OMNIBUS AGREEMENT among THE HERITAGE GROUP CALUMET GP, LLC CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. CALUMET OPERATING, LLC CALUMET LP GP, LLC and CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP
Exhibit 10.5
among
THE HERITAGE GROUP
CALUMET GP, LLC
CALUMET OPERATING, LLC
CALUMET LP GP, LLC
and
CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP
THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among The Heritage Group, an Indiana general partnership
(“THG”), Calumet GP, LLC, a Delaware limited liability company (the “General Partner”), Calumet
Specialty Products Partners, L.P., a Delaware limited partnership (the “Partnership”), Calumet
Operating, LLC, a Delaware limited liability company (the “OLLC”), Calumet LP GP, LLC, a Delaware
limited liability company (“Calumet LP GP”) and Calumet Lubricants Co., Limited Partnership, an
Indiana limited partnership (“Calumet LP”). The above-named entities are sometimes referred to in
this Agreement each as a “Party” and collectively as the “Parties.”
R E C I T A L S:
The Parties desire by their execution of this Agreement to evidence their agreement, as more
fully set forth in Article II, with respect to those business opportunities that the THG Entities
(as defined herein) will not engage in during the term of this Agreement unless the Partnership
Entities have declined to engage in any such business opportunity for their own account.
In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto hereby agree as follows:
ARTICLE I
Definitions
Definitions
1.1 Definitions.
As used in this Agreement, the following terms shall have the respective meanings set
forth below:
“Affiliate” is defined in the Partnership Agreement.
“Assets” means all assets conveyed, contributed, or otherwise transferred by THG and
Affiliates thereof to the Partnership Group prior to or on the Closing Date, including any
such assets held by a Person whose ownership interests are transferred to the Partnership
Group prior to or on the Closing Date by means of operation of law or otherwise.
“Change of Control” means, with respect to any Person (the “Applicable Person”), any of
the following events: (a) any sale, lease, exchange, or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the Applicable Person’s
assets to any other Person unless immediately following such sale, lease, exchange, or other
transfer such assets are owned, directly or indirectly, by the Applicable Person; (b) the
consolidation or merger of the Applicable Person with or into another Person pursuant to a
transaction in which the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for cash, securities, or other
property, other than any such transaction where (i) the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for Voting Securities of the surviving
Person or its parent and (ii) the holders of the Voting Securities of the Applicable Person
immediately prior to such transaction own, directly or indirectly, not less than a majority
of the Voting Securities of the surviving Person or its parent immediately after such
transaction; and (c) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2)
of the Exchange Act) (in the case of THG, other than a group consisting of some of all of
the current control persons of THG), being or becoming the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then
outstanding Voting Securities of the Applicable Person, except in a merger or consolidation
that would not constitute a Change of Control under clause (b) above.
“Closing Date” means the date of the closing of the Partnership’s initial public
offering of Common Units.
“Code” means Internal Revenue Code of 1986, as amended.
“Common Units” is defined in the Partnership Agreement.
“Conflicts Committee” is defined in the Partnership Agreement.
“Contribution Agreement” means that certain Contribution, Conveyance and Assumption
Agreement, dated as of the Closing Date, among THG, the General Partner, the Partnership,
the OLLC, Calumet LP GP, Calumet LP and certain other parties, together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
“control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through ownership of
voting securities, by contract, or otherwise.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“General Partner” is defined in the introduction to this Agreement.
“Limited Partner” is defined in the Partnership Agreement.
“Offer” is defined in Section 2.3(a).
“Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Calumet Specialty Products Partners, L.P., dated as of the Closing Date, as
such agreement is in effect on the Closing Date, to which reference is hereby made for all
purposes of this Agreement. No amendment or modification to the Partnership Agreement
subsequent to the Closing Date shall be given effect for the purposes of this Agreement
unless consented to by each of the Parties to this Agreement.
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“Partnership Entities” means the General Partner and each member of the Partnership
Group.
“Partnership Entity” means any of the Partnership Entities.
“Partnership Group” means the Partnership, the OLLC, Calumet LP GP, Calumet LP and any
Subsidiary of any such Person, treated as a single consolidated entity.
“Partnership Group Member” means any member of the Partnership Group.
“Party” and “Parties” are defined in the introduction to this Agreement.
“Person” means an individual or a corporation, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, government agency or
political subdivision thereof or other entity.
“Restricted Businesses” is defined in Section 2.1.
“Retained Assets” means any assets and investments owned or operated by any of the THG
Entities that were not conveyed, contributed or otherwise transferred to the Partnership
Group pursuant to the Contribution Agreement.
“Subject Assets” is defined in Section 2.2(d).
“Subsidiary” means, with respect to any Person, (a) a corporation of which more than
50% of the voting power of shares entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or other governing body of such
corporation is owned, directly or indirectly, at the date of determination, by such Person,
by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a Subsidiary of such Person is, at the
date of determination, a general or limited partner of such partnership, but only if more
than 50% of the partnership interests of such partnership (considering all of the
partnership interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of
such Person, or a combination thereof, or (c) any other Person (other than a corporation or
a partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has (i) at least
a majority ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
“THG Entities” means THG and any Person controlled, directly or indirectly, by THG
other than the Partnership Entities; and “THG Entity” means any of the THG Entities.
“Transfer” including the correlative terms “Transferring” or “Transferred” means any
direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or
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other encumbrance, or any other disposition (whether voluntary, involuntary or by
operation of law) of the Assets.
“Units” is defined in the Partnership Agreement.
“Voting Securities” means securities of any class of a Person entitling the holders
thereof to vote on a regular basis in the election of members of the board of directors or
other governing body of such Person.
ARTICLE II
Business Opportunities
Business Opportunities
2.1 Restricted Businesses. For so long as THG or an Affiliate of THG controls the Partnership, and
except as permitted by Section 2.2, THG and each of the THG Entities shall be prohibited from
engaging in or acquiring or investing in any business having assets engaged in the following
businesses (the “Restricted Businesses”): the business of refining or marketing specialty
lubricating oils, solvents and wax products as well as gasoline, diesel and jet fuel products in
the continental United States.
2.2 Permitted Exceptions. Notwithstanding any provision of Section 2.1 to the contrary, the THG
Entities may engage in the following activities under the following circumstances:
(a) the ownership and/or operation of any of the Retained Assets (including
replacements and natural extensions of the Retained Assets);
(b) the refining and marketing of asphalt and asphalt-related products and related
product development activities;
(c) the refining and marketing of other products that do not produce “qualifying
income” as defined in the Code;
(d) the purchase and ownership of up to 9.9% of any class of securities of any entity
engaged in any Restricted Business;
(e) the acquisition or construction of any Restricted Business that is
acquired or constructed by a THG Entity after the Closing Date (the “Subject Assets”) if, in
the case of an acquisition, the fair market value of the Subject Assets, or, in the case of
construction, the estimated construction cost of the Subject Assets, is less than $5 million
at the time of such acquisition or completion of construction, as the case may be;
(f) the acquisition or construction of any Subject Assets in an amount greater than
that permitted by Section 2.2(e); provided the Partnership Group has been offered the
opportunity to acquire such Subject Assets in accordance with Section 2.3 and the
Partnership Group (with the concurrence of the Conflicts Committee) has elected not to
purchase such Subject Assets; and
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(g) any business conducted by a THG Entity with the approval of the Conflicts
Committee.
2.3 Procedures.
(a) In the event that a THG Entity becomes aware of an opportunity to acquire or
construct Subject Assets with a fair market value or construction cost (as applicable and as
determined in good faith by the Board of Trustees of THG) equal to or greater than $5
million, then subject to Section 2.3(b), then as soon as practicable, such THG Entity shall
notify the General Partner of such opportunity and deliver to the General Partner all
information prepared by or on behalf of such THG Entity relating to such potential
transaction. As soon as practicable but in any event within 30 days after receipt of such
notification and information, the General Partner, on behalf of the Partnership, shall
notify the THG Entity that either (i) the General Partner, on behalf of the Partnership, has
elected, with the concurrence of the Conflicts Committee, not to cause a member of the
Partnership Group to pursue the opportunity to acquire or construct the Subject Assets, or
(ii) the General Partner, on behalf of the Partnership, has elected (with the concurrence of
the Conflicts Committee) to cause a member of the Partnership Group to pursue the
opportunity to acquire or construct the Subject Assets. If, at any time, the General
Partner abandons such opportunity with the approval of the Conflicts Committee (as evidenced
in writing by the General Partner following the request of the THG Entity), the THG Entity
may pursue such opportunity. Any Subject Assets which are permitted to be acquired or
constructed by a THG Entity must be so acquired (i) within 12 months of the later to occur
of (A) the date that the THG Entity becomes able to pursue such acquisition or construction
project in accordance with the provisions of this Section 2.3(a), and (B) the date upon
which all required governmental approvals to consummate such acquisition or construction
project have been obtained, and (ii) on terms not materially more favorable to the THG
Entity than were offered to the Partnership. If either of these conditions are not
satisfied, the opportunity must be reoffered to the Partnership in accordance with this
Section 2.3(a).
(b) Notwithstanding Section 2.3(a), in the event that (i) a THG Entity becomes aware of
an opportunity to make an acquisition that includes both Subject Assets and assets that are
not Subject Assets and the Subject Assets have a fair market value (as determined in good
faith by the Board of Trustees of THG) equal to or greater than $5 million but comprise less
than half of the fair market value (as determined in good faith by the Board of Trustees of
THG) of the total assets being considered for acquisition or (ii) a THG Entity desires to
construct Subject Assets with an estimated construction cost (as determined in good faith by
the Board of Trustees of THG) equal to or greater than $5 million, then the THG Entity may
make such acquisition without first offering the opportunity to the Partnership or may
construct such Subject Assets as long as it complies with the following procedures:
(i) Within 90 days after the consummation of the acquisition or the completion
of construction by a THG Entity of the Subject Assets, as the case may be, the THG
Entity shall notify the General Partner in writing of such acquisition or
construction and offer the Partnership Group the
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opportunity to purchase such Subject Assets in accordance with this Section
2.3(b) (the “Offer”). The Offer shall set forth the terms relating to the purchase
of the Subject Assets and, if any THG Entity desires to utilize the Subject Assets,
the Offer will also include the commercially reasonable terms on which the
Partnership Group will provide services to the THG Entity to enable the THG Entity
to utilize the Subject Assets. As soon as practicable, but in any event within 30
days after receipt of such written notification, the General Partner shall notify
the THG Entity in writing that either (x) the General Partner has elected, with the
concurrence of the Conflicts Committee, not to cause a Partnership Group Member to
purchase the Subject Assets, in which event the THG Entity shall be forever free to
continue to own or operate such Subject Assets, or (y) the General Partner has
elected (with the concurrence of the Conflicts Committee) to cause a Partnership
Group Member to purchase the Subject Assets, in which event the following procedures
shall apply.
(ii) If the THG Entity and the General Partner (with the concurrence of the
Conflicts Committee) within 60 days after receipt by the General Partner of the
Offer are able to agree on the fair market value of the Subject Assets that are
subject to the Offer and the other terms of the Offer including, without limitation,
the terms, if any, on which the Partnership Group will provide services to the THG
Entity to enable it to utilize the Subject Assets, a Partnership Group Member shall
purchase the Subject Assets for the agreed upon fair market value as soon as
commercially practicable after such agreement has been reached and, if applicable,
enter into an agreement with the THG Entity to provide services in a manner
consistent with the Offer.
(iii) If the THG Entity and the General Partner are unable to agree within 60
days after receipt by the General Partner of the Offer on the fair market value of
the Subject Assets that are subject to the Offer or the other terms of the Offer
including, if applicable, the terms on which the Partnership Group will provide
services to the THG Entity to enable it to utilize the Subject Assets, the THG
Entity and the General Partner will engage a mutually agreed upon investment banking
firm to determine the fair market value of the Subject Assets and/or the other terms
on which the Partnership Group and the THG Entity are unable to agree. Such
investment banking firm will determine the fair market value of the Subject Assets
and/or the other terms on which the Partnership Group and the THG Entity are unable
to agree within 30 days of its engagement and furnish the THG Entity and the General
Partner its determination. The fees of the investment banking firm will be split
equally between the THG Entity and the Partnership Group. Once the investment
banking firm has submitted its determination of the fair market value of the Subject
Assets and/or the other terms on which the Partnership Group and the THG Entity are
unable to agree, the General Partner will have the right, but not the obligation,
subject to the approval of the Conflicts Committee, to cause a Partnership Group
Member to purchase the Subject Assets pursuant to the Offer as modified by the
determination of the investment banking firm. The Partnership Group will provide
written notice of its decision to the THG Entity within 30 days after the investment
banking firm has
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submitted its determination. Failure to provide such notice within such 30-day
period shall be deemed to constitute a decision not to purchase the Subject Assets.
If the General Partner elects to cause a Partnership Group Member to purchase the
Subject Assets, then the Partnership Group Member shall purchase the Subject Assets
pursuant to the Offer as modified by the determination of the investment banking
firm as soon as commercially practicable after such determination and, if
applicable, enter into an agreement with the THG Entity to provide services in a
manner consistent with the Offer, as modified by the determination of the investment
banking firm, if applicable.
2.4 Scope of Prohibition. Except as provided in this Article II and the Partnership Agreement,
each THG Entity shall be free to engage in any business activity, including those that may be in
direct competition with any Partnership Group Member.
2.5 Enforcement. The THG Entities agree and acknowledge that the Partnership Group does not have
an adequate remedy at law for the breach by the THG Entities of the covenants and agreements set
forth in this Article II, and that any breach by the THG Entities of the covenants and agreements
set forth in this Article II would result in irreparable injury to the Partnership Group. The THG
Entities further agree and acknowledge that any Partnership Group Member may, in addition to the
other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the
THG Entities from such breach, and consent to the issuance of injunctive relief under this
Agreement.
ARTICLE III
Miscellaneous
3.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed by
the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each
Party hereby submits to the jurisdiction of the state and federal courts in the State of [Indiana]
and to venue in [Indianapolis, Indiana].
3.2 Notice. All notices or other communications required or permitted under, or otherwise in
connection with, this Agreement must be in writing and must be given by depositing same in the U.S.
mail, addressed to the Person to be notified, postpaid and registered or certified with return
receipt requested or by transmitting by national overnight courier or by delivering such notice in
person or by facsimile to such Party. Notice given by mail, national overnight courier or personal
delivery shall be effective upon actual receipt. Notice given by facsimile shall be effective upon
confirmation of receipt when transmitted by facsimile if transmitted during the recipient’s normal
business hours or at the beginning of the recipient’s next business day after receipt if not
transmitted during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address, in each case as follows:
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if to the THG Entities:
The Heritage Group
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Xx.
Fax: 000-000-0000
Fax: 000-000-0000
with a copy to:
The Heritage Group
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxx
Fax: [To come]
Fax: [To come]
if to the Partnership Entities
Calumet Specialty Products Partners, L.P.
0000 Xxxxxxxxxx Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
0000 Xxxxxxxxxx Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: R. Xxxxxxx Xxxxxx
Fax: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Fax: 000-000-0000
Fax: 000-000-0000
3.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to
the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.
3.4 Amendment or Modification.
This Agreement may be amended or modified from time to time only by the written agreement of all
the Parties hereto; provided, however, that the Partnership may not, without the prior approval of
the [Conflicts Committee], agree to any amendment or modification of this Agreement that, in the
reasonable discretion of the General Partner, will adversely affect the holders of Common Units.
Each such instrument
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shall be reduced to writing and shall be designated on its face an “Amendment”
or an “Addendum” to this Agreement.
3.5 Assignment. No Party shall have the right to assign any of its rights or obligations under
this Agreement without the consent of the other Parties hereto.
3.6 Counterparts. This Agreement may be executed in any number of counterparts with the same
effect as if all signatory parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.
3.7 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a
court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in
full force and effect.
3.8 Further Assurances. In connection with this Agreement and all transactions contemplated by
this Agreement, each signatory party hereto agrees to execute and deliver such additional documents
and instruments and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
3.9 Rights of Limited Partners. The provisions of this Agreement are enforceable solely by the
Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate
and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party
to this Agreement to comply with the terms of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.
| THE HERITAGE GROUP | ||||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
| CALUMET GP, LLC | ||||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
| CALUMET SPECIALTY PRODUCTS PARTNERS, L.P. | ||||||
| By: | CALUMET GP, LLC, its general partner | |||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
| CALUMET OPERATING, LLC | ||||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
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| CALUMET LP GP, LLC | ||||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
| CALUMET LUBRICANTS CO., LIMITED PARTNERSHIP | ||||||
| By: | CALUMET LP GP, LLC, its general partner | |||||
| By: | ||||||
| [Name] | ||||||
| [Title] | ||||||
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