Form of Omnibus Agreement] OMNIBUS AGREEMENT among CVR ENERGY, INC. CVR GP, LLC CVR PARTNERS, LP and CVR SPECIAL GP, LLC
Exhibit 10.31
[Form of Omnibus Agreement]
among
CVR ENERGY, INC.
CVR GP, LLC
CVR PARTNERS, LP
and
CVR SPECIAL GP, LLC
THIS OMNIBUS AGREEMENT (this “Agreement”) is entered into on, and effective as of, the Closing
Date (as defined herein), and is by and among CVR Energy, Inc., a Delaware corporation (“CVR”), CVR
GP, LLC, a Delaware limited liability company (the “Managing General Partner”), CVR Partners, LP, a
Delaware limited partnership (the “Partnership”) and CVR Special GP, LLC, a Delaware limited
liability company (“Special General Partner”). The above-named entities are sometimes referred to
in this Agreement each as a “Party” and collectively as the “Parties.”
R E C I T A L S:
The Parties desire by their execution of this Agreement to evidence their agreement, as more
fully set forth in Article II, with respect to those business opportunities that the CVR Entities
(as defined herein) will not engage in during the term of this Agreement unless the Partnership
Entities have declined to engage in any such business opportunities for their own account.
The Parties desire by their execution of this Agreement to evidence their agreement, as more
fully set forth in Article II, with respect to those business opportunities that the Partnership
Entities (as defined herein) will not engage in during the term of this Agreement unless the CVR
Entities have declined to engage in any such business opportunities for their own account.
In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Definitions.
Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement. As used in this Agreement, the following terms shall have the respective
meanings set forth below:
“Acquiring Party” is defined in Section 2.5(a).
“Affiliate” is defined in the Partnership Agreement.
“Break-up Costs” means the aggregate amount of any and all additional taxes and other
similar costs to (a) the CVR Entities that would be required to transfer Fertilizer Assets
acquired by the CVR Entities as part of a larger transaction to a Partnership Group Member
pursuant to Section 2.2(b) or (b) the Partnership Group that would be required to
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transfer Refinery Assets acquired by the Partnership Group as part of a larger transaction
to a CVR Entity pursuant to Section 2.4(a).
“Closing Date” is defined in the Partnership Agreement.
“Code” means Internal Revenue Code of 1986, as amended.
“Contribution Agreement” means that certain Contribution, Conveyance and Assumption
Agreement, dated as of the date hereof, among the Managing General Partner, the Partnership,
the Special General Partner, CVR, LLC and certain other parties, together with the
additional conveyance documents and instruments contemplated or referenced thereunder.
“control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership of voting
securities, by contract, or otherwise.
“CVR” is defined in the introduction to this Agreement.
“CVR Entities” means CVR and any Person controlled, directly or indirectly, by CVR other
than the Partnership Entities.
“CVR Entity” means any of the CVR Entities.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fertilizer Restricted Businesses” is defined in Section 2.1.
“Fertilizer Asset” any asset or group of related assets used in any Fertilizer Restricted
Business.
“Limited Partner” is defined in the Partnership Agreement.
“Managing General Partner” is defined in the introduction to this Agreement.
“Offer Period” is defined in Section 2.5(e).
“Offered Assets” is defined in Section 2.5(a).
“Offeree” is defined in Section 2.5(a).
“Other Business Opportunity” means a business opportunity with respect to any assets other
than Fertilizer Assets or Refinery Assets.
“Other Business Opportunity Information” is defined in Section 2.6.
“Partnership Agreement” means the Agreement of Limited Partnership of CVR Partners, LP,
dated as of the Closing Date, as such agreement is in effect on the Closing Date, to which
reference is hereby made for all purposes of this Agreement. No amendment or
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modification to the Partnership Agreement subsequent to the Closing Date shall be given
effect for the purposes of this Agreement unless consented to in writing by each of the
Parties to this Agreement.
“Partnership Entities” means the Managing General Partner and each member of the Partnership
Group.
“Partnership Entity” means any of the Partnership Entities.
“Partnership Group” means the Partnership and its Subsidiaries treated as a single entity.
“Partnership Group Member” means any member of the Partnership Group.
“Party” and “Parties” are defined in the introduction to this Agreement.
“Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.
“Refinery Restricted Businesses” is defined in Section 2.3.
“Refinery Asset” means any asset or group of related assets used in any Refinery Restricted
Business.
“Restricted Business” means, as applicable, the Refinery Restricted Business or the
Fertilizer Restricted Business.
“Retained Assets” means any assets and investments owned or operated by any of the CVR
Entities as of the Closing Date that were not conveyed, contributed or otherwise transferred
to the Partnership Group prior to or on the Closing Date pursuant to the Contribution
Agreement or otherwise.
“Special General Partner” is defined in the introduction to this Agreement.
“Special General Partner Interest” is defined in the Partnership Agreement.
“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to
vote in the election of directors or other governing body of such corporation is owned,
directly or indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or
limited) in which such Person or a Subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership, but only if more than 50%
of the partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or indirectly, at the
date of determination, by such Person, by one or more Subsidiaries of such Person, or a
combination thereof, or (c) any other Person (other than a corporation or a partnership) in
which such Person, one or more Subsidiaries of such Person, or a
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combination thereof, directly or indirectly, at the date of determination, has (i) at least
a majority ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
“transfer” including the correlative terms “transferring” or “transferred” means any
direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other
encumbrance, or any other disposition (whether voluntary, involuntary or by operation of
law) of any assets, properties or rights.
ARTICLE II
BUSINESS OPPORTUNITIES
BUSINESS OPPORTUNITIES
Section 2.1 Fertilizer Restricted Businesses
. For so long as any CVR Entity continues to own at least 50% of the Outstanding Units of the
Partnership, and except as permitted by Section 2.2, each of the CVR Entities shall be prohibited
from engaging in, whether by acquisition, construction, investment in debt or equity securities of
any Person or otherwise, any business having assets engaged in the following businesses (the
“Fertilizer Restricted Businesses”): the production, transportation or distribution, on a wholesale
basis, of fertilizer in the contiguous United States.
Section 2.2 Fertilizer Permitted Exceptions
. Notwithstanding any provision of Section 2.1 to the contrary, the CVR Entities may engage in the
following activities under the following circumstances:
(a) the ownership and/or operation of any of the Retained Assets (including replacements and
natural extensions of the Retained Assets);
(b) engaging in any Fertilizer Restricted Business acquired by a CVR Entity as part
of a business or package of assets after the Closing Date if the fair market value of the
Fertilizer Assets represents less than a majority of the fair market value of the total assets or
business acquired (fair market value as determined in good faith by the board of directors of CVR);
provided the Partnership Group will be offered the opportunity to acquire such Fertilizer Assets in
accordance with Section 2.5;
(c) engaging in any Fertilizer Restricted Business subject to the offer to the Partnership
Group set forth in Section 2.5 pending the Managing General Partner’s determination whether to
cause any Partnership Group Member to accept such offer and pending the closing of any offers any
Partnership Group Member accepts;
(d) engaging in any Fertilizer Restricted Business with respect to which the Managing General
Partner has advised CVR that the Managing General Partner’s board of directors has elected not to
cause a Partnership Group Member to acquire (or seek to acquire); and
(e) the purchase and ownership of up to 9.9% of any class of securities of any publicly-traded
entity engaged in any Fertilizer Restricted Business.
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Section 2.3 Refinery Restricted Businesses
. For so long as any CVR Entity continues to own at least 50% of the Outstanding Units of the
Partnership and except as permitted by Section 2.4, each of the Partnership Entities shall be
prohibited from, whether by acquisition, construction, investment in debt or equity securities of
any Person or otherwise, engaging in the following businesses (the “Refinery Restricted
Businesses”):
(a) the ownership or operation within the United States of any refinery with processing
capacity greater than 20,000 barrels per day whose primary business is producing transportation
fuels; or
(b) the ownership or operation outside the United States of any refinery.
Section 2.4 Refinery Permitted Exceptions
. Notwithstanding any provision of Section 2.3 to the contrary, the Partnership Entities may
engage in the following activities under the following circumstances:
(a) engaging in any Refinery Restricted Business acquired by a Partnership Entity as part of a
business or package of assets after the Closing Date if the fair market value of the Refinery
Assets represents less than a majority of the fair market value of the total assets or business
acquired (fair market value as determined in good faith by the board of directors of the Managing
General Partner); provided the CVR Entities will be offered the opportunity to acquire such
Refinery Assets in accordance with Section 2.5;
(b) engaging in any Refinery Restricted Business subject to the offer to the CVR Entities set
forth in Section 2.5 pending CVR’s determination whether to cause any CVR Entity to accept such
offer and pending the closing of any offers any Partnership Entity accepts;
(c) engaging in any Refinery Restricted Business with respect to which CVR has advised the
Managing General Partner that CVR’s board of directors has elected not to cause a CVR Entity to
acquire (or seek to acquire); and
(d) the purchase and ownership of up to 9.9% of any class of securities of any publicly-traded
entity engaged in any Refinery Restricted Business.
Section 2.5 Procedures.
(a) In the event that (i) a CVR Entity acquires Fertilizer Assets described in Section 2.2(b),
or (ii) a Partnership Group Member acquires any Refinery Assets described in Section 2.4(a), then
as soon as reasonably practicable, but in any event within 365 days of the closing of the
acquisition, such acquiring Party (the “Acquiring Party”) shall notify (A) the Managing General
Partner, in the case of an acquisition by a CVR Entity or (B) CVR, in the case of an acquisition by
a Partnership Group Member, in writing of such acquisition and offer such party to be notified
(each an “Offeree”) the opportunity for the Offeree (or, in the case of the Managing General
Partner, any Partnership Group Member and, in the case of CVR, any other CVR Entity) to purchase
such Fertilizer Assets or Refinery Assets, as applicable (the “Offered Assets”).
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(b) The purchase price for any Offered Assets shall be the Offered Assets’ fair market value
(plus any Break-up Costs).
(c) The Offer shall set forth the Acquiring Party’s proposed terms relating to the purchase of
the Offered Assets by the Offeree (or, in the case of the Managing General Partner, any Partnership
Group Member and, in the case of CVR, any other CVR Entity), including any liabilities to be
assumed by the Offeree as part of the Offer.
(d) As soon as practicable after the Offer is made, the Acquiring Party will deliver to the
Offeree all information prepared by or on behalf of or in the possession of such Acquiring Party
relating to the Offered Assets and reasonably requested by the Offeree. As soon as practicable,
but in any event, within 90 days after receipt of such notification, the Offeree shall notify the
Acquiring Party in writing that either
(i) the Offeree has elected not to purchase (or not to cause any of its permitted
Affiliates to purchase) the Offered Assets, in which event the Acquiring Party and its
Affiliates shall, subject to the other terms of this Agreement, be forever free to continue
to own or operate such Offered Assets; or
(ii) the Offeree has elected to purchase (or to cause any of its permitted Affiliates
to purchase) the Offered Assets, in which event the procedures set forth in Section 2.5(e)
shall be followed.
(e) In the event of a proposed purchase pursuant to Section 2.5(d)(ii):
(i) After the receipt of the Offer by the Offeree, the Acquiring Party and the Offeree
shall negotiate in good faith to agree upon the fair market value (and any Break-up Costs)
of the Offered Assets that are subject to the Offer and the other terms of the Offer on
which the Offered Assets will be sold to the Offeree. If the Acquiring Party and the
Offeree agree on the fair market value of the Offered Assets that are subject to the Offer
and the other terms of the Offer during the 30-day period after receipt by the Acquiring
Party of the Offeree’s election to purchase (or to cause any permitted Affiliate of the
Offeree to purchase) the Offered Assets (the “Offer Period”), the Offeree shall purchase (or
cause any of its permitted Affiliates to purchase) the Offered Assets on such terms as soon
as commercially practicable after such agreement has been reached.
(ii) If the Acquiring Party and the Offeree are unable to agree on the fair market
value (and any Break-up Costs) of the Offered Assets that are subject to the Offer or on any
other terms of the Offer during the Offer Period, the Acquiring Party and the Offeree will
engage an independent investment banking firm or other appraisal firm to determine the fair
market value (and any Break-up Costs) of the Offered Assets and/or the other terms on which
the Acquiring Party and the Offeree are unable to agree. In determining the fair market
value of the Offered Assets and other terms on which the Offered Assets are to be sold, the
investment banking firm or other appraisal firm will have access to the proposed sale and
purchase values and terms for the Offer submitted by the Acquiring Party and the Offeree,
respectively, and to all information prepared by or on behalf of the Acquiring Party
relating to the Offered Assets and reasonably
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requested by such investment banking firm or other appraisal firm and shall be
permitted to consider the purchase price paid by the Acquiring Party for the Offered Assets.
Such investment banking firm or other appraisal firm will determine the fair market value
(and any Break-up Costs) of the Offered Assets and/or the other terms on which the Acquiring
Party and the Offeree are unable to agree within 60 days of its engagement and furnish the
Acquiring Party and the Offeree its determination. The fees and expenses of the investment
banking firm will be divided equally between the Acquiring Party and the Offeree. Upon
receipt of such determination, the Offeree will have the option, but not the obligation, to
purchase the Offered Assets for the fair market value (and any Break-up Costs) and on the
other terms determined by the investment banking firm or other appraisal firm, as soon as
commercially practicable after determinations have been made. The Offeree will provide
written notice of its decision to the Acquiring Party within 30 days after the investment
banking firm or other appraisal firm has submitted its determination and if the Offerree.
Failure to provide such notice within such 30-day period shall be deemed to constitute a
decision not to purchase the Offered Assets. If the Offeree decides to purchase the Offered
Assets the Offeree shall purchase (or cause any of its permitted Affiliates to purchase) the
Offered Asset as soon as commercially practicable after it has provided such notice.
Section 2.6 Other Business Opportunities.
. For so long as any CVR Entity continues to own at least 50% of the Outstanding Units of the
Partnership and except as permitted by Section 2.4, if any CVR Entity is presented with an
opportunity to pursue, purchase or invest in any Other Business Opportunity, such CVR Entity shall
give prompt written notice to the Managing General Partner, of the Other Business Opportunity.
Such notice shall set forth all information available to any CVR Entity including, but not limited
to, the identity of the Other Business Opportunity and its seller, the proposed price, all written
information about the Other Business Opportunity provided to any CVR Entity by and on behalf of the
seller as well as any information or analyses compiled by any CVR Entity from other sources (such
information referred to collectively herein as “Other Business Opportunity Information”). The CVR
Entities shall continue to provide to the Managing General Partner, promptly any and all Other
Business Opportunity Information subsequently received. The Parties shall maintain the
confidentiality of all such Other Business Opportunity Information, subject to compliance with
applicable law. As soon as practicable but in any event within thirty (30) days after receipt of
such initial notification and information, the Managing General Partner, on behalf of the
Partnership Group, shall notify CVR that either (a) the Managing General Partner has elected to
cause a member of the Partnership Group to pursue the opportunity to acquire or invest in the Other
Business Opportunity or (b) the Managing General Partner has elected not to cause a member of the
Partnership Group to pursue the opportunity to acquire or invest in the Other Business Opportunity.
If, at any time, the Managing General Partner or the Partnership Group Member abandons such
opportunity (as evidenced in writing by the Managing General Partner following the request of any
CVR Entity), any CVR Entity may pursue such opportunity without time limit. In no event shall any
provision of this Agreement require the Managing General Partner to approve any expansion of the
purpose of the Partnership, other than in its sole discretion, as set forth in Section 2.4 of the
Partnership Agreement.
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Section 2.7 Scope of Prohibition.
. If any CVR Entity or Partnership Entity engages in a Restricted Business pursuant to any of the
exceptions described in Section 2.2 or Section 2.4, as applicable, such CVR Entity or Partnership
Entity may not subsequently expand that portion of their business except (i) pursuant to the
exceptions contained in such Sections Section 2.2 or Section 2.4 or (ii) to maintain or improve
their facilities comprising the Restricted Business or to expand their facilities with additional
facilities or assets that are physically connected, in a material manner, with the existing
facilities comprising the Restricted Business. Except as otherwise provided in this Agreement and
the Partnership Agreement, each CVR Entity and Each Partnership Entity shall be free to engage in
any business activity whatsoever, including those that may be in direct competition with the CVR
Entities or the Partnership Group
Section 2.8 Enforcement
. Each Party agrees and acknowledges that the other Parties do not have an adequate remedy at law
for the breach by any Party of its covenants and agreements set forth in this Article II, and that
any breach by any Party of its covenants and agreements set forth in this Article II would result
in irreparable injury to the other Parties. Each Party further agrees and acknowledges that any
other Party may, in addition to the other remedies which may be available to such other Party, file
a suit in equity to enjoin the breaching Party from such breach, and consent to the issuance of
injunctive relief relating to this Agreement. No Person, directly or indirectly controlled thereby
shall be liable for the failure of any other Person, directly or indirectly, controlled thereby to
comply with this Article II.
ARTICLE III
ARTICLE IVMISCELLANEOUS
Section 4.1 Choice of Law; Submission to Jurisdiction
. This Agreement shall be subject to and governed by the laws of the State of New York. THE
PARTIES AGREE THAT ANY ACTION BROUGHT IN CONNECTION WITH THIS AGREEMENT MAY BE MAINTAINED IN ANY
COURT OF COMPETENT JURISDICTION LOCATED IN THE STATE OF KANSAS, AND EACH PARTY AGREES TO SUBMIT
PERSONALLY TO THE JURISDICTION OF ANY SUCH COURT AND HEREBY WAIVES THE DEFENSES OF FORUM
NON-CONVENIENS OR IMPROPER VENUE WITH RESPECT TO ANY ACTION BROUGHT IN ANY SUCH COURT IN CONNECTION
WITH THIS AGREEMENT.
Section 4.2 Notice
. All notices or other communications required or permitted under, or otherwise in connection
with, this Agreement must be in writing and must be given by depositing same in the U.S. mail,
addressed to the Person to be notified, postpaid and registered or certified with return receipt
requested or by transmitting by national overnight courier or by delivering such notice in person
or by facsimile to such Party. Notice given by mail, national overnight courier or personal
delivery shall be effective upon actual receipt. Notice given by facsimile shall be effective upon
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confirmation of receipt when transmitted by facsimile if transmitted during the recipient’s normal
business hours or at the beginning of the recipient’s next business day after receipt if not
transmitted during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth below or at such other
address as such Party may stipulate to all other Parties in the manner provided in this Section
3.2.
if to the CVR Entities:
CVR Energy, Inc.
00 X. Xxxxxxxxx Xxxxxx, Xxx. 000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
00 X. Xxxxxxxxx Xxxxxx, Xxx. 000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
if to the Partnership Entities
CVR GP, LLC
00 X. Xxxxxxxxx Xxxxxx, Xxx. 000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
00 X. Xxxxxxxxx Xxxxxx, Xxx. 000
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
Section 4.3 Entire Agreement
. This Agreement constitutes the entire agreement of the Parties relating to the matters contained
herein, superseding all prior contracts or agreements, whether oral or written, relating to the
matters contained herein.
Section 4.4 Amendment or Modification
. This Agreement may be amended or modified from time to time only by the written agreement of all
the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on
its face an “Amendment” or an “Addendum” to this Agreement.
Section 4.5 Assignment
. No Party shall have the right to assign any of its rights or obligations under this Agreement
without the consent of the other Parties hereto.
Section 4.6 Counterparts
. This Agreement may be executed in any number of counterparts with the same effect as if all
signatory parties had signed the same document. All counterparts shall be construed together and
shall constitute one and the same instrument.
Section 4.7 Severability
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. If any provision of this Agreement shall be held invalid or unenforceable by a court or
regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full
force and effect.
Section 4.8 Further Assurances
. In connection with this Agreement and all transactions contemplated by this Agreement, each
signatory party hereto agrees to execute and deliver such additional documents and instruments and
to perform such additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions and conditions of this Agreement and all such transactions.
Section 4.9 Rights of Limited Partners; Third Party Beneficiaries
. The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no
Limited Partner of the Partnership shall have the right, separate and apart from the Partnership,
to cause the Partnership to enforce any provision of this Agreement or to compel any Party to this
Agreement to comply with the terms of this Agreement. Xxxxxxx, Xxxxx & Co., Xxxxx & Company, L.P.
and their respective Affiliates and successors and assigns as owners of interests in the CVR
Entities or Partnership Entities shall be entitled to assert rights and remedies hereunder as a
third-party beneficiary hereto with respect to Section 4.10.
Section 4.10 No Restrictions on Owners of Managing General Partner or CVR
. Notwithstanding anything herein to the contrary, nothing herein shall be deemed to restrict
Xxxxxxx, Xxxxx & Co., Xxxxx & Company, L.P. or their respective Affiliates (other than the CVR
Entities and the Partnership Entities), or their respective successors and assigns as owners of
interests in the CVR Entities or Partnership Entities, from engaging in any banking, brokerage,
trading, market making, hedging, arbitrage, investment advisory, financial advisory, anti-raid
advisory, merger advisory, financing, lending, underwriting, asset management, principal investing,
mergers & acquisitions or other activities conducted in the ordinary course of their or their
Affiliates’ business in compliance with applicable law, including without limitation buying and
selling securities of any CVR Entity or Partnership Entity, entering into derivatives transactions
regarding or shorting securities of any CVR Entity or Partnership Entity, serving as a lender,
underwriter or market maker or issuing research with respect to securities of any CVR Entity or
Partnership Entity or acquiring, selling, making investments in or entering into other transactions
with companies or businesses in the same or similar lines of business as any CVR Entity or
Partnership Entity whether or not such investments or transactions are or may be competitive with
any business of any CVR Entity or Partnership Entity.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.
| CVR ENERGY, INC. | ||||
| By: | ||||
| [Name] [Title] |
||||
| CVR GP, LLC | ||||
| By: | ||||
| [Name] [Title] |
||||
| CVR PARTNERS, LP | ||||
| By: | CVR GP, LLC, its Managing General Partner | |||
| By: | ||||
| [Name] | ||||
| [Title] | ||||
| CVR SPECIAL GP, LLC | ||||
| By: | ||||
| [Name] [Title] |
||||
Signature Page to Omnibus Agreement
