Document:

exv10w12

 

Exhibit 10.12

FEEDSTOCK PURCHASE AGREEMENT

(LVT)

between

CONOCOPHILLIPS COMPANY,

as Seller,

and

CALUMET PENRECO, LLC,

as Buyer.

January 1, 2008

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

 

FEEDSTOCK PURCHASE AGREEMENT

(LVT Feedstock)

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

ARTICLE I

EFFECTIVE DATE

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

ARTICLE II

DEFINITIONS

     As used in this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):

     Section 2.1. “Agreement” means this Feedstock Purchase Agreement and all Exhibits attached hereto.

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

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

     Section 2.4. “Base Volume” means the volume of Feedstock required to produce (i)
50,000,000 gallons of LVT Products at the LVT Unit during any of (a) Contract Years 1 and 2
combined, (b) Contract Years 2 and 3 combined, (c) Contract Years 3 and 4 combined, or (d) Contract
Years 4 and 5 combined and (ii) 50,000,000 gallons of LVT Products at the LVT Unit during any
24-month period during the remainder of the Term. For purposes of this definition, Overhead
Product is included within the term “LVT Products” only to the extent that Buyer actually purchases
Overhead Product. Assuming the Overhead Product is not purchased, Base Volume shall be based on
the following assumptions with respect to yield:

          (x) **

          (y) **

          (z) **

     Section 2.5. “Contract Year” means a twelve-month period beginning on the Effective
Date or any anniversary thereof.

     Section 2.6. “Delivery Point” means that point where the risk of loss of the Feedstock
passes from the Seller to the Buyer which is the inlet flange to the feed tank.

     Section 2.7. “Effective Date” means that date defined in Article I.

     Section 2.8. “Feedstock” means LVT feedstock.

     Section 2.9. “LVT Facilities” has the meaning ascribed to that term in the LVT Unit Agreement.

     Section 2.10. “LVT Products” means all material produced by the LVT Unit, including
Overhead Product, bottoms, sidedraw and untreated Feedstock, whether meeting specifications or
off-specification and includes molex raffinate diverted to the Buyer prior to fractionation.

     Section 2.11. “LVT Unit” has the meaning ascribed to that term in the LVT Unit
Agreement.

     Section 2.12. “LVT Unit Agreement” means the agreement of that name entered by and
between the Parties of even date herewith.

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     Section 2.13. “Market Price” is defined as the price a willing buyer will pay a
willing seller for the product in question at the time and place of the relevant transaction or
transactions.

     Section 2.14 “Measurement Point” means that point where the volume of Feedstock is
measured, which is the point at which LVT Products are loaded into tank cars or tank trucks.

     Section 2.15. “Month” or “month” means a calendar month.

     Section 2.16. “Overhead Product” means the light ends produced from the LVT Unit’s fractionator.

     Section 2.17. “Party” or “Parties” means both the Seller and the Buyer respectively whether singular or plural.

     Section 2.18. “Refinery” means the Seller’s crude oil refinery located at or near Westlake, Louisiana.

     Section 2.19. “Sasol” means Sasol North America, Inc., or any successor thereof or thereto.

     Section 2.20. “Term” has the meaning ascribed to that term in Article III.

ARTICLE III

TERM

     Section 3.1. This Agreement shall be in effect for a period beginning at the beginning
of the Effective Date and ending upon the expiration of ten years thereafter (the “Term”).

     Section 3.2. Seller may terminate this Agreement effective at any time after the first
five Contract Years of the Term if Seller voluntarily closes the Refinery or any unit of the
Refinery or undertakes a significant processing change and if such closure or processing change is
expected materially to impact the volume or quality of product Seller exchanges with Sasol in
return for Feedstock, provided that Seller shall give Buyer at least one year’s written notice in
advance of such closure or processing change.

ARTICLE IV

VOLUME AND QUALITY

     Section 4.1. Seller shall sell to Buyer and Buyer shall purchase from Seller the Base
Volume of Feedstock in approximately equal monthly volumes. Seller may sell and Buyer may purchase
such volume of Feedstock in addition to the Base Volume as they may agree at the Feedstock price
calculated according to the formula set forth in Section 7.1.

     Section 4.2. For planning purposes only:

               (a) at the end of every month, the Parties shall jointly develop a production plan for each of
the next three months, based upon the Buyer’s requirements for Feedstock, the Seller’s ability to
supply Feedstock and the capacity of the LVT Unit, and

               (b) as soon as practical after the Effective Date and before September 1 of each calendar year
of the Term, the Parties shall jointly develop a production plan for each month of the following
calendar year, based upon the Buyer’s requirements for Feedstock, the Seller’s ability to supply
Feedstock and the capacity of the LVT Unit.

     Section 4.3. Buyer and Seller acknowledge that the production and use of Feedstock are
parts of larger operations and agree to use commercially reasonable efforts to coordinate
production schedules and lifting schedules of LVT Products to minimize impacts on each other’s
operations.

     Section 4.4. The Feedstock purchased and sold pursuant to this Agreement shall have
the technical properties specified in Exhibit 4.4 which is attached hereto and made a part hereof.

     Section 4.5. Seller acknowledges that Buyer’s requirements for any Feedstock are
determined by Buyer’s customers’ needs. Seller agrees to use commercially reasonable efforts to
accommodate Buyer’s requirements for revised Feedstock specifications within the generally accepted
tolerances for each Feedstock. All costs and expenses resulting from changes in specifications as
listed in Exhibit 4.4 will be paid by Buyer.

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ARTICLE V

DELIVERY; TITLE AND RISK OF LOSS

     Feedstock purchased and sold under this Agreement shall be delivered by the Seller, and title
to and risk of loss of Feedstock shall pass to the Buyer, at the inlet flange to the feed tank at
the LVT Facilities.

ARTICLE VI

MEASUREMENT

     To simplify accounting, the volume of Feedstock delivered hereunder during a month shall be
deemed to be equal to the volume of LVT Products loaded into tank cars or tank trucks at the LVT
Facilities during such month as measured at the point at which LVT Products are loaded into tank
cars or tank trucks at the LVT Facilities, provided that volume gain, co-product production and
volume loss will be determined in the manner provided in the LVT Unit Agreement.

ARTICLE VII

PRICE

     Section 7.1. Subject to the other provisions of this Article VII, the price per gallon
of Feedstock delivered to Buyer during any month shall be equal to **

     Section 7.2. The price formula may be reopened upon written notice from one party to
the other no more than once per Contract Year if any of the following is true and results in the
prices determined using the price formula being more than five percent (5%) higher or lower than a
Market Price for Feedstock:

               (a) The formula set forth in Section 7.1 no longer represents a Market Price for Feedstock.

               (b) The Feedstock specifications are changed.

               (c) Any published data which is incorporated into the then-current price formula set forth in
Section 7.1 is no longer published in the same form as of the date of this Agreement.

               (d) Feedstock characteristics become valued differently relative to the reference product, or
geographic supply/demand balances change.

               (e) A more representative reference product quote becomes available more closely related to
the Feedstock.

               (f) The co-product adjustments calculated according to the LVT Unit Agreement no longer
reflect of the marketplace.

               (g) The operating cost adjustments calculated according to the LVT Unit Agreement are no
longer reflective of typical industry operating costs.

     Section 7.3. The new pricing formula to be negotiated in the event of a reopener as
contemplated by Section 7.2 will be negotiated according to the guiding principles set out below:

               (a) The revised formula should result in a Market Price for Feedstock.

               (b) Cost of acquisition by the Buyer and the cost of disposition by the Seller will both be
considered.

               (c) Prices will recognize local supply and demand.

               (d) Prices will recognize quality differentials.

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     Section 7.4. If the Parties are unable to agree to a revised pricing formula within 90
days of the date of the notice initiating the price negotiations, then the matter will be deemed to
be in dispute (a “Pricing Dispute”). In the event of a Pricing Dispute, at the request of either
Party, the Parties will attempt to agree upon, and to engage, an individual with experience in
prices for refined petroleum prices on the United States Gulf Coast (the “Pricing Arbitrator”) to
resolve the Pricing Dispute according to the procedure set forth in Exhibit 7.4 and in this
section. Within seven days of the selection of a Pricing Arbitrator, each Party shall submit to
the Pricing Arbitrator its position on the Pricing Dispute together with any documents reasonably
relevant to the Pricing Dispute (a “Pricing Submission”). The Pricing Arbitrator shall be
permitted to assess only those facts and opinions with respect to a Pricing Dispute as are set
forth in the Pricing Submissions, provided that the Pricing Arbitrator may pose, and consider each
Party’s responses to, one set of written questions to both Parties, to which each Party shall
respond within 15 days of receipt. The Parties shall instruct the Pricing Arbitrator to render a
decision within 30 days of his or her receipt of the Parties’ Pricing Submissions, regardless of
whether the Pricing Arbitrator has posed or the Parties have responded to written questions. In
rendering his or her decision with respect to a Pricing Dispute, the Pricing Arbitrator shall only
be permitted to choose between the positions set forth in the Parties’ respective Pricing
Submissions and shall select the one Party’s position that describes a formula most likely to
reflect market level pricing for Feedstock, applying the principles set forth in Section 7.3. Any
decision rendered by the Pricing Arbitrator shall be final and binding on the Parties.

     Section 7.5. Beginning on the first day of the sixth Contract Year, seven cents
($0.07) shall be added to the price of each gallon of feedstock calculated in accordance with the
formula described in Section 7.1, as that formula may be amended from time to time.

ARTICLE VIII

PAYMENT

     Section 8.1. By the fifteenth (15th) calendar day of a Month (“Month 2”), Seller shall
invoice Buyer for estimated volume of Feedstock for Month 2 as determined pursuant to Section 4.2
above using the price calculated according to the formula set forth in Section 7.1 for the
immediately preceding Month (“Month 1”), plus or minus an invoice adjustment to the extent that the
volume of Feedstock with respect to Month 1 determined pursuant to Article VI multiplied by the
price calculated for Month 1 is less than or greater than the amount actually invoiced with respect
to Month 1. For example, if in January the volume for January were estimated to be 10,000 gallons
pursuant to Section 4.2, and if the price in December were calculated to be $1.00 per gallon, the
unadjusted invoice would be $10,000. If in February the volume of Feedstock for January were known
to have been 8,000 gallons (and without regard to any other adjustment in the January invoice), the
adjustment to the February invoice would be ($2,000).

     Section 8.2. Payments shall be made in full, by wire transfer no later than three (3)
business days after receipt by Buyer of the invoice, without any adjustments, discounts or setoffs,
except in cases of bona fide disputes, in which cases only the disputed amount will be withheld.
Such payments shall be without prejudice to any claim for damages or any other right under this
Agreement or applicable law. In the event Buyer fails to make any payments on or before the due
date, Seller shall have the right to charge interest from the due date on the amount of the overdue
payment at a per annum rate which shall be the lower of (a) the prime rate plus two percent (2%),
or (b) the maximum interest rate permitted by law. Prime rate shall mean, for any day, the rate of
interest announced by JP Morgan Chase Bank (or its successors or an acceptable substitute agreed to
by the Parties) as its prime lending rate.

     Section 8.3. The Seller reserves the right to withhold delivery of the Feedstock to
the Buyer at any time the Buyer’s account becomes past due.

ARTICLE IX

CLAIMS

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

               (a) the Buyer gives the Seller written notice of the Buyer’s claim within ninety (90) days
after delivery of the affected Feedstock or, as to a latent defect, within seven (7) days after the
Buyer has discovered such latent defect, but in no event more than one hundred twenty (120) days
after delivery, and

               (b) the Seller is given reasonable opportunity to inspect the affected Feedstock or analyze
the Buyer’s retained samples within fifteen (15) days after receiving notice.

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

ARTICLE X

EXCLUSION OF WARRANTIES

     Seller warrants that it has title to Feedstock it delivers under this Agreement, that such
Feedstock will be free from all liens, encumbrances, and security interests, and that such
Feedstock shall be of the kind and quality described herein. THESE WARRANTIES ARE EXCLUSIVE AND
ARE IN LIEU OF ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHETHER EXPRESS
OR IMPLIED.

ARTICLE XI

LIMITATION OF LIABILITY; LIQUIDATED DAMAGES

     Section 11.1. With respect to each of any of (a) Contract Years 1 and 2 combined, (b)
Contract Years 2 and 3 combined, (c) Contract Years 3 and 4 combined, or (d) Contract Years 4 and 5
combined, if Seller fails to deliver the Base Volume of Feedstock for any reason (including reasons
that would otherwise excuse Seller’s performance, including Force Majeure), then as Buyer’s sole
remedy for such failure to supply:

               (a) as soon as reasonably practical after Buyer’s demand, Seller shall pay to Buyer, as
liquidated damages, an amount equal to (i) twenty-five cents ($0.25), multiplied by (ii) the
difference between (A) 50,000,000 gallons of Feedstock (adjusted as provided in Section 11.1(b))
and (B) the sum of the volume of all LVT Products delivered to Buyer during each of such months,
excluding any volume of LVT Products delivered to Buyer during any month of such period that was
greater than 125% of the average monthly volume of LVT Products delivered to Buyer during all of
the months of such period;

               (b) the volume described in Section 11.1(a)(ii)(A) shall be reduced by the volume by which
deliveries of LVT Products to Buyer in each month during the relevant period are less than the
volume of LVT Products Seller was ready, willing and able to deliver to Buyer, up to a maximum
volume of 3,000,000 gallons per month, provided that to the extent that (x) the LVT Facilities are
affected by Force Majeure, (y) such Force Majeure impairs the ability of the LVT Unit to receive
Feedstock or deliver LVT Products, and (z) Buyer is required to bear the cost of repair or
reconstruction pursuant to any applicable provision of the LVT Unit Agreement, then Buyer failure
to approve expenditures necessary for such repair or reconstruction shall excuse Seller’s
obligation under this Section 11.1.

     Section 11.2. The Seller’s liability to the Buyer for a breach of this Agreement by
supplying off-specification Feedstock shall be limited to the lesser of the cost to replace the
particular delivery/deliveries of Feedstock affected by such breach or the purchase price of the
particular delivery/deliveries.

     Section 11.3. In the event of a Party’s breach of this Agreement, the other party
shall take commercially reasonable steps to mitigate its damages, provided that Buyer’s failure to
mitigate its damages shall not affect its rights under Section 11.1.

     Section 11.4. Subject to the provisions of Section 9.1, neither Party shall be liable
on any claim under or arising out of or for breach of this Agreement unless action thereon shall be
brought within one (1) year from the date the cause of action arose.

     Section 11.5. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES.

ARTICLE XII

TAXES

     Section 12.1. The Seller agrees to pay any and all taxes, fees, or other charges
imposed or assessed by governmental or regulatory bodies, the taxable incident of which occurs
prior to the transfer of title to the Buyer.

     Section 12.2. The Buyer agrees to pay any and all taxes, fees, or other charges
imposed or assessed by governmental or regulatory bodies, the taxable incident of which occurs
after transfer of title to the Buyer.

     Section 12.3. Any and all taxes, fees, or other charges imposed or assessed by
governmental or regulatory bodies, the taxable incident of which is the transfer of title or
delivery of the Feedstock, shall be paid by the Party upon whom the tax, fee, or charge

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legally falls. However, if the taxes, fees, or other charges are imposed upon the Seller, such
taxes (including sales, use, and other excise taxes but excluding income taxes), fees and other
charges shall be reimbursed to the Seller by the Buyer.

     Section 12.4. Notwithstanding any other provision of this Agreement, any tax or
governmental charge or increase in the same which becomes effective after the effective date of
this Agreement, and which has the effect of increasing the cost to the Seller of purchasing,
producing, selling, transporting, or delivering the Feedstock or procuring the materials used
therein, including, by way of example and not by way of limitation, any sales tax, use tax,
retailer occupational tax, gross receipts tax, value added tax, Superfund tax, environmental tax,
and/or port dues, if such taxes (excluding income taxes) or dues are not automatically added to the
price, may at the Seller’s option be added to the price. If the Seller chooses not to add such
taxes or charges to the price, the Buyer shall be obligated to reimburse the Seller for any such
taxes (excluding income taxes) or charges.

     Section 12.5. The Buyer shall furnish the Seller with exemption or resale certificates
or other documents necessary to comply with any applicable sales and use tax laws.

ARTICLE XIII

FORCE MAJEURE

     Except as provided in Section 11.1:

     Section 13.1. Neither Party shall be liable to the other for failure or delay in
performance hereunder to the extent that the failure or delay is due to force majeure (“Force
Majeure”), which is herein defined to include but not limited to war (whether declared or
undeclared), fire, flood, lightning, earthquake, storm, or any act of God; strikes, lockouts, or
other labor difficulties, civil disturbances, riot, sabotage, accident, any official order,
directive or industry-wide request or suggestion by any governmental authority or instrumentality
thereof which in the reasonable judgment of the Party affected makes it necessary to cease or
reduce production; any disruption or breakdown of labor; any inability to secure necessary
materials, including inability to secure materials by reason of allocations promulgated by
authorized governmental agencies; or any other contingency beyond the control of the affected
Party, which interferes with the performance hereunder. Buyer acknowledges that Seller acquires the
Feedstock sold hereunder from Sasol; accordingly, Seller’s performance hereunder shall be excused
to the extent that Sasol’s ability to produce and deliver Feedstock to Seller is impaired due to
Force Majeure, provided that Seller’s failure to supply raw materials for Feedstock production to
Sasol shall not constitute a Force Majeure as to Sasol unless such failure is caused by a Force
Majeure affecting Seller or the LVT Facilities.

     Section 13.2. Performance under this Agreement shall be suspended (except for the
payment of money due or to become due for past performance hereunder) during the period of such
Force Majeure to the extent made necessary by the Force Majeure. A Party affected by Force Majeure
shall use commercially reasonable efforts to resume its performance, provided that the settlement
of strikes, lockouts, industrial disputes or labor disturbances affecting a Party shall be entirely
within the discretion of the Party so affected, and provided further that Seller is under no duty
to cause Sasol to resume production and delivery of Feedstock when such production and delivery is
impaired by a Force Majeure affecting Sasol.

     Section 13.3. In the event of Force Majeure in the nature of strikes, lockouts,
industrial disputes or labor disturbances affecting a Party, the affected Party affected will use
commercially reasonable efforts to allocate the available work force so as to continue performance
hereunder.

     Section 13.4. No curtailment, suspension or acceptance of performance pursuant to this
Article shall operate to extend the Term of, or to terminate this Agreement. Performance under
this Agreement shall resume to the extent made possible by the end or amelioration of the Force
Majeure.

     Section 13.5. Upon the occurrence of any Force Majeure, the Party claiming Force
Majeure shall notify the other Party promptly in writing of such event and to the extent possible,
inform the other Party of the expected duration of the Force Majeure and the performance to be
affected by the suspension or curtailment under this Agreement.

ARTICLE XIV

ASSIGNMENT

     Section 14.1. Except as provided in Section 14.3 below, neither Party may assign this
Agreement without the prior written consent of the other Party. Neither Party shall unreasonably
withhold its consent to the assignment of this Agreement.

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     Section 14.2. No assignment of this Agreement shall relieve the assigning Party of its
obligations under this Agreement.

     Section 14.3. A party may assign this Agreement to an affiliate without consent of the
other party.

ARTICLE XV

NOTICE

     Section 15.1. Form of Notice. Any notice or correspondence to be given with
respect to this Agreement shall be in writing or shall be given orally and confirmed in writing by
letter, and delivered personally, by certified mail, or by facsimile addressed to the respective
Party at the address stated below or such other address as either Party shall designate from time
to time.

If to Seller, addressed to:

	 	 	 	 	 
	 	 	ConocoPhillips Company
	 	 	P.O. Box 2197, Houston, Texas 77252
	 	 	600 North Dairy Ashford Road, Houston, Texas 77079
	 
	 	Attention:	 	Manager, Financial Planning and Analysis
	 
	 	 	 	Lubricants and Specialty Products Business Unit
	 
	 	Facsimile:	 	(281)293-3474

If to Buyer, addressed to:

	 	 	 	 	 
	 	 	Calumet Penreco, LLC
	 	 	% Calumet Specialty Products Partners, L.P.
	 	 	2780 Waterfront Pkwy. E. Dr., Suite 200
	 	 	Indianapolis, IN 46214
	 
	 	Attention:	 	Vice President and CFO
	 
	 	Phone:	 	(317) 328-5660
	 
	 	Facsimile:	 	(317) 328-5676

     Section 15.2. The foregoing notice requirements do not preclude normal informal
communications between Seller’s and Buyer’s employees with respect to operational matters involving
the Refinery and other property and facilities used in the performance of this Agreement.

ARTICLE XVI

AGREEMENT AMENDMENT PROCEDURES

     The parties may amend Exhibit 4.4 or Exhibit 18.1 to this Agreement by each party signing a
revised Exhibit specifying the new terms with an effective date.

ARTICLE XVII

GOVERNING LAW

     All provisions of this Agreement shall be governed by and construed in accordance with the
laws of the State of Texas excluding any conflicts-of-law rule or principle that might apply the
laws of another jurisdiction.

ARTICLE XVIII

WARNINGS

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

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

ARTICLE XIX

ALLOCATION

     Section 19.1. If, due to the event of Force Majeure (as described in Article XIII
hereof), the Seller does not produce enough Feedstock to satisfy its own internal and commercial
requirements during any month of the Term of this Agreement, and the Seller does not sell volumes
of Feedstock to any other third party during that month, then the Seller shall not be required to
sell and deliver any volumes of Feedstock to the Buyer during that month. However, if the Seller
does sell Feedstock to any third party during a month when, due to an event of Force Majeure, it
does not produce enough Feedstock to satisfy its own internal and commercial requirements, then the
Seller shall sell and deliver to the Buyer its pro rata share of the Feedstock sold to third
parties during the month.

     Section 19.2. If, due to an event of Force Majeure (as described in Article XIII
hereof), the Seller does produce enough Feedstock to satisfy all of its own internal and commercial
requirements but does not produce enough Feedstock during any month of the Term of this Agreement
to satisfy all of its external customers, then the Seller shall allocate to all of its Feedstock
customers, on a pro rata basis, the volumes of Feedstock which it does produce in excess of its own
internal and commercial requirements.

ARTICLE XX

AUDITS

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

ARTICLE XXI

ARBITRATION

     Section 21.1 Negotiation. If any dispute relating to this Agreement arises
between the Parties, the Parties will first enter into good faith negotiations to resolve the
dispute in a commercially reasonable manner. The negotiations will be held by representatives of
each Party who have the authority to settle any claims arising out of the dispute.

     Section 21.2 Arbitration. If a dispute cannot be resolved through good faith
negotiations, the dispute will be submitted for resolution by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators will apply the laws of the State of Texas to resolve the dispute. The arbitration will
take place in Houston, Texas, no later than one hundred twenty (120) days after a request for
arbitration is filed by a Party with the American Arbitration Association. Judgment upon an
arbitration award shall be final and may be entered in any court having jurisdiction over the Party
against which enforcement thereof is sought. This arbitration provision will survive the
termination of this Agreement and the dissolution of the Parties.

     Section 21.3 Alternative Arbitration. As an alternative to the arbitration
procedure set forth in paragraph 21.2 above, the Parties may (but will not be required to) agree to
an expedited dispute resolution process which will be completed no later than thirty (30) days
after the date the Parties agree in writing to pursue this expedited process. Under the expedited
process, the dispute will be submitted to a panel consisting of one executive level manager from
each Party who has the authority to settle any claims arising out of the dispute. These managers
will attempt to resolve the dispute within seven (7) business days after the date the Parties agree
to pursue the expedited process. If the managers are unable to resolve the dispute with this time
period, such dispute will be submitted to a single arbitrator from a pre-approved list of
qualified, independent arbitrators. The arbitrator will conduct the remainder of the expedited
process in Houston, Texas, and will apply the laws of the State of Texas and the Commercial
Arbitration Rules of the American Arbitration Association to resolve the dispute. The decision of
the arbitrator will be final and may be entered into any court having jurisdiction over the Party
against which enforcement thereof is sought.

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ARTICLE XXII

MISCELLANEOUS PROVISIONS

     Section 22.1. The section headings contained in this Agreement are for the convenience
of the Parties only and shall not be interpreted as part of this Agreement.

     Section 22.2. This Agreement contains the entire agreement and understanding of the
Parties with respect to the sale and delivery of the Feedstock and the same cancels and supersedes
any agreement covering the purchase of the Feedstock or other agreement incident thereto previously
executed by the Parties.

     Section 22.3. This Agreement shall not be modified except by written instrument
executed by duly authorized representatives of the respective Parties.

     Section 22.4. Waiver by one Party of the other’s breach of any provision of this
Agreement shall not be deemed a waiver of any subsequent or continuing breach of such provision or
of the breach of any other provision or provisions hereof.

     Section 22.5. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

     Section 22.6. This Agreement may be executed in any number of counterparts, and each
of such counterparts shall for all purposes be deemed to be an original.

     Section 22.7. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the respective Parties hereto.

     Section 22.8. The Buyer hereby waives the provisions of the Texas Deceptive Trade
Practices Act, Chapter 17, Subchapter E, Sections 17.41 through 17.63, inclusive (other than
Section 17.55A, which is not waived), Vernon’s Texas Codes Annotated, Business and Commerce Code.
In order to evidence its ability to grant such a waiver, the Buyer hereby represents and warrants
to the Seller that the Buyer (i) is in the business of seeking or acquiring, by purchase or lease,
goods or services for commercial or business use, (ii) on the date hereof will have assets of
$5,000,000 or more according to its most recent financial statement prepared in accordance with
generally accepted accounting principles, (iii) has knowledge and experience in financial and
business matters that enable it to evaluate the merits and risks of the transaction contemplated
hereby, and (iv) is not in a significantly disparate bargaining position.

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

	 	 	 	 	 	 	 
	CALUMET PENRECO, LLC	 	CONOCOPHILLIPS COMPANY
	 
	 	 	 	 	 	 
	By:     /s/
R. Patrick Murray, II
	 	By:     /s/ G.T. Goff
	 
	 	 	 	 	 	 
	Title:

	 	Vice President & CFO
	 	Title:	 	Vice President

9

 

EXHIBIT 4.4

LVT FEEDSTOCK SPECIFICATIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SPECIFICATIONS	 
	PROPERTY	 	ASTM TEST METHOD	 	MINIMUM	 	 	MAXIMUM	 	 	TYPICAL	 
	Aromatics, Volume%
	 	D1319	 	 	 	 	 	 	*	*	 	 	*	*
	Sulfur, Total ppm by weight
	 	D1266 or D4294 or D2622	 	 	 	 	 	 	*	*	 	 	*	*
	Flash Point, °F
	 	D56 or D3828	 	 	*	*	 	 	 	 	 	 	*	*
	Gravity °API @ 60°F
	 	D1298 or D287	 	 	*	*	 	 	*	*	 	 	*	*
	Freezing Point, °C
	 	D2386	 	 	 	 	 	 	*	*	 	 	*	*
	Cetane Index
	 	D976	 	 	*	*	 	 	 	 	 	 	*	*

 

 

Exhibit 7.4

Expert Resolution Procedures

If, pursuant to the provisions of Section 7.4 of this Agreement, a matter is required to be
referred to an expert in the relevant subject matter for determination, or a matter is expressly
required to be determined by a Pricing Arbitrator, and is so referred to a Pricing Arbitrator, the
provisions set forth below shall apply. Without the consent of both Parties, no individual
designated as an expert may be or have been employed by either Party.

	a.	 	       For any decision referred to a Pricing Arbitrator pursuant to the provisions of this
Agreement, the Parties hereby agree that the proceedings shall be conducted and the decisions
rendered expeditiously by such Pricing Arbitrator.
	 
	b.	 	       The Party desiring the determination of a Pricing Arbitrator shall first give the other Party
written notice of the request for such determination.
	 
	c.	 	       The Pricing Arbitrator shall be selected unanimously by the Parties within a maximum period
of five (5) days following the receipt of the written notice in paragraph b above. Failing
such unanimous decision by the Parties within such period, then each party shall designate a
single individual meeting the qualifications of a Pricing Arbitrator and both individuals so
designated shall designate a third individual similarly qualified, all three of whom shall
serve as a panel. The agreed individual Pricing Arbitrator or the panel of individuals as so
determined shall be deemed to be the Pricing Arbitrator for the purposes hereof, provided that
a panel shall be required to reach a single determination.
	 
	d.	 	       The Pricing Arbitrator, once appointed, shall have no ex parte communications with any of the
Parties concerning the expert determination. The Parties agree to cooperate fully in the
expeditious conduct of such expert determination and to provide the Pricing Arbitrator with
access to all facilities, books, records, documents, information and personnel necessary to
make a fully informed decision in an expeditious manner.
	 
	e.	 	       Before issuing a final decision, the Pricing Arbitrator shall issue a draft report and allow
the Parties to comment on it. The Pricing Arbitrator shall endeavor to resolve the dispute
within fifteen (15) days or such shorter period as the Parties shall agree (but no later than
thirty (30) days) after his appointment, taking into account the circumstances requiring an
expeditious resolution of the matter in dispute.
	 
	f.	 	       The Pricing Arbitrator’s decision shall be final and binding on the Parties save in the case
of fraud or manifest error. The Parties expressly waive the right to further submit the
decision of the Pricing Arbitrator to arbitration pursuant to this Agreement.
	 
	g.	 	       The Parties shall bear their respective costs and expenses related to, or arising in
connection with, any proceedings before a Pricing Arbitrator.

 

 

EXHIBIT 18.1

MATERIAL SAFETY DATA SHEET

	 	 	 
	Material Safety Data Sheet

	 	

MOLEX RAFFINATE

# 1. CHEMICAL PRODUCT/COMPANY IDENTIFICATION

MOLEX RAFFINATE

	 	 	 
	     MSDS
Code:      GASC0205

	 	Revised: 03-Oct-2000

     CAS Number            : 64741-85-1

	 	 	 
	     MANUFACTURER/DISTRIBUTOR
	 
	 

	 	Conoco, Inc.
	 

	 	P.O. Box 2197
	 

	 	Houston, TX 77252
	     PHONE NUMBERS
	 
	             Product Information: 1-281-293-5550
	             Transport
Emergency: CHENTREC 1-800-424-9300 or 1-703-527-3887 (call collect)
	             Medical Emergency: 1-800-342-5119 or 1-281-493-2767

2. COMPOSITION/INFORMATION ON INGREDIENTS

	 	 	 	 	 
	     COMPONENTS

	 	 	%	 
	 
	             Hydrocarbons (Aromatic & Paraffinic)

	>90

Petroleum distillate standard applies.

See Section 8 for exposure limits.

3. HAZARDS IDENTIFICATION

— EMERGENCY OVERVIEW —

     APPEARANCE / ODOR

Clear liquid; kerosene odor.

     OSHA REGULATORY STATUS

This material is classified as hazardous under OSHA Regulations.

May cause irritation to eyes, nose, throat, and lungs.

May cause central nervous system effects, such as headache, nausea,
blurred vision, drowsiness.

Combustible.

     HMIS Rating: Health 1; Flammability 2; Reactivity: 0

     Potential Health Effects

Primary Routes of Entry: Skin, inhalation

The product may cause irritation to the eyes, nose, throat, lungs, and skin after prolonged or
repeated exposure. Extreme overexposure or aspiration into the lungs may cause lung damage or

 

 

death, Overexposure may cause weakness, headache, nausea, confusion, blurred vision, drowsiness,
and other nervous system effects; greater overexposure may cause dizziness, slurred speech, flushed
face, unconsciousness, and convulsions.

     Carcinogenicity Information

None of the components present in this material at concentrations equal to or greater than 0.1% are
listed by IARC, NTP, OSHA or ACGIH as a carcinogen.

4. FIRST AID MEASURES

Inhalation

If inhaled, remove to fresh air. If not breathing, give artificial respiration. If breathing is
difficult, give oxygen. Call a physician.

     Skin Contact

Wash skin thoroughly with soap and water. If irritation develops and persists, consult a physician.

     Eye Contact

In case of contact, immediately flush eyes with plenty of water for at least 15 minutes. Call a
physician.

     Ingestion

If swallowed, do not induce vomiting. Immediately give 2 glasses of water. Never give anything by
mouth to an unconscious person. Call a physician.

     Notes to Physicians

Activated charcoal mixture may be administered. To prepare activated charcoal mixture, suspend 50
grams activated charcoal in 400 mL water and mix thoroughly. Administer 5 mL/kg, or 350 mL for an
average adult.

5. FIRE FIGHTING MEASURES

	 	 	 
	Flammable Properties
	 	 
	Flash Point
	 	: 150 F (65 C)
	Method
	 	: PM
	Flammable limits in Air,
	 	 % by volume
	LEL
	 	: 0.5
	UEL
	 	: 6
	 
	 	 
	NFPA Classification
	 	: Class IIIA Combustible Liquid.
	NFPA Rating
	 	:   Health 0; Flammability 2; Reactivity 0

     Extinguishing Media

Water Spray, Foam, Dry Chemical, CO2.

     Fire Fighting Instructions

Use water to keep fire-exposed containers cool. If leak or spill has not ignited, use water spray
to disperse the vapors and to provide protection for personnel attempting to stop a leak. Water
spray may be used to flush spills away from exposures.

Products of combustion may contain carbon monoxide, carbon dioxide and other toxic materials. Do
not enter enclosed or confined space

 

 

without proper protective equipment including respiratory
protection.

6. ACCIDENTAL RELEASE MEASURES

     Safeguards (Personnel)

NOTE: Review FIRE FIGHTING MEASURES and HANDLING (PERSONNEL) sections before proceeding with
clean-up. Use
appropriate PERSONAL PROTECTIVE EQUIPMENT during Clean-up.

Evacuate personnel, thoroughly ventilate area, use self-contained breathing apparatus. Remove
source of heat, sparks, flame, impact, friction or electricity.

     Initial Containment

Dike spill. Prevent material from entering sewers, waterways, or low areas.

     Spill Clean Up

Recover free liquid for reuse or reclamation. Soak up with
sawdust, sand, oil dry or other absorbent material.

7. HANDLING AND STORAGE

     Handling (Personnel)

Avoid breathing vapors. Avoid contact with eyes. Avoid prolonged or repeated contact with skin.
Wash thoroughly after handling. Wash clothing after use.

     Handling (Physical Aspects)

Close container after each use. Keep away from heat, sparks and flames. Ground container when
pouring.

     Storage

Store in accordance with national Fire Protection Association recommendations. Keep container
tightly closed. Store in a cool, dry place. Store in a well ventilated place. Store away from
oxidizers, heat, sparks and flames.

8. EXPOSURE CONTROLS/PERSONAL PROTECTION

     Engineering Controls

VENTILATION

 General mechanical ventilation normally adequate.

     Personal Protective Equipment

RESPIRATORY PROTECTION

Select appropriate NIOSH-approved respiratory protection for organic vapors where necessary to
maintain exposures below the exposure limits given below.

PROTECTIVE GLOVES

Should be worn when any potential exists for skin contact. NBR or
neoprene recommended.

EYE PROTECTION

Chemical splash goggles or face shield recommended where splashing can occur.

 

 

OTHER PROTECTIVE EQUIPMENT

Sufficient protective clothing to minimize skin exposure.

Coveralls with long sleeves if splashing is probable.

     Applicable Exposure Limits

	 	 	 	 	 
	 	 	Petroleum distillate standard applies.
	 

	 	OSHA PEL
	 	: 500 ppm, 2000 mg/m3, 8 Hr. TWA
	 

	 	ACGIH tlv
	 	: None Established

9. PHYSICAL AND CHEMICAL PROPERTIES

     Physical Data

	 	 	 	 	 
	 

	 	Boiling Point
	 	: 330-550 F (166-288 C)
	 

	 	Vapor Pressure
	 	: 2 mm Hg
	 

	 	Vapor Density
	 	: 5.2 (Air = 1)
	 

	 	% Volatiles
	 	: (by volume) Nil
	 

	 	Evaporation Rate
	 	: Not Applicable
	 

	 	Solubility in Water
	 	: Insoluble
	 

	 	Odor
	 	: Paraffinic kerosene
	 

	 	Form
	 	: Liquid
	 

	 	Color
	 	: Clear
	 

	 	Specific Gravity
	 	: 0.81-0.82 (Water = 1)

10. STABILITY AND REACTIVITY

     Chemical Stability

Stable.

     Conditions to Avoid

Avoid excessive heat, sparks, and flame.

     Incompatibility with Other Materials

Incompatible with oxidizing materials.

     Decomposition

Normal combustion forms carbon dioxide; incomplete combustion may produce carbon monoxide.

     Polymerization

Polymerization will not occur.

11. TOXICOLOGICAL INFORMATION

     Animal Data

Animal studies have shown that prolonged or repeated inhalation exposures to high concentrations of
some petroleum distillates have caused liver tumors in mice and kidney damage and tumors in male
rats. However, kidney effects were not seen in similar studies involving female rats, guinea pigs,
dogs, or monkeys, Present studies indicate the kidney effects will only occur in male rats. Also,
human studies do not indicate this peculiar sensitivity for kidney damage and studies reported in
1992 showed that this particular type of rat kidney damage is not useful in predicting a human
health hazard. The significance of liver tumors in mice exposed to high doses of chemicals is
highly speculative and probably not a good indicator for predicting a potential human carcinogenic
hazard.

Mouse skin painting studies have shown that petroleum middle

 

 

distillates (boiling range 100-700 F; naphtha, jet fuel, diesel fuel, kerosene, etc.) can cause
skin cancer when repeatedly applied and never washed from the animal’s skin. The relative
significance of this to human health is uncertain since the petroleum distillates were not washed
from the skin and resulting skin effects (irritation, cell damage, etc.) may play a role in the
tumorigenic response. A few studies have shown that washing the animal’s skin with soap and water
between treatments greatly reduces the carcinogenic effect of some petroleum oils. Other laboratory
studies indicate that middle distillates caused the skin tumors by promoting, rather than
initiating, the formation of tumors, so the effect is probably dose-related and low level exposure
should not be carcinogenic.

12. DISPOSAL CONSIDERATIONS

     Waste Disposal

Treatment, storage, transportation, and disposal must be in
accordance with applicable Federal, State/Provincial, and Local regulations. Do not flush to
surface water or sanitary sewer system. Recover nonusable free liquid and dispose of in approved
and permitted incinerator.

13. TRANSPORTATION INFORMATION

     Shipping Information

FOR RAIL CARS OF MOLEX RAFFINATE:

Kerosene,
Combustible liquid, UN 1223, PG III

Molex Raffinate

PLACARDED: COMBUSTIBLE

Kerosene, Hazmat STCC # 4914165

Refined oil (Petroleum), Freight STCC # 2911225

FOR TRUCK TRANSPORTS, ISO CONTAINERS, AND INTERMEDIATE BULK CONTAINERS (>119 GAL) OF MOLEX
RAFFINATE:

Kerosene, Combustible liquid, UN 1223, PG III

Molex Raffinate

PLACARDED: COMBUSTIBLE

(Petroleum oil)

	 	 	 	 	 
	 

	 	NOTE:
	 	Shipments in single containers <119 gallons are not regulated
	 
	 	 	 	 
	 

	 	NOTE:
	 	Not regulated for overseas shipments
	 
	 	 	 	 
	 

	 	MEXICO:
	 	Same as DOT

     Shipping Information — Canada

	 	 	 	 	 
	 

	 	Special Information
	 	: Not regulated in quantities less than
	 

	 	 	 	450 liters (119 gallons) in one
	 

	 	 	 	container.

14. REGULATORY INFORMATION

     U.S. Federal Regulations

OSHA HAZARD DETERMINATION

 

 

This material is hazardous as defined by OSHA’s Hazard Communication Standard, 29 CFR 1910.1200.

CERCLA/SUPERFUND

Not applicable; this material is covered by the cercla petroleum exclusion. Releases are
not reportable.

SARA, TITLE III, 302/304

This material is not Known to contain extremely hazardous
substances.

	 	 	 	 	 
	 	 	SARA, TITLE III, 311/312
	 
	 

	 	Acute
	 	: Yes
	 

	 	Chronic
	 	: Yes
	 

	 	Fire
	 	: Yes
	 

	 	Reactivity
	 	: No
	 

	 	Pressure
	 	: No

SARA, TITLE III, 313

This material is not known to contain any chemical(s) at a level of 1,0% or greater (0,1% for
carcinogens) on the list of Toxic Chemicals and subject to release reporting requirements.

TSCA

This material is in the TSCA Inventory of Chemical Substances (40
CFR 710) and/or is otherwise in compliance with TSCA.

RCRA

This material has been evaluated for RCRA characteristics and does not meet hazardous waste
criteria if discarded in its purchased form. Because of product use, transformation, mixing,
processing, etc., which may render the resulting material hazardous, it is the product user’s
responsibility to determine at the time of disposal whether the material meets RCRA hazardous waste
criteria.

CLEAN WATER ACT

The material contains the following ingredient(s) which is considered hazardous if spilled into
navigable waters and therefore reportable to the National Response Center (1-800-424-8802).

	 	 	 	 	 
	 

	 	Ingredient(s)
	 	: Petroleum Hydrocarbons
	 

	 	Reportable Quantity
	 	: Film or sheen upon or discoloration of
the water surface

     State Regulations (U.S.)

CALIFORNIA “PROP 65”

This material is not known to contain any ingredient(s) subject to the Act.

PENNSYLVANIA WORKER & COMMUNITY RIGHT TO KNOW ACT

To the best of our knowledge this material is not sold or produced in Pennsylvania. Please notify
Conoco if the material results in Pennsylvania commerce.

15. OTHER INFORMATION

     Additional Information: Hone.

The data in this Material Safety Data Sheet relates only to the

 

 

specific material designated herein and does not relate to use in combination with any other
material or in any process.

	 	 	 	 	 
	 

	 	Responsibility for MSDS
	 	: MSDS Coordinator
	 

	 	Address
	 	: Conoco inc.
	 

	 	>
	 	: PO Box 2197
	 

	 	>
	 	: Houston, TX 77252
	 

	 	Telephone
	 	: 1-281-293-5550

# Indicates updated section.

End of MSDSexv10w13

 

Exhibit 10.13

HDW DIESEL SALE AND PURCHASE AGREEMENT

between

CONOCOPHILLIPS COMPANY,

as Seller,

and

CALUMET PENRECO, LLC,

as Buyer.

January 1, 2008

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

 

 

HDW DIESEL SALE AND PURCHASE AGREEMENT

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

Recitals:

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

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

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

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

ARTICLE I

EFFECTIVE DATE

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

ARTICLE II

DEFINITIONS

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

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

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

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

          Section 2.4. “BPD” means barrels per day.

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

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

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

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

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

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

1

 

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

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

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

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

ARTICLE III

TERM AND TERMINATION

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

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

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

ARTICLE IV

VOLUME AND QUALITY

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

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

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

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

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

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

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

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

          Section 4.2. For planning purposes:

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

2

 

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

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

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

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

ARTICLE V

DELIVERY; TITLE AND RISK OF LOSS

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

ARTICLE VI

MEASUREMENT

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

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

ARTICLE VII

PRICE

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

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

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

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

3

 

ARTICLE VIII

PAYMENT

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

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

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

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

ARTICLE IX

CLAIMS

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

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

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

ARTICLE X

EXCLUSTION OF WARRANTIES AND LIMITATIONS OF LIABILITY

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

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

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

4

 

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

ARTICLE XI

INDEMNIFICATION

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

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

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

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

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

ARTICLE XII

TAXES

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

ARTICLE XIII

FORCE MAJEURE

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

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

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

5

 

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

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

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

ARTICLE XIV

EVENT OF DEFAULT

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

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

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

ARTICLE XV

ASSIGNMENT

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

ARTICLE XVI

NOTICES

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

6

 

If to Seller, addressed to:

ConocoPhillips Company

P.O. Box 2197, Houston, Texas 77252

600 North Dairy Ashford Road, Houston, Texas 77079

Attention:           Manager, Financial Planning and Analysis

                            Lubricants and Specialty Products Business Unit

Facsimile:           (281) 293-3474

If to Buyer, addressed to:

Calumet Penreco, LLC

% Calumet Specialty Products Partners, L.P.

2780 Waterfront Pkwy. E. Dr., Suite 200

Indianapolis, IN 46214

Attention:           Vice President and CFO

Phone:                (317) 328-5660

Facsimile:           (317) 328-5676

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

ARTICLE XVII

AGREEMENT AMENDMENT PROCEDURES

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

ARTICLE XVIII

WARNINGS

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

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

ARTICLE XIX

AUDITS

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

ARTICLE XX

ARBITRATION

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

7

 

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

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

ARTICLE XXI

MISCELLANEOUS

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

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

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

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

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

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

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

	 	 	 	 	 	 	 	 	 
	CALUMET PENRECO, LLC	 	 	CONOCOPHILLIPS COMPANY	 
	 
	 	 	 	 	 	 	 	 
	By:

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

	 	Vice President & CFO
	 	 	Title:	 	Vice President	 

8

 

EXHIBIT A

EXAMPLE OF PROCESSING FEE CALCULATION

PRODUCE ADD’N DEWAXED DIESEL PROCESSING FEE -

Example

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating Costs	 	 	 	 	 	 	 	 	 	 
	Description	 	Qty.	 	Units	 	Price	 	$/Bbl	 	 
	Hydrogen

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

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

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

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

	 	 	 	 	 	 	 	Sub-Total
	 	 	0.02	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

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

	 	 	 	 	 	 	 	Total, cpg
	 	 	3.04	 	 	 

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

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

 

 

EXHIBIT B

MATERIAL SAFETY DATA SHEETS

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 1/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

MATERIAL SAFETY DATA SHEET

Conosol® HDW

1. PRODUCT AND COMPANY IDENTIFICATION

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

Emergency Overview

24 Hour Emergency Telephone Numbers:

Spill, Leak, Fire or Accident Call CHEMTREC:

North America: (800) 424-9300

Others: (703)527-3887 (collect)

California Poison Control System: (800) 356-3219

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

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

	 	 	 	 	 
	 

	 	Appearance:
	 	Clear
	 

	 	Physical Form:
	 	Liquid
	 

	 	Odor:
	 	Hydrocarbon

NFPA 704 Hazard Class:

	 	 	 	 	 
	 

	 	Health:
	 	1 (Slight)
	 

	 	Flammability:
	 	1 (Slight)
	 

	 	Instability:
	 	0 (Least)

2. COMPOSITION / INFORMATION ON INGREDIENTS

NON-HAZARDOUS COMPONENTS

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

64742-46-7

	 	 	100	 	 	NE
	 	NE
	 	NE
	 	100 mg/m3 TWA*

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

1%=10,000 PPM.

NE=Not Established

 

 

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 2/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

3. HAZARDS IDENTIFICATION

Potential Health Effects

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

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

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

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

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

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

Target Organs: Not Evaluated

Developmental: No data available for this material.

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

4. FIRST AID MEASURES

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

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

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

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

5. FIRE-FIGHTING MEASURES

Flammable Properties:

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

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

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

 

 

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 3/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

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

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

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

6. ACCIDENTAL RELEASE MEASURES

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

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

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

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

7. HANDLING AND STORAGE

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

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

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

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

8. EXPOSURE CONTROLS / PERSONAL PROTECTION

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

Personal Protective Equipment (PPE):

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

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

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

 

 

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 4/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

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

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

9. PHYSICAL AND CHEMICAL PROPERTIES

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

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

10. STABILITY AND REACTIVITY

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

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

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

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

Hazardous Polymerization: Will not occur.

11. TOXICOLOGICAL INFORMATION

Chronic Data:

Hydrotreated Middle Distillate (64742-46-7)

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

Acute Data:

Hydrotreated Middle Distillate (64742-46-7)

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

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

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

Based on: Similar Material

 

 

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 5/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

12. ECOLOGICAL INFORMATION

Not evaluated at this time.

13. DISPOSAL CONSIDERATIONS

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

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

14. TRANSPORTATION INFORMATION

DOT

Shipping Description: Not Regulated

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

IMDG

Shipping Description: Not regulated

ICAO/IATA

Shipping Description: Not regulated

15. REGULATORY INFORMATION

U.S. Regulations:

	 	 	 	 	 	 	 
	 	 	EPA SARA 311/312 (Title III Hazard Categories)
	 
	 

	 	Acute Health:
	 	No	 	 
	 

	 	Chronic Health:
	 	No	 	 
	 

	 	Fire Hazard:
	 	No	 	 
	 

	 	Pressure Hazard:
	 	No	 	 
	 

	 	Reactive Hazard:
	 	No	 	 

SARA-Section 313 and 40 CFR 372:

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

EPA (CERCLA) Reportable Quantity (in pounds): 

—None Known—

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

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

California Proposition 65:

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

— None Known —

Carcinogen Identification:

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

 

 

	 	 	 	 	 
	MSDS Code: 776548

	 	 	 	Page 6/6
	Status: Final

	 	 	 	Date of Issue: 20-Dec-2005

TSCA:

All components are listed on the TSCA inventory.

International Regulations:

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

Domestic Substances List: Listed

WHMIS Hazard Class:

Not Regulated

International Inventories:

All components are listed on the following inventories:

Australia (AICS)

Canada (DSL)

China

Europe(EINECS)

Korea (Existing and Evaluated Chemical Substances)

Philippines (PICCS)

US (TSCA)

16. OTHER INFORMATION

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

Disclaimer of Expressed and implied Warranties:

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

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