Document:

exv10w5

 

Exhibit 10.5

MANAGEMENT RETENTION AGREEMENT

     THIS MANAGEMENT RETENTION AGREEMENT (this “Agreement”) is entered into as of February
10, 2006, by and among Youbet.com, Inc., a Delaware corporation (“Youbet”), UT Group, LLC,
a Delaware limited liability company (“Seller”), Joe Tracy (“Tracy”) and Terry
Woods (“Woods” and together with Tracy, the “Executives”).

R E C I T A L S

	A.	 	Youbet and Seller are parties to that certain Stock Purchase Agreement, dated as of November
30, 2005 (as amended, modified or supplemented from time to time, the “Purchase
Agreement”), by and among Youbet, UT Gaming, Inc., a Delaware corporation
(“Purchaser”), Seller and United Tote Company (“United Tote”), pursuant to
which Purchaser, a wholly-owned subsidiary of Youbet, has agreed to acquire from Seller, upon
the terms and conditions set forth therein, all of the capital stock of United Tote.

	B.	 	Tracy serves as the Chief Executive Officer of United Tote pursuant to the terms of that
certain Employment Agreement, dated as of September 5, 2003, by and between Tracy and United
Tote, as amended by that certain First Amendment to Employment Agreement, dated November 30,
2005 (the “Tracy Employment Agreement”).

	C.	 	Woods serves as the President and Chief Operating Officer of United Tote pursuant to the
terms of that certain Employment Agreement, dated as of September 5, 2003, by and between
Woods and United Tote, as amended by that certain First Amendment to Employment Agreement,
dated November 30, 2005 (the “Woods Employment Agreement” and together with the Tracy
Employment Agreement, the “Employment Agreements”).

	D.	 	Following the Closing of the transactions contemplated by the Purchase Agreement, Tracy and
Woods desire to continue to serve as Chief Executive Officer and President and Chief Operating
Officer of United Tote, respectively, in accordance with the terms of the Employment
Agreements.

	E.	 	As a material inducement to cause Youbet and Purchaser to enter into the Purchase Agreement,
Tracy entered into that certain Restricted Stock Purchase Agreement (the “Tracy Restricted
Stock Purchase Agreement”), dated November 30, 2005, by and between Tracy and Youbet and
that certain Lock-Up Agreement (the “Tracy Lock-Up Agreement”) by and between Youbet
and Tracy, and Woods entered into that certain Restricted Stock Purchase Agreement (the
“Woods Restricted Stock Purchase Agreement” and, together with the Tracy Restricted
Stock Purchase Agreement, the “Restricted Stock Purchase Agreements”), dated November
30, 2005, by and between Woods and Youbet and that certain Lock-Up Agreement (the “Woods
Lock-Up Agreement” and, together with the Tracy Lock-Up Agreement, the “Lock-Up
Agreements”) by and between Youbet and Woods.

 

 

	F.	 	Youbet, Purchaser and the Executives desire to terminate the Restricted Stock Purchase
Agreements and Lock-Up Agreements and replace the incentives for the Executives to remain in
the employ of United Tote after the Closing (as defined in the Purchase Agreement) provided
under such agreements with the incentives contemplated hereby.

AGREEMENTS

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

     1. Termination of Certain Agreements. Upon the Closing (as defined in the Purchase
Agreement), the Restricted Stock Purchase Agreements and Lock-Up Agreements shall terminate and
become null and void, without any liability of any party to any other party thereunder.

     2. Payments upon Termination of Employment.

          (a) In the event that any Executive ceases to be employed by United Tote, Youbet or any other
direct or indirect subsidiary of Youbet prior to the first anniversary of the date hereof for any
reason, (i) Youbet shall have the right to set off $500,000 against any amounts due or outstanding
under the $1.8 Million Note (as defined in the Purchase Agreement), or (ii) if the $1.8 Million
Note has been voluntarily prepaid, Youbet and Seller shall jointly direct the escrow agent in
writing to pay $500,000 to Youbet from the escrow account (the “Retention Escrow Account”)
established pursuant to Section 2(b) of the $1.8 Million Note, by delivery of written notice of
such termination and Youbet’s exercise of either such right to Seller; provided, that this
Section 2(a) shall not apply in the event (i) United Tote, Youbet or any other direct or indirect
subsidiary of Youbet terminates such Executive’s employment without “Cause”, as defined in such
Executive’s Employment Agreement, (ii) such Executive’s employment is terminated as a result of
such Executive suffering any mental or physical impairment or disablement that prevents such
Executive from performing his duties as an employee of United Tote, Youbet or any other direct or
indirect subsidiary of Youbet for a period of 90 days (whether or not consecutive) in any 180 day
period or (iii) such Executive’s employment is terminated as a result of such Executive’s death,
and after such termination described in clause (i) or (ii) Executive ceases to be employed by
United Tote, Youbet or any other direct or indirect subsidiary of Youbet. For the avoidance of
doubt, the foregoing obligation is cumulative, such that if both Executives cease to be employed by
United Tote, Youbet or any other direct or indirect subsidiary of Youbet prior to the first
anniversary of the date hereof, an aggregate of $1,000,000 shall be subject to set off by Youbet or
payment from the Retention Escrow Account.

          (b) Seller and each Executive hereby agree that (i) with respect to each Executive, if Youbet
sets off $500,000 against amounts due and outstanding under the $1.8 Million Note or is paid
$500,000 from the Retention Escrow Account as a result of such Executive ceasing to be employed by
United Tote, Youbet or any other direct or indirect subsidiary of Youbet as provided in Section
2(a), then such $500,000 shall be deemed to be an advance to such Executive on distributions to be
made pursuant to Section 7.2 of Seller’s Limited Liability Company Agreement, dated as of September
5, 2003, as amended (the “Seller LLC Agreement”; and any such advance, a “Deemed
Executive Distribution”), and shall appropriately

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reduce distributions to be made thereafter by Seller to such Executive under Section 7.2 of
the Seller LLC Agreement, when and as made by Seller, and (ii) that appropriate adjustments, as
determined by Seller’s board of directors, will be made to the allocations of “Profits” and
“Losses”, as applicable, to take into account any such Deemed Executive Distribution.

     3. Management Retention Agreement not a Service Contract. This Agreement is not an
employment or service contract, this Agreement shall not be deemed to create (nor shall it be
interpreted or construed as creating) any service contract or an employment or service relationship
and nothing herein shall be deemed to create in any way whatsoever any obligation on either
Executive’s part to continue in the employ of United Tote or its affiliates, or of United Tote or
its affiliates to continue either Executive’s employment.

     4. Governing Law; Consent To Jurisdiction. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THE INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW) APPLICABLE TO CONTRACTS EXECUTED
AND TO BE PERFORMED IN SUCH STATE. EACH PARTY HERETO CONSENTS TO THE PERSONAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING IN CONNECTION WITH
THIS AGREEMENT. ANY ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR ANY RIGHT ARISING
OUT OF THIS AGREEMENT MAY BE BROUGHT AGAINST EACH PARTY HERETO IN THE COURTS OF THE STATE OF NEW
YORK.

     5. Notices. Any notice provided for in this Agreement shall be in writing and shall
be either personally delivered, or mailed by first class mail, return receipt requested, to the
recipient at the address indicated below:

     Executives:

Joe Tracy

3320 Nicholson road

Westminster, MD 21151

Terry Woods

12529 Falls Road

Cockeysville, MD 12030

     Youbet:

Youbet.com, Inc.

5901 DeSoto Avenue

Woodland Hills, California 91367

Attention: Scott Solomon

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

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661

Attention: Kenneth W. Miller

     Seller:

UT Group, LLC

c/o Kinderhook Industries, LLC

888 Seventh Avenue

16th Floor

New York, NY 10106

Attention: Robert E. Michalik

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

Kirkland & Ellis LLP

153 East 53rd Street

New York, NY 10022

Attention: W. Brian Raftery

or such other address or to the attention of such other Person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered or mailed.

     6. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement or the application of any such provision to any person or circumstance shall be
held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect
by a court of competent jurisdiction, such provision shall be ineffective only to the extent of
such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

     7. Entire Agreement. This Agreement and the agreements and documents referred to
herein contain the entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and understandings, whether written or
oral, relating to such subject matter in any way.

     8. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

     9. Counterparts. This Agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement, the agreements referred to herein, and each other
agreement or instrument entered into in connection herewith or therewith or contemplated hereby or
thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, e-mail of a PDF file or other electronic transmission, shall be treated in all

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manner and respects as an original agreement or instrument and shall be considered to have the
same binding legal effect as if it were the original signed version thereof delivered in person.
At the reasonable request of any party hereto or to any such agreement or instrument, each other
party hereto or thereto shall re-execute original forms thereof and deliver them to all other
parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile
machine, e-mail of a PDF file or other electronic transmission to deliver a signature or the fact
that any signature or agreement or instrument was transmitted or communicated through the use of a
facsimile machine, e-mail of a PDF file or other electronic transmission as a defense to the
formation or enforceability of a contract and each such party forever waives any such defense.

     10. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by the parties hereto and each of their respective successors and
assigns, except that no party hereto may assign its or his rights or delegate its or his
obligations hereunder.

     11. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of each of the parties hereto, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.

     12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY,
UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN RESPECT OF ANY LITIGATION (WHETHER ARISING IN TORT OR CONTRACT) BASED ON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PERSON OR ANY EXERCISE BY ANY PARTY OF THEIR
RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING WITHOUT LIMITATION ANY ACTION TO RESCIND OR
CANCEL THIS AGREEMENT OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS PROVISION IS A MATERIAL INDUCEMENT TO ENTER INTO
THIS AGREEMENT.

[Remainder of Page Intentionally Blank]

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     In witness whereof, the parties hereto have entered into this Management Retention Agreement
on the date first above written.

	 	 	 	 	 
	 	YOUBET.COM, INC.

 	 
	 	By:  	/s/  Gary W. Sproule
 	 
	 	Name:  	Gary W. Sproule 	 
	 	Title:  	Chief Financial Officer 	 
	 
	 	UT GROUP, LLC

 	 
	 	By:  	/s/  Robert E. Michalik
 	 
	 	Name:  	Robert E. Michalik 	 
	 	Title:  	Vice President 	 
	 
	 	EXECUTIVES

 	 
	 	/s/  Joe Tracy
 	 
	 	Joe Tracy 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/  Terry Woods
 	 
	 	Terry Woodsexv10w1

 

EXHIBIT 10.1

 

OMNIBUS AGREEMENT

among

THE HERITAGE GROUP

CALUMET GP, LLC

CALUMET SPECIALTY PRODUCTS PARTNERS, L.P.

CALUMET OPERATING, LLC

CALUMET LP GP, LLC

and

CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP

 

 

 

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among The Heritage Group, an Indiana general partnership
(“THG”), Calumet GP, LLC, a Delaware limited liability company (the “General Partner”), Calumet
Specialty Products Partners, L.P., a Delaware limited partnership (the “Partnership”), Calumet
Operating, LLC, a Delaware limited liability company (the “OLLC”), Calumet LP GP, LLC, a Delaware
limited liability company (“Calumet LP GP”), and Calumet Lubricants Co., Limited Partnership, an
Indiana limited partnership (“Calumet LP”). The above-named entities are sometimes referred to in
this Agreement each as a “Party” and collectively as the “Parties.”

R E C I T A L S:

     The Parties desire by their execution of this Agreement to evidence their agreement, as more
fully set forth in Article II, with respect to those business opportunities that the THG Entities
(as defined herein) will not engage in during the term of this Agreement unless the Partnership
Entities have declined to engage in any such business opportunity for their own account.

     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I

Definitions

               1.1 Definitions.

     As used in this Agreement, the following terms shall have the respective meanings set
forth below:

     “Affiliate” is defined in the Partnership Agreement.

     “Closing Date” means the date of the closing of the Partnership’s initial public
offering of Common Units.

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

     “Common Units” is defined in the Partnership Agreement.

     “Conflicts Committee” is defined in the Partnership Agreement.

     “Contribution Agreement” means that certain Contribution, Conveyance and Assumption
Agreement, dated as of the Closing Date, among THG, the General Partner, the Partnership,
the OLLC, Calumet LP GP, Calumet LP and certain other parties, together with the additional conveyance documents and instruments contemplated or
referenced thereunder.

    

 

 

     “control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through ownership of
voting securities, by contract, or otherwise.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “General Partner” is defined in the introduction to this Agreement.

     “Limited Partner” is defined in the Partnership Agreement.

     “Offer” is defined in Section 2.3(a).

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Calumet Specialty Products Partners, L.P., dated as of the Closing Date, as
such agreement is in effect on the Closing Date, to which reference is hereby made for all
purposes of this Agreement. No amendment or modification to the Partnership Agreement
subsequent to the Closing Date shall be given effect for the purposes of this Agreement
unless consented to in writing by each of the Parties to this Agreement.

     “Partnership Entities” means the General Partner and each member of the Partnership
Group.

     “Partnership Entity” means any of the Partnership Entities.

     “Partnership Group” means the Partnership, the OLLC, Calumet LP GP, Calumet LP and any
Subsidiary of any such Person, treated as a single consolidated entity.

     “Partnership Group Member” means any member of the Partnership Group.

     “Party” and “Parties” are defined in the introduction to this Agreement.

     “Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government agency or
political subdivision thereof or other entity.

     “Restricted Businesses” is defined in Section 2.1.

     “Retained Assets” means any assets and investments owned or operated by any of the THG
Entities as of the Closing Date that were not conveyed, contributed or otherwise transferred
to the Partnership Group prior to or on the Closing Date pursuant to the Contribution
Agreement or otherwise.

     “Subject Assets” is defined in Section 2.2(e).

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     “Subsidiary” means, with respect to any Person, (a) a corporation of which more than
50% of the voting power of shares entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or other governing body of such
corporation is owned, directly or indirectly, at the date of determination, by such Person,
by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a Subsidiary of such Person is, at the
date of determination, a general or limited partner of such partnership, but only if more
than 50% of the partnership interests of such partnership (considering all of the
partnership interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of
such Person, or a combination thereof, or (c) any other Person (other than a corporation or
a partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has (i) at least
a majority ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.

     “THG Entities” means THG and any Person controlled, directly or indirectly, by THG
other than the Partnership Entities.

     “THG Entity” means any of the THG Entities.

     “transfer” including the correlative terms “transferring” or “transferred” means any
direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other
encumbrance, or any other disposition (whether voluntary, involuntary or by operation of
law) of any assets, properties or rights.

     “Units” is defined in the Partnership Agreement.

ARTICLE II

Business Opportunities

               2.1 Restricted Businesses. For so long as a THG Entity controls the Partnership, and except as
permitted by Section 2.2, each of the THG Entities shall be prohibited from engaging in, whether by
acquisition, construction, investment in debt or equity securities of any Person or otherwise, any
business having assets engaged in the following businesses (the “Restricted Businesses”): the
refining or marketing of specialty lubricating oils, solvents, wax products, gasoline, diesel or
jet fuel products in the continental United States.

               2.2 Permitted Exceptions. Notwithstanding any provision of Section 2.1 to the contrary, the THG
Entities may engage in the following activities under the following circumstances:

     (a) the ownership and/or operation of any of the Retained Assets (including
replacements and natural extensions of the Retained Assets);

     (b) the refining and/or marketing of asphalt and asphalt-related products and related
product development activities;

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     (c) the refining and/or marketing of products that do not produce “qualifying income”
as defined in the Code;

     (d) the purchase and ownership of up to 9.9% of any class of securities of any entity
engaged in any Restricted Business;

     (e) the acquisition of, construction of or investment in any Restricted
Business or any asset or group of related assets used in any Restricted Business by a THG
Entity after the Closing Date (the “Subject Assets”) if, in the case of an acquisition, the
fair market value of the Subject Assets, or, in the case of an investment, the amount of the
investment, or in the case of construction, the estimated construction cost of the Subject
Assets, is less than $5 million at the time of such acquisition, investment or construction,
as the case may be;

     (f) the acquisition of, construction of or investment in any Subject Assets involving a
fair market value, investment or construction cost, as the case may be, greater than that
permitted by Section 2.2(d) or Section 2.2(e); provided the Partnership Group has been
offered the opportunity to acquire, construct or invest in such Subject Assets in accordance
with Section 2.3 and the General Partner (with the approval of the Conflicts Committee) has
elected not to purchase such Subject Assets; and

     (g) any Restricted Business conducted by a THG Entity with the approval of the
Conflicts Committee.

               2.3 Procedures.

               (a) In the event that a THG Entity becomes aware of an opportunity to acquire,
construct or invest in Subject Assets described in Section 2.2(f), then, subject to Section
2.3(b), as soon as practicable, such THG Entity shall notify the General Partner in writing
of such opportunity and deliver to the General Partner all information in the possession of
any THG Entity relating to the Subject Assets and such potential transaction. As soon as
practicable but in any event within 30 days after receipt of such notification and
information, the General Partner, on behalf of the Partnership, shall notify the THG Entity
in writing that either (i) the General Partner, on behalf of the Partnership, has elected
(with the concurrence of the Conflicts Committee) not to cause a member of the Partnership
Group to pursue the opportunity to acquire, construct or invest in the Subject Assets, in
which case the THG Entities may acquire, construct or invest in such Subject Assets without
any further obligation to offer such opportunity to the Partnership, or (ii) the General
Partner, on behalf of the Partnership, has elected (with the concurrence of the Conflicts
Committee) to cause a member of the Partnership Group to pursue the opportunity to acquire,
construct or invest in the Subject Assets. Failure by the General Partner to provide such
notice within such 30-day period shall be deemed to constitute a decision not to pursue such
opportunity. If, at any time, the General Partner abandons such opportunity with the
approval of the Conflicts Committee (as evidenced in writing by the General Partner
following the request of the THG Entity), the THG Entity may pursue such opportunity. Any
Subject Assets which are permitted to be acquired, constructed or invested in by a THG
Entity must be so acquired, constructed or invested

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in (i) within 12 months of the later to occur of (A) the date that the THG Entity is
permitted pursuant to this Section 2.3(a) to pursue such acquisition, construction project
or investment and (B) the date upon which all required governmental approvals to consummate
such acquisition, construction project or investment have been obtained, and (ii) on terms
not materially more favorable to the THG Entity than were offered to the Partnership. If
either of these conditions are not satisfied, such opportunity must be reoffered to the
Partnership in accordance with this Section 2.3(a).

               (b) Notwithstanding Section 2.3(a), in the event that a THG Entity becomes aware of an
opportunity to make an acquisition or investment that includes both Subject Assets and
assets that are not Subject Assets and such Subject Assets have a fair market value (as
determined in good faith by the Board of Trustees of THG) equal to or greater than $5
million but comprise less than half of the fair market value (as determined in good faith by
the Board of Trustees of THG) of the total assets being considered for acquisition or
investment, then the THG Entity may make such acquisition or investment without first
offering the opportunity to the Partnership or notifying the General Partner provided that
the THG Entities comply with the following procedures:

               (i) Within 90 days after the consummation of the acquisition or investment, as
the case may be, by a THG Entity of the Subject Assets, as the case may be, the THG
Entity shall notify the General Partner in writing of such acquisition or investment
and offer the Partnership Group the opportunity to purchase such Subject Assets in
accordance with this Section 2.3(b) (the “Offer”). The Offer shall set forth the
proposed terms by which a Partnership Group Member may purchase the Subject Assets
and, if any THG Entity desires to utilize the Subject Assets, the proposed
commercially reasonable terms on which the Partnership Group will enable the THG
Entity to utilize the Subject Assets. As soon as practicable, but in any event
within 30 days after receipt of such written notification, the General Partner shall
notify the THG Entity in writing that either (x) the General Partner has elected
(with the concurrence of the Conflicts Committee) not to cause any Partnership Group
Member to purchase the Subject Assets, in which event the THG Entity shall be
forever free to continue to own or operate such Subject Assets, or (y) the General
Partner has elected (with the concurrence of the Conflicts Committee) to cause a
Partnership Group Member to purchase the Subject Assets, in which event the
following procedures in subsections (ii) and (iii) shall apply.

               (ii) If the THG Entity and the General Partner (with the approval of the
Conflicts Committee) are able, within 60 days after receipt by the General Partner
of the Offer, to agree on the fair market value of the Subject Assets that are
subject to the Offer and any other terms of the Offer including, without limitation,
the terms, if any, on which the Partnership Group will enable the THG Entity to
utilize the Subject Assets, a Partnership Group Member shall purchase the Subject
Assets for the agreed upon fair market value as soon as commercially practicable
after such agreement has been reached and, if applicable, enter into an agreement
with the THG Entity to provide services in a manner consistent with the Offer.

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               (iii) If the THG Entity and the General Partner (with the concurrence of the
Conflicts Committee) are unable, within 60 days after receipt by the General Partner
of the Offer, to agree on the fair market value of the Subject Assets that are
subject to the Offer or the other terms of the Offer including, if applicable, the
terms on which the Partnership Group will enable the THG Entity to utilize the
Subject Assets, the THG Entity and the General Partner will engage a mutually agreed
upon investment banking firm to determine the fair market value of the Subject
Assets and/or the other terms on which the Partnership Group and the THG Entity are
unable to agree. Such investment banking firm will determine the fair market value
of the Subject Assets and/or the other terms on which the Partnership Group and the
THG Entity are unable to agree within 30 days of its engagement and furnish the THG
Entity and the General Partner its determination. The fees of the investment
banking firm will be split equally between the THG Entity and the Partnership Group.
Once the investment banking firm has submitted its determination of the fair market
value of the Subject Assets and/or the other terms on which the Partnership Group
and the THG Entity are unable to agree, the General Partner will have the right, but
not the obligation, subject to the approval of the Conflicts Committee, to cause a
Partnership Group Member to purchase the Subject Assets pursuant to the Offer as
modified by the determination of the investment banking firm. The Partnership Group
will provide written notice of its decision to the THG Entity within 30 days after
the investment banking firm has submitted its determination. Failure to provide
such notice within such 30-day period shall be deemed to constitute a decision not
to purchase the Subject Assets. If the General Partner elects to cause a
Partnership Group Member to purchase the Subject Assets, then the Partnership Group
Member shall purchase the Subject Assets pursuant to the Offer as modified by the
determination of the investment banking firm as soon as commercially practicable
after such determination and, if applicable, enter into an agreement with the THG
Entity to provide services in a manner consistent with the Offer, as modified by the
determination of the investment banking firm, if applicable.

               2.4 Scope of Prohibition. Except as provided in this Article II and the Partnership Agreement,
each THG Entity shall be free to engage in any business activity, including those that may be in
direct competition with any Partnership Group Member.

               2.5 Enforcement. The THG Entities agree and acknowledge that the Partnership Group does not have
an adequate remedy at law for the breach by any THG Entity of the covenants and agreements set
forth in this Article II, and that any breach by any THG Entity of the covenants and agreements set
forth in this Article II would result in irreparable injury to the Partnership Group. The THG
Entities further agree and acknowledge that any Partnership Group Member may, in addition to the
other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the
THG Entities from such breach, and consent to the issuance of injunctive relief relating to this
Agreement. No Person, directly or indirectly controlled thereby shall be liable for the failure of
any other Person, directly or indirectly, controlled thereby to comply with this Article II.

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ARTICLE III

Miscellaneous

               3.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed by
the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each
Party hereby submits to the jurisdiction of the state and federal courts in the State of Indiana
and to venue in Indianapolis, Indiana.

               3.2 Notice. All notices or other communications required or permitted under, or otherwise in
connection with, this Agreement must be in writing and must be given by depositing same in the U.S.
mail, addressed to the Person to be notified, postpaid and registered or certified with return
receipt requested or by transmitting by national overnight courier or by delivering such notice in
person or by facsimile to such Party. Notice given by mail, national overnight courier or personal
delivery shall be effective upon actual receipt. Notice given by facsimile shall be effective upon
confirmation of receipt when transmitted by facsimile if transmitted during the recipient’s normal
business hours or at the beginning of the recipient’s next business day after receipt if not
transmitted during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth below or at such other
address as such Party may stipulate to all other Parties in the manner provided in this Section
3.2.

               if to the THG Entities:

The Heritage Group

5400 West 86th Street

Indianapolis, Indiana 46268

Attention: Fred M. Fehsenfeld, Jr.

Fax: 317-879-8145

with a copy to:

The Heritage Group

5400 West 86th Street

Indianapolis, Indiana 46268

Attention: Tom Mattix

Fax: 317-872-6327

-7-

 

               if to the Partnership Entities

Calumet Specialty Products Partners, L.P.

2780 Waterfront Parkway East Drive, Suite 200

Indianapolis, Indiana 46214

Attention: R. Patrick Murray, II

Fax: 317-328-5676

with a copy to:

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2300

Houston, Texas 77002

Attention: David Oelman

Fax: 713-758-2346

               3.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to
the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

               3.4 Amendment or Modification. This Agreement may be amended or modified from time to time only by
the written agreement of all the Parties hereto; provided, however, that the Partnership may not,
without the prior approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that the General Partner determines will adversely affect the holders of Common
Units. Each such instrument shall be reduced to writing and shall be designated on its face an
“Amendment” or an “Addendum” to this Agreement.

               3.5 Assignment. No Party shall have the right to assign any of its rights or obligations under
this Agreement without the consent of the other Parties hereto.

               3.6 Counterparts. This Agreement may be executed in any number of counterparts with the same
effect as if all signatory parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.

               3.7 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a
court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in
full force and effect.

               3.8 Further Assurances. In connection with this Agreement and all transactions contemplated by
this Agreement, each signatory party hereto agrees to execute and deliver such additional documents
and instruments and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

-8-

 

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

-9-

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.

	 	 	 	 	 	 	 
	 	 	THE HERITAGE GROUP
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Fred M. Fehsenfeld, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Fred M. Fehsenfeld, Jr.	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CALUMET GP, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	R. Patrick Murray, II	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CALUMET SPECIALTY PRODUCTS
	 	 	PARTNERS, L.P.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CALUMET GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	R. Patrick Murray, II	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CALUMET OPERATING, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Calumet Specialty Products Partners, L.P.,	 	 
	 

	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Calumet GP, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	R. Patrick Murray, II	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 

-10-

 

	 	 	 	 	 	 	 
	 	 	CALUMET LP GP, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	R. Patrick Murray, II	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CALUMET LUBRICANTS CO., LIMITED
	 	 	PARTNERSHIP
	 
	 	 	 	 	 	 
	 

	 	By:
	 	CALUMET LP GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	R. Patrick Murray, II	 	 
	 

	 	 	 	Vice President and Chief Financial Officer	 	 

-11-

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