Document:

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                                                                   EXHIBIT 10.3

                                  UNIVEC, INC.
                             2000 STOCK OPTION PLAN

1.  PURPOSE.

         The UNIVEC, INC. 2000 STOCK OPTION PLAN (the "Plan") is intended to
provide the employees, directors, independent contractors and consultants of
Univec, Inc. (the "Company") and/or any subsidiary or parent thereof with an
added incentive to commence and/or continue their services to the Company and to
induce them to exert their maximum efforts toward the Company's success. By thus
encouraging employees, directors, independent contractors and consultants and
promoting their continued association with the Company, the Plan may be expected
to benefit the Company and its stockholders. The Plan allows the Company to
grant Incentive Stock Options ("ISOs") (as defined in Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), Non-Qualified Stock
Options ("NQSOs") not intended to qualify under Section 422(b) of the Code and
Stock Appreciation Rights ("SARs") (collectively the "Options"). The vesting of
one or more Options granted hereunder may be based on the attainment of
specified performance goals of the participant or the performance of the
Company, one or more subsidiaries, parent and/or division of one or more of the
above.

2.  SHARES SUBJECT TO THE PLAN.

         The total number of shares of Common Stock of the Company, $0.001 par
value per share, that may be subject to Options granted under the Plan shall be
2,250,000 in the aggregate, subject to adjustment as provided in Paragraph 8 of
the Plan; however, the grant of an ISO to an employee together with a tandem SAR
or any NQSO to an employee together with a tandem SAR shall only require one
share of Common Stock available subject to the Plan to satisfy such joint
Option. The Company shall at all times while the Plan is in force reserve such
number of shares of Common Stock as will be sufficient to satisfy the
requirement of outstanding Options granted under the Plan. In the event any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto shall again be
available for granting of Options under the Plan.

3.  ELIGIBILITY.

         ISOs or ISOs in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through (e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who is not
otherwise an employee is not deemed an employee for such purposes. NQSOs and
NQSO's in tandem with SARs may be granted from time to time under the Plan to
one or more employees of the Company, Officers, members of the Board of
Directors, independent contractors, consultants and other

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individuals who are not employees of, but are involved in the continuing
development and success of the Company and/or of a subsidiary of the Company,
including persons who have previously been granted Options under the Plan.

4.  ADMINISTRATION OF THE PLAN.

         (a) The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by a
Stock Option Committee or Compensation Committee (the "Committee") which shall
be comprised of solely of at least two Outside Directors (as such term is
defined in regulations promulgated from time to time with respect to Section
162(m)(4)(C)(i) of the Code) appointed by such Board of Directors of the
Company. As and to the extent authorized by the Board of Directors of the
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors or Committee shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISOs,
NQSOs, and/or SARs in tandem with NQSOs, and/or SARs in tandem with ISOs) and
the number of shares of Common Stock to be subject to each Option, the manner
and form in which the optionee can tender payment upon the exercise of his
Option, and to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions of
Option agreements that may be entered into in connection with Options (which
need not be identical), subject to the limitation that agreements granting ISOs
must be consistent with the requirements for the ISOs being qualified as
"incentive stock options" as provided in Section 422 of the Code, and to make
all other determinations and take all other actions necessary or advisable for
the administration of the Plan. In making such determinations, the Board of
Directors and/or the Committee may take into account the nature of the services
rendered by such individuals, their present and potential contributions to the
Company's success, and such other factors as the Board of Directors and/or the
Committee, in its discretion, shall deem relevant. The Board of Directors'
and/or the Committee's determinations on the matters referred to in this
Paragraph shall be conclusive.

         (b) Notwithstanding anything contained herein to the contrary, at any
time during the period the Company's Common Stock is registered pursuant to
Section 12 of the Securities Exchange Act of 1934 (the "1934 Act"), the
Committee, if one has been appointed to administer all or part of the Plan,
shall have the exclusive right to grant Options to Covered Employees, as defined
under Section 162(m)(3) of the Code (generally persons subject to Section 16 of
the 1934 Act) and set forth the terms and conditions thereof. With respect to
persons subject to Section 16 of the 1934 Act, transactions under the Plan are
intended, to the extent possible, to comply with all applicable conditions of
Rule 16b-3, as amended from time to time, (and its successor provisions) if any,
under the 1934 Act and Section 162(m)(4)(C) of the Code of 1986, as amended. To
the extent any provision of the Plan or action by the Board of Directors or
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board of Directors and/or such
Committee.

                                      -2-
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5.  TERMS OF OPTIONS.

         Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs or SARs in tandem with
NQSOs or SARs in tandem with ISOs. An ISO or an NQSO enables the optionee to
purchase from the Company, at any time during a specified exercise period, a
specified number of shares of Common Stock at a specified price (the "Option
Price"). The optionee, if granted a SAR in tandem with a NQSO or ISO, may
receive from the Company, in lieu of exercising his option to purchase shares
pursuant to his NQSO or ISO, at one of the certain specified times during the
exercise period of the NQSO or ISO as set by the Board of Directors or the
Committee, the excess of the fair market value upon such exercise (as determined
in accordance with subparagraph (b) of this Paragraph 5) of one share of Common
Stock over the Option Price per share specified upon grant of the NQSO or
ISO/SAR multiplied by the number of shares of Common Stock covered by the SAR so
exercised. The character and terms of each Option granted under the Plan shall
be determined by the Board of Directors and/or the Committee consistent with the
provisions of the Plan, including the following:

         (a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.

         (b) The Option Price of the shares of Common Stock subject to each ISO
and each SAR issued in tandem with an ISO shall not be less than the fair market
value of the Common Stock at the time such ISO is granted. Such fair market
value shall be determined by the Board of Directors and, if the Common Stock is
listed on a national securities exchange or quoted on The Nasdaq Stock Market,
Inc. ("Nasdaq"), the fair market value shall be the closing price of the Common
Stock on such exchange or Nasdaq, or if closing prices are not available or the
Common Stock is quoted on the National Association of Securities Dealers, Inc.
("NASD") OTC Bulletin Board (the "OTC Bulletin Board") or otherwise traded in
the over-the-counter market, the fair market value shall be the mean of the
closing bid and asked prices of the Common Stock, as reported by Nasdaq, the
NASD, the OTC Bulletin Board or the National Quotation Bureau, Inc., as the case
may be, on the day on which the Option is granted or, if there is no closing
price or bid or asked price on that day, the closing price or mean of the
closing bid and asked prices on the most recent day preceding the day on which
the Option is granted for which such prices are available. If an ISO or SAR in
tandem with an ISO is granted to any individual who, immediately before the ISO
is to be granted, owns (directly or through attribution) more than 10% of the
total combined voting power of all classes of capital stock of the Company or a
subsidiary or parent of the Company, the Option Price of the shares of Common
Stock subject to such ISO shall not be less than 110% of the fair market value
per share of the shares of Common Stock at the time such ISO is granted.

         (c) The Option Price of the shares of Common Stock subject to an NQSO
or an SAR in tandem with a NQSO granted pursuant to the Plan shall be determined
by the Board of Directors or the Committee, in its sole discretion, but in no
event less than 85% of the fair market value per share of the shares of Common
Stock at the time of grant.

                                      -3-
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         (d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO or an SAR in tandem with an ISO is
granted to any individual who, immediately before the ISO is granted, owns
(directly or through attribution) more that 10% of the total combined voting
power of all classes of capital stock of the Company or of a subsidiary or
parent of the Company, such ISO shall by its terms expire and shall not be
exercisable after the expiration of five (5) years from the date of its grant.

         (e) An SAR may be exercised at any time during the exercise period of
the ISO or NQSO with which it is granted in tandem and prior to the exercise of
such ISO or NQSO. Notwithstanding the foregoing, the Board of Directors and/or
the Committee shall in their discretion determine from time to time the terms
and conditions of SAR's to be granted, which terms may vary from the
afore-described conditions, and which terms shall be set forth in a written
stock option agreement evidencing the SAR granted in tandem with the ISO or
NQSO. The exercise of an SAR granted in tandem with an ISO or NQSO shall be
deemed to cancel such number of shares subject to the unexercised Option as were
subject to the exercised SAR. The Board of Directors or the Committee has the
discretion to alter the terms of the SARS if necessary to comply with Federal or
state securities law. Amounts to be paid by the Company in connection with an
SAR may, in the Board of Director's or the Committee's discretion, be made in
cash, Common Stock or a combination thereof.

         (f) An Option granted under the Plan shall become exercisable, in whole
at any time or in part from time to time, but in no event may an Option (i) be
exercised as to less than one hundred (100) shares of Common Stock at any one
time, or the remaining shares of Common Stock covered by the Option if less than
one hundred (100), and (ii) except with respect to performance based Options,
become fully exercisable more than five years from the date of its grant nor
shall less than 20% of the Option become exercisable by the end of any of the
first five years of the Option, determined on an aggregate basis, if not
terminated as provided in Paragraph 6 hereof. The Board of Directors or the
Committee, if applicable, shall, in the event it so elects in its sole
discretion, set one or more performance standards with respect to one or more
Options upon which vesting is conditioned (which performance standards may vary
among the Options).

         (g) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (to the attention
of the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, which payment at the option of the optionee shall be in the form of (i)
cash or certified or bank check payable to the order of the Company, of the
Option Price of such shares of Common Stock, or, (ii) if permitted by the
Committee or the Board of Directors, as determined by the Committee or the Board
of Directors in its sole discretion at the time of the grant of the Option with
respect to an ISO and at or prior to the time of exercise with respect to a
NQSO, by the delivery of shares of Common Stock having a fair market value equal
to the Option Price or the delivery of an interest-bearing promissory note
having an original principal balance equal to the Option Price and an interest
rate not below the rate which would result in imputed interest under the Code
(provided, in order to qualify as an ISO, more than one year shall have passed
since the date of

                                      -4-
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grant and one year from the date of exercise), or (iii) at the option of the
Committee or the Board of Directors, determined by the Committee or the Board of
Directors in its sole discretion at the time of the grant of the Option with
respect to an ISO and at or prior to the time of exercise with respect to a
NQSO, by a combination of cash, promissory note and/or such shares of Common
Stock (subject to the restriction above) held by the employee that have a fair
market value together with such cash and principal amount of any promissory note
that shall equal the Option Price, and, in the case of any Option at the
discretion of the Committee or Board of Directors by having the Company withhold
from the shares of Common Stock to be issued upon exercise of the Option that
number of shares having a fair market value equal to the exercise price and/or
the tax withholding amount due, or otherwise provide for withholding as set
forth in Paragraph 9(c) hereof, or in the event an employee is granted an ISO or
NQSO in tandem with an SAR and desires to exercise such SAR, such written notice
shall so state such intention. To the extent allowed by applicable Federal and
state securities laws, the Option Price may also be paid in full by a
broker-dealer to whom the optionee has submitted an exercise notice consisting
of a fully endorsed Option, or through any other medium of payment as the Board
of Directors and/or the Committee, in its discretion, shall authorize.

         (h) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares of Common Stock covered by such holder's
Option until such shares of Common Stock shall be issued to such holder upon the
exercise of the Option.

         (i) All Options granted under the Plan shall not be transferable,
except by will or the laws of descent and distribution and may be exercised
during the lifetime of the holder thereof only by the holder. No Option granted
under the Plan shall be subject to execution, attachment or other process.

         (j) The aggregate fair market value, determined as of the time any ISO
or SAR in tandem with an ISO is granted and in the manner provided for by
Subparagraph (b) of this Paragraph 5, of the shares of Common Stock with respect
to which ISOs granted under the Plan are exercisable for the first time during
any calendar year and under incentive stock options qualifying as such in
accordance with Section 422 of the Code granted under any other incentive stock
option plan maintained by the Company or its parent or subsidiary corporations,
shall not exceed $100,000. Any grant of Options in excess of such amount shall
be deemed a grant of a NQSO.

         (k) Notwithstanding anything contained herein to the contrary, an SAR
which was granted in tandem with an ISO shall (i) expire no later than the
expiration of the underlying ISO; (ii) be for no more than 100% of the spread at
the time the SAR is exercised; (iii) only be exercised when the underlying ISO
is eligible to be exercised; and (iv) only be exercisable when there is a
positive spread.

6.  DEATH OR TERMINATION OF EMPLOYMENT/CONSULTING RELATIONSHIP.

         (a) Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company voluntarily by

                                      -5-
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the employee or termination of a consulting relationship with the Company prior
to the termination of the term thereof, a holder of an Option under the Plan may
exercise such Options to the extent such Options were exercisable as of the date
of termination at any time within thirty (30) days after termination, subject to
the provisions of Subparagraph (d) of this Paragraph 6. Except as provided
herein, or otherwise determined by the Board of Directors or the Committee in
its sole discretion, if such employment or consulting relationship shall
terminate for any reason other than death, voluntary termination by the employee
or for cause, then such Options may be exercised at anytime within three (3)
months after such termination. Notwithstanding anything contained herein to the
contrary, unless otherwise determined by the Board of Directors or the Committee
in its sole discretion, any options granted hereunder to an Optionee and then
outstanding shall immediately terminate in the event the Optionee is terminated
for cause, and the other provisions of this Paragraph 6 shall not be applicable
thereto. For purposes of this Paragraph 6, termination for cause shall be deemed
the decision of the Company, in its sole discretion, that Optionee has not
adequately performed the services for which he/she/it was hired.

         (b) If the holder of an Option granted under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation or while providing
consulting services to the Company or a subsidiary or parent corporation or (ii)
within three (3) months after the termination of such holder's
employment/consulting, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within such time as determined by
the Board of Directors or the Committee in its sole discretion, but in no event
less than six months after the individual's death, to the extent such Options
were exercisable as of the date of death or date of termination of employment,
whichever date is earlier.

         (c) If the holder of an Option under the Plan becomes disabled within
the definition of Section 22(e)(3) of the Code while employed by the Company or
a subsidiary or parent corporation, such Option may, subject to the provisions
of subparagraph (d) of this Paragraph 6, be exercised at any time within six
months after such holder's termination of employment due to the disability.

         (d) Except as otherwise determined by the Board of Directors or the
Committee in its sole discretion, an Option may not be exercised pursuant to
this Paragraph 6 except to the extent that the holder was entitled to exercise
the Option at the time of termination of employment, consulting relationship or
death, and in any event may not be exercised after the original expiration date
of the Option. Notwithstanding anything contained herein which may be to the
contrary, such termination or death prior to vesting shall, unless otherwise
determined by the Board of Directors or Committee, in its sole discretion, be
deemed to occur at a time the holder was not entitled to exercise the Option.

         (e) The Board of Directors or the Committee, in its sole discretion,
may at such time or times as it deems appropriate, if ever, accelerate all or
part of the vesting provisions with respect to one or more outstanding options.
The acceleration of one Option shall not infer that any other Option is or to be
accelerated.

                                      -6-
<PAGE>

7.  LEAVE OF ABSENCE.

         For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.

8.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION.

         (a) In the event that the outstanding shares of Common Stock are
hereafter changed by reason of recapitalization, reclassification, stock
split-up, combination or exchange of shares of Common Stock or the like, or by
the issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors, as determined by the Board
of Directors and/or the Committee, in the aggregate number of shares of Common
Stock available under the Plan, in the number of shares of Common Stock issuable
upon exercise of outstanding Options, and the Option Price per share. Subject to
subparagraph (b) of this Paragraph 8, in the event of any consolidation or
merger of the Company with or into another company, or the conveyance of all or
substantially all of the assets of the Company to another company for solely
stock and/or securities, each then outstanding Option shall upon exercise
thereafter entitle the holder thereof to such number of shares of Common Stock
or other securities or property to which a holder of shares of Common Stock of
the Company would have been entitled to upon such consolidation, merger or
conveyance; and in any such case appropriate adjustment, as determined by the
Board of Directors of the Company (or successor entity) shall be made as set
forth above with respect to any future changes in the capitalization of the
Company or its successor entity. In the event of the proposed dissolution or
liquidation of the Company, subject to subparagraph (b) of this Paragraph 8, the
sale of substantially all the assets of the Company for other than stock and/or
securities, all outstanding Options under the Plan will automatically terminate,
unless otherwise provided by the Board of Directors of the Company or any
authorized committee thereof.

         (b) Any Option granted under the Plan, may, at the discretion of the
Board of Directors of the Company and said other corporation, be exchanged for
options to purchase shares of capital stock of another corporation which the
Company, and/or a subsidiary thereof is merged into, consolidated with, or all
or a substantial portion of the property or stock of which is acquired by said
other corporation or separated or reorganized into. The terms, provisions and
benefits to the optionee of such substitute option(s) shall in all respects be
identical to the terms, provisions and benefits of optionee under his Option(s)
prior to said substitution. To the extent the above may be inconsistent with
Sections 424(a)(1) and (2) of the Code, the above shall be deemed interpreted so
as to comply therewith.

         (c) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common

                                      -7-
<PAGE>

Stock would result from any such adjustment, the adjustment shall be revised to
the next higher whole number of shares of Common Stock.

9. FURTHER CONDITIONS OF EXERCISE.

         (a) Unless the shares of Common Stock issuable upon the exercise of an
Option have been registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, prior to the exercise of the Option,
an optionee must represent in writing to the Company that such shares of Common
Stock are being acquired for investment purposes only and not with a view
towards the further resale or distribution thereof, and must supply to the
Company such other documentation as may be required by the Company, unless in
the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with said Act.

         (b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange (including for
this purpose, the Nasdaq Stock Market, Inc.) on which the shares of Common Stock
may then be listed or until there has been qualification under or compliance
with such state or federal laws, rules or regulations as the Company may deem
applicable.

         (c) The Board of Directors or Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with the exercise of any Option, including, but not
limited to, (i) the withholding of payment of all or any portion of such Option
and/or SAR until the holder reimburses the Company for the amount the Company is
required to withhold with respect to such taxes, or (ii) the canceling of any
number of shares of Common Stock issuable upon exercise of such Option and/or
SAR in an amount sufficient to reimburse the Company for the amount it is
required to so withhold, (iii) the selling of any property contingently credited
by the Company for the purpose of exercising such Option, in order to withhold
or reimburse the Company for the amount it is required to so withhold, or (iv)
withholding the amount due from such employee's wages if the employee is
employed by the Company or any subsidiary thereof.

10.  TERMINATION, MODIFICATION AND AMENDMENT.

         (a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.

         (b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of capital stock of the Company entitled to vote thereon.

                                      -8-
<PAGE>

         (c) The Board of Directors of the Company may at any time, prior to ten
(10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments of
the Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company present in
person or by proxy at an Annual or Special Meeting of the Stockholders and
voting thereon, increase (except as provided by Paragraph 8) the maximum number
of shares of Common Stock as to which Options or shares may be granted under the
Plan, or materially change the standards of eligibility under the Plan.

         (d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.

11.  EFFECTIVE DATE OF THE PLAN.

         The Plan shall become effective upon adoption by the Board of Directors
of the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company present in person or by proxy at an Annual or Special Meeting of the
Stockholders and voting thereon within one year after adoption of the Plan by
the Board of Directors.

12.  NOT A CONTRACT OF EMPLOYMENT OR FOR SERVICES.

         Nothing contained in the Plan or in any option agreement executed
pursuant hereto shall be deemed to confer upon any individual to whom an Option
is or may be granted hereunder any right to remain in the employ of or be
engaged by the Company or of a subsidiary or parent of the Company or in any way
limit the right of the Company, or of any parent or subsidiary thereof, to
terminate the employment of any employee or engagement of any consultant.

13.  OTHER COMPENSATION PLANS.

         The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.

14.  DISTRIBUTION OF FINANCIAL STATEMENTS.

         The Company shall provide copies of the Company's annual financial
statements for its most recently completed fiscal year to each person granted or
exercising an option pursuant to the Plan as long as that person continues to
hold such options or shares. The Company shall not be required to provide such
financial statements to key employees whose duties in connection with the
Company assure their access to equivalent information.

                                      -9-Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

                                      Among

                              SHORE TERMINALS LLC,

                         KANEB PIPE LINE PARTNERS, L.P.

                                       And

                            The SELLERS Named Herein

                         Dated as of SEPTEMBER 22, 2000

<PAGE>
                                TABLE OF CONTENTS

ARTICLE I         Agreement of Purchase and Sale; Certain Definitions........1

         1.1      Agreement..................................................1

         1.2      Closing....................................................1

         1.3      Consideration..............................................2

         1.4      Payoff of Senior Bank Debt.................................2

         1.5      Post-Closing Adjustment to Purchase Price..................2

         1.6      Certain Definitions........................................3

ARTICLE II        Representations and Warranties of Buyer....................6

         2.1      Due Organization...........................................6

         2.2      Due Authorization..........................................6

         2.3      Brokers....................................................7

         2.4      Investment Intent..........................................7

         2.5      Units......................................................7

         2.6      Buyer Information..........................................7

ARTICLE III       Representations and Warranties of Lancewood, Inc. and Onyx.7

         3.1      Ownership of Interests; No Liens on Interests..............7

         3.2      Other Rights to Acquire Securities.........................8

         3.3      Due Organization...........................................8

         3.4      No Subsidiaries............................................8

         3.5      Due Authorization..........................................8

         3.6      Financial Statements.......................................9

         3.7      Conduct of Business; Certain Actions.......................10

         3.8      Properties.................................................11

         3.9      Licenses and Permits.......................................12

         3.10     Intellectual Rights........................................12

         3.11     Compliance with Governmental Requirements..................12

         3.12     Insurance..................................................13

         3.13     Employee Benefit Plans.....................................13

         3.14     Contracts and Agreements...................................15

         3.15     Claims and Proceedings.....................................16

         3.16     Taxes and Governmental Returns.............................17

         3.17     Personnel..................................................18

         3.18     Business Relations.........................................18

         3.19     Accounts Receivable........................................18

         3.20     Bank Accounts..............................................19

         3.21     Agents.....................................................19

         3.22     Indebtedness To and From Officers, Managers, Members
                    and Employees............................................19

         3.23     Certain Consents...........................................19

         3.24     Brokers....................................................19

         3.25     Interest in Competitors, Suppliers and Customers...........19

         3.26     Inventory..................................................20

         3.27     Environmental Matters......................................20

         3.28     Purchase of Units for Investment...........................20

         3.29     Information Furnished......................................20

         3.30     Tax Status of Lancewood....................................21

         3.31     Accredited Investor Status.................................21

ARTICLE IV        Representations and Warranties of the Sellers..............21

         4.1      No Liens on Interests......................................21

         4.2      Other Rights to Acquire Securities.........................21

         4.3      Due Authorization..........................................21

         4.4      Brokers....................................................22

         4.5      Purchase of Units for Investment...........................22

         4.6      Tax Status of Such Seller..................................23

ARTICLE V         Covenants..................................................23

         5.1      Inspection.................................................23

         5.2      Compliance by the Company and Sellers......................23

         5.3      Satisfaction of Conditions Precedent.......................23

         5.4      No Solicitation............................................23

         5.5      Notice of Developments.....................................24

         5.6      Notice by Sellers and the Company of Breach................24

         5.7      Notice by Sellers and the Company of Litigation............24

         5.8      Continuation of Insurance Coverage.........................24

         5.9      Maintenance of Credit Terms................................24

         5.10     Financial Statements.......................................24

         5.11     Interim Operations of the Company..........................24

         5.12     HSR Act Filings............................................26

         5.13     Resignations of Managers and Officers......................26

         5.14     Compliance by Buyer........................................26

         5.15     Satisfaction of Conditions Precedent.......................27

         5.16     Notice by Buyer of Breach..................................27

         5.17     Notice by Buyer of Litigation..............................27

         5.18     Consents...................................................27

         5.19     Registration Rights Agreement..............................27

         5.20     Wickland Assumption........................................27

         5.21     Contracts Update...........................................27

         5.22     Release of Sellers.........................................28

         5.23     Tax Certificates...........................................28

         5.24     Delivery of Investment Letters.............................28

ARTICLE VI        Conditions to Closing......................................28

         6.1      Conditions to Obligations of Buyer.........................28

         6.2      Conditions to Obligations of Sellers and the Company.......30

ARTICLE VII       Termination................................................30

         7.1      Termination................................................31

         7.2      Effect of Termination......................................31

ARTICLE VIII      Indemnification............................................31

         8.1      Indemnification of Buyer...................................31

         8.2      Indemnification of Sellers by Buyer........................33

         8.3      Indemnification of Sellers by the Company..................34

         8.4      Procedures Relating to Losses other than ThirdParty Claims.35

         8.5      Notice and Defense of Third-Party Claims...................36

         8.6      Limitations of Liability...................................36

         8.7      Survival of Representations and Warranties.................38

         8.8      Environmental Remediation by Sellers.......................38

         8.9      Wickland and Time Indemnities..............................40

ARTICLE IX        Testing and Gauging........................................40

         9.1      Testing and Gauging........................................40

         9.2      Wastes.....................................................41

ARTICLE X         Damage, Destruction or Condemnation of Assets..............41

         10.1     Damage, Destruction or Condemnation........................41

         10.2     Cost Less Than or Equal to $1,600,000......................41

         10.3     Cost Between $1,600,000 and $16,000,000....................42

         10.4     Cost Greater than $16,000,000..............................42

ARTICLE XI        Miscellaneous..............................................42

         11.1     Collateral Agreements, Amendments and Waivers..............42

         11.2     Successors and Assigns.....................................43

         11.3     Expenses...................................................43

         11.4     Invalid Provisions.........................................43

         11.5     Information and Confidentiality............................43

         11.6     Waiver.....................................................44

         11.7     Notices....................................................44

         11.8     Public Announcement........................................45

         11.9     Waiver of Certain Rights...................................45

         11.10    Further Assurances.........................................45

         11.11    No Third-Party Beneficiaries...............................46

         11.12    Governing Law..............................................46

         11.13    Prevailing Party...........................................46

         11.14    Arbitration................................................46

         11.15    Gender; Numbers............................................46

         11.16    Counterparts...............................................46

         11.17    Telecopy Execution and Delivery............................47

         11.18    No Strict Construction.....................................47

         11.19    Guarantee by Onyx..........................................47

         11.20    Nondisclosure of Confidential Information..................47

         11.21    Decisions Regarding Sellers................................47

<PAGE>

                                    SCHEDULES

1.3        List of Sellers

1.6(h)     Environmental Reports

3.1        List of Sellers; Ownership of Interests

3.3        Foreign Qualification of the Company

3.7        Conduct of Business

3.7(c)     Capital Expenditures

3.8        Real and Personal Properties

3.9        Licenses and Permits

3.10       Intellectual Rights

3.11       Compliance With Governmental Requirements

3.12       Insurance

3.13       Employee Benefit Plans

3.14       Contracts and Agreements

3.15       Claims and Proceedings

3.16(a)    Tax Returns

3.16(b)    Governmental Returns

3.17       Personnel

3.18       Business Relations

3.19       Accounts Receivable

3.20       Bank Accounts

3.21       Agents

3.22       Indebtedness to and from Officers, Managers, Members and Employees

3.23       Certain Consents

3.25       Interest in Competitors, Suppliers and Customers

3.26       Inventory

6.1(k)     Required Consents, Approvals and Other Closing Matters

                                    EXHIBITS

A - Assumption Agreement

B - Registration Rights Agreement

C - Member's Release

D - Investment Letter

<PAGE>
                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this "Agreement") is entered into
as of  September  22,  2000,  among Kaneb Pipe Line  Partners,  L.P., a Delaware
limited partnership ("Buyer"), Shore Terminals LLC, a Delaware limited liability
company (the "Company"),  the individuals and entity  identified as "Sellers" on
Schedule 1.3 (the  "Sellers")  and Onyx Holdings,  Inc., a Delaware  corporation
("Onyx"), the sole shareholder of Lancewood, Inc.
("Lancewood"), which is one of the Sellers.

         The parties hereto agree as follows:

ARTICLE I    Agreement of Purchase and Sale; Certain Definitions

         1.1 Agreement.  Upon the basis of the  representations  and warranties,
for the consideration, and subject to the terms and conditions set forth in this
Agreement,  each of the  Sellers  agrees to sell all of his,  her or its  member
equity interest in the Company  (collectively,  the  "Interests") to Buyer,  and
Buyer agrees to purchase the Interests from the Sellers,  for the  consideration
described in, and payable in accordance with the terms of, this Agreement.

         1.2  Closing.  The  closing of the  transactions  contemplated  by this
Agreement  (the  "Closing")  shall take  place at the  offices  of  Fulbright  &
Jaworski L.L.P.,  2200 Ross Avenue,  Suite 2800,  Dallas,  Texas 75201, at 10:00
a.m.,  local time,  on the second  business day following  the  satisfaction  or
waiver of all the  conditions  to Closing set forth in Article VI hereof,  or at
such other time and place and/or on such other date as Buyer and  Lancewood  may
agree  upon in  writing.  The date on which the  Closing  occurs is  hereinafter
referred to as the "Closing Date".

         1.3 Consideration.  The aggregate consideration for the Interests shall
be $106,000,000 in cash, plus 2,000,000 Limited  Partnership Units (the "Units")
of Buyer (subject to Buyer's  obligation to substitute  cash for Units allocated
to certain  individual  Sellers as described below). At least three (3) business
days prior to the Closing Date,  Lancewood shall deliver to the Buyer a schedule
allocating  the cash portion of the purchase  price (net of the Payoff Amount as
defined herein) and the Units among the Sellers (the "Purchase Price  Allocation
Schedule").  Each of the  Sellers  hereby  agrees that they will be bound by the
determination  of  Lancewood  with respect to such  allocation  and the Purchase
Price Allocation  Schedule.  At the Closing,  Buyer shall deliver or cause to be
delivered to each Seller (a) by wire transfer of immediately  available funds to
the account of such Seller to be  designated by such Seller in writing not later
than three business days prior to the Closing Date, the amount of cash set forth
beside such Seller's name on the Purchase  Price  Allocation  Schedule and (b) a
certificate representing the number of Units set forth beside such Seller's name
on the Purchase  Price  Allocation  Schedule,  registered in such Seller's name,
provided that with respect to any Units that are allocated to Sellers other than
Lancewood,  Peter J. Jacullo,  III, David L. Widener,  Richard  Shore,  Jr., and
Michael J.  Burgett,  Buyer  shall have the  obligation,  in lieu of delivery of
Units, to deliver to such Seller additional cash in the amount of the Designated
Value of the Units the Seller  would  otherwise  be  entitled  to  receive.  For
purposes of the  preceding  sentence,  the term  "Designated  Value"  shall mean
$27.00  per  Unit.  Buyer  and the  Sellers  agree  to  treat  the  transactions
contemplated  by this  Agreement as (i) a  contribution  to a partnership  under
Section 721 of the Code to the extent the  consideration  for the  Interests  is
paid in Units,  and (ii) a sale of  property  to a  partnership  pursuant to the
Treasury Regulations promulgated under Section 707 of the Code to the extent the
consideration  for the Interests is paid in cash. Buyer and the Sellers agree to
file their respective tax returns consistent with this treatment.

         1.4 Payoff of Senior  Bank Debt.  On or before the  Closing  Date,  the
Sellers shall cause FleetBoston Financial Corporation,  as lead lender under the
Company's senior bank facilities (the "Bank"),  to deliver to the Buyer a payoff
letter (the "Payoff  Letter").  Such Payoff Letter shall  indicate the amount of
loan  obligations  of the  Company to be  discharged  on the  Closing  Date (the
"Payoff Amount") and include an acknowledgement by the Bank that upon receipt of
such finds (i) all of the liabilities, indebtedness and other obligations of the
Company  to the  Bank  will be paid in full  and all  loan  facilities  with the
Company  terminated,  and (ii) it  thereupon  releases  all liens  and  security
interests  encumbering any of the assets or equity  interests of the Company and
it will  forthwith  execute and deliver to the Buyer for filing all  termination
statements  and take such other  actions as may be necessary  to  discharge  all
mortgages, deeds of trust and security interests granted by the Company in favor
of the Bank. At the Closing, the Buyer will cause to be delivered to the Bank by
wire  transfer  of  immediately  available  funds an amount  equal to the Payoff
Amount,  and such  delivery  of funds  shall be deemed for all  purposes of this
Agreement as delivery of such funds to the Sellers.

1.5      Post-Closing Adjustment to Purchase Price.

(a)      Post-Closing  Adjustment.  An adjustment amount  ("Adjustment  Amount")
         shall be paid by the appropriate parties, in the manner and at the time
         set forth in Section  1.5(d),  after  determination  of the  Adjustment
         Amount, as set forth in Section 1.5(d).

(b)      Preparation  of Closing  Date Balance  Sheet.  Within 45 days after the
         Closing  Date,  Buyer  shall  prepare a balance  sheet  ("Closing  Date
         Balance  Sheet") of the  Company as of the Closing  Date and  determine
         specifically  the "net working  capital"  position of the Company as of
         the Closing  Date.  The Closing Date Balance  Sheet and the net working
         capital  position of the Company shall be prepared in  accordance  with
         generally accepted accounting  principles applied consistently with the
         past audited  financial  statements of the Company  delivered to Buyer;
         provided,  however,  that "net  working  capital"  will be  computed as
         current assets minus current  liabilities (other than (i) the debt (and
         related  interest)  that will be paid off  pursuant  to Section 1.4 and
         (ii) any  amounts  owed  under the  earn-out  payment to  Wickland  Oil
         Company  that is being  assumed by Sellers in  accordance  with Section
         5.20, but including any contingent or other liabilities  related to (x)
         late  filings of, or failures to file,  required  Forms 5500 related to
         the Company's  employee plans or (y) demurrage or consequential  claims
         brought  against the Company in connection  with the Astra Oil Company,
         Inc. matter  disclosed on Schedule  3.15).  Buyer shall cause a copy of
         the Closing  Date Balance  Sheet to be delivered to Lancewood  promptly
         upon its completion.

(c)      Procedure for Objecting to the Closing Date Balance Sheet. If Lancewood
         has not given any notice of objection  with respect to the Closing Date
         Balance Sheet within 15 days after its delivery to Lancewood,  then the
         calculation  of the net  working  capital  position  described  in this
         Section  1.5 shall be based on the  Closing  Date  Balance  Sheet.  If,
         however, Lancewood has given a written notice of objection with respect
         to the Closing Date Balance Sheet within the applicable  15-day period,
         then the parties  shall attempt to resolve  their  differences.  If the
         parties cannot agree on  appropriate  changes to be made to the Closing
         Date Balance  Sheet within 10 days after the  expiration  of the 15-day
         period,  then the parties shall submit the Closing Date Balance  Sheet,
         along with the written objections of the parties, to the Dallas,  Texas
         office of KPMG LLP (the "Accounting  Firm").  The parties shall request
         the Accounting Firm to determine only those aspects of the Closing Date
         Balance Sheet that are in controversy and to make that determination in
         accordance  with the terms of this  Agreement  within 30 days after the
         request.  The  Adjustment  Amount  shall  be based  on the  report  and
         calculation  as adjusted to take into  account  the  Accounting  Firm's
         determinations  of those matters that are in  controversy.  Any fees of
         the Accounting  Firm shall be paid one-half (1/2) by Buyer and one-half
         (1/2) by Lancewood.

(d)      Payment of  Adjustment  Amount.  If,  following  the  resolution of any
         disputes  that may arise  pursuant  to Section  1.5(c)  above,  the net
         working  capital  position  of the  Company as of the  Closing  Date is
         greater  than  $1,200,000,  Buyer shall pay the  Sellers an  Adjustment
         Amount equal to the excess of the net working  capital  position of the
         Company as of the  Closing  Date over  $1,200,000;  if the net  working
         capital  position of the  Company as of the  Closing  Date is less than
         $1,200,000,  the Sellers shall pay Buyer an Adjustment  Amount equal to
         the excess of  $1,200,000  over the amount of the net  working  capital
         position of the Company as of the Closing Date. The  Adjustment  Amount
         shall be paid  within five  business  days after its  determination  in
         accordance with this Section 1.5 and shall be paid by interbank or wire
         transfer of immediately  available  funds to the account  designated by
         the payee in writing to the payor.

1.6      Certain Definitions.

(a)      Affiliate. "Affiliate" of any Person shall mean any Person Controlling,
         Controlled by or under common Control with such Person.

(b)      Best Knowledge.  "Best Knowledge" shall mean both what a Person knew as
         well as what the Person  should  have  known had the  Person  exercised
         reasonable diligence.  When used with respect to any of Onyx, Lancewood
         or the Company,  the term "Best  Knowledge"  shall include matters that
         are known only to Peter J.  Jacullo,  III,  David L.  Widener,  Richard
         Shore,  Jr., Michael J. Burgett,  Dawn M. West, Brian A. Hoff,  Richard
         Brandes and Marco Ullmer. When "Best Knowledge" is used with respect to
         a list of more than one  Person,  the term  shall  mean what any of the
         listed  Persons  knew as well as what any of them should have known had
         all of the listed  Persons  exercised  reasonable  diligence  (and this
         shall be the meaning  whether the list is stated in the  conjunctive or
         in the disjunctive).

(c)      Code. "Code" means the Internal Revenue Code of 1986, as amended.

(d)      Control.  "Control" and all derivations  thereof shall mean the ability
         to either  (i) vote (or  direct  the vote of) 50% or more of the voting
         interests in any Person or (ii) direct the affairs of another,  whether
         through voting power, contract or otherwise.

(e)      Environmental  Laws.  "Environmental  Laws" shall mean all Governmental
         Requirements  relating to (i) the control of any  potential  pollutant,
         protection of human health or protection of the environment,  including
         air, water or land, (ii) the generation,  handling, treatment, storage,
         disposal or transportation of waste materials,  or (iii) the regulation
         of or exposure to hazardous,  toxic or other  substances  alleged to be
         harmful.   "Environmental   Laws"  shall   include  the   Comprehensive
         Environmental Response,  Compensation,  and Liability Act, 42 U.S.C.ss.
         9601 et seq., the Emergency  Planning and Community  Right to Know Act,
         42 U.S.C.ss. 11001 et seq., the Resource Conservation and Recovery Act,
         42  U.S.C.ss.  6901 et seq.,  the  Toxic  Substances  Control  Act,  15
         U.S.C.ss.  2601  et  seq.,  the  Federal  Insecticide,  Fungicide,  and
         Rodenticide  Act,  7  U.S.C.ss.136  et seq.,  the  Clean  Air  Act,  42
         U.S.C.ss.7401  et seq., the Federal Water Pollution  Control Act (Clean
         Water Act), 33 U.S.C.ss.  1251 et seq., the Safe Drinking Water Act, 42
         U.S.C.ss.300f  et seq.,  the  Occupational  Safety and Health  Act,  29
         U.S.C.ss.651 et seq., the Hazardous  Materials  Transportation  Act, 49
         U.S.C.ss.5101  et  seq.,  and any  state  or  local  law or  regulation
         addressing or concerning  matters similar to those covered in the above
         listed federal statutes.

(f)      Environmental Liabilities.  "Environmental  Liabilities" shall mean any
         and all Losses, as defined in Section 8.1 of this Agreement  (including
         any remedial,  removal,  response,  abatement,  cleanup,  investigative
         and/or  monitoring  costs and any other  related  costs and  expenses),
         incurred or imposed (i)  pursuant to any  agreement,  order,  notice of
         responsibility,   directive   (including  any  directive   embodied  in
         Environmental   Laws),   injunction,   judgment  or  similar   document
         (including   settlements)   arising   under  or  in   connection   with
         Environmental  Laws,  or (ii)  pursuant to any claim by a  Governmental
         Authority or other Person for personal injury,  property damage, damage
         to natural  resources,  remediation,  or payment  or  reimbursement  of
         response costs incurred or asserted by such  Governmental  Authority or
         Person  pursuant  to common  law or statute  and  related to the use or
         release,  as such term is defined in  Environmental  Laws, of Hazardous
         Materials.

(g)      Environmental Permits.  "Environmental  Permits" shall mean any permit,
         license,  approval,   registration,   identification  number  or  other
         authorization required under Environmental Laws.

(h)      Environmental  Reports.  "Environmental  Reports"  means  the  reports,
         correspondence,  summaries, agreements,  documents, materials and other
         information  and data regarding  environmental  matters  related to the
         Company and its assets and  business  that are  specifically  listed on
         Schedule  1.6(h).  If a  report,  correspondence,  summary,  agreement,
         document,  or other material,  information or data is referred to in an
         Environmental  Report,  but  is not  specifically  listed  on  Schedule
         1.6(h), then such report, correspondence, summary, agreement, document,
         material,  information or data shall not be an Environmental Report for
         purposes of this Agreement.

(i)      ERISA.  "ERISA" means the Employee  Retirement  Income  Security Act of
         1974, as amended.

(j)      Fines and Penalties.  "Fines and  Penalties"  means fines and penalties
         imposed by any Governmental Authority.

(k)      Governmental Authority. "Governmental Authority" shall mean any and all
         foreign,   federal,   state   or   local   governments,    governmental
         institutions,  public  authorities  and  governmental  entities  of any
         nature whatsoever,  and any subdivisions or instrumentalities  thereof,
         including departments, boards, bureaus, commissions,  agencies, courts,
         administrations  and panels,  and any  divisions  or  instrumentalities
         thereof, whether permanent or ad hoc.

(l)      Governmental Requirement. "Governmental Requirement" shall mean any and
         all laws  (including  applicable  common law  principles  and  duties),
         statutes,  ordinances,  codes,  rules,  regulations,   interpretations,
         guidelines, directions, orders, judgments, writs, injunctions, decrees,
         decisions  or similar  items or  pronouncements,  promulgated,  issued,
         passed  or set  forth  by any  Governmental  Authority,  as  each  such
         Governmental  Requirement  is or was in effect  and  constituted  on or
         prior to the Closing Date.

(m)      Hazardous Materials. "Hazardous Materials" shall mean (i) any substance
         or  material  that is listed,  defined  or  otherwise  designated  as a
         "hazardous  substance"  under  Section  101(14)  of  the  Comprehensive
         Environmental  Response,  Compensation and Liability Act, 42 U.S.C. ss.
         9601 et seq., (ii) any substance or material that is listed, defined or
         otherwise   designated  as  a  "hazardous  waste"  under  the  Resource
         Conservation  and Recovery Act, 42 U.S.C.  ss. 6901 et seq.,  (iii) any
         petroleum or petroleum product, (iv) any radioactive material, asbestos
         or polychlorinated biphenyls, and (v) any other chemical,  substance or
         waste  that  is  regulated  or  controlled  in  any  manner  under  any
         Environmental Law.

(n)      Include. Unless the context otherwise requires, the terms "include" and
         "including," and all derivations  thereof,  shall be deemed to have the
         phrase "without limitation" added thereafter,  and shall be interpreted
         as introducing a non-exclusive listing, and not an exclusive listing.

(o)      Person.  "Person"  shall  mean any  natural  person,  any  Governmental
         Authority and any entity the separate  existence of which is recognized
         by any Governmental  Authority or Governmental  Requirement,  including
         corporations,   partnerships,   limited  liability   companies,   joint
         ventures,  joint  stock  companies,   trusts,  estates,  companies  and
         associations, whether organized for profit or otherwise.

(p)      Schedule. "Schedule" shall mean the Schedules to this Agreement, unless
         otherwise  stated.  The Schedules to this  Agreement may be attached to
         this  Agreement or may be set forth in a separate  document  denoted as
         the Schedules to this Agreement, or both.

(q)      Section.  "Section"  shall  mean a Section  of this  Agreement,  unless
         otherwise stated.

(r)      Taxes.  "Tax"  and  "Taxes"  shall  mean  any and all  income,  excise,
         franchise  or other  taxes and all other  charges  or fees  imposed  or
         collected by any Governmental Authority or pursuant to any Governmental
         Requirement,  and shall also include any and all  penalties,  interest,
         deficiencies, assessments and other charges with respect thereto.

ARTICLE II       Representations and Warranties of Buyer

         Buyer  represents  and  warrants  to Sellers and the Company as follows
(with the understanding  that Sellers and the Company are relying  materially on
such  representations  and  warranties  in  entering  into and  performing  this
Agreement):

         2.1 Due Organization.  Buyer is a limited partnership,  duly organized,
validly  existing and in good standing  under the laws of the State of Delaware,
and has full  partnership  power and  authority  to enter into and perform  this
Agreement and each other instrument, agreement and document to be executed by it
in connection herewith.

         2.2 Due Authorization.  The execution, delivery and performance of this
Agreement,  the Registration  Rights Agreement (as defined below) and such other
agreements,  instruments and documents to be executed in connection  herewith by
Buyer have been duly  authorized by all requisite  partnership  action of Buyer.
This  Agreement  has been duly and validly  executed and  delivered by Buyer and
constitutes a valid and binding obligation of Buyer enforceable against Buyer in
accordance  with its  terms,  except as the same may be  limited  by  applicable
bankruptcy,  insolvency,  reorganization or other laws affecting the enforcement
of creditors'  rights  generally and the  application  of general  principles of
equity.  Upon its execution in accordance with this Agreement,  the Registration
Rights Agreement will have been duly and validly executed and delivered by Buyer
and will constitute a valid and binding obligation of Buyer enforceable  against
Buyer in  accordance  with its  terms,  except  as the  same may be  limited  by
applicable  bankruptcy,  insolvency,  reorganization or other laws affecting the
enforcement  of  creditors'  rights  generally  and the  application  of general
principles of equity. The execution,  delivery and performance of this Agreement
and the Registration Rights Agreement by Buyer will not (a) violate any federal,
state,  county  or local  law,  rule or  regulation  applicable  to Buyer or its
property,  (b)  violate or conflict  with,  or permit the  cancellation  of, any
agreement to which Buyer is a party or by which it or its property is bound, (c)
permit  the  acceleration  of  the  maturity  of  any  indebtedness  of,  or any
indebtedness  secured by the property of, Buyer, or (d) violate or conflict with
any  provision of Buyer's  certificate  of limited  partnership  or  partnership
agreement.  No action,  consent or approval  of or filing with any  Governmental
Authority is required in connection with the execution,  delivery or performance
of this  Agreement  (or any agreement or other  document  executed in connection
herewith by Buyer, including the Registration Rights Agreement to be executed by
Buyer and the Sellers in connection with the Closing (the  "Registration  Rights
Agreement"))  by Buyer,  except for (i) the filings  described  in Section  5.12
hereof,  (ii) the filings and approvals  contemplated by the Registration Rights
Agreement,  and (iii) any third  party  consents  or  approvals  and filings for
governmental  licenses  necessary for the Company to continue to own and operate
its assets and business  after  consummation  of the  transactions  contemplated
hereby.

         2.3  Brokers.  Buyer has not  engaged,  or caused  to be  incurred  any
liability  to,  any  finder,  broker  or  sales  agent  in  connection  with the
execution,  delivery  or  performance  of  this  Agreement  or the  transactions
contemplated hereby.

         2.4  Investment  Intent.  Buyer is acquiring  the Interests for its own
account for investment and not with a view toward resale or  redistribution in a
manner which would require  registration  under the  Securities Act of 1933 (the
"Securities  Act") or the  securities  laws of any  state,  and  Buyer  does not
currently have any reason to anticipate any change in its circumstances or other
particular  occasion or event which would cause it to sell the  Interests or any
part thereof or interest therein. Buyer has not offered or sold the Interests or
any part thereof or interest  therein,  and,  except for  possible  transfers to
wholly-owned  subsidiaries,  has no present  intention of dividing the Interests
with others or of reselling or otherwise  disposing of the Interests or any part
thereof or interest  therein either currently or after the passage of a fixed or
determinable  period  of time or upon the  occurrence  or  nonoccurrence  of any
predetermined event or circumstance.

         2.5 Units. The Units,  when issued and delivered in accordance with the
terms of this Agreement, will be duly authorized, validly issued, fully paid and
non-assessable.

         2.6 Buyer  Information.  Buyer has  delivered  to each  Seller true and
correct  copies of Buyer's most recent  Annual Report on Form 10-K and Quarterly
Report on Form 10-Q and, as of the date hereof,  such documents taken as a whole
do not contain any untrue statement of a material fact or omit any material fact
necessary to make the statements therein not misleading.

ARTICLE III    Representations and Warranties of Lancewood, Inc. and Onyx

         Lancewood, Inc., a Delaware corporation and the holder of a majority of
the Interests ("Lancewood"), and Onyx, the sole stockholder of Lancewood, hereby
jointly  and  severally  represent  and  warrant to Buyer as  follows  (with the
understanding that Buyer is relying  materially on each such  representation and
warranty in entering into and performing this Agreement):

         3.1 Ownership of Interests; No Liens on Interests. All of the Interests
are duly authorized, validly issued, fully paid and nonassessable. The Interests
in the aggregate  constitute 100% of the issued and outstanding  equity or other
ownership interests in the Company. All of the Interests are uncertificated, and
are not  evidenced by any  certificates  or other  documents  except the limited
liability  company  agreement of the Company.  All of the Interests are owned of
record and beneficially by the Sellers as set forth on Schedule 3.1. None of the
Interests were issued or will be  transferred  under this Agreement in violation
of any preemptive or  preferential  rights of any person.  Lancewood is the true
and lawful owner, of record and  beneficially,  of the Interest set forth by its
name on  Schedule  3.1,  free and  clear of any  liens,  restrictions,  security
interests, claims, rights of another or encumbrances; none of the Interest owned
by Lancewood is subject to any outstanding options,  warrants,  calls or similar
rights of any other person to acquire the same;  none of the  Interest  owned by
Lancewood is subject to any restrictions on transfer thereof;  and Lancewood has
the full power and  authority  to convey,  and will  convey to Buyer at Closing,
good  and  marketable  title to its  Interest,  free  and  clear  of any  liens,
restrictions, security interests, claims, rights of another or encumbrances.

         3.2 Other  Rights to Acquire  Securities.  There are no  authorized  or
outstanding warrants,  options or rights of any kind to acquire from the Company
or from  Lancewood  any equity or debt  securities  of the Company or securities
convertible into or exchangeable for equity or debt securities of the Company.

         3.3 Due Organization.  The Company is a limited liability company, duly
organized,  validly existing and in good standing under the laws of the State of
Delaware  and has full company  power and  authority to carry on its business as
now conducted.  Complete and correct copies of the  certificate of formation and
limited liability  company  agreement of the Company and all amendments  thereto
have been delivered to Buyer.  The Company is qualified to do business and is in
good  standing  in  the   jurisdictions   set  forth  on  Schedule  3.3,   which
jurisdictions represent every jurisdiction where such qualification is required,
except  where the failure to be so qualified  would not have a material  adverse
effect on the  business,  properties  or assets of the  Company.  Except for the
employee in Illinois  described on Schedule 3.3, the Company does not have,  and
has not had in the past,  any assets,  employees or business in any states other
than California, Nevada, Washington and Oregon.

         3.4 No  Subsidiaries.  The Company does not directly or indirectly have
(or possess any options or other  rights to  acquire)  any  subsidiaries  or any
direct or indirect  ownership  interests in any person,  business,  corporation,
limited liability company,  partnership,  association,  joint venture,  trust or
other entity.

3.5      Due Authorization.

(a)      Each of the Company,  Lancewood  and Onyx has full company or corporate
         power and  authority to enter into and perform this  Agreement and each
         other agreement,  instrument and document required to be executed by it
         in connection  herewith (the  "Ancillary  Agreements").  The execution,
         delivery and performance of this Agreement and the Ancillary Agreements
         have been duly  authorized  by the Board of Managers of the Company and
         by the  Board of  Directors  of each of  Lancewood  and Onyx and by all
         other necessary  company or corporate action by or on behalf of each of
         the Company, Lancewood and Onyx.

(b)      This Agreement has been duly and validly executed and delivered by each
         of the Company,  Lancewood and Onyx and constitutes a valid and binding
         obligation  of each of the  Company,  Lancewood  and  Onyx  enforceable
         against each of them in accordance  with its terms,  except as the same
         may be limited by applicable bankruptcy, insolvency,  reorganization or
         other laws affecting the enforcement of creditors' rights generally and
         the application of general principles of equity.

(c)      Upon its execution in accordance  with this  Agreement,  each Ancillary
         Agreement  to which  the  Company  is a party  will  have been duly and
         validly  executed and  delivered  by the Company and will  constitute a
         valid and binding  obligation  of the Company  enforceable  against the
         Company in accordance with its terms, except as the same may be limited
         by  applicable  bankruptcy,  insolvency,  reorganization  or other laws
         affecting  the  enforcement  of  creditors'  rights  generally  and the
         application of general principles of equity.

(d)      Upon its execution in accordance  with this  Agreement,  each Ancillary
         Agreement to which Lancewood is a party will have been duly and validly
         executed and  delivered by  Lancewood  and will  constitute a valid and
         binding  obligation  of  Lancewood  enforceable  against  Lancewood  in
         accordance  with  its  terms,  except  as the same  may be  limited  by
         applicable  bankruptcy,   insolvency,   reorganization  or  other  laws
         affecting  the  enforcement  of  creditors'  rights  generally  and the
         application of general principles of equity.

(e)      Neither the  execution,  delivery and  performance of this Agreement by
         any of the Company,  the Sellers or Onyx, nor the  execution,  delivery
         and performance of any Ancillary  Agreement by any of the Company,  the
         Sellers or Onyx, will (i) violate any federal,  state,  county or local
         law, rule or regulation  applicable to the Company,  Lancewood or Onyx,
         or their  respective  properties,  (ii)  violate or conflict  with,  or
         permit  the  cancellation  of,  any  agreement  to which  the  Company,
         Lancewood  or Onyx is a party,  or by which any of them or any of their
         respective  properties is bound, or result in the creation of any lien,
         security  interest,  charge or encumbrance upon any of such properties,
         (iii) permit the  acceleration of the maturity of any  indebtedness of,
         or indebtedness  secured by the property of, the Company,  Lancewood or
         Onyx (except for  indebtedness  outstanding  under the Company's senior
         credit  facilities,  which indebtedness will be paid in full by Sellers
         at or prior to Closing), or (iv) violate or conflict with any provision
         of the certificate of incorporation,  certificate of formation, limited
         liability  company  agreement or by-laws of the  Company,  Lancewood or
         Onyx.

(f)      No  action,  consent or  approval  of or filing  with any  Governmental
         Authority is required in  connection  with the  execution,  delivery or
         performance  of  this  Agreement  or  any  Ancillary  Agreement  by the
         Company,  Lancewood  or Onyx,  except for (i) the filings  described in
         Section 5.12 hereof,  and (ii) the items set forth in Schedule  3.23 or
         3.9.

         3.6 Financial Statements. The following Financial Statements (herein so
called) of the Company have been delivered to Buyer by the Company:

(a)      Audited  balance  sheets of the  Company as of  December  31,  1999 and
         December 31, 1998, and the related statements of operations, changes in
         members'  equity  and cash  flows for the year  then  ended and the two
         month period then ended, respectively,  together with the notes thereto
         and  the  report  of  Deloitte  &  Touche  LLP  with  respect   thereto
         (collectively, the "Audited Financial Statements"); and

(b)      An  unaudited  balance  sheet and  related  statements  of  operations,
         changes in members'  equity and cash flows of the Company as of and for
         the  six  months  ended  June  30,  2000  (collectively,  the  "Interim
         Financial Statements").

         The  Financial  Statements  have been,  and all later  dated  financial
statements of the Company delivered to Buyer pursuant to this Agreement ("Future
Financial  Statements") will be, prepared in accordance with generally  accepted
accounting  principles  applied on a  consistent  basis  throughout  the periods
indicated and present, and will present, fairly the financial position,  results
of  operations  and  changes  in  financial  position  of the  Company as of the
indicated  dates  and for the  indicated  periods  (except,  in the  case of the
Interim Financial Statements and Future Financial Statements, for the absence of
notes  thereto and subject to normal  year-end  audit  adjustments  and accruals
required to be made in the ordinary  course of business which are not materially
adverse and are consistent with past practices). Except to the extent reflected,
disclosed  or  provided  for in  the  balance  sheets  included  in the  Interim
Financial  Statements,  the Company has no liabilities  or obligations  (whether
absolute, contingent or otherwise) that would be required to be reflected in the
Interim Financial  Statements  (including  footnotes) of the Company prepared in
accordance  with  generally  accepted  accounting  principles,  and  none of the
Company, Lancewood or Onyx has any Best Knowledge of any basis for the assertion
of any such  liability or  obligation.  Since June 30,  2000,  there has been no
adverse  change in the  financial  position,  assets,  results of  operations or
business of the Company.  To the Best  Knowledge of the Company,  Lancewood  and
Onyx,  there are no pending or proposed  statutes,  rules or regulations nor any
current or pending  developments or  circumstances,  which would have an adverse
effect on the financial position,  assets,  results of operations or business of
the Company.

3.7 Conduct of Business;  Certain Actions.  Except as set forth on Schedule 3.7,
since June 30, 2000,  the Company has conducted  its business and  operations in
the ordinary  course and consistent  with past practices and has not (a) paid or
declared any dividend or distribution  or purchased or retired any  indebtedness
from any member or purchased, retired or redeemed any equity securities from any
member,  (b) increased the compensation of any of the managers,  officers or key
employees  of, or  consultants  to, the Company  or,  except for wage and salary
increases  made in the  ordinary  course of business  and  consistent  with past
practices, increased the compensation of any other employees of the Company, (c)
made any capital  expenditures  (other than those described on Schedule  3.7(c))
exceeding  $100,000  individually or $200,000 in the aggregate,  (d) sold assets
with an  aggregate  sales  price in  excess of  $50,000  in the  aggregate,  (e)
discharged  or  satisfied  any lien or  encumbrance  or paid any  obligation  or
liability,  absolute or contingent,  other than (i) current liabilities incurred
and paid in the ordinary course of business,  and (ii) indebtedness  outstanding
under the Company's senior credit  facilities,  (f) made or guaranteed any loans
or  advances  to any  Person,  (g)  suffered  or  permitted  any lien,  security
interest,  claim,  charge or other encumbrance to arise or be granted or created
against or upon any of the assets of the Company, real or personal,  tangible or
intangible,  (h) canceled, waived or released any of the Company's debts, rights
or claims  against third  parties,  (i) amended the  certificate of formation or
limited  liability  company  agreement of the Company (except to remove or admit
members of the Company or to change the respective  percentage  interests of the
members in the Company),  (j) made or paid any severance or termination  payment
to any employee or consultant  in excess of $25,000,  (k) made any change in the
method of  accounting  of the Company,  (l) made any  investment  or  commitment
therefor  in any Person,  (m) made,  entered  into,  amended or  terminated  any
written employment or consulting contract,  created, made, amended or terminated
any bonus, stock option, pension,  retirement,  profit sharing or other employee
benefit plan or  arrangement  or withdrawn  from any  "multi-employer  plan" (as
defined  in  Section  414(f) of the Code so as to  create  any  liability  under
Article IV of ERISA to any  entity,  (n)  materially  amended or  experienced  a
termination of any material contract,  agreement, lease, franchise or license to
which the  Company is a party,  (o)  borrowed  any money,  whether  under new or
existing debt facilities or otherwise,  factored any receivables or incurred any
debt  obligation  (except under the Company's  presently  existing senior credit
facilities,  which will be paid in full at Closing  pursuant to Section 1.4, and
trade  payables  and  other  obligations  incurred  in the  ordinary  course  of
business,  that will be  included  as  current  liabilities  in the net  working
capital  calculation  pursuant  to  Section  1.5),  (p)  entered  into any other
material   transactions  not  otherwise  disclosed  in  the  Schedules  to  this
Agreement, (q) entered into any contract, commitment, agreement or understanding
to do any acts described in the foregoing  clauses  (a)-(p) of this Section 3.7,
(r) suffered  damage,  destruction or loss (whether or not covered by insurance)
to assets that in the aggregate have or will cost more than $50,000 to repair or
replace,  (s)  experienced  any strike,  slowdown or demand for recognition by a
labor organization by or with respect to any of the employees of the Company, or
(t)  experienced  or  effected  any  shutdown,  slow-down  or  cessation  of any
operations conducted by, or constituting part of, the Company.

         3.8  Properties.  Except as set forth in Schedule 3.8, the Company owns
or has the right to use, pursuant to a valid lease or license,  all tangible and
intangible  assets  and  properties   (including  easements  and  rights-of-way)
necessary  for the Company to conduct its business and  operations in the manner
they have been conducted during calendar year 2000.  Attached hereto as Schedule
3.8 is a list and description of all real and personal properties (excluding, in
the case of  personal  properties,  any asset  having a book  value of less than
$25,000  as of June 30,  2000)  owned or  leased by the  Company  as of the date
hereof.  Except  as set  forth  on  Schedule  3.8,  (a) the  real  and  personal
properties of the Company are free and clear of all liens,  security  interests,
claims,  rights of another and encumbrances,  (b) the Company has good, full and
unrestricted legal and equitable title to, or a valid leasehold interest in, all
such  properties,  and (c) the operation of the  properties  and business of the
Company  in the  manner  in which  they are now and have  been  operated  by the
Company  (and,  to the Best  Knowledge  of the  Company  and  Lancewood,  by the
Company's  predecessors  in interest) does not violate in any respect any zoning
ordinances, municipal regulations or other rules, regulations or laws (excluding
Environmental Laws, which are covered by Section 3.27). No covenants, easements,
rights-of-way  or regulations of record impair in any material  respect the uses
of the  properties  of the  Company  for the  purposes  for  which  they are now
operated.  Except  as  set  forth  on  Schedule  3.8,  the  plants,  structures,
equipment,  vehicles and other tangible  properties owned, leased or licensed by
the Company are in as good of an operating condition and repair, normal wear and
tear  excepted,  as such items were in on June 26, 2000.  Except as set forth on
Schedule 3.8, all plants,  structures,  equipment,  vehicles and other  tangible
properties of the Company,  and the  Company's  past and present use of all such
items,   conform  to  all  applicable   Governmental   Requirements   (excluding
Environmental  Laws,  which are covered by Section  3.27),  and no notice of any
violation of any such Governmental  Requirements (excluding  Environmental Laws,
which are covered by Section 3.27) relating to such assets or their use has been
received by the Company.  Neither the whole nor any portion of any real property
owned or leased by the  Company has been  condemned  or  otherwise  taken by any
public authority, nor, to the Best Knowledge of the Company, Lancewood and Onyx,
is any such condemnation or taking threatened or planned.

         3.9 Licenses and Permits.  Attached hereto as Schedule 3.9 is a list of
all federal,  state,  county and local governmental  licenses,  certificates and
permits  (including  Environmental  Permits)  necessary  for the  conduct of the
Company's  business as it has been conducted in calendar year 2000  ("Permits").
Except as set  forth on  Schedule  3.9,  the  Company  has  complied,  and is in
compliance  with the terms and conditions of all Permits and no violation of any
Permits  or the laws or rules  governing  the  issuance  or  continued  validity
thereof  has  occurred.  Except  as set forth on  Schedule  3.9,  no  additional
license,  certificate or permit is required from any  Governmental  Authority in
connection  with the  conduct  of the  business  of the  Company  as it has been
conducted in calendar  year 2000.  Except as set forth on Schedule 3.9, no claim
has been made by any  Governmental  Authority (and, to the Best Knowledge of the
Company,  Lancewood and Onyx, no such claim is anticipated) to the effect that a
license,  permit or order is necessary  in respect of the business  conducted by
the Company as it has been conducted in calendar year 2000.  Except as set forth
on Schedule  3.9, the Company has issued to it and in its name all Permits,  and
all such  Permits  are valid and in full  force and  effect  and no  consent  or
approval of, or filing with, any Person or  Governmental  Authority is necessary
for such Permits to remain valid and in full force and effect after the Closing,
and there are no pending  requests for abatement of any  requirements  under any
Permits. With respect to all Permits held by the Company, Schedule 3.9 lists the
present expiration,  termination and renewal dates therefor.  The Company has no
plan nor has it received notice from any Governmental  Authority requiring it to
change  its  method  of  operation  in  such  a  manner  that  would  require  a
modification  of any  existing  Permit or the issuance of any new Permit and the
Company has no reason to believe that any Permit held by the Company will not be
timely renewed.

         3.10 Intellectual Rights. Attached hereto as Schedule 3.10 is a list of
all  patents,   trademarks,   servicemarks,   tradenames   and   copyrights  and
applications  therefor  owned by or  registered in the name of the Company or in
which the Company  has any right,  license or  interest.  Except as set forth on
Schedule 3.10, the Company is not a party to any license  agreements,  either as
licensor or licensee,  with respect to any  patents,  trademarks,  servicemarks,
tradenames or copyrights.  The Company has good and  marketable  title to or the
right to use such assets and all inventions, processes, designs, formulae, trade
secrets and know-how  necessary for the conduct of its business,  as it has been
conducted  during  calendar  year 2000,  without  the  payment of any royalty or
similar  payment.   The  Company  is  not  infringing  any  patent,   trademark,
servicemark,  trade  name or  copyright  of  others,  and  none of the  Company,
Lancewood  or Onyx is aware of any  infringement  by others  of any such  rights
owned by the Company.

         3.11 Compliance with Governmental Requirements.  Except as set forth on
Schedule  3.11,  the  Company  has  complied  and  is in  compliance,  with  all
Governmental  Requirements  applicable to its business (excluding  Environmental
Laws,  which  are  covered  by  Section  3.27)  and has  filed  with the  proper
authorities  all statements and reports  required by the laws,  regulations  and
orders to which the Company or any of its  properties or operations are subject.
Except as set forth on Schedule 3.11, no claim has been made by any Governmental
Authority  (and,  to the Best  Knowledge of the Company,  Lancewood and Onyx, no
such claim is  anticipated)  to the effect that the  business  conducted  by the
Company  fails to comply,  in any  respect,  with any  Governmental  Requirement
(excluding Environmental Laws, which are covered by Section 3.27).

         3.12  Insurance.  Attached  hereto  as  Schedule  3.12 is a list of all
policies of fire, liability,  business interruption and other forms of insurance
and all fidelity  bonds held by or  applicable  to the Company at any time since
its  inception,  which  schedule  sets forth in respect of each such  policy the
policy name, policy number,  carrier, term, type of coverage,  deductible amount
or self-insured  retention  amount,  limits of coverage and annual premium.  The
insurance  currently  held by the  Company is in such amount and is of such type
and scope as is  customary  in the  industry in which the Company is engaged and
the Company  has had in full force and effect at all times  since its  inception
comparable  insurance of similar type, amount and scope.  Except as disclosed on
Schedule  3.12,  there  has been no  change  in the type of  insurance  coverage
maintained by the Company  during the past three years which has resulted in any
period during which the Company had no insurance  coverage.  Excluding insurance
policies  which have  expired  and been  replaced,  no  insurance  policy of the
Company has been canceled within the last three years and, to the Best Knowledge
of the  Company,  Lancewood  and  Onyx,  no threat  has been made to cancel  any
insurance policy of the Company within such period.

3.13     Employee Benefit Plans.

(a)      Schedule  3.13 contains a complete and correct list of (i) all employee
         welfare  benefit  and  employee  pension  benefit  plans as  defined in
         sections 3(1) and 3(2) of ERISA,  including,  but not limited to, plans
         that  provide  retirement  income or result in a deferral  of income by
         employees for periods extending to termination of employment or beyond,
         and plans that provide medical,  surgical, or hospital care benefits or
         benefits  in the  event of  sickness,  accident,  disability,  death or
         unemployment and (ii) all other material employee benefit agreements or
         arrangements, including without limitation deferred compensation plans,
         incentive plans, bonus plans or arrangements, stock option plans, stock
         purchase  plans,  stock  award  plans,  golden  parachute   agreements,
         severance pay plans,  dependent care plans,  cafeteria plans,  employee
         assistance  programs,   scholarship  programs,   employment  contracts,
         retention incentive agreements,  noncompetition agreements,  consulting
         agreements,  confidentiality  agreements,  vacation policies, and other
         similar plans, agreements and arrangements that are currently in effect
         or were maintained within three years of the date of this Agreement, or
         have been approved before this date but are not yet effective,  for the
         benefit of directors, officers, employees or former employees (or their
         beneficiaries) of the Company, or with respect to which the Company may
         have any liability (collectively referred to as "Plans").

(b)      With  respect  to each  Plan,  the  Company,  Onyx and  Lancewood  have
         heretofore  delivered  to Buyer,  as  applicable,  complete and correct
         copies of each of the following documents:

         (i)      the Plan and any  amendments  thereto (or if the Plan is not a
                  written agreement, a description thereof);

         (ii)     the three most recent  annual Form 5500 reports filed with the
                  Internal Revenue Service ("IRS");

         (iii)    the most recent  statement  filed with the Department of Labor
                  pursuant to 29 U.S.C.ss. 2520.104-23;

         (iv)     a written summary of the legal basis for an exemption from the
                  obligation to file annual Form 5500 reports;

         (v)      the three most recent  annual Form 990 and 1041 reports  filed
                  with the IRS;

         (vi)     the most recent  summary  plan  description  and  summaries of
                  material modifications thereto;

         (vii)    the trust  agreement,  group annuity contract or other funding
                  agreement that provides for the funding of the Plan;

         (viii)   the most recent financial statement;

         (ix)     the most recent  determination  letter  received  from the IRS
                  with  respect to each Plan that is intended  to qualify  under
                  section 401 of the Code; and

         (x)      any  agreement  pursuant to which the Company is  obligated to
                  indemnify any person.

(c)      Neither the Company nor any entity (whether or not  incorporated)  that
         was at any time during the six-year  period  ending on the date of this
         Agreement  treated as a single employer together with the Company under
         section  414 of the Code  has ever  maintained,  had an  obligation  to
         contribute to,  contributed  to, or incurred any liability with respect
         to,  a  pension  plan  that is or was  subject  to Title IV of ERISA or
         section 412 of the Code.

(d)      Neither the Company nor any other  entity has engaged in a  transaction
         that could result in the imposition upon the Company of a civil penalty
         under section 409 or 502(i) of ERISA or a tax under section 4972, 4975,
         4976,  4980B or 6652 of the Code with respect to any Plan,  and no fact
         or event exists that could give rise to any such liability.

(e)      Each  Plan  has been  operated  and  administered  in all  respects  in
         accordance  with its  terms  and  applicable  laws,  including  but not
         limited to ERISA and the Code.

(f)      The terms of all Plans  that are  intended  to  qualify  under  section
         401(a) of the Code (i) have been determined by the IRS to qualify under
         section  401(a) of the Code or (ii) the applicable  remedial  amendment
         periods under section 401(b) of the Code will not have expired prior to
         the Closing  Date.  No event or  circumstance  has occurred  that could
         cause the IRS to disqualify  any Plan that is intended to qualify under
         section 401(a) of the Code.

(g)      No Plan provides medical, surgical,  hospitalization, or life insurance
         benefits  (whether or not insured by a third  party) for  employees  or
         former  employees  of the Company for periods  extending  beyond  their
         retirements or other  terminations of service,  other than (i) coverage
         mandated  by  applicable  law,  (ii) death  benefits  under any pension
         benefit plan as defined in section 3(1) of ERISA, or (iii) benefits the
         full cost of which is borne by the current or former  employee  (or his
         beneficiary).

(h)      The  consummation of the  transactions  contemplated by this Agreement,
         either  alone  or  in  conjunction   with  another  event  (such  as  a
         termination of employment),  will not (i) entitle any current or former
         employee  or officer of the  Company,  to  severance  pay, or any other
         payment under a Plan, (ii) accelerate the time of payment or vesting of
         benefits under a Plan (except for the full vesting of Interests held by
         Sellers  whose  Interests are subject to vesting  schedules),  or (iii)
         increase the amount of compensation due any such employee or officer.

(i)      There is no litigation, action, proceeding, audit, examination or claim
         pending,  or to the Best Knowledge of the Company,  Lancewood and Onyx,
         threatened  or  contemplated  relating to any Plan (other than  routine
         claims for benefits).

         3.14  Contracts  and  Agreements.  Schedule  3.14 sets forth a true and
complete list of all of the following contracts,  agreements,  leases, licenses,
arrangements or commitments, written or oral, to which the Company is a party or
by which any of its assets are bound (including all amendments,  supplements and
modifications thereto):

(a)      all contracts,  agreements,  arrangements  or commitments in respect of
         the sale or provision of products or services by the Company;

(b)      all  sales,  agency or  distributorship  agreements  or  franchises  or
         legally enforceable commitments or obligations with respect thereto;

(c)      all collective  bargaining  agreements,  union  agreements,  employment
         agreements or consulting agreements;

(d)      all loan or  credit  agreements,  indentures,  guarantees  (other  than
         endorsements  made for  collection),  mortgages,  pledges,  conditional
         sales or other title retention agreements,  and all equipment financing
         obligations, lease and lease-purchase agreements;

(e)      all leases and all other contracts,  agreements or legally  enforceable
         commitments  relating to or  affecting  real  property or any  interest
         therein (other than  covenants,  easements,  rights-of-way  or the like
         that are properly recorded in the applicable real property records);

(f)      all  performance  bonds,  bid  bonds,  surety  bonds and the like,  all
         contracts and bids covered by such bonds, and all letters of credit and
         guaranties;
(g)      all consent decrees and other judgments,  decrees or orders, settlement
         agreements and agreements relating to competitive activities, requiring
         or prohibiting any future action;

(h)      all  contracts or  agreements  of any nature with any of the Sellers or
         their Affiliates;

(i)      all  contracts,   agreements,   leases,   licenses,   arrangements   or
         commitments  entered into outside the ordinary  course of the operation
         of the business of the Company;

(j)      all other  contracts,  agreements,  leases,  licenses,  arrangements or
         commitments that (i) can be reasonably  expected to involve receipts or
         expenditures  of or by the Company in excess of $100,000 or (ii) have a
         remaining term in excess of twelve months;

(k)      all other  contracts,  agreements,  leases,  licenses,  arrangements or
         commitments  that are  material  to the  Company  or its  assets or its
         business; and

(l)      all  offers,  tenders  or the like  outstanding  and  capable  of being
         converted  into an obligation  of the Company  described in clauses (a)
         through (k) above.

         All of such contracts,  agreements, leases, licenses, arrangements, and
commitments  and all  other  such  items  held or owned by the  Company  but not
specifically described above (collectively,  the "Contracts") are valid, binding
and in full force and effect in accordance  with their terms and  conditions and
there is no existing default thereunder or breach thereof by the Company, or, to
the Best Knowledge of the Company,  Lancewood or Onyx, by any other party to the
Contracts,  or any conditions  which,  with the passage of time or the giving of
notice or both, might constitute such a default by the Company,  or, to the Best
Knowledge  of the  Company,  Lancewood  and  Onyx,  by any  other  party  to the
Contracts.  Except as set forth on  Schedule  3.14,  the  Contracts  will not be
breached  by or give any other party a right of  termination  as a result of the
transactions  contemplated  by this  Agreement and no consent or approval by any
Person is necessary for any of such Contracts to remain in full force and effect
after the Closing.  To the Best  Knowledge of the Company,  Lancewood  and Onyx,
there is no reason  why any of the  Contracts  (i) will  result in a loss to the
Company on  completion  by  performance  or (ii) cannot  readily be fulfilled or
performed by the Company with the assets presently owned,  leased or licensed by
the Company on time  without  undue or unusual  expenditure  of money or effort.
Copies of all of the documents (or in the case of oral commitments, descriptions
of the material terms thereof) relevant to the Contracts listed in Schedule 3.14
have been  delivered to the Buyer,  and such copies and  descriptions  are true,
complete and accurate and include all amendments,  supplements or  modifications
thereto.  The  Company  has not  received  any  notice  of  cancellation  of any
Contract,  and to the Best  Knowledge of the  Company,  Lancewood  and Onyx,  no
Person has threatened to deliver any notice of cancellation of any Contract.

         3.15 Claims and Proceedings. Attached hereto as Schedule 3.15 is a list
of all claims, actions, suits, proceedings and investigations pending or, to the
Best  Knowledge  of the  Company,  Lancewood  and Onyx,  threatened  against the
Company or any of its properties or assets, at law or in equity, or before or by
any  Governmental  Authority.  Except as set forth on Schedule 3.15, there is no
basis for any such claim or action or any other  claims or actions  which would,
or could reasonably be expected to  (individually or in the aggregate),  have an
adverse  effect  on the  business,  operations  or  financial  condition  of the
Company,  or  result  in a  liability  of the  Company.  Except  as set forth on
Schedule  3.15, the Company is not now subject to any order,  judgment,  decree,
stipulation  or consent of any  Governmental  Authority.  No inquiry,  action or
proceeding  has been  asserted,  instituted  or,  to the Best  Knowledge  of the
Company,  Lancewood or Onyx, threatened to restrain or prohibit the carrying out
of the transactions  contemplated by this Agreement or to challenge the validity
of such transactions or any part thereof or seeking damages on account thereof.

3.16     Taxes and Governmental Returns.

(a)      As of the date hereof,  all Tax returns of every nature required by any
         Governmental  Authority or Governmental  Requirement to be filed by the
         Company or which include or should include the Company, including those
         relating  to Taxes of any  nature  to which the  Company  or any of its
         business is subject  ("Tax  Returns"),  have been filed for all periods
         ending on or before the date hereof,  and all Taxes shown to be due and
         payable on such Tax Returns or on any  assessments  related to such Tax
         Returns have been paid.  All such Tax Returns and the  information  and
         data contained  therein have been properly and accurately  compiled and
         completed,  fairly  present  the  information  purported  to  be  shown
         therein, and reflect all Tax liabilities of the Company for the periods
         covered by such Tax Returns.  Except as set forth on Schedule  3.16(a),
         the  Company  has no  unpaid  liability  for any  Taxes  of any  nature
         whatsoever for any period prior to the date hereof. Except as set forth
         on Schedule 3.16(a), the Tax Returns of the Company or that include the
         Company  have not been  audited,  and are not now under  audit,  by any
         Governmental Authority.  Except as set forth on Schedule 3.16(a), there
         are no  agreements,  waivers  or other  arrangements  providing  for an
         extension  of time with respect to the  assessment  of any Taxes of any
         nature  against the Company or with  respect to any Tax Return filed by
         the Company or that include the Company, or any suits or other actions,
         proceedings,  investigations  or  claims  now  pending  or, to the Best
         Knowledge of the Company,  Lancewood and Onyx,  threatened  against the
         Company with respect to any Taxes or any matters under  discussion with
         any  Governmental  Authority  relating to any Taxes,  or any claims for
         additional Taxes asserted by any Governmental Authority.

(b)      As of the date hereof, all information returns and governmental reports
         of every nature  (excluding  Tax returns,  which are covered by Section
         3.16(a))  required  by  any  Governmental   Authority  or  Governmental
         Requirement (excluding Environmental Laws, which are covered by Section
         3.27) to be filed by the Company or which include or should include the
         Company  ("Governmental  Returns"),  have been  filed  for all  periods
         ending on or before  the date  hereof,  and all fees,  assessments  and
         other liabilities related to such Governmental  Returns have been paid.
         All such  Governmental  Returns and the  information and data contained
         therein have been  properly  and  accurately  compiled  and  completed,
         fairly  present  the  information  purported  to be shown  therein  and
         reflect all fees, assessments and other liabilities of the Company with
         respect thereto for the periods covered by such  Governmental  Returns.
         Except as set forth on Schedule 3.16(b), the Company has no unpaid fee,
         assessment or other liability with respect to any  Governmental  Return
         for any  period  prior  to the  date  hereof.  Except  as set  forth on
         Schedule  3.16(b),  the  Governmental  Returns  of the  Company or that
         include the Company have not been audited,  and are not under audit, by
         any Governmental  Authority.  Except as set forth on Schedule  3.16(b),
         there are no agreements, waivers or other arrangements providing for an
         extension of time with respect to the assessment of any fee, assessment
         or other liability with respect to any such Governmental Return, or any
         suits or other  actions,  proceedings,  investigations  or  claims  now
         pending or, to the Best  Knowledge of the Company,  Lancewood and Onyx,
         threatened against the Company with respect to any Governmental Returns
         or any fees,  assessments or other  liabilities  related thereto or any
         matters under  discussion with any Governmental  Authority  relating to
         any   Governmental   Returns,   or  any  claims  for  additional  fees,
         assessments or other liabilities asserted by any Governmental Authority
         with respect to such Governmental Returns.

         3.17 Personnel. Attached hereto as Schedule 3.17 is a list of the names
and annual rates of compensation of the managers,  officers and employees of the
Company  (including base salary,  bonus and incentive  pay).  Schedule 3.17 also
summarizes  the  bonus,  profit  sharing,   percentage   compensation,   company
automobile,  club membership and other like benefits, if any, paid or payable to
such managers,  officers and employees during the Company's 1999 fiscal year and
to the date hereof or under which such  managers,  officers  and  employees  are
entitled to receive benefits.  Except as set forth in Schedule 3.17, the Company
has not  received  any written  notification  that any of the  employees  of the
Company  presently  plans to  terminate  his or her  employment  during the 2000
calendar  year,  whether  by reason  of the  transactions  contemplated  in this
Agreement or  otherwise.  Schedule  3.17 also lists all  employment  agreements,
consulting  agreements and confidentiality  agreements to which the Company is a
party,  and all severance  benefits  which any manager,  officer,  consultant or
employee of the Company is or may be entitled to receive. The employee relations
of the Company are good and there is no pending or, to the Best Knowledge of the
Company,  Lancewood and Onyx,  threatened labor dispute.  Except as set forth on
Schedule 3.17, none of the employees of the Company are represented by any labor
union or organization  and, to the Best Knowledge of the Company,  Lancewood and
Onyx,  there  are no  current  union  organizing  actions  among  the  Company's
employees.  The  Company is in  compliance  in all  material  respects  with all
federal and state laws respecting employment and employment practices, terms and
conditions  of  employment  and wages and hours and is not engaged in any unfair
labor  practices.  There is no unfair labor  practice  claim against the Company
before the National Labor  Relations  Board or any strike,  labor dispute,  work
slowdown or work  stoppage  pending or, to the Best  Knowledge  of the  Company,
Lancewood  and Onyx,  threatened  against or involving the Company and there has
not been any such action during the last three years.

         3.18 Business Relations. None of the Company, Lancewood or Onyx has any
Best Knowledge that any customer or supplier of the Company will, as a result of
the  transactions  contemplated  hereby,  cease to do business  with the Company
after  the  consummation  of the  transactions  contemplated  hereby in the same
manner as previously conducted with the Company. Except as set forth on Schedule
3.18, the Company has not received notice from any of its customers or suppliers
that any such customer or supplier  will,  for any reason,  cease to do business
with  the  Company  after  the date  hereof  in the same  manner  as  previously
conducted  with the  Company.  The  Company has not  received  any notice of any
disruption  (including  delayed  deliveries or  allocations by suppliers) in the
availability of the materials or products used by the Company.

         3.19 Accounts Receivable.  Except as set forth on Schedule 3.19, all of
the  accounts,  notes  and loans  receivable  (net of  reserves)  that have been
recorded on the books of the Company are bona fide and represent amounts validly
due.  All of such  accounts,  notes  and loans  receivable  are  pledged  to the
Company's senior bank lenders to secure the payment of indebtedness  outstanding
under the  Company's  senior credit  facilities,  and will be released from such
liens at or prior to Closing.  All of such accounts,  notes and loans receivable
will be collected in full within 90 days after  Closing,  less any allowance for
doubtful  accounts  set  forth on the  balance  sheet  included  in the  Interim
Financial  Statements or the Future  Financial  Statements.  With respect to any
such  accounts,  notes and loans  receivable  that are not  collected in full in
accordance  with the  immediately  preceding  sentence,  the Buyer shall  assign
(without  recourse)  the  remaining  portion  of  such  account,  note  or  loan
receivable  to Lancewood and Onyx so long as (i) Lancewood and Onyx have paid to
the Buyer the amount required by the  indemnification  provisions of Section 8.1
as a result of such account,  note or loan  receivable not having been collected
in full accordance with the immediately  preceding sentence,  and (ii) Lancewood
and Onyx have delivered to the Buyer a written request for such assignment.

         3.20 Bank Accounts.  Attached  hereto as Schedule 3.20 is a list of all
banks or other financial  institutions  with which the Company has an account or
maintains a safe deposit box,  showing the type and account  number of each such
account  and  safe  deposit  box and the  names  of the  Persons  authorized  as
signatories thereon or to act or deal in connection therewith.

         3.21 Agents.  Except as set forth on Schedule 3.21, the Company has not
designated  or  appointed  any  person  or other  entity to act for it or on its
behalf  pursuant to any power of attorney or any agency  which is  presently  in
effect.

         3.22  Indebtedness  To  and  From  Officers,   Managers,   Members  and
Employees.  Except as set forth on Schedule  3.22,  the Company does not owe any
indebtedness to any of its officers,  managers, members or employees (other than
accrued  salaries or benefits  payable in the ordinary  course of business)  nor
does it have indebtedness owed to it from any of its officers, managers, members
or employees, excluding indebtedness for travel advances or similar advances for
expenses  incurred  on behalf of and in the  ordinary  course of business of the
Company and consistent with the Company's past practices.

         3.23 Certain Consents.  Except as set forth on Schedule 3.23 and except
in  connection  with the filings to be made  pursuant  to the  Hart-Scott-Rodino
Antitrust  Improvements  Act of 1976 (the  "HSR  Act"),  there are no  consents,
waivers or  approvals  required to be  executed  or obtained  from any Person in
connection  with the execution,  delivery and  performance by the Company or the
Sellers of this  Agreement  and the Ancillary  Agreements or in connection  with
consummation  by the Company and the  Sellers of the  transactions  contemplated
hereby or thereby.

         3.24 Brokers.  Neither Lancewood nor the Company has engaged, or caused
any liability to be incurred to, any finder, broker or sales agent in connection
with  the   execution,   delivery  or  performance  of  this  Agreement  or  the
transactions contemplated hereby.

         3.25 Interest in  Competitors,  Suppliers and Customers.  Except as set
forth on  Schedule  3.25,  no  officer,  member or manager of the Company or any
Affiliate of any such officer,  member or manager has any ownership  interest in
any competitor,  supplier or customer of the Company or any property used in the
operation of the business of the Company.

         3.26  Inventory.  Except as set forth on Schedule 3.26, the inventories
shown on the balance sheet contained in the Interim Financial Statements consist
of (and the  inventories  of the Company on the Closing  Date shall  consist of)
items of a quality  and  quantity  currently  usable in the  ordinary  course of
business by the Company as such  business  has been  conducted by the Company in
calendar year 2000.

         3.27  Environmental  Matters.  Except  as  otherwise  described  in the
Environmental  Reports,  (i) the Company  currently  is in  compliance  with all
Environmental  Laws,  and  (ii) no  claim  has  been  made  by any  Governmental
Authority (and, to the Best of Knowledge of the Company,  Lancewood and Onyx, no
such claim has been threatened) to the effect that the business conducted by the
Company fails to comply, in any respect,  with any Environmental Laws. Except as
provided in this Section 3.27, none of the Company, any Seller or Onyx makes any
representation  or warranty as to the  environmental  condition of the assets or
properties of the Company or with respect to compliance  with any  Environmental
Law.

         3.28 Purchase of Units for Investment. Lancewood is acquiring the Units
set forth beside its name on the Purchase Price Allocation  Schedule for its own
account for investment with no present intention of, or view to, distribution of
such Units or any part thereof.  Lancewood is an  "accredited  investor" as such
term is defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange  Commission pursuant to the Securities Act. Lancewood has been provided
with all information requested by Lancewood regarding Buyer and its subsidiaries
and their business and operations,  and has had the opportunity to ask questions
of Buyer's management  regarding any issues Lancewood considered relevant to its
decision  to  acquire  the Units.  Lancewood  understands  and  agrees  that the
certificates  representing  the Units  acquired  by  Lancewood  pursuant to this
Agreement will bear a legend in form and substance similar to the following:

         "The  securities   represented  by  this   certificate  have  not  been
         registered  under  the  Securities  Act  of  1933,  as  amended,   and,
         accordingly, may not be offered for sale, sold or otherwise transferred
         except (i) upon effective registration of the securities represented by
         the certificate  under the Securities Act of 1933, as amended,  or (ii)
         upon  receipt by the issuer of (A) an opinion of counsel,  in such form
         and by such  counsel as shall be  satisfactory  to the  issuer,  or (B)
         other  documentation as shall be satisfactory to counsel for the issuer
         that such registration is not required."

         3.29  Information  Furnished.  Lancewood  and  the  Company  have  made
available  to Buyer  and its  partners,  officers,  attorneys,  accountants  and
representatives  true and correct copies of all agreements,  documents and other
items listed on the schedules to this Agreement and all books and records of the
Company,  and neither this  Agreement,  the  schedules  attached  hereto nor any
information,  agreements or documents delivered to or made available to Buyer or
its partners,  officers,  attorneys,  accountants or representatives pursuant to
this Agreement  contain any untrue statement of a material fact or omit to state
any material fact  necessary to make the  statements  herein or therein,  as the
case may be, not misleading.

         3.30 Tax Status of Lancewood.  Lancewood is not a foreign person and no
Tax is required to be withheld  from  Lancewood  pursuant to Section 1445 of the
Code as a result of the transfers contemplated by this Agreement.

         3.31 Accredited Investor Status.  Each of Lancewood,  Peter J. Jacullo,
III,  Richard  Shore,  Jr.,  Michael  J.  Burgett,  and David L.  Widener  is an
"accredited  investor,"  as such term is defined  under Rule 501 of Regulation D
promulgated under the Securities Act.

ARTICLE IV    Representations and Warranties of the Sellers

         Each Seller (other than Lancewood)  hereby  severally (but not jointly)
represents and warrants to Buyer as follows (with the  understanding  that Buyer
is relying materially on each such  representation and warranty in entering into
and performing this Agreement):

         4.1 No Liens on Interests. Such Seller is the true and lawful owner, of
record and  beneficially,  of the Interest set forth beside his, her or its name
on Schedule 3.1, free and clear of any liens, restrictions,  security interests,
claims,  rights of another or encumbrances;  none of the Interests owned by such
Seller is subject to any outstanding options,  warrants, calls or similar rights
of any other  person to acquire the same;  none of the  Interests  owned by such
Seller is subject to any restrictions on the transfer  thereof;  and such Seller
has the full power and authority to convey, and will convey to Buyer at Closing,
good and  marketable  title to his, her or its  Interest,  free and clear of any
liens,   restrictions,   security  interests,   claims,  rights  of  another  or
encumbrances.

         4.2 Other  Rights to Acquire  Securities.  There are no  authorized  or
outstanding warrants,  options or rights of any kind to acquire from such Seller
any equity or debt securities of the Company or securities  convertible  into or
exchangeable for equity or debt securities of the Company.

4.3      Due Authorization.

(a)      Such Seller has full power and authority to enter into and perform this
         Agreement and each other agreement, instrument and document required to
         be executed by him, her or it in connection herewith (the "Other Seller
         Ancillary Agreements"). The execution, delivery and performance of this
         Agreement  and the Other  Seller  Ancillary  Agreements  have been duly
         authorized by all necessary action by or on behalf of such Seller.

(b)      This Agreement has been duly and validly executed and delivered by such
         Seller and  constitutes  a valid and binding  obligation of such Seller
         enforceable against such Seller in accordance with its terms, except as
         the  same  may  be  limited  by  applicable   bankruptcy,   insolvency,
         reorganization  or other laws  affecting the  enforcement of creditors'
         rights generally and the application of general principles of equity.

(c)      Upon its execution in accordance with this Agreement, each Other Seller
         Ancillary Agreement to which such Seller is a party will have been duly
         and validly executed and delivered by such Seller and will constitute a
         valid and binding  obligation of such Seller  enforceable  against such
         Seller in accordance with its terms,  except as the same may be limited
         by  applicable  bankruptcy,  insolvency,  reorganization  or other laws
         affecting  the  enforcement  of  creditors'  rights  generally  and the
         application of general principles of equity.

(d)      Neither the  execution,  delivery and  performance of this Agreement by
         such Seller,  nor the execution,  delivery and performance of any Other
         Seller  Ancillary  Agreements  by such  Seller,  will (i)  violate  any
         Governmental  Requirement  applicable to such Seller or his, her or its
         properties,  (ii) violate or conflict with, or permit the  cancellation
         of, any agreement to which such Seller is a party,  or by which he, she
         or it or any of his, her or its properties are bound,  or result in the
         creation of any lien, security interest, charge or encumbrance upon any
         of such  properties,  (iii) permit the  acceleration of the maturity of
         any indebtedness  of, or indebtedness  secured by the property of, such
         Seller,  or (iv) if such  Seller is not a natural  person,  violate  or
         conflict with any provision of the governing  documents  (including the
         trust agreement) of such Seller.

(e)      No action,  consent or approval  of, or filing with,  any  Governmental
         Authority is required in  connection  with the  execution,  delivery or
         performance of this Agreement or any Other Seller  Ancillary  Agreement
         by such Seller.

         4.4 Brokers. Such Seller has not engaged, or caused any liability to be
incurred to, any finder, broker or sales agent in connection with the execution,
delivery or  performance  of this  Agreement  or the  transactions  contemplated
hereby.

         4.5 Purchase of Units for Investment.  Such Seller, if he, she or it is
acquiring  Units under this  Agreement,  is acquiring the Units set forth beside
his, her or its name on the Purchase Price  Allocation  Schedule for his, her or
its own  account  for  investment  with no  present  intention  of,  or view to,
distribution of such Units or any part thereof. Such Seller, if he, she or it is
acquiring  Units,  is an  "accredited  investor" as such term is defined in Rule
501(a) of Regulation D promulgated  by the  Securities  and Exchange  Commission
pursuant to the  Securities  Act.  Such  Seller,  if he, she or it is  acquiring
Units, has been provided with all information requested by such Seller regarding
Buyer and its  subsidiaries  and their business and operations,  and has had the
opportunity  to ask  questions of Buyer's  management  regarding any issues such
Seller  considered  relevant to his,  her or its  decision to acquire the Units.
Such Seller,  if he, she or it is acquiring  Units,  understands and agrees that
the certificates representing the Units acquired by such Seller pursuant to this
Agreement will bear a legend in form and substance similar to the following:

         "The  securities   represented  by  this   certificate  have  not  been
         registered  under  the  Securities  Act  of  1933,  as  amended,   and,
         accordingly, may not be offered for sale, sold or otherwise transferred
         except (i) upon effective registration of the securities represented by
         the certificate  under the Securities Act of 1933, as amended,  or (ii)
         upon  receipt by the issuer of (A) an opinion of counsel,  in such form
         and by such  counsel as shall be  satisfactory  to the  issuer,  or (B)
         other  documentation as shall be satisfactory to counsel for the issuer
         that such registration is not required."

         4.6 Tax Status of Such Seller.  Such Seller is not a foreign person and
no Tax is required to be withheld  from such Seller  pursuant to Section 1445 of
the Code as a result of the transfers contemplated by this Agreement.

ARTICLE V    Covenants

         5.1 Inspection.  From the date hereof to the Closing, the Company shall
give (and  Sellers  shall cause the Company to give) to Buyer and its  partners,
officers,  attorneys,  accountants and  representatives  free, full and complete
access during  normal  business  hours to all books,  records,  returns,  files,
correspondence,  personnel,  facilities and  properties of the Company;  provide
Buyer and its partners, officers, attorneys, accountants and representatives all
information  and material  pertaining to the business and affairs of the Company
as Buyer  may deem  necessary  or  appropriate;  and use their  reasonable  best
efforts to afford Buyer and its partners, officers,  attorneys,  accountants and
representatives  the opportunity to meet with the customers and suppliers of the
Company to discuss the business, condition (financial or otherwise),  operations
and prospects of the Company;  provided,  however, that neither Buyer nor any of
its  representatives  shall  contact  any  customer  or  supplier of the Company
without the prior written approval of the Company.  At the Closing,  the Company
shall deliver to Buyer the originals of all company records of the Company.  Any
investigation  by Buyer or its partners,  officers,  attorneys,  accountants  or
representatives   shall  not  in  any  manner  affect  the  representations  and
warranties of Sellers and the Company contained herein.

         5.2 Compliance by the Company and Sellers.  From the date hereof to the
Closing,  neither  any  Seller  nor the  Company  shall take or fail to take any
action   which   action  or  failure  to  take  such  action   shall  cause  the
representations  and  warranties  made by Sellers and the  Company  herein to be
untrue or incorrect as of the Closing.

         5.3 Satisfaction of Conditions  Precedent.  From the date hereof to the
Closing,  each Seller and the Company shall use commercially  reasonable efforts
to cause all  conditions  precedent  to the  obligations  of  Sellers  and Buyer
hereunder to be satisfied by the Closing,  including  execution  and delivery by
Sellers of documents  reasonably  necessary to satisfy the conditions  precedent
set forth in Sections 6.1(a), (d), (f), (j), (l), (m), (n), and (o).

         5.4 No Solicitation.  From the date hereof to the Closing,  neither the
Company  nor any Seller  shall offer any of the  Interests  of the Company (or a
material part of its assets in one transaction or a series of transactions)  for
sale or lease,  or solicit  offers to buy or lease the  Interests of the Company
(or a material part of its assets in one  transaction  or in a series of related
transactions),  or hold  discussions  with any party (other than Buyer)  looking
toward  such an offer or  solicitation  or toward a merger,  share  exchange  or
consolidation  of the  Company  with  or  into  another  entity  or any  similar
transaction.  From the date hereof to the Closing,  Sellers shall not, and shall
not allow the Company  to,  enter into any  agreement  with any party other than
Buyer with respect to the sale, lease or other  disposition of either the equity
securities  or the assets of the Company or with  respect to any  merger,  share
exchange, consolidation or similar transaction involving the Company.

         5.5  Notice  of  Developments.  From the date  hereof  to the  Closing,
Sellers  and  the  Company  shall  notify  Buyer  of any  material  problems  or
developments  with  respect to the  business,  operations  or  prospects  of the
Company which come to the Best Knowledge of Sellers or the Company.

         5.6 Notice by Sellers and the  Company of Breach.  From the date hereof
to the Closing,  Sellers, Onyx and the Company shall,  immediately upon becoming
aware  thereof,  give detailed  written notice to Buyer of the occurrence of, or
the  impending  or  threatened  occurrence  of, any event  which  would cause or
constitute a breach, or would have caused or constituted a breach had such event
occurred or been known to any Seller,  Onyx or the Company  prior to the date of
this  Agreement,  of any of  their  covenants,  agreements,  representations  or
warranties  contained  or referred  to herein or in any  document  delivered  in
accordance with the terms hereof.

         5.7 Notice by Sellers  and the  Company  of  Litigation.  From the date
hereof to the Closing,  immediately upon becoming aware thereof, Sellers and the
Company  shall notify Buyer of (a) any suit,  action or  proceeding  (including,
without limitation,  any Tax Action or any proceeding  involving a labor dispute
or grievance or union recognition) to which the Company becomes a party or which
is  threatened  against the  Company,  (b) any order or decree or any  complaint
praying for an order or decree restraining or enjoining the consummation of this
Agreement or the transactions  contemplated  hereby,  or (c) any notice from any
tribunal of its intention to institute an investigation  into, or to institute a
suit or proceeding to restrain or enjoin the  consummation of, this Agreement or
the transactions  contemplated  hereby or to nullify or render  ineffective this
Agreement or such transactions if consummated.

         5.8  Continuation  of Insurance  Coverage.  From the date hereof to the
Closing,  Sellers  shall  cause the  Company  to keep in full  force and  effect
insurance  coverage for the Company and its assets and operations  comparable in
type,  amount and scope to the coverage now maintained  covering the Company and
its assets and operations.

         5.9  Maintenance of Credit Terms.  From the date hereof to the Closing,
Sellers  shall cause the Company to continue to effect sales of its products and
services only on the terms that have historically been offered by the Company or
on such other  terms as the Buyer shall  approve  (which  approval  shall not be
unreasonably withheld, conditioned or delayed).

         5.10 Financial Statements. Until the Closing, as soon as available, and
in any event within 45 days after the end of each calendar  month after June 30,
2000,  the Company  shall furnish to Buyer a balance sheet as of the last day of
such  month,  a statement  of  operations  and a statement  of cash flows of the
Company  for such month,  prepared in  accordance  with the  generally  accepted
accounting  principles  applied  in the  preparation  of the  Audited  Financial
Statements  (except for the absence of notes to such  financial  statements  and
subject to normal year-end  adjustments and accruals  required to be made in the
ordinary course of business which are not materially  adverse and are consistent
with past  practices).  Such  financial  statements  shall  fairly  present  the
financial  position,  results of operations and changes in financial position of
the Company as of the indicated dates and for the indicated periods.

5.11     Interim Operations of the Company.

(a)      From the date hereof to the Closing, Sellers shall cause the Company to
         conduct its business only in the ordinary  course  consistent with past
         practices and the Company shall not, and Lancewood and Onyx shall cause
         the  Company not to,  unless  Buyer  gives its prior  written  approval
         (which  approval  shall not be  unreasonably  withheld,  conditioned or
         delayed), (i) amend or otherwise change its certificate of formation or
         limited  liability company agreement (except to remove or admit members
         of the Company or to change the respective  percentage interests of the
         members in the Company), as each such document is in effect on the date
         hereof,  (ii)  issue  or  sell,  or  authorize  for  issuance  or sale,
         additional  equity  interests  or  issue,   grant  or  enter  into  any
         subscription,  option,  warrant,  right,  convertible security or other
         agreement or  commitment  of any  character  obligating  the Company to
         issue equity interests or securities, (iii) declare, set aside, make or
         pay any  dividend  or other  distribution  with  respect  to its equity
         securities,  (iv) redeem,  purchase or otherwise  acquire,  directly or
         indirectly,  any of its debtor  equity  securities,  (v)  authorize any
         capital  expenditures in excess of $50,000  individually or $100,000 in
         the  aggregate  (other  than  the  capital  expenditures  described  on
         Schedule  3.7(c),  which Buyer  hereby  consents  to) or sell,  pledge,
         dispose  of or  encumber,  or  agree  to sell,  pledge,  dispose  of or
         encumber,  any assets of the Company,  (vi)  acquire (by merger,  share
         exchange, consolidation,  acquisition of stock or assets, or otherwise)
         any  interest  in any  Person or enter  into any  contract,  agreement,
         commitment or arrangement  with respect to any of the foregoing,  (vii)
         borrow any money  (whether  under new or existing  debt  facilities  or
         otherwise), factor any receivables or incur any debt obligation (except
         under the Company's presently existing senior credit facilities,  which
         will be paid in full at  Closing  pursuant  to Section  1.4,  and trade
         payables  and other  obligations  incurred  in the  ordinary  course of
         business  that  will be  included  as  current  liabilities  in the net
         working capital calculated  pursuant to Section 1.5), or issue any debt
         securities or enter into or modify any contract, agreement,  commitment
         or  arrangement  with  respect to any items  described  in this  clause
         (vii),  (viii)  enter  into,  amend  or  terminate  any  employment  or
         consulting  agreement  with any  manager,  officer,  consultant  or key
         employee of the Company,  enter into, amend or terminate any employment
         agreement with any other person, or take any action with respect to the
         grant or  payment  of any  severance  or  termination  pay  other  than
         pursuant to policies or agreements of the Company in effect on the date
         hereof,  (ix)  enter  into,  extend or renew  any  lease for  office or
         manufacturing  space,  (x) except as required by law,  adopt,  amend or
         terminate  any  bonus,  profit  sharing,  compensation,  stock  option,
         pension,  retirement,   deferred  compensation,   employment  or  other
         employee benefit plan,  agreement,  trust,  fund or arrangement for the
         benefit or welfare of any officer or employee of the Company (except in
         order to fully vest  Interests  held by  Sellers  whose  Interests  are
         subject to vesting schedules) or withdraw from any multi-employer  plan
         so as to create any liability  under Article IV of ERISA to any Person,
         (xi) grant any increase in compensation,  or grant or make any bonus or
         other compensatory payments, to any manager, officer, consultant or key
         employee of the Company,  except as required by agreements in effect as
         of the date of this Agreement, (xii) grant any increase in compensation
         to any other  employee of the Company,  (xiii) enter into any contract,
         agreement, commitment or arrangement for the sale or provision of goods
         or  services,  or (xiv) enter into,  amend or terminate  any  contract,
         agreement, commitment or arrangement that can be reasonably expected to
         (A)  involve  receipts  or  expenditures  by the  Company  in excess of
         $50,000,  (B) have a term in excess of twelve months, or (C) involve an
         indemnity or guaranty obligation of the Company.

(b)      From the date hereof to the Closing, Sellers shall cause the Company to
         use its  reasonable  best  efforts  to  preserve  intact  the  business
         organization of the Company, to keep available in all material respects
         the services of its present officers, consultants and key employees, to
         preserve intact its banking  relationships  and credit  facilities,  to
         preserve  intact its  relationships  with its customers,  suppliers and
         distributors,  to  preserve  the  goodwill  of  those  having  business
         relationships with it and to comply with all applicable laws.

(c)      From the date of this Agreement  through the earlier of (i) Closing and
         (ii) termination of this Agreement, Buyer will make generally available
         for approximately 35 hours per week during normal business hours at the
         facilities of Seller located in Martinez,  California, a representative
         of Buyer ("Buyer's Contract Representative). With respect to any action
         for which  Buyer's  prior  written  approval is required  under Section
         5.11(a)(xiii)  or (xiv) (but not any other clause of that  section) the
         Sellers  shall  send or cause  to be sent a  written  request  for such
         approval   either  (i)  by  personal   delivery  to  Buyer's   Contract
         Representative at the Company's Martinez, California,  facility if such
         representative  is  physically  present  at such  facility,  or (ii) by
         facsimile to the following Dallas office  representatives of Buyer: Mr.
         Fred  Johnson   (facsimile  number   972/931-6526),   Mr.  Ron  Rushton
         (facsimile number 972/931-6526), and Mr. Ron Scoggins (facsimile number
         972/699-1894).  Such written  request will be accompanied by a full and
         complete copy of such contract  (including any schedules and exhibits),
         or, if no such contract is then  available,  such written  request will
         include  a  summary  of the  proposed  contract  in  form  and  content
         sufficient to describe to Buyer its material  terms.  The Sellers shall
         also  verbally  confirm  either in  person  with the  Buyer's  Contract
         Representative  or  by  telephone  with  at  least  one  Dallas  office
         representative  listed  above  receipt by such  representative  of such
         written request.  Upon receipt of such written request and accompanying
         attachments,  and after the  completion  of the in person or telephonic
         confirmation  described above,  Buyer will have 24 hours from such time
         to respond  (either  verbally or in writing) to the Sellers in order to
         approve  or  disapprove  of the  proposed  contract.  If Buyer  has not
         responded within such 24 hour period,  notwithstanding the requirements
         of Section 5.11(a) for approvals to be in writing,  such contract shall
         be deemed approved by the Buyer. 5.12 HSR Act Filings.  To the extent a
         premerger  notification  under  the  HSR Act is  required,  each of the
         Company  (and to the  extent  required,  Lancewood  and Onyx) and Buyer
         shall,  and hereby  agrees to, cause its ultimate  parent entity to (a)
         file a premerger  notification under the HSR Act with the United States
         Department of Justice and the Federal  Trade  Commission as promptly as
         practical  following the date hereof,  (b) request early termination of
         the waiting period under the HSR Act, and (c) promptly  comply with any
         requests for additional information or documentary material thereunder.
         Seller and Buyer  shall  each pay  one-half  (1/2) of all  filing  fees
         required in  connection  with any such  filings made under this Section
         5.12.

         5.13  Resignations  of Managers  and  Officers.  Sellers  shall  either
terminate,  or cause the delivery of resignations from, all members of the board
of managers of the Company (and such other employees of the Company as Buyer may
request)  from  their   positions  and  employment   with  the  Company,   which
terminations  and  resignations  shall be effective at or before the Closing and
shall be in form and substance reasonably satisfactory to Buyer.

         5.14  Compliance by Buyer.  From the date hereof to the Closing,  Buyer
shall not take or fail to take any action  which  action or failure to take such
action shall cause the representations and warranties made by Buyer herein to be
untrue or incorrect as of the Closing.

         5.15 Satisfaction of Conditions Precedent.  From the date hereof to the
Closing, Buyer shall use commercially reasonable efforts to cause all conditions
precedent to the  obligations of Buyer and Sellers  hereunder to be satisfied by
the Closing,  including execution and delivery by Buyer of documents  reasonably
necessary to satisfy the conditions precedent set forth in Sections 6.2(a), (c),
(e) and (g).

         5.16 Notice by Buyer of Breach.  From the date  hereof to the  Closing,
Buyer shall,  immediately  upon becoming  aware thereof,  give detailed  written
notice to Sellers  and the Company of the  occurrence  of, or the  impending  or
threatened occurrence of, any event which would cause or constitute a breach, or
would have caused or  constituted a breach had such event occurred or been known
to  Buyer  prior  to the  date  of  this  Agreement,  of  any of its  covenants,
agreements,  representations or warranties contained or referred to herein or in
any document delivered in accordance with the terms hereof.

         5.17  Notice  by Buyer of  Litigation.  From  the  date  hereof  to the
Closing, immediately upon becoming aware thereof, Buyer shall notify Sellers and
the Company of (a) any order or decree or any complaint  praying for an order or
decree  restraining  or  enjoining  the  consummation  of this  Agreement or the
transactions  contemplated  hereby,  or (b) any notice from any  tribunal of its
intention  to  institute  an  investigation  into,  or to  institute  a suit  or
proceeding  to restrain or enjoin the  consummation  of, this  Agreement  or the
transactions  contemplated  hereby  or to  nullify  or render  ineffective  this
Agreement or such transactions if consummated.

         5.18  Consents.  After the date  hereof,  Buyer shall use  commercially
reasonable efforts to obtain the third party consents disclosed on Schedules 3.9
and 3.14 as being  necessary in connection  with the  transactions  contemplated
hereby.  After the date hereof,  the Company and Lancewood shall fully cooperate
with Buyer in its efforts to obtain such consents.

         5.19 Registration Rights Agreement.  Contemporaneous  with the Closing,
Buyer and  Lancewood,  Peter J. Jacullo,  III,  Richard Shore,  Jr.,  Michael J.
Burgett,  and David L. Widener shall execute and deliver a  Registration  Rights
Agreement in the form attached hereto as Exhibit B.

         5.20 Wickland  Assumption.  Contemporaneous  with the Closing,  Sellers
shall assume the Company's  obligation  to make an earn-out  payment to Wickland
Oil Company pursuant to the Assumption Agreement in the form attached as Exhibit
A.

         5.21 Contracts Update. At the end of the day prior to the Closing Date,
the Company,  Lancewood and Onyx shall deliver to Buyer an accurate list showing
(a) all contracts,  agreements, leases, licenses,  arrangements and commitments,
written or oral,  to which the  Company is a party or by which any of its assets
are bound that are of a type that are either  required  to be listed on Schedule
3.14 or are  required  to be  approved  by Buyer  pursuant  to the terms of this
Agreement,  and  (b)  all  amendments,  supplements  and  modifications  to  any
Contracts  listed on  Schedule  3.14,  in each case to the extent  such item was
entered into on or after the date of this Agreement.

         5.22 Release of Sellers.  On the Closing Date, each of the Sellers and,
except as to Lancewood and Onyx, their respective Affiliates, shall execute full
and  complete  releases  of the Company  with  respect to any and all claims and
rights  they might have  against  the  Company in the form of Exhibit C attached
hereto.

         5.23 Tax  Certificates.  Each  Seller  agrees  to  provide  the Buyer a
certificate,  in  compliance  with  Section  1445 of the Code  and the  Treasury
regulations  thereunder,  that,  as of the  Closing  Date,  such Seller is not a
foreign person.

         5.24  Delivery  of  Investment  Letters.   Contemporaneously  with  the
Closing,  each of Lancewood,  Peter J. Jacullo, III, Richard Shore, Jr., Michael
J.  Burgett,  and  David  L.  Widener  shall  execute  and  deliver  to Buyer an
Investment Letter in the form attached hereto as Exhibit D.

ARTICLE VI   Conditions to Closing

         6.1  Conditions to Obligations  of Buyer.  The  obligations of Buyer to
consummate the  transactions  contemplated  by this Agreement are subject to the
fulfillment of each of the following  conditions  (any of which may be waived by
Buyer):

(a)      The  representations  and  warranties of Sellers,  Onyx and the Company
         contained in this  Agreement  shall be true and correct in all material
         respects at and as of the  Closing  Date with the same effect as though
         such  representations  and  warranties  had been  made on and as of the
         Closing Date;  Sellers,  Onyx and the Company shall have  performed and
         complied with all agreements required by this Agreement to be performed
         or  complied  with by  Sellers,  Onyx or the Company at or prior to the
         Closing Date; and Buyer shall have received a certificate,  dated as of
         the  Closing  Date,  signed by the  Sellers  and Onyx to the  foregoing
         effects;

(b)      No action or proceeding  shall have been  instituted or threatened  for
         the  purpose  or with the  probable  or  reasonably  likely  effect  of
         enjoining or preventing the  consummation  of this Agreement or seeking
         damages on account thereof;

(c)      Prior to the Closing,  there shall have been no material adverse change
         in  the  financial  condition,   business,   properties,   liabilities,
         obligations  or  operations  of the Company since June 30, 2000, or any
         occurrence  or event since the date hereof,  that has caused a material
         adverse change in the prospects of the Company;

(d)      Buyer shall have received the company  records  contemplated by Section
         5.1 hereof and the resignations contemplated by Section 5.13 hereof;

(e)      If  applicable,  the waiting period under the HSR Act applicable to the
         transactions contemplated hereby shall have expired or been terminated;

(f)      All necessary action  (corporate or otherwise) shall have been taken by
         Sellers and the Company to authorize,  approve and adopt this Agreement
         and the consummation  and performance of the transactions  contemplated
         hereby,  and Buyer shall have received a  certificate,  dated as of the
         Closing Date, of the Sellers and Onyx to the foregoing effect;

(g)      All  indebtedness   outstanding   under  the  Company's  senior  credit
         facilities  shall have been paid in full by the Sellers as contemplated
         by Section 1.4, and the Buyer shall have received the Payoff Letter and
         all  related  releases  necessary  to release the liens  securing  such
         indebtedness;

(h)      Sellers shall have assumed the Company's  obligation to make an earnout
         payment to Wickland Oil Company pursuant to the Assumption Agreement in
         the form attached hereto as Exhibit A;

(i)      The City of Los Angeles shall have  consented to or approved in writing
         the  transactions   contemplated  by  this  Agreement  and  shall  have
         indicated in writing that the Permits  numbers 712 and 713 covering the
         lease  of  the  Company's  Los  Angeles,   California,   facility,   or
         substitutes therefor, shall remain or be in full force and effect after
         consummation  of the  transactions  contemplated  by this  Agreement on
         substantially  the same  terms,  conditions  and  economic  cost as are
         presently in effect for such Permits;

(j)      Sellers  and the  Company  shall  have  delivered  to Buyer  such  good
         standing certificates, officers' certificates and similar documents and
         certificates as counsel for Buyer shall have reasonably requested prior
         to the Closing Date;

(k)      Buyer shall have received evidence of the consents, approvals, notices,
         filings and easement  assignment  listed on Schedule 6.1(k) in form and
         substance reasonably acceptable to Buyer;

(l)      Sellers shall have  delivered to Buyer such duly executed  transfer and
         other  documents  as Buyer  shall  reasonably  request  to  effect  and
         evidence the transfer of the Interests to Buyer,  free and clear of any
         liens or encumbrances of any nature whatsoever;

(m)      Lancewood,  Peter J.  Jacullo,  III,  Richard  Shore,  Jr.,  Michael J.
         Burgett and David L.  Widener  shall have  executed and  delivered  the
         Registration Rights Agreement;

(n)      Each Seller shall have  executed and  delivered to the Company,  with a
         copy to Buyer, a Member's Release as required by Section 5.22; and

(o)      The  appropriate  Sellers shall have executed and delivered  Investment
         Letters as required by Section 5.24.

         The decision of Buyer to consummate  the  transaction  contemplated  by
this Agreement without the satisfaction of any of the preceding conditions shall
not  constitute  a  waiver  of  any  of  Sellers'  or  Onyx's   representations,
warranties, covenants or indemnities herein.

         6.2  Conditions  to  Obligations  of  Sellers  and  the  Company.   The
respective obligations of Sellers and the Company to consummate the transactions
contemplated  by this  Agreement are subject to the  fulfillment  of each of the
following  conditions  (any of which may be waived by  Lancewood,  which  waiver
shall be binding on all Sellers and the Company):

(a)      Buyer's  representations  and  warranties  contained in this  Agreement
         shall be true and  correct in all  material  respects  at and as of the
         Closing  Date with the same effect as though such  representations  and
         warranties  had been made as of the  Closing  Date;  Buyer  shall  have
         performed and complied with all  agreements  required by this Agreement
         to be  performed  or complied  with by Buyer at or prior to the Closing
         Date;  and Sellers and the Company shall have  received a  certificate,
         dated as of the Closing  Date,  signed by the General  Partner of Buyer
         (on behalf of Buyer) to the foregoing effects;

(b)      No action or proceeding  shall have been  instituted or threatened  for
         the  purpose  or with the  probable  or  reasonably  likely  effect  of
         enjoining or preventing the  consummation  of this Agreement or seeking
         damages on account thereof;

(c)      Buyer  shall  have  executed  and  delivered  the  Registration  Rights
         Agreement;

(d)      Buyer  shall  have  delivered  to  Sellers  the  consideration  for the
         Interests in accordance with Section 1.3 hereof;

(e)      All necessary  action  (partnership or otherwise) shall have been taken
         by Buyer  to  authorize,  approve  and  adopt  this  Agreement  and the
         consummation and performance of the transactions  contemplated  hereby,
         and Sellers shall have received a certificate,  dated as of the Closing
         Date,  of the  General  Partner  of Buyer  (on  behalf of Buyer) to the
         foregoing effect;

(f)      If  applicable,  the waiting period under the HSR Act applicable to the
         transactions contemplated hereby shall have expired or been terminated;
         and

(g)      Buyer shall have delivered to Sellers such good standing  certificates,
         officers'  certificates  and  similar  documents  and  certificates  as
         counsel  for  Sellers  shall  have  reasonably  requested  prior to the
         Closing Date.

         The decision of Sellers and the Company to consummate  the  transaction
contemplated by this Agreement  without the satisfaction of any of the preceding
conditions  shall not  constitute  a waiver of any of  Buyer's  representations,
warranties, covenants or indemnities herein.

ARTICLE VII     Termination

         7.1 Termination.  This Agreement may be terminated prior to the Closing
by (a) the mutual consent of Buyer and Lancewood, (b) Lancewood upon the failure
of Buyer to perform or comply with any of its material  covenants or  agreements
contained herein prior to the Closing or if the  representations  and warranties
of Buyer hereunder shall not have been true and correct in all material respects
as of the time at which  such were made and as of  Closing,  (c) Buyer  upon the
failure of the Company or any Seller to perform or comply  with any of its,  his
or her material covenants or agreements contained herein prior to the Closing or
if the representations and warranties of Sellers and the Company hereunder shall
not have been true and correct in all material  respects as of the time at which
such were made and as of Closing,  (d) either  Lancewood or Buyer if the Closing
does not  occur by  December  31,  2000;  provided,  however,  that no party may
terminate this Agreement  pursuant to (b), (c) or (d) above if such party is, at
the time of any such attempted  termination,  in material breach of any material
term hereof, or (e) pursuant to the provisions of Article X hereof.

         7.2 Effect of Termination.  If this Agreement is terminated pursuant to
the provisions of Section 7.1, all further  obligations of each party under this
Agreement shall terminate  without  further  liability of such party;  provided,
however, that such termination shall not constitute a waiver by any party of any
claim it may have for specific  performance or for damages caused by reason of a
breach by any other party of a representation,  warranty, covenant, or agreement
contained herein;  and provided further,  that,  anything herein to the contrary
notwithstanding,  the respective  rights and obligations of the parties pursuant
to Article  VIII and Article XI hereof  shall  survive the  termination  of this
Agreement.

ARTICLE VIII   Indemnification

         8.1  Indemnification  of Buyer.  Except as  otherwise  provided in this
Article  VIII,  from and  after the  Closing  Lancewood  and Onyx  (the  "Seller
Indemnitors")  jointly and severally  agree to and shall  defend,  indemnify and
hold  harmless  Buyer and its  Affiliates,  equityholders,  partners,  officers,
directors,   employees,  agents,  consultants  and  representatives  (and  their
respective  successors  and assigns) and the Company (the "Buyer  Indemnitees"),
from and against,  and shall  reimburse the Buyer  Indemnitees  for, any and all
actions,   proceedings,   assessments,   penalties,  demands,  damages,  losses,
liabilities,  suits,  costs,  expenses (including  reasonable  attorneys' fees),
costs of any  settlement or judgment,  claims of any and every kind  whatsoever,
refund obligations  (including interest and penalties thereon),  and remediation
costs  (individually,  a "Loss" and collectively,  "Losses"),  paid, incurred or
suffered by the Buyer Indemnitees, relating to, resulting from or arising out of
any of the following:

(a)      any inaccuracy in any  representation or warranty of any Seller or Onyx
         under  this  Agreement,  the  schedules  hereto,  or  any  certificate,
         agreement or other document delivered or to be delivered by the Company
         or any Seller or Onyx under this Agreement;

(b)      any  breach  or  nonfulfillment  of any  covenant,  agreement  or other
         obligation  of the Company or any Seller or Onyx under this  Agreement,
         or any other agreement or document  delivered or to be delivered by the
         Company or any Seller or Onyx under this Agreement;

(c)      any  liability  to  Wickland  Oil Company  with  respect to any earnout
         payment owing to Wickland Oil Company by the Company;

(d)      any liability to the Company's  senior bank lenders in connection  with
         the Company's senior credit facilities as of the Closing Date;

(e)      any  liability or  obligation  of the Company  (whether  direct or as a
         result of assumption, indemnity, reimbursement, guarantee or otherwise,
         but excluding Environmental Liabilities that are covered by clauses (f)
         and (g) below) that is based on, arises out of or in  connection  with,
         relates to or is attributable to any act, event,  omission,  agreement,
         occurrence  or  condition  that  occurs  or  exists  at or prior to the
         Closing and that is not specifically  disclosed in this Agreement,  the
         Schedules hereto or the Financial Statements;

(f)      any Fines and  Penalties  assessed to or paid or payable by the Company
         or assessed  against its assets or business  (whether  directly or as a
         result of assumption, indemnity, reimbursement, guarantee or otherwise)
         that are based on, arise out of or in connection with, relate to or are
         attributable  to  (i)  any  violation  or  alleged   violation  of  any
         Environmental Law or Environmental  Permit that is based on, arises out
         of or in connection  with,  relates to or is  attributable  to any act,
         omission,   event,  occurrence,   release,   condition,   circumstance,
         activity,  practice  or  incident  that occurs or exists at or prior to
         Closing  or  (ii)  any  generation,   transportation,  use,  treatment,
         storage,  release or disposal  of  Hazardous  Materials  that occurs or
         exists at or prior to Closing;

(g)      any  Environmental  Liabilities  assessed  to or paid or payable by the
         Company or assessed against its assets or business (whether directly or
         as a result  of  assumption,  indemnity,  reimbursement,  guarantee  or
         otherwise)  that are based  on,  arise  out of or in  connection  with,
         relate to or are attributable to (i) any violation or alleged violation
         of any  Environmental  Law or  Environmental  Permit  that is based on,
         arises out of or in connection  with,  relates to or is attributable to
         any act, omission, event, occurrence, release, condition, circumstance,
         activity,  practice  or  incident  that occurs or exists at or prior to
         Closing  or  (ii)  any  generation,   transportation,  use,  treatment,
         storage,  release or disposal  of  Hazardous  Materials  that occurs or
         exists at or prior to Closing, but in each case only to the extent that
         the Environmental Liability is not based on or attributable to and does
         not  arise  out of or in  connection  with  or  relate  to  any  matter
         described in the Environmental Reports;

(h)      any severance,  accrued  vacation,  deferred  compensation,  bonuses or
         similar  payments  made by the Company to any  employees of the Company
         (including Richard Shore, Jr.) who resign or are terminated at or prior
         to the Closing,  and any  liabilities of the Company with respect to or
         as a result of any such  resignation or  termination,  and any payments
         made,  or  obligations  owed,  by the  Company,  or with respect to, to
         Richard Shore,  Jr.,  Michael J. Burgett,  Dawn M. West, Brian A. Hoff,
         Marco Ulmer or John M. Mackowiak  that relate to the matters  described
         in clause  (ii),  (iii) or (iv) of the  Member's  Release  for  Richard
         Shore,  Jr.,  or clause (ii) or (iii) of the  Member's  Release for the
         other individuals,  each as attached hereto as Exhibit C (provided that
         no  indemnification  will  be  required  with  respect  to any  matters
         described  in this  clause (h) to the extent  such  liability  has been
         included as part of the net working capital  adjustment to the purchase
         price provided in Section 1.5);

(i)      any claims made by any  Affiliate  of either  Lancewood or Onyx against
         the  Company or its assets that relate to or arise out of (i) any acts,
         events,  omissions  or  conditions  that  occur or exist at or prior to
         Closing, or (ii) any agreements, covenants or obligations that exist at
         or prior to the Closing;

(j)      any back rent for periods  prior to the Closing  payable by the Company
         or Buyer in connection with the Company obtaining a valid dock lease at
         the Company's Portland,  Oregon facility or a valid harbor lease at the
         Company's Tacoma,  Washington facility,  and any cost of the Company or
         Buyer for obtaining a survey in connection  with obtaining a valid dock
         lease at the Company's Portland, Oregon facility;

(k)      any  liability or  obligation  of the Company  (whether  direct or as a
         result of assumption, indemnity, reimbursement, guarantee or otherwise)
         that is based on, arises out of or in connection with, relates to or is
         attributable  to (i) the lawsuit  brought by Doug Manful  disclosed  on
         Schedule  3.15,  (ii) any  demurrage or  consequential  claims  brought
         against  the Company in  connection  with the Astra Oil  Company,  Inc.
         matter  disclosed on Schedule 3.15,  (iii) taxes for  pre-closing  time
         periods related to the tax matters  disclosed on Schedule  3.16(a),  or
         (iv) the late  filing  of, or  failure  to file,  required  Forms  5500
         related   to  the   Company's   employee   plans   (provided   that  no
         indemnification  will be required with respect to any matters described
         in this clause (k) to the extent such  liability  has been  included as
         part  of the net  working  capital  adjustment  to the  purchase  price
         provided in Section 1.5); or

(l)      a pro rata  portion  (based on the  ratio of the  number of days in the
         year 2000 prior to Closing to 365) of any  liability or  obligation  of
         the Company with respect to the Company's  year 2000 bonus  obligations
         to its employees  (provided  that no  indemnification  will be required
         with respect to any matters  described in this clause (l) to the extent
         such  liability  has been  included as part of the net working  capital
         adjustment to the purchase price provided in Section 1.5).

         8.2  Indemnification of Sellers by Buyer.  Except as otherwise provided
in this Article VIII, from and after the Closing,  the Buyer agrees to and shall
defend,  indemnify and hold harmless each Seller and his, her or its Affiliates,
equityholders, managers, directors, officers, employees, agents, consultants and
representatives  (and their  respective  successors  and  assigns)  (the "Seller
Indemnitees") from and against,  and shall reimburse the Seller Indemnitees for,
each and every Loss  paid,  incurred  or  suffered  by the  Seller  Indemnitees,
relating to, resulting from or arising out of any of the following:

(a)      any  inaccuracy  in any  representation  or warranty of the Buyer under
         this  Agreement,  or  any  certificate,  agreement  or  other  document
         delivered or to be delivered by the Buyer under this Agreement; or

(b)      any  breach  or  nonfulfillment  of any  covenant,  agreement  or other
         obligation of the Buyer under this Agreement, or any other agreement or
         document  delivered  or  to  be  delivered  by  the  Buyer  under  this
         Agreement.

         8.3  Indemnification  of Sellers by the  Company.  Except as  otherwise
provided in this  Article  VIII,  if the Closing is  consummated,  then from and
after the Closing the Company  shall  defend,  indemnify  and hold  harmless the
Seller Indemnitees from and against,  and shall reimburse the Seller Indemnitees
for, each and every Loss paid,  incurred or suffered by the Seller  Indemnitees,
relating  to,  resulting  from or  arising  out of any  Environmental  Liability
assessed to or paid or payable by the Sellers or assessed  against  their assets
or  business  (whether  directly  or  as  a  result  of  assumption,  indemnity,
reimbursement,  guarantee or  otherwise)  that is based on,  arises out of or in
connection  with,  relates to or is attributable to (i) any violation or alleged
violation of any Environmental Law or Environmental Permit by the Company or its
predecessors  that is based on, arises out of or in connection with,  relates to
or is attributable to any act, omission, event, occurrence,  release, condition,
circumstance,  activity,  practice or incident that occurs or exists at or prior
to Closing or (ii) any  generation,  transportation,  use,  treatment,  storage,
release or disposal of Hazardous  Materials  by the Company or its  predecessors
that  occurs  or  exists  at or prior to  Closing,  but in each case only to the
extent that the Environmental Liability is based on or attributable to or arises
out  of  or  in  connection  with  or  relates  to a  matter  described  in  the
Environmental Reports; provided,  however, that this Section 8.3 shall not apply
to any Loss for  which the  Seller  Indemnitors  owe an  indemnity  pursuant  to
Section 8.1.  Except as otherwise  provided in this Article VIII, if the Closing
is  consummated,  then from and after the  Closing  the  Company  shall  defend,
indemnify and hold harmless the Seller  Indemnitees from and against,  and shall
reimburse  the Seller  Indemnitees  for,  each and every Loss paid,  incurred or
suffered by the Seller  Indemnitees,  relating to, resulting from or arising out
of any Environmental  Liability assessed to or paid or payable by the Sellers or
assessed  against their assets or business  (whether  directly or as a result of
assumption, indemnity, reimbursement,  guarantee or otherwise) that is based on,
arises out of or in connection  with,  relates to or is  attributable to (i) any
violation or alleged violation of any Environmental Law or Environmental  Permit
by the Company that is based on, arises out of or in connection with, relates to
or is attributable to any act, omission, event, occurrence,  release, condition,
circumstance, activity, practice or incident that occurs or exists after Closing
or (ii) any generation,  transportation,  use,  treatment,  storage,  release or
disposal  of  Hazardous  Materials  by the Company  that occurs or exists  after
Closing.  In the event that the Company distributes assets to any owner thereof,
or engages in any merger,  consolidation,  or similar transaction, the result of
which, in any such cases, is that the net book value (assets minus  liabilities)
determined in accordance with generally acceptable accounting principles, of the
Company is reduced below $60,000,000, then either (i) Buyer or (ii) an Affiliate
of Buyer that has a net book value  (assets  minus  liabilities)  determined  in
accordance  with  generally   accepted   accounting   principles  in  excess  of
$60,000,000,  will guarantee the Company's obligations under this Section 8.3 to
the extent of the first $60,000,000 of such obligations.

         8.4 Procedures  Relating to Losses other than Third-Party  Claims. With
respect to matters for which  indemnity is sought under this  Agreement  that do
not  involve  any  judicial,   administrative,   arbitration,  or  investigatory
proceeding  or  other  proceeding  (collectively,  a  "Proceeding")  or claim or
controversy  (collectively,  a "Claim")  brought or  asserted  by third  parties
(including  any  Governmental  Authority),  if within  30  business  days  after
receiving  notification  from any  Buyer  Indemnitee  or Seller  Indemnitee  (an
"Indemnitee") supported by reasonable  documentation setting forth the nature of
the circumstances entitling the Indemnitee to indemnity hereunder,  the Buyer or
the Seller  Indemnitors (as applicable) (an  "Indemnitor") has not resolved such
matters in a manner  reasonably  acceptable to the Indemnitee,  either party may
thereafter  submit such dispute to non-binding  mediation in Dallas,  Texas. The
mediation  proceedings  shall be  commenced  by either  party  giving  the other
written  notice  ("Mediation  Notice")  that the dispute  will be  submitted  to
mediation.  Within 10  business  days from the date of receipt of the  Mediation
Notice by the  non-initiating  party, the parties shall make a good faith effort
to select a person to mediate  the  dispute.  If no mediator  has been  selected
under this procedure, the parties shall jointly request Judicial Arbitration and
Mediation  Services (JAMS) to supply within 10 business days a list of potential
qualified  attorney-mediators.  Within five (5) business  days of receipt of the
list,  the parties  shall rank the  proposed  mediators  in  numerical  order of
preference,  simultaneously  exchange  such list and select as the  mediator the
individual  receiving  the highest  combined  ranking.  If such  mediator is not
available  to serve,  they shall  proceed to contact the  mediator  who was next
highest in ranking  until  they  select a  mediator.  In  consultation  with the
mediator selected,  the parties shall promptly  designate a mutually  convenient
date and time for the  mediation,  such date to be no later  than 30 days  after
selection of the mediator. In the mediation,  each party shall be represented by
persons with  authority and discretion to negotiate a resolution of the dispute,
and may be represented by counsel.  The mediator shall  determine the format for
the meetings and the mediation  sessions shall be in private.  The mediator will
keep  confidential  all  information  learned in private  caucus  with any party
unless  specifically  authorized  by  such  party  to  make  disclosure  of  the
information  to the other party.  The parties agree that the mediation  shall be
governed by such rules as the mediator shall reasonably  prescribe  (except that
the mediator shall not prescribe formal discovery). The fees and expenses of the
mediator  shall be borne  one-half  (1/2) by the Buyer and one-half (1/2) by the
Seller Indemnitors. The mediator shall be disqualified as a witness, consultant,
expert or counsel  for any party with  respect to the  dispute  and any  related
matters. Mediation is a compromise negotiation for purposes of federal and state
rules  of  evidence  and  constitutes  privileged  communications.   The  entire
mediation  process  is  confidential,  and such  conduct,  statement,  promises,
offers,  views and  opinions  shall not be  discoverable  or  admissible  in any
Proceeding for any purpose.  If litigation or any other  Proceeding is commenced
between  the  Indemnitor  and  any  Indemnitee,  the  prevailing  party  in such
litigation or other Proceeding shall be entitled to recover all reasonable costs
and expenses  incurred in connection with such  litigation or other  Proceeding,
including, without limitation,  reasonable attorneys' fees. If litigation or any
other  Proceeding  is commenced or  threatened  by any third party for which any
Indemnitee  is  entitled  to  indemnification  under  Section  8.1 or  8.2,  the
provisions of Section 8.4 shall control.

         8.5 Notice and  Defense of  Third-Party  Claims.  If any Claim shall be
made or any Proceeding shall be brought or asserted by a third party (including,
without limitation,  any Governmental Authority) against an indemnified party or
any successor thereto (the  "Indemnified  Person") in respect of which indemnity
may be  sought  under  this  Article  VIII  from an  indemnifying  party  or any
successor thereto (the "Indemnifying Person"), the Indemnified Person shall give
prompt  written notice of such Claim or Proceeding to the  Indemnifying  Person;
provided,  that any delay or failure so to notify the Indemnifying  Person shall
relieve the Indemnifying Person of its obligations hereunder only to the extent,
if at all,  that it is  prejudiced  by reason of such delay or  failure.  In the
event that the  Indemnifying  Person,  within 30 days  after  notice of any such
Claim or Proceeding,  admits in writing to the Indemnified Person the obligation
of the  Indemnifying  Person to indemnify  the  Indemnified  Person with respect
thereto and to assume the defense thereof,  the  Indemnifying  Person shall have
the right to undertake  the defense,  compromise  or settlement of such Claim or
Proceeding.  Otherwise, the Indemnified Person shall have the right to undertake
the defense,  compromise  or  settlement  of such Claim or  Proceeding,  and the
Indemnifying  Person  shall  be  bound  thereby,  provided  that if at any  time
thereafter the Indemnifying  Person admits in writing to the Indemnified  Person
the obligation of the  Indemnifying  Person to indemnify the Indemnified  Person
with  respect to such Claim or  Proceeding  and to assume the  defense  thereof,
then, to the extent it does not materially prejudice the Indemnified Person with
respect to the Claim or Proceeding,  the  Indemnifying  Person shall,  after the
date of delivery of such writing to the  Indemnified  Person,  have the right to
undertake the defense, compromise or settlement of such Claim or Proceeding, but
shall be bound by any actions of the  Indemnified  Person prior to such date. If
the  Indemnifying  Person  undertakes  the  defense  of the Claim or  Proceeding
pursuant to either of the preceding two sentences,  the Indemnified Person shall
have the right to employ  separate  counsel in such Claim or  Proceeding  and to
participate in the defense thereof, but the reasonable fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless counsel for the
Indemnified  Person  shall have advised the  Indemnified  Person in writing that
there exists actual or potential conflicts of interest which make representation
by the same counsel inappropriate. The Indemnified Person's right to participate
in the defense or response  to any Claim or  Proceeding  should not be deemed to
limit or  otherwise  modify its  obligations  under this  Article  VIII.  If the
Indemnified  Person  undertakes  the  defense  of the Claim or  Proceeding,  the
Indemnifying Person shall have the right, at the Indemnifying  Person's expense,
to  participate  in the defense  thereof.  Anything in this  Article VIII to the
contrary  notwithstanding,  the  Indemnifying  Person  shall  not,  without  the
Indemnified   Person's  prior  written  consent  (which  consent  shall  not  be
unreasonably withheld,  conditioned or delayed),  settle or compromise any Claim
or  Proceeding or consent to the entry of any judgment with respect to any Claim
or Proceeding  unless the settlement or compromise  involves only (i) payment of
money solely by the Indemnifying Person, and (ii) a full and complete release of
the  Indemnified  Person  in form and  substance  reasonably  acceptable  to the
Indemnified  Person.  If  the  Indemnifying  Person  admits  in  writing  to the
Indemnified  Person the obligation of the  Indemnifying  Person to indemnify the
Indemnified  Person  with  respect  to a Claim or  Proceeding  and to assume the
defense thereof,  and thereafter  assumes the defense pursuant to the provisions
of this Section 8.5, then the Indemnified  Person shall not thereafter,  without
the  Indemnifying  Person's  consent  (which  consent shall not be  unreasonably
withheld,   conditioned  or  delayed),   settle  or  compromise  such  Claim  or
Proceeding.  Without  regard to which  party has  undertaken  the defense of any
Claim or Proceeding,  the Indemnifying  Person and the Indemnified  Person shall
reasonably  cooperate with each other regarding any Claim or Proceeding  brought
or asserted by a third party.

8.6      Limitations of Liability.

(a)      An  Indemnifying  Person or  Indemnitor  shall have no liability  under
         Section  8.1(a)  or  8.2(a)  unless  written  notice  of  a  claim  for
         indemnity, or written notice of facts as to which an indemnifiable Loss
         is expected to be incurred,  shall have been given within two (2) years
         after the Closing Date;  provided that the Buyer  Indemnitees  may give
         notice  of and may make a claim  relating  to the  representations  and
         warranties  contained  in  Section  3.13  [Employee  Benefit  Plans] or
         Section  3.16(a)  [taxes  and tax  returns]  at any  time  prior to the
         expiration of the appropriate statute of limitation with respect to any
         claim covered by the  representations  and warranties in such Sections,
         and the Buyer  Indemnitees may give notice of and make a claim relating
         to  the  representations  and  warranties  contained  in  Section  3.27
         [Environmental  Matters]  at any time  within  four (4) years after the
         Closing Date.  Notwithstanding the foregoing, the Buyer Indemnitees may
         give notice of and may make a claim relating to the representations and
         warranties  contained in Section 3.1 [Ownership of Interests;  No Liens
         on  Interests],  Section  3.2  [Other  Rights to  Acquire  Securities],
         Section 3.5 [Due  Authorization],  clause (b) of the third  sentence of
         Section 3.8 [title to the Company's properties], Section 3.28 [Purchase
         of Units for Investment],  Section 4.1 [No Liens on Interests], Section
         4.2  [Other   Rights  to   Acquire   Securities],   Section   4.3  [Due
         Authorization]  or  Section  4.5  [Purchase  of Units  for  Investment]
         (collectively,    the   "Sellers'   Fundamental   Representations   and
         Warranties")  at anytime after the date hereof  without any  applicable
         limitation date.  Notwithstanding the foregoing, the Seller Indemnitees
         may give notice of and may make a claim relating to the representations
         and warranties  contained in Section 2.2 [Due  Authorization],  Section
         2.4  [Investment  Intent] or Section  2.5  [Units]  (collectively,  the
         "Buyer's Fundamental  Representations and Warranties") at anytime after
         the date  hereof  without any  applicable  limitation  date.  No Seller
         Indemnitor  shall have  liability  under Section  8.1(e) unless written
         notice of claim for  indemnity,  or written notice of facts as to which
         an indemnifiable Loss is expected to be incurred, shall have been given
         within  three (3) years after the Closing  Date.  No Seller  Indemnitor
         shall have  liability  under Section  8.1(f) or 8.1(g)  unless  written
         notice of a claim for indemnity, or written notice of facts as to which
         an indemnifiable Loss is expected to be incurred, shall have been given
         within four (4) years after the Closing Date.

(b)      No  Seller  Indemnitor  will have  liability  (for  indemnification  or
         otherwise)  with respect to the matters  described in Section 8.1(a) or
         8.1(e) until the total of all Losses incurred by the Buyer  Indemnitees
         hereunder  exceeds  $100,000  (the  "Threshold"),  but then  will  have
         liability for all Losses from the first dollar,  without  regard to the
         Threshold,  and in no event will the Seller Indemnitors  (collectively)
         be liable  for any Losses  with  respect to the  matters  described  in
         Section   8.1(a)   (other   than  as  they   relate  to  Section   3.27
         [Environmental Matters], which is subject to the separate Environmental
         Cap described  below) or Section 8.1(e) in excess of  $25,000,000  (the
         "General Cap");  provided,  however, that neither the Threshold nor the
         General  Cap shall  apply to any Loss  resulting  from or  relating  to
         breaches  of  Section  3.16(a)  [taxes and tax  returns]  or any of the
         Sellers'  Fundamental  Representations  and  Warranties  or to any Loss
         arising from fraud or intentional  misrepresentation  by the Sellers or
         Onyx. In no event will the Seller Indemnitors  (collectively) be liable
         for any Losses with respect to the matters  described in Section 8.1(a)
         (to the extent they relate to Section 3.27 [Environmental  Matters]) or
         8.1(f) or 8.1(g) in excess of $60,000,000  (the  "Environmental  Cap");
         provided,  however,  that the  Environmental Cap shall not apply to any
         Loss arising from fraud or intentional misrepresentation by the Sellers
         or Onyx. For the avoidance of doubt, the parties agree that the General
         Cap and the  Environmental  Cap are separate  caps, and that the Seller
         Indemnitors may have liability for both up to $25,000,000  with respect
         to matters covered by the General Cap and up to $60,000,000 for matters
         covered  by the  Environmental  Cap,  for a  total  liability  of up to
         $85,000,000.

(c)      Any  payments  made  pursuant to this  Article VIII shall be treated as
         adjustments  to the purchase  price paid by Buyer for the Interests for
         income tax purposes.  In  calculating  the amount of any Loss for which
         any  Indemnifying  Person or  Indemnitor  is liable  under this Article
         VIII,  there  shall be  taken  into  consideration  the  amount  of any
         insurance  recoveries  the  Indemnified  Person or  Indemnitee  in fact
         receives as a direct consequence of the circumstances to which the Loss
         related or from which the Loss resulted or arose.

(d)      If the Closing is  consummated,  except for the right to seek  specific
         performance of any of the agreements  contained herein, the remedies of
         the parties specifically provided for by this Article VIII shall be the
         sole and  exclusive  remedies  of the  parties  for (i) any  breach  or
         inaccuracy  of the  representations  and  warranties  contained in this
         Agreement  or in  any  certificates  furnished  or  delivered  pursuant
         hereto,  (ii) the  failure  to perform  any  covenants,  agreements  or
         obligations   contained  in  this  Agreement  or  in  any  certificates
         furnished or delivered  pursuant hereto, and (iii) any Loss arising out
         of any  transaction  consummated  pursuant  to  this  Agreement  or any
         certificates furnished or delivered pursuant hereto.

         8.7 Survival of  Representations  and  Warranties.  The parties  hereto
agree that,  except as  otherwise  provided in this  Section  8.7,  all of their
respective  representations  and warranties  contained in this  Agreement  shall
survive for a period of two (2) years after the Closing Date;  provided that the
representations  and warranties  made in Sections 3.13 [Employee  Benefit Plans]
and 3.16(a)  [taxes and tax returns]  shall  survive for a period  ending on the
expiration  date of the  appropriate  statute of limitation  with respect to any
claim covered by the representations  and warranties in such Section;  provided,
further,   that  the   representations  and  warranties  made  in  Section  3.27
[Environmental  Matters]  shall survive for a period of four (4) years after the
Closing Date;  and provided  further,  that each of the Buyer's and the Sellers'
Fundamental Representations and Warranties shall not expire.

         8.8  Environmental   Remediation  by  Sellers.   With  respect  to  any
Environmental  Liability  for which the Sellers are  required to  indemnify  and
defend the Buyer or the Company pursuant to the terms of this Agreement and that
requires any removal, remediation, response, clean up or other corrective action
("Remediation")  on  property  owned by the Buyer or the  Company to respond to,
remove or otherwise address such Environmental  Liability, the Sellers may elect
to implement and complete such Remediation.  If the Sellers elect to conduct the
Remediation,

(a)      the Buyer and the  Company  shall have the right to be  involved in the
         planning  and  design  of any  such  Remediation  and the  right  to be
         involved in any meetings with,  hearings  before or other sessions with
         any Governmental Authority regarding the Remediation;

(b)      the  Sellers,  in good  faith,  will  coordinate  the  schedule  of the
         Remediation  with the Buyer and the Company so that  disruptions of the
         business of the Company will be minimized;

(c)      the Sellers will obtain the prior written approval of the Buyer and the
         Company, which approval will not be unreasonably withheld,  conditioned
         or delayed, for any consultant or contractor retained by the Sellers to
         design or implement the Remediation;

(d)      the  Sellers  will  conduct  the  Remediation  in  compliance  with all
         applicable  Environmental  Laws  and as  directed  by  the  appropriate
         Governmental Authority;

(e)      the Sellers will use their commercially  reasonable efforts to complete
         the Remediation in a timely and professional manner; and

(f)      the Sellers  will not agree to or select any  Remediation  that imposes
         any  obligations  on the  Buyer  or  the  Company,  including,  without
         limitation, the obligation to sign manifests or obtain permits, without
         the prior written  consent of the Buyer and the Company,  which consent
         shall not be unreasonably withheld, conditioned or delayed.

         If the Buyer and the  Company  agree in writing to a  Remediation  that
imposes  obligations  on the Buyer or the Company,  and the Sellers fail, in the
reasonable opinion of the Buyer or the Company,  to implement the Remediation in
a manner that will complete all obligations  imposed on the Buyer or the Company
in a timely manner and in compliance with all  Environmental  Laws, the Buyer or
the Company may give written  notice of such  failure to the Sellers and,  after
giving such notice,  may assume  control of the  Remediation  and  implement and
complete such Remediation at the expense of the Sellers.

         The Sellers shall attempt in good faith to provide the Buyer with draft
copies of any study,  plan or report associated with the Remediation at least 14
days before it is submitted to any  Government  Authority  (or shall provide the
Buyer and the Company such draft copies as soon as practical if at least 14 days
is not practical) and shall provide the Buyer and the Company with copies of all
reports,  plans and  correspondence  submitted to a Governmental  Authority.  In
addition, the Sellers shall provide the Buyer and the Company seven days' notice
(or shall provide the Buyer and the Company notice as soon as practical if seven
days' notice is not  practical)  of any meeting  with,  hearing  before or other
session with any  Governmental  Authority with respect to the  Remediation.  The
Sellers shall give due consideration to any comments,  suggestions,  or requests
of Buyer and the  Company  in  connection  with the  finalization  of such draft
copies and the conduct of such meetings, hearings, or other sessions.

         During the period in which the Sellers  are  conducting  a  Remediation
pursuant to this Section 8.8 on property owned by the Buyer or the Company,  the
Buyer and the  Company  shall  provide the  Sellers  and their  consultants  and
contractors reasonable access to such property for the purpose of conducting the
activities  related to the Remediation.  Any such access shall be subject to any
commercially  reasonable  restrictions  imposed  by the  Buyer  or the  Company,
including,  without  limitation,  restrictions  related  to worker  safety.  The
Sellers shall expeditiously  remove from the property all drill cuttings,  soil,
debris or liquids generated from or in connection with the Remediation and shall
restore the property and any existing structures or equipment removed or damaged
in the course of the  Remediation to a condition  substantially  the same as the
condition  that existed  immediately  prior to the  Remediation.  The Sellers or
their  consultants  and  contractors  shall provide the Buyer and the Company at
least five  business  days'  notice of the  activities  to be  conducted  on the
property,  which  notice may be in the form of a  schedule  of  activities.  The
Sellers and Onyx agree to indemnify, protect, hold harmless and defend the Buyer
and the Company from and against all liabilities,  claims, demands,  damages and
costs  that  arise or  result  from or relate  to the  Remediation  or any other
actions of Sellers or their agents,  consultants  or contractors on the property
of Buyer or the Company.  Before  beginning any Remediation or entering upon the
property  of Buyer or the Company  pursuant  to the grant of access  provided in
this Section 8.8,  Sellers or their third party  contractor shall furnish to the
Buyer and the Company  satisfactory proof of liability insurance in an amount of
not less than  $1,000,000  which names the Buyer and the  Company as  additional
insureds.

         8.9  Wickland and Time  Indemnities.  In the event Buyer or the Company
notifies  Sellers that Buyer or the Company is  asserting a claim for  indemnity
under  this  Article  VIII,  then for a period of  fifteen  (15) days after such
notice  Lancewood  shall  have  the  right  to  notify  Buyer  in  writing  (the
"Wickland/Time Indemnity Notice") that Lancewood in good faith believes that the
Company is entitled to an indemnity with respect to the matters set forth in the
claim,  either  from  Wickland  Oil  Company  or its  Affiliates  (collectively,
"Wickland") or from Time Oil Co. or its Affiliates  (collectively,  "Time"). The
Wickland/Time  Indemnity  Notice shall specify  whether the indemnity is owed by
Wickland or Time and the provisions of the relevant  agreement pursuant to which
the indemnity is owed. The  Wickland/Time  Indemnity Notice shall also include a
proposed  notice  to be  delivered  by the  Company  to  Wickland  or  Time,  as
appropriate,  with respect to such indemnity.  If Lancewood  delivers a complete
Wickland/Time  Indemnity  Notice to Buyer  within  the  fifteen  (15) day period
stated  above,  then (i) the notice  from Buyer or the  Company to Sellers  with
respect to the claim  shall be deemed to be  satisfactory  notice of Buyer's and
the Company's claim for all purposes of Section 8.6, (ii) each Buyer  Indemnitee
shall  refrain  from  pursuing   against   Sellers  the  claim  covered  by  the
Wickland/Time  Indemnity Notice for a period of six (6) months after the date of
the  Wickland/Time  Indemnity  Notice  (the "Delay  Period"),  (iii) Buyer shall
promptly   deliver  the  proposed   indemnity   claim  notice  included  in  the
Wickland/Time  Indemnity  Notice (with such  reasonable  changes  therein as the
Company and Buyer shall deem  appropriate)  to Wickland or Time, as appropriate,
and (iv) the Company and Buyer shall  permit  Lancewood  to  participate  in the
discussions with Wickland or Time, as appropriate, with respect to the indemnity
claim. If any Buyer  Indemnitee's  indemnity claims against Sellers are not paid
in full  prior to the end of the Delay  Period,  then after the end of the Delay
Period the Buyer  Indemnitees may pursue all available  remedies against Sellers
with respect to the indemnity  claims.  To the extent that the Buyer Indemnitees
receive in the aggregate from Sellers, Wickland and Time amounts with respect to
a claim covered by a  Wickland/Time  Indemnity  Notice that are in excess of the
aggregate  amounts  of  the  Buyer  Indemnitees'  indemnity  claims,  the  Buyer
Indemnitees  shall  reimburse to Sellers any indemnity  payments made by Sellers
with respect to such claim, up to the extent of such excess.

ARTICLE IX    Testing and Gauging

         9.1  Testing and  Gauging.  Buyer and the  Sellers  agree that  product
stored  at the  seven  (7) bulk  storage  terminals  owned by the  Company  (the
"Terminals")  will be gauged (to  determine  the volume of liquid stored in each
tank) and sampled, as of the Closing Date, by a mutually acceptable  independent
surveyor,  whose written  report with respect  thereto  setting forth the liquid
volumes  found to be  contained  in each tank will be  furnished  to each of the
parties,  and who will retain all samples to be analyzed in the event it becomes
useful to do so to resolve  any issues  that may arise  after the  Closing.  Any
party may,  upon  request,  keep a duplicate  sample of each  product  analyzed,
provided that the sample held by the third party shall be the controlling sample
for all  purposes  of this  Agreement.  The Sellers and Onyx will be jointly and
severally  responsible  for  and  will  indemnify  Buyer  against  any  and  all
liabilities,  obligations, damages and expenses suffered or incurred by Buyer or
the Company in connection with any claims by third parties (after accounting for
any contractual allowances set forth in the contractual arrangements between the
Company  and any such third  parties)  as a result of any (i)  shortfall  in the
volume of liquid stored in the storage tanks,  if such shortfall  occurred prior
to the Closing as evidenced by the report of the independent  surveyor  referred
to above, or (ii) discrepancy between the quality of the product and the quality
required,  if such discrepancy occurred prior to the Closing as evidenced by the
samples retained by the independent  surveyor referred to above. The fees of the
independent  surveyor  shall be shared  equally by Buyer and the Sellers.  Buyer
shall promptly notify Lancewood of any such third party claim made against Buyer
or the Company,  and shall permit  Lancewood to  participate  in  attempting  to
resolve each such third party claim.

         9.2  Wastes.  Representatives  of Buyer and the Sellers  shall  jointly
inventory all wastes  (including waste water and ship tank cleansing)  stored at
the  facilities  of the  Company  as of the  Closing  Date.  The  Sellers  shall
reimburse Buyer for the costs, if any,  incurred in the disposal of such volumes
of waste which cannot legally be disposed of through the existing systems at the
facilities  of the Company to the extent the total  aggregate  cost exceeds five
thousand  dollars ($5,000) after  consideration of amounts,  if any, paid by the
Company's  customers.  Buyer shall  dispose of said wastes  under the  Company's
generator  identification  number as soon as  reasonably  practicable  after the
Closing  Date and shall submit  copies of invoices and  manifests to the Sellers
within  thirty (30) days  thereafter.  The Sellers shall pay Buyer within thirty
(30) days of receipt of invoices.  For  purposes of this  Section  9.2,  "waste"
shall mean all material that meets the definition of "waste" under Environmental
Laws on the Closing  Date,  but  specifically  excludes any  commercial  product
(whether  solid,  semi-solid  or  liquid)  contained  in an  operating  tank  or
pipeline.

ARTICLE X    Damage, Destruction or Condemnation of Assets

         10.1  Damage,  Destruction  or  Condemnation.  In the  event any of the
assets of the Company are damaged or destroyed by fire or other casualty, or are
condemned or threatened to be condemned,  after the date hereof and prior to the
Closing,  the Sellers shall promptly notify Buyer in writing of such,  including
reasonable detail regarding the facts related thereto known to the Sellers,  and
as soon  thereafter  as possible  shall notify Buyer in writing of Sellers' good
faith  judgment as to the repair or  replacement  costs for such assets (and, in
the event that Section 10.3 or 10.4 (but not Section 10.2) applies,  the Closing
shall be delayed as is  reasonably  necessary to permit  Sellers to deliver this
notice at least ten days prior to Closing).

         10.2 Cost Less Than or Equal to  $1,600,000.  If in the  Sellers'  good
faith judgment repair or replacement of such assets can be made at a cost not to
exceed  $1,600,000,  then Closing may not be delayed by Buyer solely as a result
of such damage,  destruction  or  condemnation,  and Lancewood and Onyx shall be
obligated,  at their sole cost, to promptly  commence and diligently  pursue the
repair or replacement of such assets to a condition  that is  substantially  the
same as (or better than) the condition such assets were in immediately  prior to
such damage,  destruction or condemnation  (a  "Satisfactory  Condition"),  and,
during  the  period  on or  after  Closing,  promptly  fund the cost of any such
activities  undertaken  by the  Company or the  Buyer.  Any  insurance  proceeds
received by the Company or the Buyer as a result of any such damage, destruction
or condemnation  for which  Lancewood or Onyx has previously  funded the covered
repairs or  replacements  shall be promptly  refunded to Lancewood  and Onyx. If
Sellers'  written  notice  of  their  good  faith  judgment  of  the  repair  or
replacement  cost of such assets states an amount of  $1,600,000  or less,  then
Lancewood and Onyx shall be jointly and severally  responsible  for the costs of
repair or replacement of such assets to a Satisfactory Condition, whether or not
such costs exceed $1,600,000.

         10.3 Cost Between  $1,600,000 and $16,000,000.  If in the Sellers' good
faith judgment the cost to repair or replace such assets will exceed  $1,600,000
but will be less than  $16,000,000,  then Lancewood and Onyx shall be obligated,
at their sole cost,  to promptly  commence and  diligently  pursue the repair or
replacement of such assets to a Satisfactory Condition, and Buyer shall have the
option,  in its sole discretion,  to either (i) delay Closing until such time as
the assets have been repaired or replaced to a Satisfactory  Condition,  or (ii)
proceed  with  Closing and  require  Lancewood  and Onyx to promptly  thereafter
repair  and  replace  the  assets to a  Satisfactory  Condition.  Any  insurance
proceeds  received by the Company or the Buyer after  Closing as a result of any
such  damage,  destruction  or  condemnation  for  which  Lancewood  or Onyx has
previously funded the covered repairs or replacements shall be promptly refunded
to Lancewood and Onyx. If Sellers'  written  notice of their good faith judgment
of the repair or  replacement  costs of such  assets  states an amount less than
$16,000,000,  then Lancewood and Onyx shall be jointly and severally responsible
for the  costs  of  repair  or  replacement  of such  assets  to a  Satisfactory
Condition, whether or not such costs exceed $16,000,000.

         10.4 Cost Greater than  $16,000,000.  If in the good faith  judgment of
either the Buyer or the Sellers the repair or replacement of such assets can not
be made at a cost of less  than  $16,000,000,  then  (i)  either  the  Buyer  or
Lancewood may elect to terminate  this  Agreement,  (ii) the Buyer and Lancewood
may  mutually  agree to delay  Closing  until such time as such assets have been
repaired or replaced,  at  Lancewood's  and Onyx's sole cost, to a  Satisfactory
Condition,  or (iii) the Buyer and Lancewood may mutually  agree to proceed with
Closing,  provided that  Lancewood and Onyx will agree,  during the period on or
after  Closing,  to promptly fund the costs incurred by the Company or the Buyer
in connection  with the repair or  replacement  of such assets to a Satisfactory
Condition.

ARTICLE XI      Miscellaneous

         11.1  Collateral  Agreements,  Amendments  and Waivers.  This Agreement
(together with the documents  delivered  pursuant  hereto)  supersedes all prior
documents,  understandings  and  agreements,  oral or written,  relating to this
transaction  and  constitutes  the entire  understanding  among the parties with
respect to the subject matter hereof. No representation,  promise, inducement or
statement of  intention  has been made by any party hereto which is not embodied
or  referenced  in  this  Agreement.  Subject  to the  following  sentence,  any
modification  or amendment to, or waiver of, any provision of this Agreement (or
any document  delivered  pursuant to this Agreement unless  otherwise  expressly
provided  therein) may be made only by an instrument in writing  executed by the
party against whom enforcement  thereof is sought. In addition to the foregoing,
this Agreement may be amended prior to the Closing,  but not thereafter,  in any
respect by written  agreement of Buyer and  Lancewood,  and no such amendment of
any nature  shall  require the  consent  (written or oral) of the Company or any
other Seller or Onyx to be effective against,  and binding upon, the Company and
each  other  Seller  and Onyx.  Each of the  Company  and each  Seller  and Onyx
consents to the foregoing  provisions of this Section 11.1 and  acknowledges and
agrees that he, she or it is aware of and understands the implications thereof.

         11.2 Successors and Assigns. None of Buyer's, the Company's,  Onyx's or
any Seller's rights or obligations  under this Agreement may be assigned without
the  consent of the other  parties  hereto,  provided  that  Buyer's  rights and
obligations  hereunder  may be assigned to any  Affiliate  of Buyer  without the
necessity  of any consent  from any person,  provided  that any such  assignment
shall not relieve the Buyer of its  obligations  hereunder.  Any  assignment  in
violation  of the  foregoing  shall be null and void.  Subject to the  preceding
sentences of this Section 11.2, the provisions of this  Agreement  (and,  unless
otherwise expressly provided therein, of any document delivered pursuant to this
Agreement)  shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns.

         11.3 Expenses.  Whether or not the transactions contemplated hereby are
consummated,  each of the parties hereto will pay all costs and expenses of his,
her or its performance of and compliance with this Agreement, provided, however,
the Sellers shall, promptly upon request, reimburse the Buyer for any filing and
recording fees and other reasonable  out-of-pocket expenses (other than attorney
fees and  expenses)  incurred by Buyer in filing the  releases  contemplated  by
Section 6.1(g).

         11.4 Invalid Provisions.  If any provision of this Agreement is held to
be  illegal,  invalid  or  unenforceable  under  present  or future  laws,  such
provision  shall be fully  severable,  this  Agreement  shall be  construed  and
enforced  as if such  illegal,  invalid  or  unenforceable  provision  had never
comprised  a part  of  this  Agreement  and  the  remaining  provisions  of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal,  invalid  or  unenforceable  provision  or by its  severance  from this
Agreement.

         11.5  Information  and  Confidentiality.  Each party hereto agrees that
such  party  shall  hold in strict  confidence  all  information  and  documents
received  from any other party  hereto,  and if the Closing  does not occur each
such party shall return to the other parties  hereto all such  documents then in
such receiving party's possession without retaining copies;  provided,  however,
that each party's obligations under this Section 11.5 shall not apply to (a) any
information  or document  required to be disclosed by law or Buyer's  disclosure
requirements  under the Securities Act or any state securities laws or the rules
and regulations thereunder, (b) any information or document in the public domain
other than because of the wrongful  actions of the disclosing  party, or (c) any
information  or document  that Buyer  discloses  to any  potential  lender to or
investor in Buyer or the Company,  and provided  further that from and after the
Closing  this  Section  11.5  shall  not  apply to  Buyer  with  respect  to any
information regarding the Company.

         11.6 Waiver. No failure or delay on the part of any party in exercising
any right, power or privilege  hereunder or under any of the documents delivered
in connection with this Agreement shall operate as a waiver of such right, power
or privilege;  nor shall any single or partial exercise of any such right, power
or privilege  preclude any other or future  exercise  thereof or the exercise of
any other right, power or privilege.

         11.7 Notices.  Any notices required or permitted to be given under this
Agreement (and, unless otherwise expressly provided therein,  under any document
delivered  pursuant  to this  Agreement)  shall be given in writing and shall be
deemed  received (a) when  personally  delivered  to the  relevant  party at its
address as set forth  below,  (b) if sent by mail,  on  receipt at the  relevant
party's address as set forth below, or (c) if sent by facsimile  transmission to
the relevant party at its address indicated below, when electronic  confirmation
is received by the transmitting party:

       Buyer:                  Kaneb Pipe Line Partners, L.P.
                               2435 North Central Expressway, Suite 700
                               Richardson, Texas 75080-2731
                               Attn: Edward D. Doherty
                               Chairman of the Board and Chief Executive Officer
                               Fax:  (972) 699-1894

       With copies to:         Support Terminals Operating Partnership, L.P.
                               17304 Preston Road, Suite 1000
                               Dallas, Texas 75252
                               Attn: Fred T. Johnson
                               Fax: (972) 931-6526

                                            and

                               Fulbright & Jaworski L.L.P.
                               2200 Ross Avenue, Suite 2800
                               Dallas, Texas 75201
                               Attn: Kenneth L. Stewart
                               Fax: (214) 855-8200

       The Company:            Shore Terminals LLC
                               2801 Waterfront Road
                               Martinez, California 94553
                               Attn: Richard Shore, Jr., President
                               Fax:  (925) 228-5617

       With a copy to:         Warren W. Garden
                               5531 Greenbrier Drive
                               Dallas, Texas  75209
                               Fax:  (214) 352-3282

       The Sellers:            c/o Lancewood, Inc.
                               300 Delaware Avenue
                               9th Floor
                               Wilmington, Delaware  19801
                               Attn:  Francis Jacobs
                               Fax:   (302) 552-3128

       With copies to:         Richard Shore, Jr.
                               2801 Waterfront Road
                               Martinez, California 94553
                               Fax: (925) 228-5617

                                            and

                               Warren W. Garden
                               5531 Greenbrier Drive
                               Dallas, Texas  75209
                               Fax:  (214) 352-3282

        Onyx:                  Northwest Bank Tower
                               2550 Middle Road
                               Suite 603
                               Bettendorf, Iowa 52722
                               Attn: David L. Widener

         Each party may change its address for  purposes of this Section 11.7 by
proper  notice to the other  parties.  Sellers and Onyx hereby  acknowledge  and
agree that, in giving notice to any or all of the Sellers or to Onyx, Buyer need
only deliver one copy of such notice to Lancewood (who shall be responsible  for
delivering copies of such notice to the other Sellers and to Onyx).

         11.8 Public  Announcement.  Except as may be required by law or Buyer's
public company  disclosure  requirements,  none of the Company or any Seller (or
any of their  Affiliates) or Buyer (or any of its Affiliates) or Onyx (or any of
its Affiliates) shall make any public statements,  including any press releases,
with respect to this Agreement or the transactions  contemplated  hereby without
the prior  written  consent of Buyer and  Lancewood  (which  consent  may not be
unreasonably withheld, conditioned or delayed). If Buyer determines that the law
or its  public  company  disclosure  requirements  require  it to  issue a press
release  or other  public  disclosure  with  respect  to this  Agreement  or the
transactions contemplated hereby regardless of whether Lancewood consents, Buyer
shall furnish the draft text of the release to Lancewood and give  Lancewood the
opportunity to review and make reasonable comments to such text.

         11.9  Waiver of Certain  Rights.  Each  Seller and the  Company  hereby
waives any rights of first  refusal,  preemptive  rights or other  rights of any
nature  whatsoever  which the Company or such Seller may have to purchase any of
the Interests or other equity securities of any nature of the Company.

         11.10 Further Assurances. At, and from time to time after, the Closing,
at the request of Buyer but without  further  consideration,  each Seller  shall
execute and deliver such other instruments of conveyance,  assignment,  transfer
and delivery and take such other action as Buyer may reasonably request in order
more effectively to consummate the transactions contemplated hereby.

         11.11 No Third-Party Beneficiaries.  Other than the Indemnitees and the
Indemnified  Persons not parties hereto, no Person not a party to this Agreement
shall be deemed to be a  third-party  beneficiary  hereunder  or entitled to any
rights hereunder.

         11.12  Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.

         11.13 Prevailing  Party. If any legal action,  arbitration or any other
proceeding is brought for the  enforcement of this  Agreement,  or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement,  the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or  proceeding,  in  addition to any other  relief to which it or
they may be entitled.

         11.14  Arbitration.  Subject to and after complying with the provisions
of Section  8.3,  if  applicable,  any  controversy  or claim  arising out of or
relating  to  this  Agreement,   including,   without  limitation,  the  making,
performance,   or  interpretation  of  this  Agreement,   shall  be  settled  by
arbitration.  Unless  otherwise  agreed,  the arbitration  shall be conducted in
Dallas, Texas, in accordance with the then-current  Commercial Arbitration Rules
of  the  American   Arbitration   Association.   Unless  otherwise  agreed,  the
arbitration  shall be held before a single  arbitrator.  The arbitrator shall be
chosen from a panel of attorneys  knowledgeable  in the field of business law in
accordance with the then-current  Commercial  Arbitration  Rules of the American
Arbitration  Association.  If the arbitration is commenced, the parties agree to
permit discovery  proceedings of the type provided by the Federal Rules of Civil
Procedure both in advance of, and during recesses of, the arbitration  hearings.
The parties agree that the  arbitrator  shall have no  jurisdiction  to consider
evidence with respect to or render an award or judgment for punitive damages (or
any other  amount  awarded  for the  purpose of  imposing a penalty)  or loss of
profits.  The parties agree that all facts and other information relating to any
arbitration  arising  under this  Agreement  shall be kept  confidential  to the
fullest  extent  permitted by law. Any party may apply to any court of competent
jurisdiction  for a judgment or decree enforcing the arbitral award. The parties
will  advance  jointly  the  arbitrators'  fees and  costs of  arbitration.  The
arbitrators  may, in the  arbitrators'  discretion,  award the prevailing  party
reimbursement  for its share of the arbitral fees and costs advanced.  Any party
may, without inconsistency with this Agreement, seek from a court any interim or
provisional  relief that may be  necessary  to protect the rights or property of
that party pending the selection of the arbitrators (or pending the arbitrators'
determination of the merits of the controversy or claim).

         11.15  Gender;  Numbers.  All  references  in  this  Agreement  to  the
masculine,  feminine or neuter genders shall,  where  appropriate,  be deemed to
include all other  genders.  All plurals  used in this  Agreement  shall,  where
appropriate, be deemed to be singular, and vice versa.

         11.16  Counterparts.  This Agreement may be executed  simultaneously in
two or more counterparts,  each of which shall be deemed an original, but all of
which together  shall  constitute  one and the same  instrument.  This Agreement
shall be binding when one or more  counterparts  hereof,  individually  or taken
together,  shall bear the  signatures  of all the  parties  reflected  hereon as
signatories.

         11.17 Telecopy Execution and Delivery.  A facsimile,  telecopy or other
reproduction  of this  Agreement may be executed by one or more parties  hereto,
and an executed  copy of this  Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic  transmission device pursuant to which
the signature of or on behalf of such party can be seen,  and such execution and
delivery shall be considered valid,  binding and effective for all purposes.  At
the request of any party hereto, all parties hereto agree to execute an original
of this  Agreement  as well as any  facsimile,  telecopy  or other  reproduction
hereof.

         11.18 No Strict Construction.  The parties have participated jointly in
the  negotiation  and drafting of this  Agreement.  In the event an ambiguity or
question of intent or  interpretation  arises with respect to this  Agreement or
any  of the  documents  delivered  pursuant  hereto,  this  Agreement  and  such
documents  shall be  construed  as if  drafted  jointly by the  parties,  and no
presumption or burden of proof shall arise favoring or disfavoring  any party by
virtue of the  authorship  of any of the  provisions  of this  Agreement or such
documents.

         11.19 Guarantee by Onyx. Onyx hereby (i) unconditionally guarantees the
prompt performance and payment of the obligations and liabilities of the Sellers
under this Agreement, (ii) waives any requirements of notice, protest, demand or
grace with respect thereto, and (iii) agrees that Buyer shall not be required to
exhaust  its  remedies  against  any other  Person  (including  Sellers)  before
enforcing the provisions of this guarantee.  Onyx  acknowledges  and agrees that
Buyer is relying  materially on this guarantee in entering into and consummating
the transactions contemplated by this Agreement, and that but for this guarantee
Buyer  would not enter  into  this  Agreement  or  consummate  the  transactions
contemplated hereby.

         11.20  Nondisclosure of Confidential  Information.  Each of the Sellers
and Onyx  recognize  and  acknowledge  that they  have and will  have  access to
certain  confidential  information  concerning the Company and its business that
after the consummation of the transactions contemplated hereby will be valuable,
special and unique  property  of the Company and Buyer.  Each of the Sellers and
Onyx  agree  that they  will not  disclose,  and they will use their  reasonable
efforts  to prevent  disclosure  by any other  Person of, any such  confidential
information  to any  Person  for any  purpose  or reason  whatsoever,  except to
authorized representatives of Buyer or the Company. Each of the Sellers and Onyx
recognize and agree that  violation of any of the  agreements  contained in this
Section 11.20 will cause irreparable  damage or injury to Buyer and the Company,
the exact amount of which may be  impossible to  ascertain,  and that,  for such
reason,  among others, Buyer and the Company shall be entitled to an injunction,
without  the  necessity  of  posting  bond  therefor,  restraining  any  further
violation of such agreements. Such rights to any injunction shall be in addition
to, and not in limitation of, any other rights and remedies Buyer or the Company
may have against any Seller or Onyx.

         11.21 Decisions  Regarding Sellers. To the extent that Sellers have, or
are entitled to exercise, any rights under any provisions of this Agreement,  or
are entitled to provide any approvals,  consents or notices under any provisions
of this  Agreement,  Lancewood  shall have the sole  authority to make decisions
with respect thereto, exercise such rights, and provide such approvals, consents
and notices,  in each case on behalf of all Sellers,  and all Sellers agree that
they shall be bound by such  decisions  and actions of Lancewood  and that Buyer
may rely thereon.

        [Remainder of Page Intentionally Blank -- Signature Pages Follow]

<PAGE>

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement in one or more counterparts (all of which shall constitute one and the
same agreement) as of the day and year first above written.

                                  THE BUYER:

                                  KANEB PIPE LINE PARTNERS, L.P.

                                  By:  Kaneb Pipe Line Company,
                                       its General Partner

                                  By:      ______________________________
                                  Name:    E.D. Doherty
                                  Title:   Chairman and Chief Executive Officer

                                  THE COMPANY:

                                  SHORE TERMINALS LLC

                                  By:  Richard Shore, Jr., President

                                  THE SELLERS:

                                  LANCEWOOD, INC.

                                  By:  Francis Jacobs, President

                                  Richard Shore, Jr.

                                  David L. Widener

                                  Peter J. Jacullo, III

                                  Michael J. Burgett

                                  Dawn M. West

                                  Brian A. Hoff

                                  Marco Ullmer

                                  John M. Mackowiak

                                  ONYX:

                                  ONYX HOLDINGS, INC.

                                  By:  David L. Widener, President

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