LLC, its general partner    
 
           
 
  By:   /s/ R. Patrick Murray, II    
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
 
           
    CALUMET OPERATING, LLC
 
           
 
  By:   Calumet Specialty Products Partners, L.P.,    
 
      its sole member    
 
           
 
  By:   Calumet GP, LLC,    
 
      its general partner    
 
           
 
  By:   /s/ R. Patrick Murray, II    
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    

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    CALUMET LP GP, LLC
 
           
 
  By:   /s/ R. Patrick Murray, II    
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    
 
           
    CALUMET LUBRICANTS CO., LIMITED
    PARTNERSHIP
 
           
 
  By:   CALUMET LP GP, LLC, its general partner    
 
           
 
  By:   /s/ R. Patrick Murray, II    
 
           
 
      R. Patrick Murray, II    
 
      Vice President and Chief Financial Officer    

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EXHIBIT 10.2
CALUMET GP, LLC
LONG-TERM INCENTIVE PLAN
     SECTION 1. Purpose of the Plan .
     The Calumet GP, LLC Long-Term Incentive Plan (the “Plan”) has been adopted by Calumet GP, LLC, a Delaware limited liability company (the “Company”), the general partner of Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “Partnership”). The Plan is intended to promote the interests of the Partnership, the Company and their Affiliates by providing to Employees, Consultants and Directors incentive compensation awards based on Units to encourage superior performance. The Plan is also contemplated to enhance the ability of the Company, the Partnership and their Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Company, the Partnership and their Affiliates and to encourage them to devote their best efforts to advancing the business of the Company, the Partnership and their Affiliates.
     SECTION 2. Definitions .
     As used in the Plan, the following terms shall have the meanings set forth below:
     “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.
     “Award” means an Option, Restricted Unit, Phantom Unit or Substitute Award granted under the Plan, and shall include any tandem DERs granted with respect to a Phantom Unit or Option.
     “Award Agreement” means the written or electronic agreement by which an Award shall be evidenced.
     “Board” means the Board of Directors of the Company.
     “Change of Control” means, and shall be deemed to have occurred upon, one or more of the following events:
               (i) any “person” or “group”, within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than an Affiliate, becomes the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of fifty percent (50%) or more of the voting power of the outstanding equity interests of the Partnership;
               (ii) a Person other than the Company or an Affiliate of the Company becomes the general partner of the Partnership; or

 


 

               (iii) the sale or other disposition, including by liquidation or dissolution, of all or substantially all of the assets of the Company or the Partnership in one or more transactions to any Person other than an Affiliate.
     Notwithstanding the foregoing, with respect to any Award that is subject to Section 409A of the Internal Revenue Code, “Change of Control” shall have the meaning ascribed to such term in the regulations or other guidance issued with respect to Section 409A.
     “Committee” means the Board, the Compensation Committee of the Board or such other committee as may be appointed by the Board to administer the Plan.
     “Consultant” means an individual who renders consulting services to the Company, the Partnership or an Affiliate.
     “DER” means a distribution equivalent right, being a contingent right, granted in tandem with a specific Option or Phantom Unit, to receive an amount in cash equal to the cash distributions made by the Partnership with respect to a Unit during the period such Award is outstanding.
     “Director” means a member of the board of directors of the Company or an Affiliate who is not an Employee or a Consultant.
     “Employee” means an employee of the Company, the Partnership or an Affiliate.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Fair Market Value” means the closing sales price of a Unit on the principal national securities exchange or other market in which trading in Units occurs on the applicable date (or if there is no trading in the Units on such date, on the next preceding date on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the Committee). If Units are not traded on a national securities exchange or other market at the time a determination of fair market value is required to be made hereunder, the determination of fair market value shall be made in good faith by the Committee.
     “Option” means an option to purchase Units granted under the Plan.
     “Participant” means an Employee, Consultant or Director granted an Award under the Plan.
     “Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, as it may be amended or amended and restated from time to time.
     “Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity.

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     “Phantom Unit” means a phantom (notional) Unit granted under the Plan which upon vesting entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market Value of a Unit, as determined by the Committee in its discretion.
     “Restricted Period” means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and is not exercisable by or payable to the Participant, as the case may be.
     “Restricted Unit” means a Unit granted under the Plan that is subject to a Restricted Period.
     “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act or any successor rule or regulation thereto as in effect from time to time.
     “SEC” means the Securities and Exchange Commission, or any successor thereto.
     “Substitute Award” means an award granted pursuant to Section 6(c)(viii) of the Plan.
     “UDR” means a distribution made by the Partnership with respect to a Restricted Unit.
     “Unit” means a Common Unit of the Partnership.
     SECTION 3. Administration.
     The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the following and applicable law, the Committee, in its sole discretion, may delegate any or all of its powers and duties under the Plan, including the power to grant Awards under the Plan, to the Chief Executive Officer of the Company, subject to such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any such delegation all references in the Plan to the “Committee”, other than in Section 7, shall be deemed to include the Chief Executive Officer; provided, however, that such delegation shall not limit the Chief Executive Officer’s right to receive Awards under the Plan. Notwithstanding the foregoing, the Chief Executive Officer may not grant Awards to, or take any action with respect to any Award previously granted to, a person who is an officer subject to Rule 16b-3 or a member of the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or

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reconcile any inconsistency in the Plan or an Award Agreement in such manner and to such extent as the Committee deems necessary or appropriate. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, the Partnership, any Affiliate, any Participant, and any beneficiary of any Award.
     SECTION 4. Units .
     (a)  Limits on Units Deliverable . Subject to adjustment as provided in Section 4(c), the number of Units that may be delivered with respect to Awards under the Plan is 783,960. Units withheld from an Award to satisfy the exercise price of such Award or the Company’s or an Affiliate’s minimum tax withholding obligations with respect to the Award shall not be considered to be Units delivered under the Plan for this purpose. If any Award is forfeited, cancelled, exercised, or otherwise terminates or expires without the actual delivery of Units pursuant to such Award, the Units subject to such Award shall again be available for Awards under the Plan. There shall not be any limitation on the number of Awards that may be granted and paid in cash.
     (b)  Sources of Units Deliverable Under Awards . Any Units delivered pursuant to an Award shall consist, in whole or in part, of Units acquired in the open market, from any Affiliate, the Partnership or any other Person, or any combination of the foregoing, as determined by the Committee in its discretion.
     (c)  Adjustments . In the event of any distribution (whether in the form of Units, other securities or property other than cash), recapitalization, split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event, the Committee shall, in such manner as it may deem equitable, adjust the number and type of Units (or other securities or property) with respect to which Awards may be granted.
     SECTION 5. Eligibility .
     Any Employee, Consultant or Director who performs services, directly or indirectly, for the benefit of the Partnership shall be eligible to be designated a Participant and receive an Award under the Plan.
     SECTION 6. Awards .
     (a)  Options . The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Options shall be granted, the number of Units to be covered by each Option, whether DERs are granted with respect to such Option, the purchase price therefor and the Restricted Period and other conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.

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          (i) Exercise Price . The exercise price per Unit purchasable under an Option shall be determined by the Committee at the time the Option is granted but, except with respect to a Substitute Award, may not be less than the Fair Market Value of a Unit as of the date of grant of the Option.
          (ii) Time and Method of Exercise . The Committee shall determine the exercise terms and the Restricted Period with respect to an Option grant, which may include, without limitation, the provision for accelerated vesting up on the achievement of specified performance goals or other events, and the method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the Company, a “cashless-broker” exercise through procedures approved by the Company, withholding Units to be acquired upon the Option exercise, or any combination of methods, having a Fair Market Value on the exercise date equal to the relevant exercise price.
          (iii) Forfeitures . Except as otherwise provided in the terms of the Option grant, upon termination of a Participant’s employment with or consulting services to the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all Options shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Options.
          (iv) Option DERs . To the extent provided by the Committee, in its discretion, a grant of Options may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the same vesting restrictions as the tandem Options Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion.
     (b)  Restricted Units and Phantom Units . The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Restricted Units or Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant, the Restricted Period, the conditions under which the Restricted Units or Phantom Units may become vested or forfeited and such other terms and conditions as the Committee may establish with respect to such Awards.
          (i) DERs . To the extent provided by the Committee, in its discretion, a grant of Phantom Units may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the same vesting restrictions as the tandem Phantom Unit Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion.
          (ii) UDRs . To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide that distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. Absent such a restriction on the UDRs in the grant agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction.

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          (iii) Forfeitures . Except as otherwise provided in the terms of the Restricted Units or Phantom Units grant, upon termination of a Participant’s employment with or consulting services to the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Restricted Units and Phantom Units awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Restricted Units and/or Phantom Units.
          (iv) Lapse of Restrictions .
          (A) Phantom Units . Upon or as soon as reasonably practical following the vesting of each Phantom Unit, subject to the provisions of Section 8(b), the Participant shall be entitled to receive from the Company one Unit or cash equal to the Fair Market Value of a Unit, as determined by the Committee in its discretion.
          (B) Restricted Units . Upon or as soon as reasonably practical following the vesting of each Restricted Unit, subject to satisfying the tax withholding obligations of Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Unit certificate so that the Participant then holds an unrestricted Unit.
     (c)  General .
          (i) Awards May Be Granted Separately or Together . Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
          (ii) Limits on Transfer of Awards .
          (A) Except as provided in Paragraph (C) below, each Option shall be exercisable only by the Participant during the Participant’s lifetime, or by the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.
          (B) Except as provided in Paragraph (C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, the Partnership or any Affiliate.

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          (C) To the extent specifically provided by the Committee with respect to an Option, an Option may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.
          (iii) Term of Awards . The term of each Award shall be for such period as may be determined by the Committee, but such term may not exceed 10 years.
          (iv) Unit Certificates . All certificates for Units or other securities of the Partnership delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions.
          (v) Consideration for Grants . Awards may be granted for such consideration, including services, as the Committee determines.
          (vi) Delivery of Units or other Securities and Payment by Participant of Consideration . Notwithstanding anything in the Plan or any grant agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period during which, in the good faith determination of the Committee, the Company is not reasonably able to obtain Units to deliver pursuant to such Award without violating applicable law or the applicable rules or regulations of any governmental agency or authority or securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award grant agreement (including, without limitation, any exercise price or tax withholding) is received by the Company.
          (vii) Change of Control . Unless specifically provided otherwise in the Award agreement, upon a Change of Control all outstanding Awards shall automatically vest and be payable at their maximum target level or become exercisable in full, as the case may be. In this regard, all Restricted Periods shall terminate and all performance criteria, if any, shall be deemed to have been achieved at the maximum level.
          (viii) Substitute Awards . Awards may be granted under the Plan in substitution for similar assumed, canceled or forfeited awards held by individuals who become Employees, Consultants or Directors as a result of a merger, consolidation or acquisition by the Company or an Affiliate of another entity or the assets of another entity. Such Substitute Awards that are Options may have exercise prices less than the Fair Market Value of a Unit on the date of such substitution.

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SECTION 7. Amendment and Termination .
Except to the extent prohibited by applicable law:
     (a)  Amendments to the Plan . Except as required by the rules of the principal securities exchange on which the Units are traded and subject to Section 7(b) below, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan in any manner, including increasing the number of Units available for Awards under the Plan, without the consent of any partner, Participant, other holder or beneficiary of an Award, or any other Person.
     (b)  Amendments to Awards . Subject to Section 7(a), the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 7(c), in any Award shall materially reduce the benefit to a Participant without the consent of such Participant.
     (c)  Actions Upon the Occurrence of Certain Events . Upon the occurrence of any event described in Section 4(c) of the Plan, any Change of Control, any change in applicable law or regulation affecting the Plan or Awards thereunder, or any change in accounting principles affecting the financial statements of the Partnership, the Committee, in its sole discretion and on such terms and conditions as it deems appropriate, may take any one or more of the following actions in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or an outstanding Award:
               (A) provide for either (i) the termination of any Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of such transaction or event the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment) or (ii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion;
               (B) provide that such Award be assumed by the successor or survivor entity, or a parent or subsidiary thereof, or be exchanged for similar options, rights or awards covering the equity of the successor or survivor, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of equity interests and prices;
               (C) make adjustments in the number and type of Units (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Awards or in the terms and conditions of (including the exercise price), and the vesting/performance criteria included in, outstanding Awards, or both;

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               (D) provide that such Award shall be exercisable or payable, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and
               (E) provide that the Award cannot be exercised or become payable after such event, i.e. , shall terminate upon such event.
     SECTION 8. General Provisions .
     (a)  No Rights to Award . No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.
     (b)  Tax Withholding . Unless other arrangements have been made that are acceptable to the Company, the Company or any Affiliate is authorized to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units, Units that would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in respect of the grant of an Award, its exercise, the lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes.
     (c)  No Right to Employment or Services . The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate, continue consulting services or to remain on the Board, as applicable. Furthermore, the Company or an Affiliate may at any time dismiss a Participant from employment or consulting free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award agreement or other agreement.
     (d)  Governing Law . The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without regard to its conflict of laws principles.
     (e)  Severability . If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall be construed or deemed amended to conform to the applicable law, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
     (f)  Other Laws . The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities exchange on which the Units are then traded, or entitle the Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.

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     (g)  No Trust or Fund Created . Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any participating Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any participating Affiliate.
     (h)  No Fractional Units . No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto shall be canceled, terminated, or otherwise eliminated.
     (i)  Headings . Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
     (j)  Facility Payment . Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.
     (k)  Participation by Affiliates . In making Awards to Employees employed by an entity other than the Company, the Committee shall be acting on behalf of the Affiliate, and to the extent the Partnership has an obligation to reimburse the Company for compensation paid for services rendered for the benefit of the Partnership, such payments or reimbursement payments may be made by the Partnership directly to the Affiliate, and, if made to the Company, shall be received by the Company as agent for the Affiliate.
     (l)  Gender and Number . Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.
     (m)  Compliance with Section 409A . Nothing in the Plan or any Award Agreement shall operate or be construed to cause the Plan or an Award to fail to comply with the requirements of Section 409A of the Internal Revenue Code. The applicable provisions of Section 409A and the regulations and guidelines issued thereunder are hereby incorporated by reference and, with respect to an Award the Committee intended to comply with Section 409A, shall control over any Plan or Award Agreement provision in conflict therewith.
     SECTION 9. Term of the Plan .
     The Plan shall be effective on the date of its approval by the Board and shall continue until the earliest of (i) the date terminated by the Board or the Committee, (ii) all Units available under the Plan have been paid to Participants, or (iii) the 10th anniversary of the date the Plan is adopted by the Company. Unless otherwise expressly provided in the Plan or in an applicable

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Award Agreement, however, any Award granted prior to such termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.

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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
     This Employment Agreement (“Agreement”) made and entered into effective as of January 31, 2006 (the “Effective Date”) by and between Calumet GP, LLC (the “Company”), a Delaware limited liability company, and F. William Grube (the “Executive”).
     WHEREAS, the Company has been organized to act as the general partner of Calumet Specialty Products Partners, L.P., a Delaware limited partnership (the “MLP”) that will acquire and continue the business of Calumet Lubricants Co., Limited Partnership (the “Predecessor”); and
     WHEREAS, the Executive has been the President and Chief Executive Officer of the Predecessor since 1990; and
     WHEREAS, the Company desires to secure the continued employment of the Executive in accordance herewith and the Executive is willing to be employed by the Company on the terms and conditions set forth herein;
     NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements set forth below, it is hereby agreed as follows:
     1.  Employment and Term .
          (a) Employment . The Company agrees to employ the Executive, and the Executive agrees to be employed by the Company, in accordance with the terms and provisions of this Agreement during the Employment Period (as defined below).
          (b) Term . Subject to earlier termination as provided in Section 5, the initial term of the Executive’s employment under this Agreement shall commence as of the Effective Date and shall continue until the fifth anniversary of the Effective Date (such term as it may be earlier terminated or extended being referred to hereinafter as the “Employment Period”). On the third anniversary of the Effective Date, and on every anniversary of the Effective Date thereafter, the Employment Period shall be deemed to be automatically extended to include an additional period of twelve months past the previously established ending date of the Employment Period, unless either party notifies the other of non-extension at least ninety days prior to any such anniversary date.
     2.  Duties and Powers of the Executive .
          (a) Duties . During the Employment Period the Executive shall serve as the Chief Executive Officer and President of the Company and as a member of the Board of Directors (the “Board”) with such authority, duties, powers and responsibilities as are normally attributable to such positions and with such other duties and responsibilities as may be from time to time reasonably assigned to the Executive by the Board.
          (b) Attention . Except as provided below, during the Employment Period the Executive shall devote substantially all of his business time and efforts to the business and affairs of the Company and, notwithstanding any provision to the contrary in the limited

 


 

liability agreement of the Company, use the Executive’s best efforts to carry out such responsibilities faithfully and efficiently. It shall not be considered a violation of the foregoing for the Executive to (i) serve on industry, civic or charitable boards or committees, (ii) manage the Executive’s personal investments, (iii) serve on the board of Legacy Resources, and with the consent of the Board, serve on the boards of other businesses, and (iv) from time to time (consistent with the historical work patterns of Executive with Predecessor) work from remote locations in Indianapolis or elsewhere so long as such activities or work patterns do not interfere with the performance of the Executive’s duties in accordance with this Agreement. In no event shall such activities or work patterns by the Executive be deemed to interfere with the Executive’s duties hereunder until the Executive has been notified in writing thereof by the Board and given a reasonable period in which to cure such interference.
     3.  Place of Employment . The Executive’s principal place of employment hereunder shall be at the Company’s principal executive offices in the greater Indianapolis, Indiana area.
     4.  Compensation .
          (a) Base Salary . During the Employment Period, the Executive’s annual base salary (“Annual Base Salary”) shall be $332,800 payable in accordance with the Company’s general payroll practices; provided, however that for 2007 and for each subsequent calendar year thereafter during the employment period, the Annual Base Salary shall be increased by such amount as may be determined by the Board or the Compensation Committee thereof, but in any event by not less than the amount of increase to which the Executive would be entitled were the Annual Base Salary to be increased by the same percentage as the average of the percentage increases of all salaried employees of the Company for such new calendar year.
          (b) Annual and Long-Term Incentive Arrangements . For his services during the Employment Period, the Executive shall be eligible to earn annual and long-term compensation under such incentive plans, programs, contracts, or other arrangements (cash, equity, phantom or other) of the MLP as may from time to time be made available to other executive officers of the Company, on a basis that is reasonably calculated to result in the Executive’s having the reasonable opportunity to achieve a payout or distribution of at least 150 percent of the amount of the cash, equity or other payout or distribution that may be made to any other executive officer of the Company under the terms of any such incentive arrangements.
          (c) Retirement and Welfare Benefit Plans . During the Employment Period, the Executive shall be eligible to participate in all savings, retirement and welfare benefit plans, practices, policies and programs applicable generally to employees and/or senior executives of the Company, subject to meeting the general eligibility requirements of such plans or programs.
          (d) Expenses . The Company shall promptly reimburse the Executive for all reasonable business expenses, including those for travel and entertainment, properly incurred by the Executive in the performance of his duties hereunder in accordance with policies established from time to time by the Company.

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          (e) Fringe Benefits and Perquisites . During the Employment Period, the Executive shall be entitled to receive fringe benefits and perquisites in accordance with the plans, practices, programs and policies of the Company from time to time in effect, and which are commensurate with the Executive’s position.
          (f) Automobile . During the Employment Period, the Company shall provide the Executive with the use of an automobile, for personal and business use (including vehicle property damage and liability insurance in appropriate amounts) of generally the same quality and on the same terms and conditions as the Predecessor provided the Executive with the use of an automobile.
     5.  Termination of Employment .
          (a) Death or Disability . The Executive’s employment shall terminate upon the Executive’s death or, at the election of the Board or the Executive, by reason of his Disability (as defined below) during the Employment Period. For purposes of this Agreement, Disability shall mean Executive’s substantial inability to perform his duties under this Agreement by reason of mental or physical incapacity for 90 consecutive calendar days during the Employment Period; provided, that the Company shall not have the right to terminate Executive’s employment for Disability if (i) in the opinion of a qualified physician reasonably acceptable to the Company that is delivered to the Company within 30 days of the Company’s delivery to the Executive of a Notice of Termination (as defined below), it is reasonably likely that the Executive will be able to resume the Executive’s duties on a regular basis within 90 days of the Notice of Termination and (ii) the Executive does resume such duties within such time.
          (b) By the Company for Cause . The Company may terminate the Executive’s employment during the Employment Period for Cause (as defined below). For purposes of this Agreement, “Cause” shall mean:
               (1) the Executive’s willful and continuing failure (excluding as a result of Executive’s mental or physical incapacity) to perform, the Executive’s duties and responsibilities with the Company;
               (2) the Executive’s having committed any act of material dishonesty against the Company or any of its affiliates (including theft, misappropriation, embezzlement, forgery, fraud, or willful and intentional falsification of records or misrepresentation);
               (3) the Executive’s willful and continuing material breach of this Agreement;
               (4) the Executive’s having been convicted of, or having entered a plea of nolo contendre to any felony; or

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          (5) the Executive’s having been the subject of any final and non-appealable order, judicial or administrative, obtained or issued by the Securities and Exchange Commission, for any securities violation involving fraud, including, for example, any such order consented to by the Executive in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied.
For purposes of this Section 5(b), no act or failure to act by Executive shall be considered “willful” unless committed or omitted in bad faith and without a reasonable belief that the act or failure to act was in the best interests of the Company. In addition, no act or failure to act that otherwise may be deemed to constitute Cause under clauses (1) or (3) above shall be deemed to constitute Cause if such act or failure to act is corrected prior to the Date of Termination (as defined below) specified in the Notice of Termination (as defined below) given in respect thereof.
     (c)  By the Company without Cause or by the Executive without Good Reason . Notwithstanding any other provision of this Agreement, the Company, by action of the Board, may (subject to the provisions of Section 6(a)) terminate the Executive’s employment other than for Cause during the Employment Period and the Executive may similarly terminate his employment for other than Good Reason during the Employment Period.
     (d)  By the Executive for Good Reason . The Executive may terminate his employment during the Employment Period for Good Reason (as defined below). For purposes of this Agreement, “Good Reason” shall mean the occurrence, without the written consent of the Executive, of any one of the following acts by the Company, or failures by the Company to act, unless such act or failure to act is corrected prior to the Date of Termination (as defined below) specified in the Notice of Termination (as defined below) given in respect thereof:
          (1) any material breach by the Company of this Agreement;
          (2) any requirement by the Company that the Executive relocate outside of the metropolitan Indianapolis area;
          (3) failure of any successor to assume this Agreement not later than the date as of which it acquires substantially all of the equity, assets or business of the Company;
          (4) any material reduction in the Executive’s title, authority, responsibilities, or duties (including a change that causes the Executive to cease being a member of the Board or reporting directly and solely to the Board); or
          (5) the assignment to the Executive of any duties materially inconsistent with his duties as the Chief Executive Officer of the Company.
     Unless the Executive gives written notice to the Board of any act or omission to act constituting Good Reason hereunder within 12 months of the date the Executive becomes aware of such act or omission, such act or failure to act shall not constitute a Good Reason event for purposes of this Agreement.

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          (e) Waiver and Release . Notwithstanding anything in this Agreement to the contrary, the Executive shall not be entitled to any severance payments or vesting of benefits under Section 6(a) of this Agreement unless the Executive signs and does not revoke a waiver and release agreement substantially similar to that in Attachment A hereto.
          (f) Notice of Termination . During the Employment Period, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto (or, if by mutual agreement by a joint written agreement) in accordance with Section 15(b). For purposes of this Agreement, a “Notice of Termination” shall mean a notice that shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.
          (g) Date of Termination . “Date of Termination”, with respect to any purported termination of the Executive’s employment during the Employment Period, shall mean the date specified in the Notice of Termination (which, in the case of a termination by the Company for reasons other than Cause or for Cause under clauses (1) and (3) of Section 5(b), or a termination by the Executive shall not be less than 30 days from the date such Notice of Termination is given).
6. Obligations of the Company Upon Termination .
     (a)  Termination by the Company Other than for Cause, Death or Disability or Termination by the Executive for Good Reason . During the Employment Period, if the Company shall terminate the Executive’s employment other than for Cause, death or Disability or the Executive shall terminate his employment for Good Reason, then, subject to Sections 5(e) and 6(d) as soon as practicable following the date the Executive’s waiver and release under Section 5(e) becomes nonrevocable, the Company shall pay to the Executive the amounts described in this Section 6 and the Executive shall become vested in all MLP incentive awards granted to the Executive by the Company as provided below.
               (i) Lump Sum Payment . The Company shall pay to the Executive a lump sum amount in cash equal to three times the Executive’s Annual Base Salary then in effect.
               (ii) Accrued Obligations . The Company shall pay the Executive a lump sum amount in cash equal to the sum of (A) the Executive’s earned Annual Base Salary through the Date of Termination to the extent not theretofore paid, (B) an amount equal to any MLP incentive awards payable in cash with respect to fiscal years ended prior to the year that includes the Date of Termination to the extent not theretofore paid, and (C) an amount in respect of the Executive’s participation in any MLP plans, programs, contracts, or other arrangements that may result in a cash

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payment to the Executive in respect of his services to the Company for the fiscal year that includes the Date of Termination equal to 100% of the maximum amount that could be earned by the Executive under such arrangement multiplied by a fraction, the numerator of which shall be the number of days from the beginning of such fiscal year to and including the Date of Termination and the denominator of which shall be 365. (The amounts specified in clauses (A), (B) and (C) shall be hereinafter referred to as the “Accrued Obligations”).
               (iii) Accelerated Vesting and Payment of MLP Equity-Based Awards . All MLP equity-based awards (including phantom awards) held by the Executive shall immediately vest in full (at their target levels, if applicable) and become fully exercisable or payable, as the case may be, as of the Date of Termination.
          (b) Termination by the Company for Cause or by the Executive Other than for Good Reason . If the Executive’s employment shall be terminated for Cause during the Employment Period, or if the Executive terminates his employment during the Employment Period other than for Good Reason, the Company shall have no further obligations to the Executive under this Agreement other than the Accrued Obligations.
          (c) Termination due to Death or Disability . If the Executive’s employment shall terminate by reason of death or Disability, the Company shall pay the Executive or his estate, as the case may be, the Accrued Obligations. Such payments shall be in addition to those rights and benefits to which the Executive or his estate may be entitled under the relevant Company benefit plans or programs. In addition, all MLP equity-based awards held by the Executive shall immediately vest and become fully exercisable or payable, as the case may be, as of the Date of Termination.
          (d) Section 409A . If any payment under this Agreement would result in the Executive being subject to the additional 20% tax provided by Section 409A of the Internal Revenue Code, such payment shall be deferred until the first date it would not be subject to Section 409A.
          (e) Delayed Payments . Any delay by the Company in paying any amount due the Executive under this Agreement, including paragraph (d), shall bear interest at the maximum nonusurious rate from the date such payment was due (disregarding Section 409A) until paid.
          (f) Parachute Provisions . If any amount payable to or other benefit receivable by the Executive pursuant to this Agreement is deemed to constitute a Parachute Payment (as defined below), alone or when added to any other amount payable or paid to or other benefit receivable or received by the Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement or other agreement), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, then, in addition to any other benefits to which the Executive is entitled under this Agreement, the Executive shall be paid by the Company an amount in cash equal to the sum of the excise taxes payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to put the Executive in the same after-tax

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position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest applicable rates on such Parachute Payments and on any payments under this Section 6(f)) as if no excise taxes had been imposed with respect to Parachute Payments. The amount of any payment under this Section 6(f) shall be computed by a certified public accounting firm mutually and reasonably acceptable to the Executive and the Company, the computation expenses of which shall be paid by the Company. “Parachute Payment” shall mean any payment deemed to constitute a “parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended.
          7.  Nonexclusivity of Rights . Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, plan, program, policy or practice provided by the Company and for which the Executive may qualify, nor shall anything herein limit or otherwise adversely affect such rights as the Executive may have under any other contract or agreement entered into after the Effective Date with the Company. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any benefit, plan, policy, practice or program of, or any contract or agreement entered into with the Company shall be payable in accordance with such benefit, plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.
          8.  Full Settlement; No Mitigation . The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other clam, right or action which the Company may have against the Executive or others, provided that nothing herein shall preclude the Company from separately pursuing recovery from the Executive based on any such claim. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts (including amounts for damages for breach) payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment.
          9.  Arbitration . Any dispute about the validity, interpretation, effect or alleged violation of this Agreement (an “arbitrable dispute”) must be submitted to confidential arbitration in Indianapolis, Indiana. Arbitration shall take place before an experienced employment arbitrator licensed to practice law in such state and selected in accordance with the rules of the Model Employment Arbitration Procedures of the American Arbitration Association. Arbitration shall be the exclusive remedy of any arbitrable dispute. Should any party to this Agreement pursue any arbitrable dispute by any method other than arbitration, the other party shall be entitled to recover from the party initiating the use of such method all damages, costs, expenses and attorneys’ fees incurred as a result of the use of such method. Notwithstanding anything herein to the contrary, nothing in this Agreement shall purport to waive or in any way limit the right of any party to seek to enforce any judgment or decision on an arbitrable dispute in a court of competent jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts in Indianapolis, Indiana, for the purposes of any proceeding arising out of this Agreement.
          10.  Confidentiality . The Company agrees to provide the Executive, in the course of his employment with the Company, with non-public privileged or confidential information and trade secrets concerning the operations, future plans and methods of doing business of the Company, its

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subsidiaries and affiliates (“Proprietary Information”); and the Executive agrees that it would be extremely damaging to the Company, its subsidiaries and affiliates if such Proprietary Information were disclosed to a competitor of the Company, its subsidiaries and affiliates or to any other person or corporation. In consideration for the Company providing such Proprietary Information to the Executive, the Executive agrees that all Proprietary Information divulged to the Executive is in confidence and further agrees to keep all Proprietary Information secret and confidential (except for such information which is or becomes publicly available other than as a result of a breach by the Executive of this provision) without limitation in time. In view of the nature of the Executive’s employment and the Proprietary Information the Executive has acquired during the course of such employment, the Executive likewise agrees that the Company, its subsidiaries and affiliates would be irreparably harmed by any disclosure of Proprietary Information in violation of the terms of this paragraph and that the Company, its subsidiaries and affiliates shall therefore be entitled to preliminary and/or permanent injunctive relief prohibiting the Executive from engaging in any activity or threatened activity in violation of the terms of this Section and to any other relief available to them. Inquiries regarding whether specific information constitutes Proprietary Information shall be directed to the Board, provided that the Company shall not unreasonably classify information as Proprietary Information.
          11.  Non-Solicitation of Employees . The Executive recognizes that he will be provided confidential information about other employees of the Company, its subsidiaries and affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company, its subsidiaries and affiliates and recognizes that such information is not generally known, is of substantial value to the Company, its subsidiaries and affiliates in developing their business and in securing and retaining customers, and has been and will be acquired by him because of his business position with the Company, its subsidiaries and affiliates. Accordingly, in consideration of the Proprietary Information and other benefits provided to the Executive under this Agreement, the Executive agrees that, during the Employment Period and for the Restricted Period (as defined in Section 12), he will not, directly or indirectly, solicit or recruit any employee of the Company, its subsidiaries or affiliates on whose behalf he is acting as an agent, representative or employee and that he will not convey any such confidential information or trade secrets about other employees of the Company, its subsidiaries and affiliates to any other person; provided, however, that it shall not constitute a solicitation or recruitment of employment in violation of this Section to discuss employment opportunities with any employee of the Company, its subsidiaries or affiliates who has either first contacted the Executive or regarding whose employment the Executive has discussed with and received the written approval of the Chairman of the Board prior to making such solicitation or recruitment In view of the nature of the Executive’s employment with the Company, the Executive likewise agrees that the Company, its subsidiaries and affiliates would be irreparably harmed by any solicitation or recruitment in violation of the terms of this paragraph and that the Company, its subsidiaries and affiliates shall therefore be entitled to preliminary and/or permanent injunctive relief prohibiting the Executive from engaging in any activity or threatened activity in violation of the terms of this Section and to any other relief available to them.

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12. Noncompetition .
          (a) In consideration for the Company’s providing the Executive with Confidential Information during the Employment Period and the other benefits provided by this Agreement, the Executive agrees that while employed by the Company and for the Restricted Period (as defined below), the Executive shall not, unless the Executive receives the prior written consent of the Board, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, consultant or otherwise, any person that competes with the Company or the MLP and its affiliates in Restricted Business (as such term is defined in the Omnibus Agreement, dated the date hereof, among the Company, the MLP, the Heritage Group and the other parties named therein); provided, however, that following any termination of employment the foregoing restriction shall apply only to those areas where the Company and the MLP and its affiliates are actually doing business on the date of such termination of employment. The Restricted Period shall be the one-year period following the termination of the Executive’s employment.
          (b) The Executive has carefully read and considered the provisions of this Section 12 and, having done so, agrees that the restrictions set forth in this Section 12 (including the Restricted Period, scope of activity to be restrained and the geographical scope) are fair and reasonable and are reasonably required for the protection of the interests of the Company, its officers, directors, employees, creditors and shareholders. The Executive understands that the restrictions contained in this Section 12 may limit his ability to engage in a business similar to the Company’s or the MLP’s business, but acknowledges that he will receive sufficiently high remuneration and other benefits from the Company hereunder to justify such restrictions.
          (c) It is specifically agreed that the Restricted Period following termination of employment, during which the agreements and covenants of the Executive made in Sections 11 and 12 shall be effective, shall be computed by excluding from such computation any time which the Executive is in violation of the provisions of such Sections.
          (d) In the event that any provision of this Section 12 relating to the Restricted Period and/or the areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, the Restricted Period and/or areas of restriction deemed reasonable and enforceable by the court shall become and thereafter be the maximum time period and/or areas.
          13.  Legal Fees . The Company shall promptly pay all legal fees and expenses (including, without limitation, fees and expenses in connection with any arbitration) incurred by the Executive in disputing in good faith any issue arising under this Agreement relating to the termination of the Executive’s employment or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement.

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14. Successors .
          (a) Assignment by the Executive . This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.
          (b) Successors and Assigns of Company . This Agreement shall inure to the benefit of and be binding upon the Company, its successors and assigns.
          (c) Assumption . The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree in writing prior to such succession to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. A copy of such agreement shall be furnished to the Executive. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its businesses and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise. Any failure of the Company to timely obtain such agreement in form and substance reasonably satisfactory to the Executive shall be a material breach of this Agreement.
15. Miscellaneous .
          (a) Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without reference to its principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended, modified, repealed, waived, extended or discharged, except by an agreement in writing signed by the party against whom enforcement of such amendment, modification, repeal, waiver, extension or discharge is sought. No person, other than pursuant to a resolution of the Board or a committee thereof, shall have authority on behalf of the Company to agree to amend, modify, repeal, waive, extend or discharge any provision of this Agreement or anything in reference thereto.
          (b) Notices . All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed, in either case, to the Company’s headquarters or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee.
          (c) Severability . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

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          (d) Taxes . The Company may withhold from any amounts payable or benefits provided under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
          (e) No Waiver . The Executive’s or the Company’s failure to insist upon strict compliance with any provision hereof or any other provision of this Agreement or the failure to assert any right that the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5 of this Agreement, shall not be deemed to constitute a waiver thereof.
          (f) Entire Agreement; Effect on MLP Equity Awards . This instrument contains the entire agreement of the Executive and the Company with respect to the subject matter hereof except for the agreements evidenced by the indemnification provisions included in the Company’s limited liability company agreement (as being amended and restated concurrently with the initial public offering of the MLP) and the indemnification provisions and the registration rights provisions included in the agreement of limited partnership of the MLP (as being amended and restated concurrently with its initial public offering), all of which provisions are intended to benefit the Executive and which the Company agrees may be enforced by him, regardless of whether he is a party thereto (the “Related Agreements”), and all promises, representations, understandings, arrangements, prior and contemporaneous agreements (written or oral) between the parties with respect to the subject matter hereof (other than the Related Agreements), are terminated hereby. The provisions of this Agreement concerning the accelerated vesting of MLP equity-based awards shall be incorporated by reference into any such grants made after the Effective Date; the intent of the parties being that, in the event of any language in any plan or award agreement in conflict herewith or to the contrary, the terms of this Agreement shall control as to the vesting of MLP equity-based awards granted to the Executive.
IN WITNESS WHEREOF, the Executive and the Company have caused this Agreement to be executed effective for all purposes as of the Effective Date.
             
    CALUMET GP, LLC
 
           
 
  By:   /s/ Fred M. Fehsenfeld, Jr.    
 
           
 
      Fred M. Fehsenfeld, Jr.    
 
      Chairman of the Board of Directors    
 
           
    EXECUTIVE
 
           
 
      /s/ F. William Grube    
 
           
        F. William Grube

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Attachment A
WAIVER AND RELEASE AGREEMENT
     This Waiver and Release Agreement (the “ Agreement ”) is between Calumet GP, LLC , a Delaware limited liability company (“ Company ”), and F. William Grube (“ Executive ”), as provided pursuant to that employment agreement between Executive and Company dated January 31, 2006 (the “ Employment Agreement ”) and attached hereto as Attachment A .
     WHEREAS, Executive’s employment with Company is being terminated; and
     WHEREAS, Executive will be paid certain severance benefits in exchange for his release and waiver of his claims against the Company Releasees (as defined below) pursuant to this Agreement;
     NOW, THEREFORE, the parties agree to the following.
     1.  Complete Release and Other Consideration from Executive . In exchange for the severance benefits provided under Section 2 of this Agreement, Executive agrees as follows:
  a.   Complete Release . On behalf of Executive and Executive’s heirs and assigns, Executive fully releases Company and its direct and indirect, past present and future, parents, subsidiaries, affiliates (including, without limitation, Calumet Specialty Products Partners, L.P.), divisions, predecessors, successors, and assigns, and, with respect to all such entities, their partners, members, shareholders, owners, officers, directors, attorneys, agents, representatives and employees (collectively, the “ Company Releasees ”), from any and all claims, demands, damages, losses, expenses, liabilities and causes of action (including claims for attorneys’ fees) of any kind and character (collectively, “ Claims ”), known or unknown, that Executive, his heirs, executors, administrators, and assigns may have or may claim to have against any of the Company Releasees based upon facts occurring on or prior to the date Executive signs this Agreement, including but not limited to any claims arising out of or in any way connected with or based upon Executive’s employment relationship with and service as an employee, officer or director of Company or any Company Releasee, and the termination of such relationship or service (the “ Release ”). This Release includes, without limitation, any claims arising out of any contract (express or implied); any tort (whether based on negligence, gross negligence, or intentional conduct); or any federal, state, or local law, including, without limitation, the Age Discrimination in Employment Act and the Employee Retirement Income Security Act (“ERISA”), other than benefits that Executive is entitled to under the terms of an ERISA plan. This Release does not include (i) any claims under the Age Discrimination in Employment Act that may arise after the date this Agreement is executed by Executive, (ii) any claims that the Executive may have against the Company in respect of the

A-1


 

      Company’s Continuing Obligations (as defined in Section 4) to the Executive (regardless of when such claims may arise) under the agreements referenced in Section 4, or (iii) any claims that the Executive may have to receive distributions or otherwise exercise the rights of a holder of securities issued by the Company or of Calumet Specialty Products Partners, L.P. or of any other Company Releasee (except that Executive covenants with Company and the Company Releasees not to bring any claim against any of them in respect of Executive’s securities that are based on any alleged violation of federal or state securities law or breach of fiduciary duty arising before the date that the Executive signs this Agreement. Executive understands that this is a full and final release, with limitation, all known, unknown and suspected Claims (other than described in the preceding sentence) he may have against any of the Company Releasees.
  b.   Confidentiality . Except as may be required by law or court order or as may be necessary in an action arising out of this Agreement, Executive agrees not to disclose the existence or terms of this Agreement to anyone other than Executive’s immediate family, attorneys, tax advisors, and financial counselors, provided that Executive first informs them of this confidentiality clause and secures their agreement to be bound by it. Executive understands and agrees that a breach of this confidentiality provision by any of these authorized persons will be deemed a material breach of this Agreement by Executive.
 
  c.   Lawsuits . Executive agrees not to bring or join any lawsuit against any of the Company Releasees in any court (except as necessary to protect Executive’s rights under this Agreement or with respect to Executive’s entry into this Agreement) relating to Executive’s employment, events occurring during Executive’s employment or the termination of Executive’s employment. Executive represents that, as of the effective date of this Agreement, Executive has not brought or joined any lawsuit or filed any charge or claim against any of the Company Releasees in any court or before any government agency. If Executive brings or joins any lawsuit against any of the Company Releasees in any court (except as necessary to protect Executive’s rights under this Agreement or with respect to Executive’s entry into this Agreement) relating to Executive’s employment, events occurring during Executive’s employment or the termination of Executive’s employment, and Executive is the prevailing party in such lawsuit, Executive shall be obligated to return to the Company all amounts paid to Executive as benefits under this Agreement, to the extent permitted under applicable law and ordered by the court. Further, if any Company Releasee is the prevailing party in any lawsuit Executive brings against such Company Releasee relating to Executive’s employment that has been waived in this Agreement, to the extent permitted by applicable law (such as if Executive’s claims are found to be brought in bad faith), Executive agrees to pay all costs and expenses incurred by such person or entity, including reasonable attorneys’ fees, in defending against such lawsuit.

A-2


 

This Agreement is not intended to indicate that any Claims exist or that, if they do exist, they are meritorious. Rather, Executive is simply agreeing that, in return for the Company’s payment and vesting of benefits provided by this Agreement, any and all potential Claims that Executive may have against the Company Releasees, regardless of whether they actually exist, are expressly settled, compromised and waived. By signing this Agreement, Executive and the Company Releasees are bound by it. Anyone who succeeds to Executive’s rights and responsibilities, such as heirs or the executor of Executive’s estate, is also bound by this Agreement. The waiver and release provisions of this Agreement do not apply to any rights or claims that may arise after its effective date. This Release also applies to any claims brought by any person or agency or class action under which Executive may have a right or benefit.
     2.  Consideration from Company . In exchange for Executive’s obligations under this Agreement, the Company shall pay Executive those severance payments and benefits described in Section 6(a) of the Employment Agreement, which are incorporated herein by reference and made a part of this Agreement. Executive acknowledges that Executive is not otherwise entitled to receive such severance payments and benefits, these severance payments and benefits are conditioned on Executive’s compliance with the terms of this Agreement and the Employment Agreement. Executive acknowledges and agrees that Company will withhold any taxes required by applicable law from the severance payments and benefits.
     3.  Right to Consult an Attorney; Period of Review . Executive is encouraged to consult with an attorney before signing this Agreement. From the date this Agreement is first presented to Executive, Executive will have 21 [45, if applicable] days in which to review this Agreement. Executive may use as little or much of this 21 [45]-day review period as Executive chooses.
     4.  Entire Agreement; Amendment; Continuing Obligations . This Agreement and the Employment Agreement together contain the entire agreement of the parties with respect to the termination of Executive’s employment and the other matters covered herein and therein; moreover, this Agreement supersedes all prior and contemporaneous agreements and understandings, oral or written, between the parties hereto concerning the subject matter hereof. This Agreement may be amended, waived or terminated only by a written instrument executed by both parties hereto. Executive hereby reaffirms and agrees to continue to abide by all of Executive’s continuing obligations under Sections 9 through 12 of the Employment Agreement, and the Company hereby reaffirms and agrees to continue to abide by all of the Company’s continuing obligations to the Executive under the indemnification provisions of the Company’s limited liability company agreement (as amended through the date hereof), of which the Executive is an intended beneficiary who is entitled to enforce the same, and to cause Calumet Specialty Products Partners, L.P. (“Calumet”) to continue to abide by the continuing obligations of Calumet to the Executive under the indemnification provisions and the registration rights provisions of the agreement of limited partnership of Calumet (as amended through the date hereof), of which the Executive is an intended beneficiary who is entitled to enforce the same (such obligations of the Company and of Calumet being referred to herein as the “Continuing Obligations”).

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     5.  Revocation . Upon signing this Agreement, Executive will have 7 days to revoke the Agreement. To properly revoke the Agreement, Company must receive written notice of revocation from Executive by the close of business on the 7th day after the date the Agreement is signed by Executive. Written notice must be delivered pursuant to Section 15 of the Employment Agreement. Executive understands that failure to revoke his acceptance of this Agreement within 7 days after the date he signs it will result in this Agreement being permanent and irrevocable.
     6.  Choice of Law . This Agreement will be governed in all respects by the laws of the State of Indiana, without regard to its choice of law principles. This Agreement is subject to the arbitration provisions in Section 9 of the Employment Agreement.
     7.  Effectiveness of Agreement . This Agreement will be effective, and the severance payments and benefits provided in Section 6(a) of this Agreement will be made and provided, only if Executive executes this Agreement within 21 [45] days of receiving it and only if Executive does not revoke this Agreement under Section 5 above.
     
 
  EXECUTIVE
 
   
 
  Signature:                                                                                                         
 
   
 
  Date:
     
 
  CALUMET GP, LLC
 
   
 
  By:                                                                                          
 
       Name:                                                                                    
 
       Title:                                                                                    
 
   
 
  Date:

A- 4

 

EXHIBIT 10.4
 
CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
CONTRIBUTION, CONVEYANCE AND ASSUMPTION
AGREEMENT
 

 


 

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
     This Contribution, Conveyance and Assumption Agreement, dated as of January 31, 2006, is entered into by and among F. WILLIAM GRUBE, an individual (“ Grube ”), JANET KRAMPE GRUBE , an individual (“Grube Wife”), JANET KRAMPE GRUBE GRANTOR RETAINED ANNUITY TRUST DATED JANUARY 31, 2002 , an Indiana trust (“ Grube Trust I ”), JANET KRAMPE GRUBE GRANTOR RETAINED ANNUITY TRUST DATED MARCH 18, 2004 , an Indiana trust (“ Grube Trust II ”), FRED M. FEHSENFELD, JR. , an individual (“ Fehsenfeld, Jr. ”), MILDRED L. FEHSENFELD IRREVOCABLE INTERVIVOS TRUST FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE , an Indiana trust (“ Fehsenfeld Trust I ”), MAGGIE FEHSENFELD TRUST NUMBER 106 FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE , an Indiana trust (“ Fehsenfeld Trust II ”), CALUMET, INCORPORATED , an Indiana corporation (“ Calumet Inc. ”), THE HERITAGE GROUP , an Indiana general partnership (“ THG ”), CALUMET GP, LLC , a Delaware limited liability company (“ GP LLC ”), CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. , a Delaware limited partnership (“ MLP ”), CALUMET OPERATING, LLC, a Delaware limited liability company (“ OLLC ”), CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP, an Indiana limited partnership (“ Calumet LP ”), CALUMET SALES COMPANY INCORPORATED , a Delaware corporation (“ Reseller ”), CALUMET HOLDING, LLC , a Delaware limited liability company (“ Holding ”), CALUMET PENNSYLVANIA, LLC , a Delaware limited liability company (“ Calumet PA ”), CALUMET LP GP, LLC , a Delaware limited liability company (“ Calumet LP GP ”), and CALUMET SHREVEPORT PACKAGING, LLC , an Indiana limited liability company (“ Shreveport Packaging ”). The above-named entities are sometimes referred to in this 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.
RECITALS :
      WHEREAS , THG, Calumet Inc., Grube, Fehsenfeld, Jr., Fehsenfeld Trust I, Fehsenfeld Trust II and GP LLC have formed MLP pursuant to the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”) for the purpose of engaging in any business activity that is approved by GP LLC and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware LP Act.
      WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, each of the following actions have been taken prior to the date hereof:
     1. THG, Fehsenfeld, Jr. and Grube (collectively, the “ Organizational GP Owners ”) formed GP LLC, under the terms of the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”), to which (i) THG contributed $510.00 in exchange for a 51% member interest in GP LLC, (ii) Fehsenfeld, Jr. contributed $190.00 in exchange for a 19% member interest in GP LLC, and (iii) Grube contributed $300.00 in exchange for a 30% member interest in GP LLC (such member interests are, collectively, the “ Organizational GP Interests ”).

 


 

     2. THG, Calumet Inc., Grube, Fehsenfeld, Jr., Fehsenfeld Trust I, Fehsenfeld Trust II and GP LLC formed MLP (collectively, the “ Organizational MLP Owners ”), under the terms of the Delaware LP Act, to which (i) THG contributed $555.66 in exchange for a 55.57% limited partner interest in MLP, (ii) Calumet Inc. contributed $98.00 in exchange for a 9.80% limited partner interest in MLP, (iii) Grube contributed $203.84 in exchange for a 20.38% limited partner interest in MLP, (iv) Fehsenfeld, Jr. contributed $24.50 in exchange for a 2.45% limited partner interest in MLP, (v) Fehsenfeld Trust I contributed $49.00 in exchange for a 4.90% limited partner interest in MLP, (vi) Fehsenfeld Trust II contributed $49.00 in exchange for a 4.90% limited partner interest in MLP, and (vii) THG (on behalf of GP LLC) contributed $20.00 in exchange for a 2% general partner interest in MLP (such limited partner interests are, collectively, the “ Organizational MLP Interests ”).
     3. MLP formed OLLC, under the terms of the Delaware LLC Act, and contributed $1,000 to OLLC in exchange for all of the member interests in OLLC.
     4. Calumet LP formed Reseller, under the terms of the Delaware General Corporation Law (the “ DGCL ”), and contributed $1,000 to Reseller in exchange for all of the common stock of Reseller.
     5. Calumet Inc. formed Calumet LP GP, under the terms of the Delaware LLC Act, and contributed $1,000 to Calumet LP GP in exchange for all of the member interests in Calumet LP GP.
     6. Calumet LP formed Calumet PA, under the terms of the Delaware LLC Act, and contributed $1,000 to Calumet PA in exchange for all of the member interests in Calumet PA.
     7. Calumet LP formed Holding, under the terms of the Delaware LLC Act, and contributed $1,000 to Holding in exchange for all of the member interests in Holding.
     8. Calumet LP and certain of its subsidiaries entered into the Term Loan Facility and the Revolving Credit Facility and borrowed $225,000,000 under the Term Loan Facility and $78,300,000 under the Revolving Credit Facility and retired and repaid all amounts outstanding under the National City Facility, the Old Credit Facility and the Old Notes.
     9. Calumet LP contributed $93,352,531.01 of the amount it borrowed under the Revolving Credit Facility to Calumet Shreveport, LLC (“ Shreveport ”) as a capital contribution (the “ Shreveport Contribution ”).
     10. Shreveport used the Shreveport Contribution to retire and repay all of its outstanding indebtedness under the Shreveport Term Loan Facility and the Shreveport Revolving Credit Facility.

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      WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of the following shall occur:
     1. Calumet LP will convey all of its right, title and interest in the Non-MLP Assets to Calumet PA as a capital contribution.
     2. Calumet LP will convey all of its right, title and interest in the Non-Qualifying Income Assets to Reseller as a capital contribution.
     3. Calumet LP will convey all of its member interest in each of (i) Calumet PA (such membership interest, the “ Calumet PA Interest ”) and (ii) Shreveport Packaging, (such membership interest, the “ Shreveport Packaging Interest ”) to Holding as a capital contribution.
     4. Calumet LP will distribute all of its member interest in Holding (the “ Holding Interest ”) to Grube Wife, Grube Trust I, Grube Trust II, Fehsenfeld, Jr., Fehsenfeld Trust I, Fehsenfeld Trust II, Calumet Inc. and THG (collectively, the “ Calumet Owners ”) as follows:
  (a)   Grube Wife will receive a 0.197% interest in the Holding Interest;
 
  (b)   Grube Trust I will receive a 18.105% interest in the Holding Interest;
 
  (c)   Grube Trust II will receive a 2.498% interest in the Holding Interest;
 
  (d)   Fehsenfeld, Jr. will receive a 2.5% interest in the Holding Interest;
 
  (e)   Fehsenfeld Trust I will receive a 5.0% interest in the Holding Interest;
 
  (f)   Fehsenfeld Trust II will receive a 5.0% interest in the Holding Interest;
 
  (g)   Calumet Inc. will receive a 10.0% interest in the Holding Interest; and
 
  (h)   THG will receive a 56.7% interest in the Holding Interest.
     5. Calumet Inc. will convey its general partner interest in Calumet LP (the “ Calumet LP GP Interest ”) to Calumet LP GP as a capital contribution.
     6. Grube Trust I, Fehsenfeld Trust I, Fehsenfeld Trust II and THG (collectively, the “ New GP Owners ”) will convey a limited partner interest in Calumet LP with an aggregate value equal to 2% of the equity value of MLP at the closing of the transactions contemplated by this Agreement (the “ Interest ”) to GP LLC as a capital contribution (of which 32.4% of such Interest shall be contributed by Grube Trust I, 6.25% of such Interest shall be contributed by Fehsenfeld Trust I, 6.25% of such Interest shall be contributed by Fehsenfeld Trust II and 55.1% of such Interest shall be contributed by THG).

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     7. Fehsenfeld Trust I and Fehsenfeld Trust II will each contribute $445,006.50, respectively in cash to GP LLC as capital contributions in exchange for additional member interests in GP LLC, resulting in GP LLC being owned as follows:
  (a)   THG will own a 51% member interest;
 
  (b)   Grube Trust I will own a 30.0% member interest;
 
  (c)   Fehsenfeld Trust I will own a 9.5% member interest; and
 
  (d)   Fehsenfeld Trust II will own a 9.5% member interest.
     8. The Organizational GP Interests of the Organizational GP Owners will be redeemed and cancelled and $1,000 shall thereupon be paid to the Organizational GP Owners in proportion to their initial capital contributions.
     9. GP LLC will convey the Interest to MLP in exchange for (a) 515,857 General Partner Units, which represents a continuation of its 2% general partner interest in MLP, and (b) the issuance of the IDRs.
     10. In connection with MLP’s initial underwritten public offering (the “ Offering ”), Messrs. Fred M. Fehsenfeld Sr., Mac Fehsenfeld and Frank B. Fehsenfeld (collectively, the “ Fehsenfeld Investors ”) will contribute an aggregate $14,998,249.50 in cash to MLP in exchange for an aggregate 750,100 Common Units (at a price per Common Unit of $19.995) representing a 2.9% interest in MLP.
     11. The Calumet Owners (other than Calumet Inc.) will convey their remaining limited partner interests in Calumet LP to MLP in exchange for (a) 5,169,129 Common Units representing a 20.04% limited partner interest in MLP, of which (i) Grube Wife will receive 11,660 Common Units, (ii) Grube Trust I will receive 1,020,456 Common Units, (iii) Grube Trust II will receive 147,853 Common Units, (iv) Fehsenfeld, Jr. will receive 147,973 Common Units, (v) Fehsenfeld Trust I will receive 286,077 Common Units, (vi) Fehsenfeld Trust II will receive 286,077 Common Units and (vii) THG will receive 3,269,033 Common Units, and (b) 11,723,599 Subordinated Units representing a 45.45% limited partner interest in MLP, of which (i) Grube Wife will receive 26,445 Subordinated Units, (ii) Grube Trust I will receive 2,314,396 Subordinated Units, (iii) Grube Trust II will receive 335,332 Subordinated Units, (iv) Fehsenfeld, Jr. will receive 335,600 Subordinated Units, (v) Fehsenfeld Trust I will receive 648,825 Subordinated Units, (vi) Fehsenfeld Trust II will receive 648,825 Subordinated Units, and (vii) THG will receive 7,414,176 Subordinated Units.
     12. Calumet Inc. will convey its member interest in Calumet LP GP to MLP in exchange for (a) 591,886 Common Units representing a 2.29% limited partner interest in MLP and (b) 1,342,401 Subordinated Units representing a 5.20% limited partner interest in MLP.
     13. The Organizational MLP Interests of the Organizational MLP Owners will be redeemed and cancelled and $980 shall thereupon be paid to the Organizational MLP Owners in proportion to their initial capital contributins and $20 will be paid to GP LLC

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     14. In connection with the Offering, the public, through the Underwriters, will contribute $122,547,850 in cash to MLP, less the Underwriters’ discount of $7,965,610.25 (excluding structuring fees of $612,739.25 to be paid to Goldman, Sachs & Co. and $2,000,000 to be paid to Petrie, Parkman & Co., Inc.), in exchange for 5,699,900 Common Units representing a 22.10% limited partner interest in MLP.
     15. MLP will (a) pay or cause to be paid approximately $6,612,739.25 of offering expenses (excluding the Underwriters’ discount, but including structuring fees of $612,739 to be paid to Goldman, Sachs & Co. and $2,000,000 to be paid to Petrie, Parkman & Co., Inc.) in connection with the Offering of the Common Units and (b) contribute the balance of the Offering proceeds to Calumet LP as a capital contribution (of which 10% of such contribution will be made to Calumet LP on behalf of Calumet LP GP).
     16. MLP will convey its limited partner interest in Calumet LP and its member interest in Calumet LP GP to OLLC as a capital contribution.
     17. Calumet LP will repay approximately (a) $108,000,000 of outstanding indebtedness under the Term Loan Facility and (b) $15,000,000 of outstanding indebtedness under the Revolving Credit Facility.
     18. To the extent the Underwriters exercise their over-allotment option to purchase up to 854,985 Common Units (the “ Over-Allotment Option ”), MLP will use the net proceeds to repay up to approximately $17,187,335 of Calumet LP’s additional outstanding indebtedness under the Term Loan Facility.
     19. The organizational documents of the Parties will be amended and restated as necessary to reflect the applicable matters set forth above and as contained in this Agreement.
      NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties undertake and agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Terms . The following defined terms shall have the meanings given below:
     “ Agreement ” means this Contribution, Conveyance and Assumption Agreement.
     “ Code ” means Internal Revenue Code of 1986, as amended.
     “ Common Units ” has the meaning as set forth in the MLP Agreement.

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     “ Effective Time ” means 12:01 a.m. Eastern Standard Time on January 31, 2006.
     “ General Partner Units ” has the meaning as set forth in the MLP Agreement.
     “ IDR ” has the same meaning as “Incentive Distribution Right” as set forth in the MLP Agreement.
     “ MLP ” has the meaning as set forth in the opening paragraph of this Agreement.
     “ MLP Agreement ” means the First Amended and Restated Agreement of Limited Partnership of MLP, as it may be amended, supplemented or restated from time to time.
     “ National City Facility ” means (i) the Amended and Restated Credit Agreement dated as of February 23, 2003, among THG and certain of its affiliates, as Borrowers, and National City Bank of Indiana (“ National City ”), as Administrative Agent and (ii) the Amended and Restated Guarantee dated as of February 23, 2003, among Calumet LP and certain other parties, as Guarantors, and National City, as Administrative Agent.
     “ Non-MLP Assets ” means those assets set forth on Schedule A .
     “ Non-MLP Liabilities ” means all liabilities arising out of or related to the ownership of the Non-MLP Assets to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of Calumet LP or its affiliates.
     “ Non-Qualifying Income Assets ” means those assets set forth on Schedule B and such other assets that do not generate “qualifying income” as defined in Section 7704 of the Code.
     “ Non-Qualifying Income Liabilities ” means all liabilities arising out of or related to the ownership of the Non-Qualifying Income Assets to the extent arising or accruing on and after the Effective Time, whether known or unknown, accrued or contingent, and whether or not reflected on the books and records of Calumet LP or its affiliates.
     “ Old Credit Facility ” means that $180,000,000 revolving promissory note dated as of June 30, 2005 by and among Calumet LP, as Borrower, and The Heritage Group (d/b/a Asphalt Refining Company), as Lender.
     “ Old Notes ” means the $11,400,000 million in outstanding notes issued to The Heritage Group (d/b/a Asphalt Refining Company) by Calumet LP.
     “ Partnership Group ” means the MLP and any Subsidiary.
     “ Revolving Credit Facility ” means that $225,000,000 Revolving Credit Agreement dated as of December 9, 2005, by and among Calumet LP, Shreveport, Calumet Shreveport Lubricants & Waxes, LLC, an Indiana limited liability company

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(“ Shreveport L&W ”), and Calumet Shreveport Fuels, LLC, an Indiana limited liability company (“ Shreveport Fuels ”), as Borrowers, Bank of America, N.A., as Administrative Agent and Lender, and the other Lenders party thereto.
     “ Registration Statement ” means the registration statement on Form S-1 (Registration No. 333-128880) filed by MLP relating to the Offering.
     “ Shreveport Term Loan Facility ” means that $40,000,000 Term Loan Agreement dated as of October 25, 2004, by and among Shreveport, as Borrower, Shreveport L&W and Shreveport Fuels, as Guarantors, and Lehman Commercial paper Inc. as Administrative Agent and Lender.
     “ Shreveport Revolving Credit Facility ” means that $125,000,000 Revolving Credit Agreement dated as of October 25, 2004, by and among Shreveport, as Borrower, Shreveport L&W and Shreveport Fuels, as Guarantors, LaSalle Business Credit, LLC as Administrative Agent and Lender, and the others Lenders party thereto.
     “ Subordinated Units ” has the meaning as set forth in the MLP Agreement.
     “ Subsidiary ” shall have the meaning given to it in the MLP Agreement.
     “ Term Loan Facility ” means that $225,000,000 Term Loan Agreement dated as of December 9, 2005, by among Calumet LP, as Borrower, Calumet LP’s subsidiaries from time to time party thereto, as Guarantors, and Bank of America, N.A., as Administrative Agent and Lender.
     “ Underwriters ” means Goldman, Sachs & Co., Deutsche Banc Securities Inc., Raymond James & Associates, Inc. and Petrie Parkman & Co., Inc.
ARTICLE II
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
     Section 2.1 Contribution of Non-MLP Assets by Calumet LP to Calumet PA . Calumet LP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Calumet PA, its successors and assigns, for its and their own use forever, all of its right, title and interest in and to the Non-MLP Assets, and Calumet PA hereby accepts such assets as a contribution to the capital of Calumet PA.
TO HAVE AND TO HOLD the Non-MLP Assets unto Calumet PA, its successors and assigns, together with all and singular the rights and appurtenances thereto in any way belonging, subject, however, to the terms and conditions stated in this Agreement, forever.
     Section 2.2 Contribution of Non-Qualifying Income Assets by Calumet LP to Reseller . Calumet LP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Reseller, its successors and assigns, for its and their own use forever, all of its right, title and interest in and to the Non-Qualifying Income Assets, and Reseller hereby accepts such assets as a contribution to the capital of Reseller.

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TO HAVE AND TO HOLD the Non-Qualifying Income Assets unto Reseller, its successors and assigns, together with all and singular the rights and appurtenances thereto in any way belonging, subject, however, to the terms and conditions stated in this Agreement, forever.
     Section 2.3 Contribution of Calumet PA Interest and Shreveport Packaging Interest by Calumet LP. Calumet LP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Holding, its successors and assigns, for its and their own use forever, all of its right title and interest in and to each of the (i) Calumet PA Interest and (ii) Shreveport Packaging Interest, and Holding hereby accepts such Calumet PA Interest and Shreveport Packaging Interest as a contributions to the capital of Holding.
     Section 2.4 Distribution of Holding Interest by Calumet LP. Calumet LP hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers all of its right, title and interest in and to (i) 0.197% of the Holding Interest to Grube Wife, (ii) 18.105% of the Holding Interest to Grube Trust I, (iii) 2.498% of the Holding Interest to Grube Trust II, (iv) 2.5% of the Holding Interest to Fehsenfeld, Jr., (v) 5.0% of the Holding Interest to Fehsenfeld Trust I, (vi) 5.0% of the Holding Interest to Fehsenfeld Trust II, (vii) 10.0% of the Holding Interest to Calumet Inc., (viii) 56.7% of the Holding Interest to THG, and each of Grube Wife, Grube Trust I, Grube Trust II, Fehsenfeld, Jr, Fehsenfeld Trust I, Fehsenfeld Trust II, Calumet Inc. and THG hereby accepts its respective percentage of the Calumet PA Interest as a distribution.
     Section 2.5 Contribution of Calumet LP GP Interest by Calumet Inc. to Calumet LP GP . Calumet Inc. hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Calumet LP GP, its successors and assigns, for its and their own use forever, all of its right, title and interest in and to the Calumet LP GP Interest as a capital contribution, and Calumet LP GP hereby accepts the Calumet LP GP Interest as a contribution to the capital of Calumet LP GP.
     Section 2.6 Contribution of the Interest by New GP Owners to GP LLC. The New GP Owners hereby grant, contribute, bargain, convey, assign, transfer, set over and deliver to GP LLC, its successors and assigns, for its and their own use forever, the Interest as a capital contribution (of which 32.4% of such Interest shall be contributed by Grube Trust I, 6.25% of such Interest shall be contributed by Fehsenfeld Trust I, 6.25% of such Interest shall be contributed by Fehsenfeld Trust II and 55.1% of such Interest shall be contributed by THG), and GP LLC hereby accepts the Interest as a contribution to the capital of GP LLC.
     Section 2.7 Contribution of Additional Cash by Fehsenfeld Trust I and Fehsenfeld Trust II to GP LLC. Fehsenfeld Trust I and Fehsenfeld Trust II hereby grant, contribute, bargain, convey, assign, transfer, set over and deliver to GP LLC, its successors and assigns, for its and their own use forever, $445,006.50 and $445,006.50, respectively as a capital contribution and to increases their respective interests in GP LLC to 9.5% and 9.5%, and GP LLC hereby accepts the cash consideration as a contribution to the capital of GP LLC.
     Section 2.8 Redemption of Organizational GP Interest. Calumet GP hereby redeems the Organizational GP Interest from the Organizational GP Owners and retires the Organizational GP Interest in exchange for a payment in cash to the Organizational GP Owners equal to an aggregate $1,000.

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     Section 2.9 Contribution of the Interest by GP LLC to MLP . GP LLC hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to MLP, its successors and assigns, for its and their own use forever, the Interest in exchange for (a) 515,857 General Partner Units, which represent a continuation of its 2% general partner interest in MLP, and (b) the issuance of the IDRs, and MLP hereby accepts the Interest as a contribution to the capital of MLP.
     Section 2.10 Fehsenfeld Investors Cash Contribution . The Parties acknowledge an aggregate cash contribution by the Fehsenfeld Investors to MLP of an aggregate $14,998,249.50 in exchange for an aggregate 750,100 Common Units representing a 2.91% interest in MLP.
     Section 2.11 Contribution of Remaining Limited Partner Interests in Calumet LP by the Calumet Owners (other than Calumet Inc.) to MLP . The Calumet Owners (other than Calumet Inc.) hereby grant, contribute, bargain, convey, assign, transfer, set over and deliver to MLP, its successors and assigns, for its and their own use forever, all remaining limited partner interests in Calumet LP in exchange for (a) 5,169,129 Common Units representing a 20.04% limited partner interest in MLP, of which (i) Grube Wife will receive 11,660 Common Units, (ii) Grube Trust I will receive 1,020,456 Common Units, (iii) Grube Trust II will receive 147,853 Common Units, (iv) Fehsenfeld, Jr. will receive 147,973 Common Units, (v) Fehsenfeld Trust I will receive 286,077 Common Units, (iv) Fehsenfeld Trust II will receive 286,077 Common Units and (vii) THG will receive 3,269,033 Common Units, and (b) 11,723,599 Subordinated Units representing a 45.45% limited partner interest in MLP, of which (i) Grube Wife will receive 26,455 Subordinated Units, (ii) Grube Trust I will receive 2,314,396 Subordinated Units, (iii) Grube Trust II will receive 335,332 Subordinated Units, (iv) Fehsenfeld, Jr. will receive 335,600 Subordinated Units, (v) Fehsenfeld Trust I will receive 648,825 Subordinated Units, (vi) Fehsenfeld Trust II will receive 648,825 Subordinated Units, and (vii) THG will receive 7,414,176 Subordinated Units, and MLP hereby accepts such limited partner interests in Calumet LP as a contribution to the capital of MLP.
     Section 2.12 Contribution of Interest in Calumet LP GP by Calumet Inc. to MLP Calumet Inc. hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to MLP, its successors and assigns, for its and their own use forever, all its member interest in Calumet LP GP in exchange for (a) 591,886 Common Units representing a 2.29% limited partner interest in MLP and (b) 1,342,401 Subordinated Common Units representing a 5.20% limited partner interest in MLP, and MLP hereby accept such member interest as a contribution to the capital of MLP.
     Section 2.13 Redemption of Organizational MLP Interest; Distribution to GP. MLP hereby redeems the Organizational MLP Interest from the Organizational MLP Owners and retires the Organizational MLP Interest in exchange for a payment in cash to the Organizational MLP Owners equal to an aggregate $980. MLP hereby distributes $20 to GP LLC.

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     Section 2.15 Public Cash Contribution . The Parties acknowledge a cash contribution by the public through the Underwriters to MLP of $122,547,850 ($114,582,239.75 after the Underwriters’ discount of $7,965,610.25 (excluding structuring fees of $612,739.25 to be paid to Goldman, Sachs & Co. and $2,000,000 to be paid to Petrie, Parkman & Co., Inc.)) in exchange for 5,699,900 Common Units representing a 22.10% interest in MLP.
     Section 2.16 Payment of Transaction Expenses and Contribution of Remaining Proceeds by MLP . The Parties acknowledge (a) the payment by MLP, in connection with the transactions contemplated hereby, of transaction expenses in the amount of approximately $6,612,739.25 (exclusive of the Underwriters’ discount, but including structuring fees of $612,739.25 to be paid to Goldman, Sachs & Co. and $2,000,000 to be paid to Petrie, Parkman & Co., Inc.) and (b) the contribution by MLP of approximately $127,000,000 to Calumet LP (of which 10% is deemed to be contributed on behalf of Calumet LP GP).
     Section 2.17 Contribution of Interests in Calumet LP and Calumet LP GP by MLP to OLLC . MLP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to OLLC, its successors and assigns, for its and their own use forever, all its limited partner interest in Calumet LP and all its member interest in Calumet LP GP, and OLLC hereby accepts such limited partner interest in Calumet LP and such member interest in Calumet LP GP as a contribution to the capital of OLLC.
     Section 2.18 Payment of Outstanding Indebtedness by Calumet LP. The parties acknowledge (a) the repayment by Calumet LP of approximately $108,000,000 of outstanding indebtedness under the Term Loan Facility and (b) the repayment by Calumet LP of approximately $15,000,000 of outstanding indebtedness under the Revolving Loan Facility.
     Section 2.19 Admission of Calumet LP GP as General Partner of Calumet LP . Each of the partners of Calumet LP, all of which are parties to this Agreement, hereby expressly consents to the admission of Calumet LP GP as the new general partner of Calumet LP and to the withdrawal of Calumet Inc. as the general partner, as a result of the assignment and contribution described in Section 2.5. Calumet LP GP assumes Calumet Inc.’s liabilities under Indiana Code 23-16-3-8, 23-16-6 and 23-16-7, and Calumet Inc. is released from those liabilities. The partners of Calumet LP direct the general partner of Calumet LP to take any and all actions necessary or advisable to give effect to the admission of the new general partner of Calumet LP, including but not limited to filing an amended and restated Certificate of Limited Partnership with the Secretary of State of the State of Indiana and entering into an amended and restated limited partnership agreement reflecting all the transfers and changes effected by this Agreement.
     Section 2.20 Admission of New Limited Partner of Calumet LP . Each of the limited partners of Calumet LP has transferred and conveyed its entire limited partnership interest either to GP LLC or to MLP, with the agreement and understanding that these interests would be further conveyed by GP LLC to MLP, and then by MLP to OLLC, in the manner described in Sections 2.6, 2.9, 2.11, 2.12 and 2.15 of this Agreement. All the partners of Calumet LP, including the general partner, intend and expressly consent to the admission of OLLC as the limited partner of Calumet LP and to the withdrawal of each Calumet Owner (other than Calumet Inc.) as a limited partner. OLLC assumes the liabilities of the assigning limited partners under Indiana Code 23-16-3-8, 23-16-6 and 23-16-7, and each of the assigning limited partners is

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released from those liabilities. The partners direct the general partner to take any and all actions necessary or advisable to give effect to the admission of the new limited partner, including but not limited to entering into an amended and restated limited partnership agreement reflecting all the transfers and changes effected by this Agreement.
     Section 2.21 Intent to Admit Assignees as New Partners and/or Members . Pursuant to this Agreement, several parties assign and convey ownership interests in limited partnerships or limited liability companies, and in each case, the assignor and assignee intend for the assignee to be admitted as a partner to the partnership or admitted as a member of the limited liability company, as applicable. To the extent required by any organic document of the organization, or required by law, each partner and member of any organization affected by an assignment and conveyance of an ownership interest described in this Agreement (all of which partners and members are also parties to this Agreement) hereby consents to the admission of the assignee as a partner to the partnership (whether general or limited) or as a member of a limited liability company, as applicable. The parties agree to take any and all other actions, including execution of amendments or other documents, that may be necessary or advisable to carry out the intent and purposes of this Section.
ARTICLE III
ASSUMPTIONS OF CERTAIN LIABILITIES
     Section 3.1 Assumption of Non-MLP Liabilities by Calumet PA . In connection with the contribution and transfer by Calumet LP of the Non-MLP Assets to Calumet PA, as set forth in Section 2.1 above, Calumet PA hereby assumes and agrees to duly and timely pay, perform and discharge the Non-MLP Liabilities, to the full extent that Calumet LP has been heretofore or would have been in the future obligated to pay, perform and discharge the Non-MLP Liabilities were it not for the execution and delivery of this Agreement; provided, however, that said assumption and agreement to duly and timely pay, perform and discharge the Non-MLP Liabilities shall not (a) increase the obligation of Calumet PA with respect to the Non-MLP Liabilities beyond that of Calumet LP, (b) waive any valid defense that was available to Calumet LP with respect to the Non-MLP Liabilities or (c) enlarge any rights or remedies of any third party, if any, under any of the Non-MLP Liabilities.
     Section 3.2 Assumption of Non-Qualifying Income Liabilities by Reseller . In connection with the contribution and transfer by Calumet LP of the Non-Qualifying Income Assets to Reseller, as set forth in Section 2.2 above, Reseller hereby assumes and agrees to duly and timely pay, perform and discharge the Non-Qualifying Income Liabilities, to the full extent that Calumet LP has been heretofore or would have been in the future obligated to pay, perform and discharge the Non-Qualifying Income Liabilities were it not for the execution and delivery of this Agreement; provided, however, that said assumption and agreement to duly and timely pay, perform and discharge the Non-Qualifying Income Liabilities shall not (a) increase the obligation of Reseller with respect to the Non-Qualifying Income Liabilities beyond that of Calumet LP, (b) waive any valid defense that was available to Calumet LP with respect to the Non-Qualifying Income Liabilities or (c) enlarge any rights or remedies of any third party, if any, under any of the Non-Qualifying Income Liabilities.

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ARTICLE IV
ADDITIONAL TRANSACTIONS
     Section 4.1 Over-Allotment Option . The Parties acknowledge that in the event the Underwriters exercise their Over-Allotment Option, (i) MLP shall contribute the net proceeds therefrom to OLLC; (ii) OLLC shall then contribute the net proceeds to Calumet LP (of which 10% of such contribution will be made to Calumet LP on behalf of Calumet LP GP); and (iii) Calumet LP shall use the net proceeds to repay approximately $17,187,335 of additional outstanding indebtedness under the Term Loan Facility.
ARTICLE V
TITLE MATTERS
     Section 5.1 Encumbrances .
     (a) Except to the extent provided in any other document executed in connection with this Agreement or the Offering, the contribution and conveyance (by operation of law or otherwise) of the various physical assets owned as reflected in this Agreement (collectively, the “ Assets ”) are made expressly subject to all recorded and unrecorded liens (other than consensual liens), encumbrances, agreements, defects, restrictions, adverse claims and all laws, rules, regulations, ordinances, judgments and orders of governmental authorities or tribunals having or asserting jurisdictions over the Assets and operations conducted thereon or in connection therewith, in each case to the extent the same are valid and enforceable and affect the Assets, including all matters that a current survey or visual inspection of the Assets would reflect.
     (b) To the extent that certain jurisdictions in which the Assets are located may require that documents be recorded in order to evidence the transfers of title reflected in this Agreement, then the provisions set forth in Section 5.1(a) immediately above shall also be applicable to the conveyances under such documents.
     Section 5.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws .
     (a) EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE ASSETS, INCLUDING THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE ASSETS GENERALLY OR INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE ASSETS, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE SUITABILITY OF THE ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS OR THEIR OPERATION WITH ANY LAWS (INCLUDING ANY ZONING,

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ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH HAS HAD THE OPPORTUNITY TO INSPECT THE RESPECTIVE ASSETS, AND EACH IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE RESPECTIVE ASSETS AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ANY OF THE PARTIES. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, EACH OF THE PARTIES ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS”, “WHERE IS” CONDITION WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING.
     (b) The contributions of the Assets made under this Agreement are made with full rights of substitution and subrogation of the respective Parties receiving such contributions, and all persons claiming by, through and under such Parties, to the extent assignable, in and to all covenants and warranties by the predecessors-in-title of the Parties contributing the Assets, and with full subrogation of all rights accruing under applicable statutes of limitation and all rights of action of warranty against all former owners of the Assets.
     (c) Each of the Parties agrees that the disclaimers contained in this Section 5.2 are “conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words “grant,” “contribute,” “convey,” “bargain,” “assign,” “transfer,” “deliver,” “sell” or “set over” or any of them or any other words used in this Agreement are hereby expressly disclaimed, waived or negated.
     (d) Each of the Parties hereby waives compliance with any applicable bulk sales law or any similar law in any applicable jurisdiction in respect of the transactions contemplated by this Agreement.

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ARTICLE VI
FURTHER ASSURANCES
     Section 6.1 Further Assurances . From time to time after the date hereof, 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 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 Agreement or intended so to be and to more fully and effectively carry out the purposes and intent of this Agreement.
     Section 6.2 Other Assurances . From time to time after the Effective Time, and without any further consideration, each of the Parties shall execute, acknowledge and deliver all such additional instruments, notices and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to more fully and effectively carry out the purposes and intent of this Agreement. Without limiting the generality of the foregoing, the Parties acknowledge that the parties have used their good faith efforts to attempt to identify all of the assets being contributed to the MLP or its subsidiaries as required in connection with the Offering. However, due to the age of some of those assets and the difficulties in locating appropriate data with respect to some of the assets it is possible that assets intended to be contributed to the MLP or its subsidiaries were not identified and therefore are not included in the assets contributed to the MLP or its subsidiaries. It is the express intent of the Parties that the MLP or its subsidiaries own all assets necessary to operate the assets that are identified in this Agreement and in the Registration Statement. To the extent any assets were not identified but are necessary to the operation of assets that were identified, then the intent of the Parties is that all such unidentified assets are intended to be conveyed to the appropriate members of the Partnership Group. To the extent such assets are identified at a later date, the Parties shall take the appropriate actions required in order to convey all such assets to the appropriate member of the Partnership Group. Likewise, to the extent that assets are identified at a later date that were not intended by the parties to be conveyed as reflected in the Registration Statement, the Parties shall take the appropriate actions required in order to convey all such assets to the appropriate party.
ARTICLE VII
EFFECTIVE TIME
     Notwithstanding anything contained in this Agreement to the contrary, none of the provisions of Article II or Article III of this Agreement shall be operative or have any effect until the Effective Time, at which time all the provisions of Article II or Article III of this Agreement shall be effective and operative in accordance with Article VIII, without further action by any Party.

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ARTICLE VIII
MISCELLANEOUS
     Section 8.1 Order of Completion of Transactions . The transactions provided for in Article II of this Agreement shall be completed immediately following the Effective Time in the order set forth in Article II of this Agreement. The transactions provided for in Article III of this Agreement shall be completed simultaneously with the transactions provided for in Article II of this Agreement. The transactions provided for in Article IV of this Agreement shall be completed after those provided for in Article II and Article III of this Agreement.
     Section 8.2 Costs . Except for the transaction expenses set forth in Section 2.14, OLLC shall pay all expenses, fees and costs, including 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, OLLC 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 Article VI of this Agreement.
     Section 8.3 Headings; References; Interpretation . All Article and Section headings in this 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 Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement. All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement, respectively. All personal pronouns used in this 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 terms “include,” “includes,” “including” or words of like import shall be deemed to be followed by the words “without limitation.”
     Section 8.4 Successors and Assigns . The Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.
     Section 8.5 No Third Party Rights . The provisions of this Agreement are intended to bind the parties signatory hereto as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.
     Section 8.6 Counterparts . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties.
     Section 8.7 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Indiana applicable to contracts made and to be performed wholly within such state without giving effect to conflict of law principles thereof.
     Section 8.8 Severability . If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political

15


 

body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this 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 Agreement at the time of execution of this Agreement.
     Section 8.9 Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties.
     Section 8.10 Integration . This Agreement and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to its subject matter. This document and such instruments contain the entire understanding of the Parties. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the Parties after the date of this Agreement.
     Section 8.11 Deed; Bill of Sale; Assignment . To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.
[ THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK ]

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first written above.
         
    /s/ F. William Grube
     
    F. WILLIAM GRUBE
 
       
    /s/ Janet Krampe Grube
     
    JANET KRAMPE GRUBE
 
       
    JANET KRAMPE GRUBE GRANTOR RETAINED ANNUITY TRUST DATED JANUARY 31, 2002
 
       
 
  By:   /s/ Janet K. Grube 
 
       
 
      Janet K. Grube
 
      Trustee
 
       
    JANET KRAMPE GRUBE GRANTOR RETAINED ANNUITY TRUST DATED MARCH 18, 2004
 
       
 
  By:   /s/ Janet K. Grube
 
       
 
      Janet K. Grube
 
      Trustee
 
       
    /s/ Fred M. Fehsenfeld, Jr.
     
    FRED M. FEHSENFELD, JR.
 
       
    MILDRED L. FEHSENFELD IRREVOCABLE INTERVIVOS TRUST FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE
 
       
 
  By:   /s/ James C. Fehsenfeld
 
       
 
      James C. Fehsenfeld
 
      Trustee
Calumet Specialty Products Partners, L.P.
Contribution, Conveyance and Assumption Agreement
Signature Page

 


 

         
    MAGGIE FEHSENFELD TRUST NUMBER 106 FOR THE BENEFIT OF FRED MEHLERT FEHSENFELD, JR. AND HIS ISSUE
 
       
 
  By:   /s/ James C. Fehsenfeld
 
       
 
      James C. Fehsenfeld
 
      Trustee
 
       
    THE HERITAGE GROUP
 
 
  By:   /s/ Fred M. Fehsenfeld, Jr.
 
       
 
      Fred M. Fehsenfeld, Jr.
 
      Chief Executive Officer
 
       
    CALUMET, INCORPORATED
 
       
 
  By:   /s/ R. Patrick Murray, II
 
       
 
      R. Patrick Murray, II
 
      Vice President and Chief Financial Officer
 
       
    CALUMET GP, LLC
 
       
 
  By:   /s/ R. Patrick Murray, II
 
       
 
      R. Patrick Murray, II
 
      Vice President and Chief Financial Officer
 
       
    CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.
 
       
    By: Calumet GP, LLC, its general partner
 
       
 
    By:  /s/ R. Patrick Murray, II
 
       
 
      R. Patrick Murray, II
 
      Vice President and Chief Financial Officer
Calumet Specialty Products Partners, L.P.
Contribution, Conveyance and Assumption Agreement
Signature Page

 


 

             
    CALUMET OPERATING, LLC
 
           
    By: Calumet Specialty Products Partners, L.P., its sole member
 
           
 
      By:  Calumet GP, LLC, its general partner
 
           
 
         By: /s/ R. Patrick Murray, II
 
           
 
          R. Patrick Murray, II
 
          Vice President and Chief Financial Officer
 
           
    CALUMET LP GP, LLC
 
           
    By: Calumet, Incorporated, its sole member
 
           
 
        By: /s/ R. Patrick Murray, II
 
           
 
          R. Patrick Murray, II
 
          Vice President and Chief Financial Officer
 
           
    CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP
 
           
    By: Calumet, Incorporated, its general partner
 
           
 
        By: /s/ R. Patrick Murray, II
 
           
 
          R. Patrick Murray, II
 
          Vice President and Chief Financial Officer
 
           
    CALUMET SALES COMPANY INCORPORATED
 
           
 
  By:   /s/ R. Patrick Murray, II
         
        R. Patrick Murray, II
        Vice President and Chief Financial Officer
Calumet Specialty Products Partners, L.P.
Contribution, Conveyance and Assumption Agreement
Signature Page

 


 

             
    CALUMET PENNSYLVANIA, LLC
 
           
    By: Calumet Lubricants Co., Limited Partnership, its sole member
 
           
        By: Calumet, Incorporated, its general partner
 
 
          By: /s/ R. Patrick Murray, II                                                               
 
            R. Patrick Murray, II
 
            Vice President and Chief Financial Officer
 
           
    CALUMET HOLDING, LLC
 
           
    By: Calumet Lubricants Co., Limited Partnership, its sole member
 
           
        By: Calumet, Incorporated, its general partner
 
 
          By: /s/ R. Patrick Murray, II                                                                 
 
            R. Patrick Murray, II
 
            Vice President and Chief Financial Officer
 
           
    CALUMET SHREVEPORT PACKAGING, LLC
 
           
    By:   /s/ R. Patrick Murray, II                                                                                                             
    Name:   R. Patrick Murray, II                                                                                                               
    Title:   Vice President and Chief Financial Officer                                                                               
Calumet Specialty Products Partners, L.P.
Contribution, Conveyance and Assumption Agreement
Signature Page

 


 

SCHEDULE A
     ALL ASSETS OWNED OR USED BY CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP (“ CALUMET ”) IN CONNECTION WITH THE ROUSEVILLE REFINERY (AS DEFINED BELOW) AND/OR THE RENO FACILITY (AS DEFINED BELOW) INCLUDING, BUT NOT LIMITED TO THE FOLLOWING:
ROUSEVILLE REFINERY
          1.  Rouseville Refinery. The refinery facilities located at Plant Number 1 in Rouseville, Pennsylvania described further in item 6 below (the “ Rouseville Refinery ”), including, without limitation, (a) feedstock and supply agreements related to the operation of the wax business; (b) the hydrotreater, deresining, dewaxing and bauxite filtration units; (c) the boiler house and utility complex; (d) the wastewater treatment facilities; (e) the Rouseville Refinery packaging plant and associated tankage; (g) all existing tankage; (g) all loading and unloading facilities for tank cars and tank trucks; (h) all maintenance supplies and spare parts associated with the above equipment; (i) existing wax feedstocks, in process wax products and footsoil, and finished wax products and footsoil necessary to operate the wax business; (j) existing accounts receivable necessary to operate the wax business; and (k) any document, agreement, instrument, certificate, writing, notice, consent, affidavit, letter, telegram, telex, statement, file, computer disk, microfiche or other document in electronic format, schedule, exhibit, or any other paper or record whatsoever relating to the current and proposed operations of the Rouseville Refinery;
          2.  Equipment. All machinery, transportation equipment, spare parts, supplies tools, equipment, computer equipment furnishings and fixtures owned, leased or subject to a contract of purchase and sale, or lease commitment (collectively, the “ Equipment ”) that is used in the Rouseville Refinery as operated by Calumet;
          3.  Rouseville Inventories. All saleable, usable inventories of wax feedstocks, in process wax products and footsoil, finished wax products and related packaging materials, and footsoil related to the Rouseville Refinery wherever situated;
     4.  Accounts Receivable. All accounts and notes receivable (collectively, the “ Accounts Receivable ”) relating to the Rouseville Refinery;
     5.  Proprietary Information. All rights to the names and any derivations thereof, any patent rights, inventions, shop rights, know how, trade secrets, designs, drawings, art work, plans, prints, manuals, models, design registrations, inventor’s certificates, technical information and data, copyrightable works, lists of materials, patterns, models, records, diagrams, formulae, product design standards, tools, die, jigs, models, prototypes, product information literature, computer files, computer software, hard copy files, catalogs, specifications, confidentiality agreements, confidential information and other proprietary technology and similar information; all registered and unregistered trademarks, service marks, logos, trade names and all other trademark rights; all registered and unregistered copyrights; and all registrations for, and

 


 

applications for registration of, any of the foregoing (collectively, the “ Proprietary Information ”), that are used in the conduct of the Rouseville Refinery, and any and all other information and material proprietary to Calumet, owned, possessed or used by it, whether or not such information is embodied in writing or other physical form, and that is not generally known to the public, that (a) relates to financial information regarding the Rouseville Refinery, including, without limitation, (i) business plans and (ii) sales, financing, pricing and marketing procedures or methods of Calumet, or (b) relates to specific business matters concerning the identity of or other information regarding sales personnel or customers of the Rouseville Refinery;
     6.  Real Property. All real property, or any interest therein that is used in the Rouseville Refinery;
     7.  Entitlements. The benefit of all unfilled or outstanding purchase orders, sales or service contracts, other commitments, contracts, engagements and leases to which Calumet is entitled (collectively, the “ Entitlements ”) that relate to the Rouseville Facility;
     8.  Building and Equipment. The office building and the associated equipment and real property;
     9. Laboratory and Equipment. The laboratory and the associated equipment and real property;
     10.  Emergency Response Building and Equipment. The emergency response building and the associated equipment and real property;
     11. Software. The environmental, safety and operations software;
     12.  Prepaid Expenses and Deposits. All prepaid expenses and deposits made by Calumet relating to the Rouseville Refinery;
     13.  Air Emissions Credits. Any air emissions credits existing as of the date hereof associated with the Rouseville Refinery, if any, and any additional air emissions credits resulting from or associated with the operation of the Rouseville Refinery after the date hereof; and
     14.  Intangible Assets. Any intangible assets associated with the Rouseville Facility.

 


 

RENO FACILITY
          15.  Reno Facility. The wax producing, blending and packaging facility located in Reno, Pennsylvania described further in item 20 below (the “ Reno Facility ”), including, without limitation, all tankage, wax blending and packaging equipment, loading and unloading facilities and warehouse facility;
          16. Equipment. All Equipment that is used in the Reno Facility as operated by Calumet;
          17.  Reno Inventories. All saleable, usable inventories of wax feedstocks, in process wax products and footsoil, finished wax products and related packaging materials, and footsoil related to the Reno Refinery wherever situated;
          18. Accounts Receivable. All Accounts Receivable relating to the Reno Facility;
          19.  Proprietary Information. All Proprietary Information that are used in the conduct of the Reno Facility, and any and all other information and material proprietary to Calumet, owned, possessed or used by it, whether or not such information is embodied in writing or other physical form, and that is not generally known to the public, that (a) relates to financial information regarding the Reno Facility, including, without limitation, (i) business plans and (ii) sales, financing, pricing and marketing procedures or methods of Calumet, or (b) relates to specific business matters concerning the identity of or other information regarding sales personnel or customers of the Reno Facility;
          20. Real Property. All Real Property that is used in the Reno Facility;
          21. Entitlements. Entitlements that relate to the Reno Facility;
          22.  Office Building and Equipment. The office building and the associated equipment and real property;
          23. Software. The environmental, safety and operations software;
          24.  Prepaid Expenses and Deposits. All prepaid expenses and deposits made by Calumet relating to the Reno Facility;
          25.  Air Emissions Credits. Any air emissions credits existing as of the date hereof associated with the Reno Facility and the interests of Calumet, if any, and any additional air emissions credits resulting from or associated with the operation of the Reno Facility after the date hereof; and
          26.  Intangibles. Any intangible assets associated with the Reno Facility.

 


 

SCHEDULE B
     1. Contract No. SP0600-05-D-0470 for the purchase and sale of JP-8 jet fuel by and between the United States of America (Defense Energy Support Center) and Calumet Shreveport Fuels, LLC, dated as of March 18, 2005, as amended or novated to date.
     2. Aviation Jet Fuels Sales and Purchase Agreement by and between Calumet Shreveport Fuels, LLC and Comair, Inc., dated December 1, 2005.
     3. Supply arrangement with Atlantic Southeast Airlines for period July 1, 2005 through June 30, 2006 with approximate volumes of 150,000 gallons per month.
     4. Supply arrangement with Continental Airlines for one year period starting July 1, 2005 with approximately volumes of 45,000 gallons per month.
     5. Supply arrangement with American Eagle, a wholly owned subsidiary of AMR Corporation, which began approximately December 1, 2005 with anticipated volumes of 50,000 gallons per month.