EX-10.7



 




Exhibit
10.7


ENVIRONMENTAL AGREEMENT




     THIS ENVIRONMENTAL AGREEMENT is entered into and effective as of the 25th day of October,
2007, by and between Coffeyville Resources Refining & Marketing, LLC, a Delaware limited liability
company (“Refinery Company”), and Coffeyville Resources Nitrogen Fertilizers, LLC, a Delaware
limited liability company (“Fertilizer Company”), referred to collectively as the “Parties”.



RECITALS




     Refinery Company owns and operates the petroleum refinery located at Coffeyville, Kansas,
which refinery is shown on Exhibit A hereto (including any additions or other modifications
made thereto from time to time, the “Refinery”).



     Fertilizer Company owns and operates the nitrogen fertilizer complex located adjacent to the
Refinery consisting of the Gasification Unit, the UAN Plant, the Ammonia Synthesis Loop, the
Utility Facilities, storage and loading facilities, the Fertilizer Plant Water Clarifier and river
access, the Grounds and related connecting pipes and improvements, which fertilizer manufacturing
complex is connected to and associated with the BOC Facility and the Offsite Sulfur Recovery Unit,
all of which are shown on Exhibit A hereto (including any additions or other modifications
made thereto from time to time, the “Fertilizer Plant”).



     Fertilizer Company and Refinery Company desire to enter into this Agreement for the provision
of certain indemnification and access rights in connection with environmental matters affecting the
Refinery and the Fertilizer Plant, and certain other related matters, all upon the terms and
subject to the conditions set forth in this Agreement.



     NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations
and warranties herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:



ARTICLE 1




DEFINITIONS




     The following terms shall have the meanings set forth below, unless the context otherwise
dictates, both for purposes of this Agreement and all Exhibits hereto:



     “Accessed Property” means either the Refinery Company Property or the Fertilizer Company
Property that is to be accessed pursuant to Article 7 of this Agreement in connection with the
performance of Environmental Activities.



     “Agreement” means this Environmental Agreement and the Exhibits hereto, all as the same may be
amended, modified or supplemented from time to time.



     “BOC” means BOC Group, Inc., a Delaware corporation.



 









 





     “BOC Agreement” means that certain Amended and Restated On-Site Project Supply Agreement
between Fertilizer Company and BOC, dated June 1, 2005.



     “BOC Facility” means the plant for the production of certain products and argon, including
metering and related facilities, together with an inter-connected liquid nitrogen product storage
vessel and vaporization equipment, as shown on Exhibit A hereto, all connected to the
pipelines owned by BOC, including any additions or other modifications made thereto from time to
time.



     “Claim” means any written request by an Indemnitee relating to an indemnifiable matter (as
established in Article 2 of this Agreement), demand, cause of action, proceeding, or suit for
damages, injuries to person or property, damages to natural resources, fines, penalties, liability,
interest, or losses or for the costs of site investigations, feasibility studies, information
requests, health assessments, contribution settlement actions to correct, remove, remediate,
response to, clean up, prevent, mitigate, monitor, evaluate, assess or abate the release of a
Hazardous Material, or to enforce insurance contribution or indemnification agreements regarding
the same.



     “Coke” has the meaning given such term in the Coke Supply Agreement.



     “Coke Supply Agreement” means the Coke Supply Agreement dated as of the date hereof between
the Parties.



     “Commingled Environmental Liability” means any liability resulting from contamination
associated with activities and operations of the Fertilizer Company that overlays, underlays,
intersects, is juxtaposed to, or is otherwise commingled with any contamination associated with
activities and operations of the Refinery Company.



     “Comprehensive Coke Management Plan” means the Comprehensive Coke Management Plan between
Refinery Company and Fertilizer Company that will be finalized within ninety (90) days following
execution of this Agreement, as amended from time to time.



     “Contaminating Party” means the Party that caused contamination on the property of the Owner
Party.



     “Cross Contamination” means contamination caused by or associated with activities and
operations of the Contaminating Party that is on or affecting Owner Party’s Property.



     “Dispute” has the meaning given such term in Article 3.



     “Effective Date” means the date first above written.



     “Environmental Activities” means any investigation or remediation activity carried out in
compliance with any Environmental Law or under any work plan or order complying with or enforcing
any Environmental Law, and any activity in response to a release of a Hazardous Material.



     “Environmental Law” means all applicable federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now or hereafter in effect, and in each case
as



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amended or supplemented from time to time, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative order, consent decree,
order or judgment, imposing liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species
and vegetation). Environmental Laws include the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous
Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.) the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.) the Solid Waste
Disposal Act (42 U.S.C. §§ 6901 et seq.) the Toxic Substance Control Act (15 U.S.C. §§ 2601
et seq.) the Clean Air Act (42 U.S.C. §§ 7401 et seq.) the Federal Water Pollution
Control Act (33 U.S.C. §§ 1251 et seq.) the Occupational Safety and Health Act (29 U.S.C.
§§ 651 et seq.) and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), each
as from time to time amended, and any and all regulations promulgated thereunder, and all analogous
state, local and foreign counterparts or equivalents and any transfer of ownership notification or
approval statutes.



     “Environmental Liabilities” means with respect to any Person, all liabilities, obligations,
responsibilities, response, remedial and removal costs, investigation and feasibility study costs,
capital costs, operation and maintenance costs, losses, damages, punitive damages, property
damages, natural resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and consultants), fines,
penalties, sanctions and interest incurred as a result of or related to any claim, suit, action,
investigation, proceeding or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law, provided they arise
under or are related to any Environmental Laws, Environmental Permits, or are connected with any
Release or presence of a Hazardous Material whether on, at, in, under, from or about the Property.



     “Environmental Permits” means all permits, licenses, authorizations, certificates, approvals
or registrations required by any Government Authority under any Environmental Laws.



     “Environmental Site Information” means existing and future documentation and investigative
results relating to environmental conditions at the respective properties including, but not
limited to, Phase I and Phase II Environmental Site Assessments, environmental audits, and
correspondence, notices of violation, orders and determinations by any Government Authority.



     “Farmland” means Farmland Industries, Inc., a Kansas cooperative corporation.



     “Feedstock Agreement” means the Feedstock and Shared Services Agreement dated as of the date
hereof between the Parties.



     “Fertilizer Plant” has the meaning given such term in the Recitals.



     “Fertilizer Company” has the meaning given such term in the introductory paragraph.



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     “Fertilizer Company Property” means all property owned or leased by the Fertilizer Company as
shown on Exhibit A.



     “Fertilizer Company Representative” means the plant manager of the Fertilizer Plant or such
other person as is designated in writing by Fertilizer Company.



     “Fertilizer Plant Water Clarifier” means the Fertilizer Company’s water clarifier and
associated equipment as shown on Exhibit A.



     “Gasification Unit” means that gasification unit shown on Exhibit A, including any
additions or other modifications made thereto from time to time.



     “Government Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.



     “Grounds” means the realty on which the Fertilizer Plant is situated, which Grounds are shown
on Exhibit A.



     “Hazardous Materials” means any substance, material or waste which is regulated by or forms
the basis of liability now or hereafter under, any Environmental Laws, including any material or
substance which is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,”
“hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or
phrase under any Environmental Laws, (b) petroleum or any fraction or by-product thereof, asbestos,
polychlorinated biphenyls (PCB’s), or any radioactive substance.



     “Known Contamination Map” means the map that has been mutually agreed upon by the Parties and
is based on Environmental Site Information that documents and identifies all existing, known Cross
Contamination on Refinery Company Property and Fertilizer Company Property that is or has been
subject to Government Authority-mandated Environmental Activities. The Known Contamination Map may
be periodically updated and amended based on currently ongoing, Government Authority-mandated
Environmental Activities associated with existing, known contamination.



     “Manage” means to generate, manufacture, process, treat, store, use, re-use, refine, recycle,
reclaim, blend or burn for energy recovery, incinerate, accumulate speculatively, transport,
transfer, dispose of, or abandon Hazardous Materials.



     “Offsite Sulfur Recovery Unit” means that sulfur processing facility owned and operated by TKI
pursuant to the TKI Phase II Agreement, which Offsite Sulfur Recovery Unit is shown on Exhibit
A, including any additions or other modifications made thereto from time to time.



     “Owner Party” means the Party that owns the property that is affected by contamination caused
by the Contaminating Party or that is otherwise subject to Environmental Activities.



     “Party” and “Parties” means the parties to this Agreement.



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     “Person” means and includes natural persons, corporations, limited partners, general
partnerships, limited liability companies, limited liability partnerships, joint stock companies,
joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities.



     “Planned Project Work” means Owner Party’s work on Owner Party’s Property associated with a
planned and approved capital improvement project, the purpose of which is not primarily related to
Environmental Activities.



     “Refinery” has the meaning given such term in the Recitals hereto.



     “Refinery Company” has the meaning given such term in the introductory paragraph.



     “Refinery Company Property” means all property owned by the Refinery Company as shown on
Exhibit A.



     “Refinery Company Representative” means the plant manager of the Refinery Company or such
other person as is designated in writing by Refinery Company.



     “Refinery Water Clarifier” means the Refinery Company’s water clarifier and associated
equipment as shown on Exhibit A.



     “Release” or “Released” means any actual spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous Materials
into the environment, as “environment” is defined in CERCLA.



     “Response” or “Respond” means action taken in compliance with Environmental Laws to correct,
remove, remediate, clean-up, prevent, mitigate, monitor, evaluate, investigate, assess, or abate
the Release of a Hazardous Material.



     “Specified Environmental Activities” means any specific Environmental Activities identified in
reasonable detail in a written notice given by one Party to the other Party, which specific
Environmental Activities are permitted, required, or otherwise contemplated under this Agreement.



     “TKI” means Tessenderlo Kerley, Inc.



     “TKI Phase I Agreement” means the Sulfur Processing Agreement, dated October 2, 1996, between
Farmland and TKI, as assigned by Farmland to Refinery Company, on March 2, 2004, as amended from
time to time.



     “TKI Phase I Unit” means the sulfur processing facility owned and operated by TKI pursuant to
the TKI Phase I Agreement as shown on Exhibit A.



     “TKI Phase II Agreement” means the Phase II Sulfur Processing Agreement, dated November 13,
1998, between Farmland and TKI, as assigned by Farmland to Coffeyville Resources Nitrogen
Fertilizers, LLC, on March 2, 2004, as amended from time to time.



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     “Transfer” means the sale, exchange, gift or other assignment of rights or interests, whether
by specific assignment, merger, consolidation, entity conversion or other disposition, but not
including any bona fide pledge or assignment for collateral purpose in connection with any
financing.



     “TSDF” means a Treatment, Storage and Disposal Facility permitted in accordance with Federal
regulations.



     “UAN Plant” means the urea ammonium nitrate plant shown on Exhibit A, including any
additions or other modifications made thereto from time to time.



     “Unplanned Work” means Owner Party’s work on Owner Party’s Property that has not been
authorized in the capital improvements budgetary process, but is deemed necessary to respond to an
urgent situation to ensure compliance with Environmental Laws, to protect the environment or human
health and safety, or to otherwise protect the integrity of the Property and related improvements.



     “Utility Facilities” mean the utility facilities shown on Exhibit A, including any
additions or other modifications made thereto from time to time.



ARTICLE 2




INDEMNIFICATION




     Section 2.1 General Indemnification Obligations. Each of the Parties (each, an
“Indemnitor”) shall indemnify, defend and hold the other Party and its respective officers,
directors, members, managers and employees (each, an “Indemnitee”) harmless from and against all
liabilities, obligations, claims, losses, damages, penalties, deficiencies, causes of action, costs
and expenses, including, without limitation, attorneys’ fees and expenses (collectively, “Losses”)
imposed upon, incurred by or asserted against the person seeking indemnification that are caused
by, are attributable to, result from or arise out of any and all Claims associated with or in any
way relating to Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and feasibility study costs,
property damages, natural resource damages, costs and expenses (including all fees, disbursements
and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest
incurred as a result of or related to any claim, suit, action, investigation, proceeding or demand
by any person (including third party claims) or Government Authority, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute or common law,
provided they arise under or are related to any federal, state or local Environmental Laws,
regulations or permits, or are connected with any release or presence of Hazardous Materials
affecting the Indemnitee’s Property, which are a result of or are caused by the Indemnitor’s
actions or business operations. All costs and expenses incurred by the Indemnitee and arising from
Claims associated with the environmental liabilities identified above shall be paid by the
Indemnitor within thirty (30) days following receipt of a legitimate demand therefor from the
Indemnitee. In the event that indemnification is provided for under any other Section of this
Agreement or any other agreements between Refinery Company or any of its affiliates and Fertilizer
Company or any of its affiliates, and such indemnification is for any



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particular Losses, then such indemnification (and any limitations thereon) as provided in such
Section or other agreement shall apply as to such particular Losses and shall supersede and be in
lieu of any indemnification that would otherwise apply to such particular Losses under this Section
2.1.




     Section 2.2 Indemnification for Existing Known Contamination.



     (a) All existing, known contamination on Refinery Company Property and Fertilizer Company
Property has been documented and identified on a mutually agreed upon Known Contamination Map,
which contamination is subject to Government Authority-mandated Environmental Activities that have
either been completed and issued a “No Further Action” or “closure” determination, or remain
incomplete and subject to further action.



     (b) To the extent that existing, known contamination on Refinery Company Property has been
documented and confirmed by Environmental Site Information and is depicted on the Known
Contamination Map, and the contamination is associated with activities and operations of Fertilizer
Company, Fertilizer Company shall implement any and all Government Authority-mandated Environmental
Activities which are required to comply with Environmental Laws and Environmental Permits
pertaining to the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about any Refinery Company
Property. If the Government Authority-mandated Environmental Activities are not implemented within
a reasonable timeframe, Fertilizer Company shall indemnify Refinery Company for all of the
expenses, penalties and other associated costs Refinery Company incurs in achieving compliance
consistent with all of the foregoing actions identified in this Section 2.2(b), except as provided
in Section 2.2(g). Any invasive, on-site work that could involve impacts to subsurface soil and/or
groundwater in areas of contamination depicted on the Known Contamination Map shall be subject to
the procedural requirements established in either Section 2.2(e) or Section 2.2(f) for Planned
Project Work or Unplanned Work, respectively.



     (c) Section 2.2(b) notwithstanding, at Refinery Company’s sole discretion, Refinery Company
may at its cost and expense perform a Government Authority-mandated action with regard to
Commingled Environmental Liabilities, provided, however, (i) if such Government Authority-mandated
action requires the cooperation of the Fertilizer Company, the Refinery Company shall provide
reasonable notice of such requirement, and opportunity for Fertilizer Company to comment on such
Government Authority-mandated action, and the Parties shall coordinate their activities relating to
such required cooperation, and (ii) to the extent that any Hazardous Materials recovered as a
result of any such Government Authority-mandated action were generated solely by the Fertilizer
Company, then Fertilizer Company shall bear the cost of complying with the provisions of the
Government Authority-mandated action with respect to such Hazardous Materials that were generated
solely by the Fertilizer Company. By electing to perform such obligation, Refinery Company does
not waive any coverage under this Agreement for compensation or indemnification for third party
claims, or for any compensation or indemnification by Fertilizer Company as otherwise provided in
this Agreement.



     (d) To the extent that existing, known contamination on Fertilizer Company Property has been
documented and confirmed by Environmental Site Information and is depicted



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on the Known Contamination Map, and the contamination is associated with activities and
operations of Refinery Company, Refinery Company shall implement any and all Government
Authority-mandated Environmental Activities which are required to comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under, above, to, from or
affecting any Fertilizer Company Property. If the Government Authority-mandated Environmental
Activities are not implemented within a reasonable timeframe, Refinery Company shall indemnify
Fertilizer Company for all of the expenses, penalties and other associated costs Fertilizer Company
incurs in achieving compliance consistent with all of the foregoing activities identified in
Section 2.2(d), except as provided in Section 2.2(h). Any invasive, on-site work that could
involve impacts to subsurface soil and/or groundwater in areas of contamination depicted on the
Known Contamination Map shall be subject to the procedural requirements established in either
Section 2.2(e) or Section 2.2(f) for Planned Project Work or Unplanned Work, respectively.



     (e) For Planned Project Work, contamination that is depicted on the Known Contamination Map,
but for which Government Authority-mandated Environmental Activities remain incomplete and subject
to further action, remains the responsibility of Contaminating Party, provided that Owner Party
shall provide notification to Contaminating Party at least ninety (90) days in advance (“Ninety Day
Notice”) that Owner Party will perform work that will disturb soil and/or groundwater as part of
the Planned Project Work. Upon such notice, the Parties will meet and diligently work together to
develop a soil management plan; but in the event that the Parties are unable to agree within thirty
(30) days after Owner Party’s Ninety Day Notice, Owner Party may unilaterally proceed to develop
and implement its own commercially reasonable soil management plan in conjunction with the Planned
Project Work that will, to the extent commercially reasonable, seek to minimize as practicable soil
that requires off-site disposal as part of the Planned Project Work. Owner Party will be
responsible for the costs of excavation and load out associated specifically with the Planned
Project Work, and Contaminating Party will pay the incremental disposal costs, if any, for the
Hazardous Materials. If the Hazardous Materials require manifesting as RCRA Hazardous Waste,
Contaminating Party will be the “generator” for the purposes of manifesting and disposal. A
licensed TSDF shall be used for disposal.



     (f) For Unplanned Work, contamination that is depicted on the Known Contamination Map, but for
which Government Authority-mandated Environmental Activities remain incomplete and subject to
further action, remains the responsibility of the Party that caused the contamination, provided
that Owner Party shall provide Contaminating Party, within twenty-four (24) hours, notice that
Owner Party performed Unplanned Work and encountered contamination that it believes is the
responsibility of Contaminating Party. The noticed Party will then have twenty-four (24) hours to
inspect the affected area to determine if it accepts Owner Party’s claim of responsibility. If
Contaminating Party accepts such responsibility, Contaminating Party shall proceed with the
required Environmental Activities or, in the alternative, if Contaminating Party fails to
diligently proceed and/or if Contaminating Party does not accept such responsibility, Owner Party
may proceed with the required Environmental Activities and if Owner Party does proceed with the
required Environmental Activities, then Contaminating Party shall indemnify and reimburse Owner
Party, upon Owner Party’s demand, for costs and expenses incurred by Owner Party in proceeding with
the required Environmental



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Activities. Disputes will be managed in accordance with Article 3 of this Agreement. Owner
Party will be responsible for the costs of excavation and load out specifically associated with the
scope and extent of Unplanned Work, and Contaminating Party will pay the management and disposal
costs for the Hazardous Materials associated with the contamination depicted on the Known
Contamination Map. If the Hazardous Materials require manifesting as RCRA Hazardous Waste,
Contaminating Party will be the “generator” for the purposes of manifesting and disposal. A
licensed TSDF shall be used for disposal.



     (g) In the event that a Government Authority issues a “No Further Action”, “closure” or
similar determination concerning Fertilizer Company contamination on or affecting Refinery Company
Property, Section 2.2(b) shall become inoperative with respect to the area specifically identified
and delineated in the respective Government Authority determination, and Refinery Company shall
have the sole responsibility for remediation of Refinery Company Property that has existing, known
contamination which is disturbed by Refinery Company’s on-site development, investigation or
remediation actions.



     (h) In the event that a Government Authority issues a “No Further Action”, “closure” or
similar determination concerning Refinery Company contamination on or affecting Fertilizer Company
Property, Section 2.2(d) shall become inoperative with respect to the area specifically identified
and delineated in the respective Government Authority determination, and Fertilizer Company shall
have the sole responsibility for remediation of Fertilizer Company Property that has existing,
known contamination which is disturbed by Fertilizer Company’s on-site development, investigation
or remediation actions.



     Section 2.3 Indemnification for Existing Unknown and Future Contamination.



     (a) To the extent that operations and activities of the Refinery Company have resulted in or
caused a violation of Environmental Laws, or a Release (including a Release of existing
contamination) or other contamination affecting the Fertilizer Company Property that was existing
and unknown as of the execution of this Agreement, or involves a latent release that occurs
subsequent to the execution of this Agreement, the Refinery Company shall, upon its receipt of both
a demand from the Fertilizer Company and objective evidence of such Release or other contamination,
in a commercially reasonable manner: (i) conduct all investigations necessary to adequately
identify and characterize the contamination; (ii) develop a corrective action proposal or work
plan, if necessary; (iv) with the consent of the Fertilizer Company, coordinate with the Government
Authority; and (v) implement any and all Government Authority-mandated Environmental Activities
which are required to comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous
Material on, at, in, under, above, to, from or affecting any Fertilizer Company Property. If the
Government Authority-mandated actions are not implemented within a reasonable timeframe by Refinery
Company, Fertilizer Company shall implement such actions, and Refinery Company shall indemnify the
Fertilizer Company for all of the expenses, penalties and other associated costs it incurs in
achieving compliance consistent with all of the foregoing activities identified in this Section
2.3(a), subject to the conditions established in Sections 2.3(c), (d) and (e).



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     (b) To the extent that operations and activities of the Fertilizer Company have resulted in or
caused a violation of Environmental Laws, or a Release (including a Release of existing
contamination) or other contamination affecting the Refinery Company Property that was existing and
unknown as of the execution of this Agreement, or involves a latent release that occurs subsequent
to the execution of this Agreement, the Fertilizer Company shall, upon its receipt of both a demand
from the Refinery Company and adequate, objective evidence of such Release or other contamination,
in a commercially reasonable manner: (i) conduct all investigations necessary to adequately
identify and characterize the contamination; (ii) develop a corrective action proposal or work
plan, if necessary; (iv) with the consent of the Refinery Company, coordinate with the Government
Authority; and (v) implement any and all Government Authority-mandated Environmental Activities
which are required to comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous
Material on, at, in, under, above, to, from or affecting any Refinery Company Property. If the
Government Authority-mandated actions are not implemented within a reasonable timeframe by
Fertilizer Company, Refinery Company shall implement such actions, and Fertilizer Company shall
indemnify the Refinery Company for all of the expenses, penalties and other associated costs it
incurs in achieving compliance consistent with all of the foregoing activities identified in this
Section 2.3(b), subject to the conditions established in Section 2.3(c), (d) and (e).



     (c) Except as required as a part of Government Authority-mandated Environmental Activities, or
in responding to an accidental or sudden environmental occurrence of Hazardous Materials
contamination, or in connection with implementation of the Comprehensive Coke Management Plan,
neither Party can undertake investigation of soil or groundwater conditions.



     (d) If the contamination referenced in Sections 2.3(a) or (b) is subsumed or covered by, or is
otherwise satisfied by, a Government Authority-mandated remediation or corrective action that was
in effect prior to the execution of this Agreement, this provision shall be inapplicable.



     (e) The requirements associated with existing unknown contamination referenced in Sections
2.3(a) and (b) shall apply only to existing unknown contamination that is discovered and identified
in reasonable detail in a written notice by one Party to the other Party within five (5) years
following the Effective Date.



     Section 2.4 Indemnification for Failure to Comply with Comprehensive Coke Management
Plan.



     (a) The Parties shall work in conjunction with each other to develop a Comprehensive Coke
Management Plan, including establishing procedures for the management of Coke and the
identification of significant Coke-related contamination on the respective properties, which shall
be finalized within ninety (90) days following execution of this Agreement, and which Comprehensive
Coke Management Plan may be amended from time to time.



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     (b) Each of the Parties shall indemnify, defend and hold the other Party and its respective
officers, directors, members, managers and employees harmless from and against all Losses imposed
upon, incurred by or asserted against the person seeking indemnification that are caused by, are
attributable to, result from or arise out of any and all Claims associated with or in any way
relating to Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and feasibility study costs,
property damages, natural resource damages, costs and expenses (including all fees, disbursements
and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest
incurred as a result of or related to any claim, suit, action, investigation, proceeding or demand
by any person (including third party claims) or Government Authority, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute or common law,
provided they arise under or are related to the failure to comply with and implement its respective
obligations and responsibilities as established in the Comprehensive Coke Management Plan,
including any Coke-related violations of applicable Environmental Laws or Environmental Permits.
All costs and expenses incurred by the Indemnitee and arising from Claims associated with the
liabilities identified above shall be paid by the Indemnitor within thirty (30) days following
receipt of a legitimate demand therefor from the Indemnitee.



     Section 2.5 Indemnification for Closure of Industrial Landfill 871



     (a) Refinery Company will close the KDHE permitted Industrial Landfill 871 (“Landfill 871”,
which is located on land previously owned by Refinery Company and now owned by Fertilizer Company)
in accordance with the closure procedures specified in the Revised Closure Plan submitted to KDHE
on March 3, 2004, or any KDHE required modifications to the Revised Closure Plan. Refinery Company
will be responsible for the 60-day notification requirement under Kansas Administrative Regulation
Section 28-19-12(a) with respect to closure of Landfill 871.



     (b) Refinery Company will be responsible for all closure costs and post-closure maintenance of
the final clay cap and vegetative cover for Landfill 871. Access by Refinery Company to Landfill
871 for purposes of such maintenance will be provided in accordance with Article 7 hereof.



     (c) Refinery Company acknowledges, and will comply with, the Restrictive Covenant filed with
the Montgomery County Register of Deeds at Book 487 Page 533, which, among other things, specifies
certain post-closure property use, easement to KDHE, and disclosure requirements with respect to
Landfill 871.



     (d) Each of the Parties shall indemnify, defend and hold the other Party and its respective
officers, directors, members, managers and employees harmless from and against all Losses imposed
upon, incurred by or asserted against the person seeking indemnification that are caused by, are
attributable to, result from or arise out of any and all Claims associated with or in any way
relating to Environmental Liabilities, including, but not limited to, obligations,
responsibilities, response, remedial and removal costs, investigation and feasibility study costs,
property damages, natural resource damages, costs and expenses (including all fees, disbursements
and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest
incurred as a result of or related to any claim, suit, action, investigation, proceeding or



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demand by any person (including third party claims) or Government Authority, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute or common
law, provided they arise under or are related to the failure to comply with and implement its
respective obligations and responsibilities with respect to Landfill 871 under this Section 2.5(d).
All costs and expenses incurred by the Indemnitee and arising from Claims associated with the
liabilities identified above shall be paid by the Indemnitor within thirty (30) days following
receipt of a legitimate demand therefor from the Indemnitee.



     Section 2.6 Indemnification for Off-Site Disposal of Hazardous Materials. Each of the
Parties shall indemnify, defend and hold the other Party and its respective officers, directors,
members, managers and employees harmless from and against all liabilities, obligations, claims,
losses, damages, penalties, deficiencies, causes of action, costs and expenses, including, without
limitation, attorneys’ fees and expenses (collectively, “Losses”) imposed upon, incurred by or
asserted against the person seeking indemnification that are caused by, are attributable to, result
from or arise out of any and all Claims associated with or in any way relating to Environmental
Liabilities, including, but not limited to, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, consequential damages related to business
interruption, property damages, natural resource damages, costs and expenses (including all fees,
disbursements and expenses of counsel, experts and consultants), fines, penalties, sanctions and
interest incurred as a result of or related to any claim, suit, action, investigation, proceeding
or demand by any person (including third party claims) or Government Authority, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute or common
law, provided they arise under, or are caused by or related to the off-site disposal of Hazardous
Materials caused or generated by Indemnitor and removed from the respective Property, and disposed
at an off-site location. This indemnification shall specifically cover, but is not limited to, any
Hazardous Material-related contamination caused by one Party (i.e., Indemnitor), but registered and
disposed under the other Party’s waste generator/manifesting identification number, including the
Hazardous Materials generated by Fertilizer Company during construction of the Nitrogen Plant that
was disposed off-site using Refinery Company’s waste generator/manifesting identification number.



     Section 2.7 Reduction of Indemnification Obligation. Any indemnification obligation
pursuant to this Article 2 with respect to any particular Losses shall be reduced by all amounts
actually recovered by the Indemnitee from third parties, or from applicable insurance coverage,
with respect to such Losses. Upon making any payment to any Indemnitee, the Indemnitor shall be
subrogated to all rights of the Indemnitee against any third party in respect of the Losses to
which such payment relates, and such Indemnitee shall execute upon request all instruments
reasonably necessary to evidence and perfect such subrogation rights. If the Indemnitee receives
any amounts from any third party or under applicable insurance coverage subsequent to an
indemnification payment by the Indemnitor, then such Indemnitee shall promptly reimburse the
Indemnitor for any payment made or expense incurred by such Indemnitor in connection with providing
such indemnification payment up to the amount received by the Indemnitee, net of any expenses
incurred by such Indemnitee in collecting such amount.



12









 





     Section 2.8 Indemnification Procedures.



     (a) Promptly after receipt by an Indemnitee of notice of the commencement of any action that
may result in a claim for indemnification pursuant to this Article 2, the Indemnitee shall notify
the Indemnitor in writing within 30 days thereafter; provided, however, that any omission to so
notify the Indemnitor will not relieve it of any liability for indemnification hereunder as to the
particular item for which indemnification may then be sought (except to the extent that the failure
to give notice shall have been materially prejudicial to the Indemnitor) nor from any other
liability that it may have to any Indemnitee. The Indemnitor shall have the right to assume sole
and exclusive control of the defense of any claim for indemnification pursuant to this Article 2,
including the choice and direction of any legal counsel.



     (b) An Indemnitee shall have the right to engage separate legal counsel in any action as to
which indemnification may be sought under any provision of this Agreement and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such
Indemnitee unless (i) the Indemnitor has agreed in writing to pay such fees and expenses, (ii) the
Indemnitor has failed to assume the defense thereof and engage legal counsel within a reasonable
period of time after being given the notice required above, or (iii) the Indemnitee shall have been
advised by its legal counsel that representation of such Indemnitee and other parties by the same
legal counsel would be inappropriate under applicable standards of professional conduct (whether or
not such representation by the same legal counsel has been proposed) due to actual or potential
conflicts of interests between them. It is understood, however, that to the extent more than one
Indemnitee is entitled to engage separate legal counsel at the Indemnitor’s expense pursuant to
clause (iii) above, the Indemnitor shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of only one separate
firm of attorneys at any time for all such Indemnitees having the same or substantially similar
claims against the Indemnitor, unless but only to the extent the Indemnitees have actual or
potential conflicting interests with each other.



     (c) The Indemnitor shall not be liable for any settlement of any action effected without its
written consent, but if settled with such written consent, or if there is a final judgment against
the Indemnitee in any such action, the Indemnitor agrees to indemnify and hold harmless the
Indemnitee to the extent provided above from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.



     Section 2.9 Acitvity and Use Limitations. The Parties mutually agree that the
Refinery Company Property and the Fertilizer Company Property shall only be used for industrial
purposes in the future.



     Section 2.10 Survival. Any environmental contamination that is specifically
identified and indemnifiable hereunder prior to the termination or expiration of this Agreement
shall be covered by this Agreement beyond the term of this Agreement as established in Section
10.8.



13









 





ARTICLE 3




DISPUTES




     Section 3.1 Resolution of Disputes. The Parties shall in good faith attempt to
resolve promptly and amicably any dispute between the Parties arising out of or relating to this
Agreement (each a “Dispute”) pursuant to this Article 3. The Parties shall first submit the
Dispute to the Fertilizer Company Representative and the Refinery Company Representative, who shall
then meet within fifteen (15) days to resolve the Dispute. If the Dispute has not been resolved
within forty-five (45) days after the submission of the Dispute to the Fertilizer Company
Representative and the Refinery Company Representative, the Dispute shall be submitted to a
mutually agreed non-binding mediation. The costs and expenses of the mediator shall be borne
equally by the Parties, and the Parties shall pay their own respective attorneys’ fees and other
costs. If the Dispute is not resolved by mediation within ninety (90) days after the Dispute is
first submitted to the Refinery Company Representative and the Fertilizer Company Representative as
provided above, then the Parties may exercise all available remedies.



     Section 3.2 Multi-Party Disputes. The Parties acknowledge that they or their
respective affiliates contemplate entering or have entered into various additional agreements with
third parties that relate to the subject matter of this Agreement and that, as a consequence,
Disputes may arise hereunder that involve such third parties (each a “Multi-Party Dispute”).
Accordingly, the Parties agree, with the consent of such third parties, that any such Multi-Party
Dispute, to the extent feasible, shall be resolved by and among all the interested parties
consistent with the provisions of this Article 3.



ARTICLE 4




ASSIGNMENT




     This Agreement shall extend to and be binding upon the Parties hereto, their successors and
permitted assigns. Either Party may assign its rights and obligations hereunder solely (i) to an
affiliate under common control with the assigning Party, provided that any such assignment shall
require the prior written consent of the other Party hereto (such consent not to be unreasonably
withheld or delayed), and provided that the applicable assignee agrees, in a written instrument
delivered to (and reasonably acceptable to) such other Party, to be fully bound hereby, or (ii) to
a Party’s lenders for collateral security purposes, provided that in the case of any such
assignment each Party agrees (x) to cooperate with the lenders in connection with the execution and
delivery of a customary form of lender consent to assignment of contract rights and (y) any delay
or other inability of a Party to timely perform hereunder due to a restriction imposed under the
applicable credit agreement or any collateral document in connection therewith shall not constitute
a breach hereunder. In addition, each Party agrees that it will assign its rights and obligations
hereunder to a transferee acquiring all or substantially all of the equity in or assets of the
assigning Party related to the Refinery or Fertilizer Plant (as applicable), which transferee must
be approved in writing by the non-assigning Party (such approval not to be unreasonably withheld or
delayed) and must agree in writing (with the non-assigning Party) to be fully bound hereby.



14









 





ARTICLE 5




GOVERNING LAW AND VENUE




     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
KANSAS WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SAID STATE. THE PARTIES AGREE THAT ANY
ACTION BROUGHT IN CONNECTION WITH THIS AGREEMENT MAY BE MAINTAINED IN ANY COURT OF COMPETENT
JURISDICTION LOCATED IN THE STATE OF KANSAS, AND EACH PARTY AGREES TO SUBMIT PERSONALLY TO THE
JURISDICTION OF ANY SUCH COURT AND HEREBY WAIVES THE DEFENSES OF FORUM NON-CONVENIENS OR IMPROPER
VENUE WITH RESPECT TO ANY ACTION BROUGHT IN ANY SUCH COURT IN CONNECTION WITH THIS AGREEMENT.



ARTICLE 6




LIMITATION OF LIABILITY




     In no event, whether based on contract, indemnity, warranty, tort (including negligence),
strict liability or otherwise, shall either Party, its employees, suppliers or subcontractors, be
liable for loss of profits or revenue or special, incidental, consequential, punitive or exemplary
damages; provided, however, that the foregoing limitation shall not preclude recourse to any
insurance coverage maintained by the Parties pursuant to the requirements of this Agreement or
otherwise.



ARTICLE 7




SITE ACCESS




     Section 7.1 The Parties mutually grant to each other, and their consultants, agents,
representatives, or contractors, the right and license to access and enter onto the Accessed
Property, at such reasonable times and locations and along such routes as may be acceptable to the
Party granting access (Owner Party), for the purpose of the performance of Specified Environmental
Activities on the Accessed Property.



     Section 7.2 All existing and future Environmental Site Information is highly confidential in
nature and constitute proprietary and/or privileged information. Therefore, the Parties shall, as
provided in Section 10.1, preserve and protect the confidentiality of the Environmental Site
Information, which shall be used for the purposes of identifying and remediating contaminated soil
and groundwater, as well as to provide advice and assist in complying with Environmental Laws.



     Section 7.3 Upon request by Owner Party, Contaminating Party shall submit a copy of its work
plan for its Specified Environmental Activities to Owner Party.



     Section 7.4 The Contaminating Party’s right to access and enter the Accessed Property for
purposes of conducting Specified Environmental Activities shall be subject to the following
conditions and restrictions: (a) the performance of the Specified Environmental Activities will be



15









 







at no cost or expense to Owner Party; (b) Contaminating Party shall notify Owner Party as soon
as reasonably practicable prior to entry onto the Accessed Property to conduct Specified
Environmental Activities; (c) Contaminating Party’s activities under this section shall not
interfere with the normal business operations of the Accessed Property unless such interference is
approved by Owner Party in advance or unless such interruption is a direct result of activity
implementing a Government Authority-mandated work plan, order or other Environmental Activities;
(d) Contaminating Party, its consultant, agents, representatives, or contractors, shall diligently
restore the Accessed Property to its condition immediately prior to the performance of the
Specified Environmental Activities, to a condition that is in compliance with Environmental Laws,
the requirements of the Government Authority, and in a manner that will allow for the continuation
of normal business operations on the Accessed Property; (e) Contaminating Party shall indemnify
Owner Party against any property damage or personal injury incurred by Owner Party or third parties
as a result of the Specified Environmental Activities or the unauthorized release of Environmental
Site Information under this Agreement; and (f) these provisions allowing access to the Accessed
Property are intended and shall be construed only as a temporary license to enter the Accessed
Property and to conduct the Specified Environmental Activities upon the Accessed Property and not
as a grant of easement or any other interest in the Accessed Property.



     Section 7.5 Contaminating Party, its consultants, agents, representatives, or contractors,
shall be authorized to store and retain on the Accessed Property the necessary equipment,
materials, tools and personal property for the Specified Environmental Activities; provided,
however, that the equipment, materials, tools and personal property shall not in any way interfere
with the normal business operations of Owner Party, and that all such equipment, materials, tools
and personal property shall be removed promptly upon completion of the Specified Environmental
Activities.



     Section 7.6 The right to access the Accessed Property granted to the Contaminating Party shall
terminate upon the completion of the Specified Environmental Activities. Investigative activities
shall be deemed complete once all sampling and/or monitoring activities have been concluded, and
all restorative work has been completed to the reasonable satisfaction of Owner Party, and remedial
activities shall be deemed complete once all removal, closure, and restorative activities have been
conducted and the requisite determination has been issued by the Government Authority.



ARTICLE 8




NOTICES




     Any notice, request, correspondence, information, consent or other communication to any of the
Parties required or permitted under this Agreement shall be in writing (including telex, telecopy,
or facsimile), shall be given by personal service or by telex, telecopy, facsimile, overnight
courier service, or certified mail with postage prepaid, return receipt requested, and properly
addressed to such Party and shall be effective upon receipt. For purposes hereof the proper
address of the Parties shall be the address stated beneath the corresponding Party’s name below, or
at the most recent address given to the other Parties hereto by notice in accordance with this
Article:



16









 





	 	 	 
	If to Refinery Company, to:

	 	With a copy to:
	 
	 	 
	Coffeyville Resources

	 	Edmund S. Gross,
	Refining & Marketing, LLC

	 	Vice President and General Counsel
	400 N. Linden St., P.O. Box 1566

	 	CVR Energy, Inc.
	Coffeyville, Kansas 67337

	 	10 E. Cambridge Circle, Ste. 250
	Attention: Executive Vice President,

	 	Kansas City, Kansas 66103
	Refining Operations

	 	Facsimile: (913) 981-0000
	Facsimile: (620) 251-1456
	 	 
	 
	 	 
	If to Fertilizer Company, to:

	 	With a copy to:
	 
	 	 
	Coffeyville Resources

	 	Edmund S. Gross,
	Nitrogen Fertilizers, LLC

	 	Vice President and General Counsel
	701 E. Martin St., P.O. Box 5000

	 	CVR Energy, Inc.
	Coffeyville, Kansas 67337

	 	10 E. Cambridge Circle, Ste. 250
	Attention: Executive Vice President and

	 	Kansas City, Kansas 66103
	Fertilizer General Manager

	 	Facsimile: (913) 981-0000
	Facsimile: (620) 252-4357
	 	 






or such other address(es) as either Party designates by registered or certified mail addressed to
the other Party.



ARTICLE 9




EXHIBITS




     All of the Exhibits attached hereto are incorporated herein and made a part of this Agreement
by reference thereto.



ARTICLE 10




MISCELLANEOUS




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



17









 




(iii) shall be approved in advance thereof by the other Party, which approval shall not be
unreasonably withheld or delayed. If a Party is compelled in a judicial or administrative
proceeding to reveal, disclose, or otherwise make available any confidential information of the
other Party to any third party, such Party shall notify the other Party in writing promptly upon
receipt of the request for disclosure, and such other Party shall have the opportunity to intervene
to prevent or restrict the disclosure of the confidential information.




     Section 10.2 Headings. The headings used in this Agreement are for convenience only
and shall not constitute a part of this Agreement.



     Section 10.3 Amendments and Waiver. This Agreement may not be amended, modified or
waived except by a writing signed by all parties to this Agreement that specifically references
this Agreement and specifically provides for an amendment, modification or waiver of this
Agreement. No waiver of or failure or omission to enforce any provision of this Agreement or any
claim or right arising hereunder shall be deemed to be a waiver of any other provision of this
Agreement or any other claim or right arising hereunder.



     Section 10.4 Construction and Severability. Every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and in accordance with industry
standards and not strictly for or against either Party. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement.



     Section 10.5 Waiver. The waiver by either Party of any breach of any term, covenant
or condition contained in this Agreement shall not be deemed to be a waiver of such term, covenant
or condition or of any subsequent breach of the same or of any other term, covenant or condition
contained in this Agreement. No term, covenant or condition of this Agreement will be deemed to
have been waived unless such waiver is in writing.



     Section 10.6 No Third Party Beneficiaries. The Parties each acknowledge and agree
that there are no third party beneficiaries having rights under or with respect to this Agreement,
including without limitation, under the BOC Agreement, TKI I Phase I Agreement, or TKI Phase II
Agreement.



     Section 10.7 Entire Agreement. This Agreement, including all Exhibits hereto,
constitutes the entire, integrated agreement between the Parties regarding the subject matter
hereof and supersedes any and all prior and contemporaneous agreements, representations and
understandings of the Parties, whether written or oral, regarding the subject matter hereof.



     Section 10.8 Term. This Agreement shall continue for a minimum of twenty (20) years,
or as long as the Feedstock Agreement remains in effect, whichever is longer.



[signature page follows]




18









 









Signature Page

To

Environmental Agreement




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



	 	 	 	 	 	 	 	 	 	 	 	 	 
	COFFEYVILLE RESOURCES 

REFINING & MARKETING, LLC	 	 	 	 	 	     COFFEYVILLE RESOURCES

     NITROGEN FERTILIZERS, LLC








By:  /s/  Robert
W. Haugen



      ____________________________________________



Name:  Robert
W. Haugen



Title:    Executive
Vice
President,
            Refining Operations



By:  /s/  Kevan
A. Vick



___________________________________________



Name:  Kevan
A. Vick



Title:    Executive
Vice President and
             Fertilizer General Manager











 









 






EXHIBIT A




PLOT PLAN




See attached.





A-1