Ex-10.2(a)



 







Exhibit 10.2(a)




EXECUTION COPY




 





PURCHASE AND SALE AGREEMENT




 





By and among




PRIDE COMPANIES, L.P.

(Pride Company)




PRIDE REFINING, INC.

(Pride Refining)




PRIDE MARKETING LLC

(Pride Marketing)




and




DELEK US HOLDINGS, INC.

(Buyer)




June 21, 2006




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE I
	 	DEFINITIONS AND INTERPRETATION
	 	 	1	 
	1.1
	 	Certain Defined Terms
	 	 	1	 
	1.2
	 	References, Gender, Number
	 	 	1	 
	1.3
	 	Interpretation
	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II
	 	PURCHASE AND SALE
	 	 	3	 
	2.1
	 	Included Assets
	 	 	3	 
	2.2
	 	Inventory
	 	 	4	 
	2.3
	 	Retained Inventory
	 	 	5	 
	2.4
	 	Excluded Assets
	 	 	5	 
	2.5
	 	One-Call
	 	 	5	 
	2.6
	 	Magellan Adjustment
	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III
	 	PURCHASE PRICE
	 	 	6	 
	3.1
	 	Price
	 	 	6	 
	3.2
	 	Earnest Money
	 	 	6	 
	3.3
	 	Closing Date Payment
	 	 	6	 
	3.4
	 	Inventory Payment
	 	 	6	 
	3.5
	 	Closing Date Payment Adjustments
	 	 	6	 
	3.6
	 	Assumption of Liabilities
	 	 	7	 
	3.7
	 	Excluded Liabilities
	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV
	 	CLOSING
	 	 	9	 
	4.1
	 	Closing
	 	 	9	 
	4.2
	 	Possession and Control
	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V
	 	CLOSING CONDITIONS AND DELIVERABLES
	 	 	9	 
	5.1
	 	Conditions to Closing
	 	 	9	 
	5.2
	 	Sellers’ Deliveries
	 	 	10	 
	5.3
	 	Buyer’s Deliveries
	 	 	13	 
	5.4
	 	Affiliates
	 	 	15	 
	5.5
	 	Termination
	 	 	15	 
	5.6
	 	Entities to Receive Assets
	 	 	16	 
	5.7
	 	Magellan Deposit
	 	 	16	 
	5.8
	 	Consents
	 	 	16	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE VI
	 	ALLOCATION OF PROCEEDS AND PURCHASE PRICE
	 	 	16	 
	6.1
	 	Proceeds from Operations
	 	 	16	 
	6.2
	 	Purchase Price Allocation
	 	 	17	 
	6.3
	 	Lease and Rental Payments
	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII
	 	UTILITIES
	 	 	17	 
	7.1
	 	Utilities
	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII
	 	TAXES AND RELATED MATTERS
	 	 	17	 
	8.1
	 	Cooperation
	 	 	17	 
	8.2
	 	Property Taxes
	 	 	18	 
	8.3
	 	Income Taxes
	 	 	18	 
	8.4
	 	Transfer Taxes
	 	 	18	 
	8.5
	 	Confidential Tax Information
	 	 	18	 
	8.6
	 	Deferred Like-Kind Exchange Cooperation
	 	 	18	 
	8.7
	 	Other Taxes
	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX
	 	SELLERS’ REPRESENTATIONS
	 	 	19	 
	9.1
	 	No Brokers
	 	 	19	 
	9.2
	 	Organization
	 	 	19	 
	9.3
	 	Power and Authority
	 	 	19	 
	9.4
	 	Authorization and Enforceability
	 	 	19	 
	9.5
	 	Investment Company Act; PUHCA
	 	 	20	 
	9.6
	 	Violations of Law
	 	 	20	 
	9.7
	 	Taxes
	 	 	20	 
	9.8
	 	Permits
	 	 	20	 
	9.9
	 	Necessary Assets
	 	 	21	 
	9.10
	 	Legal Proceedings
	 	 	21	 
	9.11
	 	Debt and Long-term Liabilities
	 	 	21	 
	9.12
	 	Consents and Preferential Purchase Rights
	 	 	21	 
	9.13
	 	No Breach, Conflict
	 	 	21	 
	9.14
	 	Financial Statements
	 	 	22	 
	9.15
	 	Title
	 	 	22	 
	9.16
	 	Real Properties
	 	 	22	 
	9.17
	 	Commitments
	 	 	23	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	9.18
	 	Environmental Matters
	 	 	23	 
	9.19
	 	Pride Products
	 	 	25	 
	9.20
	 	Magellan Contract
	 	 	25	 
	9.21
	 	Magellan Lease
	 	 	26	 
	9.22
	 	Employee Benefit Plans
	 	 	27	 
	9.23
	 	Labor Relations
	 	 	27	 
	9.24
	 	Bankruptcy
	 	 	27	 
	9.25
	 	Purchased Intellectual Property
	 	 	27	 
	9.26
	 	Pipelines
	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X
	 	BUYER'S REPRESENTATIONS
	 	 	28	 
	10.1
	 	Independent Investigation
	 	 	28	 
	10.2
	 	Investment
	 	 	28	 
	10.3
	 	Evaluation by Buyer
	 	 	29	 
	10.4
	 	Transfer Restrictions
	 	 	29	 
	10.5
	 	Compliance with Laws
	 	 	29	 
	10.6
	 	Organization
	 	 	29	 
	10.7
	 	No Brokers
	 	 	29	 
	10.8
	 	Power and Authority
	 	 	29	 
	10.9
	 	Authorization and Enforceability
	 	 	29	 
	10.10
	 	Investment Company Act and PUHCA
	 	 	29	 
	10.11
	 	Consents
	 	 	29	 
	10.12
	 	No Breach, Conflict
	 	 	30	 
	10.13
	 	No Knowledge of Misrepresentations
	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI
	 	PRE-CLOSING COVENANTS OF SELLERS AND BUYER
	 	 	30	 
	11.1
	 	General
	 	 	30	 
	11.2
	 	Operation of the Business
	 	 	30	 
	11.3
	 	Preservation of the Business and Purchased Property
	 	 	30	 
	11.4
	 	Notice of Developments
	 	 	30	 
	11.5
	 	Employees
	 	 	31	 
	11.6
	 	Financial Statements
	 	 	31	 
	11.7
	 	Application for Environmental Insurance
	 	 	31	 
	11.8
	 	Governmental Filings
	 	 	32	 






-iii-




 









 








TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE XII
	 	PRE-ACQUISITION REVIEW
	 	 	32	 
	12.1
	 	Access to Information
	 	 	32	 
	12.2
	 	Information is Confidential
	 	 	33	 
	12.3
	 	Indemnity
	 	 	33	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIII
	 	TITLE AND SURVEY
	 	 	33	 
	13.1
	 	Conveyances
	 	 	33	 
	13.2
	 	Title Insurance
	 	 	33	 
	13.3
	 	Survey
	 	 	33	 
	13.4
	 	Title Examination
	 	 	34	 
	13.5
	 	Owner’s Policy
	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIV
	 	SELLERS’ INDEMNIFICATION OBLIGATIONS
	 	 	34	 
	14.1
	 	Sellers’ Indemnification Obligations
	 	 	34	 
	14.2
	 	Limitations on Sellers’ Indemnity Obligations
	 	 	35	 
	14.3
	 	No Punitive Damages
	 	 	36	 
	14.4
	 	Survival
	 	 	36	 
	14.5
	 	No Transfer of Indemnities
	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XV
	 	BUYER’S INDEMNIFICATION OBLIGATIONS
	 	 	37	 
	15.1
	 	Buyer’s Indemnification Obligations
	 	 	37	 
	15.2
	 	Punitive Damages
	 	 	37	 
	15.3
	 	Survival
	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVI
	 	CLAIMS PROCEDURE
	 	 	38	 
	16.1
	 	Claim Notice
	 	 	38	 
	16.2
	 	Defense of Claim
	 	 	38	 
	16.3
	 	Cooperation
	 	 	39	 
	16.4
	 	Third Party Claim
	 	 	39	 
	16.5
	 	Presence at Conferences
	 	 	39	 
	16.6
	 	Subrogation
	 	 	39	 
	16.7
	 	Exclusive Remedy
	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVII
	 	INCIDENTAL CONTAMINATION AND NORM
	 	 	39	 
	17.1
	 	Incidental Contamination and NORM
	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVIII
	 	TARIFFS AND ALLOCATION OF CARRIER OBLIGATIONS
	 	 	40	 
	18.1
	 	Adoption of Tariffs
	 	 	40	 






-iv-





 









 








TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	18.2
	 	Third Party Inventory
	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIX
	 	POST-CLOSING COVENANTS OF SELLERS AND BUYER
	 	 	40	 
	19.1
	 	Stored Hazardous Materials
	 	 	40	 
	19.2
	 	Hazardous Waste Permit Modification
	 	 	41	 
	19.3
	 	Intellectual Property
	 	 	41	 
	19.4
	 	License of Trademarks
	 	 	41	 
	19.5
	 	Environmental Insurance
	 	 	42	 
	19.6
	 	Compliance with Laws and Transfer Restrictions
	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XX
	 	MISCELLANEOUS
	 	 	42	 
	20.1
	 	Cooperation
	 	 	42	 
	20.2
	 	Costs and Expenses
	 	 	43	 
	20.3
	 	Risk of Loss
	 	 	43	 
	20.4
	 	No Joint Venture, Partnership or Agency
	 	 	43	 
	20.5
	 	Books and Records
	 	 	43	 
	20.6
	 	Publicity
	 	 	43	 
	20.7
	 	Recording and Filing
	 	 	44	 
	20.8
	 	Confidentiality
	 	 	44	 
	20.9
	 	Notices
	 	 	44	 
	20.10
	 	Time of Performance
	 	 	45	 
	20.11
	 	Entire Agreement and Amendment
	 	 	45	 
	20.12
	 	Assignment
	 	 	45	 
	20.13
	 	Applicable Law
	 	 	45	 
	20.14
	 	Dispute Resolution
	 	 	45	 
	20.15
	 	No Third Person Beneficiaries
	 	 	47	 
	20.16
	 	Counterparts
	 	 	47	 






-v-




 









 








     The Annexes, Schedules and Exhibits listed below are attached to this Agreement and by this
reference are fully incorporated herein:



ANNEXES




	 	 	 
	Annex A

	 	Definitions






SCHEDULES




	 	 	 
	Schedule 2.1(c)

	 	Pipelines
	Schedule 2.1(d)

	 	Tanks
	Schedule 2.1(e)

	 	Refinery Equipment
	Schedule 2.1(f)

	 	Real Property
	Schedule 2.1(g)

	 	Rights-of-Way
	Schedule 2.1(j)

	 	Assigned Contracts
	Schedule 2.1(k)

	 	Equipment
	Schedule 2.1(n)

	 	Design Mark(s)
	Schedule 2.4

	 	Excluded Assets
	Schedule 3.6

	 	Assumed Liabilities
	Schedule 5.1(c)

	 	Closing Consents and Waivers
	Schedule 5.2(y)

	 	Rolling Stock
	Schedule 6.2

	 	Purchase Price Allocation
	Schedule 9.6

	 	Violations of Law
	Schedule 9.8

	 	Permits
	Schedule 9.10

	 	Legal Proceedings
	Schedule 9.12(a)

	 	Sellers Consents and Waivers
	Schedule 9.14

	 	Financial Statements
	Schedule 9.16(a)

	 	Leased Real Property
	Schedule 9.17

	 	Commitments
	Schedule 9.18

	 	Environmental Matters
	Schedule 9.18(m)

	 	Refinery Releases
	Schedule 9.19(e)

	 	Pride Products Assets
	Schedule 9.25

	 	Intellectual Property
	Schedule 10.11

	 	Buyer Consents and Waivers
	Schedule 19.1

	 	Stored Hazardous Materials






-vi-




 









 








EXHIBITS




	 	 	 
	Exhibit 2.2(a)

	 	Inventory Procedures
	Exhibit 3.2

	 	Deposit Escrow Agreement
	Exhibit 5.2(b)

	 	Conveyance of Rights of Way
	Exhibit 5.2(c)

	 	Assignments of Partnership Interest
	Exhibit 5.2(d)

	 	Bill of Sale
	Exhibit 5.2(e)

	 	Assignment and Assumption of Contracts
	Exhibit 5.2(f)

	 	Refinery Option
	Exhibit 5.2(g)

	 	Memorandum of Option
	Exhibit 5.2(h)

	 	Guaranty — Brad Stephens
	Exhibit 5.2(i)

	 	Guaranty — Wayne Malone
	Exhibit 5.2(j)

	 	Guaranty — David Caddell
	Exhibit 5.2(k)

	 	Guaranty — George Percival
	Exhibit 5.2(l)

	 	Domain Name Assignment Agreement and Release
	Exhibit 5.2(n)

	 	Non-Competition Agreement — Stephens/Malone
	Exhibit 5.2(o)

	 	Non-Solicitation Agreement — Percival/Caddell
	Exhibit 5.2(p)

	 	Transition Services Agreement
	Exhibit 5.2(q)

	 	Opinion of Counsel
	Exhibit 5.2(s)

	 	Building Lease Agreement
	Exhibit 5.2(t)

	 	Pipeline Easement Agreement
	Exhibit 5.2(u)

	 	Refinery Access Agreement
	Exhibit 5.2(v)

	 	Easement Agreement
	Exhibit 5.2(w)

	 	Environmental Services Agreement
	Exhibit 5.2(x)

	 	Trademark Assignment
	Exhibit 13.1

	 	Special Warranty Deed(s)
	Exhibit 19.4(a)

	 	Trademark License Agreements






-vii-




 









 








PURCHASE AND SALE AGREEMENT




     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), is entered into effective the
21st day of June 2006, by and among Pride Companies, L.P., a Delaware limited
partnership (“Pride Company”), Pride Refining, Inc., a Texas corporation (“Pride Refining”), Pride
Marketing LLC, a Texas limited liability company (“Pride Marketing” and collectively with Pride
Company and Pride Refining, “Sellers”), and Delek US Holdings, Inc., a Delaware corporation
(“Buyer”). Sellers and Buyer are hereinafter sometimes referred to individually as a “Party” and
collectively as the “Parties.”



RECITALS:




     WHEREAS, Sellers are the owners of an idle oil refinery located near the City of Abilene,
Texas;



     WHEREAS, Sellers are the owners of certain refined petroleum product terminals located in the
cities of Abilene, Texas and San Angelo, Texas;



     WHEREAS, Sellers are the owners of certain pipelines that interconnect with such product
terminals;



     WHEREAS, Pride Company and Pride Marketing are the owners of all of the issued and outstanding
partnership interests of Pride Products, a Texas general partnership (“Pride Products”);



     WHEREAS, Sellers and Pride Products are in the business of marketing, transporting and
exchanging refined petroleum products (the “Business”); and



     WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, the
Purchased Property (as hereinafter defined) upon the terms and subject to the conditions set forth
in this Agreement.



     NOW, THEREFORE, for and in consideration of the mutual covenants, agreements, obligations and
benefits made and contained in this Agreement, the Parties agree as follows:



ARTICLE I

DEFINITIONS AND INTERPRETATION




     1.1 Certain Defined Terms. Unless the context otherwise requires, the terms defined in
Annex A shall have, when used in this Agreement, the respective meanings specified in
Annex A, with each such definition to be equally applicable both to the singular and the
plural forms of the term so defined.



     1.2 References, Gender, Number. All references in this Agreement to an “Annex,” “Article,”
“Section,” “subsection,” “Exhibit” or “Schedule” shall be to an Annex, Article, Section,
subsection, Exhibit or Schedule of or to this Agreement, unless the context otherwise requires.
Unless the context otherwise requires, the words “this Agreement,” “hereof,” “hereunder,” “herein,”
“hereby” or words of similar import shall refer to this Agreement as a whole (including Schedules)
and not to a particular Article, Section, subsection, clause or other subdivision hereof. Whenever
the context requires, the words used herein shall include the masculine, feminine and neuter
gender, and the singular and the plural.



Purchase and Sale Agreement

Page 1 of 47




 









 








     1.3 Interpretation. It is expressly agreed that this Agreement shall not be construed against
any Party, and no consideration shall be given or presumption made, on the basis of which Party
drafted this Agreement (or any particular provision hereof) or which Party supplied the form of
agreement. Each Party agrees that this Agreement has been purposefully drawn and correctly
reflects its understanding of the transactions that this Agreement contemplates. In construing
this Agreement:



          (a) examples shall not be construed to limit, expressly or by implication, the matter they
illustrate;



          (b) the word “includes” and its derivatives mean “includes, but is not limited to” and
corresponding derivative expressions;



          (c) a defined term has its defined meaning throughout this Agreement and each Annex, Exhibit
and Schedule to this Agreement, regardless of whether it appears before or after the place where it
is defined;



          (d) if a term is defined as one part of speech (such as a noun), it shall have a corresponding
meaning when used as another part of speech (such as a verb);



          (e) each Exhibit and Schedule to this Agreement is incorporated and made a part of this
Agreement, but if there is any conflict or inconsistency between the main body of this Agreement
(including Annex A which shall be considered part of the main body of this Agreement) and
any Exhibit or Schedule, the provisions of the main body of this Agreement shall prevail;



          (f) the term “cost” includes expense and the term “expense” includes cost;



          (g) the headings and titles herein are for convenience only and shall have no significance in
the interpretation hereof;



          (h) any reference to a statute, regulation or law shall include any amendment thereof or any
successor thereto and any rules and regulations promulgated thereunder;



          (i) currency amounts referenced herein, unless otherwise specified, are in U.S. Dollars;



          (j) whenever this Agreement refers to a number of days, such number shall refer to calendar
days, unless Business Days are specified;



          (k) the word “or” will have the inclusive meaning represented by the phrase “and/or”;



          (l) the phrase “and/or” when used in a conjunctive phrase, shall mean any one or more of the
Persons specified in or the existence or occurrence of any one or more of the events, conditions or
circumstances set forth in that phrase; provided, however, that when used to describe the
obligation of one or more Persons to do any act, it shall mean that the obligation is the
obligation of each of the Persons but that it may be satisfied by performance by any one or more of
them; and



          (m) “shall” and “will” have equal force and effect.



Purchase and Sale Agreement

Page 2 of 47





 









 








ARTICLE II

PURCHASE AND SALE 




     2.1 Included Assets. Subject to the terms and conditions set forth in this Agreement, Sellers
each agree to sell and Buyer agrees to purchase all of Sellers’ right, title and interest in and to
the following assets of Sellers, free and clear of all Liens other than Permitted Encumbrances (the
“Purchased Property”), provided, however, that notwithstanding anything in this Agreement to the
contrary, the Purchased Property shall not include the Excluded Assets:



          (a) All of the issued and outstanding partnership interests of Pride Products (the
“Partnership Interests”);



          (b) The two refined petroleum product terminals located in Abilene, Texas and San Angelo,
Texas (the “Terminals”);



          (c) The pipelines described on Schedule 2.1(c) (individually a “Pipeline” and
collectively, the “Pipelines”);



          (d) The storage tanks described on Schedule 2.1(d) (individually a “Tank” and
collectively, the “Tanks”);



          (e) All equipment currently owned by Sellers that was previously used or held Primarily in the
operation of the Refinery including the equipment described on Schedule 2.1(e) (the
“Refinery Equipment”);



          (f) All fee interests in real property described on Schedule 2.1(f) (the “Real
Property”) together with all of the right, title and interest of Sellers in and to all easements,
servitudes, rights-of-way, privileges, licenses (written or oral) and appurtenances relating to the
Real Property;



          (g) All rights-of-way appurtenant to or associated with the Pipelines or the Terminals as
further described on Schedule 2.1(g) (the “Rights-of-Way”);



          (h) All Permits described on Schedule 9.8 to the extent such Permits can be
transferred to Buyer;



          (i) All buildings, structures, fixtures and other improvements currently located on each of
the Real Properties, Rights-of-Way or the Refinery Real Property (collectively, the “Facilities”);



          (j) All of Sellers’ right, title and interest in and to the Contracts described on
Schedule 2.1(j) (the “Assigned Contracts”), which arise or accrue under such Assigned
Contracts, or are attributable to the period, from and after the Closing Date, except to the extent
related to Excluded Liabilities;



          (k) Any and all pipe, tanks, loading racks, pumps, motors, meters, valves, fittings,
interconnect equipment, miscellaneous equipment, and spare parts that are related Primarily to the
Pipelines, Tanks, Terminals and the Refinery including the personal property described on
Schedule 2.1(k) (collectively, the “Equipment”);



          (l) The Purchased Inventory;



Purchase and Sale Agreement

Page 3 of 47






 









 








          (m) The Books and Records;



          (n) The names “Pride,” “Pride Companies,” “Pride Refining,” “Pride Marketing” and any
variations thereof, the marks “Pride,” “Pride Companies,” “Pride Refining,” “Pride Marketing” and
any variations thereof, the design mark(s) shown on Schedule 2.1(n) and any other
trademarks registered by any of the Sellers that are used by Sellers Primarily in the Business
(collectively, the “Purchased Trademarks”), and any and all goodwill associated with the Business
symbolized by the Purchased Trademarks, and any and all rights of Sellers, including common law
rights, with respect to the Purchased Trademarks (collectively, the “Purchased Trademark
Intellectual Property”);



          (o) All of Sellers’ brochures, publications or other promotional items or materials Primarily
related to the Business (the “Marketing Materials”);



          (p) Sellers’ internet domain name(s) (the “Domain Name”) and internet domain name
registration(s) for entities using the Business or related to the Purchased Trademarks (the “Domain
Name Registration(s)”) and related authorization codes (together with the Domain Name(s), the
“Domain Name Intellectual Property”);



          (q) Sellers’ internet website(s) located at www.prideref.com and any derivations thereof
(collectively, the “Website”) and all intellectual property rights that may exist or arise in
connection with the Website, including all Underlying Technology (collectively, the “Website
Intellectual Property” and together with the Purchased Trademark Intellectual Property and the
Domain Name Intellectual Property, the “Purchased Intellectual Property”);



          (r) All Claims, warranties, reimbursements, indemnities, and causes of action with respect to
(i) the Purchased Property relating to the condition thereof from and after the Closing Date and
(ii) the Assumed Liabilities;



          (s) Prepaid deposits and expenses paid to Sellers by Third Person customers;



          (t) Payments, if any, by Third Person customers for products ordered from Sellers by purchase
order(s) issued prior to the Closing Date and the products therefor are included in the Purchased
Inventory and are shipped on or after the Closing Date;



          (u) Payments, if any, by Third Person customers for the shipment, transportation or storage
after the Effective Time of Third Party Inventory;



          (v) To the extent not otherwise enumerated in this Section 2.1, Sellers’ and Pride
Products’ tangible and intangible assets that are related Primarily to the operation of the
Business; and



          (w) Any goodwill related to the Business.



     2.2 Inventory.



          (a) Inventory Procedures. The Inventory will be measured as of the Effective Time and
calculated pursuant to the Inventory Procedures attached hereto as Exhibit 2.2(a) (the
“Inventory Procedures”).



          (b) Inventory Valuation. The Inventory will be valued and the Purchased Inventory will be
paid for pursuant to the Inventory Procedures.



Purchase and Sale Agreement

Page 4 of 47






 









 








          (c) Customer Products. At the Effective Time, custody of all Third Party Inventory will be
transferred to Buyer, and Buyer shall become responsible to each such shipper or customer for the
Third Party Inventory in Buyer’s custody. Sellers shall provide a schedule, at or prior to
Closing, of all such Third Party Inventory.



     2.3 Retained Inventory. In the event the aggregate value of Sellers’ Inventory as of the
Effective Time exceeds $2,000,000 (as determined in accordance with Section 2.2), then
ownership of such Inventory in excess of $2,000,000 (the “Retained Inventory”) shall be retained by
Sellers; provided, however, the Inventory (including the Purchased Inventory and the Retained
Inventory) shall not exceed in volume an amount equal to Sellers normal inventory levels based on
current practices. The Retained Inventory shall be treated as an Excluded Asset. Buyer shall permit
Sellers to store the Retained Inventory at the location(s) where the Retained Inventory is located
as of the Effective Time until such time as the Retained Inventory is sold, transferred or
otherwise disposed of by Sellers. Sellers agree to use all commercially reasonable efforts to
promptly sell, transfer and otherwise dispose of such Retained Inventory after the Effective Time
in a manner and on terms consistent with past practices. To the extent Retained Inventory exists as
of the Effective Time, the Parties agree that any volumes of Inventory sold to Third Persons after
the Effective Time shall be deemed to be sales of Retained Inventory for the account of Sellers.
Sellers shall reimburse Buyer for all reasonable direct costs incurred by Buyer or its Affiliates
in connection with storage or transportation of the Retained Inventory from and after the Effective
Time, and any amount payable by Sellers to Buyer pursuant to this Section 2.3 shall be paid
by Sellers by wire transfer of immediately available funds within three (3) days of Buyer’s request
therefor. Sellers shall indemnify, defend and hold the Buyer Indemnitees harmless from all Claims
and Damages to the extent arising from or related to the Retained Inventory stored at, on or in the
Purchased Property from and after the Effective Time.



     2.4 Excluded Assets. The Purchased Property shall not include any assets of Sellers described
on Schedule 2.4 (the “Excluded Assets”). The Excluded Assets shall include the real
property on which the Refinery was located and related tract all as described on the legal
description attached to Schedule 2.4 (the “Refinery Real Property”). Buyer agrees to grant
Pride Company and its representatives reasonable access to the Real Property and the Facilities
from and after the Closing Date for an appropriate period of time not to exceed thirty (30) days to
remove such Excluded Assets from the Purchased Property during normal business hours. Pride Company
agrees that it will consult with Buyer in advance of taking any such actions following the Closing
Date with a view towards establishing a mutually agreeable plan for such review and removal so that
these actions will not unreasonably interfere with the normal operations of Buyer.



     2.5 One-Call. Sellers will promptly, but in no event later than ninety (90) days after the
Closing Date, contact every appropriate one-call agency in the vicinity of any of the Purchased
Property and have the contact information for one-calls changed from Sellers’ name(s) to Buyer’s
name. Sellers shall send revised maps to the one-call agencies where appropriate or required.
Buyer agrees to use its Reasonable Efforts to cooperate with Sellers in connection with Sellers’
efforts pursuant to this Section 2.5 with respect to one-call matters. Sellers shall send
Buyer a letter, to the Notice address contained in Section 20.9, when all one-call
notification information has been changed from Sellers’ name(s) to Buyer’s name.



     2.6 Magellan Adjustment. Notwithstanding anything in this Agreement to the contrary, Pride
Company shall be entitled to receive and be obligated to pay the settlement amounts, if any,
determined for the months prior to and including the month containing the Closing Date in
accordance with the terms and conditions set forth in Section 6.1(D) of the Magellan Contract.
After the Closing, Buyer shall not amend, modify or waive the Magellan Contract in a manner that
adversely affects the



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operation of, or the rights and obligations established for, Pride Company pursuant to Section
6.1(D) of the Magellan Contract.




ARTICLE III

PURCHASE PRICE 




     3.1 Price. The purchase price to be paid by Buyer to Sellers in consideration for the
Purchased Property (excluding Purchased Inventory) shall be FIFTY FOUR MILLION FOUR HUNDRED
THOUSAND DOLLARS ($54,400,000) (the “Purchase Price”), subject to the provisions below in this
ARTICLE III.



     3.2 Earnest Money. Within twenty-four (24) hours of the execution hereof, Buyer shall deliver
into escrow an amount equal to THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) as a
deposit (the “Deposit Escrow”) to be held by the Escrow Agent pursuant to the terms and conditions
of the Deposit Escrow Agreement, which shall be executed and delivered by Sellers, Buyer and the
Escrow Agent contemporaneously with the payment of the Deposit Escrow to the Escrow Agent
substantially in the form attached hereto as Exhibit 3.2. The Deposit Escrow shall be
delivered by the Escrow Agent as set forth in the Deposit Escrow Agreement and Section 5.5.
In the event Buyer fails to deliver the Deposit Escrow within said twenty-four (24) hours, Sellers
shall have the right, in their sole discretion, to terminate this Agreement on or before 5:00 pm
(CDT) June 22, 2006 by providing written notice thereof to Buyer. In the event Sellers terminate
this Agreement pursuant to the preceding sentence then, the Parties will not have any further
liabilities to each other pursuant to the terms hereof .



     3.3 Closing Date Payment. At the Closing and against delivery of the items specified in
Section 5.2, Buyer shall pay an amount equal to the Purchase Price, as adjusted pursuant to
Section 3.5 (the “Closing Date Payment”), all of which shall be payable to Pride Company on
behalf of all the Sellers at the Closing by wire transfer in immediately available funds to an
account to be designated by Pride Company. At the Closing, the Deposit Escrow shall be delivered
pursuant to the terms of the Deposit Escrow Agreement to Pride Company and the amount of the
Deposit Escrow shall be applied toward payment by Buyer of the Closing Date Payment pursuant to
this Section 3.3.



     3.4 Inventory Payment. The aggregate purchase price paid by Buyer in consideration for the
Purchased Inventory (the “Inventory Price”) shall be determined and paid pursuant to Section
2.2.



     3.5 Closing Date Payment Adjustments. At the Closing, the amount of the Purchase Price
payable by Buyer pursuant to Section 3.3 shall be adjusted by the following:



          (a) increased or reduced, as applicable, by an amount, if any, equal to the pro-ration of
lease and rental payments pursuant to Section 6.3;



          (b) increased or reduced, as applicable, by an amount, if any, equal to the pro-ration of
utilities and other charges pursuant to Section 7.1;



          (c) increased or reduced, as applicable, by an amount, if any, equal to the portion of
pro-rated property Taxes pursuant to Section 8.2; and



          (d) increased or reduced, as applicable, by any other amounts provided pursuant to this
Agreement or as agreed to in writing by the Parties.



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The Parties shall prepare a closing statement detailing the items which are to be added to or
subtracted from the Purchase Price to determine the amount of the Closing Date Payment. Buyer and
Sellers shall agree to the figures on the closing statement.




     3.6 Assumption of Liabilities.



          (a) As of the Closing Date, Buyer shall, without any further action on the part of Buyer or
Sellers, assume and agree to pay, perform and discharge when due, and, subject to ARTICLE
XVI, indemnify, defend and hold the Seller Indemnitees harmless from all Claims and Damages to
the extent arising from or related to each of the following liabilities or obligations
(collectively, the “Assumed Liabilities”), provided, that the Assumed Liabilities shall not include
the Excluded Liabilities:



          (i) Any Obligation of Sellers expressly described in Schedule 3.6;



          (ii) All Obligations of Sellers to the extent arising out of, incurred in connection with or
related to the Assigned Contracts but only such Obligations for goods or services received by or on
behalf of Buyer from and after the Effective Time or that are otherwise performable on or after the
Effective Time;



          (iii) All Obligations of Sellers to the extent arising out of, incurred in connection with or
related to the Contracts set forth in Schedule 9.19(e) in the event and to the extent such
Contracts have been transferred and assigned to Pride Products prior to the Closing but only such
Obligations for goods or services received by or on behalf of Pride Products from and after the
Effective Time or that are otherwise performable on or after the Effective Time;



          (iv) All Obligations of Sellers attributable or relating to the period from and after the
Effective Time under any Permit constituting Purchased Property;



          (v) Environmental Conditions of the Purchased Property existing as of the date hereof
(excluding Environmental Conditions related to breaches by Sellers of the representations or
warranties in Section 9.18, without regard to Section 14.2(a)) to the extent such
Environmental Conditions require Remedial Action pursuant to Environmental Laws;



          (vi) All Environmental Liabilities owed to Third Persons (excluding current and former
employees of Sellers and their Affiliates) for personal injuries or property damages to the extent
related to or arising from Releases originating at, on, under or from the Tanks, Terminals,
Pipelines or Real Property that occurred prior to the date hereof (excluding Environmental
Liabilities related to breaches by Sellers of the representations or warranties in Section
9.18, without regard to Section 14.2(a));



          (vii) all Obligations with respect to Third Party Inventory pursuant to Section 18.2;



          (viii) all Obligations in respect of prepaid deposits and expenses paid to Sellers by Third
Person customers which constitute Purchased Property; and



          (ix) all other Obligations specifically assumed by Buyer pursuant to this Agreement.



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          (b) Notwithstanding anything in this Agreement to the contrary, the Parties expressly agree
that Buyer is not assuming or otherwise becoming liable for, nor shall Buyer nor any of its
Affiliates be deemed to have assumed or become liable for, any Obligation of Sellers or their
Affiliates (including Obligations related to the Purchased Property, Business or operation of the
Refinery), whether known or unknown, asserted or unasserted, accrued or unaccrued, absolute or
contingent, liquidated or unliquidated, due or to become due, and whether contractual, statutory or
otherwise, except as expressly provided in this Section 3.6 or as otherwise expressly
provided for in this Agreement or the Related Agreements.



     3.7 Excluded Liabilities. Sellers shall retain and hereby agree, jointly and severally, to
pay, perform and discharge when due, subject to the other provisions of this Agreement, and,
subject to ARTICLE XVI, indemnify, defend and hold the Buyer Indemnitees harmless from all
Claims and Damages to the extent arising from or related to any Obligations of Sellers not
specifically assumed by Buyer herein, including the following (collectively, the “Excluded
Liabilities”):



          (a) all Obligations relating to any Excluded Assets (excluding Obligations to the extent
expressly assumed by Buyer or any of its Affiliates elsewhere in this Agreement or the Related
Agreements), including any Environmental Liabilities arising out of the ownership, operation, use
or maintenance thereof;



          (b) all Obligations of Sellers or their Affiliates to the extent arising out of, incurred in
connection with or related to the ownership, operation, use or maintenance of the Purchased
Property or operation of the Business prior to the Effective Time (excluding Obligations to the
extent expressly assumed by Buyer or any of its Affiliates elsewhere in this Agreement or the
Related Agreements including those certain Obligations assumed by Buyer pursuant to Section
3.6(a)(v), Section 3.6(a)(vi), Section 17.1 and Section 19.1),
including all Obligations of Sellers or their Affiliates to the extent arising out of, incurred in
connection with or related to the Assigned Contracts but only to the extent such Obligations arise
or are performable prior to the Effective Time;



          (c) all Obligations of Sellers or their Affiliates to the extent arising out of, incurred in
connection with or related to the ownership, operation, use or maintenance of all assets and
properties other than the Purchased Property or operation of any businesses other than the Business
prior to the Effective Time (excluding Obligations to the extent expressly assumed by Buyer or any
of its Affiliates elsewhere in this Agreement or the Related Agreements), including all Obligations
of Sellers or their Affiliates to the extent arising out of, incurred in connection with or related
to the operation of the Refinery;



          (d) all Obligations of Sellers or any of their ERISA Affiliates pursuant to any multi-employer
plan withdrawal liability and/or single/multiemployer plan termination liability of Sellers or any
of their ERISA Affiliates under Title IV of ERISA, any liability of Sellers or any of their ERISA
Affiliates for any accumulated funding deficiency under Section 412 of the Code and/or Section 302
of ERISA, any liability for contributions, benefits or any other amount due under any multiemployer
plan to which Sellers or any of their ERISA Affiliates have contributed or had an obligation to
contribute to or any benefit plan of the Sellers or any of their ERISA Affiliates, and any
liability for COBRA continuation coverage for “M&A qualified beneficiaries;” and



          (e) Matters set forth on Schedules 9.6 and 9.10.



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ARTICLE IV

CLOSING 




     4.1 Closing. The closing of the purchase and sale contemplated herein (the “Closing”) shall
take place at 10:00 a.m. Central Time at such location as is mutually acceptable to the Parties on
the earlier of July 31, 2006 or the second Business Day following satisfaction or waiver of all
conditions precedent to the Parties’ obligations to consummate the transactions contemplated herein
(other than conditions with respect to actions to be taken by the Parties at the Closing), or at
such other time and place as agreed to in writing by the Parties.



     4.2 Possession and Control. Control of operations, risk of loss, and transfer of title to the
Purchased Property from Sellers to Buyer shall be effective as of 7:00 a.m. Central Time on the
Closing Date (the “Effective Time”).



ARTICLE V

CLOSING CONDITIONS AND DELIVERABLES




     5.1 Conditions to Closing. Except as expressly waived by the Parties, the obligations of each
Party to close the transaction contemplated by this Agreement are subject to the satisfaction, at
or prior to the Closing, of each of the following conditions, which conditions the Parties intend
to be conditions precedent to Sellers’ obligation to convey the Purchased Property and to Buyer’s
obligation to pay the Purchase Price:



          (a) All representations and warranties of the other Parties set forth in this Agreement shall
be true, accurate and complete in all material respects as of the date hereof and as of the Closing
Date, as if made on the Closing Date (except with respect to any representations and warranties
that include the word “material” or words of similar import, in which case such representations and
warranties must be true, accurate and complete in all respects after giving effect to such
“materiality” or similar qualifier without duplication) and the other Parties shall have performed
and complied with all covenants and conditions required by this Agreement to be performed or
complied with at or prior to the Closing;



          (b) No Law shall exist or shall have been enacted restricting or substantially delaying the
transactions contemplated by this Agreement;



          (c) The authorization, consent, approval or waiver of each Person (excluding Governmental
Authorities) necessary for the execution, delivery and performance of this Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby and thereby shall
have been obtained and shall be in full force and effect, other than those the failure of which to
obtain or keep in full force and effect would not, individually or in the aggregate, have a
Material Adverse Effect after giving effect to Section 5.8. Without limiting the
generality of the preceding, Sellers shall obtain and have delivered to Buyer all consents,
approvals, authorizations and waivers related to the matters set forth on Schedule 5.1(c);



          (d) The authorization, consent, approval or waiver of each Governmental Authority necessary
for the execution, delivery and performance of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby shall have been obtained and shall
be in full force and effect;



          (e) The authorization, consent, approval or waiver of each Governmental Authority (including
all necessary Environmental Permits) necessary for Buyer to continue the Business



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in a manner substantially similar to the operation of the Business by Sellers immediately
prior to the Closing Date shall have been obtained and shall be in full force and effect other than
such authorizations, consents, approvals or waivers that cannot be obtained on or before the
Closing but are customarily obtained post-closing; provided the failure to obtain such
authorizations, consents, approvals or waivers prior to the Closing would not reasonably be
expected to prevent Buyer from conducting the Business immediately after the Closing in a manner
substantially similar to the operation of the Business by Sellers immediately prior to the Closing
Date;




          (f) The Environmental Insurance contemplated by Section 11.7 shall have been obtained
on terms no less favorable than those contemplated by Section 11.7;



          (g) Sellers shall have cured or Buyer shall have waived all Significant Title Defects in the
manner set forth in Section 13.4;



          (h) No Party shall have exercised any right it may have to terminate this Agreement under the
express terms hereof;



          (i) No Casualty Loss shall have occurred during the Interim Period;



          (j) No Release shall have occurred during the Interim Period at, on, under, from or to the
Purchased Property that is likely to require Remedial Action or result in an Environmental
Liability in an amount reasonably estimated to equal or exceed five million dollars ($5,000,000);



          (k) Sellers shall each be willing and able to enter into, and shall have delivered or caused
to be delivered, at the Closing the items set forth in Section 5.2, and Buyer shall be
willing and able to enter into, and shall have delivered or caused to be delivered, at Closing the
items set forth in Section 5.3.



     5.2 Sellers’ Deliveries. At the Closing, Sellers shall deliver, or cause to be delivered, to
Buyer each of the following items (the receipt of all of which are conditions precedent to the
obligation of Buyer to close the transactions contemplated hereby):



          (a) duly executed Special Warranty Deed(s) for the Real Property, substantially in the form
attached hereto as Exhibit 13.1, dated as of the Closing Date, conveying fee simple title
to the Real Property free and clear of all Liens, subject only to the Permitted Encumbrances;



          (b) a duly executed Conveyance of Rights of Way, substantially in the form attached hereto as
Exhibit 5.2(b), dated as of the Closing Date;



          (c) a duly executed Assignment of Partnership Interests, substantially in the form attached
hereto as Exhibit 5.2(c), dated as of the Closing Date;



          (d) a duly executed Bill of Sale, substantially in the form attached hereto as Exhibit
5.2(d), dated as of the Closing Date;



          (e) a duly executed Assignment and Assumption of Contracts, substantially in the form attached
hereto as Exhibit 5.2(e), dated as of the Closing Date;



          (f) a duly executed Refinery Option related to the Refinery Real Property (the “Refinery
Option”), substantially in the form attached hereto as Exhibit 5.2(f), dated as of the
Closing Date;



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          (g) a duly executed Memorandum of Option for recording purposes related to the Refinery
Option, substantially in the form attached hereto as Exhibit 5.2(g), dated as of the
Closing Date;



          (h) a duly executed Guaranty of Mr. Brad Stephens, substantially in the form attached hereto
as Exhibit 5.2(h), dated as of the Closing Date;



          (i) a duly executed Guaranty of Mr. Wayne Malone, substantially in the form attached hereto as
Exhibit 5.2(i), dated as of the Closing Date;



          (j) a duly executed Guaranty of Mr. David Caddell, substantially in the form attached hereto
as Exhibit 5.2(j), dated as of the Closing Date;



          (k) a duly executed Guaranty of Mr. George Percival, substantially in the form attached hereto
as Exhibit 5.2(k), dated as of the Closing Date;



          (l) a duly executed Domain Name Assignment Agreement and Release, substantially in the form
attached hereto as Exhibit 5.2(l), dated as of the Closing Date;



          (m) all other instruments of sale, assignment, transfer and conveyance as Buyer may reasonably
and timely request evidencing and effecting the sale and transfer to Buyer of the Purchased
Property, each duly executed and dated as of the Closing Date; 



          (n) a duly executed Non-Competition Agreement executed by Sellers and by Mr. Brad Stephens and
Mr. Wayne Malone, substantially in the form attached hereto as Exhibit 5.2(n), and dated as
of the Closing Date;



          (o) a duly executed Non-Solicitation Agreement executed by Mr. George Percival and Mr. David
Caddell, substantially in the form attached hereto as Exhibit 5.2(o), and dated as of the
Closing Date;



          (p) a duly executed Transition Services Agreement, substantially in the form attached hereto
as Exhibit 5.2(p), dated as of the Closing Date;



          (q) an opinion of counsel with respect to Pride Products, substantially in the form attached
hereto as Exhibit 5.2(q), dated as of the Closing Date;



          (r) one or more certificates, dated as of the Closing Date and duly executed by an authorized
officer of each Seller, certifying as to the fulfillment by each Seller of the conditions set forth
in Section 5.1(a) required to be satisfied by Sellers;



          (s) a duly executed Building Lease Agreement, substantially in the form attached hereto as
Exhibit 5.2(s);



          (t) a duly executed Pipeline Easement Agreement, substantially in the form attached
hereto as Exhibit 5.2(t);



          (u) a duly executed Refinery Access Agreement, substantially in the form attached hereto as
Exhibit 5.2(u);



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          (v) a duly executed Easement Agreement, substantially in the form attached hereto as
Exhibit 5.2(v);



          (w) a duly executed Environmental Services Agreement, substantially in the form attached
hereto as Exhibit 5.2(w);



          (x) a duly executed Trademark Assignment, substantially in the form attached hereto as
Exhibit 5.2(x);



          (y) the Rolling Stock listed on Schedule 5.2(y);



          (z) a duly executed Trademark License Agreement, substantially in the form attached hereto as
Exhibit 19.4(a);



          (aa) all (i) authorization codes, access codes, passwords, usernames or similar sequences of
characters and numbers giving full use of and access to any of the Purchased Property, including,
but not limited to, those relating to the Domain Name Registration and any Purchased Intellectual
Property (the “Authorization Codes”), and (ii) the name and email address of any administrative
contact, technical contact and billing contact for the Domain Name (the “Administrator
Information”);



          (bb) the schedule of Third Party Inventory required pursuant to Section 2.2(c);



          (cc) one or more incumbency certificates, each dated as of the Closing Date and duly executed
by the Secretary or Assistant Secretary of the Sellers, certifying the incumbency and attesting to
the due appointment and authorization of the individuals signing, on behalf of each such Seller,
this Agreement and the Related Agreements;



          (dd) copies of the resolutions of each Seller, certified as being correct and complete and
then in full force and effect, authorizing the execution of this Agreement and the Related
Agreements to which it is a party and the consummation of the transactions contemplated under this
Agreement and the Related Agreements to which it is a party (in each case to the extent required by
such Seller’s Organizational Documents);



          (ee) a long-form Good Standing Certificate issued by the Secretary of State for the State of
Delaware in respect of Pride Company, dated within ten (10) days of the Closing Date;



          (ff) a Certificate of Existence issued by the Secretary of State of Texas and a Certificate of
Good Standing issued by the Texas Comptroller, both in respect of Pride Company, each dated within
ten (10) days of the Closing Date;



          (gg) a Certificate of Existence issued by the Secretary of State of Texas and a Certificate of
Good Standing issued by the Texas Comptroller, both in respect of Pride Refining, each dated within
ten (10) days of the Closing Date;



          (hh) a Certificate of Existence issued by the Secretary of State of Texas and a Certificate of
Good Standing issued by the Texas Comptroller, both in respect of Pride Marketing, each dated
within ten (10) days of the Closing Date;



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          (ii) an affidavit referred to in Section 1445(b)(2) of the Code and the corresponding Treasury
regulations in customary form, duly executed by each owner of the Real Property and dated as of the
Closing Date;



          (jj) all affidavits, certificates, and other documents requested by the Title Company that are
customary in connection with Buyer’s obtaining the title insurance pursuant to Section
13.5;



          (kk) all affidavits, certificates, and other documents requested by insurance company that are
customary in connection with Buyer’s obtaining the Environmental Insurance pursuant to Section
11.7;



          (ll) any other documents, instruments or agreements contemplated hereby or reasonably
necessary or appropriate to consummate the transactions contemplated hereby; and



          (mm) all rights of ownership and possession of the Purchased Property contemplated herein.



     5.3 Buyer’s Deliveries. At the Closing, Buyer shall deliver, or cause to be delivered, to
Sellers each of the following items (the receipt of all of which are conditions precedent to the
obligation of Sellers to close the transactions contemplated hereby):



          (a) the payment of the Closing Date Payment as specified in Section 3.3 accompanied
with payment of the Inventory Price as specified in the Inventory Valuation Procedure attached as
Exhibit 2.2(b);



          (b) a duly executed Conveyance of Rights of Way, substantially in the form attached hereto as
Exhibit 5.2(b), dated as of the Closing Date.



          (c) a duly executed Assignment of Partnership Interest, substantially in the form attached
hereto as Exhibit 5.2(c), dated as of the Closing Date.



          (d) a duly executed Bill of Sale, substantially in the form attached hereto as Exhibit
5.2(d), dated as of the Closing Date;



          (e) a duly executed Assignment and Assumption of Contracts, substantially in the form attached
hereto as Exhibit 5.2(e), dated as of the Closing Date;



          (f) a duly executed Refinery Option, substantially in the form attached hereto as Exhibit
5.2(f), dated as of the Closing Date;



          (g) a duly executed Memorandum of Option for recording purposes related to the Refinery
Option, substantially in the form attached hereto as Exhibit 5.2(g), dated as of the
Closing Date;



          (h) a duly executed Domain Name Assignment Agreement and Release, substantially in the form
attached hereto as Exhibit 5.2(l), dated as of the Closing Date;



          (i) a duly executed Non-Competition Agreement, substantially in the form attached hereto as
Exhibit 5.2(n), dated as of the Closing Date;



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          (j) a duly executed Non-Solicitation Agreement, substantially in the form attached hereto as
Exhibit 5.2(o), dated as of the Closing Date;



          (k) a duly executed Transition Services Agreement, substantially in the form attached hereto
as Exhibit 5.2(p), dated as of the Closing Date;



          (l) a duly executed Building Lease Agreement, substantially in the form attached hereto as
Exhibit 5.2(s);



          (m) a duly executed Pipeline Easement Agreement, substantially in the form attached
hereto as Exhibit 5.2(t);



          (n) a duly executed Refinery Access Agreement, substantially in the form attached hereto as
Exhibit 5.2(u);



          (o) a duly executed Easement Agreement, substantially in the form attached hereto as
Exhibit 5.2(v);



          (p) a duly executed Environmental Services Agreement, substantially in the form attached
hereto as Exhibit 5.2(w);



          (q) a duly executed Trademark Assignment, substantially in the form attached hereto as
Exhibit 5.2(x);



          (r) a duly executed Trademark License Agreement, substantially in the form attached hereto as
Exhibit 19.4(a);



          (s) written consents from all persons, entities, Governmental Authorities and regulatory
bodies whose consent to the transactions contemplated herein is required;



          (t) a certificate, dated as of the Closing Date and duly executed by an authorized officer of
Buyer, certifying as to the fulfillment by Buyer of the conditions set forth in Section
5.1(a) required to be satisfied by Buyer;



          (u) an incumbency certificate, dated as of the Closing Date and duly executed by the Secretary
or Assistant Secretary of Buyer, certifying the incumbency and attesting to the due appointment and
authorization of the individuals signing, on behalf of Buyer, this Agreement and the Related
Agreements;



          (v) copies of the resolutions of Buyer, certified as being correct and complete and then in
full force and effect, authorizing the execution of this Agreement and the Related Agreements to
which it is a party and the consummation of the transactions contemplated under this Agreement and
the Related Agreements to which it is a party (in each case to the extent required by such Buyer’s
Organizational Documents);



          (w) a short-form Good Standing Certificate issued by the Secretary of State for the State of
Delaware in respect of Buyer and dated within ten (10) days of the Closing Date;



          (x) a resale certificate and any other certificates or instruments necessary for the sale and
transfer of the Purchased Inventory free of any sales, excise or use Taxes of any Governmental
Authority, all to be in form reasonably satisfactory to Sellers; and



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          (y) any other documents, instruments or agreements contemplated hereby or reasonably necessary
or appropriate to consummate the transactions contemplated hereby.



     5.4 Affiliates. Sellers shall cause any of their Affiliates to transfer and assign all right,
title and interest in and to the Purchased Property, and possession and control thereof, to the
extent held by any such Affiliate, to Buyer on or prior to the Closing Date.



     5.5 Termination.



          (a) Termination. This Agreement may be terminated and the transactions contemplated by this
Agreement may be abandoned at any time prior to the Closing Date:



               (i) by mutual written consent of Sellers, on the one hand, and Buyer, on the other hand;



               (ii) by any Party in the event the conditions set forth in Section 5.1 applicable to
such Party have not been satisfied or waived, and the Closing has not occurred by the close of
business on July 31, 2006 (the “End Date”). This provision shall not, however, apply to limit the
liability of a Party who has willfully caused termination hereof by any act or failure to act in
violation of the terms and provisions of this Agreement;



               (iii) by any Party in the event a court of competent jurisdiction in a suit instituted by a
Third Person or Governmental Authority shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting a material portion of the
transactions contemplated by this Agreement and such order, decree, ruling or other action shall
have become final and non-appealable.



          (b) Procedure for and Effect of Termination. In the event of termination of this Agreement by
the Parties under Section 5.5(a), written notice thereof shall be given by a Party so
terminating to the other.



          (c) Return of Property. In the event of termination of this Agreement, Buyer shall promptly
return all records, maps, files, papers, and other property of Sellers then in the possession of
Buyer or its representatives.



          (d) Sellers’ Remedies. In the event this Agreement is terminated by Sellers due to Buyer
breaching its representations, warranties or covenants contained in this Agreement such that the
conditions precedent set forth in Section 5.1(a) to Sellers’ obligations to consummate the
transactions contemplated herein shall not have been satisfied then, Sellers shall immediately be
entitled to receive and collect the Deposit Escrow (together will any accrued interest thereon, if
any) from the Escrow Agent, as further set forth in the Deposit Escrow Agreement as liquidated
damages in full satisfaction of all Damages related or arising from such breach by Buyer (excluding
Sellers’ right to recover attorneys’ fees and other expenses as provided pursuant to the Escrow
Agreement incurred in enforcing Sellers’ rights pursuant to the Escrow Agreement). The Parties
agree that the Deposit Escrow (together will any accrued interest thereon, if any) shall be a
reasonable estimate of Sellers’ Damages in the event of any such termination and receipt of such
Deposit Escrow shall be Sellers’ sole and exclusive remedy for any such Damages. Nothing contained
herein shall limit the liability of Buyer for any breach of any covenant in this Agreement which is
unrelated to Buyer’s obligation to close.



          (e) Buyer’s Remedies. In addition to any other right or remedy to which Buyer may be
entitled, at law or in equity, Buyer shall be entitled to enforce any provision of this



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Agreement by a decree of specific performance and to temporary, preliminary and permanent
injunctive relief to prevent breaches or threatened breaches of any of the provisions of this
Agreement, without posting any bond or other undertaking.




     5.6 Entities to Receive Assets. Buyer will inform Sellers at least three (3) days prior to
the anticipated Closing Date of the names of any Affiliate(s) of Buyer to whom the various portions
of the Purchased Property are to be conveyed as of the Closing Date. In such event, the respective
Affiliate shall be deemed to be a third party beneficiary of this Agreement to the extent relating
to such Purchased Property so conveyed, and shall enjoy the same rights as Buyer in relation to
such portion of the Purchased Properties that are conveyed to such Affiliate for so long as it
remains an Affiliate of Buyer.



     5.7 Magellan Deposit. At the Closing, Buyer shall deliver to Magellan a security deposit in
accordance with the Magellan Contract. It shall be an additional condition precedent to Sellers’
obligation to consummate the transactions contemplated by this Agreement that Magellan shall have
returned or credited to Sellers all deposits held by Magellan under the Magellan Contract as of the
Closing Date.



     5.8 Consents. Notwithstanding anything in this Agreement to the contrary, this Agreement
shall not constitute an agreement to transfer, sell or otherwise assign any Contract which would
otherwise be an Assigned Contract or any Right-of-Way but which is not permitted to be assigned in
connection with the transaction contemplated by this Agreement (collectively, the “Unassigned
Contract/ROWs”). In such event, the beneficial interest in and to each Unassigned Contract/ROW
shall pass to Buyer at the Closing, and Sellers covenant and agree to cooperate with Buyer in any
lawful and economically reasonable arrangement to provide Buyer with Sellers’ entire interest in
the benefits under each of the Unassigned Contract/ROWs. Sellers shall exercise or exploit their
respective rights and options under all Unassigned Contract/ROWs to the extent as reasonably
directed by Buyer; provided, that Buyer shall be responsible for any liability incurred by any
Seller pursuant to such direction. Buyer shall accept and be responsible for the burdens and
perform the obligations under such Unassigned Contract/ROWs as subcontractor of Sellers, to the
extent that such burdens and obligations would have constituted an Assumed Liability if such
Unassigned Contract/ROW had been transferred to Buyer at the Closing. Sellers shall use Reasonable
Efforts after the Closing to obtain all necessary consents to transfer and assign all Unassigned
Contract/ROWs. Unassigned Contract/ROWs shall not be deemed to be Assigned Contracts unless and
until Sellers obtain such consents to transfer. In the event the other party(ies) to an Unassigned
Contract/ROW subsequently consent to the assignment of such Unassigned Contract/ROW to Buyer, Buyer
shall thereupon agree to assume and perform all liabilities and the obligations arising thereunder
after the date of such consent, at which time such Unassigned Contract/ROW shall be deemed a
Purchased Property, without the payment of further consideration, and the obligations so assumed
thereunder shall be deemed Assumed Liabilities. Sellers shall indemnify, defend and hold the Buyer
Indemnities harmless from all Damages to the extent arising from or related to any Unassigned
Contract/ROW to the extent Buyer is prevented from receiving Sellers’ entire beneficial interest in
and to the Unassigned Contract/ROW; provided such Obligation to indemnify, defend and hold the
Buyer Indemnities harmless shall not exceed an amount equal to the Purchase Price less the amount
paid by Sellers, if any, pursuant to Section 14.1(a).



ARTICLE VI

ALLOCATION OF PROCEEDS AND PURCHASE PRICE 




     6.1 Proceeds from Operations. All proceeds attributable to the operation, ownership, use or
maintenance of or otherwise relating to the Purchased Property or the Business prior to the
Effective Time shall be the property of Sellers and to the extent received by Buyer or its
Affiliates, Buyer shall promptly and fully disclose, account for and transmit the same to Sellers.
Except as expressly provided otherwise



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elsewhere herein or the Related Agreements, all proceeds attributable to the operation,
ownership, use, or maintenance of or otherwise relating to the Purchased Property or the Business
from and after the Effective Time shall be the property of Buyer and to the extent received by
Sellers or their Affiliates, Sellers shall promptly and fully disclose, account for and transmit
the same to Buyer.




     6.2 Purchase Price Allocation. Buyer and Sellers shall, at least three (3) days prior to the
Closing Date, agree to allocate the Purchase Price (plus other capitalized costs and any allocation
for any agreements described in line 6 of IRS Form 8594, to the extent required under the Code)
among the Purchased Property (including the assets held by Pride Products) as set forth in
Schedule 6.2, which will represent a reasonable determination in good faith of the fair
market value of the Purchased Property (including the assets held by Pride Products). Sellers and
Buyer agree (i) to report the federal, state and local income and other Tax consequences of the
transactions contemplated herein, and in particular to report the information required by Section
1060(b) of the Code on IRS Form 8594 in a manner consistent with such allocation and (ii) not to
take any position inconsistent therewith upon examination of any Tax Return, in any refund Claim,
in any litigation, investigation or otherwise, unless required by applicable Laws or with the
consent of the other Party.



     6.3 Lease and Rental Payments. Lease and rental expenses payable pursuant to the terms of any
Assigned Contracts that are lease or rental agreements shall be pro-rated between Buyer, on the one
hand, and Sellers, on the other hand, based upon the number of days during the applicable lease or
rental period each Party was entitled to the use of the equipment or property subject to such lease
or rental agreement. The Purchase Price shall be increased by an amount equal to any such lease or
rental payments paid by Sellers attributable to the period from and after the Effective Time. The
Purchase Price shall be reduced by an amount equal to any such lease or rental payments payable by
Buyer attributable to the period prior to the Effective Time. In the event the amount of any such
lease or rental payment cannot be ascertained on the Closing Date, the pro-ration made on the
Closing Date shall be made on the basis of the preceding lease or rental period, and to the extent
that such pro-ration may be inaccurate, Sellers and Buyer agree and covenant to make such payment
to the other Party promptly upon receipt of the lease or rental statements for each such agreement
as is necessary to properly allocate such lease or rental payments on a pro-rated basis between
Sellers and Buyer as of the Effective Time.



ARTICLE VII

UTILITIES




     7.1 Utilities. To the extent utilities have not been placed in Buyer’s name as of the
Effective Time, charges and credits for water, electricity, sewage, gas and all other utilities
shall be adjusted and apportioned between Sellers and Buyer through the Effective Time. To the
extent such amounts are estimated on the Closing Date and such prorations are inaccurate, Sellers
and Buyer agree to make such payment to the other after such amounts are correctly computed as is
necessary to allocate such charges properly between Sellers and Buyer as of the Closing Date. If
Buyer receives invoices for utilities for any period of time prior to the Effective Time, Buyer
will promptly forward the invoices to Sellers for payment. Likewise, if Sellers receive invoices
for utilities for any period of time on or after the Effective Time, Sellers will promptly forward
the invoices to Buyer for payment. If new utility connections or meters are required for Buyer’s
assumption of utility services, the cost shall be borne by Buyer. After the Closing, Buyer shall
promptly place in its own name all utilities associated with the Purchased Property.



ARTICLE VIII

TAXES AND RELATED MATTERS




     8.1 Cooperation. Buyer and Sellers agree to furnish, or cause to be furnished, to each other,
upon request, as promptly as practicable, such information and assistance relating to the Purchased



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Property, the Business or Pride Products as is reasonably necessary for the filing of all Tax
Returns, the preparation for any audit by any taxing authority, and the prosecution or defense of
any Proceeding relating to any Taxes. Sellers and Buyer shall cooperate with each other in the
conduct of any audit or other Proceeding related to Taxes involving the Purchased Property, the
Business or Pride Products and each shall execute and deliver such documents as are necessary to
carry out the intent of this ARTICLE VIII.




     8.2 Property Taxes. All real estate, ad valorem and personal property Taxes shall be
pro-rated between Buyer, on the one hand, and Sellers, on the other hand, as of the Closing Date
regardless of when such general property Taxes are actually billed and payable. Such proration
shall be based upon the number of days during the applicable tax period each Party owned the
Purchased Property subject to such tax. At the Closing, Sellers’ portion of such general property
Taxes attributable to the period prior to the Effective Time shall be deducted from the Purchase
Price to be paid to Sellers to the extent such general property Taxes are payable after the
Closing. At the Closing, Buyer’s portion of such general property Taxes attributable to the period
after the Effective Time shall be added to the Purchase Price to be paid to Sellers to the extent
such general property Taxes are paid by Sellers on or before the Closing. Buyer shall actually pay
to the taxing authority all general property Taxes for the year of the Closing which are payable
after the Closing. In the event the amount of any such general property Taxes cannot be ascertained
as of the Closing Date, the pro-ration made as of the Closing Date shall be made on the basis of
the preceding year Taxes, and to the extent that such pro-ration may be inaccurate, Sellers and
Buyer agree to make such payment to the other after the tax statements have been received as is
necessary to allocate such general property Taxes properly between Sellers and Buyer as of the
Closing Date.



     8.3 Income Taxes. Notwithstanding anything in this Agreement to the contrary, Sellers shall
be responsible for all income and capital gains Taxes, franchise Taxes and all other Taxes based on
overall gross or net income of Sellers resulting from the sale of the Purchased Property, including
any deemed sale of the assets held by Pride Products. All income and franchise Taxes attributable
to Pride Products for Pre-Closing Tax Periods shall remain the responsibility of Sellers, and all
deductions, credits and refunds pertaining to said Taxes, no matter when received, shall belong to
Sellers. All income and franchise Taxes attributable to Pride Products for Post-Closing Tax Periods
shall be the responsibility of Buyer.



     8.4 Transfer Taxes. Buyer shall pay and be responsible for any applicable transfer Taxes
incurred in connection with the purchase and sale of the Purchased Property, including any federal,
state or local sales, use, or excise Taxes, documentary transfer Taxes, realty transfer Taxes and
charges or fees with respect to the transfer of real property or to the recordation of documents
(excluding release of Lien documents) necessary for the transfer of real property that may be
required for the transfer of the Purchased Property from Sellers to Buyer, whether levied on
Sellers or Buyer. Buyer shall be responsible for, and will file all necessary Tax Returns and other
documentation with respect to all such Taxes and remit, upon the request of Sellers, copies of the
portions of such returns relevant to this Agreement and any necessary documentation to Sellers.



     8.5 Confidential Tax Information. Notwithstanding anything in this Agreement to the contrary,
neither Party shall be required at any time to disclose to the other Party, or to any other Person,
absent legal constraint, any Tax Return or other confidential Tax information.



     8.6 Deferred Like-Kind Exchange Cooperation. If so requested by a Party, the other Party
shall, at no cost or obligation to such other Party, cooperate in structuring and completing all or
a portion of this transaction so as to effect a disposition of “relinquished property” in
connection with a multiple party deferred like-kind exchange pursuant to Section 1031 of the Code.
In particular, Buyer hereby consents to the assignment of an interest in the Purchased Property to
a “qualified intermediary” prior to



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the Closing hereunder and the assignment by Sellers to such “qualified intermediary” of
Sellers’ right to receive the Purchase Price hereunder. The terms “qualified intermediary,” and
“relinquished property” as used herein shall have the meanings ascribed to them in Treasury
Regulations Section 1.1031(k)-1. The requesting Party agrees to indemnify and hold harmless the
other Party from any costs, expenses and Claims relating to its cooperation arising out of a
like-kind exchange of the requesting Party, which indemnity shall survive the Closing. Nothing in
this Section 8.6 is intended to relieve any Party from its obligations hereunder.




     8.7 Other Taxes. Except as provided pursuant to Sections 8.2, 8.3 and
8.4, Sellers shall be liable for all Taxes with respect to the Business, Pride Products and
the Purchased Property for Pre-Closing Tax Periods and Buyer shall be liable for all Taxes with
respect to the Business, Pride Products and the Purchased Property for Post-Closing Tax Periods;
provided, however, Sellers shall be liable for all Taxes with respect to the Retained Inventory.



ARTICLE IX

SELLERS’ REPRESENTATIONS 




     Sellers, jointly and severally, represent and warrant to Buyer as of the date hereof the
following:



     9.1 No Brokers. Sellers have not incurred any Obligation, contingent or otherwise, nor made
any agreement with respect to any broker or finder’s fees arising out of or in any way related to
the transactions contemplated by this Agreement for which Buyer will be in any way liable.



     9.2 Organization.



          (a) Pride Company is a limited partnership duly organized, validly existing and in good
standing under the Laws of the State of Delaware and is duly qualified to carry on business in the
State of Texas.



          (b) Pride Refining is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Texas and is duly qualified to carry on business in the State of
Texas.



          (c) Pride Marketing is a limited liability company, duly organized, validly existing and in
good standing under the Laws of the State of Texas and is duly qualified to carry on business in
the State of Texas.



     9.3 Power and Authority. Each Seller has the power and authority necessary to enter into and
perform this Agreement and the transactions contemplated hereby.



     9.4 Authorization and Enforceability. The execution, delivery, and performance by each Seller
of this Agreement and the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of each Seller. This Agreement has been duly
executed and delivered on behalf of each Seller, and, at the Closing, all documents and instruments
required hereunder to be executed and delivered by each Seller shall have been duly executed and
delivered by each such Seller. This Agreement does, and such documents and instruments shall,
constitute legal, valid and binding Obligations of each Seller party thereto enforceable in
accordance with their terms, subject, however, to the effect of bankruptcy, insolvency,
reorganization, moratorium and similar Laws from time to time in effect relating to the rights and
remedies of creditors, as well as to general principles of equity (regardless of whether such
enforceability is considered in a Proceeding in equity or at law).



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     9.5 Investment Company Act; PUHCA. No Seller is (1) an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940,
as amended or (2) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended or (3) a “foreign person”
within the meaning of Section 1445 of the Code.



     9.6 Violations of Law. Except as set forth in Schedule 9.6, to Sellers’ Knowledge,
Sellers are not in violation of any Law in connection with their ownership, use or operation of the
Purchased Property or the Business, except for such violations as would not have a Material Adverse
Effect.



     9.7 Taxes. There are no Liens for unpaid Taxes on, pending against or, to Sellers’ Knowledge,
threatened against the Purchased Property or the assets of Pride Products, other than Liens for
Taxes not yet due and payable. Neither the IRS nor any other Governmental Authority is asserting
or, to Sellers’ Knowledge, threatening to assert against Sellers, Pride Products or any of their
Affiliates any deficiency or Claim for additional Taxes or any adjustment of Taxes that could
result in the placing of a Tax Lien upon the Purchased Property or the assets of Pride Products.
Each of the Sellers, Pride Products and their respective Affiliates have filed (or will cause to be
filed on or before the Closing Date) all Tax Returns relating to the Business and Purchased
Property that are required to be filed on or before the Closing Date, and such Tax Returns are (and
will be) true, correct and complete in all material respects and were (and will be) prepared in
conformity with all applicable Laws, and each of the Sellers, Pride Products and their respective
Affiliates have paid (or will pay when due) all Taxes relating to the Business and the Purchased
Property whether or not shown as due on such Tax Returns that are due, or claimed to be due by any
Governmental Authority, and are attributable to any taxable period or portion thereof that ends on
or before the Closing Date except for amounts being contested in good faith by appropriate
Proceedings. Buyer will not be liable, as a result of the transactions contemplated by this
Agreement, for Taxes of Sellers or Pride Products relating to the Business or the Purchased
Property for any Pre-Closing Tax Period whether by Law, contract or otherwise except to the extent
expressly provided in this Agreement or the Related Agreements. None of the Assumed Liabilities
nor any liability of Pride Products includes: (i) an obligation to make a payment to any Person
under any Tax allocation or Tax-sharing agreement; (ii) an obligation to pay the Taxes of any
Person as a transferee or successor, by contract or otherwise, including an obligation under
Treasury regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law);
(iii) an obligation under any record retention, transfer pricing, closing or other agreement or
arrangement with any Governmental Authority that will survive the Closing or impose any liability
on Buyer or Pride Products after the Closing; or (iv) an obligation under any and all agreements,
contracts, arrangements and plans to indemnify, gross-up or otherwise compensate any Person, in
whole or in part, for any excise Tax under Section 4999 of the Code that is imposed on such Person
or any other Person. Other than the Partnership Interests, none of the Purchased Property nor any
asset held by Pride Products includes any stock, partnership interests, limited liability company
interests, legal or beneficial interests or any other equity interests in or of any Person, and
none of the Purchased Property or the assets held by Pride Products is subject to any Tax
partnership agreement or provisions requiring a partnership income Tax Return to be filed under
Subchapter K of Chapter 1 of Subtitle A of the Code. Pride Products is, and at all times prior to
the Closing has been since its formation, classified as a disregarded entity for U.S. federal Tax
purposes.



     9.8 Permits. To Sellers’ Knowledge, (i) Schedule 9.8 contains a true and complete
list of Sellers’ material Permits used in connection with the Purchased Property or the Business as
of the date of this Agreement, (ii) the Permits set forth in Schedule 9.8 are all of the
Permits which are necessary for the operation of the Business as of the date of this Agreement,
except for such Permits in which the failure to possess would not, individually or in the
aggregate, have a Material Adverse Effect, and (iii) Sellers have performed all Obligations
required to be performed by them to date under the Permits set forth in



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Schedule 9.8, and are not in default under any Obligation of any such Permits, except
for such Obligations as would not have a Material Adverse Effect.




     9.9 Necessary Assets. To Sellers’ Knowledge and except for the Excluded Assets, the Purchased
Property constitutes all of the material properties and assets necessary for the operation of the
Tanks, Pipelines, and Terminals and the Business as they are currently operated; provided, however,
that Sellers make no representation or warranty in this Section 9.9 regarding the value,
quality or condition of any of the Purchased Property. Additionally, the Refinery Equipment does
not constitute all of the equipment previously used by Sellers in the operation of the Refinery.



     9.10 Legal Proceedings. Except as set forth in Schedule 9.10, (a) there are no
Proceedings pending or, to Sellers’ Knowledge, threatened to which Sellers or Pride Products is (or
to Sellers’ Knowledge is threatened to be made) a party and which directly or indirectly relates to
the Purchased Property or the Business or seeks to prevent or make illegal the consummation by
Sellers of the transactions contemplated by this Agreement, and (b) there are no material orders,
writs, judgments, stipulations, injunctions, decrees, determinations, awards or other decisions of
any Governmental Authority, or any arbitrator or mediator, outstanding against Sellers or Pride
Products pertaining to any portion of the Purchased Property.



     9.11 Debt and Long-term Liabilities. As of the Closing, the Purchased Property will be free
and clear of any outstanding debt and all long-term liabilities which would be recorded under
generally accepted accounting principles except for environmental Obligations expressly assumed by
Buyer hereunder.



     9.12 Consents and Preferential Purchase Rights.



          (a) Other than with respect to (i) obtaining the consents or waivers set forth in Schedule
9.12(a) and (ii) as is otherwise expressly set forth in this Agreement and in the Related
Agreements, no consent, approval of or by, or filing with or notice to any Person is required to be
obtained with respect to Sellers or any of their Affiliates in connection with the execution,
delivery or enforceability of this Agreement, the Related Agreements or the consummation of the
transactions contemplated hereby and thereby, except where the failure to obtain such consent or
approval, make such filing or give such notice would not have a Material Adverse Effect on the
Purchased Property or the Business.



          (b) There are no preferential purchase rights or options or other rights that are held by any
Person to purchase or acquire any interest in the Purchased Property that shall be triggered or
become operative as a result of the execution of this Agreement or the consummation of the
transactions contemplated hereby, except as would not have a Material Adverse Effect.



     9.13 No Breach, Conflict. Subject to obtaining the consents and waivers referred to in
Section 9.12(a), the execution, delivery and performance of this Agreement, the Related
Agreements and the consummation of the transactions contemplated hereby and thereby and the
compliance by Sellers with the provisions hereof and thereof does not and will not (i) violate or
conflict with, or result in a breach of, any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under, or result in
termination of, or accelerate the performance required by, or result in the creation of any Lien
upon the Purchased Property under any of the terms, conditions or provisions of the Organizational
Documents of Sellers or Pride Products or under any contract or agreement to which Sellers or Pride
Products is a party, or by which the Purchased Property are otherwise bound, or (ii) violate any
applicable Law to which Sellers or Pride Products is subject, or by which Sellers, Pride Products
or their assets or properties may be bound, except in each case where such



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violation, conflict, breach, default, termination or acceleration or Lien would not have a
Material Adverse Effect.




     9.14 Financial Statements. Schedule 9.14 sets forth the following financial
statements (collectively the “Financial Statements”):



          (a) audited balance sheet and statements of income, changes in partner equity and cash flow as
of and for the fiscal years ended December 31, 2003, 2004 and 2005 for Pride Company;



          (b) unaudited balance sheet and statements of income, changes in partner equity and cash flow
as of and for the five (5) months ended May 31, 2006 for Pride Company (the “Most Recent Financial
Statements”).


The Financial Statements (including the notes thereto) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, present fairly the financial
condition of Sellers as of such dates and the results of operations of Sellers for such periods,
are correct and complete in all respects, and are consistent with the books and records of Sellers,
except as would not have a Material Adverse Effect; provided, however, that the Most Recent
Financial Statements (i) are subject to normal year-end adjustments (which will not be material
individually or in the aggregate) and lack footnotes and other presentation items and (ii) do not
consolidate ABQ Aviation LLC.




     9.15 Title. Sellers have good and indefeasible title to and ownership of all of the Purchased
Property, except for Purchased Property sold, consumed or otherwise disposed of prior to the
Effective Time in the ordinary course of business and consistent with past practices, free and
clear of any Liens, other than Permitted Encumbrances.



     9.16 Real Properties.



          (a) Schedule 2.1(f) sets forth a complete and correct list of all the Real Property
used or held for use in the Business. No portion of the Real Property is leased by or to Sellers,
except as provided pursuant to Schedule 9.16(a).



          (b) To Sellers’ Knowledge, all water, sewer, gas, electric, telephone and drainage facilities
and all other utilities necessary for the Business are adequately available to service the Real
Property as presently used by Sellers.



          (c) To Sellers’ Knowledge, the Real Property has access to a public street adjoining the Real
Property, and such access is not dependent upon any land or other real property interest that is
not included in the Real Property.



          (d) Sellers have no Knowledge of any pending or contemplated special assessment or
reassessment of any parcel included in the Real Property that would result in a material increase
in the real property Taxes with respect to such parcel excluding any reassessment of the parcels
included in the Real Property related to the transactions contemplated by this Agreement.



          (e) There are no pending, or to Sellers’ Knowledge, threatened condemnation or eminent domain
proceedings or contemplated sales in lieu thereof, involving a partial or total taking of any of
the Real Property.



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     9.17 Commitments. Schedule 9.17 contains an accurate and complete list of all
Contracts to which Sellers, Pride Products or any of their Affiliates are a party and which are
related Primarily to the Business, but not otherwise listed in Schedule 2.4, and that
require total payments to or by Sellers, Pride Products or any of their Affiliates of at least
Fifty Thousand Dollars ($50,000) annually or Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate relating to the Business or by which any of the Purchased Properties are bound (such
Contracts, including the Assigned Contracts, are collectively the “Commitments”). Sellers have
delivered to Buyer accurate and complete copies of all Assigned Contracts, together with all
amendments thereto, to the extent in Sellers’ possession or control. There are no oral Assigned
Contracts and no oral terms or conditions to any Assigned Contracts, except for rack sales
conducted in the ordinary course of business. The Purchased Property is not subject to any
leasehold interests except for the leases identified and set forth in Schedules 2.1(j) and
9.16(a) and excluding leases for miscellaneous office equipment incurred in the ordinary
course of business. Each Commitment is in full force and effect and is a legal, valid and
binding obligation of the Seller party thereto, enforceable against such Seller in accordance with
its terms (and to Sellers’ Knowledge, against each counterparty thereto), except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting the enforcement of creditors’ rights generally and general principles
of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).
Except as specified in Schedule 9.17, Sellers are not, nor, to Sellers’ Knowledge, is any
other party thereto, in default under any of the Commitments where such defaults would result in a
Material Adverse Effect on the Purchased Property or the Business. Except as specified in
Schedule 9.17, Sellers have not received written notice of any actual or threatened
cancellation or termination of any Commitment from any party thereto. Sellers shall be permitted to
supplement and amend Schedule 9.17 prior to the Closing with Commitments to which Sellers
have entered in the normal course of business during the Interim Period.



     9.18 Environmental Matters. The sole representations and warranties of Sellers with respect
to environmental matters are set forth in this Section 9.18. To the extent representations
and warranties in other sections of this Agreement also could apply to environmental matters,
including matters related to, arising under or concerning Environmental Laws, such representations
and warranties shall be construed for all purposes to exclude all environmental matters and to
apply to matters other than environmental matters. To Sellers’ Knowledge and except as set forth
in Schedule 9.18:



          (a) Neither Sellers nor any prior owner of the Purchased Property or operator of the Business
has caused or permitted the generation, use, treatment, storage or disposal of Hazardous Materials
at or on any of the Purchased Property in violation of applicable Environmental Laws, except as
would not reasonably be expected to have an Environmental Material Adverse Effect.



          (b) With respect to the current operation of the Purchased Property and the Business, Sellers
and Pride Products are in compliance with applicable Environmental Laws, except for such
non-compliance that would not reasonably be expected to have an Environmental Material Adverse
Effect.



          (c) Schedule 9.8 includes all Environmental Permits necessary to operate the Purchased
Property and the Business in the manner they are currently operated, all such Environmental Permits
have been duly obtained or filed and are in full force and effect, and Sellers and Pride Products
are in compliance with such Environmental Permits, except for such non-compliance that would not
reasonably be expected to have an Environmental Material Adverse Effect. The current operation of
the Purchased Property and the Business do not provide a basis for revocation or suspension of any
Environmental Permit related to the operation of the Purchased Property or the Business.



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          (d) There are no Proceedings pending or threatened against Sellers or Pride Products that are
based upon or arise under any Environmental Law and that relate to the Purchased Property or the
Business.



          (e) Except as would not reasonably be expected to have an Environmental Material Adverse
Effect, there are no Environmental Liabilities pending or threatened by or before any court or any
other Governmental Authority directed against Sellers or Pride Products relating to the operation
of the Purchased Property or the Business that pertain or relate to (i) any Remedial Actions under
any applicable Environmental Law, (ii) violations by Sellers or Pride Products of any Environmental
Law, or (iii) personal injury or property damage Claims relating to a Release of Hazardous
Materials.



          (f) None of the Purchased Property is encumbered by a Lien arising or imposed under
Environmental Laws.



          (g) Except for materials referred to in Section 17.1, there are no Hazardous Materials
present in or on the soil, sediments, surface water or ground water on, under or from or migrating
from any of the Real Property or Rights-of-Way in amounts that are reasonably likely to give rise
to an Obligation to conduct a Remedial Action.



          (h) Sellers have made available to or provided Buyer with true, accurate and complete copies
of all of Sellers’ Integrity Management Plans, Operator Qualifications, Public Awareness (API
1162), Spill Prevention Control & Countermeasures, Facility Response Plans, pipeline test reports
(including hydro-test and in-line inspection reports), Railroad Commission/DOT Inspection reports
and Operation, Maintenance and Emergency Manuals.



          (i) Sellers and Pride Products have made available to or provided Buyer with copies of reports
in their possession reflecting the Environmental Conditions of the Purchased Property.



          (j) There is no Ongoing Remedial Work at or on any of the Purchased Property.



          (k) Pride Products has not disposed of, or arranged for the transportation, treatment,
storage, recycling or disposal of, any Hazardous Materials at any Third Person treatment, storage,
disposal or recycling facility.



          (l) There are no underground storage tanks or associated piping (“UST Systems”) present on or
at any of the Purchased Property and any UST Systems previously present on or at any of the
Purchased Property were removed in accordance with all applicable Laws including federal
underground storage tank regulations.



          (m) Schedule 9.18(m) sets forth certain waste disposal, releases, fires and incidents
that have occurred at the Refinery Real Property that may have impacted the Purchased Property. No
Remedial Actions would be required on the Purchased Property as a result of the waste disposal,
releases, fires or incidents set forth on Schedule 9.18(m). The disclosure of the matters
set forth in Schedule 9.18(m) shall not modify, qualify, or expand the obligations assumed by Buyer
pursuant to Section 3.6 (Assumed Liabilities).



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     9.19 Pride Products.



          (a) Pride Products is a general partnership duly organized and validly existing under the Laws
of the State of Texas and is duly qualified to carry on business in the State of Texas. Pride
Products has all necessary partnership power and authority to own, lease and operate its properties
and conduct its business as it is currently being conducted. As of the Closing, Pride Products
shall not own, directly or indirectly, any interest in any corporation, partnership, joint venture
or other entity.



          (b) True, correct and complete copies of the partnership agreement and all other
Organizational Documents of Pride Products have been delivered to Buyer prior to the date hereof.



          (c) Pride Company and Pride Marketing are the sole record and beneficial partners of Pride
Products. Pride Company and Pride Marketing own the Partnership Interests free and clear of any
Liens, voting agreements, voting trusts or other encumbrances. The Partnership Interests have been
duly authorized and validly issued. Pride Products does not have outstanding any convertible
securities, options, warrants, contracts, commitments, agreements, understandings, arrangements or
restrictions by which it is bound to issue any additional partnership interests. Pride Products is
not subject to any Obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any ownership interest in Pride Products. There are no statutory or contractual preemptive
rights or rights of refusal with respect to the issuance of additional partnership interests in
Pride Products.



          (d) The Partnership Interests are not evidenced by certificates.



          (e) Except as set forth in Schedule 9.19(e), Pride Products is not the record or
beneficial owner of any assets whatsoever other than the Magellan Contract and rights directly
related thereto.



          (f) Except as set forth in Schedule 9.19(e), Pride Products does not have, and since
the date of its formation has not had, any direct or indirect Obligations for any Contract(s) other
than the Magellan Contract.



          (g) Pride Products does not have, and since the date of its formation has not had, any full
time, part time or contract employees.



          (h) Pride Company and Pride Marketing represent and warrant that neither has any Claim,
demand, cause of action, complaint or other liability against Pride.



          (i) No consent is required for the transfer or assignment of the Partnership Interests to
Buyer as contemplated by this Agreement.



     9.20 Magellan Contract.



          (a) Sellers have delivered to Buyer an accurate and complete copy of the Magellan Contract,
together with all amendments thereto. There are no oral terms to the Magellan Contract.



          (b) The Magellan Contract is in full force and effect and is a legal, valid and binding
obligation of Pride Products, enforceable against Pride Products in accordance with its terms (and
to Sellers’ Knowledge, against each counterparty thereto), except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting
the



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enforcement of creditors’ rights generally and general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).




          (c) Pride Products is not, nor to Sellers’ Knowledge, is any other party thereto, in default
under the Magellan Contract where such defaults would result in a Material Adverse Effect on the
Purchased Property or the Business.



          (d) Neither Pride Products nor the Sellers have received written notice of any actual or
threatened cancellation or termination of the Magellan Contract from any party thereto.



          (e) The execution and delivery of this Agreement by Sellers and the performance and
consummation by Sellers of the transactions contemplated herein will not violate or conflict with,
or result in a breach of, any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in termination of, or
accelerate the performance required by the Magellan Contract.



          (f) To Sellers’ Knowledge, no event has occurred or circumstance exists that would reasonably
be expected to contravene, conflict with or result in a breach of, or give any Person the right to
declare a default or exercise any remedy under the Magellan Contract.



          (g) To Sellers’ Knowledge, no event has occurred or circumstance exists that would reasonably
be expected to prevent Buyer from renewing and extending the term of the Magellan Contract pursuant
to its terms provided that Buyer performs under the Magellan Contract consistent with the
performance of Pride Products since January 1, 2006.



     9.21 Magellan Lease.



          (a) Sellers have delivered to Buyer an accurate and complete copy of the Magellan Lease,
together with all amendments thereto. There are no oral terms to the Magellan Lease.



          (b) The Magellan Lease is in full force and effect and is a legal, valid and binding
obligation of Pride Company, enforceable against Pride Company in accordance with its terms (and to
Sellers’ Knowledge, against each counterparty thereto), except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the
enforcement of creditors’ rights generally and general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).



          (c) Pride Company is not, nor to Sellers’ Knowledge, is any other party thereto, in default
under the Magellan Lease where such defaults would result in a Material Adverse Effect on the
Purchased Property or the Business.



          (d) Sellers have not received written notice of any actual or threatened cancellation or
termination of the Magellan Lease from any party thereto.



          (e) The execution and delivery of this Agreement by Sellers and the performance and
consummation by Sellers of the transactions contemplated herein will not violate or conflict with,
or result in a breach of, any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in termination of, or
accelerate the performance required by the Magellan Lease.



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          (f) To Sellers’ Knowledge, no event has occurred or circumstance exists that would reasonably
be expected to contravene, conflict with or result in a breach of, or give any Person the right to
declare a default or exercise any remedy under the Magellan Lease.



     9.22 Employee Benefit Plans. No event has occurred and no condition exists with respect to
any Employee Benefit Plan that will subject Buyer or the Purchased Property subsequent to the
Closing to any Tax, Lien or Loss under applicable Laws.



     9.23 Labor Relations. Except as would not have a Material Adverse Effect, there is no labor
strike, stoppage, lockout or dispute or material slowdown pending or, to Sellers’ Knowledge,
threatened by Persons employed in connection with the Business. Neither Sellers nor Pride Products
is a party to or bound by any collective bargaining agreement with any labor organization.



     9.24 Bankruptcy.



          (a) There are no bankruptcy, reorganization or arrangement proceedings pending against, being
contemplated by, or to Sellers’ Knowledge, threatened against Sellers or Pride Products.



          (b) To Sellers’ Knowledge, all Obligations of Sellers and any of its Affiliates under (i) the
Third Amended and Restated Joint Plan of Reorganization of Pride Companies, L.P. and Pride
Refining, Inc., as amended and modified, (ii) the Findings of Fact, Conclusions of Law and Order
Confirming The Debtors’ Third Amended and Restated Plan of Reorganization, As Modified entered on
January 11, 2002, and (iii) the Bankruptcy Code, each with respect to (A) Case No. 01-10041-RLJ-11
In re Pride Companies, L.P. and (B) Case No. 01-10043-RLJ-11 In re Pride Refining, Inc., in the
United States Bankruptcy Court for the Northern District of Texas, Abilene Division, have been
fully and completely satisfied or discharged and no other Obligations are outstanding.



     9.25 Purchased Intellectual Property. To Sellers’ Knowledge and except as set forth in
Schedule 9.25 (a) there are no outstanding written assignments, grants, licenses,
encumbrances, obligations or agreements, either written, oral or implied, with respect to the
Purchased Intellectual Property inconsistent with this Agreement, (b) Sellers are aware of no
Person or entity other than the Parties hereto having any claim of ownership to the Purchased
Intellectual Property, and (c) the Purchased Intellectual Property does not materially infringe or
constitute a material misappropriation of the rights of any Third Person and Sellers have no
Knowledge of any written claim to that effect. Sellers assign all Claims and causes of action for
any past or present infringement of the Purchased Intellectual Property to Buyer, and Buyer shall
have the right to recover any Damages for any past or present infringement of the Purchased
Intellectual Property.



     9.26 Pipelines.



          (a) Pride Company is the sole operator and manager of the Pipelines.



          (b) Sellers have delivered or made available to Buyer accurate and complete copies of all
tariffs related to the Pipelines.



          (c) To Sellers’ Knowledge, each Seller and Pride Products is in compliance with any tariff
which is binding upon such Seller or Pride Products, except as would not have a Material Adverse
Effect.



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          (d) There are no administrative or regulatory Proceedings pending, or to Sellers’ Knowledge,
threatened, against any of the Sellers or Pride Products the result of which are reasonably likely
to materially change, alter, or modify the rates, charges or fees for transportation services
related to the Pipelines or any other terms and conditions of service currently in effect under the
tariffs currently in effect.



          (e) Each of the Pipelines has been owned by Sellers for a period of time greater than ten (10)
years.



ARTICLE X

BUYER’S REPRESENTATIONS




     Buyer represents and warrants to Sellers as of the date hereof and as of the Closing Date the
following:



     10.1 Independent Investigation.



          (a) EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLERS EXPRESSLY SET FORTH IN
ARTICLE IX HEREOF AND ELSEWHERE IN THIS AGREEMENT AND IN THE RELATED AGREEMENTS, BUYER
ACKNOWLEDGES THAT (1) SELLERS ARE SELLING AND BUYER IS ACQUIRING THE PURCHASED PROPERTY ON AN “AS
IS”, “WHERE IS” BASIS, WITHOUT ANY REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASED PROPERTY
(EXPRESS, IMPLIED OR STATUTORY), (2) SELLERS HAVE NOT MADE AND ARE NOT MAKING ANY REPRESENTATION OR
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR OTHERWISE WITH REGARD TO THE
PURCHASED PROPERTY AND SELLERS HAVE EXPRESSLY DISCLAIMED ANY SUCH WARRANTIES (EXPRESS, IMPLIED OR
STATUTORY), AND (3) SELLERS HAVE NOT AND DO NOT WARRANT DESCRIPTION, VALUE, QUALITY, OR CONDITION
OF ANY OF THE PURCHASED PROPERTY (INCLUDING THE PIPELINES, TANKS, TERMINALS, APPURTENANT OR
ASSOCIATED EQUIPMENT, REFINERY EQUIPMENT OR OTHER REAL OR PERSONAL PURCHASED PROPERTY LOCATED ON OR
INCLUDED IN THE PURCHASED PROPERTY). BUYER FURTHER ACKNOWLEDGES THAT SELLERS HAVE NOT MADE AND ARE
NOT MAKING ANY REPRESENTATION OR WARRANTY CONCERNING THE PRESENT OR FUTURE VALUE OF THE POSSIBLE
INCOME, COSTS OR PROFITS IF ANY, TO BE DERIVED FROM THE PURCHASED PROPERTY. BUYER HAS MADE
INDEPENDENT INSPECTIONS, ESTIMATES, COMPUTATIONS, REPORTS, STUDIES, AND EVALUATIONS OF THE
PURCHASED PROPERTY AND HAS SATISFIED ITSELF WITH RESPECT TO THE CONDITION OF THE PURCHASED
PROPERTY.



          (b) Buyer acknowledges that portions of the Purchased Property have been used in the past for
the refining, storage, and transportation of refined petroleum products or crude oil and may have
been the subject of one or more Releases of refined petroleum products or crude oil as a result of
its use; provided, however, the preceding acknowledgement shall not alter, limit, diminish or
impair the representations, warranties, covenants and agreements of Sellers pursuant to this
Agreement and the Related Agreements.



     10.2 Investment. Buyer is acquiring the Purchased Property for its own benefit and account
and not with the intent of distributing fractional undivided interests thereof as would be subject
to regulation by federal or state securities Laws.



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     10.3 Evaluation by Buyer. By reason of Buyer’s knowledge and experience in the evaluation,
acquisition and operation of similar properties, Buyer has evaluated the merits and risks of
purchasing the Purchased Property and has formed an opinion based solely upon Buyer’s knowledge and
experience and not upon the Offering Memorandum or any representations or warranties by Sellers or
any of their representatives other than Sellers’ representations set forth in ARTICLE IX
hereof and elsewhere in this Agreement and in the Related Agreements.



     10.4 Transfer Restrictions. To the extent not provided elsewhere in this Agreement or the
Related Agreements, Buyer assumes the risk of any transfer restrictions or renegotiation
requirements associated with, or the expiration of, any Rights-of-Way, Permits, franchises,
Assigned Contracts or other agreements applicable to the Purchased Property.



     10.5 Compliance with Laws. Buyer is in compliance with all applicable Laws.



     10.6 Organization. Buyer is a corporation duly formed, validly existing and in good standing
under the Laws of Delaware and at the Closing will be duly qualified to carry on business in the
states in which the ownership of the Purchased Property requires it to be qualified.



     10.7 No Brokers. Buyer has not incurred any Obligation or liability, contingent or otherwise,
nor has it made any agreement with respect to any broker or finder’s fees arising out of or in any
way related to the transaction contemplated by this Agreement for which Sellers will be in any way
liable.



     10.8 Power and Authority. Buyer has the power and authority necessary to enter into and
perform this Agreement and the transaction contemplated hereby.



     10.9 Authorization and Enforceability. The execution, delivery, and performance by Buyer of
this Agreement and the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of Buyer. This Agreement has been duly executed and
delivered on behalf of Buyer, and, at the Closing, all documents and instruments required hereunder
to be executed and delivered by Buyer shall have been duly executed and delivered by Buyer. This
Agreement does, and such documents and instruments shall, constitute legal, valid and binding
obligations of Buyer enforceable in accordance with their terms, subject, however, to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar Laws from time to time in effect
relating to the rights and remedies of creditors, as well as to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in equity or at law).



     10.10 Investment Company Act and PUHCA. Buyer is not (a) an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940,
as amended, (b) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (c) a “foreign person”
within the meaning of Section 1445 of the Code.



     10.11 Consents. Other than with respect to (a) obtaining the consents or waivers set forth in
Schedule 10.11 and (b) as is otherwise contemplated in this Agreement and in the Related
Agreements, to Buyer’s Knowledge, no consent, approval of or by, or filing with or notice to any
other Person is required to be obtained with respect to Buyer or any of its Affiliates in
connection with the execution, delivery or enforceability of this Agreement, the Related Agreements
or the consummation of the transactions contemplated hereby and thereby, except where the failure
to obtain such consent or approval, make such filing or give such notice would not have a material
adverse effect on the ability of Buyer to perform its obligations hereunder and to consummate the
transactions contemplated hereby.



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     10.12 No Breach, Conflict. Subject to obtaining the consents and waivers set forth in
Schedule 10.11, the execution, delivery and performance of this Agreement, the Related
Agreements and the consummation of the transactions contemplated hereby and thereby and the
compliance by Buyer with any of the provisions hereof and thereof does not and will not (a) violate
or conflict with, or result in a breach of, any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under, or result in
termination of, or accelerate the performance required by, or result in the creation of any Lien
upon any of the assets or properties of Buyer or any of its Affiliates under any of the terms,
conditions or provisions of the Organizational Documents of Buyer or any of its Affiliates or under
any contract or agreement to which Buyer or any of its Affiliates is a party, or by which any of
their respective properties or assets is otherwise bound, or (b) violate any applicable Law to
which Buyer or any of its Affiliates is subject, or by which Buyer or any of its Affiliates or
their respective assets or properties may be bound, except in each case where such violation,
conflict, breach, default, termination or acceleration or Lien would not have a material adverse
effect on the ability of Buyer to perform its obligations hereunder and to consummate the
transactions contemplated hereby.



     10.13 No Knowledge of Misrepresentations. Buyer has no Knowledge that any representation or
warranty of Sellers in this Agreement is not true and correct in all material respects as of the
date given that has not been discussed with Sellers by Buyer’s counsel.



ARTICLE XI

PRE-CLOSING COVENANTS OF SELLERS AND BUYER 




     11.1 General. Sellers and Buyer will each use their respective Reasonable Efforts to take all
actions and to do all things necessary, proper or advisable to consummate, make effective and
comply with all of the terms of this Agreement and the transactions contemplated hereby (including
satisfaction, but not waiver, of the conditions precedent set forth Section 5.1).



     11.2 Operation of the Business. During the Interim Period, Sellers shall conduct the Business
(including conducting maintenance and repairs) in the ordinary course of business consistent with
past practices. Subject to compliance with applicable Law, Sellers will during the Interim Period
(a) confer on a regular and frequent basis with one or more representatives of Buyer to report on
the general status of the Purchased Property and the Business and (b) promptly provide to Buyer or
its representatives copies of all filings made with any Governmental Authority during such period.
Sellers shall operate the Business and the Purchased Property in material compliance with all
applicable Laws.



     11.3 Preservation of the Business and Purchased Property. Sellers will use all commercially
reasonable efforts to maintain the Business and Purchased Property substantially intact consistent
with past practices, including their present operations, physical facilities, working conditions
and relationships with suppliers, customers and Employees and will not take any action that would
reasonably be expected to detrimentally affect the Business or Purchased Property. With respect to
repairs and replacements that become necessary during the Interim Period, Sellers shall repair or
replace (with similar grade, quality and condition) Purchased Property with reasonable promptness
consistent with Sellers’ operation of the Purchased Property or conduct of the Business prior to
the date hereof. Without limiting the generality of the preceding sentence, Sellers shall make
repairs in accordance with past practices related to the hail storm damage incurred during May,
2006 at the Terminal located in Abilene, Texas or at Sellers’ option deliver to Buyer all related
insurance proceeds received by Sellers.



     11.4 Notice of Developments. Sellers will give prompt written notice to Buyer of any
developments occurring after the date of this Agreement which cause, or reasonably could be
expected to cause, any of the representations and warranties in ARTICLE IX to be inaccurate
as of the date of this Agreement or the Closing Date. Buyer will give prompt written notice to
Sellers of any developments



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occurring after the date of this Agreement which cause, or reasonably could be expected to
cause, any of the representations and warranties in ARTICLE X to be inaccurate as of the
date of this Agreement or the Closing Date. No disclosure by any Party pursuant to this
Section 11.4 shall be deemed to amend or supplement the Schedules or to prevent or cure any
misrepresentation or breach of warranty or covenant.




     11.5 Employees.



          (a) As soon as practicable after the execution of this Agreement, Sellers and Buyer shall
announce to the employees of Sellers (the “Employees”) the proposed purchase and sale of the
Purchased Property, and Buyer shall have the opportunity to make presentations regarding Buyer’s
benefit plans and other terms of employment to the Employees as a group, as well as individually,
all in accordance with a protocol to be agreed between Sellers and Buyer.



          (b) Buyer shall be entitled, but not obligated, to make offers of employment to the Employees,
at the sole and absolute discretion of Buyer and on terms satisfactory to Buyer. In connection
therewith, the Sellers will permit Buyer to have full access to all Employees for the purpose of
interviews and evaluations conducted in connection with Buyer’s assessment of whether to extend
offers of employment pursuant hereto. Notwithstanding the foregoing, in making hiring
determinations pursuant to Section 11.5(b), Buyer shall comply with all applicable Laws respecting
employment offers and hiring including the National Labor Relations Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act and the Age Discrimination in Employment
Act.



          (c) Sellers agree to use Reasonable Efforts to assist Buyer in the orderly transition to Buyer
of any Employees who accept Buyer’s offer of employment.



          (d) To the maximum extent permitted by applicable Law, Sellers shall indemnify, defend and
hold Buyer Indemnitees harmless against all Claims and Damages to the extent arising out of Claims
by current or former Employees that arise prior to, on, or after the Closing Date to the extent
related to their employment with, or the termination of their employment from, Sellers or their
Affiliates including Claims related to accrued vacation, severance pay and other employee benefits.



     11.6 Financial Statements. In the event that Buyer determines, in consultation with its legal
and accounting advisors, that Buyer must have audited financial statements meeting Regulation S-X
of the Securities and Exchange Commission (the “SEC”) with respect to the Purchased Property or the
Business, then Buyer may notify Sellers of such determination and Sellers and their Affiliates will
thereupon commence the preparation of (and cause their auditors to cooperate with and assist in the
preparation of) and deliver to Buyer audited financial statements meeting the requirements of the
SEC’s Regulation S-X with respect to the Purchased Property and Business; provided, that Buyer
provides such notice prior to March 31, 2007. All reasonable costs and expenses incurred by
Sellers in preparing such financial statements for Buyer (excluding salaries and benefits
attributable to Seller Principals) shall be for Buyer’s account and shall be promptly reimbursed,
upon submission of invoice by Sellers.



     11.7 Application for Environmental Insurance.



          (a) Buyer and Sellers intend to obtain environmental insurance to address environmental
matters arising out of the operation of the Terminals, Pipelines, Tanks and the Refinery, as
described in more detail below, other than those environmental matters for which indemnification is
specifically provided by Sellers to Buyer in this Agreement. In this connection Sellers and Buyer
agree to use Reasonable Efforts to obtain, on or before July 10, 2006, a commitment from an insurer
to provide environmental insurance (the “Environmental Insurance”) at the Closing under the
following parameters: (i) the insurance is underwritten by an insurer reasonably acceptable to
Buyer and Sellers



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provided that AIG, Chubb, and XL and other similarly positioned insurance companies shall be
deemed to be acceptable insurers; (ii) the insurance policy shall provide for TEN MILLION DOLLARS
($10,000,000) of coverage, a minimum ten (10) year term and a maximum deductible of TWO HUNDRED
FIFTY THOUSAND DOLLARS ($250,000) per occurrence; (iii) Buyer shall be named as the first named
insured and Sellers will be named as additional named insureds; (iv) the policy will be in a form
and scope reasonably acceptable to Buyer (e.g., coverage for historical issues other than criminal
fines, penalties, and punitive damages); (v) this Agreement will be listed as an insured contract;
and (vi) the policy will have exclusions which are customary and of a nature which should be
acceptable to a reasonably prudent pipeline operator similarly situated.




          (b) Sellers agree to provide to Buyer’s insurance broker true and complete copies of any
environmental studies, reports, or analyses documenting Releases or Environmental Conditions on,
at, or under the Pipelines, the Terminals, the Tanks, and the Refinery, and other information as
may reasonably be requested by the insurance broker or the insurers in order to issue the
Environmental Insurance.



          (c) Buyer agrees to provide Sellers with copies of all correspondence between potential
carriers and Buyer with respect to the efforts to obtain such insurance including copies of all
requests for information and proposals and requests to conduct environmental assessments. Sellers
shall, furthermore, be entitled to participate in all conferences, meetings and site visits with
representatives of the potential insurers.



          (d) The Environmental Insurance shall provide coverage for remediation expenses, legal fees,
and third party claims arising out of pre-closing Releases on, at, or underlying the Terminals, the
Tanks, the Pipelines and the Real Property.



          (e) The premium for the Environmental Insurance shall be borne fifty percent (50%) by Sellers
and fifty percent (50%) by Buyer provided that neither Buyer nor Sellers will be required to
contribute in excess of TWO HUNDRED EIGHTY THOUSAND DOLLARS ($280,000) each towards payment of such
premium.



          (f) Notwithstanding anything in this Agreement to the contrary, in the event that a commitment
for the Environmental Insurance pursuant to the terms hereof is not obtained by Buyer on or before
July 10, 2006, then Buyer may, at its option, terminate this Agreement by providing written notice
to Sellers of such termination prior to the close of business on July 20, 2006.



     11.8 Governmental Filings. During the Interim Period, each Party shall promptly provide to
the other Party or its representatives copies of all filings made with any Governmental Authority
during such period which relate to the transactions contemplated by this Agreement or the Business.



ARTICLE XII

PRE-ACQUISITION REVIEW




     12.1 Access to Information. During the Interim Period, at Buyer’s expense and subject to the
Confidentiality Agreement, Sellers will, and will cause their Affiliates to, (a) permit Buyer and
its Affiliates and their authorized representatives full access during normal business hours and
upon reasonable notice to the Purchased Properties and the Business, subject to Sellers’ reasonable
policies and regulations regarding safety and security, and to Sellers’ or its Affiliates’
personnel (b) permit Buyer and its Affiliates and their authorized representatives to make such
inspections as they may reasonably request, including any investigation Buyer deems necessary or
appropriate to inspect the environmental condition of the Business or the Purchased Properties,
provided that such environmental investigation



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shall not include the performance of any surface or subsurface soil or surface or ground water
sampling, monitoring, borings, or testing, and (c) cause its officers, employees and agents to
furnish Buyer and all such persons with such financial and operating data and other information,
including assessments, reports, or other information regarding environmental matters pertaining to
the Business or the Purchased Property and relevant to the continuing operations of the Business or
relevant to the transition of ownership and operation of the Business hereunder, that is available
with respect to the Purchased Property and the Business as they may from time to time reasonably
request. Without limiting the generality of the preceding, Buyer shall have access to (i) Sellers’
pipeline manuals used in the operation of the Pipelines or (ii) the process used by Sellers for
integrity assessments. Buyer shall provide Sellers with copies of any reports prepared as a result
of such investigation by consultants of Buyer concerning the condition of the Purchased Property,




     12.2 Information is Confidential. Except as required by Law, all information acquired by
Buyer in any inspection, inventory, study, or examination of the Purchased Property, and the
results of any analysis thereof, shall be kept confidential prior to Closing by Buyer from anyone
other than Sellers in accordance with the Confidentiality Agreement. Should Buyer be required by
any Law to disclose any information concerning the Purchased Property, Buyer shall notify Sellers
at least five (5) days prior to Buyer’s disclosure of such information.



     12.3 Indemnity. Buyer shall indemnify, defend and hold harmless Seller Indemnitees from any
and all Claims and Damages to the extent arising from the exercise of Buyer’s rights under this
ARTICLE XII, except to the extent the indemnified event or occurrence arises from or is
caused by the negligence or fault of Seller Indemnitees. Sellers shall have the right at all times
to participate in the preparation for and conducting of any hearing or trial related to this
indemnification provision, as well as the right to appear on its own behalf or to retain separate
counsel to represent itself at any such hearing or trial.



ARTICLE XIII

TITLE AND SURVEY




     13.1 Conveyances. At the Closing, Sellers shall transfer to Buyer title to the Purchased
Property. In the case of the Real Property, it shall be transferred at the Closing by means of a
Special Warranty Deed in substantially the form attached hereto as Exhibit 13.1.




     13.2 Title Insurance. With respect to each of the Real Properties, Buyer will be entitled to
obtain one or more title insurance commitments (collectively, the “Title Commitment”) at Buyer’s
sole expense, showing all matters affecting title to the Real Properties and binding Stewart Title
Guaranty Company, National Title Services of Houston, Texas (the “Title Company”) to issue to Buyer
at the Closing one or more Owner Policy of Title Insurance (collectively, the “Owner’s Policy”),
such policy to be on the standard form of policy prescribed by the Texas Board of Insurance and in
the amount of the Purchase Price allocated to each of the Real Properties and related Facilities.
Sellers agree to reasonably assist and cooperate with Buyer and to take all actions reasonably
necessary and requested by the Title Company to assist Buyer in obtaining the Title Commitments and
to provide Buyer with reasonable access to all Books and Records and personnel to the extent
necessary to enable Buyer to obtain such Title Commitments.



     13.3 Survey. With respect to each of the Real Properties, Buyer shall, at Buyer’s expense,
cause a current Texas Society of Professional Surveyors Category 1A or 1B, Condition II or III
survey (at Buyer’s election) (collectively, the “Surveys”), to be performed and completed on the
Real Properties by a Registered Professional Land Surveyor licensed by the State of Texas and
reasonably acceptable to Seller, Buyer and the Title Company (the “Surveyor”). Buyer shall use
Reasonable Efforts to cause such



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Surveys to be completed as soon as reasonably practicable. The Surveys shall be in a form
reasonably acceptable to Sellers, Buyer and the Title Company and a copy thereof shall be delivered
to Sellers, Buyer and the Title Company. Unless otherwise agreed by Sellers and Buyer in writing,
the legal description contained in the Surveys shall be the legal description contained in the
documents used to convey the Real Property from Sellers to Buyer.




     13.4 Title Examination. Buyer shall have ten (10) days (the “Title Examination Period”) after
the receipt of the last of (i) the Title Commitments, (ii) legible copies of all instruments
referred to in Schedules B and C of each of the Title Commitments and (iii) the Surveys, to notify
Sellers, in writing, of such objections as Buyer may have to anything contained in the Title
Commitments or the Surveys, other than a Permitted Encumbrance. In the event Buyer shall notify
Sellers of an objection to anything contained in the Title Commitments or Survey, other than a
Permitted Encumbrance, prior to the expiration of the Title Examination Period, Sellers shall have
ten (10) days from the receipt of such notice, or such greater period of time as may be mutually
acceptable to Buyer and Sellers (the “Cure Period”), within which Sellers shall use all
commercially reasonable efforts to cure or remove such objection. If one or more objection(s)
constitute a Significant Title Defect and cannot be or is not cured by Sellers to the reasonable
satisfaction of Buyer and the Title Company prior to the expiration of the Cure Period, then Buyer
may, at its election in its sole discretion, in writing: (A) terminate this Agreement without
further obligation or liability by giving written notice of termination to Sellers at any time on
or before the End Date; (B) offer to acquire the Purchased Property, including the portion affected
by the Significant Title Defect, subject to the terms of this Agreement, but at a reduced Purchase
Price offered by Buyer, which offer Sellers may accept or reject in their sole discretion; or (C)
acquire the Purchased Property, including the portion affected by the Significant Title Defect,
without adjustment to the Purchase Price.



     13.5 Owner’s Policy. At Closing, Buyer may elect to purchase at, at Buyer’s expense, the
Owner’s Policy. The Owner’s Policy may contain as exceptions the standard printed exceptions and
the Permitted Encumbrances. Notwithstanding anything contained herein to the contrary, if Buyer
requests any endorsements, modifications or additional title insurance coverage, including that the
“survey exception” in the Owner’s Policy be modified to read “shortages in area,” Buyer shall pay
all fees and additional premiums charged by the Title Company in connection therewith.



ARTICLE XIV

SELLERS’ INDEMNIFICATION OBLIGATIONS




     14.1 Sellers’ Indemnification Obligations. Subject to Section 14.2, to the fullest
extent permitted by Law, Sellers hereby agree, jointly and severally, to indemnify, defend, and
hold Buyer and its Affiliates (including Pride Products after the Closing) and their respective
directors, officers, shareholders, partners, owners, employees, attorneys and agents (collectively,
the “Buyer Indemnitees”) harmless from all Claims, and pay, any and all Damages to the extent such
relate to, arise out of, result from or are attributable to, directly or indirectly, any of the
following:



          (a) the breach of any representation or warranty of any of the Sellers in this Agreement or
any Related Agreement;



          (b) any breach of any covenant or agreement of any of the Sellers contained in this Agreement
or any Related Agreement.



          (c) Releases on or from the Purchased Property, if any, that occur during the Interim Period;
and



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          (d) any (i) misstatement or omission in any financial statements provided by Sellers in
connection with the application for the Environmental Insurance, (ii) Knowing misstatement or
omission by Sellers in Sellers’ application for the Environmental Insurance or (iii) fraud
committed by Sellers in connection with the application for the Environmental Insurance, in any
case which results in exclusion or cancellation of insurance coverage to Buyer pursuant to the
Environmental Insurance.



     14.2 Limitations on Sellers’ Indemnity Obligations.



          (a) Survival. The indemnity obligations of Sellers contained in Section 14.1(a)
related to breaches of representations and warranties (and any related Claims arising from a breach
by Sellers of Section 11.4) shall only apply to matters for which Pride Company has
received notice from Buyer within three (3) years after the Closing Date; provided, however,



          (i) the representations and warranties of Sellers in Sections 9.1 and 9.10
shall survive the Closing for a period of four (4) years after the Closing Date;



          (ii) the representations and warranties in Section 9.7 shall survive the Closing until
the expiration of the statute of limitations applicable to the underlying matter giving rise to
that Claim;



          (iii) the representations and warranties in Sections 9.2, 9.3, 9.4, and 9.15 shall survive the
Closing forever; and



          (iv) none of the time limits contained in this Section 14.2 shall apply to Knowing
breaches by Sellers of the representations or warranties in this Agreement or the Related
Agreements; provided, however, that the foregoing shall not be deemed to constitute a waiver by
Sellers of any applicable statute of limitations.



          (b) Limitation. Sellers’ aggregate liability for indemnification of Buyer Indemnitees
pursuant to Section 14.1(a) (and any related Claims arising from a breach by Sellers of
Section 11.4) shall be as follows:



          (i) For indemnification Claims made after the Closing Date but on or before the first annual
anniversary of the Closing Date, such liability of Sellers shall not exceed an amount equal to
THREE MILLION DOLLARS ($3,000,000) LESS the aggregate amount, if any, paid by Sellers in
respect of Claims made pursuant Section 14.1(a) (and any related Claims arising from a
breach by Sellers of Section 11.4) after the first annual anniversary of the Closing Date,
provided, that if such difference is a negative number, such liability of Sellers shall equal zero;



          (ii) For indemnification Claims made after the first annual anniversary of the Closing Date
but on or before the second (2nd) annual anniversary of the Closing Date, such liability
of Sellers shall not exceed an amount equal to TWO MILLION DOLLARS
($2,000,000) LESS
the aggregate amount, if any, paid by Sellers in respect of Claims made pursuant Section
14.1(a) (and any related claims arising from a breach by Sellers of Section 11.4) on or
before the first annual anniversary of the Closing Date or after the second annual anniversary of
the Closing Date, provided, that if such difference is a negative number, such liability of Sellers
shall equal zero; and



          (iii) For indemnification Claims made after the second (2nd) annual anniversary of
the Closing Date but on or before the fourth (4th) annual anniversary of the Closing
Date, such liability of Sellers shall not exceed an amount equal to ONE MILLION DOLLARS
($1,000,000), LESS the amount, if any, paid by Sellers in respect of Claims made pursuant
Section 14.1(a) (and any



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related claims arising from a breach by Sellers of Section 11.4) on or before the
second annual anniversary of the Closing Date; provided, that if such difference is a negative
number, such liability of Sellers shall equal zero.



Notwithstanding the preceding, the limitations on Sellers’ indemnification obligations set forth in
the preceding sentence shall not apply to Damages resulting from (y) any breach by Sellers
of Sections 9.2, 9.3, 9.4, 9.7, 9.15, 9.20(e) or
9.21(e) or (z) fraud or willful misconduct by Sellers in the negotiation or execution of
this Agreement or the Related Agreements; provided, however, that




(A) Sellers’ liability for breaches of Section 9.15 related to the Real Property at
Abilene, Texas shall not exceed an amount equal to TEN MILLION DOLLARS ($10,000,000);



(B) Sellers’ liability for breaches of Section 9.15 related to the Real Property at
San Angelo, Texas shall not exceed an amount equal to TEN MILLION DOLLARS ($10,000,000);



(C) Sellers’ liability for breaches of Sections 9.20(e) and 9.21(e) shall
not exceed an amount equal to TEN MILLION DOLLARS ($10,000,000);



(D) Sellers’ liability for breaches of Sections 9.2, 9.3, 9.4,
9.7, 9.15, 9.20(e) and 9.21(e) (and any related Claims
arising from a breach by Sellers of Section 11.4) shall not exceed an aggregate
amount equal to the Purchase Price less the amount paid by Sellers, if any, pursuant to (I)
Section 14.1(a) (and any related Claims arising from a breach by Sellers of
Section 11.4) for breaches other than for breaches of representations and
warranties set forth in Sections 9.2, 9.3, 9.4, 9.7,
9.15, 9.20(e) and 9.21(e) or (II) the last sentence of Section
5.8; and



(E) Although payments made in respect of (I) breaches of the representations and warranties
set forth in Sections 9.2, 9.3, 9.4, 9.7, 9.15,
9.20(e) and 9.21(e) or (II) the last sentence of Section 5.8 are not
subject to the limitations set forth in Section 14.2(b)(i), 14.2(b)(ii), or
14.2(b)(iii), such payments shall be taken into account in determining whether such
limitations have been reached.



               (c) Threshold. Sellers shall not have any indemnification liability pursuant Section
14.1(a) (and any related Claims arising from a breach by Sellers of Section 11.4)
unless and until the aggregate Damages thereunder exceed an amount equal to ONE HUNDRED FIFTY
THOUSAND DOLLARS ($150,000) (the “Threshold Amount”), and once the aggregate amount of Damages
under Section 14.1(a) (and any related Claims arising from a breach by Sellers of
Section 11.4) exceeds the Threshold Amount, the Buyer Indemnitees will be entitled to
recover all such Damages to which they are entitled in excess of the Threshold Amount.
Notwithstanding the preceding sentences to the contrary, the limitations on Sellers’
indemnification obligations set forth in this subparagraph (c) shall not apply to Damages resulting
from (y) any breach or default by Sellers of Sections 9.2, 9.3, 9.4,
9.7, 9.15 or 9.20(e) or (z) fraud or willful misconduct by Sellers in the
negotiation or execution of this Agreement or the Related Agreements. Notwithstanding the
foregoing, in calculating the Threshold Amount, all Damages which individually total less than
FIFTY THOUSAND DOLLARS ($50,000) shall be excluded in their entirety, shall not be counted toward
the Threshold Amount and Sellers shall have no liability to the Buyer Indemnitees therefor.



     14.3 No Punitive Damages. The foregoing indemnity obligation of Sellers under this
ARTICLE XIV shall not cover or include any punitive or exemplary damages, except to the
extent such punitive or exemplary damages relate to a Claim by a Governmental Authority or in
connection with a Third Party Claim.



     14.4 Survival. Each representation, warranty, covenant and obligation of Sellers in this
Agreement and the Related Agreements will survive the Closing as provided herein.



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     14.5 No Transfer of Indemnities. Sellers’ indemnity obligations contained in Section
14.1 are personal to Buyer and may not be assigned to another Person. Should Buyer sell or
transfer all or any portion of the Purchased Property acquired by Buyer hereunder, Sellers’
indemnity obligation contained in Section 14.1 relating to the Purchased Property that is
sold or transferred will be immediately extinguished. Notwithstanding the preceding sentences to
the contrary, Sellers’ indemnity obligations contained in Section 14.1 shall be (i)
applicable to Affiliates of Buyer that take title to the Purchased Property pursuant to Section
5.6 (for so long as such Affiliate remains an Affiliate of Buyer) and (ii) automatically
assigned in the event and to the extent Purchased Property is transferred or assigned after the
Closing to an Affiliate of Buyer (for so long as such Affiliate remains an Affiliate of Buyer).



ARTICLE XV

BUYER’S INDEMNIFICATION OBLIGATIONS




     15.1 Buyer’s Indemnification Obligations. To the fullest extent permitted by Law, Buyer
hereby agrees to indemnify, defend, and hold Sellers and their Affiliates (excluding Pride Products
after the Closing) and their respective directors, officers, shareholders, partners, owners,
employees, attorneys and agents (collectively, the “Seller Indemnitees”) harmless from all Claims,
and pay, any and all Damages to the extent such relate to, arise out of, result from or are
attributable to, directly or indirectly, any of the following:



          (a) the breach of any representation or warranty of Buyer in this Agreement or any Related
Agreement;



          (b) any breach of any covenant or agreement of Buyer contained in this Agreement or any
Related Agreement;



          (c) all Obligations of Buyer and its Affiliates to the extent arising out of, incurred in
connection with or related to the ownership, operation, use or maintenance of the Purchased
Property from and after the Effective Time or operation of the Business from and after the
Effective Time; and



          (d) the Assumed Liabilities; and



          (e) any (i) misstatement or omission in any financial statements provided by Buyer in
connection with the application for the Environmental Insurance, (ii) Knowing misstatement or
omission by Buyer in Buyer’s application for the Environmental Insurance or (iii) fraud committed
by Buyer in connection with the application for the Environmental Insurance, in any case which
results in exclusion or cancellation of insurance coverage to Sellers pursuant to the Environmental
Insurance.



     15.2 Punitive Damages. The foregoing indemnity obligation of Buyer under this ARTICLE
XV shall not cover or include any punitive or exemplary damages, except to the extent such
punitive or exemplary damages relate to a Claim by a Governmental Authority or in connection with a
Third Party Claim. 



     15.3 Survival. Each representation, warranty, covenant and obligation of Buyer in this
Agreement and the Related Agreements will survive the Closing as provided herein.



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ARTICLE XVI

CLAIMS PROCEDURE 




     All Claims for indemnification by a Party under ARTICLE XIV, ARTICLE XV or as
otherwise provided in this Agreement or any Related Agreements (the Party claiming indemnification
and the Party against whom such claims are asserted being herein called the “Indemnified Party” and
the “Indemnifying Party,” respectively) shall be asserted and resolved as follows:



     16.1 Claim Notice. In the event that any Claim for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be collected from such
Indemnified Party by a Third Person, such Indemnified Party shall, within thirty (30) calendar days
of the receipt thereof, give notice (the “Claim Notice”) to the Indemnifying Party of such Claim
specifying the nature of and specific basis for such Claim and the estimated amount thereof, to the
extent then feasible, which estimate shall not be binding upon the Indemnified Party in its effort
to collect the final amount of such Claim. The failure to give any such notice shall not affect the
rights of the Indemnified Party to indemnification hereunder unless the Indemnified Party has
proceeded to contest, defend or settle the Claim with respect to which it has failed to give prior
notice to the Indemnifying Party. Additionally, to the extent the Indemnifying Party is prejudiced
thereby, the failure to so notify the Indemnifying Party of any such Claim shall relieve the
Indemnifying Party from liability that it may have to the Indemnified Party under the
indemnification provisions, as applicable, but only to the extent of the loss directly attributable
to such failure to notify and shall not relieve the Indemnifying Party from any liability that it
may have to the Indemnified Party otherwise.



     16.2 Defense of Claim. The Indemnifying Party shall be given the opportunity, at its cost and
expense, to contest and defend, by all appropriate legal Proceedings, any Claim with respect to
which it is called upon to indemnify the Indemnified Party under the provisions of this Agreement;
provided, however, that notice of the intention to so contest and defend shall be delivered by the
Indemnifying Party to the Indemnified Party within thirty (30) calendar days following receipt of
the Claim Notice. If the Indemnifying Party does not give notice to the Indemnified Party of its
election to contest and defend any such Claim within such period then the Indemnifying Party shall
be bound by the result obtained with respect thereto by the Indemnified Party and shall be
responsible for all costs incurred in connection therewith. The Claim which the Indemnifying Party
elects to contest and defend may be conducted in the name and on behalf of the Indemnifying Party
or the Indemnified Party as may be appropriate. Such Claim shall be conducted by counsel employed
by the Indemnifying Party who shall be reasonably satisfactory to the Indemnified Party and the
Indemnified Party shall have the right to participate in such Claim and to be represented by
counsel of its own choosing at its own cost and expense. If the Indemnified Party joins in any such
Claim, the Indemnifying Party shall have full authority to determine all action to be taken with
respect thereto; provided that if the Indemnifying Party reserves its rights with respect to its
indemnification obligations under this Agreement as to such Claim, then the Indemnified Party shall
have full authority to determine all action to be taken with respect thereto. At any time after the
commencement of defense of any Claim, the Indemnifying Party may request the Indemnified Party to
agree in writing to the abandonment of such contest or to the payment or compromise by the
Indemnifying Party of the asserted Claim provided the Indemnifying Party agrees in writing to be
solely liable for all Losses relating to such Claim, whereupon such action shall be taken unless
the Indemnified Party determines that the contest should be continued and notifies the Indemnifying
Party in writing within fifteen (15) calendar days of such request from the Indemnifying Party. In
the event that the Indemnified Party determines that the contest should be continued, the amount
for which the Indemnifying Party would otherwise be liable hereunder shall not exceed the amount
which the Indemnifying Party had agreed to pay in payment or consideration of such Claim, provided
the other Party to the contested Claim had agreed in writing to accept such amount in payment or
compromise of the Claim as of the time the Indemnifying Party made request therefor to the
Indemnified Party, and



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further provided that under such proposed compromise, the Indemnified Party would be fully and
completely released from any further liability or obligation with respect to the matters which are
the subject of such contested Claim.




     16.3 Cooperation. If requested by the Indemnifying Party, the Indemnified Party agrees, at
the Indemnifying Party’s expense, to cooperate with the Indemnifying Party and its counsel in
contesting any Claim that the Indemnifying Party elects to contest, or, if appropriate and related
to the Claim in question, in making any counterclaim against the Person asserting the Third Person
Claim, or any cross-complaint against any Person other than an Affiliate of the Indemnified Party.



     16.4 Third Party Claim. If any Indemnified Party should have a Claim against the Indemnifying
Party hereunder that does not involve a Claim being asserted against or sought to be collected from
it by a Third Person, the Indemnified Party shall send a Claim Notice with respect to such Claim to
the Indemnifying Party. If the Indemnifying Party disputes such Claim, such dispute shall be
resolved in the manner set forth in Section 20.14.



     16.5 Presence at Conferences. The Indemnified Party agrees to afford the Indemnifying Party
and its counsel the opportunity, at the Indemnifying Party’s expense, to be present at, and to
participate in, conferences with all Persons asserting any Claim against the Indemnified Party and
conferences with representatives of, or counsel for, such Persons.



     16.6 Subrogation. In the event that an Indemnified Party has a right of recovery against any
third party with respect to any Losses in connection with which a payment is made to such
Indemnified Party by an Indemnifying Party; then (i) such Indemnifying Party shall, to the extent
of such payment, be subrogated to all of the rights of recovery of such Indemnified Party against
such third party with respect to such Losses; and (ii) such Indemnified Party shall execute all
papers reasonably required and take all commercially reasonable action necessary to secure such
rights, including the execution of such documents as are necessary to enable such Indemnifying
Party to bring suit to enforce such rights.



     16.7 Exclusive Remedy. AS BETWEEN THE BUYER INDEMNITEES AND THE SELLER INDEMNITEES AFTER THE
CLOSING, THE INDEMNIFICATION PROVISIONS, COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS AGREEMENT AND THE RELATED AGREEMENTS WILL BE THE SOLE AND EXCLUSIVE RIGHTS,
OBLIGATIONS AND REMEDIES OF THE PARTIES WITH RESPECT TO THIS AGREEMENT, THE EVENTS GIVING RISE TO
THIS AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREBY (BUT EXCLUDING CLAIMS RELATING TO FRAUD OR
INTENTIONAL MISREPRESENTATION IN THE NEGOTIATION OR EXECUTION OF THIS AGREEMENT). IF THE CLOSING
OCCURS, NEITHER PARTY NOR ANY OF ITS RESPECTIVE SUCCESSORS OR ASSIGNS SHALL HAVE ANY RIGHTS AGAINST
THE OTHER PARTY OR ITS AFFILIATES AFTER THE CLOSING DATE OTHER THAN AS IS EXPRESSLY PROVIDED IN
THIS AGREEMENT AND THE RELATED AGREEMENTS. NOTHING IN THIS SECTION 16.6 OR IN THIS
AGREEMENT SHALL LIMIT OR SHIFT SELLERS’ RETAINED OBLIGATIONS FOR ANY LIABILITIES AND OBLIGATIONS
RELATING TO THE EXCLUDED ASSETS OR TO THE EXCLUDED LIABILITIES.



ARTICLE XVII

INCIDENTAL CONTAMINATION AND NORM 




     17.1 Incidental Contamination and NORM. Buyer acknowledges that the Purchased Property may
contain inter alia asbestos in pipe coating, undisplaced petroleum hydrocarbon products in
pipelines, coats of lead-based paints, polychlorinated biphenyls (“PCB’s”) in transformers or
rectifiers,



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mercury in electrical switches, and Naturally Occurring Radioactive Material (“NORM”) in
various potential forms. Buyer also expressly understands that special procedures may be required
for the remediation, removal, transportation and disposal of such affixed or attached.
Notwithstanding anything in this Agreement to the contrary, Buyer expressly assumes liability for
or in connection with the future abandonment and removal of NORM, lead-based paint, undisplaced
petroleum hydrocarbon products, mercury, asbestos or PCBs to the extent contained in or on the
Terminals, Pipelines, Tanks, Equipment, Refinery Equipment, Facilities or other personal property
included in the Purchased Property in each case as of the date hereof; provided, however, that any
Releases of such materials to soil, surface water, groundwater or air that occur during the Interim
Period and that result in Environmental Liabilities to Buyer shall be subject to the
indemnification provisions set forth in Section 14.1(c).




ARTICLE XVIII

TARIFFS AND ALLOCATION OF CARRIER OBLIGATIONS 




     18.1 Adoption of Tariffs. Buyer agrees that, for a Pipeline which has tariffs on file with a
regulatory agency, it will either adopt Sellers’ tariff or file its own to be effective as of the
Effective Time, if required by Law to do so. Sellers shall cooperate with and provide reasonable
assistance to Buyer for such activities.



     18.2 Third Party Inventory. The Pipelines, Tanks and Terminals may contain refined products
as of the Effective Time which are held for the account of Third Person shipper(s) or customer(s)
(“Third Party Inventory”). It is understood that title to such Third Party Inventory will remain
with the shipper(s) and customer(s) and that as of the Effective Time Buyer shall assume the
obligation to handle the Third Party Inventory from and after the Effective Time in accordance with
applicable published tariffs or applicable contract provisions of the Assigned Contracts. Further,
to the extent that refined product have been tendered for shipment in the Pipelines under an
applicable published tariff, but not yet delivered, Buyer shall receive such refined products for
transportation in accordance with applicable published tariffs. At the Closing, Sellers shall
furnish Buyers with a schedule detailing all Third Party Inventory in the possession or control of
Sellers and any refined products that have been tendered for shipment in the Pipelines but not yet
delivered.



ARTICLE XIX

POST-CLOSING COVENANTS OF SELLERS AND BUYER




     19.1 Stored Hazardous Materials.



          (a) Buyer shall be responsible, at its expense, for the management and disposal of those
certain Hazardous Materials set forth on Schedule 19.1(a) (the “Stored Hazardous
Materials”) to the extent that such Hazardous Materials are stored at or in the Purchased Property
as of the Closing Date; provided, however, Buyer shall not assume or be responsible for fines and
monetary penalties to the extent related to or arising from the generation, use, treatment or
storage of the Stored Hazardous Materials prior to the Effective Time in violation of applicable
Environmental Laws. The performance of such management and disposal will be by Buyer, in the name
of Buyer, or if required by applicable Law, in the name of Sellers. Buyer will obtain all necessary
licenses, manifests, permits and approvals to perform such work. Disposal of all waste in
conjunction with management of the Stored Hazardous Materials will be performed in accordance with
all applicable Laws. Buyer will use its best efforts to (i) commence disposal of the Stored
Hazardous Materials within 60 days after the Closing Date and (ii) complete disposal of the Stored
Hazardous Materials within 18 months after the Closing Date.



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          (b) In the event of any actual or threatened Claim by a Governmental Authority that the
generation, use, treatment or storage of the Stored Hazardous Materials prior to the Effective Time
was or may have been in violation of applicable Environmental Laws, (i) the party receiving notice
of such Claim shall provide the other with prompt notice of such Claim, (ii) each party shall
provide the other party with timely notice of, and the opportunity to attend and participate in,
any meetings or hearings with a Governmental Authority regarding such Claim, and (iii) the parties
shall cooperate with each other in the defense of any such Claim.



          (c) Each party further agrees not to take any voluntary action to solicit, encourage or cause
the initiation of any Proceeding that is reasonably likely to result in the assessment of any fine
or penalty against the other relating to the Stored Hazardous Materials; provided, however, that
making any filing with, or providing any notice or information to, any Governmental Authority or
otherwise making a disclosure, in any case that a party believes, in good faith, is required under
applicable Law shall not constitute a breach of this Section 19.1(c).



     19.2 Hazardous Waste Permit Modification. Within thirty (30) days after the Closing Date,
Buyer shall submit to Sellers a permit modification application to that certain hazardous waste
permit no. HW-50125 (the “RCRA Permit”) that would remove the Real Property from the property
covered by the RCRA Permit so that the Real Property will no longer be subject to the RCRA Permit.
Within fifteen (15) days of receipt, Sellers will execute such permit modification application and
return it to Buyer for filing with the Texas Commission on Environmental Quality (“TCEQ”). Sellers
will cooperate with and support Buyer in its efforts to modify the RCRA Permit, provided that Buyer
will be responsible for any costs associated with preparation and filing of the application for the
permit modification.



     19.3 Intellectual Property.



          (a) Except as permitted under the License Agreement, from and after the Closing Date, Sellers
shall not, and shall cause their respective employees, representatives and agents not to, use the
Purchased Intellectual Property or any variations thereof or any name or mark confusingly similar
thereto or any Marketing Materials for any purpose whatsoever. Except as permitted under the
License Agreement, Sellers agree to refrain from taking any action or proceeding, legal or
otherwise, which would hinder Buyer in the use or registration, in any jurisdiction, of the
Purchased Intellectual Property or any mark, name or domain name comprised of or incorporating the
Purchased Intellectual Property or otherwise similar thereto.



          (b) Except as permitted under the License Agreement, from and after the Closing Date, Sellers
agree not to use or display the Domain Name anywhere in the world in any form, including as a
trademark, e-mail address, domain name or other proprietary designation and further agree not to
contest or challenge the validity of the Domain Name or registrations therefore as used or made by
Buyer. Sellers agree not to pursue any further action to register or in any way assert ownership
of the Domain Name or a domain name similar thereto in any generic top-level domain name or under
any country code domain, either on behalf of their selves or in assistance to a Third Person.
Except as permitted under the License Agreement, Sellers shall not, and shall cause their
respective employees, representatives and agents not to, use the Domain Name or Website or any
Purchased Intellectual Property relating thereto for any purpose whatsoever.



     19.4 License of Trademarks.



          (a) Buyer shall grant Sellers an exclusive, royalty free, worldwide license to use the names
“Pride,” “Pride,” “Pride Companies,” “Pride Refining,” “Pride Marketing” and any



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variations thereof, as set forth in a Trademark License Agreement substantially in the form
attached hereto as Exhibit 19.4 (the “License Agreement”).




          (b) Except as permitted under the License Agreement, (i) from and after the Closing Date,
Sellers shall not, and shall cause their Affiliates and their respective employees and
representatives not to, use or display in any form the name “Pride” or any variations thereof
comprised of or incorporating the word “Pride” for any purpose whatsoever including any businesses
conducted by Sellers from and after the Closing Date and (ii) within thirty (30) days after the
Closing Date, Sellers shall remove from or paint over any logo or sign on the Excluded Assets and
any other tangible assets owned, held or leased by Sellers and their Affiliates which indicates the
name “Pride” or any variations thereof.



          (c) Except as permitted under the License Agreement, Sellers further agree to refrain from
taking any action or proceeding, legal or otherwise, that would contest, challenge or hinder Buyer
in the use or registration for the “Licensor’s Business” (as defined in the License Agreement), in
any jurisdiction, of the name “Pride” or any variations thereof comprised of or incorporating the
word “Pride.” From and after the Closing Date, Sellers agree not to pursue any action to register
or in any way assert ownership in the “Licensor’s Business” of the name “Pride” or any or any
variations thereof comprised of or incorporating the word “Pride.” Nothing herein shall prevent,
restrict, inhibit, or diminish Sellers’ right to use the name “Pride” for or in any alternative
field of use other than the “Licensor’s Business.”



     19.5 Environmental Insurance. Sellers will use Reasonable Efforts to assist and fully
cooperate with Buyer on any claims made under the Environmental Insurance policy secured in
accordance with the provisions of Section 11.7. Sellers further covenant to promptly
provide notice to Buyer of any Claims that are asserted against them that may be covered under the
Environmental Insurance and to comply with notice and other the terms of the Environmental
Insurance. Any deductibles required under such Environmental Insurance will be borne by Buyer.



     19.6 Compliance with Laws and Transfer Restrictions. Buyer shall comply with all applicable
Laws and shall promptly obtain, or have transferred to its name, and maintain all Permits or
consents required by public or private parties in connection with the transfer of the Purchased
Property as contemplated hereby.



ARTICLE XX

MISCELLANEOUS 




     20.1 Cooperation. The Parties shall execute and deliver such additional documents and shall
use all Reasonable Efforts to take or cause to be taken all such actions as may be necessary or
advisable to close and make effective this transaction. It shall be Buyer’s responsibility to
obtain all governmental and Third Person consents and approvals necessary for the issuance,
reissuance or transfer of environmental and land use permits, applications, Rights-of-Way,
authorities to construct, Permits to operate, authorizations and licenses used or held by Sellers
or otherwise required in connection with the ownership, operation, use and maintenance of the
Purchased Property. Upon the request of Buyer, after the Closing, Sellers shall assist, with no
out of pocket expense to Sellers, in obtaining consents from Third Persons which are necessary or
appropriate to transfer any portion of the Purchased Property. After the Closing, each Party, at
the request of the other Party, and without additional consideration, shall execute and deliver,
from time to time, such additional documents of conveyance and transfer as may be necessary to
accomplish the orderly transfer of the Purchased Property to Buyer in the manner contemplated in
this Agreement.



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     20.2 Costs and Expenses. Each Party shall bear and pay its own costs and expenses, including
but not limited to attorneys’ fees, incurred in connection with this transaction.



     20.3 Risk of Loss. The risk of damage, destruction, or other casualty loss to or of the
Purchased Property shall remain with Sellers from and after the execution of this Agreement until
the Effective Time, at which time Sellers shall place Buyer in possession of the Purchased
Property; and from and after the Effective Time, all risks of damage, destruction, or other
casualty loss to or of the Purchased Property shall be borne solely by Buyer.



     20.4 No Joint Venture, Partnership or Agency. Nothing contained in this Agreement shall be
deemed to create a joint venture, partnership, Tax partnership or agency relationship among the
Parties.



     20.5 Books and Records.



          (a) Delivery. At the Closing, Sellers shall deliver to Buyer the Books and Records. Buyer
understands that there may be certain voluminous documents included within the Books and Records,
especially data from Sellers’ control center. Sellers will retain the control center data, on
behalf of Buyer, for the applicable Department of Transportation (“DOT”) required record retention
period and will deliver it to Buyer in a timely manner when Buyer requests the data for a DOT
audit. Buyer will give Sellers reasonable notice of its need for the data. If this transaction is
not Closed as to any portion of the Purchased Property, all of the Books and Records obtained from
Sellers in connection with the exercise of Buyer’s pre-acquisition review, and related solely to
that portion of the Purchased Property not transferred as contemplated herein, shall be returned to
Sellers within five (5) calendar days after the Closing.



          (b) Retention. Notwithstanding the inclusion of the Books and Records in the Purchased
Property under Section 2.1, Sellers shall have the right to copy and retain any copies of
any of the Books and Records relating to the Purchased Property for which it has, or may have, any
business, technical or legal need. To the extent that those Books and Records made available to
Buyer before or after the Closing contain proprietary business or technical information of Sellers
or their Affiliates, Buyer agrees to hold such Books and Records in confidence and limit their use
to the Purchased Property. Buyer shall not destroy or otherwise dispose of any of the Books and
Records acquired hereunder for a period of three (3) years following the Closing (except as to Tax
records for which the period shall be the applicable statute of limitations) except upon thirty
(30) days prior written notice to Sellers. During such periods, Buyer shall make such Books and
Records, available to Sellers or their authorized representatives for any business, legal or
technical need in a manner which does not unreasonably interfere with Buyer’s business operations.



     20.6 Publicity. Prior to the Closing, Sellers and Buyer shall, and each shall use its
Reasonable Efforts to cause its Affiliates to, cooperate in the development and distribution of all
news releases and other public disclosures, irrespective of the form of communication, relating to
the proposed transactions described in this Agreement, and to ensure that no such releases or
disclosures are made without prior notice to, and the consent of, the other Party; provided,
however, no news release or other disclosure whatsoever may disclose the terms of this Agreement
unless both Parties agree to the form and content of such disclosure, including electronic
communications, each being under no obligation to agree and having the right to withhold agreement
for any reason; provided, however, that either Party may make all disclosures which, in the written
opinion of counsel, are required under applicable Law, including, but not limited to, regulations
of the Securities and Exchange Commission, with the Party making the disclosure giving the other
Party as much advance notice thereof as is feasible.



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     20.7 Recording and Filing. Except as may be required by Law, this Agreement shall not be
recorded or filed by either Party, or their successors or assigns, in or with any Governmental
Authority without the prior written consent of the other Party.



     20.8 Confidentiality.



          (a) Sellers and Buyer (and their respective Affiliates) each acknowledge that this Agreement
(including the Schedules) and the transactions contemplated hereby are subject to the
Confidentiality Agreement. Buyer and Sellers do not intend for any obligations of confidentiality
contained herein to limit disclosure of the transaction in any way that would cause it to be
treated as a “confidential transaction” under Treasury Regulation 1.6011-4(b)(3). Except as
required by Law, all information acquired by Buyer in any inspection, inventory study or
examination of the Purchased Property, and the results of any analysis thereof, shall be kept
confidential by Buyer from anyone other than Sellers in accordance with the Confidentiality
Agreement. Should Buyer be required by Law to disclose any information concerning the Purchased
Property, Buyer shall notify Sellers at least five (5) days prior to Buyer’s disclosure of such
information.



          (b) From and after the Closing, the Confidentiality Agreement shall terminate and be of no
further force or effect. To the extent the Confidentiality Agreement conflicts with the terms of
this Agreement, the Confidentiality Agreement is hereby modified so that it is consistent with this
Agreement.



     20.9 Notices.



     All notices and consents required or authorized hereunder shall be in writing and shall be
deemed to have been duly given by one Party if delivered personally, faxed with receipt
acknowledged, three (3) Business Days after mailing if mailed by registered or certified mail,
delivered by a recognized commercial courier or otherwise actually received by the other Party at
the address set forth below, or such other address as one Party shall have designated by ten (10)
calendar days prior written notice to the other Party:



Sellers’ Address:




Pride Companies, L.P.

P.O. Box 3237

Abilene, Texas 79604

Attn: Brad Stephens

Telephone: (325) 677-5444

Fax: (325) 676-8792




With a copy to (which copy shall not constitute notice):




Skadden, Arps, Slate, Meagher & Flom LLP

1000 Louisiana, Suite 6800

Houston, Texas 77002

Attn: Frank E. Bayouth II

Telephone: (713) 655-5100

Fax: (713) 655-5200




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Buyer’s Address:




Delek U.S. Holdings, Inc.

830 Crescent Centre Dr., Suite 300

Franklin, Tennessee 37067

Attn: General Counsel

Telephone: (615) 224-2281

Fax: (615) 771-8098




With a copy to (which copy shall not constitute notice):




Fulbright & Jaworski L.L.P.

1301 McKinney, Suite 5100

Houston, Texas 77010

Attn: Daniel L. Mark

Telephone: (713) 651-5151

Fax: (713) 651-5246




     20.10 Time of Performance. Time is of the essence in the performance of all covenants and
obligations under this Agreement.



     20.11 Entire Agreement and Amendment. This Agreement constitutes the entire agreement between
the Parties with respect to the transactions contemplated herein and supersedes all prior
negotiations, statements, representations, discussions, correspondence, offers, agreements, and
understandings relating to the transactions contemplated herein. This Agreement may be modified,
amended or supplemented only upon the prior written agreement of the Parties.



     20.12 Assignment. Buyer may not sell, assign, transfer, convey, option, mortgage, pledge or
hypothecate its rights and obligations hereunder to any Third Person without the prior written
consent of Sellers, which consent shall not be unreasonably withheld. Upon any authorized sale,
assignment, transfer, conveyance, option, mortgage, pledge or hypothecation hereunder, all of the
terms, covenants and conditions of this Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Buyer, to the extent assignment is allowed under this
Agreement, but Buyer shall remain jointly liable for the performance of the Buyer’s obligations
hereunder.



     20.13 Applicable Law. THIS AGREEMENT, THE RELATED AGREEMENTS, AND THE LEGAL RELATIONS BETWEEN
THE PARTIES WITH RESPECT TO THIS AGREEMENT, SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO RULES CONCERNING CONFLICTS OF LAWS.



     20.14 Dispute Resolution.



          (a) Any dispute, controversy or Claim, whether based on contract, tort, statute or other legal
or equitable theory (including any Dispute concerning any question of validity or effect of this
Agreement, including this clause) arising out of or related to this Agreement or the Related
Agreements (including any amendments or extensions hereto or thereto) or the performance, breach,
validity, interpretation, application, or termination hereof or thereof (a “Dispute”), shall be
shall be resolved by binding arbitration initiated upon the written notice (an “Arbitration
Notice”) of any Party. The arbitration shall be conducted in accordance with this Agreement and
the then current Commercial Arbitration Rules including Procedures for Large, Complex Commercial
Disputes (collectively, the “AAA



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Rules”) issued by the American Arbitration Association (“AAA”), and judgment on the award may
be entered in any court having jurisdiction thereof.




          (b) The arbitration hearing shall held in and the award shall be issued in Dallas, Texas,
however, for the convenience of the Parties, a portion of the hearings may be held in Taylor
County, Texas if mutually agreed to by the Parties or in any other agreed-upon location. The
arbitrator(s) shall determine the matters at issue in the Dispute in accordance with the
substantive law of the State of Texas, excluding the conflicts provisions of such law, and may only
award damages in accordance with this Agreement. The arbitration shall be governed by the United
States Arbitration Act 9 U.S.C. §1 et seq, to the exclusion of any provision of state law
inconsistent therewith. The arbitrator(s) shall not be empowered to award punitive damages, and
each Party hereby irrevocably waives any right to recover punitive, exemplary or similar damages
with respect to any Dispute.



          (c) In the event that any Party’s claim or counterclaim equals or exceeds $1,000,000,
exclusive of interest or attorneys’ fees, the Dispute shall be heard and determined by three (3)
arbitrators otherwise, the Dispute shall be heard and determined by one (1) arbitrator.



          (d) In the event that one arbitrator shall hear the Dispute, the Parties shall attempt to
agree upon a qualified individual to serve as arbitrator. If the Parties are unable to so agree
within thirty (30) days of the Arbitration Notice, then the arbitrator shall be selected and
appointed in accordance with the AAA Rules.



          (e) In the event that three arbitrators shall hear the Dispute, each party shall, within
thirty (30) days of the Arbitration Notice, select one person to act as an arbitrator. The two
arbitrators so selected shall, within fifteen (15) days of their appointment, select a third
arbitrator who shall serve as the chair of the arbitral panel. The two party selected arbitrators
will serve in a non-neutral capacity. The arbitrators selected shall be qualified by education,
training, and experience to hear and determine matters in the nature of the Dispute.



          (f) If any arbitrator is not appointed within the time limits provided herein, such arbitrator
shall be appointed by the AAA in accordance with the listing, striking and ranking procedure in the
AAA Rules. Any arbitrator appointed by the AAA shall be a retired judge or a practicing attorney
with no less than fifteen years of experience with large commercial cases and an experienced
arbitrator.



          (g) Should an arbitrator die, resign, refuse to act, or become incapable of performing his or
her functions as an arbitrator, the vacancy shall be filled by the method by which that arbitrator
was originally appointed.



          (h) The arbitrator(s) shall apply this Agreement as written and according to its plain
language in all respects, and shall in no circumstances have authority to add, delete, modify, or
deviate from any of the terms of this Agreement as written, nor shall it/they have any authority to
cancel or void this Agreement, in whole or in part, or to extend the term of this Agreement, other
than as may be expressly provided herein.



          (i) All awards shall be in writing and shall state the reasoning upon which the award rests
including a statement of facts and conclusions of law. Any award shall be made and signed by at
least a majority of the arbitrator(s).



          (j) Unless the Parties agree otherwise, the Parties, the arbitrator(s), and the CPR shall
treat the dispute resolution proceedings provided for herein, any related disclosures, and the



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decisions of the arbitrator(s), as confidential, except in connection with judicial
proceedings ancillary to the dispute resolution proceedings and as otherwise required by law to
protect the legal rights of a party.




          (k) The terms of this Section 20.14 shall survive the Closing and the termination or
expiration of this Agreement.



     20.15 No Third Person Beneficiaries. Except to the extent a Third Person is expressly given
rights herein, any agreement contained, expressed or implied in this Agreement shall be only for
the benefit of the Parties hereto and their respective legal representatives, successors and
permitted assigns, and such agreements shall not inure to the benefit of the obligees of any
indebtedness of either Party hereto, it being the intention of the Parties hereto that no Person
shall be deemed a Third Person beneficiary of this Agreement, except to the extent a Third Person
is expressly given rights herein. Notwithstanding anything in this Agreement to the contrary,
nothing herein shall be deemed to create any rights with respect to any employee of either Party or
any employee of any Affiliate of a Party, except as expressly provided herein with respect to an
Indemnified Party under ARTICLE XIV or ARTICLE XV.



     20.16 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same instrument. A
facsimile transmission of a signed copy of this Agreement shall be deemed an original and shall
have the same valid and binding effect thereof.



[the balance of this page is intentionally left blank]




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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written
above.



	 	 	 	 	 
	 	SELLERS:





PRIDE COMPANIES, L.P.

 	 
	 	By:  	Pride Refining, Inc., its general partner
 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Brad Stephens
 	 
	 	 	Brad Stephens, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	PRIDE COMPANIES, L.P.

 	 
	 	By:  	Pride SGP, Inc., its general partner
 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Brad Stephens
 	 
	 	 	Brad Stephens, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	PRIDE REFINING, INC.

 	 
	 	By:  	/s/ Brad Stephens
 	 
	 	 	Brad Stephens, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	PRIDE MARKETING LLC

 	 
	 	By:  	Pride Companies, L.P., its sole Member
 	 
	 
	 	 	By: Pride Refining, Inc., its general partner  	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Brad Stephens
 	 
	 	 	Brad Stephens, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     Pride SGP, Inc., its general partner
 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Brad Stephens
 	 
	 	 	Brad Stephens, Chief Executive Officer 	 
	 	 	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BUYER:





DELEK US HOLDINGS, INC.

 	 
	 	By:  	/s/ Uzi Yemin
 	 
	 	 	Uzi Yemin, President/CEO 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Tony McLarty
 	 
	 	 	Tony McLarty, Vice President