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STOCK PURCHASE AGREEMENT
 
BETWEEN
 
CASEY CO.
 
AND
 
NTR ACQUISITION CO.

 
DATED AS OF NOVEMBER 2, 2007
 

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TABLE OF CONTENTS
 

   
Page
   
ARTICLE I               DEFINITIONS
1
ARTICLE II              PURCHASE AND SALE OF SHARES
7
2.1
Purchase and Sale of Shares
7
2.2
Purchase Price
7
2.3
Calculation of Working Capital and Company Inventory Value
8
2.4
Costs and Expenses
9
2.5
Post Closing Purchase Price Adjustment
9
2.6
Certain Definitions
10
2.7
Interest
11
2.8
Closing
12
ARTICLE III            REPRESENTATIONS AND WARRANTIES
12
3.1
Representations and Warranties of Seller
12
3.2
Representations and Warranties of Buyer
24
ARTICLE IV            COVENANTS OF SELLER
25
4.1
Conduct of Company’s Business
25
4.2
Exclusivity
28
4.3
Full Access; Title Report
29
ARTICLE V             OTHER COVENANTS
29
5.1
Standby Letters of Credit
29
5.2
Further Assurances
29
5.3
Expenses
29
5.4
Transfer Taxes
29
5.5
Press Releases and Disclosure
30
5.6
Government and other Regulatory Approvals
30
5.7
Proxy Statement
30
ARTICLE VI            CONDITIONS TO OBLIGATION TO CLOSE
31
6.1
Conditions to Buyer’s Obligation
31
6.2
Conditions to Seller’s Obligation
32
ARTICLE VII           SURVIVAL; INDEMNIFICATION
33
7.1
Survival
33

 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
7.2
Indemnification by Buyer
33
7.3
Indemnification by Seller
33
7.4
Limitations on Indemnification
34
7.5
Method of Asserting Claims
34
7.6
Duty to Mitigate
36
7.7
Tax Effect of Indemnification Payments; Insurance
37
7.8
Purchase Price Adjustments
37
ARTICLE VIII          TERMINATION
37
8.1
Termination
37
8.2
Effect of Termination
38
ARTICLE IX             MISCELLANEOUS
39
9.1
Disclosure Schedule Supplements and Data Room Additions
39
9.2
Governing Law; Dispute Resolution
39
9.3
Schedules, Addenda and Exhibits
39
9.4
Amendments
39
9.5
Entire Agreement
39
9.6
Assignment
40
9.7
Counterparts
40
9.8
Waivers
40
9.9
Third Parties
40
9.10
Headings
40
9.11
Gender and Number; Section and Article References
40
9.12
Interpretation
40
9.13
Notices
41

 
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STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (this “Agreement”) is entered into as of November
2, 2007 by and between Casey Co., a California corporation (“Seller”) and NTR
Acquisition Co., a Delaware corporation (“Buyer”). Buyer and Seller are referred
to collectively herein as the “Parties.”
 
WHEREAS, as represented by Seller below, Seller owns one thousand (1,000) shares
of the Class A Common Stock and one thousand (1,000) shares of the Class B
Common Stock (collectively, the “Shares”) of Kern Oil & Refining Co., a
California corporation (the “Company”), which constitute all of the issued and
outstanding shares of capital stock of the Company.
 
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, the Shares, upon the terms and subject to the conditions set forth in
this Agreement.
 
NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements
set forth herein, and for other good, valuable and adequate consideration
received, the Parties agree as follows:
 
ARTICLE I

 
DEFINITIONS
 
For purposes of this Agreement, the following terms shall have the following
meanings:
 
“2006 Financial Statement” means the Company’s audited financial statement for
the fiscal year ended November 30, 2006. If in the Ordinary Course of Business
the Company’s audited financial statement for the fiscal year ended November 30,
2007 is completed prior to Closing, then such audited financial statement shall
be provided to Buyer and shall be substituted for the 2006 Financial Statement
when referenced in this Agreement.
 
“Agreement” has the meaning set forth in the preface above.
 
“Affiliate” means any Person that directly, or indirectly through one or more
Persons, controls, is controlled by, or is under common control with, the Person
specified or, directly or indirectly, is related to or otherwise associated with
any such Person or entity.
 
“Auditor” has the meaning set forth in Section 2.3(b).
 
“Base Amount” has the meaning set forth in Section 2.2.
 
“Buyer” has the meaning set forth in the preface above.
 
“Business Day(s)” means any day that is not a Saturday, Sunday or a day on which
banking institutions in Los Angeles, California or New York, New York are not
required to be open.
 
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“Cap” has the meaning set forth in Section 7.4.
 
“Claim” has the meaning set forth in Section 7.5(a).
 
“Closing” has the meaning set forth in Section 2.8.
 
“Closing Date” has the meaning set forth in Section 2.8.
 
“Closing Purchase Price” has the meaning set forth in Section 2.2(d).
 
“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Section 4980B of the Code and of any similar state law.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Company” has the meaning set forth in the recitals above.
 
“Company Intellectual Property” has the meaning set forth in Section 3.1(n).
 
“Company Inventory Value” has the meaning set forth in Section 2.6.
 
“Company Inventory Value Related Consistent Principles” has the meaning set
forth in Section 2.6.
 
“Company Inventory Value Statement” has the meaning set forth in Section 2.6.
 
“Company Working Capital” has the meaning set forth in Section 2.6.
 
“Company Working Capital Statement” has the meaning set forth in Section 2.6.
 
“Company Working Capital Related Consistent Principles” has the meaning set
forth in Section 2.6.
 
“Consistent Principles” has the meaning set forth in Section 2.6.
 
“Current LOCs” has the meaning set forth in Section 5.1.
 
“Data Room” means the electronic data room sponsored by Merrill Corporation in
which the documents and information related to the Company and its business and
operations were disclosed to Buyer’s representatives, advisors and counsel.
 
“Deposit” has the meaning set forth in Section 8.2(b).
 
“Determination Date” has the meaning set forth in Section 2.6.
 
“Disclosure Schedule” has the meaning set forth in Section 3.1.
 
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“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in Section 3(3)) of ERISA and any other material employee benefit plan,
program or arrangement of any kind.
 
“Employee Pension Benefit Plan” has the meaning set forth in Section 3(2) of
ERISA.
 
“Employee Welfare Benefit Plan” has the meaning set forth in Section 3(1) of
ERISA.
 
“Environmental Requirements” means all federal, state and local laws, statutes,
regulations, rules, orders, decrees, ordinances and other requirements of any
Governmental Authority applicable to the business, assets, or operations of the
Company in force at the date of this Agreement and the Closing Date (whether
common or statutory) pertaining to public or employee health and safety
(including with respect to exposure to hazardous materials), pollution
(including assessment, containment, removal, response, cleanup, abatement and
remediation), the environment (including air, surface water, groundwater, land
surface or subsurface strata), the introduction into commerce of a hazardous
material (including the manufacture, generation, formulation, processing,
labeling, distribution, use, treatment, handling, storage, reporting or
transportation), the physical structure or condition of a building (including
any facility, fixture, or other structure included in the assets of the Company)
or the protection of fish, wildlife or natural resources including: the Clean
Air Act, as amended, CERCLA, the Federal Water Pollution Control Act, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Hazardous & Solid Waste Amendments Act of 1984, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, the Oil Pollution Act of 1990, as
amended, the Emergency Planning and Community Right-to-Know Act, as amended, the
Atomic Energy Act of 1954, as amended, the Federal Insecticide, Fungicide, and
Rodenticide Act of 1972, as amended, and any federal, state and local Laws
implementing or comparable to the foregoing, as the same may be amended or
supplemented as of the date of this Agreement and the Closing Date.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“ERISA Affiliate” means each entity that is treated as a single employer with
the Company for purposes of Section 4001 of ERISA or Section 414 of the Code.
 
“Estimated Company Working Capital” has the meaning set forth in Section 2.2(a).
 
“Estimated Company Inventory Value” has the meaning set forth in Section 2.2(b)
 
“Fiduciary” has the meaning set forth in Section 3(21) of ERISA.
 
“Financial Statement” has the meaning set forth in Section 3.1(h).
 
“Floor” has the meaning set forth in Section 7.4.
 
“GAAP” means accounting principles generally accepted in the United States of
America from time to time consistently applied in accordance with past
practices.
 
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“Governmental Authority” means any federal, state or local governmental entity
or municipality or subdivision thereof or any authority, department, commission,
board, bureau, agency, court or instrumentality.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
“Indebtedness” shall mean, without duplication: (i) all liabilities and
obligations of the Company for borrowed money or in respect of loans or
advances; (ii) all obligations of the Company evidenced by bonds, debentures,
notes or other similar instruments; (iii) any accrued interest, prepayment
premiums or penalties or other costs or expenses related to any of the items
referenced in (i) and (ii); (iv) all obligations of the Company that are not
characterized as short term liabilities under GAAP; (v)  all obligations in
respect of letters of credit, whether or not drawn, and bankers’ acceptances
issued for the account of the Company other than Current LOCs and (vi) all
guarantees of the Company in connection with any of the foregoing.
 
“Indemnity Escrow Agreement” has the meaning set forth in Section 2.2(c).
 
“Intellectual Property” means domestic or foreign inventions, discoveries,
trademarks, patents, trade names, copyrights, know-how, intellectual property,
software, shop rights, licenses, domain names, developments, research data,
designs, plans, specifications, technical information, technology, technical
expertise, production methods, trade secrets, test procedures, processes,
formulas and other confidential information, intellectual and similar intangible
property rights, whether or not patentable (or otherwise subject to legally
enforceable restrictions or protections against unauthorized third party usage),
and any and all applications for, registrations for, renewals, continuations,
reexaminations and extensions, divisions and reissuances of, any of the
foregoing, and rights therein or contractual rights thereto.
 
“Inventory” has the meaning set forth in Section 2.6.
 
“Inventory Value Reference Amount” has the meaning set forth in Section 2.6.
 
“Knowledge” in respect of “Seller’s Knowledge” means the actual knowledge of
Larry Delpit, Jake C. Belin, Steven G. Christovich, Alan Kornicks, Steve
Preheim, and Bruce Cogswell.
 
“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures,
or other interests in real property held by the Company.
 
“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties,
and other agreements with respect thereto, pursuant to which the Company is a
party or holds any Leased Real Property.
 
“Lien” means any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other than (a) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting in good faith through appropriate proceedings,
(b) purchase money liens and liens securing rental payments under capital lease
arrangements and (c) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
 
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“Losses” means any claims, actions, suits, demands, assessments, judgments,
losses, liabilities, damages (but not consequential damages), costs and
expenses, including, without limitation, interest, penalties, reasonable
attorneys’ and accounting fees and investigation costs but net of any Tax
Benefits in accordance with Section 7.7.
 
“Material Agreements” has the meaning set forth in Section 3.1(p)(xviii).
 
“Materially Adverse Effect” means to have a material and adverse effect on the
assets, business, operations and condition (financial or otherwise) of the
Company, taken as a whole. The term “material” means to be material to the
assets, business, operations and condition (financial or otherwise) of the
Company, taken as a whole.
 
“Most Recent Balance Sheet” has the meaning set forth in Section 3.1(j).
 
“Multiemployer Plan” has the meaning set forth in Section 3(37) of ERISA.
 
“Notice of Claim” has the meaning set forth in Section 7.5(a).
 
“Objection” has the meaning set forth in Section 7.5(c).
 
“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practices.
 
“Owned Real Property” means all land, together with all buildings, structures,
improvements, and fixtures located thereon, and all easements and other rights
and interests appurtenant thereto, owned by the Company.
 
“Party” has the meaning set forth in the preface above.
 
“Permits” means licenses, permits, approvals, authorizations, variances,
waivers, orders, decrees or consents issued by a Governmental Authority.
 
“Permitted Encumbrances” means with respect to each parcel of Real Property:
(a) Taxes, assessments and other governmental levies, fees, or charges imposed
with respect to such Real Property that are (i) not due and payable as of the
Closing Date or (ii) being contested in good faith and for which appropriate
reserves have been established in accordance with GAAP; (b) mechanics’ liens and
similar liens for labor, materials, or supplies provided with respect to such
Real Property incurred in the Ordinary Course of Business for amounts that are
(i) not due and payable as of the Closing Date or (ii) being contested in good
faith that would not, individually or in the aggregate, have a Materially
Adverse Effect and for which appropriate reserves have been established in
accordance with GAAP; (c) zoning, building codes, and other land use laws
regulating the use or occupancy of such Real Property or the activities
conducted thereon that are imposed by any Governmental Authority having
jurisdiction over such Real Property and are not violated by the current use or
occupancy of such Real Property or the operation of the business of the Company
as currently conducted thereon; (d) easements, rights-of-way, servitudes,
permits, leases, covenants, conditions, restrictions, and other similar matters
of record affecting title to such Real Property that do not or would not have a
Materially Adverse Effect; (e) the terms and conditions of the Material
Agreements; (f) all items set forth on the Preliminary Title Report, located in
Folder 8.01.2 in the Data Room, other than those matters constituting
Indebtedness and those items removed from title prior to the Closing as set
forth below in Section 4.1(f); and (g) all other liens, charges, encumbrances,
security interests, pledges, defects or irregularities that do not, individually
or in the aggregate, have a Materially Adverse Effect on the Real Property.
 
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“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity, or a Governmental
Authority (or any department, agency, or political subdivision thereof).
 
“Prime Rate” has the meaning set forth in Section 2.7.
 
“Prohibited Transaction” has the meaning set forth in Section 406 of ERISA and
Section 4975 of the Code.
 
“Purchase Price” has the meaning set forth in Section 2.2.
 
“Real Property” has the meaning set forth in Section 3.1(m).
 
“Reserved Amount” has the meaning set forth in Section 2.2(c).
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Seller” has the meaning set forth in the preface above.
 
“Shares” has the meaning set forth in the recitals above.
 
“Tax” or “Taxes” means all net income, gross income, gross receipts, sales, use,
personal property, real property, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, customs duties, and other
government charges of any kind together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) whether assessed solely or as part of a group or a tax sharing
agreement.
 
“Tax Benefit” has the meaning set forth in Section 7.7(a).
 
“Tax Return” means any declaration, statement, report, return or other document
or information required to be filed or supplied with respect to Taxes to any
Governmental Authority including any amendment thereof.
 
“Ten Section” means the rights described under the Ten Section Lease and that
certain Pipeline Right-of-Way Grant, dated April 5, 1994, between and among
McFarland Energy, Robert A. Teitsworth, Crescent Investment Company, Birchwood
Partners, Avondale Partners, Trio Petroleum, Inc., J. G. Boswell Company and the
Company.
 
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“Ten Section Lease” means that certain Surface Lease, dated April 7, 1995,
between and among Koch Oil Company, Koch Industries, Inc. and the Company.
 
“Termination Date” has the meaning set forth in Section 8.1(b).
 
“Third-Party Claim” has the meaning set forth in Section 7.5(a).
 
“Transaction Documents” has the meaning set forth in Section 3.1.
 
“Transfer Taxes” has the meaning set forth in Section 5.4.
 
“Working Capital Reference Amount” has the meaning set forth in Section 2.6.
 
ARTICLE II

 
PURCHASE AND SALE OF SHARES
 
2.1 Purchase and Sale of Shares. On the terms and subject to the conditions of
this Agreement, at the Closing, Buyer shall acquire from Seller, and Seller
shall sell and deliver to Buyer, all of Seller’s right, title and interest in
and to the Shares free and clear of any Liens or any other encumbrance, for the
consideration specified in this Article II.
 
2.2 Purchase Price. As consideration for the sale and delivery of the Shares,
Buyer shall pay to Seller at the Closing Two Hundred and Eighty Six Million Five
Hundred Thousand US Dollars (USD 286,500,000) (the “Base Amount”), subject to
the adjustments set forth in Sections 2.2(a) and (b) hereof, which shall be
payable as set forth in Sections 2.2(c) and (d) below and which shall be
adjusted subsequent to the Closing as set forth in Section 2.5 (such amount, as
finally adjusted, the “Purchase Price”).
 
(a) Estimated Company Working Capital Adjustment. Prior to the Closing Date,
Seller shall cause the Company to prepare and deliver to Buyer a good faith
estimate of Company Working Capital as of the Closing Date (the “Estimated
Company Working Capital”). To the extent that the Estimated Company Working
Capital exceeds the Working Capital Reference Amount, at the Closing, the Base
Amount shall be adjusted upwards dollar for dollar in the amount equal to such
difference. To the extent that the Estimated Company Working Capital is less
than the Working Capital Reference Amount, at the Closing, the Base Amount shall
be adjusted downwards dollar for dollar in the amount equal to such difference.
 
(b) Estimated Company Inventory Value Adjustment. Prior to the Closing Date,
Seller shall cause the Company to prepare and deliver to Buyer a good faith
estimate of Company Inventory Value (consistent with the principles set forth in
Schedule 2.6(a)) as of the Closing Date (the “Estimated Company Inventory
Value”) and Buyer shall be entitled to have a representative present to observe
the preparation of such estimate. To the extent that the Estimated Company
Inventory Value exceeds the Inventory Value Reference Amount, at the Closing,
the Base Amount shall be adjusted upwards dollar for dollar in the amount equal
to such difference.
 
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(c) Reserved Amount. An amount equal to three percent (3%) of the Closing
Purchase Price (the “Reserved Amount”) shall be deposited in a third party
escrow account on the Closing Date. The Reserved Amount shall be payable under
the terms and subject to the conditions as provided herein and in the Indemnity
Escrow Agreement, substantially in the form attached hereto as Exhibit A
(the “Indemnity Escrow Agreement”). The Deposit (as defined in Section 8.2(b)
below) shall be applied toward the Reserved Amount as contemplated in Section
8.2(b).
 
(d) Wire Transfer to Seller. An amount equal to the Base Amount, as adjusted in
accordance with Sections 2.2(a) and (b), as applicable (the “Closing Purchase
Price”), less the Reserved Amount, shall be paid on the Closing Date in
immediately available funds by bank wire transfer in accordance with the payment
instructions and to the account set forth on Schedule 2.2(a) attached hereto.
 
2.3 Calculation of Working Capital and Company Inventory Value.
 
(a) Initial Calculation by Buyer; Dispute by Seller. As soon as reasonably
practicable following the Closing Date, and in any event within twenty (20)
Business Days after the Closing Date, Buyer shall prepare and deliver to Seller
the Company Working Capital Statement and the Company Inventory Value Statement
and Seller shall notify Buyer in writing, once, within twenty (20) Business Days
of receipt thereof, whether Seller accepts the Company Working Capital
Statement, Buyer’s calculation of Company Working Capital set forth thereon, the
Company Inventory Value Statement and Buyer’s calculation of Company Inventory
Value set forth thereon. If Seller notifies Buyer that it does not accept
Buyer’s calculation of the Company Working Capital and/or Company Inventory
Value (as applicable), Seller shall include in and with such notice Seller’s
reason(s) for such non acceptance, the adjustments that Seller believes should
be made to the Company Working Capital Statement, the calculation of Company
Working Capital set forth thereon, the Company Inventory Value Statement and/or
the calculation of Company Inventory Value set forth thereon (as applicable) and
all documentation in support thereof. In the event that Seller does not provide
such notice of non acceptance within such twenty (20) Business Day period,
Seller shall be deemed to have accepted the Company Working Capital Statement,
the calculation of Company Working Capital set forth thereon, the Company
Inventory Value Statement and the calculation of Company Inventory Value set
forth thereon, all of which shall be final, binding and conclusive for all
purposes hereunder. If Seller has submitted a notice of non acceptance, then,
thereafter, Buyer and Seller shall use commercially reasonable efforts to
consult with each other and to reach an agreement in respect of Company Working
Capital and/or Company Inventory Value (as applicable) within fifteen (15)
Business Days of Buyer’s receipt of such notice of non acceptance.
 
(b) Final Determination by Third Party. If the Parties do not reach an agreement
after consultation within fifteen (15) Business Days of Buyer’s receipt of a
notice of non acceptance from Seller, as contemplated in Section 2.3(a), then
the matter shall be referred to a neutral auditing firm mutually agreed upon by
the Parties (the “Auditor”) for final determination of any remaining
disagreements. The following provisions shall apply to such determination:
 
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(i) Written Statements. The Parties shall each promptly (and, in any event,
within such time frame as enables the Auditor to make its final determination
within the time frame set forth in Section 2.3(b)(ii)) prepare and deliver to
the Auditor written statements on the matters in dispute (attaching supporting
documentation, including the initial calculation of Company Working Capital
and/or Company Inventory Value, as applicable, and Seller’s notice of non
acceptance with all attachments).
 
(ii) Timeline. The Parties shall request that the Auditor render its final
determination within sixty (60) calendar days of confirmation and
acknowledgement of its appointment in connection herewith.
 
(iii) Auditor’s Decision. In rendering its final determination, which shall be
in writing, the Auditor shall expressly state what adjustments are necessary, if
any, to Company Working Capital and/or Company Inventory Value (as applicable,
solely in connection with which calculation was the subject of dispute);
provided, however, the scope of the disputes to be resolved by the Auditor shall
be limited to whether such calculation(s) were done in accordance with the
Consistent Principles and/or whether there were mathematical errors in the
Company Working Capital Statement and/or Company Inventory Value Statement (as
applicable in connection with which calculation was the subject of dispute).
 
(iv) Final and Binding Effect. The Auditor’s final determination shall be final
and binding upon the Parties.
 
(c) Access to Information. Each Party shall promptly make available to the other
party and/or the Auditor, as applicable, all information (as in their respective
possession or control) and personnel who prepared such information as may be
reasonably required to enable the calculation of Company Working Capital and/or
Company Inventory Value by Buyer (as applicable), review and analysis thereof by
Seller and rendering of a final determination by the Auditor, as applicable.
 
2.4 Costs and Expenses. The Auditor’s costs and expenses shall be borne equally
by Buyer and Seller, and Buyer and Seller shall otherwise each bear their own
costs and expenses incurred in connection with the calculation of Company
Working Capital, Company Inventory Value and the determination thereof by the
Auditor.
 
2.5 Post Closing Purchase Price Adjustment.
 
(a) Working Capital Adjustment.
 
(i) Working Capital Excess Payment. Within five (5) Business Days of the
Determination Date (as defined herein), to the extent that Company Working
Capital as set forth on the Company Working Capital Statement exceeds the
Estimated Company Working Capital, Buyer shall pay to Seller the amount equal to
such difference, plus interest from the Closing Date at the Prime Rate as of the
Determination Date (computed on the basis of a 365-day year for actual days
elapsed), in immediately available funds by bank wire transfer in accordance
with the payment instructions and to the account set forth on Schedule 2.2(a)
attached hereto.
 
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(ii) Working Capital Shortfall Payment. Within five (5) Business Days of the
Determination Date (as defined herein), to the extent that Company Working
Capital as set forth on the Company Working Capital Statement is less than the
Estimated Company Working Capital, Seller shall refund to Buyer the amount equal
to such difference, plus interest from the Closing Date at the Prime Rate as of
the Determination Date (computed on the basis of a 365-day year for actual days
elapsed), in immediately available funds by bank wire transfer to an account
designated in writing by Buyer to Seller prior to the Determination Date.
 
(b) Inventory Value Adjustment.
 
(i) Inventory Value Excess Payment. Within five (5) Business Days of the
Determination Date, to the extent that Company Inventory Value as set forth on
the Company Inventory Value Statement exceeds the Estimated Company Inventory
Value, Buyer shall pay to Seller the amount equal to such difference, plus
interest from the Closing Date at the Prime Rate as of the Determination Date
(computed on the basis of a 365-day year for actual days elapsed), in
immediately available funds by bank wire transfer in accordance with the payment
instructions and to the account set forth on Schedule 2.2(a) attached hereto.
 
(ii) Inventory Value Shortfall Payment. Within five (5) Business Days of the
Determination Date (as defined herein), to the extent that Company Inventory
Value as set forth on the Company Inventory Value Statement is less than the
Estimated Company Inventory Value, Seller shall refund to Buyer the amount equal
to such difference, plus interest from the Closing Date at the Prime Rate as of
the Determination Date (computed on the basis of a 365-day year for actual days
elapsed), in immediately available funds by bank wire transfer to an account
designated in writing by Buyer to Seller prior to the Determination Date.
 
2.6 Certain Definitions.
 
(a) “Company Inventory Value” means the fair market value of the Inventory,
determined on a basis consistent and in accordance with the physical inventory
procedures, agreed upon inventory pricing, accounting principles, practices,
methodologies and policies set forth on Schedule 2.6(a) attached hereto
(the “Company Inventory Value Related Consistent Principles”).
 
(b) “Company Inventory Value Statement” means a statement showing the Company
Inventory Value as of the Closing Date.
 
(c) “Company Working Capital” means an amount equal to (i) the sum of the
Company’s (a) cash and cash equivalents, (b) marketable securities, (c) net book
value of trade accounts receivable (net of allowances), (d) net book value of
Taxes, notes and other receivables and (e) net book value of prepaid expenses
and other assets, but excluding Inventory (as defined below), less (ii) the sum
of the Company’s (a) accounts payable and (b) accrued liabilities and Accrued
Current Tax Liabilities; provided, however, that each of the foregoing items
shall be calculated on a basis consistent and in accordance with the accounting
principles, practices, methodologies and policies (including tax apportionment
and procedures for filing returns) set forth on Schedule 2.6(c) attached hereto
(the “Company Working Capital Related Consistent Principles” and, together with
the Company Inventory Value Related Consistent Principles, the “Consistent
Principles”). For purposes of determining Company Working Capital, “Accrued
Current Taxes” and “Accrued Current Tax Liabilities” mean amounts reserved for
such Taxes and specifically identified under such titles in the worksheets to
the Estimated Company Working Capital and to the Company Working Capital
Statement. For the avoidance of doubt, for purposes of determining Company
Working Capital, (x) Accrued Current Taxes and Accrued Current Tax Liabilities
shall not include any Taxes deferred under GAAP and (y) any Taxes included in
the definitions of Accrued Current Taxes and Accrued Current tax Liabilities
shall be eliminated from accrued liabilities under subclause (ii)(b) above in
this paragraph (c).
 
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(d) “Company Working Capital Statement” means a statement showing the amount of
Company Working Capital as of the Closing Date.
 
(e) “Determination Date” means the earlier of (i) in the event that Seller does
not provide the notice of non acceptance pursuant to Section 2.3(a), twenty (20)
Business Days after the date Buyer delivers the Company Working Capital
Statement and Company Inventory Statement to Seller, (ii) the date Seller
notifies Buyer of its acceptance of Buyer’s calculation of Company Working
Capital and Company Inventory Value, (iii) the date the Parties otherwise agree
upon Buyer’s Company Working Capital and Company Inventory Value calculation or
(iv) the date the Parties receive the final determination of Company Working
Capital and/or Company Inventory Value by the Auditor (as applicable, solely in
connection with which calculation was the subject of dispute).
 
(f) “Inventory” means crude exchange balances due to the Company and crude oil,
feedstocks, intermediate petroleum products and blend components, finished
petroleum products, parts and supplies inventory, chemicals and additives held
in stock by the Company or to which the Company has title.
 
(g) “Inventory Value Reference Amount” means Zero Dollars (USD 0.00).
 
(h) “Working Capital Reference Amount” means Zero Dollars (USD 0.00).
 
2.7 Interest. If any payment due hereunder is not paid when due, the Party in
default shall pay interest thereon from and including the due date through but
excluding the date on which such payment is made at a rate equal to the prime
rate as set forth in the Wall Street Journal (the “Prime Rate”) plus one (1%)
percent per annum, computed on the basis of a 365-day year for actual days
elapsed.
 
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2.8 Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Jones Day, 555 South Flower
Street, 50th Floor, Los Angeles, California 90071, at 10:00 a.m. local time on
the second (2nd) business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (except those that by their nature can only be satisfied at
the Closing) or such other date and location as mutually agreed upon by the
Parties (the “Closing Date”).
 
ARTICLE III

 
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of Seller. Except as set forth on the
schedules of exceptions and disclosures delivered in connection herewith (the
“Disclosure Schedule”) and except as to any information contained in the Data
Room, and subject to Section 9.1, Seller hereby represents and warrants to Buyer
as set forth in this Section 3.1 as of the date of this Agreement and as of
Closing. Any exception to or disclosure in respect of any representation,
warranty or covenant, and any other information, which is disclosed in one
section of the Disclosure Schedule shall be deemed to have been disclosed in
every other section of the Disclosure Schedule and shall be deemed a disclosure
in respect of every other representation, warranty or covenant contained in each
other agreement or instrument executed and delivered or to be executed and
delivered by Seller in connection herewith (such agreements and instruments
collectively with this Agreement, the “Transaction Documents”), but only to the
extent it is reasonably apparent that such exception is applicable to such other
representation, warranty or covenant. Neither Buyer nor any Affiliate of Buyer
has been given, or has relied upon or been induced to enter into this Agreement
by any representation or warranty, express or implied, other than as expressly
set forth in this Agreement. Buyer agrees and acknowledges that at the time of
entering into this Agreement, it has no actual knowledge of any breach of any of
the representations and warranties contained herein or of any matters which will
or are likely to give rise to any Losses, and to the extent that Buyer does have
any such actual knowledge, Buyer shall not be entitled to pursue any Losses in
respect thereof. For purposes of this section, “actual knowledge” of Buyer shall
mean matters known as of the date of this Agreement to Mario Rodriguez, Henry
Kuchta, William Hantke, Jeffrey Dill and James Fedena.
 
(a) Organization of Seller; Enforceability; Authorization. Seller is a
corporation existing and in good standing under the laws of the State of
California. The execution, delivery and performance of this Agreement and the
Transaction Documents to which Seller is a party has been duly authorized by
Seller’s Board of Directors and its shareholders. This Agreement and the
Transaction Documents to which Seller is a party have been duly executed and
delivered by Seller and constitutes the valid and binding obligation of Seller
and/or the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and to general principles of equity.
 
(b) Brokers’ Fees. Except as set forth on Schedule 3.1(b), neither Seller nor
the Company have any obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this Agreement.
Any obligations shown on Schedule 3.1(b) shall be for the account of Seller.
 
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(c) Title to Shares. Seller is the lawful owner, beneficially and of record, of
all of the Shares, free and clear of any Liens and with no restriction on the
voting rights and other incidents of record and beneficial ownership pertaining
thereto. Upon payment in full of the Closing Purchase Price (less the Reserved
Amount) at the Closing, good, valid and marketable title to the Shares will pass
to Buyer, free and clear of all Liens, and with no restrictions on the voting
rights or other incidents of record and beneficial ownership of the Shares.
 
(d) Organization of the Company; Qualification; Corporate Power. The Company is
a corporation existing and in good standing under the laws of the State of
California, is qualified to do business as a foreign corporation in the State of
Texas and has full corporate power and authority to carry on its business as it
is now being conducted. Schedule 3.1(d) lists the directors and officers of the
Company. The Company does not directly or indirectly have any subsidiaries and,
except as set forth on Schedule 3.1(d), does not directly or indirectly own any
shares of capital stock or any other ownership interest in any entity.
 
(e) Capitalization. The entire authorized capital stock of the Company consists
of 2,000 shares of Common Stock (consisting of 1,000 shares of Class A Common
Stock and 1,000 shares of Class B Common Stock) and the Shares constitute all
issued and outstanding shares of such Common Stock, capital stock of the
Company. All of the Shares have been duly authorized, are validly issued, fully
paid and non assessable and are held of record and beneficially by Seller. There
are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding any of its capital stock.
 
(f) Non-contravention; Consents. Neither the execution and the delivery of this
Agreement or any of the Transaction Documents to which Seller is a party, nor
the consummation of the transactions contemplated hereby, will (i) violate any
order, judgment or decree, relating to Seller’s or the Company’s business or by
which Seller or the Company is bound, (ii) violate any provision of the Seller’s
or Company’s Articles of Incorporation or Bylaws, or (iii) except as set forth
on Schedule 3.1(f), result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default, or give rise to any
right of termination, modification, cancellation or acceleration, including by
reason of any change of control provision, or require any consent, under any
indenture, license, contract, agreement or other instrument or obligation to
which the Company or Seller is a party or by which either of them or any of
their respective properties or assets are bound.
 
(g) Tangible Assets. The Company has good and marketable title to, or a valid
leasehold interest in, the tangible personal property used by it in the conduct
of its business, free and clear of all Liens, except as set forth on Schedule
3.1(g). Except as set forth on Schedule 3.1(g), such tangible assets are in
operating condition, subject to reasonable wear and tear.
 
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(h) Financial Statements. The Company has delivered to Buyer true and complete
copies of the audited financial statements of the Company for the fiscal years
ended November 30, 2004, November 30, 2005 and November 30, 2006 (collectively,
the “Financial Statements”). If the audited financial statements of the Company
for the fiscal year ended November 30, 2007 are available in the Ordinary Course
of Business prior to Closing, such statements shall be provided to Buyer and
shall be considered part of the Financial Statements. The Financial Statements
(i) have been prepared from the books and records of the Company, (ii) have been
prepared in accordance with GAAP applied on a consistent basis and (iii) fairly
present in all material respects the financial position and results of
operations of the Company as of and for the periods then ended.
 
(i) Absence of Certain Changes. Except as set forth on Schedule 3.1(i) or as
expressly contemplated in this Agreement, since December 1, 2006, the Company
has not in connection with the operation of its business (i) sold, transferred
or otherwise disposed of any properties or assets, other than in the Ordinary
Course of Business; (ii) mortgaged, pledged or subjected to any Lien (other than
any Liens arising in the Ordinary Course of Business or as set forth on Schedule
3.1(g)) any of its tangible or intangible assets; (iii) acquired any property or
assets outside the Ordinary Course of Business; (iv) made any borrowing, issued
any commercial paper or refinanced any existing borrowings; (v) paid any
obligation or liability (fixed or contingent), other than in the Ordinary Course
of Business, discharged or satisfied any Lien, or settled any claim, or suit
pending or threatened; (vi) written off as uncollectible any notes or accounts
receivable or any portion thereof (other than ordinary receivable reductions for
cash discounts or credits); (vii) made any change in its accounting methods,
policies, practices or principles, (viii) entered into or amended or terminated
any Material Agreement other than in the Ordinary Course of Business; (ix)
increased the compensation payable to or to become payable to any officers or
employees of the Company or adopted or increased any bonus, insurance, or other
Employee Benefit Plan, payment or arrangement made to, for or with any such
officers or employees other than in the Ordinary Course of Business, or (x)
agreed to, or obligated itself to, do anything identified in (i) through (ix)
above.
 
(j) Undisclosed Liabilities. The Company has no material liabilities (matured or
unmatured, absolute, accrued, fixed, contingent or otherwise) that are not (i)
on the balance sheet found in the Company’s audited financial statements for the
fiscal year ended November 30, 2006, or, if available, in lieu thereof, the
Company’s audited financial statements for the fiscal year ended November 30,
2007 (the “Most Recent Balance Sheet”), (ii) incurred in the Ordinary Course of
Business since the Most Recent Balance Sheet, (iii) expressly permitted by this
Agreement or (iv) otherwise set forth on Schedule 3.1(j). As of the Closing, the
Company shall be free of all Indebtedness.
 
(k) Legal Compliance. Except as set forth on Schedule 3.1(k), the Company is in
material compliance with all laws applicable to the Company, its assets
including Real Property and the conduct of its business. The Company is not in
default under, and to Seller’s Knowledge no event has occurred which, with the
lapse of time or action by a third party, would result in or reasonably be
expected to result in (i) default by the Company under, or a violation by the
Company of, the terms of any judgment, decree, order, writ or injunction of any
Governmental Authority or (ii) a violation of applicable law. The Company has
not received any written notification from any applicable Governmental Authority
that it or any of the Real Property is not in compliance with any laws.
 
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(l) Tax Matters. The Company has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all material respects.
All Taxes due and owing by the Company have been paid. The Company is not the
beneficiary of any extension of time within which to file any Tax Return. There
are no Liens for Taxes upon any of the assets owned by the Company and used in
the conduct of its business. Except as set forth on Schedule 3.1(l), there is no
material dispute or claim concerning any Tax liability of the Company either (A)
claimed or raised by any Governmental Authority in writing or (B) as to which
the Seller has Knowledge based upon personal contact with any agent of such a
Governmental Authority.
 
(m) Real Property.
 
(i) Schedule 3(m)(i) sets forth the address, plot plan and description of each
parcel of Owned Real Property. With respect to each parcel of Owned Real
Property:
 
(A) The Company has good, valid and marketable fee simple title, free and clear
of all Liens, except Permitted Encumbrances;
 
(B) Except as set forth in Schedule 3.1(m)(i)(B), the Company has not leased or
otherwise granted to any Person the right to use or occupy such Owned Real
Property or any portion thereof; and
 
(C) There are no outstanding options, rights of first offer or rights of first
refusal to purchase such Owned Real Property or any portion thereof or interest
therein.
 
(ii) Schedule 3.1(m)(ii) sets forth the address of each parcel of Leased Real
Property and a list of all Leases concerning each such Leased Real Property
(including the date of such Lease and the parties thereto). The Company has
provided to Buyer access to a true and complete copy of each such Lease. Except
as set forth on Schedule 3.1(m)(ii), with respect to each of the Leases
(excluding the Ten Section Lease):
 
(A) Such Lease is legal, valid, binding, enforceable and in full force and
effect in all material respects, subject to applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and to general principles of equity;
 
(B) The transactions contemplated by this Agreement do not require the consent
of any other party to such Lease, will not result in a breach of or default
under such Lease, and will not otherwise cause such Lease to cease to be legal,
valid, binding, enforceable and in full force and effect on identical terms
following the Closing, subject to applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and to general principles of equity;
 
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(C) To Seller’s Knowledge, neither the Company nor any other party to the Lease
is in material breach of or default under such Lease and no event has occurred
or circumstance exists that, with the delivery of notice, the passage of time or
both, would constitute such a material breach or default, or permit the
termination, modification or acceleration of rent under such Lease; and
 
(D) No security deposit or portion thereof deposited with respect to such Lease
has been applied in respect of a breach of or default under such Lease that has
not been re-deposited in full.
 
(iii) The Owned Real Property and the Leased Real Property (collectively, the
“Real Property”) comprise all of the real property currently held or used in the
conduct of the Company’s business. Schedule 3.1(m)(iii) lists all of the
pipelines (but not gathering lines) owned or leased by the Company located on
property owned by third parties along with the approximate locations of such
pipelines. Except as set forth on Schedule 3.1(m)(iii), no impairment that would
have a Materially Adverse Effect exists as to the use of, or current
rights-of-way in connection with, those pipelines (excluding gathering lines)
that are necessary for the Ordinary Course of Business. The Company is not
responsible for the maintenance or removal of any pipelines (excluding gathering
lines) or rights of way located on property owned by third parties other than
those listed on Schedule 3.1(m)(iii). To Seller’s Knowledge, all of the
Company’s rights in respect of gathering lines and the Ten Section are set forth
in the Data Room, at Folder 8.01.4.  
 
(iv) All buildings, structures, fixtures, building systems and equipment, and
all components thereof, included in the Real Property are in good operating
condition, subject to reasonable wear and tear.
 
(v) The Company has not received written notice of any condemnation,
expropriation or other proceeding in eminent domain affecting any parcel of
Owned Real Property or any portion thereof or interest therein nor has it
received a written notice of non-conforming use or similar notice concerning any
zoning or other land use law, code, ordinance or regulation.
 
(vi) Except as set forth on Schedule 3.1(m)(iii), those matters in the
Preliminary Title Report in the Data Room and the contents of Folder 8.01.4 in
the Data Room, there are no contracts, written or oral, to which the Company is
a party, granting to any other party the right of use or occupancy of any
portion of the Real Property.
 
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(n) Intellectual Property.
 
(i) Schedule 3.1(n)(i)(1) sets forth a complete and correct list (with an
indication of the record owner and identifying patent, application and or
registration numbers, as applicable) of all (A) patents, trademarks, service
marks, trade names, copyrights and domain names for which registrations have
been obtained (and all applications for, or extensions or reissues of, any of
the foregoing) which are owned by the Company and (B) computer software that is
owned by the Company (other than mass-marketed software purchased for less than
a total cost of $20,000). Schedule 3.1(n)(i)(2) sets forth, to Seller’s
Knowledge, a complete and correct list of all patents, trademarks, service
marks, trade names, copyrights and domain names for which registrations have
been obtained (and all applications for, or extensions or reissues of, any of
the foregoing) and unregistered trade secrets or other intellectual property
rights which are material to and used by the Company in the conduct of the
Company’s business but owned by a third party (indicating the license or
contract pursuant to which the Company has the right to use such intellectual
property, if such a license or contract exists).
 
(ii) The items set forth on Schedules 3.1(n)(i)(1) and/or 3.1(n)(i)(2)
(collectively, the “Company Intellectual Property”) comprise all of the
Intellectual Property necessary for the Ordinary Conduct of Business.
 
(iii) The Company owns and possesses, free and clear of all Liens (other than as
might be set forth on Schedule 3.1(g)), all right, title and interest in and to,
or has the rights to use, all Company Intellectual Property. The Company has
received no written claim or demand (including any offer to license) pertaining
to, and, to Seller’s Knowledge, there are no proceedings (including office
actions) which are pending or threatened, which challenge the rights of the
Company in respect of any Company Intellectual Property (including the validity,
use, ownership, enforceability or registrability of such Company Intellectual
Property).
 
(iv) No Company Intellectual Property owned by the Company is subject to any
outstanding order, ruling, decree, judgment or stipulation by or with any
Governmental Authority.
 
(v) To Seller’s Knowledge, (A) the Company has not infringed, misappropriated or
otherwise conflicted with, and the operation of its business does not infringe,
misappropriate or otherwise conflict with, any Intellectual Property rights of
any third party and (B) there are no facts which indicate a likelihood of any of
the foregoing. To Seller’s Knowledge, no third party has infringed,
misappropriated or otherwise conflicted with any of the Company Intellectual
Property.
 
(vi) All of the Company Intellectual Property will be owned or available for use
by Buyer immediately after the Closing on terms and conditions identical to
those under which Seller owned or used the Company Intellectual Property
immediately prior to the Closing.
 
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(o) Inventory. Inventory maintained by the Company as of the date hereof and as
of the Closing Date shall be adequate for the conduct of the business of the
Company in the Ordinary Course of Business.
 
(p) Contracts. Schedule 3.1(p) lists the following contracts and other
agreements to which the Company is a party and which are currently in force:
 
(i) Any agreement that relates to any Indebtedness in excess of $100,000 or the
guaranty of Indebtedness which guaranty has a maximum liability in excess of
$100,000;
 
(ii) Any agreement, including exchange contracts, that provides for aggregate
payments from or to the Company in excess of $100,000, excluding agreements for
the purchase or sale of crude oil or other petroleum inventory other than
exchange contracts;
 
(iii) Any agreement to sell crude oil or other petroleum product that extends
for a period in excess of ninety (90) days and is not cancellable within ninety
(90) days;
 
(iv) Any agreement to purchase crude oil or other petroleum product that extends
for a period in excess of ninety (90) days and is not cancellable within ninety
(90) days;
 
(v) Any agreement to sell crude oil or other petroleum product to any of the ten
(10) largest customers, by revenue, of the Company’s business for the nine-month
period ending August 31, 2007;
 
(vi) Any agreement to purchase crude oil or other petroleum product from any of
the ten (10) largest suppliers, by billings, of the Company’s business for the
nine-month period ending August 31, 2007;
 
(vii) Any license or other right granted by any third party to the Company, or
any license or other right granted by the Company to a third party, with respect
to any Company Intellectual Property or any agreement involving the payment of
royalties (excluding “off-the-shelf” programs or products or other software
readily commercially available at the date of this Agreement not exceeding an
annual cost of $100,000 and licensed in the Ordinary Course of Business);
 
(viii) Any confidentiality agreement relating to the Company’s business entered
into outside of the Ordinary Course of Business other than any relating to a
potential sale of the Company’s assets or issued and outstanding shares of
capital stock;
 
(ix) Any agreement with (1) Seller or any other Affiliate of the Company, (2)
any current or former officer, director or employee of the Company, Seller or
any other Affiliate of the Company;
 
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(x) Any agreement that cannot be terminated without penalty upon not more than
180 days prior written notice;
 
(xi) Any guaranties of payment or performance in favor of another Person;
 
(xii) Any joint venture agreement, partnership (limited or general) agreement or
limited liability company operating agreement;
 
(xiii) Any agreement that limits or purports to limit the ability of the Company
to compete in any line of business or to sell or represent competing products or
with any Person or in any geographic area or during any period of time;
 
(xiv) Any agreement which is terminable upon, or prohibits, a change of
ownership or control of Company;
 
(xv) Other than as set forth on Schedule 3.1(u), any profit sharing, stock
option, stock purchase, stock appreciation, deferred compensation, severance, or
other material plan or arrangement for the benefit of the Company’s current or
former directors, officers, and employees;
 
(xvi) any collective bargaining agreement or related documents; and
 
(xvii) any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in excess of
$100,000, other than in respect of at-will arrangements (the foregoing
agreements, collectively, the “Material Agreements”).
 
Seller has given Buyer access to a correct and complete copy of each Material
Agreement. With respect to each such Material Agreement: (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect in all material
respects, subject to applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors’ rights generally and to general principles of equity; (B) neither the
Company nor, to Seller’s Knowledge, any other party to such Material Agreement,
is in material breach or default, and no event has occurred that with notice or
lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and (C) no
party to such Material Agreement has repudiated any material provision of the
agreement.
 
(q) Accounts Receivable. All accounts receivable outstanding as of the Closing
Date will represent sales actually made in the Ordinary Course of Business and
to Seller’s Knowledge are subject to no counterclaims, setoffs or rights to
return likely to interfere with full and timely collection of, any of such
outstanding accounts receivable other than routine credits granted for errors in
ordering, shipping, pricing or similar matters. Schedule 3.1(q) sets forth an
aged listing by customer of the accounts receivable that were outstanding as of
five (5) days prior to the date of this Agreement and no more than ten (10) days
prior to the Closing.
 
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(r) Insurance. Schedule 3.1(r) sets forth the following information with respect
to each insurance policy with respect to which the Company is a party, a named
insured or otherwise the beneficiary of coverage:
 
(i) the name, address and telephone number of the agent;
 
(ii) the name of the insurer, the name of the policyholder and the name of each
covered insured;
 
(iii) the policy number and the period of coverage; and
 
(iv) the scope (including an indication of whether the coverage is on a claims
made, occurrence or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage.
 
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect in all material respects,
subject to applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of creditors’
rights generally and to general principles of equity and will remain in full
force and effect after the Closing; (B) neither the Company nor, to Seller’s
Knowledge, any other party to such policy, is in material breach or default, and
no event has occurred that with notice or lapse of time would constitute a
material breach or default, or permit termination, modification, or
acceleration, under such policy; and (C) no party to such policy has repudiated
any material provision of such policy. The Company does not maintain any
material self-insurance arrangements.
 
(s) Litigation. Except as set forth on Schedule 3.1(s), neither the Company nor
any of its assets is subject to any order of, or written agreement or memorandum
of understanding with, any Governmental Authority, and there exists no
litigation, action, suit, claim, audit or proceeding pending, or to Seller’s
Knowledge, threatened, against or affecting the Company or the Company’s
business or its assets, at law or in equity or before any Governmental
Authority.
 
(t) Employees. To Seller’s Knowledge, as of the date of this Agreement, none of
the key employees listed in Schedule 3.1(t) intends to terminate employment with
the Company prior to the Closing or during the six (6) months following the
Closing, subject to such key employees’ satisfaction with the terms of continued
employment offered by Buyer. There are no strikes, slowdowns or work stoppages,
pending or threatened which involve any employees of the Company. The Company
has not experienced any strikes, slowdowns or work stoppages, or undertaken any
plant closings or mass layoffs within the three (3) year period preceding the
date hereof. The Company is not a party to any collective bargaining or union
contract, and to Seller’s Knowledge, there exists no current union
organizational effort with respect to any of the Company’s employees.
 
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(u) Employee Benefits.
 
(i) Schedule 3.1(u) lists each Employee Benefit Plan that the Company maintains
or to which the Company contributes or has any obligation to contribute.
 
(A) Each such Employee Benefit Plan (and each related trust, insurance contract,
or fund) has been maintained, funded and administered in accordance with the
terms of such Employee Benefit Plan, except as set forth on Schedule
3.1(u)(i)(A), and complies in form and in operation in all material respects
with the applicable requirements of ERISA, the Code, and other applicable laws.
 
(B) Except as set forth on Schedule 3.1(u)(i)(B), all required reports and
descriptions (including Form 5500 annual reports, summary annual reports, and
summary plan descriptions) have been timely filed and/or distributed in
accordance with the applicable requirements of ERISA and the Code with respect
to each such Employee Benefit Plan. The requirements of COBRA have been met in
all material respects with respect to each such Employee Benefit Plan that is
subject to COBRA and each Employee Benefit Plan maintained by an ERISA Affiliate
that is an Employee Welfare Benefit Plan subject to COBRA.
 
(C) All contributions (including all employer contributions and employee salary
reduction contributions) that are due have been made within the time periods
prescribed by ERISA, the Code and any other applicable law to each such Employee
Benefit Plan that is an Employee Pension Benefit Plan and all contributions for
any period ending on or before the Closing Date that are not yet due have been
made to each such Employee Pension Benefit Plan or accrued in accordance with
the past custom and practice of the Company. All premiums or other payments for
all periods ending on or before the Closing Date have been paid or accrued with
respect to each such Employee Benefit Plan that is an Employee Welfare Benefit
Plan. No such Employee Benefit Plan (including any such Employee Benefit Plan
that is a single employer plan) has an “accumulated funding deficiency” (whether
or not waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA and there are no outstanding funding waivers with respect to any such
plan.
 
(D) Each such Employee Benefit Plan that is intended to meet the requirements of
a “qualified plan” under Section 401(a) of the Code has received a determination
from the Internal Revenue Service that such Employee Benefit Plan is so
qualified, and, except as set forth on Schedule 3.1(u)(i)(D), to Seller’s
Knowledge, there are no facts or circumstances that could adversely affect the
qualified status of any such Employee Benefit Plan.
 
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(E) There have been no Prohibited Transactions with respect to any such Employee
Benefit Plan or any Employee Benefit Plan maintained by an ERISA Affiliate. No
Fiduciary has any liability for material breach of fiduciary duty or any other
material failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No action, suit,
proceeding, hearing, or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or, to Seller’s Knowledge, threatened.
 
(F) Except as set forth on Schedule 3.1(u)(i)(F), the Company has given access
to Buyer to correct and complete copies of the plan documents and summary plan
descriptions (or in the case of an unwritten Employee Benefit Plan, a written
summary thereof), the most recent determination letter received from the
Internal Revenue Service, the most recent annual report (Form 5500, with all
applicable attachments), and all related trust agreements, insurance contracts,
and other funding arrangements which implement each such Employee Benefit Plan.
 
(G) Neither the execution of this Agreement nor the consummation of the
transactions contemplated by this Agreement will (a) entitle any employee,
former employee, consultant or director of the Company to any severance pay or
benefits or any increase in severance pay or benefits upon any termination of
employment after the date hereof, (b) except as set forth on Schedule
3.1(u)(i)(G), accelerate the time of payment or vesting or result in any payment
or funding of compensation or benefits under, increase the amount payable or
result in any other material obligation pursuant to, any such Employee Benefit
Plan, (c) limit or restrict the right of Buyer to merge, amend or terminate any
such Employee Benefit Plan, or (d) result in payments under any such Employee
Benefit Plan which would not be deductible under Section 162(m) or Section 280G
of the Code.
 
(ii) Neither the Company nor any ERISA Affiliate contributes to, has any
obligation to contribute to, or has any material liability under or with respect
to any Employee Pension Benefit Plan that is a “defined benefit plan” (as
defined in Section 3(35) of ERISA).
 
(iii) Neither the Company nor any ERISA Affiliate contributes to, has any
obligation to contribute to, or has any material liability (including withdrawal
liability as defined in Section 4201 of ERISA) under or with respect to any
Multiemployer Plan.
 
(iv) Except as set forth on Schedule 3.1(u)(iv), the Company does not maintain,
contribute to or have an obligation to contribute to, or have any material
liability or potential liability with respect to, any Employee Welfare Benefit
Plan providing health or life insurance or other welfare-type benefits for
current or future retired or terminated employees (or any spouse or other
dependent thereof) of the Company other than in accordance with COBRA. Except as
set forth on Schedule 3.1(u)(iv), the performance of this Agreement shall not
result in any severance, accelerated vesting or any similar payments by Company
to any employee or third party.
 
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(v) Environmental Matters. Except as set forth on Schedule 3.1(v):
 
(i) There is currently no pending, or to the Seller’s Knowledge threatened,
claim, action, suit, cause of action, proceeding, order or decree, or written
notice regarding any actual or alleged material violation of or liability under
Environmental Requirements by the Company.
 
(ii) The Company has given Buyer access to all site conceptual models and
written assessments, audits, investigations, and sampling or similar reports in
its possession relating to the environment or the presence or release of any
hazardous materials, to the extent relating to the Company’s property or current
or past operations of the Company.
 
(iii) Except as would not be reasonably expected to result in a Material Adverse
Effect, the Company is in compliance with all Environmental Requirements.
 
(iv) Except as would not be reasonably expected to result in a Material Adverse
Effect, the Company has obtained or filed or applied for, and is in compliance
with all Permits required under any Environmental Requirement and has timely
filed for any applicable renewals. All such Permits are listed on Schedule
3.1(y).
 
(v) This Section 3(v) constitutes the sole and exclusive representation and
warranty regarding Environmental Requirements.
 
(w) Affiliate Transactions. Except as set forth on Schedule 3.1(w), neither
Seller nor any current or former Affiliate of the Company or Seller, is now, or
has been during the three (3) year period preceding the date hereof, (i) a party
to any transaction or contract with the Company, (ii) indebted to the Company or
a guarantor or otherwise liable for any liability of the Company, (iii) a holder
of any interest in any property (whether real, personal or mixed and whether
tangible or intangible) used in or pertaining to the business of the Company or
(iv) had any relationship as a director, officer, manager or similar such
position with, or any interest (other than a passive investment in equity
securities of any Person if such equity securities are registered under the
Securities Act, provided that such equity investment does not exceed five
percent (5%) of the outstanding equity securities of such person), direct or
indirect, in any competitor, supplier, vendor or customer of the Company.
 
(x) Customers and Suppliers. Schedule 3.1(x) sets forth a true, correct and
complete list of (a) the Company’s ten (10) largest customers in terms of dollar
amounts of sales during the nine-month period ended August 31, 2007, and the
amount for which each such customer was invoiced during such period, and (b) the
Company’s ten (10) largest (based on dollar amounts of purchases) suppliers,
vendors or other providers of services from which the Company ordered raw
materials, supplies and other goods or services during the nine-month period
ended August 31, 2007. No such customer or supplier has advised the Company in
writing that such customer or supplier was or is intending to terminate its
relationship with the Company or to materially decrease or limit its purchases
or supplies.
 
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(y) Permits. Schedule 3.1(y) contains a true, correct and complete list of all
active Permits issued to the Company. The Company and its assets are in material
compliance with all such Permits and all such Permits are in full force and
effect and will be in full force and effect as at and through the Closing Date.
There has been no change in the facts or circumstances reported or assumed in
the application for or granting of such Permits that would result in a violation
of, or in the invalidity or revocation of, any such Permit. The Company has not
received notice from any Governmental Authority, which remains outstanding,
regarding any proposed modification, non-renewal, suspension or cancellation of
any such Permits, and to Seller’s Knowledge, no event has occurred which could
reasonably be expected to result in the modification, non-renewal, suspension or
cancellation of any such Permit or the requirement for additional Permits in
order to operate the Company’s assets and businesses in the Ordinary Course of
Business.
 
(z) Bank Accounts. Schedule 3.1(z) sets forth the names and locations of all
banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains any safe deposit boxes or accounts
(specifying the identifying numbers), and the names of all Persons authorized to
draw thereon, make withdrawals therefrom or have access thereto.
 
3.2 Representations and Warranties of Buyer. Buyer represents and warrants to
Seller that:
 
(a) Organization of Buyer; Enforceability; Authorization. Buyer is a corporation
existing and in good standing under the laws of the state of Delaware. Except as
set forth below, Buyer has full power and authority (including full corporate or
other entity power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. Except as set forth below, the Agreement has
been duly approved by all requisite corporate action on the part of Buyer, has
been duly executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and to general principles of equity.
 
(i) Buyer is required to file a Proxy Statement (the “Proxy Statement”) with the
United States Securities and Exchange Commission (“SEC”) concerning the
transaction described herein and related matters, and following review by the
SEC, distribute a Proxy Statement to Buyer’s shareholders of record seeking
their approval of the transactions described herein and related matters. The
Closing cannot occur without such approval by Buyer’s shareholders as set forth
in Buyer’s Second Amended and Restated Certificate of Incorporation.
 
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(b) Non-contravention; Consents. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any order, judgment or decree, relating to Buyer’s business or by
which Buyer is bound or (ii) except as set forth in Section 3.2(a)(i) above
violate any provision of Buyer’s Second Amended and Restated By-laws or Second
Amended and Restated Certificate of Incorporation. Except as set forth in
Section 3.2(a)(i) above, no consent or approval of, no action by or in respect
of or filing with, any Person is required in connection with the execution,
delivery, consummation or performance of this Agreement by Buyer.
 
(c) Brokers’ Fees. Except as set forth on Schedule 3.2(c), Buyer has no
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement. Any obligations
shown on Schedule 3.2(c) shall be for the account of Buyer.
 
(d) Due Diligence. Buyer has been provided with access to the Data Room, has had
such time as Buyer deems necessary and appropriate to review and analyze such
materials and has been provided an opportunity to ask questions of Seller with
respect to such materials. Buyer acknowledges that Seller has not made any
representations or warranties, express or implied, in connection with the
transactions contemplated in this Agreement, other than the representations and
warranties contained in this Agreement.
 
(e) Capital. Buyer has sufficient cash available, lines of credit or other
sources or commitments of immediately available funds to remit the Purchase
Price as and when due, to meet its other obligations under this Agreement and to
conduct its business in the Ordinary Course of Business.
 
(f) Investment. Buyer is acquiring the Shares for Buyer’s own account and not
with a view to or for resale in connection with any distribution or public
offering thereof in violation of the Securities Act.
 
ARTICLE IV
 
COVENANTS OF SELLER
 
4.1 Conduct of Company’s Business. Except as set forth on Schedule 4.1, during
the period from the date hereof through the Closing Date, Seller (i) shall, and
shall cause the Company to, conduct the Company’s business in the Ordinary
Course of Business (including, without limitation, using commercially reasonable
efforts to preserve goodwill and business relationships between the Company and
its suppliers and customers and perform tank, pipe and process unit maintenance
and repair) and (ii) shall cause the Company not to, except (a) as otherwise
expressly provided in this Agreement, (b) in the Ordinary Course of Business or
(c) with the written approval of Buyer:
 
(a) Obligations for Borrowed Money. (i) Create, incur or assume any debt
(including obligations in respect of capital leases) or any debt for money
borrowed (whether long- or short-term); (ii) assume or guarantee, or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligation of any other Person; or (iii) make any loans, advances or capital
contributions to any other Person;
 
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(b) Employee Matters. (i) Enter into or modify any collective bargaining
agreement, except as required by applicable law, (ii) commit itself to any
additional Employee Plan, or employment or consulting agreement with a Person,
or to amend any of such Plans or agreements, except as required by applicable
law, (iii) grant to any current or former employee or officer of the Company any
increase in wages or bonus, severance, profit sharing, retirement, deferred
compensation, insurance or other compensation or benefits, or (iv) enter into
any new or modify any existing retention or similar agreement with any of the
Company’s current or former directors, officers and employees;
 
(c) Merger; Sale of Assets. (i) Merge or consolidate with any Person, (ii) enter
into any agreement with respect to voting of the Company’s capital stock; (iii)
sell, transfer, license or otherwise dispose of or agree to sell, transfer,
license or otherwise dispose of any assets of the Company used in the conduct of
its business, except inventory as would occur in the Ordinary Course of
Business;
 
(d) Commitments. (i) Enter, terminate, modify or amend any Material Contract,
other than Material Agreements with customers and/or suppliers made in the
Ordinary Course of Business; or (ii) enter into any other agreements,
commitments, contracts or undertakings relating to the conduct of the Company’s
business;
 
(e) Leases. Terminate, modify or amend any of the Leases or enter into any new
Leases;
 
(f) Encumbrances.  Encumber or grant or create a Lien on any of the assets
(including Real Property) used by the Company in the conduct of its business and
shall have removed from title prior to Closing items 50 and 59 as shown on the
Preliminary Title Report contained in the Data Room;
 
(g) Insurance. Cause or permit any of the policies of insurance listed on
Schedule 3.1(r) to terminate, lapse or be canceled, unless equivalent
replacement policies, without lapse of coverage, shall be put in place;
 
(h) Litigation. Enter into any compromise or settlement of any litigation,
action, suit, claim, proceeding or investigation, except settlements made by
insurers, involving amounts in excess of $50,000 or non monetary commitments
that would extend after the Closing;
 
(i) Representations and Warranties. Take any action the taking of which, or omit
to take any action the omission of which, would cause any of the representations
and warranties contained in Section 3.1 to fail to be true and correct as of the
Closing as though made at and as of the Closing;
 
(j) Intellectual Property. Permit the loss, transfer, lapse or abandonment of
any Company Intellectual Property;
 
(k) Taxes. Make any material Tax election for calendar year 2007 or enter into
any settlement or compromise of any Tax liability in excess of $100,000, or
change any annual Tax accounting period or method of Tax accounting, enter into
any closing agreement relating to any Tax in excess of $100,000 or consent to
any extension or waiver of the statute of limitations period applicable to any
material Tax claim or assessment;
 
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(l) Charter Documents. Amend or change the Articles of Incorporation or Bylaws
of the Company;
 
(m) Investments. Except for cash equivalent investments or investments in
publicly traded securities, made consistent with past practice, directly or
indirectly acquire, make any investment in, or make any capital contributions
to, any Person;
 
(n) Accounting. Except as may be required as a result of a change in applicable
law or in GAAP, (i) change any of the accounting methods, practices or
principles used by it, (ii) write up, write down or write off the book value of
any of its assets except the write-off of individual accounts receivable in the
Ordinary Course of Business or (iii) vary its inventory practices in any
material respect from its current practices;
 
(o) Capital Expenditures. Make any new capital expenditure or expenditures
(including leases and in-licenses), or enter into any contract or agreement
providing for capital expenditures which, in the aggregate, are in excess of
$1,000,000 and not set forth in Schedule 3.1(p) of the Disclosure Schedule;
 
(p) Working Capital. Alter the payment terms of its trade receivables or trade
payables;
 
(q) Waiver of Claims. Waive, release or assign any claims or rights of material
value; or
 
(r) Commitments. Agree or commit to do any of the foregoing.
 
(s) Casualty or Condemnation. In the event that, prior to the Closing Date, all
or any portion of the Company’s assets are damaged or destroyed by fire or other
casualty for which the associated repair or replacement costs to the Company or
associated materially adverse impact on the earnings of the Company could
reasonably be expected to exceed $10,000,000 (a “Casualty”) or taken by
condemnation or eminent domain or by agreement in lieu thereof with any Person
or Governmental Authority authorized to exercise such rights (a “Taking”),
Seller shall promptly notify Buyer thereof.
 
(i) In the event of a Casualty or Taking between the Date of this Agreement and
the Closing Date, Seller shall elect (i) to repair or replace, after reasonable
consultation with Buyer, or make adequate provision for the repair or
replacement of the affected part of the Company at Seller’s cost prior to the
Closing, in which case Buyer’s obligation to effect the Closing shall not be
affected, but the Closing Date, at Buyer’s option, shall be deferred until three
Business Days after repairs are completed and/or (ii) to negotiate with Buyer to
reduce the Purchase Price by an amount agreed to by Seller and Buyer to reflect
the cost to repair or replace the affected part of the Company (the “Repair
Costs”), in which case, in the event of a Repair Cost Dispute, the Closing Date
shall be deferred as provided herein.
 
(ii) If Seller and Buyer agree on the Repair Costs within 15 days of Buyer’s
receipt of Seller’s notice of the Casualty or Taking (the “Repair Negotiation
Period”), Buyer’s obligation to affect the Closing shall not be affected, but
the Purchase Price shall be reduced by the Repair Costs so agreed.
 
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(iii) If Seller and Buyer do not agree on the Repair Costs within the Repair
Negotiation Period (a “Repair Cost Dispute”), either party may request a
reasonably mutually acceptable engineering firm to evaluate the affected part of
the Company and deliver to Buyer and Seller its written estimate of the Repair
Costs (the “Third-Party Estimate”) within 15 days after the end of the Repair
Negotiation Period.
 
(iv) If the Third-Party Estimate is less than $10,000,000, Buyer’s obligation to
effect the Closing shall not be affected and the parties shall submit the Repair
Cost Dispute to dispute resolution as set forth in Article IX below for
resolution after the Closing, with a post-Closing adjustment to the Purchase
Price equal to the finally-determined Repair Costs.
 
(v) If the Third-Party Estimate is equal to or greater than $10,000,000 but less
than $25,000,000, Buyer’s obligation to effect the Closing shall not be
affected, but the Purchase Price shall be reduced by the amount of the
Third-Party Estimate and the Parties shall submit the Repair Cost Dispute to
dispute resolution under Article IX below after the Closing, with a post-Closing
adjustment of the Purchase Price equal to the difference between the Third-Party
Estimate and the finally-determined Repair Costs.
 
(vi) If the Third-Party Estimate is equal to or greater than $25,000,000, Buyer
may elect, by giving Seller written notice of election within 15 days of receipt
of the Third-Party Estimate, to terminate this Agreement without further
obligation to Seller or to proceed in accordance with Section 4.1(s)(v) above.
 
(vii) In the event of any reduction in the Purchase Price in connection with a
Taking, Seller shall be entitled to collect from Buyer or any condemnor the
entire award(s) that may be made in any such proceeding or the amount of any
insurance coverage, without deduction.
 
4.2 Exclusivity. From the date hereof through and until the earlier of
termination of this Agreement pursuant to Article VIII or the Closing, Seller
shall not, and shall cause the Company not to, directly or indirectly, (a)
solicit, initiate or encourage any inquiries, proposals or offers from any
Person relating to any acquisition of the Shares or the assets or business of
the Company, or any merger, consolidation or business combination with the
Company, or (b) with respect to any effort or attempt by any other Person to do
or seek any of the foregoing, (i) participate in any discussions or
negotiations, (ii) furnish to any other Person any information with respect to,
or afford access to the properties, books or records of or relating to, the
Company, or (iii) otherwise cooperate in any way with, or assist or participate
in, or facilitate or encourage any such effort. Seller shall promptly notify
Buyer if any such proposal or offer from any Person with respect thereto is
made.

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4.3 Full Access; Title Report. Prior to the Closing, Buyer shall be entitled,
and Seller shall permit Buyer, to conduct such investigation of the condition
(financial or otherwise), business, assets, properties, operations and prospects
of the Company and its business as Buyer shall reasonably deem appropriate;
provided, however, that any such investigation shall be conducted in such a
manner as not to interfere unreasonably with the operation of the Company’s
business. Two days prior to Closing, Seller shall, at its expense, deliver to
Buyer an updated preliminary title report evidencing no new Liens or
encumbrances. If Buyer elects to obtain, at its expense, a new or updated title
policy or survey in respect of the Company’s Real Property, Seller agrees to
cooperate with Buyer, including without limitation, by delivering copies of any
existing surveys, granting access and executing and delivering customary title
affidavits as may be reasonably requested by Buyer or a title company.
 
ARTICLE V
 
OTHER COVENANTS
 
5.1 Standby Letters of Credit. Buyer shall either (i) arrange for replacement
standby letters of credit as to all standby letters of credit that the Company
has outstanding as of the Closing Date with Wells Fargo Bank, N.A. (the “Current
LOCs”), effective as of the Closing Date, in which case Seller shall cancel all
Current LOCs, effective as of the Closing Date or (ii) Buyer shall provide to
Wells Fargo Bank, N.A. standby letters of credit, to the satisfaction of Wells
Fargo Bank, N.A. in its sole discretion, to secure the Current LOCs, in which
case all Current LOCs shall remain in effect until maturity. The Parties
acknowledge that any obligation for the payment of purchases that is outstanding
as of the Closing Date and is secured by a Current LOC shall be included as
“Accounts Payable” under Schedule 2.6(c) attached hereto.
 
5.2 Further Assurances. Each Party shall use its best efforts to implement the
provisions of this Agreement. For such purpose, each Party, at the request of
the other Party, at the Closing, shall, without further consideration, promptly
execute and deliver, or cause to be executed and delivered, to the other Party
such instruments in addition to those required by this Agreement, in form and
substance satisfactory to the other Party, and take all such other actions, as
the other Party may reasonably deem necessary or desirable to implement any
provision of this Agreement.
 
5.3 Expenses. Each Party shall bear the legal, accounting and other expenses
incurred by such Party in connection with the negotiation, preparation and
execution of the Transaction Documents and the transactions contemplated hereby
and thereby, as the case may be.
 
5.4 Transfer Taxes. All excise, use, transfer, stamp, documentary, filing,
recordation and other similar Taxes which may be payable in connection with the
transactions contemplated by this Agreement, together with any interest,
additions or penalties with respect thereto (“Transfer Taxes”) shall be borne by
Buyer and Seller equally. Each Party hereby agrees to file all necessary
documentation in connection with the payment and reporting of Transfer Taxes.

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5.5 Press Releases and Disclosure. Neither Seller, Buyer nor their respective
Affiliates shall issue or cause publication of any press release or other
announcement or public communication with respect to this Agreement or the
transactions contemplated hereby or otherwise disclose this Agreement or the
transactions contemplated hereby to any third party (other than attorneys,
advisors, accountants and debt providers/lenders to Seller or Buyer) without the
consent of both Parties hereto, which consent shall not be unreasonably
withheld; provided, however, that nothing herein shall prohibit any Party from
issuing or causing publication of any regulatory filing (e.g., Form 8-K) or
shareholder Proxy Statement (including as described in Section 3.2(a)(i) above),
press release, announcement or public communication to the extent that such
party deems such action to be required by applicable law or stock exchange rule
or necessary to perform its obligations under this Agreement; provided, further,
that such Party shall, whenever practicable consult with the other Party
concerning the timing and content of such press release, announcement or
communication before the same is issued or published.
 
5.6 Government and other Regulatory Approvals.
 
(a) Each Party shall, and shall cause its appropriate respective Affiliates to,
use all commercially reasonable efforts to obtain any authorizations, consents,
novations, orders and approvals of, with or by any Governmental Authority
necessary for the performance of the respective obligations under the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby, including without limitation, in connection with the HSR Act
and shall cooperate fully with each other in all reasonable respects in promptly
seeking to obtain such authorizations, consents, orders and approvals. Neither
Seller nor Buyer shall take any action that will have the effect of delaying,
impairing or impeding the receipt of any required regulatory approvals.
 
(b) Without limiting the foregoing, (i) as soon as reasonably practicable
following the date hereof, and in any event within ten (10) days after the date
hereof, each Party shall, and shall cause its appropriate respective Affiliates
to, promptly make or cause to be made any and all required filings, reports and
notices (A) with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the HSR Act, and will request early
termination of the waiting period required under the HSR Act; and (B) to the
extent required, with the appropriate Governmental Authorities under any
applicable foreign antitrust or competition Laws, and shall use all commercially
reasonable efforts to obtain any consents required thereunder as promptly as is
reasonably possible.
 
5.7 Proxy Statement. The Proxy Statement (which shall be prepared and filed with
the SEC), shall request that Buyer's shareholders adopt and approve this
Agreement and the transactions contemplated herein, on the terms and conditions
described herein, in accordance with Buyer’s Second Amended and Restated
Certificate of Incorporation and shall contain the recommendation of the board
of directors of Buyer to do same. Buyer shall provide the Company with a
reasonable opportunity (but not less than five (5) Business Days) to review and
comment on the Proxy Statement (including any amendment or supplement thereto)
prior to the filing thereof for SEC review and approval.

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ARTICLE VI
 
CONDITIONS TO OBLIGATION TO CLOSE
 
6.1 Conditions to Buyer’s Obligation. The obligation of Buyer to consummate the
transactions provided for by this Agreement is subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions:
 
(a) Each of the representations and warranties of Seller made in Section 3.1,
(i) if specifically qualified by materiality, shall be true and complete as so
qualified and (ii) if not qualified by materiality, shall be true and correct in
all material respects, in each case as of the date hereof and as of the Closing
Date as though made at such time, except where any such representation or
warranty is specific as of a specific earlier date, in which event it shall
remain true and correct (as qualified) as of such earlier date.
 
(b) Seller shall have performed and complied in all material respects with all
covenants, obligations and agreements required to be performed or complied with
by it in connection herewith on or prior to the Closing Date.
 
(c) At the Closing, Seller shall have delivered to Buyer a Certificate signed by
the President or a Vice President of Seller, and dated the Closing Date, to the
effect that to the best of the Knowledge of Seller the conditions specified in
Sections 6.1(a) and (b) have been fulfilled.
 
(d) At the Closing, the Seller or Company shall have delivered to Buyer copies
of (i) the Company’s Articles of Incorporation and (ii) the Company’s Bylaws,
each certified by the corporate Secretary of the Company to be true, correct,
complete and in full force and effect and unmodified as of the Closing Date.
 
(e) At the Closing, the Seller or Company shall have delivered to Buyer
Certificates of corporate good standing for Seller and the Company from the
State of California, dated not more than ten (10) days prior to the Closing.
 
(f) The Seller or Company shall have procured all of the third-party consents
set forth on Schedule 6.1(f), the applicable waiting period under the HSR Act
shall have expired or been terminated and all foreign anti-trust approvals, if
required, shall have been obtained.
 
(g) No litigation, action, suit, investigation, claim or proceeding challenging
the legality of, or seeking to restrain, prohibit or materially modify, the
transactions provided for in this Agreement shall have been instituted and not
settled or otherwise terminated (other than any litigation, action, suit,
investigation, claim or proceeding instigated by one or more of Buyer’s
shareholders, which shall not constitute a condition to Buyer’s obligation to
consummate the transactions provided for by this Agreement).
 
(h) Buyer shall have received from Jones Day, counsel to Seller and the Company,
an opinion in form and substance as set forth in Exhibit B attached hereto,
addressed to Buyer and dated as of the Closing Date.

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(i) Buyer shall have received the resignations, effective as of the Closing, of
each director and officer of the Company, as requested by Buyer.
 
(j) Seller shall have furnished Buyer with an affidavit certifying as to
Seller’s non-foreign status in accordance with the requirements of Section 1445
of the Code.
 
(k) Seller shall have paid in full and the Company shall be free of all
Indebtedness.
 
(l) The Seller or the Company shall deliver or cause to be delivered to the
Buyer in form and substance satisfactory to the Buyer acting reasonably the
share certificates representing the Shares issued in the name of the Buyer,
together with evidence reasonably satisfactory to the Buyer that the Buyer is
entered upon the books of the Company as the holder and owner of the Shares.
 
(m) Buyer’s shareholders shall have approved the transactions described herein
as set forth in Section 3.2(a)(i) above.
 
(n) Seller shall have executed the Indemnity Escrow Agreement.
 
6.2 Conditions to Seller’s Obligation. The obligation of Seller to consummate
the transactions provided for by this Agreement is subject to the satisfaction,
on or prior to the Closing Date, of each of the following conditions:
 
(a) Each of the representations and warranties of Buyer made in Section 3.2, (i)
if specifically qualified by materiality, shall be true and complete as so
qualified and (ii) if not qualified by materiality, shall be true and correct in
all material respects, in each case as of the date hereof and as of the Closing
Date as though made at such time, except where any such representation or
warranty is specific as of a specific earlier date, in which event it shall
remain true and correct (as qualified) as of such earlier date.
 
(b) Buyer shall have performed and complied in all material respects with all
covenants, obligations and agreements required to be performed or complied with
by it in connection herewith on or prior to the Closing Date.
 
(c) At the Closing, Buyer shall have delivered to Seller a Certificate signed by
the CEO, President or a Vice President of Buyer, and dated the Closing Date, to
the effect that to the best of the knowledge and belief of such officer the
conditions specified in Sections 6.2(a) and (b) have been fulfilled.
 
(d) At the Closing, Buyer shall have delivered to Seller copies of Buyer’s
Second Amended and Restated By-laws and Second Amended and Restated Certificate
of Incorporation, each certified by the corporate Secretary of Buyer to be true,
correct, complete and in full force and effect and unmodified as of the Closing
Date.
 
(e) At the Closing, Buyer shall have delivered to Seller Certificates of
corporate good standing for Buyer from the State of Delaware, dated not more
than ten (10) days prior to the Closing.
 
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(f) The Seller or Company shall have procured all of the third-party consents
set forth on Schedule 3.1(f), the applicable waiting period under the HSR Act
shall have expired or been terminated and all foreign anti-trust approvals, if
required, shall have been obtained.
 
(g) No litigation, action, suit, investigation, claim or proceeding challenging
the legality of, or seeking to restrain, prohibit or materially modify, the
transactions provided for in this Agreement shall have been instituted and not
settled or otherwise terminated.
 
(h) Seller shall have received from Jeffrey Dill, counsel to Buyer, an opinion
in form and substance as set forth in Exhibit C attached hereto, addressed to
Seller and dated as of the Closing Date.
 
(j) Buyer shall have executed the Indemnity Escrow Agreement.
 
ARTICLE VII
 
SURVIVAL; INDEMNIFICATION
 
7.1 Survival. Except as otherwise set forth herein, the representations,
warranties, covenants, obligations and agreements of the Parties contained in
this Agreement shall survive the Closing for a period of eighteen (18) months;
provided, however, that in the case of claims arising out of breaches of the
representations and warranties set forth in Sections 3.1(f), (g) (as to the
first sentence only), (l) and (v), such representations and warranties shall
survive the Closing for a period of thirty six (36) months; provided, further,
that in the case of claims arising out of breaches of the representations and
warranties set forth in Sections 3.1(a), (b), (c), (d) and (e) and Sections
3.2(a) and (c), such representations and warranties shall not expire. In the
event notice of any claim for indemnification under Sections 7.2 or 7.3 has been
given prior to the foregoing expiration dates, the representations and
warranties and covenants that are subject of such indemnification claim shall
survive with respect to such claim until the final disposition thereof.
 
7.2 Indemnification by Buyer. Upon the terms and subject to the conditions set
forth in this Agreement, from and after the Closing, Buyer shall indemnify,
defend and hold Seller, its Affiliates, and their respective directors,
officers, representatives, employees and agents (and their successors and
assigns) harmless from and against any and all Losses that may be incurred by
Seller resulting or arising from or related to, or incurred in connection with
any breach of any representation, warranty, covenant, obligation or agreement
made by Buyer contained in this Agreement.
 
7.3 Indemnification by Seller. Upon the terms and subject to the conditions set
forth in this Agreement, from and after the Closing, Seller shall indemnify,
defend and hold Buyer, its Affiliates, and their respective directors, officers,
representatives, employees and agents (and their successors and assigns)
harmless from and against any and all Losses that may be incurred by Buyer
resulting or arising from, related to or incurred in connection with any breach
of any representation, warranty, covenant, obligation or agreement made by
Seller contained in this Agreement.

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7.4 Limitations on Indemnification. Seller shall not be required to indemnify,
defend or hold Buyer harmless from and against any Losses under Section 7.3
unless and until the aggregate amount of such Losses (each of which individually
exceeds $10,000) equals One Percent (1%) of the Closing Purchase Price (the
“Floor”), in which event Seller shall be obligated to indemnify Buyer solely for
Losses incurred by Buyer in excess of the Floor, and only up to ten percent
(10%) of the Closing Purchase Price (the “Cap”), as set forth more fully in
Sections 7.5(c)(ii)(C) and (D) and in the Indemnity Escrow Agreement.
 
7.5 Method of Asserting Claims.
 
(a) Notice of Claims; Time for Claims. In the event that Buyer wishes to make a
claim for Losses under Section 7.3 (a “Claim”), Buyer shall give a written
notice (a “Notice of Claim”) to Seller and the Escrow Agent (to the extent the
Indemnity Escrow Agreement remains in full force and effect at the time such
Notice of Claim is made). The Notice of Claim shall (i) describe the nature of
the Claim being made and (ii) if known, state the aggregate dollar amount of
such Claim (and if not known, estimate to the extent reasonably practical the
aggregate dollar amount of such Claim; provided, however, that any disputes in
respect of such amount that Buyer and Seller cannot resolve between themselves
shall be resolved in accordance with Section 9.2). If such notice relates to any
claim or potential claim or the commencement of any action, suit or legal,
administrative or arbitral proceedings or investigation before or by any
individual, corporation, governmental authority or other entity other than Buyer
(a “Third Party Claim”) which could give rise to a Loss, Buyer shall give Seller
and the Escrow Agent written notice describing the Third Party Claim within
thirty (30) days of receipt of actual notice of such Third Party Claim (or such
shorter period as is reasonably practical and may be warranted under the
circumstances (e.g., in the case of emergency proceedings or when a response to
a notification must be given within a period in order to avoid a forfeiture of
rights)) to permit Seller to exercise its rights hereunder. Whether the Notice
of Claim relates to a direct Claim or a Third Party Claim, Buyer’s failure to
notify in the manner set forth herein shall not affect any of its rights
hereunder, but Seller shall be obligated to Buyer only up to that amount of the
Losses which would not have been increased but for Buyer’s failure to give
timely notice.
 
(b) Defense of Third Party Claims.
 
(i) From and after the delivery of a Notice of Claim in respect of a Third Party
Claim, and until such time as it is determined or agreed that Seller has no
liability to Buyer in respect thereof, Seller shall have the right (but not the
obligation) to assume the defense of such Third Party Claim and to retain (at
Seller’s expense) counsel of its choice, reasonably acceptable to Buyer, to
represent Buyer, provided, however, that this option shall not be available to
Seller for Third Party Claims (i) which may result in criminal proceedings,
injunctions or other equitable remedies in respect of Buyer or its Affiliates or
(ii) also involves Seller or its Affiliates as a party and counsel to Seller
determines in good faith that joint representation would give rise to a conflict
of interest, for which defense shall be assumed by Buyer with the right to
retain (at Seller’s expense) counsel of its choice, reasonably acceptable to
Seller. Seller shall have twenty (20) days from the receipt of the Notice of
Claim to notify Buyer whether or not it desires to defend such Third Party Claim
failing which Seller shall be deemed to have waived such option and be
responsible for costs and fees incurred by Buyer for defense of such Third Party
Claim. The Party assuming defense of a Third Party Claim is hereinafter referred
to as the “Controlling Party” and the other Party as the “Co-Defendant”.
 
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(ii) In defending the Third Party Claim, the Controlling Party shall act in good
faith and use commercially reasonable means and defenses available to it given
due consideration to the interests of Buyer. The Co-Defendant shall take such
actions as reasonably necessary or appropriate under the circumstances to
cooperate with the Controlling Party and its counsel in defending such Third
Party Claim. The Controlling Party shall keep the Co-Defendant reasonably
informed of the development of the underlying claim. In the case where the Buyer
is the Co-Defendant, the Co-Defendant shall have the right to participate, at
its sole cost and expense in the defense of a Third Party Claim using its own
counsel (unless (x) the Controlling Party shall not have employed counsel in the
defense of such Claim after ten (10) days notice; or (y) such Co-Defendant shall
have determined in good faith that joint representation would give rise to a
conflict of interest, and in either of the foregoing events such fees and
expenses shall be borne by the Controlling Party).
 
(iii) Other than settlements, compromises or agreements involving solely
monetary payment obligations (in any amount in respect of settlement,
compromises or agreements being made by Seller, and in any amount under Ten
Thousand US Dollars (USD 10,000) in respect of those being made by Buyer),
neither the Co-Defendant nor the Controlling Party shall conclude any
settlements, compromises, agreements or withdrawals in response to any claims,
verifications, or legal or administrative proceedings in which it may be
involved without the prior written consent of the other party, which consent
shall not be unreasonably withheld, in particular with respect to the settlement
of disputes with customers, for which customary practice and the commercial
relationship shall be taken into account and involving the assets, business or
operations of the Company.
 
(c) Objection to Notice of Claim; Payment.
 
(i) If Seller wishes to object to a Claim or Third Party Claim made in a Notice
of Claim, Seller shall give a written objection (an “Objection”) to the Escrow
Agent (to the extent the Indemnity Escrow Agreement remains in full force and
effect at the time such Objection is made) and Buyer within fifteen (15)
Business Days after receipt of such Notice of Claim expressing such Objection
and explaining in reasonable detail and in good faith the basis thereof. Buyer
and Seller shall meet within fifteen (15) Business Days following receipt by
Buyer of Seller’s Objection to agree on the rights of the respective parties
with respect to each of such Claim or Third Party Claim. If Seller and Buyer
should reach an agreement, a memorandum setting forth such agreement shall be
prepared and signed by both parties and if need be shall be furnished to the
Escrow Agent. If Buyer and Seller do not reach such an agreement within such
fifteen (15) Business Day period, then the matter shall be resolved in
accordance with Section 9.2.
 
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(ii) Subject to Sections 7.4, 7.6 and 7.7, the payment of any sum due or payable
by Seller under this Article VII will be made:
 
(A) in connection with a Third Party Claim, no later than fifteen (15) Business
Days (a) after expiry of such fifteen (15) Business Day period set forth in
Section 7.5(c)(i) if Seller fails to respond to the relevant Notice of Claim,
(b) after a final non appealable award against Buyer has been rendered, (c)
after final settlement of a Notice of Claim has been reached, as determined by
mutual agreement of Buyer and Seller in accordance with Section 7.5(c)(i) or (d)
after Seller is determined to be under the obligation to pay the relevant Loss
as resolved between Buyer and Seller pursuant to Section 9.2;
 
(B) in connection with a direct Claim, no later than fifteen (15) Business Days
(a) after expiry of such fifteen (15) Business Day period set forth in
Section 7.5(c)(i) if Seller fails to respond to the relevant Notice of Claim,
(b) after final settlement of a Notice of Claim has been reached, as determined
by mutual agreement of Buyer and Seller in accordance with Section 7.5(c)(i) or
(c) after Seller is determined to be under the obligation to pay the relevant
Loss as resolved between Buyer and Seller pursuant to Section 9.2;
 
provided, however, that the relevant payments shall be made:
 
(C) first, until the expiration of the Indemnity Escrow Agreement and in
accordance with the terms thereof, by the Escrow Agent to Buyer in cash credited
from the Escrow Account (as defined in the Indemnity Escrow Agreement) in the
amount of such Loss incurred by Buyer; and
 
(D) second, following the expiration of the Indemnity Escrow Agreement, or if
the Losses exceed in whole or in part the Escrow Amount (only to the extent
Seller’s liability in respect of such Loss is not subject to the limitations set
forth in Section 7.4), by Seller to Buyer in the amount of such Loss incurred by
Buyer which cannot be discharged through payment made by the Escrow Agent.
 
7.6 Duty to Mitigate. Buyer shall take all commercially reasonable steps to
mitigate any Loss that it may incur, including making and diligently pursuing
such claims as may be reasonably justified against any third party or pursuant
to any insurance policies covering the Buyer, provided, however, that nothing
herein shall obligate Buyer to maintain any particular insurance.

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7.7 Tax Effect of Indemnification Payments; Insurance.
 
(a) Any Tax or other Loss for which indemnification is provided under this
Agreement shall be reduced (at the time and in the manner discussed in Section
 7.7(b)) by any actual Tax Benefit arising from the payment of the claim that
gave rise to Seller making an indemnity payment. If Buyer realizes any such Tax
Benefit, directly or indirectly, then Buyer shall pay an amount to Seller equal
to the Tax Benefit realized, provided that in the event an amount payable by
Seller is reduced by the amount of such Tax Benefit and there is a disallowance
of such Tax Benefit by a taxing authority (based upon a reasonable and good
faith determination by Buyer) such that Buyer is not entitled to all or any
portion of such Tax Benefit, then Seller shall pay to Buyer the amount of the
Tax Benefit that was disallowed. For purposes of this Agreement, the term “Tax
Benefit” means the amount of the reduction in the liability for Taxes (including
through recoveries of Taxes through the carryover of net operating losses or
reductions in Taxes attributable, in whole or in part, to basis adjustments) as
a result of the payment or accrual by any Person of any loss, expense, other
amount or tax.
 
(b) A Tax Benefit will be considered to be realized for purposes of this
Section 7.7 on (A) the date on which the Tax Benefit is received as a refund of
Taxes, or (B) to the extent that the Tax Benefit is not received as a refund of
Taxes but rather is claimed as an item that reduces liability for Taxes (on a
with and without basis), the due date (including extensions) of the Tax Return
that reflects such change in liability for Taxes.
 
(c) In determining the amount of a Loss there shall also be deducted from the
amount to be paid an amount equal to the proceeds from third parties, including
insurance proceeds, and interest thereon received directly by Buyer or received
by a third party (such as a claimant, vendor or lender) in respect of such
matter.
 
7.8 Purchase Price Adjustments. Any indemnification payment made pursuant to
this Agreement shall be treated as an adjustment to the Purchase Price for all
Tax purposes.
 
ARTICLE VIII
 
TERMINATION
 
8.1 Termination. This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing only if one or more of the following
conditions occurs and the effective date of such termination shall be referred
to as the “Termination Date”:
 
(a) Mutual Consent. By mutual written consent of Seller and Buyer;
 
(b) Closing Date. By Seller or Buyer if the Closing shall not have occurred on
or before the 45th (forty-fifth) day following the vote by Buyer’s shareholders
approving this Agreement and the related transactions as set forth in Section
5.7, unless an extension thereto is mutually agreed to in writing by Buyer and
Seller;
 
(c) Seller Misrepresentation or Breach. By Buyer, if there has been a material
breach by Seller of any of its representations, warranties, covenants,
obligations or agreements set forth in this Agreement; provided, however, that
Buyer shall be required to provide Seller with written notice of such breach and
Seller shall have thirty (30) days from receipt thereof to cure such breach;
 
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(d) Buyer Misrepresentation or Breach. By Seller, if there has been a material
breach by Buyer of any of its representations, warranties, covenants,
obligations or agreements set forth in this Agreement; provided, however, that
Seller shall be required to provide Buyer with written notice of such breach and
Buyer shall have thirty (30) days from receipt thereof to cure such breach;
 
(e) Court Order. By Seller or Buyer, after giving written notice, if
consummation of the transactions contemplated hereby shall violate any non
appealable final order, decree or judgment of any court or Governmental
Authority having competent jurisdiction;
 
(f) Buyer’s Conditions. By Buyer, if the Closing shall not have occurred or has
been delayed because any condition precedent to Buyer’s obligation to effect the
Closing as set forth in Section 6.1 is not timely satisfied, or shall have
become incapable of fulfillment, and such condition is not waived, if waivable,
by Buyer on or prior to the Termination Date, unless such failure of a condition
results primarily from Buyer’s breach of a representation, warranty or covenant
hereunder; and
 
(g) Seller’s Conditions. By Seller, if the Closing shall not have occurred or
has been delayed because any condition precedent to Seller’s obligation to
effect the Closing as set forth in Section 6.2 is not satisfied, or shall have
become incapable of fulfillment, and such condition is not waived, if waivable,
by Seller on or prior to the Termination Date unless such failure of a condition
results primarily from Seller’s breach of a representation, warranty or covenant
hereunder.
 
8.2 Effect of Termination. 
 
(a) Obligations Upon Termination; No Waiver. If this Agreement is terminated
pursuant to Section 8.1, written notice thereof shall forthwith be given to the
other Party and this Agreement shall thereafter become void and have no further
force and effect and all further obligations of Seller and Buyer under this
Agreement shall terminate without further liability of Seller or Buyer, except
that (a) Buyer shall return all documents, work papers and other material
relating to Seller, the Company, the Company’s business and the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to Seller; (b) the provisions of Section 5.3, this Section 8.2 and Article IX
shall survive such termination; (c) such termination shall not constitute a
waiver by any party of any claim it may have for actual damages caused by reason
of, or relieve any party from liability for, any breach of this Agreement prior
to termination under Section 8.1.
 
(b) Payment Upon Certain Termination. On the date of the execution of this
Agreement, Buyer shall initiate a wire transfer and deposit the amount of One
Million Five Hundred Thousand US Dollars (USD 1,500,000) in the third party
escrow account described in Exhibit A (the “Deposit”) as a deposit to cover the
failure of the satisfaction of the condition precedent in Section 6.1(m). If
Buyer’s shareholders do not approve the transactions described herein as set
forth in Section 3.2(a)(i), then no later than twenty four (24) hours
thereafter, Buyer and Seller shall execute and deliver to the Escrow Agent a
written statement instructing the Escrow Agent to release to Seller the Deposit,
without condition. If the Closing does not occur for any reason other than the
failure of the condition precedent in Section 6.1(m), then no later than twenty
four (24) hours thereafter, Buyer and Seller shall execute and deliver to the
Escrow Agent a written statement instructing the Escrow Agent to release to
Buyer the Deposit, without condition, and the parties shall have any other
remedies provided hereunder or at law. If the Closing occurs, the Deposit shall
be applied to the Reserved Amount as set forth in Section 2.2(c) above.
 
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ARTICLE IX
 
MISCELLANEOUS
 
9.1 Disclosure Schedule Supplements and Data Room Additions. From time to time
prior to the Closing, Seller may supplement or amend the Disclosure Schedule
and/or add items to the Data Room with respect to any matter (i) which may arise
hereafter and which, if existing or occurring at or prior to the date hereof,
would have been required to be set forth or described in the Disclosure Schedule
or (ii) which makes it necessary to correct or update any information in the
Disclosure Schedule or in any representation and warranty of Seller which has
been rendered inaccurate thereby. To the extent Seller makes any such
supplements or amendments to the Disclosure Schedule and/or additions to the
Data Room after the date hereof and prior to the Closing, the Disclosure
Schedule and/or Data Room (as applicable) and the related representations and
warranties shall be deemed modified as of the Closing to the extent set forth in
such supplements or amendments, provided, however, that any such supplement,
amendment or addition that represents a Materially Adverse Effect shall be
handled as a casualty in accordance with the terms of Section 4.1(s) above.
 
9.2 Governing Law; Dispute Resolution. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of
California, without regard to its conflicts of law doctrine. The prevailing
party in any dispute shall be entitled to all expenses, including attorneys’
fees and costs, incurred in connection with any dispute hereunder. The parties
hereby irrevocably submit and agree to the exclusive jurisdiction and venue of
the courts of the State of California located in the County of Kern or the
federal courts located in the County of Fresno. The provisions of this Section
9.2 may be enforced by any court of competent jurisdiction.
 
9.3 Schedules, Addenda and Exhibits. Subject to Section 9.1, all schedules,
addenda and exhibits attached to this Agreement, including without limitation
the Disclosure Schedule, are incorporated herein and shall be part of this
Agreement for all purposes.
 
9.4 Amendments. This Agreement may be amended only by a writing executed by all
of the parties hereto.
 
9.5 Entire Agreement. The Transaction Documents expressly provided for herein
set forth the entire understanding of the parties hereto with respect to the
subject matter hereof, including the Confidentiality and Non Disclosure
Agreement, dated as of June 29, 2007, by and between Buyer and Seller, and
supersede all prior contracts, agreements, arrangements, communications,
discussions, representations and warranties, whether oral or written, between
the parties.
 
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9.6 Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of each Party hereto, but, no rights, obligations or
liabilities hereunder shall be assignable by any Party without the prior written
consent of the other Party, and any purported assignment in violation of this
Section 9.6 shall be null and void ab initio; provided, however, Buyer may
transfer or otherwise assign its rights to receive indemnification under this
Agreement for the benefit of any direct or indirect lender or holder of debt
securities that has as a source of security having financed or refinanced all or
part of the transactions contemplated hereby; provided, further, prior to the
Closing, Buyer may elect (upon written notice sent to Seller) to assign its
rights and obligations under this Agreement to any Affiliate of Buyer (including
a subsidiary formed for such purpose) and to cause such Affiliate to perform the
obligations of Buyer under this Agreement; provided, further, that no such
assignment shall otherwise vary or diminish any of Buyer’s obligations under
this Agreement to the extent its Affiliate fails to duly perform the obligations
of Buyer under this Agreement; provided, finally, that Seller may reorganize the
form in which it conducts its business from a corporate form to another form
such as a limited liability company form, such as, for example, by a merger of
the Seller into a limited liability company owned by Seller’s shareholder as
long as such reorganization does not result in the surviving entity being less
capitalized than the Seller prior to such reorganization or otherwise have an
adverse effect upon the Company or the ability of Seller or Company to perform
their obligations hereunder and under the Transaction Documents.
 
9.7 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which together will
constitute one and the same instrument.
 
9.8 Waivers. Except as otherwise provided herein, either Party may waive in
writing compliance by the other party hereto with any of the terms, covenants or
conditions contained in this Agreement (except such as may be imposed by law).
Any waiver by any Party of any violation of, breach of, or default under, any
provision of this Agreement, by the other party shall not be construed as, or
constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any other provision of this Agreement.
 
9.9 Third Parties. Nothing expressed or implied in this Agreement is intended,
or shall be construed, to confer upon or give any Person other than Buyer and
Seller any rights or remedies under or by reason of this Agreement.
 
9.10 Headings. The headings in this Agreement are solely for convenience of
reference and shall not be given any effect in the construction or
interpretation of this Agreement.
 
9.11 Gender and Number; Section and Article References. The masculine, feminine
or neuter gender and the singular or plural number shall each be deemed to
include the others whenever the context so indicates. References to “$” or
“dollars” shall be to United States dollars. All references to Articles or
Sections refer to Articles or Sections of this Agreement, unless otherwise
stated.
 
9.12 Interpretation. No Party, nor its counsel, shall be deemed the drafter of
this Agreement for purposes of construing the provisions of this Agreement, and
all provisions of this Agreement shall be construed in accordance with their
fair meaning, and not strictly for or against any Party.
 
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9.13 Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (a)
when received if personally delivered, (b) when received if sent by registered
or certified mail, return receipt requested, postage prepaid, (c) within twelve
(12) hours after being sent by telecopy, with confirmed answer back and the
original having been sent by priority delivery by established overnight courier
within twelve (12) hours of such telecopy, or (d) within 1 business day of being
sent by priority delivery by established overnight courier, to the parties at
their respective addresses set forth below.
 
To Seller:
Casey Co.
 
180 E. Ocean Boulevard, Suite 1010
 
Long Beach, California 90802
 
Attention: Steven G. Christovich
   
With a copy to:
Jones Day
 
555 South Flower Street, 50th Floor
 
Los Angeles, CA 90071
 
Attention: James F. Childs, Jr., Esq.
   
To Buyer:
NTR Acquisition Co.
 
100 Mill Plain Road, Suite 320
 
Danbury, CT 06811
 
Attention: General Counsel
   
With a copy to:
NTR Partners, LLC
 
420 Lexington Ave., Suite 300
 
New York, New York 10170
 
Attention: President

 
Any Party by written notice to the other Party in accordance with this Section
9.13 may change the address or the Persons to whom notices or copies thereof
shall be directed.
 
[Signature page is next page]
 
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
 

 
NTR ACQUISITION CO.
     
By:
/s/ Mario E. Rodriguez  
 
Name:  Mario E. Rodriguez  
 
Title:  Chief Executive Officer      
CASEY CO.
     
By:
/s/ Larry D. Delpit, Sr.  
 
Name:  Larry D. Delpit, Sr.  
 
Title:  President

 
[Signature page to Stock Purchase Agreement]
 
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