Document:

exv10w1

 

EXHIBIT 10.1

EXECUTION COPY

PARAMOUNT PETROLEUM CORPORATION

STOCK PURCHASE AGREEMENT

AMONG

THE STOCKHOLDERS OF

PARAMOUNT PETROLEUM CORPORATION

AND

ALON USA ENERGY, INC.

DATED AS OF April 28, 2006

 

 

TABLE OF CONTENTS

Page

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II STOCK PURCHASE
	 	 	10	 
	2.1 Deposit
	 	 	10	 
	2.2 Sale and Delivery
	 	 	11	 
	2.3 Purchase Price
	 	 	11	 
	2.4 Adjustment to the Closing Payment
	 	 	13	 
	2.5 Dispute Resolution of Calculation of Purchase Price
	 	 	15	 
	2.6 Closing
	 	 	16	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS
	 	 	17	 
	3.1 Ownership of the Shares and Options
	 	 	17	 
	3.2 Authorization, Validity, and Effect of Agreements
	 	 	18	 
	3.3 No Violations
	 	 	18	 
	3.4 Trusts
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO THE COMPANY AND ITS SUBSIDIARIES
	 	 	19	 
	4.1 Existence; Good Standing
	 	 	19	 
	4.2 Capitalization
	 	 	19	 
	4.3 Acquired Subsidiaries and Other Interests
	 	 	20	 
	4.4 Material Contracts; No Violation
	 	 	21	 
	4.5 Financial Statements; No Undisclosed Liabilities
	 	 	24	 
	4.6 No Violations; Consents
	 	 	25	 
	4.7 Compliance; Permits; Litigation
	 	 	25	 
	4.8 Absence of Certain Changes
	 	 	26	 
	4.9 Taxes
	 	 	27	 
	4.10 Certain Employee Plans
	 	 	28	 
	4.11 Labor Matters
	 	 	29	 
	4.12 Environmental Matters
	 	 	30	 
	4.13 Related Party Transactions
	 	 	31	 
	4.14 Business Activities
	 	 	31	 
	4.15 Real Property
	 	 	32	 
	4.16 Intellectual Property
	 	 	34	 
	4.17 Inventories
	 	 	34	 
	4.18 Accounts Receivable
	 	 	34	 
	4.19 Other Assets
	 	 	35	 
	4.20 Insurance
	 	 	35	 
	4.21 Bank Accounts
	 	 	36	 
	4.22 No Brokers
	 	 	36	 
	4.23 Customers and Suppliers
	 	 	36	 
	4.24 Limitations on Representations and Warranties
	 	 	36	 

i

 

	 	 	 	 	 
	 
	 	 	Page	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF ALON
	 	 	37	 
	5.1 Existence; Good Standing; Corporate Authority
	 	 	37	 
	5.2 Authorization, Validity, and Effect of Agreements
	 	 	37	 
	5.3 No Violation; Litigation
	 	 	38	 
	5.4 No Brokers
	 	 	38	 
	5.5 Funds
	 	 	38	 
	5.6 Investment Purpose
	 	 	38	 
	5.7 Access to Information
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS
	 	 	40	 
	6.1 Conduct of Business
	 	 	40	 
	6.2 Further Action
	 	 	42	 
	6.3 Access to Information; Confidentiality
	 	 	43	 
	6.4 Publicity
	 	 	44	 
	6.5 Expenses; Law Firms
	 	 	45	 
	6.6 Employee Matters
	 	 	45	 
	6.7 Third Party Acquisition
	 	 	47	 
	6.8 Restrictive Covenants
	 	 	47	 
	6.9 Directors; Indemnification
	 	 	48	 
	6.10 Employee Cash Bonuses
	 	 	48	 
	6.11 Termination of the Stockholder Agreement
	 	 	48	 
	6.12 Sellers’ Representative
	 	 	49	 
	6.13 Release
	 	 	50	 
	6.14 Distribution of Excluded Company
	 	 	51	 
	6.15 Subordinated Debt
	 	 	51	 
	6.16 Holdback Escrow Agreement
	 	 	51	 
	6.17 Casualty; Condemnation
	 	 	51	 
	6.18 Title Commitments
	 	 	51	 
	6.19 Bank Facilities
	 	 	52	 
	 
	 	 	 	 
	ARTICLE VII SURVIVAL; INDEMNIFICATION
	 	 	53	 
	7.1 Survival of Representations and Warranties; Effect of Materiality Qualifiers
	 	 	53	 
	7.2 Indemnification
	 	 	53	 
	7.3 Other Limitations
	 	 	54	 
	7.4 Procedures Relating to Indemnification Involving Third Party Claims
	 	 	56	 
	7.5 Other Claims
	 	 	58	 
	7.6 Mitigation of Damages
	 	 	58	 
	7.7 Sole and Exclusive Remedy
	 	 	58	 
	 
	 	 	 	 
	ARTICLE VIII TAX MATTERS
	 	 	59	 
	8.1 Indemnification Obligations With Respect to Taxes
	 	 	59	 
	8.2 Tax Returns
	 	 	60	 
	8.3 Contest Provisions
	 	 	61	 
	8.4 Assistance and Cooperation
	 	 	62	 
	8.5 Retention of Records
	 	 	62	 
	8.6 Refunds and Tax Benefit
	 	 	62	 
	8.7 Other Provisions
	 	 	63	 

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	 	 	Page	 
	ARTICLE IX CONDITIONS
	 	 	63	 
	9.1 Conditions to Each Party’s Obligation to Effect the Stock Purchase
	 	 	63	 
	9.2 Conditions to Obligations of Alon
	 	 	63	 
	9.3 Conditions to Obligations of the Sellers
	 	 	65	 
	9.4 Remedies in the Event of Certain Material Adverse Effects on the Company
	 	 	65	 
	 
	 	 	 	 
	ARTICLE X TERMINATION
	 	 	68	 
	10.1 Termination by Mutual Consent
	 	 	68	 
	10.2 Termination by Either Alon or the Sellers
	 	 	68	 
	10.3 Termination by the Sellers
	 	 	69	 
	10.4 Termination by Alon
	 	 	69	 
	10.5 Effect of Termination
	 	 	70	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	70	 
	11.1 Entire Agreement; Assignment
	 	 	70	 
	11.2 Validity
	 	 	70	 
	11.3 Notices
	 	 	70	 
	11.4 Governing Law
	 	 	72	 
	11.5 Specific Performance
	 	 	72	 
	11.6 Construction
	 	 	72	 
	11.7 Counterparts
	 	 	72	 
	11.8 Parties In Interest
	 	 	72	 
	11.9 Waiver
	 	 	73	 
	11.10 Amendments
	 	 	73	 
	11.11 Further Assurances; Post Closing Cooperation
	 	 	73	 
	11.12 Cumulative Remedies
	 	 	73	 
	11.13 Disclosure
	 	 	73	 

iii

 

	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A	 	Deposit Escrow Agreement
	Exhibit B	 	Holdback Escrow Agreement
	 
	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule 1(a)	 	Sellers’ Knowledge
	Schedule 1(b)	 	Alon’s Knowledge
	Schedule 2.3(a)	 	December Adjusted Book Value
	 

	 	 	 	1. December 31, 2005 Inventory Value by Acquired Company
	Schedule 2.3(b)	 	Hypothetical Example
	 

	 	 	 	1. Hypothetical Calculation of Cash Payment
	 

	 	 	 	2. Assumptions for Hypothetical Closing Date Cash Payment
	 

	 	 	 	3. Hypothetical Closing Date Inventory Valuation Worksheet
	 

	 	 	 	4. Hypothetical Closing Date Inventory Value by Acquired Company
	Schedule 2.3(c)	 	Consideration Per Seller
	Schedule 2.3(d)	 	1031 Potential Properties
	Schedule 2.4(b)(i)	 	Inventory Valuation
	 

	 	 	 	1. Quality and Measurement Protocol
	Schedule 2.4(b)(ii)	 	Calculation
	Schedule 2.4(b)(iii)	 	Example Calculation
	Schedule 6.5	 	Seller Law Firms
	Schedule 6.7	 	Current Negotiations With Respect to Portions of the Business or Assets of the Acquired Companies
	 
	 	 	 	 
	Sellers’ Disclosure Schedule

	 	 	 	 	 
	 

	 	Section 3.1(a)
	 	Ownership of Shares
	 

	 	Section 3.1(b)
	 	Option Agreements
	 

	 	Section 3.4
	 	Trusts
	 

	 	Section 4.2(c)
	 	Obligations to Repurchase or Redeem
	 

	 	Section 4.3(a)
	 	Subsidiaries
	 

	 	Section 4.3(c)
	 	Interests in Subsidiaries Capital Stock
	 

	 	Section 4.3(d)
	 	Rights to Redeem or Make an Investment
	 

	 	Section 4.4(a)
	 	Material Contracts
	 

	 	Section 4.4(b)
	 	Exceptions to Material Contracts
	 

	 	Section 4.4(d)
	 	Consents and Approvals
	 

	 	Section 4.5(a)
	 	Financial Statements
	 

	 	Section 4.5(d)
	 	Undisclosed Liabilities
	 

	 	Section 4.7(c)
	 	Litigation
	 

	 	Section 4.7(d)
	 	Acquired Companies Litigation
	 

	 	Section 4.8
	 	Absence of Certain Changes
	 

	 	Section 4.10(a)
	 	Company Benefit Plans

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	 	Section 4.10(b)
	 	Qualification; Multi-Employer Plans
	 

	 	Section 4.10(c)
	 	Benefits to Former Employees
	 

	 	Section 4.10(e)
	 	Change in Control Arrangements
	 

	 	Section 4.10(f)
	 	New or Modifications to Company Benefit Plans
	 

	 	Section 4.11(a)
	 	Employees
	 

	 	Section 4.11(b)
	 	Collective Bargaining and Other Labor Agreements
	 

	 	Section 4.11(d)
	 	Employment Disputes
	 

	 	Section 4.12
	 	Environmental Matters
	 

	 	Section 4.13
	 	Related Party Transactions
	 
	 

	 	Section 4.15(a)
	 	Owned Real Property
	 

	 	Section 4.15(b)
	 	Leased Real Property
	 

	 	Section 4.15(e)
	 	Condemnation and Eminent Domain Proceedings
	 

	 	Section 4.15(f)
	 	Exceptions to Permits and Rights of Ways for Access
	 

	 	Section 4.15(i)
	 	Easements, Rights of Way, Licenses, Permits, and Other Similar Rights
	 

	 	Section 4.15(i)(B)
	 	Material Default of Material Easements, Rights of Way, Licenses, Permits and Other Similar Rights
	 

	 	Section 4.16(a)
	 	Intellectual Property of the Acquired Companies
	 

	 	Section 4.16(b)
	 	Liens on Intellectual Property
	 

	 	Section 4.16(c)
	 	Rights to the Intellectual Property
	 

	 	Section 4.18
	 	Accounts Receivable
	 

	 	Section 4.19
	 	Other Assets; Liens
	 

	 	Section 4.20(a)
	 	Insurance Policies
	 

	 	Section 4.20(b)
	 	Potential Premium Increases
	 

	 	Section 4.20(c)
	 	Material Open Insurance Claims
	 

	 	Section 4.21
	 	Bank Accounts
	 

	 	Section 4.22
	 	Brokers
	 

	 	Section 4.23(a)
	 	Customers and Suppliers
	 

	 	Section 4.23(b)
	 	Business Relationships

v

 

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “Agreement”), is dated as of April 28, 2006, by and among
Alon USA Energy, Inc., a Delaware corporation (“Alon”), and the stockholders of Paramount Petroleum
Corporation, a Delaware corporation (the “Company”), named on the signature page hereto
(collectively, the “Sellers”).

     WHEREAS, the Sellers collectively own all of the issued and outstanding shares of Capital
Stock of the Company (the “Shares”).

     WHEREAS, Lovejoy and Milano together own options to purchase 20,000 shares each of Senior
Preferred Stock of the Company (the “Options”).

     WHEREAS, subject to the terms and conditions of this Agreement, the Sellers have agreed to
sell the Shares to Alon, and Alon has agreed to purchase the Shares from the Sellers (the “Stock
Purchase”), in exchange for the consideration set forth in this Agreement.

     WHEREAS, concurrent with the Stock Purchase and subject to the terms and conditions of this
Agreement, Lovejoy and Milano have agreed to sell the Options to the Craig Barto Trust and the
Jerrel Barto Trust, and the Craig Barto Trust and the Jerrel Barto Trust have agreed to purchase
the Options issued by such trusts (the “Option
Purchase”) and thereafter immediately cancel the
Options.

     WHEREAS, the parties desire to make certain representations, warranties, covenants and
agreements in connection with the Stock Purchase, the Option Purchase and the Option cancellation,
and also to prescribe various conditions to such transactions.

     NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and for other good and valuable
consideration, intending to be legally bound, the Sellers and Alon hereby agree as follows:

ARTICLE I

DEFINITIONS

     As used in this Agreement:

     “1031 Asset” means each asset identified in Schedule 2.3(d).

     “2005 Annual Statements” is defined in Section 4.5(a).

     “Acquired Companies” means the Company and each of its Subsidiaries (other than the Excluded
Company).

     “Acquired Subsidiaries” means the Acquired Companies other than the Company.

     “Adjusted Book Value Acceptance Notice” is defined in Section 2.4(c).

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     “Adjusted Book Value Objection Notice” is defined in Section 2.4(c).

     “Affiliate”, as applied to any Person, shall mean any other Person directly or indirectly
controlling, controlled by, or under common control with, the first Person. For the purposes of
this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by Contract or
otherwise.

     “Agreement” is defined in the introductory paragraph of this Agreement.

     “Alon” is defined in the introductory paragraph of this Agreement.

     “Alon Indemnified Parties” is defined in Section 7.2(a).

     “Annual Statements” is defined in Section 4.5(a).

     “Antitrust Division” is defined in Section 6.2(a).

     “Asset Purchase Date” is defined in Section 2.3(d)(ii).

     “Bank Pledge” means collectively, the pledge by the Sellers of the Shares and the Options to
Wells Fargo Bank Northwest, National Association, acting in its capacity as administrative agent
for certain financial institutions in connection with the Term Loan Agreement; and the pledge by
the Sellers of the Shares and the Options to Bank of America, N.A., acting in its capacity as
administrative agent for itself and certain financial institutions in connection with the Revolving
Credit Agreement.

     “Business” means the business of the Acquired Companies as currently conducted, including the
business of (i) refining crude oil into motor gasoline and /or California compliant reformulated
gasoline blendstock for oxygenate blending (CARBOB), jet fuel, diesel fuel, vacuum gas oil,
naphtha, liquefied petroleum gas (LPG), paving asphalts and roofing asphalts, for delivery and sale
in the States of California, Arizona, Oregon and Washington, and (ii) purchasing for resale,
transporting, terminalling, processing or marketing of various asphalt products, in the above
states and Nevada, Utah, Oklahoma and Texas.

     “Business Day” means any day other than a Saturday, Sunday or United States federal holiday.

     “Capital Stock” means common stock, preferred stock, partnership interests, limited liability
company interests or other equity ownership interests, whether or not entitling the holder thereof
to vote with respect to matters involving the issuer thereof, or any right to share in the profits,
or upon liquidation, the assets of the issuer thereof.

     “Cash Payment” is defined in Section 2.3(a)(iii).

     “Casualty” is defined in Section 6.17.

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     “Claimed Amount” is defined in Section 2.6(d).

     “Claims” is defined in Section 6.13(a).

     “Closing” and “Closing Date” are defined in Section 2.6(a).

     “Closing Date Adjusted Book Value” is defined in Section 2.4(b)(ii).

     “Closing Date Financial Statements” is defined in Section 2.4(b)(i).

     “Closing Payment” is defined in Section 2.3(a)(iii).

     “Code” means the Internal Revenue Code of 1986, as amended (or any successor thereto).

     “Company” is defined in the introductory paragraph of this Agreement.

     “Company Benefit Plans” means each of the following which is sponsored, maintained or
contributed to by any of the Acquired Companies for the benefit of the current or former employees,
officers or directors of any of the Acquired Companies, or with respect to which the Acquired
Companies have or could reasonably be expected to have any Liability: (i) each “employee benefit
plan,” as such term is defined in Section 3(3) of ERISA, and (ii) each stock option plan, bonus
plan or arrangement, incentive award plan or arrangement, change in control or severance pay plan,
policy, or agreement, deferred compensation agreement or arrangement, or supplemental income
arrangement, and each other benefit or compensation plan, program or practice which is not
described in clause (i) of this sentence; provided, however, that such term shall not include
collective bargaining agreements, employment, severance or change in control agreements or
consulting agreements.

     “Company Common Stock” is defined in Section 4.2(a).

     “Company Permits” is defined in Section 4.7(b).

     “Company Preferred Stock” is defined in Section 4.2(a).

     “Company Transaction Expenses” is defined in Section 6.5(a).

     “Competing Business” is defined in Section 4.13(ii).

     “Condemnation” is defined in Section 6.17.

     “Confidentiality Agreement” means the Confidentiality Agreement among Alon and the Sellers,
dated December 3, 2001, including the letter agreement dated May 11, 2004, extending the term of
the Confidentiality Agreement, and as further extended by that certain Letter Agreement among Alon,
the Company and the Sellers, dated March 21, 2006, among other matters, extending the term for a
further two years from the date thereof.

     “Continuing Holdback Amount” is defined in Section 2.6(d).

3

 

     “Contracts” shall mean all contracts, agreements, and other instruments and understandings of
any kind, and all amendments, supplements, modifications, extensions or renewals in respect of the
foregoing, in each case, whether written or oral.

     “Costs” is defined in Section 11.4.

     “Craig Barto Trust” means Craig C. Barto and Gisele M. Barto Living Trust, dated April 5,
1991, a Seller.

     “Damage Estimate” is defined in Section 9.4(a).

     “Damages” is defined in Section 7.2(a).

     “Debt” means, with respect to any Person, (i) all indebtedness of such Person, whether or not
contingent, for borrowed money, (ii) all obligations for cash overdrafts, (iii) all obligations of
such Person for the deferred purchase price of property or services, (iv) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (v) all indebtedness
created or arising under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of such property), (vi)
all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or
similar facilities, (vii) all Debt of others referred to in clauses (i) through (vi) for which such
Person is potentially liable as guarantor or otherwise, and (viii) all Debt referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become liable for the
payment of such Debt.

     “December Adjusted Book Value” is defined in Section 2.3(a)(i).

     “Deposit” means a deposit in the amount of $10,000,000 to be placed with Escrow Agent by Alon
concurrent with the execution of this Agreement, provided the Deposit shall be increased to
$25,000,000 if the Termination Date is automatically extended to August 31, 2006.

     “Deposit Escrow Agreement” means the Deposit Escrow Agreement among the Sellers, Alon and the
Escrow Agent to be entered into concurrent with this Agreement, in the form set forth in
Exhibit A, relating to the Deposit.

     “Designated Employees” is defined in Section 6.10.

     “employee” means employees and other persons filling similar functions.

     “Employee Cash Bonuses” is defined in Section 6.10.

     “Environmental Laws” means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. 11001 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.,
the Toxic Substances Control Act, 15 U.S.C. 2601 et

4

 

seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 136 et seq., the Clean
Air Act, 42 U.S.C. 7401 et seq., the Clean Water Act (Federal Water Pollution Control Act), 33
U.S.C. 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. 300f et seq., the Occupational Safety
and Health Act, 29 U.S.C. 641 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801
et seq., the Oil Petroleum Act, 33, U.S.C. § 2701 et seq., the Toxic Substances Control Act, 15
U.S.C. § 2601 et seq., the National Environmental Policy Act, 42, U.S.C. § 4321 et seq., the
Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq., the Endangered Species Act, 16 U.S.C. §
1531 et seq., as any of the above statutes have been or may be amended from time to time, all rules
and regulations promulgated pursuant to any of the above statutes, and any other foreign, federal,
state or local law, statute, ordinance, permit, order, decree, common law, rule or regulation
related to or governing Environmental Matters as the same have been or may be amended from time to
time.

     “Environmental Matters” means all matters involving pollution, wetlands and other natural
resources and protection of the environment.

     “Environmental Permit” means any Company Permit issued, granted or required under
Environmental Laws.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended (or any
successor thereto).

     “ERISA Affiliate” means any Person that, together with an Acquired Company, would be
considered a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the Code.

     “Escrow Agent” means Bank of New York or such other escrow agent selected by the parties.

     “Estimated Closing Date Adjusted Book Value” is defined in Section 2.3(a)(i).

     “Estimated Closing Date Financial Statements” is defined in Section 2.4(a).

     “Estimated Financial Statements” is defined in Section 4.5(a).

     “Exceptions” is defined in Section 6.18.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Excluded Claims” is defined in Section 7.3(c).

     “Excluded Company” means Point Wells, LLC, a Washington limited liability company, which holds
title to the Upper Bluff Property.

     “Financial Statements” is defined in Section 4.5(a).

     “First Holdback Termination Date” is defined in Section 7.1(a)(iv).

     “FTC” is defined in Section 6.2(a).

5

 

     “GAAP” means United States generally accepted accounting principles as in effect from time to
time and applied on a consistent basis throughout the periods involved.

     “Governmental Entity” means any foreign, domestic, federal, territorial, state or local
governmental authority, instrumentality, court, commission, tribunal or organization or any
regulatory, administrative or other agency, or any political or other subdivision, department or
branch of any of the foregoing which has or claims to have competent jurisdiction over the relevant
Persons or its business, property, assets or operations.

     “Hazardous Materials” means any substance or material that is defined under Environmental Laws
as a “hazardous substance,” “regulated substance,” “pollutant,” “contaminant,” “hazardous waste,”
“extremely hazardous substance,” “toxic substance,” or “hazardous material,” or that is otherwise
defined in or regulated under the Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls, petroleum and petroleum products.

     “Holdback Amount” means an amount equal to $20,000,000.

     “Holdback Escrow Agreement” means the Holdback Escrow Agreement, among the Sellers, Alon and
the Escrow Agent to be entered into concurrent with the Closing, substantially in the form set
forth in Exhibit B, relating to the Holdback Amount and the Continuing Holdback Amount.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     “HSR Approval” means expiration or termination of the waiting period under the HSR Act.

     “Insurance Policies” is defined in Section 4.20(a).

     “Intellectual Property” means, collectively, patents, trademarks, trade names, service marks,
internet domain names and copyrights and applications for registration of any of the foregoing,
technology, know-how, computer software programs or applications, and any other tangible or
intangible intellectual property or proprietary rights, whether or not subject to statutory
registration or protection.

     “Interim Statements” is defined in Section 4.5(a).

     “Jerrel Barto Trust” means the Jerrel C. Barto and Janice D. Barto Living Trust, dated March
18, 1991, a Seller.

     “knowledge” means matters actually known by the persons set forth on Schedule 1(a),
with respect to the knowledge of the Sellers, and Schedule 1(b), with respect to knowledge
of Alon, or that would be reasonably expected to be discovered after a due and careful inquiry by
such persons. For purposes of this Agreement, a “due and careful inquiry” means for any such
person, reasonable consultations with the immediate subordinates of such person, as to whom such
person reasonably believes would have actual knowledge of the matters represented.

6

 

     “Leased Real Property” is defined in Section 4.15(b).

     “Liability” means, with respect to any Person, any liability or obligation of such Person of
any kind, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested, executory, determined,
determinable or otherwise, whether or not the same is required to be accrued on the financial
statements of such Person.

     “Lien” or “Liens” means all liens (including judgment and mechanics’ liens, regardless of
whether liquidated), mortgages, assessments, security interests, easements, claims, pledges, trusts
(constructive or otherwise), option or other charges, encumbrances, restrictions or other Contracts
having the same effect as any of the foregoing.

     “Lovejoy” means W. Scott Lovejoy III, a Seller.

     “Material Adverse Effect” means with respect to any Person one or more events, occurrences or
effects (whether or not covered by insurance) which, individually or in the aggregate, result in a
material adverse effect on (i) the business, operations, assets, liabilities, condition (financial
or otherwise), or results of operations of such Person, taken as a whole with its Subsidiaries, or
(ii) the ability of such Person to timely perform its obligations hereunder and consummate the
transactions contemplated hereby.

     “Material Contracts” is defined in Section 4.4(b).

     “Milano” means Mark R. Milano, a Seller.

     “Most Recent Balance Sheet ” is defined in Section 4.5(a).

     “Most Recent Balance Sheet Date” shall mean the date of the Most Recent Balance Sheet.

     “Option Agreements” means collectively those certain option agreements between the Trusts and
Lovejoy and Milano listed on Section 3.1(b) of the Sellers’ Disclosure Schedule.

     “Option Purchase” is defined in the fourth recital of this Agreement.

     “Options” is defined in the second recital of this Agreement.

     “Order” is defined in Section 9.1(b).

     “Owned Real Property” is defined in Section 4.15(a).

     “Permitted Liens” is defined in Section 4.15(c).

     “Person” shall mean any individual, corporation, limited liability company, partnership,
trust, joint venture, association, organization or other entity or group (which term shall include
a “group” as such term is defined in Section 13(d)(3) of the Exchange Act) or Governmental Entity.

7

 

     “Potential Contributor” is defined in Section 7.6(b).

     “Prepayment Penalties” means all premium, penalties and other amounts (other than principal
and accrued but unpaid interest) payable to lenders in connection with the prepayment or other
retirement of any indebtedness of the Acquired Companies in connection with the Closing.

     “Pro Rata Portion” for each Seller is as set forth in Schedule 2.3(c) under the
heading “Seller’s Pro Rata Portion.”

     “Purchase Price” means the Closing Payment as adjusted by any post-closing adjustment pursuant
to Section 2.4.

     “Qualified Termination” is defined in Section 2.1(b).

     “Real Property” means, collectively, the Owned Real Property and the Leased Real Property.

     “Relative” of a person means such person’s spouse, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law, and in the case of the
Trusts, such Relatives of the trustees of such Trusts.

     “Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing, or dumping into the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air, or any other
environmental medium.

     “Released Parties” is defined in Section 6.13(a).

     “Restrictive Covenants” is defined in Section 6.8(b).

     “Revolving Credit Agreement” means the Credit Agreement, as amended and restated as of July
26, 2005, among the Company, Bank of America, N.A., as administrative agent, and the lending
parties thereto.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Seller Indemnified Parties” is defined in Section 7.2(b).

     “Sellers” means, collectively, the Craig Barto Trust, the Jerrel Barto Trust, Lovejoy and
Milano.

     “Sellers’ Disclosure Schedule” is defined in the introductory paragraph of Article
III.

     “Sellers’ Representative” is defined in Section 6.12(a).

     “Shares” is defined in the first recital of this Agreement.

     “Stock Purchase” is defined in the third recital of this Agreement.

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     “Stockholder Agreement” means the Shareholder Agreement for Paramount Petroleum Corporation,
dated January 5, 1996, among the Company and each of the Sellers, as amended by the amendment
dated May 20, 1998.

     “Straddle Periods” is defined in Section 8.1(a)(ii).

     “Subordinated Debt” means all Debt owed to the Sellers by the Company under the four
Promissory Notes, issued to the Sellers by the Company, dated July 15, 2005, each in the principal
amount of $1,000,000.

     “Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation, limited
liability company, partnership, joint venture or other entity of which such Person (either alone or
through or together with any other subsidiary), owns, directly or indirectly, securities or other
interests (A) the holders of which are generally entitled to at least 50% of the vote for the
election of the board of directors or other similar governing body of such corporation or other
legal entity, or otherwise having the power to direct the business and policies of that Person, or
(B) representing at least 50% of the outstanding Capital Stock of such corporation or other legal
entity.

     “Survey” is defined in Section 6.18.

     “Tail Policy” is defined in Section 6.9(c).

     “Tax” or “Taxes” means (A) all federal, state, local, foreign, and other net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs duties or other taxes, fees, assessments or charges of
any kind whatsoever, together with any interest and any penalties, additions to tax or additional
amounts with respect thereto, (B) any Liability for payment of amounts described in clause (A)
whether as a result of transferee Liability, joint and several Liability for being a member of an
affiliated, consolidated, combined or unitary group for any period, or otherwise through operation
of law, and (C) any Liability for the payment of amounts described in clauses (A) or (B) as a
result of any tax sharing, tax indemnity or tax allocation agreement or any other express or
implied Contract to indemnify any other Person.

     “Tax Return” means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.

     “Termination Date” means June 30, 2006, provided, however, the Termination Date (i) shall be
automatically extended until August 31, 2006, if on June 30, 2006, the condition to Closing set
forth in Section 9.1(a) shall not have been satisfied, or (ii) may be extended as provided
in Section 9.4.

     “Term Loan Agreement” means the Term Loan Agreement, dated as of December 22, 2003, and
amended and restated as of March 1, 2005, among the Company, Wells Fargo Bank Northwest, National
Association, acting in its capacity as administrative agent and the financial institutions
referenced therein.

9

 

     “Third Party Acquisition” is defined in Section 6.7(b).

     “Third Party Claim” is defined in Section 7.5.

     “Title Commitment” is defined in Section 6.18.

     “Title Company” is defined in Section 6.18.

     “Title Objections” is defined in Section 6.18.

     “Title Policies” is defined in Section 6.18.

     “Transaction Documents” is defined in Section 3.2(a).

     “Trusts” means the Craig Barto Trust and the Jerrel Barto Trust, collectively.

     “Unrelated Accounting Firm” is defined in Section 2.5.

     “Upper Bluff Property” means the approximately 35 acre “Upper Bluff” land holdings of the
Excluded Company adjacent to Paramount of Washington, Inc.’s Richmond Beach facility.

     “WARN Act ” is defined in Section 6.6(d).

ARTICLE II

STOCK PURCHASE

     2.1 Deposit

          (a) Concurrent with the execution of this Agreement the Sellers, Alon and the Escrow Agent
shall enter into the Deposit Escrow Agreement. Within one Business Day after execution of this
Agreement, Alon shall deposit with the Escrow Agent $10,000,000 by wire transfer of immediately
available funds. If the Termination Date is automatically extended to August 31, 2006, within one
Business Day after June 30, 2006, Alon shall deposit a further $15,000,000, with the Escrow Agent.
The Escrow Agent shall deposit the Deposit into an interest bearing account as set forth in the
Deposit Escrow Agreement. If this Agreement is terminated for any reason, except as set forth in
Section 2.1(b), Alon shall be entitled to receive and retain the Deposit.

          (b) The Sellers shall be entitled to receive and retain the Deposit if:

     (i) the Sellers terminate this Agreement pursuant to Section 10.3(a)(i) or
(ii), or Alon terminates this Agreement pursuant to Section 10.4(a)(i) or
(ii), and in each case the condition to Closing set forth in Section 9.1(a)
shall not have been satisfied; or

     (ii) the Sellers terminate this Agreement pursuant to Section 10.3(b)

     (any termination described in clause (i) or (ii) above being a “Qualified Termination”).

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          (c) If the Closing does not occur for any reason, all interest or other returns earned on the
Deposit shall be paid to Alon. If the Closing does not occur as a result of a Qualified
Termination, the Sellers and Alon agree that it would be impractical and extremely difficult to
estimate the damages that the Sellers may suffer; however the Sellers and Alon agree that the
Deposit is a reasonable estimate of the minimum total damages that the Sellers would suffer in the
event the Closing does not occur, provided however, that the amount of the Deposit shall not limit
the Seller’s recovery in the event the Closing does not occur as a result of a Qualified
Termination, and, in addition to retaining the Deposit, in the event that the Closing does not
occur as a result of a Qualified Termination, the Sellers shall be entitled to seek any other
available remedy, whether at law or in equity. The payment of the Deposit as set forth herein is
not intended as a forfeiture or penalty within the meaning of applicable law.

     2.2 Sale and Delivery. At the Closing, on the terms and subject to the conditions set
forth herein, the Sellers shall sell and deliver to Alon the Shares, free and clear of all Liens,
and Alon shall purchase and accept the Shares from the Sellers.

     2.3 Purchase Price.

          (a) At the Closing, Alon shall:

          (i) pay to the Sellers by wire transfer of immediately available funds $307,000,000
less (A) the Deposit, plus (B) Sellers’ good faith estimate of the value of
the current assets (with the inventory component thereof being an estimate of actual
inventory calculated at fair market value as of the Closing Date, as provided in
Schedule 2.4(b)) less current liabilities (including current portions of long-term
debt and borrowings under the Revolving Credit Agreement), long-term indebtedness and
minority interest of the Acquired Companies on the Closing Date (the “Estimated Closing Date
Adjusted Book Value”), less (C) the value of the current assets (with inventory
calculated at fair market value as of December 31, 2005, as provided in Schedule
2.4(b)) less current liabilities (including current portions of long-term debt and
borrowings under the Revolving Credit Agreement), long-term indebtedness and minority
interest of the Acquired Companies on December 31, 2005, as set forth on Schedule
2.3(a) (the “December Adjusted Book Value”), less (D) the Holdback Amount,
less (E) the amount, if any, by which $7,400,000 exceeds the amount of cash actually
received by the Acquired Companies prior to the Closing in respect of the income and
property insurance claim for damage to Heater H 805 (the “Heater H805 Claim”), less
(F) the amount, if any, by which $27,500,000 exceeds the amount of cash actually received by
the Acquired Companies prior to Closing as a result of the sale of the Acquired Companies’
75% interest in Tidelands Oil Production Corporation, and less (G) all Prepayment
Penalties;

          (ii) direct the Escrow Agent (A) to pay the Sellers the Deposit and (B) to pay all
interest and returns thereon to Alon; and

          (iii) deposit the Holdback Amount with the Escrow Agent by wire transfer of immediately
available funds

          (the amounts in clause (i), the “Cash Payment", and with the amounts in (ii) and (iii),

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collectively, the “Closing Payment”). If the Purchase Price (and the Cash Payment) is
reduced pursuant to subclause (E) of Section 2.3(a)(i), the parties shall cause the
Acquired Companies to assign to the Sellers at the Closing, in their Pro Rata Portion,
without warranty or recourse of any kind or character, all right, title and interest of the
Acquired Companies in and to the Heater H805 Claim.

          The adjustment to the Cash Payment shall be calculated consistent with the hypothetical
calculation of the Closing Date Cash Payment set forth in Schedule 2.3(b) and its
supporting schedules (the “Hypothetical Calculation”). The Hypothetical Calculation has
been prepared for illustrative purposes only and does not purport to be a forecast or
otherwise indicative of the actual anticipated Cash Payment.

          For the avoidance of doubt, the parties intend that the Sellers shall bear the cost of the
Employee Cash Bonuses and the Company Transaction Expenses, and that such expenses shall be
paid on or before the Closing Date so that deductions therefor will be allocated to the
pre-Closing Straddle Period for purposes of Section 8.1(c). The parties further
agree that the Purchase Price shall not be affected in any manner, either directly or
indirectly, or through the adjustment to the Purchase Price contemplated by Section
2.4 as a result of the transactions contemplated by Section 2.3(d).

          (b) Concurrent with the Closing, Lovejoy and Milano will assign to the Trusts the Option
Agreements, and the Trusts shall immediately thereafter cancel the Option Agreements and the
Options. The Sellers agree that a portion of the Pro Rata Portion of the Purchase Price to be paid
to Lovejoy and Milano is a payment on behalf of the Trusts for the Option Purchase.

          (c) At the Closing, each Seller’s Pro Rata Portion of the Cash Payment, as set forth on
Schedule 2.3(c), shall be delivered to such Seller by wire transfer. Each Seller shall
designate in writing to Alon and the Escrow Agent at least three days prior to the Closing the
account to which such wire transfer payment shall be made.

     (d) (i) The provisions of Sections 2.3(d)(ii) though (v) below shall
not be effective unless and until (i) any consent required for the relevant Acquired Company
to enter into an agreement for the sale of the 1031 Assets and to consummate such a sale, as
contemplated by this Agreement, that is required in order to avoid a breach of or default or
event of default under the Term Loan Agreement has been obtained in accordance with the
terms of the Term Loan Agreement, and (ii) any consent required for the relevant Acquired
Company to enter into an agreement for the sale of the 1031 Assets and to consummate such a
sale, as contemplated by this Agreement, that is required in order to avoid a breach of or
default or event of default under the Revolving Credit Agreement has been obtained in
accordance with the terms of the Revolving Credit Agreement. For the avoidance of doubt,
the parties agree that the Sellers are not creating any duty or obligation of any sort
whatsoever to cause any Acquired Company to enter into any agreement to sell the 1031 Assets
to Alon, unless and until all consents described in the preceding sentence have been
obtained at which time the provisions set forth in Sections 2.3(d)(ii) though
(v) shall be effective, but not otherwise.

12

 

     (ii) Provided that the consents described in Section 2.3(d) shall have been
obtained, at least two Business Days prior to the Closing Date, at least one Business Day
prior to the Closing Date, Alon shall direct its qualified intermediary to purchase from the
Acquired Companies the 1031 Assets at the purchase prices specified in Schedule
2.3(d). On the date the purchase of the 1031 Assets is consummated (the "Asset Purchase
Date"), (A) Alon shall direct its qualified intermediary to pay to the Acquired Company set
forth in such schedule as the owner of the 1031 Asset to be purchased, the purchase price
specified in Schedule 2.3(d) for such asset by wire transfer of immediately
available funds (and in the event that its qualified intermediary shall have insufficient
funds for such purposes, Alon shall itself concurrently pay the deficiency), and (B) the
applicable Acquired Company shall transfer all of its right, title and interest in, to and
under the 1031 Asset being purchased to Alon’s qualified intermediary. The selling Acquired
Company shall bear all Taxes attributed to the sale of the 1031 Asset under this Section
2.3(d) and Alon shall bear all filing fees and recording costs and other expenses
attributable to or arising from the purchase and sale of the 1031 Assets. The Sellers and
the Acquired Companies shall comply with all reasonable requests of Alon to assist Alon in
its efforts to qualify the purchase of the 1031 Assets as an exchange under Section 1031 of
the Code.

     (iii) If the Closing Date does not occur within three Business Days following the Asset
Purchase Date, the purchase and sale of the 1031 Assets under this Section 2.3(d)
shall be rescinded and (A) title to the purchased 1031 Assets shall revert to the Acquired
Companies, and (B) the purchase price for the 1031 Assets shall be refunded to Alon. Alon
shall bear all costs, liabilities and expenses attributable to rescinding the 1031 Asset
sale, and the Acquired Companies shall be entitled to recover any such costs, liabilities
and expenses by offset against the purchase price refunded to Alon.

     (iv) The consummation of the transactions described above in this Section
2.3(d) and the effect thereof on the assets and conditions of the Acquired Companies
shall in no event be deemed to violate any representation, warranty, covenant or other
obligation of the Sellers under this Agreement.

     (v) The Sellers shall cause the relevant Acquired Company to take all necessary
corporate or limited liability company action on the part of such Acquired Company to
approve the execution, delivery and performance by the relevant Acquired Company under any
agreement conveying the 1031 Asset to Alon and to duly execute and deliver such agreement
and to perform all obligations thereunder.

     2.4 Adjustment to the Closing Payment.

          (a) At least five Business Days prior to the Closing Date, the Sellers shall deliver to Alon
(i) the Sellers’ good faith estimate of the consolidated balance sheet of the Acquired Companies as
of the Closing Date (the “Estimated Closing Date Financial Statements”); and (ii) the Estimated
Closing Date Adjusted Book Value.

13

 

          (b) Within 60 days following the Closing, Alon shall prepare and deliver to the Sellers’
Representative:

          (i) a consolidated balance sheet of the Acquired Companies as of the Closing Date (the
“Closing Date Financial Statements”); and

          (ii) Alon’s calculation of the book value of the current assets (except inventory shall
be calculated at fair market value as of the Closing Date), less current liabilities
(including current portions of long-term debt and borrowings under the Revolving Credit
Agreement), long-term indebtedness and minority interest of the Acquired Companies as shown
on the Closing Date Financial Statements (the “Closing Date Adjusted Book Value”).

     Except (i) as expressly provided herein, and (ii) in each case, inventory shall be valued at
fair market value as of the Closing Date (as provided in Schedule 2.4(b)), the Estimated
Closing Date Financial Statements, the Closing Date Financial Statements, the Estimated Closing
Date Adjusted Book Value and the Closing Date Adjusted Book Value shall be prepared (A) in
conformity with GAAP, (B) consistent with the December Adjusted Book Value and the methodology used
by the Company in preparing the December Adjusted Book Value and the Hypothetical Calculation and
(C) consistent with the practices and policies of the Company in preparing its audited consolidated
financial statements for the fiscal year ended December 31, 2005, provided that such consolidated
financial statements were prepared in conformity with GAAP.

     For purposes of calculating the Estimated Closing Date Adjusted Book Value and the Closing
Date Adjusted Book Value, such calculation shall not take into account (i) the impact of any
purchase accounting adjustments relating to Alon’s acquisition of the Acquired Companies, including
any write-up or write-down of assets or liabilities resulting from such purchase accounting, (ii)
any reduction in indebtedness of the Acquired Companies that results from the retirement thereof
with funds provided by Alon pursuant to Section 6.19 and (iii) the impact of the
transactions contemplated by Section 2.3(d), (e.g., the current assets of the Acquired
Companies shall not be increased by the purchase price received by any Acquired Company or
decreased by any Taxes paid by any Acquired Company and the current liabilities of the Acquired
Companies will not be increased for any accrual for Taxes payable by any Acquired Company, in each
case as a result of the transactions contemplated by Section 2.3(d)).

          (c) Within 45 days following Alon’s delivery to the Sellers’ Representative of its calculation
of the Closing Date Financial Statements and the Closing Date Adjusted Book Value, the Sellers’
Representative shall deliver to Alon a notice of objection signed by the Sellers’ Representative
(an “Adjusted Book Value Objection Notice”) or a notice of acceptance signed by the Sellers
Representative (an “Adjusted Book Value Acceptance Notice”) with respect to Alon’s calculation of
the Closing Date Adjusted Book Value. Alon shall provide the Sellers and their accountant and
other representatives, upon reasonable advance notice, access to such books and records of the
Acquired Companies relating to the calculation of the Closing Date Financial Statements and the
Closing Date Adjusted Book Value as may be reasonably requested by the Sellers’ Representative.

14

 

          (d) Alon’s calculation of the Closing Date Adjusted Book Value shall be final and binding on
the parties if an Adjusted Book Value Acceptance Notice is delivered to Alon or if no Adjusted Book
Value Objection Notice is delivered to Alon within the 45-day period required by Section
2.4(c). Any Adjusted Book Value Objection Notice shall specify the items disputed, shall
describe the reasons for the objection thereof, shall state the amount in dispute and shall state
the Sellers’ calculation of the Closing Date Adjusted Book Value. If an Adjusted Book Value
Objection Notice is delivered, the potential dispute shall be resolved as set forth in Section
2.5.

          (e) If the Sellers’ Representative delivers to Alon an Adjusted Book Value Acceptance Notice
or the Sellers’ Representative fails to deliver an Adjusted Book Value Objection Notice within the
45-day period required by Section 2.4(c), (i) an amount equal to the Closing Date Adjusted
Book Value minus the Estimated Closing Date Adjusted Book Value shall be paid (A) by Alon to the
Sellers, in their Pro Rata Portion, if such amount is positive, and (B) by the Sellers to Alon, if
such amount is negative, within five Business Days after the delivery of such Adjusted Book Value
Acceptance Notice or the expiration of such 45-day period, as the case may be. Alternatively, if
the Sellers’ Representative delivers to Alon an Adjusted Book Value Objection Notice, within five
Business Days after such delivery, the owing parties shall pay the undisputed portion, if any, of
the amount owed and, within five Business Days after the resolution of any dispute by the parties
or the Unrelated Accounting Firm relating to the Adjusted Book Value Objection Notice, the owing
parties shall pay the remainder owed, if any. Any payment pursuant to this Section 2.4
shall be made in immediately available funds.

     2.5 Dispute Resolution of Calculation of Purchase Price. If an Adjusted Book Value
Objection Notice is given, the Sellers’ Representative and Alon shall consult with each other with
respect to the objection. If Alon and the Sellers’ Representative are unable to reach agreement
within 15 days after an Objection Notice has been given, any unresolved disputed items shall be
promptly referred to the Los Angeles office of Deloitte and Touche USA LLP, provided however, if
such firm is unavailable or if either of the parties has used the services of Deloitte and Touche
USA LLP (or its Affiliates) at any time in the twelve month period prior to the date the Adjusted
Book Value Objection Notice is given, then the unresolved items shall be promptly referred to such
other nationally recognized independent accounting firm mutually agreed to by Alon and the Sellers’
Representative (Deloitte and Touche USA LLP, or such other firm, the “Unrelated Accounting Firm”).
The Unrelated Accounting Firm shall be directed to render a written report on the unresolved
disputed issues as promptly as practicable (but in no event later than 45 days following submission
of the matter to the Unrelated Accounting Firm) and to resolve only those issues of dispute set
forth in the Adjusted Book Value Objection Notice. The resolution of the dispute by the Unrelated
Accounting Firm shall be final and binding on the parties for purposes of determining the amounts
owed by the parties hereunder with respect to such dispute. The percentage of the expenses of the
Unrelated Accounting Firm that shall be borne by the Sellers on the one hand (in their Pro Rata
Portion), and Alon on the other hand, shall be the same as the percentage of the amount in dispute
that the Unrelated Accounting Firm shall determine the other party is entitled to receive.

15

 

     2.6 Closing.

          (a) The closing (the “Closing”) of the transactions contemplated by this Agreement shall take
place at the offices of Gibson, Dunn & Crutcher LLP, at 4 Park Plaza, Irvine, California, at 10:00
a.m. (local time) on the second Business Day after the last of the conditions to Closing set forth
in Sections 9.1, 9.2 and 9.3 have been satisfied or waived by the party or
parties entitled to waive the same (excluding conditions that by their nature cannot be satisfied
until the Closing, but subject to satisfaction or waiver of those conditions on the Closing Date)
or such other date and time as to which Alon and the Sellers’ Representative may agree in writing
(the “Closing Date”).

          (b) At the Closing:

          (i) each Seller shall deliver, or cause to be delivered, to Alon, against payment by
Alon to such Seller of such Seller’s Pro Rata Portion of the Cash Payment:

          (A) the stock certificate or certificates representing the Shares owned by such
Seller set forth on Section 3.1(a) of the Sellers’ Disclosure Schedule, duly
endorsed for transfer, or accompanied by duly executed assignments separate from the
certificate, and any other documentation reasonably requested by Alon to transfer
the Shares in the stock records of the Company, transferring to Alon full and
exclusive ownership of the Shares, free and clear of all Liens; and

          (B) all other documents, certificates and other instruments required to be
delivered, or caused to be delivered, by such Seller pursuant hereto.

          (ii) Lovejoy and Milano shall deliver to the Craig Barto Trust and the Jerrel Barto
Trust the Option Agreements accompanied by duly executed assignments to the Trusts and the
Trusts shall cancel the Option Agreements and the Options, and provide Alon any
documentation reasonably requested by Alon to evidence the Option Purchase and Option
cancellation.

          (iii) Alon shall deliver, or cause to be delivered, to each Seller, against delivery of
the certificates representing the Shares of such Seller (properly endorsed for transfer or
accompanied by proper assignments):

          (A) the Seller’s Pro Rata Portion of the Cash Payment, as set forth in
Schedule 2.3(c); and

          (B) all of the documents, certificates and other instruments required to be
delivered, or caused to be delivered, by Alon pursuant hereto.

          (iv) Alon shall deliver the Holdback Amount to the Escrow Agent:

          (A) the Escrow Agent shall deliver to each Seller, such Seller’s Pro Rata
Portion of the Deposit, as set forth in Schedule 2.3(c); and

16

 

          (B) to Alon, all interest and other returns on the Deposit.

          (c) On the Closing Date, Alon shall withhold the Holdback Amount from the Closing Payment and
deposit the Holdback Amount with the Escrow Agent. The Holdback Amount shall be held by the Escrow
Agent and paid out pursuant to the terms and conditions of the Holdback Escrow Agreement to be
entered into by Alon, the Sellers and the Escrow Agent on the Closing Date, substantially in the
form attached hereto as Exhibit B. The Holdback Amount (together with any interest or
other returns thereon) shall be used to satisfy any claims for indemnification by the Alon
Indemnified Parties determined to be due and payable pursuant to the Holdback Escrow Agreement and
Article VII.

          (d) Promptly following the First Holdback Termination Date, Alon and the Sellers’
Representative shall give joint written instructions to the Escrow Agent to (i) retain $10,000,000
(plus any portion of the Holdback Amount subject to a good faith pending claim for indemnification
(the “Claimed Amount”)), or, if less, any remaining portion of the Holdback Amount (the “Continuing
Holdback Amount”) and (ii) pay and distribute to the Sellers, in accordance with each Seller’s Pro
Rata Portion or as otherwise instructed in writing by the Sellers’ Representative to address
circumstances under which a Seller was deemed to be severally liable in accordance with the terms
of this Agreement, any remaining portion of the Holdback Amount, plus any interest or other return
accrued thereon through the First Holdback Termination Date.

          (e) On the third anniversary of the Closing Date, Alon and the Sellers’ Representative shall
give joint written instructions to the Escrow Agent to (A) pay and distribute to the Sellers (in
accordance with each Seller’s Pro Rata Portion or as otherwise instructed in writing by the
Sellers’ Representative to address circumstances under which a Seller was deemed to be severally
liable in accordance with the terms of this Agreement) the amount of the Continuing Holdback Amount
(together with any interest or other returns thereon) still being held in escrow pursuant to the
Holdback Escrow Agreement, less the Claimed Amount which is unresolved as of such date, if any, and
(B) retain an amount equal to the Claimed Amount which is unresolved as of such date, if any, until
such amount is released pursuant to the Holdback Escrow Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

     Subject to the exceptions set forth in the disclosure schedule delivered by the Sellers to
Alon concurrent herewith (the “Sellers’ Disclosure Schedule”), each of the Sellers, severally but
not jointly, represents and warrants to Alon, as follows:

     3.1 Ownership of the Shares and Options.

          (a) Such Seller is the sole record and beneficial owner of the shares of Capital Stock of the
Company set forth next to such Seller’s name in Section 3.1(a) of the Sellers’ Disclosure
Schedule, free and clear of all Liens (other than Liens created pursuant to: (i) the Option
Agreements, in the case of the Trusts, (ii) the Stockholder Agreement, (iii) the Bank
Pledge, and (iv) the four Agreements of Subordination and Assignment, dated as of December 9,

17

 

2002, each between a Seller and the Company; provided that each agreement listed in (i) through
(iv) will be terminated on or before the Closing, subject in the case of (iii) and (iv) to
compliance by Alon with its obligations set forth in Section 6.19). Such shares of Capital
Stock of the Company are duly registered in the name of such Seller on the stock register of the
Company. Upon delivery to Alon at the Closing of the certificates representing such Seller’s
Shares, Alon will own such Shares, free and clear of any Liens (other than Liens created or arising
from actions of Alon).

          (b) The Option Agreements to which such Seller is a party are set forth in Section
3.1(b) of the Sellers’ Disclosure Schedule and are valid and binding and in full force and
effect and are enforceable by such Seller in accordance with their terms. True, complete and
accurate copies of the Option Agreements have been provided to Alon.

          (c) The Shares set forth next to such Seller’s name in Section 3.1(a) of the Sellers’
Disclosure Schedule and such Sellers’ rights under the Option Agreements to purchase Shares, if
any, represent such Seller’s sole and entire interest in the Capital Stock of the Company.

          (d) Except for the Stockholder Agreement and this Agreement, the Shares are not subject to any
voting trust or stockholder agreement or other similar Contract, including any such Contract
restricting or otherwise relating to the voting rights or disposition of the Shares. A true,
complete and accurate copy of Stockholder Agreement has been provided to Alon.

     3.2 Authorization, Validity, and Effect of Agreements.

          (a) Such Seller has all requisite power and authority to execute and deliver this Agreement
and all agreements and documents contemplated herein (collectively, the “Transaction Documents”) to
be executed and delivered by such Seller and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by such Seller and constitutes, and
the Transaction Documents to be executed by such Seller (when executed and delivered pursuant
hereto) will constitute, the valid and legally binding obligations of such Seller, enforceable in
accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium,
or other similar laws relating to creditors’ rights and general principles of equity, whether at
equity or law.

          (b) If such Seller is an individual, such Seller has delivered to Alon the consent of such
Seller’s spouse (if any) consenting to the execution of this Agreement and the consummation of the
transactions contemplated herein and such consent has not been revoked.

     3.3 No Violations. Neither the execution and delivery by such Seller of this
Agreement, nor the other Transaction Documents, nor the consummation by such Seller of the
transactions contemplated hereby or thereby in accordance with the terms hereof or thereof, will:

     (i) conflict with or result in a breach of any provisions of the trust documents of
such Seller, if any; or

     (ii) violate any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to such Seller; or

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     (iii) violate, or conflict with, or result in a material breach of any provision of, or
constitute a material default (or an event which, with notice or lapse of time or both,
would constitute a material breach or default) under, any of the terms, conditions or
provisions of any material Contract to which such Seller is a party or by which its assets
are bound, including the Stockholder Agreement.

     Section 3.4 Trusts. If such Seller is a Trust:

     (i) Section 3.4 of the Sellers’ Disclosure Schedule sets forth the legal name
of such Seller, the name of all of the trustee(s) of the Trust and the state or other
jurisdiction which governs the trustee’s duties with respect to the Trust.

     (ii) There has not been any challenge to (A) the authority, appointment or capacity of
the trustee over the Trust or (B) the validity of the Trust.

     (iii) True, complete and accurate copies of the relevant provisions relating to the
trust powers of each trustee of the Trust, and all applicable amendments, supplements or
modifications thereto have been provided or made available to Alon.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

AS TO THE COMPANY AND ITS SUBSIDIARIES

     Subject to the exceptions set forth in the Sellers’ Disclosure Schedule, the Sellers, jointly
and severally, represent and warrant to Alon, as follows:

     4.1 Existence; Good Standing.

          (a) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware.

     (b) The Company is duly licensed or qualified to do business and is in good standing under the
laws of each state in the United States in which the character of the properties owned or leased by
it therein or in which the transaction of its business makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly qualified and licensed or
in good standing has not had and could not reasonably be expected to have a Material Adverse Effect
on the Company. The Company has all requisite corporate power and authority to own, operate and
lease its properties and assets and carry on its business as now conducted. True, complete and
accurate copies of the certificate of incorporation and bylaws of the Company have been provided to
Alon.

     4.2 Capitalization.

          (a) The authorized Capital Stock of the Company consists of 1,000 shares of common stock, par
value $0.01 per share (“Company Common Stock”) and 100,000 shares of
preferred stock, par value $1.00 per share (“Company Preferred Stock”), of which 1,000 shares
of Company Common Stock, 30,000 shares of Company Preferred Stock designated as “Senior Preferred
Stock,” of which 10,000 shares are designated as “Series A,” 10,000 shares are

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designated as
“Series B” and 10,000 shares are designated as “Series C,” and 20,500 shares of non-voting Company
Preferred Stock designated as “Junior Preferred Stock” are issued and outstanding and held of
record by the Sellers in the amounts set forth in Section 3.1(a) of the Sellers’ Disclosure
Schedule. The Option Agreements provide Lovejoy and Milano the right to purchase from the Craig
Barto Trust and the Jerrel Barto Trust (i) an aggregate of 10,000 shares of Series B Senior
Preferred Stock and (ii) an aggregate of 10,000 shares of Series C Senior Preferred Stock. All of
the outstanding shares of Company Common Stock and Company Preferred Stock have been duly
authorized and validly issued, are fully paid and nonassessable, have been issued in compliance
with all applicable federal and state securities laws, and are not subject to any preemptive rights
or rights of first refusal created by statute, the charter documents of the Company or any Contract
to which the Company or any of the Sellers is a party or by which it is bound, except for (i) the
Stockholder Agreement, which will be terminated on the Closing Date, and (ii) the Option
Agreements, which will be cancelled immediately after the Option Purchase.

          (b) Except for the Options, there are no outstanding options, warrants, calls, subscriptions,
convertible securities, convertible debt or other rights or other Contracts which obligate the
Company to issue, or the Company or any of the Sellers to transfer or sell, any Capital Stock of
the Company or any securities exercisable or exchangeable for, or convertible into, such Capital
Stock.

          (c) The Company has no outstanding bonds, debentures, notes or other obligations the holders
of which have the right to vote (or which are convertible into or exercisable or exchangeable for
securities having the right to vote) with its stockholders on any matter. Except as set forth in
Section 4.2(c) of the Sellers’ Disclosure Schedule, there are no obligations, contingent or
otherwise, of the Company to repurchase, redeem or otherwise acquire any of the Capital Stock of
the Company or to make any investment (in the form of a loan, capital contribution or otherwise) in
any Person.

          (d) The Company is not in material default or breach (and no event has occurred which with
notice or lapse of time or both, would constitute a material breach or default) of any terms or
provision of its articles of incorporation or by-laws.

     4.3 Acquired Subsidiaries and Other Interests.

          (a) Section 4.3(a) of the Sellers’ Disclosure Schedule sets forth a list of all of the
Company’s directly and indirectly owned Subsidiaries, together with (i) the jurisdiction of
organization, and (ii) for each Acquired Subsidiary, (A) that is a corporation, the amount of its
authorized Capital Stock, the amount of its outstanding Capital Stock and the owners of its
outstanding Capital Stock, (B) that is a limited liability company, the names and interests of the
members thereof, and (C) that is a partnership, the names and interests of the partners thereof.
Except as set forth in Section 4.3(a) of the Sellers’ Disclosure Schedule, the Company owns
directly or indirectly all of the outstanding Capital Stock of each of the Acquired Subsidiaries,
and the Company’s interests are held free and clear of all Liens. Except as set forth in
Section 4.3(a) of the Sellers’ Disclosure Schedule, the Company does not hold, directly or
indirectly, any Capital Stock of any other Person.

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          (b) Each of the Acquired Subsidiaries is a corporation duly incorporated, or a limited
liability company or partnership duly formed, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation. Each of the Acquired Subsidiaries is duly
licensed or qualified to do business and is in good standing under the laws of each state in the
United States in which the character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification or licensing necessary, except in such
jurisdictions where the failure by any Acquired Subsidiary to be so duly qualified and licensed or
in good standing has not had and could not reasonably be expected to have a Material Adverse Effect
on such Acquired Subsidiaries. Each of the Acquired Subsidiaries has all requisite corporate,
limited liability company or partnership power and authority to own, operate and lease its
properties and assets and carry on its business as now conducted.

          (c) Except as set forth in Section 4.3(c) of the Sellers’ Disclosure Schedule, (i) all
of the outstanding Capital Stock of each Acquired Subsidiary is duly authorized, validly issued,
fully paid and nonassessable, and (ii) there are no outstanding options, warrants, calls,
subscriptions, convertible securities, convertible debt or other rights or other Contracts which
obligate any Acquired Company to issue, transfer or sell any Capital Stock of such Acquired
Subsidiary or any securities exercisable or exchangeable for, or convertible into, any Capital
Stock.

          (d) None of the Acquired Subsidiaries has any outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are convertible into or
exercisable or exchangeable for securities having the right to vote) with its stockholders, members
or partners on any matter. Except as set forth in Section 4.3(d) of the Sellers’
Disclosure Schedule, there are no obligations, contingent or otherwise, of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of the Capital Stock of the
Acquired Subsidiaries or to make any investment (in the form of a loan, capital contribution or
otherwise) in any Person.

          (e) None of the Acquired Subsidiaries is in material default or breach (and no event has
occurred which with notice or lapse of time or both, would constitute a material breach or default)
of any terms or provision of its articles of incorporation or by-laws (or other similar constituent
documents). True, complete and accurate copies of the certificate of incorporation and bylaws of
each Acquired Subsidiary that is a corporation and similar constituent documents of each Acquired
Subsidiary that is a limited liability company or partnership have been provided to Alon.

     4.4 Material Contracts; No Violation.

          (a) Except as set forth in Section 4.4(a) of the Sellers’ Disclosure Schedule,
Contracts permitted to be entered into after the date hereof under Section 6.1(k) or
Contracts
entered into in connection with the transactions contemplated in Section 2.3(d), none
of the Acquired Companies is a party to nor are any of their respective assets bound by any
Contract:

               (i) that restricts in any material manner any Acquired Company from carrying on its
business as currently conducted;

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               (ii) to provide funds to or to make any investment in any other Person (in the form of
a loan, capital contribution or otherwise);

               (iii) with respect to obligations as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of the obligation of any other Person;

               (iv) for any line of credit, standby financing, revolving credit, term credit or other
Contract relating to Debt;

               (v) with advisors, independent contractors or consultants that (A) are not cancelable
by the Acquired Company on no more than 60 days’ notice and without liability, penalty or
premium or (B) require payments of more than $200,000 in any twelve-month period;

               (vi) relating to the supply of products to any Acquired Company or for the sale or
distribution of products by or for any Acquired Company, other than Contracts which (A) are
for a term of no more than 90 days or are cancelable by the Acquired Company on no more than
90 days’ notice and without liability, penalty or premium or (B) require payments of no more
than $500,000 in any twelve month period;

               (vii) with any Governmental Entity or involving the provision of products to a
Governmental Entity which require payments of more than $250,000 in any twelve-month period;

               (viii) with any employee of any of the Acquired Companies (including any employment,
severance or change in control agreement) which provide for annual compensation, severance
or other payments of more than $100,000;

               (ix) for the lease or sublease of Real Property under which (A) any Acquired Company is
a lessor or sublessor of, or makes available for use to any Person (other than the Acquired
Companies), any Real Property of the Acquired Companies, or (B) any Acquired Company is a
lessee or sublessee of, or holds or uses any Real Property owned by any other Person (other
than the Acquired Companies);

               (x) for the lease or sublease of personal property under which (A) any Acquired Company
is a lessee or sublessee of, or holds or uses, any machinery, equipment, vehicle or other
tangible personal property owned by any Person (other than the Acquired Companies, and
except personal property leases and installment and conditional sales agreements having
annual payments of less than $250,000), or (B) any Acquired Company is a lessor or sublessor
of, or makes available for use by any Person (other than the Acquired Companies), any
tangible personal property owned or leased by
any Acquired Company, in each such case which has a future payment or receivable, as
the case may be, in excess of $250,000;

               (xi) for Tax sharing or Tax allocation;

               (xii) for a joint venture, partnership or similar arrangement;

22

 

               (xiii) that relates to the Intellectual Property of the Acquired Companies;

               (xiv) that commits an Acquired Company to make any fixed or contingent payment or
expenditure or any related series of fixed or contingent payments or expenditures totaling
more than $250,000 in any twelve-month period (provided that this clause shall not include
any Contract of the nature described in subclauses (i) through (xiii) that is included in
any of such subclauses or that is excluded pursuant to any durational or dollar thresholds
set forth therein);

               (xv) with any Seller or any Affiliate or Relative of any of the Sellers; or

               (xvi) that is otherwise material to the Business.

     (b) Except as set forth in Section 4.4(b) of the Sellers’ Disclosure Schedule, (i)
each Contract listed in Section 4.4(a) to the Sellers’ Disclosure Schedule and each
Contract entered into after the date hereof that would be required to be so listed if entered into
prior to the date hereof (collectively, the “Material Contracts”) is, or when entered into will be,
a valid and binding obligation of the Acquired Company party to the Contract and, to the Sellers’
knowledge, each other Person who is a party thereto, enforceable against the Acquired Company party
thereto, and to the Sellers’ knowledge, each such other Person, in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or
other similar laws relating to creditors’ rights and general principles of equity, whether at
equity or at law, (ii) the Acquired Companies have performed all obligations required to be
performed by them to date under the Material Contracts and they are not (with or without the lapse
of time or the giving of notice, or both) in breach or default thereunder, and (iii) to the
knowledge of the Sellers, no other party to any of the Material Contracts is (with or without the
lapse of time or the giving of notice, or both) in breach or default thereunder, except in each
case in clauses (i) through (iii), as has not had and could not reasonably be expected to have a
Material Adverse Effect on the Company. True, complete and accurate copies of the Material
Contracts entered into on or prior to the date hereof have been provided to Alon and true, complete
and accurate copies of any Material Contracts entered into after the date hereof will be provided
to Alon promptly after being so entered into.

     (c) Neither the execution and delivery by the Sellers of this Agreement and the other
Transaction Documents, nor the consummation by Sellers of the transactions contemplated hereby or
thereby in accordance with the terms hereof or thereof, will violate, or conflict with, or result
in a material breach of any provision of, or constitute a material default (or an event which, with
notice or lapse of time or both, would constitute a material breach or default) under any of the
terms, conditions or provisions of any Material Contract.

     (d) Except as set forth on Section 4.4(d) of the Sellers’ Disclosure Schedule, no
notice to or consent or approval of any party to a Material Contract is required in connection with
the execution, delivery and performance of this Agreement, the other Transaction Documents or the
consummation of the transactions contemplated hereby and thereby.

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     4.5 Financial Statements; No Undisclosed Liabilities.

          (a) Section 4.5(a) of the Sellers’ Disclosure Schedule sets forth true and complete
copies of the consolidated balance sheets and related consolidated statements of operations,
retained earnings and cash flows for the Company and its Subsidiaries as of the years ended
December 31, 2003 and 2004, in each case audited by the independent public accountants of the
Company whose unqualified reports are attached thereto (together with the 2005 Annual Statements,
the “Annual Statements”) and the estimated consolidated balance sheet and related consolidated
statement of operations as of and for the twelve months ended December 31, 2005 (the “Estimated
Financial Statements”, and together with the Annual Statements and the Interim Statements, the
"Financial Statements”). The most recent balance sheet included in the Estimated Financial
Statements is referred to herein as the “Most Recent Balance Sheet.”

          (b) Each of the Financial Statements presents, or in the case of the Interim Statements and
the 2005 Annual Statements, will present fairly the consolidated financial condition, consolidated
results of operations and consolidated statements of cash flow of the Company and its Subsidiaries
as of the dates or for the periods indicated in accordance with GAAP, subject in the case of the
Interim Statements to normal, recurring year-end adjustments (except such Interim Statements do not
provide for (i) inventory recorded at LIFO, (ii) current accruals for paid time off, (iii) accruals
for bonuses, (iv) current accounts receivable reserves, (v) a provision for deferred taxes, and
(vi) other adjustments which will not, individually or in the aggregate be material), and have been
prepared based on the books and records of the Company and its Subsidiaries and in accordance with
the Company’s normal accounting practices, consistent with past practice and with each other.

          (c) To the Sellers’ knowledge, at all times since January 1, 2003, the Company has had in
effect a system of internal controls over financial reporting sufficient to provide reasonable
assurance that assets of the Company and its Subsidiaries are protected and transactions involving
the Company and its Subsidiaries are properly recorded. The Company’s certified public accountants
have not notified the Sellers that any reportable conditions or material weakness (each as defined
in AU 325 of the AICPA Professional Standards) have been discovered in the Company’s internal
controls by such accountants in connection with their audit of the Annual Statements.

          (d) Except as set forth in Section 4.5(d) of the Sellers’ Disclosure Schedule, there
are no Liabilities of the Company and its Subsidiaries other than: (i) Liabilities accrued on the
Most Recent Balance Sheet; and (ii) Liabilities incurred since the Most Recent Balance Sheet Date
that have been incurred in the ordinary course of business of the Company and its Subsidiaries
consistent with past practice, and that do not, and could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company (provided that as
to those matters in respect of which the Sellers’ representations or warranties set forth
elsewhere in this Article IV are expressly limited to the Sellers’ knowledge, to the
Sellers’ knowledge there are no such Liabilities).

          (e) The sole asset of the Excluded Company is the Upper Bluff Property. The Excluded Company
has not conducted any business other than owning and taking actions to develop the Upper Bluff
Property.

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     4.6 No Violations; Consents.

          (a) The execution and delivery by the Sellers of this Agreement, and the other Transaction
Documents, the performance by the Sellers of their obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby or thereby in accordance with the terms hereof
or thereof will not:

               (i) conflict with or result in a breach of any provisions of the articles of
incorporation or by-laws (or other similar constituent documents) of any of the Acquired
Companies; or

               (ii) violate any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to any of the Acquired Companies, or their respective properties or assets.

          (b) No consent, approval or authorization of, or declaration, filing, notice or registration
with, any Governmental Entity or any other Person is required to be made by or with respect to the
Acquired Companies in connection with the execution, delivery and performance of this Agreement and
the other Transaction Documents or the consummation of the transactions contemplated hereby or
thereby, except (i) the filing under the HSR Act and (ii) as set forth in Section 4.4(d) of
the Sellers’ Disclosure Schedule.

     4.7 Compliance; Permits; Litigation.

          (a) To the knowledge of the Sellers (i) each of the Acquired Companies is and at all times has
been in material compliance with, all laws, ordinances, governmental rules and regulations to which
they or any of their respective properties or assets is subject, and (ii) none of the Acquired
Companies is party or subject to or in default under any judgment, order, injunction or decree of
any Governmental Entity or arbitration tribunal applicable to it or any of its respective
properties, assets, operations or business.

          (b) To the knowledge of the Sellers (i) each of the Acquired Companies has obtained all
licenses, permits, consents, certificates, orders, approvals and other authorizations of all
Governmental Entities (collectively, the “Company Permits”) and has taken all actions required by
applicable law or regulations of any Governmental Entity in connection with its respective
business, except where the failure to obtain any such Company Permit or take such action,
individually or in the aggregate, has not had and could not reasonably be expected to have a
Material Adverse Effect on the Company, and (ii) each Acquired Company is in material compliance
with the terms of the Company Permits to which it is subject.

          (c) Section 4.7(c) of the Sellers’ Disclosure Schedule sets forth a list and
description of all pending, and to the knowledge of the Sellers, threatened, lawsuits,
arbitrations, proceedings or investigations against the Acquired Companies or their officers or
directors (as such) or any of their respective properties or assets as of the date hereof.

          (d) Except as set forth in Section 4.7(d) of the Sellers’ Disclosure Schedule, there
is no lawsuit, arbitration, proceedings or investigations by any Acquired Company pending against
any other Person.

25

 

     4.8 Absence of Certain Changes. Except as disclosed in Section 4.8 of the
Sellers’ Disclosure Schedule or permitted under Section 6.1, since December 31, 2005 each
Acquired Company has conducted its business only in the ordinary course of such business consistent
with past practice and there has not been:

               (i) any event or events through the date hereof which, individually or in the
aggregate, had or could reasonably be expected to have a Material Adverse Effect on the
Company (provided that as to those matters in respect of which the Sellers’ representations
or warranties set forth elsewhere in this Article IV are expressly limited to the
Sellers’ knowledge, to the Sellers’ knowledge there have been no such events);

               (ii) any damage or destruction, whether covered by insurance or not, suffered by any
Acquired Company which has had or could reasonably be expected to have a Material Adverse
Effect on the Company;

               (iii) any increase in the compensation payable or to become payable by any Acquired
Entity to its officers or employees, except to employees in the ordinary course consistent
with past practice or pursuant to nondiscretionary provisions of existing employment
agreements listed in Section 4.4.(a) of the Sellers’ Disclosure Schedule;

               (iv) any dividend declared, set aside or paid or any other distribution on or in
respect of the shares of its Capital Stock made or any direct or indirect redemption,
retirement, purchase or other acquisition of such Capital Stock;

               (v) any material change through the date hereof in (A) the accounting methods or
practices it follows, whether for general financial or Tax purposes, or (B) its depreciation
or amortization policies or rates;

               (vi) any sale, lease, sublease, abandonment or other disposal of any Real Property,
leasehold interests, machinery, equipment or other operating property, other than in the
ordinary course of business and consistent with past practice;

               (vii) any sale, assignment, transfer, license or other disposal of any Intellectual
Property of the Acquired Companies;

               (viii) any entry into any material commitment or transaction (including, without
limitation, any borrowing) other than in the ordinary course of business and consistent with
past practice;

               (ix) any material incurrence of Debt, except in the ordinary course of business and
consistent with past practice;

               (x) any of its property, leasehold interests or assets subjected to any Lien, except
for Liens for current taxes not yet due and purchase money security interests incurred in
the ordinary course of business and consistent with past practice;

               (xi) any transaction between any Acquired Company, on the one hand, and any Seller or
any Affiliate or Relative of any Seller, on the other hand; or

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               (xii) any agreement to take any action described in this Section 4.8 or which
would constitute a breach of any of the representations or warranties of the Sellers
contained in this Agreement.

     4.9 Taxes.

          (a) All Tax Returns that were required to be filed with respect to any of the Acquired
Companies have been accurately prepared and timely filed. All such Tax Returns are true, correct,
and complete in all material respects and such Tax Returns contain all disclosures and other items
required to avoid additional Taxes or other adverse Tax consequences.

          (b) Each of the Acquired Companies has timely paid all Taxes that have become due or payable
(without regard to whether or not such Taxes are shown on any Tax Return) and has adequately
provided in the Financial Statements (in accordance with GAAP) for all Taxes that have accrued but
are not yet due or payable.

          (c) No claim has been made by any taxing authority in any jurisdiction where any Acquired
Company does not file Tax Returns that such Acquired Company is or may be subject to Tax by that
jurisdiction. No extensions or waivers of statutes of limitations with respect to any Tax Returns
have been given by or requested from any Acquired Company.

          (d) No Acquired Company is a party to any action, proceeding or audit relating to Taxes by any
taxing authority. There is no pending and, to the knowledge of the Sellers, threatened, action,
proceeding or audit by any taxing authority for which any Acquired Company could be held liable.
All deficiencies asserted or assessments made against any Acquired Company as a result of any
examinations by any taxing authority, have been fully paid. No issue has been raised in any such
examination, audit, or other proceeding, which by application of the same or similar principles,
reasonably could be expected to result in a proposed deficiency in Taxes of any other Acquired
Company or for the Acquired Companies for any other period.

          (e) There are no Liens for Taxes (other than for current Taxes not yet due and payable) upon
the assets of the Acquired Companies. None of the assets of the Acquired Companies (i) is property
that is required to be treated as being owned by any other Person pursuant to the so-called “safe
harbor lease” provisions of former Section 168(f)(8) of the Code; (ii) directly or indirectly
secures any Debt the interest on which is tax exempt under Section 103(a) of the Code; or (iii) is
“tax-exempt use property” within the meaning of Section 168(h) of the Code.

          (f) No Acquired Company is a party to or bound by any closing agreement, offer in compromise,
or other agreement with any taxing authority that could affect Taxes for which the Acquired
Companies may be liable.

          (g) No Acquired Company has been a member of an affiliated group of corporations, within the
meaning of Section 1504 of the Code, or a member of a combined, consolidated or unitary group for
state, local or foreign Tax purposes.

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          (h) No Acquired Company has been a “distributing corporation” or a “controlled corporation” in
connection with a distribution described in Section 355 of the Code.

     4.10 Certain Employee Plans.

          (a) (i) Except as set forth in Section 4.10(a) of the Sellers’ Disclosure Schedule,
each Company Benefit Plan complies, and has been administered, in all material respects in
accordance with its governing documents and all applicable requirements of law and each of the
Acquired Companies has satisfied in all material respects all of its statutory, regulatory and
contractual obligations with respect to each such Company Benefit Plan, and (ii) no non-exempt
“prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the
Code) has occurred with respect to any Company Benefit Plan that could be reasonably expected to
result in any material Liability to the Acquired Companies. Section 4.10(a) of the
Sellers’ Disclosure Schedule lists each material Company Benefit Plan. Copies of all written
material Company Benefit Plans (including all amendments thereto) and descriptions of all unwritten
material Company Benefit Plans have previously been made available to Alon. The Sellers have made
available to Alon, with respect to each Company Benefit Plan, the most recent annual Form 5500
filing and the most recent summary plan description, in each case, to the extent such filing or
description is required by applicable law.

          (b) Except as set forth on Section 4.10(b) of the Sellers’ Disclosure Schedule, each
Company Benefit Plan intended to qualify under Section 401(a) of the Code is the subject of a
determination letter (or an opinion letter upon which it can rely) issued by the IRS with respect
to the qualification of such Company Benefit Plan, and, to the knowledge of the Sellers, no
circumstances exist which could reasonably be expected to materially and adversely affect such
qualification. A copy of each determination or opinion letter referred to in the preceding
sentence has previously been made available to Alon. No Company Benefit Plan, nor any employee
benefit plan, within the meaning of Section 3(3) of ERISA, which is or has been within the six
years preceding the date hereof, sponsored, maintained, or contributed to by an ERISA Affiliate (i)
is subject to Title IV of ERISA, Part 3 of Subtitle B of Title I of ERISA or Section 412 of the
Code or (ii) is a “multiemployer plan” as defined in Section 3(37) of ERISA. Except as set forth
on Section 4.10(b) of the Sellers’ Disclosure Schedule, no Company Benefit Plan, nor any
employee benefit plan, within the meaning of Section 3(3) of ERISA, which is sponsored, maintained,
or contributed to by an ERISA Affiliate is a “multiple employer plan” within the meaning of Section
413(c) of the Code. Each Contract or Company Benefit Plan that is a “nonqualified deferred
compensation plan” within the meaning of Section 409A of the Code has been operated and
administered since January 1, 2005, in all material respects in good faith compliance with Section
409A of the Code and the proposed regulations promulgated thereunder or IRS Notice 2005-1.

          (c) Except as required by applicable law or as set forth on Section 4.10(c) of the
Sellers’ Disclosure Schedule, none of the Company Benefit Plans provide any health, welfare or life
insurance benefits to any former or retired employees, officers or directors of any Acquired
Company or ERISA Affiliate.

          (d) There are no actions, suits, or claims pending (other than routine claims for benefits)
or, to the knowledge of the Sellers, threatened against, or with respect to, any of the

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Company Benefit Plans or their assets, which could reasonably be expected to result in a
material Liability to any Acquired Company. To the knowledge of the Sellers, none of the Pension
Benefit Guaranty Corporation, the Internal Revenue Service or the Department of Labor is currently
auditing or reviewing any Company Benefit Plan, and neither an Acquired Company nor any ERISA
Affiliate has received notice, written or otherwise, of an impending audit or review of any such
arrangements from the Pension Benefit Guaranty Corporation, the Internal Revenue Service or the
Department of Labor.

          (e) Except as disclosed in Section 4.10(e) of the Sellers’ Disclosure Schedule, the
execution and delivery of this Agreement and the other Transaction Documents and the consummation
of the transactions contemplated hereby and thereby will not (i) require any Acquired Company to
pay greater benefits or provide other rights under, any Contract between any Acquired Company and
its officers, employees or directors (or former officers, employees or directors) or Company
Benefit Plan than it otherwise would, whether or not some other subsequent action or event would be
required to cause such payment or provision to be triggered, or (ii) create or give rise to any
additional vested rights or service credits under any such Contract or Company Benefit Plan.

          (f) Other than as required by law or as disclosed in Section 4.10(f) of the Sellers’
Disclosure Schedule, none of the Acquired Companies nor any ERISA Affiliate has made any commitment
to (i) create any new Company Benefit Plans, or (ii) modify or amend any existing Company Benefit
Plans which would result in a material increase in the expense of maintaining such plans above the
level of expense incurred in respect thereto for the most recent fiscal year ended prior to the
date hereof. In addition, other than as required by law, there has been no amendment to, written
interpretation of or announcement (whether or not written) by any Acquired Company or ERISA
Affiliate relating to, or change in the class of employees eligible for participation or coverage
under, any Company Benefit Plan that would increase materially the expense of maintaining such
Company Benefit Plan above the level of expense incurred in respect thereto for the most recent
fiscal year ended prior to the date hereof.

          (g) All material contributions, premiums or payments required to be made to date with respect
to any Company Benefit Plan have been timely made.

     4.11 Labor Matters.

          (a) Section 4.11(a) of the Sellers’ Disclosure Schedule contains a list of the names
of all employees of each Acquired Company as of the date of this Agreement whose annual base
compensation exceeds $25,000 and their salaries or wages (or other payment terms), exemption
status, dates of employment and positions.

          (b) Except as set forth on Section 4.11(b) of the Sellers’ Disclosure Schedule, no
Acquired Company is a party to, or bound by, any collective bargaining agreement or Contract with a
labor union or labor organization. There is no unfair labor practice or labor arbitration
proceeding pending or, to the knowledge of the Sellers, threatened against any Acquired Company,
and to the knowledge of the Sellers, there are no organizational efforts with respect to the
formation of a collective bargaining unit being made or threatened involving employees of any
Acquired Company.

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          (c) (i) There are no controversies pending or, to the knowledge of the Sellers, threatened
between any Acquired Company and any of its employees, which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on the Company; and (ii) none of the
Acquired Companies has received notice of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any employees of the Acquired Companies.

          (d) Except as set forth on Section 4.11(d) of the Sellers’ Disclosure Schedule, no
charges have been filed claiming employment discrimination or unfair labor practices against or
involving any Acquired Company by any employee or former employee of the Acquired Companies (other
than charges that were fully resolved prior to the date hereof), and to the knowledge of the
Sellers, no such charges are threatened.

     4.12 Environmental Matters. The Sellers have made available to Alon all environmental
assessments, audit reports, testing and investigation results, and other reports relating to
environmental conditions with respect to all Real Property owned or leased by the Acquired
Companies which are in the possession of the Sellers or the Acquired Companies or any of their
agents. Except as set forth on Section 4.12 of the Sellers’ Disclosure Schedule, to the
knowledge of the Sellers:

     (i) each Acquired Company has been and currently is in material compliance with all
applicable Environmental Laws;

     (ii) (A) each Acquired Company has obtained all Environmental Permits necessary for the
operation of the Business as it is currently being operated, (B) all such Environmental
Permits are in full force and effect, (C) no appeal nor any other action is pending, or is
threatened, to revoke any such Environmental Permit, (D) each Acquired Company is in
compliance with its Environmental Permits, and (E) to the extent required by applicable
Environmental Law, each Acquired Company has timely filed all applications necessary to
renew or obtain any necessary Environmental Permit, except, in each case for subclauses (A)
through (E), where such failure has not had and could not be reasonably expected to have a
Material Adverse Effect on the Company; and the Sellers have provided Alon with copies of
all such material Environmental Permits;

     (iii) with regard to the properties currently or formerly owned or operated by any of
the Acquired Companies, there was and has been no Release of any Hazardous Materials that
could reasonably be expected to result in any material Liability under the Environmental
Laws;

     (iv) no Acquired Company has disposed or arranged to dispose of any Hazardous Materials
on any third party property that could reasonably be expected to result in any material
Liability under the Environmental Laws;

     (v) none of the Acquired Companies or the Sellers has received any notices, demand
letters, complaints, claims or requests for information from any

30

 

Governmental Entity or any other Person indicating that an Acquired Company may be in
violation of, or liable under, any Environmental Law;

          (vi) none of the Acquired Companies or their respective properties are subject to any
order or decree of any Governmental Entity or any Contract with any Government Entity
arising under any Environmental Law, or is a party to any indemnity or other Contract with
any third party which could reasonably be expected to result in any Liability under any
Environmental Law; and

          (vii) none of the properties currently owned or operated by the Acquired Companies are
subject to any Liens imposed by any Governmental Entity in connection with the presence on
or off such property of any Hazardous Materials.

     4.13 Related Party Transactions. Except as set forth in Section 4.13 of the
Sellers’ Disclosure Schedule, none of the Sellers, the Excluded Company, or any Affiliate (other
than the Acquired Companies) or Relative of any of the foregoing Persons:

          (i) has, or at any time since December 31, 2003 has had, any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in the
operations of the Acquired Companies;

          (ii) owns, or at any time since December 31, 2003 has owned (of record or as a
beneficial owner), an equity interest or any other financial or profit interest in, a Person
that has (A) business dealings or a material financial interest in any transaction with any
Acquired Company, or (B) engaged in competition with any Acquired Company with respect to
the business of any Acquired Company (a “Competing Business”) in any market presently served
by any Acquired Company, except for ownership (of record or as a beneficial owner) of less
than three percent of the outstanding Capital Stock of any Competing Business that is
publicly traded on any national or foreign stock exchange, the Nasdaq Stock Market or the
over-the-counter market; or

          (iii) has any claim or right against any Acquired Company, or is a party to any
Contract with any Acquired Company.

     4.14 Business Activities.

          (a) There is no judgment, injunction, order, decree, or other action pending before a
Governmental Entity or, to the knowledge of the Sellers, being considered by a Governmental Entity,
which has or would have the effect of restricting the conduct of business of any of the Acquired
Companies.

          (b) None of the Sellers nor, to the knowledge of the Sellers, any director, officer, agent,
employee, consultant or contractor of any Acquired Company, has directly or indirectly made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any
Person, private or public, regardless of form, whether in money, property, or services that is
illegal (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, or (iii) to obtain special concessions or for special

31

 

concessions already obtained, for or in respect of any Acquired Company, or established or
maintained any fund or asset that has not been recorded in the books and records of the Acquired
Companies.

          (c) All of the prices charged by any Acquired Company in connection with the marketing or sale
of any of its products have been in material compliance with all applicable laws and regulations.
No claims are pending or, to the knowledge of the Sellers, threatened against any Acquired Company
with respect to discriminatory pricing, price fixing, unfair competition, or any other violation of
any laws or regulations relating to anti-competitive practices or unfair trade practices.

     4.15 Real Property.

          (a) Section 4.15(a) of the Sellers’ Disclosure Schedule lists (by location and
description) all real property currently owned by any of the Acquired Companies, which together
with all easements, rights of way and other appurtenances thereto and all buildings, structures,
fixtures and improvements located thereon (other than fixtures and improvements which are the
property of tenants under applicable Contracts) shall be referred to as the “Owned Real Property”.

          (b) Section 4.15(b) of the Sellers’ Disclosure Schedule lists all real property
currently leased by any of the Acquired Companies, which together with any Acquired Company’s
rights in all of the buildings, structures, fixtures and improvements located thereon shall be
referred to as the “Leased Real Property”.

          (c) As to the Owned Real Property, each of the Acquired Companies has good and indefeasible
title, free and clear of all Liens, excepting only Liens for Taxes and assessments not yet
delinquent, Liens relating to the indebtedness described in Section 4.4(a) of the Sellers’
Disclosure Schedule, or Contracts not required to be disclosed thereon because the amount thereof
does not meet the disclosure threshold for such schedule, and such other easements, restrictions
and covenants presently of record, unrecorded Liens of which the Sellers have no knowledge, and
other imperfections of title which have not, and could not be reasonably expected to, individually
or in the aggregate, materially reduce the value of the Real Property for its present use or
materially interfere with the present use of the Real Property by the Acquired Company, in each
case, taken as a whole (collectively, the “Permitted Liens”). The foregoing representation shall
be interpreted as would a special warranty of title that can be breached only if (1) a failure or
impairment in title first occurs with respect to any such Owned Real Property due to a defect or
claim arising on or before the Closing Date by, through or under the Sellers or any of the Acquired
Companies (during the time that such Acquired Companies were held, directly or indirectly, by the
Sellers), but no further, or (2) during the shorter of the (i) period of ownership of the Owned
Real Property by the applicable Acquired Company and (ii) the period of ownership of the applicable
Acquired Company, directly or indirectly, by the Sellers, a failure or impairment of title has
first occurred with respect to the Owned Real Property that remains open and uncured as of the
Closing.

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          (d) As to the Leased Real Property, each of the Acquired Companies has good and valid title to
the leasehold estate and the right to quiet enjoyment, free and clear of all Liens, except
Permitted Liens.

          (e) Except as set forth in Section 4.15(e) of the Sellers’ Disclosure Schedule, no
condemnation, eminent domain, or similar proceeding exists or is pending with respect to any Owned
Real Property, or to the Sellers’ knowledge exists or is pending with respect to any Leased Real
Property, or to the Sellers’ knowledge, is threatened, with respect to any such Real Property.

          (f) Except as set forth in Section 4.15(f) of the Sellers’ Disclosure Schedule, to
Sellers’ knowledge, each Acquired Company has obtained all permits and rights-of-ways which are
currently required to allow vehicular and pedestrian ingress and egress to and from the Real
Property.

          (g) Except this Agreement, no Acquired Company is a party to any option to purchase or sell,
right of first refusal to purchase or sell or agreement for the sale and purchase of the Owned Real
Property to any Person.

          (h) Except pursuant to Contracts disclosed on Section 4.4 of the Sellers’ Disclosure
Schedule, or Contracts not required to be disclosed thereon because the amount thereof does not
meet the disclosure threshold for such schedule, other than the Acquired Companies, there are no
parties in possession of any portion of the Owned Real Property or Leased Real Property, as
lessees, subtenants, or tenants at sufferance, or trespassers. The Real Property and pipelines
constitute all the parcels, tracts of land, buildings, fixtures and improvements that are used or
held for use primarily in connection with the Business.

          (i) To the Sellers’ knowledge, Section 4.15(i) of the Sellers’ Disclosure Schedule
sets forth (i) a description of all pipelines owned or operated by the Acquired Companies and (ii)
a list of all easements, rights of way, property use agreements, line rights, and real property
licenses and permits (including right-of-way permits from railroads and road crossing permits or
other rights-of-way permits from Governmental Entities) and all other right, title and interest of
any of the Acquired Companies in and to real property by, through and under which any pipelines are
operated and which are necessary for the operation or maintenance of such pipelines. To the
Sellers’ knowledge, (i) such material pipeline easements of the Acquired Companies are in full
force and effect, and there is no pending modification or cancellation of such easements, and (ii)
except for (A) any matters that have been settled and resolved prior to the date hereof or (B)
matters disclosed on Section 4.15(i)(B) of the Sellers’ Disclosure Schedule, no Acquired
Company has received any written notice from any third party that (1) such Acquired Company is in
material default under any material easement, right of way, property use agreement, line right,
real property license or permit, (2) there exists any easement gap affecting any material pipeline
owned or used by such Acquired Company, and (3) any such pipeline is not located within applicable
easement boundaries.

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     4.16 Intellectual Property.

          (a) Section 4.16(a) of the Sellers’ Disclosure Schedule sets forth a true and complete
list of all patents, trademarks, trade names, service marks, internet domain names and copyrights
and applications for registration of any of the foregoing, owned, used, filed by or licensed to any
of the Acquired Companies, in each case which are, individually or in the aggregate, material to
the Acquired Companies.

          (b) Except as set forth in Section 4.16(b) of the Sellers’ Disclosure Schedule, the
Acquired Companies own, free and clear of any and all Liens, or are licensed or otherwise possess
legally enforceable rights to use, without payment to any other Person, all Intellectual Property
that is used in the Business as currently conducted, except where the failure to own, be licensed
or to possess such rights has not had and could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company, and the consummation of the
transactions contemplated hereby will not conflict with, alter or impair any such Intellectual
Property in any material respect.

          (c) To the knowledge of the Sellers, (i) the conduct of the Business does not conflict with
the valid Intellectual Property rights of others and (ii) there are no conflicts with or
infringements of any of the Intellectual Property of the Acquired Companies by any other Person.
Except as set forth on Section 4.16(c) of the Sellers’ Disclosure Schedule, no other Person
has any rights in or right to use any of the Intellectual Property owned by any of the Acquired
Companies.

     4.17 Inventories. The inventories shown on the Most Recent Balance Sheet or
thereafter acquired by the Acquired Companies consist of items of a quantity and quality usable or
salable in the ordinary course of business, except for obsolete items and items below standard
quality, all of which have been written off or written down to net realizable value in the Most
Recent Balance Sheet, or will be written off or written down, as of the Closing Date, on the
accounting records of the Acquired Companies consistent with past practice. The quantities of each
item of inventory (whether raw materials or finished product) of the Acquired Companies are
reasonable under the circumstances. The value of the inventories on the Most Recent Balance Sheet
reflects the inventory valuation policy of the Company, which is consistent with its past practice.

     4.18 Accounts Receivable. Section 4.18 of the Sellers’ Disclosure Schedule
sets forth the accounts receivable as of the date of the Most Recent Balance Sheet, which schedule
also sets forth the aging of each such account receivable. Such accounts receivable arose in the
ordinary course of business of the Acquired Companies and have been collected or, to the knowledge
of the Sellers, are collectible in the book amounts thereof, less an amount not in excess of the
allowance for doubtful accounts and returns provided for in the Most Recent Balance Sheet. The
accounts receivable of the Acquired Companies arising after the Most Recent Balance Sheet Date
arose in the ordinary course of business and have been collected or, to the knowledge of the
Sellers, will be collectible in the book amounts thereof, less allowances for doubtful accounts to
be included on the accounting records of the Acquired Companies, as of the Closing Date, determined
in accordance with GAAP and consistent with past practices of the Company.

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     4.19 Other Assets.

          (a) Except as set forth in Section 4.19 of the Sellers’ Disclosure Schedule, the
Acquired Companies own, and have good and valid title to, all other material assets reflected on
the Most Recent Balance Sheet or thereafter acquired (except those sold or otherwise disposed of
since the Most Recent Balance Sheet Date in the ordinary course of business consistent with past
practice and not in violation of this Agreement), in each case free and clear of all Liens except:

          (i) such Liens as are set forth in Section 4.19 of the Sellers’ Disclosure
Schedule;

          (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or
incurred in the ordinary course of business, Liens arising under original purchase price
conditional sales contracts and equipment leases with third parties entered into in the
ordinary course of business and Liens for Taxes or assessments which are not due and payable
or which may thereafter be paid without penalty;

          (iii) Liens which secure Debt issued pursuant to agreements listed in Section
4.4(a) of the Sellers’ Disclosure Schedule; and

          (iv) other immaterial imperfections of title or encumbrances, if any.

          (b) All of the books and records of the Acquired Companies (including without limitation, the
financial records) are true, complete and accurate in all material respects and have been
maintained in accordance with generally accepted business practices.

          (c) The assets and rights of the Acquired Companies are sufficient to conduct the Business as
conducted as of the date hereof and constitute all of the material operating assets currently used
by the Acquired Companies in the Business (subject to changes after the date hereof permitted under
Section 6.1).

     4.20 Insurance.

          (a) The Acquired Companies have insurance policies in full force and effect for such amounts
as are sufficient for material compliance with all requirements of law and all Contracts to which
any Acquired Company is a party or by which it is bound. Section 4.20(a) of the Sellers’
Disclosure Schedule contains a true and complete list of all liability, property, workers’
compensation, directors’ and officers’ liability and other insurance policies in effect since
January 1, 2005 that insure the business, operations or employees of the Acquired Companies or the
assets of the Acquired Companies, whether issued to the Acquired Companies or to any other Person
for the benefit of the Acquired Companies (the “Insurance Policies”). Except for expirations or
terminations in the ordinary course, all such Insurance Policies will remain in full force and
effect with respect to periods prior to the Closing Date.

          (b) There is no material claim pending under any of the Insurance Policies as to which
coverage has been questioned, denied or disputed by the underwriters of such policies. All
premiums due and payable under all Insurance Policies have been paid, and each Acquired Company is
otherwise in compliance with the terms of such policies. Except for (i) Insurance

35

 

Policies terminated or expired prior to the date hereof and (ii) premium increases disclosed
on Section 4.20(b) of the Sellers’ Disclosure Schedule, to the Seller’s knowledge, there is
no threatened termination of, or material premium increase with respect to, any of the Insurance
Policies.

          (c) Section 4.20(c) of the Sellers’ Disclosure Schedule contains a listing of all
material open claims made or otherwise asserted by the Acquired Companies against any Insurance
Policy as of the date hereof. All material claims under the Insurance Policies have been filed in
a timely fashion.

          (d) To the knowledge of the Sellers, none of the Acquired Companies has failed to disclose any
fact to the insurance companies or failed to take any other action, the consequences of
non-disclosure or failure to take action would reasonably be expected to render any Insurance
Policy void or voidable.

     4.21 Bank Accounts. Section 4.21 of the Sellers’ Disclosure Schedule sets
forth the names and locations of all banks and other financial institutions at which any Acquired
Company maintains accounts of any nature and the names of all persons authorized to draw thereon or
make withdrawals therefrom.

     4.22 No Brokers. Except as disclosed in Section 4.22 of the Sellers’
Disclosure Schedule, the Sellers have not directly or indirectly (including through the Acquired
Companies) entered into any Contract with any Person, or taken any other action, which may result
in the obligation to pay any investment banking or finder’s fees, brokerage or agent’s commissions
or other like payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.

     4.23 Customers and Suppliers. Section 4.23(a) of the Sellers’ Disclosure
Schedule sets forth (a) a list of the ten largest customers of the Acquired Companies collectively
based on sales during the year ended December 31, 2005, showing the approximate total sales by the
Acquired Companies to each such customer during the year ended December 31, 2005, and (b) a list of
the ten largest suppliers of the Acquired Companies collectively based on purchases during the year
ended December 31, 2005, showing the approximate total purchases by the Acquired Companies from
each supplier during the year ended December 31, 2005. Except as set forth on Section
4.23(b) of the Sellers’ Disclosure Schedule, to the knowledge of the Sellers, since January 1,
2005 through the date hereof, there has not been any material adverse change in the business
relationship of the Acquired Companies with any customer or supplier named in Section
4.23(a) of the Sellers’ Disclosure Schedule.

     4.24 Limitations on Representations and Warranties.

          (a) To the Sellers’ knowledge, (i) the Sellers have heretofore made available to Alon, all
material, documentary information pertaining to the assets, properties, businesses and operations
of the Acquired Companies (including, but not limited to, data and information concerning: accounts
receivable and payable; commercial contracts or other financial commitments; real and personal
property interests belonging to the Acquired Companies; operating licenses and/or permits needed to
conduct the business of the Acquired Companies; the

36

 

personnel of the Acquired Companies and their compensation and employee benefits; and
Intellectual Property used by the Acquired Companies; and taxation matters), and (ii) the Sellers
have provided Alon with all such information that Alon has requested. TO THE SELLERS’ KNOWLEDGE,
THEY HAVE NOT KNOWINGLY PROVIDED, AND WILL NOT KNOWINGLY PROVIDE, FALSE, MISLEADING OR INCORRECT
INFORMATION TO ALON, AND HAVE NOT KNOWINGLY WITHHELD (AND WILL NOT KNOWINGLY WITHHOLD) MATERIAL
INFORMATION ABOUT THE ACQUIRED COMPANIES, BUT EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THE SELLERS HAVE MADE AND ARE MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS
OR IMPLIED, AS TO THE ACCURACY, RELIABILITY, COMPLETENESS OR DEPENDABILITY OF ANY DATA OR
INFORMATION THAT THE SELLERS HAVE PROVIDED OR WILL PROVIDE TO ALON IN CONNECTION WITH THIS
AGREEMENT.

          (b) To the Sellers’ knowledge, Alon is not in breach, as of the date hereof, of any of the
representations or warranties of Alon contained in this Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

OF ALON

     Alon represents and warrants to the Sellers, as follows:

     5.1
Existence; Good Standing; Corporate Authority.

          (a) Alon is a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware.

          (b) Alon is duly licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the character of the
properties owned or leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or in good standing could not
reasonably be expected to have a Material Adverse Effect on Alon. Alon has all requisite corporate
power and authority to own, operate and lease its properties and carry on its businesses as now
conducted. Alon is not in violation of any order or decree of any Governmental Entity, or any law,
ordinance, or regulation to which Alon or any of its properties or assets is subject, except where
such violation, individually or in the aggregate, has not and could not reasonably be expected to
have a Material Adverse Effect on Alon.

     5.2 Authorization, Validity, and Effect of Agreements. Alon has the requisite
corporate power and authority to execute and deliver this Agreement and the other Transaction
Documents to be executed by it. The consummation by Alon of the transactions contemplated herein
and therein has been duly authorized by all requisite corporate action on the part of Alon, and no
further corporate action is required to consummate the transactions contemplated hereby. This
Agreement constitutes, and the other Transaction Documents to be executed by Alon (when executed
and delivered pursuant hereto for value received) will constitute, the valid and legally binding
obligations of Alon, enforceable in accordance with their respective terms, subject to

37

 

applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or other
similar laws relating to creditors’ rights and general principles of equity, whether at equity or
at law.

     5.3 No Violation; Litigation.

          (a) Neither the execution and delivery by Alon of this Agreement or the other Transaction
Documents, nor the consummation by Alon of the transactions contemplated hereby or thereby in
accordance with the terms hereof and thereof, will:

          (i) conflict with or result in a breach of any provisions of the certificate of
incorporation or by-laws of Alon;

          (ii) violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both, would
constitute a default) under any of the terms, conditions or provisions of any material
Contract to which Alon or its Subsidiaries is a party, or by which Alon or its Subsidiaries
or any of their respective properties or assets are bound; or

          (iii) require any material consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Entity or other Person (other than under the
HSR Act) required to be obtained by Alon.

          (b) There is no action, suit or proceeding, claim, arbitration or investigation pending
against Alon or its assets or business or as to which Alon has received any written notice of
assertion, which could reasonably be expected (i) to have a Material Adverse Effect on Alon, or
(ii) to prevent or materially alter or delay the transactions contemplated by this Agreement.

     5.4 No Brokers. Neither Alon nor any of its Affiliates has entered into any Contract
with any Person, or taken any other action, which may result in the obligation to pay any
investment banking or finder’s fees, brokerage or agent’s commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.

     5.5 Funds. Alon will have at the Closing Date the funds necessary to consummate the
Stock Purchase in accordance with this Agreement.

     5.6 Investment Purpose. Alon is an “accredited investor,” as such term is defined in
Regulation D of the Securities Act, and will acquire the Shares for its own account and not with a
view to a sale or distribution thereof in violation of any securities laws and will not sell or
distribute any of the Shares in violation of any securities laws. Alon has the present intention of
holding the Shares for investment purposes.

     5.7 Access to Information.

          (a) During the course of the negotiation of this Agreement, Alon has reviewed or been afforded
the opportunity to review all information provided to it by the Sellers and has had the opportunity
to ask questions of and receive answers to its satisfaction from

38

 

representatives of the Sellers concerning the Acquired Companies, the Shares and the Options,
and to obtain any additional information reasonably requested by it.

          (b) Alon has relied solely on its own review of the Acquired Companies and the representations
of the Sellers made in Articles III and IV of this Agreement and in the Transaction
Documents and not on any other representations made by or on behalf of the Sellers or their
representatives.

          (c) Alon has expertise in evaluating and investing in private placement transactions of
securities of companies similar to the Acquired Companies and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of the
prospective investment in the Shares.

          (d) EXCEPT AS OTHERWISE EXPRESSLY STATED TO THE CONTRARY IN THIS AGREEMENT, ALON ACKNOWLEDGES
AND AGREES THAT IT SHALL AT THE CLOSING (OR, IF APPLICABLE, THE ASSET PURCHASE DATE) ACCEPT THE
PROPERTY AND ASSETS OF THE ACQUIRED COMPANIES IN AN “AS IS” AND “WHERE IS”
CONDITION WITH ALL FAULTS, SUBJECT TO THE PROVISIONS OF SECTION 6.1. IN PARTICULAR, BUT
WITHOUT LIMITATION, ALON ACKNOWLEDGES THAT EXCEPT FOR THE SELLERS’ EXPRESS REPRESENTATIONS AND
WARRANTIES IN THIS AGREEMENT AND THE TRANSACTION DOCUMENTS, THE SELLERS DO NOT MAKE AND THE
SELLERS, THEIR AFFILIATES AND AGENTS HAVE NOT MADE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO
TITLE, MERCHANTABILITY, QUALITY, VALUE, CONDITION, SAFETY, CONFORMITY OR FITNESS FOR ANY PARTICULAR
USE OR PURPOSE OF ANY ASSETS OR OTHER PROPERTIES OF THE ACQUIRED COMPANIES.

          (e) ALON ACKNOWLEDGES THAT IT IS ENGAGED IN AND EXPERIENCED IN THE BUSINESS OF OWNING AND
OPERATING REFINERIES. ALON ACKNOWLEDGES THAT, EXCEPT FOR THE SELLERS’ EXPRESS REPRESENTATIONS AND
WARRANTIES IN THIS AGREEMENT, IT IS ENTERING INTO THIS AGREEMENT AND WILL PERFORM ITS OBLIGATIONS
HEREUNDER (INCLUDING THE STOCK PURCHASE) ON THE BASIS OF ALON’S OWN INVESTIGATION, JUDGMENT AND
CONCLUSIONS OF THE VALUE OF THE ACQUIRED COMPANIES AND THE BUSINESS AND THE CONDITION OF THE
PROPERTY, ASSETS, BUSINESS AND OPERATIONS OF THE ACQUIRED COMPANIES (INCLUDING PHYSICAL AND
ENVIRONMENTAL CONDITION) AND OF ALL OTHER MATTERS RELATING TO SUCH VALUE AND SUCH PROPERTY, ASSETS,
BUSINESS AND OPERATIONS.

          (f) To the knowledge of Alon, the Sellers are not in breach, as of the date hereof, of any of
the representations or warranties of the Sellers contained in this Agreement.

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ARTICLE VI

COVENANTS

     6.1 Conduct of Business. Except (i) as expressly contemplated in this Agreement, or
(ii) with the express written approval of Alon (which approval shall not be unreasonably withheld
or delayed), during the period from the date hereof to the earlier of the termination of this
Agreement or the Closing Date, the Sellers shall cause the Acquired Companies:

          (a) to conduct their respective operations in the ordinary course, in substantially the same
manner as heretofore conducted;

          (b) to use commercially reasonable efforts to (i) preserve their respective business
organization and goodwill, (ii) keep available the services of their respective employees in the
ordinary course and (iii) maintain satisfactory relationships with their customers, suppliers and
other Persons having business relationships with them;

          (c) to confer on a regular basis with one or more representatives of Alon, including to report
material operational matters and any proposals of the Acquired Companies to engage in material
transactions, and to provide such other information as Alon may reasonably request;

          (d) not to amend the organizational documents of the Acquired Companies;

          (e) to notify Alon within three Business Days of (i) any material change in the condition
(financial or otherwise) of the business, properties, assets or liabilities of any of the Acquired
Companies, or (ii) any material litigation or investigations or hearings of any Governmental Entity
against any Acquired Company;

          (f) not to (i) issue any Capital Stock, effect any stock split or combination, reclassify its
Capital Stock or otherwise change its capitalization, (ii) grant, confer or award any option,
warrant, conversion right or other right to acquire any of its Capital Stock, (iii) increase any
compensation or benefits or enter into or amend any employment, severance, termination or similar
Contract with any of its employees, officers or directors, except for (A) ordinary increases in
compensation and benefits to employees consistent with past practice, (B) employment arrangements
with new employees that are consistent with employment arrangements for similarly situated
employees, and (C) arrangements that relate to the Employee Cash Bonuses, (iv) adopt any new
employee benefit plan or amend any existing employee benefit plan in any material respect, except
for (A) changes which may be required by applicable law or (B) plans that relate to the Employee
Cash Bonuses, or (v) increase the amount, or expand the scope, of any indemnification currently
provided for employees, officers or directors;

          (g) not to (i) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any of its Capital Stock (other than the distribution of the equity
interests in the Excluded Company to the Sellers); or (ii) directly or indirectly redeem, purchase
or otherwise acquire any of its Capital Stock or that of any of the other Acquired Companies;

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          (h) except in the ordinary course of business consistent with past practice to (i) use best
efforts to maintain the assets of the Acquired Companies in substantially the same condition
existing as of the date of this Agreement, (ii) not sell, lease or otherwise dispose of any assets,
or enter into any commitment to do so (other than entry into an agreement to sell, and consummation
of the sale, of the 1031 Assets to Alon, as contemplated herein); and (iii) not move any asset to
any location other than the Real Property;

          (i) not to (i) incur or assume any Debt or issue any Debt securities, (ii) assume, guaranty,
endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or
otherwise) for the obligations of any other Person; (iii) modify in any manner adverse to any of
the Acquired Companies any outstanding Debt of the Acquired Companies; or (iv) mortgage or pledge
any of its material assets, tangible or intangible, or create or suffer to create any Lien of any
kind in respect to such asset, except (A) the incurrence of Debt under the Revolving Credit
Agreement under subclause (i) to the extent necessary to pay the Employee Cash Bonuses, and (B) in
each case, actions in the ordinary course of business consistent with past practice;

          (j) not to materially change any of its accounting principles or practices, except as required
pursuant to GAAP or applicable law;

          (k) not to:

          (i) enter into any Contract that would be required to be listed on Section
4.4(a) of the Sellers’ Disclosure Schedule, or amend any Material Contract (provided
that (A) the Acquired Companies may enter into Contracts without such approval if such
Contracts relate to the supply of products to the Acquired Companies in the ordinary course
of business consistent with past practice or the sale or distribution of products for any
Acquired Company in the ordinary course of business, which (1) are for a term of no more
than 90 days or are cancelable by it on no more than 90 days’ notice and without liability,
penalty or premium or (2) require payments of no more than $500,000 in any twelve month
period, and (B) the Acquired Companies may enter into Contracts without such approval to the
extent necessary or advisable to permit a change in administrator of the Company’s 401(k)
plan and to modify the waiting period for eligibility under such plan);

          (ii) authorize any new capital expenditure or expenditures (except in the ordinary
course of business consistent with past practice or pursuant to Contracts listed in
Section 4.4(a) of the Sellers’ Disclosure Schedule) which, individually, is in
excess of $250,000 or, in the aggregate, are in excess of $500,000 for the Acquired
Companies, as a whole; or

          (l) not to pay, discharge or satisfy any Liabilities, other than (A) the payment, discharge or
satisfaction in the ordinary course of business of Liabilities reflected, reserved against or
disclosed in the Most Recent Balance Sheet or incurred in the ordinary course of business
thereafter consistent with past practice or (B) the repayment of the Subordinated Debt in
accordance with this Agreement;

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          (m) not to settle or compromise any material pending or threatened suit, action or claim,
except settlements or compromises in the ordinary course of business solely for monetary payments
to be paid prior to the Closing;

          (n) not to make any material Tax election (other than in a manner consistent with prior
practices of the Acquired Companies), file any Tax Return (other than Tax Returns due), settle or
compromise any material Tax Liability (other than Taxes due) or agree to an extension of a statute
of limitations with respect to any material amount of Tax (other than extensions for filing Tax
Returns), except to the extent the amount of any such Tax, settlement or compromise has been
reserved for in the Most Recent Balance Sheet; provided, Alon shall not unreasonably withhold or
delay consent as to such matters;

          (o) not to loan or advance any amount to, or sell, transfer or lease any of its assets to, or
enter into any Contract or other transaction with, or otherwise make any payments to any Seller,
the Excluded Company, or any of their respective Affiliates (other than the Acquired Companies);
except payments of salary and advancement of expenses in the ordinary course, consistent with past
practice, to Sellers, in their capacity as employees of the Acquired Companies); and

          (p) not to take any action or agree to take any action described in Sections 6.1(a)
through (o).

     During the period from the date hereof until the termination of this Agreement or the Closing
Date, the Sellers shall not exercise any right to require the Company to redeem any of the Shares.

     6.2 Further Action.

          (a) Alon and the Sellers shall promptly prepare and file Notification and Report Forms under
the HSR Act with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the
Department of Justice (the “Antitrust Division”), but in no event later than five Business Days
after the date hereof, and respond as promptly as practicable to all inquiries received from the
FTC or the Antitrust Division for additional information or documentation.

          (b) Upon the terms and subject to the conditions of this Agreement, the Sellers, on the one
hand, and Alon, on the other hand, shall use commercially reasonable efforts, and with respect to
clause (i), Alon shall use its best efforts, to take, or cause to be taken, all other actions, and
to do, or cause to be done, all other things necessary, proper or advisable (i) to consummate, and
make effective as promptly as practicable the transactions contemplated in this Agreement, (ii) to
obtain in a timely manner all waivers, consents and approvals with respect to the execution and
delivery of this Agreement and the performance of the transactions contemplated hereby, including
to obtain the HSR Approval, to obtain the release of the Bank Pledge and to obtain the consents set
forth in Section 4.4(d) of the Sellers’ Disclosure Schedule, and (iii) otherwise to satisfy
or cause to be satisfied in all material respects all conditions precedent to its obligations under
this Agreement.

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          (c) Without limiting subsections (a) and (b) of this Section 6.2, Alon shall take all
actions necessary to obtain the HSR Approval, provided however, Alon shall not be required to agree
to commit to divest, hold separate, offer for sale, abandon, limit its operation of or take similar
action with respect to any assets (tangible or intangible) or any business interest of it or any of
its Subsidiaries (including the Company after consummation of the transaction contemplated by this
Agreement) in each case existing as of the date of this Agreement in connection with or as a
condition to obtaining HSR Approval.

          (d) The Sellers shall deliver the notices and request the consents set forth on Section
4.4(d) of the Sellers’ Disclosure Schedule as soon as practicable after the date hereof, and
the parties shall pursue such consent requests in a good faith and diligent manner. The Sellers
further agree to provide Alon with detailed progress reports on such requested consents on at least
a weekly basis.

          (e) Within one Business Day after the Company’s receipt thereof, the Sellers shall deliver to
Alon true and complete copies of the consolidated balance sheet and related consolidated statements
of operations, retained earnings and cash flows for the Company and its Subsidiaries as of and for
the year ended December 31, 2005 audited by the independent public accountants of the Company with
such accountants’ unqualified reports attached thereto (the “2005 Financial Statements"). With
respect to each calendar month ending after December 31, 2005 and prior to the earlier of
termination of this Agreement or the Closing Date, the Sellers shall provide monthly financial
statements for such calendar month (the “Interim Statements") to Alon, within two Business Days
following the time such financial statements are completed.

     6.3 Access to Information; Confidentiality.

          (a) From the date hereof until the termination of this Agreement or the Closing Date, upon
reasonable notice and subject to applicable laws, the Sellers shall cause the Acquired Companies to
afford Alon and its accountants, counsel, and other representatives, during normal business hours
and subject to the Seller’s reasonable security requirements, access to all of the properties and
assets, books, Contracts, records and personnel of the Acquired Companies reasonably requested by
Alon. Alon shall, and shall cause its advisors and representatives to:

          (i) conduct its investigation in such a manner that will not unreasonably interfere
with the normal operations, customers or employee relations of the Acquired Companies, and

          (ii) treat as confidential in accordance with the terms of the Confidentiality
Agreement all such information obtained hereunder or in connection herewith and not
otherwise known to them prior to execution of the Confidentiality Agreement.

          (b) From the date hereof until the termination of this Agreement or the Closing Date, each
party shall furnish promptly to the other a copy of all filings made by such party or its
Affiliates with any Governmental Entity in connection with the transactions

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contemplated in this Agreement and all written communications received from such Governmental
Entities related thereto.

          (c) The Sellers shall, and shall cause their respective employees, accountants, counsel,
consultants, advisors, agents and Affiliates to hold, in confidence, unless compelled to disclose
by judicial, administrative or other legal process or by other requirements of law or disclosed in
a legal proceeding brought by a party hereto to enforce its rights or in the exercise of its
remedies hereunder, all proprietary and confidential documents and information of or concerning
Alon and its Affiliates, and if the Closing occurs, the Acquired Companies, and their respective
businesses and affairs, except to the extent that such information is or becomes generally
available to the public other than as a direct result of the disclosure of any such information by
a Seller or any of their respective Affiliates after the Closing Date.

          (d) Neither the Sellers nor, prior to the Closing, any of the Acquired Companies shall,
without the prior written consent of Alon, terminate, amend, modify or waive any provision of any
confidentiality or similar agreement pertaining to proprietary or confidential documents or
information of or concerning the Acquired Companies or their respective businesses to which any of
the Sellers or any Acquired Company is a party. Each of the Sellers and, prior to the Closing, the
Acquired Companies shall enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreements, including using commercially reasonable efforts to obtain
injunctions to prevent any breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court having jurisdiction over the matter.

          (e) Each party shall promptly notify the other parties orally and in writing if such party
becomes aware (unless such party knows that the other party has actual knowledge) of:

          (i) (A) the material inaccuracy at any time of any representation or warranty contained
in this Agreement of any party, (B) the material breach of any covenant or agreement under
this Agreement of any party, or (C) the inability of such party to comply with or satisfy in
any material respect any covenant, condition or agreement under this Agreement;

          (ii) any notice or other communication from any third party alleging that the consent
of such third party is or may be required in connection with the transactions contemplated
in this Agreement or the other Transaction Documents;

          (iii) any notice or other communication from any Governmental Entity in connection with
this Agreement or the transactions contemplated hereby; and

          (iv) any change that could reasonably be expected to have a Material Adverse Effect on
the Company, or could reasonably be expected to delay or impede the ability of Alon to
fulfill its obligations set forth herein.

     6.4 Publicity. The initial press release and other public communications relating to
this Agreement shall be in the form heretofore approved by the parties, and thereafter until the
Closing Date or termination of this Agreement, the Sellers and Alon shall, subject to their

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respective legal obligations (including requirements of stock exchanges and similar
Governmental Entities), consult with each other, and use reasonable efforts to agree upon the text
of any press release or other public communication, before issuing any such press release or public
communication with respect to the transactions contemplated hereby and in making any filings with
any Governmental Entity or with any national securities exchange with respect thereto.

     6.5 Expenses; Law Firms.

          (a) Except as set forth herein, all costs and expenses (including fees of attorneys,
accountants and brokers or finders) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses; provided however, Alon, on
the one hand, and the Sellers, on the other hand, shall each be responsible for one half of (i) all
filing fees in connection with the filings required by the HSR Act, (ii) all fees of the entity
providing the inventory measurement as set forth in Schedule 2.4(b), and (iii) the premium
for the Tail Policy. Notwithstanding the foregoing, if the Stock Purchase is consummated, all
legal, accounting, financial advisory, consulting, investment banking, brokers and finders fees and
expenses incurred by the Company or the Sellers relating to the negotiation, preparation and
carrying out of this Agreement and the transactions contemplated hereby, and obtaining all
authorizations, consents, orders or approvals of, or declarations or filings with, all Governmental
Entities in connection with such transactions, including fees and other expenses under the HSR Act,
for inventory measurement and the Tail Policy (the “Company Transaction Expenses”) shall be paid by
the Company prior to the Closing Date in accordance with Section 2.3(a).

          (b) Alon acknowledges that the law firms representing the Sellers and the Company in
connection with the Stock Purchase listed on Schedule 6.5 have long-standing relationships
with the Sellers, and notwithstanding any payment by the Company of any legal fees of the Sellers
or the Acquired Companies pursuant to Section 6.5(a), in the event of any dispute or
potential dispute between the parties hereto, the Sellers may desire to engage one or more of such
law firms to advise the Sellers in connection with such dispute or potential dispute or any other
matter. Accordingly, Alon hereby agrees that it shall not, and shall not permit any of the
Acquired Companies to, assert any claim that such representation of the Sellers by such law firms
in any such matter creates an impermissible conflict of interest with the interests of the Acquired
Companies (or any one of them) under the applicable rules of professional conduct. If the Closing
occurs, to the extent of any such potential conflict of interest, Alon hereby waives, on behalf of
itself, and the Acquired Companies, any such conflict, and with a full understanding of the
implications of such potential conflicts of interest, provides its informed consent to the
representation of the Sellers by any or all of such law firms in any such matters that may be
adverse to Alon or the Acquired Companies.

     6.6 Employee Matters.

          (a) Until December 31, 2007, Alon shall cause the Acquired Companies to provide the continuing
employees of the Acquired Companies employee benefits that are substantially equivalent to those
provided to such employees as of the Closing Date by the Acquired Companies. Such benefits shall
be provided though Company Benefit Plans, Alon

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benefit plans or policies, or a combination of the foregoing, as determined by Alon in its
discretion. Following the Closing, Alon shall recognize the years of service of each continuing
employee of the Acquired Companies with the Acquired Companies prior to the Closing Date for all
purposes (other than benefit accrual under a defined benefit pension plan) under the employee
benefit plans and policies of Alon; provided, that such service shall not be recognized to the
extent that such recognition would result in a duplication of benefits for the same period of
service or to the extent that such service was not recognized under the corresponding Company
Benefit Plan. To the extent that the continuing employees of the Acquired Companies become covered
by any Alon group health plan, Alon shall cause any and all pre-existing condition (or actively at
work or similar) limitations, eligibility waiting periods and evidence of insurability requirements
under such plans to be waived with respect to such continuing employees of the Acquired Companies
and their eligible dependents, to the extent satisfied under a corresponding Company Benefit Plan,
and shall provide them with credit for any co-payments, deductibles, and offsets (or similar
payments) made during the plan year including the date such employees become eligible to
participate in such Alon group health plan for the purposes of satisfying any applicable
deductible, out-of-pocket, or similar requirements under any such plan. For purposes of this
Section 6.6, “continuing employee of the Acquired Companies” means an employee of the
Acquired Companies as of the Closing Date.

          (b) Nothing contained in this Section 6.6 shall confer upon any employee of the
Acquired Companies any right to continued employment or participation in any Company Benefit Plan
at any time after the Closing Date.

          (c) If within one year after the Closing Date, the employment of any continuing employee of
the Acquired Companies is terminated by the Acquired Company employer of such continuing employee
(excluding any termination which is concurrent with the hiring of such continuing employee by
another Acquired Company or an Affiliate of such Acquired Company), for other than cause (as
defined under applicable law), the Acquired Companies shall pay such employee a lump sum, promptly
after such termination, equal to the product of (i) two weeks of such employee’s base salary
immediately prior to such termination (excluding any overtime or bonus payments) and (ii) the
number of years of continuous service of such continuing employee with the Acquired Companies. The
foregoing payments shall not apply to any continuing employee of the Acquired Companies who is
party to a Contract with one of the Acquired Companies that provides for severance benefits upon
termination of the employment of such employee or any continuing employee subject to a collective
bargaining agreement or other labor contract.

          (d) Alon shall be solely responsible for any required notice and payments under the Worker
Adjustment Retraining and Notification Act of 1988 (the “WARN Act”) and any similar state statutes,
and otherwise to comply with any such statute with respect to any “plant closing” or “mass layoff”
(as defined in the WARN Act) or group termination or similar event affecting any continuing
employees of the Acquired Companies occurring on or after the Closing Date. The Sellers shall be
solely responsible for causing the Acquired Companies to provide any required notice and payments
under the WARN Act, and any similar state statutes, and otherwise to comply with any such statute
with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group
termination or similar event affecting any employees of the Acquired Companies before the Closing
Date.

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          (e) Prior to the Closing, the Sellers shall take all actions necessary to terminate the
participation in the Company Benefit Plans, effective as of the Closing Date, of each Person that
is not an Acquired Company, including, without limitation, Signal Hill Petroleum Inc.

     6.7 Third Party Acquisition.

          (a) From and after the date of this Agreement until the earlier of the Closing or termination
of this Agreement, each of the Sellers, and their Affiliates (including the Acquired Companies) and
their respective officers, directors, trustees, employees, representatives (including, without
limitation, any investment banker, attorney or accountant) and agents shall immediately cease any
discussions or negotiations with any Persons with respect to any Third Party Acquisition, and none
of the Sellers, their Affiliates (including the Acquired Companies) nor any of their respective
officers, directors, trustees, employees, representatives (including, without limitation, any
investment banker, attorney or accountant) or agents shall, directly or indirectly, encourage,
solicit, participate in or initiate any inquiries, discussions or negotiations with or, except as
expressly required to comply with the provisions of the Agreement listed on Schedule 6.7,
provide any information or access to any Person concerning any potential Third Party Acquisition or
otherwise facilitate any effort to make a Third Party Acquisition. The Sellers shall promptly
communicate to Alon the existence or occurrence and the terms of any potential Third Party
Acquisition or contact related to any potential Third Party Acquisition that the Sellers, their
Affiliates (including the Acquired Companies) or any of their respective officers, directors,
trustees, employees, representatives or agents, receive in respect of such a proposed transaction,
and the identity of the Person from whom such proposal or contact was received.

          (b) “Third Party Acquisition” means the acquisition by a Person or group, other than Alon or
any Affiliate of Alon, in a single transaction or series of transactions, of any of the Capital
Stock or the operating or other tangible assets of any of the Acquired Companies (other than
inventory in the ordinary course of business), or any interest therein, whether by sale or other
disposition of Capital Stock, sale, lease or other disposition of assets, merger or otherwise, or
any other transaction that would interfere with the Stock Purchase; provided however, a Third Party
Acquisition shall not include the Option Purchase or the distribution of the Excluded Company to
the Sellers.

     6.8 Restrictive Covenants.

          (a) For a period of two years from the Closing Date, each of the Sellers shall not, and each
Seller shall cause each of its Affiliates under its control not to, directly or indirectly:

          (i) perform any act to encourage the following: (A) soliciting or recruiting any
employees of the Acquired Companies; (B) soliciting or encouraging any employee of the
Acquired Companies to leave the employment of the Acquired Companies; or

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          (ii) solicit or encourage any contractor or other supplier of the Acquired Companies to
terminate or adversely alter in any material respect any relationship such supplier may have
with any of the Acquired Companies.

          Notwithstanding the foregoing, nothing herein shall prohibit general solicitations by the
Sellers or their Affiliates not directed at any specific employees of the Acquired Companies,
including any newspaper advertisements or internet job postings.

          (b) The Sellers acknowledge that if they violate any of the covenants contained in Section
6.8(a) (collectively, the “Restrictive Covenants”), it will be difficult to determine the
resulting damages to Alon and, in addition to any other remedies Alon may have, Alon shall be
entitled to temporary or permanent injunctive relief without the necessity of proving actual
damages. Each Seller shall be solely liable for a breach by such Seller of the covenants contained
in this Section 6.8, and such liability shall not be joint. The non-prevailing party or
parties shall be severally liable to pay all costs, including reasonable attorneys’ fees and
expenses, that the prevailing party or parties may incur in enforcing or defending, to any extent,
any of the Restrictive Covenants.

     6.9 Directors; Indemnification.

          (a) Effective as of the Closing Date, the Sellers shall cause all directors of the Acquired
Companies to resign.

          (b) From and after the Closing, Alon shall cause the Acquired Companies to continue to honor,
with respect to all persons who served as directors and/or officers of the Acquired Companies prior
to the Closing, the provisions of their respective organizational documents relating to the
exculpation and indemnification of their respective directors and officers as such provisions are
in effect on the date hereof.

          (c) Prior to the Closing, the Sellers may, or may cause the Company to, obtain a “tail” policy
providing for coverage comparable to that provided under the Company’s director and officer
liability and employment practices insurance as in effect on the date hereof in respect of claims
made during a period ending six years after the Closing Date with respect to the current and former
directors and officers of the Company (the “Tail Policy”).

     6.10 Employee Cash Bonuses. At or prior to the Closing, the Company may pay cash
bonuses (the “Employee Cash Bonuses”) to certain employees of the Company designated by the
Sellers, in their sole discretion (the “Designated Employees"). The Sellers shall notify Alon in
writing at least one Business Day prior to the Closing Date of the aggregate amount of the Employee
Cash Bonuses and the amount to be paid to each Designated Employee, which amounts shall be
determined in the sole discretion of the Sellers.

     6.11 Termination of the Stockholder Agreement. On or before the Closing Date, the
Sellers shall terminate the Stockholder Agreement.

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     6.12 Sellers’ Representative.

          (a) The Sellers shall until at least five years after the Closing Date maintain a
representative (the “Sellers’ Representative”) for purposes of:

          (i) giving and receiving notices and communications to or from Alon (on behalf of
itself or any other Alon Indemnified Party) and/or the Escrow Agent relating to this
Agreement, the Holdback Escrow Agreement or any of the transactions and other matters
contemplated hereby or thereby (except to the extent that this Agreement or the Holdback
Escrow Agreement expressly contemplates that any such notice or communication shall be given
or received by a Seller individually);

          (ii) authorizing deliveries to Alon of cash out of the Holdback Amount in satisfaction
of claims asserted by Alon (on behalf of itself or any other Alon Indemnified Party,
including by not objecting to such claims) for which the Sellers are jointly liable;

          (iii) objecting to such claims pursuant to Article VII;

          (iv) consenting or agreeing to, negotiating, entering into settlements and compromises
of, and prosecuting and defending litigation, arbitration or other proceedings with respect
to, such claims;

          (v) asserting, negotiating, entering into settlements and compromises of, and
prosecuting and defending litigation, arbitration or other proceedings with respect to, any
other claim by any Alon Indemnified Party against the Sellers for which they are jointly
liable, in each case relating to this Agreement, the Holdback Escrow Agreement or the
transactions contemplated hereby or thereby; and

          (vi) taking all actions necessary or appropriate in the judgment of the Sellers’
Representative for the accomplishment of the foregoing.

          No Seller will have any right to receive any such notice or communication or take any of the
foregoing actions individually.

          (b) Within 10 Business Days after the date hereof the Sellers shall appoint the initial
Sellers’ Representative, and notify Alon in writing as to the identity of such person. The Sellers
(or their successors), may elect replacements to the Sellers’ Representative by the affirmative
vote of at least three of the four Sellers, provided that Alon is notified in writing thereof
(including written agreement by such replacement to serve as the Sellers’ Representative as set
forth herein). Each of the Sellers acknowledge that actions taken, consents given and
representations made by the Sellers’ Representative on behalf of the Sellers pursuant hereto shall
be binding upon the Sellers. This appointment and grant of power and authority by each Seller is
coupled with an interest and is irrevocable and shall not be terminated by any act of the Seller or
by operation of law, whether by the death or incapacity of the Seller or by the occurrence of any
other event. The Sellers’ Representative is authorized by the Sellers to take any action on behalf
of the Sellers to facilitate or administer the transactions contemplated hereby, including without
limitation, amending this Agreement, and executing such other documents or instruments as the
Sellers’ Representative deems necessary or appropriate.

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     6.13 Release. In consideration of the payments of the Purchase Price by Alon to the
Sellers, but subject to Section 6.9, each Seller hereby gives the following general release
effective as of the Closing Date.

          (a) Each Seller on behalf of himself or itself and his or its agents (including its trustees,
if applicable), successors and assigns, hereby irrevocably and unconditionally releases, acquits
and forever discharges each of Alon, the Acquired Companies, and their respective partners,
stockholders, members, directors, officers and agents, and respective successors and assigns
(collectively, the “Released Parties”), to the extent not prohibited by applicable law, from any
and all charges, complaints, claims, obligations, promises, agreements, controversies, damages,
causes of action, suits, demands, remedies, costs, losses, debts, expenses and fees, of every type,
kind, nature, description or character, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, including those arising out of or in connection with (i) the Seller’s
employment with any of the Acquired Companies, if any, (ii) any equity or other interests the
Seller may have or claim to have in the Acquired Companies, and (iii) the assets, properties,
business, operations and Liabilities of the Excluded Company, whether before, on or after the
Closing Date, or the existence of Hazardous Materials in or on soils, sediments, surface water or
groundwater at, on, under or from such assets and properties, in each case arising from events,
occurrences or circumstance prior to the Closing (the “Claims”). Each Seller represents that he or
it has not heretofore assigned or transferred or purported to have assigned or transferred to any
Person any Claims released, acquitted and forever discharged herein. This general release shall
not affect any rights that the Sellers may have which arise solely under this Agreement, including
payment of the Purchase Price, or that arise after the Closing Date.

          (b) Each Seller acknowledges and agrees that the releases made herein constitute final and
complete releases of the Released Parties with respect to all Claims. Each Seller expressly
acknowledges and agrees that this general release is intended to include in its effect, without
limitation, all Claims which Seller does not know or suspect to exist in his or its favor at the
time hereof, and this general release contemplates the extinguishment of any and all such Claims.
In this regard, each Seller expressly waives the provisions of Section 1542 of the California Civil
Code, which states:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Furthermore, each Seller hereby expressly waives and relinquishes any rights and benefits he or it
may have under other statutes or common law principles of similar effect. Each Seller understands
that the facts under which he or it gives this full and complete release and discharge of the
Released Parties may hereafter prove to be different than now known or believed by such Seller and
such Seller hereby accepts and assumes the risk thereof and agrees that his or its full and
complete release and discharge of the Released Parties shall remain effective in all respects and
not be subject to termination, rescission or modification by reason of any such difference in
facts.

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     6.14 Distribution of Excluded Company. Subject to compliance of Alon with its
obligations in Section 6.19, on or before the Closing Date, the Sellers shall cause all of the
equity interests in the Excluded Company to be transferred to the Sellers in their Pro Rata Portion
as a distribution in partial redemption of the stock of the Company.

     6.15 Subordinated Debt. On or before the Closing Date, the Sellers shall cause the
Company to repay to the Sellers the principal amount of the Subordinated Debt. For the avoidance
of doubt, the net effect of such repayment shall not result in any adjustment to the Purchase
Price.

     6.16 Holdback Escrow Agreement. At or prior to the Closing, Alon and the Sellers
shall, and shall use commercially reasonable efforts to cause the Escrow Agent to, execute the
Holdback Escrow Agreement.

     6.17 Casualty; Condemnation. In the event that, after execution of this Agreement but
prior to the Closing Date, any material asset of the Acquired Companies is subject to (a) loss,
destruction or damage (a “Casualty”), or (b) condemnation or partial condemnation by a Governmental
Entity (a “Condemnation”), all proceeds from any insurance claims, condemnation awards,
compensation or other reimbursements relating to such Casualty or Condemnation (i) received by any
Seller or any Affiliate of a Seller, whether before, on or after the Closing Date, shall be
promptly paid over to the Company, or (ii) received by the Company whether before, on or after the
Closing Date, shall be retained by the Company (and may, for the avoidance of doubt, at the
Company’s sole option, be used to repair any such loss, destruction or damage). Any party
receiving a notice of Casualty or Condemnation shall notify all other parties to this Agreement in
accordance with Section 11.3.

     6.18 Title Commitments. Prior to the Closing, Alon may in its sole discretion obtain
a title commitment (the “Title Commitment”) for one or more ALTA title insurance policies (the
"Title Policies”) to be issued by a title company selected by Alon (the “Title Company”) and a
survey (the “Survey”) with respect to each parcel of Owned Real Property and Leased Real Property.
Each Title Commitment shall list as exceptions all matters that may affect title to such Owned Real
Property, including, without limitation, all easements, covenants, restrictions, Liens,
encumbrances, tenancies and other exceptions to title affecting title to the applicable parcel of
Real Property (collectively, the “Exceptions”) and shall include copies of all instruments creating
such Exceptions. Alon may following its review of any Title Commitment and no more than ten days
after receipt of the Title Commitment, provide the Acquired Companies with written notice of
objection to any Exceptions (other than the Permitted Liens, except Permitted Liens which are
unrecorded Liens) that it claims constitutes a title or survey defect that first occurred during
the period such Owned Real Property was owned by the Acquired Companies, or if a shorter period,
during the period the applicable Acquired Company was owned, directly or indirectly, by the Sellers
(the “Title Objections”). The Acquired Companies shall use commercially reasonable efforts to cure
or remove such Title Objections to Alon’s reasonable satisfaction prior to Closing; provided
however, so long as the Acquired Companies have used commercially reasonable efforts to cure or
remove such Title Objections, the cure or removal of such Title Objections shall not be a condition
of Alon to close the transactions contemplated hereby. Sellers and the Acquired Companies agree to
reasonably cooperate with Alon in executing any documents reasonably requested by the Title Company
which may be necessary to

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issue the Title Policies, including providing any affidavit reasonably requested by the Title
Company or Alon to evidence the payment or satisfaction of any Liens, to evidence the payment of
any Taxes affecting the Owned Real Property, or to evidence the satisfaction of any other matter
which Alon may be required to establish in order to obtain the Title Policies or any endorsement
thereto (other than in each case, Permitted Liens, except Permitted Liens which are unrecorded
Liens, if satisfied). Alon shall pay the premium for the Title Policies, fees for title searches
and costs of any endorsements or deletions to the Title Policies. In addition, Alon shall pay for
the costs of Surveys, if any, that Alon elects to obtain with respect to the Real Property or any
portion thereof.

     6.19 Bank Facilities.

          (a) At the Closing, Alon will pay to, or make available to the Company for payment to, the
lenders under the Term Loan Agreement an amount sufficient to repay the principal and accrued but
unpaid interest outstanding thereunder as of the Closing Date, together with all Prepayment
Penalties and other amounts due to such lenders in connection with such repayment. The Sellers
will cause the Company to apply all funds made available to it pursuant to the immediately
preceding sentence to the payments to the lenders under the Term Loan Agreement in the manner
contemplated by the immediately preceding sentence.

          (b) The Sellers and the Acquired Companies shall comply with all reasonable requests of Alon
to assist Alon in its efforts to (i) cause the Revolving Credit Agreement, and the ability of the
Company to effect borrowings thereunder and under the credit facilities provided for therein, to
remain in full force and effect immediately after and unaffected by the Closing (subject to Alon
pledging the Shares as security for the Acquired Companies’ obligations thereunder if and to the
extent requested by the lenders thereunder) or (ii) cause all Liens securing indebtedness and other
amounts due under the Revolving Credit Agreement to be released effective as of the Closing
(subject to Alon’s fulfillment of its obligations under the immediately succeeding sentence). If,
as of five Business Days prior to the Closing, the parties have not received the consent of the
lenders under the Revolving Credit Agreement to, as of the Closing, (i) keep the Revolving Credit
Facility in full force and effect after the Closing, (ii) release all existing guarantors,
sureties, and indemnitors (other than the Acquired Companies) of or under the Revolving Credit
Agreement, and any related agreements executed in connection with the Revolving Credit Agreement,
from their respective obligations, and (iii) fully reconvey the Upper Bluff Property from any
recorded deed of trust encumbering the Upper Bluff Property granted in connection with the Term
Loan Agreement, then Alon, at the Closing, shall pay to, or make available to the Company for
payment to, the lenders under the Revolving Credit Agreement an amount sufficient to repay the
principal and accrued but unpaid interest outstanding thereunder as of the Closing Date, together
with all Prepayment Penalties and other amounts due to such lenders in connection with such
repayment.

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ARTICLE VII

SURVIVAL; INDEMNIFICATION

     7.1 Survival of Representations and Warranties; Effect of Materiality Qualifiers.

          (a) The representations and warranties made in this Agreement shall survive the Closing as
follows:

          (i) the representations and warranties in Sections 3.1, 3.2,
4.1(a), 4.2, 4.3(a) and (c), 4.15(c), 5.1(a)
and 5.2 shall survive the Closing indefinitely;

          (ii) the representations and warranties in Sections 4.9 and 4.10 shall
survive until 90 days after the applicable statute of limitations (subject, in the case of
Section 4.9, to the covenants of Alon in Section 8.2(c) regarding granting
of extensions of any statute of limitations and its covenant to timely file);

          (iii) the representations and warranties in Sections 4.12, 4.22 and
5.4 shall survive the closing and will not terminate until the third anniversary of
the Closing Date; and

          (iv) all other representations and warranties in this Agreement shall survive the
Closing and will not terminate until the first anniversary of the Closing Date (the “First
Holdback Termination Date”);

provided, however, that if a written notice of a claim under Section 7.2(a)(i) or
7.2(b)(i) has been given pursuant to Section 7.4 prior to the expiration of the
applicable survival period, then the party giving such notice shall continue to have the right to
be indemnified with respect to the matter or matters to which such claim relates until such claim
has been finally resolved.

          (b) The covenants and agreements of the parties hereto contained in this Agreement shall,
subject to the express terms thereof, survive the Closing indefinitely (subject to the expiration
of the statute of limitations, or termination of rights under laches or other equitable bar to the
matters covered thereby).

          (c) Subject to Section 7.3(a) and (b), for purposes of this Article
VII, in determining (i) whether any representation or warranty in this Agreement was true and
correct as of any particular date and (ii) the amount of any Damages in respect of the failure of
any such representation or warranty to be true and correct as of any particular date, any
qualification or limitation as to materiality (whether by reference to Material Adverse Effect or
otherwise) contained in such representation or warranty shall be disregarded.

     7.2 Indemnification.

          (a) Each of the Sellers shall, jointly and severally, indemnify and hold harmless Alon, its
Affiliates (including the Acquired Companies following the Closing) and each of their respective
officers, directors, employees, agents, successors and assigns (the “Alon Indemnified Parties”)
from any and all costs, expenses, losses, Liabilities, damages, amounts paid in settlement, claims,
interests, awards, judgments, fines, diminution of value and penalties

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(including reasonable legal, accounting and consulting fees and expenses and any other
reasonable out-of-pocket expenses) actually suffered or incurred by them (including in connection
with any action, suit or proceeding brought or otherwise initiated by any of them) (collectively
"Damages”), arising out of or resulting from:

               (i) any failure of any representation or warranty made by the Sellers in this Agreement or any
of the other Transaction Documents to be true and correct as of the Closing Date; provided however,
that each Seller shall be solely liable for a breach by such Seller of the representations and
warranties of such Seller in Article III, and such liability shall not be joint;

               (ii) any breach of any covenant of the Sellers contained in this Agreement required to be
performed on or prior to the Closing;

               (iii) any breach of any covenant of the Sellers contained in this Agreement, by its terms,
required to be performed after the Closing; provided however, that each Seller shall be solely
liable for a breach by such Seller of the covenants contained in Section 6.8, and such
liability shall not be joint;

               (iv) the Employee Cash Bonuses or the Company Transaction Expenses; and

               (v) the assets, properties, business, operations and Liabilities of the Excluded Company,
whether before, on or after the Closing Date, or the existence of Hazardous Materials in or on
soils, sediments, surface water or groundwater at, on, under or from such assets and properties, in
each case arising from events, occurrences or circumstances prior to the Closing.

          (b) Alon shall indemnify and hold harmless the Sellers and their Affiliates and each of their
respective officers, directors, employees, agents, successors and assigns (the “Seller Indemnified
Parties”) from any and all Damages arising out of or resulting from:

               (i) any failure of any representation or warranty made by Alon in this Agreement or any of the
other Transaction Documents to be true and correct as of the Closing Date;

               (ii) any breach of any covenant of Alon contained in this Agreement; and

               (iii) the conduct of the business and operations of the Acquired Companies after the Closing
Date.

     7.3 Other Limitations.

          (a) Except for claims based on fraud or intentional misrepresentations by the Sellers and
claims relating to the matters arising under Section 3.1, 3.2, 4.1(a),
4.2 or 4.3(a) and (c) to which the thresholds described in this Section
7.3(a) shall be inapplicable, the Sellers shall have no liability (for indemnification or
otherwise) with respect to (i) any individual claim based

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on an occurrence, event or circumstance relating to the matters described in Section
7.2(a)(i), unless the Damages with respect to such claim exceed $85,000, or (ii) the matters
described in Section 7.2(a)(i) until the total of all Damages with respect to such matters
exceeds $2,000,000, and then only for the amount by which such Damages exceed $2,000,000 (and for
such purpose, no claims excluded under clause (i) shall be included in determining if such
aggregated Damages have been met).

          (b) Except for claims based on fraud or intentional misrepresentations by Alon and claims
relating to the matters arising under Section 5.1(a) or 5.2, Alon shall have no
liability (for indemnification or otherwise) with respect to (i) any individual claim based on an
occurrence, event or circumstance relating to the matters described in Section 7.2(b)(i),
unless the Damages with respect to such claim exceed $85,000, or (ii) the matters described in
Section 7.2(b)(i) until the total of all Damages with respect to such matters exceeds
$2,000,000, and then only for the amount by which such Damages exceed $2,000,000 (and for such
purpose, no claims excluded under clause (i) shall be included in determining if such aggregated
Damages have been met).

          (c) In no event will the Sellers’ liability (for indemnification or otherwise) with respect to
the matters in Section 7.2(a)(i) exceed, in the aggregate, $40,000,000, provided however,
(i) the Sellers’ liability for claims or causes of action arising from fraud or intentional
misrepresentation by the Sellers or arising from the representations and warranties contained in
Sections 3.1, 3.2, 4.1(a), 4.2 and 4.3(a) and (c)
shall not be limited to $40,000,000 (collectively, with fraud and intentional misrepresentation,
the “Excluded Claims”); provided that with respect to the Excluded Claims, in no event shall the
aggregate liability of the Sellers for Damages relating to the Excluded Claims exceed the Purchase
Price. Notwithstanding the foregoing, if the Alon Indemnified Parties are entitled to recover any
Damages relating to claims or causes of action arising from the Excluded Claims or the matters set
forth in Sections 7.2(a)(ii), (iii), (iv) or (v), the Alon
Indemnified Parties shall first satisfy such claims for indemnification from the Holdback Amount,
and if the Holdback Amount is depleted and shall be insufficient to pay the full amount of such
Damages, then such amounts shall be paid by the Sellers.

          (d) Only the Sellers’ Representative, on behalf of the Seller Indemnified Parties, may assert
a claim for indemnification against Alon pursuant to this Article VII.

          (e) The amount of any Damages subject to indemnification hereunder shall be reduced by any
insurance proceeds actually received by the indemnified party from an unrelated third party on
account of such Damages prior to the time payment by the indemnifying party is due and payable
under this Agreement. In the event that the indemnifying party pays to or on behalf of an
indemnified party any amount in respect of Damages subject to indemnification under this
Article VII prior to the indemnified party’s receipt, directly or indirectly, of any
insurance proceeds on account of such Damages from an unrelated third party which duplicate, in
whole or in part, the payment made by the indemnifying party to or on behalf of the indemnified
party, the indemnified party shall remit to the indemnifying party an amount equal to the amount of
the insurance proceeds actually received by the indemnified party on account of such Damages which
duplicate, in whole or in part, the payment made by the indemnifying party to or on behalf of the
indemnified party.

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          (f) The amount of any Damages subject to indemnification hereunder shall be reduced by the
amount of any net Tax benefit actually realized by such Person after the Closing Date on account of
such Damages prior to the time payment by the indemnifying party is due and payable under this
Agreement. In the event that the indemnifying party pays to or on behalf of an indemnified party
any amount in respect of Damages subject to indemnification under this Article VII and,
subsequent to such payment the indemnified party actually realizes a net Tax benefit on account of
such Damages, the indemnified party shall remit to the indemnifying party an amount equal to the
amount of such net Tax benefit actually realized on account of such Damages.

          (g) Notwithstanding anything contained herein to the contrary, the Sellers shall have no
liability hereunder for any Damages to the extent specific reserves for such Damages were reflected
on the Closing Date Financial Statements and had the effect of reducing the Closing Date Adjusted
Book Value.

          (h) If Alon commences any legal proceedings seeking indemnification hereunder, it shall use
commercially reasonable efforts (for a period of 30 days) to serve, and join in such action, all of
the Sellers potentially liable therefor. Notwithstanding the foregoing, except as expressly set
forth herein, each of the Sellers shall be jointly and severally liable to the Alon Indemnified
Parties hereunder for 100% of the Damages to which the Alon Indemnified Parties are entitled under
this Agreement. Nothing herein shall effect the rights of such Sellers to contribution from the
other Sellers.

          (i) Except for matters disclosed in the Sellers’ Disclosure Schedule, to the extent that such
matters constitute exceptions to the Sellers’ representations and warranties, and provided, in the
case of Alon, it is in material compliance with its representations and warranties in Section
5.7(f) and its covenants in Section 6.3(e), and in the case of the Sellers, they are in
material compliance with their respective representations and warranties in Section 4.24(b)
and their covenants in Section 6.3(e), no right or remedy of any Person shall be limited in
any respect by any investigation made by such Person, the knowledge of such Person of any breach of
any provision of this Agreement or any inaccuracy of any representation, warranty or certificate
contained herein or delivered pursuant hereto, or the decision of such Person to consummate the
transactions contemplated by this Agreement.

     7.4 Procedures Relating to Indemnification Involving Third Party Claims.

          (a) In order for an indemnified party to be entitled to any indemnification provided for under
this Agreement in respect of, arising out of or involving a claim or demand made by any Person not
a party to this Agreement against the indemnified party (a “Third Party Claim”), such indemnified
party must promptly notify the indemnifying party in writing of the Third Party Claim after receipt
by such indemnified party of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided hereunder except to
the extent the indemnifying party shall have been actually prejudiced as a result of such failure.
The notice of claim shall describe in reasonable detail the facts known to the indemnified party
giving rise to such indemnification claim, and the amount or good faith estimate of the amount
arising therefrom. Thereafter, the indemnified party shall promptly deliver to the indemnifying
party after the indemnified party’s receipt thereof,

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copies of all notices and documents (including court papers) received by the indemnified party
relating to the Third Party Claim. In the event the provisions of Section 8.4 are
inconsistent with any provision of this Article VII, the provisions of Section 8.4
shall control with respect to the contest of Tax matters. In the event that more than one Seller
is an indemnifying party hereunder, the indemnified party may provide the notices and other
communications required pursuant to this Section 7.5 solely to the Sellers’ Representative.

          (b) The Sellers’ Representative, on behalf of the Sellers (if the indemnified party is an Alon
Indemnified Party), or Alon (if the indemnified party is a Seller Indemnified Party), as
applicable, shall be entitled to assume and control the defense of such Third Party Claim at its
expense (or, in the care of the Sellers’ Representative, at the expense of the Sellers) and through
counsel of its choice if it gives written notice of its intention to do so to the indemnified party
within 30 calendar days of the receipt of the notice of claim from the indemnified party in which
case the indemnifying party shall not be liable to the indemnified party for any fees of counsel or
any other expenses with respect to the defense of such Third Party Claim; provided, however, that
if the indemnified party reasonably determines based upon written advice of counsel that a conflict
of interest exists that would make it inappropriate for the same counsel to represent both the
indemnified party and the indemnifying party, then the indemnified party shall be entitled to
retain its own counsel at the expense of the indemnifying party; provided, further, that the
indemnifying party shall not in such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel in connection with any Third Party Claim in the same
jurisdiction, in addition to one firm of local counsel. In the event that the Sellers’
Representative or Alon exercises the right to undertake any such defense against such Third Party
Claim as provided above, the indemnified party shall cooperate with the Sellers’ Representative or
Alon, as applicable, in such defense and make available to the Sellers’ Representative or Alon, as
applicable, at the indemnifying party’s expense, all witnesses, pertinent records, materials and
information in the indemnified party’s possession or under the indemnified party’s control relating
thereto as is reasonably requested by or on behalf of the indemnifying party. Similarly, in the
event the indemnified party is, directly or indirectly, conducting the defense against any such
Third Party Claim, the indemnifying party shall cooperate with the indemnified party in such
defense and make available to the indemnified party, at the indemnifying party’s expense, all such
witnesses, records, materials and information in the indemnifying party’s possession or under the
indemnifying party’s control relating thereto as is reasonably requested by the indemnified party.

          (c) No compromise or settlement of such Third Party Claim may be effected by either the
indemnified party, on the one hand, or the Sellers’ Representative (if the indemnified party is an
Alon Indemnified Party) or Alon (if the indemnified party is a Seller Indemnified Party), on the
other hand, without the consent of the other (which shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing, the Sellers’ Representative (if the indemnified party is an Alon
Indemnified Party) or Alon (if the indemnified party is a Seller Indemnified Party) may pay, settle
or compromise a Third Party Claim without the written consent of the indemnified party, so long as
such settlement includes (i) an unconditional release of the indemnified party from all Liability
in respect of such Third Party Claim, (ii) does not subject the indemnified party to any injunctive
relief or other equitable remedy, and (iii) does not include a statement or admission of fault,
culpability or failure to act by or on behalf of any indemnified party.

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     7.5 Other Claims. A claim for indemnification for any matter not involving a Third
Party Claim may be asserted by written notice to the Sellers’ Representative (if the indemnified
party is an Alon Indemnified Party) or to Alon (if the indemnified party is a Seller Indemnified
Party), as applicable, which notice of claim shall describe in reasonable detail the facts known to
the indemnified party giving rise to such indemnification claim, and the amount or good faith
estimate of the amounts thereof. Such claims shall be paid promptly after receipt of such notice,
unless such claim is disputed, in which case it shall be promptly paid upon resolution of such
dispute, if any payment is then due.

     7.6 Mitigation of Damages.

          (a) Alon and the Sellers shall cooperate with each other with respect to resolving any claim
or liability with respect to which one party is obligated to indemnify the other party hereunder,
including by making commercially reasonable efforts to mitigate or resolve any such claim or
liability. In the event that Alon or the Sellers shall fail to make commercially reasonably
efforts to mitigate or resolve any claim or liability, which efforts are proposed by the other
party, then notwithstanding anything else to the contrary contained herein, the other party shall
not be required to indemnify any Person for any Damages to the extent the same could reasonably be
expected to have been avoided if Alon or the Sellers, as the case may be, had made such efforts
following such proposal.

          (b) If any Alon Indemnified Party requests any payment from the Sellers in respect of any
Damages pursuant to Section 7.2(a) and the Acquired Companies or the Alon Indemnified Party
could have recovered all or a part of such Damages from a third party (a “Potential Contributor”)
based on the underlying claim asserted against the Sellers, the Alon Indemnified Party shall
assign, on a non-recourse basis and without any representation or warranty, such of its rights to
proceed against the Potential Contributor as are necessary to permit the Sellers to recover from
the Potential Contributor any amount paid by the Sellers to the Alon Indemnified Parties.

     7.7 Sole and Exclusive Remedy. Should the Closing occur, except as set forth in the
Confidentiality Agreement and Section 6.8(b), (i) Alon’s sole and exclusive remedies for
any breach of the representations, warranties or covenants of the Sellers under this Agreement and
any other Transaction Documents (other than claims of or causes of action arising from fraud or
intentional misrepresentation by the Sellers), shall be the remedies provided in this Article
VII and Article VIII, and Alon hereby waives, from and after the Closing, any and all
other remedies (other than claims of or causes of actions arising from fraud or intentional
misrepresentation by the Sellers) which may be available at law or equity for any breach or alleged
breach of the representations, warranties and covenants of the Sellers hereunder, and (ii) the
Sellers’ sole and exclusive remedies for any breach of the representations, warranties or covenants
of Alon under this Agreement and any other Transaction Documents (other than claims of or causes of
action arising from fraud or intentional misrepresentation by Alon), shall be the remedies provided
in this Article VII and Article VIII, and each of the Sellers hereby waives, from
and after the Closing, any and all other remedies (other than claims of or causes of actions
arising from fraud or intentional misrepresentation by Alon) which may be available at law or
equity for any breach or alleged breach of the representations, warranties and covenants of Alon
hereunder. Notwithstanding the foregoing, nothing herein will limit the right of any party to seek
injunctive

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or other equitable relief for any breach or alleged or threatened breach of any covenant in
this Agreement or any other Transaction Document.

ARTICLE VIII

TAX MATTERS

     8.1 Indemnification Obligations With Respect to Taxes.

          (a) The Sellers shall be responsible for, and shall indemnify, defend and hold harmless Alon
and the Acquired Companies from and against:

          (i) all Taxes of the Acquired Companies due with respect to periods ending on or prior
to the Closing Date including, all Taxes of the Acquired Companies that are due with respect
to periods (“Straddle Periods”) that include but do not end on the Closing Date to the
extent attributable to the portion of the Straddle Period ending on the Closing Date;

          (ii) all losses resulting from any inaccuracy in or breach of the representations and
warranties with respect to Tax matters that are contained in Section 4.9 or in this
Article VIII and any covenants contained in this Agreement with respect to Tax
matters (without giving effect to any supplement to the Sellers’ Disclosure Schedule
delivered after the date hereof or any materiality qualifier), or contained in any
certificate or other Transaction Document delivered pursuant hereto; and

          (iii) all losses imposed on or sustained by Alon or its Affiliates (including the
Acquired Companies after the Closing Date), directly or indirectly, by reason of or in
connection with the foregoing amounts.

          Notwithstanding the foregoing, the Sellers (i) shall only be liable for such amounts to the
extent that such amounts are in excess of the amounts, if any, specifically reserved for such
amounts (excluding any reserves for deferred Taxes established to reflect timing differences
between book and Tax income) on the Closing Date Balance Sheet and (ii) shall in no event have any
liability to Alon or any obligation to indemnify Alon for any Tax liability to the extent resulting
from or related to the transactions contemplated by Section 2.3(d).

          (b) Alon shall be responsible for, and shall indemnify, defend and hold harmless the Sellers
from and against:

          (i) all Taxes of the Acquired Companies that are due with respect to periods commencing
after the Closing Date;

          (ii) all Taxes of the Acquired Companies that are due with respect to Straddle Periods
to the extent attributable to the portion of the Straddle Period commencing on the day
following the Closing Date;

          (iii) all losses resulting from any breach of any covenants of Alon and Alon contained
in this Agreement with respect to tax matters or contained in any certificate or other
Transaction Document delivered by Alon pursuant hereto;

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          (iv) Taxes of the Acquired Companies that are due with respect to the transactions
contemplated by Section 2.3(d); and

          (v) all losses imposed on or sustained by the Sellers or their Affiliates, directly or
indirectly, by reason or in connection with the foregoing amounts.

          (c) For purposes of this Article VIII, whenever it is necessary to determine the
liability for Taxes of the Acquired Companies for a Straddle Period, the determination of the Taxes
for the portion of the Straddle Period ending on and including, and the portion of the Straddle
Period beginning after, the Closing Date shall be determined by assuming that the Straddle Period
consisted of two taxable years or periods, one of which ended at the close of the Closing Date and
the other of which began at the beginning of the day following the Closing Date, and items of
income, gain, deduction, loss or credit, and state and local apportionment factors of the Acquired
Companies for the Straddle Period shall be allocated between such two taxable years or periods on a
“closing of the books basis” by assuming that the books of the Acquired Companies were closed at
the close of business on the Closing Date; provided however, (i) exemptions, allowances or
deductions that are calculated on an annual basis, such as the deduction for depreciation; and (ii)
periodic taxes, such as real and personal property taxes, shall be apportioned ratably between such
periods on a daily basis; provided further however, except with respect to any deduction for
Employee Cash Bonuses and the Company Transaction Expenses (which shall be allocated to the
pre-Closing Straddle Period), Alon and Sellers agree to report all transactions not in the ordinary
course of business occurring on the Closing Date after Alon’s purchase of the Shares on Alon’s
Federal income tax return to the extent permitted by Treasury Regulation Section
1.1502-76(b)(1)(ii)(B). Notwithstanding anything to the contrary in this Section 8.1, any
item of income, gain, deduction, loss or credit with respect to the transactions contemplated by
Section 6.14 shall be allocated to the pre-Closing Straddle Period and any items of income,
gains, deduction, loss or credit with respect to the transaction contemplated by Section
2.3(d) shall be allocated to the post-Closing Straddle Period.

          (d) Notwithstanding anything to the contrary in this Agreement, the obligations of the Sellers
and Alon under this Article VIII shall be unconditional and absolute, and shall not be
subject to a deductible, threshold, or similar concept, but the representations of the Sellers set
forth in Section 4.9 shall be subject to the $40,000,000 cap in Section 7.3(c) and
such representations shall remain in effect until 90 days after the expiration of the applicable
statute of limitations as set forth in Section 7.1.

     8.2 Tax Returns.

          (a) Alon shall prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Acquired Companies that are filed after the Closing Date.

          (b) All Tax Returns that are to be prepared and filed by Alon pursuant to the preceding
paragraph and that relate to Taxes for which the Sellers are liable under this Article VIII
(including Straddle Period Tax Returns) shall be submitted to the Sellers not later than 15 days
prior to the due date for filing of such Tax Returns, taking into account applicable extensions (or
if such due date is within 45 days following the Closing Date, as promptly as practicable following
the Closing Date). The Sellers shall have the right to review such Tax

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Returns and to review all work papers and procedures used to prepare any such Tax Return. If
the Sellers’ Representative, within 10 days after delivery of any such Tax Return, notifies Alon in
writing that it objects to any of the items in such Tax Return, the parties shall attempt in good
faith to resolve the dispute and, if they are unable to do so, the disputed items shall be resolved
(within a reasonable time, taking into account the deadline for filing such Tax Return) by an
internationally recognized independent accounting firm chosen by both Alon and the Sellers. Upon
resolution of all such items, the relevant Tax Return shall be filed on that basis. The costs,
fees and expenses of such accounting firm shall be borne equally by Alon and the Sellers.

          (c) Alon shall not (and shall not cause or permit the Acquired Companies to) amend, refile or
otherwise modify (or grant an extension of any statute of limitation with respect to) any Tax
Return relating in whole or in part to the Acquired Companies with respect to any taxable year or
period ending on or before the Closing Date or with respect to any Straddle Period without the
prior written consent of the Sellers’ Representative, which consent may not be unreasonably
withheld or delayed. The Sellers shall not amend, refile, or otherwise modify any such Tax Return
if such action could have an adverse affect on the liability of the Acquired Companies, without the
prior written consent of Alon, which consent may not be unreasonably withheld or delayed.

          (d) All sales, use, transfer and other similar Taxes, including any stock transfer stamp Taxes
resulting from the sale of the Shares, shall be borne jointly and severally by the Sellers.

     8.3 Contest Provisions.

          (a) In the event (i) any Seller or their Affiliates or (ii) Alon or its Affiliates receive
notice of any pending or threatened Tax audits or assessments or other disputes concerning Taxes
with respect to which the other party may incur liability under this Article VIII, the
party in receipt of such notice shall promptly notify the other party of such matter in writing,
provided that failure to comply with this provision shall not affect a party’s right to
indemnification hereunder unless such failure materially adversely affects the party’s ability to
challenge such Tax audits or assessments.

          (b) The Sellers shall have the sole right to represent the interests of the Acquired Companies
in any Tax audit or administrative or court proceeding relating to any Tax for any taxable period
ending on or before the Closing Date, and to employ counsel of their choice at their expense.
Notwithstanding the foregoing, the Sellers shall not be entitled to settle, either administratively
or after the commencement of litigation, any claim for Taxes with respect to any Tax Return of any
of the Acquired Companies which would adversely affect the liability for Taxes of Alon or the
Acquired Companies for any period after the Closing Date to any extent (including, but not limited
to, the imposition of income Tax deficiencies, the reduction of asset basis or cost adjustments,
the lengthening of any amortization or depreciation periods, the denial of amortization or
depreciation deductions, or the reduction of the loss or credit carry forwards) without the prior
written consent of Alon, which consent shall not be unreasonably withheld or delayed.

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          (c) Alon shall have the sole right to represent the interests of the Acquired Companies in any
Tax audit or administrative or court proceeding relating to Taxes with respect to taxable periods
including (but not ending on) or beginning after the Closing Date and to employ counsel of its
choice at its expense, provided that Alon shall not be entitled to settle, either administratively
or after the commencement of litigation, any claim regarding Taxes that would adversely affect the
liability of the Sellers for any Taxes for any period ending on or before the Closing Date or for
any Straddle Period, without the prior consent of the Sellers’ Representative, which consent shall
not be unreasonably withheld or delayed and shall not be required to the extent that Alon has
indemnified the Sellers against the effects of such settlement. Where consent to a settlement is
withheld by the Sellers’ Representative pursuant to this section, the Sellers may continue or
initiate any further proceedings at their own expense, Alon shall not be obligated to incur any
further expenses in such matter and the liability of Alon, after giving effect to this Agreement,
shall not exceed the liability that would have resulted from the settlement or amended return.

     8.4 Assistance and Cooperation. After the Closing Date, the Sellers, on the one hand,
and Alon, on the other hand, shall (and shall cause their respective Affiliates to): (a) assist
the other party in preparing and filing any Tax Returns or reports which such other party is
responsible for preparing and filing in accordance with this Article VIII; (b) cooperate
fully in preparing for any audits of, or disputes with taxing authorities regarding, any Tax
Returns of the Acquired Companies; (c) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to Taxes of the Acquired
Companies; (d) provide timely notice to the other in writing of any pending or threatened Tax
audits or assessments of the Acquired Companies for taxable periods for which the other may have a
liability under this Article VIII; and (e) furnish the other with copies of all
correspondence received from any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period.

     8.5 Retention of Records. After the Closing Date, the Sellers, Alon and the Acquired
Companies will preserve all information, records or documents relating to liabilities for Taxes of
the Acquired Companies until six months after the expiration of any applicable statute of
limitations (including extensions thereof) with respect to the assessment of such Taxes, provided
that neither party shall dispose of any of the foregoing items without first offering such items to
the other party.

     8.6 Refunds and Tax Benefit. Except to the extent included as current assets in the
Closing Date Adjusted Book Value, any Tax refunds that are received by Alon or the Acquired
Companies, and any amount credited against Tax to which Alon or the Acquired Companies become
entitled, that relate to the Tax periods or portions thereof ending on or before the Closing Date
(including, without limitation, the pre-Closing Straddle Period) shall be for the account of the
Sellers, and Alon shall pay to the Sellers, in their Pro Rata Portions, any such refund or the
amount of any such credit within 15 days after receipt or entitlement thereto. In addition, to the
extent that a claim for refund or a proceeding results in a payment or credit against Tax by a
taxing authority to Alon or the Acquired Companies of any amount accrued as a current liability in
the Closing Date Adjusted Book Value, Alon shall pay such amount to the Sellers, in their Pro Rata
Portions, within 15 days after receipt or entitlement thereto.

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     8.7 Other Provisions. The provisions of this Article VIII (and not Section
7.2) shall govern all indemnity claims with respect to Tax matters of the Acquired Companies
and the Stock Purchase pursuant to this Agreement. All indemnity payments under this Agreement and
any adjustment to any payment of the Purchase Price as described in Section 2.3 shall be
treated as an adjustment to the Purchase Price paid for the Shares for tax purposes.

ARTICLE IX

CONDITIONS

     9.1 Conditions to Each Party’s Obligation to Effect the Stock Purchase. The respective
obligations of each party to effect the Stock Purchase and the other transactions contemplated
hereby are subject to the satisfaction or waiver at or prior to the Closing Date of each of the
following conditions:

          (a) all consents of any Governmental Entity required to be obtained prior to the Closing Date
by the Sellers, Alon or any of their respective Affiliates in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated herein by the
Sellers and Alon shall have been made or obtained (as the case may be), including the HSR Approval.

          (b) no court or other Governmental Entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order, whether temporary, preliminary or permanent (collectively, an “Order”)
that is in effect and restrains, enjoins or otherwise prohibits, materially delays, makes illegal,
or would be violated by consummation of the transactions contemplated in this Agreement.

     9.2 Conditions to Obligations of Alon. The obligations of Alon to effect the Stock
Purchase and the other transactions contemplated hereby are also subject to the satisfaction or
waiver by Alon at or prior to the Closing Date of the following conditions (provided that the
condition in Section 9.2(j) may not be waived by Alon):

          (a) all of the representations and warranties of the Sellers set forth in this Agreement,
shall be true and correct as of the Closing Date (except to the extent such representations and
warranties speak as of an earlier date, in which case such representation or warranty shall be true
and correct as of such earlier date), without regard to any materiality qualifier contained in such
representations and warranties, except where the failure to be so true and correct, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Company
or a material adverse effect upon the consummation of the Stock Purchase;

          (b) the Sellers shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing Date;

          (c) Alon shall have been furnished with a certificate, executed by the Sellers’
Representative, dated the Closing Date, certifying as to the fulfillment of the conditions in
Sections 9.2(a) and (b);

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          (d) all consents required under the Material Contracts listed on Schedule 9.2(d) in
connection with the execution, delivery and performance of this Agreement, the other Transaction
Documents or the consummation of the transactions contemplated hereby or thereby, shall have been
obtained, shall be in full force and effect and shall have been delivered to Alon;

          (e) there shall not be pending any suit, action or proceeding by any Governmental Entity, (i)
seeking to obtain from Alon or any Affiliate thereof, in connection with the purchase of the Shares
or the other transactions contemplated hereby, any material money damages; (ii) seeking to impose
material limitations on the ability of Alon to acquire or hold, or exercise full rights of
ownership of the Shares, including the right to vote the Shares on all matters properly presented
to the stockholders of the Company; or (iii) that would likely have the effect of preventing or
otherwise materially interfering with the transactions contemplated by this Agreement and the other
Transaction Documents;

          (f) subject to Section 9.4, since the date of this Agreement, there shall have been no
event, change, occurrence or circumstance which has had, or which reasonably could be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Company; provided however,
for purposes of this condition, a Material Adverse Effect on the Company shall be deemed to exclude
any event, change, occurrence or circumstance resulting from (i) changes, after the date hereof, in
GAAP, (ii) compliance by the Sellers or the Acquired Companies with the terms and conditions of
this Agreement, (iii) changes affecting the industry in which the Acquired Companies operate which
do not in any material respect disproportionately affect the Acquired Companies as a whole,
compared to similarly situated companies in the same business, or (iv) any events or changes
affecting general economic or capital market conditions which do not in any material respect
disproportionately affect the Acquired Companies as a whole, compared to similarly situated
companies in the same business;

          (g) Alon shall have received the resignations of the directors of the Acquired Companies
pursuant to Section 6.9;

          (h) the Option Agreements and the Options shall have been cancelled;

          (i) the Stockholder Agreement shall have been terminated;

          (j) all Liens securing indebtedness and other amounts due under the Term Loan Agreement and,
if Alon shall have become obligated pursuant to the second sentence of Section 6.19(b) to
pay to, or make available to the Company for payment to, the lenders under the Revolving Credit
Agreement the amounts due to the lenders thereunder as of the Closing Date, all Liens securing
indebtedness and other amounts due under the Revolving Credit Agreement, shall have been released
effective as of the Closing;

          (k) the Sellers and the Escrow Agent shall have executed and delivered the Holdback Escrow
Agreement; and

          (l) Alon shall have received such other documents as Alon reasonably requests evidencing the
satisfaction of any condition referred to in this Section 9.2.

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     9.3 Conditions to Obligations of the Sellers. The obligations of the Sellers to effect
the Stock Purchase and the other transactions contemplated hereby are also subject to the
satisfaction or waiver by the Sellers prior to the Closing Date of the following conditions:

          (a) all of the representations and warranties of Alon set forth in this Agreement, shall be
true and correct as of the Closing Date (except to the extent such representations and warranties
speak as of an earlier date, in which case such representation or warranty shall be true and
correct as of such earlier date), without regard to any materiality qualifier contained in such
representations and warranties, except where the failure to be so true and correct, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Alon or a
material adverse effect upon the consummation of the Stock Purchase;

          (b) Alon shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date;

          (c) the Sellers’ Representative shall have been furnished with a certificate, executed by a
duly authorized officer of Alon, dated the Closing Date, certifying as to the fulfillment the
conditions in Sections 9.3(a) and (b);

          (d) Alon shall have delivered to each Seller, such Seller’s Pro Rata Portion of the Cash
Payment;

          (e) Alon shall have delivered to the Escrow Agent the Holdback Amount;

          (f) the Escrow Agent shall have delivered to each Seller, such Seller’s Pro Rata Portion of
the Deposit;

          (g) Alon and the Escrow Agent shall have executed and delivered the Holdback Escrow Agreement;
and

          (h) the Sellers shall have received such other documents as the Sellers’ Representative
reasonably requests evidencing the satisfaction of any condition referred to in this Section
9.3.

     9.4 Remedies in the Event of Certain Material Adverse Effects on the Company.

          (a) If after the date hereof and prior to the Closing or the termination of this Agreement, there
shall be an event, circumstance or occurrence that causes the failure of any condition to the
obligation of Alon set forth in Section 9.2(a), (b), or (f) (a “Pre-Closing
Adverse Change”) and the Damages that could reasonably be expected to result from such Pre-Closing
Adverse Change (the "Damage Estimate") are in the aggregate no more than $40,000,000, then the
Sellers may elect to extend the Termination Date to a date no more than 30 days after the
occurrence of such Pre-Closing Adverse Change and (i) if the Damages or other effects resulting
from such Pre-Closing Adverse Change are curable, to cure the Damages or other effects resulting
from such Pre-Closing Adverse Change in all material respects, or (ii) in the event that such
Damages or effects are not curable, or the Sellers elect not to cure such Damages or effects, the
Sellers may elect to proceed with the Closing, subject to and in accordance with subsection (c)
below. For purposes of determining whether the Damage Estimate is no more than $40,000,000 or more

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than $40,000,000 in the context of determining whether Alon is obligated to proceed with the
Closing pursuant to Section 9.4(c) below, the Damage Estimate shall be determined without
regard to any insurance, condemnation or other proceeds. For purposes of determining the amount of
any adjustment to the Purchase Price (and, if applicable, the Cash Payment) pursuant to this
Section 9.4, the Damage Estimate shall exclude any Damages to the extent that such Damages
shall have or have had the effect of reducing the Purchase Price (and the Cash Payment) pursuant to
Section 2.3(a) and shall be reduced by the amount of any insurance, condemnation or other
proceeds previously received by the Acquired Companies (and, if so received prior to the Closing,
retained by the Acquired Companies), and not included in the Closing Date Adjusted Book Value. If
following any reduction in the Purchase Price (and, if applicable, the Cash Payment) pursuant to
this Section 9.4, the Acquired Companies receive any insurance, condemnation or other
proceeds which duplicate, in whole or in part, such reduction in the Purchase Price (and, if
applicable, the Cash Payment), Alon shall remit to the Sellers in their Pro Rata Portions an amount
equal to the amount of such insurance, condemnation or other proceeds actually so received by the
Acquired Companies which duplicate, in whole or in part, such reduction in the Purchase Price (and,
if applicable, the Cash Payment).

          (b) If after seven days following the election set forth in subsection (a)(ii) above, the
parties have not mutually agreed, after using their good faith reasonable best efforts, to the
amount of the Damage Estimate, the parties shall pursue such valuation and/or dispute resolution
mechanisms as may be reasonably appropriate and available to the parties to permit in all due haste
a determination of the amount of the Damage Estimate prior to the Termination Date, such mechanism
to include each party designating one independent expert in the profession most relevant to the
nature of the Damages.

     (c) (i) If prior to the Termination Date (as extended pursuant to this Section
9.4, if applicable), the parties (or their independent experts, if applicable) have
mutually determined the amount of the Damage Estimate and such amount is no more than
$40,000,000, and all other conditions set forth in Sections 9.1, 9.2 and
9.3 have been satisfied or waived, the parties shall proceed with the Closing and
the Purchase Price (and Cash Payment) shall be reduced by the agreed amount of the Damage
Estimate and the relevant condition set forth in Section 9.2, to the extent not
satisfied as a result of the Post-Closing Adverse Change, shall be deemed satisfied. If,
prior to the Termination Date (as extended pursuant to this Section 9.4, if
applicable), the parties (or their independent experts, if applicable) have mutually
determined that the Damage Estimate is greater than $40,000,000 (whether or not the specific
amount of the Damage Estimate has been determined) the relevant condition set forth in
Section 9.2 shall be deemed to not have been satisfied and Alon shall have all
remedies available to it under this Agreement.

          (ii) If, prior to the Termination Date (as extended pursuant to this Section
9.4, if applicable), neither the parties nor their independent experts have mutually
determined that the Damage Estimate is either more than $40,000,000 or not more than
$40,000,000, the Sellers may elect to extend the Termination Date by an additional fifteen
days and the parties’ experts shall promptly provide their respective best and good faith
estimate of the Damage Estimate to a third independent expert mutually selected by the
parties’ experts (the “Third Expert”), together with all information, materials, work

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papers and other data utilized or developed by the parties’ experts in connection with
their efforts to determine the amount of the Damage Estimate.

     (A) If, prior to the Termination Date (as further extended pursuant to this
clause (ii)), the Third Expert shall have determined the amount of the Damage
Estimate, and such amount is no more than $40,000,000, and all other conditions set
forth in Sections 9.1, 9.2 and 9.3 have been satisfied or
waived, the parties shall proceed with the Closing and the Purchase Price (and Cash
Payment) shall be reduced by the amount of the Damage Estimate (so determined) and
the relevant condition set forth in Section 9.2, to the extent not satisfied
as a result of the specific event, circumstance or occurrence giving rise to the
Damage Estimate, shall be deemed satisfied.

     (B) If, prior to the Termination Date (as further extended pursuant to this
clause (ii)), the Third Expert shall have determined that the Damage Estimate is
greater than $40,000,000 (whether or not the specific amount of the Damage Estimate
has been determined), the relevant condition set forth in Section 9.2 shall
be deemed to not have been satisfied and Alon shall have all remedies available to
it under this Agreement.

     (C) If, prior to the Termination Date (as further extended pursuant to this
clause (ii)), the Third Expert shall have determined that the Damage Estimate is
less than $40,000,000, but has not determined the specific amount of the Damage
Estimate, then if all other conditions set forth in Sections 9.1,
9.2 and 9.3 have been satisfied or waived, (A) the parties shall
proceed with the Closing, (B) the relevant condition set forth in Section
9.2, to the extent not satisfied as a result of the Post-Closing Adverse Change,
shall be deemed satisfied, (C) the Purchase Price (and Cash Payment), shall be
reduced by the Third Expert’s good faith best estimate of the amount of the Damage
Estimate, and (D) the Third Expert shall, within 30 days after the Closing, make a
final determination of the amount of the Damage Estimate. If the final amount of
the Damage Estimate determined by the Third Expert in such 30 day period exceeds the
reduction to the Purchase Price (and Cash Payment) made at Closing pursuant to the
proceeding sentence, the Sellers shall promptly pay the amount of the difference to
Alon. If the final amount of the Damage Estimate determined by the Third Expert is
less than such reduction to the Purchase Price (and Cash Payment) made at Closing,
Alon shall promptly pay the amount of the difference to the Sellers.

          (iii) If, prior to the Termination Date (as extended pursuant to this Section
9.4, if applicable) the parties or their independent experts have mutually determined
that the Damage Estimate is no more than $40,000,000, but neither the parties nor their
independent experts have mutually agreed to the specific amount of the Damage Estimate, then
if all other conditions set forth in Sections 9.1, 9.2 and 9.3 have
been satisfied or waived, (A) the parties shall proceed with the Closing, (B) the relevant
condition set forth in Section 9.2, to the extent not satisfied as a result of the
Post-Closing Adverse Change shall be deemed satisfied, (C) the Purchase Price (and Cash
Payment) shall be reduced by the average of each parties’ expert’s good faith best estimate
of the

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amount of the Estimated Damages, and (D) the parties’ experts shall promptly provide
their best and good faith estimate of the Damage Estimate to the Third Expert, together with
all information, materials, work papers and other data utilized or developed by the parties’
experts in connection with their efforts to determine the amount of the Damage Estimate.
The Third Expert shall make a final determination of the amount of the Damage Estimate which
determination shall be (1) either the amount of the Damage Estimate proposed by either
party’s expert or an amount between such two proposals and (2) determined by such Third
Expert no later than 30 days after the Closing Date. If the final amount of the Damage
Estimate so determined exceeds the reduction to Purchase Price (and Cash Payment) made at
Closing pursuant to the preceding sentence, the Sellers shall promptly pay the amount of the
difference to Alon. If the final amount of the Damage Estimate so determined is less than
such reduction to the Purchase Price (and Cash Payment) made at Closing, Alon shall promptly
pay the amount of the difference to the Sellers.

          (d) For all purposes of Section 9.4(c), in the event that any Damage Estimate provided
by an expert engaged pursuant to this Section 9.4 shall consist of a range of possible
amounts of the Damage Estimate, the midpoint amount in such range shall be deemed to be the Damage
Estimate provided by such expert.

          (e) Any mutual determination by the parties or the parties’ experts regarding the Damage
Estimate, and any determination by the Third Expert regarding the Damage Estimate, shall be final
and binding on the parties. Each party shall bear all costs and expenses of its respective expert
and the costs and expenses of the Third Expert shall be shared equally by the parties. Each party
shall act in good faith with respect to all matters arising under this Section 9.4,
including in negotiating and determining the amount of any Damage Estimate and in its selection of
and dealings with its respective independent expert. Each party will fully cooperate with the
other party and each of the experts engaged pursuant to this Section 9.4 in the efforts to
determine the amount of any Damage Estimate, including the provision of access to any property or
facility of any affected Acquired Company and the provision of all information, materials,
documents and other data relevant to such determination.

ARTICLE X

TERMINATION

     10.1 Termination by Mutual Consent. This Agreement may be terminated and the Stock
Purchase may be abandoned at any time prior to the Closing, by mutual written consent of the
Sellers and Alon.

     10.2 Termination by Either Alon or the Sellers. This Agreement may be terminated and
the Stock Purchase may be abandoned at any time prior to the Closing by either Alon or the Sellers
if any Order permanently restraining, enjoining or otherwise prohibiting the Stock Purchase shall
be entered and such Order is or shall have become nonappealable, provided that (i) the party
seeking to terminate this Agreement shall have complied with its obligations under Section
6.2 with respect to the removal or lifting of such Order, and (ii) the breach of or

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noncompliance with this Agreement by the party seeking to terminate this Agreement shall not
have been the proximate cause of the issuance of the Order.

     10.3 Termination by the Sellers. This Agreement may be terminated and the Stock
Purchase may be abandoned at any time prior to the Closing, by the Sellers, by written notice to
Alon, if:

     (a) (i) the Stock Purchase shall not have been consummated on or before the Termination
Date, or

          (ii) any of the conditions set forth in Section 9.1 or 9.3 shall have
become incapable of fulfillment ; provided, however, that this Agreement may not be
terminated prior to the Termination Date as a result of the condition in Section 9.1
having become incapable of fulfillment so long as Alon is continuing to seek to cause the
condition in Section 9.1 to be fulfilled;

provided, however, that the right to terminate this Agreement pursuant to this subsection (a) shall
not be available to the Sellers if the breach of or noncompliance with this Agreement by any of
them shall have proximately contributed to the failure referenced in this subsection (a); or

          (b) there has been a material breach by Alon of any representation, warranty, covenant or
agreement of Alon contained in this Agreement that is not curable or, if curable, is not cured
prior to the earlier of (i) 30 days after written notice of such breach is given by the Sellers to
Alon and (ii) the Termination Date; provided that no Seller is then in material default or breach
of this Agreement.

     10.4 Termination by Alon. This Agreement may be terminated and the Stock Purchase may
be abandoned at any time prior to the Closing by Alon, by written notice to the Sellers, if:

     (a) (i) the Stock Purchase shall not have been consummated on or before the Termination
Date, or

          (ii) any of the conditions set forth in Section 9.1 or Section 9.2
shall have become incapable of fulfillment ; provided, however, that this Agreement may not
be terminated prior to the Termination Date as a result of the condition in Section
9.1 having become incapable of fulfillment so long as Alon is continuing to seek to
cause the condition in Section 9.1 to be fulfilled;

provided, however, that the right to terminate this Agreement pursuant to this subsection (a) shall
not be available to Alon if the breach of or noncompliance with this Agreement by it shall have
proximately contributed to the failure referred to in this subsection (a); or

          (b) subject to Section 9.4, there has been a material breach of any representation,
warranty, covenant or agreement of the Sellers contained in this Agreement that is not curable or,
if curable, is not cured prior to the earlier of (i) 30 days after written notice of such breach is
given by Alon to the Sellers’ Representative, and (ii) the Termination Date; provided that Alon is
not then in material default or breach of this Agreement.

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     10.5 Effect of Termination. Each party’s right of termination under this Article
X is in addition to any other rights it may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this Agreement is
terminated, all further obligations of the parties under this Agreement will terminate, except that
Sections 6.3 and 6.5 and Article XI hereof and the Confidentiality
Agreement will survive. Notwithstanding the foregoing, if this Agreement is terminated by a party
because of the willful breach of the Agreement by another party or because one or more of the
conditions to the terminating party’s obligations under this Agreement is not satisfied as a result
of another party’s willful failure to comply with its obligations under this Agreement, the
terminating party’s right to pursue all legal remedies will survive such termination unimpaired.

ARTICLE XI

MISCELLANEOUS

     11.1 Entire Agreement; Assignment.

          (a) This Agreement (including the documents, schedules, exhibits and instruments referred to
herein) and the Confidentiality Agreement constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, and all contemporaneous oral agreements and
understandings among the parties hereto with respect to the subject matter hereof.

          (b) Neither this Agreement nor any of the rights, interests or obligations hereunder will be
assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior
written consent of each of the other parties hereto; provided, however, that Alon may assign all or
a portion of its rights and obligations under this Agreement to any Subsidiary of Alon without the
consent of the Sellers (which such assignment shall not relieve Alon of any obligation or liability
under this Agreement).

          (c) This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

     11.2 Validity. Whenever possible, each provision or portion of any provision of this
Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision or portion of any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision or portion of any provision in such jurisdiction, and this
Agreement shall be reformed, construed and enforced in such jurisdiction in such manner as will
effect as nearly as lawfully possible the purposes and intent of such invalid, illegal or
unenforceable provision.

     11.3 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when delivered in person,
by overnight courier or facsimile to the respective parties as follows:

     If to Alon:

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Alon USA Energy, Inc.

7616 LBJ Frwy, Suite 300

Dallas, TX 75251

Attention: General Counsel

Facsimile No.: (972) 367-3724

with a copy to:

Jones Day

2727 North Harwood

Dallas, Texas 75201

Attention:  Mark E. Betzen

Mark T. Goglia

Fax No.: 214-969-5100

If to the Sellers (prior to the Closing):

Paramount Petroleum

14700 Downey Avenue

Paramount, CA 90723

Attn: W. Scott Lovejoy III

Facsimile Number: (562) 408-0926

with a copy to:

Songstad & Randall LLP

2201 Dupont Drive

Suite 100

Irvine, CA 92612

Attn: L. Allan Songstad, Jr.

Facsimile Number: (949) 757-1613

and

Gibson Dunn & Crutcher, LLP

4 Park Plaza

Irvine, CA. 92614-8557

Attn: Michelle Hodges

Facsimile Number: (949) 475-4703

Copies to such persons shall also be made with respect to notices sent to the
Sellers’ Representative post-Closing, with notices sent to the Sellers’
Representative at the address set forth in the notice of appointment required by
Section 6.12,

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or to such other address as the Person to whom notice is given may have previously furnished to the
other in writing in the manner set forth above; provided that notice of any change of address shall
be effective only upon receipt thereof.

     11.4 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California, regardless of the laws or rules that might otherwise
govern under applicable principles of conflicts of laws thereof. In the event of the bringing of
any action or suit by a party hereto against another party hereunder arising out of or relating to
this Agreement, then in that event, (i) the sole forum for resolving such disputes shall be the
federal courts located in Orange County, California, and each of the parties hereby irrevocably
submits to such exclusive jurisdiction, and (ii) the prevailing party in such action or dispute,
whether by final judgment, or out of court settlement shall be entitled to have and recover of and
from the non-prevailing parties all costs and expenses of suit, including actual attorneys’ fees.
Any judgment or order entered in any final judgment shall contain a specific provision providing
for the recovery of all costs and expenses of suit, including actual attorneys’ fees (collectively
"Costs”) incurred in enforcing, perfecting and executing such judgment. For the purposes of this
paragraph, Costs shall include, without limitation, attorneys’ fees, costs and expenses incurred in
(a) appeals, (b) post-judgment motions, (c) contempt proceeding, (d) garnishment, levy, and debtor
and third party examination, (e) discovery, and (f) bankruptcy litigation.

     11.5 Specific Performance. The parties recognize that if the Sellers refuse to
perform under the provisions of this Agreement, monetary damages alone will not be adequate to
compensate Alon for its injury. Alon shall therefore be entitled, in addition to any other
remedies that may be available, to obtain specific performance of this Agreement. If any action is
brought by Alon to enforce this Agreement, the Sellers shall waive the defense that there is an
adequate remedy at law. In the event of a default by the Sellers which results in the filing of a
lawsuit for damages, specific performance, or other remedies, Alon shall be entitled to
reimbursement from the Sellers of reasonable legal fees and expenses incurred by Alon.

     11.6 Construction. The headings herein are inserted for convenience of reference only
and are not intended to be part of or to affect the meaning or interpretation of this Agreement.
Unless the context clearly requires otherwise “or” is not exclusive, and “includes” means
“includes, but is not limited to.”

     11.7 Counterparts. This Agreement may be executed in counterparts, including facsimile
counterparts, each of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be effective delivery of a manually executed counterpart
to this Agreement.

     11.8 Parties In Interest. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to
confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of
this Agreement, including any employee or former employee of the Acquired Companies (or any
beneficiary or dependent thereof), except that each Alon Indemnified Party and Seller

72

 

Indemnified Party shall be a third party beneficiary with respect to Article VII and
shall be entitled to the rights and benefits of, and to enforce, the provisions thereof.

     11.9 Waiver. No waiver of any breach of the provisions of this Agreement will be
deemed to have been made by any party, unless such waiver is expressed in writing and signed by the
party against which it is to be enforced. The waiver by any party of any right under this
Agreement or to a remedy for the breach of any of the provisions herein shall not operate nor be
construed by the breaching party as a waiver of the non-breaching party’s remedies with respect to
any other or continuing or subsequent breach.

     11.10 Amendments. No amendment or modification in respect of this Agreement shall be
effective unless it shall be in writing and signed by the parties hereto.

     11.11 Further Assurances; Post Closing Cooperation. The parties agree (a) to furnish
upon request to each other such further information, (b) to execute and deliver to each other such
other documents, and (c) to do such other acts and things, all as any other party hereto may
reasonably request for the purpose of carrying out the transactions contemplated by this Agreement.
After the Closing Date, Alon shall provide the Sellers reasonable access, during normal business
hours and on at least three Business Day’s prior notice, to the records of the Acquired Companies
relating to periods prior to the Closing Date for any reasonable purpose. After the Closing, Alon
shall cause the Acquired Companies to fulfill all of their obligations hereunder, and shall
guarantee such performance.

     11.12 Cumulative Remedies. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any other rights, remedies, powers and privileges provided by
law.

     11.13 Disclosure . Notwithstanding anything to the contrary contained in the
Disclosure Schedules or in this Agreement, the information and disclosures contained in any section
of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any
other section of the Disclosure Schedule as though fully set forth in such section of the
Disclosure Schedule to the extent that the applicability of such information and disclosure is
reasonably apparent on its face. The fact that any item of information is disclosed in any section
of the Disclosure Schedule shall not be construed to mean that such information is required to be
disclosed by this Agreement. Such information and the dollar thresholds set forth herein shall not
be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other
similar terms in this Agreement.

[Signature page follows]

73

 

[SIGNATURE PAGE — STOCK PURCHASE AGREEMENT]

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf
by its respective officer thereunto duly authorized, all as of the day and year first above
written.

“ALON”

ALON USA ENERGY, INC.,

a Delaware corporation

	 	 	 	 	 	 	 
	By:

	 	/s/David Wiessman
	 	By:
	 	/s/ Jeff D. Morris
	 

	 	 
	 	 	 	 
	Name:

	 	DAVID WIESSMAN,
	 	Name:
	 	JEFF D. MORRIS,
	 

	 	Executive Chairman
	 	 	 	President and CEO
	 
	 	 	 	 	 	 
	“SELLERS”
	 
	 	 	 	 	 	 
	THE CRAIG C. BARTO AND GISELE M. BARTO LIVING TRUST, DATED APRIL 5, 1991
	 
	 	 	 	 	 	 
	By:

	 	/s/ Gisele M. Barto
	 	By:
	 	/s/ Craig C. Barto
	 

	 	 
	 	 	 	 
	Name:

	 	GISELE M. BARTO, Trustee of the
	 	Name:
	 	CRAIG C. BARTO, Trustee of the
	 

	 	Craig C. Barto and Gisele M. Barto
	 	 	 	Craig C. Barto and Gisele M. Barto
	 

	 	Living Trust, Dated April 5, 1991
	 	 	 	Living Trust, Dated April 5, 1991
	 
	 	 	 	 	 	 
	THE JERREL C. BARTO AND JANICE D. BARTO LIVING TRUST, DATED MARCH 18, 1991
	 
	 	 	 	 	 	 
	By:

	 	/s/ Jerrel C. Barto
	 	By:
	 	/s/Janice D. Barto
	 

	 	 
	 	 	 	 
	Name:

	 	JERREL C. BARTO, Trustee of the
	 	Name:
	 	JANICE D. BARTO, Trustee of the
	 

	 	Jerrel C. Barto and Janice D. Barto
	 	 	 	Jerrel C. Barto and Janice D. Barto
	 

	 	Living Trust, Dated March 18, 1991
	 	 	 	Living Trust, Dated March 18, 1991
	 
	 	 	 	 	 	 
	By:

	 	/s/ W. Scott Lovejoy III
	 	By:
	 	/s/ Mark R. Milano
	 

	 	 
	 	 	 	 
	Name:

	 	W. SCOTT LOVEJOY III, an individual
	 	Name:
	 	MARK R. MILANO, an individualexv10w2

 

EXHIBIT 10.2

AGREEMENT AND PLAN OF MERGER

DATED AS OF APRIL 28, 2006

BY AND AMONG

EOC ACQUISITION, LLC,

ALON USA ENERGY, INC.,

EDGINGTON OIL COMPANY

AND

APEX OIL COMPANY, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1 MERGER
	 	 	1	 
	1.1 Merger
	 	 	1	 
	1.2 Excluded Assets
	 	 	3	 
	ARTICLE 2 ASSUMPTION OF LIABILITIES
	 	 	4	 
	2.1 No Assumption of Liabilities
	 	 	4	 
	2.2 Retained Liabilities
	 	 	4	 
	ARTICLE 3 CONVERSION OF SHARES
	 	 	5	 
	3.1 Effect on Common Stock
	 	 	5	 
	3.2 Merger Consideration
	 	 	6	 
	3.3 Estimated Inventory Value Documentation
	 	 	6	 
	3.4 Inventory Adjustment
	 	 	6	 
	ARTICLE 4 THE CLOSING
	 	 	7	 
	4.1 Date of Closing
	 	 	7	 
	4.2 Effective Time
	 	 	7	 
	4.3 Managers; Officers
	 	 	7	 
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES
	 	 	8	 
	5.1 Representations and Warranties of Seller
	 	 	8	 
	5.2 Representations and Warranties of Alon and Purchaser
	 	 	22	 
	ARTICLE 6 PRE-CLOSING COVENANTS
	 	 	23	 
	6.1 Access to Information
	 	 	23	 
	6.2 Conduct of Business
	 	 	23	 
	6.3 OMITTED
	 	 	25	 
	6.4 Notification
	 	 	25	 
	6.5 Cooperation
	 	 	25	 
	6.6 No Inconsistent Action
	 	 	25	 
	6.7 Satisfaction of Conditions
	 	 	25	 
	6.8 Injunctions
	 	 	25	 
	6.9 Filings and Consents
	 	 	26	 
	6.10 Confidentiality
	 	 	27	 
	6.11 Publicity
	 	 	28	 
	6.12 Title Commitments
	 	 	28	 
	6.13 Acquisition Proposals
	 	 	29	 

i

 

	 	 	 	 	 
	6.14 Licenses and Permits
	 	 	29	 
	6.15 Environmental Insurance
	 	 	30	 
	6.16 Remediation Costs
	 	 	30	 
	6.17 Paribas Payoff
	 	 	30	 
	6.18 Termination of Participation in Employee Plans
	 	 	31	 
	ARTICLE 7 CONDITIONS TO THE MERGER
	 	 	31	 
	7.1 Conditions Precedent to Obligations of Purchaser
	 	 	31	 
	7.2 Conditions Precedent to Obligations of Seller
	 	 	32	 
	ARTICLE 8 DOCUMENTS TO BE DELIVERED AT THE CLOSING
	 	 	33	 
	8.1 Documents to be Delivered by Seller
	 	 	33	 
	8.2 Documents to be Delivered by Purchaser
	 	 	33	 
	ARTICLE 9 POST-CLOSING COVENANTS
	 	 	34	 
	9.1 Employees and Non-Solicitation
	 	 	34	 
	9.2 Discharge of Business Obligations
	 	 	34	 
	9.3 Maintenance of Books and Records
	 	 	35	 
	9.4 Payments Received
	 	 	35	 
	9.5 Use of Name
	 	 	35	 
	9.6 Confidentiality
	 	 	36	 
	9.7 Post-Closing Notifications
	 	 	36	 
	9.8 Certain Tax Matters
	 	 	36	 
	9.9 Insurance
	 	 	37	 
	9.10 Seller Guaranties
	 	 	38	 
	9.11 Excluded Inventory
	 	 	38	 
	ARTICLE 10 SURVIVAL AND INDEMNIFICATION
	 	 	38	 
	10.1 Survival of Representations, Warranties and Covenants
	 	 	38	 
	10.2 Limitations on Liability
	 	 	39	 
	10.3 Indemnification
	 	 	39	 
	10.4 Defense of Claims
	 	 	40	 
	10.5 Claims Related to Title
	 	 	41	 
	ARTICLE 11 TERMINATION
	 	 	42	 
	11.1 Termination
	 	 	42	 
	11.2 Effect of Termination
	 	 	42	 
	ARTICLE 12 Definitions
	 	 	43	 

ii

 

	 	 	 	 	 
	12.1 Definition of Certain Terms
	 	 	43	 
	ARTICLE 13 MISCELLANEOUS PROVISIONS
	 	 	50	 
	13.1 Specific Performance
	 	 	50	 
	13.2 Notices
	 	 	50	 
	13.3 Expenses
	 	 	51	 
	13.4 Successors and Assigns
	 	 	51	 
	13.5 Amendment; Waiver
	 	 	51	 
	13.6 Entire Agreement
	 	 	52	 
	13.7 Rights of the Parties
	 	 	52	 
	13.8 Brokers
	 	 	52	 
	13.9 Further Assurances
	 	 	52	 
	13.10 Governing Law
	 	 	52	 
	13.11 Severability
	 	 	52	 
	13.12 Execution in Counterparts
	 	 	53	 
	13.13 Titles and Headings
	 	 	53	 
	13.14 Passage of Title and Risk of Loss
	 	 	53	 
	13.15 Interpretive Matters
	 	 	53	 
	13.16 No Recourse
	 	 	53	 
	13.17 Guaranty
	 	 	53	 
	13.18 Waiver of Punitive and Other Damages and Jury Trial
	 	 	53	 

iii

 

	 	 	 
	Schedule 1.1.1

	 	Assigned Contracts
	Schedule 1.1.5

	 	Intellectual Property
	Schedule 1.1.6(a)

	 	Owned Real Property
	Schedule 1.1.6(b)

	 	Real Property Leases
	Schedule 1.1.6(c)

	 	Pipeline Easements
	Schedule 1.1.7

	 	Permits
	Schedule 1.2.7

	 	Other Excluded Assets
	Schedule 3.3

	 	Inventory Methodology
	Schedule 6.2

	 	Conduct of Business Prior to Closing
	Schedule 6.17

	 	BNP Paribas Indebtedness
	Schedule 9.1

	 	Offers of Employment
	Schedule 9.10

	 	Seller Guarantees
	 
	 	 
	Exhibit A

	 	Form of Transition Services Agreement
	Exhibit B

	 	Form of Assumption Agreement

iv

 

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of
the 28th day of April, 2006, by and among APEX OIL COMPANY, INC., a Missouri corporation
(“Seller”), EDGINGTON OIL COMPANY, a Missouri corporation and wholly owned subsidiary of
Seller (“Edgington”), EOC ACQUISITION, LLC, a Delaware limited liability company
(“Purchaser”), and ALON USA ENERGY, INC., a Delaware corporation (“Alon”).
Capitalized terms used herein are defined in Article 12.

RECITALS:

     A. It is the intention of the parties that Edgington shall merge with and into Purchaser, with
Purchaser being the surviving entity;

     B. Seller owns all the issued and outstanding shares of common stock, par value $1.00 per
share, of Edgington (the “Shares”).

     C. Edgington presently conducts the business (the “Business”) of acquiring and
refining petroleum feedstocks and marketing petroleum products, including naptha, jet fuel, diesel
fuel, VGO / gas oil, roofing and paving asphalt and fuel oil (the “Products”); and

     D. The parties desire to effect the Merger, and thereby cause Purchaser to acquire through
merger the assets, rights and properties of Edgington used or held for use in the operation of the
Business, provided that, in connection with the Merger, Seller is willing to assume certain
obligations and liabilities of Edgington, all on the terms and subject to the conditions set forth
in this Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1

MERGER

     1.1 Merger. On the terms and subject to the conditions hereof and in accordance with
the Delaware Limited Liability Company Act (the “DLLCA”) and the General and Business
Corporation Law of Missouri (the “GBCLM”), Edgington shall be merged with and into
Purchaser (the “Merger”) at the Effective Time. At the Effective Time, the separate existence of
Edgington shall cease, and Purchaser shall continue to exist as the surviving corporation (the
“Surviving Corporation”). The Merger shall have the effects set forth in this Agreement
and in the applicable provisions of the DLLCA and GBCLM. At the Effective Time, Purchaser will
acquire as a result of the Merger, but subject to Section 1.2, all rights, properties and assets of
Edgington used or held for use in connection with the Business, wherever located (collectively, the
“Assets”), free and clear of all Liens, except Permitted Liens, including all of
Edgington’s right, title and interest in and to the rights, properties and assets described in this
Section 1.1:

          1.1.1 Contract Rights. All rights and incidents of interest as of the Closing in and
to all leases, agreements and other contracts and legally binding contractual rights and

 

 

obligations relating to the Business (collectively, “Contracts”), including such of
the foregoing as are described on Schedule 1.1.1;

          1.1.2 Inventories and Stores and Supplies. All raw materials, feedstocks, components,
work-in-process, finished and refined products, stores and supplies, spare parts and samples, but
excluding naphtha, distillate and VGO/gas oil (collectively, “Inventories”), wherever
located;

          1.1.3 Tangible Personal Property. All machinery and equipment, engines, pipes,
pipelines, valves, valve boxes, tanks, pumps, fittings, tools, spare and maintenance parts,
furniture, vehicles and all other tangible personal property, wherever located, but excluding the
tangible personal property not primarily related to the Business located at Seller’s executive
offices located at 8235 Forsyth Blvd., Clayton, Missouri 63105 (collectively, the “Tangible
Personal Property”);

          1.1.4 Manufacturers’ and Vendors’ Warranties. All rights under manufacturers’ and
vendors’ warranties relating to items included in the Assets and all similar rights against third
parties relating to items included in the Assets;

          1.1.5 Intellectual Property. All right, title and interest in and to all domestic and
foreign letters patent, patents, patent applications, patent licenses, software licenses and
know-how licenses, trade names, trademarks, registered copyrights, service marks, trademark
registrations and applications, service mark registrations and applications and copyright
registrations and applications owned or used by Edgington in the operation of the Business and all
trade secrets, technical knowledge, know-how and other confidential proprietary information and
related ownership, use and other rights of Edgington, including those listed or described on
Schedule 1.1.5, but excluding the software licenses not primarily related to the Business located
at Seller’s executive offices located at 8235 Forsyth Blvd., Clayton, Missouri 63105 (collectively,
the “Intellectual Property”);

          1.1.6 Real Property. (a) The real property owned in fee by Edgington and listed and
described on Schedule 1.1.6(a), together with all easements, rights of way and other appurtenants
thereunto and all buildings, structures, fixtures and improvements located thereon (the “Owned
Real Property”); (b) the rights and incidents of interests of Edgington in and to all real
property leases (the “Real Property Leases”) relating to the operations of the Business,
including but not limited to those listed or described on Schedule 1.1.6(b), and all of Edgington’s
rights as of the Closing in all of the structures, fixtures and improvements located thereon (the
“Leased Real Property”); and (c) all easements, rights of way, property use agreements,
line rights and real property licenses and permits relating to the Owned Real Property and the
Leased Real Property as described on Schedule 1.1.6(c) together with any buildings, structures,
fixtures and improvements located thereon (the “Pipeline Easements” and, together with the
Owned Real Property and the Leased Real Property, the “Real Property”);

          1.1.7 Governmental Licenses, Permits and Approvals. All rights and incidents of
interest of Edgington in and to all licenses, permits, authorizations and approvals (collectively,
“Permits”) issued to Edgington by any Governmental Entity, including such of the foregoing
as are listed in Schedule 1.1.7;

2

 

          1.1.8 Books and Records. All the books and records of Edgington, including all books
and records relating to employees, the purchase of materials, supplies and services, financial,
accounting and operations matters, product engineering, research and development, manufacture and
sale of products and all customer and vendor lists relating to the operation of the Business and
all files and documents (including credit information) relating to customers and vendors of the
Business (other than, subject to Section 1.1.9, any of the foregoing located at Seller’s executive
offices located at 8235 Forsyth Blvd., Clayton, Missouri 63105 and which is not readily divisible
from Seller’s books and records unrelated to Edgington);

          1.1.9 Corporate Documents. Edgington’s corporate seal, minute books, charter
documents and corporate stock record books;

          1.1.10 Edgington’s Name. All Edgington’s rights to the name “Edgington Oil Company;”

          1.1.11 Prepaid Items. All prepaid items, costs and fees; and

          1.1.12 Miscellaneous Assets. Except for Excluded Assets, such other rights,
properties and assets owned by Edgington, wherever located, that are reflected on the Balance Sheet
or were acquired subsequent to the Balance Sheet Date.

     1.2 Excluded Assets. Notwithstanding anything contained in this Agreement to the
contrary, the following rights, properties and assets (collectively, the “Excluded Assets”)
will not be included in the Assets and, on or prior to the Closing Date, Seller will cause
Edgington to distribute the Excluded Assets (other than those described in Sections 1.2.3, 1.2.4
and 1.2.5) to Seller by way of dividend distribution:

          1.2.1 Cash. All cash and cash equivalents in transit, on hand and/or in bank;

          1.2.2 Accounts Receivable. All accounts receivable and any notes receivable,
including amounts due from Affiliates, arising out of the operation of the Business prior to the
Closing;

          1.2.3 Ordinary Course of Business Dispositions. All of the Inventories and Tangible
Personal Property which have been transferred or consumed by Edgington prior to the Closing in the
ordinary course of the conduct of the Business consistent with past practice;

          1.2.4 Contracts Terminated in the Ordinary Course of Business. All Contracts that
have terminated or expired prior to the Closing in the ordinary course of the conduct of the
Business consistent with past practice and as permitted hereunder;

          1.2.5 Apex 401(k) Plan. The Apex 401(k) Plan;

          1.2.6 Insurance Policies. Subject to Section 9.9, Edgington’s rights under any
policies of insurance purchased by Seller or any of its Affiliates (other than Edgington), or any
benefits, proceeds or premium refunds payable or paid thereunder or with respect thereto; and

3

 

          1.2.7 Other Excluded Assets. Any right, property or asset which is described on
Schedule 1.2.7.

The Excluded Assets to be distributed to Seller pursuant to this Section 1.2 will be distributed
“as is, where is,” without any express or implied warranties of any kind, including as to fitness,
merchantability, or being fit for any particular purpose, and in their present condition and state
of repair, with all existing faults, limitations and defects.

ARTICLE 2

ASSUMPTION OF LIABILITIES

     2.1 No Assumption of Liabilities. Except as otherwise specifically set forth in this
Agreement, as between Purchaser and Seller, Purchaser does not assume or agree to pay, satisfy,
discharge or perform, and will not be deemed by virtue of the execution and delivery of this
Agreement or any document delivered at the Closing pursuant to this Agreement, or as a result of
the consummation of the transactions contemplated by this Agreement, to have assumed, or to have
agreed to pay, satisfy, discharge and perform, any Liability of Edgington, whether primary or
secondary, direct or indirect.

     2.2 Retained Liabilities. As of the Closing, Seller will assume and agree to pay,
satisfy, discharge and perform in accordance with the terms thereof, those Liabilities set forth
below (such Liabilities to be assumed by Seller being referred to herein as the “Retained
Liabilities”):

          (a) all Liabilities of Edgington (including any Liabilities in respect of which Edgington may
be liable jointly and severally with Seller or any Affiliate of Seller) which relate to any of the
Excluded Assets;

          (b) all Liabilities of Edgington (including any Liabilities in respect of which Edgington may
be liable jointly and severally with Seller of any Affiliate or Seller) relating to Taxes with
respect to the Business, or otherwise, for all periods, or portions thereof, prior to the Closing
Date;

          (c) all liabilities of Edgington relating to Taxes arising under Treasury Regulation Section
1.1502-6 or any similar provision of state or local law or arising out of Edgington’s inclusion in
any affiliated, consolidated, combined or unitary group for tax purposes;

          (d) all Liabilities for any legal, accounting, investment banking, brokerage or similar fees
or expenses incurred by Edgington prior to Closing or in connection with, resulting from or
attributable to the transactions contemplated by this Agreement;

          (e) all Liabilities for accounts payable arising out of the operation of the Business prior to
Closing, including amounts due to Affiliates, amounts payable (or required contributions) with
respect to the acquisition of an equity interest in Huntington E-P Pipeline Company, LLC
(“Huntington”) and amounts payable with respect to Edgington’s portion of

4

 

operating and maintenance costs and expenses with respect to Huntington arising prior to the
Closing;

          (f) all Liabilities for any Indebtedness of Edgington;

          (g) subject to Sections 6.15 and 6.16, all Liabilities of Edgington (other than Environmental
Costs and Liabilities) with respect to third party claims resulting from, caused by or arising out
of, directly or indirectly, the conduct of the Business or ownership or lease of any of the Assets
or any properties or assets previously used in the Business at any time prior to the Closing Date,
including such of the foregoing as constitute, may constitute or are alleged to constitute a tort,
breach of contract or violation or requirement of any domestic or foreign statute, law, ordinance,
rule or regulation (“Law”) of any domestic or foreign court, government, governmental
agency, authority, entity or instrumentality (“Governmental Entity”);

          (h) all claims for severance, other employee benefits (including benefits mandated by Law) or
other compensation or damages by or on behalf of any employees (present or former), agents or
independent contractors of Edgington or by or on behalf of any Governmental Entity in respect of
employees (present or former), agents or independent contractors of Edgington involving any alleged
employment loss, violation of any Law or termination of employment actually or constructively (by
operation of Law or pre-existing contract, including any Liability for severance), all Liabilities
of Edgington (including any Liabilities in respect of which Edgington may be liable jointly and
severally with Seller or any Affiliate of Seller) with respect to employees (present or former),
agents or independent contractors of Edgington under or relating to any Employee Plan (other than
an Edgington Benefit Plan) or under or relating to any Edgington Benefit Plan to the extent such
Liability results from or relates to a breach of any representation or warranty in Section 5.1.19,
or in respect of payments for unemployment compensation or unemployment insurance, and all other
Liabilities in respect of employees (present or former), agents or independent contractors of
Edgington, in each case, relating to periods of employment ending prior to the Closing Date; and

          (i) all Liabilities of Edgington arising prior to the Closing not related or arising in
connection with the conduct of the Business or the use, non-use or ownership of the Assets.

ARTICLE 3

CONVERSION OF SHARES

     3.1 Effect on Common Stock. As of the Effective Time, by virtue of the Merger and
without any action on the part of Seller, each of the following shall occur:

          (a) At the Effective Time, each share of common stock, par value $1.00 per share, of Edgington
(the “Common Stock”) issued and outstanding immediately prior to the Effective Time (other
than any shares of Common Stock to be canceled pursuant to Section 3.1(b)) and all rights in
respect thereof shall be canceled and shall be converted automatically into the right to receive
the Per Share Consideration. As of the Effective Time, all such shares of Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares

5

 

of Common Stock shall cease to have any rights with respect thereto, except for the right to
receive upon surrender of the certificate that formerly evidenced such share of Common Stock to the
Surviving Corporation, the Per Share Consideration;

          (b) At the Effective Time, each share of Common Stock held in treasury by Edgington, if any,
shall automatically be canceled and retired and shall cease to exist and no payment or distribution
shall be made with respect thereto; and

          (c) At the Effective Time and after delivery of the Shares to Purchaser pursuant to Section
8.1.1, the Surviving Corporation shall pay the Merger Consideration by wire transfers of
immediately available funds to one or more accounts to be designated in writing by Seller to
Purchaser not less than two business days prior to the Closing

     3.2 Merger Consideration. The parties acknowledge that, on March 24, 2006, Alon
deposited $5,000,000 (the “Earnest Deposit”) with Regions Bank. Upon the terms and subject
to the conditions set forth in this Agreement, at the Closing, Seller and Alon will instruct
Regions Bank to deliver the Earnest Deposit to Seller. The “Merger Consideration” shall
consist of a cash amount equal to the sum of (a) $52,000,000 and (b) the Estimated Inventory Value,
minus the Earnest Deposit.

     3.3 Estimated Inventory Value Documentation. At least three Business Days prior to
the Closing, Seller shall deliver to Purchaser a statement (the “Estimated Inventory
Statement”) indicating Seller’s good faith estimate of the value of the Inventory as of the
Closing Date (the “Estimated Inventory Value”). For purposes of calculating the Estimated
Inventory Value and the Final Inventory Value pursuant to this Section 3.3 and Section 3.4,
respectively, Inventory consisting of products, crude oil, tank bottoms and heels and line fill
shall be valued at market value at the time of valuation based on the pricing methodologies set
forth on Schedule 3.3, and all other Inventory, including consumables, chemicals and supplies,
shall be valued at cost.

     3.4 Inventory Adjustment.

          (a) At the close of business on the day prior to the Closing Date, Caleb Brett or another
inventory service reasonably acceptable to Purchaser and Seller (the “Inventory Service”)
will conduct a physical inventory of all Inventory as of the Closing Date as well as all naphtha,
distillate and VGO/gas oil held in inventory by Edgington as of the Closing Date (the “Physical
Inventory”). The Physical Inventory may be observed by Seller, Purchaser or their respective
representatives. Seller and Edgington will cooperate and give access to representatives of the
Inventory Service and Purchaser for this purpose. The cost of the Inventory Service will be paid
50% by Seller and 50% by Purchaser.

          (b) As soon as practicable, but in no event later than 30 days following the completion of the
Physical Inventory, Purchaser shall prepare a statement of the value of the Inventory as of the
Closing Date (the “Inventory Statement”). Purchaser shall deliver a copy of the Inventory
Statement to Seller promptly after it has been prepared. Seller shall have the opportunity to
examine the work papers, schedules and other documents prepared by Purchaser in connection with its
preparation of the Inventory Statement. The Inventory Statement shall be

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final and binding on the parties unless, within 30 days after delivery to Seller, notice is
given by Seller to Purchaser of its objection setting forth in reasonable detail Seller’s basis for
objection. If notice of objection is given, the parties shall consult with each other with respect
to the objection. If the parties are unable to reach agreement within 15 days after the notice of
objection has been given, the dispute shall be referred for resolution to PricewaterhouseCoopers
LLP (the “Accountants”) as promptly as practicable. The Accountants will make a
determination as to each of the items in dispute, which determination will be (i) in writing, (ii)
furnished to each of the parties hereto as promptly as practicable after the items in dispute have
been referred to the Accountants, (iii) made in accordance with this Agreement, and (iv) conclusive
and binding upon each of the parties hereto. The fees and expenses of the Accountants will be
shared equally by Purchaser and Seller. Each of Purchaser and Seller will use Commercially
Reasonable Efforts to cause the Accountants to render their decision as soon as reasonably
practicable, including by promptly complying with all reasonable requests by the Accountants for
information, books, records and similar items. The term “Final Inventory Value” shall mean
the definitive value of the Inventory as of the Closing Date agreed to (or deemed to be agreed to)
by Purchaser and Seller in accordance with this Section 3.4.

          (c) If the Estimated Inventory Value exceeds the Final Inventory Value, then Seller shall
promptly pay to Purchaser an amount equal to such excess. If the Final Inventory Value exceeds the
Estimated Inventory Value, then Purchaser shall promptly pay to Seller an amount equal to such
excess.

ARTICLE 4

THE CLOSING

     4.1 Date of Closing. The closing of the Merger contemplated hereby (the
“Closing”) shall take place at the offices of Jones Day, 2727 N. Harwood Street, Dallas,
Texas (or at such other place as the parties may designate) on June 1, 2006 (provided that such
date will be extended to July 1, 2006 if and only if the necessary consents under the HSR Act have
not been received by June 1, 2006 or the condition in Section 7.1.8 shall not have been fulfilled
by June 1, 2006). The date on which the Closing is effected is referred to in this Agreement as
the “Closing Date.” At the Closing, the parties shall execute and deliver the documents
referred to in Article 8.

     4.2 Effective Time. At the Closing, after the satisfaction or waiver of each of the
conditions set forth in Article 7, the parties shall cause to be duly prepared and filed with the
Secretary of State of the State of Delaware a certificate of merger and with the Secretary of State
of the State of Missouri articles of merger, each in such form as is required by, and executed in
accordance with, the applicable provisions of the DLLCA and GBCLM, as applicable. The Merger shall
become effective at such time as the filing with the Secretary of State of the State of Delaware of
the Certificate of Merger becomes effective (the “Effective Time”).

     4.3 Managers; Officers. The managers of Purchaser immediately prior to the Effective
Time shall be the managers of the Surviving Corporation as of the Effective Time until their
successors are elected and qualified. The officers of Purchaser immediately prior to the Effective
Time shall be the officers of the Surviving Corporation as of the Effective Time until their
successors are elected and qualified.

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES

     5.1 Representations and Warranties of Seller. Subject to the exceptions set forth in
the letter from Seller, dated the date of this Agreement, addressed to Purchaser (the
“Disclosure Letter”), each of which exceptions in order to be effective shall indicate the
Section, and, if applicable, subsection of this Section 5.1 to which it relates, Seller makes the
following representations and warranties to Purchaser, each of which is true and correct as of the
date hereof and shall be true and correct as of the Closing Date and shall be unaffected by any
investigation heretofore or hereafter made by Purchaser.

          5.1.1 Organization and Good Standing. Each of Seller and Edgington is a corporation
duly organized, validly existing and in good standing under the Laws of the state of its
incorporation. Each of Seller and Edgington has the requisite corporate power and authority to
own, lease or otherwise hold the assets owned, leased or otherwise held by it and to carry on the
businesses presently conducted by it. Edgington is in good standing and duly qualified to conduct
business as a foreign corporation in every state of the United States in which its ownership or
lease of property or conduct of its business makes such qualification necessary, except such states
in which the failure to qualify, individually or in the aggregate, has not had or resulted in, and
could not reasonably be expected to have or result in, a Material Adverse Effect. Section 5.1.1 of
the Disclosure Letter sets forth each state in which Edgington is qualified to conduct business as
a foreign corporation.

          5.1.2 Authorization of Agreement; Binding Obligation. Each of Seller and Edgington
has the requisite corporate power to execute and to deliver this Agreement and to perform the
transactions contemplated hereby to be performed by them. The execution and delivery by each of
Seller and Edgington of this Agreement and the performance by them of the transactions contemplated
hereby to be performed by them have been duly authorized by all necessary corporate and shareholder
action on the part of Seller and Edgington. This Agreement has been duly executed and delivered by
duly authorized officers of each of Seller and Edgington and, assuming the due execution and
delivery of this Agreement by Purchaser and Alon, constitutes a valid and binding obligation of
Seller and Edgington enforceable against them in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the
enforcement of creditors’ rights in general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at Law).

          5.1.3 No Restrictions Against the Merger; Required Consents. The execution and
delivery of this Agreement by Seller or Edgington does not, and the Merger and the performance by
Seller or Edgington of the transactions contemplated hereby to be performed by them will not (a)
conflict with the Organizational Documents of either Seller or Edgington, (b) conflict with, or
result in any violation of, or constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a benefit under, any contract, permit, order, judgment or decree to which either
Seller or Edgington is a party or by which any of their properties are bound, (c) constitute a
violation of any Law or regulation applicable to either Seller or Edgington, or (d) result in the
creation of any Lien upon the Shares or any of the Assets. Except as set forth in

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Section 5.1.3 of the Disclosure Letter, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or third party is required to be
obtained or made by or with respect to Seller and/or Edgington in connection with the execution and
delivery of this Agreement by Seller and/or Edgington, the Merger or the performance by Seller
and/or Edgington of the transactions contemplated hereby to be performed by either of them, except
for any filings, if required, with the Federal Trade Commission and Department of Justice pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”).

          5.1.4 Capitalization.

          (a) The authorized capital stock of Edgington consists of 30,000 shares of common stock, par
value $1.00 per share, of which 1,000 shares, which constitute the Shares, are issued and
outstanding. The Shares constitute the only issued and outstanding shares of capital stock of
Edgington, have been duly authorized and are validly issued, fully paid and nonassessable. There
are no issued and outstanding securities, rights or obligations which are convertible into,
exchangeable for, or exercisable to acquire any capital stock or other equity securities of
Edgington. There are no outstanding contractual obligations, commitments or arrangements of
Edgington to repurchase, redeem or otherwise acquire or make any payment in respect of any shares
of capital stock of Edgington.

          (b) Edgington is not bound by or subject to any (i) preemptive right or other outstanding
rights, subscriptions, options, warrants, conversion, call, put, exchange or other rights,
agreements, commitments, arrangements or understandings of any kind pursuant to which Edgington,
contingently or otherwise, is or may become obligated to offer, issue, sell, purchase or redeem, or
cause to be offered, issued, sold, purchased or redeemed, any Edgington Securities; (ii)
shareholder agreements, voting trusts, proxies or other agreements or understandings to which
Edgington is a party or to which Edgington is bound relating to the holding, voting, sale,
purchase, redemption or other acquisition of Edgington Securities; or (iii) except as set forth in
Section 1.2, agreements, commitments, arrangements, understandings or other obligations to declare,
make or pay any dividends or distributions, whether current or accumulated, or due or payable, on
any Edgington Securities. Except for this Agreement, Edgington is not obligated to become a party
to any contract or arrangement for the sale of or is otherwise obligated to sell, transfer or
otherwise dispose of any Edgington Securities. Edgington has no outstanding bonds, debentures,
notes or other obligations the holders of which have the right to vote (or which are convertible
into or exercisable for securities having the right to vote) with the shareholders of Edgington on
any matter.

          (c) Except as set forth in Section 5.1.4(c) of the Disclosure Letter, Edgington does not own,
directly or indirectly, beneficially or of record, any capital stock of or other equity or voting
securities or interests in any other Person. Except as set forth in Section 5.1.4(c) of the
Disclosure Letter, Edgington is not a party to any shareholders agreement, voting trusts or other
agreements or undertakings relating to the voting, purchase, redemption or other acquisition of
capital stock or other equity interests in any other Person. Except as set forth in Section
5.1.4(c) of the Disclosure Letter, there are no outstanding obligations of Edgington to make any
investment in or provide funds (whether in form of a loan, capital contribution or otherwise), and

9

 

Edgington does not currently have outstanding any such investment or provision of funds, to
any other Person.

          5.1.5 Ownership of Shares and Assets.

          (a) The Merger and delivery of the Shares as contemplated by this Agreement are not subject to
any preemptive right, right of first refusal or other right or restriction. Seller is the record
and beneficial owner of, and has good and marketable title to, all of the Shares, free and clear of
any Liens, except Liens set forth in Section 5.1.5 of the Disclosure Letter. At the Effective
Time, Purchaser will acquire good and marketable title to the Shares, free and clear of any Liens.

          (b) There are no existing agreements with, options or rights of, or commitments to any Person
to acquire any of the Assets or any interest therein, except for those contracts entered into in
the normal course of business consistent with past practice for the sale of Inventory.

          5.1.6 Financial Statements. Edgington has delivered to Purchaser true and complete
copies of (a) the unaudited balance sheets of Edgington at September 30, 2004 and 2005 and related
statements of income for the periods then ended (the “Year-End Financial Statements”) and
(b) the unaudited balance sheet of Edgington at February 28, 2006 and related statement of income
for the three-month period then ended (together with the Year-End Financial Statement, the
“Financial Statements”). Except as set forth in Section 5.1.6 of the Disclosure Letter,
the Financial Statements (i) have been prepared, in all material respects, in accordance with GAAP
applied on a consistent basis during the periods involved (except that the Financial Statements do
not contain all footnote disclosure required by GAAP); (ii) present fairly, in all material
respects, the financial position, assets and liabilities (whether accrued, absolute, contingent or
otherwise) of Edgington as at the dates thereof and the results of operations of Edgington for the
periods then ended; and (iii) accurately reflect in all material respects the books of account and
other financial records of Edgington. References in this Agreement to the “Balance Sheet”
shall mean the balance sheet of Edgington as of February 28, 2006, referred to above; and
references in this Agreement to the “Balance Sheet Date” shall be deemed to refer to
February 28, 2006.

          5.1.7 Inventory. All Inventory consisting of finished jet fuel is of quality
consistent with such product produced by Edgington in the ordinary course of its Business.
Edgington is not under any Liability with respect to the return of inventory in the possession of
wholesalers, retailers or other customers.

          5.1.8 Absence of Undisclosed Liabilities. Except as set forth in Section 5.1.8 of the
Disclosure Letter, Edgington has no Liabilities with respect to the Business, except:

          (a) those Liabilities set forth on the Balance Sheet and not heretofore paid or discharged;

          (b) Liabilities arising in the ordinary course of business under any agreement, contract,
commitment or lease specifically disclosed in Section 5.1.10(a) of the Disclosure Letter or not
required to be disclosed because of the term or amount involved; and

10

 

          (c) those Liabilities or obligations incurred, consistently with past business practice, in or
as a result of the normal and ordinary course of business since the Balance Sheet Date.

This Section 5.1.8 does not apply to Environmental Costs and Liabilities.

          5.1.9 Books of Account. Except as set forth in Section 5.1.9 of the Disclosure
Letter, the books, records and accounts of Edgington maintained with respect to the Business
accurately and fairly reflect, in reasonable detail, the transactions and the assets and
Liabilities of Edgington with respect to the Business. Except as set forth in Section 5.1.9 of the
Disclosure Letter, Edgington has not engaged in any transaction with respect to the Business,
maintained any bank account for the Business or used any of the funds of Edgington in the conduct
of the Business except for transactions, bank accounts and funds which have been and are reflected
in the normally maintained books and records of the Business.

          5.1.10 Contracts and Commitments. (a) Except as disclosed in Section 5.1.10(a) of the
Disclosure Letter, Edgington is not a party to any written or oral:

          (i) agreement, contract or commitment for the future purchase of, or payment for,
feedstocks, supplies or products, or for the performance of services by a third party which
feedstocks, supplies, products or services are used in the conduct of the Business involving
in any one case $50,000 or more;

          (ii) agreement, contract or commitment to sell or supply products or to perform
services in connection with the Business involving in any one case $50,000 or more;

          (iii) agreement, contract or commitment relating to the Business, other than Real
Property Leases, continuing over a period of more than six months from the date hereof or
exceeding $50,000 in value;

          (iv) distribution, dealer, representative or sales agency agreement, contract or
commitment relating to the Business;

          (v) lease under which Edgington is either lessor or lessee relating to the Assets or
any property at which the Assets are located, other than the Real Property Leases;

          (vi) note, debenture, bond, equipment trust agreement, letter of credit agreement, loan
agreement or other contract or commitment for the borrowing or lending of money relating to
the Business or agreement or arrangement for a line of credit or guarantee, pledge or
undertaking of the Indebtedness of any other Person relating to the Business;

          (vii) agreement, contract or commitment for any charitable or political contribution
relating to the Business;

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          (viii) commitment or agreement for any capital expenditure or leasehold improvement in
excess of $50,000 relating to the Business;

          (ix) agreement, contract or commitment limiting or restraining Edgington, the Business
or any successor thereto from engaging or competing in any manner or in any business;

          (x) license, franchise, distributorship or other agreement which relates in whole or in
part to any software, patent, trademark, trade name, service mark or copyright or to any
ideas, technical assistance or other know-how of or used by Edgington in the conduct of the
Business; or

          (xi) material agreement, contract or commitment relating to the Business not made in
the ordinary course of business.

          (b) Each of the agreements, contracts, commitments, leases, plans and other instruments,
documents and undertakings listed or required to be listed in Section 5.1.10(a) of the Disclosure
Letter, or not required to be listed therein because of the amount thereof, is valid and
enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights in
general and subject to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); Edgington is, and to the knowledge of Seller all
other parties thereto are, in compliance in all material respects with the provisions thereof;
Edgington is not, and to the knowledge of Seller no other party thereto is, in default in any
material respect in the performance, observance or fulfillment of any obligation, covenant or
condition contained therein; and no event has occurred which with or without the giving of notice
or lapse of time, or both, would constitute a default in any material respect thereunder. Except
as disclosed in Section 5.1.10(b) of the Disclosure Letter, no written or oral agreement, contract
or commitment described or required to be described in Section 5.1.10(a) of the Disclosure Letter
requires the consent of any party in connection with the transactions contemplated hereby.

          5.1.11 Title to Assets. At the Closing, Edgington will have, good, valid and
marketable title to the Assets free and clear of all Liens, other than Permitted Liens.

          5.1.12 Intellectual Property. Schedule 1.1.5 contains an accurate and complete list
of all Intellectual Property owned or used by Edgington in the operation of the Business, except
for software purchased or licensed off-the-shelf. Except as set forth in Section 5.1.12 of the
Disclosure Letter, Edgington owns or has licensed the right, title and interest in and to the
Intellectual Property used in the operation of the Business (including the right to use and license
the same). There are no pending, or to the knowledge of Seller, threatened actions of any nature
affecting the Intellectual Property. There are no notices or claims currently pending or received
by Seller or Edgington which claim infringement of any domestic or foreign letters patent, patent
applications, patent licenses, software licenses and know-how licenses, trade names, trademark
registrations and applications, service marks, copyrights, copyright registrations or applications,
trade secrets, technical knowledge, know-how or other confidential proprietary information. There
is, to the knowledge of Seller, no reasonable basis upon which any claim may be asserted

12

 

against Edgington for infringement or misappropriation of any domestic or foreign letters
patent, patents, patent applications, patent licenses, software licenses, and know-how licenses,
trade names, trademark registrations and applications, trademarks, service marks, copyrights,
copyright registrations or applications, trade secrets, technical knowledge, know-how or other
confidential proprietary information. All letters patent, registrations and certificates issued by
any Governmental Entity relating to any of the Intellectual Property and all licenses and other
agreements pursuant to which Edgington uses any of the Intellectual Property, are valid and
subsisting, have been properly maintained and neither Edgington, nor to the knowledge of Seller,
any other Person, is in default or violation thereunder.

          5.1.13 Sufficiency of Assets. Other than the Excluded Assets, the Assets constitute
all assets and rights currently used in the Business. No Person other than Edgington owns any
equipment or other tangible assets or properties situated on the premises of Edgington or necessary
to the operation of the Business of Edgington, except for leased items disclosed in Section
5.1.10(a) or Section 5.1.13 of the Disclosure Letter.

          5.1.14 Real Property.

          (a) Title to Owned Real Property. Title to the Owned Real Property at Closing shall
be, good and marketable, fee simple absolute, free and clear of all Liens, adverse claims and other
matters affecting Edgington’s title to or possession of such Owned Real Property, including all
encroachments, boundary disputes, covenants, restrictions, easements, rights of way, mortgages,
security interests, leases, encumbrances and title objections, excepting only the Permitted Liens.

          (b) Leased Real Property. Except as set forth in Section 5.1.14(b) of the Disclosure
Letter, Edgington has no Leased Real Property.

          (c) Zoning. The Real Property complies with all applicable zoning and other land use
requirements and, to Seller’s knowledge, there is no pending action to modify or terminate the
present zoning of the Real Property or any portion thereof.

          (d) Utility Services. The water, electric, gas and sewer utility services and the
septic tank and storm drainage facilities currently available to the Real Property are adequate for
the present use of the Real Property by Edgington in conducting the Business, are not being
appropriated by Edgington but rather are being supplied to Edgington by utility companies or
municipalities pursuant to valid and enforceable contracts, and, to the knowledge of Seller, there
is no condition which will result in the termination of the present access from the Real Property
to such utility services and other facilities.

          (e) Access. Edgington has obtained all Permits and rights-of-way, including
proof-of-dedication, which are necessary to ensure vehicular and pedestrian ingress and egress to
and from the Real Property. There are no restrictions on entrance to or exit from the Real
Property to adjacent public streets and, to the knowledge of Seller, no conditions which will
result in the termination of the present access from the Real Property to existing highways and
roads.

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          (f) Assessments or Hazards. Edgington has received no notices, oral or written, from
any Governmental Entity that the assessed value of the Real Property has been determined to be
greater than that upon which county, township or school tax was paid for the 2005 tax year
applicable to each such Tax, or from any insurance carrier of Edgington of fire hazards with
respect to the Real Property.

          (g) Eminent Domain. Edgington has received no notices, oral or written, that any
Governmental Entity having the power of eminent domain over the Real Property has commenced or
intends to exercise the power of eminent domain or a similar power with respect to all or any part
of the Real Property.

          (h) No Violations. The Real Property and the present uses thereof comply in all
material respects with all Laws of all Governmental Entities having jurisdiction over the Real
Property, and Edgington has received no notices, oral or written, from any Governmental Entity, and
has no reason to believe, that the Real Property or any improvements erected or situated thereon,
or the uses conducted thereon or therein, violate in any material respect any Laws of any
Governmental Entity having jurisdiction over the Real Property. This Section 5.1.14(h) does not
apply to Environmental Laws.

          (i) Public Improvements. No work for municipal improvements has been commenced on or
in connection with the Real Property or any street immediately adjacent thereto. No assessment for
public improvements has been made against the Real Property which remains unpaid. No notice from
any county, township or other Governmental Entity has been served upon the Real Property or
received by Edgington requiring or calling attention to the need for any work, repair,
construction, alteration or installation on or in connection with the Real Property which has not
been complied with.

          (j) Flood Plain. No part of the Real Property contains, is located within, or abuts
any flood plain, navigable water or other body of water, tideland, wetland, marshland or any other
area which is subject to similar state, federal or municipal regulation, control or protection.

          (k) Commitments and Options. Except for this Agreement, Edgington is not a party to
any option to purchase or sell, right of first refusal to purchase or sell or agreement for the
sale and purchase of the Owned Real Property to any Person.

          (l) Parties in Possession. Other than Edgington and as set forth in Section 5.1.14(l)
of the Disclosure Letter, there are no parties in possession of any portion of the Owned Real
Property or Leased Real Property, as lessees, subtenants, or tenants at sufferance, or trespassers.
The Real Property constitutes all the parcels, tracts of land, buildings, fixtures and
improvements that are used or held for use primarily in connection with the Business.

          (m) Pipeline Easements. Except as set forth in Schedule 1.1.6(c), (i) Edgington is
not in default under any easement to which is a party in connection with the Pipeline Easements,
nor to the knowledge of Seller, is there any event or circumstances that with the giving of notice
or the lapse of time or both would constitute a default under any such easement; (ii) to the
knowledge of Seller, there are no easement gaps in the pipelines located on

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the Pipeline Easements; and (iii) except as set forth in Section 5.1.14(m) of the Disclosure
Letter, the Pipeline Easements are in full force and effect and are sufficient to allow Edgington
to continue to operate any pipelines therein or thereon (without interruption) as currently
operated. All Pipeline Easements represent valid, binding and enforceable agreements of Edgington,
and to the knowledge of Seller, each of the parties thereto except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of
creditors’ rights in general and subject to general principles of equity (regardless of whether
such enforceability is considered in equity or at Law), and there is no pending modification or
cancellation of same. Edgington owns no pipelines other than pipelines located within the Real
Property.

          5.1.15 Insurance. To the knowledge of Seller, Edgington or an Affiliate of Edgington
has insurance policies in full force and effect for such amounts as are sufficient for material
compliance with all requirements of Law and of all agreements to which Edgington is a party or by
which it is bound. Set forth in Section 5.1.15 of the Disclosure Letter is a list of all fire,
liability and other forms of insurance and all fidelity bonds held by or applicable to Edgington or
the Business, setting forth, in respect of each such policy, the policy name, policy number,
carrier, term, type of coverage and annual premium. To the knowledge of Seller, no event relating
to Edgington or the Business has occurred which can reasonably be expected to result in a
retroactive upward adjustment in premiums under any such insurance policies or which is likely to
result in a prospective upward adjustment in such premiums. Excluding insurance policies that have
expired and been replaced in the ordinary course of business, no insurance policy has been
cancelled within the last two years and, to the knowledge of Seller, no threat has been made to
cancel any insurance policy of Edgington during such period except as set forth in Section 5.15 of
the Disclosure Letter. All such insurance will remain in full force and effect with respect to
periods before the Closing. To the knowledge of Seller, no event has occurred, including the
failure by Edgington to give any notice or information or Edgington giving any inaccurate or
erroneous notice or information, which limits or impairs the rights of Edgington under any such
insurance policies.

          5.1.16 Conduct of the Business Since the Balance Sheet Date. Except as set forth in
Section 5.1.16 of the Disclosure Letter, since the Balance Sheet Date, Edgington has not:

          (a) incurred any Liabilities, other than Liabilities incurred in the ordinary course of
business consistent with past practice, or discharged or satisfied any Lien, or paid any
Liabilities, other than in the ordinary course of business consistent with past practice, or failed
to pay or discharge when due any Liabilities of which the failure to pay or discharge has caused or
will cause any material damage or risk of material loss to Edgington or any of the Assets;

          (b) sold, encumbered, assigned or transferred any assets or properties which would have been
included in the Assets, except for the sale of Inventory in the ordinary course of business
consistent with past practice and except for dispositions of worn out or obsolete equipment or
other Tangible Personal Property in the ordinary course of business consistent with past practice;

          (c) created, incurred, assumed or guaranteed any Indebtedness, or mortgaged, pledged or
subjected any of the Assets to any Lien, except for Permitted Liens;

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          (d) made or suffered any amendment or termination of any material agreement, contract,
commitment, lease or plan to which Edgington is a party or by which Edgington is bound, or
cancelled, modified or waived any substantial debts or claims held by Edgington or waived any
rights of substantial value, whether or not in the ordinary course of business;

          (e) suffered any damage, destruction or loss, whether or not covered by insurance, (i) which
has had or resulted in, or could reasonably be expected to have or result in, a Material Adverse
Effect, or (ii) of any item or items carried on its books of account individually or in the
aggregate at more than $50,000, or suffered any repeated, recurring or prolonged shortage,
cessation or interruption of supplies or utility or other services required to conduct its business
and operations;

          (f) received notice or had knowledge of any actual or threatened labor trouble, strike or
other occurrence, event or condition of any similar character which has had or might have an
adverse effect on its business, operations, assets properties or prospects;

          (g) made commitments or agreements for capital expenditures or capital additions or
betterments exceeding in the aggregate $50,000 except such as may be involved in ordinary repair,
maintenance or replacement of the Assets;

          (h) increased the salaries or other compensation of, or made any advance (excluding advances
for ordinary and necessary business expenses) or loan to, any of Edgington’s employees or made any
increase in, or any addition to, other benefits to which any of Edgington’s employees may be
entitled;

          (i) changed any of the accounting principles followed by Edgington or the methods of applying
such principles;

          (j) entered into any transaction other than in the ordinary course of business consistent with
past practice; or

          (k) suffered any changes, events or occurrences which, individually or in the aggregate, have
had or resulted in, or could reasonably be expected to have or result in, a Material Adverse
Effect.

          5.1.17 Customers and Suppliers. Since September 30, 2005, there has not been any
adverse change in the business relationship of Edgington with any customer or supplier.

16

 

          5.1.18 Personnel Information.

          (a) Neither Edgington nor any Affiliate of Edgington is a party to or bound by any employment
or consulting agreement or any collective bargaining agreement or other labor agreement, or any
pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation,
bonus, group insurance or other incentive or welfare contract, plan or arrangement relating to the
Business except as set forth in Section 5.1.18(a) of the Disclosure Letter.

          (b) Section 5.1.18(b) of the Disclosure Letter sets forth a true and complete list as of March
31, 2006 of all individuals employed by Edgington in connection with the Business, including a
description of their hourly wage or bi-weekly salary for the calendar year ending December 31,
2006. Except as set forth in Section 5.1.18(b) of the Disclosure Letter, to the knowledge of
Seller, no employee material to the Business will terminate his or her employment with the Business
as a result of the consummation of the transactions contemplated by this Agreement.

          (c) Edgington has not agreed to recognize any union or other collective bargaining unit, nor
has any union or other collective bargaining unit been certified as representing any of Edgington’s
employees. To the knowledge of Seller, no organizational effort is currently being made or
threatened by or on behalf of any labor union with respect to employees of Edgington. There is no
labor strike, slowdown, work stoppage or lockout actually pending or, to the knowledge of Seller,
threatened against or affecting Edgington.

          (d) Except as set forth in Section 5.1.18(d) of the Disclosure Letter, Edgington, with respect
to its employees, (i) has no written personnel policy applicable to such employees, (ii) is and has
been in material compliance for the past five years with all applicable Laws regarding employment
and employment practices, including ERISA, and those Laws relating to terms and conditions of
employment, wages and hours, occupational safety and health and workers’ compensation and is not
engaged in any unfair labor practices, (iii) has no unfair labor practice charges or complaints
pending or, to the knowledge of Seller, threatened against it before the National Labor Relations
Board, (iv) has no grievances pending or, to the knowledge of Seller, threatened against it, and
(v) has no charges pending before the Equal Employment Opportunity Commission of any state or local
agency responsible for the prevention of unlawful employment practices.

          (e) Edgington is in compliance with its obligations pursuant to the WARN Act, the California
WARN Act, California Labor Code Section 1400 et seq., and all other notification obligations.

          5.1.19 Employee Benefit Plans. All “employee benefit plans,” as defined by Section
3(3) of ERISA, and all other plans, programs, agreements, policies, contracts, commitments or
schemes, written or oral, statutory or contractual, that provide for compensation or benefits, with
respect to which Edgington or any Company ERISA Affiliate has or has had any Liability or which are
or were maintained by Edgington or any Company ERISA Affiliate or to which Edgington or any Company
ERISA Affiliate contributed (the “Employee Plans”) are listed in Section 5.1.19 of the
Disclosure Letter. Section 5.1.19 of the Disclosure Letter

17

 

separately identifies those Employee Plans maintained, contributed to or sponsored solely by
Edgington (the “Edgington Benefit Plans”). Except for the Apex 401(k) Plan, each Employee
Plan is an Edgington Benefit Plan. With respect to each Employee Plan, Edgington has delivered to
Purchaser a true and complete copy of such Employee Plan (including all amendments thereto) and, if
applicable, a true and complete copy of (i) each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, (iii) the most recently filed IRS
Form 5500, if applicable, and (iv) the most recent IRS favorable determination letter. No Employee
Plan constitutes a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA or is subject to
Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.

          (a) Each Employee Plan intended to be qualified under Section 401 of the Code is so qualified,
and any trust maintained pursuant thereto is exempt from federal income taxation under Section 501
of the Code. Each Employee Plan is in compliance in all material respects with, and Edgington and
the Company ERISA Affiliates have complied with respect to each Employee Plan in all material
respects with, the requirements of ERISA and the Code and no “party in interest” or “disqualified
person” has engaged in a “prohibited transaction” within the meaning of Section 406 of ERISA or
Section 4975 of the Code.

          (b) All contributions required to have been made under any Employee Plan (without regard to
any waivers granted under Section 412 of the Code) have been made.

          (c) None of the Employee Plans is a “nonqualified deferred compensation plan” as defined in
Section 409A(d)(1) of the Code. None of the Employee Plans provides for the payment of separation,
severance, termination or similar-type benefits to any person or provides for or, except to the
extent required by Law, promises retiree medical or life insurance benefits to any current or
former employee, officer or director of Edgington or any Company ERISA Affiliate.

          (d) No legal action, suit or claim is pending or, to the knowledge of Seller, threatened with
respect to any Employee Plan (other than claims for benefits in the ordinary course) and no fact or
event exists that could reasonably be expected to give rise to any such action, suit or claim.
There is no pending or threatened assessment, complaint, proceeding, investigation or inquiry of
any kind in any court or government agency with respect to any Employee Plan, nor, to the knowledge
of Seller, is there any basis for one.

          (e) Except as set forth in Section 5.1.19(e) of the Disclosure Letter, there has been no
amendment to, written interpretation of or announcement (whether or not written) by Edgington
relating to, or change in employee participation or coverage under, any Employee Plan that would
increase materially the expense of maintaining such Employee Plan above the level of expense
incurred in respect thereto for the most recent fiscal year ended prior to the date hereof.

          (f) No employee or former employee of Edgington will become entitled to any bonus, retirement,
severance, job security or similar benefit or enhanced such benefit (including acceleration of
vesting or exercise of an incentive award) as a result of the transactions contemplated by this
Agreement.

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          (g) Neither Edgington nor any Company ERISA Affiliate has made any express or implied
commitment to create, incur liability with respect to or cause to exist any employee benefit plan,
program or arrangement or to modify any Employee Plan, except for Liabilities arising under the
Apex 401(k) Plan and the Edgington Benefit Plans (each as of the date of this Agreement) or
required by Law.

          5.1.20 Litigation; Decrees. There are no judicial or administrative actions,
proceedings or investigations pending or, to the knowledge of Seller, threatened that question the
validity of this Agreement, the Merger or any action taken or to be taken by Seller or Edgington in
connection with this Agreement. Except as set forth in Section 5.1.19 of the Disclosure Letter,
there are no (i) lawsuits, claims, administrative or other proceedings or investigations relating
to the conduct of the Business pending or, to the knowledge of Seller, threatened by, against or
affecting Edgington, Seller or any Affiliate of Seller or (ii) judgments, orders or decrees of any
Governmental Entity binding on Edgington or the Assets.

          5.1.21 Compliance With Law; Permits. Edgington has complied in all material respects
with each Law, judgment, order and decree of any Governmental Entity to which Edgington or its
business, operations, assets or properties is subject and is not currently in material violation of
any of the foregoing. Edgington owns, holds, possesses or lawfully uses in the operation of the
Business all Permits which are in any manner necessary for it to conduct the Business as now
conducted, or, to the knowledge of Seller, has owned, held, possessed or lawfully used in the
operations of the Business all Permits which were necessary for it to conduct the Business as
previously conducted or for the ownership and use of the Assets, in material compliance with all
Laws. All such Permits are listed and described on Schedule 1.1.7. Edgington is not in default in
any material respect, nor has it received any notice of any claim of default, with respect to any
such Permits. To the knowledge of Seller, all such Permits are renewable by their terms or in the
ordinary course of business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees. No shareholder, director, officer, employee or
former employee of Edgington or any Affiliate of Edgington, or any other Person owns or has any
proprietary, financial or other interest (direct or indirect) in any Permits which Edgington owns,
possesses or uses in the operation of the Business as now or previously conducted. This Section
does not apply to Environmental Laws or Environmental Permits or judgments, order or decrees of any
Governmental Entity issued thereunder.

          5.1.22 Environmental Matters. Except as set forth in Section 5.1.22 of the Disclosure
Letter:

          (a) the operation of the Business is in material compliance with all applicable Environmental
Laws;

          (b) (i) to the knowledge of Seller, Edgington has obtained and currently maintains all
Environmental Permits necessary for its operations and is in material compliance with such
Environmental Permits, (ii) there are no judicial or administrative actions, proceedings or
investigations pending or, to the knowledge of Seller, threatened concerning compliance with such
Environmental Permits, and (iii) Edgington has not received any notice from any Governmental Entity
or written notice from any Person to the effect that there is lacking any

19

 

Environmental Permit required for the current use or operation of any property owned, operated
or leased by Edgington;

          (c) there are no judicial or administrative actions, proceedings or investigations pending or,
to the knowledge of Seller, threatened against Seller concerning compliance with violation of any
Environmental Law or Environmental Permit;

          (d) Edgington has not filed any notice under any Environmental Law indicating past or present
treatment, storage, or disposal of or reporting a Release or threatened Release of Hazardous
Material into the environment requiring investigation, clean up or other Remedial Action;

          (e) neither Edgington nor any of its past or current facilities and operations, is subject to
any outstanding written order, injunction, judgment, decree, ruling, assessment or arbitration
award or any agreement with any Governmental Entity or other Person, or to any federal, state,
local or foreign investigation respecting (i) Environmental Laws, (ii) Remedial Action, (iii) any
Environmental Claim or (iv) the Release or threatened Release of any Hazardous Material;

          (f) to the knowledge of Seller, all the Real Property and all real property formerly owned,
operated or leased by Edgington is free of contamination by or from any Hazardous Materials which,
if disclosed to an appropriate Governmental Entity, would require investigation, clean up or other
Remedial Action;

          (g) there is not now, nor to the knowledge of Seller, has there been in the past, on, in or
under the Real Property or any other real property currently or formerly owned, leased or operated
by Edgington (i) any underground storage tanks, above-ground storage tanks, dikes or impoundments,
(ii) any asbestos-containing materials, (iii) any polychlorinated biphenyls or (iv) any radioactive
substances; and

          (h) Edgington is not subject to Environmental Costs and Liabilities with respect to Hazardous
Materials, and, to the knowledge of Seller, no facts or circumstances exist which could give rise
to Environmental Costs and Liabilities with respect to compliance with Environmental Laws
applicable to Hazardous Materials.

          5.1.23 Taxes.

          (a) All Tax Returns that are required to be filed on or before the Closing Date by Edgington
or with respect to the Business have been duly filed on a timely basis under the statutes, rules or
regulations of each applicable jurisdiction. All such Tax Returns were complete and accurate in
all material respects. All Taxes owed by Edgington have been paid by it, whether or not such Taxes
are disputed. Except as set forth in Section 5.1.23 of the Disclosure Letter, Edgington has not
executed or filed with the Internal Revenue Service or any other Tax Authority any agreement
extending the period for filing any Tax Return.

          (b) No claim for assessment or collection of Taxes has been asserted against Edgington which
claim has not been paid or which is not yet due. Edgington is not a party to any pending action,
proceeding or investigation by any Governmental Entity for the assessment

20

 

or collection of Taxes nor to the knowledge of Seller are any such actions, proceedings or
investigations threatened.

          (c) No waivers of statutes of limitation in respect of any Tax Returns have been given or
requested by Edgington nor has Edgington agreed to any extension of time with respect to a Tax
assessment or deficiency. No claim has ever been made by a Governmental Entity in a jurisdiction
where Edgington does not currently file Tax Returns that it is or may be subject to taxation by
that jurisdiction nor to the knowledge of Seller is any such assertion of jurisdiction threatened.
No security interests have been imposed upon or asserted against the Shares or any of the Assets as
a result of or in connection with any failure, or alleged failure, to pay any Tax.

          (d) Edgington has withheld and paid all Taxes required to be withheld in connection with any
amounts paid or owing to any employee, creditor, independent contractor or other third party.

          (e) Edgington is not and has not been a member of an affiliated, consolidated, combined or
unitary group other than those of which Apex Holding Co. is the common parent, or any other
arrangement by which it could be liable for the Taxes of any other Person under applicable Tax law,
nor is it liable for the Taxes of any other Person as a transferee or successor.

          (f) Edgington is not a party to any tax sharing agreement or other similar arrangement under
which it could be liable for the Taxes of any other Person, and if it has ever been subject to any
such agreement or arrangement it has been fully released from such prior to the Closing Date.

          (g) Edgington has not participated in any “tax shelter” within the meaning of Section 6662 of
the Code or any similar provision of state or local law, or in any “reportable transaction” within
the meaning of Section 6662A of the Code or any similar provision of state or local law, unless
such participation would not be required to be reported by Edgington for any period beginning on or
after the Closing Date.

          (h) Edgington is not a party to any closing agreement or other agreement with a Tax Authority
which could affect the Taxes of Edgington for any period beginning on or after the Closing Date.

          5.1.24 Commissions or Finders Fees. Neither Seller, Edgington nor any Person acting
on the behalf of Seller or Edgington has agreed to pay a commission, finder’s fee or similar
payment in connection with this Agreement or any matter related hereto to any Person.

          5.1.25 Potential Conflicts of Interest. Except as set forth in Section 5.1.25 of the
Disclosure Letter, none of the stockholders, officers or directors of either Seller or Edgington or
any entity controlled by any of the foregoing (i) owns, directly or indirectly, any significant
interest in, or is a director, officer, employee, consultant or agent of, any Person which is a
competitor, lessor, lessee or customer of, or supplier of goods or services to, the Business, (ii)
owns, directly or indirectly, in whole or in part, any real property, leasehold interests or other
property with a fair market value of at least $25,000 in the aggregate the use of which is
necessary for the Business, (iii) has any cause of action or other suit, action or claim whatsoever

21

 

against, or owes any amount to Edgington other than claims in the ordinary course of business,
(iv) has sold to, or purchased from, either Seller or Edgington any assets or property for
aggregate consideration in excess of $25,000 since January 1, 2004, or (v) is a party to any
contract or participates in any arrangement, written or oral, pursuant to which the Business
provides services of any nature to any such individual or entity, except to such individual in his
capacity as an employee of the Business.

          5.1.26 “AS-IS, WHERE-IS” CONDITION. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT OR IN ANY OF THE CLOSING DOCUMENTS TO BE DELIVERED TO
PURCHASER PURSUANT TO SECTION 8.1, THE ASSETS WILL BE TRANSFERRED “AS IS, WHERE IS,” WITHOUT ANY
EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING AS TO FITNESS, MERCHANTABILITY OR FITNESS FOR
ANY PURPOSE, AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR, WITH ALL FAULTS, LIMITATIONS AND
DEFECTS.

     5.2 Representations and Warranties of Alon and Purchaser. Each of Alon and Purchaser
makes the following representations and warranties to Seller, each of which is true and correct as
of the date hereof and shall be true and correct as of the Closing Date and shall be unaffected by
any investigation heretofore or hereafter made by Seller.

          5.2.1 Organization and Good Standing. Alon is a corporation and Purchaser is a
limited liability company in each case duly organized, validly existing and in good standing under
the Laws of the State of Delaware, and each has the requisite corporate or limited liability
company power, as applicable, and authority to own, lease and operate its assets and properties and
to conduct its business as now being conducted.

          5.2.2 Authorization of Agreement; Binding Obligation. Each of Alon and Purchaser has
the requisite corporate or limited liability company power, as applicable, to execute and to
deliver this Agreement and to perform the transactions contemplated hereby to be performed by it.
The execution and delivery by each of Alon and Purchaser of this Agreement and the performance by
it of the transactions contemplated hereby to be performed by it have been duly authorized by all
necessary corporate or limited liability company and stockholder or member action, as applicable,
on the part of Alon and Purchaser. This Agreement has been duly executed and delivered by duly
authorized officers of Alon and Purchaser and, assuming the due execution and delivery of this
Agreement by Seller and Edgington, constitutes a valid and binding obligation of each of Alon and
Purchaser enforceable against Alon and Purchaser in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the
enforcement of creditors’ rights in general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

          5.2.3 No Restrictions Against the Merger; Required Consents. The execution and
delivery of this Agreement by Alon and Purchaser does not, and the Merger and the performance by
Alon and Purchaser of the transactions contemplated hereby to be performed by them will not (a)
conflict with the Organizational Documents of either Alon or Purchaser, (b) conflict with, or
result in any violation of, or constitute a default (with or without notice or lapse

22

 

of time, or both) under, or give rise to a right of termination, cancellation or acceleration
of any obligation or to loss of a benefit under, any contract, permit, order, judgment or decree to
which either Alon or Purchaser is a party or by which any of their properties are bound, or (c)
constitute a violation of any Law or regulation applicable to either Alon or Purchaser. Except for
any applicable requirements of the HSR Act, no consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity or third party is required to be
obtained or made by or with respect to either Alon or Purchaser in connection with the execution
and delivery of this Agreement by either Alon or Purchaser, the Merger or the performance by it of
the transactions contemplated hereby to be performed by it.

          5.2.4 Litigation. There are no judicial or administrative actions, proceedings or
investigations pending or, to the knowledge of Purchaser, threatened that question the validity of
this Agreement or any action taken or to be taken by either Alon or Purchaser in connection with
this Agreement.

          5.2.5 “AS-IS, WHERE-IS” CONDITION. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT OR IN ANY OF THE CLOSING DOCUMENTS TO BE DELIVERED TO
PURCHASER PURSUANT TO SECTION 8.1, ALON AND PURCHASER ACKNOWLEDGE THAT THE ASSETS WILL BE
TRANSFERRED “AS IS, WHERE IS,” WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING AS
TO FITNESS, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE, AND IN THEIR PRESENT CONDITION AND STATE OF
REPAIR, WITH ALL FAULTS, LIMITATIONS AND DEFECTS.

ARTICLE 6

PRE-CLOSING COVENANTS

     6.1 Access to Information. Prior to the Closing, upon reasonable notice from
Purchaser to Seller, Edgington will afford to the officers, attorneys, accountants or other
authorized representatives of Purchaser reasonable access during normal business hours to the
employees, Assets, facilities and the books and records of Edgington so as to afford Purchaser full
opportunity, at Purchaser’s sole expense, to make such review, examination and investigation of the
Business as Purchaser may desire to make, including an environmental evaluation of Edgington,
provided that such reviews, examinations or investigations do not unreasonably interfere with the
operation of the Business. Purchaser will be permitted to make extracts from or to make copies of
such books and records as may be reasonably necessary in connection therewith. Prior to the
Closing, Edgington and Seller will promptly furnish or cause to be furnished to Purchaser such
financial and operating data and other information relating to Edgington as Purchaser may
reasonably request.

     6.2 Conduct of Business. Except as set forth on Schedule 6.2, as contemplated herein
or as otherwise consented to by Purchaser in writing, during the period from the date of the
Agreement and continuing until the Closing Date, Edgington will, in respect of its conduct of the
Business, and Seller will cause Edgington to:

23

 

          (a) (i) carry on the Business in the usual, regular and ordinary course as presently conducted
and consistent with past practice, (ii) keep the Business intact, (iii) keep available the services
of the present employees of the Business (other than those individuals identified in Schedule 6.2),
and (iv) maintain the goodwill associated with the Business, including preserving the relationships
of customers, suppliers and others having business dealings with the Business;

          (b) maintain the Assets in substantially the same condition existing as of the date of this
Agreement, ordinary wear and tear excepted, and not move any Asset to any location other than the
Real Property;

          (c) not sell, lease or dispose of, or make any contract for the sale, lease or disposition of,
or subject to Lien, any Assets other than sales of Products and other Inventory in the ordinary
course of the Business consistent with past practice;

          (d) maintain Inventories in the ordinary course of business and at levels consistent with past
practice;

          (e) not intentionally incur any Liability (absolute, accrued, contingent or otherwise) or
assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations
of any other Person, other than in the ordinary course of business;

          (f) not amend or terminate any Contract or other agreement, other than in the ordinary course
of business consistent with past practices;

          (g) not make any change in financial or tax accounting methods, principles or practices unless
required by GAAP or applicable Law;

          (h) not extend credit in the sale of Products, collection of receivables or otherwise, other
than in the ordinary course of business consistent with past practices;

          (i) maintain its books, accounts and records in the usual, regular and ordinary manner on a
basis consistent with prior years;

          (j) not grant to any employee of the Business any increase in compensation or in severance or
termination pay, grant any severance or termination pay, or enter into any employment agreement
with any employee, except as may be required under employment or termination agreements in effect
on the date of this Agreement;

          (k) not enter into any agreement, including an agreement to purchase or lease Assets, which
includes an aggregate payment or commitment on the part of either party of more than $50,000, other
than purchases of crude oil, raw materials, additives and other feedstocks in the ordinary course
of business consistent with past practice;

          (l) not adopt or amend any Employee Plan, except as required by Law;

          (m) maintain in full force and effect all insurance described in Section 5.1.15 of the
Disclosure Letter; and

24

 

          (n) not take or omit to take any action as a result of which any representation or warranty of
Seller in Section 5.1 would be rendered untrue or incorrect if such representation or warranty were
made immediately following the taking or failure to take such action.

     6.3 OMITTED.

     6.4 Notification.

          (a) Seller shall notify Purchaser, and Purchaser shall notify Seller, of any litigation,
arbitration or administrative proceeding pending or, to its knowledge, threatened against Seller,
Edgington, Alon or Purchaser, as the case may be, which challenges the transactions contemplated
hereby.

          (b) Seller will provide prompt written notice to Purchaser of any change in any of the
information contained in its representations and warranties made in Section 5.1, the Disclosure
Letter or any Exhibits or Schedules referred to herein or attached hereto and shall promptly
furnish any information which Purchaser may reasonably request in relation to such change;
provided, however, that such notice shall not operate to cure any breach of the
representations and warranties made in Section 5.1 or any Exhibits or Schedules referred to herein
or attached hereto. Purchaser will provide prompt written notice to Seller of any change in any of
the information contained in Alon’s and Purchaser’s representations and warranties made in Section
5.2, and shall promptly furnish any information which Seller may reasonably request in relation to
such change; provided, however, that such notice shall not operate to cure any
breach of the representations and warranties made in Section 5.2.

     6.5 Cooperation. Alon and Purchaser, on the one hand, and Edgington and Seller, on
the other hand, shall cooperate fully with one another in taking any actions, including actions to
obtain the required consent of any Governmental Entity or any third party, necessary or helpful to
accomplish the transactions contemplated by this Agreement; provided, however,
that, notwithstanding any other provision in this Agreement, no party shall be required to take any
action which would have a material adverse effect upon it or any Affiliate, including any
divestiture of any asset or property held thereby.

     6.6 No Inconsistent Action. Neither Alon and Purchaser, on the one hand, nor Seller
and Edgington, on the other hand, shall take any action which is materially inconsistent with its
obligations under this Agreement.

     6.7 Satisfaction of Conditions. Without limiting the generality or effect of any
provision of Article 7, prior to the Closing, each of the parties will use Commercially Reasonable
Efforts and good faith to satisfy promptly all conditions required hereby to be satisfied by such
party in order to expedite the consummation of the transactions contemplated hereby.

     6.8 Injunctions. Without limiting the generality or effect of any provision of
Section 6.9 or Article 7, if any United States, state or foreign court having jurisdiction over any
party issues or otherwise promulgates any injunction, decree or similar order prior to the Closing
which prohibits the consummation of the transactions contemplated hereby, the parties will use
their respective Commercially Reasonable Efforts to have such injunction dissolved or otherwise

25

 

eliminated as promptly as possible and, prior to or after the Closing, to pursue the
underlying litigation diligently and in good faith.

     6.9 Filings and Consents.

          (a) As promptly as practicable after the execution of this Agreement, each party shall use its
Commercially Reasonable Efforts to obtain, and to cooperate with the other parties in obtaining,
all authorizations, consents, orders and approvals of any Governmental Entity or other Persons that
may be or become necessary in connection with the consummation of the transactions contemplated by
this Agreement, and to take all reasonable actions to avoid the entry of any order or decree by any
Governmental Entity prohibiting the consummation of the transactions contemplated hereby. Without
limiting the foregoing, as promptly as practicable after the date of this Agreement, Seller and
Edgington (i) shall give any notices required to be given under any Contracts, Real Property
Leases, Pipeline Easements, Permits and contracts related to manufacturer and vendor warranties and
Intellectual Property, (ii) shall obtain prior to Closing any consents required under any
Contracts, Real Property Leases, Pipeline Easements, Permits and contracts related to manufacturer
and vendor warranties and Intellectual Property and (iii) shall concurrently deliver to Purchaser a
copy of each such notice delivered and each such consent received. Also without limiting the
following, as promptly as practicable after the date of this Agreement, Alon and Purchaser (i)
shall give any notices required to be given by them, (ii) shall obtain prior to Closing any
consents required to be obtained by them, and (iii) shall concurrently deliver to Seller a copy of
each such notice delivered and each such consent received.

          (b) Subject to (i) applicable Laws relating to the exchange of information and the direction
of any Governmental Entity and (ii) matters not related to the Business that Seller or Purchaser
reasonably determines should not be disclosed to the other due to confidentiality concerns, Alon
and Purchaser, on the one hand, and Seller and Edgington, on the other hand, shall have the right
to review in advance, and to the extent practicable each will consult the other on, all the
information relating to Alon and Purchaser or Seller and Edgington, as the case may be, and any of
their respective Subsidiaries, that appears in any filing made with, or written materials submitted
to, any third party or any Governmental Entity in connection with the transactions contemplated by
this Agreement. In exercising the foregoing right, each of Seller, Edgington, Alon and Purchaser
shall act reasonably and as promptly as practicable. Without limiting the foregoing, the parties
shall cause all necessary initial filings with all Governmental Entities in connection with the HSR
Act to be made as promptly as practicable on or after the date of this Agreement, and in any event
no later than five Business Days after the date of this Agreement. Each of Alon, Purchaser, Seller
and Edgington will respond promptly under the circumstances to any requests for additional
information by any Governmental Entity in connection with the transactions contemplated by this
Agreement, including promptly filing a response to a “second request” from an applicable
Governmental Entity in connection with its review of the transactions contemplated by this
Agreement pursuant to the HSR Act.

          (c) Subject to applicable Laws relating to the exchange of information and the direction of
any Governmental Entity, each of Seller and Edgington, on the one hand, and Alon and Purchaser, on
the other hand, shall, upon request by the other, furnish the other with all information concerning
itself, its Subsidiaries, directors, officers and stockholders and such other

26

 

matters as may be reasonably necessary or advisable in connection with any statement,
submission, filing, notice or application made by or on behalf of Alon, Purchaser, Seller,
Edgington or any of their respective Subsidiaries to any third party or any Governmental Entity in
connection with the approval of or consent to the transactions contemplated by this Agreement.

          (d) Subject to applicable Laws relating to the exchange of information and the direction of
any Governmental Entity, (i) each of Seller and Edgington, on the one hand, and Alon and Purchaser,
on the other hand, shall keep the other apprised of the status of matters relating to completion of
the transactions contemplated by this Agreement, including (A) promptly furnishing the other with
copies of notices or other communications (if written) or summaries thereof (if oral) received by
Alon and Purchaser or Seller and Edgington, as the case may be, from any third party or any
Governmental Entity (including any notice or communication alleging that the consent of such Person
is or may be required in connection with the transactions contemplated by this Agreement); (B)
promptly informing the other of any communications or discussions with any such third party or
Governmental Entity, in each case with respect to the transactions contemplated by this Agreement
(including in connection with all approvals required under the HSR Act); (ii) Seller and Edgington
shall give prompt notice to Purchaser of any notice or other communication from any Person,
development, event or circumstance that could reasonably have or result in a Material Adverse
Effect or prevent, materially delay or materially impair the ability of Seller to consummate the
transactions contemplated by this Agreement; (iii) Purchaser shall give prompt notice to Seller
and Edgington of any change, development, event or circumstance that could reasonably prevent,
materially delay or materially impair the ability of Alon or Purchaser to consummate the
transactions contemplated by this Agreement; and (iv) neither Seller and Edgington, on the one
hand, nor Alon and Purchaser, on the other hand, shall permit any of its officers, directors or any
other representatives or agents to participate in any meeting with any Governmental Entity in
respect of any filings, investigation or other inquiry relating to the transactions contemplated by
this Agreement, unless it consults with the other party in advance and gives the other party the
opportunity to attend and participate thereat.

     6.10 Confidentiality.

          (a) Alon and Purchaser, on the one hand, and Seller and Edgington, on the other hand, shall
each keep confidential all information obtained by it with respect to the other in connection with
this Agreement and the negotiations preceding this Agreement, and if the transactions contemplated
hereby are not consummated, each shall return to the other, without retaining a copy thereof, any
schedules, documents or other written information obtained from the other in connection with this
Agreement and the transactions contemplated hereby as required by the Confidentiality Agreement.

          (b) Prior to the Closing, none of Alon and Purchaser, on the one hand, or Edgington or Seller,
on the other hand, shall, without the prior written consent of the other, terminate, amend, modify
or waive any provision of any confidentiality or similar agreement in respect of the matters
contemplated by this Agreement to which it or any of its Subsidiaries is a party. Each of Alon,
Purchaser, Edgington and Seller shall enforce, to the fullest extent permitted under applicable
Law, the provisions of any such agreements, including using

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Commercially Reasonable Efforts to obtain injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any court having
jurisdiction over the matter.

     6.11 Publicity. Prior to the Closing, neither Alon or Purchaser, on the one hand, nor
Edgington or Seller, on the other hand, will issue or cause the publication of any press release or
other public announcement with respect to this Agreement or the transactions contemplated hereby
without the prior consent of the other, which consent will not be unreasonably withheld;
provided, however, that nothing herein will prohibit any party from issuing or
causing publication of any such press release or public announcement to the extent that such party
determines such action to be required by Law or the rules of any national stock exchange applicable
to it or its Affiliates, in which event the party making such determination will, if practicable in
the circumstances, use reasonable efforts to allow the other parties reasonable time to comment on
such release or announcement in advance of its issuance.

     6.12 Title Commitments.

          (a) Prior to the date hereof, Seller has delivered to Purchaser (i) legal descriptions for
each parcel of Real Property, and (ii) copies of any existing title insurance policies relating to
the Real Property which are in Seller’s or Edgington’s possession or control.

          (b) Prior to Closing, Purchaser may obtain commitments (the “Title
Commitments”) for one or more ALTA title insurance policies (the “Title Policies”)
to be issued by a title company selected by Purchaser (the “Title Company”) with respect to
each parcel of Owned Real Property and Leased Real Property. Each Title Commitment shall list as
exceptions all matters which may affect title to such Real Property, including all easements,
covenants, restrictions, Liens, encumbrances, tenancies and other exceptions to title affecting
title to the applicable parcel of Real Property (collectively, the “Exceptions”) and shall
include copies of all instruments creating such Exceptions. With respect to any Exception (which
Exception is not a Permitted Lien) objected to by Purchaser, Edgington shall use its Commercially
Reasonable Efforts to cure or remove such Exception to Purchaser’s reasonable satisfaction prior to
Closing. Notwithstanding the foregoing, in the event a mortgage Lien or other monetary Lien
affects all or any portion of Edgington’s interest in the Real Property, on or before Closing,
Edgington shall cause all such Liens to be satisfied by Edgington in a manner which is sufficient
to cause them to no longer affect title to the Real Property, and the Real Property shall be
conveyed free and clear of all such matters, and such matters shall in no event constitute, or be
deemed to constitute, a Permitted Lien.

          (c) Each Title Policy shall insure good and marketable fee simple title to the Owned Real
Property in Edgington for an amount determined by Purchaser in its sole discretion and subject to
only Permitted Liens and the standard printed exceptions; provided, that Purchaser may
cause the Title Company, at Purchaser’s sole cost and expense, to issue any available endorsement
or to otherwise limit or cause the removal of such standard printed exceptions. Seller and
Edgington agree to reasonably cooperate with Purchaser in executing any documents reasonably
requested by the Title Company which may be necessary to issue the Title Policies, including
providing any affidavit reasonably requested by the Title Company or Purchaser to evidence the
payment or satisfaction of any Liens, to evidence the payment of any Taxes

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affecting the Owned Real Property, to certify any of the representations set forth in Section
5.1.14, or to evidence the satisfaction of any other matter within the scope of Seller’s
representations and warranties set forth in this Agreement which Purchaser may be required to
establish in order to obtain the Title Policy or any endorsement thereto. Purchaser shall pay the
premium for the Title Policies, fees for title searches and costs of any endorsements or deletions
to the Title Policies.

     6.13 Acquisition Proposals.

          (a) Edgington and Seller shall not, and shall cause their respective Affiliates, directors,
employees, agents and representatives (including any investment banker, financial advisor, attorney
or accountant retained by Seller or any of its Subsidiaries) not to, directly or indirectly, (i)
initiate, solicit or encourage submission of any proposal or offer (including by way of furnishing
information) from any Person which constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (ii) participate in any discussion or negotiations regarding any Acquisition
Proposal or furnish any information to any other Person with respect to any Acquisition Proposal,
or (iii) agree to any Acquisition Proposal. Seller shall promptly notify Purchaser after receipt
of any Acquisition Proposal or any request for information relating to Edgington or Seller by any
Person who has informed Edgington or Seller that such Person is considering making, or has made, an
Acquisition Proposal (which notice shall identify the Person making, or considering making, such
Acquisition Proposal and shall set forth the material terms of any Acquisition Proposal received).

          (b) For purposes of this Agreement, “Acquisition Proposal” means an inquiry or the
making of an offer or proposal regarding any of the following (other than the transactions provided
for in this Agreement), involving Edgington: (i) any merger, consolidation, share exchange,
recapitalization, business combination or other similar transaction; (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of all or any substantial portion of the
Assets, taken as a whole, in a single transaction or series of related transactions; or (iii) any
purchase or other acquisition of shares of the outstanding capital stock of Edgington.

          (c) To the extent that it has not done so already, Edgington and Seller shall and shall cause
their respective Affiliates, directors, employees, agents or other representatives to discontinue
and desist from any solicitation efforts or negotiations with respect to or in furtherance of any
Acquisition Proposal. Edgington shall immediately demand that any Person which has heretofore
executed a confidentiality agreement with Edgington, Seller or any of their Subsidiaries,
Affiliates, employees, agents or other representatives with respect to such Person’s consideration
of a possible Acquisition Proposal to immediately return or destroy all confidential information
heretofore furnished by Edgington, Seller or any of their Subsidiaries, Affiliates, employees,
agents or other representatives to such Person or any of its Affiliates or Subsidiaries or any of
its or their respective Affiliates, employees, agents or other representatives.

     6.14 Licenses and Permits. As soon as reasonably practicable following the date of
this Agreement, Seller and Edgington shall use Commercially Reasonable Efforts to assist Purchaser
to obtain all operating permits required for Purchaser’s operation of the Business following the
Effective Time.

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     6.15 Environmental Insurance. Environmental Insurance. At or prior to
Closing, Purchaser shall use Commercial Reasonable Efforts to obtain a form of policy of pollution
legal liability insurance (the “PLL Policy”) issued by a Qualified Insurer, to be effective
as of the Closing Date, that (i) provides coverage for bodily injury and property damage to third
parties related to or arising out of the existence prior to the Closing Date of Hazardous Material
in or on the structures, soil, sediments, surface water or groundwater at, on, under or from the
Assets at levels requiring remediation under applicable Environmental Laws (the “Pre-Existing
Environmental Matters”) (including, with respect to any Third Party Claim for which
indemnification is available under the terms of this Agreement) on a claims made basis, (ii) has a
term of at least ten years from the Closing Date, (iii) identifies Purchaser and Edgington as the
named insureds, (iv) has an aggregate and per incident combined clean-up cost and third party
liability coverage under the PLL Policy of no less than $25 million and $5 million, respectively,
and a per incident deductible under the policy of $500,000, and (v) is otherwise mutually
acceptable to Seller and Purchaser (in their good faith and reasonable discretion); provided,
however, in the event one or more of the foregoing express provisions identified in clauses (ii)
and (iv) of this sentence are not available to the parties based on quotes obtained from a
Qualified Insurer, Purchaser may in its sole discretion elect to obtain a PLL Policy with a term,
coverage limits and/or deductible which are higher or lower than those set forth in clauses (ii)
and (iv) of this sentence. Seller shall bear one-third of the premium of the PLL Policy, up to a
maximum of $500,000, and Purchaser shall bear the remainder of the premium. Any deductible amount
under the PLL Policy with respect to any incident covered by such policy shall be borne two-thirds
by Purchaser and one-third by Seller. For purposes of securing such quotations with the coverages
contemplated by this Section 6.15, Purchaser, Seller and Edgington shall cooperate with the insurer
during the application process and shall make full disclosure to the Qualified Insurers of all
environmental conditions known to exist at the Assets and such other additional information as the
Qualified Insurers may request. At the Closing, Purchaser shall obtain a bound PLL Policy that is
identical to the form of PLL Policy selected pursuant to the terms of this Section 6.15.

     6.16 Remediation Costs. For a period of seven years after the Closing Date, Seller
shall reimburse Purchaser an amount per year during such period equal to one-third of the first
$1,000,000 of uninsured costs and expenses paid by Purchaser or its Affiliates in such year to
parties unaffiliated with Purchaser or its Affiliates (including contractors and service providers)
with respect to any environmental investigation, Remedial Action or other actions to correct any
Pre-Existing Environmental Matters. Seller’s obligations to Purchaser, Alon or Edgington with
respect to Pre-Existing Environmental Matters is limited solely as set forth in Section 6.15 and
this Section 6.16 and no other indemnification provision hereunder shall apply to any Pre-Existing
Environmental Matters, Environmental Claims, violations of Environmental Laws or Environmental
Permits or any Environmental Costs and Liabilities. Notwithstanding the foregoing, the maximum
amount that Seller shall be obligated to pay pursuant to Section 6.15 and this Section 6.16 shall
be $2 million.

     6.17 Paribas Payoff. At the Closing, Seller will take all actions necessary to
extinguish all of Edgington’s Indebtedness to BNP Paribas described on Schedule 6.17 and obtain a
release of all Liens related to such Indebtedness.

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     6.18 Termination of Participation in Employee Plans. Prior to the Closing, Seller and
Edgington will take all necessary actions to terminate, effective as of the Closing, Edgington’s
participation in all Employee Plans other than the Edgington Benefit Plans.

ARTICLE 7

CONDITIONS TO THE MERGER

     7.1 Conditions Precedent to Obligations of Purchaser. The obligations of Alon and
Purchaser under this Agreement to consummate the transactions contemplated hereby will be subject
to the satisfaction, at or prior to Closing, of all of the following conditions, any one or more of
which may be waived at the option of Alon or Purchaser:

          7.1.1 Representations, Warranties and Covenants.

          (a) Each of the representations and warranties of Seller made in this Agreement or in any
Exhibit, Schedule or document delivered pursuant hereto shall be true and complete in all material
respects (except for such representations and warranties that are qualified by their terms by a
reference to materiality or Material Adverse Effect (other than with respect to Section 5.1.1),
which representations and warranties as so qualified shall be true and correct in all respects) as
of the date hereof without regard to any schedule updates furnished by Seller after the date hereof
and on and as of the Closing Date as if made on and as of that date.

          (b) All of the terms, covenants and conditions to be complied with and performed by Seller
and/or Edgington on or prior to the Closing Date shall have been complied with or performed in all
material respects.

          (c) Purchaser shall have received a certificate, dated as of the Closing Date, executed on
behalf of Seller by authorized officers thereof, certifying in such detail as Purchaser may
reasonably request that the conditions specified in Sections 7.1.1(a) and (b) hereof have been
fulfilled.

          7.1.2 Closing Documents. Seller shall have delivered to Purchaser the documents
identified in Section 8.1.

          7.1.3 Physical Inventory. The Physical Inventory shall have been taken in accordance
with Section 3.4.

          7.1.4 Governmental Consents or Approvals. Each of the governmental and other
approvals, consents or waivers listed in Section 5.1.3 of the Disclosure Letter shall have been
obtained.

          7.1.5 HSR Act. The waiting period under the HSR Act shall have expired or terminated.

          7.1.6 No Adverse Proceedings. No suit, action, claim or governmental proceeding shall
be pending against, and no order, decree or judgment of any court, agency or other Governmental
Entity shall have been rendered against, any party hereto which would

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render it unlawful, as of the Closing Date, to effect the transactions contemplated by this
Agreement in accordance with its terms.

          7.1.7 Material Adverse Change. From the date hereof to the Closing Date, there shall
not have been any changes, events or occurrences which, individually or in the aggregate, have had
or resulted in, or would reasonably be expected to result in, a Material Adverse Effect.

          7.1.8 PLL Policy. The PLL Policy shall have been issued and shall be (i) in full
force and effect and (ii) valid, binding and enforceable against the Qualified Insurer named
therein, in each case in accordance with the terms of the PLL Policy.

     7.2 Conditions Precedent to Obligations of Seller. The obligations of Seller and
Edgington under this Agreement to consummate the transactions contemplated hereby will be subject
to the satisfaction, at or prior to the Closing, of all the following conditions, any one or more
of which may be waived at the option of Seller:

          7.2.1 Representations, Warranties and Covenants.

          (a) Each of the representations and warranties of Alon and Purchaser made in this Agreement or
in any Exhibit, Schedule or document delivered pursuant hereto, shall be true and complete in all
material respects (except for such representations and warranties that are qualified by their terms
by a reference to materiality, which representations and warranties as so qualified shall be true
and correct in all respects) as of the date hereof without regard to any schedule updates furnished
by Alon or Purchaser after the date hereof and on and as of the Closing Date as if made on and as
of that date.

          (b) All of the terms, covenants and conditions to be complied with and performed by Alon and
Purchaser on or prior to the Closing Date shall have been complied with or performed in all
material respects.

          (c) Seller shall have received a certificate, dated as of the Closing Date, executed on behalf
of Alon and Purchaser by an authorized officer thereof, certifying in such detail as Seller may
reasonably request that the conditions specified in Sections 7.2.1(a) and (b) have been fulfilled.

          7.2.2 Closing Documents. Alon and Purchaser shall have delivered to Seller the
documents identified in Section 8.2.

          7.2.3 Physical Inventory. The Physical Inventory shall have been taken in accordance
with Section 3.4.

          7.2.4 Governmental Consents or Approvals. Each of the governmental and other
approvals, consents or waivers listed in Section 5.1.3 of the Disclosure Letter shall have been
obtained.

          7.2.5 HSR Act. The waiting period under the HSR Act shall have expired or terminated.

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          7.2.6 No Adverse Proceedings. No suit, action, claim or governmental proceeding shall
be pending against, and no order, decree or judgment of any court, agency or other Governmental
Entity shall have been rendered against, any party hereto which would render it unlawful, as of the
Closing Date, to effect the transactions contemplated by this Agreement in accordance with its
terms.

          7.2.7 PLL Policy. The PLL Policy shall have been issued and shall be (i) in full
force and effect and (ii) valid, binding and enforceable against the Qualified Insurer named
therein, in each case in accordance with the terms of the PLL Policy.

ARTICLE 8

DOCUMENTS TO BE DELIVERED AT THE CLOSING

     8.1 Documents to be Delivered by Seller. At the Closing, Seller will deliver to
Purchaser the following, at the expense of Seller:

          8.1.1 Transfer Documents. A certificate or certificates representing the Shares, duly
endorsed in blank or accompanied by share transfer forms duly endorsed in blank in proper form for
transfer, with appropriate transfer stamps, if any, affixed.

          8.1.2 Officer’s Certificate. A certificate, dated the Closing Date, executed on
behalf of the Seller in the form described in Section 7.1.1.

          8.1.3 Good Standing Certificates. Governmental certificates showing that each of
Seller and Edgington is duly incorporated and in good standing in the state of its incorporation,
and that Edgington is in good standing in each state in which it is qualified to conduct business
as a foreign corporation certified as of a date not more than sixty days before the Closing Date.

          8.1.4 FIRPTA Affidavit. An affidavit of an officer of Edgington, sworn to under
penalty of perjury, setting forth Edgington’s name, address and federal tax identification number
and stating that Edgington is not a “foreign person” within the meaning of Section 1445 of the Code
and applicable regulations.

          8.1.5 Transition Services Agreement. A transition services agreement executed by
Seller in substantially the form attached hereto as Exhibit A.

          8.1.6 Assumption Agreement. An assumption agreement relating to Seller’s assumption
of the Retained Liabilities in substantially the form attached hereto as Exhibit B.

          8.1.7 Estimated Inventory Statement. The Estimated Inventory Statement.

          8.1.8 Resignations. Written resignations, effective as of the Effective Time, of the
officers and directors of Edgington.

     8.2 Documents to be Delivered by Purchaser. At the Closing, Alon and Purchaser will
deliver to Seller the following, at the expense of Purchaser:

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          8.2.1 Merger Consideration. Evidence of a wire transfer in the amount of the Merger
Consideration.

          8.2.2 Officer’s Certificate. A certificate, dated the Closing Date, executed on
behalf of Alon and Purchaser in the form described in Section 7.2.1.

          8.2.3 Good Standing Certificates. Governmental certificates showing that each of Alon
and Purchaser is duly incorporated or formed, as applicable, and in good standing in the state of
its incorporation or formation, as applicable, certified as of a date not more than sixty days
before the Closing Date

ARTICLE 9

POST-CLOSING COVENANTS

     9.1 Employees and Non-Solicitation. (a) Each individual who is an employee of
Edgington immediately prior to the Closing will continue as an employee of Edgington on and
immediately after the Closing (the “Employees”). Seller shall be responsible for any
severance or similar obligations arising from the transaction contemplated hereby. Until the third
anniversary of the Closing Date, Seller will not directly or indirectly solicit or offer employment
to any Employee (i) who did not remain an employee of Edgington, (ii) who is then an employee of
Purchaser or Edgington, or (iii) who has terminated such employment without the consent of
Edgington within 180 days of such solicitation or offer, except that Seller may make an offer of
employment to each Employee listed on Schedule 9.1. Until the third anniversary of the Closing
Date, none of Alon, Purchaser or Edgington (from and after the Effective Time) will directly or
indirectly solicit or offer employment to any employee of Seller on or after the Closing (i) who is
then an employee of Seller, or (ii) who has terminated such employment without the consent of
Seller within 180 days of such solicitation or after. For purposes of this Section 9.1, a general
advertisement by any party not specifically directed at the employees of another party shall not be
deemed a direct or indirect solicitation of such employees.

          (b) The parties hereto specifically acknowledge and agree that the remedy at law for any
breach of this Section 9.1 will be inadequate and that Alon and Purchaser, on the one hand, and
Seller, on the other hand, in addition to any other relief available to them, shall be entitled to
temporary and permanent injunctive relief without the necessity of proving actual damage or posting
any bond whatsoever. The parties expressly acknowledge that the limitations set forth in this
Section 9.1 are reasonable as to scope and duration. In the event that the provisions of this
Section 9.1 should ever be deemed to exceed any limitation permitted under applicable Law, then the
parties hereto agree that such provisions shall be reformed to set forth the maximum limitations
permitted.

     9.2 Discharge of Business Obligations. From and after the Closing Date, Seller shall
pay and discharge, in accordance with past practice but not less than on a timely basis, all
Retained Liabilities. From and after the Closing, Alon and Purchaser shall cause Edgington to pay
and discharge, in accordance with past practice but not less than on a timely basis, all
Liabilities of Edgington existing as of the Closing other than Retained Liabilities.

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     9.3 Maintenance of Books and Records. Each of Seller, Edgington, Alon and Purchaser
shall preserve until the tenth anniversary of the Closing Date all records possessed or to be
possessed by such party relating to any of the assets, liabilities or business of Edgington prior
to the Closing Date. After the Closing Date, where there is a legitimate purpose, such party shall
provide the other parties with access, upon prior reasonable written request specifying the need
therefor, during regular business hours, to (i) the officers and employees of such party and (ii)
the books of account and records of such party, but, in each case, only to the extent relating to
the assets, liabilities or business of Edgington prior to the Closing Date, and the other parties
and their representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable in
such a manner as to interfere unreasonably with the normal operations and business of such party;
and further, provided, that, as to so much of such information as constitutes trade
secrets or confidential business information of such party, the requesting party and its officers,
directors and representatives will use due care to not disclose such information except (i) as
required by Law, (ii) with the prior written consent of such party, which consent shall not be
unreasonably withheld, or (iii) where such information becomes available to the public generally,
or becomes generally known to competitors of such party, through sources other than the requesting
party, its Affiliates or its officers, directors or representatives. Such records may nevertheless
be destroyed by a party if such party sends to the other parties written notice of its intent to
destroy records, specifying with particularity the contents of the records to be destroyed. Such
records may then be destroyed after the 30th day after such notice is given unless another party
objects to the destruction, in which case the party seeking to destroy the records shall either
agree to retain such records or deliver such records to the objecting party.

     9.4 Payments Received. Any asset (including all remittances and all mail and other
communications) that is or otherwise relates to an Excluded Asset and that is or comes into the
possession, custody or control of Edgington or any of Edgington’s Affiliates (including its or
their successors in interest or assigns) must forthwith be transferred, assigned and conveyed by
Edgington or such Affiliate of Edgington to Seller. Until such transfer, assignment or conveyance,
Edgington and Edgington’s Affiliates do not have any right, title or interest in such asset nor may
they use the same; rather, they hold such asset in trust for the benefit of Seller. Any asset
(including all remittances and all mail and other communications) that is or otherwise relates to
an Asset and that is or comes into the possession, custody or control of Seller or any of Seller’s
Affiliates (including its or their successors in interest or assigns) must forthwith be
transferred, assigned and conveyed by Seller or such Affiliate of Seller to Edgington. Until such
transfer, assignment or conveyance, Seller and Seller’s Affiliates do not have any right, title or
interest in such asset nor may they use the same; rather, they hold such asset in trust for the
benefit of Edgington. From and after the Closing, Seller shall have the right and authority to
endorse without recourse the name of Edgington on any check or any other evidences of indebtedness
received by Seller on account of the Excluded Assets transferred to Seller hereunder.

     9.5 Use of Name. From and after the Closing Date, Seller will not itself use the name
“Edgington” or any names similar thereto or variants thereof.

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     9.6 Confidentiality.

          (a) Seller agrees that neither it nor any of its Affiliates will, directly or indirectly,
disclose, reveal, divulge or communicate to any Person other than authorized officers, directors
and employees of Alon, Purchaser or Edgington, or use or otherwise exploit for its own benefit or
for the benefit of anyone other than Alon, Purchaser or Edgington, any Confidential Information.
Seller shall have no obligation to keep confidential any Confidential Information if and to the
extent disclosure thereof is specifically required by Law; provided, however, that
in the event disclosure is required by applicable Law, Seller shall, to the extent reasonably
possible, provide Purchaser and Edgington with prompt notice of such requirement prior to making
any disclosure so that Purchaser or Edgington may seek an appropriate protective order. For
purposes of this Section 9.6, “Confidential Information” shall mean any confidential
information with respect to the conduct or details of the Business, including methods of operation,
customers, and customer lists, products, proposed products, former products, proposed, pending or
completed acquisitions of any company, division, product line or other business unit, prices, fees,
costs, plans, designs, technology, inventions, trade secrets, know-how, software, marketing
methods, policies, plans, personnel, suppliers, competitors, markets or other specialized
information or proprietary matters. The term “Confidential Information” does not include,
and there shall be no obligation hereunder with respect to, information that (i) is generally
available to the public on the date of this Agreement, or (ii) becomes generally available to the
public other than as a result of a disclosure by Seller not otherwise permissible thereunder, or
(iii) Seller learns from other sources where, to the knowledge of Seller, such sources have not
violated their confidentiality obligation to Alon, Purchaser or Edgington.

          (b) The parties hereto specifically acknowledge and agree that the remedy at law for any
breach of this Section 9.6 will be inadequate and that Alon and Purchaser, in addition to any other
relief available to them, shall be entitled to temporary and permanent injunctive relief without
the necessity of proving actual damage or posting any bond whatsoever. The parties expressly
acknowledge that the limitations set forth in this Section 9.6 are reasonable as to scope and
duration. In the event that the provisions of this Section 9.6 should ever be deemed to exceed any
limitation permitted under applicable Law, then the parties hereto agree that such provisions shall
be reformed to set forth the maximum limitations permitted.

     9.7 Post-Closing Notifications. Purchaser and Seller will, and each will cause their
respective Affiliates to, comply with any post-Closing notification or other requirements, to the
extent then applicable to such party, of any antitrust, trade competition, investment or control,
export or other Law of any Governmental Entity having jurisdiction over Purchaser or Seller related
to the Merger and the other transactions contemplated hereunder. From and after the Closing,
Seller will promptly refer all inquiries with respect to the Merger, ownership of the Assets or the
Business to Edgington.

     9.8 Certain Tax Matters.

          (a) The parties hereto intend that the Merger be treated for all tax purposes as a taxable
purchase of assets by Purchaser in accordance with Revenue Ruling 69-6. Purchaser and Seller shall
work together in good faith to determine a mutually agreeable allocation of the total purchase
price for the Assets (including the Merger Consideration and the value of the

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assumed liabilities, to the extent that such value is fixed and determinable as of the Closing
Date) for purposes of any relevant Tax Returns and filings to be filed by them (including any forms
or reports required to be filed pursuant to section 1060 of the Code, the Treasury Regulations
promulgated thereunder or any similar provisions of local, state or foreign law (“1060 Forms”)),
will follow any agreed upon allocation in determining and reporting their liabilities for federal,
state, local and foreign Tax Returns filed by them subsequent to the Closing Date and will
cooperate in the preparation and filing of any 1060 Forms in the manner required by applicable law.
The allocation described herein shall be adjusted in a manner agreed by Purchaser and Seller to
reflect any changes or adjustments to the purchase price. Notwithstanding the foregoing, if
Purchaser and Seller are unable to agree upon such allocation, each party shall be entitled to file
such Tax Returns and filings based on such allocation as such party shall reasonably determine in
good faith.

          (b) All sales, use, transfer, stamp, conveyance, value added or other similar Taxes, duties,
excises or governmental charges (including any penalties, interests and additions to Tax) imposed
by any Tax Authority with respect to or incurred in connection with the Merger will by borne by
Seller.

          (c) Edgington will prepare and file or cause to be prepared and filed all Tax Returns with
respect to the Assets or the conduct of the Business required to be filed with the appropriate Tax
Authorities for all taxable periods for which Tax Returns are due after the Closing Date other than
the consolidated Federal income Tax Returns and combined Illinois income Tax Returns, which shall
be filed, or cause to be filed, by Seller. Edgington will make all payments required with respect
to any such Tax Returns to be prepared and filed by Edgington. The preceding sentence will not
limit or relieve Seller of its obligation to reimburse Edgington concurrently therewith to the
extent that any payment by Edgington relates to the operations of the Business for any period
ending on or before the Closing Date or with respect to the allocable portion of any taxable period
that includes but does not end on the Closing Date.

          (d) Seller will prepare and file or cause to be prepared and filed all Tax Returns for
Edgington or in which Edgington is included that are required to be filed with respect to the
Business, other than Tax Returns that Edgington is obligated to prepare and file pursuant to
Section 9.8(c), with the appropriate Tax Authorities. Seller will pay or cause to be paid all
Taxes required to be paid with respect to such Tax Returns. Seller will pay all Taxes that are
imposed with respect to the Business or with respect to the allocable portion of any taxable period
that includes but does not end on the Closing Date (or, if applicable, reimburse Edgington for the
payment of such Taxes) attributable to taxable periods ending on or prior to the Closing Date. For
purposes of the prior sentence, property Taxes that are due after Closing will be apportioned
between Seller and Edgington on a per diem basis.

          (e) All payments made pursuant to Section 3.4 and Article 10 shall be treated as adjustments
to purchase price for purposes of all Tax Returns except to the extent otherwise required by Tax
Law.

     9.9 Insurance. With respect to any loss, liability or damage relating to, resulting
from or arising out of the conduct of the Business on or prior to the Closing Date for which (i)
Purchaser and its Affiliates are not entitled to indemnification from Seller pursuant to Section

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10.3(a) and (ii) Seller would be entitled to assert, or cause any Affiliate or other Person to
assert, a claim for recovery under any policy of insurance maintained by or for the benefit of
Seller or any Affiliate thereof in respect of the Business or the Assets, at the request of
Purchaser or Edgington, Seller will use reasonable efforts to assert, or to assist Purchaser or
Edgington to assert, one or more claims under such insurance covering such loss, liability or
damage if Edgington is not itself entitled to assert such claim but Seller is so entitled. In the
case of any damage to or destruction of the Assets occurring prior to Closing that is covered by
insurance maintained by Seller or any Affiliate of Seller, Seller shall deliver all insurance
proceeds realized therefrom to Purchaser at Closing or as soon thereafter as collected by Seller or
such Affiliate.

     9.10 Seller Guaranties. Alon and Purchaser shall (a) use Commercially Reasonable
Efforts to obtain, effective as of the Closing, the full release of Seller and its Affiliates from
all guaranties made in respect of Edgington by Seller and such Affiliates which are described on
Schedule 9.10 (each a “Seller Guaranty”) and (b) replace, effective as of the Closing, any
letter of credit described on Schedule 6.17 and posted by Seller for the benefit of Edgington with
an equivalent Letter of Credit posted by Alon or Purchaser. Alon and Purchaser will indemnify
Seller for any out-of-pocket expense incurred by Seller with respect to any matter arising after
the Closing as a result of the failure by Alon or Purchaser to obtain such release.

     9.11 Excluded Inventory. After the Closing, Edgington will afford to Seller and its
agents access during normal business hours to the facilities of Edgington in order to enable Seller
to access and sell the naphtha, distillate and VGO / gas oil excluded from Inventory. After the
Closing, sales of naphtha, distillate and VGO / gas oil, respectively, fulfilled from the
inventories of Edgington and in aggregate amounts up to and not to exceed the aggregate amount of
naphtha, distillate and VGO / gas oil, respectively, held in inventory by Edgington as of the
Closing Date (as calculated pursuant to Section 3.4(a)) shall be for the account of Seller. After
the volume of naphtha, distillate and VGO / gas oil held in inventory by Edgington as of the
Closing Date has been depleted, all subsequent sales of naphtha, distillate and VGO / gas oil shall
be for the account of Edgington.

ARTICLE 10

SURVIVAL AND INDEMNIFICATION

     10.1 Survival of Representations, Warranties and Covenants.

          (a) Except as to (i) the representations and warranties contained in Section 5.1.5 relating to
title to the Shares and Section 5.1.11 relating to title to the Assets, which shall survive the
Effective Time and remain in effect indefinitely, and (ii) the representations and warranties
contained in Section 5.1.23, which shall survive the Effective Time until the expiration of the
last day on which any Tax may be validly assessed by the Internal Revenue Service or any other Tax
Authority against the Assets or the Business, the representations and warranties of Seller and of
Alon and Purchaser contained in this Agreement shall survive the Effective Time until the
expiration of two years from the Effective Time. Any claim for indemnification with respect to any
of such matters which is not asserted by notice given as herein provided relating thereto within
such specified period of survival may not be pursued and is hereby irrevocably waived after such
time. Any claim for an Indemnifiable Loss asserted in

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writing and delivered to the Indemnifying Party within such period of survival as herein
provided will be timely made for purposes hereof.

          (b) Unless a specified period is set forth in this Agreement (in which event such specified
period will control), the covenants in this Agreement will survive the Effective Time and remain in
effect indefinitely.

     10.2 Limitations on Liability.

          (a) For purposes of this Agreement, (i) “Indemnitee” means any Person entitled to
indemnification under this Agreement, (ii) “Indemnifying Party” means any Person required
to provide indemnification under this Agreement, (iii) “Indemnifiable Losses” means any and
all damages, losses, liabilities, obligations, costs and expenses, amounts paid in settlement,
awards, judgments, fines, diminution in value, penalties, and any and all claims, demands or suits
(by any Person, including any Governmental Entity), including the costs and expenses of any and all
actions, suits, proceedings, demands, assessments, judgments, settlements and compromises relating
thereto and including reasonable attorneys’ fees and expenses in connection therewith, and (iv)
“Third Party Claim” means any claim, action or proceeding made or brought by any Person who
or which is not a party to this Agreement or an Affiliate of a party to this Agreement.

          (b) Notwithstanding any other provision hereof or of any applicable Law, no Indemnifying Party
shall have liability for any claim for indemnification pursuant to Sections 10.3(a)(i) or
10.3(b)(i), as applicable, unless and until the aggregate amount of claims in respect of
Indemnifiable Losses under 10.3(a)(i) or 10.3(b)(i), as applicable, exceeds $100,000, in which
event the Indemnitee will be entitled to make a claim against the Indemnifying Party to the extent
of the full amount of Indemnifiable Losses; provided that in no event shall the aggregate
indemnification to be paid by Seller, on the one hand, or Alon and Purchaser, on the other hand, in
respect of Indemnifiable Losses under 10.3(a)(i) or 10.3(b)(i), as applicable, exceed $10,000,000.
The limitations set forth in this Section 10.2(b) shall not apply to and claim for indemnification
based upon (i) fraud or intentional misrepresentation, or (ii) the failure of any representation or
warranty contained in Sections 5.1.1, 5.1.2, 5.1.5, 5.1.11, 5.1.23, 5.2.1 or 5.2.2 to be true and
correct as of the Closing Date. Notwithstanding the foregoing, Alon’s and Purchaser’s remedies for
any breach of a representation or warranty set forth in Section 5.1.22 shall be limited to the
remedies and procedures set forth in Sections 6.15 and 6.16.

     10.3 Indemnification.

          (a) Subject to Sections 10.1 and 10.2, Seller agrees to indemnify, defend and hold harmless
Purchaser and its Affiliates and their respective directors, officers, partners, employees, agents
and representatives from and against any and all Indemnifiable Losses to the extent relating to,
resulting from or arising out of:

          (i) any failure of any representation or warranty made by Seller under the terms of
this Agreement (other than the representations and warranties made in Section 5.1.22) or any
certificate or other document delivered pursuant hereto to be true and correct as of, and as
if made on, the Closing Date;

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          (ii) any breach or nonfulfillment of any agreement or covenant of Seller or Edgington
(as to covenants to be fulfilled by Edgington on or prior to Closing) under the terms of
this Agreement; and

          (iii) any Retained Liabilities.

          (b) Alon and Purchaser agree, jointly and severally, to indemnify, defend and hold harmless
Seller and its Affiliates and their respective directors, officers, partners, employees, agents or
representatives from and against any and all Indemnifiable Losses to the extent relating to,
resulting from or arising out of:

          (i) any failure of any representation or warranty made by Alon or Purchaser under the
terms of this Agreement or any certificate or other document delivered pursuant hereto to be
true and correct as of, and as if made on, the Closing Date;

          (ii) any breach or nonfulfillment of any agreement or covenant of Alon, Purchaser or
Edgington (as to covenants to be fulfilled by Edgington after the Closing) under the terms
of this Agreement; and

          (iii) any Liabilities of Edgington other than Retained Liabilities.

     10.4 Defense of Claims.

          (a) If any Indemnitee receives notice of assertion or commencement of any Third Party Claim
against such Indemnitee with respect to which an Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnitee will give such Indemnifying Party reasonably
prompt written notice thereof. Such notice will describe the Third Party Claim in reasonable
detail, will include copies of all material written evidence thereof and will indicate the
estimated amount, if reasonably practicable, of the Indemnifiable Loss that has been or may be
sustained by the Indemnitee. The Indemnifying Party will have the right to participate in, or, by
giving written notice to the Indemnitee, to assume, the defense of any Third Party Claim at such
Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel (reasonably
satisfactory to the Indemnitee), and the Indemnitee will cooperate in good faith in such defense.

          (b) If, within ten days after giving notice of a Third Party Claim to an Indemnifying Party
pursuant to Section 10.4(a), an Indemnitee receives written notice from the Indemnifying Party that
the Indemnifying Party has elected to assume the defense of such Third Party Claim as provided in
the last sentence of Section 10.4(a), the Indemnifying Party will not be liable for any legal
expenses subsequently incurred by the Indemnitee in connection with the defense thereof;
provided, however, that if the Indemnifying Party fails to take reasonable steps
necessary to defend diligently such Third Party Claim within ten days after receiving written
notice from the Indemnitee that the Indemnitee believes the Indemnifying Party has failed to take
such steps or if the Indemnifying Party has not undertaken fully to indemnify the Indemnitee in
respect of all Indemnifiable Losses relating to the matter, the Indemnitee may assume its own
defense, and the Indemnifying Party will be liable for all reasonable costs or expenses paid or
incurred in connection therewith. Without the prior written consent of the Indemnitee, the

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Indemnifying Party will not enter into any settlement of any Third Party Claim which would
lead to Liability or create any financial or other obligation on the part of the Indemnitee for
which the Indemnitee is not entitled to indemnification hereunder. If a firm offer is made to
settle a Third Party Claim without leading to Liability or the creation of a financial or other
obligation on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder and the Indemnifying Party desires to accept and agree to such offer, the
Indemnifying Party will give written notice to the Indemnitee to that effect. If the Indemnitee
fails to consent to such firm offer within ten days after its receipt of such notice, the
Indemnitee may continue to contest or defend such Third Party Claim and, in such event, the maximum
Liability of the Indemnifying Party as to such Third Party Claim will not exceed the amount of such
settlement offer, plus costs and expenses paid or incurred by the Indemnitee through the end of
such ten calendar day period.

          (c) A failure to give timely notice or to include any specified information in any notice as
provided in Sections 10.4(a) or 10.4(b) will not affect the rights or obligations of any party
hereunder except and only to the extent that, as a result of such failure, any party which was
entitled to receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise damaged as a result of such failure.

          (d) The Indemnifying Party will have a period of 30 days within which to respond in writing to
any claim by an Indemnitee on account of an Indemnifiable Loss which does not result from a Third
Party Claim. If the Indemnifying Party does not so respond within such 30 calendar day period, the
Indemnifying Party will be deemed to have rejected such claim, in which event the Indemnitee will
be free to pursue such remedies as may be available to the Indemnitee on the terms and subject to
the provisions of this Article 10.

     10.5 Claims Related to Title. The amount of any Indemnifiable Losses subject to
indemnification hereunder due to a failure of any representation or warranty set forth in Section
5.1.11 concerning Edgington’s title to the Real Property to be true and correct (“Indemnifiable
Title Losses”) shall be calculated net of any insurance proceeds received by the Indemnified
Party from the Title Company on account of such Indemnifiable Title Losses. In the event that the
Indemnifying Party reimburses the Indemnified Party for any such Indemnifiable Title Losses (or
pays to any third party, on behalf of the Indemnified Party, any amount in respect of such
Indemnifiable Title Losses) under this Article 10 prior to the Indemnified Party’s receipt,
directly or indirectly, of any insurance proceeds on account of such Indemnifiable Title Losses
which duplicate, in whole or in part, the payment by the Indemnifying Party to the Indemnified
Party or to such third party, the Indemnified Party shall remit to the Indemnifying Party an amount
equal to the amount of the insurance proceeds subsequently received by the Indemnified Party on
account of such Indemnifiable Title Losses which duplicate, in whole or in part, the payment made
by the Indemnifying Party to the Indemnified Party or to such third party. Purchaser will use
Commercially Reasonable Efforts to collect any proceeds from the Title Company with respect to
Indemnifiable Title Losses.

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ARTICLE 11

TERMINATION

     11.1 Termination. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may be terminated at any time prior to the Effective Time, if the party
seeking to terminate is not then in material default or breach of this Agreement:

          (a) By the mutual written consent of Purchaser and Seller;

          (b) By either Purchaser or Seller, by written notice to the other party, if the Closing shall
not have occurred by June 1, 2006 (the “Termination Date”); provided, no party may
terminate this Agreement pursuant to this Section 11.1(b) if that party has breached its
obligations under this Agreement in a manner that shall have proximately contributed to the failure
of the Closing to occur by such date; provided, further that, in the event that
either of the conditions set forth in Sections 7.1.5 or 7.1.8 above shall not have been satisfied
by June 1, 2006, either Purchase or Seller may unilaterally extend the Termination Date until July
1, 2006 upon written notice to the other, in which case the Termination Date shall be deemed for
all purposes to be July 1, 2006;

          (c) By either Purchaser or Seller, by written notice to the other party, if (i) a Governmental
Order shall have been issued by a Governmental Entity in the United States permanently restraining,
enjoining or otherwise prohibiting the consummation of the Merger, and such Governmental Order
shall have become final and nonappealable, or (ii) any Law shall have been enacted by any
Governmental Entity in the United States which prohibits the consummation of the Merger;

          (d) By Seller, by written notice to Purchaser, if at any time the representations and
warranties of Alon or Purchaser contained in this Agreement shall fail to be true and correct, or
Alon or Purchaser shall at any time have failed to perform and comply with all agreements and
covenants of Alon or Purchaser contained in this Agreement requiring performance or compliance
prior to such time, and in either case, such failure (i) shall be such that, if not cured, the
conditions set forth in Section 7.2(a) or Section 7.2(b) would not be fulfilled and (ii) shall not
have been cured within 30 days of the receipt of written notice thereof by Alon or Purchaser from
Seller; or

          (e) By Purchaser, by written notice to Seller, if at any time the representations and
warranties of Seller contained in this Agreement shall fail to be true and correct, or Seller or
Edgington shall at any time have failed to perform and comply with all agreements and covenants of
Seller or Edgington contained in this Agreement requiring performance or compliance prior to such
time, and in either case, such failure (i) shall be such that, if not cured, the conditions set
forth in Section 7.1(a) or Section 7.1(b) would not be fulfilled and (ii) shall not have been cured
within 30 days of the receipt of written notice thereof by Seller from Purchaser.

     11.2 Effect of Termination. In the event of the termination of this Agreement
pursuant to the provisions of Section 11.1, this Agreement shall become void and have no effect,
without any Liability to any Person in respect hereof or of the transactions contemplated hereby on
the part of any party hereto, or any of its directors, officers, employees, agents, legal and
financial

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advisors, representatives, stockholders or Affiliates; provided, however, that
the agreements contained in Section 6.1 (Access to Information), Section 6.10 (Confidentiality),
Section 6.11 (Publicity), this Section 11.2 and Article 13 (other than Section 13.1) shall survive
the termination of this Agreement; and provided, further, that except as otherwise
provided herein, no such termination shall relieve any party hereto of any Liability or damages
resulting from any breach of this Agreement prior to the time of such termination. If this
Agreement is terminated due to a material breach of this Agreement by Seller or Edgington or due to
the failure to satisfy Section 7.1.5, Alon and Purchaser are not then in material breach of this
Agreement, Seller and Alon shall instruct, in writing, Regions Bank to deliver the Earnest Deposit
to Alon. If this Agreement is terminated for any other reasons, Seller and Alon will instruct, in
writing, Regions Bank to deliver the Earnest Deposit to Seller. In the absence of joint
instructions to Regions Bank, Seller, Purchaser, Alon or Regions Bank may initiate appropriate
litigation for provision of orders by a court of competent jurisdiction, it being understood that
the decision of such court shall be based on the terms set forth in this Agreement. In such event,
Regions Bank shall act based on a final non-appealable order of such court or the joint
instructions of Seller and Purchaser. If Seller receives the Earnest Deposit, neither Purchaser or
Alon shall have any further Liability to Seller or Edgington pursuant to this Agreement or the
transactions contemplated herein.

ARTICLE 12

DEFINITIONS

     12.1 Definition of Certain Terms. The terms defined in this Article 12, whenever used
in this Agreement (including in the Schedules or the Disclosure Letter), shall have the respective
meanings indicated below for all purposes of this Agreement (each such meaning to be equally
applicable to the singular and the plural forms of the respective terms so defined). Unless the
context otherwise requires, (a) all references to Sections, Articles or Schedules are to Sections,
Articles or Schedules of or to this Agreement, (b) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with GAAP, (c) “or” is disjunctive but
not necessarily exclusive, and (d) words in the singular include the plural and vice versa. All
references to “$” or dollar amounts will be to lawful currency of the United States of America.

          1060 Forms: the meaning set forth in Section 9.8.

          Accountants: the meaning set forth in Section 3.4.

          Acquisition Proposal: the meaning set forth in Section 6.13.

          Affiliate: with respect to any Person, a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common control with such
Person. “Control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.

          Agreement: the meaning set forth in the preamble.

          Alon: the meaning set forth in the preamble.

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          Apex 401(k) Plan: the Apex Oil Company, Inc. Employee Savings Plan.

          Assets: the meaning set forth in Section 1.1.

          Balance Sheet: the meaning set forth in Section 5.1.6.

          Balance Sheet Date: the meaning set forth in Section 5.1.6.

          Business: the meaning set forth in the recitals.

          Business Day: any day other than Saturday, Sunday or a United States federal holiday.

          Closing: the meaning set forth in Section 4.1.

          Closing Date: the meaning set forth in Section 4.1.

          Code: the Internal Revenue Code of 1986, as amended.

          Commercially Reasonable Efforts: means efforts which are commercially reasonable
under the circumstances taking into account relevant facts, but such term does not include the
provision of any material consideration to any third Person of the suffering of any material
economic detriment to a party’s ongoing operations for the taking of any action (including the
procurement of any consent) required under this Agreement except for: (i) the cost of gathering or
supplying any data or other information or making any filings; (ii) fees and expenses of counsel
and consultant; and (iii) customary fees and charges of Governmental Entities or third Persons.

          Common Stock: the meaning set forth in Section 3.1.

          Company ERISA Affiliate: any Person that together with Edgington has been or would be
deemed a “single employer” within the meaning of Section 4001 of ERISA or Section 414 of the Code.

          Confidential Information: the meaning set forth in Section 9.6.

          Confidentiality Agreement: means the Confidentiality Agreement, dated as of October 1,
2005, between Alon and Edgington.

          Consultant: the meaning set forth in Section 6.15.

          Contracts: the meaning set forth in Section 1.2.

          Disclosure Letter: the meaning set forth in Section 5.1.

          DLLCA: the meaning set forth in Section 1.1.

          Earnest Deposit: the meaning set forth in Section 3.2.

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          Edgington: the meaning set forth in the preamble.

          Edgington Benefit Plans: the meaning set forth in Section 5.1.19.

          Edgington Securities: any shares of capital stock or other equity interests in, or
securities of, Edgington or any securities, rights or obligations convertible into, exchangeable
for or exercisable to acquire any securities of Edgington.

          Effective Time: the meaning set forth in Section 4.2.

          Employees: the meaning set forth in Section 9.1.

          Employee Plans: the meaning set forth in Section 5.1.19.

          Environmental Claim: any accusation, allegation, notice of violation, action, claim,
Lien, demand, abatement or other order or directive (conditional or otherwise) by any Governmental
Entity or any other Person (including any employee or former employee of any contractor or
subcontractor of Edgington) for personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment (including natural resources), nuisance,
pollution, contamination, trespass or other adverse effects on the environment, or for fines,
penalties or restrictions resulting from or based upon (i) the existence, or the continuation of
the existence, of a Release (including sudden or non-sudden accidental or non-accidental Releases)
of, or exposure to, any Hazardous Material, odor or audible noise in, into or onto the environment
(including the air, soil, surface water or ground water) at, in, by, from or related to the Real
Property or any other property currently or formerly owned, operated or leased by Edgington or any
activities or operations thereof; (ii) the transportation, storage, treatment or disposal of
Hazardous Materials in connection with the Real Property or any other property currently or
formerly owned, operated or leased by Edgington or the operation of the Business; or (iii) the
violation, or alleged violation, of any Environmental Laws or Environmental Permits relating to
environmental matters connected with the Real Property or any other property currently or formerly
owned, operated or leased by Edgington or the operation of the Business.

          Environmental Costs and Liabilities: any and all losses, Liabilities, obligations,
damages, fines, penalties, judgments, actions, claims, costs and expenses (including fees,
disbursements and expenses of legal counsel, experts, engineers and consultants and the costs of
investigation and feasibility studies, remedial or removal actions and cleanup activities) arising
from or under any Environmental Law or Environmental Claim or any order or agreement now in effect
with any Governmental Entity or other Person.

          Environmental Law: any applicable federal, state, local or foreign Law (including
common law), statute, code, ordinance, rule, regulation or other requirement relating to the
environment, natural resources, or public and employee health and safety and includes, but is not
limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §
9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. § 1251 et
seq., the Clean Air Act, 33 U.S.C. § 2601, et seq., the Toxic Substances Control Act, 15 U.S.C. §
2601, et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.

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§ 136, et seq., the Oil Pollution Act of 1990, 33 U.S.C. § 2701, et seq., the Federal Safe
Drinking Water Act, 42 U.S.C. § 300F, et seq., and the Occupational Safety and Health Act, 29
U.S.C. § 651, et seq., as such Laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes.

          Environmental Permit: any permit, approval, authorization, license, variance,
registration, or permission required under any applicable Environmental Law.

          ERISA: the Employee Retirement Income Security Act of 1974, as amended.

          Estimated Inventory Statement: the meaning set forth in Section 3.3.

          Estimated Inventory Value: the meaning set forth in Section 3.3.

          Exceptions: the meaning set forth in Section 6.12.

          Excluded Assets: the meaning set forth in Section 1.2.

          Final Inventory Value: the meaning set forth in Section 3.4.

          Financial Statements: the meaning set forth in Section 5.1.6.

          GAAP: accounting principles generally accepted in the United States of America.

          GBCLM: the meaning set forth in Section 1.1.

          Governmental Entity: the meaning set forth in Section 2.2.

          Governmental Order: any order, writ, judgment, injunction, decree, declaration,
stipulation, determination or award entered by or with any Governmental Entity.

          Hazardous Material: any substance, material or waste which is regulated by any
Governmental Entity under any Environmental Law, including any material, substance or waste which
is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely
hazardous substance,” “restricted hazardous waste,” “contaminant,” “toxic waste” or “toxic
substance” under any provision of Environmental Law, which includes, but is not limited to,
petroleum, petroleum products (including crude oil and any fraction thereof), asbestos,
asbestos-containing materials, urea formaldehyde and polychlorinated biphenyls.

          HSR Act: the meaning set forth in Section 5.1.3.

          Huntington: the meaning set forth in Section 2.2.

          Indebtedness: with respect to any Person, (i) all indebtedness of such Person, whether
or not contingent, for borrowed money, (ii) all obligations for cash overdrafts, (iii) all
obligations of such Person for the deferred purchase price of property or services, (iv) all
obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (v)
all indebtedness created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and remedies

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of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities, (vii) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of
such Person or any warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (viii) all Indebtedness of others referred to in
clauses (i) through (vii) guaranteed by such Person, and (ix) all Indebtedness referred to in
clauses (i) through (vii) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts
and contract rights) owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness.

          Indemnifiable Losses: the meaning set forth in Section 10.2.

          Indemnifiable Title Losses: the meaning set forth in Section 10.5.

          Indemnifying Party: the meaning set forth in Section 10.2.

          Indemnitee: the meaning set forth in Section 10.2.

          Intellectual Property: the meaning set forth in Section 1.1.5.

          Inventories: the meaning set forth in Section 1.1.2.

          Inventory Service: the meaning set forth in Section 3.4.

          Inventory Statement: the meaning set forth in Section 3.4.

          “knowledge of Seller”: the actual knowledge, after due inquiry, of any officer of
Seller or Edgington, or of any other management personnel of Seller or Edgington with direct
responsibility for the mater to which the representation or warranty is being made.

          Law: the meaning set forth in Section 2.2.

          Leased Real Property: the meaning set forth in Section 1.1.6.

          Liabilities: any debt, liability or obligation, whether known or unknown, asserted or
unasserted, determined or determinable, absolute or contingent, accrued or unaccrued and whether
due or to become due.

          Lien: any mortgage, pledge, deed of trust, lien (including environmental and tax
liens), hypothecation, charge, claim, security interest, title defect, encumbrance, burden, charge
or other similar restriction, lease, sublease, claim, title retention agreement, preferential
arrangement, option, easement, covenant, encroachment or other adverse claim of any kind, including
any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes
of ownership.

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          Material Adverse Effect: a material adverse effect, whether or not limited in
duration, on the business, operations, properties, assets, liabilities, financial condition,
results of operations or prospects of Edgington, but shall exclude any material adverse effect
arising out of (i) any changes in United States general economic or securities markets conditions,
(ii) any changes that effect the asphalt refining and marketing industry in general, and (iii) any
changes resulting from any joint announcement of this Agreement by the parties hereto or the
consummation of the transactions contemplated hereby.

          Merger: the meaning set forth in Section 1.1.

          Merger Consideration: the meaning set forth in Section 3.2.

          Organizational Documents: with respect to any Person that is a corporation, its
articles or certificate of incorporation and bylaws, and with respect to any Person that is a
limited liability corporation, its certificate of formation and limited liability company
agreement.

          Owned Real Property: the meaning set forth in Section 1.1.6.

          Per Share Consideration: an amount equal to the Merger Consideration divided by the
aggregate number of shares of Common Stock outstanding immediately prior to the Effective Time.

          Permits: the meaning set forth in Section 1.1.7.

          Permitted Liens: such of the following: (i) statutory Liens for Taxes, assessments or
other governmental charges not yet due and payable; (ii) materialmen’s, mechanics’, carriers’,
workmen’s and repairmen’s Liens and other similar Liens imposed by Law arising in the ordinary
course of business securing obligations that are not overdue; (iii) Real Property Leases; (iv) any
reservations, restrictions, easements, encroachments or rights of way which are of record and
which, individually or in the aggregate, do not materially detract from the value, or impair in any
material manner, the current use of the property subject thereto; and (v) any additional
encumbrances (which are not Liens) appearing in Schedule B to the Title Commitments (other than
standard printed exceptions) and not objected to in writing by Purchaser within ten Business Days
after receipt by Purchaser thereof.

          Person: any natural person, firm, partnership, association, corporation, company,
trust, business trust, Governmental Entity or other entity.

          Physical Inventory: the meaning set forth in Section 3.4.

          Pipeline Easements: the meaning set forth in Section 1.1.6.

          PLL Policy: the meaning set forth in Section 6.15.

          Pre-Existing Environmental Matters: the meaning set forth in Section 6.15.

          Products: the meaning set forth in the recitals.

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          Purchaser: the meaning set forth in the preamble.

          Qualified Insurer: means ACE Environmental Risk, XL Specialty Risk Control and
American International Specialty Lines Insurance Company, each of which has signed a
confidentiality agreement with Edgington, and each of such insurer’s respective affiliates and
reinsurers (including, without limitation, Indian Harbor, an affiliate of XL Specialty Risk
Control).

          Real Property: the meaning set forth in Section 1.1.6.

          Real Property Leases: the meaning set forth in Section 1.1.6.

          Release: any release, spill, emission, leaking, pumping, pouring, dumping, emptying,
injection, deposit, disposal, discharge, dispersal, leaching, or migration on or into the indoor or
outdoor environment or into or out of any property.

          Remedial Action: all actions, including any capital expenditures, required or
voluntarily taken to (i) clean up remove, treat, or in any other way address any Hazardous Material
or other substance; (ii) prevent the Release or threat of Release, or minimize the further Release,
of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care; or (iv) bring facilities on any property
owned, operated or leased by Edgington and the facilities located and operations conducted thereon
into compliance with all Environmental Laws and Environmental Permits.

          Retained Liabilities: the meaning set forth in Section 2.2.

          Seller: the meaning set forth in the preamble.

          Seller Guaranty: the meaning set forth in Section 9.10.

          Shares: the meaning set forth in the recitals.

          Subsidiary: with respect to any Person (other than a natural Person) means any other
Person of which (i) the first mentioned Person or any Subsidiary thereof is a general partner, (ii)
voting power to elect a majority of the board of directors or others performing similar functions
with respect to such other Person is held by the first mentioned Person and/or by any one or more
of its Subsidiaries, or (iii) at least 50% of the equity interests of such other Person is,
directly or indirectly, owned or controlled by such first mentioned Person and/or by any one or
more of its Subsidiaries.

          Surviving Corporation: the meaning set forth in Section 1.1.

          Tangible Personal Property: the meaning set forth in Section 1.1.3.

          Tax or Taxes: all federal, state, local, and foreign taxes, fees, levies or other
assessments, including income, gross receipts, excise, real and personal property, municipal,
capital, sales, use, transfer, license, unemployment, payroll and franchise taxes, and such term

49

 

shall include any interest, penalties, or additions to tax attributable to such taxes, fees,
levies or other assessments, imposed by any Tax Authority.

          Tax Authority: the IRS and any other domestic or foreign governmental authority or
subdivision or agency responsible for the administration of any Taxes.

          Tax Returns: all federal, state, local, and foreign tax returns, declarations,
statements, reports, claims for refund, forms, and information returns, including any schedule or
attachment thereto, and including any amendments thereof.

          Termination Date: the meaning set forth in Section 11.1.

          Third Party Claim: the meaning set forth in Section 10.2.

          Title Commitments: the meaning set forth in Section 6.12.

          Title Company: the meaning set forth in Section 6.12.

          WARN Act: the U.S. Workers Adjustment and Retraining Notification Act of 1988.

          Year-End Financial Statements: the meaning set forth in Section 5.1.6.

ARTICLE 13

MISCELLANEOUS PROVISIONS

     13.1 Specific Performance. The parties recognize that if Seller refuses to consummate
the Merger in accordance with the provisions of this Agreement, monetary damages alone will not be
adequate to compensate Purchaser for its injury. Purchaser shall therefore be entitled, in
addition to any other remedies that may be available, to obtain specific performance with respect
to the consummation of the Merger in accordance with the terms of this Agreement. If any action is
brought by Purchaser to enforce this Agreement as described in this Section 13.1, Seller shall
waive the defense that there is an adequate remedy at Law. In the event of a default by Seller
which results in the filing of a lawsuit for damages, specific performances, or other remedies,
Purchaser shall be entitled to reimbursement by Seller of reasonable legal fees and expenses
incurred by Purchaser.

     13.2 Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and shall be deemed to
have been duly given if (i) delivered personally, (ii) mailed, certified or registered mail with
postage prepaid, (iii) sent by next-day or overnight mail or delivery or (iv) sent by fax or
telegram, as follows:

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	 	(a)	 	If to Seller or Edgington, to:
	 
	 	 	 	Apex Oil Company, Inc.

8235 Forsyth Blvd., 4th Floor

Clayton, Missouri 63105

Facsimile No.: (314) 889-9603

Attention: Douglas D. Hommert

	 
	 	(b)	 	If to Alon or Purchaser, to:
	 
	 	 	 	Alon USA Energy, Inc.

7616 LBJ Frwy, Suite 300

Dallas, TX 75251

Facsimile No.: (972) 367-3724

Attention: General Counsel

or, in each case, at such other address as may be specified in writing to the other parties hereto.

     13.3 Expenses. Except as otherwise specifically provided in this Agreement, Seller,
on the one hand, and Purchaser and Alon, on the other hand, shall bear their respective expenses,
costs and fees (including attorneys’ and auditors’ fees, if any) in connection with the
transactions contemplated hereby, including the preparation, execution and delivery of this
Agreement and compliance herewith, whether or not the transactions contemplated hereby are
effected. Purchaser and Alon shall be responsible for all filing fees in connection with the
filings required by the HSR Act.

     13.4 Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns, but will not
be assignable or delegable by any party without the prior written consent of the other party which
shall not be unreasonably withheld; provided, however, that (a) nothing in this
Agreement is intended to limit Purchaser’s ability to sell or to transfer any or all of the Assets
following the Closing Date, and (b) upon notice to Seller, Purchaser may assign or delegate any or
all of its rights or obligations under this Agreement; provided that any such assignment
does not release Alon or Purchaser from any of its obligations hereunder. Seller agrees to execute
acknowledgements of such assignment(s) and collateral assignments in such forms as Purchaser may
from time to time reasonably request. In the event of such a proposed assignment by Purchaser, the
provisions of this Agreement shall inure to the benefit of and be binding upon Purchaser’s assigns.

     13.5 Amendment; Waiver. No amendment, modification or discharge of this Agreement,
and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by
the party against whom enforcement of the amendment, modification, discharge or waiver is sought.
Any such waiver shall constitute a waiver only with respect to the specific matter described in
such writing and shall in no way impair the rights of the party granting such waiver in any other
respect or at any other time. The waiver by any of the parties hereto of a breach of or a default
under any of the provisions of this Agreement or to exercise any right or privilege hereunder,
shall not be construed as a waiver of any other breach or default

51

 

of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder.
The rights and remedies herein provided are cumulative and none is exclusive of any other, or of
any rights or remedies that any party may otherwise have at Law or in equity.

     13.6 Entire Agreement. This Agreement (including the Exhibits and Schedules referred
to herein or delivered hereunder), the Confidentiality Agreement and paragraph 11 (solely to the
extent relating to Regions Bank, as Agent) of the “Proposed Terms” dated March 24, 2006 executed by
Alon, Seller, Edgington and Regions Bank constitute the entire agreement of the parties to this
Agreement with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, both written and oral, between the parties with respect to the subject matter
hereof.

     13.7 Rights of the Parties. Except as provided in Article 10 or in Section 13.4,
nothing expressed or implied in this Agreement is intended or will be construed to confer upon or
give any Person other than the parties hereto and their respective Affiliates any rights or
remedies under or by reason of this Agreement or any transaction contemplated hereby.

     13.8 Brokers. Alon and Purchaser hereby agrees to indemnify and hold harmless Seller,
and Seller hereby agree to indemnify and hold harmless Alon and Purchaser, against any liability,
claim, loss, damage or expense incurred by Alon or Purchaser, on the one hand, or Seller or
Edgington, on the other hand, relating to any fees or commissions owed to any broker, finder, or
financial advisor as a result of actions taken by Alon or Purchaser, on the one hand, or Seller or
Edgington, on the other hand.

     13.9 Further Assurances. From time to time, as and when requested by any party, the
other parties will execute and deliver, or cause to be executed and delivered, all such documents
and instruments as may be reasonably necessary to consummate the transactions contemplated by this
Agreement.

     13.10 Governing Law. This Agreement, including the interpretation, construction and
validity hereof, shall be governed by the Laws of the state of Texas.

     13.11 Severability. Whenever possible, each provision or portion of any provision of
this Agreement shall be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision or portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision or portion of any provision in such jurisdiction, and this
Agreement shall be reformed, construed and enforced in such jurisdiction in such manner as will
effect as nearly as lawfully possible the purposes and intent of such invalid, illegal or
unenforceable provision. Upon a determination that any provision of this Agreement is prohibited,
unenforceable or not authorized, the parties agree to negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible, in a mutually
acceptable manner, in order that the transactions contemplated hereby are consummated as originally
contemplated to the fullest extent possible.

52

 

     13.12 Execution in Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same agreement. For purposes of this Agreement, a document (or signature page thereto)
signed and transmitted by facsimile machine or electronic mail is to be treated as an original
document. The signature of any party thereon, for purposes hereof, is to be considered as an
original signature on an original document. At the request of any party, any facsimile or
electronically mailed document is to be re-executed in original form by the parties who executed
the facsimile or electronically mailed document. No party may raise the use of a facsimile machine
or electronic device or the fact that any signature was transmitted through the use of a facsimile
or electronic device as a defense to the enforcement of this Agreement or any amendment or other
document executed in compliance with this Section.

     13.13 Titles and Headings. Titles and headings to sections herein and the table of
contents are inserted for convenience of reference only, and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.

     13.14 Passage of Title and Risk of Loss. The Merger will be deemed effective for tax,
accounting and other computational purposes as of 12:01 A.M. (Pacific Time) on the Closing Date.

     13.15 Interpretive Matters. No provision of this Agreement will be interpreted in
favor of, or against, either of the parties hereto by reason of the extent to which either such
party or its counsel participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.

     13.16 No Recourse. Notwithstanding any of the terms or provisions of this Agreement,
each of Alon and Purchaser, on the one hand, and Seller and Edgington, on the other hand, agree
that neither it nor any Person acting on its behalf may assert any claims or cause of action
against any officer or director of the other party (or parties) or stockholder of such other party
(or parties) in connection with or arising out of this Agreement or the transactions contemplated
hereby.

     13.17 Guaranty. Alon hereby guarantees to Seller the prompt and full discharge by
Purchaser of all of Purchaser’s payment and performance obligations under this Agreement in
accordance with the terms hereof.

     13.18 Waiver of Punitive and Other Damages and Jury Trial.

          (a) EACH PARTY TO THIS AGREEMENT EXPRESSLY WAIVES AND FOREGOES ANY RIGHT TO RECOVER PUNITIVE,
EXEMPLARY OR SIMILAR DAMAGES IN ANY ARBITRATION, LAWSUIT, LITIGATION OR PROCEEDING ARISING OUT OF
OR RESULTING FROM ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

          (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY

53

 

IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

          (c) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE EITHER OF THE FOREGOING WAIVERS, (ii) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv) IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 13.18.

[SIGNATURE PAGE FOLLOWS]

54

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	APEX OIL COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/Douglass D. Hommert	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Douglass D. Hommert	 	 
	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	EDGINGTON OIL COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/Douglass D. Hommert	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Douglass D. Hommert	 	 
	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	ALON USA ENERGY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Wiessman	 	 
	 

	 	 	 	 	 	 
	 	 	Name: David Wiessman	 	 
	 	 	Title: Executive Chairman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/Jeff D. Morris	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Jeff D. Morris	 	 
	 	 	Title: President and CEO	 	 
	 
	 	 	 	 	 	 
	 	 	EOC ACQUISITION, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey S. Towers	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Jeffery S. Towers	 	 
	 	 	Title: Vice President of Typex Acquisitions, Inc.
	 	 
	 

	 	 
	 	  Managing Member

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