Exhibit 10.2

SEPARATION AGREEMENT

BY AND BETWEEN

RENTECH NITROGEN PARTNERS, L.P.,

RENTECH NITROGEN GP, LLC

AND

RENTECH NITROGEN PASADENA HOLDINGS, LLC

DATED AS OF MARCH 14, 2016

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TABLE OF CONTENTS

 

Article I. DEFINITIONS

     1   

Article II. THE SEPARATION

     8   

2.1

 

Transfer of Assets and Assumption of Liabilities

     8   

2.2

 

Transferred Assets

     9   

2.3

 

Assumed Liabilities

     10   

2.4

 

Approvals and Notifications

     10   

2.5

 

Novation of Assumed Liabilities

     12   

2.6

 

Novation of Partnership Liabilities

     12   

2.7

 

Termination of Agreements

     13   

2.8

 

Bank Accounts

     13   

2.9

 

Disclaimer of Representations and Warranties

     14   

Article III. DISPUTE RESOLUTION

     14   

3.1

 

Arbitration

     14   

3.2

 

Confidentiality

     15   

Article IV. MUTUAL RELEASES; INDEMNIFICATION

     15   

4.1

 

Regardless of Fault

     15   

4.2

 

Intention of Parties

     15   

4.3

 

Release of Pre-Separation Claims

     15   

4.4

 

Indemnification by Pasadena Holdings

     17   

4.5

 

Indemnification by Partnership

     18   

4.6

 

Indemnification Obligations Net of Insurance Proceeds and Other Amounts

     19   

4.7

 

Procedures for Indemnification of Third-Party Claims

     19   

4.8

 

Additional Matters

     20   

4.9

 

Remedies Cumulative

     21   

4.10

 

Survival of Indemnitees

     21   

4.11

 

No Impact on Third Parties

     21   

4.12

 

No Cross-Claims or Third-Party Claims

     21   

4.13

 

Severability

     21   

Article V. INSURANCE MATTERS

     21   

5.1

 

Insurance Matters

     21   

Article VI. EXCHANGE OF INFORMATION; CONFIDENTIALITY

     22   

6.1

 

Agreement for Exchange of Information

     22   

6.2

 

Ownership of Information

     22   

6.3

 

Compensation for Providing Information

     22   

6.4

 

Record Retention

     22   

6.5

 

Production of Witnesses; Records; Cooperation

     22   

6.6

 

Confidentiality

     23   

6.7

 

Protective Arrangements

     23   

Article VII. FURTHER ASSURANCES AND ADDITIONAL COVENANTS

     23   

7.1

 

Further Assurances

     23   

7.2

 

Performance

     24   

 

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7.3

 

Conflicts with and between Ancillary Agreements

     24   

7.4

 

Attorney Client Privilege

     24   

7.5

 

Tax Matters

     24   

Article VIII. MISCELLANEOUS

     25   

8.1

 

Counterparts; Entire Agreement; Corporate Power

     25   

8.2

 

Governing Law; Waiver of Trial by Jury

     25   

8.3

 

Assignability

     25   

8.4

 

Third-Party Beneficiaries

     26   

8.5

 

Notices

     26   

8.6

 

Severability

     26   

8.7

 

Force Majeure

     27   

8.8

 

Expenses

     27   

8.9

 

Late Payments

     27   

8.10

 

Headings

     27   

8.11

 

Survival of Covenants

     27   

8.12

 

Waivers of Default

     27   

8.13

 

Specific Performance

     27   

8.14

 

Amendments

     27   

8.15

 

Interpretation

     27   

8.16

 

Limitations of Liability

     28   

 

Schedule 1.1

  

Pasadena Balance Sheet

  

 

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SEPARATION AGREEMENT

This SEPARATION AGREEMENT, made and entered into effective as of March 14, 2016
(this “Agreement”), is by and between Rentech Nitrogen Partners, L.P., a
Delaware limited partnership (“Partnership”), Rentech Nitrogen GP, LLC, a
Delaware limited liability company (“Partnership GP”), and Rentech Nitrogen
Pasadena Holdings, LLC, a Delaware limited liability company and wholly owned
subsidiary of Partnership (“Pasadena Holdings”). Capitalized terms used herein
and not otherwise defined shall have the respective meanings assigned to them in
Article I.

R E C I T A L S

WHEREAS, following the execution and delivery of this Agreement, Partnership,
Pasadena Holdings, Rentech, Inc. (“Rentech”) and Pasadena International
Commodities, LLC (“Pasadena Buyer”) will enter into a Membership Interest
Purchase Agreement dated as of the date hereof (such agreement as it may be
amended from time to time, the “Purchase Agreement”), pursuant to which Pasadena
Buyer will purchase all of the limited liability company interests in Pasadena
Holdings in accordance with the terms and conditions set forth therein;

WHEREAS, in furtherance of the foregoing, the Partnership Board determined that
it is appropriate and desirable for Partnership and its applicable Subsidiaries
to transfer the Transferred Assets to Pasadena Holdings and Rentech Nitrogen
Pasadena, LLC, a Delaware limited liability company (“Pasadena” and,
collectively with Pasadena Holdings, the “Pasadena Entities”), and for the
Pasadena Entities to assume or retain, as applicable, the Assumed Liabilities in
each case as more fully described in this Agreement and the Ancillary Agreements
(the “Separation”); and

WHEREAS, each of the Parties has determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect the
Separation (to the extent not previously completed prior to the date hereof) and
certain other agreements that will govern certain matters relating to the
Separation and the relationship of Partnership, Partnership GP, Pasadena
Holdings and their respective Subsidiaries, following the Separation.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the Parties, intending to be legally
bound, agree as follows:

ARTICLE I.

DEFINITIONS

For the purpose of this Agreement, the following terms shall have the following
meanings:

“AAA” shall have the meaning set forth in Section 3.1(b).

“AAA Commercial Arbitration Rules” shall have the meaning set forth in
Section 3.1(b).

“Action” means any demand, action, claim, dispute, suit, countersuit,
arbitration, inquiry, subpoena, proceeding or investigation of any nature
(whether criminal, civil, legislative, administrative, regulatory, prosecutorial
or otherwise) by or before any federal, state, local, foreign or international
Governmental Authority or any arbitration or mediation tribunal.

“Affiliate” means, when used with respect to a specified Person, a Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such specified Person. For the
purpose of this definition, “control” (including with correlative meanings,
“controlled by” and “under common control with”), when used with respect to any
specified Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or other interests, by
contract, agreement, obligation, indenture, instrument, lease, promise,
arrangement, release, warranty, commitment, undertaking or otherwise. From and
after the Separation Date, (a) no Pasadena Group member shall be deemed to be an
Affiliate of any Partnership Group member and (b) no Partnership Group member
shall be deemed to be an Affiliate of any Pasadena Group member.

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“Agreement” shall have the meaning set forth in the Preamble.

“Ancillary Agreements” means the Services Agreements and the Transfer Documents.

“Approvals or Notifications” means any consents, waivers, approvals, permits or
authorizations to be obtained from, notices, registrations or reports to be
submitted to, or other filings to be made with, any Third Party, including any
Governmental Authority.

“Assets” means, with respect to any Person, the assets, properties, claims and
rights (including goodwill) of such Person, wherever located (including in the
possession of vendors or other Third Parties or elsewhere), of every kind,
character and description, whether real, personal or mixed, tangible, intangible
or contingent, in each case, whether or not recorded or reflected or required to
be recorded or reflected on the books and records or financial statements of
such Person, including the following:

(a) all Records;

(b) all apparatus, IT Equipment, fixtures, machinery, furniture, office and
other equipment, automobiles, trucks, vessels, motor vehicles and other
transportation equipment, tubing, pumps, motors, machinery, rods, tanks,
boilers, structures, materials and other tangible personal property;

(c) all inventories of materials, parts, raw materials, components, supplies,
works-in-process and finished goods and products;

(d) all interests in real property of whatever nature, including buildings,
fixtures and easements, whether as owner, mortgagee or holder of a Security
Interest in real property, lessor, sublessor, lessee, sublessee or otherwise,
including interests in and rights with respect to all leases, subleases,
licenses, easements, rights-of-way or other similar surface interests, or other
occupancy or similar agreements granting surface use or surface occupancy
rights;

(e) (i) all interests in any capital stock or other equity interests of any
Subsidiary, Affiliate or any other Person, (ii) all bonds, notes, debentures or
other securities issued by any Subsidiary, Affiliate or any other Person,
(iii) all loans, advances or other extensions of credit or capital contributions
to any Subsidiary, Affiliate or any other Person, and (iv) all other investments
in securities of any Person;

(f) all license agreements, leases of personal property, open purchase orders
for raw materials, supplies, parts or services and other contracts, agreements
or commitments;

(g) all letters of credit, deposits, performance bonds and other surety bonds;

(h) all written (including in electronic form) or oral technical information,
data, specifications, research and development information, engineering drawings
and specifications, operating and maintenance manuals, and materials and
analyses prepared by consultants and other Third Parties;

(i) all Intellectual Property;

(j) all Software;

(k) all cost information, sales and pricing data, customer prospect lists,
supplier records, customer and supplier lists, customer and vendor data,
correspondence and lists, product data and literature, artwork, design,
formulations and specifications, quality records and reports and other books,
records, studies, surveys, reports, plans and documents;

(l) all prepaid expenses, trade accounts and other accounts and notes
receivable;

 

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(m) all rights under contracts or agreements, all claims or rights against any
Person arising from the ownership of any Asset described in (a) through (l) and
(n) through (p) hereof, including, to the extent transferrable, all rights
against Third Parties with respect to indemnification, and all rights in
connection with any bids or offers and all claims, choses in action or similar
rights, whether accrued or contingent;

(n) all licenses, permits, approvals and authorizations which have been issued
by any Governmental Authority and any pending applications therefor;

(o) all cash or cash equivalents, bank accounts, lock boxes and other deposit
arrangements; and

(p) all interest rate, currency, commodity or other swap, collar, cap or other
hedging or similar agreements or arrangements.

“Assigned Pasadena Contracts” means all contracts, agreements and instruments to
which Partnership or any of its Affiliates is a party or by which it or any of
its Affiliates or any of their respective Assets is bound, whether or not in
writing, in each case immediately prior to the Separation Date, that relate
exclusively to the Pasadena Business (except for any such contract or agreement
that is contemplated to be retained by Partnership or any Partnership Group
member pursuant to any provision of this Agreement or any Ancillary Agreement
(each, a “Partnership Contract”)).

“Assumed Actions” means those Actions that are primarily related to the Pasadena
Business.

“Assumed Liabilities” shall have the meaning set forth in Section 2.3(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” shall have the meaning set forth in Section 6.6(a).

“Disclosing Party” shall have the meaning set forth in Section 6.6(a).

“Dispute” shall have the meaning set forth in Section 3.1(a).

“Environmental Law” means any Law pertaining to (a) the protection of, or
prevention of harm to, the environment or natural resources, (b) exposure or the
generation, use, handling, transportation, treatment, storage, management,
presence, disposal or arrangement for disposal, Release, or threatened Release
of Hazardous Materials, (c) the prevention of pollution, remediation of
contamination, or restoration of environmental quality, or (d) occupational
health or workplace safety.

“Environmental Liabilities” means all Liabilities, environmental response costs
(including all removal, remediation or cleanup costs, investigatory costs,
monitoring costs, and response costs with respect to Hazardous Materials),
damages (including natural resources damages, property damages and personal
injury damages) and costs of compliance (including with respect to any product
take back requirements, or with any settlement, judgment or other determination
of Liability and indemnity, contribution or similar obligations) relating to,
arising out of or resulting from any order, notice of responsibility, directive,
injunction, judgment or similar act (including settlements) by any Governmental
Authority to the extent arising out of non-compliance with or any violation of,
or obligation under, any Environmental Laws, or pursuant to any demand, action,
claim, dispute, suit, countersuit, settlement, arbitration, formal inquiry,
subpoena, investigation, proceeding or other legal determination of liability by
a Governmental Authority or any other Person with respect to Hazardous Materials
(including any exposure to Hazardous Materials), Environmental Law or contract
or agreement relating to environmental, health or safety matters.

“Governmental Approvals” means any notices, reports or other filings to be made,
or any consents, registrations, approvals, permits or authorizations to be
obtained from, any Governmental Authority.

 

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“Governmental Authority” means any nation or government, any state, municipality
or other political subdivision thereof, and any entity, body, agency,
commission, department, board, bureau, court, tribunal or other instrumentality,
whether federal, state, local, domestic, foreign or multinational, exercising
executive, legislative, judicial, regulatory, administrative or other similar
functions of, or pertaining to, government and any executive official thereof.

“Group” means either the Pasadena Group or the Partnership Group, as the context
requires.

“Hazardous Materials” means any chemical, material, substance, waste, pollutant,
emission, discharge, release, contaminant or words of similar meaning or import
that could result in liability under, or that is prohibited, limited or
regulated by or pursuant to, any Environmental Law, and any natural or
artificial substance (whether solid, liquid or gas, noise, ion, vapor or
electromagnetic) that could cause harm to human health or the environment,
including petroleum, petroleum products and byproducts, oil and gas exploration
and production wastes, natural gas, condensate or any components, fractions or
derivatives thereof, asbestos and asbestos-containing materials, urea
formaldehyde foam insulation, electronic, medical or infectious wastes,
polychlorinated biphenyls, naturally occurring radioactive materials, radon gas,
radioactive substances, and chlorofluorocarbons and all other ozone-depleting
substances.

“Indemnifying Party” shall have the meaning set forth in Section 4.6(a).

“Indemnitee” shall have the meaning set forth in Section 4.6(a).

“Indemnity Payment” shall have the meaning set forth in Section 4.6(a).

“Information” means information, whether or not patentable or copyrightable, in
written, oral, electronic or other tangible or intangible forms, stored in any
medium, including studies, reports, records, books, contracts, instruments,
surveys, discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts, data, computer data, disks, diskettes, tapes, computer programs or
other Software, marketing plans, customer names, memos, and other technical,
financial, employee or business information or data.

“Insurance Proceeds” means those monies (a) received by an insured (or its
successor-in-interest) from an insurance carrier or (b) paid by an insurance
carrier on behalf of the insured (or its successor-in-interest); in any such
case net of any applicable premium adjustments (including reserves and
retrospectively rated premium adjustments) and net of any reasonable, out of
pocket, costs or expenses incurred in the collection thereof; provided, however,
that with respect to a captive insurance arrangement, Insurance Proceeds shall
only include net amounts received by the captive insurer in respect of any
reinsurance arrangement with respect to the insurance issued by such captive
insurer.

“Intellectual Property” means any and all proprietary and intellectual property
rights whether arising under the Laws of the United States or of any other
foreign or multinational jurisdiction or provided by international treaties or
convention, including: (a) patents, patent applications and statutory invention
registrations, including reissues, divisions, continuations, continuations in
part, substitutions, renewals, extensions and reexaminations of any of the
foregoing; (b) trademarks, service marks, trade names, service names, trade
dress, logos, Internet domain names, uniform resource locaters, and other source
or business identifiers, including all goodwill associated with any of the
foregoing and any and all common law rights in and to any of the foregoing,
registrations and applications for registration of any of the foregoing, and all
reissues, extensions and renewals of any of the foregoing; (c) copyrights, moral
rights, mask work rights, database rights, other rights in works of authorship,
and all registrations and applications for registration of any of the foregoing;
and (d) trade secrets, know how, and rights in confidential and proprietary
information, including invention disclosures, formulations, concepts,
compilations of information, methods, techniques, procedures, and processes,
whether or not patentable.

“IT Equipment” means all computers, servers, printers, computer hardware, wired
or mobile telephones, on-site process control and automation systems,
telecommunication assets, and other information technology-related equipment.

 

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“Law” means any national, supranational, federal, state, provincial, local or
similar law (including common law), statute, code, order, ordinance, rule,
regulation, treaty (including any income tax treaty), license, permit,
authorization, approval, consent, decree, injunction, binding judicial or
administrative interpretation or other requirement, in each case, enacted,
promulgated, issued or entered by a Governmental Authority.

“Liabilities” means any and all debts, guarantees, assurances, commitments,
liabilities (including Environmental Liabilities), responsibilities,
remediation, deficiencies, reimbursement obligations in respect of letters of
credit, fines, settlements, sanctions, Taxes, interest, obligations and Losses,
whether accrued or fixed, absolute or contingent, matured or unmatured, accrued
or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or
unforeseen, known or unknown, reserved or unreserved, or determined or
determinable, including those arising under any Law, claim (including any
Third-Party Claim), demand, Action, or order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority or arbitration tribunal, and those arising under any contract,
agreement, obligation, indenture, instrument, lease, promise, arrangement,
release, warranty, commitment or undertaking, or any damages or equitable relief
that is imposed, in each case, including all costs and expenses relating
thereto.

“Losses” means actual losses, costs, damages, penalties and expenses (including
legal and accounting fees and expenses and costs of investigation and
litigation), whether or not involving a Third-Party Claim.

“Partnership” shall have the meaning set forth in the Preamble.

“Partnership Accounts” shall have the meaning set forth in Section 2.8(a).

“Partnership Assets” shall have the meaning set forth in Section 2.2(b).

“Partnership Business” means the business of Partnership and its Subsidiaries as
conducted at any point in time prior to the Separation Date, other than the
Pasadena Business.

“Partnership Contract” shall have the meaning set forth in the definition of
Assigned Pasadena Contracts.

“Partnership GP” shall have the meaning set forth in the Preamble.

“Partnership Group” means (a) prior to the Separation Date, Partnership,
Partnership GP and each Subsidiary of Partnership and Partnership GP other than
the Pasadena Entities and (b) after the Separation Date, (i) Partnership and
Partnership GP, (ii) each Affiliate of Partnership controlled by Partnership or
Partnership GP immediately after the Separation Date and (iii) each other entity
that becomes a Subsidiary of Partnership or Partnership GP at any time following
the Separation Date for so long as such entity is a Subsidiary of Partnership or
Partnership GP; provided that, from and after the Separation Date, each Pasadena
Group member will be deemed not to be a Partnership Group member.

“Partnership Indemnitees” shall have the meaning set forth in Section 4.4.

“Partnership Liabilities” shall have the meaning set forth in Section 2.3(b).

“Partnership Third-Party Claim” shall mean any claim or commencement of any
Action by any Person (including any Governmental Authority) other than a
Partnership Group member.

“Partnership Transfer Documents” shall have the meaning set forth in
Section 2.1(c).

“Parties” means Pasadena Holdings, Partnership and Partnership GP.

“Pasadena” shall have the meaning set forth in the Recitals.

“Pasadena Accounts” shall have the meaning set forth in Section 2.8(a).

 

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“Pasadena Balance Sheet” means the unaudited consolidated balance sheet of the
Pasadena Group, including the notes thereto, as of January 31, 2016, attached as
Schedule 1.1 hereto.

“Pasadena Business” means the business of (a) owning, operating, and maintaining
the Pasadena Facility, (b) the procurement of feedstocks for and the marketing
and sale of products produced by the Pasadena Facility, and (c) such other items
as reflected in Partnership’s Pasadena Segment.

“Pasadena Buyer” shall have the meaning set forth in the Recitals.

“Pasadena Facility” means Pasadena’s facility on the Houston Ship Channel that
produces primarily ammonium sulfate.

“Pasadena Segment” means the Pasadena segment of Partnership described in
Partnership’s Annual Report on Form 10-K for the period ended December 31, 2014
and Quarterly Report on Form 10-Q for the quarterly period ended September 30,
2015, which relates to the operations of the Pasadena Facility.

“Pasadena Entities” shall have the meaning set forth in the Recitals.

“Pasadena Group” means (a) prior to the Separation Date, the Pasadena Entities
and (b) after the Separation Date, (i) the Pasadena Entities, (ii) each
Subsidiary of Pasadena Holdings immediately after the Separation Date, (b) each
Affiliate of Pasadena Holdings controlled by Pasadena Holdings immediately after
the Separation Date and (c) each other entity that becomes a Subsidiary of
Pasadena Holdings at any time following the Separation Date for so long as such
entity is a Subsidiary of Pasadena Holdings.

“Pasadena Holdings” shall have the meaning set forth in the Preamble.

“Pasadena Indemnitees” shall have the meaning set forth in Section 4.5.

“Pasadena Third-Party Claim” means any claim or commencement of any Action by
any Person (including any Governmental Authority) other than a Pasadena Group
member.

“Pasadena Transfer Documents” shall have the meaning set forth in
Section 2.1(d).

“Person” means an individual, a general or limited partnership, a corporation, a
trust, a joint venture, an unincorporated organization, a limited liability
entity, any other entity and any Governmental Authority.

“Prime Rate” means the rate which JPMorgan Chase Bank (or any successor thereto)
announces from time to time as its prime lending rate, as in effect from time to
time.

“Privilege” shall have the meaning set forth in Section 6.1.

“Purchase Agreement” shall have the meaning set forth in the Recitals.

“Receiving Party” shall have the meaning set forth in Section 6.6(a).

“Records” means all corporate, operational, accounting and other books and
records, files, data, correspondence, studies, surveys, reports, sales contract
files, processing files, and other data (in each case whether in written or
electronic format).

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, seeping, dumping, or disposing of Hazardous Materials into
or through the environment (including ambient air, surface water, groundwater
and surface or subsurface strata).

 

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“Representatives” means, with respect to any Person, any of such Person’s
directors, officers, employees, agents, managers, consultants, advisors,
accountants, attorneys or other representatives.

“Security Interest” means any mortgage, security interest, pledge, lien, charge,
claim, option, right to acquire, voting or other restriction, right-of-way,
covenant, condition, easement, encroachment, restriction on transfer, or other
encumbrance of any nature whatsoever.

“Separation” shall have the meaning set forth in the Recitals.

“Separation Date” means the date and time at which the Separation occurs.

“Services Agreements” means (a) the Transition Services Agreement, dated as of
the date hereof, between Rentech and Pasadena Buyer and (b) the Transition
Services Agreement, dated as of the date hereof, between Partnership and
Pasadena Buyer.

“Software” means any and all (a) computer programs, including the tangible media
on which it is recorded (in any form), and any and all software implementation
of algorithms, models and methodologies, whether in source code, object code,
human readable form or other form, together with all translations, adaptations,
modifications, derivations, combinations or derivative works thereof,
(b) databases and compilations, including any and all data and collections of
data, whether machine readable or otherwise, (c) descriptions, flow charts and
other work products used to design, plan, organize and develop any of the
foregoing, screens, user interfaces, report formats, firmware, development
tools, templates, menus, buttons and icons, and (d) documentation, including
user manuals and other training documentation, relating to any of the foregoing.

“Subsidiary” or “subsidiary” means, with respect to any Person, any Person,
whether incorporated or unincorporated, of which (a) more than 50% of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions, (b) a general partner interest or (c) a managing member interest, is
directly or indirectly owned or controlled by the subject Person or by one or
more of its respective Subsidiaries.

“Tax” or “Taxes” means (a) any taxes, charges, fees, levies, assessments,
unclaimed property and escheat obligations and other governmental charges
imposed by any Governmental Authority, including all net income, gross income,
gross receipts, net proceeds, alternative or add on minimum, sales, use, ad
valorem, value added, turnover, goods and services, capital, transfer,
registration, franchise, profits, license, withholding, social security (or
similar), unemployment, disability, payroll, employment, social contributions,
employer health, fuel, excess profits, premium, windfall profit, excise,
estimated, severance, stamp, occupation, property, personal property (tangible
and intangible), leasing, lease, user, custom duties, or other similar
assessments or charges of any kind whatsoever, together with any interest,
penalties, or additions thereto, whether disputed or not; and (b) any liability
for the payment of any amounts of the type described in clause (a) as a result
of being a member for any period of an affiliated, combined, consolidated,
unitary or similar group with respect to any Taxes, including any affiliated
group within the meaning of Section 1504 of the Code electing to file
consolidated U.S. federal income Tax Returns and any similar group under
foreign, state or local law; and (c) any liability of for the payment of any
amounts of the type described in clause (a) or (b) as a result of the operation
of law or any express or implied obligation to indemnify any other Person.

“Tax Return” means any return, report or similar filing (including any attached
schedules, supplements and additional or supporting material) filed or required
to be filed with respect to Taxes, including any information return, claim for
refund, amended return or declaration of estimated Taxes (and including any
amendments with respect thereto).

“Third Party” means any Person (including any Governmental Authority) other than
a Group member.

“Third-Party Claim” means a Pasadena Third-Party Claim or a Partnership
Third-Party Claim.

“Third-Party Proceeds” shall have the meaning set forth in Section 4.6(a).

 

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“Transfer Documents” shall have the meaning set forth in Section 2.1(d).

“Transferred Assets” shall have the meaning set forth in Section 2.2(a).

“Unreleased Partnership Liability” shall have the meaning set forth in
Section 2.6(b).

“Unreleased Pasadena Liability” shall have the meaning set forth in
Section 2.5(b).

ARTICLE II.

THE SEPARATION

2.1 Transfer of Assets and Assumption of Liabilities.

(a) Except as otherwise specifically set forth in this Agreement or any
Ancillary Agreement, (i) and except for where the assignment, transfer or
conveyance of any Transferred Assets from a Partnership Group member to a
Pasadena Group member would be a violation of applicable Law, or require any
Approvals or Notifications in connection with the Separation that have not been
obtained or made by the Separation Date, to the extent that any Transferred
Assets are held by a Partnership Group member as of the Separation Date, then
from and after the Separation Date, the applicable Partnership Group member
hereby assigns and Pasadena Holdings accepts such assignment of the Partnership
Group member’s right, title and interest in such Transferred Assets and (ii) and
except for where the assignment, transfer or conveyance of any Partnership
Assets from a Pasadena Group member to any Partnership Group member would be a
violation of applicable Law, or require any Approvals or Notifications in
connection with the Separation that have not been obtained or made by the
Separation Date, to the extent that any Partnership Assets are held by a
Pasadena Group member as of the Separation Date, then from and after the
Separation Date, the applicable Pasadena Group members hereby assign and the
Partnership hereby accepts such assignment of such Pasadena Group member’s
right, title and interest in such Partnership Assets.

(b) Except as otherwise specifically set forth in this Agreement or any
Ancillary Agreement, (i) and except for where the assumption by Pasadena
Holdings of any Assumed Liabilities would be a violation of applicable Law, or
require any Approvals or Notifications in connection with the Separation that
have not been obtained or made by the Separation Date, to the extent that the
Partnership Group has any Assumed Liabilities as of the Separation Date, then
from and after the Separation Date, Pasadena Holdings shall and hereby does,
accept, assume and agree faithfully to perform, discharge and fulfill all such
Assumed Liabilities in accordance with their respective terms and (ii) and
except for where the assumption by Partnership of any Partnership Liabilities
would be a violation of applicable Law, or require any Approvals or
Notifications in connection with the Separation that have not been obtained or
made by the Separation Date, to the extent that the Pasadena Group has any
Partnership Liabilities as of the Separation Date, then from and after the
Separation Date, Partnership shall and hereby does, accept, assume and agree
faithfully to perform, discharge and fulfill all such Partnership Liabilities in
accordance with their respective terms.

(c) In furtherance of the assignment, transfer and conveyance of the Transferred
Assets and the assumption of the Assumed Liabilities in accordance with Sections
2.1(a) and 2.1(b), on, before and/or as of the date that such Transferred Assets
are assigned, transferred or conveyed or such Assumed Liabilities are assumed
(i) Partnership and Partnership GP shall execute and deliver, and shall cause
their respective Subsidiaries to execute and deliver, such bills of sale,
quitclaim deeds, stock powers, certificates of title, assignments of contracts
and other instruments of transfer, conveyance and assignment as and to the
extent necessary to evidence the transfer, conveyance and assignment of all of
Partnership GP’s and Partnership’s and their respective Subsidiaries’ (other
than Pasadena Group members) right, title and interest in and to the Transferred
Assets to the Pasadena Group members, and (ii) Pasadena Holdings shall execute
and deliver, and shall cause the Pasadena Group members to execute and deliver,
such assumptions of contracts and other instruments of assumption as and to the
extent necessary to evidence the valid and effective assumption of the Assumed
Liabilities. All of the foregoing documents contemplated by this Section 2.1(c)
(whether executed on, prior to or after the Separation Date in contemplation of
the Separation) shall be referred to collectively herein as the “Partnership
Transfer Documents.”

(d) In furtherance of the assignment, transfer and conveyance of Partnership
Assets and the assumption of Partnership Liabilities set forth in Sections
2.1(a) and 2.1(b), on, before and/or as of the date that such

 

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Partnership Assets are assigned, transferred or conveyed or such Partnership
Liabilities are assumed: (i) Pasadena Holdings shall execute and deliver, and
shall cause the Pasadena Group members to execute and deliver, such bills of
sale, quitclaim deeds, stock powers, certificates of title, assignments of
contracts (including partial assignments) and other instruments of transfer,
conveyance and assignment as and to the extent necessary to evidence the
transfer, conveyance and assignment of all of the Pasadena Group members’ right,
title and interest in and to the Partnership Assets to the Partnership Group
members, and (ii) Partnership and Partnership GP shall execute and deliver, and
shall cause the Partnership Group members to execute and deliver, such
assumptions of contracts and other instruments of assumption as and to the
extent necessary to evidence the valid and effective assumption of the
Partnership Liabilities. All of the foregoing documents contemplated by this
Section 2.1(d) (whether executed on, prior to or after the Separation Date in
contemplation of the Separation) shall be referred to collectively herein as the
“Pasadena Transfer Documents” and, together with the Partnership Transfer
Documents, the “Transfer Documents.”

(e) Each Party hereby waives compliance by each and every Group member with the
requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any
jurisdiction that may otherwise be applicable with respect to the transfer or
sale of any or all of Assets hereunder.

2.2 Transferred Assets.

(a) For purposes of this Agreement, “Transferred Assets” means (without
duplication):

(i) all Assets that are specifically provided pursuant to the express terms of
this Agreement as Assets to be transferred to Pasadena Holdings or any other
Pasadena Group member;

(ii) (A) all Assigned Pasadena Contracts and (B) all issued and outstanding
equity interests held by Partnership or its Subsidiaries in the Pasadena
Entities (other than the equity interests transferred to Pasadena Buyer pursuant
to the Purchase Agreement);

(iii) all Assets reflected as assets of Pasadena Holdings or its Subsidiaries on
the Pasadena Balance Sheet, subject to any dispositions of such Assets
subsequent to the date of the Pasadena Balance Sheet;

(iv) any and all other Assets owned and used or held for use immediately prior
to the Separation Date by Partnership or any of its Subsidiaries (other than the
Pasadena Entities) exclusively in the Pasadena Business, including any account
or trade receivables, inventory, property, plant and equipment, prepaid expenses
and other Assets associated with ammonium sulfate production by the Pasadena
Business, whether or not reflected as Assets of Pasadena Holdings or its
Subsidiaries on the Pasadena Balance Sheet; and

(v) the National Federal Flood Policies related solely to the Pasadena Facility.

Notwithstanding the foregoing, the Transferred Assets shall not, in any event,
include the Partnership Assets referred to in Section 2.2(b)(i) and
Section 2.2(b)(ii).

(b) For the purposes of this Agreement, “Partnership Assets” means (without
duplication):

(i) all Assets that are specifically provided pursuant to the express terms of
this Agreement as Assets to be transferred to the Partnership or any other
Partnership Group member;

(ii) the Partnership Accounts; and

(iii) any and all Assets of the Partnership or its Subsidiaries that are not
Transferred Assets pursuant to Section 2.2(a).

 

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2.3 Assumed Liabilities.

(a) For the purposes of this Agreement, “Assumed Liabilities” means (without
duplication):

(i) all Liabilities, including any Environmental Liabilities, Taxes and any
Liability relating to any Company Plan (as defined in the Purchase Agreement) in
effect on the Separation Date or any employee or independent contractor to the
extent relating to:

(A) the operation or ownership of the Pasadena Business, as conducted at any
time prior to, on or after the Separation Date, including any Liability to the
extent relating to, arising out of or resulting from (i) any strict liability
under or violation of Environmental Law with respect to any Transferred Assets;
(ii) a Release of Hazardous Materials to, on or under any Transferred Assets
(including Releases that migrate from Transferred Assets to, on or under other
properties, or vice versa); or (iii) any Liabilities related to Hazardous
Materials generated at, transported from or disposed of by any Pasadena
Business, including any act or failure to act by any Person, whether or not such
act or failure to act is or was within such Person’s authority;

(B) any Transferred Assets;

in any such case, whether arising on, before or after the Separation Date;

(ii) any and all other Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement as Liabilities to be assumed by Pasadena
Holdings or any Pasadena Group member including the Assumed Actions, and all
agreements, obligations and Liabilities of any Pasadena Group member under this
Agreement or any of the Ancillary Agreements;

(iii) all Liabilities reflected as liabilities or obligations of Pasadena
Holdings or its Subsidiaries on the Pasadena Balance Sheet, subject to any
discharge of such Liabilities subsequent to the date of the Pasadena Balance
Sheet; and

(iv) all Liabilities arising out of claims made by the respective directors,
officers, unitholders, employees, agents, managers, Subsidiaries or Affiliates
of either Group against any member of either Group relating to, arising out of
or resulting from the Pasadena Business or the other businesses, operations,
activities or Liabilities referred to in clauses (i) through (iii) above,
inclusive; and

(v) any Liability relating to any phantom unit award agreement by and between
the Partnership and any employee or independent contractor of the Pasadena
Group, including any such Liability arising out of claims by any such individual
and excluding the Phantom Unit Payments (as defined in the Purchase Agreement).

Notwithstanding the foregoing, the Assumed Liabilities shall not include any
Partnership Liabilities.

(b) For the purposes of this Agreement, “Partnership Liabilities” means (without
duplication): (1) all Liabilities of Partnership and its Subsidiaries other than
Assumed Liabilities; (2) all other Liabilities that are expressly stated in this
Agreement or any Ancillary Agreement as Liabilities to be retained or assumed by
Partnership or any other Partnership Group member; and (3) all agreements and
obligations of any Partnership Group member under this Agreement or any of the
Ancillary Agreements.

2.4 Approvals and Notifications.

(a) To the extent that the transfer or assignment of any Asset, the assumption
of any Liability or the Separation requires any Approvals or Notifications, the
Parties will endeavor to obtain or make such Approvals or Notifications as soon
as reasonably practicable; provided, however, that, except to the extent
expressly provided in this Agreement (including in Section 2.4(f)) or any of the
Ancillary Agreements or as otherwise agreed between the applicable Parties),
neither Partnership or Partnership GP, on the one hand, nor Pasadena Holdings,
on the other hand, shall be obligated to contribute capital or pay any
consideration in any form (including providing any letter of credit, guaranty or
other financial accommodation) to any Person in order to obtain or make such
Approvals or Notifications.

(b) If and to the extent that the valid, complete and perfected transfer or
assignment to a Group of any Assets or assumption by a Group of any Liabilities
would be a violation of applicable Law, or require

 

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any Approvals or Notifications in connection with the Separation that have not
been obtained or made by the Separation Date, then, unless the Parties shall
otherwise mutually determine, the transfer or assignment to the applicable Group
of such Assets or the assumption by the applicable Group of such Liabilities, as
the case may be, shall be automatically deemed deferred and any such purported
transfer, assignment or assumption shall be null and void until such time as all
legal impediments are removed or such Approvals or Notifications have been
obtained or made. Notwithstanding the foregoing, (i) any such Assets that are
Transferred Assets and any such Liabilities that are Assumed Liabilities shall
continue to constitute Transferred Assets and Assumed Liabilities for all other
purposes of this Agreement; and (ii) any such Assets that are Partnership Assets
and any such Liabilities that are Partnership Liabilities shall continue to be
Partnership Assets and Partnership Liabilities for all other purposes of this
Agreement.

(c) If any transfer or assignment of any Asset or any assumption of any
Liability intended to be transferred, assigned or assumed hereunder, as the case
may be, is not consummated on or prior to the Separation Date, whether as a
result of the provisions of Section 2.4(b) or for any other reason, then,
insofar as reasonably possible, the Group member retaining such Asset or such
Liability, as the case may be, shall thereafter hold such Asset or Liability, as
the case may be, for the use, benefit and/or burden of the applicable Group
member entitled thereto (at the expense and for the account of the Group member
entitled thereto). In addition, the Group member retaining such Asset or such
Liability shall, insofar as reasonably possible and to the extent permitted by
applicable Law, treat such Asset or Liability in the ordinary course of business
in accordance with past practice and take such other actions as may be
reasonably requested by the Group member to whom such Asset is to be transferred
or assigned, or which will assume such Liability, as the case may be, in order
to place such Group member in a substantially similar position as if such Asset
or Liability had been transferred, assigned or assumed as contemplated hereby
and so that all the benefits and burdens relating to such Asset or Liability, as
the case may be, including use, risk of loss, potential for gain, and dominion,
control and command over such Asset or Liability, as the case may be, and all
costs and expenses related thereto, shall inure from and after the Separation
Date to the applicable Group.

(d) If the transfer or assignment of any Asset or the assumption of any
Liability not intended to be transferred, assigned or assumed hereunder, as the
case may be, is consummated on or prior to the Separation Date, then, insofar as
reasonably possible, the Group member holding or owning such Asset or such
Liability, as the case may be, shall thereafter hold such Asset or Liability, as
the case may be, for the use, benefit and/or burden of the Group member entitled
thereto (at the expense of the Group member entitled thereto). In addition, the
Group member retaining such Asset or such Liability shall, insofar as reasonably
possible and to the extent permitted by applicable Law, treat such Asset or
Liability in the ordinary course of business in accordance with past practice
and take such other actions as may be reasonably requested by the Group member
to whom such Asset is to be transferred or assigned, or which will assume such
Liability, as the case may be, in order to place such Group member in a
substantially similar position as if such Asset or Liability had not been so
transferred, assigned or assumed and so that all the benefits and burdens
relating to such Asset or Liability, as the case may be, including use, risk of
loss, potential for gain, and dominion, control and command over such Asset or
Liability, as the case may be, and all costs and expenses related thereto, shall
inure from and after the Separation Date to the applicable Group. In addition,
the Parties shall use their commercially reasonable efforts to promptly transfer
or convey such Asset back to the transferring or conveying Party or to rescind
any acceptance or assumption of such Liability, as the case may be. Any transfer
or conveyance made or acceptance or assumption rescinded pursuant to this
Section 2.4(d) shall be treated by the Parties for all purposes as if such Asset
or Liability had never been originally transferred, conveyed, accepted or
assumed, as the case may be, except as otherwise required by applicable Law.

(e) If and when the Approvals or Notifications, the absence of which caused the
deferral of transfer or assignment of any Asset or the deferral of assumption of
any Liability pursuant to Section 2.4(b) are obtained or made, and, if and when
any other legal impediments for the transfer or assignment of any Asset or the
assumption of any Liability or for the transfer or assignment of any Asset or
the assumption of any Liability, have been removed, the transfer or assignment
of the applicable Asset or the assumption of the applicable Liability, as the
case may be, shall be effected in accordance with the terms of this Agreement
and/or the applicable Ancillary Agreement.

(f) Except as otherwise agreed between the Parties, any Group member holding,
owning or retaining any Asset or Liability for the use, benefit and/or burden of
another Group member entitled thereto (whether as a result of the provisions
above or for any other reason), shall not be obligated, in order to effect the

 

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transfer of such Asset or Liability to the Group member entitled thereto, to
expend any money unless the necessary funds are advanced (or otherwise made
available) by the Group member entitled thereto, other than reasonable
out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of
which shall be promptly reimbursed by the Group member entitled to such Asset or
Liability.

2.5 Novation of Assumed Liabilities.

(a) Each of Partnership and Partnership GP, on the one hand, and Pasadena
Holdings, on the other hand, at the request of the other, shall endeavor, if
reasonably practicable, to obtain, or to cause to be obtained, if reasonably
practicable, any consent, substitution, approval or amendment required to novate
or assign all obligations under agreements, leases, licenses and other
obligations or Liabilities of any nature whatsoever that constitute Assumed
Liabilities, or to obtain in writing the unconditional release of all parties to
such arrangements other than any Pasadena Group member, so that, in any such
case, the Pasadena Group members will be solely responsible for the Assumed
Liabilities; provided, however, that neither Partnership nor Pasadena Holdings
shall be obligated to contribute any capital or pay any consideration in any
form (including providing any letter of credit, guaranty or other financial
accommodation) to any Third Party from whom any such consent, substitution,
approval, amendment or release is requested.

(b) If Partnership and Partnership GP, on the one hand, or Pasadena Holdings, on
the other hand, are unable to obtain, or to cause to be obtained, any such
required consent, substitution, approval, amendment or release and the
applicable Partnership Group member continues to be bound by such agreement,
lease, license or other obligation or Liability (each, an “Unreleased Pasadena
Liability”), Pasadena Holdings shall, to the extent not prohibited by Law, as
indemnitor, guarantor, agent or subcontractor for such Partnership Group member,
as the case may be, (i) pay, perform and discharge fully all the obligations or
other Liabilities of such Partnership Group member that constitute Unreleased
Pasadena Liabilities from and after the Separation Date and (ii) use its
commercially reasonable efforts to effect such payment, performance, or
discharge prior to any demand for such payment, performance, or discharge is
permitted to be made by the obligee thereunder on any Partnership Group member.
If and when any such consent, substitution, approval, amendment or release shall
be obtained or the Unreleased Pasadena Liabilities shall otherwise become
assignable or able to be novated, Partnership shall promptly assign, or cause to
be assigned, and Pasadena Holdings or the applicable Pasadena Group member shall
assume, such Unreleased Pasadena Liabilities without exchange of further
consideration.

2.6 Novation of Partnership Liabilities.

(a) Each of Partnership and Partnership GP, on the one hand, and Pasadena
Holdings, on the other hand, at the request of the other, shall endeavor, if
reasonably practicable, to obtain, or to cause to be obtained, if reasonably
practicable, any consent, substitution, approval or amendment required to novate
or assign all obligations under agreements, leases, licenses and other
obligations or Liabilities of any nature whatsoever that constitute Partnership
Liabilities, or to obtain in writing the unconditional release of all parties to
such arrangements other than any Partnership Group member, so that, in any such
case, the Partnership Group members will be solely responsible for such
Partnership Liabilities; provided, however, that neither Partnership nor
Pasadena Holdings shall be obligated to contribute any capital or pay any
consideration in any form (including providing any letter of credit, guaranty or
other financial accommodation) to any Third Party from whom any such consent,
substitution, approval, amendment or release is requested.

(b) If Partnership and Partnership GP, on the one hand, or Pasadena Holdings, on
the other hand, are unable to obtain, or to cause to be obtained, any such
required consent, substitution, approval, amendment or release and the
applicable Pasadena Group member continues to be bound by such agreement, lease,
license or other obligation or Liability (each, an “Unreleased Partnership
Liability”), Partnership shall, to the extent not prohibited by Law, as
indemnitor, guarantor, agent or subcontractor for such Pasadena Group member, as
the case may be, (i) pay, perform and discharge fully all the obligations or
other Liabilities of such Pasadena Group member that constitute Unreleased
Partnership Liabilities from and after the Separation Date and (ii) use its
commercially reasonable efforts to effect such payment, performance, or
discharge prior to any demand for such payment, performance, or discharge is
permitted to be made by the obligee thereunder on any Pasadena Group member. If
and when any such consent, substitution, approval, amendment or release shall be
obtained or the Unreleased Partnership Liabilities shall otherwise become
assignable or able to be novated, Pasadena Holdings shall promptly assign, or
cause to be assigned, and Partnership or the applicable Partnership Group member
shall assume, such Unreleased Partnership Liabilities without exchange of
further consideration.

 

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2.7 Termination of Agreements.

(a) Except as set forth in Section 2.7(b), in furtherance of the releases and
other provisions of this Agreement, Pasadena Holdings and each Pasadena Group
member, on the one hand, and Partnership and each Partnership Group member, on
the other hand, hereby terminate any and all agreements, arrangements,
commitments or understandings, whether or not in writing, between or among
Pasadena Holdings and/or any Pasadena Group member and/or any entity that shall
be a Pasadena Group member as of the Separation Date, on the one hand, and
Partnership and/or any Partnership Group member (other than entities that shall
be Pasadena Group members as of the Separation Date), on the other hand,
effective as of the Separation Date. No such terminated agreement, arrangement,
commitment or understanding (including any provision thereof which purports to
survive termination) shall be of any further force or effect after the
Separation Date. Each Party shall, at the reasonable request of the other Party,
take, or cause to be taken, such other actions as may be necessary to effect the
foregoing.

(b) The provisions of Section 2.7(a) shall not apply to any of the following
agreements, arrangements, commitments or understandings (or to any of the
provisions thereof): (i) this Agreement, the Ancillary Agreements (and each
other agreement or instrument expressly contemplated by this Agreement or any
Ancillary Agreement to be entered into by any of the Parties or any of the
members of their respective Groups) and the Purchase Agreement (and the
agreements or instruments expressly contemplated thereby to be entered into by
any of the Parties or any of the members of their respective Groups); (ii) any
agreements, arrangements, commitments or understandings to which any Person
other than the Parties and the members of their respective Groups is a Party (it
being understood that to the extent that the rights and obligations of the
Parties and the members of their respective Groups under any such agreements,
arrangements, commitments or understandings constitute Assets or Liabilities,
they shall be assigned pursuant to Section 2.1); and (iii) any other agreements,
arrangements, commitments or understandings that this Agreement or any Ancillary
Agreement expressly states will survive the Separation Date.

2.8 Bank Accounts.

(a) The Parties shall continue to utilize their existing centralized cash
management process pursuant to which (i) the bank and brokerage accounts owned
by Pasadena Holdings or any other Pasadena Group member (collectively, the
“Pasadena Accounts”) are managed centrally and funds collected transferred into
one or more centralized accounts maintained by a Pasadena Group Member;
(ii) bank or brokerage accounts owned by Partnership or any other Partnership
Group member (collectively, the “Partnership Accounts”) are managed centrally
and funds collected transferred into one or more centralized accounts maintained
by a Partnership Group Member and (iii) such Pasadena Accounts and Partnership
Accounts are de-linked and held separate for all purposes.

(b) With respect to any outstanding payments initiated by any Party, or any of
their respective Subsidiaries prior to the Separation Date, such outstanding
payments shall be honored following the Separation by the Person or Group owning
the account from which the payment was initiated.

(c) As between Partnership and Partnership GP, on the one hand, and Pasadena
Holdings, on the other hand (and the members of their respective Groups), all
payments made and reimbursements received after the Separation by any Party (or
member of its Group) that relate to a business, Asset or Liability of the other
Party or Parties (or member of its Group), shall be held by such Party for the
use and benefit of the Party entitled thereto (at the expense of the Party
entitled thereto). Each of Partnership and Partnership GP, on the one hand, and
Pasadena Holdings, on the other hand, shall maintain an accounting of any such
payments and reimbursements, and the Parties shall have a monthly
reconciliation, whereby all such payments made and reimbursements received by
each Party are calculated and the net amount owed to Partnership and Partnership
GP, on the one hand, or Pasadena Holdings, on the other hand, shall be paid over
with right of set-off. If at any time the net amount owed to either Party
exceeds $1,000,000, an interim payment of such net amount owed shall be made to
the Party entitled thereto within three (3) business days of such amount
exceeding $1,000,000. Notwithstanding the foregoing, no Party shall act as
collection agent for the other Party, nor shall any Party act as surety or
endorser with respect to non-sufficient funds checks, or funds to be returned in
a bankruptcy or fraudulent conveyance action.

 

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2.9 Disclaimer of Representations and Warranties. EACH OF PARTNERSHIP AND
PARTNERSHIP GP (ON BEHALF OF THEMSELVES AND EACH PARTNERSHIP GROUP MEMBER) AND
PASADENA HOLDINGS (ON BEHALF OF ITSELF AND EACH PASADENA GROUP MEMBER)
UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY
ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY
AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE
ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED, ASSUMED OR RETAINED AS
CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN
CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF,
OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE
OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO
ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS
TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED
HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION,
DELIVERY AND FILING HEREOF OR THEREOF, AND IN ENTERING INTO THIS AGREEMENT, EACH
OF PARTNERSHIP AND PARTNERSHIP GP (ON BEHALF OF THEMSELVES AND EACH PARTNERSHIP
GROUP MEMBER) AND PASADENA HOLDINGS (ON BEHALF OF ITSELF AND EACH PASADENA GROUP
MEMBER) ACKNOWLEDGES THAT IT IS NOT RELYING ON ANY SUCH REPRESENTATION OR
WARRANTY. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY
AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS
AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT
(I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD
AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY
NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS
OF LAWS, INCLUDING ENVIRONMENTAL LAWS, OR JUDGMENTS ARE NOT COMPLIED WITH.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER PARTNERSHIP
NOR PARTNERSHIP GP MAKES ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR
CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF HAZARDOUS MATERIALS
INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL
RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE
PASADENA ASSETS.

ARTICLE III.

DISPUTE RESOLUTION

3.1 Arbitration.

(a) Any dispute, controversy or claim arising out of or relating to this
Agreement or the Ancillary Agreements (except as otherwise set forth in any such
Ancillary Agreements), including the validity, interpretation, breach or
termination thereof (a “Dispute”), shall be resolved in accordance with the
procedures set forth in this Article III, which shall be the sole and exclusive
procedures for the resolution of any such Dispute unless otherwise specified in
the applicable Ancillary Agreement or in this Article III.

(b) Any Dispute shall be settled by arbitration administered by the American
Arbitration Association (“AAA”) in accordance with its Commercial Arbitration
Rules (the “AAA Commercial Arbitration Rules”).

(c) Without waiving its rights to any remedy under this Agreement and without
first complying with the provisions of this Section 3.1, either Party may seek
any emergency measures of protection or interim relief (i) before any Delaware
federal or state court, (ii) before an emergency arbitrator, as provided for
under the AAA Commercial Arbitration Rules, or (iii) before the arbitrator
established hereunder.

 

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(d) Unless otherwise agreed by the Parties, any Dispute to be decided in
arbitration hereunder shall be decided by a single arbitrator appointed pursuant
to the AAA Commercial Arbitration Rules.

(e) The place of arbitration shall be Wilmington, Delaware or in such other
location as shall be agreed to by Pasadena Holdings and the Partnership. The
final hearing(s) in such arbitration shall take place within twelve (12) months
of the date of appointment of the arbitrator, unless the Parties agree otherwise
in writing.

(f) The arbitrator will have the right to award, on an interim basis, or include
in the final award, any relief which it deems proper in the circumstances,
including money damages (with interest on unpaid amounts from the due date),
injunctive relief (including specific performance) and attorneys’ fees and
costs; provided that the arbitrator will not award any relief not specifically
requested by the Parties and, in any event, will not award special damages. Upon
constitution of the arbitrator following any grant of interim relief by a
special arbitrator or court pursuant to Section 3.1(c), the tribunal may affirm
or disaffirm that relief, and the Parties will take such measures that are
necessary to execute the tribunal’s decision.

(g) So long as either Party has a timely claim to assert, the agreement to
arbitrate Disputes set forth in this Section 3.1 will continue in full force and
effect subsequent to, and notwithstanding the completion, expiration or
termination of, this Agreement.

(h) Any award of the arbitrator shall state reasons and shall be conclusive and
binding upon the Parties. Judgment on any award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.

(i) Each Party shall bear its own fees, costs and expenses and shall bear an
equal share of the costs and expenses of the arbitration, including the fees,
costs and expenses of the arbitrator, provided, that the arbitrator may award
the prevailing Party its reasonable fees and expenses (including attorneys’
fees), including such reasonable fees and expenses for any Disputes relating to
the Parties’ rights and obligations for indemnification under this Agreement, if
it finds that there was no good faith basis for the position taken by the other
Party in the arbitration.

3.2 Confidentiality. Except as may be required by Law or to enforce an award,
neither a Party nor an arbitrator may disclose the existence, content or results
of any arbitration hereunder without the prior written consent of the Parties.

ARTICLE IV.

MUTUAL RELEASES; INDEMNIFICATION

4.1 Regardless of Fault. IN THIS ARTICLE IV, THE PHRASE “REGARDLESS OF FAULT”
MEANS WITH RESPECT TO ANY INDEMNITY OR RELEASE PROVISION THAT THE INDEMNITY OR
RELEASE IS BEING GIVEN WITHOUT REGARD TO THE FAULT OF THE PARTY BEING RELEASED
OR INDEMNIFIED AND THAT THE INDEMNITY OR RELEASE WILL BE ENFORCEABLE EVEN IF THE
LIABILITY BEING RELEASED OR INDEMNIFIED AGAINST WAS CAUSED BY THE NEGLIGENCE (OF
ANY DEGREE OR CHARACTER), STRICT LIABILITY, BREACH OF DUTY OR ANY OTHER FAULT ON
THE PART OF THE PARTY OR PERSON BEING RELEASED OR INDEMNIFIED.

4.2 Intention of Parties. IT IS THE INTENTION OF THE PARTIES THAT THE
INDEMNITIES AND RELEASES IN THIS ARTICLE IV COMPLY WITH BOTH THE EXPRESS
NEGLIGENCE DOCTRINE AND THE CLEAR AND CONSPICUOUS RULE AND THAT WHEREVER
“REGARDLESS OF FAULT” APPEARS IN ARTICLE IV, THE DEFINITION SET OUT IN SECTION
4.1 IS INCORPORATED AS THOUGH FULLY SET OUT THEREIN.

4.3 Release of Pre-Separation Claims.

(a) Except as provided in Section 4.(c), effective as of the Separation Date,
Pasadena Holdings does hereby, for itself and each other Pasadena Group member,
their respective Affiliates (other than any Partnership Group member),
successors and assigns, and all Persons who at any time prior to the Separation
Date

 

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have been directors, officers, agents, managers, or employees of any Pasadena
Group member (in each case, in their respective capacities as such), release and
forever discharge REGARDLESS OF FAULT Partnership and the Partnership Group
members, their respective controlled Affiliates (other than any Pasadena Group
member), successors and assigns, and all Persons who at any time prior to the
Separation Date have been unitholders, directors, officers, agents, managers or
employees of any Partnership Group member (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and assigns, from any and all Liabilities whatsoever, whether at law
or in equity (including any right of contribution), whether arising under any
contract or agreement, by operation of law or otherwise, including from fraud,
existing or arising from any acts or events occurring or failing to occur or
alleged to have occurred or to have failed to occur or any conditions existing
or alleged to have existed on or before the Separation Date, including in
connection with the Separation and all other activities to implement the
Separation; provided, however, that with respect to unitholders, directors,
officers, agents, managers, or employees of any Partnership Group member (in
each case, in their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, such release and discharge
shall not apply to the extent any such Person acted in bad faith or engaged in
fraud or willful misconduct or, in the case of a criminal matter, acted with
knowledge that such person’s or party’s conduct was unlawful.

(b) Except as provided in Section 4.3(c), effective as of the Separation Date,
Partnership does hereby, for itself and each other Partnership Group member,
their respective Affiliates (other than any Pasadena Group member), successors
and assigns, and all Persons who at any time prior to the Separation Date have
been directors, officers, agents, managers, or employees of any Partnership
Group member (in each case, in their respective capacities as such), release and
forever discharge REGARDLESS OF FAULT Pasadena Holdings, the Pasadena Group
members, their respective controlled Affiliates (other than any Partnership
Group member), successors and assigns, and all Persons who at any time prior to
the Separation Date have been unitholders, directors, officers, agents,
managers, or employees of any Pasadena Group member (in each case, in their
respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at law or in equity (including any right of contribution), whether
arising under any contract or agreement, by operation of law or otherwise,
including from fraud, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Separation Date,
including in connection with the transactions and all other activities to
implement the Separation; provided, however, that with respect to unitholders,
directors, officers, agents, managers, or employees of any Pasadena Group member
(in each case, in their respective capacities as such), and their respective
heirs, executors, administrators, successors and assigns, such release and
discharge shall not apply to the extent any such person or party acted in bad
faith or engaged in fraud or willful misconduct or, in the case of a criminal
matter, acted with knowledge that such person’s or party’s conduct was unlawful.

(c) Nothing contained in Section 4.3(a) or (b) shall impair any right of any
Person to enforce this Agreement, any Ancillary Agreement or any agreement,
arrangements, commitments or understandings that are specified in Section 2.7(b)
as not to be terminated as of the Separation Date, in each case in accordance
with its terms. Nothing contained in Section 4.3(a) or (b) shall release any
Person from:

(i) any Liability provided in or resulting from any agreement among any
Partnership Group members or the Pasadena Group that is specified in
Section 2.7(b) as not to terminate as of the Separation Date, or any other
Liability specified in such Section 2.7(b) as not to terminate as of the
Separation Date;

(ii) any Liability, contingent or otherwise, assumed, transferred, assigned or
allocated to the Group of which such Person is a member in accordance with, or
any other Liability of any member of any Group under, this Agreement or any
Ancillary Agreement;

(iii) any Liability for the agreed upon purchase price or fee due arising out of
the sale, lease, construction or receipt of goods, property or services
purchased, obtained or used in the ordinary course of business by a member of
one Group from a member of the other Group prior to the Separation Date;

 

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(iv) any Liability that the Parties may have with respect to indemnification or
contribution pursuant to this Agreement for claims brought against the Parties
by Third Parties, which Liability shall be governed by the provisions of this
Article IV and Article V and, if applicable, the other appropriate provisions of
this Agreement and the other Ancillary Agreements; or

(v) any Liability the release of which would result in the release of any Third
Parties other than a Person released pursuant to this Section 4.3; provided,
however, that the Parties agree not to bring or allow their respective
Subsidiaries to bring suit or other Action against any other Party or any of
their respective past, present or future directors, officers and employees, and
each of the heirs, executors, successors and assigns of any of the foregoing,
with respect to any such Liability.

In addition, nothing contained in Section 4.3(a) shall release Partnership or
Partnership GP from honoring its obligations in effect immediately prior to the
Separation to indemnify any director, officer or employee of a Pasadena Group
member who was a director, officer or employee of a Partnership Group member on
or prior to the Separation Date, to the extent such director, officer or
employee becomes a named defendant in any Action covered by such indemnity
obligations; it being understood that, if the underlying obligation giving rise
to such Action is a Pasadena Liability, Pasadena Holdings shall indemnify
Partnership and Partnership GP for such Liability (including Partnership’s and
Partnership GP’s costs to indemnify the director, officer or employee) in
accordance with the provisions set forth in this Article IV.

(d) Pasadena Holdings covenants that it will not make, and will not permit any
Pasadena Group member to make, any claim or demand, or commence any Action
asserting any claim or demand, including any claim of contribution or any
indemnification, against Partnership or any Partnership Group member, or any
other Person released pursuant to Section 4.3(a), with respect to any
Liabilities released pursuant to Section 4.3(a). Partnership and Partnership GP
covenant that they will not make, and will not permit any Partnership Group
member to make, any claim or demand, or commence any Action asserting any claim
or demand, including any claim of contribution or any indemnification, against
Pasadena Holdings or any Pasadena Group member, or any other Person released
pursuant to Section 4.3(b), with respect to any Liabilities released pursuant to
Section 4.3(b).

(e) It is the intent of each of Partnership and Partnership GP, on the one hand,
and Pasadena Holdings, on the other hand, by virtue of the provisions of this
Section 4.3, to provide for a full and complete release and discharge of all
Liabilities existing or arising from all acts and events occurring or failing to
occur or alleged to have occurred or to have failed to occur and all conditions
existing or alleged to have existed on or before the Separation Date, between or
among Partnership or any member of the Partnership Group, on the one hand, and
Pasadena Holdings or any member of the Pasadena Group, on the other hand
(including any contractual agreements or arrangements existing or alleged to
exist between or among any such members on or before the Separation Date),
except as set forth in Section 4.3(c) or elsewhere in this Agreement or in any
Ancillary Agreement. At any time, at the request of the Partnership or
Partnership GP, on the one hand, or Pasadena Holdings, on the other hand, the
other Party shall cause each member of its respective Group to execute and
deliver releases reflecting the provisions hereof.

(f) Any breach of the provisions of this Section 4.3 by either Partnership or
Partnership GP, on the one hand, or Pasadena Holdings, on the other hand, shall
entitle the other Parties to recover reasonable fees and expenses of counsel in
connection with such breach or any action resulting from such breach.

4.4 Indemnification by Pasadena Holdings. Subject to Section 4.6, Pasadena
Holdings shall REGARDLESS OF FAULT indemnify, defend and hold harmless
Partnership, each Partnership Group member and each of their respective past,
present and future directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“Partnership Indemnitees”), from and against any and all Liabilities of the
Partnership Indemnitees arising out of or resulting from any of the following
items (without duplication):

(a) any Partnership Third-Party Claim to the extent arising out of or resulting
from any of the following items:

(i) the failure of Pasadena Holdings or any other Pasadena Group member or any
other Person to pay, perform or otherwise promptly discharge any Assumed
Liabilities or Assigned Pasadena Contracts in accordance with its respective
terms, whether prior to or after the Separation Date;

 

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(ii) any Assumed Liabilities;

(iii) any representation or other warranty (including any warranty of title) or
indemnity from or made by the Partnership Group contained in any deed, agreement
or other document constituting or relating to the Transferred Assets or the
Pasadena Business, including any conveyancing instrument whereby any of the
Pasadena Assets were conveyed, assigned or transferred to a Pasadena Group
member (whether in connection with the Separation or a transaction not related
to the Separation);

(iv) any Action relating to the Pasadena Business from which Pasadena Holdings
is unable to cause any Partnership Group party to be removed pursuant to
Section 4.8(d), but only to the extent relating to the Pasadena Business;

(v) any guarantee, indemnification obligation, letter of credit reimbursement
obligations, surety, bond or other credit support agreement, arrangement,
commitment or understanding for the benefit of any Pasadena Group member by a
Partnership Group member that survives following the Separation Date; and

(vi) any and all Taxes attributable to the transfer of the Transferred Assets;
and

(b) any breach by Pasadena Holdings or any Pasadena Group member of this
Agreement or any of the other Ancillary Agreements.

4.5 Indemnification by Partnership. Subject to Section 4.6, Partnership shall
REGARDLESS OF FAULT indemnify, defend and hold harmless Pasadena Holdings, each
Pasadena Group member and each of their respective past, present and future
directors, officers and employees, and each of the heirs, executors, successors
and assigns of any of the foregoing (collectively, the “Pasadena Indemnitees”),
from and against any and all Liabilities of the Pasadena Indemnitees arising out
of or resulting from any of the following items (without duplication):

(a) any Pasadena Third-Party Claim to the extent arising out of or resulting
from any of the following items:

(i) the failure of Partnership or any other Partnership Group member or any
other Person to pay, perform or otherwise promptly discharge any Partnership
Liabilities or Partnership Contracts, whether prior to or after the Separation
Date;

(ii) any Partnership Liabilities;

(iii) any representation or other warranty (including any warranty of title) or
indemnity from or made by the Pasadena Group contained in any deed, agreement or
other document constituting or relating to the Partnership Assets or the
Partnership Business, including any conveyancing instrument whereby any of the
Partnership Assets were conveyed, assigned or transferred to a Partnership Group
member (whether in connection with the Separation or a transaction not related
to the Separation); and

(iv) any Action relating to the Partnership Business from which Partnership is
unable to cause a Pasadena Group party to be removed pursuant to Section 5.8(d)
(but only to the extent relating to the Partnership Business); and

(b) any breach by Partnership or any Partnership Group member of this Agreement
or any of the Ancillary Agreements.

 

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4.6 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

(a) The Parties intend that any Liability subject to indemnification or
reimbursement pursuant to this Article IV ultimately will be net of
(i) Insurance Proceeds that actually reduce the amount of, or are paid to the
applicable Indemnitee in respect of, the Liability or (ii) other amounts
recovered from any third party that actually reduce the amount of, or are paid
to the applicable Indemnitee in respect of, the Liability (“Third-Party
Proceeds”). Accordingly, the amount which any Party (an “Indemnifying Party”)
has paid to or on behalf of any Person entitled to indemnification or
reimbursement hereunder (an “Indemnitee”) will be reduced by any Insurance
Proceeds or Third-Party Proceeds theretofore actually recovered by or on behalf
of the Indemnitee in respect of the related Liability. If an Indemnitee receives
a payment required by this Agreement from an Indemnifying Party in respect of
any Liability (an “Indemnity Payment”) and subsequently receives Insurance
Proceeds or Third-Party Proceeds in respect of such Liability, then the
Indemnitee will pay to the Indemnifying Party an amount equal to the excess of
the Indemnity Payment received minus any costs or expenses incurred by the
Indemnitee in recovering such payment over the amount of the Indemnity Payment
that would have been due if the Insurance Proceeds had been received, realized
or recovered before the Indemnity Payment was made.

(b) An insurer who would otherwise be obligated to pay any claim shall not be
relieved of the responsibility therefor, or have any subrogation rights with
respect thereto, as a consequence of the indemnification rights under this
Agreement, it being expressly understood and agreed that no insurer or any other
Third Party shall be entitled to a “wind-fall” (i.e., a benefit they would not
be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof. Each member of the Partnership
Group and Pasadena Group shall use commercially reasonable efforts to seek to
collect or recover any Insurance Proceeds and any Third-Party Proceeds to which
such Person is entitled in connection with any Liability for which such Person
seeks indemnification pursuant to this Article IV; provided, however, that such
Person’s inability to collect or recover any such Insurance Proceeds or
Third-Party Proceeds shall not limit the Indemnifying Party’s obligations
hereunder.

(c) For all claims as to which indemnification is provided under Section 4.4 or
Section 4.5 other than Third-Party Claims (as to which Section 4.7 shall apply),
the reasonable fees and expenses of counsel to the Indemnitee for the
enforcement of the indemnity obligations shall be borne by the Indemnifying
Party.

4.7 Procedures for Indemnification of Third-Party Claims.

(a) If an Indemnitee shall receive written notice of a Third-Party Claim with
respect to which an Indemnifying Party may be obligated to provide
indemnification to such Indemnitee pursuant to Section 4.4 or 4.5, or any other
Section of this Agreement or any other Ancillary Agreement, such Indemnitee
shall give such Indemnifying Party written notice thereof within fourteen
(14) days of such written notice. Any such notice shall describe the Third-Party
Claim in reasonable detail and include copies of all notices and documents
(including court papers) received by the Indemnitee relating to the Third-Party
Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide
notice in accordance with this Section 4.7(a) shall not relieve an Indemnifying
Party of its indemnification obligations under this Agreement, except to the
extent to which the Indemnifying Party shall demonstrate that it was materially
prejudiced by the Indemnitee’s failure to provide notice in accordance with this
Section 4.7(a).

(b) An Indemnifying Party may elect to defend (and, unless the Indemnifying
Party has specified any reservations or exceptions, to seek to settle or
compromise), at such Indemnifying Party’s own expense and by such Indemnifying
Party’s own counsel, any Third-Party Claim; provided, however, that an
Indemnifying Party shall not be entitled to elect to defend any Third-Party
Claim that potentially includes Liabilities for which the Indemnitee will not be
indemnified hereunder unless either the Indemnitee consents to the Indemnifying
Party assuming such defense or the Indemnifying Party agrees to assume such
defense and indemnify without reservation or exception. Within thirty (30) days
after the receipt of notice from an Indemnitee in accordance with Section 4.7(a)
(or sooner, if the nature of such Third-Party Claim so requires), the
Indemnifying Party shall notify the Indemnitee of its election whether the
Indemnifying Party will assume responsibility for defending such Third-Party
Claim, which election shall specify any reservations or exceptions if the
Indemnitee has consented to the Indemnifying Party assuming the defense
notwithstanding such reservations or exceptions. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense of a
Third-Party Claim,

 

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such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnitee except as set forth in Section 4.7(c).

(c) If the Indemnifying Party has elected (and is permitted hereunder) to assume
the defense of the Third-Party Claim but has specified, and continues to assert,
any reservations or exceptions in such notice, then, in any such case, the
reasonable fees and expenses of one separate counsel (plus reasonably required
local counsel) for all Indemnitees shall be the expense of such Indemnitees, but
shall be promptly reimbursed by the Indemnifying Party.

(d) Notwithstanding an election by an Indemnifying Party to defend a Third-Party
Claim pursuant to Section 4.7(b), the Indemnitee may, upon notice to the
Indemnifying Party, elect to take over the defense of such Third-Party Claim if
(i) in its exercise of reasonable business judgment, the Indemnitee determines
that the Indemnifying Party is not defending such Third-Party Claim competently
or in good faith, (ii) the Indemnitee determines in its exercise of reasonable
business judgment that there exists a compelling business reason for such
Indemnitee to defend such Third-Party Claim (other than as contemplated by the
foregoing clause (i)), or (iii) the Indemnifying Party makes a general
assignment for the benefit of creditors, files a petition in bankruptcy or
insolvency (or has filed against it a petition in bankruptcy or insolvency), is
declared bankrupt or insolvent or declares that it is bankrupt or insolvent.

(e) If an Indemnifying Party elects not to assume responsibility for defending a
Third-Party Claim, or fails to notify an Indemnitee of its election as provided
in Section 4.7(b), or if an Indemnitee takes over the defense of a Third-Party
Claim as provided in Section 4.7(d), the Indemnifying Party shall bear, and
reimburse promptly, all of the Indemnitee’s reasonable costs and expenses
incurred in defending such Third-Party Claim.

(f) If, pursuant to Section 4.7(d) or for any other reason, the Indemnifying
Party is not defending a Third-Party Claim for which indemnification is provided
under this Agreement, the Indemnifying Party shall have the right, at its own
expense, to monitor reasonably the defense of such Third-Party Claim; provided,
that such monitoring activity shall not interfere in any material respect with
the conduct of such defense.

(g) If an Indemnitee takes over the defense of a Third-Party Claim as provided
in Section 4.7(d), such Indemnitee may not settle or compromise any Third-Party
Claim without the consent of the Indemnifying Party, such consent not to be
unreasonably withheld or delayed.

(h) No Indemnifying Party shall consent to entry of any judgment or enter into
any settlement of any Third-Party Claim without the consent of the applicable
Indemnitee or Indemnitees; provided, however, that such Indemnitee(s) shall be
required to consent to such entry of judgment or to such settlement that the
Indemnifying Party may recommend if the judgment or settlement (i) contains no
finding or admission of any violation of Law or any violation of the rights of
any Person, (ii) involves only monetary relief which the Indemnifying Party has
agreed to pay and (iii) includes a full and unconditional release of the
Indemnitee. Notwithstanding the foregoing, in no event shall an Indemnitee be
required to consent to any entry of judgment or settlement if the effect thereof
is to permit any injunction, declaratory judgment, other order other nonmonetary
relief to be entered, directly or indirectly, against any Indemnitee.

4.8 Additional Matters.

(a) THE INDEMNITY AGREEMENTS CONTAINED IN THIS ARTICLE IV SHALL REMAIN OPERATIVE
AND IN FULL FORCE AND EFFECT, REGARDLESS OF (I) ANY INVESTIGATION MADE BY OR ON
BEHALF OF ANY INDEMNITEE AND (II) THE KNOWLEDGE BY THE INDEMNITEE OF LIABILITIES
FOR WHICH IT MIGHT BE ENTITLED TO INDEMNIFICATION HEREUNDER.

(b) Any claim on account of a Liability that does not result from a Third-Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of thirty
(30) days after the receipt of such notice within which to respond thereto. If
such Indemnifying Party does not respond within such thirty (30)-day period,
such Indemnifying Party shall be deemed to have refused to accept responsibility
to make payment. If such Indemnifying Party does not respond within such thirty
(30)-day period or rejects such claim in whole or in part, such Indemnitee shall
be free to pursue such remedies as may be available to such Party as
contemplated by this Agreement and the other Ancillary Agreements.

 

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(c) In the event of payment by or on behalf of any Indemnifying Party to any
Indemnitee in connection with any Third-Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right,
defense or claim relating to such Third-Party Claim against any claimant or
plaintiff asserting such Third-Party Claim or against any other Person. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right, defense or claim.

(d) In the event of an Action for which indemnification is sought pursuant to
Section 4.4 or 4.5 and in which the Indemnifying Party is not a named defendant,
if either the Indemnitee or Indemnifying Party shall so request, the Parties
shall use commercially reasonable efforts to substitute the Indemnifying Party
for the named defendant.

4.9 Remedies Cumulative. The remedies provided in this Article IV shall be
cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any and all other remedies against any Indemnifying
Party; provided, however, that if a Party has recovered any Losses from the
other Party pursuant to any provision of this Agreement or any Ancillary
Agreement or otherwise, it shall not be entitled to recover the same Losses
pursuant to any other provision of this Agreement or any Ancillary Agreement.

4.10 Survival of Indemnitees. The rights and obligations of each of the Parties
and their respective Indemnitees under this Article IV shall survive the sale or
other transfer by any Party of any Assets or businesses or the assignment by it
of any Liabilities.

4.11 No Impact on Third Parties. For the avoidance of doubt, except as expressly
set forth in this Agreement, the indemnifications provided for in this Article
IV are made only for purposes of allocating responsibility for Liabilities
between the Partnership Group, on the one hand, and the Pasadena Group, on the
other hand, and are not intended to, and shall not, affect any obligations to,
or give rise to any rights of, any Third Parties.

4.12 No Cross-Claims or Third-Party Claims. Each of the Parties agrees that it
shall not, and shall not permit any of its respective Subsidiaries or controlled
Affiliates to, in connection with any Third-Party Claim, assert as a
counterclaim or third-party claim against any Partnership Group member or
Pasadena Group member, respectively, any claim (whether sounding in contract,
tort or otherwise) that arises out of or relates to this Agreement, any breach
or alleged breach hereof, the transactions contemplated hereby (including all
actions taken in furtherance of the transactions contemplated hereby on or prior
to the Separation Date), or the construction, interpretation, enforceability or
validity hereof, other than as contemplated by this Article IV.

4.13 Severability. If any indemnification provided for in this Article IV is
determined by any arbitrator with authority to make such determination under
this Article IV or by a Delaware federal or state court to be invalid, void or
unenforceable, to the maximum extent permitted by Law, the Liability shall be
apportioned between the Indemnitee and the Indemnifying Party in accordance with
this Article IV.

ARTICLE V.

INSURANCE MATTERS

5.1 Insurance Matters. Pasadena Holdings shall cooperate with Partnership and
share such Information at Pasadena Holdings’ cost as is reasonably necessary in
order to permit Partnership to manage and conduct its insurance matters as it
deems appropriate. Each of Partnership and Partnership GP, on the one hand, and
Pasadena Holdings, on the other hand shall provide the other with reasonable
access to records and information relating to the insurance claims, as may be
reasonably requested by such Party and/or its insurers from time to time.

 

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ARTICLE VI.

EXCHANGE OF INFORMATION; CONFIDENTIALITY

6.1 Agreement for Exchange of Information. Subject to Section 6.7 and any other
applicable confidentiality obligations, each of Partnership, on the one hand,
and Pasadena Holdings, on the other hand, on behalf of their respective Group,
agrees to provide, or cause to be provided, to the other Group, at any time on,
before or after the Separation Date, as soon as reasonably practicable after
written request therefor, any Information in the possession or under the control
of such respective Group which the requesting Party reasonably needs (a) to
comply with reporting, disclosure, filing or other requirements imposed on the
requesting Party (including under applicable securities or Tax Laws) by a
Governmental Authority having jurisdiction over the requesting Party, (b) for
use in any other judicial, regulatory, administrative, Tax or other proceeding
or in order to satisfy audit, accounting, claims, regulatory, litigation, Tax or
other similar requirements, in each case other than claims or allegations that
one Party has against the other, or (c) subject to the foregoing clause (b), to
comply with its obligations under this Agreement or any other Ancillary
Agreement; provided, however, that, in the event that any Party determines that
any such provision of Information could be commercially detrimental, violate any
Law or agreement, or waive any privilege otherwise available under applicable
Law, including the attorney-client privilege, work product, joint defense,
common interest or other applicable privilege (each, a “Privilege”) the Parties
shall take all reasonable measures to permit the compliance with such
obligations in a manner that avoids any such harm or consequence, and shall only
provide that portion of the Information that is mandatorily required by the
requesting agency.

6.2 Ownership of Information. Any Information owned by one Group that is
provided to a requesting Party pursuant to Section 6.1 or Section 6.6 shall be
deemed to remain the property of the providing Party. Unless specifically set
forth herein, nothing contained in this Agreement shall be construed as granting
or conferring rights of license or otherwise in any such Information.

6.3 Compensation for Providing Information. The Party requesting Information
agrees to reimburse the other Party for the reasonable costs, if any, of
creating, gathering and copying such Information (including internal costs for
time devoted by employees for creating, gathering and copying such Information),
to the extent that such costs are incurred for the benefit of the requesting
Party. Except as may be otherwise specifically provided elsewhere in this
Agreement or in any other agreement between the Parties, such costs shall be
computed in accordance with the providing Party’s standard methodology and
procedures.

6.4 Record Retention. To facilitate the possible exchange of Information
pursuant to this Article VI and other provisions of this Agreement after the
Separation Date, the Parties agree to use their commercially reasonable efforts
to retain all Information relating to the other Party or its business, Assets or
Liabilities in their respective possession or control on the Separation Date. No
Party will destroy, or permit any of its Subsidiaries to destroy, any
Information which another Party may have the right to obtain pursuant to this
Agreement prior to the end of the retention period established in such Party’s
standard document retention policies without first notifying the other Parties
of the proposed destruction and giving the other Parties the opportunity to take
possession of such information prior to such destruction; provided, however,
that in the case of any Information relating to Taxes, employee benefits or
Environmental Liabilities, such retention period shall be extended to the
expiration of the applicable statute of limitations (giving effect to any
extensions thereof).

6.5 Production of Witnesses; Records; Cooperation. After the Separation Date,
except in the case of an adversarial Action by one Party against another Party,
each Party shall use its commercially reasonable efforts to make available to
the other Parties, upon written request, the former, current and future
directors, officers, employees, managers, other personnel and agents of the
members of its respective Group as witnesses and any Records (unless the
provision of any Record would result in the waiver of any applicable Privilege)
or other documents within its control or which it otherwise has the ability to
make available, to the extent that any such person (giving consideration to
business demands of such directors, officers, employees, managers, other
personnel and agents) or Records or other documents may reasonably be required
in connection with any Action in which the requesting Party may from time to
time be involved, regardless of whether such Action is a matter with respect to
which indemnification may be sought hereunder. The requesting Party shall bear
all costs and expenses in connection therewith, except to the extent such costs
and expenses are covered by indemnification under Section 4.4 or Section 4.5.
Without limiting the foregoing, the Parties shall cooperate and consult to the
extent reasonably necessary with respect to any Actions.

 

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6.6 Confidentiality.

(a) Subject to Section 6.7, until the five (5)-year anniversary of the
Separation Date, each of Pasadena Holdings and Partnership (the “Receiving
Party”), on behalf of itself and each of its Group members, agrees to hold, and
to cause their respective Representatives to hold, in strict confidence, with at
least the same degree of care that applies to its own confidential and
proprietary information, all Information that is owned by the other Party (the
“Disclosing Party”) or its Group and that is either in its possession or
furnished by the Disclosing Party or its Group or its Representatives at any
time pursuant to this Agreement, any Ancillary Agreement or otherwise (such
Information, “Confidential Information”), and shall not use such Confidential
Information other than for such purposes as may be expressly permitted hereunder
or thereunder, except, in each case, “Confidential Information” shall not
include Information that has been (i) in the public domain through no fault of
the Receiving Party or any of its Group members or any of their respective
Representatives, as applicable, (ii) later lawfully acquired from other sources
by the Receiving Party (or any of its Group members) which sources are not
themselves bound by a confidentiality obligation, or (iii) independently
generated without reference to any proprietary or confidential Information of
the Disclosing Party or its Group.

(b) Each Receiving Party, on behalf of itself and each of its Group members,
agrees not to release or disclose, or permit to be released or disclosed, any
such Confidential Information to any other Person, except its Representatives
who need to know such Confidential Information (who shall be advised of their
obligations hereunder with respect to such Confidential Information), except in
compliance with Section 6.7. Without limiting the foregoing, when any such
Confidential Information is no longer needed for the purposes contemplated by
this Agreement or any Ancillary Agreement, except as provided in Section 6.4,
the Receiving Party will promptly after request of the Disclosing Party either
return to the Disclosing Party all such Confidential Information in a tangible
form (including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the Disclosing Party that it has destroyed such
Confidential Information (and such copies thereof and such notes, extracts or
summaries based thereon); provided, however, that the Receiving Party shall not
be required to destroy or return any such Confidential Information to the extent
that (i) the Receiving Party or any of its Group members is required to retain
such Confidential Information in order to comply with any applicable Law,
(ii) such Confidential Information has been backed up electronically pursuant to
the Receiving Party’s standard document retention policies and will be managed
and ultimately destroyed consistent with such policies or (iii) it is kept in
the Receiving Party’s or any of its Group member’s files for purposes of
resolving any dispute that may arise under this Agreement or any Ancillary
Agreement.

6.7 Protective Arrangements. If the Receiving Party or any member of its Group
either determines on the advice of its counsel that it is required to disclose
any such Confidential Information pursuant to applicable Law or receives any
demand under lawful process or from any Governmental Authority to disclose or
provide such Confidential Information of the Disclosing Party (or any of its
Group members) that is subject to the confidentiality provisions hereof, the
Receiving Party shall use commercially reasonable efforts to notify the
Disclosing Party prior to disclosing or providing such Confidential Information
and shall cooperate at the expense of the Disclosing Party in seeking any
reasonable protective arrangements requested by the Disclosing Party. Subject to
the foregoing, the Receiving Party may thereafter disclose or provide such
Confidential Information to the extent required by such Law (as so advised by
counsel) or by lawful process or such Governmental Authority.

ARTICLE VII.

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

7.1 Further Assurances.

(a) In addition to the actions specifically provided for elsewhere in this
Agreement, each of the Parties shall use its commercially reasonable efforts, on
and after the Separation Date, to take, or cause to be taken, all actions, and
to do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable Laws, regulations and agreements, to consummate and
make effective the transactions contemplated by this Agreement and the Ancillary
Agreements.

 

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(b) Without limiting the foregoing, on and after the Separation Date, each Party
hereto shall cooperate with the other Parties, and without any further
consideration, but at the expense of the requesting Party, to execute and
deliver, or use its commercially reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any
Third-Party consents or Governmental Approvals), and to take all such other
actions as such Party may reasonably be requested to take by any other Party
hereto from time to time, consistent with the terms of this Agreement and the
Ancillary Agreements, in order to effectuate the provisions and purposes of this
Agreement and the Ancillary Agreements and the transfers of the Assets and the
assignment and assumption of the Liabilities and the other transactions
contemplated hereby and thereby.

7.2 Performance. Partnership and Partnership GP will cause to be performed, and
hereby guarantee the performance of, all actions, agreements and obligations set
forth in this Agreement or in any Ancillary Agreement to be performed by any
Partnership Group member. Pasadena Holdings will cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth in this Agreement or in any Ancillary Agreement to be performed by any
Pasadena Group member.

7.3 Conflicts with and between Ancillary Agreements. Notwithstanding anything to
the contrary in this Agreement or any Ancillary Agreement, in the case of any
conflict between this Agreement or any Ancillary Agreement in relation to any
matters addressed by this Agreement, this Agreement shall prevail.

7.4 Attorney Client Privilege. Pasadena Holdings agrees that, in the event of
any Dispute or other litigation, dispute, controversy or claim between
Partnership or a Partnership Group member, on the one hand, and Pasadena
Holdings or a Pasadena Group member, on the other hand, Pasadena Holdings will
not, and will cause the members of its Group not to, seek any waiver of any
applicable Privilege with respect to any oral or written communications relating
to advice given prior to the Separation Date by counsel to Partnership or
Partnership GP or any Person that was a Subsidiary of Partnership of Partnership
GP prior to the Separation Date, regardless of any argument that such advice may
have affected the interests of the Parties. Moreover, Pasadena Holdings will,
and will cause the members of its Group to, honor any such applicable Privilege
between Partnership and the members of its Group and its or their counsel, and
will not assert that Partnership or a member of its Group has waived,
relinquished or otherwise lost such Privilege. For the avoidance of doubt, in
the event of any litigation, dispute, controversy or claim between Partnership
or a member of its Group, on the one hand, and a Third-Party other than a
Pasadena Group member, on the other hand, Partnership shall retain the right to
assert any applicable Privilege with respect to any communications relating to
advice given prior to the Separation Date by counsel to Partnership or
Partnership GP or any Person that was a Subsidiary of Partnership or Partnership
GP prior to the Separation Date (it being understood, for the avoidance of
doubt, that nothing in this Section 7.4 shall prevent Pasadena Holdings from
asserting any applicable Privilege with respect to the matters discussed herein
in the event such Privilege is not waived by Partnership).

7.5 Tax Matters.

(a) Tax Cooperation. The Parties shall cooperate as and to the extent reasonably
requested by the other Parties, in connection with the filing of Tax Returns and
any Tax proceeding with respect to Taxes imposed on or with respect to the
operations or activities of the Partnership Group and the Pasadena Group. Such
cooperation shall include the retention and (upon such other Party’s request)
the provision of records and Information which are reasonably relevant to any
such Tax Return or Tax proceeding and making employees available on a mutually
convenient basis to provide additional Information and explanation of any
material provided hereunder.

(b) Treatment of Payments for Tax Purposes. For all Tax purposes, the Parties
agree to treat (a) any payment required by this Agreement (other than payments
with respect to interest accruing after the Separation Date) as either a
contribution by Partnership to Pasadena Holdings or a distribution by Pasadena
Holdings to Partnership, as the case may be, occurring immediately prior to the
Separation Date or as a payment of an Assumed Liability or a Partnership
Liability; and (b) any payment of interest as taxable or deductible, as the case
may be, to the Party entitled under this Agreement to retain such payment or
required under this Agreement to make such payment, in either case except as
otherwise required by applicable Law.

 

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ARTICLE VIII.

MISCELLANEOUS

8.1 Counterparts; Entire Agreement; Corporate Power.

(a) This Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Party.

(b) This Agreement and the Ancillary Agreements contain the entire agreement
between the Parties with respect to the subject matter hereof, supersede all
previous agreements, negotiations, discussions, writings, understandings,
commitments and conversations with respect to such subject matter and there are
no agreements or understandings between the Parties other than those set forth
or referred to herein or therein.

(c) Partnership represents on behalf of itself and each other Partnership Group
member, and Pasadena Holdings represents on behalf of itself and each other
Pasadena Group member, as follows:

(i) each such Person has the requisite corporate or other power and authority
and has taken all corporate or other action necessary in order to execute,
deliver and perform each of this Agreement and each Ancillary Agreement to which
it is a party and to consummate the transactions contemplated hereby and
thereby; and

(ii) this Agreement and each Ancillary Agreement to which it is a party has been
duly executed and delivered by it and constitutes a valid and binding agreement
of it enforceable in accordance with the terms thereof.

(d) Each Party acknowledges that it and each other Party may execute certain of
the Ancillary Agreements by facsimile, stamp or mechanical signature. Each Party
expressly adopts and confirms each such facsimile, stamp or mechanical signature
made in its respective name as if it were a manual signature, agrees that it
will not assert that any such signature is not adequate to bind such Party to
the same extent as if it were signed manually and agrees that at the reasonable
request of any other Party hereto at any time it will as promptly as reasonably
practicable cause each such Ancillary Agreement to be manually executed (any
such execution to be as of the date of the initial date thereof).

8.2 Governing Law; Waiver of Trial by Jury.

(a) This Agreement and, unless expressly provided therein, each Ancillary
Agreement (and any claims or disputes arising out of or related hereto or
thereto or to the transactions contemplated hereby and thereby or to the
inducement of any party to enter herein and therein, whether for breach of
contract, tortious conduct or otherwise and whether predicated on common law,
statute or otherwise) shall be governed by and construed and interpreted in
accordance with the Laws of the State of Delaware, irrespective of the choice of
laws principles of the State of Delaware, including all matters of validity,
construction, effect, enforceability, performance and remedies.

(b) THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY.

8.3 Assignability. Except as set forth in any Ancillary Agreement, this
Agreement and each Ancillary Agreement shall be binding upon and inure to the
benefit of the parties hereto and thereto, respectively, and their respective
successors and permitted assigns; provided, however, that no party hereto or
thereto may assign its respective rights or delegate its respective obligations
under this Agreement or any Ancillary Agreement without the express prior
written consent of the other parties hereto or thereto.

 

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8.4 Third-Party Beneficiaries. Except for the indemnification rights under this
Agreement or any Ancillary Agreement of any Partnership Indemnitee or Pasadena
Indemnitee in their respective capacities as such, (a) the provisions of this
Agreement and each Ancillary Agreement are solely for the benefit of the Parties
and are not intended to confer upon any Person except the Parties any rights or
remedies hereunder or thereunder, and (b) there are no third-party beneficiaries
of this Agreement or any Ancillary Agreement and neither this Agreement nor any
Ancillary Agreement shall provide any Third-Party with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement or any Ancillary Agreement.

8.5 Notices. All notices, requests, claims, demands or other communications
under this Agreement and, to the extent applicable and unless otherwise provided
therein, under each of the Ancillary Agreements, shall be in writing and shall
be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, or by facsimile or
electronic transmission with receipt confirmed, to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
in a notice given in accordance with this Section 8.5):

If to Partnership or Partnership GP, to:

CVR GP, LLC

10 East Cambridge Circle Drive, Suite 250

Kansas City, Kansas 66103

Attention: General Counsel

Facsimile: (913) 982-0976

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

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attention: Jeffery B. Floyd and E. Ramey Layne

Facsimile: (713) 615-5660

If to Pasadena Holdings, to:

Pasadena Commodities International, LLC

2001 Jackson Road

Pasadena, TX 77506

Attention: Chief Executive Officer

Facsimile: (914) 762-8001

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

Exall & Wood, PLLC

3838 Oak Lawn Ave., Suite 1750

Dallas, TX 75219

Attention: Allison Exall and Christine A. Hathaway

Facsimile: (469) 619-6317

Any Party may, by notice to the other Party, change the address and contact
person to which any such notices are to be given.

8.6 Severability. If any provision of this Agreement or any Ancillary Agreement
or the application thereof to any Person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof or thereof, or the application of such provision to
Persons or circumstances or in jurisdictions other than those as to which it has
been held invalid or unenforceable, shall remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby. Upon such
determination, the Parties shall negotiate in good faith in an effort to agree
upon such a suitable and equitable provision to effect the original intent of
the Parties.

 

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8.7 Force Majeure. No Party shall be deemed in default of this Agreement to the
extent that any delay or failure in the performance of its obligations under
this Agreement or any Ancillary Agreement, other than a delay or failure to make
a payment, results from any cause beyond its reasonable control and without its
fault or negligence, such as acts of God, acts of civil or military authority,
embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes,
floods, unusually severe weather conditions, labor problems or unavailability of
parts, or, in the case of computer systems, any failure in electrical or air
conditioning equipment. In the event of any such excused delay, the time for
performance shall be extended for a period equal to the time lost by reason of
the delay.

8.8 Expenses. Except as expressly set forth in this Agreement or in any
Ancillary Agreement, all fees, costs and expenses incurred in connection with
the preparation, execution, delivery and implementation of this Agreement and
any Ancillary Agreement, and with the consummation of the transactions
contemplated hereby and thereby, will be borne by the Party incurring such fees,
costs or expenses.

8.9 Late Payments. Except as expressly provided to the contrary in this
Agreement or in any Ancillary Agreement, any amount not paid when due pursuant
to this Agreement or any Ancillary Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within
thirty (30) days of such bill, invoice or other demand) shall accrue interest at
a rate per annum equal to the Prime Rate plus 2% but in no event higher than the
highest rate permitted by applicable Law.

8.10 Headings. The article, section and paragraph headings contained in this
Agreement and in the Ancillary Agreements are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement or
any Ancillary Agreement.

8.11 Survival of Covenants. Except as expressly set forth in any Ancillary
Agreement, the covenants, representations and warranties contained in this
Agreement and each Ancillary Agreement, and liability for the breach of any
obligations contained herein or therein, shall survive the Separation and shall
remain in full force and effect.

8.12 Waivers of Default. Waiver by any Party of any default by the other Party
of any provision of this Agreement or any Ancillary Agreement shall not be
deemed a waiver by the waiving Party of any subsequent or other default, nor
shall it prejudice the rights of such Party. No failure or delay by any Party
(or the applicable member of its Group) in exercising any right, power or
privilege under this Agreement or any Ancillary Agreement shall operate as a
waiver thereof nor shall a single or partial exercise thereof prejudice any
other or further exercise thereof or the exercise of any other right, power or
privilege.

8.13 Specific Performance. Subject to the provisions of Article III, in the
event of any actual or threatened default in, or breach of, any of the terms,
conditions and provisions of this Agreement or any Ancillary Agreement, the
Party or Parties who are, or are to be, thereby aggrieved shall have the right
to specific performance and injunctive or other equitable relief in respect of
its or their rights under this Agreement or such Ancillary Agreement, in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative. The Parties agree that the
remedies at law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. Any
requirements for the securing or posting of any bond with such remedy are waived
by each of the Parties.

8.14 Amendments. No provisions of this Agreement or any Ancillary Agreement
shall be deemed waived, amended, supplemented or modified by any Party, unless
such waiver, amendment, supplement or modification is in writing and signed by
the authorized representative of the Party against whom it is sought to enforce
such waiver, amendment, supplement or modification.

8.15 Interpretation. In this Agreement and any Ancillary Agreement, (a) words in
the singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other genders as the

 

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context requires; (b) the terms “hereof,” “herein,” “herewith” and words of
similar import, and the terms “Agreement” and “Ancillary Agreement” shall,
unless otherwise stated, be construed to refer to this Agreement or the
applicable Ancillary Agreement as a whole (including all of the Schedules,
Exhibits and Appendices hereto and thereto) and not to any particular provision
of this Agreement or such Ancillary Agreement; (c) Article, Section, Exhibit,
Schedule and Appendix references are to the Articles, Sections, Exhibits,
Schedules and Appendices to this Agreement (or the applicable Ancillary
Agreement) unless otherwise specified; (d) the word “including” and words of
similar import when used in this Agreement (or the applicable Ancillary
Agreement) means “including, without limitation”; (e) the word “or” shall not be
exclusive; and (f) unless expressly stated to the contrary in this Agreement or
in any Ancillary Agreement, all references to “the date hereof,” “the date of
this Agreement,” “hereby” and “hereupon” and words of similar import shall all
be references to the date first stated in the preamble to this Agreement,
regardless of any amendment or restatement hereof. Nothing contained herein
shall be interpreted or construed against the drafter(s) of these agreements.
Both Parties had full and fair opportunity to contribute to the drafting of this
Agreement.

8.16 Limitations of Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY OTHER THAN THE FOLLOWING PROVISO, NEITHER PASADENA HOLDINGS OR ITS
AFFILIATES, ON THE ONE HAND, NOR PARTNERSHIP, PARTNERSHIP GP OR THEIR RESPECTIVE
AFFILIATES, ON THE OTHER HAND, SHALL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER
FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, REMOTE,
SPECULATIVE, LOSS OF PROFIT OR SIMILAR DAMAGES OF THE OTHER ARISING IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY; PROVIDED, THAT THE
AFORESAID LIMITATION ON DAMAGES SHALL NOT APPLY TO ANY SUCH DAMAGES THAT ARE
OWED PURSUANT TO A THIRD-PARTY CLAIM FOR WHICH INDEMNIFICATION IS REQUIRED UNDER
ARTICLE IV.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.

 

RENTECH NITROGEN PARTNERS, L.P. By: Rentech Nitrogen GP, LLC, its general
partner By:  

/s/ Colin Morris

Name:   Colin Morris Title:   Senior Vice President, General Counsel and
Secretary RENTECH NITROGEN GP, LLC By:  

/s/ Colin Morris

Name:   Colin Morris Title:   Senior Vice President, General Counsel and
Secretary RENTECH NITROGEN PASADENA HOLDINGS, LLC By:  

/s/ Colin Morris

Name:   Colin Morris Title:   Vice President and Secretary

 

Signature Page to Separation Agreement

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SCHEDULE 1.1

PASADENA BALANCE SHEET