Document:

NTR
      ACQUISITION CO.

    

    PROMISSORY
      NOTE

     

    
      	
              $3,000,000

            	
              New
                York, New York

            
	 	
              November
                2, 2007

            

    

    

    FOR
      VALUE
      RECEIVED, the undersigned, NTR ACQUISITION CO., a Delaware corporation
      (“Borrower”),
      promises to pay to the order of OCCIDENTAL
      PETROLEUM INVESTMENT CO.,
      a
      California company, (“Lender”),
      on
      the earlier of (i) November 1, 2008 and (ii) such date as Lender purchases
      Series A Senior Convertible Preferred Stock, par value $0.0001, of Borrower,
      (A)
      the principal sum of THREE MILLION DOLLARS ($3,000,000), or such lesser amount
      as is equal to the aggregate unpaid principal amount of all loans made by Lender
      to Borrower under this Note (the “Principal”),
      and
      (B) interest on such Principal, as set forth below. 

    

    Interest
      on this promissory note (“Note”)
      shall
      be calculated for the quarterly periods ending on March 15, June 15, September
      15 and December 15 of each year (“Interest
      Calculation Period”)
      (commencing on the date of this Note and continuing until the unpaid Principal
      and accrued but unpaid interest have been paid in full) at a rate per annum
      equal to 9.0%. Interest shall be calculated based on the average Principal
      balance, on the basis of a 360-day year for the actual number of days (including
      the first day but excluding the last day) elapsed during the Interest
      Calculation Period. Interest
      for each Interest Calculation Period shall be due and payable on the last day
      of
      such Interest Calculation Period (with the first payment payable on December
      15,
      2007). Payment of interest due on or before September 15, 2008 may be effected
      by delivery of a new promissory note (an “Additional
      Note”)
      in the
      same form as this Note and in a principal amount equal to the interest amount
      then due. If interest is not paid in cash on or before the date due, Borrower
      shall be deemed to have delivered an Additional Note in payment thereof without
      further action of Borrower or Lender unless the interest payment date with
      respect to such payment falls after September 15, 2008. Any amount of Principal
      of, or interest on, this Note which is not paid (in cash or by the delivery
      or
      deemed delivery of Additional Notes) on or before the date due (whether upon
      valid demand, by acceleration or otherwise), shall bear interest from the date
      when due until paid, and shall be payable on demand, at a rate per annum equal
      to 11.0%. The rate of interest payable on this Note shall in no event exceed
      the
      maximum rate of interest permitted by applicable law.

     

    Whenever
      any payment to be made under this Note shall be due on a day which is not a
      Business Day, then such payment shall be made on the next succeeding Business
      Day. Any such extension of time shall in each case (other than in the case
      of
      regular accruals of interest) be included in the computation of interest under
      this Note. 

    

    All
      payments and prepayments made under this Note shall be applied first to interest
      on the aggregate unpaid Principal balance of this Note and any Additional Note
      deemed delivered pursuant hereto and then to the aggregate unpaid Principal
      balance of this Note and any Additional Note deemed delivered pursuant hereto.
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      Note
      evidences (i) the amount of the aggregate unpaid Principal balance owed from
      time to time by the Borrower to the Lender hereunder and under any Additional
      Note that the Borrower is deemed to have delivered pursuant hereto, and (ii)
      the
      amount of any interest accruing hereunder on such aggregate unpaid Principal
      balance and, under any Additional Note deemed to have been delivered pursuant
      hereto, on the aggregate unpaid Principal balance thereof. In the event that,
      at
      the date hereof, or at any time thereafter, no such amount shall be owed by
      the
      Borrower to the Lender under this Note, this Note shall, nevertheless, remain
      in
      full force and effect. 

     

    The
      Borrower may prepay this Note in whole or in part at any time without premium
      or
      penalty. This Note may not be amended or modified except by an instrument in
      writing signed by the Borrower and the Lender. Borrower may not delegate its
      obligations under this Note without the prior written consent of Lender, which
      consent shall not be unreasonably withheld or delayed. 

     

    If
      any of
      the following events, acts or occurrences shall occur and be
      continuing:

     

    (i)
      default in the payment when due (in cash or by delivery or deemed delivery
      of an
      Additional Notes) of any amount owing by the Borrower under this Note in respect
      of principal of, or interest on, the Notes;

     

    (ii)
      any
      representation or warranty on the part of the Borrower contained in the Series
      A
      Senior Convertible Preferred Stock Purchase Agreement dated as of even date
      herewith between the Borrower and the Lender (the “SPA”)
      shall
      at any time prove to have been incorrect when made, deemed made or
      reaffirmed;

     

    (iii)
      the
      Borrower shall default in the performance or observance of any term, covenant,
      condition or agreement on its part to be performed or observed under this Note
      or the SPA and such default continues unremedied for thirty (30) days;

     

    (iv)
      either (a) the Borrower shall generally fail to pay, or admit in writing its
      inability to pay, its debts as they become due, or shall voluntarily commence
      any case or proceeding or file any petition under any bankruptcy, insolvency
      or
      similar law or seeking dissolution, liquidation or reorganization or the
      appointment of a receiver, trustee, custodian or liquidator for itself or a
      substantial portion of its property, assets or business or to effect a plan
      or
      other arrangement with its creditors, or shall file any answer admitting the
      jurisdiction of the court and the material allegations of any involuntary
      petition filed against it in any bankruptcy, insolvency or similar case or
      proceeding, or shall be adjudicated bankrupt, or shall make a general assignment
      for the benefit of creditors, or shall consent to, or acquiesce in the
      appointment of, a receiver, trustee, custodian or liquidator for itself or
      a
      substantial portion of its property, assets or business, or (b) corporate action
      shall be taken by the Borrower for the purpose of effectuating any of the
      foregoing; or

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    (v)
      involuntary proceedings or an involuntary petition shall be commenced or filed
      against the Borrower under any bankruptcy, insolvency or similar law or seeking
      the dissolution, liquidation or reorganization of the Borrower or the
      appointment of a receiver, trustee, custodian or liquidator for the Borrower
      or
      of a substantial part of the property, assets or business of the Borrower,
      or
      any writ, judgment, warrant of attachment, execution or similar process shall
      be
      issued or levied against a substantial part of the property, assets or business
      of the Borrower, and such proceedings or petition shall not be dismissed, or
      such writ, judgment, warrant of attachment, execution or similar process shall
      not be released, vacated or fully bonded, within sixty (60) days after
      commencement, filing or levy, as the case may be;

     

    then,
      and
      in any such event, all Principal, interest or other sums then accrued or owing
      by the Borrower under this Note shall become and be immediately due and payable,
      without presentment, demand, protest or notice of any kind, all of which are
      hereby expressly waived by the Borrower.

    

    Payments
      of the Principal of, interest on, and any other sums owing under this Note
      shall
      be made in such coin or currency of the United States of America as at the
      time
      of payment is legal tender for the payment of public and private debts. All
      such
      payments shall be made at such place or places and in such manner as may be
      specified by the Lender to the Borrower in writing.

    

    In
      addition to, and not in limitation of, any rights which the Lender may have
      under this Note, any agreement or applicable law, the Borrower agrees, subject
      only to any limitation imposed by applicable law, to pay all expenses, including
      reasonable attorneys’ fees and legal expenses, paid or incurred by the Lender in
      endeavoring to collect any amounts payable hereunder which are not paid when
      due, whether by acceleration or otherwise.

    

    All
      notices, demand and other communications required or permitted by this Note
      to
      be given to, or made upon, the Borrower or the Lender shall be in writing and
      shall be personally delivered or sent by registered or certified mail, postage
      prepaid, return receipt requested, or by telecopier, to the following address
      of
      the Borrower or the Lender, as the case may be, or to such other address with
      respect to the Borrower or the Lender as the Borrower or the Lender shall notify
      the other in writing:

    

    
      	
              If
                to the Borrower: 

            	
              NTR
                Acquisition Co.

            
	 	
              100
                Mill Plain Road

            
	 	
              Suite
                320

            
	 	
              Danbury,
                CT 06811

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              If
                to the Lender: 

            	
              Occidental
                Petroleum Investment Co.

            
	 	
              10889
                Wilshire Boulevard

            
	 	
              Los
                Angeles, California 90024

            
	 	
              Attention:
                Vice President - Business Development;
                Treasurer

            

    

    

    Each
      such
      notice, demand or other communication shall be in writing and shall be deemed
      to
      be given for the purposes of this Note on the day on which such notice, demand
      or other communication is delivered or sent to the intended recipient thereof
      in
      accordance with the provisions of this Note.

    

    This
      Note
      and the loans evidenced hereby have been made in and shall be governed by and
      construed in accordance with the laws of the State of New York without reference
      to the choice of laws thereof. To the fullest extent permitted by applicable
      law, each party hereto (i) agrees that any claim, action or proceeding by such
      party seeking any relief whatsoever arising out of, or in connection with,
      this
      Note shall be brought only in the United States District Court for the Central
      District of California and in any California State court located in Los Angeles
      County and not in any other State or Federal court in the United States of
      America or any court in any other country, (ii) agrees to submit to the
      exclusive jurisdiction of such courts located in the State of California for
      purposes of all legal proceedings arising out of, or in connection with, this
      Note and (iii) irrevocably waives any objection which it may now or hereafter
      have to the laying of the venue of any such proceeding brought in such a court
      and any claim that any such proceeding brought in such a court has been brought
      in an inconvenient forum. If any provision of this Note or the application
      thereof is held invalid or unenforceable for any reason, the remainder of this
      Note and the application thereof will not be affected thereby, the provisions
      of
      this Note being severable in any such instance. 

     

    Except
      as
      otherwise set forth in this Note, the Borrower hereby waives diligence,
      presentment, demand, protest and notice of any kind whatsoever. The nonexercise
      by the Lender of any of its rights hereunder in any particular instance shall
      not constitute a waiver thereof in that or any subsequent instance.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    The
      Lender understands and acknowledges that the Borrower is a recently organized
      blank check company formed for the purpose of acquiring (an “initial business
      combination”) one or more businesses or assets in the energy industry. The
      Lender further understands that (a) the Borrower’s assets consist of the cash
      proceeds of its public offering (the “IPO”)
      and
      private placements of its securities, and that substantially all of those
      proceeds have been deposited in a trust account with a third party (the
“Trust
      Account”)
      for
      the benefit of the Borrower, certain of its stockholders and the underwriters
      of
      its IPO and (b) the monies in the Trust Account may be disbursed only (i) to
      the
      Borrower in limited amounts from time to time (and in no event more than
      $3,250,000 in total) in order to permit the Borrower to pay its operating
      expenses; (ii) if the Borrower completes an initial business combination, to
      certain dissenting public stockholders, to the underwriters for the IPO in
      the
      amount of underwriting discounts and commissions they earned in the IPO but
      whose payment they have deferred, and then to the Borrower; and (iii) if the
      Borrower fails to complete an initial business combination within the allotted
      time period and liquidates, subject to the terms of the agreement governing
      the
      Trust Account, to the Borrower in limited amounts to permit the Borrower to
      pay
      the costs and expenses of its liquidation and dissolution, and then to the
      Borrower’s stockholders who purchased securities in the IPO. Unless and until
      the initial business combination occurs, the Borrower waives any right, title,
      interest or claim of any kind (any “Claim”)
      it or
      any of its affiliates have or may have in the future in or to any monies in
      the
      Trust Account and agrees not to seek recourse against the Trust Account or
      any
      funds distributed therefrom (except amounts properly released to the Borrower
      as
      described above) as a result of, or arising out of, any Claims against the
      Borrower in connection with this Note.

    

    For
      purposes of this Note, “Business
      Day”
shall
      mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
      on
      which banking institutions in The City of New York are authorized or obligated
      by law or executive order to close.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
              Borrower:
                

            	NTR
              ACQUISITION CO.
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                MARIO E. RODRIGUEZ

            
	 	 	
              Mario
                E. Rodriguez

            
	 	 	
              Chief
                Executive Officer

            
	 	 	 
	 	 	 
	
              Lender:
                

            	
              OCCIDENTAL
                PETROLEUM

              INVESMENT
                CO.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	
              /s/
                TODD STEVENS

            
	 	 	
              Todd
                Stevens

            
	 	 	
              Vice
                PresidentSTOCK
      PURCHASE AGREEMENT

     

    
      BETWEEN

       

    

    
      CASEY
        CO.

       

    

    AND

     

    NTR
      ACQUISITION CO.

    

     

    
      DATED
        AS OF NOVEMBER 2, 2007

    

     

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        TABLE
          OF CONTENTS

         

      

      
        
          	 	 	
                  Page

                
	 	 
	
                  ARTICLE
                    I               DEFINITIONS

                	
                  1

                
	
                  ARTICLE
                    II              PURCHASE
                    AND SALE OF SHARES

                	
                  7

                
	
                  2.1

                	
                  Purchase
                    and Sale of Shares

                	
                  7

                
	
                  2.2

                	
                  Purchase
                    Price

                	
                  7

                
	
                  2.3

                	
                  Calculation
                    of Working Capital and Company Inventory Value

                	
                  8

                
	
                  2.4

                	
                  Costs
                    and Expenses

                	
                  9

                
	
                  2.5

                	
                  Post
                    Closing Purchase Price Adjustment

                	
                  9

                
	
                  2.6

                	
                  Certain
                    Definitions

                	
                  10

                
	
                  2.7

                	
                  Interest

                	
                  11

                
	
                  2.8

                	
                  Closing

                	
                  12

                
	
                  ARTICLE
                    III            REPRESENTATIONS
                    AND WARRANTIES

                	
                  12

                
	
                  3.1

                	
                  Representations
                    and Warranties of Seller

                	
                  12

                
	
                  3.2

                	
                  Representations
                    and Warranties of Buyer

                	
                  24

                
	
                  ARTICLE
                    IV            COVENANTS
                    OF SELLER

                	
                  25

                
	
                  4.1

                	
                  Conduct
                    of Company’s Business

                	
                  25

                
	
                  4.2

                	
                  Exclusivity

                	
                  28

                
	
                  4.3

                	
                  Full
                    Access; Title Report

                	
                  29

                
	
                  ARTICLE
                    V             OTHER
                    COVENANTS

                	
                  29

                
	
                  5.1

                	
                  Standby
                    Letters of Credit

                	
                  29

                
	
                  5.2

                	
                  Further
                    Assurances

                	
                  29

                
	
                  5.3

                	
                  Expenses

                	
                  29

                
	
                  5.4

                	
                  Transfer
                    Taxes

                	
                  29

                
	
                  5.5

                	
                  Press
                    Releases and Disclosure

                	
                  30

                
	
                  5.6

                	
                  Government
                    and other Regulatory Approvals

                	
                  30

                
	
                  5.7

                	
                  Proxy
                    Statement

                	
                  30

                
	
                  ARTICLE
                    VI            CONDITIONS
                    TO OBLIGATION TO CLOSE

                	
                  31

                
	
                  6.1

                	
                  Conditions
                    to Buyer’s Obligation

                	
                  31

                
	
                  6.2

                	
                  Conditions
                    to Seller’s Obligation

                	
                  32

                
	
                  ARTICLE
                    VII           SURVIVAL;
                    INDEMNIFICATION

                	
                  33

                
	
                  7.1

                	
                  Survival

                	
                  33

                

        

         

        
          
            
            

          

          
            -i-

            
              

            

          

          
            
            

          

        

         

        
          TABLE
            OF CONTENTS

          (continued)

        

         

        
          	 	 	
                  Page

                
	 	 	 
	
                  7.2

                	
                  Indemnification
                    by Buyer

                	
                  33

                
	
                  7.3

                	
                  Indemnification
                    by Seller

                	
                  33

                
	
                  7.4

                	
                  Limitations
                    on Indemnification

                	
                  34

                
	
                  7.5

                	
                  Method
                    of Asserting Claims

                	
                  34

                
	
                  7.6

                	
                  Duty
                    to Mitigate

                	
                  36

                
	
                  7.7

                	
                  Tax
                    Effect of Indemnification Payments; Insurance

                	
                  37

                
	
                  7.8

                	
                  Purchase
                    Price Adjustments

                	
                  37

                
	
                  ARTICLE
                    VIII          TERMINATION

                	
                  37

                
	
                  8.1

                	
                  Termination

                	
                  37

                
	
                  8.2

                	
                  Effect
                    of Termination

                	
                  38

                
	
                  ARTICLE
                    IX             MISCELLANEOUS

                	
                  39

                
	
                  9.1

                	
                  Disclosure
                    Schedule Supplements and Data Room Additions

                	
                  39

                
	
                  9.2

                	
                  Governing
                    Law; Dispute Resolution

                	
                  39

                
	
                  9.3

                	
                  Schedules,
                    Addenda and Exhibits

                	
                  39

                
	
                  9.4

                	
                  Amendments

                	
                  39

                
	
                  9.5

                	
                  Entire
                    Agreement

                	
                  39

                
	
                  9.6

                	
                  Assignment

                	
                  40

                
	
                  9.7

                	
                  Counterparts

                	
                  40

                
	
                  9.8

                	
                  Waivers

                	
                  40

                
	
                  9.9

                	
                  Third
                    Parties

                	
                  40

                
	
                  9.10

                	
                  Headings

                	
                  40

                
	
                  9.11

                	
                  Gender
                    and Number; Section and Article References

                	
                  40

                
	
                  9.12

                	
                  Interpretation

                	
                  40

                
	
                  9.13

                	
                  Notices

                	
                  41

                

        

      

    

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    STOCK
      PURCHASE AGREEMENT

     

    This
      Stock Purchase Agreement (this “Agreement”)
      is
      entered into as of November 2, 2007 by and between Casey Co., a California
      corporation (“Seller”)
      and NTR
      Acquisition Co., a Delaware corporation (“Buyer”).
      Buyer
      and Seller are referred to collectively herein as the “Parties.”

     

    WHEREAS,
      as represented by Seller below, Seller owns one thousand (1,000) shares of
      the
      Class A Common Stock and one thousand (1,000) shares of the Class B Common
      Stock
      (collectively, the “Shares”)
      of
      Kern
      Oil & Refining Co., a California corporation (the “Company”),
      which
      constitute all of the issued and outstanding shares of capital stock of the
      Company. 

     

    WHEREAS,
      Buyer desires to purchase from Seller, and Seller desires to sell to Buyer,
      the
      Shares, upon the terms and subject to the conditions set forth in this
      Agreement.

     

    NOW,
      THEREFORE, in consideration of the Parties’ mutual covenants and agreements set
      forth herein, and for other good, valuable and adequate consideration received,
      the Parties agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    “2006
      Financial Statement”
      means
      the Company’s audited financial statement for the fiscal year ended November 30,
      2006. If in the Ordinary Course of Business the Company’s audited financial
      statement for the fiscal year ended November 30, 2007 is completed prior to
      Closing, then such audited financial statement shall be provided to Buyer and
      shall be substituted for the 2006 Financial Statement when referenced in this
      Agreement.

     

    “Agreement”
      has the
      meaning set forth in the preface above.

     

    “Affiliate”
      means
      any Person that directly, or indirectly through one or more Persons, controls,
      is controlled by, or is under common control with, the Person specified or,
      directly or indirectly, is related to or otherwise associated with any such
      Person or entity.

     

    “Auditor”
      has
      the
      meaning set forth in Section 2.3(b).

     

    “Base
      Amount” has
      the
      meaning set forth in Section 2.2.

     

    “Buyer”
      has the
      meaning set forth in the preface above.

     

    “Business
      Day(s)”
      means
      any day that is not a Saturday, Sunday or a day on which banking institutions
      in
      Los Angeles, California or New York, New York are not required to be
      open.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    “Cap”
      has the
      meaning set forth in Section 7.4.

     

    “Claim”
      has the
      meaning set forth in Section 7.5(a).

     

    “Closing”
      has the
      meaning set forth in Section 2.8.

     

    “Closing
      Date”
      has the
      meaning set forth in Section 2.8.

     

    “Closing
      Purchase Price”
      has the
      meaning set forth in Section 2.2(d).

     

    “COBRA”
      means
      the requirements of Part 6 of Subtitle B of Title I of ERISA and
      Section 4980B of the Code and of any similar state law.

     

    “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    “Company”
      has the
      meaning set forth in the recitals above.

     

    “Company
      Intellectual Property”
      has the
      meaning set forth in Section 3.1(n).

     

    “Company
      Inventory Value” has
      the
      meaning set forth in Section 2.6.

     

    “Company
      Inventory Value Related Consistent Principles”
      has the
      meaning set forth in Section 2.6.

     

    “Company
      Inventory Value Statement” has
      the
      meaning set forth in Section 2.6.

     

    “Company
      Working Capital” has
      the
      meaning set forth in Section 2.6.

     

    “Company
      Working Capital Statement” has
      the
      meaning set forth in Section 2.6.

     

    “Company
      Working Capital Related Consistent Principles”
      has the
      meaning set forth in Section 2.6. 

     

    “Consistent
      Principles” has
      the
      meaning set forth in Section 2.6.

     

    “Current
      LOCs” has
      the
      meaning set forth in Section 5.1.

     

    “Data
      Room” means
      the
      electronic data room sponsored by Merrill Corporation in which the documents
      and
      information related to the Company and its business and operations were
      disclosed to Buyer’s representatives, advisors and counsel.

     

    “Deposit”
      has the
      meaning set forth in Section 8.2(b).

     

    “Determination
      Date” has
      the
      meaning set forth in Section 2.6.

     

    “Disclosure
      Schedule”
      has the
      meaning set forth in Section 3.1.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    “Employee
      Benefit Plan”
      means
      any “employee benefit plan” (as such term is defined in Section 3(3)) of
      ERISA and any other material employee benefit plan, program or arrangement
      of
      any kind. 

     

    “Employee
      Pension Benefit Plan”
      has the
      meaning set forth in Section 3(2) of ERISA.

     

    “Employee
      Welfare Benefit Plan”
      has the
      meaning set forth in Section 3(1) of ERISA.

     

    “Environmental
      Requirements”
      means
      all federal, state and local laws, statutes, regulations, rules, orders,
      decrees, ordinances and other requirements of any Governmental Authority
      applicable to the business, assets, or operations of the Company in force at
      the
      date of this Agreement and the Closing Date (whether common or statutory)
      pertaining to public or employee health and safety (including with respect
      to
      exposure to hazardous materials), pollution (including assessment, containment,
      removal, response, cleanup, abatement and remediation), the environment
      (including air, surface water, groundwater, land surface or subsurface strata),
      the introduction into commerce of a hazardous material (including the
      manufacture, generation, formulation, processing, labeling, distribution, use,
      treatment, handling, storage, reporting or transportation), the physical
      structure or condition of a building (including any facility, fixture, or other
      structure included in the assets of the Company) or the protection of fish,
      wildlife or natural resources including: the Clean Air Act, as amended, CERCLA,
      the Federal Water Pollution Control Act, as amended, the Resource Conservation
      and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended,
      the Toxic Substances Control Act, as amended, the Hazardous & Solid Waste
      Amendments Act of 1984, as amended, the Superfund Amendments and Reauthorization
      Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
      the Oil Pollution Act of 1990, as amended, the Emergency Planning and Community
      Right-to-Know Act, as amended, the Atomic Energy Act of 1954, as amended, the
      Federal Insecticide, Fungicide, and Rodenticide Act of 1972, as amended, and
      any
      federal, state and local Laws implementing or comparable to the foregoing,
      as
      the same may be amended or supplemented as of the date of this Agreement and
      the
      Closing Date.

     

    “ERISA”
      means
      the Employee Retirement Income Security Act of 1974, as amended.

     

    “ERISA
      Affiliate”
      means
      each entity that is treated as a single employer with the Company for purposes
      of Section 4001 of ERISA or Section 414 of the Code.

     

    “Estimated
      Company Working Capital”
      has the
      meaning set forth in Section 2.2(a).

     

    “Estimated
      Company Inventory Value”
      has the
      meaning set forth in Section 2.2(b)

     

    “Fiduciary”
      has the
      meaning set forth in Section 3(21) of ERISA.

     

    “Financial
      Statement”
      has the
      meaning set forth in Section 3.1(h).

     

    “Floor”
      has the
      meaning set forth in Section 7.4.

     

    “GAAP”
      means
      accounting principles generally accepted in the United States of America from
      time to time consistently applied in accordance with past
      practices.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    “Governmental
      Authority”
      means
      any federal, state or local governmental entity or municipality or subdivision
      thereof or any authority, department, commission, board, bureau, agency, court
      or instrumentality.

     

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

     

    “Indebtedness”
      shall
      mean, without duplication: (i) all liabilities and obligations of the
      Company for borrowed money or in respect of loans or advances; (ii) all
      obligations of the Company evidenced by bonds, debentures, notes or other
      similar instruments; (iii) any accrued interest, prepayment premiums or
      penalties or other costs or expenses related to any of the items referenced
      in
      (i) and (ii); (iv) all obligations of the Company that are not
      characterized as short term liabilities under GAAP; (v)  all obligations in
      respect of letters of credit, whether or not drawn, and bankers’ acceptances
      issued for the account of the Company other than Current LOCs and
      (vi) all guarantees of the Company in connection with any of the
      foregoing.

     

    “Indemnity
      Escrow Agreement”
      has the
      meaning set forth in Section 2.2(c).

     

    “Intellectual
      Property”
      means
      domestic or foreign inventions, discoveries, trademarks, patents, trade names,
      copyrights, know-how, intellectual property, software, shop rights, licenses,
      domain names, developments, research data, designs, plans, specifications,
      technical information, technology, technical expertise, production methods,
      trade secrets, test procedures, processes, formulas and other confidential
      information, intellectual and similar intangible property rights, whether or
      not
      patentable (or otherwise subject to legally enforceable restrictions or
      protections against unauthorized third party usage), and any and all
      applications for, registrations for, renewals, continuations, reexaminations
      and
      extensions, divisions and reissuances of, any of the foregoing, and rights
      therein or contractual rights thereto.

     

    “Inventory”
      has the
      meaning set forth in Section 2.6.

     

    “Inventory
      Value Reference Amount” has
      the
      meaning set forth in Section 2.6.

     

    “Knowledge”
      in
      respect of “Seller’s Knowledge” means the actual knowledge of Larry Delpit, Jake
      C. Belin, Steven G. Christovich,
      Alan
      Kornicks, Steve Preheim, and Bruce Cogswell.

     

    “Leased
      Real Property”
      means
      all leasehold or subleasehold estates and other rights to use or occupy any
      land, buildings, structures, improvements, fixtures, or other interests in
      real
      property held by the Company.

     

    “Leases”
      means
      all leases, subleases, licenses, concessions and other agreements (written
      or
      oral), including all amendments, extensions, renewals, guaranties, and other
      agreements with respect thereto, pursuant to which the Company is a party or
      holds any Leased Real Property.

     

    “Lien”
      means
      any mortgage, pledge, lien, encumbrance, charge, or other security interest,
      other than (a) liens for Taxes not yet due and payable or for Taxes that
      the taxpayer is contesting in good faith through appropriate proceedings,
      (b) purchase money liens and liens securing rental payments under capital
      lease arrangements and (c) other liens arising in the Ordinary Course of
      Business and not incurred in connection with the borrowing of
      money.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    “Losses”
      means
      any
      claims, actions, suits, demands, assessments, judgments, losses, liabilities,
      damages (but not consequential damages), costs and expenses, including, without
      limitation, interest, penalties, reasonable attorneys’ and accounting fees and
      investigation costs but net of any Tax Benefits in accordance with
      Section 7.7. 

     

    “Material
      Agreements”
      has the
      meaning set forth in Section 3.1(p)(xviii).

     

    “Materially
      Adverse Effect”
      means to
      have a material and adverse effect on the assets, business, operations and
      condition (financial or otherwise) of the Company, taken as a whole. The term
      “material”
      means to
      be material to the assets, business, operations and condition (financial or
      otherwise) of the Company, taken as a whole.

     

    “Most
      Recent Balance Sheet”
      has the
      meaning set forth in Section 3.1(j).

     

    “Multiemployer
      Plan”
      has the
      meaning set forth in Section 3(37) of ERISA.

     

    “Notice
      of Claim”
      has the
      meaning set forth in Section 7.5(a).

     

    “Objection”
      has
      the
      meaning set forth in Section 7.5(c).

     

    “Ordinary
      Course of Business”
      means
      the ordinary course of business consistent with past custom and
      practices.

     

    “Owned
      Real Property”
      means
      all land, together with all buildings, structures, improvements, and fixtures
      located thereon, and all easements and other rights and interests appurtenant
      thereto, owned by the Company.

     

    “Party”
      has the
      meaning set forth in the preface above.

     

    “Permits”
      means
      licenses, permits, approvals, authorizations, variances, waivers, orders,
      decrees or consents issued by a Governmental Authority.

     

    “Permitted
      Encumbrances”
      means
      with respect to each parcel of Real Property: (a) Taxes, assessments and
      other governmental levies, fees, or charges imposed with respect to such Real
      Property that are (i) not due and payable as of the Closing Date or
      (ii) being contested in good faith and for which appropriate reserves have
      been established in accordance with GAAP; (b) mechanics’ liens and similar
      liens for labor, materials, or supplies provided with respect to such Real
      Property incurred in the Ordinary Course of Business for amounts that are
      (i) not due and payable as of the Closing Date or (ii) being contested
      in good faith that would not, individually or in the aggregate, have a
      Materially Adverse Effect and for which appropriate reserves have been
      established in accordance with GAAP; (c) zoning, building codes, and other
      land use laws regulating the use or occupancy of such Real Property or the
      activities conducted thereon that are imposed by any Governmental Authority
      having jurisdiction over such Real Property and are not violated by the current
      use or occupancy of such Real Property or the operation of the business of
      the
      Company as currently conducted thereon; (d) easements, rights-of-way,
      servitudes, permits, leases, covenants, conditions, restrictions, and other
      similar matters of record affecting title to such Real Property that do not
      or
      would not have a Materially Adverse Effect; (e) the terms and conditions of
      the
      Material Agreements; (f) all items set forth on the Preliminary Title Report,
      located in Folder 8.01.2 in the Data Room, other than those matters constituting
      Indebtedness and those items removed from title prior to the Closing as set
      forth below in Section 4.1(f); and (g) all other liens, charges, encumbrances,
      security interests, pledges, defects or irregularities that do not, individually
      or in the aggregate, have a Materially Adverse Effect on the Real
      Property.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    “Person”
      means an
      individual, a partnership, a corporation, a limited liability company, an
      association, a joint stock company, a trust, a joint venture, an unincorporated
      organization, any other business entity, or a Governmental Authority (or any
      department, agency, or political subdivision thereof).

     

    “Prime
      Rate”
      has the
      meaning set forth in Section 2.7.

     

    “Prohibited
      Transaction”
      has the
      meaning set forth in Section 406 of ERISA and Section 4975 of the
      Code.

     

    “Purchase
      Price”
      has the
      meaning set forth in Section 2.2.

     

    “Real
      Property”
      has the
      meaning set forth in Section 3.1(m).

     

    “Reserved
      Amount”
      has the
      meaning set forth in Section 2.2(c).

     

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

     

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

     

    “Shares”
      has the
      meaning set forth in the recitals above.

     

    “Tax”
      or
“Taxes”
      means
      all net income, gross income, gross receipts, sales, use, personal property,
      real property, ad valorem, transfer, franchise, profits, license, withholding,
      payroll, employment, excise, severance, stamp, occupation, premium, property
      or
      windfall profits taxes, customs duties, and other government charges of any
      kind
      together with any interest and any penalties, additions to tax or additional
      amounts imposed by any taxing authority (domestic or foreign) whether assessed
      solely or as part of a group or a tax sharing agreement.

     

    “Tax
      Benefit”
      has the
      meaning set forth in Section 7.7(a).

     

    “Tax
      Return”
      means
      any declaration, statement, report, return or other document or information
      required to be filed or supplied with respect to Taxes to any Governmental
      Authority including any amendment thereof.

     

    “Ten
      Section”
      means
the
      rights described under the Ten Section Lease and that certain Pipeline
      Right-of-Way Grant, dated April 5, 1994, between and among McFarland Energy,
      Robert A. Teitsworth, Crescent Investment Company, Birchwood Partners, Avondale
      Partners, Trio Petroleum, Inc., J. G. Boswell Company and the
      Company.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    “Ten
      Section Lease”
      means
      that certain Surface Lease, dated April 7, 1995, between and among Koch Oil
      Company, Koch Industries, Inc. and the Company.

     

    “Termination
      Date” has
      the
      meaning set forth in Section 8.1(b).

     

    “Third-Party
      Claim”
      has the
      meaning set forth in Section 7.5(a).

     

    “Transaction
      Documents”
      has the
      meaning set forth in Section 3.1.

     

    “Transfer
      Taxes” has
      the
      meaning set forth in Section 5.4.

     

    “Working
      Capital Reference Amount” has
      the
      meaning set forth in Section 2.6.

     

    ARTICLE
      II

     

    PURCHASE
      AND SALE OF SHARES

     

    2.1 Purchase
      and Sale of Shares.
      On the
      terms and subject to the conditions of this Agreement, at the Closing, Buyer
      shall acquire from Seller, and Seller shall sell and deliver to Buyer, all
      of
      Seller’s right, title and interest in and to the Shares free and clear of any
      Liens or any other encumbrance, for the consideration specified in this
      Article II.

     

    2.2 Purchase
      Price.
      As
      consideration for the sale and delivery of the Shares, Buyer shall pay to Seller
      at the Closing Two Hundred and Eighty Six Million Five Hundred Thousand US
      Dollars (USD 286,500,000) (the “Base
      Amount”),
      subject to the adjustments set forth in Sections 2.2(a) and (b) hereof, which
      shall be payable as set forth in Sections 2.2(c) and (d) below and which shall
      be adjusted subsequent to the Closing as set forth in Section 2.5 (such amount,
      as finally adjusted, the “Purchase
      Price”).

     

    (a) Estimated
      Company Working Capital Adjustment.
      Prior
      to the Closing Date, Seller shall cause the Company to prepare and deliver
      to
      Buyer a good faith estimate of Company Working Capital as of the Closing Date
      (the “Estimated
      Company Working Capital”).
      To the
      extent that the Estimated Company Working Capital exceeds the Working Capital
      Reference Amount, at the Closing, the Base Amount shall be adjusted upwards
      dollar for dollar in the amount equal to such difference. To the extent that
      the
      Estimated Company Working Capital is less than the Working Capital Reference
      Amount, at the Closing, the Base Amount shall be adjusted downwards dollar
      for
      dollar in the amount equal to such difference. 

     

    (b) Estimated
      Company Inventory Value Adjustment.
      Prior
      to the Closing Date, Seller shall cause the Company to prepare and deliver
      to
      Buyer a good faith estimate of Company Inventory Value (consistent with the
      principles set forth in Schedule
      2.6(a))
      as of
      the Closing Date (the “Estimated
      Company Inventory Value”)
      and
      Buyer shall be entitled to have a representative present to observe the
      preparation of such estimate. To the extent that the Estimated Company Inventory
      Value exceeds the Inventory Value Reference Amount, at the Closing, the Base
      Amount shall be adjusted upwards dollar for dollar in the amount equal to such
      difference.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (c) Reserved
      Amount.
      An
      amount equal to three percent (3%) of the Closing Purchase Price
      (the “Reserved
      Amount”)
      shall
      be deposited in a third party escrow account on the Closing Date. The Reserved
      Amount shall be payable under the terms and subject to the conditions as
      provided herein and in the Indemnity Escrow Agreement, substantially in the
      form
      attached hereto as Exhibit
      A
      (the “Indemnity
      Escrow Agreement”).
      The
      Deposit (as defined in Section 8.2(b) below) shall be applied toward the
      Reserved Amount as contemplated in Section 8.2(b). 

     

    (d) Wire
      Transfer to Seller. An
      amount
      equal to the Base Amount, as adjusted in accordance with Sections 2.2(a) and
      (b), as applicable (the “Closing
      Purchase Price”),
      less
      the Reserved Amount, shall be paid on the Closing Date in immediately available
      funds by bank wire transfer in accordance with the payment instructions and
      to
      the account set forth on Schedule 2.2(a)
      attached
      hereto.

     

    2.3 Calculation
      of Working Capital and Company Inventory Value.
      

     

    (a) Initial
      Calculation by Buyer; Dispute by Seller.
      As soon
      as reasonably practicable following the Closing Date, and in any event within
      twenty (20) Business Days after the Closing Date, Buyer shall prepare and
      deliver to Seller the Company Working Capital Statement and the Company
      Inventory Value Statement and Seller shall notify Buyer in writing, once, within
      twenty (20) Business Days of receipt thereof, whether Seller accepts the Company
      Working Capital Statement, Buyer’s calculation of Company Working Capital set
      forth thereon, the Company Inventory Value Statement and Buyer’s calculation of
      Company Inventory Value set forth thereon. If Seller notifies Buyer that it
      does
      not accept Buyer’s calculation of the Company Working Capital and/or Company
      Inventory Value (as applicable), Seller shall include in and with such notice
      Seller’s reason(s) for such non acceptance, the adjustments that Seller believes
      should be made to the Company Working Capital Statement, the calculation of
      Company Working Capital set forth thereon, the Company Inventory Value Statement
      and/or the calculation of Company Inventory Value set forth thereon (as
      applicable) and all documentation in support thereof. In the event that Seller
      does not provide such notice of non acceptance within such twenty (20) Business
      Day period, Seller shall be deemed to have accepted the Company Working Capital
      Statement, the calculation of Company Working Capital set forth thereon, the
      Company Inventory Value Statement and the calculation of Company Inventory
      Value
      set forth thereon, all of which shall be final, binding and conclusive for
      all
      purposes hereunder. If Seller has submitted a notice of non acceptance, then,
      thereafter, Buyer and Seller shall use commercially reasonable efforts to
      consult with each other and to reach an agreement in respect of Company Working
      Capital and/or Company Inventory Value (as applicable) within fifteen (15)
      Business Days of Buyer’s receipt of such notice of non acceptance.

     

    (b) Final
      Determination by Third Party.
      If the
      Parties do not reach an agreement after consultation within fifteen (15)
      Business Days of Buyer’s receipt of a notice of non acceptance from Seller, as
      contemplated in Section 2.3(a), then the matter shall be referred to a neutral
      auditing firm mutually agreed upon by the Parties (the “Auditor”)
      for
      final determination of any remaining disagreements. The following provisions
      shall apply to such determination:

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (i) Written
      Statements.
      The
      Parties shall each promptly (and, in any event, within such time frame as
      enables the Auditor to make its final determination within the time frame set
      forth in Section 2.3(b)(ii)) prepare and deliver to the Auditor written
      statements on the matters in dispute (attaching supporting documentation,
      including the initial calculation of Company Working Capital and/or Company
      Inventory Value, as applicable, and Seller’s notice of non acceptance with all
      attachments).

     

    (ii) Timeline.
      The
      Parties shall request that the Auditor render its final determination within
      sixty (60) calendar days of confirmation and acknowledgement of its appointment
      in connection herewith.

     

    (iii) Auditor’s
      Decision.
      In
      rendering its final determination, which shall be in writing, the
      Auditor shall
      expressly state what adjustments are necessary, if any, to Company Working
      Capital and/or Company Inventory Value (as applicable, solely in connection
      with
      which calculation was the subject of dispute); provided,
      however,
      the
      scope of the disputes to be resolved by the Auditor shall be limited to whether
      such calculation(s) were done in accordance with the Consistent Principles
      and/or whether there were mathematical errors in the Company Working Capital
      Statement and/or Company Inventory Value Statement (as applicable in connection
      with which calculation was the subject of dispute). 

     

    (iv) Final
      and Binding Effect.
      The
      Auditor’s final
      determination shall be final and binding upon the Parties.

     

    (c) Access
      to Information.
      Each
      Party shall promptly make available to the other party and/or the Auditor,
      as
      applicable, all information (as in their respective possession or control)
      and
      personnel who prepared such information as may be reasonably required to enable
      the calculation of Company Working Capital and/or Company Inventory Value by
      Buyer (as applicable), review and analysis thereof by Seller and rendering
      of a
      final determination by the Auditor, as applicable.

     

    2.4 Costs
      and Expenses.
      The
      Auditor’s costs
      and
      expenses shall be borne equally by Buyer and Seller, and Buyer and Seller shall
      otherwise each bear their own costs and expenses incurred in connection with
      the
      calculation of Company Working Capital, Company Inventory Value and the
      determination thereof by the Auditor. 

     

    2.5 Post
      Closing Purchase Price Adjustment.

     

    (a) Working
      Capital Adjustment.

     

    (i) Working
      Capital Excess Payment.
      Within
      five (5) Business Days of the Determination Date (as defined herein), to the
      extent that Company Working Capital as set forth on the Company Working Capital
      Statement exceeds the Estimated Company Working Capital, Buyer shall pay to
      Seller the amount equal to such difference, plus interest from the Closing
      Date
      at the Prime Rate as of the Determination Date (computed on the basis of a
      365-day year for actual days elapsed), in immediately available funds by bank
      wire transfer in accordance with the payment instructions and to the account
      set
      forth on Schedule
      2.2(a)
      attached
      hereto.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    (ii) Working
      Capital Shortfall Payment.
      Within
      five (5) Business Days of the Determination Date (as defined herein), to the
      extent that Company Working Capital as set forth on the Company Working Capital
      Statement is less than the Estimated Company Working Capital, Seller shall
      refund to Buyer the amount equal to such difference, plus interest from the
      Closing Date at the Prime Rate as of the Determination Date (computed on the
      basis of a 365-day year for actual days elapsed), in immediately available
      funds
      by bank wire transfer to an account designated in writing by Buyer to Seller
      prior to the Determination Date.

     

    (b) Inventory
      Value Adjustment.
      

     

    (i) Inventory
      Value Excess Payment.
      Within
      five (5) Business Days of the Determination Date, to the extent that Company
      Inventory Value as set forth on the Company Inventory Value Statement exceeds
      the Estimated Company Inventory Value, Buyer shall pay to Seller the amount
      equal to such difference, plus interest from the Closing Date at the Prime
      Rate
      as of the Determination Date (computed on the basis of a 365-day year for actual
      days elapsed), in immediately available funds by bank wire transfer in
      accordance with the payment instructions and to the account set forth on
Schedule
      2.2(a)
      attached
      hereto.

     

    (ii) Inventory
      Value Shortfall Payment.
      Within
      five (5) Business Days of the Determination Date (as defined herein), to the
      extent that Company Inventory Value as set forth on the Company Inventory Value
      Statement is less than the Estimated Company Inventory Value, Seller shall
      refund to Buyer the amount equal to such difference, plus interest from the
      Closing Date at the Prime Rate as of the Determination Date (computed on the
      basis of a 365-day year for actual days elapsed), in immediately available
      funds
      by bank wire transfer to an account designated in writing by Buyer to Seller
      prior to the Determination Date.

     

    2.6 Certain
      Definitions.

     

    (a) “Company
      Inventory Value”
      means
      the fair market value of the Inventory, determined on a basis consistent and
      in
      accordance with the physical inventory procedures, agreed upon inventory
      pricing, accounting principles,
      practices, methodologies and policies set forth on Schedule
      2.6(a)
      attached
      hereto (the “Company
      Inventory Value Related Consistent Principles”).

     

    (b) “Company
      Inventory Value Statement”
      means a
      statement showing the Company Inventory Value as of the Closing
      Date.

     

    (c) “Company
      Working Capital”
      means an
      amount equal to (i) the sum of the Company’s (a) cash and cash equivalents, (b)
      marketable securities, (c) net book value of trade accounts receivable (net
      of
      allowances), (d) net book value of Taxes, notes and other receivables and (e)
      net book value of prepaid expenses and other assets, but excluding Inventory
      (as
      defined below), less (ii) the sum of the Company’s (a) accounts payable and (b)
      accrued liabilities and Accrued Current Tax Liabilities; provided,
      however,
      that
      each of the foregoing items shall be calculated on a basis consistent and in
      accordance with the accounting
      principles,
      practices, methodologies and policies (including tax apportionment and
      procedures for filing returns) set forth on Schedule
      2.6(c)
      attached
      hereto (the “Company
      Working Capital Related Consistent Principles”
      and,
      together with the Company Inventory Value Related Consistent Principles, the
      “Consistent
      Principles”).
      For
      purposes of determining Company Working Capital, “Accrued
      Current Taxes”
      and
“Accrued
      Current Tax Liabilities”
      mean
      amounts reserved for such Taxes and specifically identified under such titles
      in
      the worksheets to the Estimated Company Working Capital and to the Company
      Working Capital Statement. For the avoidance of doubt, for purposes of
      determining Company Working Capital, (x) Accrued Current Taxes and Accrued
      Current Tax Liabilities shall not include any Taxes deferred under GAAP and
      (y)
      any Taxes included in the definitions of Accrued Current Taxes and Accrued
      Current tax Liabilities shall be eliminated from accrued liabilities under
      subclause (ii)(b) above in this paragraph (c). 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (d) “Company
      Working Capital Statement”
      means a
      statement showing the amount of Company Working Capital as of the Closing
      Date.

     

    (e) “Determination
      Date”
      means
      the earlier of (i) in the event that Seller does not provide the notice of
      non
      acceptance pursuant to Section 2.3(a), twenty (20) Business Days after the
      date
      Buyer delivers the Company Working Capital Statement and Company Inventory
      Statement to Seller, (ii) the date Seller notifies Buyer of its acceptance
      of
      Buyer’s calculation of Company Working Capital and Company Inventory Value,
      (iii) the date the Parties otherwise agree upon Buyer’s Company Working Capital
      and Company Inventory Value calculation or (iv) the date the Parties receive
      the
      final determination of Company Working Capital and/or Company Inventory Value
      by
      the Auditor (as applicable, solely in connection with which calculation was
      the
      subject of dispute).

     

    (f) “Inventory”
      means
      crude exchange balances due to the Company and crude oil, feedstocks,
      intermediate petroleum products and blend components, finished petroleum
      products, parts and supplies inventory, chemicals and additives held in stock
      by
      the Company or to which the Company has title.

     

    (g) “Inventory
      Value Reference Amount”
      means
      Zero Dollars (USD 0.00).

     

    (h) “Working
      Capital Reference Amount”
      means
      Zero Dollars (USD 0.00).

     

    2.7 Interest.
      If any
      payment due hereunder is not paid when due, the Party in default shall pay
      interest thereon from and including the due date through but excluding the
      date
      on which such payment is made at a rate equal to the prime rate as set forth
      in
      the Wall Street Journal (the “Prime
      Rate”)
      plus
      one (1%) percent per annum, computed on the basis of a 365-day year for actual
      days elapsed.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    2.8 Closing.
      The
      closing of the transactions contemplated by this Agreement
      (the “Closing”)
      shall
      take place at the offices of Jones Day, 555 South Flower Street, 50th
      Floor,
      Los Angeles, California 90071, at 10:00 a.m. local time on the second
      (2nd)
      business day following the satisfaction or waiver of all conditions to the
      obligations of the Parties to consummate the transactions contemplated hereby
      (except those that by their nature can only be satisfied at the Closing) or
      such
      other date and location as mutually agreed upon by the Parties (the “Closing
      Date”).

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of Seller.
      Except
      as set forth on the schedules of exceptions and disclosures delivered in
      connection herewith (the “Disclosure
      Schedule”)
      and
      except as to any information contained in the Data Room, and subject to
      Section 9.1, Seller hereby represents and warrants to Buyer as set forth in
      this Section 3.1 as of the date of this Agreement and as of Closing. Any
      exception to or disclosure in respect of any representation, warranty or
      covenant, and any other information, which is disclosed in one section of the
      Disclosure Schedule shall be deemed to have been disclosed in every other
      section of the Disclosure Schedule and shall be deemed a disclosure in respect
      of every other representation, warranty or covenant contained in each other
      agreement or instrument executed and delivered or to be executed and delivered
      by Seller in connection herewith (such agreements and instruments collectively
      with this Agreement, the “Transaction Documents”),
      but
      only to the extent it is reasonably apparent that such exception is applicable
      to such other representation, warranty or covenant. Neither Buyer nor any
      Affiliate of Buyer has been given, or has relied upon or been induced to enter
      into this Agreement by any representation or warranty, express or implied,
      other
      than as expressly set forth in this Agreement. Buyer agrees and acknowledges
      that at the time of entering into this Agreement, it has no actual knowledge
      of
      any breach of any of the representations and warranties contained herein or
      of
      any matters which will or are likely to give rise to any Losses,
      and to the extent that Buyer does have any such actual knowledge, Buyer shall
      not be entitled to pursue any Losses in respect thereof. For purposes of this
      section, “actual knowledge” of Buyer shall mean matters known as of the date of
      this Agreement to Mario Rodriguez, Henry Kuchta, William Hantke, Jeffrey Dill
      and James Fedena. 

     

    (a) Organization
      of Seller; Enforceability; Authorization.
      Seller
      is a corporation existing and in good standing under the laws of the State
      of
      California. The execution, delivery and performance of this Agreement and the
      Transaction Documents to which Seller is a party has been duly authorized by
      Seller’s Board of Directors and its shareholders. This Agreement and the
      Transaction Documents to which Seller is a party have been duly executed and
      delivered by Seller and constitutes the valid and binding obligation of Seller
      and/or the Company, enforceable in accordance with its terms, subject to
applicable
      bankruptcy, insolvency, reorganization or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally and to
      general principles of equity.

     

    (b) Brokers’
      Fees.
      Except
      as set forth on Schedule
      3.1(b),
      neither
      Seller nor the Company have any obligation to pay any fees or commissions to
      any
      broker, finder or agent with respect to the transactions contemplated by this
      Agreement. Any obligations shown on Schedule 3.1(b) shall be for the account
      of
      Seller.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (c) Title
      to Shares.
      Seller
      is the lawful owner, beneficially and of record, of all of the Shares, free
      and
      clear of any Liens and with no restriction on the voting rights and other
      incidents of record and beneficial ownership pertaining thereto. Upon payment
      in
      full of the Closing Purchase Price (less the Reserved Amount) at the Closing,
      good, valid and marketable title to the Shares will pass to Buyer, free and
      clear of all Liens, and with no restrictions on the voting rights or other
      incidents of record and beneficial ownership of the Shares.

     

    (d) Organization
      of the Company; Qualification; Corporate Power.
      The
      Company is a corporation existing and in good standing under the laws of the
      State of California, is qualified to do business as a foreign corporation in
      the
      State of Texas and has full corporate power and authority to carry on its
      business as it is now being conducted. Schedule
      3.1(d) lists
      the
      directors and officers of the Company. The Company does not directly or
      indirectly have any subsidiaries and, except as set forth on Schedule
      3.1(d),
      does
      not directly or indirectly own any shares of capital stock or any other
      ownership interest in any entity. 

     

    (e) Capitalization.
      The
      entire authorized capital stock of the Company consists of 2,000 shares of
      Common Stock (consisting of 1,000 shares of Class A Common Stock and 1,000
      shares of Class B Common Stock) and the Shares constitute all issued and
      outstanding shares of such Common Stock, capital stock of the Company. All
      of
      the Shares have been duly authorized, are validly issued, fully paid and non
      assessable and are held of record and beneficially by Seller. There are no
      outstanding or authorized options, warrants, purchase rights, subscription
      rights, conversion rights, exchange rights, or other contracts or commitments
      that could require the Company to issue, sell, or otherwise cause to become
      outstanding any of its capital stock. 

     

    (f) Non-contravention;
      Consents.
      Neither
      the execution and the delivery of this Agreement or any of the Transaction
      Documents to which Seller is a party, nor the consummation of the transactions
      contemplated hereby, will (i) violate any order, judgment or decree,
      relating to Seller’s or the Company’s business or by which Seller or the Company
      is bound, (ii) violate any provision of the Seller’s or Company’s Articles of
      Incorporation or Bylaws, or (iii) except as set forth on Schedule
      3.1(f),
      result
      in a violation or breach of, or constitute (with or without due notice or lapse
      of time or both) a default, or give rise to any right of termination,
      modification, cancellation or acceleration, including by reason of any change
      of
      control provision, or require any consent, under any indenture, license,
      contract, agreement or other instrument or obligation to which the Company
      or
      Seller is a party or by which either of them or any of their respective
      properties or assets are bound. 

     

    (g) Tangible
      Assets.
      The
      Company has good and marketable title to, or a valid leasehold interest in,
      the
      tangible personal property used by it in the conduct of its business, free
      and
      clear of all Liens, except as set forth on Schedule 3.1(g). Except as set forth
      on Schedule
      3.1(g), such
      tangible assets are in operating condition, subject to reasonable wear and
      tear.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (h) Financial
      Statements.
      The
      Company has delivered to Buyer true and complete copies of the audited financial
      statements of the Company for the fiscal years ended November 30, 2004, November
      30, 2005 and November 30, 2006 (collectively, the “Financial
      Statements”).
      If
      the audited financial statements of the Company for the fiscal year ended
      November 30, 2007 are available in the Ordinary Course of Business prior to
      Closing, such statements shall be provided to Buyer and shall be considered
      part
      of the Financial Statements. The Financial Statements (i) have been prepared
      from the books and records of the Company, (ii) have been prepared in accordance
      with GAAP applied on a consistent basis and (iii) fairly present in all material
      respects the financial position and results of operations of the Company as
      of
      and for the periods then ended.

     

    (i) Absence
      of Certain Changes.
      Except
      as set forth on Schedule
      3.1(i)
      or as
      expressly contemplated in this Agreement, since December 1, 2006, the Company
      has not in connection with the operation of its business (i) sold, transferred
      or otherwise disposed of any properties or assets, other than in the Ordinary
      Course of Business; (ii) mortgaged, pledged or subjected to any Lien (other
      than
      any Liens arising in the Ordinary Course of Business or
      as set
      forth on Schedule 3.1(g)) any of its tangible or intangible assets;
      (iii) acquired any property or assets outside the Ordinary Course of
      Business; (iv) made any borrowing, issued any commercial paper or refinanced
      any
      existing borrowings; (v) paid any obligation or liability (fixed or contingent),
      other than in the Ordinary Course of Business, discharged or satisfied any
      Lien,
      or settled any claim, or suit pending or threatened; (vi) written off as
      uncollectible any notes or accounts receivable or any portion thereof (other
      than ordinary receivable reductions for cash discounts or credits); (vii) made
      any change in its accounting methods, policies, practices or principles, (viii)
      entered into or amended or terminated any Material Agreement other than in
      the
      Ordinary Course of Business; (ix) increased the compensation payable to or
      to
      become payable to any officers or employees of the Company or adopted or
      increased any bonus, insurance, or other Employee Benefit Plan, payment or
      arrangement made to, for or with any such officers or employees other than
      in
      the Ordinary Course of Business, or (x) agreed to, or obligated itself to,
      do
      anything identified in (i) through (ix) above.

     

    (j) Undisclosed
      Liabilities.
      The
      Company has no material liabilities (matured or unmatured, absolute, accrued,
      fixed, contingent or otherwise) that are not (i) on the balance sheet found
      in
      the Company’s audited financial statements for the fiscal year ended November
      30, 2006, or, if available, in lieu thereof, the Company’s audited financial
      statements for the fiscal year ended November 30, 2007 (the “Most
      Recent Balance Sheet”),
      (ii)
      incurred in the Ordinary Course of Business since the Most Recent Balance Sheet,
      (iii) expressly permitted by this Agreement or (iv) otherwise set forth on
      Schedule
      3.1(j).
      As of
      the Closing, the Company shall be free of all Indebtedness.

     

    (k) Legal
      Compliance.
      Except
      as set forth on Schedule
      3.1(k),
      the
      Company is in material compliance with all laws applicable to the Company,
      its
      assets including Real Property and the conduct of its business. The Company
      is
      not in default under, and to Seller’s Knowledge no event has occurred which,
      with the lapse of time or action by a third party, would result in or reasonably
      be expected to result in (i) default by the Company under, or a violation
      by the Company of, the terms of any judgment, decree, order, writ or injunction
      of any Governmental Authority or (ii) a violation of applicable law. The
      Company has not received any written notification from any applicable
      Governmental Authority that it or any of the Real Property is not in compliance
      with any laws.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (l) Tax
      Matters.
      The
      Company has filed all Tax Returns that it was required to file. All such Tax
      Returns were correct and complete in all material respects. All Taxes due and
      owing by the Company have been paid. The Company is not the beneficiary of
      any
      extension of time within which to file any Tax Return. There are no Liens for
      Taxes upon any of the assets owned by the Company and used in the conduct of
      its
      business. Except as set forth on Schedule
      3.1(l),
      there
      is no material dispute or claim concerning any Tax liability of the Company
      either (A) claimed or raised by any Governmental Authority in writing or (B)
      as
      to which the Seller has Knowledge based upon personal contact with any agent
      of
      such a Governmental Authority.

     

    (m) Real
      Property.

     

    (i) Schedule
      3(m)(i) sets
      forth the address, plot plan and description of each parcel of Owned Real
      Property. With respect to each parcel of Owned Real Property:

     

    (A) The
      Company has good, valid and marketable fee simple title, free and clear of
      all
      Liens, except Permitted Encumbrances;

     

    (B) Except
      as
      set forth in Schedule
      3.1(m)(i)(B),
      the
      Company has not leased or otherwise granted to any Person the right to use
      or
      occupy such Owned Real Property or any portion thereof; and

     

    (C) There
      are
      no outstanding options, rights of first offer or rights of first refusal to
      purchase such Owned Real Property or any portion thereof or interest
      therein.

     

    (ii) Schedule
      3.1(m)(ii) sets
      forth the address of each parcel of Leased Real Property and a list of all
      Leases concerning each such Leased Real Property (including the date of such
      Lease and the parties thereto). The Company has provided to Buyer access to
      a
      true and complete copy of each such Lease. Except as set forth on Schedule
      3.1(m)(ii),
      with
      respect to each of the Leases (excluding the Ten Section Lease):

     

    (A) Such
      Lease is legal, valid, binding, enforceable and in full force and effect in
      all
      material respects, subject to applicable bankruptcy, insolvency, reorganization
      or other laws of general application relating to or affecting the enforcement
      of
      creditors’ rights generally and to general principles of equity;

     

    (B) The
      transactions contemplated by this Agreement do not require the consent of any
      other party to such Lease, will not result in a breach of or default under
      such
      Lease, and will not otherwise cause such Lease to cease to be legal, valid,
      binding, enforceable and in full force and effect on identical terms following
      the Closing, subject to applicable
      bankruptcy, insolvency, reorganization or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally and to
      general principles of equity;

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    (C) To
      Seller’s Knowledge, neither the Company nor any other party to the Lease is in
      material breach of or default under such Lease and no event has occurred or
      circumstance exists that, with the delivery of notice, the passage of time
      or
      both, would constitute such a material breach or default, or permit the
      termination, modification or acceleration of rent under such Lease;
      and

     

    (D) No
      security deposit or portion thereof deposited with respect to such Lease has
      been applied in respect of a breach of or default under such Lease that has
      not
      been re-deposited in full.

     

    (iii) The
      Owned
      Real Property and the Leased Real Property (collectively, the “Real
      Property”)
      comprise all of the real property currently held or used in the conduct of
      the
      Company’s business. Schedule
      3.1(m)(iii)
      lists
      all of the pipelines (but not gathering lines) owned or leased by the Company
      located on property owned by third parties along with the approximate locations
      of such pipelines. Except as set forth on Schedule
      3.1(m)(iii),
      no
      impairment that would have a Materially Adverse Effect exists as to the use
      of,
      or current rights-of-way in connection with, those pipelines (excluding
      gathering lines) that are necessary for the Ordinary Course of Business. The
      Company is not responsible for the maintenance or removal of any pipelines
      (excluding gathering lines) or rights of way located on property owned by third
      parties other than those listed on Schedule
      3.1(m)(iii).
      To
      Seller’s Knowledge, all of the Company’s rights in respect of gathering lines
      and the Ten Section are set forth in the Data Room, at Folder 8.01.4.
 

     

    (iv) All
      buildings, structures, fixtures, building systems and equipment, and all
      components thereof, included in the Real Property are in good operating
      condition, subject to reasonable wear and tear.

     

    (v) The
      Company has not received written notice of any condemnation, expropriation
      or
      other proceeding in eminent domain affecting any parcel of Owned Real Property
      or any portion thereof or interest therein nor has it received a written notice
      of non-conforming use or similar notice concerning any zoning or other land
      use
      law, code, ordinance or regulation.

     

    (vi) Except
      as
      set forth on Schedule
      3.1(m)(iii),
      those
      matters in the Preliminary Title Report in the Data Room and the contents of
      Folder 8.01.4 in the Data Room, there are no contracts, written or oral, to
      which the Company is a party, granting to any other party the right of use
      or
      occupancy of any portion of the Real Property.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    (n) Intellectual
      Property.
      

     

    (i) Schedule
      3.1(n)(i)(1) sets
      forth a complete and correct list (with an indication of the record owner and
      identifying patent, application and or registration numbers, as applicable)
      of
      all (A) patents, trademarks, service marks, trade names, copyrights and domain
      names for which registrations have been obtained (and all applications for,
      or
      extensions or reissues of, any of the foregoing) which are owned by the Company
      and (B) computer software that is owned by the Company (other than mass-marketed
      software purchased for less than a total cost of $20,000). Schedule
      3.1(n)(i)(2) sets
      forth, to Seller’s Knowledge, a complete and correct list of all patents,
      trademarks, service marks, trade names, copyrights and domain names for which
      registrations have been obtained (and all applications for, or extensions or
      reissues of, any of the foregoing) and unregistered trade secrets or other
      intellectual property rights which are material to and used by the Company
      in
      the conduct of the Company’s business but owned by a third party (indicating the
      license or contract pursuant to which the Company has the right to use such
      intellectual property, if such a license or contract exists).

     

    (ii) The
      items
      set forth on Schedules
      3.1(n)(i)(1) and/or
      3.1(n)(i)(2)
      (collectively, the “Company
      Intellectual Property”)
      comprise all of the Intellectual Property necessary for the Ordinary Conduct
      of
      Business.

     

    (iii) The
      Company owns and possesses, free and clear of all Liens (other than as might
      be
      set forth on Schedule 3.1(g)), all right, title and interest in and to, or
      has
      the rights to use, all Company Intellectual Property. The Company has received
      no written claim or demand (including any offer to license) pertaining to,
      and,
      to Seller’s Knowledge, there are no proceedings (including office actions) which
      are pending or threatened, which challenge the rights of the Company in respect
      of any Company Intellectual Property (including the validity, use, ownership,
      enforceability or registrability of such Company Intellectual
      Property).

     

    (iv) No
      Company Intellectual Property owned by the Company is subject to any outstanding
      order, ruling, decree, judgment or stipulation by or with any Governmental
      Authority.

     

    (v) To
      Seller’s Knowledge, (A) the Company has not infringed, misappropriated or
      otherwise conflicted with, and the operation of its business does not infringe,
      misappropriate or otherwise conflict with, any Intellectual Property rights
      of
      any third party and (B) there are no facts which indicate a likelihood of any
      of
      the foregoing. To Seller’s Knowledge, no third party has infringed,
      misappropriated or otherwise conflicted with any of the Company Intellectual
      Property.

     

    (vi) All
      of
      the Company Intellectual Property will be owned or available for use by Buyer
      immediately after the Closing on terms and conditions identical to those under
      which Seller owned or used the Company Intellectual Property immediately prior
      to the Closing.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    (o) Inventory.
      Inventory maintained by the Company as of the date hereof and as of the Closing
      Date shall be adequate for the conduct of the business of the Company in the
      Ordinary Course of Business. 

     

    (p) Contracts.
      Schedule
      3.1(p)
      lists
      the following contracts and other agreements to which the Company is a party
      and
      which are currently in force:

     

    (i) Any
      agreement that relates to any Indebtedness in excess of $100,000 or the guaranty
      of Indebtedness which guaranty has a maximum liability in excess of
      $100,000;

     

    (ii) Any
      agreement, including exchange contracts, that provides for aggregate payments
      from or to the Company in excess of $100,000, excluding agreements for the
      purchase or sale of crude oil or other petroleum inventory other than exchange
      contracts;

     

    (iii) Any
      agreement to sell crude oil or other petroleum product that extends for a period
      in excess of ninety (90) days and is not cancellable within ninety (90)
      days;

     

    (iv) Any
      agreement to purchase crude oil or other petroleum product that extends for
      a
      period in excess of ninety (90) days and is not cancellable within ninety (90)
      days;

     

    (v) Any
      agreement to sell crude oil or other petroleum product to any of the ten (10)
      largest customers, by revenue, of the Company’s business for the nine-month
      period ending August 31, 2007;

     

    (vi) Any
      agreement to purchase crude oil or other petroleum product from any of the
      ten
      (10) largest suppliers, by billings, of the Company’s business for the
      nine-month period ending August 31, 2007;

     

    (vii) Any
      license or other right granted by any third party to the Company, or any license
      or other right granted by the Company to a third party, with respect to any
      Company Intellectual Property or any agreement involving the payment of
      royalties (excluding “off-the-shelf” programs or products or other software
      readily commercially available at the date of this Agreement not exceeding
      an
      annual cost of $100,000 and licensed in the Ordinary Course of
      Business);

     

    (viii) Any
      confidentiality agreement relating to the Company’s business entered into
      outside of the Ordinary Course of Business other than any relating to a
      potential sale of the Company’s assets or issued and outstanding shares of
      capital stock;

     

    (ix) Any
      agreement with (1) Seller or any other Affiliate of the Company, (2) any current
      or former officer, director or employee of the Company, Seller or any other
      Affiliate of the Company;

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    (x) Any
      agreement that cannot be terminated without penalty upon not more than 180
      days
      prior written notice;

     

    (xi) Any
      guaranties of payment or performance in favor of another Person;

     

    (xii) Any
      joint
      venture agreement, partnership (limited or general) agreement or limited
      liability company operating agreement;

     

    (xiii) Any
      agreement that limits or purports to limit the ability of the Company to compete
      in any line of business or to sell or represent competing products or with
      any
      Person or in any geographic area or during any period of time;

     

    (xiv) Any
      agreement which is terminable upon, or prohibits, a change of ownership or
      control of Company; 

     

    (xv) Other
      than as set forth on Schedule
      3.1(u),
      any
      profit sharing, stock option, stock purchase, stock appreciation, deferred
      compensation, severance, or other material plan or arrangement for the benefit
      of the Company’s current or former directors, officers, and
      employees;

     

    (xvi) any
      collective bargaining agreement or related documents; and

     

    (xvii) any
      agreement for the employment of any individual on a full-time, part-time,
      consulting, or other basis providing annual compensation in excess of $100,000,
      other than in respect of at-will arrangements (the foregoing agreements,
      collectively, the “Material
      Agreements”).

     

    Seller
      has given Buyer access to a correct and complete copy of each Material
      Agreement. With respect to each such Material Agreement: (A) the agreement
      is legal, valid, binding, enforceable, and in full force and effect in all
      material respects, subject to applicable
      bankruptcy, insolvency, reorganization or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally and to
      general principles of equity;
      (B) neither the Company nor, to Seller’s Knowledge, any other party to such
      Material Agreement, is in material breach or default, and no event has occurred
      that with notice or lapse of time would constitute a material breach or default,
      or permit termination, modification, or acceleration, under the agreement;
      and
      (C) no party to such Material Agreement has repudiated any material
      provision of the agreement.

     

    (q) Accounts
      Receivable.
      All
      accounts receivable outstanding as of the Closing Date will represent sales
      actually made in the Ordinary Course of Business and to Seller’s Knowledge are
      subject to no counterclaims, setoffs or rights to return likely to interfere
      with full and timely collection of, any of such outstanding accounts receivable
      other than routine credits granted for errors in ordering, shipping, pricing
      or
      similar matters. Schedule
      3.1(q) sets
      forth an aged listing by customer of the accounts receivable that were
      outstanding as of five (5) days prior to the date of this Agreement and no
      more
      than ten (10) days prior to the Closing.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    (r) Insurance.
      Schedule
      3.1(r) sets
      forth the following information with respect to each insurance policy with
      respect to which the Company is a party, a named insured or otherwise the
      beneficiary of coverage:

     

    (i) the
      name,
      address and telephone number of the agent;

     

    (ii) the
      name
      of the insurer, the name of the policyholder and the name of each covered
      insured;

     

    (iii) the
      policy number and the period of coverage; and

     

    (iv) the
      scope
      (including an indication of whether the coverage is on a claims made, occurrence
      or other basis) and amount (including a description of how deductibles and
      ceilings are calculated and operate) of coverage.

     

    With
      respect to each such insurance policy: (A) the policy is legal, valid, binding,
      enforceable, and in full force and effect in all material respects, subject
      to
applicable
      bankruptcy, insolvency, reorganization or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally and to
      general principles of equity and will remain in full force and effect after
      the
      Closing;
      (B) neither the Company nor, to Seller’s Knowledge, any other party to such
      policy, is in material breach or default, and no event has occurred that with
      notice or lapse of time would constitute a material breach or default, or permit
      termination, modification, or acceleration, under such policy; and (C) no
      party to such policy has repudiated any material provision of such policy.
      The
      Company does not maintain any material self-insurance arrangements.

     

    (s) Litigation.
      Except
      as set forth on Schedule
      3.1(s),
      neither
      the Company nor any of its assets is subject to any order of, or written
      agreement or memorandum of understanding with, any Governmental Authority,
      and
      there exists no litigation, action, suit, claim, audit or proceeding pending,
      or
      to Seller’s Knowledge, threatened, against or affecting the Company or the
      Company’s business or its assets, at law or in equity or before any Governmental
      Authority. 

     

    (t) Employees.
      To
      Seller’s Knowledge, as of the date of this Agreement, none of the key employees
      listed in Schedule
      3.1(t)
      intends
      to terminate employment with the Company prior to the Closing or during the
      six
      (6) months following the Closing, subject to such key employees’ satisfaction
      with the terms of continued employment offered by Buyer. There are no strikes,
      slowdowns or work stoppages, pending or threatened which involve any employees
      of the Company. The Company has not experienced any strikes, slowdowns or work
      stoppages, or undertaken any plant closings or mass layoffs within the three
      (3)
      year period preceding the date hereof. The Company is not a party to any
      collective bargaining or union contract, and to Seller’s Knowledge, there exists
      no current union organizational effort with respect to any of the Company’s
      employees.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    (u) Employee
      Benefits.

     

    (i) Schedule
      3.1(u) lists
      each Employee Benefit Plan that the Company maintains or to which the Company
      contributes or has any obligation to contribute.

     

    (A) Each
      such
      Employee Benefit Plan (and each related trust, insurance contract, or fund)
      has
      been maintained, funded and administered in accordance with the terms of such
      Employee Benefit Plan, except
      as
      set forth on Schedule
      3.1(u)(i)(A),
      and
      complies in form and in operation in all material respects with the applicable
      requirements of ERISA, the Code, and other applicable laws.

     

    (B) Except
      as
      set forth on Schedule
      3.1(u)(i)(B),
      all
      required reports and descriptions (including Form 5500 annual reports, summary
      annual reports, and summary plan descriptions) have been timely filed and/or
      distributed in accordance with the applicable requirements of ERISA and the
      Code
      with respect to each such Employee Benefit Plan. The requirements of COBRA
      have
      been met in all material respects with respect to each such Employee Benefit
      Plan that
      is
      subject to COBRA and
      each
      Employee Benefit Plan maintained by an ERISA Affiliate that is an Employee
      Welfare Benefit Plan subject to COBRA.

     

    (C) All
      contributions (including all employer contributions and employee salary
      reduction contributions) that are due have been made within the time periods
      prescribed by ERISA, the Code and any other applicable law to each such Employee
      Benefit Plan that is an Employee Pension Benefit Plan and all contributions
      for
      any period ending on or before the Closing Date that are not yet due have been
      made to each such Employee Pension Benefit Plan or accrued in accordance with
      the past custom and practice of the Company. All premiums or other payments
      for
      all periods ending on or before the Closing Date have been paid or accrued
      with
      respect to each such Employee Benefit Plan that is an Employee Welfare Benefit
      Plan. No such Employee Benefit Plan (including any such Employee Benefit Plan
      that is a single employer plan) has an “accumulated funding deficiency” (whether
      or not waived) within the meaning of Section 412 of the Code or Section 302
      of
      ERISA and there are no outstanding funding waivers with respect to any such
      plan.

     

    (D) Each
      such
      Employee Benefit Plan that is intended to meet the requirements of a “qualified
      plan” under Section 401(a) of the Code has received a determination from the
      Internal Revenue Service that such Employee Benefit Plan is so qualified, and,
      except
      as
      set forth on Schedule
      3.1(u)(i)(D),
      to
      Seller’s Knowledge, there are no facts or circumstances that could adversely
      affect the qualified status of any such Employee Benefit Plan.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (E) There
      have been no Prohibited Transactions with respect to any such Employee Benefit
      Plan or any Employee Benefit Plan maintained by an ERISA Affiliate. No Fiduciary
      has any liability for material breach of fiduciary duty or any other material
      failure to act or comply in connection with the administration or investment
      of
      the assets of any such Employee Benefit Plan. No action, suit, proceeding,
      hearing, or investigation with respect to the administration or the investment
      of the assets of any such Employee Benefit Plan (other than routine claims
      for
      benefits) is pending or, to Seller’s Knowledge, threatened.

     

    (F) Except
      as
      set forth on Schedule
      3.1(u)(i)(F),
      the
      Company has given access to Buyer to correct and complete copies of the plan
      documents and summary plan descriptions (or
      in the
      case of an unwritten Employee Benefit Plan, a written summary
      thereof),
      the
      most recent determination letter received from the Internal Revenue Service,
      the
      most recent annual report (Form 5500, with all applicable attachments), and
      all
      related trust agreements, insurance contracts, and other funding arrangements
      which implement each such Employee Benefit Plan.

     

    (G) Neither
      the execution of this Agreement nor the consummation of the transactions
      contemplated by this Agreement will (a) entitle any employee, former employee,
      consultant or director of the Company to any severance pay or benefits or any
      increase in severance pay or benefits upon any termination of employment after
      the date hereof, (b) except as set forth on Schedule
      3.1(u)(i)(G),
      accelerate the time of payment or vesting or result in any payment or funding
      of
      compensation or benefits under, increase the amount payable or result in any
      other material obligation pursuant to, any such Employee Benefit Plan, (c)
      limit
      or restrict the right of Buyer to merge, amend or terminate any such Employee
      Benefit Plan, or (d) result in payments under any such Employee Benefit Plan
      which would not be deductible under Section 162(m) or Section 280G of the
      Code.

     

    (ii) Neither
      the Company nor any ERISA Affiliate contributes to, has any obligation to
      contribute to, or has any material liability under or with respect to any
      Employee Pension Benefit Plan that is a “defined benefit plan” (as defined in
      Section 3(35) of ERISA).

     

    (iii) Neither
      the Company nor any ERISA Affiliate contributes to, has any obligation to
      contribute to, or has any material liability (including withdrawal liability
      as
      defined in Section 4201 of ERISA) under or with respect to any Multiemployer
      Plan.

     

    (iv) Except
      as
      set forth on Schedule
      3.1(u)(iv),
      the
      Company does not maintain, contribute to or have an obligation to contribute
      to,
      or have any material liability or potential liability with respect to, any
      Employee Welfare Benefit Plan providing health or life insurance or other
      welfare-type benefits for current or future retired or terminated employees
      (or
      any spouse or other dependent thereof) of the Company other than in accordance
      with COBRA. Except
      as
      set forth on Schedule
      3.1(u)(iv),
      the
      performance of this Agreement shall not result in any severance, accelerated
      vesting or any similar payments by Company to any employee or third
      party.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    (v) Environmental
      Matters.
      Except
      as set forth on Schedule
      3.1(v):
      

     

    (i) There
      is
      currently no pending, or to the Seller’s Knowledge threatened, claim, action,
      suit, cause of action, proceeding, order or decree, or written notice regarding
      any actual or alleged material violation of or liability under Environmental
      Requirements by the Company.

     

    (ii) The
      Company has given Buyer access to all site conceptual models and written
      assessments, audits, investigations, and sampling or similar reports in its
      possession relating to the environment or the presence or release of any
      hazardous materials, to the extent relating to the Company’s property or current
      or past operations of the Company.

     

    (iii) Except
      as
      would not be reasonably expected to result in a Material Adverse Effect, the
      Company is in compliance with all Environmental Requirements.

     

    (iv) Except
      as
      would not be reasonably expected to result in a Material Adverse Effect, the
      Company has obtained or filed or applied for, and is in compliance with all
      Permits required under any Environmental Requirement and has timely filed for
      any applicable renewals. All such Permits are listed on Schedule
      3.1(y).

     

    (v) This
      Section 3(v) constitutes the sole and exclusive representation and warranty
      regarding Environmental Requirements.

     

    (w) Affiliate
      Transactions.
      Except
      as set forth on Schedule
      3.1(w),
      neither
      Seller nor any current or former Affiliate of the Company or Seller, is now,
      or
      has been during the three (3) year period preceding the date hereof, (i) a
      party
      to any transaction or contract with the Company, (ii) indebted to the Company
      or
      a guarantor or otherwise liable for any liability of the Company, (iii) a holder
      of any interest in any property (whether real, personal or mixed and whether
      tangible or intangible) used in or pertaining to the business of the Company
      or
      (iv) had any relationship as a director, officer, manager or similar such
      position with, or any interest (other than a passive investment in equity
      securities of any Person if such equity securities are registered under the
      Securities Act, provided that such equity investment does not exceed five
      percent (5%) of the outstanding equity securities of such person), direct or
      indirect, in any competitor, supplier, vendor or customer of the
      Company.

     

    (x) Customers
      and Suppliers.
      Schedule
      3.1(x) sets
      forth a true, correct and complete list of (a) the Company’s ten (10) largest
      customers in terms of dollar amounts of sales during the nine-month period
      ended
      August 31, 2007, and the amount for which each such customer was invoiced during
      such period, and (b) the Company’s ten (10) largest (based on dollar amounts of
      purchases) suppliers, vendors or other providers of services from which the
      Company ordered raw materials, supplies and other goods or services during
      the
      nine-month period ended August 31, 2007. No such customer or supplier has
      advised the Company in writing that such customer or supplier was or is
      intending to terminate its relationship with the Company or to materially
      decrease or limit its purchases or supplies.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    (y) Permits.
      Schedule
      3.1(y) contains
      a true, correct and complete list of all active Permits issued to the Company.
      The Company and its assets are in material compliance with all such Permits
      and
      all such Permits are in full force and effect and will be in full force and
      effect as at and through the Closing Date. There has been no change in the
      facts
      or circumstances reported or assumed in the application for or granting of
      such
      Permits that would result in a violation of, or in the invalidity or revocation
      of, any such Permit. The Company has not received notice from any Governmental
      Authority, which remains outstanding, regarding any proposed modification,
      non-renewal, suspension or cancellation of any such Permits, and to Seller’s
      Knowledge, no event has occurred which could reasonably be expected to result
      in
      the modification, non-renewal, suspension or cancellation of any such Permit
      or
      the requirement for additional Permits in order to operate the Company’s assets
      and businesses in the Ordinary Course of Business.

     

    (z) Bank
      Accounts.
      Schedule
      3.1(z) sets
      forth the names and locations of all banks, trust companies, savings and loan
      associations and other financial institutions at which the Company maintains
      any
      safe deposit boxes or accounts (specifying the identifying numbers), and the
      names of all Persons authorized to draw thereon, make withdrawals therefrom
      or
      have access thereto.

     

    3.2 Representations
      and Warranties of Buyer.
      Buyer
      represents and warrants to Seller that:

     

    (a) Organization
      of Buyer; Enforceability; Authorization.
      Buyer
      is a corporation existing and in good standing under the laws of the state
      of
      Delaware. Except as set forth below, Buyer has full power and authority
      (including full corporate or other entity power and authority) to execute and
      deliver this Agreement and to perform its obligations hereunder. Except as
      set
      forth below, the Agreement has been duly approved by all requisite corporate
      action on the part of Buyer, has been duly executed and delivered by Buyer
      and
      constitutes the valid and binding obligation of Buyer, enforceable in accordance
      with its terms, subject to applicable
      bankruptcy, insolvency, reorganization or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally and to
      general principles of equity.

     

    (i) Buyer
      is
      required to file a Proxy Statement (the “Proxy Statement”) with the United
      States Securities and Exchange Commission (“SEC”) concerning the transaction
      described herein and related matters, and following review by the SEC,
      distribute a Proxy Statement to Buyer’s shareholders of record seeking their
      approval of the transactions described herein and related matters. The Closing
      cannot occur without such approval by Buyer’s shareholders as set forth in
      Buyer’s Second Amended and Restated Certificate of Incorporation. 

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (b) Non-contravention;
      Consents.
      Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will (i) violate any order, judgment or
      decree, relating to Buyer’s business or by which Buyer is bound or (ii) except
      as set forth in Section 3.2(a)(i) above violate any provision of Buyer’s Second
      Amended and Restated By-laws or Second Amended and Restated Certificate of
      Incorporation. Except as set forth in Section 3.2(a)(i) above, no consent or
      approval of, no action by or in respect of or filing with, any Person is
      required in connection with the execution, delivery, consummation or performance
      of this Agreement by Buyer.

     

    (c) Brokers’
      Fees.
      Except
      as set forth on Schedule
      3.2(c),
      Buyer
      has no obligation to pay any fees or commissions to any broker, finder or agent
      with respect to the transactions contemplated by this Agreement. Any obligations
      shown on Schedule
      3.2(c)
      shall be
      for the account of Buyer.

     

    (d) Due
      Diligence. Buyer
      has
      been provided with access to the Data Room, has had such time as Buyer deems
      necessary and appropriate to review and analyze such materials and has been
      provided an opportunity to ask questions of Seller with respect to such
      materials. Buyer acknowledges that Seller has not made any representations
      or
      warranties, express or implied, in connection with the transactions contemplated
      in this Agreement, other than the representations and warranties contained
      in
      this Agreement.

     

    (e) Capital. Buyer
      has
      sufficient cash available, lines of credit or other sources or commitments
      of
      immediately available funds to remit the Purchase Price as and when due, to
      meet
      its other obligations under this Agreement and to conduct its business in the
      Ordinary Course of Business.

     

    (f) Investment.
      Buyer
      is acquiring the Shares for Buyer’s own account and not with a view to or for
      resale in connection with any distribution or public offering thereof in
      violation of the Securities Act.

     

    ARTICLE
      IV

     

    COVENANTS
      OF SELLER

     

    4.1 Conduct
      of Company’s Business.
      Except
      as
      set forth on Schedule 4.1,
      during
      the period from the date hereof through the Closing Date, Seller (i) shall,
      and
      shall cause the Company to, conduct the Company’s business in the Ordinary
      Course of Business (including, without limitation, using commercially reasonable
      efforts to preserve goodwill and business relationships between the Company
      and
      its suppliers and customers and perform tank, pipe and process unit maintenance
      and repair) and (ii) shall cause the Company not to, except (a) as otherwise
      expressly provided in this Agreement, (b) in the Ordinary Course of Business
      or
      (c) with the written approval of Buyer:

     

    (a) Obligations
      for Borrowed Money.
      (i) Create, incur or assume any debt (including obligations in respect of
      capital leases) or any debt for money borrowed (whether long- or short-term);
      (ii) assume or guarantee, or otherwise become liable or responsible
      (whether directly, contingently or otherwise) for the obligation of any other
      Person; or (iii) make any loans, advances or capital contributions to any
      other Person;

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (b) Employee
      Matters.
      (i)
      Enter into or modify any collective bargaining agreement, except as required
      by
      applicable law, (ii) commit itself to any additional Employee Plan, or
      employment or consulting agreement with a Person, or to amend any of such Plans
      or agreements, except as required by applicable law, (iii) grant to any current
      or former employee or officer of the Company any increase in wages or bonus,
      severance, profit sharing, retirement, deferred compensation, insurance or
      other
      compensation or benefits, or (iv) enter into any new or modify any existing
      retention or similar agreement with any of the Company’s current or former
      directors, officers and employees;

     

    (c) Merger;
      Sale of Assets.
      (i)
      Merge or consolidate with any Person, (ii) enter into any agreement with respect
      to voting of the Company’s capital stock; (iii) sell, transfer, license or
      otherwise dispose of or agree to sell, transfer, license or otherwise dispose
      of
      any assets of the Company used in the conduct of its business, except inventory
      as would occur in the Ordinary Course of Business;

     

    (d) Commitments.
      (i)
      Enter, terminate, modify or amend any Material Contract, other than Material
      Agreements with customers and/or suppliers made in the Ordinary Course of
      Business; or (ii) enter into any other agreements, commitments, contracts or
      undertakings relating to the conduct of the Company’s business;

     

    (e) Leases.
      Terminate, modify or amend any of the Leases or enter into any new
      Leases;

     

    (f) Encumbrances. 
      Encumber
      or grant or create a Lien on any of the assets (including Real Property) used
      by
      the Company in the conduct of its business and shall have removed from title
      prior to Closing items 50 and 59 as shown on the Preliminary Title Report
      contained in the Data Room; 

     

    (g) Insurance.
      Cause
      or permit any of the policies of insurance listed on Schedule 3.1(r)
      to
      terminate, lapse or be canceled, unless equivalent replacement policies, without
      lapse of coverage, shall be put in place;

     

    (h) Litigation.
      Enter
      into any compromise or settlement of any litigation, action, suit, claim,
      proceeding or investigation, except settlements made by insurers, involving
      amounts in excess of $50,000 or non monetary commitments that would extend
      after
      the Closing;

     

    (i) Representations
      and Warranties.
      Take any
      action the taking of which, or omit to take any action the omission of which,
      would cause any of the representations and warranties contained in
      Section 3.1 to fail to be true and correct as of the Closing as though made
      at and as of the Closing;

     

    (j) Intellectual
      Property.
      Permit
      the loss, transfer, lapse or abandonment of any Company Intellectual
      Property;

     

    (k) Taxes.
      Make any
      material Tax election for calendar year 2007 or enter into any settlement or
      compromise of any Tax liability
      in
      excess of $100,000,
      or
      change any annual Tax accounting period or method of Tax accounting, enter
      into
      any closing agreement relating to any Tax in excess of $100,000 or consent
      to
      any extension or waiver of the statute of limitations period applicable to
      any
      material Tax claim or assessment;

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    (l) Charter
      Documents.
      Amend or
      change the Articles of Incorporation or Bylaws of the Company;

     

    (m) Investments.
      Except
      for cash equivalent investments or investments in publicly traded securities,
      made consistent with past practice, directly or indirectly acquire, make any
      investment in, or make any capital contributions to, any Person;

     

    (n) Accounting.
      Except
      as may be required as a result of a change in applicable law or in GAAP, (i)
      change any of the accounting methods, practices or principles used by it, (ii)
      write up, write down or write off the book value of any of its assets except
      the
      write-off of individual accounts receivable in the Ordinary Course of Business
      or (iii) vary its inventory practices in any material respect from its current
      practices;

     

    (o) Capital
      Expenditures.
      Make any
      new capital expenditure or expenditures (including leases and in-licenses),
      or
      enter into any contract or agreement providing for capital expenditures which,
      in the aggregate, are in excess of $1,000,000 and not set forth in Schedule
      3.1(p) of
      the
      Disclosure Schedule;

     

    (p) Working
      Capital.
      Alter
      the payment terms of its trade receivables or trade payables;

     

    (q) Waiver
      of Claims.
      Waive,
      release or assign any claims or rights of material value; or

     

    (r) Commitments. Agree
      or
      commit to do any of the foregoing.

     

    (s) Casualty
      or Condemnation. In
      the
      event that, prior to the Closing Date, all or any portion of the Company’s
      assets are damaged or destroyed by fire or other casualty for which the
      associated repair or replacement costs to the Company or associated materially
      adverse impact on the earnings of the Company could reasonably be expected
      to
      exceed $10,000,000 (a “Casualty”) or
      taken by condemnation or eminent domain or by agreement in lieu thereof with
      any
      Person or Governmental Authority authorized to exercise such rights
      (a “Taking”),
      Seller
      shall promptly notify Buyer thereof.

     

    (i) In
      the
      event of a Casualty or Taking between the Date of this Agreement and the Closing
      Date, Seller shall elect (i) to repair or replace, after reasonable consultation
      with Buyer, or make adequate provision for the repair or replacement of the
      affected part of the Company at Seller’s cost prior to the Closing, in which
      case Buyer’s obligation to effect the Closing shall not be affected, but the
      Closing Date, at Buyer’s option, shall be deferred until three Business Days
      after repairs are completed and/or (ii) to negotiate with Buyer to reduce the
      Purchase Price by an amount agreed to by Seller and Buyer to reflect the cost
      to
      repair or replace the affected part of the Company (the “Repair
      Costs”),
      in
      which case, in the event of a Repair Cost Dispute, the Closing Date shall be
      deferred as provided
      herein.

     

    (ii) If
      Seller
      and Buyer agree on the Repair Costs within 15 days of Buyer’s receipt of
      Seller’s notice of the Casualty or Taking (the “Repair
      Negotiation Period”),
      Buyer’s obligation to affect the Closing shall not be affected, but the Purchase
      Price shall be reduced by the Repair Costs so agreed.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    (iii) If
      Seller
      and Buyer do not agree on the Repair Costs within the Repair Negotiation Period
      (a “Repair
      Cost Dispute”),
      either party may request a reasonably mutually acceptable engineering firm
      to
      evaluate the affected part of the Company and deliver to Buyer and Seller its
      written estimate of the Repair Costs (the “Third-Party
      Estimate”)
      within
      15 days after the end of the Repair Negotiation Period.

     

    (iv) If
      the
      Third-Party Estimate is less than $10,000,000, Buyer’s obligation to effect the
      Closing shall not be affected and the parties shall submit the Repair Cost
      Dispute to dispute resolution as set forth in Article IX below for resolution
      after the Closing, with a post-Closing adjustment to the Purchase Price equal
      to
      the finally-determined Repair Costs.

     

    (v) If
      the
      Third-Party Estimate is equal to or greater than $10,000,000 but less than
      $25,000,000, Buyer’s obligation to effect the Closing shall not be affected, but
      the Purchase Price shall be reduced by the amount of the Third-Party Estimate
      and the Parties shall submit the Repair Cost Dispute to dispute resolution
      under
      Article IX below after the Closing, with a post-Closing adjustment of the
      Purchase Price equal to the difference between the Third-Party Estimate and
      the
      finally-determined Repair Costs.

     

    (vi) If
      the
      Third-Party Estimate is equal to or greater than $25,000,000, Buyer may elect,
      by giving Seller written notice of election within 15 days of receipt of
      the Third-Party Estimate, to terminate this Agreement without further obligation
      to Seller or to proceed in accordance with Section 4.1(s)(v) above.

     

    (vii) In
      the
      event of any reduction in the Purchase Price in connection with a Taking, Seller
      shall be entitled to collect from Buyer or any condemnor the entire award(s)
      that may be made in any such proceeding or the amount of any insurance coverage,
      without deduction. 

     

    4.2 Exclusivity.
      From the
      date hereof through and until the earlier of termination of this Agreement
      pursuant to Article VIII or the Closing, Seller shall not, and shall cause
      the Company not to, directly or indirectly, (a) solicit, initiate or encourage
      any inquiries, proposals or offers from any Person relating to any acquisition
      of the Shares or the assets or business of the Company, or any merger,
      consolidation or business combination with the Company, or (b) with respect
      to
      any effort or attempt by any other Person to do or seek any of the foregoing,
      (i) participate in any discussions or negotiations, (ii) furnish to any other
      Person any information with respect to, or afford access to the properties,
      books or records of or relating to, the Company, or (iii) otherwise cooperate
      in
      any way with, or assist or participate in, or facilitate or encourage any such
      effort. Seller shall promptly notify Buyer if any such proposal or offer from
      any Person with respect thereto is made.

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    4.3 Full
      Access; Title Report.
      Prior to
      the Closing, Buyer shall be entitled, and Seller shall permit Buyer, to conduct
      such investigation of the condition (financial or otherwise), business, assets,
      properties, operations and prospects of the Company and its business as Buyer
      shall reasonably deem appropriate; provided,
      however,
      that
      any such investigation shall be conducted in such a manner as not to interfere
      unreasonably with the operation of the Company’s business. Two days prior to
      Closing, Seller shall, at its expense, deliver to Buyer an updated preliminary
      title report evidencing no new Liens or encumbrances. If Buyer elects to obtain,
      at its expense, a new or updated title policy or survey in respect of the
      Company’s Real Property, Seller agrees to cooperate with Buyer, including
      without limitation, by delivering copies of any existing surveys, granting
      access and executing and delivering customary title affidavits as may be
      reasonably requested by Buyer or a title company.

     

    ARTICLE
      V

     

    OTHER
      COVENANTS

     

    5.1 Standby
      Letters of Credit.
      Buyer
      shall either (i) arrange for replacement standby letters of credit as to all
      standby letters of credit that the Company has outstanding as of the Closing
      Date with Wells Fargo Bank, N.A. (the “Current
      LOCs”),
      effective as of the Closing Date, in which case Seller shall cancel all Current
      LOCs, effective as of the Closing Date or (ii) Buyer shall provide to Wells
      Fargo Bank, N.A. standby letters of credit, to the satisfaction of Wells Fargo
      Bank, N.A. in its sole discretion, to secure the Current LOCs, in which case
      all
      Current LOCs shall remain in effect until maturity. The Parties acknowledge
      that
      any obligation for the payment of purchases that is outstanding as of the
      Closing Date and is secured by a Current LOC shall be included as “Accounts
      Payable” under Schedule
      2.6(c)
      attached
      hereto. 

     

    5.2 Further
      Assurances.
      Each
      Party shall use its best efforts to implement the provisions of this Agreement.
      For such purpose, each Party, at the request of the other Party, at the Closing,
      shall, without further consideration, promptly execute and deliver, or cause
      to
      be executed and delivered, to the other Party such instruments in addition
      to
      those required by this Agreement, in form and substance satisfactory to the
      other Party, and take all such other actions, as the other Party may reasonably
      deem necessary or desirable to implement any provision of this
      Agreement.

     

    5.3 Expenses. Each
      Party shall bear the legal, accounting and other expenses incurred by such
      Party
      in connection with the negotiation, preparation and execution of the Transaction
      Documents and the transactions contemplated hereby and thereby, as the case
      may
      be. 

     

    5.4 Transfer
      Taxes. All
      excise, use, transfer, stamp, documentary, filing, recordation and other similar
      Taxes which may be payable in connection with the transactions contemplated
      by
      this Agreement, together with any interest, additions or penalties with respect
      thereto (“Transfer
      Taxes”)
      shall
      be borne by Buyer and Seller equally. Each Party hereby agrees to file all
      necessary documentation in connection with the payment and reporting of Transfer
      Taxes.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    5.5 Press
      Releases and Disclosure. Neither
      Seller, Buyer nor their respective Affiliates shall issue or cause publication
      of any press release or other announcement or public communication with respect
      to this Agreement or the transactions contemplated hereby or otherwise disclose
      this Agreement or the transactions contemplated hereby to any third party (other
      than attorneys, advisors, accountants and debt providers/lenders to Seller
      or
      Buyer) without the consent of both Parties hereto, which consent shall not
      be
      unreasonably withheld; provided,
      however,
      that
      nothing herein shall prohibit any Party from issuing or causing publication
      of
      any regulatory filing (e.g., Form 8-K) or shareholder Proxy Statement (including
      as described in Section 3.2(a)(i) above), press release, announcement or public
      communication to the extent that such party deems such action to be required
      by
      applicable law or stock exchange rule
      or
      necessary to perform its obligations under this Agreement; provided,
      further,
      that
      such Party shall, whenever practicable consult with the other Party concerning
      the timing and content of such press release, announcement or communication
      before the same is issued or published.

     

    5.6 Government
      and other Regulatory Approvals.

     

    (a) Each
      Party shall, and shall cause its appropriate respective Affiliates to, use
      all
      commercially reasonable efforts to obtain any authorizations, consents,
      novations, orders and approvals of, with or by any Governmental Authority
      necessary for the performance of the respective obligations under the
      Transaction Documents, and the consummation of the transactions contemplated
      hereby and thereby, including without limitation, in connection with the HSR
      Act
      and shall cooperate fully with each other in all reasonable respects in promptly
      seeking to obtain such authorizations, consents, orders and approvals. Neither
      Seller nor Buyer shall take any action that will have the effect of delaying,
      impairing or impeding the receipt of any required regulatory
      approvals.

     

    (b) Without
      limiting the foregoing, (i) as soon as reasonably practicable following the
      date
      hereof, and in any event within ten (10) days after the date hereof, each Party
      shall, and shall cause its appropriate respective Affiliates to, promptly make
      or cause to be made any and all required filings, reports and notices (A) with
      the Federal Trade Commission and the Antitrust Division of the United States
      Department of Justice under the HSR Act, and will request early termination
      of
      the waiting period required under the HSR Act; and (B) to the extent required,
      with the appropriate Governmental Authorities under any applicable foreign
      antitrust or competition Laws, and shall use all commercially reasonable efforts
      to obtain any consents required thereunder as promptly as is reasonably
      possible. 

     

    5.7 Proxy
      Statement.
      The
      Proxy
      Statement (which shall be prepared and filed with the SEC), shall request that
      Buyer's shareholders adopt and approve this Agreement and the transactions
      contemplated herein, on the terms and conditions described herein, in accordance
      with Buyer’s Second Amended and Restated Certificate of Incorporation and shall
      contain the recommendation of the board of directors of Buyer to do same. Buyer
      shall provide the Company with a reasonable opportunity (but not less than
      five
      (5) Business Days) to review and comment on the Proxy Statement (including
      any
      amendment or supplement thereto) prior to the filing thereof for SEC review
      and
      approval.

    
      
        
        

      

      
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    ARTICLE
      VI

     

    CONDITIONS
      TO OBLIGATION TO CLOSE

     

    6.1 Conditions
      to Buyer’s Obligation.
      The
      obligation of Buyer to consummate the transactions provided for by this
      Agreement is subject to the satisfaction, on or prior to the Closing Date,
      of
      each of the following conditions:

     

    (a) Each
      of
      the representations and warranties of Seller made in Section 3.1,
      (i) if specifically qualified by materiality, shall be true and complete as
      so qualified and (ii) if not qualified by materiality, shall be true and
      correct in all material respects, in each case as of the date hereof and as
      of
      the Closing Date as though made at such time, except where any such
      representation or warranty is specific as of a specific earlier date, in which
      event it shall remain true and correct (as qualified) as of such earlier
      date.

     

    (b) Seller
      shall have performed and complied in all material respects with all covenants,
      obligations and agreements required to be performed or complied with by it
      in
      connection herewith on or prior to the Closing Date.

     

    (c) At
      the
      Closing, Seller shall have delivered to Buyer a Certificate signed by the
      President or a Vice President of Seller, and dated the Closing Date, to the
      effect that to the best of the Knowledge of Seller the conditions specified
      in
      Sections 6.1(a) and (b) have been fulfilled.

     

    (d) At
      the
      Closing, the Seller or Company shall have delivered to Buyer copies of (i)
      the
      Company’s Articles of Incorporation and (ii) the Company’s Bylaws, each
      certified by the corporate Secretary of the Company to be true, correct,
      complete and in full force and effect and unmodified as of the Closing
      Date.

     

    (e) At
      the
      Closing, the Seller or Company shall have delivered to Buyer Certificates of
      corporate good standing for Seller and the Company from the State of California,
      dated not more than ten (10) days prior to the Closing.

     

    (f) The
      Seller or Company shall have procured all of the third-party consents set forth
      on Schedule 6.1(f),
      the
      applicable waiting period under the HSR Act shall have expired or been
      terminated and all foreign anti-trust approvals, if required, shall have been
      obtained.

     

    (g) No
      litigation, action, suit, investigation, claim or proceeding challenging the
      legality of, or seeking to restrain, prohibit or materially modify, the
      transactions provided for in this Agreement shall have been instituted and
      not
      settled or otherwise terminated (other than any litigation, action, suit,
      investigation, claim or proceeding instigated by one or more of Buyer’s
      shareholders, which shall not constitute a condition to Buyer’s obligation to
      consummate the transactions provided for by this Agreement).

     

    (h) Buyer
      shall have received from Jones Day, counsel to Seller and the Company, an
      opinion in form and substance as set forth in Exhibit
      B
      attached
      hereto, addressed to Buyer and dated as of the Closing Date.

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    (i) Buyer
      shall have received the resignations, effective as of the Closing, of each
      director and officer of the Company, as requested by Buyer.

     

    (j) Seller
      shall have furnished Buyer with an affidavit certifying as to Seller’s
      non-foreign status in accordance with the requirements of Section 1445 of the
      Code.

     

    (k) Seller
      shall have paid in full and the Company shall be free of all
      Indebtedness.

     

    (l) The
      Seller or the Company shall deliver or cause to be delivered to the Buyer in
      form and substance satisfactory to the Buyer acting reasonably the share
      certificates representing the Shares issued in the name of the Buyer, together
      with evidence reasonably satisfactory to the Buyer that the Buyer is entered
      upon the books of the Company as the holder and owner of the
      Shares.

     

    (m) Buyer’s
      shareholders shall have approved the transactions described herein as set forth
      in Section 3.2(a)(i) above.

     

    (n) Seller
      shall have executed the Indemnity Escrow Agreement. 

     

    6.2 Conditions
      to Seller’s Obligation.
      The
      obligation of Seller to consummate the transactions provided for by this
      Agreement is subject to the satisfaction, on or prior to the Closing Date,
      of
      each of the following conditions:

     

    (a) Each
      of
      the representations and warranties of Buyer made in Section 3.2, (i) if
      specifically qualified by materiality, shall be true and complete as so
      qualified and (ii) if not qualified by materiality, shall be true and correct
      in
      all material respects, in each case as of the date hereof and as of the Closing
      Date as though made at such time, except where any such representation or
      warranty is specific as of a specific earlier date, in which event it shall
      remain true and correct (as qualified) as of such earlier date.

     

    (b) Buyer
      shall have performed and complied in all material respects with all covenants,
      obligations and agreements required to be performed or complied with by it
      in
      connection herewith on or prior to the Closing Date.

     

    (c) At
      the
      Closing, Buyer shall have delivered to Seller a Certificate signed by the CEO,
      President or a Vice President of Buyer, and dated the Closing Date, to the
      effect that to the best of the knowledge and belief of such officer the
      conditions specified in Sections 6.2(a) and (b) have been
      fulfilled.

     

    (d) At
      the
      Closing, Buyer shall have delivered to Seller copies of Buyer’s Second Amended
      and Restated By-laws and Second Amended and Restated Certificate of
      Incorporation, each certified by the corporate Secretary of Buyer to be true,
      correct, complete and in full force and effect and unmodified as of the Closing
      Date.

     

    (e) At
      the
      Closing, Buyer shall have delivered to Seller Certificates of corporate good
      standing for Buyer from the State of Delaware, dated not more than ten (10)
      days
      prior to the Closing.

     

    
      
        
        

      

      
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    (f) The
      Seller or Company shall have procured all of the third-party consents set forth
      on Schedule 3.1(f),
      the
      applicable waiting period under the HSR Act shall have expired or been
      terminated and all foreign anti-trust approvals, if required, shall have been
      obtained.

     

    (g) No
      litigation, action, suit, investigation, claim or proceeding challenging the
      legality of, or seeking to restrain, prohibit or materially modify, the
      transactions provided for in this Agreement shall have been instituted and
      not
      settled or otherwise terminated.

     

    (h) Seller
      shall have received from Jeffrey Dill, counsel to Buyer, an opinion in form
      and
      substance as set forth in Exhibit
      C
      attached
      hereto, addressed to Seller and dated as of the Closing Date.

     

    (j) Buyer
      shall have executed the Indemnity Escrow Agreement.

     

    ARTICLE
      VII

     

    SURVIVAL;
      INDEMNIFICATION

     

    7.1 Survival.
      Except
      as otherwise set forth herein, the representations, warranties, covenants,
      obligations and agreements of the Parties contained in this Agreement shall
      survive the Closing for a period of eighteen (18) months; provided,
      however,
      that in
      the case of claims arising out of breaches of the representations and warranties
      set forth in Sections 3.1(f), (g) (as to the first sentence only), (l) and
      (v),
      such representations and warranties shall survive the Closing for a period
      of
      thirty six (36) months; provided,
      further,
      that in
      the case of claims arising out of breaches of the representations and warranties
      set forth in Sections 3.1(a), (b), (c), (d) and (e) and Sections 3.2(a) and
      (c),
      such representations and warranties shall not expire. In the event notice of
      any
      claim for indemnification under Sections 7.2 or 7.3 has been given prior to
      the
      foregoing expiration dates, the representations and warranties and covenants
      that are subject of such indemnification claim shall survive with respect to
      such claim until the final disposition thereof.

     

    7.2 Indemnification
      by Buyer.
      Upon
      the terms and subject to the conditions set forth in this Agreement, from and
      after the Closing, Buyer shall indemnify, defend and hold Seller, its
      Affiliates, and their respective directors, officers, representatives, employees
      and agents (and their successors and assigns) harmless from and against any
      and
      all Losses that may be incurred by Seller resulting or arising from or related
      to, or incurred in connection with any breach of any representation, warranty,
      covenant, obligation or agreement made by Buyer contained in this
      Agreement.

     

    7.3 Indemnification
      by Seller.
      Upon the
      terms and subject to the conditions set forth in this Agreement, from and after
      the Closing, Seller shall indemnify, defend and hold Buyer, its Affiliates,
      and
      their respective directors, officers, representatives, employees and agents
      (and
      their successors and assigns) harmless from and against any and all Losses
      that
      may be incurred by Buyer resulting or arising from, related to or incurred
      in
      connection with any breach of any representation, warranty, covenant, obligation
      or agreement made by Seller contained in this Agreement.

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    7.4 Limitations
      on Indemnification.
      Seller
      shall not be required to indemnify, defend or hold Buyer harmless from and
      against any Losses under Section 7.3 unless and until the aggregate amount
      of
      such Losses (each of which individually exceeds $10,000) equals One Percent
      (1%)
      of the Closing Purchase Price (the “Floor”),
      in
      which event Seller shall be obligated to indemnify Buyer solely for Losses
      incurred by Buyer in excess of the Floor, and only up to ten percent (10%)
      of
      the Closing Purchase Price (the “Cap”),
      as
      set forth more fully in Sections 7.5(c)(ii)(C) and (D) and in the Indemnity
      Escrow Agreement.

     

    7.5 Method
      of Asserting Claims.

     

    (a) Notice
      of Claims; Time for Claims.
      In the
      event that Buyer wishes to make a claim for Losses under Section 7.3 (a
“Claim”),
      Buyer
      shall give a written notice (a “Notice
      of Claim”)
      to
      Seller and the Escrow Agent (to the extent the Indemnity Escrow Agreement
      remains in full force and effect at the time such Notice of Claim is made).
      The
      Notice of Claim shall (i) describe the nature of the Claim being made and (ii)
      if known, state the aggregate dollar amount of such Claim (and if not known,
      estimate to the extent reasonably practical the aggregate dollar amount of
      such
      Claim; provided,
      however,
      that
      any disputes in respect of such amount that Buyer and Seller cannot resolve
      between themselves shall be resolved in accordance with Section 9.2). If
      such notice relates to any claim or potential claim or the commencement of
      any
      action, suit or legal, administrative or arbitral proceedings or investigation
      before or by any individual, corporation, governmental authority or other entity
      other than Buyer (a “Third
      Party Claim”)
      which
      could give rise to a Loss, Buyer shall give Seller and the Escrow Agent written
      notice describing the Third Party Claim within thirty (30) days of receipt
      of
      actual notice of such Third Party Claim (or such shorter period as is reasonably
      practical and may be warranted under the circumstances (e.g., in the case of
      emergency proceedings or when a response to a notification must be given within
      a period in order to avoid a forfeiture of rights)) to permit Seller to exercise
      its rights hereunder. Whether the Notice of Claim relates to a direct Claim
      or a
      Third Party Claim, Buyer’s failure to notify in the manner set forth herein
      shall not affect any of its rights hereunder, but Seller shall be obligated
      to
      Buyer only up to that amount of the Losses which would not have been increased
      but for Buyer’s failure to give timely notice.

     

    (b) Defense
      of Third Party Claims.

     

    (i) From
      and
      after the delivery of a Notice of Claim in respect of a Third Party Claim,
      and
      until such time as it is determined or agreed that Seller has no liability
      to
      Buyer in respect thereof, Seller shall have the right (but not the obligation)
      to assume the defense of such Third Party Claim and to retain (at Seller’s
      expense) counsel of its choice, reasonably acceptable to Buyer, to represent
      Buyer, provided,
      however,
      that
      this option shall not be available to Seller for Third Party Claims (i) which
      may result in criminal proceedings, injunctions or other equitable remedies
      in
      respect of Buyer or its Affiliates or (ii) also involves Seller or its
      Affiliates as a party and counsel to Seller determines in good faith that joint
      representation would give rise to a conflict of interest, for which defense
      shall be assumed by Buyer with the right to retain (at Seller’s expense) counsel
      of its choice, reasonably acceptable to Seller. Seller shall have twenty (20)
      days from the receipt of the Notice of Claim to notify Buyer whether or not
      it
      desires to defend such Third Party Claim failing which Seller shall be deemed
      to
      have waived such option and be responsible for costs and fees incurred by Buyer
      for defense of such Third Party Claim. The Party assuming defense of a Third
      Party Claim is hereinafter referred to as the “Controlling
      Party”
      and the
      other Party as the “Co-Defendant”.

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    (ii) In
      defending the Third Party Claim, the Controlling Party shall act in good faith
      and use commercially reasonable means and defenses available to it given due
      consideration to the interests of Buyer. The Co-Defendant shall take such
      actions as reasonably necessary or appropriate under the circumstances to
      cooperate with the Controlling Party and its counsel in defending such Third
      Party Claim. The Controlling Party shall keep the Co-Defendant reasonably
      informed of the development of the underlying claim. In the case where the
      Buyer
      is the Co-Defendant, the Co-Defendant shall have the right to participate,
      at
      its sole cost and expense in the defense of a Third Party Claim using its own
      counsel (unless (x) the Controlling Party shall not have employed counsel in
      the
      defense of such Claim after ten (10) days notice; or (y) such Co-Defendant
      shall
      have determined in good faith that joint representation would give rise to
      a
      conflict of interest, and in either of the foregoing events such fees and
      expenses shall be borne by the Controlling Party).

     

    (iii) Other
      than settlements, compromises or agreements involving solely monetary payment
      obligations (in any amount in respect of settlement, compromises or agreements
      being made by Seller, and in any amount under Ten Thousand US Dollars (USD
      10,000) in respect of those being made by Buyer), neither the Co-Defendant
      nor
      the Controlling Party shall conclude any settlements, compromises, agreements
      or
      withdrawals in response to any claims, verifications, or legal or administrative
      proceedings in which it may be involved without the prior written consent of
      the
      other party, which consent shall not be unreasonably withheld, in particular
      with respect to the settlement of disputes with customers, for which customary
      practice and the commercial relationship shall be taken into account and
      involving the assets, business or operations of the Company. 

     

    (c) Objection
      to Notice of Claim; Payment.

     

    (i) If
      Seller
      wishes to object to a Claim or Third Party Claim made in a Notice of Claim,
      Seller shall give a written objection (an “Objection”)
      to the
      Escrow Agent (to the extent the Indemnity Escrow Agreement remains in full
      force
      and effect at the time such Objection is made) and Buyer within fifteen (15)
      Business Days after receipt of such Notice of Claim expressing such Objection
      and explaining in reasonable detail and in good faith the basis thereof. Buyer
      and Seller shall meet within fifteen (15) Business Days following receipt by
      Buyer of Seller’s Objection to agree on the rights of the respective parties
      with respect to each of such Claim or Third Party Claim. If Seller and Buyer
      should reach an agreement, a memorandum setting forth such agreement shall
      be
      prepared and signed by both parties and if need be shall be furnished to the
      Escrow Agent. If Buyer and Seller do not reach such an agreement within such
      fifteen (15) Business Day period, then the matter shall be resolved in
      accordance with Section 9.2.

     

    
      
        
        

      

      
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    (ii) Subject
      to Sections 7.4, 7.6 and 7.7, the payment of any sum due or payable by
      Seller under this Article VII will be made:

     

    (A) in
      connection with a Third Party Claim, no later than fifteen (15) Business Days
      (a) after expiry of such fifteen (15) Business Day period set forth in
      Section 7.5(c)(i) if Seller fails to respond to the relevant Notice of
      Claim, (b) after a final non appealable award against Buyer has been rendered,
      (c) after final settlement of a Notice of Claim has been reached, as determined
      by mutual agreement of Buyer and Seller in accordance with
      Section 7.5(c)(i) or (d) after Seller is determined to be under the
      obligation to pay the relevant Loss as resolved between Buyer and Seller
      pursuant to Section 9.2;

     

    (B) in
      connection with a direct Claim, no later than fifteen (15) Business Days (a)
      after expiry of such fifteen (15) Business Day period set forth in
      Section 7.5(c)(i) if Seller fails to respond to the relevant Notice of
      Claim, (b) after final settlement of a Notice of Claim has been reached, as
      determined by mutual agreement of Buyer and Seller in accordance with
      Section 7.5(c)(i) or (c) after Seller is determined to be under the
      obligation to pay the relevant Loss as resolved between Buyer and Seller
      pursuant to Section 9.2;

     

    provided,
      however,
      that
      the relevant payments shall be made:

     

    (C) first,
      until the expiration of the Indemnity Escrow Agreement and in accordance with
      the terms thereof, by the Escrow Agent to Buyer in cash credited from the Escrow
      Account (as defined in the Indemnity Escrow Agreement) in the amount of such
      Loss incurred by Buyer; and 

     

    (D) second,
      following the expiration of the Indemnity Escrow Agreement, or if the Losses
      exceed in whole or in part the Escrow Amount (only to the extent Seller’s
      liability in respect of such Loss is not subject to the limitations set forth
      in
      Section 7.4), by Seller to Buyer in the amount of such Loss incurred by Buyer
      which cannot be discharged through payment made by the Escrow Agent.

     

    7.6 Duty
      to Mitigate.
      Buyer
      shall take all commercially reasonable steps to mitigate any Loss that it may
      incur, including making and diligently pursuing such claims as may be reasonably
      justified against any third party or pursuant to any insurance policies covering
      the Buyer, provided, however, that nothing herein shall obligate Buyer to
      maintain any particular insurance.

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    7.7 Tax
      Effect of Indemnification Payments; Insurance.

     

    (a) Any
      Tax
      or other Loss for which indemnification is provided under this Agreement shall
      be reduced (at the time and in the manner discussed in Section  7.7(b)) by
      any actual Tax Benefit arising from the payment of the claim that gave rise
      to
      Seller making an indemnity payment. If Buyer realizes any such Tax Benefit,
      directly or indirectly, then Buyer shall pay an amount to Seller equal to the
      Tax Benefit realized, provided that in the event an amount payable by Seller
      is
      reduced by the amount of such Tax Benefit and there is a disallowance of such
      Tax Benefit by a taxing authority (based upon a reasonable and good faith
      determination by Buyer) such that Buyer is not entitled to all or any portion
      of
      such Tax Benefit, then Seller shall pay to Buyer the amount of the Tax Benefit
      that was disallowed. For
      purposes of this Agreement, the term “Tax
      Benefit”
      means
the
      amount of the reduction in the liability for Taxes (including through recoveries
      of Taxes through the carryover of net operating losses or reductions in Taxes
      attributable, in whole or in part, to basis adjustments) as a result of the
      payment or accrual by any Person of any loss, expense, other amount or
      tax.

     

    (b) A
      Tax
      Benefit will be considered to be realized for purposes of this Section 7.7
      on (A) the date on which the Tax Benefit is received as a refund of Taxes,
      or
      (B) to the extent that the Tax Benefit is not received as a refund of Taxes
      but rather is claimed as an item that reduces liability for Taxes (on a with
      and
      without basis), the due date (including extensions) of the Tax Return that
      reflects such change in liability for Taxes.

     

    (c) In
      determining the amount of a Loss there shall also be deducted from the amount
      to
      be paid an amount equal to the proceeds from third parties, including insurance
      proceeds, and interest thereon received directly by Buyer or received by a
      third
      party (such as a claimant, vendor or lender) in respect of such
      matter.

     

    7.8 Purchase
      Price Adjustments.
      Any
      indemnification payment made pursuant to this Agreement shall be treated as
      an
      adjustment to the Purchase Price for all Tax purposes. 

     

    ARTICLE
      VIII

     

    TERMINATION

     

    8.1 Termination.
      This
      Agreement and the transactions contemplated hereby may be terminated at any
      time
      prior to the Closing only if one or more of the following conditions occurs
      and
      the effective date of such termination shall be referred to as the “Termination
      Date”:

     

    (a) Mutual
      Consent.
      By
      mutual written consent of Seller and Buyer;

     

    (b) Closing
      Date.
      By
      Seller or Buyer if the Closing shall not have occurred on or before the
      45th
      (forty-fifth) day following the vote by Buyer’s shareholders approving this
      Agreement and the related transactions as set forth in Section 5.7, unless
      an
      extension thereto is mutually agreed to in writing by Buyer and
      Seller;

     

    (c) Seller
      Misrepresentation or Breach.
      By
      Buyer, if there has been a material breach by Seller of any of its
      representations, warranties, covenants, obligations or agreements set forth
      in
      this Agreement; provided,
      however,
      that
      Buyer shall be required to provide Seller with written notice of such breach
      and
      Seller shall have thirty (30) days from receipt thereof to cure such
      breach;

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

    (d) Buyer
      Misrepresentation or Breach.
      By
      Seller, if there has been a material breach by Buyer of any of its
      representations, warranties, covenants, obligations or agreements set forth
      in
      this Agreement; provided,
      however,
      that
      Seller shall be required to provide Buyer with written notice of such breach
      and
      Buyer shall have thirty (30) days from receipt thereof to cure such
      breach;

     

    (e) Court
      Order. By
      Seller
      or Buyer, after giving written notice, if consummation of the transactions
      contemplated hereby shall violate any non appealable final order, decree or
      judgment of any court or Governmental Authority having competent
      jurisdiction;

     

    (f) Buyer’s
      Conditions.
      By
      Buyer, if the Closing shall not have occurred or has been delayed because any
      condition precedent to Buyer’s obligation to effect the Closing as set forth in
      Section 6.1 is not timely satisfied, or shall have become incapable of
      fulfillment, and such condition is not waived, if waivable, by Buyer on or
      prior
      to the Termination Date, unless such failure of a condition results primarily
      from Buyer’s breach of a representation, warranty or covenant hereunder;
      and

     

    (g) Seller’s
      Conditions.
      By
      Seller, if the Closing shall not have occurred or has been delayed because
      any
      condition precedent to Seller’s obligation to effect the Closing as set forth in
      Section 6.2 is not satisfied, or shall have become incapable of
      fulfillment, and such condition is not waived, if waivable, by Seller on or
      prior to the Termination Date unless such failure of a condition results
      primarily from Seller’s breach of a representation, warranty or covenant
      hereunder.

     

    8.2 Effect
      of Termination. 

     

    (a) Obligations
      Upon Termination; No Waiver.
      If this
      Agreement is terminated pursuant to Section 8.1, written notice thereof
      shall forthwith be given to the other Party and this Agreement shall thereafter
      become void and have no further force and effect and all further obligations
      of
      Seller and Buyer under this Agreement shall terminate without further liability
      of Seller or Buyer, except that (a) Buyer shall return all documents, work
      papers and other material relating to Seller, the Company, the Company’s
      business and the transactions contemplated hereby, whether so obtained before
      or
      after the execution hereof, to Seller; (b) the provisions of Section 5.3,
      this Section 8.2 and Article IX shall survive such termination; (c)
      such termination shall not constitute a waiver by any party of any claim it
      may
      have for actual damages caused by reason of, or relieve any party from liability
      for, any breach of this Agreement prior to termination under
      Section 8.1.

     

    (b) Payment
      Upon Certain Termination.
      On the
      date of the execution of this Agreement, Buyer shall initiate a wire transfer
      and deposit the amount of One Million Five Hundred Thousand US Dollars (USD
      1,500,000) in the third party escrow account described in Exhibit
      A
      (the
“Deposit”)
      as a
      deposit to cover the failure of the satisfaction of the condition precedent
      in
      Section 6.1(m). If Buyer’s shareholders do not approve the transactions
      described herein as set forth in Section 3.2(a)(i), then no later than twenty
      four (24) hours thereafter, Buyer and Seller shall execute and deliver to the
      Escrow Agent a written statement instructing the Escrow Agent to release to
      Seller the Deposit, without condition. If the Closing does not occur for any
      reason other than the failure of the condition precedent in Section 6.1(m),
      then
      no later than twenty four (24) hours thereafter, Buyer and Seller shall execute
      and deliver to the Escrow Agent a written statement instructing the Escrow
      Agent
      to release to Buyer the Deposit, without condition, and the parties shall have
      any other remedies provided hereunder or at law. If the Closing occurs, the
      Deposit shall be applied to the Reserved Amount as set forth in Section 2.2(c)
      above. 

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    ARTICLE
      IX

     

    MISCELLANEOUS

     

    9.1 Disclosure
      Schedule Supplements and Data Room Additions.
      From
      time to time prior to the Closing, Seller may supplement or amend the Disclosure
      Schedule and/or add items to the Data Room with respect to any matter (i) which
      may arise hereafter and which, if existing or occurring at or prior to the
      date
      hereof, would have been required to be set forth or described in the Disclosure
      Schedule or (ii) which makes it necessary to correct or update any information
      in the Disclosure Schedule or in any representation and warranty of Seller
      which
      has been rendered inaccurate thereby. To the extent Seller makes any such
      supplements or amendments to the Disclosure Schedule and/or additions to the
      Data Room after the date hereof and prior to the Closing, the Disclosure
      Schedule and/or Data Room (as applicable) and the related representations and
      warranties shall be deemed modified as of the Closing to the extent set forth
      in
      such supplements or amendments, provided,
      however,
      that
      any such supplement, amendment or addition that represents a Materially Adverse
      Effect shall be handled as a casualty in accordance with the terms of Section
      4.1(s) above.

     

    9.2 Governing
      Law; Dispute Resolution.
      This
      Agreement shall in all respects be governed by and construed in accordance
      with
      the laws of the State of California, without regard to its conflicts of law
      doctrine. The prevailing party in any dispute shall be entitled to all expenses,
      including attorneys’ fees and costs, incurred in connection with any dispute
      hereunder. The parties hereby irrevocably submit and agree to the exclusive
      jurisdiction and venue of the courts of the State of California located in
      the
      County of Kern or the federal courts located in the County of Fresno. The
      provisions of this Section 9.2 may be enforced by any court of competent
      jurisdiction.

     

    9.3 Schedules,
      Addenda and Exhibits.
      Subject
      to Section 9.1, all schedules, addenda and exhibits attached to this
      Agreement, including without limitation the Disclosure Schedule, are
      incorporated herein and shall be part of this Agreement for all
      purposes.

     

    9.4 Amendments.
      This
      Agreement may be amended only by a writing executed by all of the parties
      hereto.

     

    9.5 Entire
      Agreement.
      The
      Transaction Documents expressly provided for herein set forth the entire
      understanding of the parties hereto with respect to the subject matter hereof,
      including the Confidentiality and Non Disclosure Agreement, dated as of June
      29,
      2007, by and between Buyer and Seller, and supersede all prior contracts,
      agreements, arrangements, communications, discussions, representations and
      warranties, whether oral or written, between the parties.

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

     

    9.6 Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the successors
      and
      assigns of each Party hereto, but, no rights, obligations or liabilities
      hereunder shall be assignable by any Party without the prior written consent
      of
      the other Party, and any purported assignment in violation of this Section
      9.6
      shall be null and void ab
      initio;
      provided,
      however,
      Buyer
      may transfer or otherwise assign its rights to receive indemnification under
      this Agreement for the benefit of any direct or indirect lender or holder of
      debt securities that has as a source of security having financed or refinanced
      all or part of the transactions contemplated hereby; provided,
      further,
      prior
      to the Closing, Buyer may elect (upon written notice sent to Seller) to assign
      its rights and obligations under this Agreement to any Affiliate of Buyer
      (including a subsidiary formed for such purpose) and to cause such Affiliate
      to
      perform the obligations of Buyer under this Agreement; provided,
      further,
      that no
      such assignment shall otherwise vary or diminish any of Buyer’s obligations
      under this Agreement to the extent its Affiliate fails to duly perform the
      obligations of Buyer under this Agreement; provided,
      finally,
      that
      Seller may reorganize the form in which it conducts its business from a
      corporate form to another form such as a limited liability company form, such
      as, for example, by a merger of the Seller into a limited liability company
      owned by Seller’s shareholder as long as such reorganization does not result in
      the surviving entity being less capitalized than the Seller prior to such
      reorganization or otherwise have an adverse effect upon the Company or the
      ability of Seller or Company to perform their obligations hereunder and under
      the Transaction Documents. 

     

    9.7 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, and all of which together will constitute one and
      the
      same instrument.

     

    9.8 Waivers.
      Except
      as otherwise provided herein, either Party may waive in writing compliance
      by
      the other party hereto with any of the terms, covenants or conditions contained
      in this Agreement (except such as may be imposed by law). Any waiver by any
      Party of any violation of, breach of, or default under, any provision of this
      Agreement, by the other party shall not be construed as, or constitute, a
      continuing waiver of such provision, or waiver of any other violation of, breach
      of or default under any other provision of this Agreement.

     

    9.9 Third
      Parties.
      Nothing
      expressed or implied in this Agreement is intended, or shall be construed,
      to
      confer upon or give any Person other than Buyer and Seller any rights or
      remedies under or by reason of this Agreement.

     

    9.10 Headings.
      The
      headings in this Agreement are solely for convenience of reference and shall
      not
      be given any effect in the construction or interpretation of this
      Agreement.

     

    9.11 Gender
      and Number; Section and Article References.
      The
      masculine, feminine or neuter gender and the singular or plural number shall
      each be deemed to include the others whenever the context so indicates.
      References to “$” or “dollars” shall be to United States dollars. All references
      to Articles or Sections refer to Articles or Sections of this Agreement, unless
      otherwise stated.

     

    9.12 Interpretation.
      No
      Party, nor its counsel, shall be deemed the drafter of this Agreement for
      purposes of construing the provisions of this Agreement, and all provisions
      of
      this Agreement shall be construed in accordance with their fair meaning, and
      not
      strictly for or against any Party.

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

    9.13 Notices.
      Any
      notice, request or other communication required or permitted hereunder shall
      be
      in writing and shall be deemed to have been duly given (a) when received if
      personally delivered, (b) when received if sent by registered or certified
      mail,
      return receipt requested, postage prepaid, (c) within twelve (12) hours after
      being sent by telecopy, with confirmed answer back and the original having
      been
      sent by priority delivery by established overnight courier within twelve (12)
      hours of such telecopy, or (d) within 1 business day of being sent by priority
      delivery by established overnight courier, to the parties at their respective
      addresses set forth below.

     

    
      	
              To
                Seller:

            	
              Casey
                Co.

            
	 	
              180
                E. Ocean Boulevard, Suite 1010

            
	 	
              Long
                Beach, California 90802

            
	 	
              Attention:
                Steven G. Christovich

            
	 	 
	
              With
                a copy to:

            	
              Jones
                Day

            
	 	
              555
                South Flower Street, 50th Floor

            
	 	
              Los
                Angeles, CA 90071

            
	 	
              Attention:
                James F. Childs, Jr., Esq.

            
	 	 
	
              To
                Buyer:

            	
              NTR
                Acquisition Co.

            
	 	
              100
                Mill Plain Road, Suite 320

            
	 	
              Danbury,
                CT 06811

            
	 	
              Attention:
                General Counsel

            
	 	 
	
              With
                a copy to:

            	
              NTR
                Partners, LLC

            
	 	
              420
                Lexington Ave., Suite 300

            
	 	
              New
                York, New York 10170

            
	 	
              Attention:
                President

            

    

     

    Any
      Party
      by written notice to the other Party in accordance with this Section 9.13 may
      change the address or the Persons to whom notices or copies thereof shall be
      directed.

     

    [Signature
      page is next page]

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              NTR
                ACQUISITION CO.

            
	 	
			 
	 	
              By:

            	
			/s/
              Mario E. Rodriguez
	 	
              
				 

            	
			Name: 
Mario
              E. Rodriguez
	 	
              
				 

            	
			Title: 
Chief
              Executive Officer
	 	
			 
	 	
              CASEY
                CO.

            
	 	
			 
	 	
              By:

            	
			/s/
              Larry D. Delpit, Sr.
	 	
              
				 

            	
			Name: 
Larry
              D. Delpit, Sr.
	 	
              
				 

            	
			Title: 
President

    

     

    [Signature
      page to Stock Purchase Agreement]

     

    
      
        
        

      

      
        -42-

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