Exhibit 10.7
ENVIRONMENTAL AGREEMENT
     THIS ENVIRONMENTAL AGREEMENT is entered into and effective as of the 25th
day of October, 2007, by and between Coffeyville Resources Refining & Marketing,
LLC, a Delaware limited liability company (“Refinery Company”), and Coffeyville
Resources Nitrogen Fertilizers, LLC, a Delaware limited liability company
(“Fertilizer Company”), referred to collectively as the “Parties”.
RECITALS
     Refinery Company owns and operates the petroleum refinery located at
Coffeyville, Kansas, which refinery is shown on Exhibit A hereto (including any
additions or other modifications made thereto from time to time, the
“Refinery”).
     Fertilizer Company owns and operates the nitrogen fertilizer complex
located adjacent to the Refinery consisting of the Gasification Unit, the UAN
Plant, the Ammonia Synthesis Loop, the Utility Facilities, storage and loading
facilities, the Fertilizer Plant Water Clarifier and river access, the Grounds
and related connecting pipes and improvements, which fertilizer manufacturing
complex is connected to and associated with the BOC Facility and the Offsite
Sulfur Recovery Unit, all of which are shown on Exhibit A hereto (including any
additions or other modifications made thereto from time to time, the “Fertilizer
Plant”).
     Fertilizer Company and Refinery Company desire to enter into this Agreement
for the provision of certain indemnification and access rights in connection
with environmental matters affecting the Refinery and the Fertilizer Plant, and
certain other related matters, all upon the terms and subject to the conditions
set forth in this Agreement.
     NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
     The following terms shall have the meanings set forth below, unless the
context otherwise dictates, both for purposes of this Agreement and all Exhibits
hereto:
     “Accessed Property” means either the Refinery Company Property or the
Fertilizer Company Property that is to be accessed pursuant to Article 7 of this
Agreement in connection with the performance of Environmental Activities.
     “Agreement” means this Environmental Agreement and the Exhibits hereto, all
as the same may be amended, modified or supplemented from time to time.
     “BOC” means BOC Group, Inc., a Delaware corporation.

 

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     “BOC Agreement” means that certain Amended and Restated On-Site Project
Supply Agreement between Fertilizer Company and BOC, dated June 1, 2005.
     “BOC Facility” means the plant for the production of certain products and
argon, including metering and related facilities, together with an
inter-connected liquid nitrogen product storage vessel and vaporization
equipment, as shown on Exhibit A hereto, all connected to the pipelines owned by
BOC, including any additions or other modifications made thereto from time to
time.
     “Claim” means any written request by an Indemnitee relating to an
indemnifiable matter (as established in Article 2 of this Agreement), demand,
cause of action, proceeding, or suit for damages, injuries to person or
property, damages to natural resources, fines, penalties, liability, interest,
or losses or for the costs of site investigations, feasibility studies,
information requests, health assessments, contribution settlement actions to
correct, remove, remediate, response to, clean up, prevent, mitigate, monitor,
evaluate, assess or abate the release of a Hazardous Material, or to enforce
insurance contribution or indemnification agreements regarding the same.
     “Coke” has the meaning given such term in the Coke Supply Agreement.
     “Coke Supply Agreement” means the Coke Supply Agreement dated as of the
date hereof between the Parties.
     “Commingled Environmental Liability” means any liability resulting from
contamination associated with activities and operations of the Fertilizer
Company that overlays, underlays, intersects, is juxtaposed to, or is otherwise
commingled with any contamination associated with activities and operations of
the Refinery Company.
     “Comprehensive Coke Management Plan” means the Comprehensive Coke
Management Plan between Refinery Company and Fertilizer Company that will be
finalized within ninety (90) days following execution of this Agreement, as
amended from time to time.
     “Contaminating Party” means the Party that caused contamination on the
property of the Owner Party.
     “Cross Contamination” means contamination caused by or associated with
activities and operations of the Contaminating Party that is on or affecting
Owner Party’s Property.
     “Dispute” has the meaning given such term in Article 3.
     “Effective Date” means the date first above written.
     “Environmental Activities” means any investigation or remediation activity
carried out in compliance with any Environmental Law or under any work plan or
order complying with or enforcing any Environmental Law, and any activity in
response to a release of a Hazardous Material.
     “Environmental Law” means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and in each case as

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amended or supplemented from time to time, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.) the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.) the Solid Waste
Disposal Act (42 U.S.C. §§ 6901 et seq.) the Toxic Substance Control Act (15
U.S.C. §§ 2601 et seq.) the Clean Air Act (42 U.S.C. §§ 7401 et seq.) the
Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.) the Occupational
Safety and Health Act (29 U.S.C. §§ 651 et seq.) and the Safe Drinking Water Act
(42 U.S.C. §§ 300(f) et seq.), each as from time to time amended, and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
     “Environmental Liabilities” means with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, provided they arise under or
are related to any Environmental Laws, Environmental Permits, or are connected
with any Release or presence of a Hazardous Material whether on, at, in, under,
from or about the Property.
     “Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Government Authority
under any Environmental Laws.
     “Environmental Site Information” means existing and future documentation
and investigative results relating to environmental conditions at the respective
properties including, but not limited to, Phase I and Phase II Environmental
Site Assessments, environmental audits, and correspondence, notices of
violation, orders and determinations by any Government Authority.
     “Farmland” means Farmland Industries, Inc., a Kansas cooperative
corporation.
     “Feedstock Agreement” means the Feedstock and Shared Services Agreement
dated as of the date hereof between the Parties.
     “Fertilizer Plant” has the meaning given such term in the Recitals.
     “Fertilizer Company” has the meaning given such term in the introductory
paragraph.

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     “Fertilizer Company Property” means all property owned or leased by the
Fertilizer Company as shown on Exhibit A.
     “Fertilizer Company Representative” means the plant manager of the
Fertilizer Plant or such other person as is designated in writing by Fertilizer
Company.
     “Fertilizer Plant Water Clarifier” means the Fertilizer Company’s water
clarifier and associated equipment as shown on Exhibit A.
     “Gasification Unit” means that gasification unit shown on Exhibit A,
including any additions or other modifications made thereto from time to time.
     “Government Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
     “Grounds” means the realty on which the Fertilizer Plant is situated, which
Grounds are shown on Exhibit A.
     “Hazardous Materials” means any substance, material or waste which is
regulated by or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance which is (a) defined as
a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or
other similar term or phrase under any Environmental Laws, (b) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s), or
any radioactive substance.
     “Known Contamination Map” means the map that has been mutually agreed upon
by the Parties and is based on Environmental Site Information that documents and
identifies all existing, known Cross Contamination on Refinery Company Property
and Fertilizer Company Property that is or has been subject to Government
Authority-mandated Environmental Activities. The Known Contamination Map may be
periodically updated and amended based on currently ongoing, Government
Authority-mandated Environmental Activities associated with existing, known
contamination.
     “Manage” means to generate, manufacture, process, treat, store, use,
re-use, refine, recycle, reclaim, blend or burn for energy recovery, incinerate,
accumulate speculatively, transport, transfer, dispose of, or abandon Hazardous
Materials.
     “Offsite Sulfur Recovery Unit” means that sulfur processing facility owned
and operated by TKI pursuant to the TKI Phase II Agreement, which Offsite Sulfur
Recovery Unit is shown on Exhibit A, including any additions or other
modifications made thereto from time to time.
     “Owner Party” means the Party that owns the property that is affected by
contamination caused by the Contaminating Party or that is otherwise subject to
Environmental Activities.
     “Party” and “Parties” means the parties to this Agreement.

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     “Person” means and includes natural persons, corporations, limited
partners, general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities.
     “Planned Project Work” means Owner Party’s work on Owner Party’s Property
associated with a planned and approved capital improvement project, the purpose
of which is not primarily related to Environmental Activities.
     “Refinery” has the meaning given such term in the Recitals hereto.
     “Refinery Company” has the meaning given such term in the introductory
paragraph.
     “Refinery Company Property” means all property owned by the Refinery
Company as shown on Exhibit A.
     “Refinery Company Representative” means the plant manager of the Refinery
Company or such other person as is designated in writing by Refinery Company.
     “Refinery Water Clarifier” means the Refinery Company’s water clarifier and
associated equipment as shown on Exhibit A.
     “Release” or “Released” means any actual spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing of Hazardous Materials into the environment, as
“environment” is defined in CERCLA.
     “Response” or “Respond” means action taken in compliance with Environmental
Laws to correct, remove, remediate, clean-up, prevent, mitigate, monitor,
evaluate, investigate, assess, or abate the Release of a Hazardous Material.
     “Specified Environmental Activities” means any specific Environmental
Activities identified in reasonable detail in a written notice given by one
Party to the other Party, which specific Environmental Activities are permitted,
required, or otherwise contemplated under this Agreement.
     “TKI” means Tessenderlo Kerley, Inc.
     “TKI Phase I Agreement” means the Sulfur Processing Agreement, dated
October 2, 1996, between Farmland and TKI, as assigned by Farmland to Refinery
Company, on March 2, 2004, as amended from time to time.
     “TKI Phase I Unit” means the sulfur processing facility owned and operated
by TKI pursuant to the TKI Phase I Agreement as shown on Exhibit A.
     “TKI Phase II Agreement” means the Phase II Sulfur Processing Agreement,
dated November 13, 1998, between Farmland and TKI, as assigned by Farmland to
Coffeyville Resources Nitrogen Fertilizers, LLC, on March 2, 2004, as amended
from time to time.

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     “Transfer” means the sale, exchange, gift or other assignment of rights or
interests, whether by specific assignment, merger, consolidation, entity
conversion or other disposition, but not including any bona fide pledge or
assignment for collateral purpose in connection with any financing.
     “TSDF” means a Treatment, Storage and Disposal Facility permitted in
accordance with Federal regulations.
     “UAN Plant” means the urea ammonium nitrate plant shown on Exhibit A,
including any additions or other modifications made thereto from time to time.
     “Unplanned Work” means Owner Party’s work on Owner Party’s Property that
has not been authorized in the capital improvements budgetary process, but is
deemed necessary to respond to an urgent situation to ensure compliance with
Environmental Laws, to protect the environment or human health and safety, or to
otherwise protect the integrity of the Property and related improvements.
     “Utility Facilities” mean the utility facilities shown on Exhibit A,
including any additions or other modifications made thereto from time to time.
ARTICLE 2
INDEMNIFICATION
     Section 2.1 General Indemnification Obligations. Each of the Parties (each,
an “Indemnitor”) shall indemnify, defend and hold the other Party and its
respective officers, directors, members, managers and employees (each, an
“Indemnitee”) harmless from and against all liabilities, obligations, claims,
losses, damages, penalties, deficiencies, causes of action, costs and expenses,
including, without limitation, attorneys’ fees and expenses (collectively,
“Losses”) imposed upon, incurred by or asserted against the person seeking
indemnification that are caused by, are attributable to, result from or arise
out of any and all Claims associated with or in any way relating to
Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and
feasibility study costs, property damages, natural resource damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any person (including third party claims) or Government Authority, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law, provided they arise under or are related to any
federal, state or local Environmental Laws, regulations or permits, or are
connected with any release or presence of Hazardous Materials affecting the
Indemnitee’s Property, which are a result of or are caused by the Indemnitor’s
actions or business operations. All costs and expenses incurred by the
Indemnitee and arising from Claims associated with the environmental liabilities
identified above shall be paid by the Indemnitor within thirty (30) days
following receipt of a legitimate demand therefor from the Indemnitee. In the
event that indemnification is provided for under any other Section of this
Agreement or any other agreements between Refinery Company or any of its
affiliates and Fertilizer Company or any of its affiliates, and such
indemnification is for any

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particular Losses, then such indemnification (and any limitations thereon) as
provided in such Section or other agreement shall apply as to such particular
Losses and shall supersede and be in lieu of any indemnification that would
otherwise apply to such particular Losses under this Section 2.1.
     Section 2.2 Indemnification for Existing Known Contamination.
     (a) All existing, known contamination on Refinery Company Property and
Fertilizer Company Property has been documented and identified on a mutually
agreed upon Known Contamination Map, which contamination is subject to
Government Authority-mandated Environmental Activities that have either been
completed and issued a “No Further Action” or “closure” determination, or remain
incomplete and subject to further action.
     (b) To the extent that existing, known contamination on Refinery Company
Property has been documented and confirmed by Environmental Site Information and
is depicted on the Known Contamination Map, and the contamination is associated
with activities and operations of Fertilizer Company, Fertilizer Company shall
implement any and all Government Authority-mandated Environmental Activities
which are required to comply with Environmental Laws and Environmental Permits
pertaining to the presence, generation, treatment, storage, use, disposal,
transportation or Release of any Hazardous Material on, at, in, under, above,
to, from or about any Refinery Company Property. If the Government
Authority-mandated Environmental Activities are not implemented within a
reasonable timeframe, Fertilizer Company shall indemnify Refinery Company for
all of the expenses, penalties and other associated costs Refinery Company
incurs in achieving compliance consistent with all of the foregoing actions
identified in this Section 2.2(b), except as provided in Section 2.2(g). Any
invasive, on-site work that could involve impacts to subsurface soil and/or
groundwater in areas of contamination depicted on the Known Contamination Map
shall be subject to the procedural requirements established in either
Section 2.2(e) or Section 2.2(f) for Planned Project Work or Unplanned Work,
respectively.
     (c) Section 2.2(b) notwithstanding, at Refinery Company’s sole discretion,
Refinery Company may at its cost and expense perform a Government
Authority-mandated action with regard to Commingled Environmental Liabilities,
provided, however, (i) if such Government Authority-mandated action requires the
cooperation of the Fertilizer Company, the Refinery Company shall provide
reasonable notice of such requirement, and opportunity for Fertilizer Company to
comment on such Government Authority-mandated action, and the Parties shall
coordinate their activities relating to such required cooperation, and (ii) to
the extent that any Hazardous Materials recovered as a result of any such
Government Authority-mandated action were generated solely by the Fertilizer
Company, then Fertilizer Company shall bear the cost of complying with the
provisions of the Government Authority-mandated action with respect to such
Hazardous Materials that were generated solely by the Fertilizer Company. By
electing to perform such obligation, Refinery Company does not waive any
coverage under this Agreement for compensation or indemnification for third
party claims, or for any compensation or indemnification by Fertilizer Company
as otherwise provided in this Agreement.
     (d) To the extent that existing, known contamination on Fertilizer Company
Property has been documented and confirmed by Environmental Site Information and
is depicted

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on the Known Contamination Map, and the contamination is associated with
activities and operations of Refinery Company, Refinery Company shall implement
any and all Government Authority-mandated Environmental Activities which are
required to comply with Environmental Laws and Environmental Permits pertaining
to the presence, generation, treatment, storage, use, disposal, transportation
or Release of any Hazardous Material on, at, in, under, above, to, from or
affecting any Fertilizer Company Property. If the Government Authority-mandated
Environmental Activities are not implemented within a reasonable timeframe,
Refinery Company shall indemnify Fertilizer Company for all of the expenses,
penalties and other associated costs Fertilizer Company incurs in achieving
compliance consistent with all of the foregoing activities identified in
Section 2.2(d), except as provided in Section 2.2(h). Any invasive, on-site work
that could involve impacts to subsurface soil and/or groundwater in areas of
contamination depicted on the Known Contamination Map shall be subject to the
procedural requirements established in either Section 2.2(e) or Section 2.2(f)
for Planned Project Work or Unplanned Work, respectively.
     (e) For Planned Project Work, contamination that is depicted on the Known
Contamination Map, but for which Government Authority-mandated Environmental
Activities remain incomplete and subject to further action, remains the
responsibility of Contaminating Party, provided that Owner Party shall provide
notification to Contaminating Party at least ninety (90) days in advance
(“Ninety Day Notice”) that Owner Party will perform work that will disturb soil
and/or groundwater as part of the Planned Project Work. Upon such notice, the
Parties will meet and diligently work together to develop a soil management
plan; but in the event that the Parties are unable to agree within thirty
(30) days after Owner Party’s Ninety Day Notice, Owner Party may unilaterally
proceed to develop and implement its own commercially reasonable soil management
plan in conjunction with the Planned Project Work that will, to the extent
commercially reasonable, seek to minimize as practicable soil that requires
off-site disposal as part of the Planned Project Work. Owner Party will be
responsible for the costs of excavation and load out associated specifically
with the Planned Project Work, and Contaminating Party will pay the incremental
disposal costs, if any, for the Hazardous Materials. If the Hazardous Materials
require manifesting as RCRA Hazardous Waste, Contaminating Party will be the
“generator” for the purposes of manifesting and disposal. A licensed TSDF shall
be used for disposal.
     (f) For Unplanned Work, contamination that is depicted on the Known
Contamination Map, but for which Government Authority-mandated Environmental
Activities remain incomplete and subject to further action, remains the
responsibility of the Party that caused the contamination, provided that Owner
Party shall provide Contaminating Party, within twenty-four (24) hours, notice
that Owner Party performed Unplanned Work and encountered contamination that it
believes is the responsibility of Contaminating Party. The noticed Party will
then have twenty-four (24) hours to inspect the affected area to determine if it
accepts Owner Party’s claim of responsibility. If Contaminating Party accepts
such responsibility, Contaminating Party shall proceed with the required
Environmental Activities or, in the alternative, if Contaminating Party fails to
diligently proceed and/or if Contaminating Party does not accept such
responsibility, Owner Party may proceed with the required Environmental
Activities and if Owner Party does proceed with the required Environmental
Activities, then Contaminating Party shall indemnify and reimburse Owner Party,
upon Owner Party’s demand, for costs and expenses incurred by Owner Party in
proceeding with the required Environmental

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Activities. Disputes will be managed in accordance with Article 3 of this
Agreement. Owner Party will be responsible for the costs of excavation and load
out specifically associated with the scope and extent of Unplanned Work, and
Contaminating Party will pay the management and disposal costs for the Hazardous
Materials associated with the contamination depicted on the Known Contamination
Map. If the Hazardous Materials require manifesting as RCRA Hazardous Waste,
Contaminating Party will be the “generator” for the purposes of manifesting and
disposal. A licensed TSDF shall be used for disposal.
     (g) In the event that a Government Authority issues a “No Further Action”,
“closure” or similar determination concerning Fertilizer Company contamination
on or affecting Refinery Company Property, Section 2.2(b) shall become
inoperative with respect to the area specifically identified and delineated in
the respective Government Authority determination, and Refinery Company shall
have the sole responsibility for remediation of Refinery Company Property that
has existing, known contamination which is disturbed by Refinery Company’s
on-site development, investigation or remediation actions.
     (h) In the event that a Government Authority issues a “No Further Action”,
“closure” or similar determination concerning Refinery Company contamination on
or affecting Fertilizer Company Property, Section 2.2(d) shall become
inoperative with respect to the area specifically identified and delineated in
the respective Government Authority determination, and Fertilizer Company shall
have the sole responsibility for remediation of Fertilizer Company Property that
has existing, known contamination which is disturbed by Fertilizer Company’s
on-site development, investigation or remediation actions.
     Section 2.3 Indemnification for Existing Unknown and Future Contamination.
     (a) To the extent that operations and activities of the Refinery Company
have resulted in or caused a violation of Environmental Laws, or a Release
(including a Release of existing contamination) or other contamination affecting
the Fertilizer Company Property that was existing and unknown as of the
execution of this Agreement, or involves a latent release that occurs subsequent
to the execution of this Agreement, the Refinery Company shall, upon its receipt
of both a demand from the Fertilizer Company and objective evidence of such
Release or other contamination, in a commercially reasonable manner: (i) conduct
all investigations necessary to adequately identify and characterize the
contamination; (ii) develop a corrective action proposal or work plan, if
necessary; (iv) with the consent of the Fertilizer Company, coordinate with the
Government Authority; and (v) implement any and all Government
Authority-mandated Environmental Activities which are required to comply with
Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or affecting any
Fertilizer Company Property. If the Government Authority-mandated actions are
not implemented within a reasonable timeframe by Refinery Company, Fertilizer
Company shall implement such actions, and Refinery Company shall indemnify the
Fertilizer Company for all of the expenses, penalties and other associated costs
it incurs in achieving compliance consistent with all of the foregoing
activities identified in this Section 2.3(a), subject to the conditions
established in Sections 2.3(c), (d) and (e).

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     (b) To the extent that operations and activities of the Fertilizer Company
have resulted in or caused a violation of Environmental Laws, or a Release
(including a Release of existing contamination) or other contamination affecting
the Refinery Company Property that was existing and unknown as of the execution
of this Agreement, or involves a latent release that occurs subsequent to the
execution of this Agreement, the Fertilizer Company shall, upon its receipt of
both a demand from the Refinery Company and adequate, objective evidence of such
Release or other contamination, in a commercially reasonable manner: (i) conduct
all investigations necessary to adequately identify and characterize the
contamination; (ii) develop a corrective action proposal or work plan, if
necessary; (iv) with the consent of the Refinery Company, coordinate with the
Government Authority; and (v) implement any and all Government
Authority-mandated Environmental Activities which are required to comply with
Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or affecting any Refinery
Company Property. If the Government Authority-mandated actions are not
implemented within a reasonable timeframe by Fertilizer Company, Refinery
Company shall implement such actions, and Fertilizer Company shall indemnify the
Refinery Company for all of the expenses, penalties and other associated costs
it incurs in achieving compliance consistent with all of the foregoing
activities identified in this Section 2.3(b), subject to the conditions
established in Section 2.3(c), (d) and (e).
     (c) Except as required as a part of Government Authority-mandated
Environmental Activities, or in responding to an accidental or sudden
environmental occurrence of Hazardous Materials contamination, or in connection
with implementation of the Comprehensive Coke Management Plan, neither Party can
undertake investigation of soil or groundwater conditions.
     (d) If the contamination referenced in Sections 2.3(a) or (b) is subsumed
or covered by, or is otherwise satisfied by, a Government Authority-mandated
remediation or corrective action that was in effect prior to the execution of
this Agreement, this provision shall be inapplicable.
     (e) The requirements associated with existing unknown contamination
referenced in Sections 2.3(a) and (b) shall apply only to existing unknown
contamination that is discovered and identified in reasonable detail in a
written notice by one Party to the other Party within five (5) years following
the Effective Date.
     Section 2.4 Indemnification for Failure to Comply with Comprehensive Coke
Management Plan.
     (a) The Parties shall work in conjunction with each other to develop a
Comprehensive Coke Management Plan, including establishing procedures for the
management of Coke and the identification of significant Coke-related
contamination on the respective properties, which shall be finalized within
ninety (90) days following execution of this Agreement, and which Comprehensive
Coke Management Plan may be amended from time to time.

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     (b) Each of the Parties shall indemnify, defend and hold the other Party
and its respective officers, directors, members, managers and employees harmless
from and against all Losses imposed upon, incurred by or asserted against the
person seeking indemnification that are caused by, are attributable to, result
from or arise out of any and all Claims associated with or in any way relating
to Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and
feasibility study costs, property damages, natural resource damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any person (including third party claims) or Government Authority, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law, provided they arise under or are related to the
failure to comply with and implement its respective obligations and
responsibilities as established in the Comprehensive Coke Management Plan,
including any Coke-related violations of applicable Environmental Laws or
Environmental Permits. All costs and expenses incurred by the Indemnitee and
arising from Claims associated with the liabilities identified above shall be
paid by the Indemnitor within thirty (30) days following receipt of a legitimate
demand therefor from the Indemnitee.
     Section 2.5 Indemnification for Closure of Industrial Landfill 871
     (a) Refinery Company will close the KDHE permitted Industrial Landfill 871
(“Landfill 871”, which is located on land previously owned by Refinery Company
and now owned by Fertilizer Company) in accordance with the closure procedures
specified in the Revised Closure Plan submitted to KDHE on March 3, 2004, or any
KDHE required modifications to the Revised Closure Plan. Refinery Company will
be responsible for the 60-day notification requirement under Kansas
Administrative Regulation Section 28-19-12(a) with respect to closure of
Landfill 871.
     (b) Refinery Company will be responsible for all closure costs and
post-closure maintenance of the final clay cap and vegetative cover for Landfill
871. Access by Refinery Company to Landfill 871 for purposes of such maintenance
will be provided in accordance with Article 7 hereof.
     (c) Refinery Company acknowledges, and will comply with, the Restrictive
Covenant filed with the Montgomery County Register of Deeds at Book 487 Page
533, which, among other things, specifies certain post-closure property use,
easement to KDHE, and disclosure requirements with respect to Landfill 871.
     (d) Each of the Parties shall indemnify, defend and hold the other Party
and its respective officers, directors, members, managers and employees harmless
from and against all Losses imposed upon, incurred by or asserted against the
person seeking indemnification that are caused by, are attributable to, result
from or arise out of any and all Claims associated with or in any way relating
to Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and
feasibility study costs, property damages, natural resource damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or

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demand by any person (including third party claims) or Government Authority,
whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law, provided they arise under or are
related to the failure to comply with and implement its respective obligations
and responsibilities with respect to Landfill 871 under this Section 2.5(d). All
costs and expenses incurred by the Indemnitee and arising from Claims associated
with the liabilities identified above shall be paid by the Indemnitor within
thirty (30) days following receipt of a legitimate demand therefor from the
Indemnitee.
     Section 2.6 Indemnification for Off-Site Disposal of Hazardous Materials.
Each of the Parties shall indemnify, defend and hold the other Party and its
respective officers, directors, members, managers and employees harmless from
and against all liabilities, obligations, claims, losses, damages, penalties,
deficiencies, causes of action, costs and expenses, including, without
limitation, attorneys’ fees and expenses (collectively, “Losses”) imposed upon,
incurred by or asserted against the person seeking indemnification that are
caused by, are attributable to, result from or arise out of any and all Claims
associated with or in any way relating to Environmental Liabilities, including,
but not limited to, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, consequential damages
related to business interruption, property damages, natural resource damages,
costs and expenses (including all fees, disbursements and expenses of counsel,
experts and consultants), fines, penalties, sanctions and interest incurred as a
result of or related to any claim, suit, action, investigation, proceeding or
demand by any person (including third party claims) or Government Authority,
whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law, provided they arise under, or are
caused by or related to the off-site disposal of Hazardous Materials caused or
generated by Indemnitor and removed from the respective Property, and disposed
at an off-site location. This indemnification shall specifically cover, but is
not limited to, any Hazardous Material-related contamination caused by one Party
(i.e., Indemnitor), but registered and disposed under the other Party’s waste
generator/manifesting identification number, including the Hazardous Materials
generated by Fertilizer Company during construction of the Nitrogen Plant that
was disposed off-site using Refinery Company’s waste generator/manifesting
identification number.
     Section 2.7 Reduction of Indemnification Obligation. Any indemnification
obligation pursuant to this Article 2 with respect to any particular Losses
shall be reduced by all amounts actually recovered by the Indemnitee from third
parties, or from applicable insurance coverage, with respect to such Losses.
Upon making any payment to any Indemnitee, the Indemnitor shall be subrogated to
all rights of the Indemnitee against any third party in respect of the Losses to
which such payment relates, and such Indemnitee shall execute upon request all
instruments reasonably necessary to evidence and perfect such subrogation
rights. If the Indemnitee receives any amounts from any third party or under
applicable insurance coverage subsequent to an indemnification payment by the
Indemnitor, then such Indemnitee shall promptly reimburse the Indemnitor for any
payment made or expense incurred by such Indemnitor in connection with providing
such indemnification payment up to the amount received by the Indemnitee, net of
any expenses incurred by such Indemnitee in collecting such amount.

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     Section 2.8 Indemnification Procedures.
     (a) Promptly after receipt by an Indemnitee of notice of the commencement
of any action that may result in a claim for indemnification pursuant to this
Article 2, the Indemnitee shall notify the Indemnitor in writing within 30 days
thereafter; provided, however, that any omission to so notify the Indemnitor
will not relieve it of any liability for indemnification hereunder as to the
particular item for which indemnification may then be sought (except to the
extent that the failure to give notice shall have been materially prejudicial to
the Indemnitor) nor from any other liability that it may have to any Indemnitee.
The Indemnitor shall have the right to assume sole and exclusive control of the
defense of any claim for indemnification pursuant to this Article 2, including
the choice and direction of any legal counsel.
     (b) An Indemnitee shall have the right to engage separate legal counsel in
any action as to which indemnification may be sought under any provision of this
Agreement and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee unless (i) the
Indemnitor has agreed in writing to pay such fees and expenses, (ii) the
Indemnitor has failed to assume the defense thereof and engage legal counsel
within a reasonable period of time after being given the notice required above,
or (iii) the Indemnitee shall have been advised by its legal counsel that
representation of such Indemnitee and other parties by the same legal counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same legal counsel has been proposed)
due to actual or potential conflicts of interests between them. It is
understood, however, that to the extent more than one Indemnitee is entitled to
engage separate legal counsel at the Indemnitor’s expense pursuant to clause
(iii) above, the Indemnitor shall, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys at any time
for all such Indemnitees having the same or substantially similar claims against
the Indemnitor, unless but only to the extent the Indemnitees have actual or
potential conflicting interests with each other.
     (c) The Indemnitor shall not be liable for any settlement of any action
effected without its written consent, but if settled with such written consent,
or if there is a final judgment against the Indemnitee in any such action, the
Indemnitor agrees to indemnify and hold harmless the Indemnitee to the extent
provided above from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
     Section 2.9 Acitvity and Use Limitations. The Parties mutually agree that
the Refinery Company Property and the Fertilizer Company Property shall only be
used for industrial purposes in the future.
     Section 2.10 Survival. Any environmental contamination that is specifically
identified and indemnifiable hereunder prior to the termination or expiration of
this Agreement shall be covered by this Agreement beyond the term of this
Agreement as established in Section 10.8.

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ARTICLE 3
DISPUTES
     Section 3.1 Resolution of Disputes. The Parties shall in good faith attempt
to resolve promptly and amicably any dispute between the Parties arising out of
or relating to this Agreement (each a “Dispute”) pursuant to this Article 3. The
Parties shall first submit the Dispute to the Fertilizer Company Representative
and the Refinery Company Representative, who shall then meet within fifteen
(15) days to resolve the Dispute. If the Dispute has not been resolved within
forty-five (45) days after the submission of the Dispute to the Fertilizer
Company Representative and the Refinery Company Representative, the Dispute
shall be submitted to a mutually agreed non-binding mediation. The costs and
expenses of the mediator shall be borne equally by the Parties, and the Parties
shall pay their own respective attorneys’ fees and other costs. If the Dispute
is not resolved by mediation within ninety (90) days after the Dispute is first
submitted to the Refinery Company Representative and the Fertilizer Company
Representative as provided above, then the Parties may exercise all available
remedies.
     Section 3.2 Multi-Party Disputes. The Parties acknowledge that they or
their respective affiliates contemplate entering or have entered into various
additional agreements with third parties that relate to the subject matter of
this Agreement and that, as a consequence, Disputes may arise hereunder that
involve such third parties (each a “Multi-Party Dispute”). Accordingly, the
Parties agree, with the consent of such third parties, that any such Multi-Party
Dispute, to the extent feasible, shall be resolved by and among all the
interested parties consistent with the provisions of this Article 3.
ARTICLE 4
ASSIGNMENT
     This Agreement shall extend to and be binding upon the Parties hereto,
their successors and permitted assigns. Either Party may assign its rights and
obligations hereunder solely (i) to an affiliate under common control with the
assigning Party, provided that any such assignment shall require the prior
written consent of the other Party hereto (such consent not to be unreasonably
withheld or delayed), and provided that the applicable assignee agrees, in a
written instrument delivered to (and reasonably acceptable to) such other Party,
to be fully bound hereby, or (ii) to a Party’s lenders for collateral security
purposes, provided that in the case of any such assignment each Party agrees
(x) to cooperate with the lenders in connection with the execution and delivery
of a customary form of lender consent to assignment of contract rights and
(y) any delay or other inability of a Party to timely perform hereunder due to a
restriction imposed under the applicable credit agreement or any collateral
document in connection therewith shall not constitute a breach hereunder. In
addition, each Party agrees that it will assign its rights and obligations
hereunder to a transferee acquiring all or substantially all of the equity in or
assets of the assigning Party related to the Refinery or Fertilizer Plant (as
applicable), which transferee must be approved in writing by the non-assigning
Party (such approval not to be unreasonably withheld or delayed) and must agree
in writing (with the non-assigning Party) to be fully bound hereby.

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ARTICLE 5
GOVERNING LAW AND VENUE
     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF KANSAS WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF
SAID STATE. THE PARTIES AGREE THAT ANY ACTION BROUGHT IN CONNECTION WITH THIS
AGREEMENT MAY BE MAINTAINED IN ANY COURT OF COMPETENT JURISDICTION LOCATED IN
THE STATE OF KANSAS, AND EACH PARTY AGREES TO SUBMIT PERSONALLY TO THE
JURISDICTION OF ANY SUCH COURT AND HEREBY WAIVES THE DEFENSES OF FORUM
NON-CONVENIENS OR IMPROPER VENUE WITH RESPECT TO ANY ACTION BROUGHT IN ANY SUCH
COURT IN CONNECTION WITH THIS AGREEMENT.
ARTICLE 6
LIMITATION OF LIABILITY
     In no event, whether based on contract, indemnity, warranty, tort
(including negligence), strict liability or otherwise, shall either Party, its
employees, suppliers or subcontractors, be liable for loss of profits or revenue
or special, incidental, consequential, punitive or exemplary damages; provided,
however, that the foregoing limitation shall not preclude recourse to any
insurance coverage maintained by the Parties pursuant to the requirements of
this Agreement or otherwise.
ARTICLE 7
SITE ACCESS
     Section 7.1 The Parties mutually grant to each other, and their
consultants, agents, representatives, or contractors, the right and license to
access and enter onto the Accessed Property, at such reasonable times and
locations and along such routes as may be acceptable to the Party granting
access (Owner Party), for the purpose of the performance of Specified
Environmental Activities on the Accessed Property.
     Section 7.2 All existing and future Environmental Site Information is
highly confidential in nature and constitute proprietary and/or privileged
information. Therefore, the Parties shall, as provided in Section 10.1, preserve
and protect the confidentiality of the Environmental Site Information, which
shall be used for the purposes of identifying and remediating contaminated soil
and groundwater, as well as to provide advice and assist in complying with
Environmental Laws.
     Section 7.3 Upon request by Owner Party, Contaminating Party shall submit a
copy of its work plan for its Specified Environmental Activities to Owner Party.
     Section 7.4 The Contaminating Party’s right to access and enter the
Accessed Property for purposes of conducting Specified Environmental Activities
shall be subject to the following conditions and restrictions: (a) the
performance of the Specified Environmental Activities will be

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at no cost or expense to Owner Party; (b) Contaminating Party shall notify Owner
Party as soon as reasonably practicable prior to entry onto the Accessed
Property to conduct Specified Environmental Activities; (c) Contaminating
Party’s activities under this section shall not interfere with the normal
business operations of the Accessed Property unless such interference is
approved by Owner Party in advance or unless such interruption is a direct
result of activity implementing a Government Authority-mandated work plan, order
or other Environmental Activities; (d) Contaminating Party, its consultant,
agents, representatives, or contractors, shall diligently restore the Accessed
Property to its condition immediately prior to the performance of the Specified
Environmental Activities, to a condition that is in compliance with
Environmental Laws, the requirements of the Government Authority, and in a
manner that will allow for the continuation of normal business operations on the
Accessed Property; (e) Contaminating Party shall indemnify Owner Party against
any property damage or personal injury incurred by Owner Party or third parties
as a result of the Specified Environmental Activities or the unauthorized
release of Environmental Site Information under this Agreement; and (f) these
provisions allowing access to the Accessed Property are intended and shall be
construed only as a temporary license to enter the Accessed Property and to
conduct the Specified Environmental Activities upon the Accessed Property and
not as a grant of easement or any other interest in the Accessed Property.
     Section 7.5 Contaminating Party, its consultants, agents, representatives,
or contractors, shall be authorized to store and retain on the Accessed Property
the necessary equipment, materials, tools and personal property for the
Specified Environmental Activities; provided, however, that the equipment,
materials, tools and personal property shall not in any way interfere with the
normal business operations of Owner Party, and that all such equipment,
materials, tools and personal property shall be removed promptly upon completion
of the Specified Environmental Activities.
     Section 7.6 The right to access the Accessed Property granted to the
Contaminating Party shall terminate upon the completion of the Specified
Environmental Activities. Investigative activities shall be deemed complete once
all sampling and/or monitoring activities have been concluded, and all
restorative work has been completed to the reasonable satisfaction of Owner
Party, and remedial activities shall be deemed complete once all removal,
closure, and restorative activities have been conducted and the requisite
determination has been issued by the Government Authority.
ARTICLE 8
NOTICES
     Any notice, request, correspondence, information, consent or other
communication to any of the Parties required or permitted under this Agreement
shall be in writing (including telex, telecopy, or facsimile), shall be given by
personal service or by telex, telecopy, facsimile, overnight courier service, or
certified mail with postage prepaid, return receipt requested, and properly
addressed to such Party and shall be effective upon receipt. For purposes hereof
the proper address of the Parties shall be the address stated beneath the
corresponding Party’s name below, or at the most recent address given to the
other Parties hereto by notice in accordance with this Article:

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If to Refinery Company, to:
  With a copy to:
 
   
Coffeyville Resources
  Edmund S. Gross,
Refining & Marketing, LLC
  Vice President and General Counsel
400 N. Linden St., P.O. Box 1566
  CVR Energy, Inc.
Coffeyville, Kansas 67337
  10 E. Cambridge Circle, Ste. 250
Attention: Executive Vice President,
  Kansas City, Kansas 66103
Refining Operations
  Facsimile: (913) 981-0000
Facsimile: (620) 251-1456
   
 
   
If to Fertilizer Company, to:
  With a copy to:
 
   
Coffeyville Resources
  Edmund S. Gross,
Nitrogen Fertilizers, LLC
  Vice President and General Counsel
701 E. Martin St., P.O. Box 5000
  CVR Energy, Inc.
Coffeyville, Kansas 67337
  10 E. Cambridge Circle, Ste. 250
Attention: Executive Vice President and
  Kansas City, Kansas 66103
Fertilizer General Manager
  Facsimile: (913) 981-0000
Facsimile: (620) 252-4357
   

or such other address(es) as either Party designates by registered or certified
mail addressed to the other Party.
ARTICLE 9
EXHIBITS
     All of the Exhibits attached hereto are incorporated herein and made a part
of this Agreement by reference thereto.
ARTICLE 10
MISCELLANEOUS
     Section 10.1 Confidential Information. During the course of the Parties’
performance hereunder, the Parties acknowledge and agree that each of them may
receive or have access to confidential information of the other Party (which for
the purposes of this Agreement means any Environmental Site Information, or
other information, that is not generally known or that is not known in the
industry or community in general). Each Party agrees not to use or disclose any
such confidential information within their respective organizations (including
affiliates) except as required to perform its obligations hereunder and on a
need-to-know basis and will not disclose such information to others except to
the extent (i) such information was known to the receiving Party prior to its
receipt from the other Party, (ii) such information is required to be disclosed
under applicable law or regulation, or (iii) such information was required to be
disclosed or appropriate for disclosure in connection with a Transfer (or
proposed Transfer) of the Refinery or Fertilizer Plant or in connection with
required disclosures to a Party’s financing sources and their representatives,
as the case may be, provided that any disclosure under clause

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(iii) shall be approved in advance thereof by the other Party, which approval
shall not be unreasonably withheld or delayed. If a Party is compelled in a
judicial or administrative proceeding to reveal, disclose, or otherwise make
available any confidential information of the other Party to any third party,
such Party shall notify the other Party in writing promptly upon receipt of the
request for disclosure, and such other Party shall have the opportunity to
intervene to prevent or restrict the disclosure of the confidential information.
     Section 10.2 Headings. The headings used in this Agreement are for
convenience only and shall not constitute a part of this Agreement.
     Section 10.3 Amendments and Waiver. This Agreement may not be amended,
modified or waived except by a writing signed by all parties to this Agreement
that specifically references this Agreement and specifically provides for an
amendment, modification or waiver of this Agreement. No waiver of or failure or
omission to enforce any provision of this Agreement or any claim or right
arising hereunder shall be deemed to be a waiver of any other provision of this
Agreement or any other claim or right arising hereunder.
     Section 10.4 Construction and Severability. Every covenant, term and
provision of this Agreement shall be construed simply according to its fair
meaning and in accordance with industry standards and not strictly for or
against either Party. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.
     Section 10.5 Waiver. The waiver by either Party of any breach of any term,
covenant or condition contained in this Agreement shall not be deemed to be a
waiver of such term, covenant or condition or of any subsequent breach of the
same or of any other term, covenant or condition contained in this Agreement. No
term, covenant or condition of this Agreement will be deemed to have been waived
unless such waiver is in writing.
     Section 10.6 No Third Party Beneficiaries. The Parties each acknowledge and
agree that there are no third party beneficiaries having rights under or with
respect to this Agreement, including without limitation, under the BOC
Agreement, TKI I Phase I Agreement, or TKI Phase II Agreement.
     Section 10.7 Entire Agreement. This Agreement, including all Exhibits
hereto, constitutes the entire, integrated agreement between the Parties
regarding the subject matter hereof and supersedes any and all prior and
contemporaneous agreements, representations and understandings of the Parties,
whether written or oral, regarding the subject matter hereof.
     Section 10.8 Term. This Agreement shall continue for a minimum of twenty
(20) years, or as long as the Feedstock Agreement remains in effect, whichever
is longer.
[signature page follows]

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Signature Page
To
Environmental Agreement
     IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement
as of the date first above set forth.

                          COFFEYVILLE RESOURCES
REFINING & MARKETING, LLC                COFFEYVILLE RESOURCES
     NITROGEN FERTILIZERS, LLC

By:  /s/  Robert W. Haugen
      ____________________________________________
Name:  Robert W. Haugen
Title:    Executive Vice President,
            Refining Operations
By:  /s/  Kevan A. Vick
___________________________________________
Name:  Kevan A. Vick
Title:    Executive Vice President and
             Fertilizer General Manager

 

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EXHIBIT A
PLOT PLAN
See attached.

A-1