Document:

Exhibit
10.1

     

    AMENDMENT
NO. 3 TO FORBEARANCE AGREEMENT

     

    AMENDMENT
NO. 3 (the “Amendment”),
dated as of March 27, 2008, to the Forbearance Agreement (as amended, the “Agreement”)1 dated as of January 16, 2008 by and among
Tekni-Plex, Inc. (the “Company”),
each of the Company’s subsidiaries identified on the signature pages thereof
(the “Subsidiaries”),
the Holders of the Company’s 12 3/4% Senior Subordinated Notes due 2010 (the
“Notes”)
that were issued pursuant to that certain Indenture, dated as of June 21, 2000
(as supplemented on May 6, 2002, August 22, 2002, and April 25, 2005, the “Indenture”),
that are signatories thereto (each a “Noteholder,”
and collectively, the “Noteholders,”
and together with the Company, the “Parties”)
and U.S.
Bank National Association, as successor indenture trustee (the “Indenture
Trustee”) under the Indenture.

     

    RECITALS

     

    WHEREAS,
the parties hereto are desirous of extending the Agreement on the terms set
forth herein;

     

    WHEREAS,
the Noteholders continue to collectively hold not less than $286,650,000 in
aggregate principal amount of the Notes, representing not less than 91% of the
aggregate principal amount of the Notes that are outstanding, and not less than
$178,275,000 in aggregate principal amount of the Second Lien Notes,
representing not less than 64% of the aggregate principal amount of the Second
Lien Notes that are outstanding.

    
       

        
          

        

      

      
        
          	
                   
      

                	
                  1
      Each capitalized term used but not defined herein shall have the meaning
      ascribed to it in the Agreement (and to the extent not defined therein,
      the meaning ascribed to it in the
  Indenture).

                

        

         

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW
THEREFORE, in consideration of the premises and the respective covenants and
agreements set forth in this Agreement, the Parties, each intending to be
legally bound, agree as follows:

     

    1. Forbearance.  Section
1(c) of the Agreement is hereby amended and restated in its entirety as
follows:

     

    “(c) As used herein, the
term “Forbearance
Period” shall mean the period beginning on January 17, 2008 and ending
upon the occurrence of a Termination Event.  As used herein, “Termination
Event” shall mean the earliest to occur of (i) 11:59 p.m. EST on May 13,
2008, (ii) 11:59 p.m. EST on April 1, 2008, unless by such time Paul, Weiss (as
defined below) delivers to the Company a written notice stating that either (A)
a term sheet (the “Restructuring
Term Sheet”) memorializing the restructuring transaction agreed to in
principle between holders of a majority in principal amount of the Notes and the
Required Preferred Stockholders (as defined in the Company’s Certificate of
Incorporation) on March 27, 2008, has been agreed to among the Company, holders
of a majority in principal amount of the Notes, the Required Preferred
Stockholders and the two holders of the Company’s common stock or (B) holders of
a majority in principal amount of the Notes have agreed to extend the date set
forth in this clause (ii) to a date specified in such written notice, (iii)
11:59 p.m. EST on April 15, 2008 if any required tender offer for the Notes
shall not have been launched by such time, unless Paul, Weiss delivers to the
Company a written notice stating that holders of a majority in principal amount
of the Notes have agreed to extend the date set forth in this clause (iii) to a
date specified in such written notice or waive compliance with this

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    clause
(iii), and (iv) four Business Days after the delivery by Paul, Weiss, as counsel
to the Noteholder Group, to the Company and the Indenture Trustee of a written
notice terminating the Forbearance Period (the “Termination
Notice”), which notice may be delivered at any time but only upon or
after the occurrence of any Forbearance Default (as defined below); provided,
however,
that notwithstanding the foregoing, this Agreement shall immediately terminate
upon the occurrence of a Forbearance Default under subsection (H) below, without
the need for delivery of the Termination Notice or any other
notice.  As used herein, the term “Forbearance
Default” shall mean: (A) the valid acceleration of obligations arising
under (i) the 8 3/4% Senior Secured Notes due 2013 (the “Second
Lien Notes”) issued pursuant to that certain indenture dated as of
November 21, 2003 (the “Second
Lien Indenture”); (ii) the 10 7/8 % Senior Secured Notes due 2012 (the
“First
Lien Notes”) issued pursuant to that certain indenture dated as of June
10, 2005 (the “First
Lien Indenture”); or (iii) the Credit Agreement dated as of June 10,
2005, between the Company, as borrower, Citicorp USA, Inc. as administrative
agent, General Electric Capital Corporation as syndication agent, and the
lenders and issuers party thereto (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”); (B) the Company’s payment of or entry into an agreement to
pay the fees or expenses of any ad-hoc group of holders of First Lien Notes or
Second Lien Notes (other than the Noteholder Group); (C) the failure of the
Company and the Required Preferred Stockholders, after four business days’
written notice from Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul
Weiss”, together with Houlihan, Lokey, Howard & Zukin Capital, Inc.
(“Houlihan
Lokey”), the “Advisors”)
as counsel to the Noteholder Group alleging such a failure, to engage in good
faith efforts to 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    negotiate,
document and consummate the transactions contemplated by the Restructuring Term
Sheet, which determination shall be made by the holders of a majority in
principal amount of the Notes in good faith and their reasonable discretion; (D)
the failure of the Company, after four business days’ written notice from Paul
Weiss alleging such a failure, to engage in good faith efforts to produce
documentation and due diligence materials reasonably requested by the Advisors,
which determination shall be made by the holders of a majority in principal
amount of the Notes in good faith and their reasonable discretion; (E) the
occurrence of any Event of Default other than the Interest Default; (F) the
failure of the Company to comply with any material term, condition, covenant or
agreement set forth in this Agreement; (G) the failure of any representation or
warranty made by the Company under this Agreement to be true and correct in all
material respects as of the date when made; (H) the commencement by or against
the Company or any Subsidiary that is a Significant Subsidiary as defined in the
Indenture of a case under title 11 of the United States Code; (I) the Company
engages in any material asset sales (other than the disposition of inventory),
material sale-leaseback, or material financing transaction (including any
increase in commitment under the Credit Agreement) without the consent of a
majority in principal amount of the Notes held by the Noteholder Group; (J) the
Company pays any management, sponsor or consulting fees to its preferred
stockholders or their affiliates; or (K) from and after February 14, 2008, the
Company enters into any material amendment, restatement, supplement or
modification to or under the Credit Agreement without the consent of a majority
in principal amount of the Notes held by the Noteholder Group (except to the
extent that such requirement that the Company obtain such consent would violate
Section 6.8 of the Credit Agreement).”

     

    2. Effectiveness.  This
Amendment shall become effective upon execution and delivery of counterparts of
this Agreement by the Noteholders (other than Barclays Bank, PLC, provided that
(i) this Amendment shall not be binding on Barclays Bank, PLC and (ii) all
references to the “Noteholders” or the “Noteholder Group” herein or in the
Agreement shall be deemed to exclude Barclays Bank, PLC, in each case unless and
until the Amendment is executed and delivered by such party), the Company and
the Subsidiaries.  This Amendment shall be effective as to the
Noteholders, the Company and the Subsidiaries in accordance with Section 2
hereof regardless of whether the Indenture Trustee executes this
Agreement.  This Amendment shall be effective as to the Indenture
Trustee upon the Indenture Trustee becoming a signatory
hereto.  

     

    3. Representations,
Warranties and Covenants.

     

    (a) The
Company and the Subsidiaries represent, warrant and covenant as
follows:

     

    (i) Except for
the Interest Default, no other Default or Event of Default has occurred and is
continuing.

     

    (ii) The
execution, delivery and performance by the Company and the Subsidiaries of this
Agreement:

     

    (1) are within
their corporate powers;

     

    (2) have been
duly authorized by all necessary corporate action;

     

    (3) do not and
will not (A) contravene their certificate of incorporation or by-laws or limited
partnership or other constituent documents, (B) violate any (i) applicable
material requirement of law or (ii) material order or decree of any

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    governmental
authority or arbitrator applicable to them, (C) materially conflict with or
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any material contractual obligation of the
Company or the Subsidiaries, or (D) result in the creation or imposition of any
material lien or encumbrance upon any of the material property of the Company or
the Subsidiaries; and

     

    (4) do not and
will not require the consent of, authorization by, approval of any governmental
authority.

     

    (b) The
Noteholders represent as follows:

     

    (i) As of the
date hereof, based on the representations of each of the individual Noteholders,
the Noteholders, in the aggregate, hold, with all rights, including without
limitation the right to vote, not less than $286,650,000 in principal amount of
the Notes, representing not less than 91% of the aggregate principal amount of
the Notes outstanding.

     

     

    (ii) As of the
date hereof, based on the representations of each of the individual Noteholders,
the Noteholders, in the aggregate, hold, with all rights, including without
limitation the right to vote, not less than $178,275,000 in principal amount of
the Second Lien Notes, representing not less than 64% of the aggregate principal
amount of the Second Lien Notes outstanding.

     

    4. Ratification
of Liability.  The Company and its Subsidiaries hereby ratify
and reaffirm all of their payment and performance obligations and obligations to
indemnify, contingent or otherwise, under the Indenture.

     

    5. Complete
Integration; Amendments.  This Amendment, together with the
Agreement – which remains in full force and effect except as expressly modified
by this Amendment – constitutes the full and final agreement between the Parties
with respect to the subject matter hereof, and may not be modified or amended
except by a written instrument, signed by each of the Parties, expressing such
amendment or modification.  The Parties warrant, promise and represent
that in 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    executing
this Amendment, each Party is not relying upon any oral representation, promise
or statement made by any other Party hereto and that each Party is not relying
upon any promise, statement or representation contained in any other written
instrument.

     

    6. No
Other Amendments; Reservation of Rights, No Waiver.  Other than
as otherwise expressly provided herein, this Amendment shall not be deemed to
operate as an amendment or waiver of, or to prejudice, any right, power,
privilege or remedy of the Noteholders or the Indenture Trustee, as applicable,
under the Indenture or applicable law, nor shall the entering into this
Amendment preclude the Noteholders from refusing to enter into any further
amendments or forbearances with respect to the Indenture.  Other than
as expressly provided herein, this Amendment shall not constitute a forbearance
with respect to (i) any failure by the Company to comply with any covenant or
other provision in the Indenture or (ii) the occurrence or continuance of any
present or future Event of Default.

     

    7. Counterparts/Facsimile
Transmission.  This Amendment may be signed in counterparts,
each of which, when taken together, shall be deemed an
original.  Execution of this Amendment is effective if a signature is
delivered by facsimile transmission or electronic (e.g., “pdf”)
transmission.

     

    8. Successors
and Assigns.  This Amendment shall be binding upon and inure to
the benefit of the Parties hereto and each of their respective successors,
assigns, heirs and personal representatives.

     

    9. Authority.  Any
person signing this Amendment in a representative capacity (i) represents and
warrants that he/she is authorized to sign this Amendment on behalf of the Party
he/she represents and that his/her signature upon this Amendment

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    will bind
the represented Party to the terms of this Amendment, and (ii) acknowledges that
the other Party to this Amendment has relied upon such representation and
warranty.

     

    10. Governing
Law.  This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its choice
of law provisions.

     

    11. Direction
to Indenture Trustee.  The Noteholders’ agreement to forbear as
provided in the Agreement as amended by this Amendment shall constitute a
direction from such Noteholders to the Indenture Trustee to similarly forbear
during the Forbearance Period as extended hereby.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

     

    IN WITNESS
WHEREOF, each of the Parties hereto has caused this Amendment to be duly
executed and delivered as of the date first above written.

     

     

    
      	 	
              TEKNI-PLEX,
      INC.

            	 
	 	 	 	 	 
	 	 	
              By:

            	
              /s/
      James E. Condon

            	 
	 	 	
              Name:

            	
              James
      E. Condon

            	 
	 	 	
              Title:

            	
              Chief
      Financial Officer

            	 
	 	 	 	 	 
	 	
              SUBSIDIARIES

               

              PURETEC
      CORPORATION

              NATVAR
      HOLDINGS, INC.

              TRI-SEAL
      HOLDINGS, INC.

              PLASTIC
      SPECIALTIES AND TECHNOLOGIES, INC.

              BURLINGTON
      RESINS, INC.

              PLASTIC
      SPECIALTIES AND TECHNOLOGIES

              INVESTMENTS,
      INC.

              DISTRIBUTORS
      RECYCLING, INC.

              TPI
      ACQUISITION SUBSIDIARY, INC. 

                TP/ELM
      ACQUISITION SUBSIDIARY, INC.,

              

            	 

    

    
      	 	 	collectively,
      as Guarantors	 
	 	 	 	 
	 	
              By:

            	
              /s/
      James E. Condon

            	 
	 	
              Name:

            	
              James
      E. Condon

            	 
	 	
              Title:

            	
              Chief
      Financial Officer

            	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    THE
NOTEHOLDERS

    
 

    
      	 	
              AVENUE
      INVESTMENTS, L.P.

            	 
	 	 	 	 	 
	 	 	
              By:

            	
              Avenue
      Partners, LLC,

              its
      General Partner

            	 
	 	 	 	 	 
	 	 	
              By:

            	
              /s/
      Sonia Gardner

            	 
	 	 	
              Name:

            	
              Sonia
      Gardner

            	 
	 	 	
              Title:

            	
              Member

            	 

    

     

    
      
        	 	
                
                  AVENUE-CDP
      GLOBAL OPPORTUNITIES FUND, L.P.

                

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  Avenue
      Global Opportunities Fund GenPar, LLC,

                  its
      General Partner

                

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                /s/
      Sonia Gardner

              	 
	 	 	
                Name:

              	
                Sonia
      Gardner

              	 
	 	 	
                Title:

              	
                Member

              	 

      

      
         

        
          
            	 	
                    
                      
                        AVENUE
      INTERNATIONAL MASTER, L.P.

                      

                    

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      
                        Avenue
      International
      Master GenPar,
      Ltd.,

                        its
      General Partner

                      

                    

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    /s/
      Sonia Gardner

                  	 
	 	 	
                    Name:

                  	
                    Sonia
      Gardner

                  	 
	 	 	
                    Title:

                  	
                    Member

                  	 

          

          
             

            
              
                	 	
                        
                          
                            AVENUE
      SPECIAL SITUATIONS FUND IV, L.P.

                          

                        

                      	 
	 	 	 	 	 
	 	 	
                        By:

                      	
                        
                          
                            Avenue
      Capital Partners IV, LLC,
      its General Partner

                          

                        

                      	 
	 	 	
                        By:

                      	
                        GL
      Partners IV, LLC,

                        its
      General Partner

                      	 
	 	 	 	 	 
	 	 	
                        By:

                      	
                        /s/
      Sonia Gardner

                      	 
	 	 	
                        Name:

                      	
                        Sonia
      Gardner

                      	 
	 	 	
                        Title:

                      	
                        Member

                      	 

              

              

 

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    
       

      
        
          	 	
                  
                    
                      
                        AVENUE
      SPECIAL SITUATIONS FUND V,
      L.P.

                      

                    

                  

                	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  
                    
                      
                        Avenue
      Capital Partners V,
      LLC,

                        its
      General Partner

                      

                    

                  

                	 
	 	 	
                  By:

                	
                  
                    GL
      Partners V,
      LLC,

                    its
      General Partner

                  

                	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  /s/
      Sonia Gardner

                	 
	 	 	
                  Name:

                	
                  Sonia
      Gardner

                	 
	 	 	
                  Title:

                	
                  Member

                	 

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

     

    
      	 	
              GLENVIEW
      CAPITAL MANAGEMENT, LLC,

              as
      investment adviser for GCM Little Arbor Partners, L.P.,

              GCM
      Little Arbor Institutional Partners, L.P., and

              GCM
      Little Arbor Master Fund, Ltd.

            	 
	 	 	
              By:

            	
              /s/
      Purvi Shah Goor

            	 
	 	 	
              Name:

            	
              Purvi
      Shah Goor

            	 
	 	 	
              Title:

            	
              Deputy
      General Counsel

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      
        
          	 	
                  
                    
                      MORGAN
      STANLEY & CO., INC

                    

                  

                	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  /s/
      Andrew Brenner

                	 
	 	 	
                  Name:

                	
                  Andrew
      Brenner

                	 
	 	 	
                  Title:

                	
                  Managing
      Director

                	 
	 	 	 
      	 
      	 

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    
      	 	OCM
      OPPORTUNITIES FUND V, L.P.	 
	 	 	 	 	 
	 	 	
              By:

            	
              OCM
      Opportunities Fund V GP, L.P.

            	 
	 	 	
              Its:

            	
              General
      Partner

            	 
	 	 	 	 	 
	 	 	
              By:

            	
              Oaktree
      Fund GP I, L.P.

            	 
	 	 	
              Its:

            	
              General
      Partner

            	 
	 	 	 	 	 
	 	 	
              By:

            	
              
                /s/
      Kenneth Liang

              

            	 
	 	 	
              Name:

            	
              
                Kenneth
      Liang

              

            	 
	 	 	
              Title:

            	
              Managing
      Director

            	 
	 	 	 
      	 
      	 

    

    
      	 	 	
              By:

            	
              
                /s/
      Kenneth Liang

              

            	 
	 	 	
              Name:

            	
              
                Kenneth
      Liang

              

            	 
	 	 	
              Title:

            	
              Managing
      Director

            	 
	 	 	 
      	 
      	 

      

        
          	 	OCM
      OPPORTUNITIES FUND VI, L.P.	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  OCM
      Opportunities Fund VI GP, L.P.

                	 
	 	 	
                  Its:

                	
                  General
      Partner

                	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  Oaktree
      Fund GP I, L.P.

                	 
	 	 	
                  Its:

                	
                  General
      Partner

                	 
	 	 	 	 	 
	 	 	
                  By:

                	
                  
                    /s/
      Kenneth Liang

                  

                	 
	 	 	
                  Name:

                	
                  
                    Kenneth
      Liang

                  

                	 
	 	 	
                  Title:

                	
                  Managing
      Director

                	 
	 	 	 
      	 
      	 

        

        
          	 	 	
                  By:

                	
                  
                    
                      /s/
      Robert O’Leary

                    

                  

                	 
	 	 	
                  Name:

                	
                  
                    
                      Robert
      O’Leary

                    

                  

                	 
	 	 	
                  Title:

                	
                  Managing
      Director

                	 
	 	 	 
      	 
      	 

           

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	 	
                OCM
      OPPORTUNITIES FUND VII, L.P.

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  OCM
      Opportunities Fund VII GP, L.P.

                

              	 
	 	 	
                Its:

              	
                General
      Partner

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  OCM
      Opportunities Fund VII GP, Ltd.

                

              	 
	 	 	
                Its:

              	
                General
      Partner

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                Oaktree
      Capital Management, L.P.

              	 
	 	 	
                Its:

              	
                Director

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  /s/
      Kenneth Liang

                

              	 
	 	 	
                Name:

              	
                
                  Kenneth
      Liang

                

              	 
	 	 	
                Title:

              	
                Managing
      Director

              	 
	 	 	 
      	 
      	 

      

      
        	 	 	
                By:

              	
                
                  
                    /s/
      Robert O’Leary

                  

                

              	 
	 	 	
                Name:

              	
                
                  
                    Robert
      O’Leary

                  

                

              	 
	 	 	
                Title:

              	
                Managing
      Director

              	 
	 	 	 
      	 
      	 

        

          
            	 	
                    
                      OCM
      PRINCIPAL OPPORTUNITIES
      FUND III, L.P.

                      OCM
      PRINCIPAL OPPORTUNITIES FUND IIIA, L.P.

                    

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      
                        OCM
      Opportunities Fund III GP, L.P.

                      

                    

                  	 
	 	 	
                    Its:

                  	
                    General
      Partner

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    Oaktree
      Fund GP I, L.P.

                  	 
	 	 	
                    Its:

                  	
                    General
      Partner

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      
                        /s/
      Skardon F. Baker

                      

                    

                  	 
	 	 	
                    Name:

                  	
                    
                      
                        Skardon
      F. Baker

                      

                    

                  	 
	 	 	
                    Title:

                  	
                    Managing
      Director

                  	 
	 	 	 
      	 
      	 

          

          
            	 	 	
                    By:

                  	
                    
                      
                        
                          /s/Aaron
      Bendikson

                        

                      

                    

                  	 
	 	 	
                    Name:

                  	
                    
                      
                        
                          Aaron
      Bendikson

                        

                      

                    

                  	 
	 	 	
                    Title:

                  	
                    
                      Senior
      Vice President

                    

                  	 
	 	 	 
      	 
      	 

          

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	 	
                
                  OCM
      PRINCIPAL OPPORTUNITIES FUND IV, L.P.

                

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  
                    OCM
      Opportunities Fund IV GP, L.P.

                  

                

              	 
	 	 	
                Its:

              	
                General
      Partner

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  
                    OCM
      Opportunities Fund IV GP, Ltd.

                  

                

              	 
	 	 	
                Its:

              	
                General
      Partner

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                Oaktree
      Capital Management, L.P.

              	 
	 	 	
                Its:

              	
                Director

              	 
	 	 	 	 	 
	 	 	
                By:

              	
                
                  
                    /s/
      Skardon F. Baker

                  

                

              	 
	 	 	
                Name:

              	
                
                  
                    Skardon
      F. Baker

                  

                

              	 
	 	 	
                Title:

              	
                Managing
      Director

              	 
	 	 	 
      	 
      	 

      

      
        	 	 	
                By:

              	
                
                  
                    
                      /s/Aaron
      Bendikson

                    

                  

                

              	 
	 	 	
                Name:

              	
                
                  
                    
                      Aaron
      Bendikson

                    

                  

                

              	 
	 	 	
                Title:

              	
                
                  Senior
      Vice President

                

              	 
	 	 	 
      	 
      	 

        

          
            	 	
                    
                      
                        OAKTREE
      VALUE OPPORTUNITIES FUND, L.P.

                      

                    

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      
                        
                          Oaktree
      Value Opportunities Fund 

                          GP,
      L.P.

                        

                      

                    

                  	 
	 	 	
                    Its:

                  	
                    General
      Partner

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      Oaktree
      Value Opportunities Fund GP, Ltd.

                    

                  	 
	 	 	
                    Its:

                  	
                    General
      Partner

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    Oaktree
      Capital Management, L.P.

                  	 
	 	 	
                    Its:

                  	
                    Director

                  	 
	 	 	 	 	 
	 	 	
                    By:

                  	
                    
                      
                        
                          /s/
      Kenneth Liang

                        

                      

                    

                  	 
	 	 	
                    Name:

                  	
                    
                      
                        
                          Kenneth
      Liang

                        

                      

                    

                  	 
	 	 	
                    Title:

                  	
                    Managing
      Director

                  	 
	 	 	 
      	 
      	 

          

          
            	 	 	
                    By:

                  	
                    
                      
                        
                          
                            /s/
      Robert O’Leary

                          

                        

                      

                    

                  	 
	 	 	
                    Name:

                  	
                    
                      
                        
                          
                            Robert
      O’Leary

                          

                        

                      

                    

                  	 
	 	 	
                    Title:

                  	
                    
                      Senior
      Vice PresidentEX-10.17.1

 

Exhibit 10.17.1

SUPPLEMENT TO ENVIRONMENTAL AGREEMENT

     THIS
SUPPLEMENT TO ENVIRONMENTAL AGREEMENT
(“Supplement”) is
entered into and effective as of the 15th day of February, 2008, 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”. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Environmental Agreement, dated as
of October 25, 2007, by and between the Refinery Company and the Fertilizer Company (the
“Environmental Agreement”).

RECITALS

     Refinery Company owns and operates a Refinery, and Fertilizer Company owns and operates a
Fertilizer Plant located adjacent to the Refinery, and Refinery Company and Fertilizer Company
entered into the Environmental 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.

     Refinery Company and Fertilizer Company now desire to supplement the Environmental Agreement
as provided in this Supplement.

     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

TRANSFER OF PROPERTY AND RETAINED OBLIGATIONS

     The Parties acknowledge and agree to the transfer by Refinery Company, as Grantor, to
Fertilizer Company, as Grantee, pursuant to a Quitclaim Deed, of the property described in
Exhibit A attached hereto (the “Transferred
Property”), which Transferred Property is part
of the property referred to in the Environmental Agreement as Refinery Company Property and is
subject to certain indemnification obligations as provided in the Environmental Agreement. All
indemnification obligations of Refinery Company contemplated under the Environmental Agreement
with respect to any Environmental Liabilities arising from contamination existing on the
Transferred Property as of the effective date of transfer of the Transferred Property by Refinery
Company to Fertilizer Company (whether such existing contamination is known or unknown), and the
obligation of Refinery Company to close Landfill 871 as contemplated in the Environmental
Agreement, shall be and remain the obligations of Refinery Company notwithstanding such transfer
of the Transferred Property by Refinery Company to Fertilizer Company
(collectively “Retained
Obligations”). Upon the transfer of the Transferred Property to Fertilizer Company, the
Transferred Property shall become a part of the Fertilizer Company Property for purposes of the
Environmental Agreement, subject to the Refinery Company’s Retained Obligations with respect
to the Transferred Property. Fertilizer Company

 

 

acknowledges receipt of, and agrees to comply with, the Restrictive Covenant referred to in Section
2.5(c) of the Environmental Agreement and all disclosures required thereunder.

ARTICLE 2

KNOWN CONTAMINATION MAP

     The Environmental Agreement refers to all existing, known contamination on Refinery Company
Property and Fertilizer Company Property as being documented and identified on a mutually agreed
upon Known Contamination Map, and the Parties hereby acknowledge and agree that such Known
Contamination Map is attached hereto as Exhibit B.

ARTICLE 3

COMPREHENSIVE COKE MANAGEMENT PLAN

     The Environmental Agreement provides for the development and finalization of a Comprehensive
Coke Management Plan, and the Parties hereby acknowledge and agree that such Comprehensive Coke
Management Plan is attached hereto as Exhibit C.

ARTICLE 4

INCORPORATION BY REFERENCE

     This Supplement and all of the Exhibits attached hereto are hereby incorporated in and made a
part of the Environmental Agreement by reference thereto.

[signature page follows]

2

 

Signature Page

To

Supplement to Environmental Agreement

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

	 	 	 	 	 	 	 	 	 
	COFFEYVILLE RESOURCES

REFINING & MARKETING, LLC	 	COFFEYVILLE RESOURCES

NITROGEN FERTILIZERS, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert W. Haugen
	 	By:
	 	/s/ Kevan A. Vick	 	 
	Name:

	 	 

Robert W. Haugen
	 	Name:
	 	 

Kevan A. Vick
	 	 
	Title:

	 	Executive Vice President,
Refining Operations
	 	Title:
	 	Executive Vice President and
Fertilizer General Manager	 	 

 

 

EXHIBIT A

Legal Description of Transferred Property

PARCEL 7

A PART OF COFFEYVILLE HEIGHTS ADDITION TO THE CITY OF COFFEYVILLE AND PART OF THE NE/4 OF SECTION
36, TOWNSHIP 34 SOUTH, RANGE 16 EAST, MONTGOMERY COUNTY, KANSAS,
DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID NE/4; THENCE ON AN ASSUMED BEARING OF S00°00’00” E ALONG
THE EAST LINE OF SAID NE/4 A DISTANCE OF 200.17 FEET TO THE NORTHERLY LINE OF THE FORMER UNION
PACIFIC RAILROAD RIGHT-OF-WAY; THENCE S59°30’09” W ALONG SAID NORTHERLY LINE A DISTANCE OF 1007.15
FEET; THENCE S00°00’00” E A DISTANCE OF 116.06 FEET TO A POINT ON THE SOUTHERLY LINE OF THE FORMER
UNION PACIFIC RAILROAD RIGHT-OF-WAY, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE
CONTINUING S00°00’00” E A DISTANCE OF 187.99 FEET; THENCE N88°14’41” W A DISTANCE OF 11.20 FEET;
THENCE S00°00’00” E A DISTANCE OF 327.50 FEET; THENCE N90°00’00” E A DISTANCE OF 125.00 FEET;
THENCE N00°31’37” W A DISTANCE OF 20.00 FEET; THENCE N90°00’00” E A DISTANCE OF 165.00 FEET; THENCE
S00°00’00” E A DISTANCE OF 24.03 FEET; THENCE N90°00’00” E A DISTANCE OF 120.83 FEET; THENCE
S00°00’00” E A DISTANCE OF 161.64 FEET; THENCE N89°00’00” W A DISTANCE OF 399.51 FEET; THENCE
S00°00’00” E A DISTANCE OF 377.30 FEET TO THE CENTERLINE OF MARTIN STREET; THENCE N89°14’03” W
ALONG SAID CENTERLINE OF MARTIN STREET A DISTANCE OF 34.19 FEET; THENCE N00°00’00” W A DISTANCE OF
343.04 FEET; THENCE S90°00’00” W A DISTANCE OF 10.00 FEET; THENCE N00°06’41” E A DISTANCE OF 515.00
FEET; THENCE S90°00’00” W A DISTANCE OF 4.00 FEET; THENCE N00°00’00” W A DISTANCE OF 164.85 FEET TO
SAID SOUTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY; THENCE N59°30’09” E ALONG
SAID SOUTHERLY LINE A DISTANCE OF 54.77 FEET TO THE POINT OF BEGINNING.

PARCEL 8

A PART OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY IN THE NE/4 OF SECTION 36, TOWNSHIP 34
SOUTH, RANGE 16 EAST, MONTGOMERY COUNTY, KANSAS, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID NE/4; THENCE ON AN ASSUMED BEARING OF S00°00’00” E
ALONG THE EAST LINE OF SAID NE/4 A DISTANCE OF 200.17 FEET TO THE NORTHERLY LINE OF THE FORMER
UNION PACIFIC RAILROAD RIGHT-OF-WAY; THENCE S59°30’09” W ALONG SAID NORTHERLY LINE A DISTANCE OF
1967.29 FEET TO THE TRUE POINT OF BEGINNING; THENCE S00°01’28” E A DISTANCE OF 116.03 FEET TO THE
SOUTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY;

 

 

THENCE S59°30’09” W ALONG SAID SOUTHERLY LINE A DISTANCE OF 438.39 FEET; THENCE SOUTHWESTERLY ON A
CURVE TO THE LEFT HAVING A RADIUS OF 1500.00 FEET, A CHORD WHICH BEARS S58°58’19” W, A CHORD
DISTANCE OF 27.78 FEET AND AN ARC LENGTH OF 27.78 FEET; THENCE N15°00’43” W A DISTANCE OF 104.03
FEET TO SAID NORTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY; THENCE N59°30’09” E
ALONG SAID NORTHERLY LINE A DISTANCE OF 497.23 FEET TO THE POINT OF BEGINNING.

PARCEL 8A

A PART OF THE NE/4 OF SECTION 36, TOWNSHIP 34 SOUTH, RANGE 16 EAST,
MONTGOMERY COUNTY, KANSAS, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID NE/4; THENCE ON AN ASSUMED BEARING OF S00°00’00” E
ALONG THE EAST LINE OF SAID NE/4 A DISTANCE OF 200.17 FEET TO THE NORTHERLY LINE OF THE FORMER
UNION PACIFIC RAILROAD RIGHT-OF-WAY; THENCE S59°30’09” W ALONG SAID NORTHERLY LINE A DISTANCE OF
1999.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID NORTHERLY LINE
S59°30’09” W A DISTANCE OF 465.00 FEET; THENCE N30°29’51” W A DISTANCE OF 20.00 FEET; THENCE
N59°30’09” E A DISTANCE OF 465.00 FEET; THENCE S30°29’51” E A DISTANCE OF 20.00 FEET TO
THE POINT OF BEGINNING.

PARCEL 9

A PART OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY IN THE NE/4 OF SECTION 36, TOWNSHIP 34
SOUTH, RANGE 16 EAST, MONTGOMERY COUNTY, KANSAS, DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID NE/4; THENCE ON AN ASSUMED BEARING OF
S00°00’00” E ALONG THE EAST LINE OF SAID NE/4 A DISTANCE OF 200.17 FEET TO THE
NORTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY; THENCE S59°30’09” W ALONG SAID
NORTHERLY LINE A DISTANCE OF 1007.15 FEET TO THE TRUE POINT OF BEGINNING; THENCE S00°00’00” E A
DISTANCE OF 116.06 FEET TO THE SOUTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY;
THENCE S59°30’09” W ALONG SAID SOUTHERLY LINE A DISTANCE OF 536.40 FEET; THENCE N00°00’00” W A
DISTANCE OF 116.06 FEET TO SAID NORTHERLY LINE OF THE FORMER UNION PACIFIC RAILROAD RIGHT-OF-WAY;
THENCE N59°30’09” E ALONG SAID NORTHERLY LINE A DISTANCE OF 536.40 FEET TO THE POINT OF BEGINNING.

PARCEL 10

A PART OF THE NW/4 OF SECTION 31, T34S, R17E, MONTGOMERY COUNTY,
KANSAS, DESCRIBED AS FOLLOWS:

 

 

COMMENCING AT THE NW CORNER OF SAID NW/4; THENCE ON AN ASSUMED BEARING OF S00°00’00” E ALONG THE
WEST LINE OF SAID NW/4 A DISTANCE OF 1013.07 FEET TO THE SW CORNER OF THE NORTH 75 ACRES OF LOTS 2
AND 3 OF SAID SECTION 31; THENCE S86°24’15” E ALONG THE SOUTH LINE OF SAID NORTH 75 ACRES OF LOTS 2
AND 3 A DISTANCE OF 1152.27 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG THE SOUTH
LINE OF SAID NORTH 75 ACRES OF LOTS 2 AND 3, S86°24’15” E A DISTANCE OF 1926.79 FEET MORE OR LESS
TO THE CENTERLINE OF THE VERDIGRIS RIVER; THENCE ALONG THE APPROXIMATE CENTERLINE OF SAID VERDIGRIS
RIVER THE FOLLOWING COURSES: S15°13’05” W A DISTANCE OF 90.34 FEET; THENCE S03°03’48” W A DISTANCE
OF 488.35 FEET; THENCE LEAVING SAID CENTERLINE OF THE VERDIGRIS RIVER S89°44’00” W A DISTANCE OF
2993.22 FEET MORE OR LESS TO THE EAST RIGHT-OF-WAY LINE OF SUNFLOWER STREET; THENCE N00°00’00” W
ALONG SAID EAST RIGHT-OF-WAY LINE A DISTANCE OF 27.93 FEET; THENCE N90°00’00” E A DISTANCE OF
1120.00 FEET; THENCE N00°00’00” W A DISTANCE OF 681.67 FEET TO THE POINT OF BEGINNING.

 

 

EXHIBIT B

Known Contamination Map

[see attached]

 

 

EXHIBIT C

Comprehensive Coke Management Plan

[see attached]

 

 

EXHIBIT B

Known Contamination Map

 

 

EXHIBIT C

Comprehensive Coke Management Plan

11911 Freedom Drive, Ninth Floor • Reston, Virginia 20190 • (703) 709-6500 • Fax (703) 709-8505

COMPREHENSIVE COKE MANAGEMENT PLAN

COFFEYVILLE RESOURCES REFINING & MARKETING, LLC

COFFEYVILLE RESOURCES NITROGEN FERTILIZERS, LLC

COFFEYVILLE, KANSAS

JUNE
11, 2007

 

 

 

i

Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.0
	 	Introduction 	 	 	1	 
	 
	 	 	 	 	 	 
	2.0
	 	Coke Handling Systems Description 	 	 	2	 
	 
	 	 	 	 	 	 
	3.0
	 	Coke Management Responsibilities 	 	 	4	 
	3.1
	 	Coffeyville Resources Refining & Marketing 	 	 	4	 
	3.2
	 	Coffeyville Resources Nitrogen Fertilizers 	 	 	4	 
	3.3
	 	Coke Handling Contractor 	 	 	5	 
	 
	 	 	 	 	 	 
	List of Figures:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Figure 1 - Site Plan	 	 	 	 
	 
	 	 	 	 	 	 
	List of Tables:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Table 1 - Coke Handling Process Responsibilities	 	 	 	 
	 
	 	 	 	 	 	 
	List of Appendices:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Appendix A - Coke Handling Contractor Agreement	 	 	 	 
	 
	 	Appendix B - Coke Handling Contractor Procedures	 	 	 	 
	 
	 	Appendix C - Kansas Motor Vehicle Regulations	 	 	 	 

 

 

 

1

1.0 Introduction

     This Comprehensive Coke Management Plan (the Plan) establishes management roles, procedures,
and practices for processing, storing, and handling petroleum coke and coke gasification slag at
the Coffeyville Resources Refining & Marketing, LLC (CRRM) refinery (400 North Linden Street) and
the Coffeyville Resources Nitrogen Fertilizers, LLC (CRNF) facility (701 East Martin Street). These
facilities are located adjacent to each other in Coffeyville, Kansas (Figure 1).

     The purpose of the Plan is to satisfy the applicable provisions of the environmental
agreement and shared services agreement between CRRM and CRNF. Petroleum coke is produced by CRRM
as part of their petroleum refining operations. CRNF uses the coke as a raw material to produce
the hydrogen-rich synthesis gas it uses to manufacture ammonia and other nitrogen fertilizers.
CRNF produces the coke gasification slag as a byproduct.

 

 

 

2

2.0 Coke Handling Systems Description

     Petroleum coke is produced by the CRRM coker units. During the coking process, petroleum coke
accumulates in one of the coker unit coke drums. When the drum is full, the process is switched to
an empty drum, and the full drum is quenched, cooled, and opened for coke cutting. Coke is cut from
the drum using a high-pressure water stream. Cut coke falls through the bottom of the drum into the
west end of the coker unit coke pit. The coke pit is surrounded by a concrete wall. The pit is
oriented in an east-west direction, and is sloped so that water flows toward the west end. An
overhead traveling crane is used to pile the coke for dewatering at, or near, the mid-point of the
pit.

     After the coke is dewatered, a tracked excavator, positioned on the paved area just outside
the pit to the south, loads coke from the middle section of the coke pit into dump trucks. The
coke is transported to either the CRNF coke pad for feed to the gasification process, or to the
Intermediate Coke Storage Area for temporary storage. A contractor manages the coke handling,
loading, and transportation operations under the direction of CRNF.

     Coke is transported to the coke pad from storage area or directly from the coke pit in dump
trucks. Trucks unload by dumping from the top of the ramp located at the west side of the coke
pad. At the coke pad, coke is blended with amendments for desired properties and then loaded into
a hopper on the feeder-breaker to begin the crushing process. Coke blending and loading is carried
out on the coke pad using a front-end loader. The coke is reduced in size to pieces less than 4
inches in diameter. From the feeder-breaker the coke is conveyed to the crusher, which further
reduces the size of the coke to pieces no larger than 0.5 inches in diameter. The crushed coke is
moved directly from the crusher to the storage silo by the storage silo conveyor. A contractor
manages the coke handling, loading, and crushing operations under the direction of CRNF.

     From the coke storage silo, coke is conveyed by the coke belt feeders onto the rod mill
conveyor. Fluxant is added and the combined feed is slurried with recycled grey water in the rod
mill. From the rod mill, the slurry is pumped to the slurry run-tanks; from there it is fed to the
gasification process.

 

 

 

3

     Slag is the residual ash and mineral content of the coke once all the carbon and hydrogen have
been taken in the gasification process. Slag is a dark grey or black granular solid and is produced
as a byproduct of the process.

     The Intermediate Coke Storage Area is a 3.7-acre section of the facility tank farm located
east of Sunflower Road. It is surrounded by a low berm topped by a gravel haul road. Coke is
stored on the northern portion of the area. Coke is transported to the intermediate storage area
from the coke pit, or from off-site petroleum coke suppliers, in dump or hopper trucks that are
unloaded by dumping. A front-end loader is used to move coke within the storage area and to load
coke into dump trucks for transportation from the storage area to the coke pad. Slag produced as a
residual of the gasification process is stored on the south side of the Intermediate Coke Storage
Area and is loaded by front-end loader into trucks for transportation off-site. Up to 60,000 tons
of coke (approximately a 40-day supply) can be stored in the Intermediate Coke Storage Area. A
contractor manages the coke and slag handling, loading, and transportation operations under the
direction of CRNF.

 

 

4

 

3.0 Coke Management Responsibilities

     This section provides a narrative description of the responsibility of each of the entities
involved in the coke handling and transportation process. A detailed breakdown of responsibilities
by area is provided in Table 1. This section also describes the minimum management practices and
standards to be followed by each entity.

3.1 Coffeyville Resources Refining & Marketing

     CRRM produces petroleum coke from the refinery’s coker units. Coking is a batch process. Coke
accumulates in a coke drum during the coking cycle and exits the process when cut from the drum by
a high-pressure water stream. CRRM is responsible for production of the coke, cutting coke from
the coke drums, and moving coke away from the base of the drums at the western end of the coke
pit, to the middle section of the coke pit, using the overhead traveling crane.

     Management practices for the coker process and coke cutting operations are beyond the scope
of this Plan. The CRRM management practices for handling cut coke include:

	 	•	 	Operate the crane so as to prevent coke from being spilled outside of the coke pit.
	 
	 	•	 	Ensure that any coke spilled outside of the coke pit is cleaned up before the
end of each shift.

3.2 Coffeyville Resources Nitrogen Fertilizers

     CRNF is the user of the petroleum coke, and acts as the primary supervisor of the coke
handling contractor. Coke is transported and crushed by the contractor under CRNF supervision
before being fed into the coke storage silo by the coke storage silo conveyor. CRNF operates the
coke storage silo, coke belt feeders, rod mill and the downstream gasification process. CRNF is
responsible for responding to coke spills from the coke storage silo conveyor and coke belt
feeders. CRNF is also responsible for non-routine maintenance and repair of fixed coke handling
equipment and associated emission control devices such as the coke crusher baghouse.

 

 

 

5

     Operating practices for the coke gasification process are beyond the scope of this Plan. The
CRNF management practices for the coke belt feeders, conveyors and coke storage silo include:

	 	•	 	Ensure that all conveyor, silo, and feeder covers are maintained in-place and
that access hatchways are kept closed.
	 
	 	•	 	Ensure that any coke leakage from the silo conveyor or belt feeders, and all
coke spilled during conveyor maintenance, is cleaned up before the end of each shift.
	 
	 	•	 	Complete all repairs of coke handling equipment in a timely manner.
	 
	 	•	 	Complete all repairs of the coke crusher baghouse and other emission control
devices as quickly as possible, and ensuring that the crusher is not operated unless
the baghouse is in service.
	 
	 	•	 	Install catch basin covers, sediment screens or other similar storm water
best management practices to prevent coke dust from entering storm drains located
near coke handling or transportation operations.

3.3 Coke Handling Contractor

     The coke handling contractor is responsible for loading, offsite transporting and unloading
coke at the facility, and for loading and transporting slag to buyers as specified in their
agreement with CRNF. A copy of the current agreement is provided in Appendix A. This includes the
responsibility to operate and maintain all coke loading equipment and trucks. The contractor is
also responsible for operation and routine maintenance of the feeder-breaker, crusher, and related
conveyors. Finally, the contractor operates a street sweeper to remove coke and slag dust from
paved facility roads.

     The contractor has developed a set of procedures for coke transportation and handling
operations that are used to train the contractor’s employees. A current copy of these procedures
is provided in Appendix B.

     The contractor’s existing procedures specify several standard management practices, including
periodically washing coke loading equipment and trucks, operating the street sweeper, and
maintaining good communication to prevent accidents.

 

 

 

6

     Kansas motor vehicle regulations apply to dump trucks carrying coke when driving on or
crossing Sunflower Road or other public roads. A complete text of the current regulation is
provided in Appendix C.

     The contractor should ensure that its existing procedures are followed and should incorporate
the additional management practices listed below into their procedures. Additional management
practices for coke handling and transportation include the following:

	 	•	 	Ensure that spills of coke from trucks are minimized, and that spillage onto
public roads is prevented.
	 
	 	•	 	Clean up all coke spilled during truck loading from the coke pit as soon as
practical. Ensure that all coke spilled on or around the loading area on the south
side of the coke pit is cleaned up before the end of each shift.
	 
	 	•	 	Clean up all coke spilled over the walls of the CRNF coke pad before the end of
each shift.
	 
	 	•	 	Maintain catch basin covers, sediment screens or other similar storm water
best management practices to prevent coke dust from entering storm drains located near
coke handling or transportation operations.

     The following specific additions should be made to the contractor’s operating procedures:

	 	•	 	Add items to the section on loading and unloading coke in the 10 Wheel Dump
Truck Procedures, to the Front End Loader Procedure, and to the Coke Pit Excavator
Procedure specifying that loaders fill coke trucks no higher than 6 inches below the
top of the bed walls.
	 
	 	•	 	The parties should acknowledge that the Coke Handling Agreement (Appendix A)
was previously assigned to Savage Service Corporation (by Banks Construction Company,
Inc.) and to Coffeyville Resources Nitrogen Fertilizers, LLC (by Farmland Industries,
Inc.).
	 
	 	•	 	The Coke Handling Procedures (Appendix B) refer to the gasification/nitrogen
plant as a part of the refinery. These references should be updated to reflect the
split in ownership between Coffeyville Resources Refining & Marketing, LLC and
Coffeyville Resources Nitrogen Fertilizers, LLC.

 

 

 

7

	 	•	 	The Coke Handling Procedures (Appendix B) make reference to, and are
subordinate to, refinery safety and security procedures. These sections should be updated
to reference CRRM safety and security procedures when work is conducted on refinery
property and CRNF safety and security procedures when work is conducted on nitrogen plant
property.

 

 

Figures

 

 

 

 

Tables

 

 

Table 1

Coke Handling Process Responsibilities

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Responsible for	 	Responsible for	 	Responsible for Heavy	 	Responsible for
	 	 	 	 	Daily	 	Routine	 	Maintenance and	 	Clean up of spilled
	Area	 	Process	 	Operations	 	Maintenance	 	Repair	 	Coke
	 
	 	 	 	 	 	 	 	 	 	 
	Coker Pit

	 	Coke cutting
	 	CRRM
	 	CRRM
	 	CRRM
	 	CRRM
	Coker Pit

	 	Piling cut coke for dewatering.

Crane operation.

  Coke storage in
pit.
	 	CRRM
	 	CRRM
	 	CRRM
	 	Contractor
	Coker Pit

	 	Loading coke trucks
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Facility-wide

	 	Street Sweeping
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Intermediate Coke 

Storage Area

	 	Emptying coke and slag trucks
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Intermediate Coke 

Storage Area

	 	Loading coke and slag trucks
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Intermediate Coke 

Storage Area

	 	Coke Storage in bermed area
	 	Contractor
	 	Contractor
	 	CRNF
	 	Contractor
	Coke Pad

	 	Unloading Coke Trucks
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Coke Pad

	 	Coke transfer and conveyor loading
	 	Contractor
	 	Contractor
	 	Contractor
	 	Contractor
	Coke Pad

	 	Feeder-breaker Conveyor and operation
	 	Contractor
	 	Contractor
	 	CRNF
	 	Contractor
	Coke Pad

	 	Coke Crusher conveyor and operation
	 	Contractor
	 	Contractor
	 	CRNF
	 	Contractor
	Coke Pad

	 	Coke Crusher Baghouse
	 	Contractor
	 	Contractor
	 	CRNF
	 	Contractor
	Coke Pad

	 	Coke Storage Silo Conveyor
	 	Contractor
	 	Contractor
	 	CRNF
	 	CRNF
	Coke Storage

	 	Coke Storage Silo
	 	CRNF
	 	CRNF
	 	CRNF
	 	CRNF
	Coke Slurrying

	 	Belt Feeder, Fluxant Storage and
Feeders, Rod Mill, Slurry Run Tanks
	 	CRNF
	 	CRNF
	 	CRNF
	 	CRNF
	Coke Gasification

	 	Gasification Process
	 	CRNF
	 	CRNF
	 	CRNF
	 	CRNF
	Slag Pad

	 	Slag Truck Loading
	 	Contractor
	 	Contractor
	 	CRNF
	 	Contractor

 

 

Appendix A — Coke Handling Contractor Agreement

 

 

COKE HANDLING AGREEMENT

BETWEEN

BANKS CONSTRUCTION COMPANY, INC.

AND

FARMLAND INDUSTRIES, INC.

     THIS COKE HANDLING AGREEMENT is entered into and effective as of the 1st day of July, 2000, by
and between BANKS CONSTRUCTION COMPANY, INC., a Kansas corporation (“Banks”) and FARMLAND
INDUSTRIES, INC., a Kansas cooperative corporation (“Farmland”). Banks and Farmland are each a
“Party” to the Agreement and collectively are the “Parties.”

RECITALS:

     WHEREAS, Farmland owns a petroleum refinery located at Coffeyville, Kansas (the “Refinery”);
and

     WHEREAS, Farmland has invested in facilities that will, among other things, convert the Coke
produced at the Refinery into hydrogen for use in its ammonia synthesis loop located in
Coffeyville, Kansas and into purified carbon dioxide for use in Farmland’s UAN Plant located in
Coffeyville, Kansas; and

     WHEREAS, Banks has the equipment, personnel and expertise to haul, store and handle Coke, all
in accordance with this Agreement; and

     WHEREAS, Farmland and Banks desire to enter into this Agreement providing for the handling
and storage of Coke, 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 Parties agree
as follows:

ARTICLE
I: DEFINITIONS

Section 1.1 “Agreement” means this Coke Handling Agreement and the Exhibits hereto, all as the
same may be amended, modified or supplemented from time to time.

Section 1.2 “Coke” means coke produced at the Refinery, and coke produced other than at the
Refinery, to be used by Farmland at its Fertilizer Complex.

Section 1.3 “Coke Pit” means the existing Refinery coke storage pit.

Section 1.4 “Coke Unit” means the existing Refinery coker unit.

 

 

Section 1.5 “Commercially Reasonable” means in accordance with commonly accepted trade practices
among reputable businesses and commercial enterprises engaged in the same or similar businesses,
acting prudently.

Section 1.6 “Day” means any calendar day.

Section 1.7 “Equipment” means that equipment which is needed by Banks to duly and timely perform
Banks’ duties under this Agreement.

Section 1.8 “Fertilizer Complex” means Farmland’s fertilizer complex at or near the Refinery
consisting of the hydrogen production facility, the air separation unit, the UAN plant, the
ammonia synthesis loop, the offsite sulfur recovery unit, the utility facilities, the grounds and
related connecting pipes and improvements.

Section 1.9 “Fertilizer Plant Coke Silo” means the new coke silo,
01-T101.

Section 1.10 “Fertilizer Plant Coke Storage Area” means the open containment area south of the
coke crushing and conveying system.

Section 1.11 “Fertilizer Plant Fluxant Storage Shed” means the storage shed east of the Fertilizer
Plant Coke Silo.

Section 1.12 “Fertilizer Plant Slag Storage Area” means the open containment area south of the
gasifier structure and north of Martin Street.

Section 1.13 “Fertilizer Plant Weigh Bin Feeder Hopper” means slagging additive truck hopper,
0l-T-102.

Section 1.14 “Force Majeure” means war (whether declared or undeclared); fire, flood, lightning,
earthquake, storm, tornado, or any other act of God; strikes, lockouts or other labor
difficulties; civil disturbances, riot, sabotage, accident, and official order or directive,
including with respect to condemnation, or industry-wide request or suggestion by any governmental
authority or instrumentality thereof which, in the reasonable judgment of the Party affected,
interferes with such Party’s performance under this Agreement; any disruption of labor; any
inability to secure materials and/or services, including, but not limited to, inability to secure
materials and/or services by reason of allocations promulgated by authorized governmental
agencies; or any other contingency beyond the reasonable control of the affected Party, which
interferes with such Party’s performance under this Agreement.

Section 1.15 “Imported Coke” means Coke produced from a source other than the Refinery.

Section 1.16 “Intermediate Coke Storage Area” means the open storage area at the Refinery tank
farm east of Sunflower Road.

Section 1.17 “Laws” means all applicable laws, regulations, orders and decrees, including,
without limitation, laws, regulations, permits, orders and decrees respecting health, safety and
the environment.

 

 

Section 1.18 “mlbs” means thousand pounds.

Section 1.19 “Multi-Party Dispute” shall have the meaning given such term in Section 5.1 hereof.

Section 1.20 “Party” and “Parties” shall have the meaning given such terms in the
introductory paragraph hereof.

Section 1.21 “Refinery” shall have the meaning given such in the introductory paragraph hereof.

Section 1.22 “ST” means short tons.

Section 1.23 “STPD” means short tons per Day.

ARTICLE II: GENERAL

Section 2.1 Equipment

     Banks
shall purchase, maintain and operate all Equipment. Such Equipment shall be suitable
for conducting the operations for which it is used in a safe, efficient and effective manner
without causing damage to the Refinery, the Fertilizer Complex or any property appurtenant
thereto.

Section 2.2 Costs

    
 Banks shall be responsible for and shall pay all costs of equipment, labor, fuels,
lubricants, maintenance and repair required for the Equipment. Lubricants, fuel and repair costs
for Farmland owned equipment will be provided or paid for by Farmland.

Section 2.3 Haul Roads

     Farmland shall provide adequate roads for Banks to haul Coke, slag, fluxant and other
materials (“Materials”) pursuant to this Agreement. Banks
shall be responsible for normal
maintenance of roads pursuant to this Agreement. Farmland will provide suitable materials for
maintenance of the roads.

Section 2.4 Storage Areas

     Farmland shall provide adequate space for the establishment of the Fertilizer Plant Coke
Storage Area, Fertilizer Plant Slag Storage Area and Intermediate Coke Storage Area. These storage
areas will be established within a reasonable distance from the source of the materials to be
stored therein and connected to such source by adequate hauling roads to allow Banks to meet its
obligations hereunder.

 

 

Section 2.5 Miscellaneous Services

     During the term of this Agreement, Banks shall provide Coke crushing, sizing and precision
blending, as directed by Farmland, as well as other Coke handling services not otherwise
specifically described herein. Farmland shall pay Banks for such services as agreed by the Parties
and otherwise in accordance with Exhibit III.

Section 2.6 Temporary Shut Down

     Except for the obligations contained in Section 7.6, the requirements, obligations and rights
under this Agreement shall be suspended during any period that the Refinery or Fertilizer Complex
is shut down. A temporary shutdown of the Refinery or Fertilizer Complex shall be deemed to have
occurred and be continuing for such period as Farmland shall reasonably designate. Farmland shall
give Banks notice of a shutdown of the Refinery or Fertilizer Complex upon such shutdown. However,
Banks shall continue to be compensated in accordance with the rate structure described in Section
7.2.

Section 2.7 Solicitation of Employees

     During the term of this Agreement and for a period of one year after its termination, neither
party shall solicit, offer employment to or in any other manner cause or encourage an employee of
the other party to terminate employment with such other party for the purpose of being employed by
the soliciting party.

Section 2.8 Days Per Week

     In order to facilitate the level of support Farmland desires for the Refinery under this
Agreement, Banks shall operate and provide the services set forth herein a minimum of five Days
per week and a maximum of seven (7) Days per week. However, it is anticipated a six (6) day per
week operation will be required. The number of Days per week is to be determined by that level of
support Farmland requires to maintain the operation of the Refinery and Fertilizer Complex at the
capacities determined by Farmland in its sole discretion.

Section 2.9 License

     Until the earlier of the termination of this Agreement or notice by Farmland to Banks, Banks
shall have a license to keep an office trailer and fuel tanks (sufficient to allow it to perform
its duties under this Agreement) at a location on Farmland property, as determined by
Farmland.

 

 

ARTICLE III: COKE HANDLING

Section 3.1 Wet Coke Handling

     Farmland shall use its Commercially Reasonable efforts to cause the Refinery to
cooperate with Banks to operate the existing bridge crane so as to move wet Coke, generally
from the west end of the Coke Pit, to approximately the mid-point of the Coke Pit. In order to
facilitate the timely and efficient loading of trucks by Banks, Farmland shall use its
Commercially Reasonable efforts to cause the overhead crane operator to fully cooperate with,
and comply with reasonably requests made by, Banks to move the Coke to the mid-point of the
Coke Pit to make available for loading. Provided that the Refinery’s Coke production is
available, Banks shall load onto Banks’ trucks in a safe and efficient manner, all Coke to support
the continuous 24-hour per day, 7-days per week operation of the Coke Unit and the Fertilizer
Complex. The operator of the Refinery may from time to time, in its discretion, hire Banks to
move wet coke from the west end of the Coke Pit to the midpoint of the Coke Pit.

Section 3.2 Coke Handling

     Banks, at the direction of Farmland, shall load onto Banks’ trucks and transport, in a safe
and efficient manner, wet Coke from the Coke Pit to either the Intermediate Coke Storage Area or
the Fertilizer Plant Coke Storage Area. Banks, at the direction of Farmland, shall load into
Banks’ trucks and transport, in a safe and efficient manner, Coke from the Intermediate Coke
Storage Area to the Fertilizer Plant Coke Storage Area. All Coke handling shall be done to support
the continuous 24-hour per day, 7 days per week operations of the Coke Unit and the Fertilizer
Complex.

Section 3.3 Intermediate Coke Storage Area Management

     Banks shall receive and stockpile Coke, to the extent possible, separated in accordance with
quality and source, as requested by Farmland, in the Intermediate Coke Storage Area. Farmland
shall supply adequate space and facilities to stockpile all Coke to be stockpiled at the
Intermediate Coke Storage Area. Farmland shall supply Banks with adequate facilities at the
Intermediate Coke Storage Area capable of receiving Coke in a manner that will reasonably control
tracking of Coke by Banks’ hauling equipment. In addition, Farmland shall supply adequate
facilities to control Coke dust and to support Banks’ clean-up activities. Banks shall be
responsible for the receipt of Coke in a method so as to eliminate or control the tracking of Coke
by its vehicles, the suppression of Coke dust and the general clean-up in and around the
Intermediate Coke Storage Area. Banks shall blend, as directed by Farmland, the various qualities
and sources of Coke and shall load such blended Coke onto Banks’ trucks for delivery to the
Fertilizer Plant or as otherwise directed by Farmland.

 

 

Section 3.4 Fertilizer Plant Coke Handling

     Banks, at the direction of Farmland, shall receive, stockpile and handle blended and unblended
Coke at the Fertilizer Plant Coke Storage Area. Banks shall, to the extent reasonably possible,
maintain separate stocks of blended and unblended Coke. Farmland shall supply adequate space and
facilities to stockpile coke at the Fertilizer Plant Coke Storage Area. Farmland shall supply Banks
with adequate facilities to control Coke dust and to support Banks’ clean up activities. Banks
shall be responsible for the receipt and handling of Coke in a method so as to eliminate or control
the tracking of Coke by its vehicles, the suppression of Coke dust and the general clean up in and
around the Fertilizer Plant Coke Storage Area. Banks shall feed Coke stored in the Fertilizer Plant
Coke Storage Area into the Fertilizer Plant Coke Silo in an efficient manner at such rates to
support the continuous 24-hour per day, 7-day per week operation of the Fertilizer Complex.

Section 3.5 Fertilizer Plant Equipment Maintenance

     Banks shall operate and provide daily maintenance on an as needed basis for the Farmland coke
handling equipment listed in Exhibit II. Banks shall not be responsible for repairs to or the
replacement for any such equipment.

ARTICLE IV: FLUXANT HANDLING

Section 4.1 Fluxant Handling

     Banks shall receive, unload, manage and store fluxant at the Fertilizer Plant Fluxant Storage
Shed. Banks shall transport fluxant from the Fertilizer Plant Fluxant Storage Shed to and feed
into the Fertilizer Plant Weigh Bin Feeder Hopper sufficient fluxant to support the continuous
24-hour per day, 7-days per week operation of the Fertilizer Complex. Fluxant recipe and materials
shall be determined by Farmland.

ARTICLE V: SLAG HANDLING

Section 5.1 Slag Handling

     Banks, at the direction of Farmland, shall load onto Banks’ trucks in a safe and efficient
manner, slag from the Fertilizer Plant Slag Storage Area (after Farmland has performed the
dewatering process) so as to support the continuous 24-hour per day, 7-day per week operation of
the Fertilizer Complex.

ARTICLE VI: TERM

Section 6.1 Term

     The Agreement shall be for an initial term of five (5) years and shall thereafter extend for
additional five (5) year periods unless and until either Party gives the other Party at least
four (4) months’ prior written notice of election not to extend.

 

 

ARTICLE VII: PAYMENT

Section 7.1 Payment

     Banks shall invoice on a monthly basis Farmland for services rendered hereunder. All such
invoices will be due net 30 days. Such invoices shall include the services rendered. Invoices not
paid when due shall accrue interest at the rate of 18% per annum from the due date until paid.

Section 7.2 Per Day Rate for Handling Coffeyville Produced Coke

     This rate includes the following work listed in the above-mentioned scope of work:

	 	3.1	 	Loading wet coke from the Coke Pit into hauling equipment.
	 
	 	3.2	 	Hauling wet coke from the Coke Pit into the Intermediate Coke Storage Area
and/or Fertilizer Plant Coke Storage Area.
	 
	 	3.3	 	Managing the Intermediate Coke Storage Area
	 
	 	3.4	 	Managing the Fertilizer Plant Coke Storage Area
	 
	 	3.4	 	Filling the Fertilizer Plant Coke Silo
	 
	 	4.1	 	Filling the Fertilizer Plant Weigh Bin Feeder Hopper
	 
	 	5.1	 	Loading slag from Fertilizer Plant Slag Storage Area into hauling
equipment; 50 ton per day maximum

Per Day rate for handling Coke (including all Equipment, personnel, maintenance and fuel) =
$3,000.00 per Day. Five (5) days per week, Fifty-Two (52) weeks per year minimum, as required
pursuant to this Agreement. However, it is anticipated that Banks will be required to operate six
(6) days per week to support Farmland operations.

Section 7.3 Rate for Section 3.3 Hauling Coke from Intermediate Coke Storage Area to Fertilizer
Plant Coke Storage Area

     Rate for loading and hauling Coke, in excess of Coke addressed in Section 3.2, from
Intermediate Coke Storage Area to Fertilizer Plant Coke Storage Area = $30.00 per truck (tandem
axle) load.

Section 7.4 Rate for Handling Imported Coke

     This rate includes handling imported Coke pursuant to section 3.4 when the Day rate per
Section 7.2 does not apply. Rate for handling imported Coke = $1.50 per ST. The parties agree that
a fully loaded tandem axle truck to be used by Banks for the handling of Imported Coke will carry
approximately 20.0 ST of Coke. Farmland may pay based on such approximate weight, or may at its
discretion require Banks to weigh trucks transporting imported Coke. In the event Farmland
requires Banks to weigh any trucks loaded with imported Coke, Farmland shall provide priority
access to its scales for such purpose or shall provide scales dedicated to weighing Banks’ trucks
transporting imported Coke.

 

 

Section 7.5 Service Personnel

     A service person will be provided by Banks to perform basic maintenance to Fertilizer Complex
equipment as contemplated in Section 3.5 hereof. This price includes normal non-special hand tools.
Service person = $250.00 per shift.

Section 7.6 Personnel Availability

     In the event that the Refinery or Fertilizer Complex is shut down, in accordance with Section
2.6, Banks’ employees will be made available to Farmland to assist in duties or functions, for
which such employees are qualified, as assigned by Farmland.

Section 7.7 Adjustments to the Base Rates

     Throughout the term of this Agreement, the Base Rates shall be adjusted in the manner
provided and demonstrated in Exhibit I. For the purpose of calculating adjustment as set forth
herein, the rate component breakdown, Base Rate, index definitions, index base dates and
procedures contained in Exhibit I shall apply.

Section 7.8 Government Imposition

     In the event that any new law, regulation or requirement is promulgated or the interpretation
of any existing law, regulation or requirement is changed subsequent to the date of this
Agreement, which increases or decreases Banks’ cost, Banks shall compute such cost changes and
adjust its rate to reflect such changes. Farmland shall have the right to review and approve,
which approval shall not be unreasonably withheld, Banks’ calculations hereunder prior to change
going into effect.

ARTICLE VIII: DISPUTES

Section 8.1 Disputes

     (a) 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 Section 8.1. The Parties shall first submit the Dispute to a representative of each Party,
who shall then meet within 30 days to resolve the Dispute. If the Dispute has not been resolved
within 60 days of the submission of the Dispute to such representative, the Dispute shall be
submitted to a mutually agreed arbitrator who shall then meet with the Parties within 30 days to
resolve the Dispute. If the Parties cannot agree on an arbitrator, each Party shall appoint one
arbitrator, each such arbitrator being appointed within 10 days thereafter, and the appointed
arbitrators shall mutually select a fourth and fifth arbitrator within 10 days after their
appointment. The arbitration shall be in accordance with the then current Commercial Arbitration
Rules of the American Arbitration Association. The arbitration shall be held in Kansas City,
Missouri, or such other place as the Parties agree, within 30 days of the appointment of the

arbitrator(s). The judgment of the arbitrator(s) shall be determined within 30

 

 

days after the conclusion of the arbitration hearing, and shall be final and binding on the
Parties and may be entered in any court having jurisdiction. The costs and expenses of the
arbitrator(s) shall be borne equally by the Parties, and the Parties shall pay their own
respective attorney’s fees and other costs.

     (b) 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 pursuant to the provisions of
this Section 8.1.

ARTICLE IX: INDEMNITY AND INSURANCE COVERAGE

Section 9.1 Indemnification

     Each of the Parties shall indemnify, defend and hold the other Parties and their respective
officers, directors and employees harmless from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) imposed upon, incurred by or asserted against the person seeking
indemnification that are caused by, or attributable to, result from or arise out of the negligence
or willful misconduct of the indemnifying party.

Section 9.2 Indemnification Procedures

     (a) Promptly after receipt by a Party seeking indemnification (the “Indemnitee”) of notice of
the commencement of any action that may result in a claim for indemnification pursuant to this
Article IX, the Indemnitee shall notify the indemnifying party (the “Indemnitor”) in writing
within 30 days thereafter, provided, however, that any omission so to 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 IX, including the choice and
direction of any legal counsel.

     (b) An Indemnitee shall have the right to employ separate 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 employ counsel within a reasonable period
of time after being given the notice required above or (iii) the Indemnitee shall have been
advised in writing by its counsel that representation of such Indemnitee and other parties by the
same counsel would be inappropriate under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed) due to actual or potential
differing interests between them. It is understood, however, that to the extent more than one
Indemnitee is entitled to employ separate 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 actual or potential differing
interests with the Indemnitor, unless but only to the extent the Indemnitees have actual or
potential differing interests with each other.

     (c) The Indemnitor shall not be liable for any settlement of any such 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
expenses by reason of such settlement or judgment.

Section 9.3 Insurance

     Without limiting in any way the scope of obligations or liabilities assumed hereunder by
Banks, Banks shall procure or cause to be procured and maintained at its expense, for the duration
of this Agreement, and with insurance companies acceptable to Farmland, the insurance policies
described below.

     (a) Workers’ Compensation and Employer’s Liability Insurance — Covering the employees
of Banks for all compensation and other benefits required of Banks by the Workers’ Compensation or
other statutory insurance laws in the state having jurisdiction over such employees, and over the
location where the Work is being performed. Employer’s Liability Insurance shall have limits of
Five Hundred Thousand Dollars ($500,000) per occurrence.

     (b) General Liability Insurance — Including contractual liability, XCU hazards
(explosion, collapse and underground) and completed operations to cover liability for bodily
injury and property damage with a combined single limit of Two Million Dollars ($2,000,000)
per occurrence.

     (c) Business Automobile Liability Insurance — If owned, hired or non-owned automobile
equipment is used in the performance of this Agreement, to cover liability for bodily injury and
property damage with a combined single limit of Two Million Dollars ($2,000,000) per occurrence.

     (d) Special Provisions Concerning Policies Placed by Banks — The General and Business
Automobile Liability policies shall include Farmland and its Affiliates as additional insured for
liabilities arising out of the performance under this Agreement and shall be primary to any other
insurance of Farmland, provided however, insurance provided by Banks shall not cover the negligent
acts or omissions of any of the additional insureds. The worker’s compensation and employee’s
liability insurance shall include a waiver executed by the carrier, waiving any right of
subrogation the carrier might have against Farmland or its Affiliates or adding Farmland under an
alternate employer endorsement. Such insurance shall specifically provide that it applies
separately to each insured against which claim is made or suit is brought, except with respect to
the limits of the insurer’s liability.

 

 

     Prior to commencement of any Work, Banks shall furnish Farmland with Certificates of
Insurance, which document that all coverages and endorsements required by this Article have been
obtained. Renewal certificates shall be obtained by Banks as and when necessary and copies thereof
shall be forwarded to Farmland as soon as same are available and in any event prior to the
expiration of the policy so renewed. These certificates shall provide that the insurer shall give
thirty (30) days written notice to Farmland prior to change or cancellation of any policy. In no
event shall Farmland’s acceptance of an insurance certificate that does not comply with this
paragraph constitute a waiver of any requirement of this Article.

Section 9.4 Survival

     The provisions of this Article shall survive the termination of this Agreement.

ARTICLE X: ASSIGNMENT

Section 10.1 Assignment

     This Agreement shall extend to and be binding upon the Parties hereto, their successors and
assigns. No assignment by Banks to any other Party shall be permitted hereunder without the
express written consent of Farmland, and any assignment made without such express consent shall be
void. Farmland shall have the right to assign this Agreement (or interests therein).

ARTICLE XI: GOVERNING LAW

     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. TO THE EXTENT SUCH LAWS
CONFLICT WITH THE FEDERAL ARBITRATION ACT, THE FEDERAL ARBITRATION ACT SHALL APPLY.

ARTICLE XII: NOTICE

     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) and 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. 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 Section:

 

 

If to Farmland:

Farmland Industries, Inc.

Nitrogen Plant

701 East North Street

Post Office Box 5000

Coffeyville, Kansas 67337

Attention: General Manager

Fax:(316) 252-4357

with a copy to:

Farmland Industries, Inc.

Department 62

3315 North Oak Trafficway

Kansas City, Missouri 64116

Attn: General Counsel

Fax: (316) 241-5562

If to Banks:

Banks Construction Company, Inc

1515 West 6th

P.O. Box 995

E1 Dorado, Kansas 67042

Attn: Vice President

Fax: (316) 321-2794

With a copy to:

Banks Construction Company, Inc.

5250 South Commerce Drive

Suite 200

Salt Lake City, UT 84107

Attn: Exec Vice President & General Counsel

FAX: (801) 261-8766

or such other addresses as either Party designates by registered or certified mail addressed to the
other Party.

ARTICLE XIII: EXHIBITS

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

 

 

ARTICLE XIV: HEADINGS

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

ARTICLE XV: FORCE MAJEURE

Section 15.1 Force Majeure

     No Party shall be liable to any other Party for failure of or delay in performance hereunder
(except for the payment of money) to the extent that the failure or delay is due to Force Majeure.

Section 15.2 Suspension of Performance

     Performance under this Agreement shall be suspended (except for the payment of money then due
or to become due) during the period of Force Majeure to the extent made necessary by the Force
Majeure.

Section 15.3 No Extension

     No failure of or delay in performance pursuant to this Article XV shall operate to extend the
term of this Agreement. Performance under this Agreement shall resume to the extent made possible
by the end or amelioration of the Force Majeure event.

Section 15.4 Notice of Force Majeure

     Upon the occurrence of any event of Force Majeure, the Party claiming Force Majeure shall
notify the other Parties promptly in writing of such event and, to the extent possible, inform the
other Parties of the expected duration of the Force Majeure event and the performance to be
affected by the event of Force Majeure under this Agreement. Each Party shall designate a person
with the power to represent such Party with respect to the event of Force Majeure. The Party
claiming Force Majeure shall use its Commercially Reasonable efforts, in cooperation with the
other Party and such Party’s designee, to diligently and expeditiously end or mitigate the Force
Majeure event. In this regard, the Parties shall confer and cooperate with one another in
determining the most cost-effective and appropriate action to be taken. If the Parties are unable
to agree upon such determination, the matter shall be determined by dispute resolution in
accordance with Article VIII.

ARTICLE XVI: MISCELLANEOUS

Section 16.1 Standard of Conduct

     The Parties shall at all times carry out their duties and responsibilities hereunder in an
efficient, cost-effective and prudent manner, consistent with standards and practices that are
customary in the chemicals and industrial gases industry.

 

 

Section 16.2 Independent Contractor

     The Parties acknowledge and agree that Banks shall not, by reason of this Agreement, be an
agent, employee or representative of Farmland with respect to any matters relating to this
Agreement, unless specifically provided to the contrary in writing by such Party. This Agreement
shall not be deemed to create a partnership or joint venture of any kind between the Parties.

Section 16.3 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 any
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 16.4 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 16.5 Entire Agreement

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

 

 

EXECUTED as of the date first above set forth.

	 	 	 	 	 	 	 
	 	 	FARMLAND INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Neal E. Barkley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Neal E. Barkley	 	 
	 

	 	Title:
	 	Plant Manager	 	 
	 
	 	 	 	 	 	 
	 	 	BANKS CONSTRUCTION COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:
	 	/s/ Nathan N. Savage	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Nathan N. Savage	 	 
	 

	 	Title:
	 	Vice President	 	 

 

 

EXHIBIT I

Adjustments to the Base Rates

     Throughout the term of this Agreement, the Base Rates shall be adjusted in the manner provided
and demonstrated in this Exhibit I. For the purpose of calculating adjustment as set forth herein,
the following rate component breakdown, Base Rate, index definitions, index base dates and
procedures shall apply:

Rate Component Breakdown:

	 	 	 	 	 
	 	 	% of
	 	 	Base Rates
	(1)      Fuel Component Percent
	 	 	15	%
	(2)       Other Operating Costs
	 	 	85	%

	 	 	 
	Section	 	Base Rate
	Section 7.2

	 	$3,000 per day
	Section 7.3

	 	$30 per truck
	Section 7.4

	 	$1.50 per ST
	Section 7.5

	 	$250 per shift

Index Definition:

Component (1) — Fuel

     The Fuel Component shall be adjusted quarterly beginning March 1, 2001 for changes in the
Lundberg Survey Inc.’s Wholesale Price Average (Blue Sheets) for Coffeyville, Kansas, Branded Low
Sulfur Terminal #2 diesel price. The Lundberg Price published for each third Friday of the month
immediately preceding each quarterly adjustment date shall be used for each adjustment. The Base
Fuel Component shall be the June 2, 2000 Lundberg posting.

Component (2) — Other Operating Costs

     The Other Operating Costs Component shall be adjusted annually, beginning June 1, 2001, for
changes in the Producer Price Indexes for special commodities groupings, not seasonally adjusted,
industrial commodities less fuels and related products and power as first published monthly by the
U. S. Department of Labor in its PPI Detailed Report publication. Each immediate prior May
index will be used for each June 1 adjustment. The base index will be the June 1, 2000 PPI
posting. The parties agree that the Other Operating Costs component shall not adjust more than
2.5% per contract year from the base index.

     Adjustments shall be calculated by multiplying each rate compound (i.e., Fuel and Other
Operating Costs) by a factor, the numerator of which is the current index figure and the
denominator of which is the base index figure. Computation for rate adjustments shall be

 

 

rounded to the nearest $0.001. Below is an example of the rate adjustment determination. The
parties agree that in no case shall the rate per ton be adjusted lower than the Base Rates in
effect as of the date of this Agreement. In the event any of the above defined indexes are
discontinued or suspended, the parties agree to negotiate, in good faith, for suitable
substitutes for such index.

Example

I. Current Rate Components: (Base Rate of $3,000/day)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base	 	Index	 	Current
	Component	 	Component	 	% Change	 	Adjustment
	1. Fuel (15%)
	 	$450.00/shift	 	 	5.15	 	 	 	23.18	 
	2. All other components (85%)
	 	$2,550.00/shift	 	 	2.5	*	 	 	63.75	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	86.93	 

II. Index Changes:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Base 	 	Example	 	Index
	Rate Component	 	Index	 	Index	 	Change	 	% Change
	1. Fuel
	 	Lundberg	 	 	.834	 	 	 	.877	 	 	 	5.15	 
	2. All other components
	 	PPI	 	 	155.2    	 	 	 	160.1    	 	 	 	3.16	*

III. Rate Adjustment:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Current
	 	 	 	 	 	 	Current	 	Adjusted
	 	 	Base	 	Adjustment	 	Rate
	 
	 	$3,000/day	 	$	86,93	 	 	 	$3086.93	 

 

			
	*	 	The Other Operating Component shall not be adjusted more than 2.5% per contract
year.

 

 

EXHIBIT II

Fertilizer
Complex Coke Handling Equipment

	 	 	 
	Equipment No.	 	Description
	1. l-H-101

	 	Feeder Breaker
	2. l-H-102

	 	Crusher Feed Conveyor
	3. l-H-10

	 	Bag House at Crusher Building
	4. l-H-103

	 	Magnetic Separator at Crusher
	5. l-Y-101

	 	Crusher
	6. 1-H-105

	 	Silo Feed Conveyor
	7. 1-H-08A

	 	Silo Dust Collector
	8. None

	 	Slagging Additive Storage Building
	9. 01-T-102

	 	Fertilizer Plant Weigh Bin Feeder Hopper
	10. 01-H-120

	 	Slagging Additive Screw Conveyor
	11. 01-H-123 A/B

	 	Slagging Additive Chutes
	12. 01-H-121 A/B

	 	Slagging Additive Chain Conveyor
	13. 01-H-122 A/B

	 	Slagging Additive Diverter Gates
	14. 01-P-10

	 	Sump Pump at Fertilizer Plant Coke Storage Area
	15. None

	 	Fertilizer Plant Coke Storage Area Sump
	16. To Be Determined

	 	Sump Pump at Intermediate Coke Storage Area

 

 

Appendix B — Coke Handling Contractor Procedures

 

 

10 Wheel Dump Truck Procedures

Petroleum Coke and Slag

PURPOSE: The purpose of this procedure is to outline the correct procedure for loading and
unloading petroleum coke and slag into 10 wheel dump trucks operating in the Coffeyville Resources
Refinery.

HAZARDS: Hazards associated with loading and unloading petroleum coke stag utilizing 10 wheel dump
trucks include the following:

	 	*	 	Operating within the confines of a refinery. All refinery safety rules and regulations
must be followed 100% of the time — NO EXCEPTIONS
	 
	 	*	 	Tipping trailer bed over when trailer bed is raised for dumping
	 
	 	*	 	Moving around heavy machinery, golf carts and pedestrians
	 
	 	*	 	Falls while climbing in and out of dump truck
	 
	 	*	 	Hydrogen Sulfide (H2S) — In sufficient concentrations, H2S can be lethal. Extreme
caution must be exercised anytime there is a potential exposure to H2S. All employees will
wear an H2S monitor that has an auditory, a visual, and a vibrating alert when outside of
the dump truck.
	 
	 	*	 	Hazardous conditions created by repetitive backing operations, unguarded rail road tracks

SCOPE:

	 	*	 	This procedure applies to all members of the Savage Refinery Services Group — Gulf Coast
Region;
	 
	 	*	 	All driving rules and functions will be regulated by Department of
Transportation and the Fleet Motor Carrier Safety Regulations as well as Savage
Policies and Procedures;
	 
	 	*	 	Deviations from the requirements of this procedure are not permitted without the prior
consent of Savage management and/or appropriate management of the customer;
	 
	 	*	 	Failure to follow this procedure may be grounds for disciplinary action, up to and
including termination for the first offence;

RESPONSIBILITY: The respective Operations Manager shall ensure that this procedure is followed by
all personnel when loading or unloading end-dump trucks for Coffeyville Resources Refinery, and
that personnel are adequately trained and are provided with the necessary personal protective
equipment (PPE) and tools to accomplish this task. Training will be documented and placed in the
employee’s training file.

The
below listings are the specific items required to successfully accomplish this task.

	 	 	 	 	 	 	 
	Personal Protective
Equipment (PPE)

	 	
 
	 	
Miscellaneous
Safety Equipment
	 	
	
 

	 	Hard Hat

(ANSI Z89.1 Certified)
	 	 
	 	Flashlight
	 

	 	Savage Approved FRC

(Nomex) Uniform
	 	 	 	Leather Gloves
	 

	 	Safety Toed Leather Work
Boots, with a heeled sole
(ANSI Z41.1 Certified)
	 	 	 	CB Radio, channel 32
	 

	 	Safety Glasses with side

shields (ANSI Z-87)	 	 	 	 
	 

	 	H2S Monitor	 	 	 	 

Entering the Refinery:

	1.1	 	Prior to the start of driving the 10 wheel dump truck, it is both DOT policy and Savage
Services that a
pre-trip inspection of the vehicle is completed. Three points of contact will be utilized at
all times when mounting or dismounting the vehicle;
	 
	1.2	 	Ensure that you have all required PPE, security badges, and your drivers license;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/2007
	Document: 10 Wheel Dump Truck Procedures

	 	Revision Date:
	 	Page #: 1 of 4

 

 

10 Wheel Dump Truck Procedures

Petroleum Coke and Slag

	1.3	 	The speed limit of the refinery is 13 MPH. The speed limit of the intermediate pad is 15 MPH;
	 
	1.4	 	Communication between the excavator operator or loader operator and the driver of the 10
wheel dump truck will be by CB radio, channel 32;
	 
	1.5	 	Cell phones may be prohibited in certain areas of the plant, always refer to the site
specific procedures for the customer or check with the guard to
determine if you have to turn off your cell phone
prior to entering
the plant. Cell phones will not be used while your vehicle is in motion at any time;

Loading and Unloading Coke:

The day’s normal operation will generally consist of two specific types of hauls, from
the coke pit to the crusher pad, and from the slag pit to the intermediate pad. Under
normal operations, the day will begin with hauling coke from the coke pit to the crusher
pad;

There may be occasions that the dump truck will be utilized to haul excess coke from the
coke pit to the intermediate pad or return from the intermediate pad back to the crusher.
The same basic steps will be completed if this is to be performed as outlined in this
procedure;

Ensure four way flashers are on and tap the horn to warn others of your intentions to back
up. Initiate communication with the excavator operator. The dump truck will then back up to
the coke pit wall;

Communication is critical with the excavator operator. The two most prevalent hazards
during the backing of the vehicle are pedestrian/vehicle traffic, and moving rail cars;

	1.5	 	After the truck is loaded, the excavator will inform the dump truck operator that they are
clear to move;
	 
	1.6	 	The dump truck will proceed to the ramp of the crusher. There are two sets of rail road
tracks that the truck must cross.

The
driver must be very aware of any train car movements prior to crossing as there are often
times that the rail has not provided any personnel to warn of movement and there are not any
automatic gates at either set of rails;

Under
no circumstances will the truck back into the crusher pad. If
required to enter the
crusher pad, Savage Supervisor or the Manager must be notified of the reason that this is
required. The truck will only drive forward and MUST communicate with the loader operator
prior to entry;

	1.9	 	Ensure four way flashers are on and tap the horn to warn others of your intentions to back
up. The dump will then back up the ramp of the crusher pad;
	 
	1.10	 	Place the dump lever in the “Hold” position, unlatch the tailgate and engage the PTO;
	 
	1.11	 	Move the dump lever to the “Raise” position. Raise
the engine RPM’s to between 1200 and
1600 RPM’s. This may vary depending on the truck. Do not raise the bed faster than the product will
slide out evenly;
	 
	1.12	 	If the product does not start sliding out prior to the bed being halfway up, stop the
bed from going up. Lower it again in an attempt to loosen the product enough to start sliding out;
	 
	1.13	 	When the bed reaches maximum height, place the dump lever in the “Hold” position. Disengage
the PTO;
	 
	1.14	 	Check with the loader operator via CB radio to ensure that the bed is empty and that there
is no product buildup. Move the dump lever to the “Lower” position;
	 
	1.15	 	It is critical that the driver ensures that the bed is completely lowered prior to exiting
the ramp. If the bed is left up, it will hit the overhead pipes that are over the rail road tracks;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/2007
	Document:
10 Wheel Dump Truck Procedures

	 	Revision Date:
	 	Page #: 2 of 4

 

 

10 Wheel Dump Truck Procedures

Petroleum Coke and Slag

	1.16	 	Move the dump lever to the “Hold” position and latch the tailgates;
	 
	1.17	 	Return to the coke pit for another load. All loads will be kept on the Coffeyville Mileage
and Fuel report and turned in daily;

Loading
and Unloading Slag:

	1.1	 	During a cut of the coker unit and the overhead crane begins operations, the
loading operation of the 10 wheel dump truck will cease;
	 
	1.2	 	At this time, the dump truck will proceed to the slag pit to begin loading operations
there until the coke cut has been moved from in front of the coker unit chutes and the
overhead crane has completed it’s operation;
	 
	1.3	 	Ensure four way flashers are on. Place the dump truck alongside the south wall to place
into position for loading. Do not drive over the hump at the S.E. corner of the slag pit;
	 
	1.4	 	Throughout operations, the driver must get out and physically check all the tires. If any
tire is low or flat, the flat must be fixed prior to attempting to dump the load to prevent tipping the truck
over during the
unloading process;
	 
	1.5	 	Communication between the dump truck driver and the loader
is critical. The loader will
assist the driver in watching for pedestrian and vehicle traffic as the truck is being moved into
position to load;
	 
	1.6	 	After the truck is loaded, the loader operator will inform that he is clear to move the
vehicle;
	 
	1.7	 	The dump truck will proceed to the intermediate pad, stopping at the gate to check out of
the refinery by presenting his/her security badge to security personnel;
	 
	1.8	 	Enter the intermediate pad through the Lab Gate. The driver will have to card in at the gate’s
card reader;
	 
	1.9	 	Pull into the slag pile area and find a level spot to dump the load of slag. If there
is snow or ice present, the ground that the dump truck will travel on will be cleared by the
loader prior to attempting to dump the load. This is applicable any time a dump truck enters
the intermediate pad area;
	 
	1.10	 	Place the dump lever in the “Hold” position, unlatch the tailgate and engage the PTO;
	 
	1.11	 	Move the dump lever to the “Raise” position. Raise the engine RPM’s to between 1200 and
1600 RPM’s. This may vary depending on the truck. Do not raise the bed faster than the product will
slide out evenly;
	 
	1.12	 	As the bed empties out, allow the truck to be pushed forward slightly. If the product does
not start sliding out prior to the bed being halfway up, stop the bed from going up. Lower it again in an
attempt to loosen the product enough to start sliding out;
	 
	1.13	 	When the bed reaches maximum height, Place the dump lever in
the “Hold” position. Disengage
the PTO;
	 
	1.14	 	Pull the truck forward slowly to clear the product pile. Avoid slapping the tailgate
against the bed of the truck as the truck is pulled forward;
	 
	1.15	 	Move the dump lever to the “Lower” position;
	 
	1.16	 	Move the dump lever to the “Hold” position and latch the tailgates after the bed has
completely lowered;
	 
	1.17	 	Return to the slag pit for another load. All loads will be kept on the Coffeyville Mileage
and Fuel report and turned in daily;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/2007
	Document: 10 Wheel Dump Truck Procedures

	 	Revision Date:
	 	Page #: 3 of 4

 

 

10 Wheel Dump Truck Procedures

Petroleum Coke and Slag

	1.18	 	The excavator operator or the Savage Supervisor will inform the loader operator and the
dump truck driver when to return to the coke pit to haul more coke to the crusher pad;
	 
	1.19	 	At the end of hauling operations daily, the dump truck will be washed down, have all trash
removed from the cab, and fueled up;

END OF THIS PROCEDURE

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/2007
	Document: 10 Wheel Dump Truck Procedures

	 	Revision Date:
	 	Page #: 4 of 4

 

 

			
	
	 	FRONT END LOADER PROCEDURES

Petroleum Coke and Slag

PURPOSE: This Safe Work Practice (SWP) outlines the correct procedures to follow daily when
utilizing a front end loader in the Coffeyville Resources Refinery. There are many hazards
associated with loader operations, extreme caution must be exercised at all time you are in or near
the front end loader, especially during operational activities.

HAZARDS: This is not an all inclusive listing but is intended to give the reader an overview
of the hazards associated with being in and around an operating coker unit and pit.

	 	•	 	Heavy equipment operation
	 
	 	•	 	Vehicle and pedestrian traffic
	 
	 	•	 	Overhead exposures to pipes, conveyor tubes, and energized lines
	 
	 	•	 	Visibility issues, steam, pressurized systems
	 
	 	 	 	Falls from the equipment

SCOPE:

	 	•	 	This procedure applies to all members of the Savage Refinery Services Group — Gulf Coast Region;
	 
	 	•	 	Deviations from the requirements of this procedure are not permitted without the prior consent of Savage
management and/or appropriate management of the customer;
	 
	 	•	 	Failure to follow this procedure may be grounds for disciplinary action, up to and including termination for
the first offence;

RESPONSIBILITY: The respective Operations Manager shall ensure that this procedure is followed
by all personnel when working in and around the coke pit and that those personnel are
adequately trained and are provided with the necessary personal protective equipment (PPE) and
tools to accomplish this task.

The below listings are the specific items required to successfully accomplish this task.

	 	 	 	 	 
	Personal Protective
Equipment (PPE)
	 

	 	Hard Hat	 	 
	 

	 	(ANSI Z89.1 Certified)
	 	Hearing protection
	 

	 	Safety Toed Leather Work Boots, with a heeled sole	 	 
	 

	 	(ANSI Z41.1 Certified)
	 	Gloves
	 

	 	H2S Monitor
	 	CB Radio channel 32
	 

	 	Safety Glasses with side shields (ANSI Z-87)
	 	Flame resistant clothing

Procedures:

	1.1	 	Ensure that you have all required PPE and security badges;
	 
	1.2	 	At the beginning of each shift, a pre-operational check will be made of the loader;
	 
	1.3	 	The loader speed limit in front of the control room and in any high traffic area is 5 MPH. Under no
circumstances will the loader be operated at a speed that does not allow complete control of the
equipment;
	 
	1.4	 	It is critical that ANY foot or vehicle traffic will only
be allowed to enter the working area of the
front end loader if communication has been established with the operator of the loader. Once
the
loader has been made aware of the pedestrian or vehicle traffic in area, he/she must be
constantly
conscious of the location of the person and/or equipment until they leave the area;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/16/07
	Document: Front End Loader Procedures

	 	Revision Date:
	 	Page #: 1 of 3

 

 

			
	
	 	FRONT END LOADER PROCEDURES

Petroleum Coke and Slag

	1.5	 	When visibility is obscured by steam or some other interference, stop what you are doing
and wait for
your visibility to return. NEVER assume that it is okay to work in an area if you cannot see.
	 
	1.6	 	The material handled by the front end loader will be petroleum coke and the slag generated when the
coke is used. This coke is used to feed the Gasifier Unit of the refinery. The coke is feed into a crusher,
which feeds the feeder breaker, which conveys the crushed coke to the silo for use by the Gasifier Unit of
the refinery;
	 
	1.7	 	Under normal operation, the loader will generally have three specific operational areas that will be worked
in daily. These operation areas are the slag additive bin, the crusher pad and the slag pit;
	 
	1.8	 	At the beginning of the day, the loader will proceed to the slag additive bin and ensure that the bin is filled
with slag additive;
	 
	1.9	 	After the slag additive bin is filled, the loader will
proceed to the slag pit. All the
slag will be pushed into the southwest corner to allow the water to drain from the slag.
Additionally, the slag must be cleared up to the concrete blocks in the north west corner so
the water has free travel to the drain;
	 
	1.10	 	While working in the slag pit, the loader operator must remain aware of the conveyer belt
that is delivering the slag into the pit;
	 
	1.11	 	The loader operator will then proceed to the crusher pad. While in the crusher pad, there will be two
separate and distinctive jobs performed, however they will be performed simultaneously;
	 
	1.12	 	The first job will be to stack the coke brought over from the coker unit in the 10 wheel dump trucks. It is
wet and cannot be fed into the crusher as it will likely cause a stoppage in the feeder breaker;
	 
	1.13	 	This coke will be dumped into the crusher pad from the dump trucks off the ramp to the crusher pad;
	 
	1.14	 	As the coke from the coker unit is dumped, the loader operator will move the coke from the bottom of the
ramp to the stacked coke piled up around the pad to allow proper drainage of the coke;
	 
	1.15	 	If the coke is brought from the intermediate pad in a 10 wheel dump truck, the coke
can be fed into the crusher hopper;
	 
	1.16	 	UNDER NO CIRCUMSTANCES WILL A TRUCK BACK INTO THE PAD. If it necessary to bring a truck
into the pad, it will drive in forward. The supervisor must be notified that this is
happening and communication between the loader operator and the truck driver is critical;
	 
	1.17	 	The second job will be to feed the coke brought in from off site in end dump trucks into the
crusher;
	 
	1.18	 	Once the coke from the end dump is dumped at the ramp, the loader operator will move the
coke directly
into the crusher or stacked if the silo is full;
	 
	1.19	 	When the operations at the coker unit is complete, the 10 wheel dump truck will move from delivering
coke from the coke unit to the crusher pad to delivering slag from
the slag pit to the intermediate pad. At
this time the loader operator will proceed to the slag pit to load the 10 wheel dump truck;
	 
	1.20	 	After loading the 10 wheel dump truck with slag at the slag pit, the loader operator will move back to the
crusher pad to continue stacking coke or filling the crusher hopper as off site trucks
bring in dry coke;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/07
	Document: Front End Loader Procedures

	 	Revision Date:
	 	Page #: 2 of 3

 

 

			
	
	 	FRONT END LOADER PROCEDURES

Petroleum Coke and Slag

	1.21	 	The 10 wheel dump truck will communicate when he/she has delivered the load of slag to the
intermediate pad and they are at the Gasifier Gate, at which time the loader operator will proceed back to
the slag pit to load the 10 wheel dump truck;
	 
	1.22	 	The delivery of the slag to the intermediate pad will continue until the slag pit is empty or operations start
again at the coker unit;
	 
	1.23	 	Prior to securing at the end of the day, the loader operator
will proceed to the slag additive bin and refill it
for the evening;
	 
	1.24	 	After the slag additive bin is filled, the loader will proceed to the slag pit. All the slag will be pushed into
the southwest corner to allow the water to drain from the slag.
Additionally, the slag must
be cleared up to
the concrete blocks in the north west corner so the water has free travel to the drain;
	 
	1.25	 	The loader will then be washed, all the trash will be removed from the cab, and filled
with fuel. This will be
accomplished daily;
	 
	1.26	 	The loader will be parked in the area in front of the Savage
break room. The loader will NEVER be nosed
in to park. The loader will be backed in utilizing a ground guide if one is available. However, always look
behind the equipment while backing and do not rely solely on the ground guide for safe backing;
	 
	1.27	 	A post operation check will be completed on the loader. The post operation checklist will be turned into
the shop after each shift,

END OF THIS PROCEDURE

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/07
	Document: Front End Loader Procedures

	 	Revision Date:
	 	Page #: 3 of 3

 

 

			
	
	 	COKE PIT EXCAVATOR PROCEDURE

Petroleum Coke

PURPOSE: This Safe Work Practice (SWP) outlines the correct procedures to follow when working in,
or around, the area of the coke pit within Coffeyville Resources
Refinery. There are many hazards
associated with coke pit operations, extreme caution must be exercised at all time you are in or
near the coke pit, especially during operational activities.

HAZARDS: This is not an all inclusive listing but is intended to give the reader an overview
of the hazards associated with being in and around an operating coker
unit and pit.

	 	•	 	Working under an overhead crane
	 
	 	•	 	Falling material
	 
	 	•	 	Hot liquid and solid material
	 
	 	•	 	Noise, heavy equipment operation
	 
	 	•	 	Vehicle and pedestrian traffic
	 
	 	•	 	Overhead exposures to pipes and energized lines
	 
	 	•	 	Visibility issues, steam, pressurized systems

SCOPE:

	 	•	 	This procedure applies to all members of the Savage Refinery Services Group — Gulf Coast
Region;
	 
	 	•	 	Deviations from the requirements of this procedure are not permitted without the
prior consent of Savage
management and/or appropriate management of the customer;
	 
	 	•	 	Failure to follow this procedure may be grounds for disciplinary action, up to and
including termination for
the first offence;

RESPONSIBILITY:
The respective Operations Manager shall ensure that this procedure is followed by
all personnel when working in and around the coke pit and that those personnel are adequately
trained and are provided with the necessary personal protective
equipment (PPE) and tools to
accomplish this task.

The below listings are the specific items required to successfully accomplish this task.

	 	 	 	 	 
	Personal Protective
Equipment (PPE)
	 

	 	Hard Hat	 	 
	 

	 	(ANSI Z89.1 Certified)
	 	Hearing protection
	 

	 	Safety Toed Leather Work Boots, with a heeled sole	 	 
	 

	 	(ANSI Z41.1 Certified)
	 	Gloves
	 

	 	H2S Monitor
	 	CB Radio channel 32
	 

	 	Safety Glasses with side shields (ANSI Z-87)
	 	Flame resistant clothing

Procedures:

	1.1	 	Ensure that you have all required PPE and security badges;
	 
	1.2	 	At the beginning of each shift, a pre-operational check will be made of the excavator;
	 
	1.3	 	Excavator operator needs to have the bucket greased at least twice during each shift;
	 
	1.4	 	The excavator will start from the west end of the pit and work to the east end;
	 
	1.5	 	No foot traffic is allowed to enter the pit if there is an active cut on any drum it could
cause a serious injury
to a pedestrian if there is any type of “blow out” during
the cut. If anyone has to enter
the pit for any reason, all excavator activity will cease immediately;

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/07
	Document: Coke Pit Excavator Procedures

	 	Revision Date:
	 	Page #: 1 of 2

 

 

			
	
	 	COKE PIT EXCAVATOR PROCEDURE

Petroleum Coke

	1.6	 	When visibility is obscured by steam or some other interference, stop what you
are doing and wait for
your visibility to return. NEVER assume that it is okay to work in an area if you cannot see.
	 
	1.7	 	In between loading dump trucks, the excavator will move product from west end of the pit to the east end
to allow room for the overhead crane to work;
	 
	1.8	 	Anytime the excavator is moved alongside the pit wall, the boom and stick will be lowered far enough to
clear the overhead crane;
	 
	1.9	 	Once the overhead crane is put into operation in the west end near the coker units, the excavator will
move to the east end out of the overhead crane’s dumping area or cease operation completely if the
overhead crane has to work in the close proximity of the excavator,
	 
	1.10	 	At no time will the excavator operate within thirty feet (or the approximate length of the boom extended all
the way out) of the overhead crane. If the excavator has to cease operations, then the boom and bucket
will be removed from the pit area and placed outside the pit wall;
	 
	1.11	 	As you work in the coke pit area, it is important that you understand that you are entering a high traffic
area with many hazards. The excavator operator will assist the dump truck driver by communicating
pedestrian or vehicle traffic in the area as the dump truck driver positions his truck for loading;
	 
	1.12	 	The excavator operator MUST be aware of any train movements, vehicle or pedestrian traffic prior or
during the dump truck backing. The excavator operator will assist the dump truck driver by communicating
with him by radio as he is backing;
	 
	1.13	 	As the dump truck is being loaded, keep in mind that the load should be placed in the center of the dump
truck from side to side, and evenly from front to rear to prevent tip over when it is unloaded;
	 
	1.14	 	The dump truck will then proceed to the ramp of the crusher pad;
	 
	1.15	 	After the coke pile from the cut is depleted, the excavator
operator will clean alongside the outside of the
pit area and the concrete pad with the skid steer. The skid steer will be at the crusher pad or the break
room area;
	 
	1.16	 	A post operation check will be completed on the excavator and turned into the shop after each shift.

END OF THIS PROCEDURE

	 	 	 	 	 
	Written By: Russ Shinert

	 	Revised By:
	 	Issue Date: 2/15/07
	Document: Coke Pit Excavator Procedures

	 	Revision Date:
	 	Page #: 2 of 2

 

 

Appendix C — Kansas Motor Vehicle Regulations

			
	 	 	 
	 
	 	

 

 

Regulations

49 CFR 393.100 — General rules for protection against shifting or falling cargo, as incorporated by
reference in KAR 36-1-36(n)(3).

Source: 38 FR 23522, Aug. 31, 1973, unless otherwise noted.

	(a)	 	Application and scope of the rules in this section. This section applies to trucks, truck
tractors, semitrailers, full trailers, and pole trailers. Each of those motor vehicles must,
when transporting cargo, be loaded and equipped to prevent the shifting or falling of the
cargo in the manner prescribed by the rules in paragraph (b) of this section. In addition,
each cargo-carrying motor vehicle must conform to the applicable rules in Secs. 393.102,
393.104, and 393.106.
	 
	(b)	 	Basic protection components. Each cargo-carrying motor vehicle must be equipped with
devices providing protection against shifting or falling cargo that meet the requirements
of either paragraph (b) (1), (2), (3), or (4) of this section.
	 
	(1)	 	Option A. The vehicle must have sides, side-boards, or stakes, and a rear endgate,
endboard, or stakes. Those devices must be strong enough and high enough to assure that
cargo will not shift upon, or fall from the vehicle. Those devices must have no aperture
large enough to permit cargo in contact with one or more of the devices to pass through
it.
	 
	(2)	 	Option B. The vehicle must have at least one tiedown assembly that meets the
requirements of Sec. 393.102 for each 10 linear feet of lading or fraction thereof.
(However, a pole trailer or an expandable trailer transporting metal articles under the
special rules in paragraph (c) of this section is required only to have two or more of those
tiedown assemblies at each end of the trailer.) In addition, the vehicle must have as many
additional tiedown assemblies meeting the requirements of Sec. 393.102 as are necessary
to secure all cargo being transported either by direct contact between the cargo and the
tiedown assemblies or by dunnage which is in contact with the cargo and is secured by
tiedown assemblies.
	 
	(3)	 	Option C (for vehicles transporting metal articles only). A vehicle transporting cargo
which consists of metal articles must conform to either the rules in paragraph (b) (1), (2),
or (4) of this section, or the special rules for transportation of metal articles set forth
in
paragraph (c) of this section.
	 
	(4)	 	Option D. The vehicle must have other means of protecting against shifting or falling
cargo which are similar to, and at least as effective as, those specified in paragraph (b)
(1), (2), or (3) of this section.

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