exv10w13



 





Exhibit 10.13




HDW DIESEL SALE AND PURCHASE AGREEMENT




between




CONOCOPHILLIPS COMPANY,




as Seller,




and




CALUMET PENRECO, LLC,




as Buyer.




January 1, 2008




SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR
THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS
HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS(**).




 









 






HDW DIESEL SALE AND PURCHASE AGREEMENT




          In consideration of the covenants contained in this Agreement, ConocoPhillips Company (the
“Seller”) and Calumet Penreco, LLC (the “Buyer”) agree as follows:




Recitals:




          WHEREAS, the Seller purchases HDW Diesel from Excel Paralubes pursuant to the Co-Products Sale
and Purchase Agreement between Excel Paralubes and Seller’s predecessor, Conoco Inc., dated May 12,
1995;




          WHEREAS, the Seller has agreed to sell all of such HDW Diesel to the Buyer and the Buyer has
agreed to purchase such HDW Diesel from the Seller for the purpose of further value upgrading the
HDW Diesel to be sold as finished solvents, white oils or other specialty products and not for
resale as a feedstock or into fuels markets; and




          WHEREAS, Buyer and Seller wish to set forth the terms and conditions under which Buyer shall
purchase and Seller shall sell the HDW Diesel under this Agreement;




          NOW, THEREFORE, in consideration of the terms and covenants contained in this Agreement, the
Seller and the Buyer agree as follows:




ARTICLE I

EFFECTIVE DATE




          This Agreement shall be effective as of January 1, 2008 (the “Effective Date”).




ARTICLE II

DEFINITIONS




          As used in this Agreement, the following terms shall have the following meanings:




          Section 2.1. “Agreement” shall mean this HDW Diesel Sale and Purchase Agreement
between the Seller and the Buyer and all Exhibits attached hereto.




          Section 2.2. “ASTM” means American Society for Testing Materials.




          Section 2.3 “Barrel” means 42 U.S. standard gallons of 231 cubic inches per gallon
corrected for temperature to 60° Fahrenheit in accordance with the latest edition of ASTM-D-1250
Petroleum Measurement Table 6B.




          Section 2.4. “BPD” means barrels per day.




          Section 2.5. “Effective Date” has the meaning ascribed to that term in Article I.




          Section 2.6. “Event of Default” has the meaning assigned to such term in Article XIV.




          Section 2.7. “Excel Paralubes” means the Texas general partnership of that name.




          Section 2.8. “HDW Diesel” means the diesel stream that is produced from the
Hydrodewaxer unit at the Excel Paralubes Facility in Westlake, Louisiana, and is transferred from
Excel Paralubes to Seller pursuant to the Co-Products Sale and Purchase Agreement described in the
first Recital above.




          Section 2.9. “Initial Term” means the period beginning at the beginning of the
Effective Date and ending at the end of September 30, 2017.




          Section 2.10. “Party” means either Seller or Buyer and its respective successors and
assigns and “Parties” means both Seller and Buyer and their respective successors and assigns.




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          Section 2.11. “Refinery” means Excel Paralubes’ facility located at Westlake, Louisiana.




          Section 2.12 “Renewal Term” means a period of one year during which this Agreement is in effect.




          Section 2.13. “Supplemental Volumes” means those volumes of a product or product
having characteristics similar to HDW Diesel, but manufactured as a result of intentionally
injecting hydrotreater diesel into a dewaxer.




          Section 2.14. “Term” means the Initial Term of this Agreement plus all Renewal Terms.




ARTICLE III

TERM AND TERMINATION




          Section 3.1. Upon the expiration of the Initial Term and upon the expiration of any
Renewal Term, this Agreement shall be automatically renewed for a Renewal Term, subject to the
provisions of Section 3.2 below.




          Section 3.2. Either Party may terminate this Agreement effective at the end of the
Initial Term or at the end of a Renewal Term by giving written notice to the other Party not less
than one year before the end of such Initial Term or Renewal Term, as the case may be.




          Section 3.3. Notwithstanding anything to the contrary in this Article III, Seller may
terminate this Agreement at any time without cause with at least one year’s written notice. In the
event that this Agreement is terminated as provided in this Section 3.3, Seller shall reimburse
Buyer for any penalties incurred by Buyer if Buyer terminates its processing agreement with South
Hampton Refining Co. because of the early termination of this Agreement.




ARTICLE IV

VOLUME AND QUALITY




          Section 4.1. Seller shall make available to Buyer all of the volume of HDW Diesel that
Seller is able to purchase and receive from Excel Paralubes pursuant to the May 12, 1995
Co-Products Sale and Purchase Agreement between Seller and Excel Paralubes. By way of illustration
(and not for the purpose of establishing any minimum, maximum or typical volume of HDW Diesel that
may be supplied hereunder), the volume of HDW Diesel Seller was able to purchase and receive from
Excel Paralubes during 2006 and the first six months of 2007 was:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Month/Year	 	Barrels	 	Month/Year	 	Barrels	 	Month/Year	 	Barrels
	Jan-06

	 	 	64,868	 	 	Jul-06
	 	 	54,940	 	 	Jan-07
	 	 	59,394	 
	Feb-06

	 	 	4,289	 	 	Aug-06
	 	 	59,264	 	 	Feb-07
	 	 	47,018	 
	Mar-06

	 	 	489	 	 	Sep-06
	 	 	53,164	 	 	Mar-07
	 	 	66,336	 
	Apr-06

	 	 	53,940	 	 	Oct-06
	 	 	49,581	 	 	Apr-07
	 	 	53,270	 
	May-06

	 	 	61,215	 	 	Nov-06
	 	 	55,014	 	 	May-07
	 	 	53,902	 
	Jun-06

	 	 	56,277	 	 	Dec-06
	 	 	39,276	 	 	Jun-07
	 	 	43,738	 






          Section 4.2. For planning purposes:





	 	(a)	 	at the end of every month, the Buyer shall furnish the Seller with a good faith
estimate of the total volumes of HDW Diesel which the Buyer will require during each month
for the following three (3) months;
	 
	 	(b)	 	at or as soon as practical after the Effective Date and before September 1 of
subsequent calendar year of the Term, the Buyer shall furnish the Seller with a good faith
estimate of the total volumes of HDW Diesel which the Buyer will require during the
succeeding calendar year;
	 
	 	(c)	 	at the end of every month, the Seller shall furnish the Buyer with a good faith
estimate of the total volumes of HDW Diesel which the Seller expects to purchase and
receive from Excel Paralubes during each month for the following three (3) months; and




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	 	(d)	 	at or as soon as practical after the Effective Date and before September 1 of
subsequent calendar year of the Term, the Seller shall furnish the Buyer with a good faith
estimate of the total volumes of HDW Diesel which the Seller expects to purchase and
receive from Excel Paralubes during the succeeding calendar year.





          Section 4.3. The HDW Diesel shall meet the specifications established from time to
time by Excel Paralubes. If Buyer requests a change in specifications, and if Excel Paralubes is
willing to accommodate that request, the price of HDW Diesel sold hereunder shall be adjusted to
include cost incurred due to the change. At the Effective Date, the specifications for HDW Diesel
are as follows:




	 	 	 	 	 
	PMCC, Flashpoint, degrees F
	 	 	*	*
	D-86 90% Point, degrees F
	 	 	*	*
	ASTM D1500 Color
	 	 	*	*






          Section 4.4. From time to time, Buyer may request and Seller may supply Supplemental
Volume having the same specifications as HDW Diesel. Seller shall supply Supplemental Volume upon
Buyer’s request if Excel Paralubes produces Supplemental Volume; the decision to produce or not to
produce Supplemental Volume is solely within the discretion of Excel Paralubes and of its partners,
including Seller. Neither Seller nor Excel Paralubes has any obligation to produce Supplemental
Volume or to sell or deliver Supplemental Volume to Buyer. No Supplemental Volume has been
delivered to Seller by Excel Paralubes during 2006 or the first six months of 2007.




ARTICLE V

DELIVERY; TITLE AND RISK OF LOSS




          The HDW Diesel purchased and sold under this Agreement shall be delivered by the Seller, and
title to and risk of loss of such HDW Diesel shall pass to the Buyer, at the custody transfer point
at which the HDW Diesel leaves Excel Paralubes’ truck loading flange and is delivered into Buyer’s
hired truck transports.




ARTICLE VI

MEASUREMENT




          Section 6.1. The volume of HDW Diesel and Supplemental Volumes delivered pursuant to
this Agreement shall be determined by metering the HDW Diesel as it is delivered through Excel
Paralubes’ truck rack.




          Section 6.2. Supplemental Volumes processed and delivered under this Agreement will be
metered by Excel Paralubes and the relevant processing fee will billed according to that metered
volume.




ARTICLE VII

PRICE




          Section 7.1. The purchase price per barrel of HDW Diesel (and, to the extent
Supplemental Volume is supplied hereunder, of Supplemental Volume) shall be equal to ** plus the
blending fee.




          Section 7.2. For purposes of Section 7.1, the “blending fee” shall be $** per gallon
of product sold. The blending fee may be recalculated periodically but recalculation may occur no
more than once in a twelve-month period.




          Section 7.3. To the extent Supplemental Volume is supplied hereunder, a monthly amount
equal to the Supplemental Volume (as determined pursuant to Section 5.2) times the processing fee
will be invoiced separately each month. The “processing fee” is based on the actual cost to
produce the Supplemental Volumes (an example of this calculation is set forth in Exhibit A).




          Section 7.4. Should any published price referenced in Section 7.1 cease to be
published, the Parties will agree upon an acceptable substitute price reference source. All
purchase price adjustments contained in Section 7.1 (such as quality and transportation), reflect
market and industry practices, conditions and requirements as of the effective date of this
Agreement. Material changes in such market and industry factors may necessitate modifications to
these purchase price adjustments. In such event, the Parties shall meet and negotiate in good
faith modifications to the purchase price adjustments.




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ARTICLE VIII

PAYMENT




          Section 8.1. By the fifteenth (15th) calendar day of a month (“Month 2”), Seller shall
invoice Buyer for estimated volume of HDW Diesel for Month 2 (the lesser of the volume determined
pursuant to Section 4.2(a) or Section 4.2(c)) using the price calculated according to the formula
set forth in Section 7.1 for the immediately preceding month (“Month 1”), plus or minus an invoice
adjustment to the extent that the volume of HDW Diesel with respect to Month 1 measured pursuant to
Article VI multiplied by the price calculated for Month 1 is less than or greater than the amount
actually invoiced with respect to Month 1. For example, if in January the volume for January were
estimated to be 10,000 barrels pursuant to Section 4.2, and if the price in December were
calculated to be $50.00 per barrel, the unadjusted invoice would be $500,000. If in February the
volume of Feedstock for January were known to have been 8,000 barrels (and without regard to any
other adjustment in the January invoice), the adjustment to the February invoice would be
($100,000).




          Section 8.2. Seller shall invoice Buyer for the actual Supplemental Volume and
applicable processing fee (pursuant to Section 7.3) by the fifteenth (15th) calendar day of the
month following the month of delivery.




          Section 8.3. Payments shall be made in full, by wire transfer no later than three (3)
business days after receipt by Buyer of the invoice, without any adjustments, discounts or setoffs,
except in cases of bona fide disputes, in which cases only the disputed amount will be withheld.
Such payments shall be without prejudice to any claim for damages or any other right under this
Agreement or applicable law. In the event Buyer fails to make any payments on or before the due
date, Seller shall have the right to charge interest from the due date on the amount of the overdue
payment at a per annum rate which shall be the lower of (a) the prime rate plus two percent (2%),
or (b) the maximum interest rate permitted by law. Prime rate shall mean, for any day, the rate of
interest announced by JP Morgan Chase Bank (or its successors or an acceptable substitute agreed to
by the Parties) as its prime lending rate.




          Section 8.4. The Seller reserves the right to withhold delivery of HDW Diesel to the
Buyer at any time the Buyer’s account becomes more than thirty (30) days past due.




ARTICLE IX

CLAIMS




          Section 9.1. The Seller shall have no liability to the Buyer for any defect in the
quality of the HDW Diesel delivered pursuant to this Agreement unless:





	 	(a)	 	the Buyer gives the Seller written notice of the Buyer’s claim of defect within ninety
(90) days after delivery of the HDW Diesel or, with respect to a latent defect, within
seven (7) days after the Buyer has discovered such latent defect, but in no event more than
one hundred twenty (120) days after delivery; and
	 
	 	(b)	 	the Seller is given reasonable opportunity to inspect the HDW Diesel or analyze the
Buyer’s retained samples, which analysis must occur within fifteen (15) days after Seller
receives notice of defect.





          Section 9.2. Nothing contained in this Article shall limit the defenses which the
Seller may have against such claims.




ARTICLE X

EXCLUSTION OF WARRANTIES AND LIMITATIONS OF LIABILITY




          Section 10.1. Warranties. Seller warrants that it has title to the HDW Diesel
it delivers under this Agreement, that the HDW Diesel is free from all liens, encumbrances and
security interests, and that the HDW Diesel conforms to the specifications as provided in
Section 4.3. THESE WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ANY WARRANTY OF MERCHANTYABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, WHETHER EXPRESS OR IMPLIED.




          Section 10.2. Liability. Seller’s liability under this Agreement for breach
of warranty shall, at Seller’s option, be limited to:





	 	(a)	 	replacement of the HDW Diesel, or
	 
	 	(b)	 	refund to Buyer of an amount of money not to exceed the purchase price paid to Seller
for the HDW Diesel.




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          Section 10.3. Damages. In no event shall either Party be liable to the other
for incidental or consequential damages under this Agreement.




ARTICLE XI

INDEMNIFICATION




          Section 11.1. Seller’s Liability. Seller shall indemnify Buyer from and
against any claim for:





	 	(a)	 	personal injury to or loss of life of any employee, contractor, invitee or agent of
Seller, and
	 
	 	(b)	 	loss of or damage to any property of Seller, arising out of this Agreement. This
indemnification applies regardless of the cause or reason therefore and regardless of
whether claims arise as a result of the sole or concurrent negligence of Buyer.





          Section 11.2. Buyer’s Liability. Buyer shall indemnify Seller from and
against any claim for:





	 	(a)	 	personal injury to or loss of life of any employee, contractor, invitee or agent of
Buyer, and
	 
	 	(b)	 	loss of or damage to any property of Buyer, arising out of this Agreement. This
indemnification applies regardless of the cause or reason therefore and regardless of
whether claims arise as a result of the sole or concurrent negligence of Seller.





          Section 11.3. Third Party Liability. Except as otherwise provided in this
Article, Buyer and Seller shall indemnify each other from and against claims from third parties
arising out of or connected to this Agreement, to the extent of each Party’s own negligence.




ARTICLE XII

TAXES




          Buyer will reimburse Seller for any applicable sales, use or excise taxes imposed by any
taxing authority on Seller, arising from the sale of HDW Diesel to Buyer by Seller, within thirty
(30) days after receipt of Seller’s invoice to Buyer. Seller will be responsible for remitting to
the taxing authority such applicable sales, use or excise taxes arising from the sale of HDW Diesel
to Buyer by Seller.




ARTICLE XIII

FORCE MAJEURE




          Section 13.1. Force Majeure. Except for the payment of matured obligations of
money, neither Party shall be liable to the other for failure or delay in performance hereunder to
the extent that the failure or delay is due to an event of force majeure, which is herein defined
to include: war (whether declared or undeclared), fire, flood, lightning, earthquake, storm or any
act of God; strikes, lockouts or other labor difficulties, civil disturbances, riot, sabotage,
accident, any official order or directive or industry-wide request or suggestion by any
governmental authority or instrumentality thereof which, in the reasonable judgment of the party
affected, makes it necessary to cease or reduce production; any disruption of labor or breakdown of
machinery; any inability to secure necessary materials, including inability to secure materials by
reason of allocations promulgated by authorized governmental agencies, or any other contingency
beyond the control of the affected Party, which interferes with the performance hereunder.




          Section 13.2. Suspension of Performance. Except for the payment of matured
obligations of money, performance under this Agreement shall be suspended during the period of such
force majeure to the extent made necessary by the force majeure; provided, however, the settlement
of strikes, lockouts, industrial disputes or disturbances shall be entirely within the discretion
of the Party so settling.




          Section 13.3. No Extension. No curtailment, suspension or acceptance of
performance pursuant to this force majeure section shall operate to extend the Term of, or to
terminate this Agreement. Performance under this Agreement shall resume to the extent made
possible by the end or amelioration of the force majeure event. Seller shall not be required to
make up any deliveries of HDW Diesel not made as a result of force majeure, and Buyer shall not be
required to take or purchase any quantities of HDW Diesel not delivered or received due to an event
of force majeure.




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          Section 13.4 Notice of Force Majeure. Upon the occurrence of any event of
force majeure, the Party claiming force majeure shall notify the other Party promptly in writing of
such event and, to the extent possible, inform the other Party of the expected duration of the
force majeure event and the performance to be affected by the event of force majeure under this
Agreement.




          Section 13.5 Replacement of HDW Diesel. In the event that Seller is unable to
deliver HDW Diesel because of an occurrence under this Article XIII, Buyer may elect to obtain
replacement HDW Diesel from other sources to the extent required to meet Buyer’s reasonable
anticipated requirements for the duration of the event of force majeure. Buyer will incur no
liability or other obligation with respect to Seller for such emergency replacement purchases of
HDW Diesel, nor shall the Term of this Agreement be extended as a result of the event of force
majeure.




          Section 13.6. Excel Paralubes Co-Products Sale and Purchase Agreement Force
Majeure. In the event Excel Paralubes declares an event of force majeure under the Co-Products
Sale and Purchase Agreement between Excel Paralubes and Seller, which event of force majeure
prevents the sale of the HDW Diesel to Seller thereunder, then Seller may also declare an event of
force majeure hereunder.




ARTICLE XIV

EVENT OF DEFAULT




          Section 14.1. Event of Default. The failure of Buyer or Seller to perform or
comply with any material term or condition of this Agreement shall constitute an Event of Default
hereunder unless cured pursuant to Section 14.2.




          Section 14.2. Notice of Default and Opportunity to Cure. No event shall be
deemed to be an Event of Default under this Agreement unless the non-defaulting Party shall first
have given written notice to the other Party of any alleged Event of Default, specifying the nature
of the alleged Event of Default, and the Party receiving such notice shall have failed within
thirty (30) days of the date of receipt of such notice to remedy or cure any such alleged Event of
Default; provided, however, that if any Event of Default cannot reasonably be cured within thirty
(30) days, the commencement of the cure of such Event of Default within such thirty (30) day period
shall be deemed to be a cure of such Event of Default for purposes of this Section, provided such
cure is diligently prosecuted to completion.




          Section 14.3. Remedies. Upon the occurrence of any Event of Default under
this Agreement which has not been cured as permitted pursuant to Section 14.2 above, the
non-defaulting Party shall have the right (without an election of remedies and without limiting the
non-defaulting Party in the exercise of any right or remedy which the non-defaulting party may have
by reason of such Event of Default) to exercise all remedies available at law or equity, including
the bringing of an action for damages on account of such Event of Default.




ARTICLE XV

ASSIGNMENT




          This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns; provided, however, that any assignment by either Party without
the prior written consent of the other Party shall be void. Further, provided, that Seller may
assign this Agreement or any interest herein, without Buyer’s consent, to any party providing
financing to Seller. Neither Party’s consent shall be required for any assignment by either Party
to any of its subsidiaries or affiliates, or to any company to which all or substantially all of
the assets of either Party may be assigned.




ARTICLE XVI

NOTICES




          Section 16.1. Form of Notice. Any notice or correspondence to be given with
respect to this Agreement shall be in writing or shall be given orally and confirmed in writing by
letter, and delivered personally, by certified mail, or by facsimile addressed to the respective
Party at the address stated below or such other address as either Party shall designate from time
to time.




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If to Seller, addressed to:




ConocoPhillips Company

P.O. Box 2197, Houston, Texas 77252

600 North Dairy Ashford Road, Houston, Texas 77079

Attention:           Manager, Financial Planning and Analysis

                            Lubricants and Specialty Products Business Unit

Facsimile:           (281) 293-3474



If to Buyer, addressed to:



Calumet Penreco, LLC

% Calumet Specialty Products Partners, L.P.

2780 Waterfront Pkwy. E. Dr., Suite 200

Indianapolis, IN 46214

Attention:           Vice President and CFO

Phone:                (317) 328-5660

Facsimile:           (317) 328-5676




          Section 16.2. Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by facsimile shall be effective upon actual receipt (confirmed by answer
back) if received during the recipient’s normal business hours, or on the next business day after
receipt if not received during the recipient’s normal business hours.




ARTICLE XVII

AGREEMENT AMENDMENT PROCEDURES




          The parties may amend this Agreement, including any exhibit hereto, by signing an amendment
specifying the new terms, including an effective date.




ARTICLE XVIII

WARNINGS




          Section 18.1. A Material Safety Data Sheet for HDW Diesel is attached hereto and made
a part hereof as Exhibit B. The Seller may from time to time provide supplementary Material Safety
Data Sheets. The Buyer shall advise its employees about the hazards of HDW Diesel, as well as the
precautionary procedures for handling HDW Diesel, which are set out in such Material Safety Data
Sheet or supplementary Material Safety Data Sheets.




          Section 18.2 The Buyer shall give to any third party to whom Buyer, its parent,
subsidiaries or affiliates convey HDW Diesel, a copy of the Material Safety Data Sheet or
supplementary Material Safety Data Sheets it has received from the Seller.




ARTICLE XIX

AUDITS




          The Buyer shall have the right to audit the Seller’s relevant books and records in order to
verify (i) the cost and other data used by the Seller each month to calculate the HDW Diesel price
under Article VII of this Agreement, and (ii) the amount of any taxes, fees, or other charges
billed to the Buyer pursuant to Article XII of this Agreement. The audit shall take place during
the Seller’s normal business hours on mutually agreeable dates at the locations where the records
are located. Only the results of the audit and not the specifically audited data shall be
disclosed by the Buyer’s auditors, unless the Buyer is required to judicially pursue a claim
against the Seller.




ARTICLE XX

ARBITRATION




          Section 20.1. Negotiation. If any dispute relating to this Agreement arises
between the Parties, the Parties will first enter into good faith negotiations to resolve the
dispute in a commercially reasonable manner. The negotiations will be held by representatives of
each party who have the authority to settle any claims arising out of the dispute.




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          Section 20.2. Arbitration. If a dispute cannot be resolved through good faith
negotiations, the dispute will be submitted for resolution by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration Association. The
arbitrations will apply the laws of the State of Texas to resolve the dispute. The arbitration
will take place in Houston, Texas, no later than one hundred twenty (120) days after a request for
arbitration is field by a Party with the American Arbitration Association. Judgment upon an
arbitration award shall be final and may be entered in any court having jurisdiction over the Party
against which enforcement thereof is sought. This arbitration provision will survive the
termination of this Agreement.




          Section 20.3. Alternative Arbitration. As an alternative to the arbitration
procedure set forth in Section 20.2 above, the Parties may (but will not be required to) agree to
an expedited dispute resolution process which will be completed no later than thirty (30) days
after the date the Parties agree in writing to pursue this expedited process. Under the expedited
process, the dispute will be submitted to a panel consisting of one executive level manager from
each Party who has the authority to settle any claims arising out of the dispute. These managers
will attempt to resolve the dispute within seven (7) business days after the date the Parties agree
to pursue the expedited process. If the mangers are unable to resolve the dispute within this time
period, such dispute will be submitted to a single arbitrator from a pre-approved list of
qualified, independent arbitrators. The arbitrator will conduct the remainder of the expedited
process in Houston, Texas, and will apply the laws of the State of Texas and the Commercial
Arbitration Rules of the American Arbitration Association to resolve the dispute. The decision of
the arbitrator will be final and may be entered into any court having jurisdiction over the Party
against which enforcement thereof is sought.




ARTICLE XXI

MISCELLANEOUS




          Section 21.1. Waiver of Breach. No waiver by Seller or Buyer of any breach of
any of the terms and conditions contained in this Agreement shall be construed as a waiver of any
subsequent breach of the same or any other terms and conditions.




          Section 21.2. Governing Law. This Agreement shall be governed by and
interpreted according to the laws of the State of Texas and, where applicable, the laws of the
United States.




          Section 21.3. Headings. The headings are for the convenience of the Parties
only and shall not be interpreted as part of this Agreement.




          Section 21.4 Severability. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or unenforceable, the
remainder of this Agreement and the application of such provision to other persons or circumstances
shall not be affected thereby, but rather shall be enforce to the maximum extent permissible under
applicable law, so long as the material economic and legal interests of either Party are not
affected in any adverse manner.




          Section 21.5 Multiple Counterparts. This Agreement and the exhibits attached
hereto contain the entire agreement among the Parties. This Agreement may be executed and
acknowledged in multiple counterparts and by different Parties in separate counterparts, each of
which shall be an original but all of which shall be and constitute one instrument.




          Section 21.6 Entire Agreement. This Agreement and the exhibits attached
hereto constitute and contain the entire Agreement between Buyer and Seller as to the subject
matter set forth herein; there are no promises, representations or warranties other than as set
forth in this Agreement. No alteration or amendment of this Agreement will be effective unless it
is in writing and signed by Buyer and Seller.




          EXECUTED to be effective as of the date first above set forth.




	 	 	 	 	 	 	 	 	 
	CALUMET PENRECO, LLC	 	 	CONOCOPHILLIPS COMPANY	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ R. Patrick Murray, II
	 	 	By:
	 	/s/ G.T. Goff	 
	 	 	 	 	 
	Title:

	 	Vice President & CFO
	 	 	Title:	 	Vice President	 








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EXHIBIT A





EXAMPLE OF PROCESSING FEE CALCULATION




PRODUCE ADD’N DEWAXED DIESEL PROCESSING FEE -

Example




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Costs	 	 	 	 	 	 	 	 	 	 
	Description	 	Qty.	 	Units	 	Price	 	$/Bbl	 	 
	Hydrogen

	 	 	250	 	 	SCF’s/Bbl
	 	$1.89/MSCF
	 	 	0.47	 	 	 
	Fuel Gas

	 	 	88	 	 	SCF’s/Bbl
	 	$5.56/MSCF
	 	 	0.48	 	 	 
	Electricity

	 	 	6.110898388	 	 	KWH/Bbl
	 	 	0.0507	 	 	 	0.31	 	 	Assumed 25% of
Excel’s electricity
costs are incurred
in the Dewaxer
	License Fee	 	— Does Not Apply to Diesel + Lighter —	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Sub-Total
	 	 	1.26	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Yield Loss
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WABT Increases 1F
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	0.05% Loss HVN ==> Diesel
	 	 	 	 	 	 	 	 	0.0125	 	 	HVN valued at $25.04/Bbl Diesel
	0.15% Loss HVN ==> MVN
	 	 	 	 	 	 	 	 	0.0063	 	 	HVN Valued at
$4.20/Bbl over MVN
	 

	 	 	 	 	 	 	 	Sub-Total
	 	 	0.02	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Total
	 	 	1.28	 	 	Cost per barrel to
Produce Add’n
Dewaxer Diesel
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Total, cpg
	 	 	3.04	 	 	 






HDW Use of Total Plant Electricity Consumption ==>25%




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Plant	 	 	 	 
	 	 	KWH	 	HDW KWH Used,	 	HDW Feed
	 	 	Used	 	Calculated	Bbls
	Y20001
	 	 	190,500,673	 	 	 	47,625,168	 	 	 	7,773,981	 
	Y2002
	 	 	197,237,003	 	 	 	49,309,251	 	 	 	8,088,557	 
	 
	2-Yr Totals
	 	 	387,737,676	 	 	 	96,934,419	 	 	 	15,862,538	 
	 






 











 





EXHIBIT B




MATERIAL SAFETY DATA SHEETS




	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 1/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005











MATERIAL SAFETY DATA SHEET




Conosol® HDW




1. PRODUCT AND COMPANY IDENTIFICATION




	 	 	 
	Product Name:
	 	Conosol® HDW
	Synonyms:
	 	Petroleum Distillate
	Intended Use:
	 	Solvent
	 
	 	 
	Responsible Party:
	 	Penreco
	 
	 	8701 New Trails Dr. Suite 175
	 
	 	The Woodlands, TX 77381
	Customer Service:
	 	800-245-3952
	 
	 	www.penreco.com
	Technical Information:
	 	800-245-3952






Emergency Overview




24 Hour Emergency Telephone Numbers:

Spill, Leak, Fire or Accident Call CHEMTREC:

North America: (800) 424-9300

Others: (703)527-3887 (collect)




California Poison Control System: (800) 356-3219




Health Hazards/Precautionary Measures: Avoid contact with skin and clothing. Wash thoroughly after handling.




Physical Hazards/Precautionary Measures: Keep away from all sources of ignition.




	 	 	 	 	 
	 

	 	Appearance:
	 	Clear
	 

	 	Physical Form:
	 	Liquid
	 

	 	Odor:
	 	Hydrocarbon






NFPA 704 Hazard Class:




	 	 	 	 	 
	 

	 	Health:
	 	1 (Slight)
	 

	 	Flammability:
	 	1 (Slight)
	 

	 	Instability:
	 	0 (Least)






2. COMPOSITION / INFORMATION ON INGREDIENTS




NON-HAZARDOUS COMPONENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Concentration	 	 	 	 	 	 	 	 
	Component / CAS No:	 	(wt %)	 	ACGIH:	 	OSHA:	 	NIOSH:	 	Other:
	Hydrotreated Middle Distillate 

64742-46-7

	 	 	100	 	 	NE
	 	NE
	 	NE
	 	100 mg/m3 TWA*





Note: State, local or other agencies or advisory groups may have established more stringent limits.
Consult an industrial hygienist or similar professional, or your local agencies, for further
information.




1%=10,000 PPM.

NE=Not Established




 









 





	 	 	 	 	 
	MSDS Code: 776548

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	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005






3. HAZARDS IDENTIFICATION




Potential Health Effects



Eye: Contact may cause mild eye irritation including stinging, watering, and redness.



Skin: Contact may cause mild skin irritation including redness, and a burning sensation.
Prolonged or repeated contact can worsen irritation by causing drying
and cracking of the
skin leading to dermatitis (inflammation). No harmful effects from skin absorption are
expected.



Inhalation (Breathing): No information available. Studies by other exposure routes suggest a low
degree of toxicity by inhalation.



Ingestion (Swallowing): No harmful effects expected from ingestion. ASPIRATION HAZARD — This
material can enter lungs during swallowing or vomiting and cause lung inflammation and
damage.



Signs and Symptoms: Effects of overexposure may include irritation of the digestive tract,
irritation of the respiratory tract, nausea, diarrhea, transient excitation followed by signs
of nervous system depression (e.g.; headache, drowsiness, dizziness, loss of
coordination, disorientation and fatigue).



Cancer: There is inadequate information to evaluate the cancer hazard of this material. See
Section 11 for information on the individual components, if any.



Target Organs: Not Evaluated



Developmental: No data available for this material.



Pre-Existing Medical Conditions: Conditions aggravated by exposure may include skin disorders.




4. FIRST AID MEASURES



Eye: If irritation or redness develops, move victim away from exposure and into fresh air.
Flush eyes with clean water. If symptoms persist, seek medical attention.



Skin: Remove contaminated shoes and clothing and cleanse affected area(s) thoroughly by washing
with mild soap and water. If irritation or redness develops and persists, seek medical
attention.



Inhalation (Breathing): If respiratory symptoms develop, move victim away from source of exposure
and into fresh air. If symptoms persist, seek medical attention. If
victim is not breathing, clear
airway and immediately begin artificial respiration. If breathing difficulties develop, oxygen
should be administered by qualified personnel. Seek immediate medical attention.



Ingestion (Swallowing): Aspiration hazard: Do not induce vomiting or give anything by mouth
because this material can enter the lungs and cause severe lung damage. If victim is drowsy or
unconscious and vomiting, place on the left side with the head down. If possible, do
not leave victim unattended and observe closely for adequacy of breathing. Seek medical
attention.




5. FIRE-FIGHTING MEASURES




Flammable Properties:




	 	 	 	 	 
	 
	 	Flash Point:	 	>220°F / 104°C
	 
	 	Test Method:	 	Pensky-Martens Closed Cup (PMCC), ASTM D93, EPA 1010
	 
	 	OSHA Flammability Class:	 	Not applicable
	 
	 	LEL%:	 	0.58
	 
	 	UEL%:	 	No data
	 
	 	Autoignition Temperature:	 	442°F / 228°C





Unusual Fire & Explosion Hazards: This material may burn, but will not ignite readily. Vapors are
heavier than air and can accumulate in low areas. If container is not properly cooled, it can
rupture in the heat of a fire.



Extinguishing Media: Dry chemical, carbon dioxide, foam, or water spray is recommended. Water or
foam may cause frothing of materials heated above 212° F. Carbon dioxide can displace oxygen. Use
caution when applying carbon dioxide in confined spaces.




 









 








	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 3/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005





Fire Fighting Instructions: For fires beyond the incipient stage, emergency responders in the
immediate hazard area should wear bunker gear. When the potential chemical hazard is unknown, in
enclosed or confined spaces, or when explicitly required by DOT, a self contained breathing
apparatus should be worn. In addition, wear other appropriate protective equipment as conditions
warrant (see Section 8).



Isolate immediate hazard area, keep unauthorized personnel out. Stop spill/release if it
can be done with minimal risk. Move undamaged containers from immediate hazard area if it
can be done with minimal risk.



Water spray may be useful in minimizing or dispersing vapors and to protect personnel. Cool
equipment exposed to fire with water, if it can be done with minimal risk. Avoid spreading burning
liquid with water used for cooling purposes.




6. ACCIDENTAL RELEASE MEASURES



This material may burn, but will not ignite readily. Keep all sources of ignition away from
spill/release.



Stay upwind and away from spill/release. Notify persons down wind of the spill/release, isolate
immediate hazard area and keep unauthorized personnel out. Stop spill/release if it can be done with
minimal risk. Wear appropriate protective equipment including respiratory protection as conditions
warrant (see Section 8).



Prevent spilled material from entering sewers, storm drains, other unauthorized drainage systems,
and natural waterways. Dike far ahead of spill for later recovery or disposal. Spilled
material may be absorbed into an appropriate absorbent material.



Notify fire authorities and appropriate federal, state, and local agencies. Immediate cleanup of
any spill is recommended.




7. HANDLING AND STORAGE



Handling: Do not enter confined spaces such as tanks or pits without following proper entry
procedures such as ASTM D-4276 and 29CFR 1910.146. The use of appropriate respiratory protection is
advised when concentrations exceed any established exposure limits (see Sections 2 and 8).



Do not wear contaminated clothing or shoes. Use good personal hygiene practices.



“Empty” containers retain residue and may be dangerous. Do not pressurize, cut, weld, braze,
solder, drill, grind, or expose such containers to heat, flame, sparks, or other sources of
ignition. They may explode and cause injury or death. “Empty” drums should be completely drained,
properly bunged, and promptly shipped to the supplier or a drum reconditioner. All containers
should be disposed of in an environmentally safe manner and in accordance with governmental
regulations.



Storage:
Keep container(s) tightly closed. Use and store this material in cool, dry,
well-ventilated areas away from heat and all sources of ignition. Store only in approved
containers. Keep away from any incompatible material (see Section 10). Protect container(s)
against physical damage.




8. EXPOSURE CONTROLS / PERSONAL PROTECTION



Engineering controls: If current ventilation practices are not adequate to maintain airborne
concentrations below the established exposure limits (see Section 2), additional engineering
controls may be required.




Personal Protective Equipment (PPE):





Respiratory: The use of respiratory protection is advised when concentrations are expected to
exceed the established exposure limits (see Section 2). Depending on the airborne
concentration, use a respirator with appropriate cartridges (NIOSH certified) or supplied-air
equipment.




Skin: The use of gloves impervious to the specific material handled is advised to prevent skin
contact, possible irritation, and skin damage (see glove manufacturer literature for
information on permeability). Depending on conditions of use, apron and/or arm covers may be
necessary.




Eye/Face: Approved eye protection to safeguard against potential eye contact, irritation, or
injury is recommended. Depending on conditions of use, a face shield may be necessary.



 









 





	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 4/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005







Other Protective Equipment: A source of clean water should be available in the work
area for flushing eyes and skin. Impervious clothing should be worn as needed.




Suggestions for the use of specific protective materials are based on readily available
published data. Users should check with specific manufacturers to confirm the performance of
their products.



9. PHYSICAL AND CHEMICAL PROPERTIES




Note: Unless otherwise stated, values are determined at 20°C (68°F) and 760 mm Hg (1 atm).



	 	 	 	 	 
	 
	 	Appearance:	 	Clear
	 
	 	Physical Form:	 	Liquid
	 
	 	Odor:	 	Hydrocarbon
	 
	 	Odor Threshold:	 	No data
	 
	 	pH:	 	Not applicable
	 
	 	Vapor Pressure (mm Hg):	 	< 0. 1
	 
	 	Vapor Density (air=1):	 	No data
	 
	 	Boiling Point:	 	420-690°F/ 216-366°C
	 
	 	Solubility in Water:	 	Insoluble
	 
	 	Solubility in Other Solvents:	 	Soluble in hydrocarbons
	 
	 	Partition Coefficient (n-octanol/water) (Kow):	 	No data
	 
	 	Specific Gravity:	 	0.83-0.84 @ 60°F (15.6°C)
	 
	 	Evaporation Rate (nBuAc=1):	 	No data
	 
	 	Flash Point:	 	>220°F / 104°C
	 
	 	Test Method:	 	Pensky-Martens Closed Cup (PMCC), ASTM D93, EPA 1010
	 
	 	LEL%:	 	0.58
	 
	 	UEL%:	 	No data
	 
	 	Autoignition Temperature:	 	442°F / 228°C
	 
	 	Decomposition Temperature:	 	No data






10. STABILITY AND REACTIVITY



Stability: Stable under normal ambient and anticipated storage and handling conditions
of temperature and pressure.



Conditions to Avoid: Avoid high temperatures and all sources of ignition (see Sections 5 and 7).



Materials to Avoid (Incompatible Materials): Avoid contact with acids and oxidizers such as
chlorine and other halogens, chromates, perchlorates, peroxides and oxygen.



Hazardous Decomposition Products: Combustion car yield carbon dioxide, carbon monoxide.



Hazardous Polymerization: Will not occur.




11. TOXICOLOGICAL INFORMATION




Chronic Data:




Hydrotreated Middle Distillate (64742-46-7)





Carcinogenicity:
Prolonged and repeated skin exposure of mice to certain middle distillate
streams has resulted in dermatitis, which has been associated with the promotion of skin
tumors via a non-genotoxic mechanism. This material has not been identified as a carcinogen by
NTP, IARC, or OSHA.



Acute Data:





Hydrotreated Middle Distillate (64742-46-7)




Dermal  LD50 = >2.0 g/kg (No deaths) (Rabbit)




          
LC50 = 4600 mg/m3/4 hr. (Rat)


      Oral LD50 =>5 g/kg (No deaths) (Rat)




Based on: Similar Material



 









 





	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 5/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005






12. ECOLOGICAL INFORMATION



Not evaluated at this time.




13. DISPOSAL CONSIDERATIONS



This
material if discarded as produced, is not a RCRA “listed” hazardous waste. However, it should
be fully evaluated for hazardous waste characteristics prior to disposal (40 CFR 261). Use which
results in chemical or physical change or contamination may subject it to regulation as a hazardous
waste. Along with properly characterizing all waste materials, consult state and local
regulations regarding the proper disposal of this material.



Container contents should be completely used and containers should be emptied prior to discard.
Container rinsate could be considered a RCRA hazardous waste and must be disposed of with care and
in full compliance with federal, state and local regulations. Larger empty containers, such as
drums, should be returned to the distributor or to a drum reconditioner. To assure proper disposal
of smaller empty containers, consult with state and local regulations and disposal authorities.




14. TRANSPORTATION INFORMATION




DOT





Shipping Description: Not Regulated

Note: Material is unregulated unless shipped by land in a packaging having a capacity of 3500 gallons or more. Then the
provisions of 49 CFR. Part 130 apply.



IMDG





Shipping Description: Not regulated



ICAO/IATA





Shipping Description: Not regulated



15. REGULATORY INFORMATION




U.S. Regulations:




	 	 	 	 	 	 	 
	 	 	EPA SARA 311/312 (Title III Hazard Categories)
	 
	 

	 	Acute Health:
	 	No	 	 
	 

	 	Chronic Health:
	 	No	 	 
	 

	 	Fire Hazard:
	 	No	 	 
	 

	 	Pressure Hazard:
	 	No	 	 
	 

	 	Reactive Hazard:
	 	No	 	 







SARA-Section 313 and 40 CFR 372:

This material contains the following chemicals subject to the reporting requirements
of SARA 313 and 40 CFR 372: —None Known—




EPA (CERCLA) Reportable Quantity (in pounds): 

—None Known—




CERCLA
/ SARA — Section 302 Extremely Hazardous Substances and TPQs (in pounds):

This material contains the following chemicals subject to the reporting requirements of SARA
302 and 40 CFR 372:




California Proposition 65:

Warning: This material contains the following chemicals which are known to the State of
California to cause cancer, birth defects or other reproductive harm, and are subject to the
requirements of California Proposition 65 (CA Health & Safety
Code Section 25249.5): 

— None Known —




Carcinogen Identification:

This material has not been identified as a carcinogen by NTP, IARC, or OSHA.



 









 





	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 6/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005







TSCA:

All components are listed on the TSCA inventory.



International Regulations:





Canadian Regulations: This product has been classified in accordance with the
hazard criteria of the Controlled Products Regulations (CPR) and the MSDS contains all the
information required by the CPR.




Domestic Substances List: Listed

WHMIS Hazard Class:

Not Regulated




International Inventories:

All components are listed on the following inventories:




Australia (AICS)

Canada (DSL)

China

Europe(EINECS)

Korea (Existing and Evaluated Chemical Substances)

Philippines (PICCS)

US (TSCA)




16. OTHER INFORMATION




	 	 	 
	Issue Date:
	 	20-D6C-2005
	Previous Issue Date:
	 	None
	Product Code:
	 	100266
	Revised
Sections or Basis for Revision:
	 	New MSDS
	MSDS Code:
	 	776548





Disclaimer of Expressed and implied Warranties:



The information presented in this Material Safety Data Sheet is based on data believed to be
accurate as of the date this Material Safety Data Sheet was prepared.
HOWEVER, NO WARRANTY OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER WARRANTY IS EXPRESSED OR IS TO BE
IMPLIED REGARDING THE ACCURACY OR COMPLETENESS OF THE INFORMATION
PROVIDED ABOVE, THE RESULTS TO BE
OBTAINED FROM THE USE OF THIS INFORMATION OR THE PRODUCT, THE SAFETY OF THIS PRODUCT, OR THE
HAZARDS RELATED TO ITS USE. No responsibility is assumed for any damage or injury resulting from
abnormal use or from any failure to adhere to recommended practices. The information provided
above, and the product, are furnished on the condition that the person receiving them shall make
their own determination as to the suitability of the product for their particular purpose and on
the condition that they assume the risk of their use. In addition no authorization is given nor
implied to practice any patented invention without a license.