Document:

ASSET PURCHASE AGREEMENT

 Exhibit 10.15 
 ASSET PURCHASE AGREEMENT 
 By and Among 

SUNOCO PARTNERS MARKETING & TERMINALS L.P. 
 and 
 BLUE DOLPHIN PIPE LINE COMPANY 

and 

BITTER CREEK PIPELINES, LLC 
 August 3, 2011 
 -- 

 Table of Contents 

 

					
	 1.      Definitions.
	  	 	1	  
	 2.      Purchase and Sale
	  	 	5	  
	 (a)    Assets
	  	 	5	  
	 (b)    Excluded Assets
	  	 	6	  
	 (c)    Purchase Price
	  	 	7	  
	 (d)    Easements
	  	 	7	  
	 (e)    Product Agreement
	  	 	7	  
	 (f)     Conveyance Documents
	  	 	7	  
	 (g)    Excluded Liabilities
	  	 	7	  
	 (h)    The Closing
	  	 	8	  
	 (i)     Deliveries at the Closing
	  	 	8	  
	 (j)     Apportionments
	  	 	8	  
	 (k)    Purchase Price Allocation
	  	 	9	  
	 3.      Representations and Warranties Concerning the Transaction
	  	 	10	  
	 (a)    Representations and Warranties of the Seller
	  	 	10	  
	 (b)    Representations and Warranties of the Buyer
	  	 	11	  
	 4.      Representations and Warranties Concerning the Assets
	  	 	12	  
	 (a)    Noncontravention
	  	 	12	  
	 (b)    Title to Assets
	  	 	12	  
	 (c)    Material Change
	  	 	12	  
	 (d)    Legal Compliance
	  	 	13	  
	 (e)    Contracts and Commitments
	  	 	13	  
	 (f)     Litigation
	  	 	13	  
	 (g)    Environmental Matters
	  	 	13	  
	 (h)    Permits
	  	 	14	  
	 (i)     Pipeline Rights-of-Way
	  	 	15	  
	 (j)     Condition of Assets
	  	 	15	  
	 (k)    Taxes
	  	 	15	  
	 (l)     Disclaimer of Representations and Warranties Concerning Personal Property, Equipment, and
Fixtures
	  	 	15	  
	 5.      Post-Closing Covenants
	  	 	16	  
	 (a)    General
	  	 	16	  
	 (b)    Litigation Support
	  	 	16	  
	 (c)    Delivery and Retention of Records
	  	 	16	  
	 (d)    Mail; Communications
	  	 	17	  

  
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	 (e)    Certificate of Non-foreign Status
	  	 	17	  
	 (f)     Identified Environmental Issue
	  	 	17	  
	 6.      Remedies for Breaches of this Agreement
	  	 	18	  
	 (a)    Claim Relating to Pre-Closing and Post Closing Obligations
	  	 	18	  
	 (b)    Survival of Representations, Warranties and Certain Covenants
	  	 	18	  
	 (c)    Indemnification Provisions for Benefit of the Buyer
	  	 	19	  
	 (d)    Indemnification Provisions for Benefit of the Seller
	  	 	20	  
	 (e)    Matters Involving Third Parties
	  	 	21	  
	 (f)     Determination of Amount of Adverse Consequences
	  	 	22	  
	 (g)    Special Indemnification Provisions
	  	 	22	  
	 (h)    Buyer and Seller Damages
	  	 	23	  
	 7.      Miscellaneous
	  	 	23	  
	 (a)    Seller’s Representative
	  	 	23	  
	 (b)    Press Releases and Public Announcements
	  	 	24	  
	 (c)    No Third Party Beneficiaries
	  	 	24	  
	 (d)    Succession and Assignment
	  	 	24	  
	 (e)    Counterparts
	  	 	24	  
	 (f)     Headings
	  	 	24	  
	 (g)    Notices
	  	 	24	  
	 (h)    Governing Law
	  	 	26	  
	 (i)     Amendments and Waivers
	  	 	26	  
	 (j)     Severability
	  	 	26	  
	 (k)    Transaction Expenses
	  	 	26	  
	 (l)     Certain Taxes
	  	 	26	  
	 (m)   Construction
	  	 	26	  
	 (n)    Incorporation of Exhibits and Schedules
	  	 	27	  
	 (o)    Entire Agreement
	  	 	27	  

  
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 ASSET PURCHASE AGREEMENT 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of August 3, 2011, by and among Blue Dolphin
Pipe Line Company, a Delaware corporation (“Blue Dolphin”), and Bitter Creek Pipelines, LLC, a Colorado limited liability company (“Bitter Creek”), Blue Dolphin and Bitter Creek are collectively referred to herein
as the “Seller”), and Sunoco Partners Marketing & Terminals L.P., a Texas limited partnership (the “Buyer”). The Seller and the Buyer are sometimes referred to collectively herein as the
“Parties” and each individually as a “Party.” 
 RECITALS 

WHEREAS, the Seller owns the Assets (as hereinafter defined); and 

WHEREAS, this Agreement contemplates a transaction in which the Buyer will purchase from the Seller, and the Seller will sell to the
Buyer, all of the Seller’s right, title and interest in and to the Assets in return for the consideration specified herein; 
 NOW, THEREFORE, in consideration of the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties hereby agree as follows:

 1. Definitions. 
 “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses, but excluding punitive, exemplary,
special or consequential damages, unless such punitive, exemplary, special or consequential damages are payable in connection with a Third Party Claim by an Indemnified Party. 
 “Affiliate” means, with respect to any Person, any Person which directly or indirectly, controls, is controlled by, or is under a common control with such Person. The term
“control” (including the terms “controlled by” and “under common control with”) as used in the preceding sentence means the possession, directly or indirectly, of the power to direct or cause the direction of management
and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. 

“Assets” has the meaning set forth in Section 2(a). 

“Bill of Sale” has the meaning set forth in Section 2(f)(i). 

  
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 “Business Day” means any day other than a Saturday, Sunday, federal holiday
or state holiday in Houston, Texas, or any other day on which national banks with offices in Houston, Texas, are authorized or required by Applicable Law to be closed. 
 “Buyer” has the meaning set forth in the preface hereto. 

“Buyer Easements” has the meaning set forth in Section 2(d). 

“Buyer Parties” means the Buyer, its Affiliates and their respective officers, directors, members, shareholders,
employees and agents, and their successors and permitted assigns. 
 “Closing” has the meaning set forth in
Section 2(h). 
 “Closing Date” has the meaning set forth in Section 2(h). 

“Closing Payment” has the meaning set forth in Section 2(c). 

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

“Deeds” has the meaning set forth in Section 2(f)(ii). 

“Dow Plant” means the Dow Chemical Freeport, TX processing plant where the Seller’s onshore natural gas pipeline
terminates. 
 “Encumbrance” means any mortgage, deed of trust, lease, pledge, option, easement, right of way,
encroachment, conditional sales agreement, lien, encumbrance, charge, security interest, charge or restriction of any kind, or other defect in title. 
 “Environmental Law” or “Environmental Laws” has the meaning set forth in Section 4(g)(i). 
 “Facility” has the meaning set forth in Section 2(b)(x). 

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time and
consistently applied. 
 “GIGS Valve Site” has the meaning set forth in Section 5(h). 

“Governmental Authority” means the United States and any department, commission, board, bureau, court, agency or any
other instrumentality of any federal, state, provincial, county, city, municipal or other political subdivision, agency, court or instrumentality, whether foreign or domestic. 

  
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 “Hazardous Substances” means all hazardous or toxic materials, substances
and wastes which are regulated under any Environmental Law or which may form the basis for liability under any Environmental Law. 
 “Identified Environmental Issue” shall have the meaning given said term in Section 4(g). 
 “Indemnified Party” has the meaning set forth in Section 6(e)(i). 
 “Indemnifying Party” has the meaning set forth in Section 6(e)(i). 
 “Knowledge” means, in the case of the Seller, the actual knowledge of the officers and directors of Blue Dolphin after reasonable investigation and inquiry and with respect to Bitter
Creek, the actual knowledge of the Executive Vice President and Chief Operating Officer without any requirement to investigate. 

“Laws” means any statute, code, constitution, law, regulation, rule, writ, injunction, judgment, directive, order,
decree, ruling, charge, or other restriction of any applicable Governmental Authority. 
 “Material Adverse
Effect” means any change or effect that, individually or in the aggregate with other changes or effects, is materially adverse to the Assets and/or would cost in excess of $450,000 to cure or remedy, provided that in determining whether a
Material Adverse Effect has occurred, changes or effects relating to (i) the natural gas pipeline industry generally (including the price of natural gas and the costs associated with the drilling and/or production of natural gas),
(ii) United States or global economic conditions or financial markets in general, or (iii) the transactions contemplated by this Agreement, shall not be considered. 
 “Ordinary Course of Business” means the ordinary course of business consistent with the Seller’s commercially reasonable past custom and practice (including with respect to
quantity and frequency). 
 “Party” and “Parties” have the meanings set forth in the
preface. 
 “Permitted Encumbrances” means any of the following: (i) any liens for Taxes not yet
delinquent or, if delinquent, that are being contested in good faith in the ordinary course of business; (ii) any obligations or duties reserved to or vested in any municipality or other Governmental Authority to regulate any of the Assets in
any manner including all applicable Laws; (iii) the terms and conditions of all permits, licenses and other agreements set forth in Schedule 1; (iv) easements, rights of way, servitudes, permits, surface leases and other rights with
respect to surface obligations, pipelines, conditions, covenants or other restrictions, so long as individually or in the aggregate they are not such as are reasonably likely to have a Material Adverse Effect; and (v) materialmen’s,
mechanics’, repairmen’s, and other similar liens or 

  
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charges arising in the ordinary course of business incidental to construction, maintenance or operation of the Assets (A) if they have not been filed pursuant to law, (B) if filed, they
have not yet become due and payable or (C) if their validity is being contested in good faith in the ordinary course of business by appropriate action. For the purposes of clarity, the liabilities underlying the Permitted Encumbrances described
in subclauses (i) and (v) are Excluded Liabilities notwithstanding such liens or charges being Permitted Encumbrances. 
 “Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, Governmental
Authority or any other legal entity. 
 “Product Agreement” has the meaning set forth in Section 2(e).

 “Purchase Price” has the meaning set forth in Section 2(c). 

“ROW Assignments” has the meaning set forth in Section 2(f)(ii). 

“Seller” has the meaning set forth in the preface hereto. 

“Seller Easements” has the meaning set forth in Section 2(d). 

“Seller Parties” means the Seller, its Affiliates and their respective officers, directors, members, shareholders,
employees and agents, and their successors and permitted assigns. 
 “Seller’s Representative” has the
meaning set forth in Section 7(a). 
 “Tax” or “Taxes” means (i) any federal, state,
local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), custom duties, capital stock, franchise, profits,
withholding, social security (or similar excises), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax, assessment, charge, duty, levy or
other similar governmental charge of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not, together with all estimated taxes, deficiency assessments, additions to tax, penalties and interest;
(ii) any liability for the payment of any amount of a type described in clause (i) arising as a result of being or having been a member of any consolidated, combined, unitary or other group or being or having been included or required to
be included in any Tax Return related thereto; and (iii) any liability for the payment of any amount of a type described in clause (i) or clause (ii) as a result of any obligation to indemnify or otherwise assume or succeed to the
liability of any other Person. 
 “Tax Return” means any return, declaration, report, estimate, claim for
refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 

  
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 “Third Party Claim” has the meaning set forth in Section 6(e)(i).

 2. Purchase and Sale. 
 (a) Assets. Subject to the terms and conditions of this Agreement, the Seller agrees to sell, and the Buyer agrees to purchase from the Seller, the following assets (the “Assets”):

 (i) that certain pipeline system located onshore in Brazoria County, Texas, which is commonly known as the “Buccaneer
Pipeline,” including the easements and rights-of-way listed on Exhibit 2(a)(i), and all pipelines, pumping station, barge terminal, including loading birth, resting dolphins and related equipment and fixtures primarily used in the operation of
the Buccaneer Pipeline; 
 (ii) those certain tracts or parcels of real estate described in Exhibit 2(a)(ii) (the
“Land”), including (A) all right-of-ways, ingress and egress, easements, rights, benefits, privileges, hereditaments, tenements, remainders, interests, reversions and appurtenances thereto belonging or in any way appertaining
to the Land, (B) to the extent transferable, all access, air, water, riparian, development, utility and solar rights related to the Land, and (C) any unused, undeveloped or abandoned platted street, road, alley, highway, right-of-way or
avenue, which is not on the Retained Land, opened or proposed, within, in front of, abutting or adjoining the Land, to the centerline thereof; 
 (iii) all improvements upon the Land, including any buildings, storage tanks, including the onshore tanks numbered S-1000, S-1001, S-1002, and S-1003, fixtures, facilities and other fixed assets located
on and/or affixed to the Land and related equipment, internal transfer pipelines and fixtures which are located on the Land on the date of this Agreement; 
 (iv) all other tangible personal property and fixtures that are used by the Seller primarily in the operation of the Assets, including all pipes, piping, pumps, motors, valves, fittings, miscellaneous
equipment, automation systems, personal computers, printers and servers, electrical facilities, improvements, storage tanks, buildings and all other fixed assets and personal property; 

(v) all books, files, maps, records and reports (including electronic data files that would not violate any license or Law) pertaining
primarily to the Assets other than income Tax Returns, income Tax work papers and other income Tax records, including all pipeline and plant construction and testing records, vessel and pipe certifications and weld x-rays, equipment specifications
and operating manuals and inspection reports, real and personal property and ad valorem Tax records and information relating to the other Assets, and reports and filings to and with the U.S. Environmental Protection Agency, the state of Texas or any
other Governmental Authority or agency thereof; and 

  
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 (vi) all permits, licenses, orders, concessions, certificates of occupancy and other
governmental authorizations and approvals obtained by the Seller pertaining or relating to the Assets, including those set forth on Exhibit 2(a)(vi) hereto, to the extent legally assignable or transferable. 

(b) Excluded Assets. Notwithstanding any provision of Section 2(a) hereof, the Assets do not include, and the Seller shall
retain all right, title and interest in and to the following assets (the “Excluded Assets”): 
 (i) all cash and
cash equivalents of the Seller; 
 (ii) all accounts and notes receivable arising out of, resulting from or relating to the
business and operations of the Assets for periods up to the Closing Date, and all claims, causes of action and rights relating thereto and proceeds thereof; 
 (iii) all rights under insurance policies of the Seller and its Affiliates relating to the Assets; 
 (iv) all computer equipment; 
 (v) Tax credits, Tax refunds or other Tax assets
relating to whole or partial taxable periods on or before the Closing Date; 
 (vi) Tax Returns, Tax work papers and other Tax
records and information other than real and personal property and ad valorem Tax records and information relating to the Assets; 
 (vii) All equipment located in the Seller’s offices; 
 (viii) The 20 inch
liquids and natural gas pipeline offshore and onshore pipeline which terminates at the Facility which is commonly known as the “Blue Dolphin Pipeline;” 
 (ix) Any real estate interests which are not expressly included in the Land (the “Retained Land”); 
 (x) The processing facility located on the Retained Land (the “Facility”); 
 (xi) The 16 inch natural gas pipeline which begins at the Facility and which terminates at the Dow Plant; and 

  
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 (xv) All inventory of crude oil and crude products located in any of the onshore tanks; and

 (xvii) All other assets of Seller not specifically described in paragraph 2(a). 

(c) Purchase Price. In consideration for the sale of the Assets, the Buyer agrees to pay to the Seller at the Closing $4,500,000
(the “Purchase Price”), less the Seller’s allocation for ad valorem and real property Taxes as set forth on the written agreement by the Parties made in accordance with Section 2(j)(ii) (the resulting amount, the
“Closing Payment”), payable by wire transfer of immediately available funds as follows: 16 2/3% of the Closing Payment shall be paid to Bitter Creek, and 83 1/3% of the Closing Payment shall be paid to Blue Dolphin. 

(d) Easements. At the Closing, (i) the Seller shall deliver to the Buyer easements (the “Buyer Easements”)
with respect to the Retained Land in the form of Exhibit 2(d)-1, and (ii) the Buyer shall deliver to the Seller easements with respect to the Land (the “Seller Easements”), in the form of Exhibit 2(d)-2. 

(e) Product Agreement. At the Closing, Blue Dolphin and the Seller will enter into an agreement in the form of Exhibit 2(e) (the
“Product Agreement”). 
 (f) Conveyance Documents. 

(i) At the Closing, the sale, transfer, assignment, conveyance and delivery of all tangible and intangible personal property, any
assignable permits and the books and records included in the Assets shall be effected pursuant to a bill of sale and assignment agreement substantially in the form of Exhibit 2(f)(i) (“Bill of Sale”). 

(ii) At the Closing, the transfer of the Land and improvements on the Land shall be effected pursuant to (1) one or more special
warranty deeds substantially in the form of Exhibit 2(f)(ii)-1 (the “Deeds”) and (2) one or more assignments of easements and rights of way substantially in the form of Exhibit 2(f)(ii)-2 (the “ROW
Assignments”). 
 (g) Excluded Liabilities. The Buyer shall not assume, and the Seller shall retain and be
responsible for and shall pay and discharge when due, any liabilities or obligations arising out of, resulting from or relating to any of the Assets, whether absolute, contingent, matured or unmatured, arising or relating to events or circumstances
occurring prior to or on the Closing Date (collectively, the “Excluded Liabilities”), and specifically (but not by way of limitation), the Buyer shall not assume the following liabilities and obligations: 

(i) any accounts and notes payable arising out of, resulting from or relating to the Assets to the extent relating to or for periods up
to and including the Closing Date; 

  
 7 

 (ii) all indebtedness of the Seller for borrowed money; 

(iii) all Taxes arising out of, resulting from or relating to the Assets for whole or partial taxable periods on or before the Closing
Date; and 
 (iv) all Liabilities relating to the ownership, use, operation or disposition of the Assets prior to the Closing
Date. 
 (h) The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Stewart Title Company on the date hereof, or on such other date as the Buyer and the Seller’s Representative may mutually determine (the “Closing Date”). The Closing will be effective as of
1:00 p. m. on the Closing Date. 
 (i) Deliveries at the Closing. At the Closing, (i) Blue Dolphin will deliver the
Product Agreement and the Seller will deliver to the Buyer the Buyer Easements, Bill of Sale, Deeds, ROW Assignments and various other certificates, instruments, and documents required to be delivered by it pursuant to this Agreement, (ii) the
Buyer will deliver to Blue Dolphin the Product Agreement and will deliver to the Seller the Seller Easements and various other certificates, instruments, and documents required to be delivered by it pursuant to this Agreement, (iii) the Seller
will deliver to the Buyer such other instruments of assignment and transfer as shall be necessary to transfer to the Buyer all of the Seller’s right, title and interest in and to the Assets free and clear of any Encumbrance other than any
Permitted Encumbrance, and (iv) the Buyer will deliver to the Seller the Closing Payment. 
 (j) Apportionments.

 (i) Subject to Section 2(j)(ii) below, all charges, expenses, ad valorem and property Taxes and
other costs payable with respect to operating or owning any or all of the Assets, including water, electricity, sewage, gas, and all other utilities shall be prorated between the Seller and the Buyer as of the Closing Date. Any charges, expenses, ad
valorem and property Taxes and other costs payable shall be deemed to have accrued when the event giving rise to such charge, expense, ad valorem and property Tax and other cost payable occurred (whether or not such charge, expense, ad valorem and
property Tax and other cost payable was invoiced or paid at the Closing Date). All proceeds attributable to the operation, ownership, use or maintenance of or otherwise relating to the Assets prior to the Closing Date shall be the property of the
Seller. In the event, through inadvertence, mistake or otherwise, any such proceeds are transferred to or received by the Buyer, the Buyer shall promptly and fully disclose, account for and transmit the same to the Seller’s Representative
(which shall distribute 1/6th of the proceeds to Bitter
Creek and 5/6ths of the proceeds to Blue Dolphin). All proceeds attributable to the operation, ownership, use or maintenance of or otherwise relating to the Assets after the Closing Date shall be the property of the Buyer. In the event, through
inadvertence, mistake or otherwise, any such proceeds are transferred to or received by the Seller, the Seller shall promptly and fully disclose, account for and transmit the same to the Buyer. 

  
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 (ii) The Buyer shall be responsible for the actual payment of all ad valorem and property
Taxes with respect to the Assets for the calendar year in which the Closing occurs; provided, however, that the Seller shall reimburse the Buyer for its pro rata share of such Taxes to the extent not previously paid by the Seller. An estimate of
such ad valorem and property Taxes, based upon the prior year’s ad valorem and property Tax assessments plus five percent (5%), together with a resulting calculation of the Closing Payment, is attached hereto as Exhibit 2(j)(ii). Such amount
shall be binding on the Parties as a final allocation of ad valorem and property Taxes notwithstanding the actual amount of Taxes paid by the Buyer and shall be included as an adjustment to the Purchase Price reflected in the Closing Payment, as
described in Section 2(c). The ad valorem and property Taxes for the year of Closing for which the Seller is responsible shall be determined by applying a fraction based on the number of days in the calendar year prior to the Closing Date to
such Taxes for the calendar year. 
 (k) Purchase Price Allocation. The Seller’s Representative and the Buyer shall,
within thirty (30) days prior to the filing the respective 2011 federal Tax Returns of Blue Dolphin, Bitter Creek and the Buyer attempt in good faith to agree to an allocation of the Purchase Price among the Assets. Should the allocation be
agreed to, the Buyer, Blue Dolphin and Bitter Creek will (i) report the federal, state and local income and other Tax consequences of the transactions contemplated herein, and in particular report the information required by
Section 1060(b) of the Code, and jointly prepare Form 8594 (Asset Acquisition Statement under Section 1060) in a manner consistent with such allocation and (ii) not to take any position inconsistent therewith upon examination of any
Tax Return, in any refund claim, or in any litigation or investigation or otherwise, unless required by applicable Laws or with the consent of the other Parties. Blue Dolphin, Bitter Creek and the Buyer agree that each will furnish to the others a
copy of Form 8594 proposed to be filed with the Internal Revenue Service by such Party or any Affiliate thereof within ten (10) days prior to the filing of such form with the Internal Revenue Service. Should the Parties not agree as to the
allocation, they shall so indicate the same on their respective Form 8594 to the extent required by the Asset Acquisition Statement under IRC Section 1060. The Buyer further agrees that if the amount of the Purchase Price allocated to any of
the Assets by the Seller and the Buyer increases (or decreases) after the taxable year that includes the Closing Date, the Seller and the Buyer shall file “Supplemental Asset Acquisition Statements” on Form 8594 with their respective
income Tax Returns for the taxable year in which the increase (or decrease) is properly taken into account. 

  
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 3. Representations and Warranties Concerning the Transaction. 

(a) Representations and Warranties of the Seller. Blue Dolphin hereby represents and warrants to the Buyer, with respect to Blue
Dolphin, and Bitter Creek hereby represents and warrants to the Buyer, with respect to Bitter Creek, as follows: 
 (i)
Organization of the Seller. Blue Dolphin and Bitter Creek are each, and on the Closing Date each will be, a corporation and a limited liability company respectively, duly organized, validly existing, and in good standing, in the case of Blue
Dolphin under the Laws of the state of Delaware, and in the case of Bitter Creek under the Laws of the state of Colorado, and are each duly qualified or licensed to do business as a foreign entity in all states where it is necessary and required to
be so qualified or licensed in order to perform the obligations and effect the transactions contemplated by this Agreement. 

(ii) Authorization of Transaction. Each of Blue Dolphin and Bitter Creek has full power and authority to (i) own and operate
the Assets and to carry on its business with respect to the Assets as currently conducted and (ii) execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, and all other
documents required hereunder to be executed and delivered by the Seller, and the performance of the transactions contemplated hereby have been duly and validly authorized by such action, corporate or otherwise, necessary on behalf of each of Blue
Dolphin and Bitter Creek. This Agreement constitutes, and each document required to be executed and delivered by each of Blue Dolphin and Bitter Creek hereunder shall constitute, the valid and legally binding obligation of each of Blue Dolphin and
Bitter Creek, enforceable in accordance with its terms and conditions, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally, and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Except as set forth on Schedule 3(a)(ii), the Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement. 
 (iii)
Noncontravention. Except for the approvals and filings specified in Schedule 3(a)(ii), or as set forth in Schedule 3(a)(iii), neither the execution and delivery of this Agreement, nor the performance by Seller of its obligations hereunder,
nor the consummation of the transactions contemplated hereby, will (A) violate any provision of the constituent organizational documents of either Blue Dolphin or Bitter Creek, (B) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any Governmental Authority to which either each of Blue Dolphin or Bitter Creek is subject or any provision of its charter or bylaws, or (C) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice, approval or consent under any agreement, contract, lease, license, instrument, or other
arrangement to which either Blue Dolphin or Bitter Creek is a party 

  
 10 

 
or by which it is bound or to which any of its assets is subject, except for such violations, defaults, breaches, or other occurrences that do not, individually or in the aggregate, have a
Material Adverse Effect on the ability of the Seller to consummate the transactions contemplated by this Agreement. 
 (iv)
Brokers’ Fees. The Seller has no liability or obligation to pay any fees or commissions to any broker, finder, agent or any other Person with respect to the transactions contemplated by this Agreement for which the Buyer could become
liable or obligated. 
 (b) Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the
Seller as follows: 
 (i) Organization of the Buyer. The Buyer is, and on the Closing Date will be, a limited partnership
duly organized, validly existing, and in good standing under the Laws of the state of Texas, and is duly qualified or licensed to do business as a foreign entity in all states where it is necessary and required to be so qualified or licensed in
order to perform the obligations and effect the transactions contemplated by this Agreement. 
 (ii) Authorization of
Transaction. The Buyer has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, and all other documents required hereunder to be executed and
delivered by Buyer, and the performance of the transactions contemplated hereby have been duly and validly authorized by such action, limited partnership or otherwise, necessary on behalf of the Buyer. This Agreement constitutes, and each document
required to be executed and delivered by Buyer hereunder shall constitute, the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Buyer need not give any
notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement. 

(iii) Noncontravention. Neither the execution and delivery of this Agreement, nor the performance by Buyer of its obligations
hereunder, nor the consummation of the transactions contemplated hereby, will (A) violate any provision of the constituent organizational documents of Buyer, (B) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which the Buyer is subject, or (C) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice, approval or consent under any agreement, contract, lease, license, instrument, or other arrangement to which the Buyer is a party or by which it is bound or to which any of its assets
is subject, except for such violations, defaults, breaches, or other occurrences that do not, individually or in the aggregate, have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated by this Agreement.

  
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 (iv) Brokers’ Fees. The Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, agent or any other Person with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated. 

(v) Financing. The Buyer has sufficient financial resources to enable it to make payment of the Closing Payment at Closing without
encumbrance or delay and without causing the Buyer to become insolvent or to declare insolvency. 
 4. Representations and
Warranties Concerning the Assets. The Seller hereby represents and warrants to the Buyer as follows: 
 (a)
Noncontravention. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any Law or other restriction of any Governmental Authority to which the Assets are
subject or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or trigger any rights to payment
or other compensation under any agreement, contract, lease, license, instrument, or other arrangement to which any of the Assets is subject (or result in the imposition of any Encumbrance upon any of the Assets), except where the violation,
conflict, breach, default, acceleration, termination, modification, cancellation, failure to give notice, right to payment or other compensation, or Encumbrance would not have a Material Adverse Effect, or would not materially adversely affect the
ability of the Seller to consummate the transactions contemplated by this Agreement, or (iii) result in the cancellation, forfeiture, revocation, suspension or modification of any Assets or any existing permits or other governmental
authorizations pertaining to the Assets. 
 (b) Title to Assets. Seller has good and defensible title to the Assets, free
and clear of all Encumbrances, except for (i) Permitted Encumbrances, and (ii) the Encumbrances disclosed in Schedule 4(b). Blue Dolphin has an undivided 5/6 interest in the Assets, and Bitter Creek has an undivided 1/6 interest in the
Assets; no other party has any interest in the Assets. 
 (c) Material Change. Except as set forth in Schedule 4(c),
since February 28, 2011: 
 (i) there has not been any Material Adverse Effect; 

(ii) the Assets have been prudently operated and maintained in the Ordinary Course of Business; 

(iii) there has not been any material damage, destruction or loss to any material portion of the Assets, whether or not covered by
insurance; 

  
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 (iv) there has been no change affecting any of the Assets with any customers, licensors,
suppliers, distributors or sales representatives, except for changes that do not have a Material Adverse Effect; and 
 (v)
there is no contract, commitment or agreement by Seller to do any of the foregoing, except as expressly permitted hereby. 
 (d)
Legal Compliance. The Assets are in legal compliance with all applicable Laws of all Governmental Authorities as they are currently enforced, except where the failure to comply would not have a Material Adverse Effect. The Seller makes no
representations or warranties in this Section 4(e) with respect to Environmental Laws, for which the sole representations and warranties of the Seller are set forth in Section 4(g). 

(e) Contracts and Commitments. There are no material contracts or commitments with respect to the Assets (including
any contract, lease, agreement or commitment, written or oral, providing for receipt or payment, contingent or otherwise, of $25,000 or more, or which may not be terminated without payment or penalty, or containing any indemnity obligation, or
relating to indebtedness or guarantee obligations, or concerning the transportation or processing of the products of any party by means of the Assets) to which the Seller or any of its Affiliates is a party, or which concerns the Assets as of the
date hereof, with respect to which the Buyer will have any legal obligation to perform after Closing.  
 (f)
Litigation. Schedule 4(f) sets forth each instance in which either Blue Dolphin or Bitter Creek (with respect to the Assets) or the Assets (i) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge or
(ii) is a party to or the subject of any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction, or is the subject of any
pending or, to the Seller’s Knowledge, threatened claim, demand, or notice of violation or liability from any party. 
 (g)
Environmental Matters. Except as set forth in Schedule 4(g): 
 (i) The Seller (with respect to the Assets) is in
compliance with all applicable Laws (including common law) relating to (A) the control of any pollution or protection of human health and the environment (including the air, water, land surface or substrata), (B) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation, (C) releases of or exposure to any Hazardous Substances and (D) the protection of the environment, including the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. section 9601, et seq. (“CERCLA”), the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. section 6901, et seq., the Clean Air Act, as

  
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amended, 42 U.S.C. section 7401, et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. section 1251, et seq., and the Oil Pollution Act of 1990, 33 U.S.C. section 2701, et seq.
(collectively, the “Environmental Laws” and individually an “Environmental Law”), except for such instances of noncompliance that individually or in the aggregate do not have a Material Adverse Effect. 

(ii) The Seller (with respect to the Assets) has obtained all permits, licenses, franchises, authorities, consents, and approvals, and
has made all filings and maintained all material information, documentation, and records, as necessary under applicable Environmental Laws for operating the Assets and all such permits, licenses, franchises, authorities, consents, approvals, and
filings remain in full force and effect, except for such matters that individually or in the aggregate do not have, or would not reasonably be expected to have, a Material Adverse Effect. 

(iii) There are no pending or, to the Seller’s Knowledge, threatened, claims, demands, actions, administrative proceedings or
lawsuits against the Seller (with respect to the Assets), and neither the Seller nor any of the Assets are subject to any outstanding injunction, judgment, order, decree or ruling under any Environmental Laws. 

(iv) The Seller has not received any written notice that it is or may be a potentially responsible party under CERCLA or any analogous
state law in connection with any site actually or allegedly containing or used for the treatment, storage or disposal of Hazardous Substances. 
 (v) The Seller acknowledges, as of the Closing Date, the presence of the environmental conditions and/or potential noncompliance with Environmental Laws with respect to benzene levels identified in the
Limited Phase II Environmental Assessment – Blue Dolphin Processing Facility dated July 7, 2011 and prepared by Groundwater & Environmental Services, Inc. for Sunoco Logistics Partners, L.P., which is referred to herein as the
“Identified Environmental Issue.” The Identified Environmental Issue shall be subject to Section 5(f). 

The Seller makes no representation or warranty regarding any compliance or failure to comply with, or any actual or contingent liability
under, any Environmental Law, except as expressly set forth in this Section 4(g). 
 (h) Permits. Except as set
forth in Schedule 4(h), the Seller owns or holds all franchises, licenses, permits, consents, approvals, and authorizations of all Governmental Authorities necessary for the conduct of the business conducted with the Assets (collectively, the
“Permits”), except for Permits whose absence would not have a Material Adverse Effect. Each Permit is in full force and effect, and the Seller (with respect to the Assets) is in compliance with all of its obligations with respect to
each Permit, except where the failure to be in full force and effect or to be in compliance would not have a Material Adverse Effect, and, to the Seller’s 

  
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Knowledge, no event has occurred that permits, or upon the giving of notice or the lapse of time or otherwise would permit, revocation or termination of any Permit except such as would not have a
Material Adverse Effect. 
 (i) Pipeline Rights-of-Way. Except as expressly set forth in Schedule 4(i), the
Seller has not received written notice from any third party and does not have Knowledge of any deficiency in any rights-of-way or other easements with respect to the entire route of all pipelines owned and used or held for use with respect to the
Assets. The Seller has not sold or assigned any such rights-of-way and/or easements, in whole or in part, or any undivided interest therein, to any party whatsoever.  

(j) Condition of Assets. Except as set forth in Schedule 4(j), the Assets constitute all of the tangible assets, real and
personal, and permits reasonably necessary for Seller to operate the Assets as of the date hereof. Except as set forth in Schedule 4(j), to the Knowledge of Seller, the Assets: (i) are in serviceable and functional condition, (ii) have
been maintained to normal industry standards,(iii) are suitable for the purposes used by the Seller, and there is no imminent repair or replacement pending with respect to the Assets. 

(k) Taxes. Except as set forth in the Schedule 4(k), the Seller has timely filed all material federal, state, local and foreign
Tax returns related to the Assets and has paid (except amounts being diligently contested in good faith by appropriate proceedings and disclosed in Schedule 4(k)) when due all Taxes arising from or related to the Assets, including any interest,
penalties or additions attributable thereto shown as due on all such filings. Taxes which the Seller was required by applicable Laws to withhold or collect arising from or related to the Assets have been withheld or collected and have been paid over
to the proper Governmental Authority or are properly held by the Seller for such payment when due and payable. 
 (l)
Disclaimer of Representations and Warranties Concerning Personal Property, Equipment, and Fixtures. The Buyer acknowledges that (i) it has had and pursuant to this Agreement will have before Closing access to the Seller and the Assets,
and the officers and employees of the Seller and (ii) in making the decision to enter into this Agreement and consummate the transactions contemplated hereby, the Buyer has relied solely on the basis of its own independent investigation and
upon the express representations, warranties, covenants, and agreements set forth in this Agreement and in the other agreements referred to herein. Accordingly, the Buyer acknowledges that, except as expressly set forth in this Agreement and in the
other agreements referred to herein, the Seller has not made, and THE SELLER MAKES NO AND DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE, REGARDING (A) THE QUALITY,
CONDITION, OR OPERABILITY OF ANY PERSONAL PROPERTY, EQUIPMENT, OR FIXTURES, (B) ITS MERCHANTABILITY, (C) ITS FITNESS FOR ANY PARTICULAR PURPOSE, (D) ITS CONFORMITY TO MODELS, SAMPLES OF MATERIALS OR MANUFACTURER DESIGN, AND ALL
PERSONAL 

  
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PROPERTY AND EQUIPMENT IS DELIVERED “AS IS, WHERE IS” IN THE CONDITION IN WHICH THE SAME EXISTS, OR (E) ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO
BUYER BY OR ON BEHALF OF SELLER (INCLUDING WITHOUT LIMITATION, IN RESPECT OF THE EXISTENCE OR EXTENT OF OIL, GAS OR OTHER MINERAL RESERVES, THE RECOVERABILITY OF OR THE COST OF RECOVERING SUCH RESERVES, OR THE LIKELIHOOD THAT SUCH RESERVES, IF
RECOVERED, WILL BE TRANSPORTED OR PROCESSED BY MEANS OF THE ASSETS). 
 5. Post-Closing Covenants. The Parties agree as
follows: 
 (a) General. In case at any time after the Closing any further action is necessary to carry out the purposes
of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as the other Party reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefore under Section 6, in which case the allocation of such cost and expense shall be in accordance with Section 6). 

(b) Litigation Support. In the event and for so long as any Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in connection with (i) any transaction contemplated under this Agreement or (ii) any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction involving the Assets, the other Party shall reasonably cooperate with the contesting or defending Party and its counsel in the defense or contest, make available its personnel, and
provide such testimony and access to its books and records (other than books and records which are subject to privilege or to confidentiality restrictions) as shall be reasonably necessary in connection with the defense or contest, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or defending Party is entitled to indemnification therefor under Section 6, in which case the allocation of such cost and expense shall be in accordance with
Section 6), but there shall be no cost to the contesting or defending Party for the direct labor cost of employees of the other Party. 
 (c) Delivery and Retention of Records. On or promptly after the Closing Date, the Seller will deliver or cause to be delivered to the Buyer all files, records, ad valorem and real property Tax
records, information and data relating to the Assets, together with all of the Seller’s and its subsidiaries’ contractual rights to request other such files, records, information, and data from any third party (other than income Tax
Returns, income Tax workpapers and other income Tax records and information that are in the possession or control of the Seller and its subsidiaries) (the “Records”). The Buyer agrees (i) to hold the Records and not to destroy
or dispose of any thereof for a period of 4 years from the Closing Date or such longer time as may be required by Law, provided that, if it desires to destroy or dispose of such Records during such period, it will first offer in writing at
least 60 days before such destruction or disposition to 

  
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surrender them to the Seller’s Representative and if the Seller’s Representative does not accept such offer in writing within 20 days after receipt of such offer, the Buyer may take
such action and (ii) following the Closing Date to afford the Seller’s Representative, its accountants, and counsel, during normal business hours, upon reasonable request, at any time, full access to the Records and to the Buyer’s
employees to the extent that such access may be requested for any legitimate purpose at no cost to the Seller’s Representative (other than for reasonable out-of-pocket expenses), so long as such access does not unreasonably interfere with
Buyer’s operations, is conducted during normal business hours and is limited solely to such legitimate purpose; provided that such access will not be construed to require the disclosure of Records that would cause the waiver of any
attorney-client, work product or like privilege; provided, further, that in the event of any litigation nothing herein shall limit either Party’s rights of discovery under applicable Law. The Buyer shall have the same rights, and
the Seller shall have the same obligations, as are set forth in this Section 5(c) with respect to any copies of the records of the Seller pertaining to the Assets that are retained by the Seller, provided that such access will not be construed
to require the disclosure of records that would cause the waiver of any attorney-client, work product, or like privilege. 
 (d)
Mail; Communications. 
 (i) The Seller hereby authorizes the Buyer from and after the Closing to receive and open all
mail and other communications relating to the business conducted with the Assets, and to act with respect to such communications in such manner as the Buyer may elect to the extent that such communications relate to the rights and obligations of the
Buyer with respect to the Assets. If any communication does not relate exclusively to the rights and obligations of the Buyer with respect to the Assets, the Buyer shall forward the original or a copy of such communication promptly to the
Seller’s Representative. 
 (ii) The Seller shall promptly deliver to the Buyer the original or a copy of any mail or other
communication received by it after the Closing pertaining to the Assets. 
 (e) Certificate of Non-foreign Status. On the
Closing Date, each of Blue Dolphin and Bitter Creek shall provide the Buyer with a properly executed certificate of non-foreign status in accordance with Treasury Regulation §1.1445-2(b) certifying under penalties of perjury that such Party is
not a foreign person within the meaning of Section 1445(f) of the Code and Treasury Regulation §1.1445-2(b). 
 (f)
Identified Environmental Issue. As promptly as may be practicable following Closing, the Seller shall perform such remediation work to the extent required to obtain a closure letter from the Texas Railroad Commission with respect to the
Identified Environmental Issue. Such remediation work shall be done at the expense and risk of the Seller. The Buyer shall cooperate with the Seller with respect to such remediation work to the extent reasonably required by Seller. Upon the
obtainment of such closure letter, Seller shall no longer have any liability or responsibility for the Identified Environmental Issue. 

  
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 (g) Division of Tax Parcels. The Parties shall use commercially reasonable efforts to
effectuate the division of any tax parcels of land for which Seller does not acquire a 100% interest in as part of the Land, including (i) Lot 1 of the Brazos County Investment Company Subdivision No. 10, in the F.J. Calvit League,
Abstract 51, Brazoria County, Texas and (ii) a 105.52 acre tract out of the F.J. Calvit League, Abstract 51, Brazoria County, Texas, said tract being more particularly described by metes and bounds in a deed from Shell Oil Company recorded in
Volume 1058, Page 783 of the Deed Records, Brazoria County, Texas, as promptly as may be practicable following Closing. 
 (h)
GIGS Valve Site Easement. Within 90 days of the Closing Date, Blue Dolphin shall perform a survey of the “GIGS” pipeline constructed pursuant to the easement granted to TPC Transmission, Inc. and Buccaneer Land Partnership dated
September 12, 1980 recorded in the Official Real Property Records of Brazoria County, Texas in Volume (89)730, Page 366, and shall determine an appropriate valve site on the Land (if any) for a connection between Seller’s Blue Dolphin
Pipeline and the “GIGS” pipeline, which shall be for a parcel of land of a size no less than 30 feet by 30 feet and no more 100 feet by 100 feet (the “GIGS Valve Site”); provided that (i) Blue Dolphin shall use
commercially reasonable efforts to minimize the amount of land required for the GIGS Valve Site and (ii) the GIGS Valve Site shall not unreasonably interfere with the operations of the Buccaneer Pipeline as of the Closing Date. After Blue
Dolphin has determined the GIGS Valve Site, Buyer shall execute in favor of Seller an easement in substantially the same form as Exhibit 2(d)-2 “Pipeline and Valve Site Easement” for a 2-year term; provided that such easement shall provide
that when Seller completes construction of a stub-up/GIGS connection, such stub-up/GIGS connection to be reasonably acceptable to Buyer, such easement shall become permanent with no additional fee, subject to abandonment and removal provisions in
the easement; provided further, that such easement shall provide that Seller may renew the easement for successive one-year periods prior to the expiration of the term by paying to Buyer $10,000 per calendar year, escalated 3% annually, due 30 days
prior to the expiration of the easement.  
 6. Remedies for Breaches of this Agreement. 

(a) Claim Relating to Pre-Closing and Post Closing Obligations. From and after the Closing the Seller will indemnify the Buyer
Parties against any Adverse Consequences relating to claims brought by Third Parties which arise from the operation of the Assets prior to the Closing. From and after the Closing the Buyer will indemnify the Seller Parties against any Adverse
Consequences relating to claims brought by Third Parties which arise from the operation of the Assets subsequent to the Closing. 
 (b) Survival of Representations, Warranties and Certain Covenants. (i) All of the 

  
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representations and warranties of the Seller contained in this Agreement shall survive the Closing hereunder for a period of one year after the Closing Date, provided that the representations of
the Seller contained in Sections 3(a)(i), 3(a)(ii), 3(a)(iv) and 4(b) shall survive the Closing indefinitely, and the representations made by the Seller in Section 4(k) shall survive until 60 days following the expiration of the applicable
statute of limitations (taking into account any extensions thereof). The representations and warranties of the Buyer contained in this Agreement shall survive the Closing for a period of one year after the Closing Date, provided that the
representations of the Buyer contained in Sections 3(b)(i), 3(b)(ii) and 3(b)(iv) shall survive the Closing indefinitely. The covenants contained in this Agreement to be performed after the Closing shall survive the Closing indefinitely. 

(c) Indemnification Provisions for Benefit of the Buyer. 
 (i) From and after the Closing, in the event that: (x) the Seller breaches any of its representations and warranties contained herein (other than the representations and warranties in
Section 3(a)(i), (ii) and (iv) and Section 4(b)); and (y) a Buyer Party makes a written claim for indemnification against the Seller pursuant to Section 10(g) within the applicable survival period as set forth in
Section 6(b), then the Seller shall indemnify the Buyer Parties from and against any Adverse Consequences to the extent in excess of $10,000 per breach to the extent they are caused proximately by the breach and suffered by the Buyer Parties;
provided, that the Seller shall not have any obligation to indemnify the Buyer Parties from and against any such Adverse Consequences (A) until the Buyer Parties have suffered Adverse Consequences by reason of all such breaches in excess
of a $100,000 aggregate deductible (after which point the Seller will be obligated only to indemnify the Buyer Parties from and against further such Adverse Consequences) or thereafter (B) to the extent the Adverse Consequences the Buyer
Parties have suffered by reason of all such breaches exceeds a $1,125,000 aggregate ceiling (after which point the Seller will have no obligation to indemnify the Buyer Parties from and against further such Adverse Consequences). Blue Dolphin and
Bitter Creek’s liability is several and not joint and as such, Blue Dolphin’s aggregate ceiling is $937,500 and Bitter Creek’s aggregate ceiling is $187,500. 

(ii) From and after the Closing, in the event the Seller breaches any of its representations and warranties in
Section 3(a)(i), (ii) or (iv) or Section 4(b) or its post-Closing covenants contained herein (other than the covenants in Section 2(g)), then the Seller shall indemnify the Buyer Parties from and against the entirety of any
Adverse Consequences caused proximately by the breach and suffered by the Buyer Parties through and after the date of the claim for indemnification, up to a maximum aggregate indemnification amount equal to the Purchase Price. Blue Dolphin and
Bitter Creek’s liability is several and not joint and as such, Blue Dolphin’s aggregate indemnification amount is 5/6ths of the indemnification amount and Bitter Creek’s aggregate indemnification amount is 1/6th of the indemnification amount. 

(iii) Except for (A) the rights of indemnification provided in Section 6(a), this

  
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Section 6(c), Section 6(d) and in the Product Agreement, (B) the covenants in Section 6(a), which the Buyer may specifically enforce, (C) rights with respect to any
agreement entered into by the Parties after the Closing Date, and (D) claims arising out of the Seller’s actual fraud or willful misconduct, the Buyer hereby waives any claim or cause of action pursuant to common or statutory law or
otherwise against the Seller regarding obligations and liabilities of any nature whatsoever that are attributable to the Assets, whether arising before or after the Closing Date. 

(d) Indemnification Provisions for Benefit of the Seller. 

(i) From and after the Closing, in the event that: (x) the Buyer breaches any of its representations and warranties contained herein
(other than the representations and warranties in Section 3(b)(i), (ii) and (iv)); and (y) a Seller Party makes a written claim for indemnification against the Buyer pursuant to Section 6(g) within the applicable survival period
as set forth in Section 6(b), then the Buyer shall indemnify the Seller Parties from and against any Adverse Consequences to the extent in excess of $10,000 per breach to the extent they are caused proximately by the breach and suffered by the
Seller Parties; provided, that the Buyer shall not have any obligation to indemnify the Seller Parties from and against any such Adverse Consequences (A) until the Seller Parties have suffered Adverse Consequences by reason of all such breaches
in excess of a $100,000 aggregate deductible (after which point the Buyer will be obligated only to indemnify the Seller Parties from and against further such Adverse Consequences) or thereafter (B) to the extent the Adverse Consequences the
Seller Parties have suffered by reason of all such breaches exceeds a $1,125,000 aggregate ceiling (after which point the Buyer will have no obligation to indemnify the Seller Parties from and against further such Adverse Consequences). 

(ii) From and after the Closing, in the event the Buyer breaches any of its representations and warranties in Section 3(b)(i),
(ii) or (iv) or its post-Closing covenants contained herein, then the Buyer shall indemnify the Seller Parties from and against the entirety of any Adverse Consequences caused proximately by the breach and suffered by the Seller Parties
through and after the date of the claim for indemnification, up to a maximum aggregate indemnification amount equal to the Purchase Price. 
 (iii) Except for (A) the rights of indemnification provided in Section 6(a), this Section 6(d), and in the Product Agreement, (B) the covenants in Section 6(a), which the Seller
may specifically enforce, (C) rights with respect to any agreement entered into by the Parties after the Closing Date, and (D) claims arising out of the Buyer’s actual fraud or willful misconduct, the Seller hereby waives any claim or
cause of action pursuant to common or statutory law or otherwise against the Buyer regarding obligations and liabilities of any nature whatsoever that are attributable to the Assets, whether arising before or after the Closing Date. 

  
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 (e) Matters Involving Third Parties. 

(i) If any third party shall notify any Seller Party or Buyer Party (the “Indemnified Party”) with respect to any matter
(a “Third Party Claim”) that may give rise to a claim for indemnification against any Party (the “Indemnifying Party”) under this Section 6, then the Indemnified Party shall promptly (and in any event within 10
Business Days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing. The failure of any Indemnified Party to give notice of any such Third Party Claim on a timely basis shall not affect the rights of the
Indemnified Party to indemnification hereunder unless the Indemnified Party demonstrates actual and material Adverse Consequences caused by such failure, in which case the Indemnified Party’s right to be indemnified shall be reduced to the
extent the Indemnifying Party demonstrates actual and material Adverse Consequences caused by such failure. 
 (ii) The
Indemnifying Party (provided that for purposes of this Section 6(e) the Seller’s Representative shall have the sole and exclusive right to act on behalf of the Seller as Indemnifying Party) will have the right to assume and thereafter
conduct the defense of the Third Party Claim with reputable counsel of its choice reasonably satisfactory to the Indemnified Party; provided that, prior to the Indemnifying Party assuming control of such defense it shall first verify to the
Indemnified Party in writing that such Indemnifying Party shall be fully responsible (with no reservation of any rights) for all Adverse Consequences relating to such claim for indemnification and that (subject to all monetary limitations set forth
herein) it shall provide full indemnification (subject to the monetary limitations set forth herein) to the Indemnified Party with respect to such Third Party Claim giving rise to such claim for indemnification hereunder; provided further, however,
that notice of the intention to so contest and defend shall be delivered by the Indemnifying Party to the Indemnified Party within 30 calendar days following receipt of the notice of the Third Party Claim. Notwithstanding the foregoing, the
Indemnifying Party shall not be entitled to assume control of such defense (unless otherwise agreed to in writing by the Indemnified Party) and shall pay the reasonable fees and expenses of counsel retained by the Indemnified Party if (A) the
claim for indemnification relates to or arises in connection with any criminal or quasi criminal Proceeding; (B) the claim seeks an injunction or equitable or other non-monetary relief against the Indemnified Party; (C) the Indemnified
Party has been advised by counsel that a reasonable likelihood exists of a conflict of interest between the Indemnifying Party and the Indemnified Party that would make it inappropriate in the reasonable judgment of such counsel, that the same
counsel represent both the Indemnified Party and the Indemnifying Party; (D) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend such claim; or
(E) the Indemnified Party reasonably believes that the Adverse Consequences relating to the Claim could exceed the maximum amount that such Indemnified Party could then be entitled to recover under the applicable provisions of this
Section 6. The Indemnified Party shall have the right to participate in such Third Party Claim and to be represented by counsel of its own choosing at its own cost and expense. The Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably), unless the judgment or proposed

  
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settlement (A) involves only the payment of money damages and does not impose an injunction or other equitable relief upon the Indemnified Party, (B) does not involve a payment of money
damages that exceeds the maximum amount that such Indemnified Party could then be entitled to recover under the applicable provisions of this Section 6, and (C) provides that the Indemnified Party will be fully and completely released from
any further liability or obligation with respect to the matters which are the subject of such Third Party Claim, in which case consent shall not be required. 
 (iii) Unless and until the Indemnifying Party assumes the defense of the Third Party Claim as provided in subsection 6(d)(ii), the Indemnified Party may defend against the Third Party Claim in any manner
it reasonably may deem appropriate, and the Indemnifying Party shall be responsible for all costs incurred in connection therewith. 
 (iv) In no event will the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying
Party, which consent shall not be withheld unreasonably; provided that, (A) if the Indemnifying Party does not give notice to the Indemnified Party of its election to contest and defend any such Third Party Claim in accordance with
Section 6(d)(ii), then no such consent shall be required and the Indemnifying Party shall be bound by the result obtained with respect thereto by the Indemnified Party and (B) the Indemnified Party may consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party if such judgment or settlement would result in no liability to the Indemnifying Party pursuant to this Section 6.

 (f) Determination of Amount of Adverse Consequences. The Adverse Consequences giving rise to any indemnification
obligation hereunder shall be limited to the actual loss suffered by the Indemnified Party (i.e., reduced by any insurance proceeds or other payment or recoupment received, realized or retained by the Indemnified Party as a result of the events
giving rise to the claim for indemnification net of any expenses related to the receipt of such proceeds, payment or recoupment, including retrospective or prospective premium adjustments, if any). The amount of the actual loss and the amount of the
indemnity payment shall be computed by taking into account the timing of the loss or payment, as applicable, using a 10 percent interest or discount rate, as appropriate. Upon the request of the Indemnifying Party, the Indemnified Party shall
provide the Indemnifying Party with information sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section 6(f). An Indemnified Party shall take reasonable steps to mitigate
damages in respect of any claim for which it is seeking indemnification and shall use reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof.

 (g) Special Indemnification Provisions. Notwithstanding any terms and provisions of this Agreement to the contrary,
from and after the Closing, the Seller hereby covenants and 

  
 22 

 
agrees to protect, defend, indemnify and save the Buyer, its successors and assigns, harmless from and against any and all Adverse Consequences incurred in connection with or arising out of all
breaches, if any, by the Seller of its covenants to the Buyer under Section 2(g) above, or otherwise relating to or arising from the Excluded Liabilities. 
 (h) BUYER AND SELLER (I) AGREE THAT ONLY ACTUAL DAMAGES SHALL BE RECOVERABLE UNDER THIS AGREEMENT AND (II) HEREBY WAIVE ANY RIGHT TO RECOVER SPECIAL, PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR EXEMPLARY
DAMAGES EXCEPT TO THE EXTENT ANY SUCH PARTY SUFFERS SUCH DAMAGES TO AN UNAFFILIATED THIRD-PARTY IN CONNECTION WITH A THIRD-PARTY CLAIM, IN WHICH EVENT SUCH DAMAGES SHALL BE RECOVERABLE AS PROVIDED PURSUANT TO THE TERMS OF THIS SECTION 6. 

(i) Liability of Blue Dolphin and Bitter Creek under this Agreement, including this Section 6, is several and not joint. 

7. Miscellaneous. 
 (a) Seller’s Representative. Blue Dolphin and Bitter Creek hereby designate Blue Dolphin as the representative for the Seller (collectively, the “Seller’s
Representative”) to represent Blue Dolphin and Bitter Creek, as the Seller, from and after the date hereof in all matters relating to this Agreement and the transactions contemplated hereby. The Seller’s Representative shall have the
following powers and duties: (i) to take the actions contemplated to be taken by the Seller’s Representative under this Agreement; (ii) to compromise, modify, settle, waive, relinquish, exchange, liquidate or otherwise resolve the
rights of the Seller in and to any amounts that are or may be payable after the Closing Date by the Seller to the Buyer hereunder, which compromise, modification, settlement, waiver, relinquishment, exchange, liquidation or resolution may include
payment to the Buyer of cash, property or any combination thereof; (iii) to compromise, modify, settle, waive, relinquish, exchange, liquidate or otherwise resolve the rights of the Seller in and to any amounts that are or may be payable after
the Closing Date by the Buyer to the Seller hereunder, which compromise, modification, settlement, waiver, relinquishment, exchange, liquidation or resolution may include payment to the Seller of cash, property or any combination thereof;
(iv) to take all actions the Seller’s Representative deems necessary or advisable on behalf of the Seller pursuant to the terms of this Agreement; and (v) to take all actions which the Seller’s Representative deems necessary or
advisable in order to carry out the foregoing. The Seller’s Representative shall consult with Bitter Creek in performing actions under this section. The Seller’s Representative shall serve without compensation, but shall be entitled to
reimbursement from Bitter Creek for 1/6th of its costs and
expenses. The Seller’s Representative shall not be liable to Bitter Creek for the performance of any act or failure to act in such capacity so long as it does not act (or fail to act) in bad faith. The Seller’s Representative shall be
entitled to indemnity from Bitter Creek from and against 1/6th of any and all damages which may at any time be imposed on, incurred by or asserted against the Seller’s 

  
 23 

 
Representative in any way relating to or arising out of this Agreement or any related agreement or instrument or any action taken or omitted to be taken by the Seller’s Representative under
or in connection therewith, unless such damages resulted from the bad faith of the Seller’s Representative. 
 (b) Press
Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement before the Closing without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, delayed or denied; provided that any Party may make any public disclosure it believes in good faith is required by applicable Law or any listing or trading agreement concerning its publicly traded securities (in
which case the disclosing Party will use its commercially reasonable efforts to advise the other Party before making the disclosure). 
 (c) No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns. 

(d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Party; provided that Buyer may assign its interest in
this Agreement, in whole or in part, at or prior to Closing. 
 (e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together will constitute one and the same instrument. Facsimile or other electronic copies (such as .pdf files delivered by electronic mail) of signatures shall constitute original
signatures for all purposes of this Agreement and any enforcement hereof. 
 (f) Headings. The section headings contained
in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 
 (g) Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly
given two Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: 

  
 24 

 If to the Buyer: 

Sunoco Partners Marketing & Terminals L.P. 

One Fluor Daniel Drive, Bldg A, Level 3 
 Sugar Land, TX 77478 
 Attention: Vice President of Business Development

 FAX: 877-501-4380 
 with a copy to counsel (which copy shall not constitute notice to the Buyer): 

Sunoco Partners Marketing & Terminals L.P. 
 1818 Market Street, Suite 1500 
 Philadelphia, PA 19103 

Attention: General Counsel 
 Fax: (215) 977-3565 
 If to the Seller: 

Blue Dolphin Pipe Line Company 
 801 Travis Street, Suite 2100 
 Houston, Texas 77002 

Fax: (713) 227-7626 
 Attention: President 
 Bitter Creek Pipelines, LLC 

1250 West Century Avenue 
 Bismarck, ND 58503 
 Fax: (701)530-1596 

Attention: Executive Vice President and Chief Operating Officer 
 If to the Seller’s Representative: 
 Blue Dolphin Pipeline Company

 801 Travis Street, Suite 2100 
 Houston, Texas 77002 
 Fax: (713) 227-7626 

Attention: President 
 Additionally, any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the addresses set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, ordinary mail, facsimile or electronic mail), and such notice, request, demand, claim, or other communication shall be deemed to have been duly given when it actually is received by the
intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth. 

  
 25 

 (h) Governing Law. This Agreement shall be governed by and construed in accordance
with the domestic Laws of the state of Texas without giving effect to any choice or conflict of law provision or rule (whether of the state of Texas or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other
than the state of Texas. 
 (i) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by the Buyer and the Seller. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 

(j) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. The Parties furthermore agree to
execute and deliver such amendatory contractual provisions to accomplish lawfully as nearly as possible the goals and purposes of the provision so held to be invalid or unenforceable. 

(k) Transaction Expenses. Buyer and Seller shall each pay 50% of the costs of the survey of the Land by Topographic, including the
access road on Lot 107 and surveys of Seller’s other pipelines located on the Land. Buyer shall pay 100% of the costs to acquire its title policy on the Land. Except as expressly otherwise set forth herein, each of the Buyer and the Seller will
bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 
 (l) Certain Taxes. Notwithstanding anything in this Agreement to the contrary, the Seller will file all necessary Tax Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and other Taxes and fees in connection with this Agreement, and, if required by applicable law, the Buyer will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.
The Buyer will pay to the Seller, on or before the date such payments are due from the Seller, any transfer, documentary, sales, use, stamp, registration and other Taxes and fees incurred in connection with this Agreement. 

(m) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word
“including” shall mean including without limitation. 

  
 26 

 (n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in
this Agreement are incorporated herein by reference and made a part hereof. 
 (o) ENTIRE AGREEMENT. THIS AGREEMENT
(INCLUDING THE DOCUMENTS REFERRED TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ANY PRIOR UNDERSTANDINGS, AGREEMENTS, OR REPRESENTATIONS BY OR AMONG THE PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY HAVE RELATED IN ANY
WAY TO THE SUBJECT MATTER HEREOF. 
 ***** 

  
 27 

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

			
	BUYER:
	
	SUNOCO PARTNERS MARKETING & TERMINALS L.P.
	
	By: Sunoco Logistics Partners Operations GP LLC, its general partner
		
	By:	 	 
		
	Name:	 	 
		
	Title:	 	 

  

			
	SELLER:
	
	BLUE DOLPHIN PIPE LINE COMPANY
		
	By:	 	 
		
	Name:	 	 
		
	Title:	 	 

  

			
	
	BITTER CREEK PIPELINES, LLC
		
	By:	 	 
		
	Name:	 	 
		
	Title:	 	 

 [Signature Page to Asset Purchase Agreement]Form of Pacific Drilling S.A. 2011 Omnibus Stock Incentive Plan

 Exhibit 4.3 
 FORM OF 
 PACIFIC DRILLING S.A. 

2011 OMNIBUS STOCK INCENTIVE PLAN 
 NOTICE OF SUBSTITUTION OF STOCK OPTIONS 
 AND STOCK OPTION GRANT

 In substitution of your options to purchase common stock of Pacific Drilling Limited, Pacific Drilling S.A. (the
“Company”) hereby grants you (the “Optionee”) the following option (the “Option”) to purchase shares representing the Company’s share capital (“Shares”). The terms and conditions of this Option are set
forth in this notice below, as well as in the attached stock option agreement (the “Stock Option Agreement”) and the Pacific Drilling S.A. 2011 Omnibus Stock Incentive Plan (the “Plan”), both of which are attached to and made a
part of this document. 
  

			
	Date of Grant:	  	[                    ]
		
	Name of Optionee:	  	[                    ]
		
	Number of Option Shares:	  	[            ]
		
	Exercise Price per Share:	  	$[        ]
		
	Type of Option:	  	Non-Qualified Stock Option
		
	Vesting Schedule:	  	
[                    
]

 By signing this document, you acknowledge receipt of a copy of the Plan, and agree that
(a) you have carefully read, fully understand and agree to all of the terms and conditions described in the attached Stock Option Agreement, the Plan document and “Notice of Exercise and Common Stock Purchase Agreement” (the
“Exercise Notice”); (b) you hereby make the purchaser’s investment representations contained in the Exercise Notice with respect to the grant of this Option; (c) you understand and agree that the Plan, Stock Option
Agreement, and Notice, including its cover sheet and attachments, constitutes the entire understanding between you and the Company regarding this Option, and that any prior agreements, commitments or negotiations concerning this Option are replaced
and superseded; (d) you have been given an opportunity to consult your own legal and tax counsel with respect to all matters relating to this Option prior to signing this cover sheet and that you have either consulted such counsel or
voluntarily declined to consult such counsel and (e) any tax liability or other adverse tax consequences to you resulting from the grant, vesting or exercise of the Option will be the responsibility of, and will be borne entirely by, you.

  

									
	[NAME]	 		 	Pacific Drilling S.A.
	  
	 		 	 Société Anonyme
 37, rue d’Anvers
 L-1130 Luxembourg

					
	Date:	 	  
	 		 		 	
		 		 		 	By:	 	  

					
		 		 		 	Title:	 	  

		 		 		 	Date:	 	  

  
 Pacific
Drilling S.A. 
 Notice of Substitution of Stock Options and Stock Option Grant 

-2- 

 PACIFIC DRILLING S.A. 

2011 OMNIBUS STOCK INCENTIVE PLAN 
 STOCK OPTION AGREEMENT 
  

	SECTION 1.	KIND OF OPTION. 

This Option is intended to be either an incentive stock option intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (an “ISO”) or a non-statutory option (an “NSO”), which is not intended to meet the requirements of an ISO, as indicated in the Notice of Substitution of Stock Options and Stock Option Grant. Even
if this Option is designated as an ISO, it shall be deemed to be an NSO to the extent required by the $100,000 annual limitation under Section 422(d) of the Code. 
  

	SECTION 2.	VESTING. 

 Subject
to the terms and conditions of the Plan and this Stock Option Agreement (the “Agreement”), your Option will be exercisable with respect to the Shares underlying the Option that have become vested in accordance with the schedule set forth
in the Notice of Substitution of Stock Options and Stock Option Grant. If your Option is granted in consideration of your service as an employee or a consultant, subject to any terms and conditions relating to a Change in Control as set forth in the
Plan or the Notice of Substitution of Stock Options and Stock Option Grant, after your service as an employee or a consultant terminates for any reason, vesting of your Shares subject to such Option immediately stops and such Option expires
immediately as to the number of Shares that are not vested as of the date your service as an employee or a consultant terminates. If your Option is granted in consideration of your service as an Independent Director, after your service as an
Independent Director terminates for any reason, vesting of your Shares subject to such Option immediately stops and such Option expires immediately as to the number of Shares that are not vested as of the date your service as an Independent Director
terminates. 
  

	SECTION 3.	TERM. 

 Your Option
will expire in any event on the tenth (10th) anniversary of the Date of Grant; provided, however, that if your Option is an ISO it will expire five (5) years after the Date of Grant if, as of the date Date of Grant, you own more than 10%
of the voting stock (i.e., you are a “Ten-Percent Shareholder”) of the Company (such date of expiration, the “Expiration Date”). Also, your Option will expire earlier if your service terminates, as described below in
Section 4. 
  

	SECTION 4.	REGULAR TERMINATION. 

 (a) If your service terminates for any reason except death, the vested portion of your Option will expire on the 90th day after your termination of service. Except as otherwise provided under this
Agreement, during that 90-day period, you may exercise the portion of your Option that was vested on your termination date. Notwithstanding the foregoing, the Option may not be exercised after the Expiration Date determined under Section 3
above. 

 (b) If you die while in service with the Company, the vested portion of your Option will
expire on the six-month anniversary of the date of your death. During that six-month period, your estate, legatees or heirs may exercise that portion of your Option that was vested on the date of your death. Notwithstanding the foregoing, the Option
may not be exercised after the Expiration Date determined under Section 3 above. 
  

	SECTION 5.	EXERCISING YOUR OPTION. 

 To exercise your Option, you must execute the Notice of Exercise and Common Stock Purchase Agreement (the “Exercise Notice”), attached as Exhibit A. You must submit the Exercise Notice, together
with full payment, to the Company. Your exercise will be effective when both the Exercise Notice and full payment of the Exercise Price plus the amount of any Federal, state, local or foreign income or employment taxes required to be withheld is
received by the Company. If someone else wants to exercise your Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so. If determined by the Committee in its sole discretion, in order
to facilitate the delivery of Shares pursuant to the exercise of your Option, the execution of the exercise of your option (including, without limitation, the delivery to you of Shares pursuant to such exercise) may be delayed until an exercise date
specified by the Committee, which shall in no event be later than such date as is as soon as reasonably practicable following the next regularly scheduled meeting of the Board following receipt of your Exercise Notice and applicable payment.

  

	SECTION 6.	PAYMENT FORMS. 

When you exercise your Option, you must either include payment of the Exercise Price for the Shares you are purchasing plus any Federal,
state, local and foreign income and employment taxes required to be withheld in cash or instruct the Company to withhold a portion of the Shares to be acquired by exercise of the Option with a Fair Market Value equal to the Exercise Price plus any
Federal, state, local and foreign income and employment taxes required to be withheld. The Board may permit such other payment forms as it deems appropriate, subject to applicable laws, regulations and rules. 

 

	SECTION 7.	TAX WITHHOLDING AND REPORTING. 

 (a) You will not be allowed to exercise this Option unless you pay, or make acceptable arrangements to pay, any taxes required to be withheld as a result of the Option exercise. You hereby authorize
withholding from payroll or any other payment due to you from the Company or any Affiliate (including, without limitations, amounts due in respect of your exercise of the Option if the Company determines to settle the Option in cash upon your
exercise of the Option pursuant to Section 8 below) or your employer to satisfy any such withholding tax obligation. You may also, subject to and pursuant to procedures described under Section 6, and at the sole and plenary discretion of
the Committee, pay all or part of your withholding obligation by using any Shares that you own. 
 (b) If you sell or otherwise
dispose of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, you shall immediately notify the Company in writing of such disposition.

  
 2 

	SECTION 8.	RESALE RESTRICTIONS/MARKET STAND-OFF. 

 In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the U.S. Securities Act of 1933, as amended,
including the Company’s initial public offering, you may be prohibited from engaging in any transaction with respect to any of the Company’s Shares without the prior written consent of the Company or its underwriters for a period of time
communicated to you by the Company. 
  

	SECTION 9.	TRANSFER OF OPTION. 

Prior to your death, only you may exercise this Option. Unless otherwise permitted by the Board or the Committee, this Option and the
rights and privileges conferred hereby cannot be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, pledge, attachment, levy or similar process. For instance, you may
not sell this Option or use it as security for a loan. If you attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will. 

 

	SECTION 10.	RETENTION RIGHTS. 

This Agreement does not give you the right to be retained by the Company or its Affiliates in any capacity. The Company and its Affiliates
reserves the right to terminate your service at any time and for any reason without thereby incurring any liability to you. 
  

	SECTION 11.	SHAREHOLDER RIGHTS. 

Neither you nor your estate or heirs have any rights as a shareholder of the Company until the Shares acquired upon exercise of this
Option are registered in the Company’s share register in your name or, if the shares are held through a central depositary, in an account opened in your name with a broker. No adjustments are made for dividends or other rights if the applicable
record date occurs before the Shares are registered in your name, your stock certificate is issued. . Prior to the consummation of any initial public offering of Shares by the Company, as a condition of delivery of Shares pursuant to your exercise
of this Option, you shall be required to execute, as a condition of delivery of such Shares, a Shareholder’s agreement in a form approved by the Committee (the “Shareholder’s Agreement”). The Shareholder’s Agreement may
contain (i) restrictions on your transfer and sale of such Units, (ii) obligations for you to sell such Units in connection with a sale of interests in the Company or its affiliates and (iii) such other restrictions and obligations as
the Committee determines, in its sole discretion, to impose, all of which will be applicable prior to the consummation of any initial public offering of Shares by the Company. If you fail to execute such Shareholder’s Agreement within the
deadline established by the Committee therefor, your exercise shall be immediately cancelled and of no further effect. 

  
 3 

	SECTION 12.	LEGENDS. 

 You
agree that the Shares which you may acquire by exercising this Option will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal, state or foreign securities laws. You also agree that
(i) the Company may refuse to register the transfer of the Shares purchased under this Option on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a
violation of any applicable securities law, and (ii) the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Shares purchased under this Option. 

 

	SECTION 13.	TAX DISCLAIMER. 

You agree that you are responsible for consulting your own tax advisor as to the tax consequences associated with your Option. The tax
rules governing options are complex, change frequently and depend on the individual taxpayer’s situation. In addition, options granted at a discount from fair market value may be considered “deferred compensation” subject to adverse
tax consequences under new Section 409A of the Code. The Board has made a good faith determination that either the exercise price per share of the Option is not less than the fair market value of the Shares underlying your Option on the Date of
Grant or, if less, that the exercise price was determined in a manner permitted under Section 409A of the Code with respect to the substitution of a stock right in connection with a corporate transaction. It is possible, however, that the
Internal Revenue Service could later challenge that determination and assert that the fair market value of the Shares underlying your Option was greater on the Date of Grant than the exercise price determined by the Board or, if applicable, that the
Company did not comply with the rules applicable to stock right substitutions, which could result in immediate income tax upon the vesting of your Option (whether or not exercised) and a 20% tax penalty. The Company gives no assurance that such
adverse tax consequences will not occur and specifically assumes no responsibility therefor. 
 By accepting this Option, you
acknowledge that any tax liability or other adverse tax consequences to you resulting from the grant, vesting or exercise of the Option will be the responsibility of, and will be borne entirely by, you. YOU ARE THEREFORE ENCOURAGED TO CONSULT YOUR
OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OF THIS OPTION. 
  

	SECTION 14.	THE PLAN AND OTHER AGREEMENTS. 

 The text of the Plan is incorporated in this Agreement by reference. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. The
Notice of Substitution of Stock Options and Stock Option Grant, this Agreement, including its attachments, and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or
negotiations concerning this Option are superseded. To the extent the terms of the Notice of Substitution of Stock Options and Stock Option Grant or this Agreement conflict with the terms of the Plan, the terms of the Notice of Substitution of Stock
Options and Stock Option Grant and this Agreement shall prevail. 

  
 4 

	SECTION 15.	MISCELLANEOUS PROVISIONS. 

 (a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company and your employer have reserved the right to amend, suspend or terminate the Plan at any time,
(iii) the grant of an option does not in any way create any contractual or other right to receive additional grants of options (or benefits in lieu of options) at any time or in any amount and (iv) all determinations with respect to any
additional grants, including (without limitation) the times when options will be granted, the number of Shares offered, the Exercise Price and the vesting schedule, will he at the sole discretion of the Company. 

(b) The value of this Option shall be an extraordinary item of compensation outside the scope of your employment contract, if any, and
shall not be considered a part of your normal or expected compensation for purposes of calculating severance, resignation, redundancy or end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

 (c) You understand and acknowledge that participation in the Plan ceases upon termination of your service for any reason,
except as may explicitly be provided otherwise in the Plan or this Agreement. 
 (d) You hereby authorize and direct your
employer to disclose to the Company or any Subsidiary any information regarding your employment, the nature and amount of your compensation and the fact and conditions of your participation in the Plan, as your employer deems necessary or
appropriate to facilitate the administration of the Plan. 
  

	SECTION 16.	APPLICABLE LAW. 

This Agreement will be interpreted and enforced under the laws of the State of New York (without regard to their choice of law
provisions). 

  
 5 

 EXHIBIT A 
 PACIFIC DRILLING S.A. 
 2011 OMNIBUS STOCK INCENTIVE PLAN 

NOTICE OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT 
 This notice of exercise and common stock purchase agreement is dated as of             ,         ,
between Pacific Drilling S.A. (the “Company”), and                     (“Purchaser”) (the “Exercise Notice”).

 WITNESSETH: 
 WHEREAS, the Company granted to Purchaser a stock option (the “Option”) on
                    (the “Date of Grant”) pursuant to a notice of substitution of stock options and stock option grant (the “Notice of
Substitution of Stock Options and Stock Option Grant”) and a stock option agreement (the “Option Agreement”) under which Purchaser has the right to purchase up to [        ] shares of the
Company’s share capital (the “Option Shares”); and 
 WHEREAS, the Option is exercisable with respect to certain
of the Option Shares as of the date hereof; and 
 WHEREAS, pursuant to the Option Agreement, Purchaser desires to purchase
shares of the Company as herein described, on the terms and conditions set forth in this Exercise Notice, the Option Agreement and the Pacific Drilling S.A. 2011 Omnibus Stock Incentive Plan (the “Plan”). Certain capitalized terms used in
this Exercise Notice and not otherwise defined herein shall have the meanings ascribed to them in the Plan. 
 NOW, THEREFORE,
it is agreed between the parties as follows: 
  

	SECTION 1.	PURCHASE OF SHARES. 

(a) Pursuant to the terms of the Option Agreement, Purchaser hereby notifies the Company of its desire to purchase from the Company
                    shares representing the Company’s share capital (the “Common Stock”) for the Exercise Price per share specified in
the Notice of Substitution of Stock Options and Stock Option Grant plus any Federal, state, local and foreign income and employment taxes required to be withheld, payable either (i) by personal check, cashier’s check, money order,
(ii) by instructing the Company to withhold a portion of the Shares to be acquired by exercise of the Option with a Fair Market Value equal to the Exercise Price plus any Federal, state, local and foreign income and employment taxes required to
be withheld or (iii) otherwise as permitted by the Option Agreement. Payment shall be delivered at the Closing, as such term is defined below. 
 (b) The closing (the “Closing” under this Exercise Notice shall occur at the offices of the Company as of the date hereof, or such other time and place as may he designated by the Company (the
“Closing Date”). 

  
 A-1

	SECTION 2.	LEGEND OF SHARES. 

Purchaser agrees that the Shares which Purchaser may acquire by exercising this Option will not be sold or otherwise disposed of in any
manner which would constitute a violation of any applicable securities laws. Purchaser also agrees that (i) the Company may refuse to register the transfer of the Shares purchased under this Option on the stock transfer records of the Company
if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Shares purchased under this Option. 
  

	SECTION 3.	PURCHASER’S INVESTMENT REPRESENTATIONS. 

 By executing this Exercise Notice, the Purchaser hereby acknowledges, represents, warrants and agrees as follows: 
 (a) This Exercise Notice is made with Purchaser in reliance upon Purchaser’s representation to the Company, which by Purchaser’s acceptance hereof Purchaser confirms, that the Common Stock which
Purchaser will receive will be acquired with Purchaser’s own funds for investment for an indefinite period for Purchaser’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and
that Purchaser has no present intention of selling, granting participation in, or otherwise distributing the same, but subject, nevertheless, to any requirement of law that the disposition of Purchaser’s property shall at all times be within
Purchaser’s control. By executing this Exercise Notice, Purchaser further represents that Purchaser does not have any contract, understanding or agreement with any person to sell, transfer, or grant participation to such person or to any third
person, with respect to any of the Common Stock. 
 (b) Purchaser understands that the Common Stock may not be registered or
qualified under applicable U.S. federal, state or foreign securities laws on the ground that the sale provided for in this Exercise Notice is exempt from registration or qualification under applicable U.S. federal, state or foreign securities laws
and that the Company’s reliance on such exemption is predicated on Purchaser’s representations set forth herein. 

(c) In no event shall Purchaser make a disposition of any of the Common Stock (including a disposition under Section 3 of this
Exercise Notice) prior to such date as the Plan and Common Stock thereunder are covered by a valid Form S-8 or similar U.S. federal registration statement, unless and until (i) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition and (ii) Purchaser shall have furnished the Company with an opinion of counsel satisfactory to the Company to the effect
that (A) such disposition will not require registration or qualification of such Common Stock under applicable U.S. federal or state or foreign securities laws or (B) appropriate action necessary for compliance with the applicable U.S.
federal, state or foreign securities laws has been taken or (iii) the Company shall have waived, expressly and in writing, its rights under clauses (i) and (ii) of this Subsection. 

  
 A-2

 (d) With respect to a transaction occurring prior to such date as the Plan and Common Stock
thereunder are covered by a valid Form S-8 or similar U.S. federal registration statement, this Subsection shall apply unless the transaction is covered by an exemption. In connection with the investment representations made herein, Purchaser
represents that Purchaser: (i) is able to fend for himself or herself in the transactions contemplated by this Exercise Notice, (ii) has such knowledge and experience in financial and business matters as to be capable of evaluating the
merits and risks of Purchaser’s investment, (iii) has the ability to bear the economic risks of Purchaser’s investment, (iv) has been furnished with and has had access to such information as would be made available in the form of
a registration statement together with such other information regarding the Company and the Shares as the Purchaser has requested in connection with making its investment decision and such additional information as is necessary to verify the
accuracy of the information supplied and (v) has been afforded an opportunity to ask questions concerning the Company, the Shares and Purchaser’s investment and has had all such questions answered to its satisfaction by the Company.

 (e) Purchaser understands that if the Company has not registered the Common Stock with the U.S. Securities and Exchange
Commission pursuant to section 12 of the U.S. Securities Exchange Act of 1934, as amended, or if a registration statement covering the Common Stock (or a filing pursuant to the exemption from registration under Regulation A of the Securities Act)
under the Securities Act is not in effect when Purchaser desires to sell the Common Stock, Purchaser may be required to hold the Common Stock for an indeterminate period. Purchaser also acknowledges that Purchaser understands that any sale of the
Common Stock which might be made by Purchaser in reliance upon Rule 144 under the Securities Act may be made only in limited amounts in accordance with the terms and conditions of that Rule. 

 

	SECTION 4.	NO DUTY TO TRANSFER IN VIOLATION OF THIS EXERCISE NOTICE. 

 The Company shall not be required (a) to transfer on its books any Shares which shall have been sold or transferred in violation of any of the provisions set forth in this Exercise Notice or
(b) to treat as owner of such Shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such Shares shall have been so transferred. 

 

	SECTION 5.	RIGHTS OF PURCHASER. 

 (a) Except as otherwise provided herein, Purchaser shall, during the term of this Exercise Notice, exercise all rights and privileges of a shareholder of the Company with respect to the Common Stock.

 (b) Nothing in this Exercise Notice shall be construed as a right by Purchaser to be retained by the Company or its
Affiliates in any capacity. The Company reserves the right to terminate Purchaser’s service at any time and for any reason without thereby incurring any liability to Purchaser. 

  
 A-3

	SECTION 6.	RESALE RESTRICTIONS/MARKET STAND-OFF. 

 Purchaser hereby agrees that in connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act,
including the Company’s initial public offering, Purchaser shall not, directly or indirectly, engage in any transaction prohibited by the underwriter, or sell, make any short sale of, contract to sell, transfer the economic risk of ownership
in, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Shares without the prior written consent of the Company or
its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or such underwriters. To enforce the provisions of this Section, the Company may impose stop-transfer instructions
with respect to the Shares until the end of the applicable stand-off period. 
  

	SECTION 7.	OTHER NECESSARY ACTIONS. 

 The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Exercise Notice. 

 

	SECTION 8.	NOTICE. 

 Any
notice required or permitted under this Exercise Notice shall be given in writing and shall be deemed effectively given upon the earliest of personal delivery, receipt or the third full day following deposit in the United States Post Office with
postage and fees prepaid, addressed to the other party hereto at the address last known or at such other address as such party may designate by ten (10) days’ advance written notice to the other party hereto. 

 

	SECTION 9.	SUCCESSORS AND ASSIGNS. 

 This Exercise Notice shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser and Purchaser’s
heirs, executors, administrators, successors and assigns. 
  

	SECTION 10.	WAIVER. 

 No waiver
of any breach or condition of this Exercise Notice shall he deemed to be a waiver of any other or subsequent breach or condition, whether of a like or different nature. 

 

	SECTION 11.	APPLICABLE LAW. 

This Exercise Notice shall be governed by, and construed in accordance with, the laws of the State of New York, as such laws are applied
to contracts entered into and performed in such state. 
  

	SECTION 12.	NO ORAL MODIFICATION. 

 No modification of this Exercise Notice shall be valid unless made in writing and signed by the parties hereto. 

  
 A-4

	SECTION 13.	ENTIRE AGREEMENT. 

This Exercise Notice, the Option Agreement and the Plan constitute the entire complete and final agreement between the parties hereto with
regard to the subject matter hereof. 
 IN WITNESS WHEREOF, the parties have executed this Exercise Notice as of the day and
year first above written. 
  

							
	 Pacific Drilling S.A.
 Société Anonyme
 37 rue d’Anvers

L-1130 Luxembourg
	 		 	(Purchaser)
		 		 	  

		 		 		 	Signature
				
	By:	 	  
	 		 	
				
	Title:	 	  
	 		 	

  

  
 A-5

 ANNEX I 
 ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND 
 BY THE NOTICE OF EXERCISE
AND COMMON STOCK PURCHASE AGREEMENT 
 OF 
 PACIFIC DRILLING S.A. 
 The undersigned, as transferee of shares of Pacific
Drilling S.A. hereby acknowledges that he or she has read and reviewed the terms of the Notice of Exercise and Common Stock Purchase Agreement of Pacific Drilling S.A. and hereby agrees to be bound by the terms and conditions thereof, as if the
undersigned had executed said Exercise Notice as an original party thereto. 
  

							
	 Dated:            ,        .
	 		 		 	
		 		 		 	  

		 		 		 	(Signature of Transferee)
				
		 		 		 	  

		 		 		 	(Printed Name of Transferee)

  
 Annex I

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