Form of Contribution, Conveyance and Assumption Agreement] CVR PARTNERS, LP CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
Exhibit 10.44
CVR PARTNERS, LP
This Contribution, Conveyance and Assumption Agreement, dated as of , 2007, is
entered into by and among COFFEYVILLE RESOURCES, LLC, a Delaware limited liability company
(“CR”), CVR GP, LLC., a Delaware limited liability company (the “Managing General
Partner”), CVR SPECIAL GP, LLC, a Delaware limited liability company (the “Special General
Partner”), CVR LP, LLC, a Delaware limited liability company (the “Organizational Limited
Partner”) and CVR PARTNERS, LP, a Delaware limited partnership (the “Partnership”). The
above-named entities are sometimes referred to in this Agreement each as a “Party” and
collectively as the “Parties.” Capitalized terms used herein shall have the meanings
assigned to such terms in Section 1.1.
RECITALS:
WHEREAS, CR, the Managing General Partner, the Special General Partner and the Organizational
Limited Partner have formed the Partnership pursuant to the Delaware Revised Uniform Limited
Partnership Act (the “Delaware LP Act”) for the purpose of engaging in any business
activity that is approved by and that lawfully may be conducted by a limited partnership organized
pursuant to the Delaware LP Act in accordance with the terms of the Partnership Agreement.
WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, each of
the following actions have been taken prior to the date hereof:
1. CR formed the Managing General Partner under the terms of the Delaware Limited
Liability Company Act (the “Delaware LLC Act”) and contributed $1,000 to the
Managing General Partner in exchange for all of the member interests in the Managing General
Partner.
2. CR formed the Special General Partner under the terms of the Delaware LLC Act and
contributed $1,000 to the Special General Partner in exchange for all of the member
interests in the Special General Partner.
3. CR formed the Organizational Limited Partner under the terms of the Delaware LLC Act
and contributed $1,000 to the Organizational Limited Partner in exchange for all of the
member interests in the Organizational Limited Partner.
4. The Managing General Partner, the Special General Partner and the Organizational
Limited Partner formed the Partnership under the terms of the Delaware LP Act and (a) the
Managing General Partner contributed $1000 to the Partnership in exchange for a managing
general partner interest in the Partnership, (b) the Special General Partner contributed
$1000 to the Partnership in exchange for a non-managing
general partner interest in the Partnership and (c) the Organizational Limited Partner
contributed $1000 to the Partnership in exchange for a nominal limited partner interest in
the Partnership.
WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of
the following shall occur:
1. CR will convey:
(a)
99.9% of the Fertilizer Interests the Partnership, on behalf of the Special
General Partner, in exchange for 30,303,000 Special GP Units, representing a 99.9%
special general partner interest in the Partnership; and
(b)
0.1% of the Fertilizer Interests to the Partnership, on behalf of the
Organizational Limited Partner, in exchange for 30,333 Special LP Units,
representing a 0.1% limited partner interest in the Partnership.
2. As additional consideration for the Fertilizer Interests, the Partnership will issue
a $75 million intercompany note to CR (the “Intercompany Note”).
WHEREAS, it is the intent of the Parties that the Managing General Partner have the discretion
to effect an Initial Offering, consistent with provisions of the Partnership Agreement, and it may
be necessary for the Parties to take reasonable actions to effect the Initial Offering.
NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Terms. Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement. The following defined terms shall have the meanings given below:
“Agreement” means this Contribution, Conveyance and Assumption Agreement.
“Code” means Internal Revenue Code of 1986, as amended.
“Coffeyville Credit Agreement” has the meaning as set forth in the Partnership
Agreement.
“CR” has the meaning as set forth in the opening paragraph of this Agreement.
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“Delaware LLC Act” has the meaning as set forth in the Recitals of this
Agreement.
“Delaware LP Act” has the meaning as set forth in the Recitals of this
Agreement.
“Effective Time” means 8:00 a.m. prevailing Eastern Time on , 2007.
“Fertilizer Interests” means the membership interests in Fertilizers.
“Fertilizer Interest Liabilities” means all liabilities arising out of or
related to the ownership of the Fertilizer Interests to the extent arising or accruing on
and after the Effective Time, whether known or unknown, accrued or contingent, and whether
or not reflected on the books and records of Fertilizers or their affiliates.
“Fertilizers” means Coffeyville Resources Nitrogen Fertilizers, LLC, a Delaware
limited liability company.
“Intercompany Note” has the meaning set forth in the recitals of this
Agreement.
“Managing General Partner” has the meaning as set forth in the opening
paragraph of this Agreement.
“Managing General Partner Interest” has the meaning as set forth in the
Partnership Agreement.
“Organizational Limited Partner” has the meaning as set forth in the opening
paragraph of this Agreement.
“Partnership” has the meaning as set forth in the opening paragraph of this
Agreement.
“Party” or “Parties” has the meaning as set forth in the opening
paragraph of this Agreement.
“Special General Partner” has the meaning as set forth in the opening paragraph
of this Agreement.
“Special GP Units” has the meaning as set forth in the Partnership Agreement.
“Special LP Units” has the meaning as set forth in the Partnership Agreement.
ARTICLE II
CONTRIBUTION
CONTRIBUTION
CR hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers
the Fertilizer Interests to the Partnership, its successors and assigns, for its and their own
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use forever, on behalf of the Managing General Partner, the Special General Partner and the
Organizational Limited Partner as described in the recitals hereto, in exchange for (a) the issuance
to the Special General Partner of 30,303,000 Special GP Units, representing a 99.9% general partner
interest in the Partnership, (b) the issuance to the Organizational Limited Partner of 30,333
Special LP Units, representing a 0.1% limited partner interest in the Partnership and (c) the
issuance of the Intercompany Note, and the Partnership hereby accepts such Fertilizer Interests as
contributions to the capital of the Partnership.
The
Partnership agrees to refund the initial $1,000 contributed by each of the Special General
Partner and the Organizational Limited Partner promptly following the issuance of Special GP Units
and Special LP Units described above.
ARTICLE III
ASSUMPTIONS OF CERTAIN LIABILITIES
ASSUMPTIONS OF CERTAIN LIABILITIES
Section 3.1 Assumption of Fertilizer Interest Liabilities by the Partnership.
In connection with the contribution and transfer by CR of the Fertilizer Interest to the
Partnership, as set forth in Article II above, the Partnership hereby assumes and agrees to duly
and timely pay, perform and discharge the Fertilizer Interest Liabilities, to the full extent that
CR has been heretofore or would have been in the future obligated to pay, perform and discharge the
Fertilizer Interest Liabilities were it not for the execution and delivery of this Agreement;
provided, however, that said assumption and agreement to duly and timely pay, perform and discharge
the Fertilizer Interest Liabilities shall not (a) increase the obligation of the Partnership with
respect to the Fertilizer Interest Liabilities beyond that of CR, (b) waive any valid defense that
was available to CR with respect to the Fertilizer Interest Liabilities or (c) enlarge any rights
or remedies of any third party, if any, under any of the Fertilizer Interest Liabilities.
ARTICLE IV
ADDITIONAL TRANSACTIONS
ADDITIONAL TRANSACTIONS
Section 4.1 Notice of Initial Offering.
If the Managing General Partner elects to cause the Partnership to undertake the Initial
Offering the Managing General Partner shall give prompt notice to CR and the Special General
Partner of such election and the proposed terms of the Initial Offering, including whether it will
be an Initial Public Offering or an Initial Private Offering, the anticipated timing and size of
the Initial Offering, the proposed use of proceeds and the identity of the managing underwriter or
initial purchaser, as applicable.
Section 4.2 Actions in Connection with Initial Offering.
CR shall use, and shall cause each of its Subsidiaries to use, its commercially reasonable
efforts to take such actions and enter into such transactions as the Managing General Partner
reasonably requests to effectuate and permit the consummation of the Initial Offering. Such
actions may include the entry into customary lock-up agreements with the managing
underwriters or initial purchasers, as applicable, and the transfer by CR or its wholly-owned
Affiliates of their ownership interest in the Partnership to other wholly-owned Affiliates of CR.
CR and the Special General Partner agree that the Managing General Partner may structure the
Initial Offering to include (x) a secondary offering of Units by the Special General
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Partner or (y)
a primary offering of Units by the Partnership where the use of proceeds is to redeem an equal
number of Units (Common Units first, then Subordinated Units to the extent the Special General
Partner no longer has Common Units) from the Special General Partner (with a per-Unit redemption
price equal to the price at which a Unit is purchased from the Partnership, net of any sales
commissions or underwriting discounts charged to the Partnership) (each a “Special GP
Offering”), provided that in either case the number of Units associated with the Special GP
Offering is reasonably expected by the Managing General Partner, at the time of filing of the
initial registration statement or first distribution of the offering memorandum, as applicable, to
generate up to $100 million in net proceeds to the Special General Partner (excluding any net
proceeds from the exercise of any Over-Allotment Option); provided, that without the Special
General Partner’s consent the Special GP Offering may not be consummated if the net proceeds to the
Special General Partner are less than $10 per Unit.
If the Managing General Partner reasonably determines that, in order to consummate the Initial
Offering on terms materially consistent with terms prevalent in the then-current market for initial
public offerings of publicly traded partnerships relying primarily on 7704(d)(1)(E) of the Code, it
is necessary or appropriate that the Partnership and its Subsidiaries be released from their
obligations as obligors or guarantors of the Coffeyville Credit Agreement and CR’s ISDA swap
agreements between CR and X. Xxxx & Company (the “Swaps”), or any amendment or successor or
replacement agreement thereto, or that other amendments or modifications thereto are necessary or
appropriate, then the Managing General Partner shall give prompt written notice to CR describing
such amendments or modifications (the “Requested Modifications”). Such notice shall, in
any event, be given ninety (90) days prior to the anticipated closing date of the Initial Offering.
CR shall use, and shall cause each of its Subsidiaries to use, its commercially reasonable efforts
(as qualified below) to effect the Requested Modifications, through amendment to, or replacement
(including by way of refinancing) of, the applicable agreement. CR shall not be considered to have
made “commercially reasonable efforts” to effect the Requested Modifications if it determines not
to pursue or effect such Requested Modifications due to (i) payment of fees to the lenders under
the Coffeyville Credit Agreement or the swap counterparty, (ii) the costs of this type of amendment
or replacement, (iii) an increase in applicable margins or spreads or (iv) changes to the terms
required by the lenders or swap counterparty including revised covenants, events of default and
repayment and prepayment provisions; provided that (i), (ii), (iii) and (iv) are not reasonably
likely, in the aggregate, to have a material adverse effect on CR. In order to effect the
Requested Modifications, CR may require that (A) the Initial Offering include a Special GP Offering
generating at least $140 million in net proceeds to the Special General Partner and (B) the
Partnership repay the Intercompany Note in full immediately prior to, or concurrently with, the
closing of the Initial Offering.
If the Initial Offering includes a Special GP Offering and an Over-Allotment Option, then (i)
if the Special GP Offering is a secondary offering, the Special General Partner will agree with the
underwriters or initial purchasers of the Initial Offering to sell its pro rata portion of the
Units issued upon any exercise of the Over-Allotment Option, or (ii) if the Special GP Offering is
a redemption, that its pro rata portion of the Units issued upon any exercise of the
Over-Allotment Option shall be redeemed (with a per-Unit redemption price equal to the price at
which a Unit is purchased from the Partnership, net of any sales commissions or underwriting
discounts charged to the Partnership).
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Section 4.3 Managing
General Partner Put Right. If the Initial Offering is not consummated by the second anniversary of the date hereof,
the Managing General Partner shall have the right to require CR to purchase the Managing General
Partner Interest (the “Put Right”). The Put Right shall expire on the earlier of (i) the
fifth anniversary of the date hereof and (ii) the closing of the Initial Offering.
Section 4.4 CR Call
Right.
If the Initial Offering is not consummated by the fifth anniversary of the date hereof, CR
shall have the right to require the Managing General Partner to sell the Managing General Partner
Interest to CR (the “Call Right”). The Call Right shall expire on the closing of the
Initial Offering. The Call Right may not be exercised for a period of 120 consecutive days
following the initial filing of a registration statement relating to an Initial Public Offering.
Section 4.5 Procedures
for Put/Call.
In the event of an exercise of the Put Right or the Call Right, the purchase price shall be
the fair market value of the Managing General Partner interest, determined and payable as of the
effective date of the purchase and sale. The fair market value of the Managing General Partner
Interest shall be determined by an independent investment banking firm selected by the Managing
General Partner and CR, which, in turn, may rely on other experts, and the determination of which
shall be conclusive. If such parties cannot agree upon one independent investment banking firm
within 45 days after the date of notice of exercise of the Put Right or Call Right, then the
Managing General Partner shall designate an independent investment banking firm, CR shall designate
an independent investment banking firm, and such firms shall mutually select a third independent
investment banking firm, which third independent investment banking firm shall determine the fair
market value of the Managing General Partner Interest. In making its determination, such third
independent investment banking firm may consider the value of the Partnership’s assets, the rights
and obligations of the Managing General Partner and other factors it may deem relevant but the fair
market value shall not include any control premium and shall be determined as if the last provisos
contained in Sections 6.4(a), (b) and (c) of the Partnership Agreement (which provide that no
distributions will be paid to the Managing General Partner (in respect of the Incentive
Distribution Rights) for so long as any Group Member is a guarantor of the Coffeyville Credit
Agreement) no longer applied.
Section 4.6 Substantive
Restructuring of Coffeyville Credit Agreement.
If CR materially amends, or amends and restates, the Coffeyville Credit Agreement, and the
substance of the amendments are in the nature of a refinancing of the Coffeyville Credit Agreement,
CR shall use, and shall cause each of its Subsidiaries to use, its commercially reasonable efforts
to obtain the release of the Partnership and its Subsidiaries as obligors or
guarantors thereunder. “Commercially reasonable efforts” shall be qualified in the same
manner as specified in Section 4.2.
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ARTICLE V
FURTHER ASSURANCES
FURTHER ASSURANCES
From time to time after the date hereof, and without any further consideration the Parties
agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale,
conveyances, instruments, notices, releases, acquittances and other documents, and will do all such
other acts and things, all in accordance with applicable law, as may be necessary or appropriate
(a) more fully to assure that the applicable Parties own all of the properties, rights, titles,
interests, estates, remedies, powers and privileges granted by this Agreement, or which are
intended to be so granted, or (b) more fully and effectively to vest in the applicable Parties and
their respective successors and assigns beneficial and record title to the interests contributed
and assigned by this Agreement or intended so to be and to more fully and effectively carry out the
purposes and intent of this Agreement.
ARTICLE VI
EFFECTIVE TIME
EFFECTIVE TIME
Notwithstanding anything contained in this Agreement to the contrary, none of the provisions
of Article II or Article III of this Agreement shall be operative or have any effect until the
Effective Time, at which time all the provisions of Article II or Article III of this Agreement
shall be effective and operative in accordance with Article VII, without further action by any
Party.
ARTICLE VII
MISCELLANEOUS
MISCELLANEOUS
Section 7.1 Order of Completion of Transactions.
The transactions provided for in Article III of this Agreement shall be completed
simultaneously with the transactions provided for in Article II of this Agreement.
Section 7.2 Costs.
The Partnership shall pay all expenses, fees and costs, including sales, use and similar
taxes arising out of the contributions, conveyances and deliveries to be made hereunder, and shall
pay all documentary, filing, recording, transfer, deed and conveyance taxes and fees required in
connection therewith. In addition, the Partnership shall be responsible for all costs, liabilities
and expenses (including court costs and reasonable attorneys’ fees) incurred in
connection with the implementation of any conveyance or delivery pursuant to Article V of this
Agreement.
Section 7.3 Headings; References; Interpretation.
All Article and Section headings in this Agreement are for convenience only and shall not
be deemed to control or affect the meaning or construction of any of the provisions hereof. The
words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement,
shall refer to this Agreement as a whole, and not to any particular provision of this Agreement.
All references herein to Articles and Sections shall, unless the context requires a different
construction, be
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deemed to be references to the Articles and Sections of this Agreement,
respectively. All personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders, and the singular shall include the
plural and vice versa. The terms “include,” “includes,” “including” or words of like import shall
be deemed to be followed by the words “without limitation.”
Section 7.4 Successors and Assigns.
The Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns.
Section 7.5 No Third Party Rights.
The provisions of this Agreement are intended to bind the parties signatory hereto as to
each other and are not intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to be a third party
beneficiary of any of the provisions of this Agreement.
Section 7.6 Counterparts.
This Agreement may be executed in any number of counterparts, all of which together shall
constitute one agreement binding on the Parties.
Section 7.7 Governing Law. This Agreement shall be subject to and governed by the laws of the State of New York.
Section 7.8 Arbitration.
Any controversy, dispute or claim arising out of or relating in any way to this Agreement
or the transactions arising hereunder that cannot be resolved by negotiation shall be settled by
binding arbitration in accordance with the CPR Rules for Non-Administered Arbitration in effect on
the date of this Agreement by three independent and impartial arbitrators, of whom the Managing
General Partner and CR shall each appoint one, and those appointed arbitrators shall select the
third arbitrator, who shall be the presiding arbitrator. The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. 1-16 (the “Federal Arbitration Act”) to the exclusion of state
laws inconsistent therewith, and judgment upon the award rendered by
the arbitrators may be entered by any court having jurisdiction thereof. The arbitration
hearing shall take place in the state of Kansas or at some other mutually agreeable location and
the hearing shall take place within 120 calendar days from the date of demand for arbitration. The
arbitrators shall base their award on the terms of this Agreement and shall follow the law and
judicial precedents which a United States District Judge sitting in federal court in the City of
New York would apply in the event the dispute were litigated in such court. The parties expressly
agree that this Agreement shall confer no power or authority upon the arbitrators to render any
judgment or award that is erroneous in its application of substantive law and expressly agree that
no such erroneous judgment or award shall be eligible for confirmation. The arbitrators shall
render their award in writing and shall include the findings of fact and conclusions of law upon
which their award is based. The arbitration shall be governed by the laws of the State of New York
applicable to contracts made and to be performed wholly within such state, and by the arbitration
law of the Federal Arbitration Act. The arbitration hearings shall be continuous subject to
weekends, holidays, or other days to be mutually agreed and the total days of hearing shall not
exceed ten hearing days per party. The arbitrators shall render their award no later than thirty
calendar days after the conclusion of the hearings. The submission of post-hearing legal briefs
shall be subject to the discretion of the arbitrators, but in no event shall the briefs delay the
arbitrators’ decision in this matter. All expenses and fees of the arbitrators
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and expenses for
hearing facilities and other expenses of the arbitration shall be borne equally by the Managing
General Partner and CR unless they agree otherwise. The arbitrators shall render their award
within 90 days of the conclusion of the arbitration hearing. The arbitrators shall not be
empowered to award any punitive damages in connection with any dispute arising out of or relating
in any way to this Agreement or the transactions arising hereunder, and all parties hereby
irrevocably waives any right to recover such damages. The arbitration hearings and award shall be
maintained in confidence.
Section 7.9 Severability.
If any of the provisions of this Agreement are held by any court of competent jurisdiction
to contravene, or to be invalid under, the laws of any political body having jurisdiction over the
subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement.
Instead, this Agreement shall be construed as if it did not contain the particular provision or
provisions held to be invalid, and an equitable adjustment shall be made and necessary provision
added so as to give effect to the intention of the Parties as expressed in this Agreement at the
time of execution of this Agreement.
Section 7.10 Amendment or Modification.
This Agreement may be amended or modified from time to time only by the written agreement
of all the Parties.
Section 7.11 Integration. This Agreement and the instruments referenced herein supersede all previous understandings
or agreements among the Parties, whether oral or written, with respect to its subject matter. This
document and such instruments contain the entire understanding of the Parties. No understanding,
representation, promise or agreement, whether oral or written, is
intended to be or shall be included in or form part of this Agreement unless it is contained
in a written amendment hereto executed by the Parties after the date of this Agreement.
Section 7.12 Deed; Xxxx of Sale; Assignment. To the extent required and permitted by applicable law, this Agreement shall also
constitute a “deed,” “xxxx of sale” or “assignment” of the assets and interests referenced herein.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first
written above.
| CVR PARTNERS, LP | ||||
| By: | CVR GP, LLC, | |||
| its Managing General Partner | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| COFFEYVILLE RESOURCES, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CVR GP, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CVR SPECIAL GP, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| CVR LP, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
