PAR PETROLEUM CORP/CO (Form: 10-Q, Received: 08/14/2013 18:22:06)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-16203

PAR PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)


Delaware	84-1060803
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

800 Gessner Road, Suite 875 Houston, Texas	77024
(Address of principal executive offices)	(Zip Code)

(713) 969-3293

(Registrant’s telephone number, including area code)

1301 McKinney, Suite 2025, Houston, Texas 77010

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act): Yes ¨ No x

Indicate by check mark whether the registrant has filed all document and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No ¨

152,693,842 shares of common stock, $0.01 par value per share, were outstanding as of August 12, 2013.

INDEX


		Page No.
PART I FINANCIAL INFORMATION		1
Item 1.	Consolidated Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statement of Changes in Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46
PART II OTHER INFORMATION		47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49

The terms “Par,” “Company,” “we,” “our,” and “us” refer to Par Petroleum Corporation (and for periods prior to the reorganization described herein, Delta Petroleum Corporation) and its consolidated subsidiaries unless the context suggests otherwise.

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PART I FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

PAR PETROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30, 2013			December 31, 2012
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	43,018		$	6,185
Restricted cash		318			23,970
Acquisition deposits		40,000			—
Trade accounts receivable, net of allowance for doubtful accounts of $167 at June 30, 2013 and $0 at December 31, 2012, respectively		10,204			17,730
Inventories		10,275			10,466
Prepaid and other current assets		1,474			1,575

Total current assets		105,289			59,926

Property and equipment:
Natural gas and oil properties, at cost, successful efforts method of accounting:
Proved		4,873			4,804
Other		1,439			1,415

Total property and equipment		6,312			6,219
Less accumulated depreciation and depletion		(1,110	)		(373	)

Net property and equipment		5,202			5,846

Long-term assets:
Investment in unconsolidated affiliate		103,815			104,434
Intangible assets, net		7,805			8,809
Goodwill		8,290			7,756
Assets held for sale		—			2,800
Other long-term assets		7			11

Total long-term assets		119,917			123,810

Total assets	$	230,408		$	189,582

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of debt	$	—		$	35,000
Accounts payable		21,508			25,329
Other accrued liabilities		4,434			981
Accrued settlement claims		7,234			8,667

Total current liabilities		33,176			69,977

Long-term liabilities:
Long – term debt, net of current maturities and unamortized discount		91,549			7,391
Derivative liabilities		16,200			10,945
Asset retirement obligations		540			512

Total liabilities		141,465			88,825

Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value: authorized 3,000,000 shares, none issued		—			—
Common stock, $0.01 par value; authorized 300,000,000 shares at June 30, 2013 and December 31, 2012, issued 152,678,486 shares and 150,080,927 shares at June 30, 2013 and December 31, 2012, respectively		1,527			1,501
Additional paid-in capital		110,284			108,095
Accumulated deficit		(22,868	)		(8,839	)

Total stockholders’ equity		88,943			100,757

Total liabilities and stockholders’ equity	$	230,408		$	189,582

See accompanying notes to consolidated financial statements.

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PAR PETROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Successor			Predecessor
	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012
Revenue:
Marketing and transportation revenues	$	32,448		$	—
Natural gas and oil sales		2,229			7,703

Total revenues		34,677			7,703

Operating expenses:
Marketing and transportation expenses		29,115			—
Lease operating expense		1,941			3,149
Transportation expense		—			2,794
Production taxes		20			502
Exploration expense		—			1
Depreciation, depletion, amortization and accretion		1,037			4,899
Trust litigation and settlements		3,867			—
General and administrative expense		3,456			3,725

Total operating expenses		39,436			15,070

Income from unconsolidated affiliates		1,495			—

Operating loss		(3,264	)		(7,367	)

Other income and (expense):
Interest expense and financing costs, net		(2,975	)		(2,604	)
Other income (expense)		41			(39	)
Unrealized loss on derivative instruments		(3,015	)		—
Income from unconsolidated affiliates		—			7

Total other expense		(5,949	)		(2,636	)

Loss before income taxes and reorganization items		(9,213	)		(10,003	)

Income tax expense		—			—

Loss before reorganization items		(9,213	)		(10,003	)
Reorganization items
Professional fees and administrative costs		—			5,908
Loss on settlement of liabilities		—			2

Net loss	$	(9,213	)	$	(15,913	)

Basic and diluted loss per common share	$	(0.06	)	$	(0.55	)

See accompanying notes to consolidated financial statements.

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PAR PETROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Successor			Predecessor
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Revenue:
Marketing and transportation revenues	$	95,757		$	—
Natural gas and oil sales		3,806			17,613

Total revenues		99,563			17,613

Operating expenses:
Marketing and transportation expenses		82,905			—
Lease operating expense		3,175			6,815
Transportation expense		—			5,286
Production taxes		24			799
Exploration expense		—			1
Dry hole costs and impairments		—			1
Depreciation, depletion, amortization and accretion		1,804			10,226
Trust litigation and settlements		5,164			—
General and administrative expense		9,059			7,745

Total operating expenses		102,131			30,873

Loss from unconsolidated affiliates		(865	)		—

Operating loss		(3,433	)		(13,260	)

Other income and (expense):
Interest expense and financing costs, net		(5,871	)		(4,862	)
Other income (expense)		770			(10	)
Realized gain on derivative instruments, net		410			—
Unrealized loss on derivative instruments		(5,255	)		—
Income from unconsolidated affiliates		—			9

Total other expense		(9,946	)		(4,863	)

Loss before income taxes and reorganization items		(13,379	)		(18,123	)

Income tax expense		(650	)		—

Loss before reorganization items		(14,029	)		(18,123	)
Reorganization items
Professional fees and administrative costs		—			11,635
Gain on settlement of liabilities		—			(383)

Net loss	$	(14,029	)	$	(29,375	)

Basic and diluted loss per common share	$	(0.09	)	$	(1.02	)

See accompanying notes to consolidated financial statements.

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PAR PETROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended June 30, 2013

(Unaudited)

	Common stock				Additional paid-in		Accumulated			Total Stockholders’
	Shares		Amount		capital		deficit			equity
	(in thousands)
Balance, December 31, 2012		150,081	$	1,501	$	108,095	$	(8,839	)	$	100,757
Stock issued to settle bankruptcy claims		1,740		17		1,917		—			1,934
Stock based compensation		857		9		272		—			281
Net loss		—		—		—		(14,029	)		(14,029	)

Balance, June 30, 2013		152,678	$	1,527	$	110,284	$	(22,868	)	$	88,943

See accompanying notes to consolidated financial statements.

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PAR PETROLEUM CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Successor			Predecessor
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Cash flows from operating activities:
Net loss	$	(14,029	)	$	(29,375	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation, depletion, amortization and accretion		1,804			10,226
Interest, prepayments premiums and exit penalty capitalized into note balance		4,918			1,696
Amortization of deferred financing costs and bond discount		880			—
Gain on sale of assets held for sale		(50	)		—
Loss on disposal of other assets		33			126
Stock-based compensation		281			1,895
Unrealized loss on derivative contracts		5,255			—
(Income) loss from unconsolidated affiliates		865			(9	)
Professional fees paid through restricted cash related to trust activities		1,226			—
Non cash trust litigation and settlement expenses		3,938			—
Other		—			28
Net changes in operating assets and liabilities:
Trade accounts receivable		7,526			4,585
Deposits and prepaid assets		(99	)		(17	)
Inventories		191			—
Other assets		4			—
Accounts payable and other accrued liabilities		(913	)		(4,594	)
Accrued reorganization costs		—			2,285

Net cash provided by (used in) operating activities		11,830			(13,154	)

Cash flows from investing activities:
Acquisition deposits		(40,000	)		—
Additions to property and equipment		(131	)		(420	)
Capitalized drilling costs owed to operator		(246	)		—
Proceeds from sale of oil and gas properties		—			42
Proceeds from sale of other fixed assets		—			26
Proceeds from sale of assets held for sale		2,850			—

Net cash used in investing activities		(37,527	)		(352	)

Cash flows from financing activities:
Proceeds from borrowings		44,865			5,000
Repayments of borrowing		(1,335	)		—
Release of restricted cash held to secure letters of credit		19,000			—

Net cash provided by financing activities		62,530			5,000

Net increase (decrease) in cash and cash equivalents		36,833			(8,506	)
Cash at beginning of period		6,185			12,862

Cash at end of period	$	43,018		$	4,356

Non cash investing and financing activities and supplemental disclosure of cash paid:
Stock issued to settle bankruptcy claims	$	1,934		$	—
Cash paid for interest and financing costs	$	73		$	3,049
Restricted cash used to settle bankruptcy claims	$	3,426		$	—

See accompanying notes to consolidated financial statements.

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PAR PETROLEUM CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

(1) Reorganization under Chapter 11

On December 16, 2011, Delta Petroleum Corporation (“Delta”) and its subsidiaries Amber Resources Company of Colorado, DPCA, LLC, Delta Exploration Company, Inc., Delta Pipeline, LLC, DLC, Inc., CEC, Inc. and Castle Texas Production Limited Partnership filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On January 6, 2012, Castle Exploration Company, Inc., a subsidiary of Delta Pipeline, LLC, also filed a voluntary petition under Chapter 11 in the Bankruptcy Court. Delta and its subsidiaries included in the bankruptcy petitions are collectively referred to as the “Debtors.”

On December 27, 2011, the Debtors filed a motion requesting an order to approve matters relating to a proposed sale of Delta’s assets, including bidding procedures, establishment of a sale auction date and establishment of a sale hearing date. On January 11, 2012, the Bankruptcy Court issued an order approving these matters. On March 20, 2012, Delta announced that it was seeking court approval to amend the bidding procedures for its upcoming auction to allow bids relating to potential plans of reorganization as well as asset sales. On March 22, 2012, the Bankruptcy Court approved the revised procedures.

Following the auction, the Debtors obtained approval from the Bankruptcy Court to proceed with Laramie Energy II, LLC (“Laramie”) as the sponsor of a plan of reorganization (the “Plan”). In connection with the Plan, Delta entered into a non-binding term sheet describing a transaction by which Laramie and Delta intended to form a new joint venture called Piceance Energy, LLC (“Piceance Energy”). On June 4, 2012, Delta entered into a Contribution Agreement (the “Contribution Agreement”) with Piceance Energy and Laramie to effect the transactions contemplated by the term sheet.

On June 4, 2012, the Debtors filed a disclosure statement relating to the Plan. The Plan was confirmed on August 15, 2012 and was declared effective on August 31, 2012 (the “Emergence Date”). On the Emergence Date, Delta consummated the transaction contemplated by the Contribution Agreement and each of Delta and Laramie contributed to Piceance Energy their respective assets in the Piceance Basin. Piceance Energy is owned 66.66% by Laramie and 33.34% by Delta (referred to after the closing of the transaction as “Successor”). At the closing, Piceance Energy entered into a new credit agreement, borrowed $100 million under that agreement, and distributed approximately $72.6 million net of settlements to the Company and approximately $24.9 million to Laramie. The Company used its distribution to pay bankruptcy expenses and to repay its secured debt. The Company also entered into a new credit facility and borrowed $13 million under that facility at closing, and used those funds primarily to pay bankruptcy claims and expenses.

On the Emergence Date, Delta also amended and restated its certificate of incorporation and bylaws and changed its name to Par Petroleum Corporation (“Par”). The amended and restated certificate of incorporation contains restrictions that render void certain transfers of the Company stock that involve a holder of five percent or more of its shares. The purpose of this provision is to preserve certain of the Company’s tax attributes including net operating loss carryforwards that the Company believes may have value. Under the amended and restated bylaws, the Company’s board of directors has five members, each of whom was appointed by its stockholders pursuant to a Stockholders’ Agreement entered into on the Emergence Date.

Following the reorganization, Par retained its interest in the Point Arguello Unit offshore California and other miscellaneous assets and certain tax attributes, including significant net operating loss carryforwards. Based upon the Plan as confirmed by the Bankruptcy Court, Delta’s creditors were issued approximately 147.7 million shares of common stock, and Delta’s former stockholders received no consideration under the Plan.

Contemporaneously with the consummation of the Contribution Agreement, the Company, through a wholly-owned subsidiary, entered into a Limited Liability Company Agreement with Laramie that governs the operations of Piceance Energy (the “LLC Agreement”).

In addition, Laramie and Piceance Energy entered into a Management Services Agreement pursuant to which Laramie provides certain services to Piceance Energy for a fee of $650,000 per month.

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(2) Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of Par Petroleum Corporation and its consolidated subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Certain of our natural gas and oil activities may be conducted through partnerships and joint ventures. We will include our proportionate share of assets, liabilities, revenues and expenses from these entities in our consolidated financial statements. We do not have any off-balance sheet financing arrangements (other than operating leases) or any unconsolidated special purpose entities.

Our wholly owned primary operating subsidiaries include Par Piceance Energy, LLC, which owns our investment in Piceance Energy (see Note 3), and Texadian Energy, Inc. (formerly known as SEACOR Energy Inc. (“Texadian”)), which we acquired on December 31, 2012 (see Note 4).

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Some information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the Securities and Exchange Commission’s (“SEC”) rules and regulations. In our opinion, all adjustments, consisting only of normal recurring accruals, considered necessary to state fairly the information in our unaudited condensed consolidated financial statements have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the complete fiscal year. As a result, these unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto previously filed with our Annual Report on Form 10-K for the year ended December 31, 2012.

Fresh Start Accounting and the Effects of the Plan

As required by U.S. generally accepted accounting principles (“U.S. GAAP”), effective as of August 31, 2012, Par adopted fresh start accounting following the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 “Reorganizations” (“ASC 852”). Fresh start accounting results in us becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements for periods prior to August 31, 2012 reflect the operations of Delta prior to reorganization (hereinafter also referred to as “Predecessor”) and are not comparable to the consolidated financial statements presented on or after August 31, 2012. Accordingly, certain disclosures relating to the Predecessor’s financial statements for the three and six months ended June 30, 2012 have been omitted. Fresh start accounting was required upon emergence from Chapter 11 because (i) holders of voting shares immediately before confirmation of the Plan received less than 50% of the emerging entity and (ii) the reorganization value of our assets immediately before confirmation of the Plan was less than our post-petition liabilities and allowed claims. Fresh start accounting results in a new basis of accounting and reflects the allocation of our estimated fair value to underlying assets and liabilities.

Cash Equivalents

We consider all highly liquid investments with maturities at date of acquisition of three months or less to be cash equivalents.

Restricted Cash

As of June 30, 2013, restricted cash consisted of approximately $318,000 designated to settle bankruptcy matters that is not available for operating activities (see Note 7). At December 31, 2012, restricted cash included amounts held at a commercial bank to support our letter of credit facility totaling approximately $19.0 million (see Note 5). During the six months ended June 30, 2013, the restricted cash supporting the letter of credit facility was released to us and is available for general corporate purposes.

Trade Receivables

Texadian’s customers primarily included major independent refining and marketing companies. Customers are required to pay in advance or are granted credit on a short-term basis when credit risks are considered acceptable. We routinely review our trade receivables and make provisions for doubtful accounts based on existing customer and economic conditions; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables that are deemed uncollectible are removed from accounts receivable and from the allowance for doubtful accounts when collection efforts have been unsuccessful. As of June 30, 2013, we had no significant allowance for doubtful accounts. Several of Texadian’s physical purchases and sales are with the same counterparty and therefore, they are settled on a net basis and Texadian’s receivables are recorded net of any corresponding payables. Additionally, we provide an accrual for natural gas and oil sales using the sales method by estimating natural gas and oil volumes and prices for months in which revenues have not been received using production and pricing information provided by the operator.

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Inventories

Texadian’s inventories, which consist of in-transit oil, are stated at the lower of cost (using the first-in, first-out method) or market. We record impairments, as needed, to adjust the carrying amount of inventories to the lower of cost or market.

Investment in Unconsolidated Affiliate

Investments in operating entities where we have the ability to exert significant influence, but do not control the operating and financial policies, are accounted for using the equity method. Our share of net income (loss) of these entities is recorded as income (loss) from unconsolidated affiliates in the consolidated statements of operations.

Our investment in unconsolidated affiliates consisted of our ownership interest in Piceance Energy (see Note 3).

Assets Held for Sale

As of December 31, 2012, we classified our compressors as held for sale, which were recorded at the lower of cost or estimated net realizable value. On February 20, 2013, these compressors were sold for approximately $2.9 million resulting in a gain of $50,000.

Property and Equipment

We account for our natural gas and oil exploration and development activities using the successful efforts method of accounting. Under such method, costs of productive exploratory wells, development dry holes and productive wells and undeveloped leases are capitalized. Natural gas and oil lease acquisition costs are also capitalized. Exploration costs, including personnel costs, certain geological or geophysical expenses and delay rentals for natural gas and oil leases, are charged to expense as incurred. Exploratory drilling costs are initially capitalized, then evaluated quarterly and charged to expense if and when the well is determined not to have found reserves in commercial quantities. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the units-of-production amortization rate. A gain or loss is recognized for all other sales of producing properties.

Unproved properties with significant acquisition costs are assessed quarterly on a property-by-property basis and any impairment in value is charged to expense. If the unproved properties are determined to be productive, the related costs are transferred to proved oil and natural gas properties and are depleted. Proceeds from sales of partial interests in unproved leases are accounted for as a recovery of cost without recognizing any gain or loss until all costs have been recovered.

Depreciation, depletion and amortization of capitalized acquisition, exploration and development costs is computed using the units-of-production method by individual fields (common reservoirs) using proved producing natural gas and oil reserves amortized as the related reserves are produced. Associated leasehold costs are depleted using the unit-of-production method based on total proved natural gas and oil reserves amortized as the related reserves are produced.

Other property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives ranging from three to 15 years.

Goodwill and Other Intangible Assets

We recorded goodwill as a result of our acquisition of Texadian. Goodwill was attributable to opportunities expected to arise from combining our operations with Texadian’s, and specifically utilization of our net operating loss carryforwards, as well as other intangible assets that do not qualify for separate recognition. In addition, as a result of our acquisition of Texadian, we recorded certain other identifiable intangible assets. These intangible assets include relationships with suppliers and shippers and favorable railcar leases. These intangible assets will be amortized over their estimated useful lives on a straight line basis.

Impairment of Goodwill and Long-Lived Assets

Goodwill is not amortized, but is tested for impairment. We assess the recoverability of the carrying value of goodwill during the fourth quarter of each year or whenever events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors assessed for the reporting unit would include the competitive environments and financial performance of the reporting unit. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a two-step quantitative test is required. If required, we will review the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit, based upon a multiple of estimated earnings. If the carrying value exceeds the estimated fair value of the reporting unit, an

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impairment indicator exists and an estimate of the impairment loss is calculated. The fair value calculation uses Level 3 (see Note 6) inputs and includes multiple assumptions and estimates, including the projected cash flows and discount rates applied. Changes in these assumptions and estimates could result in a goodwill impairment that could materially adversely impact our financial position or results of operations.

We evaluate the carrying value of our intangible assets when impairment indicators are present or when circumstances indicate that impairment may exist under authoritative guidance. When we believe impairment indicators may exist, projections of the undiscounted future cash flows associated with the use of and eventual disposition of the intangible assets are prepared. If the projections indicate that their carrying values are not recoverable, we reduce the carrying values to fair value. These impairment tests are heavily influenced by assumptions and estimates that are subject to change as additional information becomes available.

Our natural gas and oil assets, including our investment in our unconsolidated affiliate, are reviewed for impairment quarterly or when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Estimates of expected future cash flows represent our best estimate based on reasonable and supportable assumptions and projections.

For proved properties, if the expected future cash flows exceed the carrying value of the asset, no impairment is recognized. If the carrying value of the asset exceeds the expected future cash flows, an impairment exists and is measured by the excess of the carrying value over the estimated fair value of the asset. Any impairment provisions recognized are permanent and may not be restored in the future.

We assess proved properties on an individual field basis for impairment each quarter when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. For proved properties, the review consists of a comparison of the carrying value of the asset with the asset’s expected future undiscounted cash flows without interest costs.

For unproved properties, the need for an impairment charge is based on our plans for future development and other activities impacting the life of the property and our ability to recover our investment. When we believe the costs of the unproved property are no longer recoverable, an impairment charge is recorded based on the estimated fair value of the property.

Asset Retirement Obligations

Our asset retirement obligations arise from plugging and abandonment liabilities for our natural gas and oil wells.

Derivatives and Other Financial Instruments

We may periodically enter into commodity price risk transactions to manage our exposure to natural gas and oil price volatility. These transactions may take the form of non-exchange traded fixed price forward contracts and exchange traded futures contracts, collar agreements, swaps or options. The purpose of the transactions will be to provide a measure of stability to our cash flows in an environment of volatile commodity prices.

Texadian enters into fixed-price forward purchase and sale contracts for crude oil. The contracts typically contain settlement provisions in the event of a failure of either party to fulfill its commitments under the contract. Texadian’s policy is to fulfill or accept the physical delivery of the product, even if shipment is delayed, and it will not net settle. Should Texadian not designate a contract as a normal purchase or normal sale or should a scheduled delivery under the terms of contract not occur, then these exceptions may require the recording of the contract as a derivative. If derivative accounting treatment is required then these contracts would be recorded at fair value as either an asset or a liability and marked to market each reporting period with changes in fair value being charged to earnings. As of June 30, 2013, we have elected the normal purchase normal sale exemption for these contracts. As such, we did not recognize the unrealized gains or losses related to these contracts in our consolidated financial statements. As of December 31, 2012, we did not elect this exemption for our open contracts that were settled in the first quarter 2013.

In addition, from time to time we may have other financial instruments, such as warrants or embedded debt features, that may be classified as liabilities when either (a) the holders possess rights to net cash settlement, (b) physical or net equity settlement is not in our control, or (c) the instruments contain other provisions that cause us to conclude that they are not indexed to our equity. Such instruments are initially recorded at fair value and subsequently adjusted to fair value at the end of each reporting period through earnings.

As a part of the Plan, we issued warrants (see Note 5) that are not considered to be indexed to our equity. Accordingly, these warrants are accounted for as liabilities. In addition, our delayed draw term loan facility contains certain puts that are required to be accounted for as embedded derivatives. The warrant liabilities and embedded derivatives are accounted for at fair value with changes in fair value reported in earnings.

The carrying value of trade accounts receivable and accounts payable approximates fair value due to their short term nature. Our

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long-term debt is recorded on the amortized cost basis. We estimate our long term debt’s fair value to be approximately $80.7 million at June 30, 2013 using a discounted cash flow analysis and an estimate of the current yield (5.72%) by reference to market interest rates for term debt of comparable companies which is considered to be a Level 3 fair value measurement (see Note 6).

Accrued Settlement Claims

As of June 30, 2013, we have accrued approximately $7.2 million relating to claims resulting from our bankruptcy (See Note 7). Professional fees relating to the settlement of bankruptcy claims are charged to earnings in the period incurred.

Income Taxes

We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. The realizability of deferred tax assets is evaluated quarterly based on a “more likely than not” standard, and to the extent this threshold is not met, a valuation allowance is recorded.

We recognize in the financial statements the impact of an uncertain tax position only if it is more likely than not of being sustained upon examination by the relevant taxing authority based on the technical merits of the position. As a general rule, our open years for Internal Revenue Service (“IRS”) examination purposes are 2010, 2011, and 2012. However, since we have net operating loss carryforwards, the IRS has the ability to make adjustments to items that originate in a year otherwise barred by the statute of limitations under Section 6501 of the Internal Revenue Code of 1986, as amended (the “Code”), in order to re-determine tax for an open year to which those items are carried. Therefore, in a year in which a net operating loss deduction is claimed, the IRS may examine the year in which the net operating loss was generated and adjust it accordingly for purposes of assessing additional tax in the year the net operating loss deductions was claimed. Any penalties or interest as a result of an examination will be recorded in the period assessed.

We expect to incur state income tax liabilities as a result of Texadian’s operations. Texadian operates in states where we have no net operating loss carryovers available to offset taxable income generated within those states. Accordingly, we have accrued state income tax expense of approximately $0 and $650,000 for the three and six months ended June 30, 2013, respectively.

Stock Based Compensation

We recognize the cost of share based payments over the period the employee provides service, generally the vesting period, and includes such costs in general and administrative expense in the statements of operations. The fair value of equity instruments issued to employees is measured on the grant date and recognized over the service period on a straight-line basis.

Revenue Recognition

Natural Gas and Oil

Revenues are recognized when title to the products transfers to the purchaser. We follow the “sales method” of accounting for our natural gas and oil revenue and recognize sales revenue on all natural gas or oil sold to our purchasers, regardless of whether the sales are proportionate to our ownership in the property. A liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves. As of June 30, 2013, our aggregate natural gas and oil imbalances were not material to our consolidated financial statements.

Marketing and Transportation

Texadian earns revenues from the sale and transportation of oil and the rental of rail cars. Accordingly, revenues and related costs from sales of oil are recorded when title transfers to the buyer. Transportation revenues are recognized when title passes to the customer, which is when risk of ownership transfers to the purchaser, and physical delivery occurs. Revenues from the rental of railcars are recognized ratably over the lease periods.

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Other Income

For the six months ended June 30, 2013, other income totaled approximately $770,000 and consists primarily of a state tax refund totaling approximately $483,000 and a legal settlement of approximately $200,000.

Foreign Currency Transactions

We may, on occasion, enter into transactions denominated in currencies other than our functional currency (“U.S. $”). Gains and losses resulting from changes in currency exchange rates between the functional currency and the currency in which a transaction is denominated are included in foreign currency gains or losses, net in the accompanying consolidated statements of operations in the period in which the currency exchange rates change.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include fair value of assets and liabilities recorded under fresh start accounting, fair value of assets and liabilities recorded under purchase accounting, natural gas and oil reserves, bad debts, depletion and impairment of natural gas and oil properties, income taxes and the valuation allowances related to deferred tax assets, derivatives, asset retirement obligations, contingencies and litigation accruals. Actual results could differ from these estimates.

(3) Investments in Piceance Energy

We account for our 33.34% ownership interest in Piceance Energy using the equity method of accounting because we are able to exert significant influence, but do not control the operating and financial policies, and as a result, we do not meet the accounting criteria which require us to consolidate the joint venture. The LLC Agreement provides that its sole manager may make a written capital call such that each member shall make additional capital contributions up to an aggregate combined total capital contribution of $60 million ($20 million to our interest), if approved by a majority of its board. If any member does not fund its share of the capital call, its interest may be reduced or diluted by the amount of the shortfall. In addition, Piceance Energy has a $400 million secured revolving credit facility secured by a lien on its natural gas and oil properties and related assets with a borrowing base currently set at $140 million. As of June 30, 2013, the balance outstanding on the revolving credit facility was approximately $91.0 million. We are guarantors of Piceance Energy’s credit facility, with recourse limited to the pledge of our equity interests of Par Piceance Energy. Under the terms of its credit facility, Piceance Energy is generally prohibited from making future cash distributions to its owners, including us.

Piceance Energy holds various commodity hedging instruments to mitigate a portion of the effect of natural gas and oil price fluctuations. The contracts are in the form of costless collars of 15,000 MMBtu/day with floors of an average of $3.37 and ceilings of an average of $4.28 with 5,000 MMBtu/day through March 2014 and 10,000 MMBtu/day through September 2014, and as well as swaps of 10,000 MMBtu/day for an average price of $3.46 through September 2014. Piceance Energy also holds natural gas gathering and processing contracts for a fixed rate expiring on various dates beginning in 2017 through 2032. Some of our contracts require a minimum throughput commitment.

The change in our equity investment in Piceance Energy is as follows:

		Three Months Ended June 30, 2013	Six Months Ended June 30, 2013
		(in thousands)

Beginning balance	$	102,292	$	104,434
Income (loss) from unconsolidated affiliates		1,495		(865	)
Capitalized drilling costs obligation paid		28		246

Ending balance	$	103,815	$	103,815

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Summarized balance sheet information and our share of the equity investment are as follows:

	June 30, 2013
		100%		Our Share
	(Unaudited)
	(in thousands)
Assets
Cash and equivalents	$	35		$	12
Accounts receivable		3,972			1,324
Prepaids and other assets		1,661			554

Total current assets		5,668			1,890

Natural gas and oil property, successful efforts method of accounting		544,266			181,458
Other real estate and land		14,314			4,772
Office furniture and equipment		3,116			1,039

Total		561,696			187,269
Less: accumulated depletion, depreciation and amortization		(100,329	)		(33,450	)

Total property and equipment, net		461,367			153,819
Deferred issue costs and other assets, net		1,026			342

Total assets	$	468,061		$	156,051

	June 30, 2013
		100%		Our Share
	Unaudited)
	(in thousands)
Liabilities and Members’ Equity
Accounts payable and accrued liabilities	$	13,285		$	4,428
Natural gas and oil sales payable		1,780			595
Derivative liabilities		397			132

Total current liabilities		15,462			5,155

Note payable		91,000			30,339
Asset retirement obligations		2,920			974
Derivative liabilities		204			68

Total non-current liabilities		94,124			31,381

Total liabilities		109,586			36,536

Members equity
Members’ equity		365,046			121,706
Accumulated deficit		(6,571	)		(2,191	)

Total members’ equity		358,475			119,515

Total liabilities and members’ equity	$	468,061		$	156,051

At June 30, 2013, our members’ equity in the underlying net assets of Piceance Energy exceeded the carrying value of our investment recorded on our consolidated balance sheet by approximately $15.7 million. We attribute this difference, which is expected to be permanent, to lack of control and marketability discounts.

Summarized income statement information and our share for the period for which our investment was accounted for under the equity method is as follows:

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	Three Months Ended June 30, 2013
		100%		Our Share
	(Unaudited)
	(in thousands)
Natural gas, oil and natural gas liquids revenues	$	15,467		$	5,157

Natural gas and oil operating expenses		7,222			2,408
Depletion, depreciation and amortization		4,232			1,411
Management fee		1,950			650
General and administrative		382			128

Total operating expenses		13,786			4,597

Income from operations		1,681			560
Other income (expense)
Income from derivatives		3,587			1,196
Interest expense and debt issue costs		(724	)		(241	)
Other expense		(61	)		(20	)

Total other income (expense)		2,802			935

Net income	$	4,483		$	1,495

	Six Months Ended June 30, 2013
		100%		Our Share
	(Unaudited)
	(in thousands)
Natural gas, oil and natural gas liquids revenues	$	29,454		$	9,820

Natural gas and oil operating expenses		14,744			4,916
Depletion, depreciation and amortization		10,661			3,554
Management fee		3,900			1,300
General and administrative		1,973			658

Total operating expenses		31,278			10,428

Loss from operations		(1,824	)		(608	)
Other income (expense)
Income from derivatives		720			240
Interest expense and debt issue costs		(1,421	)		(473	)
Other expense		(71	)		(24	)

Total other expense		(772	)		(257	)

Net loss	$	(2,596	)	$	(865	)

(4) Acquisitions

SEACOR Energy, Inc

On December 31, 2012, we acquired Texadian, an indirect wholly-owned subsidiary of SEACOR Holdings Inc., for $14.0 million plus estimated net working capital of approximately $4.0 million at closing resulting in approximately $18.0 million of cash paid at closing. Texadian operates a oil transportation, distribution and marketing business with significant logistics capabilities. We acquired Texadian in furtherance of our growth strategy that focuses on the acquisition of income producing businesses. The purchase price for the acquisition was funded with a combination of cash and additional borrowings under the Tranche B Loan (see Note 5).

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The purchase was accounted for as a business combination in accordance with ASC 805 whereby the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Goodwill is defined in ASC 805 as the future economic benefit of other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is attributable to opportunities expected to arise from combining our operations with Texadian’s, and specifically utilization of our net operating loss carryforwards, as well as other intangible assets that do not qualify for separate recognition. In addition, we recorded certain other identifiable intangible assets. These include relationships with suppliers and shippers and favorable railcar leases. These intangible assets will be amortized over their estimated useful lives on a straight line basis, which approximates their consumptive life.

A summary of the fair value of the assets acquired and liabilities assumed is as follows (in thousands):

Intangible assets	$	8,809
Goodwill		8,290
Net non cash working capital		3,097
Deferred tax liabilities		(2,757	)

Total, net of cash acquired	$	17,439

None of the goodwill or intangible assets are expected to be deductible for income tax reporting purposes.

The results of operations of Texadian are included in our consolidated statement of operations beginning January 1, 2013. We have not presented pro forma results for Predecessor periods as the entities are not comparable.

Membership Interest Purchase Agreement – Tesoro Corporation

On June 17, 2013 (the “Execution Date”), our wholly-owned subsidiary, Hawaii Pacific Energy, LLC ("Hawaii Pacific Energy"), entered into a membership interest purchase agreement (the “Purchase Agreement”) with Tesoro Corporation, (the “Seller”) and solely for the purpose set forth in the Purchase Agreement, Tesoro Hawaii, LLC (“Tesoro Hawaii”). Pursuant to the Purchase Agreement, Hawaii Pacific Energy will purchase from the Seller all of the issued and outstanding units representing the membership interests in Tesoro Hawaii (the “Purchased Units”), and indirectly thereby also acquiring Tesoro Hawaii’s wholly owned subsidiary, Smiley’s Super Service, Inc. Tesoro Hawaii owns and operates (i) a petroleum refinery located at the Campbell Industrial Park in Kapolei, Hawaii (the “Refinery”), (ii) certain pipeline assets, floating pipeline mooring equipment, and refined products terminals, and (iii) retail assets selling fuel products and merchandise on the islands of Oahu, Maui and Hawaii.

Set forth below are certain material terms of the Purchase Agreement:

Purchase Price and Earnout Payments : Hawaii Pacific Energy has agreed to purchase the Purchased Units for $75.0 million, payable in cash at the closing of the Purchase Agreement, plus or minus adjustments for net working capital, plus adjustments for inventories at closing and plus certain contingent earnout payments of up to $40.0 million. The earnout payments, if any, are to be paid annually following each of the three calendar years beginning January 1, 2014 through the year ending December 31, 2016, in an amount equal to 20% of the consolidated annual gross margin of Tesoro Hawaii in excess of $165.0 million during such calendar years, with an annual cap of $20.0 million. In the event that the Refinery ceases operations or in the event Hawaii Pacific Energy disposes of any facility used in the acquired business, Hawaii Pacific Energy's obligation to make earnout payments could be modified and/or accelerated as provided in the Purchase Agreement.

Deposit : As consideration for the Seller’s entry into the Purchase Agreement, Hawaii Pacific Energy made a deposit against the purchase price for the Purchased Units of $25.0 million (the “Deposit”). The Deposit will be returned to Hawaii Pacific Energy in the event that the Purchase Agreement is terminated (i) by the mutual agreement of the parties thereto, (ii) in the event of certain breaches by the Seller of the representations, warranties and covenants contained in the Purchase Agreement, and (iii) following a casualty event with an estimated cost of greater than $20.0 million; provided, however, in a casualty event the amount to be returned is reduced by the amount of losses sustained by Seller in the Refinery startup (as described below), including crude purchases.

Refinery Startup Activities : Prior to the Execution Date, the Seller had commenced activities to shutdown the Refinery and to convert it into an import terminal. The Purchase Agreement contains certain pre-closing covenants, including covenants related to the startup of operations at the Refinery (the “Refinery Startup Activities”). The expenses associated with the Refinery Startup Activities are currently estimated to be $27.0 million (the “Startup Expenses”). Pursuant to the terms of the Purchase Agreement, Hawaii Pacific Energy made a deposit of $15.0 million for the Startup Expenses within seven days of the Execution Date. The next $5.0 million of Startup Expenses will be borne by the Seller, with all Startup Expenses in excess of $20.0 million to be borne by Hawaii Pacific Energy. Due to the Startup Expenses exceeding $20.0 million, Hawaii Pacific Energy made an additional deposit of $7.0 million for the Startup Expenses on August 5, 2013. In addition, Hawaii Pacific Energy funded $2.3 million on July 23, 2013 for a major overhaul of a gas turbine engine used in the operations of the refinery's steam cogeneration. The Seller draws upon the deposit as expenses are incurred.

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delivery of an operational Refinery, (ii) the Seller’s provision of certain operational software for the benefit of Hawaii Pacific Energy, and (iii) the provision by us to the Seller of reasonable confirmation that Hawaii Pacific Energy's adjusted net worth immediately prior to the closing of the Purchase Agreement shall equal or exceed $150 million. The closing of the Purchase Agreement will take place on the second business day following the satisfaction of the closing conditions contained in the Purchase Agreement, or on such other date to which the parties thereto may mutually agree. As of June 30, 2013, Hawaii Pacific Energy has made advances for the Deposit and Startup Expenses totaling $40.0 million, which are reflected as Acquisition Deposits on our consolidated balance sheet. On August 5, 2013, Hawaii Pacific Energy made an additional deposit for Start Up Expenses totaling $7.0 million.

Financing Commitments

In connection with Hawaii Pacific Energy's entry into the Purchase Agreement and to finance the operations of the business of Tesoro Hawaii after the acquisition, we obtained commitment letters to enter into financing arrangements and commodity swap transactions with certain third party lenders or counterparties, including (i) crude oil supply and intermediation arrangements (involving the purchase, storage, transport, logistics, and related exchange mechanism necessary to facilitate delivery and processing of crude oil and refined product inventory at the Refinery), and (ii) a senior secured asset-based credit facility of up to $125.0 million.

Private Offering Commitment

In connection with Hawaii Pacific Energy's entry into the Purchase Agreement, we obtained a binding commitment from a group of accredited investors pursuant to which the investors will purchase in the aggregate $200.0 million of our common stock, in a private placement, at a price of $1.39 per share, pursuant to the exemptions from registration provided in the Securities Act of 1933, as amended.

(5) Debt

Delayed Draw Term Loan Credit Agreement

Pursuant to the Plan, on the Emergence Date, we and certain of our subsidiaries (the “Guarantors” and, together with the Company, the “Loan Parties”) entered into a Delayed Draw Term Loan Credit Agreement (the “Loan Agreement”) with Jefferies Finance LLC, as administrative agent (the “Agent”) for the lenders party thereto from time to time, including WB Delta, Ltd., Waterstone Offshore ER Fund, Ltd., Prime Capital Master SPC, GOT WAT MAC Segregated Portfolio, Waterstone Market Neutral MAC51, Ltd., Waterstone Market Neutral Master Fund, Ltd., Waterstone MF Fund, Ltd., Nomura Waterstone Market Neutral Fund, ZCOF Par Petroleum Holdings, L.L.C. and Highbridge International, LLC (collectively, the “Lenders”), pursuant to which the Lenders agreed to extend credit to us in the form of term loans (each, a “Loan” and collectively, the “Loans”) of up to $30.0 million. We borrowed $13.0 million on the Emergence Date in order to, along with the proceeds from the Contribution Agreement, (i) repay the loans and obligations due under the Predecessor’s secured debtor-in-possession credit facility, and (ii) pay allowed but unpaid administrative expenses to the Debtors related to the Plan. During the three months ended March 31, 2013, we borrowed $8.0 million and an additional $9.0 million during the three months ended June 30, 2012 for a total of $17.0 million for general corporate use. As of June 30, 2013, we have no capacity for future borrowings under this Loan Agreement.

Below are certain of the material terms of the Loan Agreement:

Interest . At our election, any Loans will bear interest at a rate equal to 9.75% per annum payable either (i) in cash, quarterly, in arrears at the end of each calendar quarter or (ii) in-kind, accruing quarterly. In addition, all repayments made under the Loan Agreement will be charged a minimum of a 3% repayment premium. Accordingly, we will accrue amounts due for the minimum repayment premium over the term of loan using the effective interest method.

At any time after an event of default under the Loan Agreement has occurred and is continuing, (i) all outstanding obligations will, to the extent permitted by applicable law, bear interest at a rate per annum equal to 11.75% and (ii) all interest accrued and accruing will be payable in cash on demand.

Prepayment . We may prepay Loans at any time, in any amount. Such prepayment is to include all accrued and unpaid interest on the portion of the obligations being prepaid through the prepayment date. If at any time within the twelve months following the Emergence Date, we prepay the obligations due, in whole, but not in part, then in addition to the repayment of 100% of the principal amount of the obligations being prepaid plus accrued and unpaid interest thereon, we are required to pay the interest that would have accrued on the prepaid amount through the first anniversary of the Emergence Date plus a 6% prepayment premium.

In addition to the above described prepayment premium, we will pay an additional repayment premium equal to the percentage of the principal repaid during the following periods:

Period	Repayment Premium
From the Emergence Date through the first anniversary of the Emergence Date		3	%
From the day after the first anniversary of the Emergence Date through the second anniversary of the Emergence Date		2	%

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We are also required to make certain mandatory repayments after certain dispositions of property, debt issuances, joint venture distributions from Piceance Energy, casualty events and equity issuances, in each case subject to customary reinvestment provisions. These mandatory repayments are subject to the prepayment premiums described above.

The contingent repayments described above are required to be accounted for as an embedded derivative. The estimated fair of the embedded derivative at issuance was approximately $65,000 and was recorded as a derivative liability with the offset to debt discount. Subsequent changes in fair value are reflected in earnings.

Collateral . The Loans and all obligations arising under the Loan Agreement are secured by (i) a perfected, first-priority security interest in all of our assets other than our equity interest in Piceance Energy held by Par Piceance Energy Equity, LLC, one of our wholly owned subsidiaries (“Par Piceance Energy Equity”) , pursuant to a pledge and security agreement made by us and certain of our subsidiaries in favor of the Agent, and (ii) a perfected, second-lien security interest in our equity interest in Piceance Energy held by Par Piceance Energy Equity, pursuant to a pledge agreement by Par Piceance Energy Equity in favor of the Agent. The priority of the Lenders’ security interest in our assets is specified in that certain intercreditor agreement (the “Intercreditor Agreement”), among JPMorgan Chase Bank, N.A., as administrative agent for the First Priority Secured Parties (as defined in the Intercreditor Agreement), the Agent, as administrative agent for the Second Priority Secured Parties (as defined in the Intercreditor Agreement), the Company and Par Piceance Energy Equity.

Guaranty . All of our obligations under the Loan Agreement are unconditionally guaranteed by the Guarantors.

Fees and Commissions . We agreed to pay the Agent an annual nonrefundable administrative fee that was earned in full on the Emergence Date. In addition, we agreed to pay the Lenders a nonrefundable closing fee that was earned in full on the Emergence Date.

Warrants . As consideration for granting the Loans, we have also issued warrants to the Lenders to purchase shares of our common stock as described under “– Warrant Issuance Agreement” below.

Term . All loans and all other obligations outstanding under the Loan Agreement are payable in full on August 31, 2016.

Covenants . The Loan Agreement has no financial covenants that we are required to comply with; however, it does require us to comply with various affirmative and negative covenants affecting our business and operations which we were in compliance with at June 30, 2013.

Amendment to the Loan Agreement—Tranche B Loan

On December 28, 2012, in order to fund a portion of the purchase price for our acquisition of Texadian Energy, the Loan Parties entered into an amendment to the Loan Agreement with the Agent and the Lenders, pursuant to which certain lenders (the “Tranche B Lenders”) agreed to extend additional borrowings to us (the “Tranche B Loan”). The total commitment of the Tranche B Loan of $35.0 million was drawn at closing. In addition to funding a portion of the purchase price of the acquisition of Texadian, the Tranche B Loan provided cash collateral for the Letter of Credit Facility with Compass Bank (as described below).

Set forth below are certain of the material terms of the Tranche B Loan:

Interest . At our election, the Tranche B Loan bears interest at a rate equal to 9.75% per annum payable either (i) in cash or (ii) in-kind. At any time after an event of default has occurred and is continuing, (i) all outstanding obligations will, to the extent permitted by applicable law, bear interest at a rate per annum equal to 11.75% and (ii) all interest accrued and accruing will be payable in cash on demand.

Prepayment . We may prepay the Tranche B Loan at any time, provided that any prepayment is in an integral multiple of $100,000 and not less than $100,000 or, if less, the entire outstanding principal amount of the Tranche B Loan.

Maturity date. The maturity date is July 1, 2013.

Collateral . The Tranche B Loan is secured by a lien on substantially all of our assets and our subsidiaries, including Texadian, but excluding our equity interests in Piceance Energy.

Guaranty . All of our obligations under the Tranche B Loan are unconditionally guaranteed by the Guarantors, including, Texadian.

Fees and Commissions . We agreed to pay the Lenders a nonrefundable exit fee equal to five percent (5%) of the aggregate

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amount of the Tranche B Loan. The exit fee is earned in full and payable on the maturity date of the Tranche B Loan or, if earlier, the date on which the Tranche B Loan is paid in full. Accordingly, we will accrete amounts due for the nonrefundable exit fee over the term of loan using the effective interest method.

On April 19, 2013, we entered into a Fourth Amendment to our Loan Agreement.

Set forth below are certain material terms of the Fourth Amendment:

Lender Consent to Compressor Disposition . The Lenders agreed that, in connection with the previous sale of our natural gas compressor assets held for sale (see Note 2) (a) 50% of the net cash proceeds are to be applied to pay (i) first, an amendment fee and (ii) second, to repay the Tranche B Loan in accordance with each Tranche B Lender’s pro rata share, and (ii) 50% of the net cash proceeds are to be retained by us and used for general corporate purposes.

Collateral . The Lenders agreed to the release of their liens and security interests on the assets of Texadian, including a release of any lien on the equity interests of Texadian pledged by us, and a release of Texadian from its guarantee under the Loan Agreement, if necessary. Such releases will only be made in connection with the closing of a definitive trade finance credit facility by Texadian and is subject in all respects to the satisfaction of the conditions to release described in the Fourth Amendment.

Mandatory Prepayment . Net cash proceeds of asset dispositions (other than as a result of a casualty), debt issuances and equity issuances can no longer be invested by us, and must be used to prepay the Loan Agreement, other than net cash proceeds from asset sales for fair market value resulting in no more than $150,000 in net cash proceeds per disposition (or series of related dispositions) and less than $300,000 in aggregate net cash proceeds before the Maturity Date.

Maturity Date . The Lenders agreed to extend the maturity date of the Tranche B Loan to December 31, 2013.

With the execution of the Fourth Amendment, we repaid approximately $1.3 million of the Tranche B Loan.

On June 4, 2013, we entered into a Fifth Amendment to our Loan Agreement allowing us to form a subsidiary, Hawaii Pacific Energy LLC, in furtherance of our acquisition of Tesoro Hawaii.

On June 12, 2013, we entered into a Sixth Amendment to our Loan Agreement.

Set forth below are certain material terms of the Sixth Amendment:

Pledge of Equity Interests . We are expressly permitted to pledge our equity interests in Texadian to secure the loans and other obligations of Texadian and Texadian Canada under the Uncommitted Credit Agreement (as described below).

Capital Contributions . We are permitted to make up to an aggregate amount of $5 million of capital contributions and/or loans to Texadian per year.

In connection with Hawaii Pacific Energy's entry into the Purchase Agreement, on June 17, 2013, we entered into a Seventh Amendment to the Loan Agreement.

Set forth below are certain of the material terms of the Seventh Amendment:

Lender Consent to Purchase Agreement . The Lenders consented to the execution of the Purchase Agreement by Hawaii Pacific Energy, and the performance of Hawaii Pacific Energy's obligations thereunder.

Lender Consent to Refinery Startup Reimbursement . The Lenders consented to the payment by Hawaii Pacific Energy of a cash deposit of up to $25 million, in addition to the reimbursement obligations specified in the Purchase Agreement in connection with the Refinery Startup Activities.

Lender Consent to the Consummation of the Acquisition of Tesoro Hawaii . The Lenders consented to our use of any advance under the Loan Agreement to consummate the acquisition of Tesoro Hawaii pursuant to the Purchase Agreement.

Lender Consent to Purchase Agreement Guaranty . The Lenders consented to the execution of our guaranty of certain obligations under the Purchase Agreement.

On June 24, 2013, we entered into an Eighth Amendment to our Loan Agreement, pursuant to which the Lenders agreed to refinance and replace the Tranche B Loans outstanding immediately prior to the Eighth Amendment with new Tranche B Loans in the aggregate principal amount of $65.0 million (the “New Tranche B Loans”). The proceeds from the New Tranche B Loans were applied to prepay in full the Existing Tranche B Loans, to make payments due under the Purchase Agreement, to consummate acquisitions permitted under the Loan Agreement and for working capital and general corporate purposes.

Set forth below are certain of the material terms of the New Tranche B Loans:

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Interest . The New Tranche B Loans will bear interest (a) through September 29, 2013 at a rate equal to 9.75% per annum payable, at our election, either (i) in cash or (ii) in-kind, and (b) from and after September 29, 2013, at a rate equal to 14.75% per annum payable either (i) in cash or (ii) in-kind.

At any time after an event of default has occurred and is continuing, (i) all outstanding obligations will, to the extent permitted by applicable law, bear interest at a rate per annum equal to 2% plus the rate otherwise applicable and (ii) all interest accrued and accruing will be payable in cash on demand.

Prepayment . We may prepay the New Tranche B Loans at any time, provided that any prepayment is in an integral multiple of $100,000 and not less than $100,000 or, if less, the outstanding principal amount of the New Tranche B Loans. Amounts to be applied to prepayment of New Tranche B Loans shall be applied (i) first, towards payment of interest then outstanding and fees then due, and (ii) second, towards payment of principal then outstanding.

Collateral . The New Tranche B Loans are secured by a lien on substantially all of our assets and our subsidiaries, excluding Texadian, Texadian Energy Canada Limited (“Texadian Canada”), certain of our immaterial subsidiaries, and Hawaii Pacific Energy, LLC.

Guaranty . All our obligations under the New Tranche B Loans are unconditionally guaranteed by the Guarantors.

Fees and Commissions . We agreed to pay the New Tranche B Lenders a nonrefundable exit fee equal to 2.5% of the aggregate amount of the New Tranche B Loans. The exit fee is earned in full and payable on the maturity date of the Tranche B Loans or, if earlier, the date on which the New Tranche B Loans are paid in full. Accordingly, we will accrete amounts due for the nonrefundable exit fee over the term of loan using the effective interest method.

Maturity Date . The New Tranche B Loans mature and are payable in full on August 31, 2016.

Texadian Uncommitted Credit Agreement

On June 12, 2013, Texadian and its wholly owned subsidiary Texadian Canada entered into an uncommitted credit agreement with BNP Paribas, as the initial lender party thereto, and BNP Paribas, as the administrative agent and collateral agent for the lenders and as an issuing bank (the “Uncommitted Credit Agreement”). The Uncommitted Credit Agreement provides for loans and letters of credit, on an uncommitted and absolutely discretionary basis, in an aggregate amount at any one time outstanding not to exceed $50.0 million. Loans and letters of credit issued under the Uncommitted Credit Agreement are secured by a security interest in and lien on substantially all of Texadian’s assets, including, but not limited to, cash, accounts receivable, and inventory, a pledge by Texadian of 65% of its ownership interest in Texadian Canada, and a pledge by us of 100% of our ownership interest in Texadian. Texadian agreed to pay certain fees with respect to the loans and letters of credit made available to it under the Uncommitted Credit Agreement, including an up-front fee, an origination fee, a minimum compensation fee, a collateral audit fee, and fees with respect to letters of credit. The Uncommitted Credit Agreement requires Texadian to comply with various affirmative and negative covenants affecting its business, and Texadian must comply with certain financial maintenance covenants, including among other things, covenants regarding the minimum net working capital and minimum tangible net worth of Texadian. The Uncommitted Credit Facility does not permit, at any time, Texadian’s consolidated leverage ratio to be greater than 5.00 to 1.00 or its consolidated gross asset coverage to be equal to or less than zero. As of June 30, 2013, Texadian was in compliance with these covenants.

Letter of Credit Facility

On December 27, 2012, we entered into a letter of credit facility agreement with Compass Bank, as the lender (the “Compass Letter of Credit Facility”). The Compass Letter of Credit Facility, which matures on December 26, 2013, provides for a letter of credit facility in an aggregate principal amount of $30.0 million that is available for the issuance of cash-collateralized standby letters of credit for us or any of our subsidiaries’ account. Letters of credit issued under the Compass Letter of Credit Facility are secured by an amount of cash pledged and delivered by us to Compass equal to one hundred five percent (105%) of the undrawn amount of all outstanding letters of credit. We agreed to pay a letter of credit fee equal to one and one half percent (1.5%) per annum of the stated face amount of each letter of credit for the number of days such letter of credit is to remain outstanding plus standard and customary administrative fees. The Compass Letter of Credit Facility does not contain any financial covenants; however, it does require us to comply with various affirmative and negative covenants affecting our business and operations. As of June 30, 2013, the Compass Letter of Credit Facility has been terminated.

In connection with the acquisition of Texadian, Compass Bank issued an Irrevocable Standby Letter of Credit in favor of SEACOR Holdings, Inc. in the amount of $11.71 million (the “Irrevocable Standby Letter of Credit”). The Irrevocable Standby Letter of Credit secured SEACOR Holdings, Inc. in the event that either of the following letters of credit is drawn: (i) the letter of credit issued by DNB Bank, ASA in favor of Suncor Energy Marketing Inc., with an original maturity date of February 5, 2013; or (ii) the letter of credit issued by DNB Bank, ASA in favor of Cenovus Energy Marketing Services Limited, with an original maturity date of February 5, 2013. Those letters of credit have been terminated and released.

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Cross Default Provisions

Included within each of the Company’s debt agreements are customary cross default provisions that require the repayment of amounts outstanding on demand should an event of default occur and not be cured within the permitted grace period, if any.

Warrant Issuance Agreement

Pursuant to the Plan, on the Emergence Date, we issued to the Lenders warrants (the “Warrants”) to purchase up to an aggregate of 9,592,125 shares of our common stock (the “Warrant Shares”). In connection with the issuance of the Warrants, we also entered into a Warrant Issuance Agreement, dated as of the Emergence Date (the “Warrant Issuance Agreement”). Subject to the terms of the Warrant Issuance Agreement, the holders are entitled to purchase shares of common stock upon exercise of the Warrants at an exercise price of $0.01 per share of common stock (the “Exercise Price”), subject to certain adjustments from time to time as provided in the Warrant Issuance Agreement. The Warrants expire on the earlier of (i) August 31, 2022 or (ii) the occurrence of certain merger or consolidation transactions specified in the Warrant Issuance Agreement. A holder may exercise the Warrants by paying the applicable exercise price in cash or on a cashless basis.

The number of Warrant Shares issued on the Emergence Date was determined based on the number of shares of our common stock issued as allowed claims on or about the Emergence Date by the Bankruptcy Court pursuant to the Plan. The Warrant Issuance Agreement provides that the number of Warrant Shares and the Exercise Price shall be adjusted in the event that any additional shares of common stock or securities convertible into common stock (the “Unresolved Bankruptcy Shares”) are authorized to be issued under the Plan by the Bankruptcy Court after the Emergence Date as a result of any unresolved bankruptcy claims under the Plan. Upon each issuance of any Unresolved Bankruptcy Shares, the Exercise Price shall be reduced to an amount equal to the product obtained by multiplying (A) the Exercise Price in effect immediately prior to such issuance or sale, by (B) a fraction, the numerator of which shall be (x) 147,655,815 and (y) the denominator of which shall be the sum of (1) 147,655,815 and (2) and the number of additional Unresolved Bankruptcy Shares authorized for issuance under the Plan. Upon each such adjustment of the Exercise Price, the number of Warrant Shares shall be increased to the number of shares determined by multiplying (A) the number of Warrant Shares which could be obtained upon exercise of such Warrant immediately prior to such adjustment by (B) a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately after such adjustment. In the event that any Lender or its affiliates fails to fund its pro rata portion of any Loans required to be made under the Loan Agreement, then the number of Warrant Shares exercisable under the Warrants held by such Lender will be reduced to an amount equal to the product of (i) the number of Warrant Shares initially exercisable under the Warrant held by the Lender and (ii) a fraction equal to one minus the quotient obtained by dividing (x) the amount of Loans previously made under the Loan Agreement by such Lender by (y) such Lender’s full commitment for Loans. From the Emergence Date through June 30, 2013, we issued an additional 1,942,272 Unresolved Bankruptcy Shares. This entitles the Lenders to receive an additional 126,175 Warrant Shares, for a total of 9,718,300 Warrant Shares, based on the formula described above.

The Warrant Issuance Agreement includes certain restrictions on the transfer by holders of their Warrants, including, among others, that (i) the Warrants and the notes under the Loan Agreement are not detachable for transfer purposes, and for as long as obligations under the Loan Agreement are outstanding, the notes and Warrants may not be transferred separately, and (ii) in the event that any holder desires to transfer any pro rata portion of the notes and Warrants, then such holder must provide the other Lenders and/or holders of the Warrants with a right of first offer to make an election to purchase such offered notes and Warrants.

The number of shares of our common stock issuable upon exercise of the Warrants and the exercise prices of the Warrants will be adjusted in connection with certain issuances or sales of shares of the Company’s common stock and convertible securities, or any subdivision, reclassification or combinations of common stock. Additionally, in the case of any reclassification or capital reorganization of the capital stock of the Company, the holder of each Warrant outstanding immediately prior to the occurrence of such reclassification or reorganization shall have the right to receive upon exercise of the applicable Warrant, the kind and amount of stock, other securities, cash or other property that such holder would have received if such Warrant had been exercised.

Based on certain anti-dilution provisions in the Warrant Issuance Agreement, we have concluded that the Warrants are not indexed to our equity. Accordingly, we have estimated the fair value of the Warrants on the date of grant to be approximately $6.6 million and recorded the estimated fair value of the Warrants as a derivative liability with the offset to debt discount. The debt discount will be amortized over the life of the Loan Agreement, using the effective interest method. Subsequent changes in the fair value of the Warrants will be reflected in earnings.

Summary

Our debt at June 30, 2013 is as follows (in thousands):

New Tranche B Loan, including interest in-kind	$	65,179
Delayed Draw Term Loan Agreement, including interest in-kind		31,564
Less: unamortized debt discount – warrants and embedded derivative		(5,194	)

Total debt, net of unamortized debt discount		91,549
Less: current maturities		—

Long term debt, net of current maturities and unamortized discount	$	91,549

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Interest and financing costs consists of the following:

		Three Months Ended June 30, 2013	Six Months Ended June 30, 2013
		(in thousands)

Interest accrued in kind	$	1,494	$	3,012
Interest for Texadian credit agreements		18		73
Accretion of 3% repayment premium on the Delayed Draw Term Loan Agreement		24		48
Accretion of 5% exit fee on the Tranche B Loan		875		1,750
Accretion of 2.5% exit fee on the New Tranche B Loan		108		108
Amortization of debt discount relating to the warrants and embedded derivative		456		880

Interest and financing costs, net	$	2,975	$	5,871

(6) Fair Value Measurements

We follow accounting guidance which defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and requires additional disclosures about fair value measurements. As required, we applied the following fair value hierarchy:

Level 1 – Assets or liabilities for which the item is valued based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.

The level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Our policy is to recognize transfer in and/or out of fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. We have consistently applied the valuation techniques discussed below for the periods presented. These valuation policies are determined by our Chief Financial Officer, with the assistance of third party experts as needed, and approved by our Chief Executive Officer. They are discussed with our Audit Committee as deemed appropriate. Each quarter, our Chief Financial Officer and Chief Executive Officer update the inputs used in the fair value measurement and internally review the changes from period to period for reasonableness. We use data from peers as well as external sources in the determination of the volatility and risk free rates used in our fair value calculations. A sensitivity analysis is performed as well to determine the impact of inputs on the ending fair value estimate.

Assets and Liabilities Measure at Fair Value on a Recurring Basis

Derivative liabilities associated with our debt agreement – Derivative liabilities include the Warrants and fair value is estimated using an income valuation technique and a Monte Carlo Simulation Analysis, which is considered to be Level 3 fair value measurement. Significant inputs used in the Monte Carlo Simulation Analysis include the stock price of $1.63 per share, initial exercise price $0.01, term of 9.17 years, risk free rate of 2.44%, and expected volatility of 75.29%. The expected volatility is based on the 10 year historical volatilities of comparable public companies. Based on the Monte Carlo Simulation Analysis, the estimated fair value of the Warrants was $1.67 per share, or approximately $16.2 million, as of June 30, 2013. Since the Warrants were in the money upon issuance, we do not believe that changes in the inputs to the Monte Carlo Simulation Analysis will have a

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significant impact to the value of the Warrants other than changes in the value of our common stock. Increases in the value of our common stock will directly be correlated to increases in the value of the Warrants. Likewise, a decrease in the value of our common stock will result in a decrease in the value of the Warrants.

In addition, our Loan Agreement contains mandatory repayments subject to premiums as set forth in the agreement. Factors such as the sale of assets, distributions from our investment in Piceance Energy, issuance of additional debt or issuance of additional equity may result in a mandatory prepayment. We consider the contingent prepayment feature to be an embedded derivative which was bifurcated from the loan and accounted for as a derivative. The fair value of the embedded derivative is estimated using an income valuation technique and a crystal ball forecast. The fair value measurement is considered to be a Level 3 fair value measurement. We do not believe that changes to the inputs in the model would have a significant impact on the valuation of the embedded derivative, other than a change to the estimate of the probability that a triggering event would occur. An increase in the probability of a triggering event occurring would cause an increase in the fair value of the embedded derivative. Likewise, a decrease in the probability of a triggering event occurring would cause a decrease in the value of the embedded derivative. As of June 30, 2013, we do not believe that there is any probability of us repaying the loan prior to maturity; accordingly, we have concluded that the embedded derivative has no value.

Derivative instruments – With the acquisition of Texadian, we assumed certain open positions consisting of non-exchange traded fixed price physical contracts. These contracts were not treated as normal purchase or normal sales contracts and changes in fair value were recorded in earnings. In addition, we had certain exchange traded oil contracts that settled during the period and had no open positions as of June 30, 2013. The fair value of our commodity derivatives is measured using the closing market price at the end of the reporting period obtained from the New York Mercantile Exchange and from third party broker quotes and pricing providers. As of June 30, 2013, we had no open positions relating to these non-exchange traded fixed price physical contracts except for contracts treated as normal purchase or normal sale contracts as discussed in our Summary of Significant Accounting Policies.

Our liabilities measured at fair value on a recurring basis as of June 30, 2013 consist of the following (in thousands):

	June 30, 2013
	Fair Value			Level 1		Level 2		Level 3
Liabilities
Derivatives:
Warrants	$	(16,200	)	$	—	$	—	$	(16,200	)
Embedded derivatives		—			—		—		—

	$	(16,200	)	$	—	$	—	$	(16,200	)

	Location on Consolidated Balance Sheet	Fair Value at June 30, 2013
		(in thousands)

Warrant derivatives	Noncurrent liabilities	$	(16,200	)
Embedded derivative	Noncurrent liabilities	$	—

A rollforward of Level 3 derivative warrants and the embedded derivative measured at fair value using Level 3 on a recurring basis is as follows (in thousands):

Description
Balance, at December 31, 2012	$	(10,945	)
Purchases, issuances, and settlements		—
Total unrealized losses included in earnings		(5,255	)
Transfers		—

Balance, at June 30, 2013	$	(16,200	)

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The following table summarizes the pretax effect resulting from changes in fair value of derivative instruments charged directly to earnings (in thousands):

	For the three months ended June 30, 2013
	Income Statement Classification	Gain (loss) recognized in income

Derivatives not designated as hedges:
Warrants	Other income (expense)	$	(3,300	)
Embedded derivatives	Other income (expense)		285
Commodities - exchange traded futures	Other income (expense)		—
Commodities - physical forward contracts	Other income (expense)		—

	For the six months ended June 30, 2013
	Income Statement Classification	Gain (loss) recognized in income

Derivatives not designated as hedges:
Warrants	Other income (expense)	$	(5,300	)
Embedded derivatives	Other income (expense)		45
Commodities - exchange traded futures	Other income (expense)		104
Commodities - physical forward contracts	Other income (expense)		306

(7) Commitments and Contingencies

Recovery Trusts

On the Emergence Date, two trusts were formed, the Wapiti Recovery Trust (the “Wapiti Trust”) and the Delta Petroleum General Recovery Trust (the “General Trust,” and together with the Wapiti Trust, the “Recovery Trusts”). The Recovery Trusts were formed to pursue certain litigation against third-parties, including preference actions, fraudulent transfer and conveyance actions, rights of setoff and other claims, or causes of action under the U.S. Bankruptcy Code, and other claims and potential claims that the Debtors hold against third parties. The Recovery Trusts were funded with $1.0 million each pursuant to the Plan.

On September 19, 2012, the Wapiti Trust settled all causes of action against Wapiti Oil & Gas, LLC (“Wapiti Oil & Gas”). Wapiti Oil & Gas made a one-time cash payment in the amount of $1.5 million to the Wapiti Trust, as consideration for the release of claims against it. These proceeds were then distributed to us, along with funds remaining from the initial funding of the Wapiti Trust of approximately $1.0 million. Further distributions are not anticipated from the Wapiti Trust and the Wapiti Trust is anticipated to be liquidated during 2013.

The General Trust is pursuing all bankruptcy causes of action not otherwise vested in the Wapiti Trust, claim objections and resolutions, and all other responsibilities for winding-up the bankruptcy. The General Trust is overseen by a three person General Trust Oversight Board and our former Chief Executive Officer is the trustee. Costs, expenses and obligations incurred by the General Trust are charged against assets in the General Trust. To conduct its operations and fulfill its responsibilities under the Plan and the trust agreements, the recovery trustee may request additional funding from us. Any litigation pending at the time we emerged from Chapter 11 was transferred to the General Trust for resolution and settlement in accordance with the Plan and the order confirming the Plan. We are the beneficiary for each of the Recovery Trusts, subject to the terms of the respective trust agreements and the Plan. Since the Emergence Date, the General Trust has filed various claims and causes of action against third parties before the Bankruptcy Court, which actions are ongoing. Upon liquidation of the various claims and causes of action held by the General Trust, the proceeds, less certain administrative reserves and expenses, will be transferred to us. It is unknown at this time what proceeds, if any, we will realize from the General Trust’s litigation efforts.

From the Emergence Date through June 30, 2013, the Recovery Trusts have released approximately $5.2 million to us, which is available for our general use, due to a negotiated reduction in certain fees and claims associated with the bankruptcy, as well as a favorable variance in actual expenses versus budgeted expenses. The entire $5.2 million was released prior to December 31, 2012.

Shares Reserved for Unsecured Claims

The Plan provides that certain allowed general unsecured claims be paid with shares of our common stock. On the Emergence Date, 106 claims totaling approximately $73.7 million had been filed in the bankruptcy. Pursuant to the Plan, between the Emergence Date and December 31, 2012, the Recovery Trustee settled 25 claims with an aggregate face amount of $6.6 million for $258,905 in cash and 202,753 shares of common stock. Pursuant to the Plan, during the six months ended June 30, 2013, the Recovery Trustee settled an additional 41 claims with an aggregate face amount of $17.0 million for approximately $2.7 million in cash and 1,739,519 shares of common stock.

As of June 30, 2013, it is estimated that a total of 40 claims totaling approximately $50.2 million remain to be resolved by the

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Recovery Trustee. The largest remaining proof of claim was filed by the US Government for approximately $22.4 million relating to ongoing litigation concerning a plugging and abandonment obligation in Pacific Outer Continental Shelf Lease OCS-P 0320, comprising part of the Sword Unit in the Santa Barbara Channel, California. We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners, and the Predecessor Company owned a 2.41934% working interest in the unit. In addition, litigation and/or settlement efforts are ongoing with Macquarie Capital (USA) Inc., as well as other claim holders.

The settlement of claims is subject to ongoing litigation and we are unable to predict with certainty how many shares will be required to satisfy all claims. Pursuant to the Plan, allowed claims are settled at a ratio of 544 shares per $1,000 of claim. At June 30, 2013, we have reserved approximately $7.2 million representing the estimated value of claims remaining to be settled which are deemed probable and estimable at period end. A summary of claims is as follows:

	Emergence-Date August 31, 2012				From Emergence-Date through December 31, 2012
	Filed Claims				Settled Claims								Remaining Filed Claims
									Consideration
	Count		Amount		Count		Amount		Cash		Stock		Count		Amount
U.S. Government Claims		3	$	22,364,000		—	$	—	$	—		—		3	$	22,364,000
Former Employee Claims		32		16,379,849		13		3,685,253		229,478		202,231		19		12,694,596
Macquarie Capital (USA) Inc.		1		8,671,865		—		—		—		—		1		8,671,865
Swann and Buzzard Creek Royalty Trust		1		3,200,000		—		—		—		—		1		3,200,000
Other Various Claims*		69		23,120,396		12		2,914,859		29,427		522		57		20,205,537

Total		106	$	73,736,110		25	$	6,600,112	$	258,905		202,753		81	$	67,135,998

	For the Six Months Ended June 30, 2013
	Settled Claims								Remaining Filed Claims
					Consideration
	Count		Amount		Cash		Stock		Count		Amount

U.S. Government Claims		—	$	—	$	—		—		3	$	22,364,000
Former Employee Claims		19		12,694,596		339,588		1,614,988		—		—
Macquarie Capital (USA) Inc.		—		—		—		—		1		8,671,865
Swann and Buzzard Creek Royalty Trust		1		3,200,000		2,000,000		—		—		—
Other Various Claims*		21		1,075,493		397,753		124,531		36		19,130,044

Total		41	$	16,970,089	$	2,737,341		1,739,519		40	$	50,165,909

*	Includes reserve for contingent/unliquidated claims in the amount of $10 million.

Other

On April 22, 2013, Texadian entered into a terminaling and storage agreement whereby the operator will provide Texadian with storage facilities, access to a marine terminal and pipelines, and railcar offloading services. The initial term of the agreement is for a period of four years and Texadian’s minimum purchase commitment during the initial term is approximately $28.0 million.

As of June 30, 2013, Texadian had various agreements to lease railcars, inland river tank barges and towboats and other equipment. These leasing agreements have been classified as operating leases for financial reporting purposes and the related rental fees are charged to expense over the lease term as they become payable. Leases generally range in duration of five years or less and contain lease renewal options at fair value.

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(8) Stockholders’ Equity

Common Stock

During the six months ended June 30, 2013, we issued approximately 1,740,000 shares of our common stock for settlement of bankruptcy claims and approximately 855,000 shares of restricted common stock to certain key employees.

Incentive Plan

On December 20, 2012, our Board of Directors (the “Board”) approved the Par Petroleum Corporation 2012 Long Term Incentive Plan (the “Incentive Plan”). Under the Incentive Plan, the Board, or a committee of the Board, may issue up to 16 million shares of our common stock, or incentive stock options, nonstatutory stock options or restricted stock to our employee or directors, or other individuals providing services to us. In general, the terms of any award issue will be determined by the committee upon grant.

On December 31, 2012, a total of 2,191,834 shares of our restricted common stock were granted to members of the Board of Directors and certain key employees. During the six months ended June 30, 2013, an additional 854,493 shares of our restricted stock were granted to certain key employees. Restricted stock granted to members of the Board vests in full after one year from the date of grant, while most restricted stock granted to employees vests on a pro-rata basis over five years. For the six months ended June 30, 2013, the following activity occurred under our Incentive Plan:

	Shares		Weighted-Average Grant Date Fair Value
Stock Awards:
Non vested balance, beginning of period		2,191,834	$	1.09
Granted		854,493		1.63
Vested		—		—
Forfeited		—		—

Non vested balance, end of period		3,046,327	$	1.24

For the three and six months ended June 30, 2013, we recognized compensation costs of approximately $140,000 and $281,000, respectively, related to the restricted stock awards. As of June 30, 2013, there are approximately $3.5 million of total unrecognized compensation costs related to restricted stock awards, which are expected to be recognized on a straight-line basis over a weighted average period of 4.5 years. The grant date fair value was estimated using the previous 20 days average trading price of our common stock.

(9) Income Taxes

Under the Plan, our prepetition debt securities, primarily prepetition notes, were extinguished. Absent an exception, a debtor recognizes cancellation of debt income (“CODI”) upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. Tax regulations provide that a debtor in a bankruptcy case may exclude CODI from income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. As a result of the market value of our equity upon emergence from Chapter 11 bankruptcy proceedings, we were able to retain a significant portion of our NOLs and other “Tax Attributes” after reduction of the Tax Attributes for CODI realized on emergence from Chapter 11 and certain prior interest payments on debt converted to equity. Our NOLs have been reduced by approximately $230 million of CODI as a result of emergence from Chapter 11.

Pursuant to the Plan, on the Emergence Date, the existing equity interests of the Predecessor were extinguished. New equity interests were issued to creditors in connection with the terms of the Plan, resulting in an ownership change as defined under Section 382 of the Code. Section 382 generally places a limit on the amount of net operating losses and other tax attributes arising before the change that may be used to offset taxable income after the ownership change. We believe however that we will qualify for an exception to the general limitation rules. This exception under Code Section 382(l)(5) provides for substantially less restrictive limitations on our net operating losses; however the net operating losses are eliminated should another ownership change occur within two years. Our amended and restated certificate of incorporation places restrictions upon the ability of the equity interest holders to transfer their ownership in us. These restrictions are designed to provide us with the maximum assurance

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that another ownership change does not occur that could adversely impact our net operating loss carry forwards.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future results of operations, and tax planning strategies in making this assessment. Based upon the level of historical taxable income, significant book losses during the current and prior periods, and projections for future results of operations over the periods in which the deferred tax assets are deductible, among other factors, management continues to conclude that we did not meet the “more likely than not” requirement of ASC 740 in order to recognize deferred tax assets and a valuation allowance has been recorded for the full amount of our net deferred tax assets at June 30, 2013.

During the three and six month periods ended June 30, 2013, no adjustments were recognized for uncertain tax benefits.

Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our NOL carry forwards will not always be available to offset taxable income apportioned to the various states. The states from which Texadian’s revenues are derived are not the same states in which our NOLs were incurred; therefore we expect to incur state tax liabilities on the net income of Texadian’s operations. State income tax expense of approximately $0 and $650,000 was recognized for the three and six months ending June 30, 2013, respectively.

During 2013 and thereafter, we will continue to assess the realizability of our deferred tax assets based on consideration of actual and projected operating results and tax planning strategies. Should actual operating results improve, the amount of the deferred tax asset considered more likely than not to be realizable could be increased.

(10) Earnings Per Share

Basic earnings per share (“EPS”) are computed by dividing net loss by the sum of the weighted average number of common shares outstanding, and the weighted average number of shares issuable under the Warrants, representing 9,718,300 shares (see Note 5 and 6). U.S. GAAP requires the inclusion of these Warrants in the calculation of basic EPS because they are issuable for minimal consideration. Non-vested restricted stock is excluded from the computation as these shares are not considered earned until vesting. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Successor			Predecessor
	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012
Net loss attributable to common stockholders	$	(9,213	)	$	(15,913	)

Basic weighted-average common stock outstanding		159,349			28,806
Add: dilutive effects of common stock equivalents		—			—

Diluted weighted-average common stock outstanding		159,349			28,806

Basic loss per common share:	$	(0.06	)	$	(0.55	)

Diluted loss per common share:	$	(0.06	)	$	(0.55	)

Potentially dilutive securities excluded from the calculation of diluted shares outstanding include the following (in thousands):

	Successor		Predecessor
	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012
Stock issuable upon conversion of convertible notes		—		379
Stock options		—		150
Non-vested restricted stock		3,046		558

Total potentially dilutive securities		3,046		1,087

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	Successor			Predecessor
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Net loss attributable to common stockholders	$	(14,029	)	$	(29,375	)

Basic weighted-average common stock outstanding		158,684			28,812
Add: dilutive effects of common stock equivalents		—			—

Diluted weighted-average common stock outstanding		158,684			28,812

Basic loss per common share:	$	(0.09	)	$	(1.02	)

Diluted loss per common share:	$	(0.09	)	$	(1.02	)

Potentially dilutive securities excluded from the calculation of diluted shares outstanding include the following (in thousands):

	Successor		Predecessor
	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Stock issuable upon conversion of convertible notes		—		379
Stock options		—		150
Non-vested restricted stock		3,046		558

Total potentially dilutive securities		3,046		1,087

(11) Segment Information

Following our acquisition of Texadian, we have two business segments, (i) natural gas and oil exploration and production and (ii) commodity transportation and marketing. Summarized financial information concerning reportable segments consists of the following (in thousands):

For the three months ended June 30, 2013:	Natural Gas and Oil Exploration and Production			Commodity Transportation and Marketing		Trust Litigation and Settlements			Total
Sales and operating revenues	$	2,229		$	32,448	$	—		$	34,677
Operating income (loss)		(1,513	)		2,116		(3,867	)		(3,264	)
Income from unconsolidated affiliate		1,495			—		—			1,495
Capital expenditures		110			39		—			149
Depreciation, depletion, amortization and accretion		504			533		—			1,037

For the six months ended June 30, 2013:	Natural Gas and Oil Exploration and Production			Commodity Transportation and Marketing		Trust Litigation and Settlements			Total
Sales and operating revenues	$	3,806		$	95,757	$	—		$	99,563
Operating income (loss)		(6,120	)		7,851		(5,164	)		(3,433	)
Loss from unconsolidated affiliate		(865	)		—		—			(865	)
Capital expenditures		338			39		—			377
Depreciation, depletion, amortization and accretion		773			1,031		—			1,804

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At June 30, 2013, our reportable segment assets consisted of the following (in thousands):

	Natural Gas and Oil Exploration and Production		Commodity Transportation and Marketing		Trust Litigation and Settlements		Total
Current assets	$	2,551	$	44,560	$	318	$	47,429
Property and equipment, net		5,163		39		—		5,202
Investments in unconsolidated affiliates		103,815		—		—		103,815
Goodwill and other intangible assets, net		—		16,095		—		16,095
Other long term assets		7		—		—		7

Totals	$	111,536	$	60,694	$	318	$	172,548

Reconciliation of reportable segment assets to our consolidated totals is as follows (in thousands):

	June 30, 2013
Total assets for reportable segments	$	172,548
Cash and restricted cash not allocated to segments		17,441
Acquisition deposits		40,000
Prepaid expenses		419

Total assets	$	230,408

(12) Related Party Transactions

Certain of our stockholders who are lenders under the Loan Agreement received Warrants exercisable for shares of common stock in connection with such loan (see Note 5).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

We are including the following discussion to inform our existing and potential security holders generally of some of the risks and uncertainties that can affect us and to take advantage of the “safe harbor” protection for forward-looking statements afforded under federal securities laws. From time to time, our management or persons acting on our behalf make forward-looking statements to inform existing and potential security holders about us. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “propose,” “potential,” “predict,” “forecast,” “believe,” “expect,” “anticipate,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. Except for statements of historical or present facts, all other statements contained in this report are forward-looking statements. The forward-looking statements may appear in a number of places and include statements with respect to, among other things: business objectives and strategies, operating strategies; natural gas and oil reserve estimates (including estimates of future net revenues associated with such reserves and the present value of such future net revenues); estimates of future production of natural gas and oil; marketing of natural gas and oil; expected future revenues and earnings, and results of operations; future capital, development and exploration expenditures (including the amount and nature thereof); anticipated compliance with and impact of laws and regulations; and the outcome of the bankruptcy and claims allowance proceedings and other affirmative recoveries sought.

These statements by their nature are subject to certain risks, uncertainties and assumptions and will be influenced by various factors. Should any of the assumptions underlying a forward-looking statement prove incorrect, actual results could vary materially. In some cases, information regarding certain important factors that could cause actual results to differ materially from any forward-looking statement appears together with such statement. In addition, the factors described under Critical Accounting Policies and Risk Factors, as well as other possible factors not listed, could cause actual results to differ materially from those expressed in forward-looking statements, including, without limitation, the following:

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•

we may be unable to achieve the benefits expected in the transactions contemplated by the acquisition of Tesoro Hawaii

•

not all potential risks and liabilities have been identified in our due diligence of Tesoro Hawaii and its business;

•

Tesoro Hawaii and its business may not be integrated successfully or such integration may require a disproportionate amount of management’s attention and our resources;

•

Tesoro Hawaii and its business may not operate profitably;

•

anticipated cost efficiencies or synergies from the acquisition of Tesoro Hawaii may not be realized;

•

the success of Texadian’s risk management strategies;

•

compliance with laws and regulations relating to Texadian’s business;

•

commodity price risk for the business of Texadian;

•

the continued availability of our net operating loss tax carryforwards;

•

our dependence on the results of Piceance Energy;

•

our ability to control activities on properties we do not operate;

•

inadequate liquidity;

•

identifying future acquisitions and our diligence of any acquired properties;

•

our level of indebtedness;

•

our ability to generate cash flow;

•

the volatility of natural gas and oil prices, including the effect of local or regional factors;

•

instability in the global financial system;

•

uncertainties in the estimation of proved reserves and in the projection of future rates of production;

•

our ability to replace production;

•

the success of our exploration and development efforts;

•

declines in the values of our natural gas and oil properties resulting in writedowns;

•

timing, amount, and marketability of production;

•

third party curtailment, or processing plant or pipeline capacity constraints beyond our control;

•

the strength and financial resources of our competitors;

•

seasonal weather conditions;

•

operating hazards that result in losses;

•

uninsured or underinsured operating activities;

•

legal and/or regulatory compliance requirements;

•

credit risk of our contract counterparties;

•

effectiveness of our disclosure controls and procedures and our internal controls over financial reporting;

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•

our ability to develop and grow our marketing, transportation, distribution and logistics business;

•

the illiquidity and price volatility of our common stock; and

•

the concentrated ownership of our common stock.

Many of these factors are beyond our ability to control or predict. These factors are not intended to represent a complete list of the general or specific factors that may affect us.

All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements above and other cautionary statements included in this report. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

We caution you not to place undue reliance on these forward-looking statements. We urge you to carefully review and consider the disclosures made in this Form 10-Q and our other reports filed with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

Reorganization under Chapter 11

On June 4, 2012, the Debtors filed a disclosure statement relating to the Plan. The Plan was confirmed on August 16, 2012 and was declared effective on August 31, 2012 (the “Emergence Date”). On the Emergence Date, Delta consummated the transactions contemplated by the Contribution Agreement and each of Delta and Laramie contributed to Piceance Energy their respective assets in the Piceance Basin. Piceance Energy is owned 66.66% by Laramie and 33.34% by Delta (referred to after the closing of the transaction as “Successor”). At the closing, Piceance Energy entered into a new credit agreement, borrowed $100 million under that agreement, and distributed approximately $72.6 million net of settlements to the Company and approximately $24.9 million to Laramie. The Company used its distribution to pay bankruptcy expenses and repaid secured debt. The Company also entered into a new credit facility and borrowed $13 million under that facility at closing, and used those funds primarily to pay bankruptcy claims and expenses.

Following the reorganization, the Company retained its interest in the Point Arguello Unit offshore California and other miscellaneous assets and certain tax attributes, including significant net operating loss carryforwards. Based upon the Plan as confirmed by the Bankruptcy Court, Delta’s creditors were issued approximately 147.7 million shares of common stock, and Delta’s former stockholders received no consideration under the Plan.

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In addition, Laramie and Piceance Energy entered into a Management Services Agreement pursuant to which Laramie provides certain services to Piceance Energy for a fee of $650,000 per month.

On the Emergence Date, Delta also amended and restated its certificate of incorporation and bylaws and changed its name to “Par Petroleum Corporation.” The amended and restated certificate of incorporation contains restrictions that render void certain transfers of our stock that involve a holder of five percent or more of our shares. The purpose of this provision is to preserve certain of our tax attributes that we believe may have value. Under the amended and restated bylaws, the Company’s board of directors has five members, each of whom was appointed by our stockholders pursuant to a Stockholders’ Agreement entered into on the Emergence Date.

Fresh Start Accounting and the Effects of the Plan

As required by U.S. generally accepted accounting principles (“U.S. GAAP”), effective as of August 31, 2012, we adopted fresh start accounting following the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 “Reorganizations” (“ASC 852”). Fresh start accounting results in us becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements for periods prior to August 31, 2012 reflect the operations of Delta prior to reorganization (hereinafter also referred to as “Predecessor”) and are not comparable to consolidated financial statements presented on or after August 31, 2012. Accordingly, certain disclosures relating to the Predecessor’s financial statements for the three and six months ended June 30, 2012 have been omitted. Fresh start accounting was required upon emergence from Chapter 11 because (i) holders of voting shares immediately before confirmation of the Plan received less than 50% of the emerging entity and (ii) the reorganization value of our assets immediately before confirmation of the Plan was less than our post-petition liabilities and allowed claims. Fresh start accounting results in a new basis of accounting and reflects the allocation of our estimated fair value to underlying assets and liabilities.

Piceance Energy

Laramie is a Denver-based company primarily focused on finding and developing natural gas reserves from unconventional gas reservoirs within the Rocky Mountain Region. Laramie is backed by equity capital commitments funded by Laramie’s management team, EnCap Investments, Avista Capital, and DLJ Merchant Banking Partners (an affiliate of Credit Suisse Securities).

All of the assets contributed to Piceance Energy are located within Garfield and Mesa Counties, Colorado and are within a 10-mile radius in the Piceance Basin geologic formation. All of the natural gas and oil reserves contributed to Piceance Energy produce from the same geologic formations, the Mesaverde and Mancos Formations, and some of the contributed acreage is contiguous.

Piceance Energy, LLC Agreement

In connection with the consummation of the Contribution Agreement, as discussed under “- Reorganization under Chapter 11”, Laramie and Par Piceance Energy Equity LLC, one of our wholly owned subsidiaries (“Par Piceance Energy Equity”), entered into the LLC Agreement. The business of Piceance Energy is to own the natural gas and oil, surface real estate, and related assets formerly owned by Laramie and the Company in Garfield and Mesa Counties, Colorado, or other assets subsequently acquired by Piceance Energy, and to operate such assets. Pursuant to the LLC Agreement, Piceance is managed by Laramie, which controls its day-to-day operations, subject to the supervision of a six-person board, four (4) of which were appointed by Laramie and two (2) of which were appointed by Par Piceance Energy Equity. Certain major decisions require the unanimous consent of the board. The LLC Agreement provides that the sole manager, which is initially Laramie, may make a written capital call such that each member shall make additional capital contributions up to an aggregate combined total capital contribution of $60 million ($20 million to our interest), if approved by a majority of the board. If any member does not fund its share of the capital call, its interest may be reduced or diluted by the amount of the shortfall. The LLC Agreement also contains certain restrictions on transfers by the members of their units. One such restriction provides that in the event one member elects to sell or transfer a majority of its units, the other member may elect to participate in such sale. The LLC Agreement also provides that under certain circumstances, a member desiring to transfer all, but not less than all, of its units may require the other member to participate in such transfer.

Piceance Energy Credit Facility

On June 4, 2012, Piceance Energy entered into a credit facility, (as amended, the “Piceance Energy Credit Facility”), with J.P. Morgan Securities LLC and Wells Fargo Securities LLC, each as an arranger, JPMorgan Chase Bank, N.A., as the administrative agent (the “Administrative Agent”), and the lenders party thereto. The Piceance Energy Credit Facility is a $400 million secured revolving credit facility secured by a lien on Piceance Energy’s natural gas and oil properties and related assets. Par Piceance Energy Equity and Laramie are each guarantors of the Piceance Energy Credit Facility, with recourse limited to the pledge of the equity interests of Par Piceance Energy Equity and Laramie in Piceance Energy.

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Availability under the Piceance Energy Credit Facility is limited to the lesser of (i) $400 million or (ii) the borrowing base in effect from time to time. The initial borrowing base at the Emergence Date was set at $140 million. The borrowing base is determined by the Administrative Agent and the lenders, in their sole discretion, based on customary lending practices, review of the natural gas and oil properties included in the borrowing base, financial review of Piceance Energy, and such other factors as may be deemed relevant. The borrowing base is redetermined (i) on or about March 15 of each year based on the previous December 31 reserve report prepared by an independent engineering firm acceptable to the Administrative Agent, and (ii) on or about September 15 of each year based on the previous June 30 reserve report prepared by Piceance Energy’s internal engineers. The borrowing base was redetermined on March 12, 2013 and set at $140 million. In connection with the consummation of the Contribution Agreement, Piceance Energy borrowed $100 million under the Piceance Energy Credit Facility and distributed approximately $72.6 million of that amount to us and approximately $24.9 million to Laramie. The total amount outstanding under the Piceance Energy Credit Facility of June 30, 2013 is approximately $91.0 million.

The Piceance Energy Credit Facility will mature on June 4, 2016. Amounts borrowed bear interest at rates ranging from LIBOR plus 1.75% to LIBOR plus 2.75% per annum for Eurodollar loans and the prime rate plus 0.75% to prime rate plus 1.75% per annum for Base Rate loans, depending upon the ratio of outstanding credit to the borrowing base. The agreement contains customary operational and financial covenants, including a current ratio covenant, a total debt to consolidated EBITDAX covenant and a borrowing base covenant. At June 30, 2013, Piceance Energy was in compliance with all such covenants. Under the terms of the Piceance Energy Credit Facility, Piceance Energy is generally prohibited from making future cash distributions to its owners, including Par Piceance Energy Equity.

2012 Operations Overview

During the first eight months of 2012, we focused on our restructuring while operating as a debtor in possession under Chapter 11 of the U.S. Bankruptcy Code. Our operations consisted of maintaining and operating existing natural gas and oil properties with no significant exploration or drilling activities. Effective August 31, 2012, we emerged from Chapter 11 of the U.S. Bankruptcy Code. Since then, our operations in 2012 primarily consisted of activities related to our minority ownership interest in Piceance Energy and Texadian Energy, Inc. formerly known as Seacor Energy, Inc. (“Texadian”), which we acquired effective December 31, 2012. A discussion of operations for 2013 follows.

Results of Operations

The following discussion and analysis relates to items that have affected the Successor’s results of operations for three months ended June 30, 2013, and the results of operations of the Predecessor for the three months ended June 30, 2012.

Successor three months ended June 30, 2013 compared to Predecessor three months ended June 30, 2012

The 2013 and 2012 periods lack comparability due to the application of fresh start accounting effective August 31, 2012, the contribution of the majority of our natural gas and oil assets to Piceance Energy effective August 31, 2012 and our acquisition of Texadian effective December 31, 2012.

Net Loss. Net loss was approximately $9.2 million, or a loss of $0.06 per basic and diluted common share, for the three months ended June 30, 2013, compared to a net loss of approximately $15.9 million, or a loss of $0.55 per basic and diluted common share, for the three months ended June 30, 2012.

Marketing and Transportation Revenues. For the three months ended June 30, 2013, our marketing and transportation revenues were approximately $32.4 million. There were no such revenues in the three months ended March 31, 2012 due to Texadian being acquired effective December 31, 2012. For the three months ended June 30, 2013, tow and barge revenues were approximately $29.0 million. In addition, we have a pipeline transportation contract which expired in June 2013 from which revenue of approximately $2.2 million was recorded for the three months ended June 30, 2013. In addition, we generated approximately $1.2 million from the lease of rail cars.

Natural Gas and Oil Sales . For the three months ended June 30, 2013, natural gas and oil sales were approximately $2.2 million. For the three months ended June 30, 2012, natural gas and oil sales were approximately $7.7 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Marketing and Transportation Expenses. For the three months ended June 30, 2013, our marketing and transportation expenses were approximately $29.1 million. There were no such expenses in the three months ended June 30, 2012 due to Texadian being acquired effective December 31, 2012. Cost of goods sold associated with tow and barge charters were approximately $24.0 million. Related barge transportation costs and dock space fees were approximately $3.2 million. Pipeline tariff expense was approximately $1.1 million and railcar lease rental expense was approximately $400,000.

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Lease Operating Expense. For the three months ended June 30, 2013, lease operating expense was approximately $1.9 million. For the three months ended June 30, 2012, lease operating expense was approximately $3.1 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Transportation Expense. For the three months ended June 30, 2013, we incurred no transportation expense. For the three months ended June 30, 2012, transportation expense was approximately $2.8 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Production Taxes. For the three months ended June 30, 2013, production taxes were approximately $20,000. For the three months ended June 30, 2012, production taxes were approximately $502,000. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Depreciation, Depletion, Amortization and Accretion. For the three months ended June 30, 2013, depreciation, depletion, amortization and accretion expense was approximately $1.0 million. For the three months ended June 30, 2012, depreciation, depletion, amortization and accretion expense was approximately $4.9 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Trust Litigation and Settlements. For the three months ended June 30, 2013, trust litigation and settlement expense was approximately $3.9 million and consisted of professional fees relating to Recovery Trust activities paid through restricted cash and an increase in the settlement claim liability.

General and Administrative Expense. For the three months ended June 30, 2013, general and administrative expense was approximately $3.5 million. For the three months ended June 30, 2012, general and administrative expense was approximately $3.7 million. Significant components of general and administrative expense for the three months ended June 30, 2013, include general and administrative expense related to Texadian totaling approximately $684,000, professional fees of approximately $2.2 million and miscellaneous expense of approximately $516,000.

Loss From Unconsolidated Affiliates. For the three months ended June 30, 2013, our allocated income from Piceance Energy totaled approximately $1.5 million, which includes a gain of approximately $1.2 million from derivative obligations and operating income of approximately $560,000 less financing costs of approximately $241,000.

Interest Expense and Financing Costs. For the three months ended June 30, 2013, our interest expense and financing costs were approximately $3.0 million consisting of interest accrued in kind totaling approximately $1.5 million, approximately $18,000 related to Texadian’s credit facilities, amortization of debt discount related to our Loan Agreement totaling approximately $456,000 and accretion of the 5% and 2.5% exit penalties on our Tranche B Loans of approximately $875,000 and $108,000, respectively. For the three months ended June 30, 2012, interest expense and financing costs was approximately $2.6 million. The consummation of the Plan on August 31, 2012 resulted in a new capital structure for us.

Unrealized Loss of Derivative Instruments . For the three months ended June 30, 2013, we recognized an unrealized loss on our embedded derivative and warrant derivative liabilities of approximately $3.0 million due to mark to market adjustments resulting from an increase in the price of our common stock.

Income Taxes . For the three months ended June 30, 2013, we recorded no state tax expense. We recorded no Federal income tax expense or benefit as there was insufficient evidence for us to conclude that it was more likely than not that the deferred tax asset would be realized.

Reorganization Items . For the three months ended June 30, 2012, the Predecessor recognized approximately $5.9 million in professional fees and administrative expenses. There are no reorganization items in periods subsequent to August 31, 2012.

The following discussion and analysis relates to items that have affected the Successor’s results of operations for six months ended June 30, 2013, and the results of operations of the Predecessor for the six months ended June 30, 2012.

Successor six months ended June 30, 2013 compared to Predecessor six months ended June 30, 2012

Net Loss. Net loss was approximately $14.0 million, or a loss of $0.09 per basic and diluted common share, for the six months ended June 30, 2013, compared to a net loss of approximately $29.4 million, or a loss of $1.02 per basic and diluted common share, for the six months ended June 30, 2012.

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Marketing and Transportation Revenues. For the six months ended June 30, 2013, our marketing and transportation revenues were approximately $95.8 million. There were no such revenues in the six months ended June 30, 2012 due to Texadian being acquired effective December 31, 2012. For the six months ended June 30, 2013, tow and barge revenues were approximately $89.0 million. In addition, we have a pipeline transportation contract which expired in June 2013 from which revenue of approximately $4.3 million was recorded for the six months ended June 30, 2013. In addition, we generated approximately $2.2 million from the lease of rail cars.

Natural Gas and Oil Sales . For the six months ended June 30, 2013, natural gas and oil sales were approximately $3.8 million. For the six months ended June 30, 2012, natural gas and oil sales were approximately $17.6 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Marketing and Transportation Expenses. For the six months ended June 30, 2013, our marketing and transportation expenses were approximately $82.9 million. There were no such expenses in the six months ended June 30, 2012 due to Texadian being acquired effective December 31, 2012. Cost of goods sold associated with tow and barge charters were approximately $73.0 million. Related barge transportation costs and dock space fees were approximately $6.7 million. Pipeline tariff expense was approximately $1.9 million and railcar lease rental expense was approximately $800,000.

Lease Operating Expense. For the six months ended June 30, 2013, lease operating expense was approximately $3.2 million. For the six months ended June 30, 2012, lease operating expense was approximately $6.8 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Transportation Expense. For the six months ended June 30, 2013, we incurred no transportation expense. For the six months ended June 30, 2012, transportation expense was approximately $5.3 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Production Taxes. For the six months ended June 30, 2013, production taxes were approximately $24,000. For the six months ended June 30, 2012, production taxes were approximately $799,000. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Depreciation, Depletion, Amortization and Accretion. For the six months ended June 30, 2013, depreciation, depletion, amortization and accretion expense was approximately $1.8 million. For the six months ended June 30, 2012, depreciation, depletion, amortization and accretion expense was approximately $10.2 million. The decrease is primarily related to the contribution of the majority of our natural gas and oil assets to Piceance Energy.

Trust Litigation and Settlements. For the six months ended June 30, 2013, trust litigation and settlement expense was approximately $5.1 million and consisted of professional fees relating to Recovery Trust activities paid through restricted cash of approximately $1.2 million and an increase in the settlement claim liability of approximately $3.9 million.

General and Administrative Expense. For the six months ended June 30, 2013, general and administrative expense was approximately $9.1 million. For the six months ended June 30, 2012, general and administrative expense was approximately $7.7 million. Significant components of general and administrative expense for the six months ended June 30, 2013, include general and administrative expense related to Texadian totaling approximately $4.0 million, professional fees of approximately $4.1 million and miscellaneous expense of approximately $900,000.

Loss From Unconsolidated Affiliates. For the six months ended June 30, 2013, our allocated loss from Piceance Energy totaled approximately $865,000, which includes a gain of approximately $240,000 from derivative obligations and a loss of approximately $608,000 from operating activities less financing costs of approximately $473,000.

Interest Expense and Financing Costs. For the six months ended June 30, 2013, our interest expense and financing costs were approximately $5.9 million consisting of interest accrued in kind totaling approximately $3.0 million, interest related to Texadian’s credit facilities of approximately $73,000, amortization of debt discount related to our Loan Agreement totaling approximately $880,000 and accretion of the 5% and 2.5% exit penalties on our Tranche B Loans of approximately $1.7 million and $108,000, respectively. For the six months ended June 30, 2012, interest expense and financing costs was approximately $4.9 million. The consummation of the Plan on August 31, 2012 resulted in a new capital structure for us.

Unrealized Loss of Derivative Instruments . For the six months ended June 30, 2013, we recognized an unrealized loss on our embedded derivative and warrant derivative liabilities of approximately $5.3 million due to mark to market adjustments resulting from an increase in the price of our common stock.

Other Income. For the six months ended June 30, 2013, other income totaled approximately $770,000 and consists primarily of a state tax refund totaling approximately $483,000 and a legal settlement of approximately $200,000. Other income for the six months ended June 30, 2012 was not significant.

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Income Taxes . For the six months ended June 30, 2013, we recorded a state tax expense of approximately $650,000 due to the operating results of Texadian. We recorded no Federal income tax expense or benefit as there was insufficient evidence for us to conclude that it was more likely than not that the deferred tax asset would be realized.

Reorganization Items . For the six months ended June 30, 2012, the Predecessor recognized approximately $11.6 million in professional fees and administrative expenses and a gain on the extinguishment of liabilities of approximately $383,000. There are no reorganization items in periods subsequent to August 31, 2012.

Liquidity and Capital Resources

As of June 30, 2013, we have access to the Texadian Uncommitted Credit Agreement, as described below, and unrestricted cash of $43.0 million. In addition, in conjunction with our pending acquisition of Tesoro Hawaii, and to finance the acquisition and the operations of the business of Tesoro Hawaii after the acquisition, we have obtained a binding commitment from a group of accredited investors for the sale of an aggregate of $200.0 million of our common stock in a private placement, a commitment letter for a crude oil supply and intermediation arrangement, and a commitment letter for a senior secured asset-based credit facility of up to $125.0 million. Since the Emergence Date, the primary uses of our capital resources have been in the operation of Texadian and natural gas and oil properties, acquisitions, professional fees, and bankruptcy expenses. Prior to our bankruptcy filing, our sources of liquidity and capital resources were cash provided through the issuance of debt and equity securities when market conditions permitted, operating activities, sales of natural gas and oil properties, and borrowings under our credit facilities. During bankruptcy proceedings, our principal sources of liquidity and capital resources were borrowings under the Predecessor’s secured debtor-in-possession credit facility and cash flows from operating activities.

Prior to our acquisition of Texadian, our principal asset since the consummation of the Plan and our emergence from bankruptcy was a minority interest in Piceance Energy. Piceance Energy’s primary sources of liquidity are cash from operations and borrowings under the Piceance Energy Credit Facility. Our liquidity is constrained by the restrictions on Piceance Energy’s ability to distribute cash to us under the Piceance Energy Credit Facility, by our need to satisfy our obligations under the Loan Agreement, and by potential capital contributions required to be made by us to Piceance Energy. We expect that the operations of Texadian will provide us with additional liquidity. We also expect to have minimal cash flows from certain assets not contributed to Piceance Energy pursuant to the Contribution Agreement on the Emergence Date.

We may be required to fund capital contributions of up to $20 million to Piceance Energy under the LLC Agreement. We expect that our capital contributions will be funded from available cash on hand, advances under the Loan Agreement, and possible equity contributions from certain existing stockholders. If our cash sources are not sufficient to fund our entire capital contribution, then our equity ownership interest in Piceance Energy may be reduced or diluted to the extent of our shortfall.

In addition, as of August 12, 2013, we have funded acquisition deposits of $47.0 million related to our pending acquisition of Tesoro Hawaii, LLC.

Delayed Draw Term Loan Credit Agreement

Pursuant to the Plan, on the Emergence Date, we and certain of our subsidiaries (the “Guarantors” and, together with the Company, the “Loan Parties”) entered into a Delayed Draw Term Loan Credit Agreement (the “Loan Agreement”) with Jefferies Finance LLC, as administrative agent (the “Agent”) for the lenders party thereto from time to time, including WB Delta, Ltd., Waterstone Offshore ER Fund, Ltd., Prime Capital Master SPC, GOT WAT MAC Segregated Portfolio, Waterstone Market Neutral MAC51, Ltd., Waterstone Market Neutral Master Fund, Ltd., Waterstone MF Fund, Ltd., Nomura Waterstone Market Neutral Fund, ZCOF Par Petroleum Holdings, L.L.C. and Highbridge International, LLC (collectively, the “Lenders”), pursuant to which the Lenders agreed to extend credit to us in the form of term loans (each, a “Loan” and collectively, the “Loans”) of up to $30.0 million. We borrowed $13.0 million on the Emergence Date in order to, along with the proceeds from the Contribution Agreement; (i) repay the loans and obligations due under the Predecessor’s secured debtor-in-possession credit facility, and (ii) pay allowed but unpaid administrative expenses to the Debtors related to the Plan. During the three months ended March 31, 2013, we borrowed $8.0 million and an additional $9.0 million during the three months ended June 30, 2012 for a total of $17.0 million for general corporate use. As of June 30, 2013, we have no capacity for future borrowings under this Loan Agreement.

Below are certain of the material terms of the Loan Agreement:

Prepayment . We may prepay Loans at any time, in any amount. Such prepayment is to include all accrued and unpaid

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interest on the portion of the obligations being prepaid through the prepayment date. If at any time within the twelve months following the Emergence Date, we prepay the obligations due, in whole, but not in part, then in addition to the repayment of 100% of the principal amount of the obligations being prepaid plus accrued and unpaid interest thereon, we are required to pay the interest that would have accrued on the prepaid amount through the first anniversary of the Emergence Date plus a 6% prepayment premium.

In addition to the above described prepayment premium, we will pay an additional repayment premium equal to the percentage of the principal repaid during the following periods:

Period	Repayment Premium
From the Emergence Date through the first anniversary of the Emergence Date		3	%
From the day after the first anniversary of the Emergence Date through the second anniversary of the Emergence Date		2	%

Collateral . The Loans and all obligations arising under the Loan Agreement are secured by (i) a perfected, first-priority security interest in all of our assets other than our equity interest in Piceance Energy held by Par Piceance Energy Equity, pursuant to a pledge and security agreement made by us and certain of our subsidiaries in favor of the Agent, and (ii) a perfected, second-lien security interest in our equity interest in Piceance Energy held by Par Piceance Energy Equity, pursuant to a pledge agreement by Par Piceance Energy Equity in favor of the Agent. The priority of the Lenders’ security interest in our assets is specified in that certain intercreditor agreement (the “Intercreditor Agreement”), among JPMorgan Chase Bank, N.A., as administrative agent for the First Priority Secured Parties (as defined in the Intercreditor Agreement), the Agent, as administrative agent for the Second Priority Secured Parties (as defined in the Intercreditor Agreement), the Company and Par Piceance Energy Equity.

Guaranty . All of our obligations under the Loan Agreement are unconditionally guaranteed by the Guarantors.

Warrants . As consideration for granting the Loans, we have also issued warrants to the Lenders to purchase shares of our common stock as described under “– Warrant Issuance Agreement” below.

Term . All loans and all other obligations outstanding under the Loan Agreement are payable in full on August 31, 2016.

Amendment to the Loan Agreement – Tranche B Loan

On December 28, 2012, in order to fund a portion of the purchase price for our acquisition of Texadian (see “–Capital and Exploration Expenditures” below), the Loan Parties entered into an amendment to the Loan Agreement with the Agent and the Lenders, pursuant to which certain lenders (the “Tranche B Lendors”) agreed to extend additional borrowings to us (the “Tranche B Loan”). The total commitment of the Tranche B Loan of $35.0 million was drawn at closing. In addition to funding a portion of the purchase price of the acquisition of Texadian, the Tranche B Loan provided cash collateral for the letter of credit facility with Compass Bank (as described below).

Set forth below are certain of the material terms of the Tranche B Loan:

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to the extent permitted by applicable law, bear interest at a rate per annum equal to 11.75% and (ii) all interest accrued and accruing will be payable in cash on demand.

Prepayment . We may prepay the Tranche B Loan at any time, provided that any prepayment is in an integral multiple of $100,000 and not less than $100,000 or, if less, the outstanding principal amount of the Tranche B Loan.

Collateral . The Tranche B Loan is secured by a lien on substantially all of our assets and our subsidiaries, including Texadian, but excluding our equity interests in Piceance Energy.

Guaranty . All of our obligations under the Tranche B Loan are unconditionally guaranteed by the Guarantors, including, Texadian.

Maturity date. The maturity date is July 1, 2013.

Fees and Commissions . We agreed to pay the Lenders a nonrefundable exit fee equal to five percent (5%) of the aggregate amount of the Tranche B Loan. The exit fee is earned in full and payable on the maturity date of the Tranche B Loan or, if earlier, the date on which the Tranche B Loan is paid in full.

On April 19, 2013, we entered into a Fourth Amendment to our Loan Agreement.

Set forth below are certain material terms of the Fourth Amendment:

Lender Consent to Compressor Disposition . The Lenders agreed that, in connection with the previous sale of our natural gas compressor assets held for sale (a) 50% of the net cash proceeds are to be applied to pay (i) first, an amendment fee and (ii) second, to repay the Tranche B Loan in accordance with each Tranche B Lender’s pro rata share, and (ii) 50% of the net cash proceeds are to be retained by us and used for general corporate purposes.

Maturity Date . The Lenders agreed to extend the maturity date of the Tranche B Loan to December 31, 2013.

With the execution of the Fourth Amendment, we repaid approximately $1.3 million of the Tranche B Loan.

On June 4, 2013, we entered into a Fifth Amendment to our Loan Agreement allowing us to form a subsidiary, Hawaii Pacific Energy, LLC ("Hawaii Pacific Energy"), in furtherance of our acquisition of Tesoro Hawaii.

On June 12, 2013, we entered into a Sixth Amendment to our Loan Agreement.

Set forth below are certain material terms of the Sixth Amendment:

Capital Contributions . We are permitted to make up to an aggregate amount of $5 million of capital contributions and/or loans to Texadian per year.

In connection with Hawaii Pacific Energy's entry into the Purchase Agreement, on June 17, 2013, we entered into a Seventh Amendment to the Loan Agreement.

Set forth below are certain of the material terms of the Seventh Amendment:

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Lender Consent to Purchase Agreement Guaranty . The Lenders consented to the execution of our guaranty of certain obligations under the Purchase Agreement.

On June 24, 2013, we entered into an Eighth Amendment to our Loan Agreement, pursuant to which the Lenders agreed to refinance and replace the Tranche B Loans outstanding immediately prior to the Eighth Amendment with new Tranche B Loans in the aggregate principal amount of $65.0 million (the “New Tranche B Loans”). The proceeds from the New Tranche B Loans were applied to prepay in full the Existing Tranche B Loans, to make payments due under the Purchase Agreement (see Note 5), to consummate acquisitions permitted under the Loan Agreement and for working capital and general corporate purposes.

Set forth below are certain of the material terms of the New Tranche B Loans:

Guaranty . All our obligations under the New Tranche B Loans are unconditionally guaranteed by the Guarantors.

Fees and Commissions . We agreed to pay the Tranche B Lenders a nonrefundable exit fee equal to 2.5% of the aggregate amount of the Tranche B Loans. The exit fee is earned in full and payable on the maturity date of the Tranche B Loans or, if earlier, the date on which the Tranche B Loans are paid in full. Accordingly, we will accrete amounts due for the nonrefundable exit fee over the term of loan using the effective interest method.

Maturity Date . The Tranche B Loans mature and are payable in full on August 31, 2016.

Texadian Uncommitted Credit Agreement

Letter of Credit Facility

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annum of the stated face amount of each letter of credit for the number of days such letter of credit is to remain outstanding plus standard and customary administrative fees. The Compass Letter of Credit Facility does not contain any financial covenants; however, it does require us to comply with various affirmative and negative covenants affecting our business and operations. As of June 30, 2013, the Compass Letter of Credit Facility has been terminated.

Warrant Issuance Agreement

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Cash Flows

	Successor			Predecessor
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
	(In thousands)

Net cash provided by (used in) operating activities	$	11,830		$	(13,154	)
Net cash used in investing activities	$	(37,527	)	$	(352	)
Net cash provided by financing activities	$	62,530		$	5,000

Net cash provided by operating activities was approximately $11.8 million for the six months ended June 30, 2013. Net cash provided by operating activities for the six months ended June 30, 2013 resulted from a net loss of approximately $14.0 million offset by non-cash charges to operations of approximately $19.2 million and net cash provided by changes in operating assets and liabilities of approximately $6.7 million. Net cash used by operating activities for the six months ended June 30, 2012 was approximately $13.2 million. The operations of the two periods are not comparable due to the contribution of the majority of our natural gas and oil assets to Piceance Energy and the application of fresh start accounting effective August 31, 2012 and our acquisition of Texadian effective December 31, 2012.

For the six months ended June 30, 2013, net cash used in investing activities was primarily related acquisition deposits made of $40.0 million, capitalized drilling costs and additions to property and equipment totaling approximately $377,000, partially offset by proceeds of the sale of our assets held for sale of approximately $2.9 million. Net cash used in investing activities was approximately $352,000 during the six months ended June 30, 2012 and was related to additions to property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2013 was from additional net borrowings under our Loan Agreement totaling approximately $43.5 million and the release of approximately $19.0 million from restricted cash held to secure letters of credit. For the six months ended June 30, 2012, net cash provided by financing activities totaled $5.0 million.

Capital and Exploration Expenditures

Our capital and exploration expenditures for the six months ended June 30, 2013 totaled approximately $377,000.

Additional capital may be required to maintain our interests at our Point Arguello Unit offshore California, but this is currently unestimatable. Furthermore, we may be required as part of our equity investment in Piceance Energy to contribute up to an aggregate of approximately $20.0 million if approved by the majority of its board of directors. We also continue to seek strategic investments in business opportunities, but the amount and timing of those investments are not predictable.

On December 31, 2012, we acquired Texadian, an indirect wholly-owned subsidiary of SEACOR Holdings Inc., for approximately $14.0 million plus estimated net working capital of approximately $4.0 million at closing. Texadian operates an oil sourcing, marketing, transportation, distribution and marketing business with significant logistics capabilities in historical pipeline shipping status, a railcar fleet and tow and barge chartering. We acquired Texadian in furtherance of our growth strategy that focuses on the acquisition of income producing businesses.

Membership Interest Purchase Agreement

On June 17, 2013 (the “Execution Date”), our wholly owned subsidiary, Hawaii Pacific Energy, entered into a membership interest purchase agreement (the “Purchase Agreement”) with Tesoro Corporation, (the “Seller”) and solely for the purpose set forth in the Purchase Agreement, Tesoro Hawaii, LLC. Pursuant to the Purchase Agreement, Hawaii Pacific Energy will purchase from the Seller all of the issued and outstanding units representing the membership interests in Tesoro Hawaii (the “Purchased Units”), and indirectly thereby also acquiring Tesoro Hawaii’s wholly owned subsidiary, Smiley’s Super Service, Inc. Tesoro Hawaii owns and operates (i) a petroleum refinery located at the Campbell Industrial Park in Kapolei, Hawaii (the “Refinery”), (ii) certain pipeline assets, floating pipeline mooring equipment, and refined products terminals, and (iii) retail assets selling fuel products and merchandise on the islands of Oahu, Maui and Hawaii.

Set forth below are certain material terms of the Purchase Agreement:

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Refinery Startup Activities : Prior to the Execution Date, the Seller had commenced activities to shutdown the Refinery and to convert it into an import terminal. The Purchase Agreement contains certain pre-closing covenants, including covenants related to the startup of operations at the Refinery (the “Refinery Startup Activities”). The expenses associated with the Refinery Startup Activities are currently estimated to be $27.0 million (the “Startup Expenses”). Pursuant to the terms of the Purchase Agreement, Hawaii Pacific Energy made a deposit of $15.0 million for the Startup Expenses within seven days of the Execution Date. The next $5 million of Startup Expenses will be borne by the Seller, with all Startup Expenses in excess of $20.0 million to be borne by Hawaii Pacific Energy. Due to the Startup Expenses exceeding $20.0 million, Hawaii Pacific Energy made an additional deposit of $7.0 million for the Startup Expenses on August 5, 2013. In addition, Hawaii Pacific Energy funded $2.3 million on July 23, 2013 for a major overhaul of a gas turbine engine used in the operations of the refinery’s steam cogeneration. The Seller draws upon the deposit as expenses are incurred.

The closing of the Purchase Agreement is subject to certain customary closing conditions, and contains customary representations, warranties, covenants, indemnifications and guarantees typical for a transaction of this type. The closing of the Purchase Agreement is also conditioned upon (i) the Seller’s completion of the Refinery Startup Activities in all material respects and the delivery of an operational Refinery, (ii) the Seller’s provision of certain operational software for the benefit of us, and (iii) the provision by us to the Seller of reasonable confirmation that Hawaii Pacific Energy's adjusted net worth immediately prior to the closing of the Purchase Agreement shall equal or exceed $150 million. The closing of the Purchase Agreement will take place on the second business day following the satisfaction of the closing conditions contained in the Purchase Agreement, or on such other date to which the parties thereto may mutually agree. As of June 30, 2013, Hawaii Pacific Energy have made advances for the Deposit and Startup Expenses totaling $40.0 million, which are reflected as Acquisition Deposits on our consolidated balance sheet. On August 5, 2013, Hawaii Pacific Energy made an additional deposit for Start Up Expenses totaling $7.0 million.

Financing Commitments

Private Offering Commitment

Commitments and Contingencies

On the Emergence Date, two trusts were formed, the Wapiti Trust and the Delta Petroleum General Recovery Trust (the “General Trust,” and together with the Wapiti Trust, the “Recovery Trusts”). The Recovery Trusts were formed to pursue certain litigation against third-parties, including preference actions, fraudulent transfer and conveyance actions, rights of setoff and other claims, or causes of action under the U.S. Bankruptcy Code, and other claims and potential claims that the Debtors hold against third parties. The Recovery Trusts were funded with $1 million each pursuant to the Plan.

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parties before the Bankruptcy Court, which actions are ongoing. Upon liquidation of the various claims and causes of action held by the General Trust, the proceeds, less certain administrative reserves and expenses, will be transferred to us. It is unknown at this time what proceeds, if any, we will realize from the General Trust’s litigation efforts.

The Plan provides that certain allowed general unsecured claims be paid with shares of our common stock. On the Emergence Date, 105 claims totaling approximately $73.7 million had been filed in the bankruptcy. Pursuant to the Plan, between the Emergence Date and December 31, 2012, the Recovery Trustee settled 25 claims with an aggregate face amount of $6.6 million for $258,905 in cash and 202,753 shares of common stock. Pursuant to the Plan, during the six months ended June 30, 2013, the Recovery Trustee settled an additional 41 claims with an aggregate face amount of $17.0 million for approximately $2.7 million in cash and 1,739,519 shares of common stock.

As of June 30, 2013, it is estimated that a total of 40 claims totaling approximately $50.2 million remain to be resolved by the Recovery Trustee. The largest remaining proof of claim was filed by the US Government for approximately $22.4 million relating to ongoing litigation concerning a plugging and abandonment obligation in Pacific Outer Continental Shelf Lease OCS-P 0320, comprising part of the Sword Unit in the Santa Barbara Channel, California. We believe the probability of issuing stock to satisfy the full claim amount is remote, as the obligations upon which such proof of claim is asserted are joint and several among all working interest owners, and the Predecessor Company owned a 2.41934% working interest in the unit. In addition, litigation and/or settlement efforts are ongoing with Macquarie Capital (USA) Inc., as well as other claim holders.

	Emergence-Date August 31, 2012				From Emergence-Date through December 31, 2012
	Filed Claims				Settled Claims								Remaining Filed Claims
									Consideration
	Count		Amount		Count		Amount		Cash		Stock		Count		Amount
U.S. Government Claims		3	$	22,364,000		—	$	—	$	—		—		3	$	22,364,000
Former Employee Claims		32		16,379,849		13		3,685,253		229,478		202,231		19		12,694,596
Macquarie Capital (USA) Inc.		1		8,671,865		—		—		—		—		1		8,671,865
Swann and Buzzard Creek Royalty Trust		1		3,200,000		—		—		—		—		1		3,200,000
Other Various Claims*		69		23,120,396		12		2,914,859		29,427		522		57		20,205,537

Total		106	$	73,736,110		25	$	6,600,112	$	258,905		202,753		81	$	67,135,998

	For the Six Months Ended June 30, 2013
	Settled Claims								Remaining Filed Claims
					Consideration
	Count		Amount		Cash		Stock		Count		Amount

U.S. Government Claims		—	$	—	$	—		—		3	$	22,364,000
Former Employee Claims		19		12,694,596		339,588		1,614,988		—		—
Macquarie Capital (USA) Inc.		—		—		—		—		1		8,671,865
Swann and Buzzard Creek Royalty Trust		1		3,200,000		2,000,000		—		—		—
Other Various Claims*		21		1,075,493		397,753		124,531		36		19,130,044

Total		41	$	16,970,089	$	2,737,341		1,739,519		40	$	50,165,909

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*	Includes reserve for contingent/unliquidated claims in the amount of $10 million.

Other

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations were based on the consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Our significant accounting policies are described in Note 2 of our unaudited consolidated financial statements included herein. We have identified certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. We analyze our estimates, including those related to fresh start accounting adjustments, natural gas and oil reserves, bad debts, natural gas and oil properties, income taxes, derivatives, contingencies and litigation, and base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Derivatives and Other Financial instruments

Texadian enters into fixed-price forward purchase and sale contracts for crude oil. The contracts typically contain settlement provisions in the event of a failure of either party to fulfill its commitments under the contract. Texadian’s policy is to fulfill or accept the physical delivery of the product, even if shipment is delayed, and it will not net settle. Should Texadian not designate a contract as a normal purchase or normal sale or should a scheduled delivery under the terms of contract not occur, then these exceptions may require the recording of a derivative. If derivative accounting treatment is required then these contracts would be recorded at fair value as either an asset or a liability and marked to market each reporting period with changes in fair value being charged to earnings. As of June 30, 2013, we have elected the normal purchase or normal sale exemption for these derivative instruments. As such, we did not recognize the unrealized gains or losses related to these designated derivative instruments in our consolidated financial statements. As of December 31, 2012, we did not elect this exemption for its open contracts that were settled in the first quarter 2013.

Investment in unconsolidated affiliate

Investments in operating entities where we have the ability to exert significant influence, but do not control the operating and financial policies, are accounted for using the equity method. Our share of net income of these entities is recorded as income (losses) from unconsolidated affiliates in the consolidated statements of operations.

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Impairment of Goodwill and Long-Lived Assets

Fair Value Measurements

Level 1 – Assets or liabilities for which the item is valued based on quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments.

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Audit Committee as deemed appropriate. Each quarter, our Chief Financial Officer and Chief Executive Officer update the inputs used in the fair value measurement and internally review the changes from period to period for reasonableness. We use data from peers as well as external sources in the determination of the volatility and risk free rates used in our fair value calculations. A sensitivity analysis is performed as well to determine the impact of inputs on the ending fair value estimate.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Our liabilities measured at fair value on a recurring basis as of June 30, 2013 consist of the following (in thousands):

	June 30, 2013
	Fair Value			Level 1		Level 2		Level 3
Liabilities
Derivatives:
Warrants	$	(16,200	)	$	—	$	—	$	(16,200	)
Embedded derivatives		—			—		—		—

	$	(16,200	)	$	—	$	—	$	(16,200	)

	Location on Consolidated Balance Sheet	Fair Value at June 30, 2013
		(in thousands)

Warrant derivatives	Noncurrent liabilities	$	(16,200	)
Embedded derivative	Noncurrent liabilities	$	—

A rollforward of Level 3 derivative warrants and the embedded derivative measured at fair value using Level 3 on a recurring basis is as follows (in thousands):

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Description
Balance, at December 31, 2012	$	(10,945	)
Purchases, issuances, and settlements		—
Total unrealized losses included in earnings		(5,255	)
Transfers		—

Balance, at June 30, 2013	$	(16,200	)

The following table summarizes the pretax effect resulting from changes in fair value of derivative instruments charged directly to earnings (in thousands):

	For the three months ended June 30, 2013
	Income Statement Classification	Gain (loss) recognized in income

Derivatives not designated as hedges:
Warrants	Other income (expense)	$	(3,300	)
Embedded derivatives	Other income (expense)		285
Commodities - exchange traded futures	Other income (expense)		—
Commodities - physical forward contracts	Other income (expense)		—

	For the six months ended June 30, 2013
	Income Statement Classification	Gain (loss) recognized in income

Derivatives not designated as hedges:
Warrants	Other income (expense)	$	(5,300	)
Embedded derivatives	Other income (expense)		45
Commodities - exchange traded futures	Other income (expense)		104
Commodities - physical forward contracts	Other income (expense)		306

Income Taxes

Pursuant to the Plan, on the Emergence Date, the existing equity interests of the Predecessor were extinguished. New equity interests were issued to creditors in connection with the terms of the Plan, resulting in an ownership change as defined under Section 382 of the Code. Section 382 generally places a limit on the amount of net operating losses and other tax attributes arising before the change that may be used to offset taxable income after the ownership change. We believe however that it will qualify for an exception to the general limitation rules. This exception under Code Section 382(l)(5) provides for substantially less restrictive limitations on our net operating losses; however the net operating losses are eliminated should another ownership change occur within two years. Our amended and restated certificate of incorporation places restrictions upon the ability of the equity interest holders to transfer their ownership in the Company. These restrictions are designed to provide us with the maximum assurance that another ownership change does not occur that could adversely impact our net operating loss carry forwards.

Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our net operating loss carry forwards will not always be available to offset taxable income apportioned to the various states. The states from which Texadian’s revenues are derived are not the same states in which our net operating losses were incurred; therefore we expect to incur state tax liabilities on the net income of Texadian’s operations. State income tax

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expense of approximately $0 and $650,000 was recognized for the three and six months ending June 30, 2013, respectively.

We will continue to assess the realizability of its deferred tax assets on a go forward basis taking into account actual and projected operating results and tax planning strategies. Should actual operating results improve, the amount of the deferred tax asset considered more likely than not to be realizable could be increased.

During the six months ended June 30, 2013, no adjustments were recognized for uncertain tax benefits.

Revenue Recognition

Natural Gas and Oil

Revenues are recognized when title to the products transfers to the purchaser. We follow the “sales method” of accounting for our natural gas and oil revenue, so that we recognize sales revenue on all natural gas or oil sold to our purchasers, regardless of whether the sales are proportionate to our ownership in the property. A liability is recognized only to the extent that we have an imbalance on a specific property greater than the expected remaining proved reserves. As of March 31, 2013, our aggregate natural gas and oil imbalances were not material to our consolidated financial statements.

Marketing and Transportation

We recognize revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Revenue that does not meet these criteria is deferred until the criteria are met. Texadian earns revenues from the sale and transportation of oil, and the rental of rail cars. Accordingly, revenues and related costs from sales of oil are recorded when title transfers to the buyer. Transportation revenues are recognized upon fulfillment of the contract. Revenues from the rental of railcars are recognized ratably over the lease periods.

Item 3. Quantita tive and Qualitative Disclosures About Market Risk

Market Rate and Price Risk

Revenues from our natural gas and oil business are derived from the sale of our natural gas and oil production. Based on projected annual sales volumes for 2013, a 10% decline in the estimated average prices we expect to receive for our natural gas and oil production would have an approximate $0.7 million impact on our estimated 2013 natural gas and oil revenues, or approximately $0.5 million for the remainder of 2013.

Texadian enters and settles positions in various exchange traded commodity swap and future contracts. Texadian also enters into exchange traded positions to protect its inventory balances from market changes. As of June 30, 2013, we had no open positions relating to exchange derivative positions.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, as of June 30, 2013, an evaluation was performed under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 15d-15(e) under the Exchange Act. In performing this evaluation, management reviewed the selection, application and monitoring of our historical accounting policies. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2013, these disclosure controls and procedures were not effective and not designed to ensure that the information required to be disclosed in our reports filed with the SEC is recorded, processed, summarized and reported on a timely basis, due to the existence of material weaknesses identified as of December 31, 2012 as discussed below.

Prior to December 31, 2011, the Company filed for voluntary bankruptcy and during the duration of the proceedings, the Company’s ability to maintain effect internal control over financial reporting was weakened due to a high amount of turnover of its accounting staff. Because of the high turnover and low number of accounting personnel available, the Company was not able to timely file its Form 10-K as of December 31, 2011. Management concluded that internal control over financial reporting as of December 31, 2011 was not effective. As of August 31, 2012, the Company emerged from bankruptcy and replaced the operations and financial reporting functions with a new accounting group. During the fourth quarter of 2012, management performed a comprehensive assessment of the design and operating effectiveness of internal control over financial reporting. While performing the review of the design and operating effectiveness of internal control over final reporting, control gaps were identified in internal control and related processes that require remediation to be performed in order for management to conclude that internal control

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over final reporting is effective in preventing the financial statements and related disclosures from being materially misstated. The internal control gap remediation to be performed by management was not completed as of December 31, 2012. Additionally, while completing our December 31, 2012 year end close process, adjustments were identified relating to the application of fresh start accounting that impacted the amounts, presentation of the financial statements and related disclosures previously reported at September 30, 2012 in our related Form 10-Q. Because of the items mentioned above, management concluded that material weaknesses exist in the operating effectiveness of internal control over financial reporting.

As of June 30, 2013, we believe these material weaknesses remain present and until our material weaknesses are remediated, there is a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. As part of our remediation efforts, we have contracted with experienced financial and accounting consultants to assist with our financial close and other accounting matters and in the preparation of the financial statements and related accounting and reporting disclosures. We are evaluating other remediation alternatives and efforts are in progress, however any contemplated changes to our internal control over financial reporting have not been implemented.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management is required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control over Financial Reporting

There have been no changes during the quarter ended June 30, 2013, in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financing reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of our business. As of the date of this report, no legal proceedings are pending against us that we believe individually or collectively could have a materially adverse effect upon our financial condition, results of operations or cash flows. Any litigation pending at the time we emerged from Chapter 11 was transferred to the Trust for resolution and settlement. See Note 7 to our unaudited consolidated financial statements included herein.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2012.

The representations, warranties and indemnification obligations of Tesoro Corporation in the Purchase Agreement are limited; as a result, the assumptions on which our estimates of future results contemplated by the Purchase Agreement have been based may prove to be incorrect in a number of material ways, resulting in our not realizing the expected benefits of the acquisition of Tesoro Hawaii, if completed.

The representations and warranties of Tesoro Corporation contained in the Purchase Agreement are limited. In addition, the agreement provides limited indemnities. As a result, the assumptions on which our estimates of future results of the transactions contemplated by the Purchase Agreement have been based may prove to be incorrect in a number of material ways, resulting in our not realizing the expected benefits of the acquisition of Tesoro Hawaii, including anticipated increased cash flows.

Acquisitions, such as the acquisition of Tesoro Hawaii, if completed, may prove to be worth less than we paid because of uncertainties in evaluating potential liabilities.

Our recent growth is due in large part to acquisitions, such as the acquisitions of Texadian and, if completed, Tesoro Hawaii. We expect acquisitions, such as the acquisitions of Texadian and, if completed, Tesoro Hawaii, to be instrumental to our future growth. Successful acquisitions require an assessment of a number of factors, including estimates of potential unknown and contingent liabilities. Such assessments are inexact and their accuracy is inherently uncertain. In connection with our assessments, we perform due diligence reviews of acquired companies and their businesses that we believe are generally consistent with industry practices. However, such reviews will not reveal all existing or potential problems. In addition, our reviews may not permit us to become sufficiently familiar with potential environmental problems or other contingent and unknown liabilities that may exist or arise. We performed such a due diligence review in connection with the entry into the Purchase Agreement for the acquisition of Tesoro Hawaii, but there may be unknown and contingent liabilities related to Tesoro Hawaii and its business of

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which we are unaware. We could be liable for unknown obligations relating to the acquisition of Tesoro Hawaii, if completed, for which indemnification is not available, which could materially adversely affect our business, results of operations and cash flow.

We may have difficulty integrating and managing the growth associated with our recent acquisition of Tesoro Hawaii.

Our recent acquisition of Tesoro Hawaii, if completed, is expected to result in a significant growth in our assets and revenues and may place a significant strain on our financial, technical, operational, and administrative resources. We may not be able to integrate the operations of Tesoro Hawaii without increases in costs, losses in revenues, or other difficulties. In addition, we may not be able to realize the operating efficiencies, synergies, costs savings, or other benefits expected from the acquisition of Tesoro Hawaii. Any unexpected costs or delays incurred in connection with such integration could have an adverse effect on our business, results of operations or financial condition. We believe our general and administrative expenses for the third quarter of 2013 will increase due to the acquisition of Tesoro Hawaii, including integrating the acquired business, and adding refining capabilities. We have hired or intend to hire additional new employees that we expect will be required to manage the business of Tesoro Hawaii and plan to add resources as needed as we scale up our business. However, we may experience difficulties in finding the additional qualified personnel. In an effort to stay on schedule with our planned activities, we intend to supplement our staff with contract and consultant personnel until we are able to hire new employees. Our ability to continue to grow after this acquisition will depend upon a number of factors, including our ability to identify and acquire new acquisition targets, our ability to continue to retain and attract skilled personnel, the results of our acquisition efforts, and access to capital. We may not be successful in achieving or managing growth and any such failure could have a material adverse effect on us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Pursuant to the Plan, during the three months ended June 30, 2013, the Recovery Trustee settled an additional 11 claims with an aggregate face amount of $3.7 million for approximately $2.0 million in cash and 16,408 shares of stock. See Note 7 to our unaudited consolidated financial statements included herein. The Company’s common stock was issued pursuant to Section 1145 of the Bankruptcy Code, which exempts the issuance of securities from the registration requirements of the Securities Act of 1933, as amended.

As long as any obligations remain outstanding under the Loan Agreement, we are prohibited from paying any dividends.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosure

Not applicable

Item 5. Other Information

None

Table of Contents

Item 6. Exhibits.

Exhibits are as follows:

2.1	Third Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and Its Debtor Affiliates dated August 13, 2012. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

2.2	Contribution Agreement, dated as of June 4, 2012, among Piceance Energy, LLC, Laramie Energy, LLC and the Company. Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on June 8, 2012.

2.3	Purchase and Sale Agreement dated as of December 31, 2012, by and among the Company, SEACOR Energy Holdings Inc., SEACOR Holdings Inc., and Gateway Terminals LLC. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 3, 2013.

2.4	Membership Interest Purchase Agreement dated as at June 17, 2013 by and among Tesoro Corporation, Tesoro Hawaii, LLC and Hawaii Pacific Energy, LLC*@

3.1	Amended and Restated Certificate of Incorporation of the Company. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

3.2	Amended and Restated Bylaws of the Company. Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.1	Form of the Company’s Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.2	Stockholders Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.3	Registration Rights Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.4	Warrant Issuance Agreement dated as of August 31, 2012, by and among the Company and WB Delta, Ltd., Waterstone Offshore ER Fund, Ltd., Prime Capital Master SPC, GOT WAT MAC Segregated Portfolio, Waterstone Market Neutral MAC51, Ltd., Waterstone Market Neutral Master Fund, Ltd., Waterstone MF Fund, Ltd., Nomura Waterstone Market Neutral Fund, ZCOF Par Petroleum Holdings, L.L.C. and Highbridge International, LLC. Incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.5	Form of Common Stock Purchase Warrant dated as of June 4, 2012. Incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.6	Par Petroleum Corporation 2012 Long Term Incentive Plan. Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on December 21, 2012.

10.1	Fourth Amendment to Delayed Draw Term Loan Credit Agreement dated as of April 19, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 22, 2013.

10.2	Fifth Amendment to Delayed Draw Term Loan Credit Agreement dated as of June 4, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders.*

10.3	Sixth Amendment to Delayed Draw Term Loan Credit Agreement dated as of June 12, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 17, 2013.

Table of Contents


10.4	Seventh Amendment to Delayed Draw Term Loan Credit Agreement dated as of June 17, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed in June 17, 2013.

10.5	Eighth Amendment to Delayed Draw Term Loan Credit Agreement dated as of June 14, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed in June 24, 2013.

10.6	Uncommitted Credit Agreement dated as of June 12, 2013, by and among Texadian Energy, Inc., Texadian Energy Canada Limited and BNP Paribas. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed in June 17, 2013.

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 350.*

32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350. *

101.INS	XBRL Instance Document.**

101.SCH	XBRL Taxonomy Extension Schema Documents.**

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.**

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.**

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.**

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.**

* Filed herewith.

** These interactive data files are furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

@ Schedules and similar attachments to the Membership Interest Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	PAR PETROLEUM CORPORATION (Registrant)

	By:	/s/ William Monteleone
		William Monteleone
		Chief Executive Officer

	By:	/s/ R. Seth Bullock
		R. Seth Bullock
		Chief Financial Officer

Date: August [ ], 2013

Execution Copy

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

TESORO CORPORATION

TESORO HAWAII, LLC

and

HAWAII PACIFIC ENERGY, LLC

June 17, 2013

TABLE OF CONTENTS


		Page
ARTICLE I	DEFINITIONS	1
Section 1.1	Definitions	1
Section 1.2	Construction	18
ARTICLE II	PURCHASE AND SALE	18
Section 2.1	Transfer of TH Interest	18
Section 2.2	Deposit	18
Section 2.3	Purchase Price	19
Section 2.4	Closing; Closing Date	19
Section 2.5	Deliveries at the Closing	19
Section 2.6	Net Working Capital	22
Section 2.7	Inventories	23
Section 2.8	Earnout Payments	26
Section 2.9	Company Assumed Liabilities; Seller Retained Liabilities	31
Section 2.10	Excluded Assets	32
Section 2.11	Undelivered Refinery Inventory	32
Section 2.12	Committed Refinery Inventory	33
ARTICLE III	REPRESENTATIONS AND WARRANTIES REGARDING SELLER	33
Section 3.1	Organization and Qualification	33
Section 3.2	Authority; Enforceability	34
Section 3.3	Conflicts and Approvals	34
Section 3.4	Proceedings	34
Section 3.5	Ownership of the TH Interest	34
Section 3.6	Brokers	35
ARTICLE IV	REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANies	35
Section 4.1	Organization and Qualification	35
Section 4.2	Authority; Enforceability	35

TABLE OF CONTENTS
(continued)


		Page
Section 4.3	Conflicts and Approvals	36
Section 4.4	Capitalization of the Company	36
Section 4.5	Capitalization of the Acquired Subsidiary	36
Section 4.6	Financial Statements	37
Section 4.7	Assets	38
Section 4.8	Material Contracts	39
Section 4.9	Authorizations	41
Section 4.10	Compliance With Law	41
Section 4.11	Proceedings and Orders	41
Section 4.12	Employee Matters	42
Section 4.13	Company Plans	42
Section 4.14	Labor Matters	43
Section 4.15	Taxes	44
Section 4.16	Intellectual Property	45
Section 4.17	Absence of Certain Changes	45
Section 4.18	Bank Accounts	46
Section 4.19	Insurance	46
Section 4.20	Customers and Suppliers	46
ARTICLE V	REPRESENTATIONS AND WARRANTIES REGARDING BUYER	47
Section 5.1	Organization and Qualification	47
Section 5.2	Authority; Enforceability	47
Section 5.3	Conflicts and Approvals	47
Section 5.4	Proceedings	48
Section 5.5	Brokers	48
Section 5.6	Purchase the TH Interest for Investment	48

TABLE OF CONTENTS
(continued)


		Page
Section 5.7	Financing	49
Section 5.8	Solvency	49
Section 5.9	Personnel Credentials	49
ARTICLE VI	PRE-CLOSING COVENANTS	50
Section 6.1	Refinery Shutdown, Turnaround and Startup Activities	50
Section 6.2	Operation of the Business	53
Section 6.3	Appropriate Action; Consents; Filings	55
Section 6.4	Breach Notice	57
Section 6.5	Exclusive Dealing	57
Section 6.6	Right of Entry	57
Section 6.7	Condition of the Assets	58
Section 6.8	Independent Investigation	59
Section 6.9	Supplement to Disclosure Schedules	60
Section 6.10	Financing Matters	61
Section 6.11	Company Monthly Financial Statements	61
Section 6.12	Title Insurance and Surveys	61
Section 6.13	Cooperation with Respect to Financial Statements	62
Section 6.14	Closing Date Feedstock Inventory	62
Section 6.15	Hawaii Consent Decree	63
Section 6.16	Personnel Credentials	63
Section 6.17	Data Room Documentation	63
ARTICLE VII	POST-CLOSING COVENANTS; TAX AND EMPLOYEE MATTERS	63
Section 7.1	Retention of Employees	63
Section 7.2	Service Recognition for Post-Closing Employees	64
Section 7.3	Pension Plan Coverage	64
Section 7.4	Welfare Plan Coverage	65

iii

TABLE OF CONTENTS
(continued)


		Page
Section 7.5	Post-Retirement Welfare Benefits	65
Section 7.6	Other Benefits	66
Section 7.7	Liabilities and Indemnities	66
Section 7.8	No Third Party Beneficiaries	67
Section 7.9	Insurance	67
Section 7.10	Tax Matters	68
Section 7.11	No Solicitation/Non-Competition	74
Section 7.12	Third Person Consents Not Obtained Prior To Closing	75
Section 7.13	Multi-Site Contracts	76
Section 7.14	Operation of Business	76
Section 7.15	Seller�s Names; Removal of Logos and Signs	76
Section 7.16	Further Assurances	77
Section 7.17	Retention of and Access to Books and Records	77
Section 7.18	Intellectual Property	78
Section 7.19	Releases	79
ARTICLE VIII	CLOSING CONDITIONS	80
Section 8.1	Conditions to Obligations of Each Party Under this Agreement	80
Section 8.2	Additional Conditions to Seller�s Obligations	80
Section 8.3	Additional Conditions to Buyer�s Obligations	81
ARTICLE IX	CASUALTY OR CONDEMNATION	82
Section 9.1	Notice	82
Section 9.2	Repair or Replacement	82
Section 9.3	Condemnation Awards	83
Section 9.4	Purchase Price Adjustment	83
Section 9.5	Deferral of Closing Date and Termination Date	83

TABLE OF CONTENTS
(continued)


		Page
ARTICLE X	TERMINATION	83
Section 10.1	Termination	83
Section 10.2	Deferral of Closing Date and Termination Date	84
Section 10.3	Effect of Termination	84
ARTICLE XI	INDEMNIFICATION AND REMEDIES	84
Section 11.1	Survival	84
Section 11.2	Indemnification Provisions for the Benefit of Buyer	85
Section 11.3	Indemnification Provisions for the Benefit of Seller	87
Section 11.4	Indemnification Procedures; Matters Involving Third Parties	88
Section 11.5	Determination of Losses	90
Section 11.6	No Multiple Recoveries	90
Section 11.7	Limitations on Liability/Exclusive Remedies	90
Section 11.8	Governing Law	91
Section 11.9	Jurisdiction; Consent to Service of Process; Waiver	91
ARTICLE XII	MISCELLANEOUS	92
Section 12.1	Amendment	92
Section 12.2	Notices	92
Section 12.3	Public Announcements	93
Section 12.4	Expenses	93
Section 12.5	Headings	93
Section 12.6	No Strict Construction	93
Section 12.7	Severability	94
Section 12.8	Assignment	94
Section 12.9	Parties in Interest	94
Section 12.10	Failure or Indulgence Not Waiver	94
Section 12.11	Disclosure Schedules	94
Section 12.12	Time of the Essence	94
Section 12.13	Entire Agreement	94
Section 12.14	Confidentiality	95
Section 12.15	Specific Performance	95
Section 12.16	Counterparts	95

TABLE OF CONTENTS
(continued)

EXHIBITS


Exhibit A		Assignment of Contracts

Exhibit B		Buyer Guaranty

Exhibit C		Environmental Agreement

Exhibit D		Knowledge Individuals

Exhibit E		Transition Services Agreement

Exhibit F		Retail Assets

Exhibit G-1		Hydrocarbon Inventory Measurement Procedures

Exhibit G-2		Hydrocarbon Inventory Valuation Procedures

Exhibit H		Merchandise Inventory Measurement and Valuation Procedures

Exhibit I		Parts and Supplies Inventory Measurement and Valuation Procedures

Exhibit J		Assignment of Membership Interest

Exhibit K		License Agreement

Exhibit L		Pre-Closing Transition Services Agreement

SELLER�S DISCLOSURE SCHEDULES

Section		Description
1.1(a)		Excluded Intellectual Property
1.1(b)		Permitted Liens
1.1(c)		Seller Officers and Directors
2.5(a)(i)		Wire Transfer Instructions
3.3(a)		Seller Third Person Consents
3.3(b)		Seller�s Authorizations from Governmental Authorities
3.5		Ownership of the TH Interest
4.6		Financial Statements
4.7(d)		Fixed Assets
4.7(e)		Owned Real Property
4.7(f)		Leased Real Property
4.8(b)		Material Company Contracts
4.8(c)		Seller Contracts
4.8(d)		Excluded Contracts

TABLE OF CONTENTS
(continued)


4.8(e)		Material Company Contract Defaults
4.9(a)		Authorizations
4.10		Compliance with Law
4.11		Proceedings and Orders
4.12(a)		Employees
4.13(b)		Company Plans and Company Benefit Obligations and Consents
4.14(a)		CBA�s
4.14(b)		Labor Related Administrative Proceedings
4.15		Taxes
4.16(a)		Company Intellectual Property
4.16(b)		Process Licenses
4.18		Bank Accounts/Safety Deposit Boxes
4.20(a)		Top Customers and Suppliers
4.20(b)		Customer and Supplier Terminations

BUYER�S DISCLOSURE SCHEDULES

Section		Description
5.3(a)		Buyer Third Person Consents
5.3(b)		Buyer's Authorizations from Governmental Authorities

OTHER DISCLOSURE SCHEDULES

Section		Description
2.8(a)(ii)		Annual Gross Margin Calculation
2.8(k)		Earnout Dispositions
6.1(b)(ii)		Refinery Startup Criteria
6.2		Operation of the Business
6.3(g)		Credit Support Arrangements
7.7(a)		Description of Severance Plan
7.13		Multi-Site Contracts
8.2(c)		Closing Consents

vii

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this " Agreement ") is entered into effective as of June 17, 2013 (the " Execution Date "), by and among TESORO CORPORATION, a Delaware corporation (" S eller "), HAWAII PACIFIC ENERGY, LLC, a Delaware limited liability company (" Buyer "), and, for the limited purposes set forth herein, TESORO HAWAII, LLC , a Hawaii limited liability company (the " Company "). Seller, Buyer and the Company may be referred to herein individually as a " Party ," and collectively as the " Parties ."

RECITALS

A. Seller is the sole record and beneficial owner of all of the issued and outstanding units representing membership interests in the Company (the " TH Interest ");

B. The Company is the record and beneficial owner of all of the issued and outstanding capital stock of Smiley's Super Service, Inc., a Hawaii corporation (the " Acquired Subsidiary ");

C. Seller desires to sell and convey the TH Interest to Buyer and Buyer desires to purchase and acquire the TH Interest; and

D. In order to induce Seller to enter into this Agreement, Buyer Guarantor is willing to execute and deliver the Buyer Guaranty simultaneously with the execution of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties and covenants contained herein, the Parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 Definitions . As used in this Agreement (including in the Recitals), the following terms shall have the following meanings:

" Acquired Subsidiary " has the meaning given such term in the Recitals of this Agreement.

" Adjusted Net Worth " means as to any Person, at any time, in accordance with GAAP (except as otherwise specifically set forth below), on a consolidated basis for such Person and its wholly-owned subsidiaries (if any), the amount equal to the difference between: (a) the aggregate net book value of all assets of such Person and its wholly-owned subsidiaries (excluding the value of patents, trademarks, tradenames, copyrights, licenses, goodwill, leasehold improvements, prepaid assets and other intangible assets), calculating the book value of inventory for this purpose on a first-in-first-out basis, after deducting from such book values all appropriate reserves in accordance with GAAP (including all reserves for doubtful receivables, obsolescence, depreciation and amortization) and (b) the aggregate amount of the indebtedness and other liabilities of such Person and its wholly-owned subsidiaries (including tax and other proper accruals).

" Affiliate " means, as to any specified Person, any other Person that directly, or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified Person. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management or policies of such Person whether by contract or otherwise, and ownership of 50% or more of the voting securities of another Person shall create a rebuttable presumption that such Person controls such other Person.

" Affiliated Group " means any affiliated group within the meaning of Section 1504(a) of the Code, or any similar group defined under a corresponding or similar provision of state, local or foreign Tax Law.

" Agreement " has the meaning given such term in the preamble of this Agreement and includes all Exhibits and Schedules attached hereto or delivered pursuant hereto.

" Allocation Schedule " has the meaning given such term in Section 7.10(j)(iii) .

" Allocation Schedule Notice of Disagreement " has the meaning given such term in Section 7.10(j)(iii) .

" Applicable Rate " means a rate per annum which shall be equal to the sum of LIBOR plus 2.0%, but in no event shall the Applicable Rate be less than an amount equal to 6.5%.

" Arbiter " has the meaning given such term in Section 2.6(e) .

" Asset Purchase Allocation Schedule " has the meaning given such term in Section 7.10(j)(i) .

" Assets " means the Refinery, the Logistics Assets, the Retail Assets, the Real Property Interests, improvements owned by the Company and the Acquired Subsidiary (except for assets and properties sold, consumed or otherwise disposed of in the ordinary course of business during the period from the Balance Sheet Date until the date of this Agreement) and located on or attached or affixed to the Real Property Interests, and all fixed assets, equipment and all other assets and rights owned or leased by, or licensed to or used by the Company and the Acquired Subsidiary, in each case, used in the day-to-day operation of the Business as it is currently operated, together with any and all rights of the Company and the Acquired Subsidiary under the contracts and agreements to which the Company or the Acquired Subsidiary is a party, and the rights to be assigned to the Company under Seller Contracts pursuant to this Agreement; but in all cases excluding the Excluded Assets.

" Assignment of Contracts " means an assignment and assumption of contracts with respect to the Seller Contracts in the form of Exhibit A attached hereto.

" Authorization " means any franchise, permit, license, authorization, certificate, registration, exemption, concession, approval, variance, waiver, right, settlement, compliance plan or other consent or approval granted or issued by any Governmental Authority (i) under any Law, including any Environmental Law, or (ii) under or pursuant to any Order or Material Contract with any such Governmental Authority; provided, however , "Authorizations" shall not include any license or permit issued by a Governmental Authority that grants or authorizes any interest in a right-of-way or easement or similar rights including the Pipeline ROW Interests.

" Balance Sheet " means the unaudited consolidated balance sheet of the Companies as of the Balance Sheet Date.

" Balance Sheet Date " means March 31, 2013.

" Base Amount " has the meaning given such term in Section 2.3 .

" Books and Records " means all files, documents, instruments, papers, plans, drawings, manuals, books and records (including electronically stored information, to the extent reasonably practicable) owned and used by or for Seller or the Companies and relating exclusively to the ownership of the Assets or the conduct of the Business, excluding in each case any such items (i) included in or relating to the Excluded Assets or Retained Liabilities, (ii) to the extent comprising personnel medical and other records relating to employees which are prohibited by Laws or by Seller's or its Affiliates" internal policies from being transferred to Buyer or the Company without consent of the relevant employee, (iii) with respect to all corporate, financial, Tax and legal files, documents, instruments, papers, plans, drawings, manuals, books and records related to the ownership of the Assets or conduct of the Business prior to the Closing Date, (iv) to the extent disclosure or transfer is prohibited or subject to payment of fee or consideration by any license or other agreement with a Person other than Affiliates of Seller (other than the Companies), or by Law, and for which no consent to transfer has been received, until such time as consent has been obtained (at which time such item shall be deemed to be part of the Books and Records) (v) work product and attorney-client communications with any of Seller's or its Affiliates" legal counsel (other than the Companies" legal counsel), (vi) prepared in connection with or relating in any way to the transactions contemplated by this

Agreement, including bids received from other parties and analyses relating in any way to the Assets or Business, (vii) whose delivery or transfer would violate any confidentiality agreements or cause a waiver of any attorney-client or work-product privilege available to Seller or its Affiliates (other than the Companies), (viii) relating to Seller's or its Affiliates" inter-company or intra-company feedstock and product pricing information, internal transfer prices, hedging activity records and Hydrocarbon Inventory valuation procedures and records, (ix) to the extent that the disclosure of the particular terms of a contract, in the reasonable judgment of Seller, would violate any antitrust or similar Law, (x) containing financial or other data or information that is co-mingled or otherwise integrated with the data or information of Seller and its Affiliates (other than the Companies) and cannot be segregated with Commercially Reasonable Efforts by Seller or its Affiliates (other than the Companies), and (xi) that (a) are archived at locations controlled or managed by third parties and (b) are not clearly, solely, and exclusively related to the Assets or the Business and cannot be readily identified as such through the exercise of Commercially Reasonable Efforts.

" Breach Notice " has the meaning given such term in Section 6.4 .

" Business " means the business conducted by the Company and the Acquired Subsidiary in accordance with recent past practices, including the ownership, operation and use of the Refinery, the Logistics Assets, the Retail Assets and other Assets.

" Business Day " means a day other than Saturday, Sunday or any day on which commercial banks located in the State of New York are authorized or obligated to close.

" Buyer " has the meaning given such term in the preamble of this Agreement.

" Buyer Guarantor " means Par Petroleum Corporation, a Delaware corporation.

" Buyer Guaranty " means the Guaranty to be executed and delivered simultaneously with the execution of this Agreement from Buyer Guarantor to Seller, in the form of Exhibit B attached hereto.

" Buyer Indemnitees " means Buyer, its Affiliates (including the Companies post-Closing) and their respective officers, directors, managers, employees, agents, representatives (including any officers, directors, managers, employees, agents or representatives of the Companies appointed or retained by Buyer or the Companies after the Closing or otherwise acting at the direction of Buyer, the Companies or Buyer's Affiliates after the Closing) and their permitted successors or assigns.

" Buyer Third Person Consent " means any Third Person Consent required under (i) any Governing Document of Buyer, or (ii) any contract to which Buyer is a party or by which it or its assets is bound.

" Buyer's FSP " has the meaning given such term in Section 7.4(b) .

" Buyer's Pension Plan " has the meaning given such term in Section 7.3(a) .

" Buyer's Plans " has the meaning given such term in Section 7.1(d) .

" Buyer's Savings Plan " has the meaning given such term in Section 7.3(b) .

" Casualty " has the meaning given such term in Section 9.1 .

" CBAs " means, collectively, all collective bargaining agreements between the Company and any collective bargaining unit of any employee union and all existing contract extension agreements, memoranda of agreement, letters of understanding and similar agreements and instruments with any such collective bargaining unit.

" Claim " means any demand, claim, complaint, notice of violation or any other assertion of an Obligation, whether written or oral, for any Loss, specific performance, injunctive relief, remediation or other equitable relief whether or not ultimately determined to be valid.

" Claiming Employee " has the meaning given such term in Section 7.7(b) .

" Closing " has the meaning given such term in Section 2.4 .

" Closing Date " has the meaning given such term in Section 2.4 .

" Closing Date Payment " has the meaning given such term in Section 2.5(a)(i) .

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

" Commercially Reasonable Efforts " means efforts which are commercially reasonable to enable a Person, directly or indirectly, to satisfy a condition to or otherwise assist in the consummation of a desired result and which do not require the performing Person to sell any assets, pursue any litigation or pay, incur, convey, endure or deliver any material monetary payments or other form of consideration, whether tangible or intangible, including any property, detriment, debt, right, license, obligation, waiver or release.

" Commitment Letters " has the meaning given such term in Section 5.7 .

" Committed Refinery Inventory " means crude oil, feedstocks, intermediates and blendstocks that Seller and its Affiliates (excluding the Companies) have legally committed to purchase for delivery to the Refinery after the Closing but where title has not yet passed to Seller or its Affiliates (excluding the Companies) as of the Measurement Time.

" Companies " means the Company and the Acquired Subsidiary.

" Company " has the meaning given such term in the preamble of this Agreement.

" Company Assumed Liabilities " has the meaning given such term in Section 2.9(a) .

" Company Benefit Obligations " means all Obligations, arrangements, policies, or customary practices (other than those contained in or provided under the Company Plans), whether or not legally enforceable and whether written or oral, to provide benefits (other than salary or wages) to present or former directors, managers, officers, employees or consultants of the Company, the Acquired Subsidiary or their ERISA Affiliates. Company Benefit Obligations also include consulting agreements under which the compensation paid does not depend upon the amount of the service rendered, sabbatical policies, severance payment policies, fringe benefits within the meaning of Code Section 132, workers" compensation plans, cafeteria plans, change-in-control benefits, disability benefits, retirement benefits, post-retirement benefits, supplemental unemployment benefits, vacation benefits, deferred compensation, loan, retention, bonus or other incentive compensation, and equity-based rights or compensation.

" Company Environmental Liabilities " means any and all Orders, Claims, Losses or Obligations, including required capital expenditures, arising from or related to Environmental Laws or the Hawaii Consent Decree to the extent related to the Company, the Assets or the Business, whether known or unknown, of the Companies or the Business, whether arising before or after the Closing, including those related to Third Party Claims, actual or threatened releases of Hazardous Materials, off-site treatment, storage, recycling, or disposal and off-site migrations of Hazardous Materials or any fine, penalty or other cost assessed in connection with any alleged or actual violation(s) of Environmental Laws.

" Company Monthly Financial Statements " has the meaning given such term in Section 6.11 .

" Company Plans " means all pension plans, as defined in Section 3(2) of ERISA (" Pension Plans ") and welfare plans, as defined in Section 3(1) of ERISA (" Welfare Plans "), which the Company or an ERISA Affiliate maintains, administers, or contributes to, or is required to contribute to, or within the five (5) years prior to the Closing Date, maintained, administered, contributed to or was required to contribute to, or under which the Company or an ERISA Affiliate may incur any liability and which cover any employee or former employee of the Company or any ERISA Affiliate.

" Compensation Claims " has the meaning given such term in Section 7.7(b) .

" Confidentiality Agreement " means the Confidentiality Agreement, dated March 4, 2013 by and between Seller and Buyer Guarantor.

" Consulting Work " means the design and planning services, engineering services, and procurement consulting and assistance performed by Seller reasonably necessary to complete the Scope of Work.

" Credit Support Arrangements " has the meaning given such term in Section 6.3(g) .

" Current Assets " means the current assets of the Companies, on a consolidated basis, determined in accordance with GAAP and the Companies" past practices (to the extent not inconsistent with GAAP), consistently applied, as of the Measurement Time including, without duplication: (i) accounts receivable, (ii) deposits (regardless of classification) and (iii) assets accounted for as other current assets of the Companies, but excluding (A) book values for Feedstock Inventory, Product Inventory, Merchandise Inventory and Parts and Supplies Inventory to the extent such assets are measured and valued pursuant to Section 2.7 and (B) any Tax assets. For the avoidance of doubt, Current Assets shall include current assets generated by the operation of the Business prior to the Measurement Time, including credit card receipts, fuel card receipts and fleet sales. Notwithstanding the foregoing, "Current Assets" shall not include any Excluded Assets.

" Current Liabilities " means the current liabilities of the Companies, on a consolidated basis, determined in accordance with GAAP and the Companies" past practices (to the extent not inconsistent with GAAP), consistently applied, as of the Measurement Time, including, without duplication: (i) accounts payable and (ii) liabilities accounted for as other current liabilities of the Companies. For the avoidance of doubt, Current Liabilities shall include current liabilities generated by the operation of the Business prior to the Measurement Time. Notwithstanding the foregoing, "Current Liabilities" shall not include the current portion of any capital lease obligations to the extent such capital lease obligations are not then due and payable, any Retained Liabilities, Company Environmental Liabilities or any Tax liabilities.

" Data Room " means the electronic data room maintained by Intralinks, Inc. on behalf of Seller for the posting of documents for review by Buyer in connection with the transactions contemplated hereby.

" De Minimis Amount " has the meaning given such term in Section 11.2(c) .

" Deposit " has the meaning given such term in Section 2.2 .

" Deposit Return Event " means the occurrence of any of the following: (a) this Agreement is terminated pursuant to Section 10.1(a) ; (b) this Agreement is terminated by Buyer pursuant to Section 10.1(c) and the failure to Close in such circumstance is solely due to a failure to satisfy the Closing conditions set forth in Section 8.3(a) or Section 8.3(b) (other than the execution and delivery of the Closing certificate from an executive officer of Seller); or (c) this Agreement is terminated pursuant to Section 10.1(e) .

" Diligence Representative " has the meaning given such term in Section 6.6(a) .

" Direct Claim " has the meaning given such term in Section 11.4(g) .

" Disclosure Schedules " means the disclosure schedule letters delivered by Seller to Buyer or Buyer to Seller, as the case may be, on the Execution Date. The Disclosure Schedules have been arranged in sections corresponding to the numbered sections of this Agreement.

" Dollars " and the symbol "$" mean the lawful currency of the United States of America.

" Effective Time " means 12:01 a.m. Hawaii-Aleutian Standard Time on the Closing Date.

" Employees " has the meaning given such term in Section 4.12(a)(i) .

" Environmental Agreement " means the Environmental Agreement to be entered into by and among Seller, Buyer and the Company on the Closing Date, substantially in the form attached hereto as Exhibit C .

" Environmental Condition " means any condition at, on, under, within or migrating from any tangible Assets, in each case arising out of the presence or release of any Hazardous Materials on, at or underlying the Real Property Interests or the Pipeline ROW Interests.

" Environmental Law " means any Law or Authorization pertaining to public or employee exposure to Hazardous Materials, pollution, the environment or the protection of fish, wildlife or natural resources. For the avoidance of doubt, due to the inclusion of the word "applicable" in the definition of "Law" incorporated into this definition, any references in this Agreement to "any Environmental Law" or "any applicable Environmental Law" shall have the same meaning.

" Equity Interests " means capital stock, partnership or membership interests or units (whether general or limited), other equity interests, and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity.

" Equity Securities " means (i) Equity Interests, (ii) subscriptions, calls, warrants, options or commitments of any kind or character relating to, or entitling any Person to acquire, any Equity Interests and (iii) securities convertible into or exercisable or exchangeable for shares of Equity Interests.

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

" ERISA Affiliate " means any entity which is (or at any relevant time was) a member of a "controlled group of corporations" with, under "common control" with, or a member of an "affiliated service group" with, the Company as defined in Section 414(b), (c), (m) or (o) of the Code, or under "common control" with the Company within the meaning of Section 4001(b)(l) of ERISA.

" Estimated Hydrocarbon Inventory Value " has the meaning given such term in Section 2.7(a)(iii) .

" Estimated Merchandise Inventory Value " has the meaning given such term in Section 2.7(b)(iii) .

" Estimated Net Working Capital " has the meaning given such term in Section 2.6(c) .

" Estimated Parts and Supplies Inventory Value " has the meaning given such term in Section 2.7(c)(iii) .

" Estimated Refinery Startup Reimbursement " has the meaning given such term in Section 6.1(d)(v) .

" Excluded Assets " has the meaning given such term in Section 2.10 .

" Excluded Asset Transfer " has the meaning given such term in Section 2.10 .

" Excluded Contract(s) " has the meaning given such term in Section 4.8(d) .

" Excluded Intellectual Property " means the intellectual property and intellectual technology systems set forth in Section 1.1(a) of the Disclosure Schedules.

" Execution Date " has the meaning given such term in the preamble of this Agreement.

" Feedstock Inventory " means all crude oil, feedstock, intermediates and blendstocks owned by the Companies as of the Measurement Time, whether located at or in the Refinery, the Terminals or the Pipelines, in transit by pipeline or vessel or located elsewhere, whether in the possession of the Companies or any other Person, and regardless of whether such inventory represents wholesale exchange imbalances. For the avoidance of doubt, Feedstock Inventory includes all hydrocarbons located at the Refinery in processing units and interconnecting pipes and hydrocarbons serving as tank bottoms and heels but excluding sludge and bs&w. Additionally, Feedstock Inventory shall include Undelivered Refinery Inventory, if any.

" Feedstock Inventory Value " means an aggregate amount equal to the market values for each constituent component of the Feedstock Inventory, calculated as of the Measurement Time in accordance with the provisions of Section 2.7(a)(ii) .

" Final Inventory Value " has the meaning given such term in Section 2.7(d)(i) .

" Final Net Working Capital " has the meaning given such term in Section 2.6(d) .

" Final Refinery Startup Reimbursement " has the meaning given such term in Section 6.1(d)(viii) .

" Financial Statements " has the meaning given such term in Section 4.6(a) .

" Financing " has the meaning given such term in Section 5.7 .

" Food Supplies " means all food products, ingredients and miscellaneous items that are intended to undergo further processing, packaging or preparation prior to their sale to customers at the retail sites of the Retail Assets or that are provided to customers at the Retail Assets at no additional charge, including soft drink syrups, coffee, hot chocolate, condiments, cups, lids, straws and napkins.

" Fuel Credits " means all credits, allotments, renewable identification numbers (" RINs "), certificates or other authorizations relating to any applicable fuel quality standards or renewable fuel standards.

" Fundamental Representations " has the meaning given such term in Section 11.1 .

" GAAP " means generally accepted accounting principles in the United States.

" Governmental Authority " means any national, federal, regional, state, local or other governmental agency, authority, administrative agency, regulatory body, commission, board, bureau, instrumentality, court or arbitral tribunal having governmental or quasi-governmental powers.

" Governing Documents " means the articles of incorporation, certificate of incorporation, charter, bylaws, articles or certificate of formation, regulations, limited liability company agreement, operating agreement, certificate of limited partnership, partnership agreement, and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the formation, organization or governance of a Person, including any amendments thereto.

" Hawaii Consent Decree " has the meaning given such term in Section 6.15 .

" Hazardous Materials " means (i) any chemicals, materials or substances in any form, whether solid, liquid, gaseous, semisolid, or any combination thereof, whether waste materials, raw materials, chemicals, finished products, by-products, degradation products or any other materials or articles, which are listed, defined or otherwise designated as hazardous, toxic or dangerous and as such are regulated under any Environmental Law, including asbestos, and lead-containing paints or coatings, (ii) any petroleum (including crude oil), petroleum derivatives, petroleum products or by-products of petroleum refining or any oxygenate (including degradation products) in any fuel, and (iii) any other chemical, substance or waste that is regulated by any Environmental Law.

" Honolulu Pipeline " means that certain refined products pipeline running approximately 21.2 miles connecting the Refinery to terminals located at the Honolulu International Airport, terminals located at certain military facilities, the Tesoro Sand Island Terminal, the Aloha Honolulu terminal and the Chevron terminal.

" HSR Act " means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

" Hydrocarbon Inventory " has the meaning given such term in Section 2.7(a)(ii) .

" Hydrocarbon Inventory Value " has the meaning given such term in Section 2.7(a)(i) .

" Indemnification Cap " has the meaning given such term in Section 11.2(e) .

" Indemnification Deductible " has the meaning given such term in Section 11.2(d) .

" Indemnified Party " has the meaning given such term in Section 11.4(a) .

" Indemnifying Party " has the meaning given such term in Section 11.4(a) .

" Intellectual Property " has the meaning given such term in Section 4.16(a) .

" Interim Period " means the period of time from the Execution Date until the earlier of the Closing or the termination of this Agreement pursuant to Article X .

" Inventory Challenged Amount " has the meaning given such term in Section 2.7(d)(i) .

" Inventory Protest Letter " has the meaning given such term in Section 2.7(d)(i) .

" Inventory Statement " has the meaning given such term in Section 2.7(d)(i) .

" Kalaeloa Pipelines " means, collectively, the four (4) refined products pipelines running approximately 2.2 miles and connecting the Refinery to the loading facility at the Kalaeloa Barbers Point Harbor, the Chevron refinery, Aloha Barbers Point Terminal and HECO.

" Knowledge " and " Known " mean, in the case of Seller, the actual knowledge of the individuals listed in Part I of Exhibit D , obtained in the normal course of their respective duties as officers, employees or consultants of Seller or any of its Affiliates, without independent investigation or inquiry and, in the case of Buyer, the actual knowledge of the individuals listed on Part II of Exhibit D , obtained in the normal course of their respective duties as officers, employees or consultants of Buyer or any of its Affiliates, without independent investigation or inquiry.

" Law " means any applicable law (including common law), statute or ordinance of any nation or state, including the United States of America, and any political subdivision thereof, including any state of the United States of America, any regulation, policy, protocol, proclamation or executive order promulgated by any Governmental Authority, any rule or regulation of any self-regulatory organization such as a securities exchange, or any applicable Order of any court or other Governmental Authority having the effect of law in any such jurisdiction. For the avoidance of doubt, any references herein to "any Law" shall, as indicated by this definition, be deemed to refer only to such Law as is applicable in the circumstances.

" Leased Real Property " has the meaning given such term in Section 4.7(f).

" LIBOR " means for each applicable day, the rate stated in the "Money Rates" section of The Wall Street Journal published on such day as the one (1) month London Interbank Offered Rate; and if The Wall Street Journal is not published on such day, then the aforesaid rate in the most recent edition of The Wall Street Journal preceding such day shall be utilized for such day.

" License Agreement " means the License Agreement to be entered into by and among Seller, Buyer and the Company on the Closing Date, substantially in the form attached hereto as Exhibit K .

" Licensed Technology Rights " has the meaning given such term in Section 7.18(c) .

" Lien " means any mortgage, pledge, security interest, hen, deed of charge, right of first refusal or first offer, floating charge or other charge of any kind (including any agreement to give any of the foregoing), any conditional sale or other title retention agreement, or the filing of or agreement to give any security interest, charge or financing statement under the Laws of any jurisdiction.

" Logistics Assets " means, collectively, the Pipeline Assets, the SPM and the Terminals along with two (2) time chartered tug/barge units and one (1) leased tug boat.

" Long-Term Inactive Employee " has the meaning given such term in Section 4.12(a)(ii) .

" Loss " means, subject to Section 11.5 and Section 11.7 , any and all damages, penalties, fines, assessments, charges, costs, Obligations, losses, expenses and fees, including costs of investigation, court costs, costs of defense and reasonable fees of attorneys, accountants and other professional advisors and expert witnesses in connection therewith.

" Management Work " means the turnaround management, pre-start up and start-up management, operations management, and training services performed by Seller reasonably necessary to complete the Scope of Work.

" Material Adverse Effect " means an effect, event, fact, circumstance or development (" Effects ") that, individually or in the aggregate, has had, or would reasonably be expected to have a material adverse effect on the business, properties, financial condition or results of operations of the Companies, taken as a whole; provided, however , that in no event shall any Effect that results from any of the following be deemed to constitute a Material Adverse Effect: (a) this Agreement or any actions required to be taken in compliance with this Agreement, the transactions contemplated hereby, or the pendency or announcement thereof, (b) changes or conditions generally affecting the petroleum refining, marketing and transportation industry (including feedstock pricing, refining, marketing, transportation, terminalling and trading, generally or regionally), (c) changes in general economic, capital market, regulatory or political conditions in the United States or elsewhere (including interest rate and currency fluctuations), (d) changes or proposed changes in Law occurring after the Execution Date, (e) changes or proposed changes in accounting principles or GAAP occurring after the Execution Date, (f) acts of war, insurrection, sabotage or terrorism occurring after the Execution Date, other than such acts that are specifically directed towards the Companies or the Assets, or (g) the Company's or the Acquired Subsidiary's failure, in and of itself, to meet operational or financial expectations or projections other than as a result of a breach of this Agreement by the Company or Seller; except, in the cases of clauses (b) and (c), to the extent that such Effects have a disproportionate impact on the Company or the Assets, as a whole, relative to other participants in the industry and in the locations in which the Company operates the Business.

" Material Company Contract " has the meaning given such term in Section 4.8(b) .

" Material Contract " has the meaning given such term in Section 4.8(a) .

" Measurement Time " means 11:59 p.m. Hawaii-Aleutian Standard Time on the Closing Date.

" Merchandise Inventory " means all merchandise (excluding any Product Inventory) owned by the Companies as of the Measurement Time and acquired for resale or use in the Retail Assets (including Food Supplies), whether in transit or located elsewhere, whether in the possession of the Companies or any other Person.

" Merchandise Inventory Value " means the amount to be paid for the Merchandise Inventory, calculated in accordance with the provisions of Section 2.7(b)(ii) .

" Multi-Site Contract " has the meaning given such term in Section 7.13 .

" Multi-Site License " has the meaning given such term in Section 7.18(c) .

" Net Working Capital " means the sum of (a) the Current Assets; less (b) the Current Liabilities.

" Net Working Capital Statement " has the meaning given such term in Section 2.6(d) .

" New Seller Information " has the meaning given such term in Section 6.9(a) .

" NWC Challenged Amount " has the meaning given such term in Section 2.6(d) .

" NWC Protest Letter " has the meaning given such term in Section 2.6(d) .

" Obligations " means, with respect to any Person, any duties, liabilities, covenants and obligations of such Person, whether vested or unvested, absolute or contingent, conditional or unconditional, primary or secondary, direct or indirect, known or unknown, asserted or unasserted, disputed or undisputed, matured or unmatured, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, and whether contractual, statutory or otherwise.

" Order " means any order, writ, ruling, decision, verdict, decree, assessment, award (including arbitration awards), judgment, stipulation, injunction, or other determination, decision or finding by, before, or under the supervision of any Governmental Authority.

" Other Tax Contest " has the meaning given such term in Section 7.10(d)(iii) .

" Owned Real Property " has the meaning given such term in Section 4.7(e) .

" Parts and Supplies Inventory " means the warehouse and stores inventory (including tools, spare parts, catalysts, chemicals, precious metals, sulphur and other similar items) owned by the Companies as of the Measurement Time.

" Parts and Supplies Inventory Value " means the amount to be paid for the Parts and Supplies Inventory, calculated in accordance with the provisions of Section 2.7(c)(ii) .

" Party " has the meaning given such term in the preamble of this Agreement.

" Pension Plan " has the meaning given in the definition of Company Plan.

" Permitted Lien " means:

(i) inchoate Liens and charges imposed by Law and incidental to the construction, maintenance, development or operation of the Company's or the Acquired Subsidiary's properties or the operation of the Business, if payment of the obligation secured thereby is not yet due or if the validity or amount of which is being contested in good faith by the Company or the Acquired Subsidiary by appropriate action, as applicable;

(ii) Liens for Taxes, assessments, Obligations under workers" compensation or other social welfare legislation or other requirements, charges or levies of any Governmental Authority, in each case not yet delinquent or which are being contested in good faith by the Company or the Acquired Subsidiary by appropriate actions:

(iii) easements, servitudes, rights-of-way and other rights, exceptions, reservations, conditions, limitations, covenants and other restrictions on the Real Property Interests (A) described in the Title Commitments, (B) to the extent related to a Real Property Interest not covered by the Title Commitments, of record or contained in any lease of such Real Property Interest or portion thereof, or (C) that do not materially interfere with, materially impair or materially impede the operation, value or use of the Assets affected thereby;

(iv) pledges and deposits to secure the performance of bids, tenders, trade or government contracts (other than for repayment of borrowed money), leases, licenses, statutory Obligations, surety bonds, performance bonds, completion bonds and other Obligations of a like kind as set forth in Section 1.1(b) of the Disclosure Schedules or as otherwise incurred in the ordinary course of business that do not materially interfere with, impair or impede the Business as currently conducted by the Company or the Acquired Subsidiary;

(v) any Liens consisting of (A) rights reserved to or vested in any Governmental Authority to control or regulate any property of the Company or the Acquired Subsidiary, or to limit the use of such property in any manner which does not materially impair the use of such property for the purposes for which it is held by the Company or the Acquired Subsidiary, (B) Obligations to any Governmental Authority with respect to any Authorization and the rights reserved or vested in any Governmental Authority to terminate any such Authorization or to condemn or expropriate any property, or (C) zoning or other land use or environmental laws and ordinances of any Governmental Authority, in each case that do not materially detract from the value or marketability of the property affected or interfere with, impede or impair the Business as currently conducted by the Company or the Acquired Subsidiary;

(vi) mechanics" and materialmen's Liens and similar charges not filed of record and not delinquent;

(vii) mechanics" and materialmen's Liens and similar charges filed of record but (A) are being contested in good faith by appropriate action, (B) for which the Company or the Acquired Subsidiary is the beneficiary of a contractual indemnity from another Person, or (C) for which the applicable statutory foreclosure period or other enforcement rights have lapsed;

(viii) mechanics" and materialmen's Liens and similar charges filed of record and not included in clause (vii) above for which Seller has bonded around on or before the Closing;

(ix) Liens in respect of Orders with respect to which an appeal or other proceeding for review is being prosecuted and with respect to which a stay of execution pending such appeal or such proceeding for review has been obtained;

(x) any Lien or title imperfection with respect to the Assets created by or resulting from any act or omission by, at the direction of or on behalf of Buyer; and

(xi) Liens that will be paid in full or released on or prior to the Closing Date.

" Person " means an individual, partnership, limited liability company, corporation, joint stock company, trust, estate, joint venture, association or unincorporated organization, or any other form of business or professional entity.

" Pipeline Assets " means, collectively, the (i) SPM Pipelines; (ii) the Honolulu Pipeline; and (iii) the Kalaeoloa Pipelines, and all current appurtenances, facilities, fixtures, pumps, valves, meters and other equipment related thereto.

" Pipeline ROW Interests " means the parcels of land and waterways which the Company or the Acquired Subsidiary has the right to use, traverse or occupy under easements, rights-of-way, franchises, permits, licenses and other rights to or interests in relating to the installation, construction, ownership, maintenance and repair of the Pipeline Assets.

" Post-Closing Employee " has the meaning given such term in Section 7.1(c) .

" Pre-Closing Tax Contest " has the meaning given such term in Section 7.10(d)(ii) .

" Pre-Closing Tax Period " means all taxable periods ending on or prior to the Closing Date and the portion of any Straddle Period through the end of the Closing Date.

" Pre-Closing Tax Return " has the meaning given such term in Section 7.10(b)(i) .

" Pre-Closing Transition Services Agreement " means that certain Pre-Closing Transition Services Agreement to be executed and delivered simultaneously with the execution of this Agreement by and between Tesoro Companies, Inc., a Delaware corporation, and Buyer, substantially in the form attached hereto as Exhibit L .

" Pre-Transaction Claims " has the meaning given such term in Section 7.19(a) .

" Pre-Transaction Matters " has the meaning given such term in Section 7.19(a) .

" Proceeding " means any action, case, lawsuit, arbitration, mediation, investigation, hearing, audit, examination or other proceeding (including regulatory or administrative proceedings) at law or in equity, commenced, brought, conducted or heard by or before, any Governmental Authority, or any mediator, arbitrator or board of arbitration.

" Process Licenses " has the meaning given such term in Section 4.16(b) .

" Product Inventory " means all refined products owned by the Companies as of the Measurement Time, whether located at or in the Refinery, the Pipelines, the Terminals or the Retail Assets, whether in transit by pipeline, rail car, vehicle or vessel or located elsewhere, whether in the possession of the Companies or any other Person, and regardless of whether such inventory represents wholesale exchange imbalances. For the avoidance of doubt, Product Inventory includes all hydrocarbons in interconnecting pipes and hydrocarbons serving as tank bottoms and heels.

" Product Inventory Value " means an aggregate amount equal to the market values for each constituent component of the Product Inventory, calculated as of the Measurement Time in accordance with the provisions of Section 2.7(a)(ii) .

" Property, Motor Fuels, and Sales Taxes " has the meaning given such term in Section 7.10(a) .

" Purchase Price " has the meaning given such term in Section 2.3 .

" Real Property Interests " means the real property interests owned or leased by the Company or the Acquired Subsidiary, together with all fixtures, buildings and other structures, facilities or improvements currently or hereafter located thereon prior to the Closing and all easements, licenses, rights, appurtenances, right-of-way agreements, option agreements, use agreements and similar land-related agreements or interests relating to the foregoing but excluding the Pipeline ROW Interests.

" Refinery " means the Company's petroleum refinery located at the Campbell Industrial Park in Kapolei, Hawaii, with a throughput capacity of 94,000 barrels per day.

" Refinery Operational Plan " has the meaning given such term in Section 6.14(a) .

" Refinery Shutdown Activities " has the meaning given such term in Section 6.1(a) .

" Refinery Startup Completion " has the meaning given such term in Section 6.1(b)(i) .

" Refinery Startup Deposit " has the meaning given such term in Section 6.1(d)(i) .

" Refinery Startup Dispute " has the meaning given such term in Section 6.1(c) .

" Refinery Startup Expenses " means any and all expenses incurred by Seller or its Affiliates directly relating to the Refinery Turnaround and Startup Activities, including expenses relating to (i) salary, payroll expenses and benefits for employees of Seller (but excluding salary expenses of employees of the Company), (ii) engineers, (iii) contractors, (iv) third party expenses, (v) materials (including catalysts) and (vi) leased or purchased equipment incorporated into or used in the Refinery Turnaround and Startup Activities.

" Refinery Turnaround and Startup Activities " has the meaning given such term in Section 6.1(b) .

" Refund Conditions " has the meaning given such term in Section 2.2 .

" Related Agreements " means the agreements, documents and instruments listed in Section 2.5 and any other agreements, documents and instruments executed and delivered pursuant to this Agreement including the Buyer Guaranty and the Pre-Closing Transition Services Agreement.

" Repair Costs " has the meaning given such term in Section 9.2(a) .

" Repair Cost Dispute " has the meaning given such term in Section 9.2(c) .

" Repair Negotiation Period " has the meaning given such term in Section 9.2(b) .

" Represented Employee " has the meaning given such term in Section 4.12(b) .

" Retail Assets " means the retail assets owned by the Company located on the islands of Oahu, Maui and Hawaii at which fuel products and merchandise are marketed and sold to retail customers, and related assets, as set forth in Exhibit F to this Agreement.

" Retained Liabilities " has the meaning given such term in Section 2.9(b) .

" Retiree Welfare Benefit " has the meaning given such term in Section 7.5 .

" S cope of Work " means the scope of work set forth in the electronic folder titled "Refinery Turnaround Scope of Work" located in the Data Room as of the Execution Date.

" Section 338 Allocation Schedule " has the meaning given such term in Section 7.10(j)(ii) .

" Section 338(h)(10) Election Forms " has the meaning given such term in Section 7.10(i)(ii) .

" Section 338(h)(10) Elections " has the meaning given such term in Section 7.10(i)(i) .

" Securities Act " has the meaning given such term in Section 3.5 .

" Seller " has the meaning given such term in the preamble of this Agreement.

" Seller Affiliated Group " means an Affiliated Group which includes the Seller.

" Seller Captive Insurers " has the meaning given such term in Section 7.9(a) .

" Seller Contracts " has the meaning given such term in Section 4.8(c) .

" Seller Indemnitees " means Seller, its Affiliates (excluding the Companies post-Closing) and their respective officers, directors, employees, agents, representatives (including any officers, directors, managers, employees, agents or representatives of the Companies to the extent acting at the direction of Seller or its Affiliates prior to the Closing), and their permitted successors or assigns.

" Seller IP " has the meaning given such term in Section 7.18(a) .

" Seller Officers and Directors " means those individuals identified as "Seller Officers and Directors" in Section 1.1(c) of the Disclosure Schedules, being all individuals holding positions with the Companies.

" Seller Policies " has the meaning given such term in Section 7.9(a) .

" Seller Third Person Consent " means any Third Person Consent required under (i) any Governing Document of Seller, the Company or the Acquired Subsidiary, or (ii) any Material Contract to which Seller, the Company or the Acquired Subsidiary is a party or by which Seller or any of its assets is bound.

" Seller Transaction Expenses " means the aggregate amount of all out-of-pocket fees and expenses, incurred by, or to be paid by, the Companies relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the pre-Closing transactions contemplated hereby and thereby, which shall include (a) any fees and expenses associated with obtaining necessary or appropriate waivers, consents or approvals of any Governmental Authority or third parties on behalf of Seller or the Companies, (b) any fees or expenses associated with obtaining the release and termination of any Liens (other than Permitted Liens), (c) all brokers" or finders" fees, and (d) fees and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and experts, in all cases, whether payable prior to or on the Closing Date or thereafter. For avoidance of doubt, Seller Transaction Expenses shall not include any expenses incurred by the Companies on or after the Closing at the direction or request of Buyer or its Affiliates (including the Companies beginning after the Closing Date).

" Seller's Pension Plans " has the meaning given such term in Section 7.3(a) .

" Seller's Savings Plans " has the meaning given such term in Section 7.3(b) .

" Short-Term Inactive Employee " has the meaning given such term in Section 4.12(a)(ii) .

" SPM " means that certain floating single point mooring used for petroleum product and crude oil loading and off-loading equipment owned by the Company and located approximately 1.7 miles off the coast of the Kalaeloa Barbers Point Harbor.

" SPM Pipelines " means, collectively, the three (3) subsea pipelines running approximately 2.0 miles and connecting the Refinery to the SPM.

" Startup Criteria " shall mean the criteria set forth in Section 6.1(b)(ii) of the Disclosure Schedules.

" Startup Deposit Drawn Amount " means, at a given point in time, the total amount transferred by Seller to its own account pursuant to Section 6.1(d)(iv) as of such time.

" Straddle Period " has the meaning given such term in Section 7.10(a) .

" Straddle Tax Return " has the meaning given such term in Section 7.10(b)(ii) .

" Subsidiary Shares " has the meaning given such term in Section 4.5 .

" Taking " has the meaning given such term in Section 9.1 .

" Tax " means all United States federal, state, provincial, local or foreign income, profits, accumulated earnings, personal holding company, estimated, gross receipts, windfall profits, sales, use, transfer, value added, severance, franchise, capital gains, capital stock, withholding, ad valorem, employment, unemployment, workers" compensation, occupation, occupancy, production, social security, disability, wage, payroll, stamp, registration, premium, goods and services, real property, personal property, intangible property, severance, excise, general excise, alternative or add-on minimum, customs, or environmental taxes, or any other taxes, charges, fees, imposts, duties, levies, withholdings, escheat payments, or other assessments, imposed by any Taxing Authority, whether or not shown on a Tax Return, together with any interest, fines, penalties, or additions to tax attributable to or imposed with respect thereto, imposed by, or on behalf of any Taxing Authority, whether or not disputed.

" Tax Contest " has the meaning given such term in Section 7.10(d)(i) .

" Tax Return " means any return, declaration, report, claim for refund or information return or statement or similar statement relating to Taxes, including any schedule or attachment thereto.

" Taxing Authority " means, with respect to any Tax, the Governmental Authority that imposes such Tax and the Governmental Authority charged with the collection of such Tax, including any Governmental Authority that imposes, or is charged with collecting, social security or similar charges or premiums.

" Terminals " means, collectively, (i) the two (2) refined products terminals leased and operated by the Company located on the island of Hawaii in Hilo, Hawaii; (ii) the one (1) refined products terminal leased and operated by the Company located on the island of Maui in Kahului, Hawaii; (iii) the one (1) refined products terminal leased and operated by the Company located on the island of Oahu in Hawaii; and (iv) the one (1) refined products terminal leased and operated by the Company located on the island of Kauai at the Lihue Airport in Hawaii.

" Termination Date " has the meaning given such term in Section 10.1(d) .

" Tesoro Marks " means any name incorporating "Tesoro" or any derivation thereof that would reasonably be expected to be confused therewith, or any trademarks, service marks, trade dress, trade names, logos, corporate names and domain names, insignia, imprints, brand identifications, and advertising of Seller or its Affiliates (including "2 Go Tesoro") and other similar indicia of origin, and all goodwill associated therewith, and registrations of and applications to register the foregoing, together with all other legal rights that arise in any of the foregoing under Law.

" TH Interest " has the meaning given such term in the Recitals of this Agreement.

" Third-Party Claim " has the meaning given such term in Section 11.4(b) .

" Third-Party Estimate " has the meaning given such term in Section 9.2(c) .

" Third Person Consent " means any approval, consent, amendment or waiver of a Person that is required in order to effect the transactions contemplated hereby or any of the Related Agreements or any part hereof or thereof, including waivers and consents by lenders and waivers of transfer or change of control restrictions; provided that Third Person Consents shall not include Authorizations.

" Title Commitments " means those certain Preliminary Reports obtained by Seller issued by the Title Company under Order Nos. 6707000738 for Lot 12765, 6707000740 for Lot 3167-A, and 6707000739 for Lot 3167-B.

" Title Company " means Old Republic Title & Escrow of Hawaii.

" Title Policies " has the meaning given such term in Section 6.12 .

" Transition Services Agreement " means the Transition Services Agreement to be entered into by and among Tesoro Companies, Inc., a Delaware corporation, Buyer and the Company on the Closing Date, substantially in the form attached hereto as Exhibit E .

" Treasury Regulation " means the regulations promulgated under the Code by the United States Department of Treasury.

" Undelivered Refinery Inventory " means all crude oil, feedstock, intermediates, blendstocks and refined products owned by Seller and its Affiliates (excluding the Companies) as of the Measurement Time that is designated for use at and is in transit by vessel to the Refinery, whether in the possession of Seller, its Affiliates (excluding the Companies) or any other Person.

" Union " has the meaning given such term in Section 4.12(b) .

" WARN Act " has the meaning given such term in Section 7.7(a) .

" Welfare Plan " has the meaning given in the definition of Company Plan.

Section 1.2 Construction . Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine and neuter and terms defined in the singular have the corresponding meanings in the plural, and vice versa. All references to Articles and Sections refer to articles and sections of this Agreement, all references to Exhibits refer to exhibits to this Agreement and all references to Schedules refer to Schedules to this Agreement, which Exhibits and Schedules are attached hereto or delivered pursuant hereto and made a part of this Agreement for all purposes. Except as this Agreement otherwise specifies, all references herein to any Law defined or referred to herein are references to that Law (and any rules and regulations promulgated thereunder), as the same may have been (or may hereafter be) amended from time to time; provided , however , that any references to any Law in Article III , Article IV or Article V (or, as used in any Section in any such Article, any references to any Law included in any defined term used in Article III , Article IV or Article V ) are references to that Law (and any rules and regulations promulgated thereunder), as the same may have been amended, interpreted and applied through the Closing Date. In the event of any conflict between the main body of this Agreement and the Exhibits and Schedules hereto, the provisions of the main body of this Agreement shall prevail, but only with respect to the application of the provisions hereof or the interpretation of any of the provisions hereof. The word "includes" or "including" means "including, but not limited to," unless the context otherwise requires. The words "shall" and "will" are used interchangeably and have the same meaning. The words "this Agreement," "hereof," "hereby," "herein," "hereunder" and similar terms in this Agreement shall refer to this Agreement as a whole and not to any particular Section or Article in which such words appear. If a word or phrase is defined, its other grammatical forms have a corresponding meaning. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. The language used in this Agreement will be deemed to be the language the Parties have chosen to express their mutual intent, and no rule of strict construction will be applied against any Party. A defined term has its defined meaning throughout this Agreement and each Exhibit and Schedule to this Agreement, regardless of whether it appears before or after the place where it is defined. The term "cost" includes expense, and the term "expense" includes cost. All references to a specific time of day in this Agreement shall be based upon Central Standard Time or Central Daylight Savings Time, as applicable, on the date in question unless otherwise specified. The word "or" will have the inclusive meaning represented by the phrase "and/or" unless the context requires otherwise. Time periods within or following which any payment is to be made or an act is to be done shall be calculated by excluding the day on which the time period commences and including the day on which the time period ends and by extending the period to the next Business Day following if the last day of the time period is not a Business Day. For purposes of Article III or Article IV , the words "delivered to," "provided to," "made available to" or words of similar import mean posted to the Data Room or physically delivered to Buyer, in each case, as of the Execution Date.

ARTICLE II
PURCHASE AND SALE

Section 2.1 Transfer of TH Interest . Subject to and in accordance with the terms of this Agreement, Seller agrees to sell, assign, transfer, convey and deliver the TH Interest to Buyer, and Buyer agrees to purchase and accept the TH Interest from Seller, for and in consideration of the Purchase Price and the other covenants and agreements of the Parties herein.

Section 2.2 Deposit . On the Execution Date, Buyer shall pay Seller, by wire transfer or delivery of other immediately available funds to an account, or accounts, designated by Seller, a deposit against the Purchase Price of the TH Interest in an amount equal to $25,000,000 (the " Deposit "), as consideration for Seller's entry into this Agreement. This Agreement will not become a legally binding and enforceable obligation of Seller unless and until the Deposit is received by Seller. As soon as practicable after the

Execution Date, but in any event within ten (10) days after Seller receives the Deposit, Seller shall transfer the Deposit into a segregated investment account. Unless Seller and Buyer otherwise agree in writing, Seller shall use Commercially Reasonable Efforts to invest such funds in U.S. Treasury obligations with a maturity of six (6) months or less, or money market funds that invest exclusively in U.S. Treasury obligations. The Deposit shall be non-refundable in that it shall not be returned to Buyer unless all of the following events (the " Refund Conditions ") occur: (a) this Agreement is terminated by Buyer or by Seller as permitted herein, and (b) a Deposit Return Event shall have occurred. Within ten (10) days following the occurrence of the Refund Conditions, Seller shall transfer to Buyer, by wire transfer or delivery of other immediately available funds to an account designated by Buyer, a cash amount equal to the Deposit. If the Closing occurs, an amount equal to the Deposit will be applied to the Purchase Price. Seller shall retain all interest or earnings received on the Deposit unless the Parties otherwise agree. Notwithstanding the preceding sentences to the contrary, in the event this Agreement is terminated pursuant to Section 10.1(e) then the amount of the Deposit that is to be refunded to Buyer shall be reduced, but not below zero, by the amount of Losses incurred by Seller and its Affiliates related to or arising from the Refinery Turnaround and Startup Activities including Losses related to the disposition of Feedstock Inventory, Undelivered Refinery Inventory and Committed Refinery Inventory.

Section 2.3 Purchase Price . As consideration for the sale and transfer of the TH Interest, Buyer shall pay to Seller at the Closing SEVENTY FIVE MILLION ($75,000,000) (the " Base Amount "), plus or minus the adjustment set forth in Section 2.6 (Net Working Capital), plus the adjustments set forth in Section 2.7 (Inventories), and plus the Earnout Payments, if any, payable pursuant to Section 2.8 (such Base Amount, as finally adjusted, the " Purchase Price ").

Section 2.4 Closing; Closing Date . The closing of the transactions contemplated by this Agreement (the " Closing ") shall take place at the offices of Seller in San Antonio, Texas, or at such other place as Buyer and Seller may mutually agree, at 10:00 a.m. at the site of the Closing on the second (2 nd ) Business Day after the satisfaction or waiver of the conditions contained in Article VIII (other than those conditions that by their nature are to be fulfilled at Closing), or on such other date as Seller and Buyer may mutually agree (the " Closing Date "); provided, however , the Closing shall be deemed for all purposes of this Agreement to occur as of the Effective Time on the Closing Date. Buyer shall assume operational control of the Company and the Business on the Closing Date upon Seller's receipt of the Closing Date Payment by wire transfer of immediately available funds as provided below.

Section 2.5 Deliveries at the Closing . At the Closing, the following events shall occur:

(a) Buyer shall deliver, or cause to be delivered, to Seller:

(i) An amount (the " Closing Date Payment ") equal to the Base Amount,


	(1)	less the Deposit,

	(2)	plus or minus , as applicable, an amount equal to the Estimated Net Working Capital pursuant to Section 2.6(c) ,

	(3)	plus an amount equal to the Estimated Hydrocarbon Inventory Value pursuant to Section 2.7(a)(iii) ,

	(4)	plus an amount equal to the Estimated Merchandise Inventory Value pursuant to Section 2.7(b)(iii) ,


	(5)	plus an amount equal to the Estimated Parts and Supplies Inventory Value pursuant to Section 2.7(c)(iii) ,

	(6)	plus an amount equal to the Estimated Refinery Startup Reimbursement pursuant to Section 6.1(d)(v) , and

	(7)	less an amount to be agreed upon, in good faith, by Seller and Buyer prior to the Closing Date for any Taxes required under applicable Law to be deducted or withheld by Buyer which amount deducted or withheld shall be subject to Section 7.10(n) ,

	such Closing Date Payment to be paid by wire transfer of immediately available funds to the account of Seller set forth in Section 2.5(a)(i) of the Disclosure Schedules;

(ii) resolutions of Buyer authorizing the execution of this Agreement and the Related Agreements to which Buyer is a party and the consummation of the transactions contemplated under this Agreement and the Related Agreements to which Buyer is a party (to the extent required by Buyer's organizational documents), in each case certified by the Secretary or other executive officer of Buyer as being complete and correct and then in full force and effect;

(iii) a certificate of incumbency of the signatory officers of Buyer;

(iv) a certificate as to the good standing of Buyer issued by the Secretary of State of Delaware;

(v) the certificates referred to in Section 8.2(a) and Section 8.2(b);

(vi) copies of all Buyer Third Person Consents and Authorizations obtained pursuant to Section 6.3;

(vii) the Environmental Agreement in the form attached hereto as Exhibit C, duly executed by Buyer on behalf of itself and the Company;

(viii) the Transition Services Agreement in the form attached hereto as Exhibit E, duly executed by Buyer on behalf of itself and the Company; and

(ix) the License Agreement in the form attached hereto as Exhibit K , duly executed by Buyer on behalf of itself and the Company.

In addition, Buyer shall accept the TH Interest from Seller, and duly execute and deliver the Related Agreements to which Buyer is a party.

(b) Seller shall deliver, or cause to be delivered, to Buyer:

(i) an Assignment of Membership Interest in the form attached hereto as Exhibit J with regard to the transfer of the TH Interest to Buyer and the admission of Buyer as the sole member of the Company;

(ii) the minute books and any membership records and company seals of the Company and the minute books and any stock records and company seals of the Acquired Subsidiary;

(iii) executed resignation letters of (or resolutions removing) the Seller Officers and Directors from their respective positions with the Company and the Acquired Subsidiary;

(iv) resolutions of Seller and the Company authorizing the execution of this Agreement and the Related Agreements to which Seller or the Company, as applicable, is a party and the consummation of the transactions contemplated under this Agreement and the Related Agreements to which Seller or the Company, as applicable, is a party (to the extent required by Seller's or the Company's organizational documents), in each case certified by the Secretary or other executive officer of Seller or the Company, as applicable, as being complete and correct and then in full force and effect;

(v) Governing Documents of the Company, in each case certified by the Secretary or Assistant Secretary of the Company as being complete and correct and then in full force and effect;

(vi) Governing Documents of the Acquired Subsidiary, in each case certified by the Secretary or Assistant Secretary of the Acquired Subsidiary as being complete and correct and then in full force and effect;

(vii) certificates of incumbency of the signatory officers of Seller and the Company, as applicable;

(viii) short form certificates as to the good standing of Seller, the Company and the Acquired Subsidiary issued by the Secretary of State or other applicable Governmental Authority of the state of formation of Seller, the Company and the Acquired Subsidiary;

(ix) the certificates referred to in Section 8.3(a) and Section 8.3(b) ;

(x) a certificate from Seller conforming to the requirements of Treasury Regulations Section 1.1445-2(b)(2) stating that Seller is not a "foreign person" within the meaning of Section 1445 of the Code, duly executed by Seller;

(xi) the Section 338(h)(10) Election Forms referred to Section 7.10(i)(ii) .

(xii) copies of all Seller Third Person Consents and Authorizations obtained pursuant to Section 6.3 ;

(xiii) Assignment of Contracts for those Seller Contracts for which Third Person Consents have either been obtained as of or prior to Closing or for which no Third Person Consent is required, duly executed by the Company or the Acquired Subsidiary, as applicable, and the applicable Affiliate of Seller;

(xiv) the Environmental Agreement in the form attached hereto as Exhibit C ;

(xv) the Transition Services Agreement in the form attached hereto as Exhibit E ;

(xvi) the License Agreement in the form attached hereto as Exhibit K ;

(xvii) Certificates of resident status certifying that the Acquired Subsidiary is a "resident person" as such term is used in, and otherwise complying with, Hawaii Revised Statutes Section 235-68; and

(xviii) A tax clearance certificate (Form A-6) for each of the Company and the Acquired Subsidiary issued by the State of Hawaii Department of Taxation not more than fifteen (15) Business Days before the Closing Date.

Additionally, Seller shall duly execute and deliver (or cause to be executed and delivered) the Related Agreements to which Seller or any of its Affiliates are a party.

Section 2.6 Net Working Capital .

(a) If the Net Working Capital as of the Measurement Time is a positive amount, then the Purchase Price shall be increased in an amount equal to the Net Working Capital, and if the Net Working Capital as of the Measurement Time is a negative amount, then the Purchase Price shall be reduced in an amount equal to the Net Working Capital, in each case as calculated in accordance with this Section 2.6 .

(b) Except as otherwise provided in this Section 2.6 , or in the definitions of Current Assets and Current Liabilities, the items included in the components of Current Assets and Current Liabilities shall be determined, and the amounts of such items shall be calculated, in the same manner as the corresponding line items were determined and calculated, and using the same policies, practices, assumptions, procedures, classifications, methods, estimates and judgments as were used in preparing the Balance Sheet.

(c) At least three (3) Business Days prior to the Closing Date, Seller shall submit in writing to Buyer its good faith estimate of the Net Working Capital as of the Measurement Time (the " Estimated Net Working Capital ") along with documentation supporting its good faith calculation of the Estimated Net Working Capital and shall reasonably respond to questions and comments from Buyer regarding such submission prior to the Closing Date. The Base Amount payable by Buyer on the Closing Date shall be increased or decreased, as applicable, by the amount of the Estimated Net Working Capital.

(d) Within sixty (60) days after the Closing Date, Seller shall submit to Buyer its written calculation (the " Net Working Capital Statement ") of the actual Net Working Capital as of the Measurement Time (the " Final Net Working Capital ") accompanied by the consolidated balance sheet of the Companies as of the Measurement Time. From the Closing Date through the final determination of the Final Net Working Capital in accordance with this Section 2.6(d) ,Buyer shall cause the Companies and their employees to provide Seller and its advisors reasonable access during normal business times to the personnel, properties and books and records of the Companies for the purpose of determining the Final Net Working Capital. Unless Buyer gives notice to Seller (a " NWC Protest Letter ") on or before the thirtieth (30 th ) day after Buyer's receipt of the Net Working Capital Statement that Buyer disputes the Final Net Working Capital specified in the Net Working Capital Statement and setting forth in reasonable detail the amounts in dispute and the reasons therefor, then the Final Net Working Capital as specified in the Net Working Capital Statement shall become final and binding on the Parties. Except for the matters specifically set out in the NWC Protest Letter, Buyer shall be deemed to have agreed to the Net Working Capital Statement in full. If Buyer gives a NWC Protest Letter to Seller on or before such thirtieth (30 th ) day that it disputes the Final Net Working Capital specified in the Net Working Capital Statement, then Seller and Buyer shall meet by telephone, or at a mutually agreeable location, to discuss in good faith and attempt to reconcile their differences with respect to the amount of the Final Net Working Capital that is being challenged by Buyer (the " NWC Challenged Amount ").

(e) If the Parties are unable to mutually resolve the NWC Challenged Amount within twenty (20) days after receipt of the NWC Protest Letter by Seller, then PricewaterhouseCoopers, LLP or another mutually acceptable independent accounting firm (the " Arbiter ") will be engaged by the Parties to determine the NWC Challenged Amount. The Arbiter: (1) will be jointly engaged by Seller and Buyer; (2) will be provided, within the (10) Business Days of accepting the engagement, with a definitive written statement from Seller and Buyer of their respective positions and a copy of the Net Working Capital Statement and the NWC Protest Letter; (3) will be advised in the engagement letter that the Parties accept the Arbiter as the appropriate Person to interpret this Agreement for all purposes relevant to the resolution of the NWC Challenged Amount; (4) will be granted access to all records and personnel of the Companies and (5) will have forty-five (45) days to carry out a review and prepare a written statement of its decision regarding the NWC Challenged Amount, which shall be binding and final upon Seller and Buyer. In no event shall the Arbiter's determination be outside of the range of amounts claimed by the respective Parties with respect to those items in dispute. Each Party will be afforded the opportunity to present to the Arbiter any material such Party deems relevant to the determination. The decision of the Arbiter shall be final and binding upon the Parties except in the event of manifest error (when the relevant part of their determination shall be void and the matter shall be remitted to the Arbiter for correction) and shall be in substitution for and precludes the bringing of any Proceedings, including in any court, in connection with any dispute under this Section 2.6 . The fees and expenses of the Arbiter incurred in resolving the disputed matter shall be shared equally by Seller, on the one hand, and Buyer, on the other hand.

(f) Not later than the fifth (5 th ) Business Day after the final determination of the Final Net Working Capital is made pursuant to this Section 2.6 :

(i) if the Final Net Working Capital is less than the Estimated Working Capital, then Seller shall pay to Buyer, by wire transfer of immediately available funds to the account or accounts designated in writing by Buyer prior to such fifth (5 th ) Business Day, the amount of such difference together with interest thereon at the Applicable Rate from and including the Closing Date to but excluding the date of payment; or

(ii) if the Final Net Working Capital is greater than the Estimated Net Working Capital, then Buyer shall pay to Seller by wire transfer of immediately available funds to the account or accounts designated in writing by Seller prior to such fifth (5 th ) Business Day, the amount of such difference together with interest thereon at the Applicable Rate from and including the Closing Date to but excluding the date of payment.

Section 2.7 Inventories .

(a) Feedstock Inventory and Product Inventory :

(i) The Purchase Price shall be increased in an amount equal to the Feedstock Inventory Value plus the Product Inventory Value (collectively, the " Hydrocarbon Inventory Value "), in each case as calculated in accordance with this Section 2.7 .

(ii) The Feedstock Inventory and the Product Inventory (collectively, the " Hydrocarbon Inventory ") shall be measured as of the Measurement Time in accordance with the measurement procedures set forth in Exhibit G-1 and shall be valued in accordance with the valuation formulas set forth in Exhibit G-2 . Each Party shall be permitted to have representatives present to observe any measurements taken of Hydrocarbon Inventories.

(iii) At least three (3) Business Days prior to the Closing Date, Seller shall submit in writing to Buyer its good faith estimate of the Hydrocarbon Inventory and the Hydrocarbon Inventory Value as of the Measurement Time (the " Estimated Hydrocarbon Inventory Value ") setting forth the types, characteristics and volumes, on a tank, truck, pipeline, vessel or other location basis along with documentation supporting its good faith calculation of the Estimated Hydrocarbon Inventory Value and shall reasonably respond to questions and comments from Buyer regarding such submission prior to the Closing Date. The Base Amount payable by Buyer on the Closing Date shall be increased by the amount of the Estimated Hydrocarbon Inventory Value.

(b) Merchandise Inventory :

(i) The Purchase Price shall be increased in an amount equal to the Merchandise Inventory Value as calculated in accordance with this Section 2.7 .

(ii) The Merchandise Inventory shall be measured as of the Measurement Time in accordance with the measurement procedures and valued in accordance with the valuation formulas all as set forth in Exhibit H . Each Party shall be permitted to have representatives present to observe any measurements taken of Merchandise Inventory.

(iii) At least three (3) Business Days prior to the Closing Date, Seller shall submit in writing to Buyer its good faith estimate of the Merchandise Inventory and the Merchandise Inventory Value as of the Measurement Time (the " Estimated Merchandise Inventory Value ") setting forth the types, quantities and volumes of Merchandise Inventory on a location by location basis along with documentation supporting its good faith calculation of the Estimated Merchandise Inventory Value and shall reasonably respond to questions and comments from Buyer regarding such submission prior to the Closing Date. The Base Amount payable by Buyer on the Closing Date shall be increased by the amount of the Estimated Merchandise Inventory Value.

(i) The Purchase Price shall be increased in an amount equal to the Parts and Supplies Inventory Value as calculated in accordance with this Section 2.7 .

(ii) The Parts and Supplies Inventory shall be measured as of the Measurement Time in accordance with the measurement procedures and valued in accordance with the valuation formulas all as set forth in Exhibit I . Each Party shall be permitted to have representatives present to observe any measurements taken of Parts and Supplies Inventory.

(iii) At least three (3) Business Days prior to the Closing Date, Seller shall submit in writing to Buyer its good faith estimate of Parts and Supplies Inventory and the Parts and Supplies Inventory Value as of the Measurement Time (the " Estimated Parts and Supplies Inventory Value ") setting forth the types, quantities and volumes of Parts and Supplies Inventory on a location by location basis along with documentation supporting its good faith calculation of the Estimated Parts and Supplies Inventory Value and shall reasonably respond to questions and comments from Buyer regarding such submission prior to the Closing Date. The Base Amount payable by Buyer on the Closing Date shall be increased by the amount of the Estimated Parts and Supplies Inventory Value.

(d) Post-Closing Inventory Adjustments :

(i) Within sixty (60) days after the Closing Date, Seller shall submit to Buyer its written calculation (the " Inventory Statement ") of the actual Hydrocarbon Inventory Value, the Merchandise Inventory Value and the Parts and Supplies Inventory Value all as of the Measurement Time (the " Final Inventory Value "). From the Closing Date through the final determination of the Final Inventory Value in accordance with this Section 2.7(d) , Buyer shall cause the Companies and their employees to provide Seller and its advisors reasonable access during normal business times to the personnel, properties and books and records of the Companies for the purpose of determining the Final Inventory Value. Unless Buyer gives notice to Seller (an " Inventory Protest Letter ") on or before the thirtieth (30 th ) day after Buyer's receipt of the Inventory Statement that Buyer disputes the Final Inventory Value specified in the Inventory Statement and setting forth in reasonable detail the amounts in dispute and the reasons therefor, then the Final Inventory Value as specified in the Inventory Statement shall become final and binding on the Parties. Except for the matters specifically set out in the Inventory Protest Letter, Buyer shall be deemed to have agreed to the Inventory Statement in full. If Buyer gives an Inventory Protest Letter to Seller on or before such thirtieth (30 th ) day that it disputes the Final Inventory Value specified in the Inventory Statement, then Seller and Buyer shall meet by telephone, or at a mutually agreeable location, to discuss in good faith and attempt to reconcile their differences with respect to the amount of the Final Inventory Value that is being challenged by Buyer (the " Inventory Challenged Amount ").

(ii) If the Parties are unable to mutually resolve the Inventory Challenged Amount within twenty (20) days after receipt of the Inventory Protest Letter by Seller, then the Arbiter will be engaged by the Parties to determine the Inventory Challenged Amount. The Arbiter: (1) will be jointly engaged by Seller and Buyer; (2) will be provided, within the (10) Business Days of accepting the engagement, with a definitive written statement from Seller and Buyer of their respective positions and a copy of the Inventory Statement and the Inventory Protest Letter; (3) will be advised in the engagement letter that the Parties accept the Arbiter as the appropriate Person to interpret this Agreement for all purposes relevant to the resolution of the Inventory Challenged Amount; (4) will be granted access to all records and personnel of the Companies and (5) will have forty-five (45) days to carry out a review and prepare a written statement of its decision regarding the Inventory Challenged Amount, which shall be binding and final upon Seller and Buyer. In no event shall the Arbiter's determination be outside of the range of amounts claimed by the respective Parties with respect to those items in dispute. Each Party will be afforded the opportunity to present to the Arbiter any material such Party deems relevant to the determination. The decision of the Arbiter shall be final and binding upon the Parties except in the event of manifest error (when the relevant part of their determination shall be void and the matter shall be remitted to the Arbiter for correction) and shall be in substitution for and precludes the bringing of any Proceedings, including in any court, in connection with any dispute under this Section 2.7 . The fees and expenses of the Arbiter incurred in resolving the disputed matter shall be shared equally by Seller, on the one hand, and Buyer, on the other hand.

(iii) Not later than the fifth (5 th ) Business Day after the final determination of the Final Inventory Value is made pursuant to this Section 2.7 :


	(1)	if the Final Inventory Value is less than the sum of the Estimated Hydrocarbon Inventory Value, the Estimated Merchandise Inventory Value and the Estimated Parts and Supplies Inventory Value, then Seller shall pay to Buyer, by wire transfer of immediately available funds to the account or accounts designated in writing by Buyer prior to such fifth (5th) Business Day, the amount of such difference together with interest thereon at the Applicable Rate from and including the Closing Date to but excluding the date of payment; or


	(2)	if the Final Inventory is greater than the sum of the Estimated Hydrocarbon Inventory Value, the Estimated Merchandise Inventory Value and the Estimated Parts and Supplies Inventory Value, then Buyer shall pay to Seller by wire transfer of immediately available funds to the account or accounts designated in writing by Seller prior to such fifth (5th) Business Day, the amount of such difference together with interest thereon at the Applicable Rate from and including the Closing Date to but excluding the date of payment.

Section 2.8 Earnout Payments .

(a) Definitions . This Section 2.8 uses the following terms with the meanings assigned to them below:

(i) " Annual Earnout Cap " means $20,000,000.

(ii) " Annual Gross Margin " means, for any Earnout Measurement Period, the excess, if any, of (A) the consolidated revenues of the Company and its subsidiaries over (B) the consolidated cost of sales of the Company and its subsidiaries, each as determined pursuant to the Consolidated Income Statement for such Earnout Measurement Period. For the avoidance of doubt, Section 2.8(a)(ii) of the Disclosure Schedules sets forth a sample calculation of the Annual Gross Margin.

(iii) " Computed Amounts " means, for each Earnout Measurement Period, each of the following: (A) the consolidated revenues of the Company and its subsidiaries determined pursuant to the Consolidated Income Statement for such Earnout Measurement Period, (B) the consolidated cost of sales of the Company and its subsidiaries determined pursuant to the Consolidated Income Statement for such Earnout Measurement Period, (C) the Annual Gross Margin for such Earnout Measurement Period; and (D) the Earnout Amount, if any, for such Earnout Measurement Period.

(iv) " Consolidated Income Statement " means, with respect to any Earnout Measurement Period, the audited consolidated statement of operations of the Company and its subsidiaries which is prepared (A) from the records of the Company, (B) on the same consolidated basis as and consistent with the financial statements for the year ended December 31, 2011 set forth in Section 4.6 of the Disclosure Schedules and (C) in accordance with GAAP applied in a consistent basis during the periods set forth therein; provided, however , that such consolidated statement of operations will exclude the effects of each item of income, gain or loss, or any revenue, charge or expense, that is: (i) extraordinary or nonrecurring (in either case, as such term is used under GAAP); (ii) not related to the ordinary course of operations of the Business; (iii) in the nature of general corporate overhead of Buyer or its Affiliates; (iv) incurred by the Company or any of its Affiliates before or after the Closing Date in connection with or related to this Agreement or the transactions contemplated by this Agreement or any financing related thereto, including transaction fees, legal, accounting or other professional fees and expenses; (v) incurred for restructuring or arising out of the voluntary shutdown or closure of any plant or facility, including severance, relocation or facility closure expenses; (vi) incurred for restructuring or arising out of the integration or consolidation of services or facilities subsequent to any acquisition, including severance, relocation or facility closure expenses; (vii) in the nature of a management fee or similar arrangement involving any Obligations to Buyer or any of its other Affiliates; or (viii) associated with the executive compensation arrangements of Buyer or any of its Affiliates or the grant, issuance or exercise of any shares of stock or other Equity Securities of Buyer or any of its Affiliates.

(v) " Earnout Amount " means, with respect to any Earnout Measurement Period, a dollar amount equal to the result of (A) 0.20 multiplied by (B) the positive amount, if any, by which the Annual Gross Margin for such Earnout Measurement Period exceeds the Earnout Threshold.

(vi) " Earnout Measurement Periods " (each an " Earnout Measurement Period ") means each of the three (3) calendar years beginning January 1, 2014 through the year ending December 31, 2016.

(vii) " Earnout Payment " means any payment made to Seller in accordance with the provisions of Section 2.8(b) .

(viii) " Earnout Statement " has the meaning specified in Section 2.8(c) .

(ix) " Earnout Threshold " means, with respect to any Earnout Measurement Period an amount equal to $165,000,000.

(x) " Prior Earnout Payments " means, as of the time of any determination pursuant to this Section 2.8 , the aggregate amount of all Earnout Payments that have been previously paid by Buyer to Seller in accordance with this Section 2.8 .

(xi) " Post-Closing Earnout Period " means the period from (but not including) the Closing Date through (and including) the first to occur of (A) December 31, 2016, (B) the date that Buyer indefeasibly makes the payment contemplated by Section 2.8(f) , (C) the date that Buyer indefeasibly makes the final Acceleration Payment contemplated by Section 2.8(j) , and (D) the date that Buyer pays Earnout Payments that equal, in the aggregate, the Total Earnout Cap.

(xii) " Total Earnout Cap " means an amount equal to $40,000,000.

(b) Payment Obligation . With respect to each Earnout Measurement Period, Buyer shall pay (or cause the Company to pay) to Seller an amount equal to the Earnout Amount, if any; provided, however , that with respect to any payment pursuant to this Section 2.8(b) in no event (i) shall the Earnout Amount exceed the Annual Earnout Cap for any of the Earnout Measurement Periods or (ii) shall the aggregate of all Earnout Payments paid to Seller exceed the Total Earnout Cap. For the avoidance of doubt, in the event the Annual Gross Margin for any Earnout Measurement Period does not exceed the Earnout Threshold then such deficit shall not be carried over to any subsequent Earnout Measurement Period. In the event the Earnout Amount due to Seller with respect to an Earnout Measurement Period, when added to the Prior Earnout Payments, would cause the total of all Earnout Payments paid to and received by Seller to exceed the Total Earnout Cap, then the Earnout Amount due from Buyer to Seller with respect to such Earnout Measurement Period shall be that amount which, when added to the Prior Earnout Payments , causes the total of all Earnout Payments paid to and received by Seller to equal the Total Earnout Cap. Upon receipt by Seller of Earnout Payments that equal, in the aggregate, the Total Earnout Cap, then Buyer shall have no further Obligation to Seller for additional Earnout Amounts hereunder or otherwise under this Section 2.8 .

(c) Earnout Statements . As soon as practicable after the end of each Earnout Measurement Period, and in any event prior to ninety (90) days after the end of each Earnout Measurement Period, Buyer will cause to be prepared in writing and delivered to Seller (i) the Consolidated Income Statement for such Earnout Measurement Period and (ii) a statement (the " Earnout Statement ") setting forth each Computed Amount for such Earnout Measurement Period. Buyer shall provide (or cause the Companies to provided) to Seller and its designees reasonable access during normal business times to all materials, records and personnel of the Companies and the Business necessary for Seller to verify the correctness of each such Consolidated Income Statement and each such Computed Amount and compliance by Buyer with this Section 2.8 . Subject to Section 2.8(i), each Consolidated Income Statement and each Earnout Statement will be final and binding on Buyer and Seller to the extent of information disclosed to Seller at such time unless, within thirty (30) days following the delivery of the Earnout Statement, Seller notifies Buyer in writing that Seller does not accept as correct any one or more of the Computed Amounts set forth in the Earnout Statement (the " Earnout Protest Letter ") and setting forth in reasonable detail the amounts in dispute and the reasons therefor. Except for the matters specifically set out in the Earnout Protest Letter, Seller shall be deemed to have agreed to the Earnout Statement to the extent of information disclosed to Seller at such time. If Seller timely delivers an Earnout Protest Letter, then Seller and Buyer shall meet by telephone, or at a mutually agreeable location, to discuss in good faith and attempt to reconcile their differences with respect to the amount of the Computed Amounts that are being challenged by Seller. Buyer shall pay to Seller any amounts that are not in dispute.

(d) Disputes . Subject to Section 2.8(i) , i f Seller and Buyer are unable to mutually agree upon the Computed Amounts within twenty (20) days after receipt of an Earnout Protest Letter by Buyer, the Arbiter will be engaged by Seller and Buyer to determine the Computed Amounts. The Arbiter: (i) will be jointly engaged by Seller and Buyer; (ii) will be provided, within the ten (10) Business Days of accepting the engagement, with a definitive written statement from Seller and Buyer of their respective positions and a copy of the Earnout Statement and the Earnout Protest Letter; (iii) will be advised in the engagement letter that Seller and Buyer accept the Arbiter as the appropriate Person to interpret this Agreement for all purposes relevant to the resolution of the Computed Amounts; (iv) will be granted access to all records and personnel of the Companies and (v) will have forty (45) days to carry out a review and prepare a written statement of its decision regarding the Computed Amounts, which shall be binding and final upon Seller and Buyer. Seller and Buyer shall each submit their proposed Computed Amounts to the Arbiter. In no event shall the Arbiter's determination be outside of the range of amounts claimed by the respective Parties with respect to those items in dispute. Each Party will be afforded the opportunity to present to the Arbiter any material such Party deems relevant to the determination. For the avoidance of doubt, the Arbiter shall have no authority to interpret the legal provisions of this Agreement except for the calculation of the Computed Amounts and definitions contained (whether directly or indirectly) therein. The decision of the Arbiter shall be final and binding upon the Parties except in the event of manifest error (in which case the relevant part of the Arbiter's determination shall be void and the matter shall be remitted to the Arbiter for correction) and shall be in substitution for and precludes the bringing of any Proceedings by either Party, including in any court, in connection with any dispute under this Section 2.8 . The fees and expenses of the Arbiter incurred in resolving the disputed matter shall be shared equally by Seller, on the one hand, and Buyer, on the other hand.

(e) Payment . Subject to Section 2.8(f) , any Earnout Payment that Buyer is required to pay pursuant to Section 2.8(b) shall be paid in full (to the extent not previously paid) no later than five (5) Business Days following the date upon which the determination of the Earnout Payment becomes final and binding upon the Parties to the extent as provided in Section 2.8(c) or Section 2.8(d) , by wire transfer of immediately available funds to the account or accounts designated in writing by Seller.

(f) Early Termination Payment . Buyer shall have the option at any time to discharge in full its continuing obligation to make the Earnout Payments pursuant to this Section 2.8 by paying to Seller an amount equal to the positive amount by which the Total Earnout Cap exceeds the aggregate of all Prior Earnout Payments (such amount, as of any applicable date of determination, being the " Earnout Termination Payment Amount "). Any such payment shall be made by Buyer, by wire transfer of immediately available funds to an account designated in writing by Seller. Notwithstanding the foregoing provisions of this Section 2.8(f) , if any petition or other action is filed by or against Buyer or the Companies under the U.S. Bankruptcy Code, Title 11 of the U.S.C., or any other Law relating to liquidation, insolvency or reorganization of debtors, or any other proceeding involving the estate or assets of Buyer or the Companies, the obligation of Buyer to make the Earnout Payments hereunder will remain effective or be reinstated, as the case may be (even if the payment contemplated by the first sentence of this Section 2.8(f) has been made), to the extent such payment is or may be voidable or otherwise subject to rescission or return as a preferential transfer, fraudulent conveyance or otherwise.

(g) Conduct of the Business . During the Post-Closing Earnout Period, Buyer shall (and shall cause the Companies to), in good faith, conduct the Business in the ordinary course and not in a manner intended or reasonably likely to reduce or avoid the payment of any Earnout Payments. Without limiting the foregoing, during the Post-Closing Earnout Period, without the prior written consent of Seller:

(i) Buyer shall (and shall cause the Companies to) use Commercially Reasonable Efforts to (A) retain and keep available the services of their respective officers and employees and (B) preserve the goodwill of their respective customers, suppliers and others having business relations with them;

(ii) Buyer shall not (and shall not permit the Companies to) enter into any contracts, agreements or arrangements relating to the Business with any of Buyer's Affiliates, other than contracts, agreements or arrangements on terms and conditions that are equal to or more favorable than terms and conditions which could be obtained from independent parties in arm's-length transactions; and

(iii) In the event Buyer or any of its Affiliates acquire, directly or indirectly, any additional assets, businesses or properties in the State of Hawaii then such assets, businesses and properties shall be owned by the Company or its wholly owned subsidiaries and results of operations of such assets, business and properties shall be included in the Annual Gross Margin calculation.

(h) No Equity Interest .The Parties understand and agree that (i) the contingent rights to receive the Earnout Payments shall not be represented by any form of certificate or other instrument, is not transferable, and does not constitute an equity or ownership interest in Buyer or the Companies, (ii) Seller shall not have any rights as a security holder of Buyer or the Companies as a result of Seller's contingent right to receive the Earnout Payments hereunder, and (iii) no interest is payable with respect to Earnout Payments made on a timely basis. Seller acknowledges that (A) there is no assurance that Seller will be entitled to receive Earnout Payments and Buyer has not promised or projected the Earnout Payments and (B) the Parties solely intend the express provisions of this Agreement to govern their contractual relationship with regards to the Earnout Payments.

(i) Separate Records . Buyer shall (or shall cause the Companies to) maintain separate books and records for the Business in accordance with GAAP and in such detail as to enable Seller to adequately audit the Companies" performance under the provisions of this Section 2.8 and the calculations required hereunder. Buyer shall (and shall cause the Companies to) permit Seller to conduct an audit on an annual basis in connection with Seller's review of the Earnout Statement, at Seller's cost and expense; provided that Seller shall provide notice to the Company of any such audit (such notice to be provided within thirty (30) days following receipt by Seller of the Earnout Statement for such year) and Seller's audit activities shall not unreasonably interfere with the operations of the Business. Buyer will promptly deliver (or shall cause the Companies to deliver) to Seller copies of the annual audited consolidated financial statements and the quarterly unaudited consolidated financial statements of the Companies delivered to any lender or any representative of any lender pursuant to the terms and provisions of any agreement or instrument governing or creating any material indebtedness of Buyer or any of its Affiliates . Notwithstanding the provisions of Section 2.8(c) and Section 2.8(d) to the contrary, in the event Seller elects to conduct an audit as provided above in any year, then delivery of the Earnout Protest Letter and the provisions of Section 2.8(d) for such year shall be deferred until such audit is completed.

(j) Acceleration Event . In the event the Refinery ceases operations (an " Acceleration Event "), Buyer shall notify Seller promptly of such Acceleration Event and Buyer shall, in lieu of Buyer's obligation to make any other Earnout Payments under this Section 2.8 , make three (3) additional payments to Seller (collectively, the " Acceleration Payments "), each in an amount equal to one-sixth of the positive amount by which the Total Earnout Cap exceeds the Prior Earnout Payments at the time of the Acceleration Event. Any payment by Buyer pursuant to this Section 2.8(j) shall be made notwithstanding the Annual Earnout Cap. Such Acceleration Payments shall be made by Buyer with the first payment being due and payable six (6) months after the Acceleration Event and the remaining two (2) payments being due and payable eighteen (18) months and thirty (30) months, respectively, after the Acceleration Event. Each Acceleration Payment shall be by wire transfer of immediately available funds to an account designated in writing by Seller. Upon payment of the final Acceleration Payment by Buyer, Buyer's obligation to make any payments under this Section 2.8 will terminate. Notwithstanding the provisions above, Seller shall have the right to elect not to accept the Acceleration Payments in lieu of Buyer's obligation to make Earnout Payments (such election to be provided within thirty (30) days following receipt by Seller of the notification of the Acceleration Event) in which event Buyer's obligation to make Earnout Payments shall continue pursuant to this Section 2.8 during the Post-Closing Earnout Period.

(k) Dispositions . If Buyer or the Companies shall (i) dispose, directly or indirectly, of any facility used in the Business or any portion thereof, whether by sale, merger, consolidation, operation of law, lease or otherwise, or (ii) divest, sell, convey, transfer or assign any capital equipment used in the Business (regardless, in any case, of whether such divestiture, sale, conveyance, transfer or assignment is to an unaffiliated third party or to an Affiliate of Buyer), then Buyer shall, in each such case, make an additional Earnout Payment (regardless of the Annual Earnout Cap) in an amount equal to the result of 0.20 multiplied by an amount equal to (a) the original purchase price of such asset or assets as set forth in Section 2.8(k) of the Disclosure Schedules minus (b) the sales price of such asset. Any payment by Buyer pursuant to this Section 2.8(k) shall be made notwithstanding the Annual Earnout Cap and shall not be credit against the Annual Earnout Cap. The total amount of Earnout Payments paid by Buyer as a result of the foregoing shall not exceed the Total Earnout Cap. Upon such payment by Buyer, Buyer's obligation to make any Earnout Payments with respect to such assets will terminate.

Section 2.9 Company Assumed Liabilities; Seller Retained Liabilities .

(a) Buyer and the Company acknowledge and agree that, except for the Retained Liabilities and Obligations of Seller pursuant to the Environmental Agreement, (i) after the Closing, the Company will continue to retain all of its Obligations (including Company Environmental Liabilities), and (ii) to the extent not already assumed by the Company, the Company hereby unconditionally assumes all Obligations of Seller and its Affiliates in any way arising out of or related to the ownership, use or operation of the Assets or the Business on or after the Effective Time (all such Obligations in clauses (i) and (ii), whether past, present or future, known or unknown, absolute or contingent, and whether in the nature of Orders, Claims, Losses or otherwise, being herein referred to as " Company Assumed Liabilities ").

(b) As of the Closing, Seller hereby assumes and agrees to be liable for the following (collectively, the " Retained Liabilities "):

(i) Obligations arising out of or with respect to (A) Long-Term Inactive Employees" employment with, or the termination of their employment from, Seller, the Company or the Acquired Subsidiary, whether such employment period is, or termination of employment occurs, prior to, on or after the Closing (except that Seller shall have no liability for Long-Term Inactive Employees who are re-employed by the Company or the Acquired Subsidiary under Section 7.1(a)(iii) ); (B) Post-Closing Employees" employment with Seller, the Company, the Acquired Subsidiary or their respective Affiliates prior to the Closing (but not Post-Closing Employees" employment with, or the termination of their employment from, the Company or the Acquired Subsidiary after the Closing, including severance); (C) Company Plans or Company Benefit Obligations to Post-Closing Employees and other Employees prior to, on, or after the Closing Date only to the extent relating to employment of and eligibility of retirement benefits for the Post-Closing Employees and other Employees prior to and as of the Closing Date; (D) employees formerly employed by the Company, excluding Post-Closing Employees or Long Term Inactive Employees related to their employment with, or the termination of their employment from the Company prior to the Closing Date; and (E) any other Obligations for which Seller or its Affiliates (other than the Company and the Acquired Subsidiary) are responsible for pursuant to Section 7.1 through Section 7.7 ;

(ii) any Obligation for which Seller or its Affiliates (other than the Compan y and the Acquired Subsidiary) are responsible for pursuant to Section 7.10 ;

(iii) any Obligation to the extent arising out of or relating to the Excluded Assets or the transfer of the Excluded Assets pursuant to the Excluded Asset Transfer, including any Taxes arising out of or relating thereto;

(iv) any accounts payable, notes payable or other amounts that are payable by the Companies to Seller or any of its Affiliates (other than the Company and the Acquired Subsidiary);

(v) any indebtedness of the Company incurred prior to the Closing Date for borrowed money or issued for or in exchange of indebtedness for borrowed money, or (b) indebtedness of the Company incurred prior to the Closing Date that is evidenced by a note, bond, debenture or similar instrument, except (i) trade debt in the ordinary course of business and (ii) indebtedness to Affiliates of the Company that will be settled prior to the Closing (for the avoidance of doubt the provisions of this clause (v) shall not apply to any lease Obligations of the Company);

(vi) any liabilities to indemnify, reimburse or advance amounts to any officer or director of the Companies in respect of acting in such capacities (including with respect to any breach of fiduciary obligations by same), to the extent such liabilities accrue prior to the Closing Date, even if such Persons do not bring a Claim for indemnity, reimbursement or advancement for such liabilities until after the Closing Date; and

(vii) Seller Transaction Expenses but excluding such expenses that are taken into account as a liability of the Companies for purposes of the Final Net Working Capital.

For the avoidance of doubt, the Company Environmental Liabilities are included in the Company Assumed Liabilities and are excluded from the Retained Liabilities except to the extent indemnified by Seller pursuant to the Environmental Agreement.

Section 2.10 Excluded Assets . Each of Seller and Buyer acknowledges and agrees that (i) all rights and Obligations under the Excluded Contracts, (ii) all Excluded Intellectual Property and all of Seller's and its Affiliates" (other than the Companies") proprietary trade names, trademarks and trade dress including the Tesoro Marks, (iii) all rights of the Company related to or arising from trademark registrations for "Tesoro" or "2 Go Tesoro" or any derivations thereof, (iv) all assets and rights owned by third parties, (v) all documents and communications of Seller and its Affiliates (other than the Companies") that are subject to the attorney-client privilege or that comprise attorney work product or the attorney-client relationship, (vi) all rights on the part of Seller, its Affiliates (other than the Companies") and their respective counsel to assert or rely upon the attorney-client privilege, (vii) any accounts receivable, notes receivable or other amounts that are receivable by the Company or the Acquired Subsidiary from Seller or any of its Affiliates (subsection (i) through (vii) being collectively referred to as the " Excluded Assets ") will be retained by Seller (or one or more of Seller and its Affiliates, as applicable) after the Closing. Immediately prior to Closing, the Companies shall distribute and transfer to Seller or its Affiliates (other than the Companies) or release and discharge all rights to all Excluded Assets (other than those owned by third parties) not already in possession of Seller or its Affiliates (with such distribution and transfer referred to as the " Excluded Asset Transfer "). The Excluded Asset Transfer shall be made pursuant to bills of sale, assignment and assumption agreements and such other general conveyance or release instruments as appropriate to transfer and assign title to or release and discharge rights to such Excluded Assets. Excluded Assets includes any Fuel Credits that (A) relate to the ownership or operation of the Business or the Assets and are in existence, acquired, generated, accrued or otherwise attributable to the period prior to the Closing, (B) do not otherwise relate to the operation of the Business or the Assets or (C) relate to the ownership or operation of any business by Seller or any of its Affiliates from and after the Closing. In connection with the Fuel Credits enumerated in subsection (A) in the preceding sentence, Buyer and Seller acknowledge that pursuant to the terms of that certain Product Contract by and between Aloha Petroleum Ltd. and the Company, RINs for 2013 provided for thereunder will not actually be transferred to the Company until after the Closing Date. Upon actual receipt by the Company of such RINs, Buyer agrees to cause the Company to segregate such RINs that arose on or prior to the Closing Date from those RINs that arose after the Closing Date and to transfer such pre-Closing Date RINs for 2013 to Seller through the Environmental Protection Agency's Moderated Transaction System in accordance with Section 40 CFR 80.1452 of the Renewable Fuel Standard.

Section 2.11 Undelivered Refinery Inventory . In the event and to the extent Undelivered Refinery Inventory exists as of the Measurement Time, Seller and its Affiliates, as applicable, shall transfer and assign title to the Undelivered Refinery Inventory, effective as of the Measurement Time, to the Company. In the event and to the extent Seller or its Affiliates are contractually prohibited from transferring and assigning title to any Undelivered Refinery Inventory to the Company as of the Measurement Time then Seller (and its Affiliates, if applicable) shall continue to retain title to such Undelivered Refinery Inventory until such time as title can be transferred and assigned to the Company at which time Buyer shall cause the Company to purchase and acquire title to such Undelivered Refinery Inventory. Measurement and valuation of all Undelivered Refinery Inventory shall be made pursuant to Exhibit G-1 and G-2 and shall be included in the Hydrocarbon Inventory Value and the Estimated Hydrocarbon Inventory Value. Notwithstanding any other provision in this Agreement to the contrary, Buyer shall indemnify, defend and hold harmless the Seller

Indemnitees from and against any and all Claims and Losses related to or arising from the Undelivered Refinery Inventory (and any other Feedstock Inventory acquired by the Company as a result of or in furtherance of the Refinery Turnaround and Startup Activities) regardless of whether the Closing occurs and regardless of any reason that the Closing does not occur; provided, however , such indemnification shall not apply in the event (i) all of the conditions to Closing pursuant to Article VIII are satisfied (other than those conditions that by their nature are to be performed at Closing) and Seller defaults in its Obligation to consummate the Closing or (ii) Buyer terminates this Agreement pursuant to Section 10.1(c) solely due to the breach by Seller of its Fundamental Representations (excluding representations and warranties contained in Section 4.15 ) provided that all of the other conditions to Closing pursuant to Article VIII were satisfied at the time of Buyer's termination (other than those conditions that by their nature were to be performed at Closing).

Section 2.12 Committed Refinery Inventory . At the Closing, Seller shall transfer and assign (and, as applicable, shall cause its Affiliates (excluding the Companies) to transfer and assign), effective as of the Measurement Time, all of Seller's and its Affiliates" rights and obligations with respect to Committed Refinery Inventory which shall be transferred and assigned to the Company and the Company shall assume such rights and obligations. In the event and to the extent Seller or its Affiliates are contractually prohibited from transferring and assigning any rights or Obligations to Committed Refinery Inventory to the Company as of the Measurement Time then Seller (and its Affiliates, if applicable) shall continue to retain such rights and obligations until such time as such rights and Obligations can be transferred and assigned to the Company or title to the commodities represented thereby can be transferred to the Company at which time Buyer shall cause the Company to assume such rights and Obligations or, if applicable, purchase and acquire title to the actual commodities. Notwithstanding any other provision in this Agreement to the contrary, Buyer shall indemnify, defend and hold harmless the Seller Indemnitees from and against any and all Claims and Losses related to or arising from the Committed Refinery Inventory and the commodities represented thereby regardless of whether the Closing occurs and regardless of any reason that the Closing does not occur; provided, however , such indemnification shall not apply in the event (i) all of the conditions to Closing pursuant to Article VIII are satisfied (other than those conditions that by their nature are to be performed at Closing) and Seller defaults in its Obligation to consummate the Closing or (ii) Buyer terminates this Agreement pursuant to Section 10.1(c) solely due to the breach by Seller of its Fundamental Representations (excluding representations and warranties contained in Section 4.15 ) provided that all of the other conditions to Closing pursuant to Article VIII were satisfied at the time of Buyer's termination (other than those conditions that by their nature were to be performed at Closing).

ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING SELLER

Except as set forth in the Disclosure Schedules, Seller hereby represents and warrants to Buyer that the statements contained in this Article III are complete and correct as of the Execution Date, and will be complete and correct as of the Closing Date (unless any such representation or warranty speaks to an earlier date and provided that any such representation or warranty that speaks to a "current" or "currently" dated time period shall be deemed to refer to such representation or warranty as of the Execution Date):

Section 3.1 Organization and Qualification . Seller is a Delaware corporation, duly organized and validly existing and in good standing under the Laws of the State of Delaware. Seller has the requisite corporate power and authority to carry on its business as it is now being conducted. Seller is duly qualified as a foreign corporation and in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Seller's ability to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party.

Section 3.2 Authority; Enforceability . Seller has full corporate power and authority to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party, and to carry out the transactions contemplated hereby and thereby. This Agreement has been and the Related Agreements to which Seller will be a party will be duly and validly executed and delivered by Seller and, assuming the due authorization, execution and delivery by Buyer, this Agreement and the Related Agreements to which Seller will be a party constitute the legal, valid and binding Obligations of Seller enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors" rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any Proceeding therefor may be brought.

Section 3.3 Conflicts and Approvals . Assuming the accuracy of Buyer's representations and warranties and except for (a) the receipt of the Seller Third Person Consents set forth in Section 3.3(a) of the Disclosure Schedules and (b) the effectuation of all filings required under the HSR Act and the other filings and registrations with and the receipt of the Authorizations from Governmental Authorities set forth in Section 3.3(b) of the Disclosure Schedules, neither the execution and delivery by Seller of this Agreement or the Related Agreements to which Seller will be a party, nor the performance by Seller of its Obligations hereunder or thereunder will (A) conflict with, result in a breach or violation of the terms of, cause or constitute a default under, give rise to any right of termination, cancellation or acceleration under, or require to be obtained or made any consent, waiver, order, approval, order or authorization of, or declaration, of, or notice to, or filing or registration with, any third party or any Governmental Authority, under, (i) any Law applicable to Seller or to which the TH Interest is subject, (ii) the Governing Documents of Seller, (iii) any Authorizations or Orders binding on Seller or to which the TH Interest is subject or (iv) any contract or other instrument or obligation to which Seller is a party or by which the TH Interest is subject, (B) result in the imposition or creation of any Lien, other than Permitted Liens, on the TH Interest, other than any Liens that may be created by or on behalf of Buyer, or (C) with the passage of time, the giving of notice or the taking of any action, have any of the effects set forth in clauses (A) or (B) of this Section 3.3 , except for any matters described in clauses (A)(i), (iii) or (iv) that would not reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of Seller to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party.

Section 3.4 Proceedings . There are no Proceedings or Orders pending (for which Seller has received service of process or otherwise notice) or, to Seller's Knowledge, threatened, against Seller or its assets that would reasonably be expected to materially and adversely affect the ability of Seller to execute, deliver and perform its Obligations under this Agreement or any Related Agreement to which Seller will be a party.

Section 3.5 Ownership of the TH Interest . Seller is the sole record and beneficial owner of the TH Interest and Seller owns the TH Interest free and clear of any Liens, other than Liens (a) arising under this Agreement, (b) arising under the Governing Documents of the Company or as disclosed in Section 3.5 of the Disclosure Schedules, and (c) imposed pursuant to the Securities Act of 1933, as amended (the 's ecurities Act "), and applicable state securities or "blue sky" laws. At the Closing, the delivery of the TH Interest to Buyer in accordance with the terms of this Agreement will transfer good and valid title to the TH Interest free and clear of any Liens, other than the Liens described in clauses (a) through (c) above.

Section 3.6 Brokers . No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or the Related Agreements based upon arrangements made by or on behalf of Seller or any of its Affiliates, except any fees and commissions that will be discharged by Seller. For the avoidance of doubt, Seller has engaged Aegis Energy Advisors Corp. as financial advisor to Seller and Seller shall be responsible for the fees and expenses of such financial advisor.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES

Except as set forth in the Disclosure Schedules, Seller and the Company hereby represent and warrant, jointly and severally, to Buyer that the statements contained in this Article IV are complete and correct as of the Execution Date, and will be complete and correct as of the Closing Date (unless any such representation or warranty speaks to an earlier date and provided that any such representation or warranty that speaks to a "current" or "currently" dated time period shall be deemed to refer to such representation or warranty as of the Execution Date):

Section 4.1 Organization and Qualification .

(a) The Company is an Hawaii limited liability company duly organized and validly existing and in good standing under the Laws of the State of Hawaii. The Acquired Subsidiary is an Hawaii corporation organized and validly existing and in good standing under the Laws of the State of Hawaii.

(b) Each of the Companies has the requisite power and authority to carry on its respective portion of the Business as currently conducted by such company. Each of the Companies is qualified and in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Seller has heretofore made available to Buyer complete and correct copies of the Governing Documents of each of the Companies, each as amended to the Execution Date and each of which is in full force and effect. None of the Companies is in violation of its Governing Documents.

(c) Other than the Acquired Subsidiary, there are no corporations, partnerships, limited partnerships, limited liability companies, joint ventures or other legal entities in which the Company owns, of record or beneficially, any direct or indirect Equity Securities or any right (contingent or otherwise) to acquire the same.

Section 4.2 Authority; Enforceability . Each of the Companies has full power and authority to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party, and to carry out the transactions contemplated hereby and thereby. This Agreement has been and the Related Agreements to which each of the Companies will be a party will be duly and validly executed and delivered by the Companies, as applicable, and, assuming the due authorization, execution and delivery by Buyer, this Agreement and the Related Agreements to which each of the Companies will be a party constitute the legal, valid and binding Obligations of each of the Companies, as applicable, enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors" rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any Proceeding therefor may be brought.

Section 4.3 Conflicts and Approvals . Assuming the accuracy of Buyer's representations and warranties and except for (a) the receipt of the Seller Third Person Consents set forth in Section 3.3(a) of the Disclosure Schedules, (b) the effectuation of all filings required under the HSR Act and the other filings and registrations with and the receipt of the Authorizations from Governmental Authorities set forth in Section 3.3(b) of the Disclosure Schedules and (c) for any consents, approvals or notices that may be required related to the Pipeline ROW Interests, neither the execution and delivery by the Companies of this Agreement or the Related Agreements to which each or either of the Companies will be a party, nor the performance by each of the Companies of its Obligations, as applicable, hereunder or thereunder will (A) conflict with, result in a breach or violation of the terms of, cause or constitute a default under, give rise to any right of termination, cancellation or acceleration under, or require to be obtained or made any consent, waiver, order, approval, order or authorization of, or declaration, of, or notice to, or filing or registration with, any third party or any Governmental Authority, under, (i) any Law applicable to either of the Companies or to which any of their assets are subject, (ii) the respective Governing Documents of the Companies, (iii) any Authorizations or Orders binding on either of the Companies or to which any of their respective assets are subject or (iv) any contract or other instrument or obligation of either of the Companies or to which any of their assets are subject, (B) result in the imposition or creation of any Lien, other than Permitted Liens, on any asset of any of the Companies, other than any Liens that may be created by or on behalf of Buyer, or (C) with the passage of time, the giving of notice or the taking of any action by a third Person, have any of the effects set forth in clause (A) or (B) of this Section 4.3 , except for any matters described in clauses (A)(i), (iii) or (iv) that would not reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of each of the Companies to execute, deliver and perform its Obligations, as applicable, under this Agreement and the Related Agreements to which it will be a party.

Section 4.4 Capitalization of the Company . The TH Interest constitutes the sole issued and outstanding membership interest in the Company and consists of five hundred (500) issued and outstanding units. The TH Interest constitutes all of the Equity Securities of the Company. The TH Interest is uncertificated. The TH Interest is validly issued, fully paid and nonassessable and was issued and remains free of preemptive rights. There are no bonds, debentures, notes or other evidences of indebtedness issued or outstanding having the right to vote on any matters on which the holder of the TH Interest may vote. Other than Buyer's rights as contemplated by this Agreement, there are no options, warrants, calls or other rights or agreements outstanding obligating Seller or the Company to issue, deliver or sell units representing the Company's membership interest or debt securities, or obligating Seller or the Company to grant, extend or enter into any such option, warrant, call or other such right or agreement.

Section 4.5 Capitalization of the Acquired Subsidiary . The authorized capital stock of the Acquired Subsidiary consists of 1,000 shares of common stock, $1.00 par value, of which 1,000 shares (the 's ubsidiary Shares ") are issued and outstanding. The Subsidiary Shares constitute all of the Equity Securities of the Acquired Subsidiary. The Company owns of record and beneficially all of the Subsidiary Shares free and clear of any Liens, other than Liens (a) arising indirectly under this Agreement, (b) arising under the Governing Documents of the Acquired Subsidiary, and (c) imposed pursuant to the Securities Act and applicable state securities or "blue sky" laws. The Subsidiary Shares are validly issued, fully paid and nonassessable and were issued and remain free of preemptive rights. There are no bonds, debentures, notes or other evidences of indebtedness issued or outstanding having the right to vote on any matters on which the holder of the capital stock of the Acquired Subsidiary may vote. There are no options, warrants, calls or other rights or agreements outstanding obligating the Acquired Subsidiary to issue, deliver or sell capital stock or debt securities, or obligating the Acquired Subsidiary to grant, extend or enter into any such option, warrant, call or other such right or agreement.

Section 4.6 Financial Statements .

(a) Section 4.6 of the Disclosure Schedules sets forth the following financial statements (collectively, the " Financial Statements "):

(i) the audited consolidated balance sheet of the Company (including the Acquired Subsidiary) as of December 31, 2011 and 2010, together with corresponding audited consolidated statements of operations and of cash flows of the Company (including the Acquired Subsidiary) for the fiscal years ended December 31, 2011, 2010 and 2009;

(ii) the unaudited consolidated balance sheet of the Company (including the Acquired Subsidiary) as of December 31, 2012, together with corresponding unaudited consolidated statements of operations and of cash flows for the twelve-month period ended December 31, 2012; and

(iii) the unaudited consolidated interim balance sheet of the Company (including the Acquired Subsidiary) as of March 31, 2013, together with corresponding unaudited consolidated interim statements of operations and of cash flows for the three-month period ended March 31, 2013.

(b) The Financial Statements described in Section 4.6(a)(i) have been prepared from the records of the Company (including the Acquired Subsidiary) and present fairly, in all material respects, the consolidated financial position of the Company (including the Acquired Subsidiary) as of the respective dates of the balance sheets included therein and the consolidated results of operations and cash flows of the Company (including the Acquired Subsidiary) for the respective periods set forth therein, all in accordance with GAAP applied on a consistent basis during the periods covered thereby (except as noted in the accompanying footnotes thereto).

(c) The Financial Statements described in Section 4.6(a)(ii) and Section 4.6(a)(iii) have been prepared from the records of the Company (including the Acquired Subsidiary) and reflect all adjustments necessary for a fair statement, in all material respects, of the consolidated financial position of the Company (including the Acquired Subsidiary) as of the respective dates of the balance sheet included therein and the consolidated results of operations and cash flows of the Company (including the Acquired Subsidiary) for the respective periods set forth therein, all in accordance with GAAP applied on a consistent basis during the respective period covered thereby (except as noted therein) (subject to the absence of footnote disclosures and to normal and recurring year-end adjustments).

(d) Historically, financial statements have not been prepared for the Business as it has not operated as a separate, stand-alone enterprise. The Financial Statements for the Business have been prepared from the historical accounting records of the Companies in anticipation of a potential transaction to separate the Business from the other business activities of Seller and its other Affiliates as though the Business had been managed as a separate, stand-alone enterprise for all periods presented. As the Business has been historically managed and financed as part of a larger group, its accounts reflect certain charges for functions provided by Seller and its Affiliates that have been identified as related party transactions. It is possible that the terms of the related party transactions are not the same as the terms that might otherwise result from transactions between unrelated parties. To Seller's Knowledge, all adjustments have been reflected that are necessary for a fair presentation of the carve-out financial statements for the Business for their respective dates. The allocations have been made on a reasonable basis and have been consistently applied for each period presented. The Financial Statements may not necessarily reflect the financial position, results of operations or cash flows that the Business might have had in the past, or might have in the future, if it had existed as a separate, stand-alone enterprise.

(e) The net investment of Seller and its other Affiliates in the Companies has been presented in lieu of stockholder's equity in the Financial Statements. Inter-company transactions associated with the Business that involve Seller and its other Affiliates have been included in the net investment reflected in the Financial Statements since payments are not made with respect to such inter-company transactions. Transfers of asset and liabilities to and from the Companies and Seller and its other Affiliates is reflected as a component of the changes in the net investment identified by the headings "Net change in Parent advances" or "Net cash advances by Parent."

(f) Since the Balance Sheet Date, the Companies have not incurred any liabilities that would be required by GAAP to be included on a consolidated balance sheet of the Companies but excluding liabilities (i) reflected or reserved against in the Financial Statements or disclosed in the footnotes thereto, (ii) incurred in the ordinary course of business, (iii) included in the Final Net Working Capital, relate to the Shutdown Activities or the Startup Activities or (v) that have individually or in the aggregate, not had or would not reasonably be expected to have a Material Adverse Effect.

Section 4.7 Assets .

(a) To Seller's Knowledge, the Title Commitments contain legal descriptions of all lands owned in fee simple or leased by the Company and on which the material operations of the Refinery (but not any pipelines or terminals serving it) are located subject in each case to Permitted Liens.

(b) Subject to the receipt of any Third Person Consent or Authorization for the transfer and assignment from Seller to the Company or the Acquired Subsidiary, as applicable, the Company and the Acquired Subsidiary own, lease or have the legal right to use their respective material Assets (or in the case of the Company's or Acquired Subsidiary's contract rights, receive the benefits of their respective Assets) free and clear of all Liens except Permitted Liens.

(c) The Company and the Acquired Subsidiary have good and marketable title to, or valid leasehold interests in, or license to, all of their tangible personal property, free and clear of all Liens, other than Permitted Liens, except for such nonmaterial properties as are no longer used or useful in the conduct of the Business.

(d) Section 4.7(d) of the Disclosure Schedules lists all material fixed assets used in or reasonably necessary for the operation of the Refinery as conducted prior to the Refinery Shutdown Activities other than the Excluded Assets.

(e) Section 4.7(e) of the Disclosure Schedules sets forth a complete and correct list of all Real Property Interests owned in fee simple by the Company (the " Owned Real Property "). There are no outstanding options or rights of first refusal to purchase or lease the Owned Real Property or any portion thereof or interest therein. There are no pending or, to the Knowledge of Seller, threatened condemnation proceedings (for which Seller or the Company has received service of process or otherwise notice) before any Governmental Authority with respect to any Owned Real Property. The Acquired Subsidiary does not own any Real Property Interests in fee simple.

(f) Section 4.7(f) of the Disclosure Schedules sets forth a list of all Real Property Interests leased to the Company (the " Leased Real Property "), including the name and address of each landlord for each such lease. Seller has delivered to Buyer complete and correct copies of each such lease. The Company is not a sublessor or grantor under any sublease or other instrument granting to another Person any right to the possession, lease, occupancy or enjoyment of the Leased Real Property except as set forth in Section 4.7(f) of the Disclosure Schedules. The Acquired Subsidiary does not own any leasehold interest in any Real Property Interests, except as a sublessee for certain Retail Assets.

(g) To the Knowledge of Seller, there are no pending special assessments or reassessments (for which Seller or the Company has received service of process or otherwise notice) of any parcel included in the Real Property Interests that would reasonably be expected to result in a material increase in the real property taxes or other similar charges payable by the Company with respect to any parcel of Owned Real Property or a material increase in the rent, additional rent or other sums and charges payable by the Company under the leases for the Leased Real Property.

Section 4.8 Material Contracts .

(a) For purposes of this Agreement, a " Material Contract " means, with respect to a Person, any of the following, except for this Agreement, any Excluded Contract, any Company Plan and any contract for the purchase or sale of crude oil feedstocks:

(i) any contract relating to any indebtedness of such Person for borrowed money in an amount in excess of $500,000, or the granting of any Lien by such Person securing any such borrowing;

(ii) any contract whereby such Person guarantees an Obligation in excess of $500,000 of any other Person;

(iii) any contract with an employee or consultant of such Person providing for annual payment by such Person in excess of $500,000 or a change in control severance benefit in excess of $500,000;

(iv) any contract with any officer, director or manager of such Person;

(v) other than the CBAs set forth in Section 4.14(a) of the Disclosure Schedules, any collective bargaining contract or other contract with a labor union;

(vi) any contract for the purchase or sale of feedstocks, intermediate stocks or refined products that (A) provides for forward physical delivery on a date more than ninety (90) days in the future or (B) provides for the future payment by or to the such Person of more than $2,500,000;

(vii) any contract for the supply of goods or services by or to such Person not covered in any other paragraph of this Section 4.8(a) that provides for future payments by or to such Person of more than $1,000,000;

(viii) any contract for the sale of any asset by or to such Person not covered in any other paragraph of this Section 4.8(a) that provides for the future payment by or to such Person of more than $1,000,000;

(ix) any lease covering the Leased Real Property or any other lease under which such Person is the lessor or lessee of real or personal property that provides for an annual base rental to or from such Person of more than $500,000;

(x) any contract prohibiting such Person from competing with another Person in any business or area or soliciting or hiring any Person with respect to employment;

(xi) any contract or agreement providing for the direct or indirect merger, consolidation, or other reorganization of the Company or the Acquired Subsidiary;

(xii) any other contract or agreement (other than a contract or agreement of a type described in clause (vi) above) of such Person not covered in any other paragraph of this Section 4.8(a) that provides for the future payment by or to such Person of more than $1,000,000;

(xiii) any joint venture, partnership, limited liability company or other similar contract;

(xiv) any contract that grants "most favored nations" pricing to a customer or counterparty; and

(xv) any contract or agreement to enter into any agreement with respect to any of the matters described in any other paragraph of this Section 4.8(a) .

(b) Section 4.8(b) of the Disclosure Schedules sets forth a list of each Material Contract to which the Company or the Acquired Subsidiary is a party or to which any of the Assets is bound (the " Material Company Contracts ").

(c) Section 4.8(c) of the Disclosure Schedules sets forth a list of each Material Contract to which Seller or any Affiliate of Seller (excluding the Companies) is a party, other than the Excluded Contracts, which relate primarily to the Business as currently conducted by the Company or the Acquired Subsidiary (the 's eller Contracts ").

(d) Section 4.8(d) of the Disclosure Schedules sets forth a list of each material contract or agreement to which the Company, the Acquired Subsidiary, Seller, or any Affiliate of Seller is a party and which are used in the operation of the Business, as currently conducted by the Company or the Acquired Subsidiary, that are to be retained by Seller or its Affiliates (or if the Company or the Acquired Subsidiary is a party, which are to be assigned to Seller or its Affiliates prior to the Closing or terminated as to the Company or the Acquired Subsidiary prior to the Closing) (the " Excluded Contracts ").

(e) Except as set forth in Section 4.8(e) of the Disclosure Schedules and as would not reasonably be expected to have a material effect, (i) none of the Company, the Acquired Subsidiary, Seller or any Affiliate of Seller has breached and is continuing the terms of any Material Company Contract or Seller Contract, or received from any third party to any such Material Company Contract or Seller Contract written notification that such contract is not in full force and effect, that the Company, the Acquired Subsidiary, Seller or any Affiliate of Seller, as applicable, has failed to perform, and such failure is continuing, its Obligations thereunder to date, or that any third party thereto has not performed its Obligations thereunder to date, (ii) to Seller's Knowledge, no event has occurred and no circumstance or condition exists, that (with or without notice or lapse of time) would reasonably be expected to result in a breach or violation of, or a default under, any such Material Company Contact or Seller Contract and (iii) each Material Company Contract or Seller Contract is a legal, valid, binding and enforceable agreement of the Company, the Acquired Subsidiary, Seller or any Affiliate of Seller, as applicable, and, to Seller's Knowledge, the other parties thereto and is in full force and effect, except as enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors" rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any Proceeding therefor may be brought.

(f) Seller has provided to Buyer complete and correct copies of each Material Company Contract and Seller Contract relating to the Business as currently conducted by the Company or the Acquired Subsidiary (including all waivers thereunder).

Section 4.9 Authorizations .

(a) The Companies possess, as of the Execution Date, all Authorizations (or have timely applied for the renewal, the granting of which is pending) that are materially necessary to carry on the Business, as currently conducted, all of which, to the extent material to the operation of the Business (taken as a whole) as currently conducted, are set forth in Section 4.9(a) of the Disclosure Schedules, and, to Seller's Knowledge, all such Authorizations are in full force and effect (except to the extent affected by the Refinery Shutdown Activities). A complete and correct copy of each material Authorization set forth in Section 4.9(a) of the Disclosure Schedules has previously been delivered to or made available for inspection by Buyer or Buyer has been given access thereto;

(b) To Seller's Knowledge, (i) no event has occurred and no circumstance or condition exists, that (with or without notice or lapse of time) would reasonably be expected to constitute or result in a violation by any of the Companies of, or a failure on the part of any of the Companies to comply with the terms of, any Authorization set forth in Section 4.9(a) of the Disclosure Schedules, (ii) neither of the Companies has received from any Governmental Authority written notification that any Authorization set forth in Section 4.9(a) of the Disclosure Schedules (A) is not in full force and effect, (B) has been violated in any respect, or (C) is subject to any suspension, revocation, modification or cancellation, and (iii) there is no Proceeding pending (for which the Companies have received service of process or otherwise notice) or threatened, regarding suspension, revocation, modification or cancellation of any such Authorization.

(c) Notwithstanding the foregoing, no representation or warranty is made in this Section 4.9 with respect to (i) Authorizations under Environmental Laws, which are addressed exclusively in Environmental Agreement, (ii) Authorizations under ERISA, which are addressed exclusively in Section 4.13 or (iii) Authorizations under Tax Laws, which are addressed exclusively in Section 4.15 .

Section 4.10 Compliance With Law . Except as set forth in Section 4.10 of the Disclosure Schedules, to Seller's Knowledge: (a) the Companies are in compliance in all material respects with all material Laws, (b) neither of the Companies has received any written notification from any applicable Governmental Authority that it is not in compliance in all material respects with any material Laws, and (c) no event has occurred and no circumstance or condition exists, that (with or without notice or lapse of time) would reasonably be expected to constitute or result in a failure of the Companies to comply in all material respects with the terms of any material Law. Notwithstanding the foregoing, no representation or warranty is made in this Section 4.10 with respect to (A) compliance with Environmental Laws, which are addressed exclusively in the Environmental Agreement, (B) compliance with ERISA, which are addressed exclusively in Section 4.13 or (C) compliance with Tax Laws, which are addressed exclusively in Section 4.15 .

Section 4.11 Proceedings and Orders . Except (i) as set forth in Section 4.11 of the Disclosure Schedules or (ii) as would not reasonably be expected to have a material effect, there are no Proceedings or Orders pending (for which the Companies have received service of process or otherwise notice) or, to Seller's Knowledge, threatened, against the Companies or to which the Assets or the Business, as currently conducted by the Companies, are subject, in any court or before or by any other Governmental Authority or any arbitrator. Notwithstanding the foregoing, no representation or warranty is made in this Section 4.11 with respect to (i) Proceedings or Orders under or involving Environmental Laws, which are addressed exclusively in the Environmental Agreement, (ii) Proceedings or Orders under or involving ERISA, which are addressed exclusively in Section 4.13 or (iii) Proceedings or Orders under or involving Tax Laws, which are addressed exclusively in Section 4.15 .

Section 4.12 Employee Matters .

(a) Section 4.12(a) of the Disclosure Schedules sets forth a list of:

(i) the regular, full-time and regular, part-time active employees employed by the Company as of the end of the pay period immediately preceding the Execution Date (each, an " Employee ", and collectively the " Employees "); and

(ii) the employees of the Company who, as of the Execution Date, are not actively at work, including those who are on inactive employee status or leave of absence, separately identifying those employees classified as Short-Term Inactive Employees and those employees classified as Long-Term Inactive Employees. 's hort-Term Inactive Employee " means an employee who is not actively at work due to a Company-approved leave of absence of six (6) months or less that entitles such employee to reinstatement upon completion of the leave under the applicable leave policies of the Company or Laws. " Long-Term Inactive Employee " means an employee who is not actively at work due to a Company-approved leave of absence that entitles the employee to reinstatement upon completion of the leave or Laws and is not a Short-Term Inactive Employee.

(b) Section 4.12(a) of the Disclosure Schedules also sets forth each Employee who is represented by United Steelworkers, Local Union No. 12-591 (the " Union ") (each such Employee being a " Represented Employee ").

(c) There are no individual employment agreements governing the employment of Employees. With the exception of Employees represented by the Union, the Employees are employed at will.

(d) The Acquired Subsidiary does not have any employees.

Section 4.13 Company Plans .

(a) With respect to each Company Plan to which the following could apply: (i) no withdrawal liability, within the meaning of Section 4201 of ERISA, has been incurred that would reasonably be expected to result in a material liability to the Company after the Closing, which withdrawal liability has not been satisfied, (ii) no liability to the Pension Benefit Guaranty Corporation that would reasonably be expected to result in a material liability to the Company after the Closing has been incurred by the Company or any ERISA Affiliate, which liability has not been satisfied, (iii) no failure to meet the minimum funding standard, whether or not waived, within the meaning of Section 302 of ERISA or Section 412 of the Code or any funder or other requirement of the Pension Protection Act has been incurred that would reasonably be expected to result in a material liability to the Company after the Closing, (iv) all contributions (including installments) to such plan required by Section 302 of ERISA and Section 412 of the Code and the requirements of the Pension Protection Act have been timely made, (v) neither the Company nor any of its ERISA Affiliates maintains or has an obligation to contribute, either presently or within the past six (6) years, to a "multiemployer plan" within the meaning of Section 3(37) of ERISA, and (vi) no notification to or approval from the Pension Benefit Guaranty Corporation or Internal Revenue Service is required in connection with or as a result of any transactions contemplated by this Agreement.

(b) Section 4.13(b) of the Disclosure Schedules sets forth a list of all material Company Plans and Company Benefit Obligations to the extent applicable to the Post-Closing Employees. Seller has made available to Buyer complete and correct copies of each of the following with respect to the Company Plans and the Company Benefit Obligations, to the extent applicable to any Post-Closing Employee: (i) any plan documents and all amendments thereto, the most recent written descriptions thereof which have been distributed to the Employees, (ii) the most recent determination or opinion letter issued with respect to each Company Plan that is intended to be qualified under Code Section 401(a), (iii) the actuarial report prepared for the last three (3) plan years for each Company Plan for which such a report was prepared, (iv) all trust documents, declarations of trust and other documents establishing other funding arrangements and all amendments thereto, and the latest financial statements thereof, (v) all material contracts and agreements relating to each Company Plan and Company Benefit Obligation, and (vi) annual report (Form 5500 series), if applicable, for the three (3) most recent plan years and all schedules thereto. Except as set forth in Section 4.13(b) of the Disclosure Schedules, transactions contemplated by this Agreement will not constitute a reportable event under ERISA or require any notice or approval from any trustee or CBA representative or other third party on account of or in connection with any Company Plan or Company Benefit Obligation or collective bargaining agreement. The transactions contemplated by this Agreement will not result in any additional funding obligation under any Company Plan or Company Benefit Obligation by the Company or its successors.

(c) Each Company Plan and Company Benefit Obligation has been maintained and administered in all material respects in compliance with its terms, ERISA, the Code and all applicable Laws. There are no material claims, causes of actions, penalties, penalty taxes, audit or investigation or events for any of the foregoing with respect to any Company Plan or Company Benefit Obligation.

(d) No payment, vesting or other benefit that could be received (whether in cash or property or the vesting of property) as a result of the transactions contemplated by this Agreement (alone or in combination with any other event) by any Person who is or was associated with the Company and is a "disqualified individual" (as defined in Treasury Regulation Section 1.280G-1) would be characterized as an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code).

(e) The consummation of the transactions contemplated by this Agreement, either alone or in conjunction with another event that occurred on or prior to the Closing Date (such as a termination of employment), will result in payments of any kind that would not be deductible under Section 162(m) of the Code.

Notwithstanding any other provisions in this Agreement to the contrary, the representations and warranties contained in this Section 4.13 are the only representations and warranties made with respect to matters arising under ERISA.

Section 4.14 Labor Matters .

(a) Section 4.14(a) of the Disclosure Schedules sets forth a list of all CBAs to which the Company is a party or is bound. Seller has provided to Buyer complete and correct copies of such CBAs.

(b) Except as disclosed in (b) of the Disclosure Schedules or except as would not reasonably be expected to have a Material Adverse Effect, to Seller's Knowledge, (i) there are no arbitrations pending (for which the Company has received notice) pursuant to the CBAs nor are there any unfair labor practice Claims pending (for which the Company has received notice) before any agency having jurisdiction over any of the Employees and there are no union representation Claims involving any of the active Represented Employees and (ii) there are no pending strikes, work stoppages, work slowdowns, picketing, lockouts or similar labor activity, except for routine grievance matters or complaints by or with respect to any of the active Represented Employees.

Section 4.15 Taxes . Except as set forth in Section 4.15 of the Disclosure Schedules:

(a) There are no audits or other reviews pertaining to Taxes pending or scheduled (for which the Seller, the Company or the Acquired Subsidiary have received written notice) with respect to the Company or the Acquired Subsidiary.

(b) All Tax Returns which were required to be filed by or with respect to the Company or the Acquired Subsidiary have been duly and timely filed (taking into account any valid extensions) and each such Tax Return was complete and correct in all material respects; all material Taxes that were required to be paid by or with respect to the Company and the Acquired Subsidiary (whether or not shown as due on any such Tax Return) have been timely (taking into account any valid extensions) paid in full.

(c) The Company and the Acquired Subsidiary have withheld and paid all material Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, member, shareholder or other third party.

(d) There is no Lien for unpaid Taxes against the property of the Company or the Acquired Subsidiary other than Permitted Liens. Seller has not received any written notice of, and does not otherwise have Knowledge of, any audit, other examination or matter in controversy with respect to Taxes being conducted by a Taxing Authority with respect to the Company or the Acquired Subsidiary.

(e) There are no waivers of any statute of limitations in respect of Taxes or any extension of time with respect to a Tax assessment or deficiency affecting the Company or the Acquired Subsidiary.

(f) There are no pending proposed deficiencies or other claims (for which the Companies have received written notice) by a Taxing Authority for unpaid Taxes of or with respect to the Company or the Acquired Subsidiary.

(g) Neither the Company nor the Acquired Subsidiary has any liability for the Taxes of any Person other than the Company, the Acquired Subsidiary or the Seller Affiliated Group under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or foreign Tax Law), as a transferee or successor, or pursuant to any contract, law, rule or regulation.

(h) Neither the Company nor the Acquired Subsidiary has received a written Claim from any Taxing Authority in a jurisdiction where the Company or the Acquired Subsidiary does not file Tax Returns stating that the Company or the Acquired Subsidiary is or may be subject to taxation by that jurisdiction.

(i) Neither the Company nor the Acquired Subsidiary is the beneficiary of any extension of time within which to file any Tax Return.

(j) The unpaid Taxes of the Company and the Acquired Subsidiary did not, as of the Balance Sheet Date, materially exceed the reserve for Tax liabilities shown on the interim balance sheet as of the Balance Sheet Date included in the Financial Statements.

(k) No power of attorney granted by the Company or the Acquired Subsidiary with respect to any Taxes is currently in force.

(l) Immediately prior to the Closing, the Company will be disregarded as an entity separate from the Seller for U.S. federal income tax purposes, and no election has been, or will be, made under Treasury Regulations Section 301.7701-3(c) prior to the Closing to treat the Company as an association taxable as a corporation for U.S. federal income tax purposes after the Closing.

(m) The Acquired Subsidiary has not been a "controlled corporation" or a "distributing corporation" in any distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code occurring during the two-year period ending on the date hereof.

(n) All Tax returns which were required to be filed by or with respect to the Seller Affiliated Group have been duly and timely filed (taking into account any valid extensions) and each such Tax Return was correct and complete in all material respects; all material taxes that were required to be paid by the Seller Affiliated Group (whether or not shown as due on any such Tax Return) have been timely (taking into account any valid extensions) paid in full.

(o) The only state or political subdivisions therein in which the Company or the Acquired Subsidiary currently is required to file Tax Returns or pay Taxes is the State of Hawaii and political subdivisions therein.

Notwithstanding any other provisions in this Agreement to the contrary, the representations and warranties contained in this Section 4.15 are the only representations and warranties made with respect to Tax matters.

Section 4.16 Intellectual Property .

(a) Except as set forth in Section 4.16(a) of the Disclosure Schedules, (i) the Company or the Acquired Subsidiary owns, or is licensed to use, all material trademarks, tradenames, copyrights, technology, know-how and processes necessary for the conduct of the Business as currently conducted by the Companies (the " Intellectual Property "), (ii) no Claim has been asserted and is pending (for which the Companies have received notice) by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor, to Seller's Knowledge, is there any valid basis for any such Claim, and (iii) to Seller's Knowledge, the use of such Intellectual Property by the Company or the Acquired Subsidiary, as applicable, does not infringe on the material rights of any Person.

(b) Except as would not have a Material Adverse Effect, all payment obligations and royalties accruing prior to the Execution Date under the licenses of Intellectual Property set forth in Section 4.16(b) of the Disclosure Schedules (the " Process Licenses ") which are used by the Company in connection with the operation of the Refinery process units, have been paid.

Section 4.17 Absence of Certain Changes . Except as contemplated by this Agreement or as reflected in Section 4.17 of the Disclosure Schedules, the Business, as currently conducted by the Companies, has not, since the Balance Sheet Date, experienced any occurrence outside of the ordinary course of business which constituted a Material Adverse Effect. Without limiting the generality of the preceding sentence, since the Balance Sheet Date there has not been any:

(i) offer, sale, issue or grant, or any authorization of any offering, sale, issuance or grant of, any Equity Securities of the Companies;

(ii) acquisition or disposition, whether by merger or consolidation, by purchasing Equity Securities or otherwise, of (A) any business or any corporation, partnership, association or other business organization or division thereof by the Companies or (B) any material assets or properties of the Companies, in each case, except for the purchase or sale of inventory in the ordinary course of business or pursuant to the Refinery Shutdown Activities or the Refinery Turnaround and Startup Activities;

(iii) adoption of any amendments to the Governing Documents of the Companies;

(iv) incurrence by the Companies of any Obligations for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, or entrance into any guarantees, except trade debt in the ordinary course of business;

(v) change in any accounting principle, policy, method or procedure of the Companies or any revaluation of any material Assets;

(vi) material damage, destruction or loss to the Assets prior to the Execution Date;

(vii) destruction of any books or records of the Company or the Acquired Subsidiary other than in the ordinary course of business;

(viii) the settlement of any Proceeding, other than in the ordinary course of business, in each case in an amount in excess of $1,000,000 or that imposes non-monetary relief that materially adversely affects the ability of the Companies to operate the Business as currently conducted;

(ix) increase in the salaries or base wages of any Employee except pursuant to regular salary/wage review procedures or pursuant to CBAs;

(x) acceleration or delay in the collection of material accounts or notes receivable or the payment of accounts or notes payable; or

(xi) agreement or commitment to do any of the foregoing, or any action or omission that would reasonably be expected to result in any of the foregoing.

Section 4.18 Bank Accounts . Section 4.18 of the Disclosure Schedules is a complete and correct list of all bank accounts and safety deposit boxes of the Companies and the names of all the Persons authorized to draw thereon and have access thereto.

Section 4.19 Insurance . The Companies maintain, or under contractual arrangements are named as an additional insured in, policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers" compensation, vehicular, directors" and officers" liability, fiduciary liability and other casualty and property insurance relating to the Business which are customarily maintained by Persons engaged in businesses similar to the Business.

Section 4.20 Customers and Suppliers .

(a) Section 4.20(a) of the Disclosure Schedules sets forth the name of (i) each of the top ten (10) customers (as determined by revenue) and (ii) each of the top ten (10) suppliers (as determined by expenses) of the Business, in each case for the twelve months ended on the December 31, 2012.

(b) Except as set forth in Section 4.20(b) of the Disclosure Schedules, to Seller's Knowledge, since December 31, 2012 until the Execution Date, no material vendor, exhibitor, advertiser, customer, supplier or distributor of the Business has (i) terminated, or threatened in writing to terminate, its relationship with either of the Companies or (ii) decreased materially, or threatened in writing to decrease materially, its services, supplies or materials to either of the Companies or its usage of either of the Companies" services or products in connection with the Business except to the extent related to or as a result of the Refinery Shutdown Activities.

ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING BUYER

Except as set forth in the Disclosure Schedules, Buyer hereby represents and warrants to Seller that the statements contained in this Article V are complete and correct as of the Execution Date, and will be complete and correct as of the Closing Date (unless any such representation or warranty speaks to an earlier date and provided that any such representation or warranty that speaks to a "current" or "currently" dated time period shall be deemed to refer to such representation or warranty as of the Execution Date):

Section 5.1 Organization and Qualification . Buyer is a limited liability company duly organized and validly existing and in good standing under the Laws of the State of Delaware. Buyer has the requisite limited liability company power and authority to carry on its business as it is now being conducted. Buyer is duly qualified as a foreign limited liability company and in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Buyer's ability to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party.

Section 5.2 Authority; Enforceability . Buyer has full limited liability company power and authority to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party, and to carry out the transactions contemplated hereby and thereby. This Agreement has been and the Related Agreements to which Buyer will be a party will be duly and validly executed and delivered by Buyer and, assuming the due authorization, execution, and delivery by Seller, this Agreement and the Related Agreements to which Buyer will be a party constitute the legal, valid and binding Obligations of Buyer enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors" rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any Proceeding therefor may be brought.

Section 5.3 Conflicts and Approvals . Assuming the accuracy of Seller's representations and warranties and except for (a) the receipt of the Buyer Third Person Consents set forth in Section 5.3(a) of the Disclosure Schedules and (b) the effectuation of all filings required under the HSR Act and the other filings and registrations with and the receipt of the Authorizations from Governmental Authorities set forth in Section 5.3(b) of the Disclosure Schedules, neither the execution and delivery by Buyer of this Agreement or the Related Agreements to which Buyer will be a party, nor the performance by Buyer of its Obligations hereunder or thereunder will (A) violate or breach the terms of or cause a default under (i) any Law applicable to Buyer, (ii) the Governing Documents of Buyer, (iii) any Authorizations or Orders binding on Buyer or to which any of its assets are subject or (iv) any Material Contract of Buyer or (B) with the passage of time, the giving of notice or the taking of any action by a third Person, have any of the effects set forth in clause (A) of this Section 5.3 , except for any matters described in this Section 5.3 that would not reasonably be expected to materially and adversely affect the ability of Buyer to execute, deliver and perform its Obligations under this Agreement and the Related Agreements to which it will be a party.

Section 5.4 Proceedings . There are no Proceedings or Orders pending (for which Buyer has received service of process or otherwise notice) or, to Buyer's Knowledge, threatened, against Buyer or its assets that would reasonably be expected to materially and adversely affect the ability of Buyer to execute, deliver and perform its Obligations under this Agreement or any Related Agreement to which Buyer will be a party.

Section 5.5 Brokers . No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or the Related Agreements based upon arrangements made by or on behalf of Buyer, except any fees and commissions that will be discharged by Buyer.

Section 5.6 Purchase the TH Interest for Investment .

(a) The TH Interest, when acquired by Buyer at the Closing, will be acquired from Seller for Buyer's own account, for investment purposes and Buyer is not acquiring the TH Interest from Seller with a view to, or to make offers of sales for Seller in connection with, any distribution thereof, or to participate or have a direct or indirect participation in any such undertaking, or to participate or have a participation in the direct or indirect underwriting of any such undertaking, in each case within the meaning of the Securities Act, or applicable state securities Laws.

(b) Buyer understands that (i) the TH Interest has not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act and has not been qualified under any state securities Laws on the grounds that the offering and sale of securities contemplated by this Agreement are exempt from registration thereunder, and (ii) Seller's reliance on such exemptions is predicated on Buyer's representations set forth herein. Buyer understands that the resale of the TH Interest may be restricted indefinitely, unless a subsequent disposition thereof is registered under the Securities Act and registered under any state securities Law or is exempt from such registration.

(c) Buyer is an "accredited investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act. Buyer is able to bear the economic risk of the acquisition of the TH Interest pursuant to the terms of this Agreement, including a complete loss of Buyer's investment in the TH Interest.

(d) Buyer can bear the economic risk of its investment in the TH Interest (including possible complete loss of such investment) for an indefinite period of time and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of its acquisition of the TH Interest.

(e) Buyer, together with its representatives and advisors, is familiar with investments of the nature of the TH Interest, understands that the purchase of the TH Interest involves certain risks, and believes that it has adequately investigated the Company, and has substantial knowledge and experience in financial and business matters such that it is capable of evaluating, and has evaluated, the merits and risks inherent in purchasing the TH Interest. Buyer and its representatives and advisors have been afforded access, to the extent not prohibited by Law, to such information concerning the Companies and have been afforded an opportunity to ask such questions of Seller and the Companies as Buyer has deemed necessary or desirable to evaluate the merits and risks of the prospective investments in the TH Interest contemplated herein.

(f) For purposes of state "blue sky" Laws, Buyer represents and warrants that Buyer is located in the State of Texas and that the decision by Buyer to acquire the TH Interest shall be deemed to occur solely in the State of Texas.

Section 5.7 Financing . Prior to the execution of this Agreement, Buyer has delivered to Seller complete and correct copies of executed commitment letters from (i) Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc. and (ii) Barclays Bank PLC (including all schedules, annexes, exhibits or other attachments to such commitment letters other than those documents solely relating to fee arrangements in connection with such letters (collectively, the " Commitment Letters ")). The documents relating to such fee arrangements do not contain any conditions precedent relating to the provision of the financing referred to in the Commitment Letters except for the payment of the fees provided therein. Pursuant to the Commitment Letters, such lenders and their affiliates have committed to provide and arrange the financing described therein subject to the terms and conditions set forth therein, the proceeds of which may be used to consummate the transactions contemplated by this Agreement (such financing collectively referred to as the " Financing "). The Commitment Letters are in effect as of the Execution Date and Buyer has not agreed to any material amendment or modification to any of the Commitment Letters that would adversely affect the ability of Buyer or its Affiliates to obtain financing as contemplated thereby. As of the date of this Agreement, (i) Buyer has not received from or provided to any counterparty to the Commitment Letters written notification that the Commitment Letters are not in full force and effect or have been withdrawn or terminated or otherwise amended or modified in any respect, that Buyer has failed to perform, and such failure is continuing, its Obligations thereunder to date, or that any counterparty thereto has not performed its Obligations thereunder to date, (ii) to Buyer's Knowledge, no event has occurred and no circumstance or condition exists, that (with or without notice or lapse of time) has resulted in or would reasonably be expected to result in a breach or violation of, or a default under, the Commitment Letters and (iii) each Commitment Letter is a legal, valid, binding and enforceable agreement of Buyer, and, to Buyer's Knowledge, the other parties thereto and is in full force and effect, except as enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors" rights generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any Proceeding therefor may be brought. Buyer and its Affiliates are in a position to satisfy all of their respective conditions to advances under the Commitment Letters to the extent such conditions are within their control. Buyer acknowledges that obtaining the Financing (y) is not a condition to its Obligation to consummate the transactions contemplated by this Agreement and (z) is not to be treated as a provision of Section 8.3 .

Section 5.8 Solvency . Buyer is not entering into the transactions contemplated by this Agreement with the actual intent to hinder, delay, or defraud either present or future creditors. Assuming (i) satisfaction of the conditions to the obligations of Buyer to consummate the transactions contemplated by this Agreement and (ii) the accuracy of the representations and warranties in Article III and Article IV , at and immediately after the Closing, and after giving effect to the Closing and the other transactions contemplated hereby, Buyer will not (A) be insolvent (in that both the fair value of its assets will not be less than the sum of its debts and the present fair saleable value of its assets will not be less than the amount required to pay its probable liability on its debts as they become absolute and matured) and (B) have incurred debts beyond its ability to pay as they become absolute and matured.

Section 5.9 Personnel Credentials . Buyer or its Affiliates will, as of the Closing Date, have employed, contracted with, or otherwise retained sufficient personnel having the credentials, experience, training and safety records reasonably necessary for the safe operation of the Refinery from and after the Closing.

ARTICLE VI
PRE-CLOSING COVENANTS

Section 6.1 Refinery Shutdown, Turnaround and Startup Activities .

(a) Refinery Shutdown . Buyer acknowledges that prior to the Execution Date the Company determined and commenced activities to shut down the Refinery and intended to convert the Refinery into an import terminal. The Company ceased refining operations at the Refinery on or about April 23, 2013 pursuant to which the Company shut down those processing units of the Refinery set forth in Section 6.1(a) of the Disclosure Schedules including ceasing long-term capital improvement and replacement projects and ceasing routine maintenance and routine preventive maintenance activities necessary for ongoing refining operations (collectively, the " Refinery Shutdown Activities ").

(b) Refinery Turnaround and Startup . Seller shall use Commercially Reasonable Efforts, beginning promptly after the execution of this Agreement, to provide, to and for the benefit of the Company, the Consulting Work and the Management Work (collectively, the " Refinery Turnaround and Startup Activities "). Buyer hereby approves the Scope of Work.

(i) The Refinery Turnaround and Startup Activities shall be deemed to be complete when the operations of the Refinery satisfy the Startup Criteria (the " Refinery Startup Completion "), and Seller shall not be obligated to perform any further Refinery Turnaround and Startup Activities following the Refinery Startup Completion.

(ii) If Seller and Buyer are unable to agree whether the Startup Criteria have been met, then an independent and experienced third party engineering firm that is mutually agreeable to Seller and Buyer shall be engaged to determine and evaluate the non-legal issues that are in dispute. The cost of retaining such firm shall be borne equally by Buyer and Seller.

(c) Changes in Scope of Work . Any amendments or modifications to the Scope of Work shall be in writing signed by an authorized representative of Seller and Buyer, and an authorized representative of Buyer shall be reasonably available during the normal business hours of the Company to make such decisions. In the event that Seller proposes a change to the Scope of Work to which Buyer does not agree, and Seller believes in good faith that such change is necessary for successful and safe completion of the remaining items in the Scope of Work (a " Refinery Startup Dispute "), Seller shall provide written notice to Buyer setting forth in reasonable detail the basis of the Refinery Startup Dispute. A member of senior management (vice president level or higher) of Buyer and Seller shall meet by telephone, or at a mutually agreeable location, in good faith to attempt to resolve the Refinery Startup Dispute within five (5) days from the date of the notice. In the event Buyer and Seller are unable to resolve the Refinery Startup Dispute in accordance with the foregoing provisions, Seller may, in Seller's discretion, cease further Refinery Turnaround and Startup Activities.

(d) Pricing and Payment; Reimbursement . Seller shall pay the Refinery Startup Expenses, subject to the reimbursement provisions set forth below. For the avoidance of doubt, Seller shall not be reimbursed by Buyer for Refinery Startup Expenses in excess of $15,000,000 unless and until the Refinery Startup Expenses exceed $20,000,000, in which event Seller shall receive reimbursement from Buyer for amounts in excess of $20,000,000 (whether pursuant to Section 2.5(a)(i)(6) at Closing or Section 6.1(d)(iv) prior to Closing).

(i) Within seven (7) days of the Execution Date, Buyer shall pay Seller, by wire transfer of immediately available funds to an account, or accounts, designated by Seller, an initial deposit for the benefit of Seller in the amount of $15,000,000 (the " Refinery Startup Deposit ").

(ii) In the event that the Refinery Startup Expenses incurred by Seller or its Affiliates exceed $20,000,000 in the aggregate, Seller shall so notify Buyer in writing. Within three (3) Business Days of receipt of such notice, Buyer shall replenish the Refinery Startup Deposit by paying Seller, by wire transfer of immediately available funds to an account, or accounts, designated by Seller, an additional deposit for the benefit of Seller in the amount of $7,000,000.

(iii) As soon as practicable after receipt of any funds attributed to the Refinery Startup Deposit by Seller, but in any event within ten (10) days thereafter, Seller shall transfer the Refinery Startup Deposit into a segregated investment account.

(iv) Seller may transfer portions of the Refinery Startup Deposit to its own account from time to time as Seller may desire to reimburse Seller for Startup Refinery Expenses. Seller may not transfer any portion of the Refinery Startup Deposit to its own account unless the Refinery Startup Expenses incurred to date exceed the Startup Deposit Drawn Amount. From and after the date the Refinery Turnaround and Startup Activities commence, Seller shall provide, as requested by Buyer, reasonably appropriate records indicating the Refinery Startup Expenses incurred to date with a reasonable level of detail sufficient to allow Buyer to evaluate Seller's draws on the Refinery Startup Deposit. If Buyer disputes the amount or payment of any Refinery Startup Expenses, at any time (subject to Section 6.1(d)(viii) ), Buyer shall provide Seller with written notice setting forth in reasonable detail the amounts in dispute and the reasons therefor. If Buyer provides such a notice, a procedure similar to the procedure set forth in Section 2.6(d) and Section 2.6(e) shall be followed to resolve the dispute.

(v) At least three (3) Business Days prior to the Closing Date, Seller shall submit in writing to Buyer its good faith estimate, as of the Closing Date, by which the Refinery Startup Expenses will exceed $27,000,000 (the " Estimated Refinery Startup Reimbursement ") along with documentation supporting its good faith calculation of the Estimated Refinery Startup Reimbursement and shall reasonably respond to questions and comments from Buyer regarding such submission prior to the Closing Date. The Base Amount payable by Buyer on the Closing Date shall be increased or decreased, as applicable, by the amount of the Estimated Refinery Startup Reimbursement.

(vi) In the event that the total amount of the Refinery Startup Deposit delivered to Seller exceeds the Refinery Startup Expenses upon the completion of the Refinery Turnaround and Startup Activities, Seller shall refund to Buyer such excess at the Closing (subject to a reasonable amount reserved by Seller for invoices Seller expects to receive after the Closing).

(vii) Notwithstanding any other provision in this Agreement to the contrary and regardless of whether or not the Closing occurs and regardless of any reason that the Closing does not occur, Buyer shall pay to Seller (1) the Estimated Refinery Startup Reimbursement, either at the Closing pursuant to Section 2.5(a)(i)(6) or within ten (10) Business Days of the termination of this Agreement, and (2) the Final Refinery Startup Reimbursement within five (5) Business Days after the Final Refinery Startup Reimbursement becomes final pursuant to Section 6.1(d)(viii) .

(viii) Within sixty (60) days after the payment contemplated in Section 6.1(d)(vii) has been delivered by Buyer to Seller, Seller shall deliver to Buyer notice of the amount by which the Refinery Startup Expenses exceeded $27,000,000 (the " Final Refinery Startup Reimbursement "). Unless Buyer gives notice to Seller on or before the thirtieth (30th) day after Buyer's receipt of such notice that Buyer disputes the amount setting forth in reasonable detail the amounts in dispute and the reasons therefor, then the Final Refinery Startup Reimbursement as specified in the notice shall become final and binding on the Parties. If Buyer provides such a notice, a procedure similar to the procedure set forth in Section 2.6(d) and Section 2.6(e) shall be followed to arrive at a Final Refinery Startup Reimbursement. Buyer shall promptly pay any amounts not in dispute.

(ix) Seller shall provide, as reasonably requested by Buyer, accounting reports setting forth actual and budgeted amounts for the Refinery Startup Expenses. Seller shall permit a Diligence Representative of Buyer to have reasonable access to the Refinery, subject to Section 6.6 , to review such reports and monitor the Refinery Turnaround and Startup Activities.

(e) Course of performance . To the extent Seller performs the Refinery Turnaround and Startup Activities, during the course thereof:

(i) Seller shall use its Commercially Reasonable Efforts to perform the Refinery Turnaround and Startup Activities within the time frames indicated in the Scope of Work and to perform the Refinery Turnaround and Startup Activities in a diligent, orderly and professional manner; and

(ii) Seller shall keep Buyer informed of all material factors which may affect Seller's progress of the Refinery Turnaround and Startup Activities and the various dates when Seller anticipates completion of the items detailed on the Scope of Work.

(f) Independent Contractor . Seller will be an independent contractor with respect to all Refinery Turnaround and Startup Activities performed pursuant to this Section. Neither Seller nor any contractors nor the employees of either shall be deemed to be servants, employees or agents of Buyer.

(g) Waiver of Warranties . Notwithstanding any other provision in this Agreement to the contrary, SELLER HAS NOT MADE AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE, REGARDING (I) THE QUALITY, CONDITION, OR OPERABILITY OF THE ASSETS AS MODIFIED BY THE REFINERY TURNAROUND AND STARTUP ACTIVITIES, (II) THE MERCHANTABILITY OF THE ASSETS AS MODIFIED BY THE REFINERY TURNAROUND AND STARTUP ACTIVITIES, (III) FITNESS FOR ANY PARTICULAR PURPOSE OF THE ASSETS AS MODIFIED BY THE REFINERY TURNAROUND AND STARTUP ACTIVITIES, OR (IV) THE CONFORMITY OF THE ASSETS AS MODIFIED BY THE REFINERY TURNAROUND AND STARTUP ACTIVITIES TO MODELS, SAMPLES OF MATERIALS OR MANUFACTURER DESIGN, AND ALL TANGIBLE PURCHASED ASSETS SUBJECT TO THE REFINERY TURNAROUND AND STARTUP ACTIVITIES SHALL BE DELIVERED "AS IS, WHERE IS" WITH ALL FAULTS.

(h) Release and Indemnification of Seller . In addition to other indemnifications provided by Buyer elsewhere in this Agreement, Buyer hereby releases and discharges and agrees to indemnify, defend, and hold harmless the Seller Indemnitees from and against any and all Claims and Losses caused by, arising out of, or in any way incidental to or in connection with the performance of the Refinery Turnaround and Startup Activities, whether arising before or after completion thereof, and in any manner directly or indirectly caused, occasioned or contributed to, in whole or in part, or claimed to be caused, occasioned or contributed to, in whole or in part, by the following:

(i) The negligence or fault or gross negligence, whether active or passive, (but excluding willful misconduct) of the Seller Indemnitees or their contractors, subcontractors or vendors;

(ii) The negligence, fault, gross negligence or willful misconduct, whether active or passive, of Buyer or its contractors, subcontractors or vendors or any third parties (or any of its owners, directors, officers, employees or agents);

(iii) The concurrent negligence or fault, whether active or passive, of any combination of the Seller Indemnitees, Buyer or its contractors, subcontractors or vendors, or any third party (or any of their respective owners, directors, officers, employees or agents); or

(iv) Where liability with or without fault is imposed, or sought to be imposed, on the basis of any theory of strict liability by operation of law or any violation or failure to comply with any law, rule, regulation, order or requirement of any Governmental Authority.

BUYER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT SUCH INDEMNIFICATION INCLUDES AN INDEMNIFICATION OF THE SELLER INDEMNITEES FOR AND AGAINST EACH OF THEIR OWN NEGLIGENCE AND GROSS NEGLIGENCE (but excluding to the extent of willful misconduct of the Seller Indemnitees). The provisions of this Section 6.1(h) shall survive the termination or completion of the Refinery Turnaround and Startup Activities and the Closing.

Section 6.2 Operation of the Business . Except (i) as set forth in Section 6.2 of the Disclosure Schedules, (ii) as otherwise contemplated by this Agreement (including the pre-Closing transfer of any Excluded Assets to Seller or any Affiliate of Seller (other than to the Company or the Acquired Subsidiary) and including the Refinery Shutdown Activities and the Refinery Turnaround and Startup Activities), or (iii) as otherwise consented to by Buyer, such consent not to be unreasonably withheld, conditioned or delayed, during the Interim Period Seller shall (and shall cause the Company and the Acquired Subsidiary) to:

(a) afford to Buyer and its agents, advisors and representatives reasonable access during normal business hours to the Company's and the Acquired Subsidiary's properties, personnel and the books and records and shall furnish such information about the Company and the Acquired Subsidiary's as Buyer shall reasonably request, all upon reasonable notice to Seller and in a manner that does not interfere in any material respect with the normal operations of the Business and the Company or the Acquired Subsidiary;

(b) operate the Business and provide routine maintenance of the Assets in the usual and ordinary course consistent with past practice or as otherwise provided in Section 6.2 of the Disclosure Schedules;

(c) use Commercially Reasonable Efforts to preserve substantially intact its business organization, and to preserve relationships with agents, lessors, suppliers, customers and employees;

(d) not offer, sell, issue or grant, or authorize the offering, sale, issuance or grant of, any Equity Securities of the Companies;

(e) not acquire or sell by or through the Companies, whether by merger or consolidation, by purchasing Equity Securities or otherwise, any business or any corporation, partnership, association or other business organization or division thereof or any material assets or properties of the Companies, in each case, except for the purchase or sale of inventory in the ordinary course of business or assets purchased pursuant to the Refinery Turnaround and Startup Activities;

(f) not adopt any amendments to the Governing Documents of the Companies;

(g) not incur any Obligations of the Companies for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, nor enter into any guarantees by the Companies, except (i) trade debt in the ordinary course of business and (ii) indebtedness to Affiliates of the Company and the Acquired Subsidiary that will be settled prior to Closing;

(h) not destroy any books or records of the Companies other than in the ordinary course of business;

(i) promptly notify Buyer of any material emergency or other material change in the Business or the Assets (for purposes of this subsection (i) only, "material" shall mean events or circumstances which result or would reasonably be likely to result in Losses equal to or greater than $5 million in relation to the Refinery, $1 million in relation to the Logistic Assets and $250,000 in relation to the Retail Assets);

(j) not settle any Proceeding related to the Companies or the Business, other than in the ordinary course of business or as contemplated pursuant to Section 6.15 related to the Hawaii Consent Decree, in each case in an amount in excess of $1,000,000 or that imposes non-monetary relief that materially and adversely affects the ability of the Companies to operate the Business as currently conducted;

(k) not create any Lien (other than a Permitted Lien the release of which the Companies are pursuing by Commercially Reasonable Efforts) against any of the Assets;

(l) not make an election under Treasury Regulations Section 301.7701-3(c) to treat the Company as an association taxable as a corporation for U.S. federal income tax purposes;

(m) except as may be required by GAAP, not change any accounting method or accounting practice of the Companies;

(n) not enter into, terminate or materially amend or materially modify any Material Company Contract or Seller Contract (excluding Multi-Site Contracts), or otherwise waive, release or assign any material rights, claims or benefits of the Company or the Acquired Subsidiary under any such Material Contract or enter into any derivative, option, hedge or futures contracts in all cases other than in the ordinary course of business; provided , that this provision shall not require the Company to seek or obtain Buyer's consent in order to set or change the prices at which the Company or the Acquired Subsidiary provides goods or services to customers in the ordinary course of business;

(o) perform and comply in all material respects with the Material Company Contracts;

(p) comply in all material respects with applicable Laws;

(q) maintain (or continue to have the benefit of) insurance with respect to the Business, comparable in amount, scope and coverage to that in effect on the Execution Date;

(r) not adopt, enter into or amend any Company Plan or CBA if the adoption, entry or amendment would reasonably be likely to result in any materially increased cost or expense to either of the Companies after the Closing;

(s) not enter into or amend any employment, severance, consulting or other compensation agreement or arrangement with any existing or new director, officer, independent contractor or employee of either of the Companies except for offer letters, employment agreements and individual consulting agreements for new hires (other than the hiring of officer-level employees) entered into in the ordinary course of business that are terminable at will and without further liability to either of the Companies;

(t) not materially increase the salaries or base wages of any Employee, or terminate any individual without cause or except pursuant to a CBA, if applicable;

(u) not agree, resolve or commit to do any of the actions prohibited in clauses (d) through (h) , ( j ) through ( n ) or ( r ) through ( t ) that would, or the effects of which would, survive the Closing.

Section 6.3 Appropriate Action; Consents; Filings . During the Interim Period:

(a) Subject to Seller's and Buyer's additional Obligations in clauses (b) , (c) and (d) of this Section 6.3 and the other terms and conditions of this Agreement, Seller and Buyer shall each use Commercially Reasonable Efforts to (i) take, or cause to be taken, all actions, and do, or cause to be done, all things that, in either case, are necessary, proper or advisable under Law or otherwise to consummate and make effective the transactions contemplated by this Agreement and the Related Agreements; provided, however , that the foregoing shall not require or cause any Party to waive any right it may have under other provisions of this Agreement and (ii) obtain from the relevant Governmental Authorities all Authorizations required to be obtained at or prior to the Closing by Buyer, Seller, the Company or the Acquired Subsidiary in connection with the authorization, execution, delivery and performance of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby.

(b) As promptly as practicable, Seller and Buyer shall make all necessary filings, including filings under the HSR Act and other filings and registrations referred to in the Disclosure Schedules, and thereafter make any other required submissions, with respect to this Agreement and the transactions contemplated hereby required under any Law at or prior to the Closing. Buyer and Seller shall bear the costs and expenses of their respective filings; provided , that Buyer shall pay the filing fee in connection with any such filings. Seller and Buyer shall reasonably cooperate in connection with the making of all such filings and subsequent submissions to any Governmental Authority. Seller and Buyer shall each use Commercially Reasonable Efforts to furnish to the other Party such necessary information and reasonable assistance as the other Party may reasonably request in connection with the foregoing and will keep the other Party reasonably informed with respect to any consent, authorization, order or approval sought from, or exemption, review, investigation or inquiry conducted by, any Governmental Authority in connection with this Agreement and the transactions contemplated hereby. Each Party shall (i) have the right to review in advance, and to the extent practicable consult on, any written materials submitted to any Governmental Authority in connection with the transactions contemplated by this Agreement, and (ii) consult with and consider in good faith the views of the other Party, prior to making any submission, providing any material correspondence or entering into any agreement with any Governmental Authority with respect to the transactions contemplated hereby.

(c) Buyer and Seller shall each give prompt notice to the other of the receipt of and if in writing, furnish the others with copies of (or, in the case of oral communications, advise the others of the contents of) any notice or other communication from (i) any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated hereby, (ii) any Governmental Authority in connection with the transactions contemplated hereby, (iii) any Governmental Authority or other Person regarding the initiation or threat of initiation of any Claims or Proceedings against, relating to, or involving or otherwise affecting the Company, the Acquired Subsidiary, Buyer or Seller that relate to the consummation of the transactions contemplated hereby, and (iv) any Person regarding the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be reasonably likely to (A) cause any condition to the Obligations of the other Party to consummate the transactions contemplated hereby not to be satisfied, (B) cause a breach of the representations, warranties or covenants of such Party under this Agreement, or (C) delay or impede the ability of either Buyer or Seller, respectively, to consummate the transactions contemplated by this Agreement or to fulfill their respective Obligations set forth herein.

(d) Buyer and Seller each agree to cooperate and to use Commercially Reasonable Efforts to contest and to resist any action, including legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any Order (whether temporary, preliminary or permanent) of any court or other Governmental Authority that is in effect and that restricts, prevents or prohibits the consummation of the transactions contemplated by this Agreement or the Related Agreements, including the pursuit of all available avenues of administrative and judicial appeal and all available legislative action. Notwithstanding the foregoing, nothing in this Section 6.3 shall require, or be construed to require any Party or its Affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or interests of the Parties or any of their respective Affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets, businesses or interests which, in either case, could reasonably be expected to result in a Material Adverse Effect or materially and adversely impact the economic or business benefits to the Parties of the transactions contemplated by this Agreement; or (iii) any material modification or waiver of the terms and conditions of this Agreement. Neither Buyer nor Seller nor any of their respective Affiliates shall purchase or otherwise acquire or agree to purchase or otherwise acquire, whether directly or indirectly, any assets or interest in any assets or Persons that would reasonable be expected to materially and adversely affect the filings made pursuant to Section 6.3(b) .

(e) Buyer and Seller shall each timely give or cause to be given all notices to third Persons and use Commercially Reasonable Efforts to obtain all Third Person Consents (i) set forth in Section 3.3 (a) and Section 5.3(a) of the Disclosure Schedules, (ii) required under any Material Company Contract or Seller Contract in connection with the consummation of the transactions contemplated hereby or (iii) otherwise required to prevent a Material Adverse Effect from occurring prior to or after the Closing.

(f) Buyer shall use Commercially Reasonable Efforts to secure the release of Seller and its Affiliates from liability for any post-Closing Obligations of the Companies under any Authorizations or Material Contracts assigned or transferred from Seller or its Affiliates to the Companies, and to secure the release of Seller and its Affiliates from any guarantees of the Companies" post-Closing Obligations under any Authorizations or Material Contracts to which the Companies remain a party after Closing. Buyer's efforts in this regard shall include, if necessary, causing the Buyer Guarantor to guarantee the Obligations of the Company under the affected Authorizations or Material Contracts. Buyer acknowledges that Seller and its Affiliates shall have the right to cancel or revoke all guarantees, bonds, letters of credit and similar undertakings provided by them or on their behalf to secure any post-Closing Obligations of the Companies. The provisions of this paragraph shall survive the Closing.

(g) Notwithstanding Section 6.3(f) , prior to the Closing Buyer shall deliver to the applicable beneficiary or counterparty replacement or substitute guaranties, letters of credit, bonds, security deposits, and other surety obligations and evidence of financial capacity, in each case acceptable to Buyer and the relevant beneficiary or counterparty, in substitution and replacement of those credit support arrangements set forth in Section 6.3(g) of the Disclosure Schedules (the " Credit Support Arrangements "), in form and substance acceptable to Seller, and shall cause the release as of the Closing of Seller and its Affiliates from all Obligations relating to the Credit Support Arrangements.

Section 6.4 Breach Notice . If, prior to the Closing Date, Buyer obtains Knowledge of a breach of any of Seller's representations, warranties or covenants contained in this Agreement, Buyer shall notify Seller in writing of such information (the " Breach Notice ") as promptly as reasonably possible but in all events no later than two (2) Business Days prior to the Closing Date. The Breach Notice shall contain reasonable details regarding the alleged breach and Buyer's good faith estimate of the potential Losses associated with such breach.

Section 6.5 Exclusive Dealing . During the Interim Period, Seller and the Company shall, and each shall cause each of their respective officers, directors, employees and Affiliates to, not discuss, or otherwise enter into any agreements or other arrangements regarding, a possible sale or other disposition (whether by merger, reorganization, recapitalization or otherwise) of all or any part of the Equity Securities or assets of the Companies with any other Person (an " Acquisition Proposal ") or provide any information to any third party other than information which is traditionally provided in the ordinary course of such entity's business operations to third parties where such entity and its officers, directors and Affiliates have no reason to believe that such information may be utilized to evaluate any such possible sale or other disposition of the equity or assets of the Companies. During the Interim Period, Seller and the Company shall, and each shall cause their respective officers, directors, employees and Affiliates to, immediately cease and cause to be terminated any and all contacts, discussions and negotiations with third parties regarding the foregoing. Notwithstanding the foregoing, the provisions of this Section 6.5 shall not apply to or limit or impair any future discussions, plans, negotiations or agreements for the sale, merger or consolidation of Seller.

Section 6.6 Right of Entry .

(a) Buyer hereby acknowledges that any access to the Refinery and any other Assets of the Company or the Acquired Subsidiary utilized by Buyer or any representative, consultant or other Person acting by or on behalf of Buyer (" Diligence Representative ") shall be at the sole risk, cost and expense of Buyer. Buyer shall comply and shall ensure that each Diligence Representative complies with all safety and similar requirements customarily imposed by the Company or the Acquired Subsidiary on its properties. Before and after the Closing, Buyer shall assume and indemnify, defend and hold harmless the Seller Indemnitees from and against any and all Claims and Losses for personal injury, death, disease, illness or property damage or other Losses arising out of Buyer's or any Diligence Representative's entry upon or access to the Refinery and any other assets or other Losses of the Company or the Acquired Subsidiary and all Losses incurred by the Seller Indemnitees with respect to each such Claim. Additionally, any inspection or investigation conducted by or on behalf of Buyer or its Diligence Representatives shall be conducted in accordance with all Laws, including all Environmental Laws, applicable Refinery rules and regulations (including those related to health, safety, security and the environment) and in such manner as not to unreasonably interfere with the Refinery or any other Assets or operations of the Company or the Acquired Subsidiary. During the Interim Period, Buyer shall not be entitled to conduct any invasive testing or environmental assessments or any other sampling (including air sampling) or testing of soil or ground or surface water at, on or under, any real property associated with the Refinery or any other Assets of the Company or the Acquired Subsidiary, without the prior written consent of Seller, Buyer being limited to the review of Seller's or its Affiliate's records or any other publicly available materials or information with regard to these matters.

(b) Before Buyer or any Diligence Representative is permitted to engage in any activities within the Refinery or at any other locations of Assets, Buyer shall (or shall cause the applicable Diligence Representative to) provide proof or otherwise attest that the following types and minimum amounts of insurance coverage are in effect and cover the activities of Buyer or such Diligence Representative:


A.	1. Worker's Compensation [1]	As required by applicable law.
	2. Employer's Liability	$100,000 each accident
B.	Commercial General Liability:	$1,000,000 Combined Single Limit endorsed to cover (i) contractual liability Bodily Injury and Property Damage assumed under this Agreement, (ii) products liability, and (iii) completed operations
C.	Automobile Liability Coverage: endorsed to cover all owned, non-owned and hired vehicles	$1,000,000 Combined Single Limit Bodily Injury and Property Damage Combined
D.	Umbrella Liability in excess of A.2., B. & C. Endorsed to provide a drop-down endorsement in the event underlying limits are exhausted by claims. (Not required for Diligence Representatives whose scope of work is limited to low risk activities distant from Refinery operational areas.)	$10,000,000

Buyer shall furnish (or cause to be furnished) to Seller a certificate of insurance evidencing that the above minimum coverages are in effect. All policies shall contain a waiver of subrogation clause in favor of the Seller Indemnitees. All policies except A.1 above shall be endorsed to name the Seller Indemnitees as additional insureds. The certificate of insurance shall further specify that all coverages are primary over (and not contributory with or secondary to) any insurance carried by the Seller Indemnitees for their own account. Such insurance shall be endorsed with a standard cross liability clause in favor of the Seller Indemnitees. Such insurance shall cover the actions of Buyer and all Diligence Representatives. The certificate of insurance shall state that Seller shall be provided with not less than thirty (30) days prior written notice of any cancellation or material adverse change with respect to any of the policies.

Notwithstanding anything to the contrary contained in this Agreement, the provisions of this Section 6.6 shall survive the Closing and any cancellation or termination of this Agreement. The insurance required under this paragraph shall operate independent and apart from Buyer's indemnification Obligations under this Agreement.

Section 6.7 Condition of the Assets . In consummating the purchase and the sale of the TH Interest contemplated hereunder, Buyer acknowledges that it will become the sole member of the Company and thereby an indirect owner of the Assets including the Subsidiary Shares, and that, and that, except for (and without limiting) the representations and warranties expressly made in Article III and Article IV or in any other document delivered pursuant hereto, BUYER ACCEPTS SUCH ASSETS AS MODIFIED IN CONNECTION WITH THE REFINERY TURNAROUND AND STARTUP ACTIVITIES (TO THE EXTENT SUCH ACTIVITIES HAVE BEEN CONDUCTED AS OF THE CLOSING) IN THEIR AS-IS, WHERE-IS, CONDITION, WITH ALL FAULTS, WITHOUT ANY EXPRESS OR IMPLIED COVENANT, WARRANTY AS TO TITLE, CONDITION (INCLUDING ANY ENVIRONMENTAL CONDITION), MERCHANTABILITY, PERFORMANCE, FITNESS (BOTH GENERALLY AND FOR ANY PARTICULAR PURPOSE) OR OTHERWISE (WHICH WARRANTIES SELLER HEREBY EXPRESSLY DISCLAIMS), OR RECOURSE, OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE ENVIRONMENTAL AGREEMENT.

______________________

1 Not required for individual Diligence Representatives who have no employees.

Section 6.8 Independent Investigation . EXCEPT FOR (AND WITHOUT LIMITING) THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN ARTICLE III AND ARTICLE IV OF THIS AGREEMENT, OR IN ANY OTHER DOCUMENT DELIVERED PURSUANT HERETO, BUYER ACKNOWLEDGES AND AGREES THAT: (a) THERE ARE NO REPRESENTATIONS, WARRANTIES, STATEMENTS, ASSURANCES OR GUARANTEES MADE BY SELLER OR ANY OF ITS AFFILIATES, EXPRESS OR IMPLIED, AS TO (i) THE ASSETS, OR (ii) THE LIABILITIES, THE BUSINESS, RESULTS OF OPERATIONS, CONDITION (FINANCIAL, ENVIRONMENTAL OR OTHERWISE) OR PROSPECTS RELATING TO THE BUSINESS, AND THAT IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE PURCHASE OF THE TH INTEREST, BUYER HAS RELIED AND WILL RELY SOLELY UPON ITS OWN INDEPENDENT INVESTIGATION, VERIFICATION, ANALYSIS AND EVALUATION; (b) SELLER DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY OTHER REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION ORALLY OR IN WRITING MADE OR COMMUNICATED TO BUYER INCLUDING ANY OPINION, INFORMATION OR ADVICE WHICH MAY HAVE BEEN PROVIDED TO BUYER BY OR ON BEHALF OF SELLER, THE COMPANY, THE ACQUIRED SUBSIDIARY OR ANY AFFILIATES OF SELLER, INCLUDING (i) ANY MODELS PROVIDED BY SELLER OR ITS AFFILIATES, WHICH HAVE BEEN PROVIDED FOR ILLUSTRATION PURPOSES ONLY, (ii) ANY OTHER INFORMATION PROVIDED IN THE CONFIDENTIAL INFORMATION MEMORANDUM DATED MAY 2012, AS SUPPLEMENTED, IF ANY, TO THE DATE OF THIS AGREEMENT, (iii) ANY CORRESPONDENCE FROM SELLER OR AEGIS ENERGY ADVISORS CORP. OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AFFILIATES, (iv) ANY PRESENTATION BY THE MANAGEMENT OF SELLER OR ITS AFFILIATES, AND (v) ANY INFORMATION MADE AVAILABLE TO BUYER, OR STATEMENTS MADE TO BUYER, DURING SITE OR OFFICE VISITS, IN ANY DATA ROOM OR MANAGEMENT PRESENTATION; (c) NEITHER SELLER NOR ANY AFFILIATE, AGENT, OR REPRESENTATIVE OF SELLER HAS MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS (BOTH GENERALLY AND FOR A PARTICULAR PURPOSE), OR CONFORMITY TO MODELS OR SAMPLES AND ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, RELATING TO THE COMPANY, THE ACQUIRED SUBSIDIARY OR THEIR RESPECTIVE ASSETS; AND (d) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE USE OR CONDITION (INCLUDING ENVIRONMENTAL USE OR CONDITION), THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER OR FROM ANY PORTION OF THE REFINERY OR THE OTHER ASSETS, COMPLIANCE WITH APPLICABLE STATUTES, LAWS, CODES, ORDINANCES, REGULATIONS OR REQUIREMENTS RELATING TO LEASING, ZONING, SUBDIVISION, PLANNING, LAND USE, BUILDING, FIRE, SAFETY, HEALTH OR ENVIRONMENTAL MATTERS, COMPLIANCE WITH COVENANTS, CONDITIONS AND RESTRICTIONS (WHETHER OR NOT OF RECORD), OTHER INTERNATIONAL, NATIONAL, REGIONAL, FEDERAL, STATE, PROVINCIAL OR LOCAL REQUIREMENTS OR OTHER STATUTES, LAWS, CODES, ORDINANCES, REGULATIONS OR REQUIREMENTS, INCLUDING ENVIRONMENTAL HEALTH AND SAFETY LAWS AND PERMITS.

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES NO REPRESENTATION OR WARRANTY REGARDING ANY THIRD PARTY BENEFICIARY RIGHTS OR OTHER RIGHTS WHICH BUYER MIGHT CLAIM UNDER ANY STUDIES, REPORTS, TESTS OR ANALYSES PREPARED BY ANY THIRD PARTIES FOR SELLER OR ANY OF ITS AFFILIATES OTHER THAN COMPANY AND THE ACQUIRED SUBSIDIARY (SHOULD THE CLOSING OCCUR), EVEN IF THE SAME WERE MADE AVAILABLE FOR REVIEW BY BUYER OR ITS AGENTS, REPRESENTATIVES OR CONSULTANTS.

BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT BUYER SHALL INDEMNIFY, DEFEND AND HOLD THE SELLER INDEMNITEES HARMLESS AGAINST ALL CLAIMS AND LOSSES CAUSED BY BUYER's CLAIMING OR ATTEMPTING TO EXERCISE ANY RIGHTS (WHETHER AS A THIRD PARTY BENEFICIARY OR OTHERWISE) UNDER, ANY STUDIES, REPORTS, TESTS OR ANALYSES PREPARED BY ANY THIRD PARTIES FOR SELLER OR ANY OF ITS AFFILIATES.

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NONE OF THE DOCUMENTS, INFORMATION OR OTHER MATERIALS PROVIDED TO BUYER AT ANY TIME OR IN ANY FORMAT BY SELLER OR ANY OF ITS AFFILIATES CONSTITUTE LEGAL ADVICE, AND BUYER (i) WAIVES ALL RIGHTS TO ASSERT THAT IT RECEIVED ANY LEGAL ADVICE FROM SELLER, ANY OF SELLER's AFFILIATES, OR ANY OF THEIR RESPECTIVE EMPLOYEES, AGENTS, REPRESENTATIVES OR COUNSEL, OR THAT IT HAD ANY SORT OF ATTORNEY-CLIENT RELATIONSHIP WITH ANY OF SUCH PERSONS, AND (ii) AGREES TO INDEMNIFY, DEFEND AND HOLD THE SELLER INDEMNITEES HARMLESS AGAINST ANY SUCH ASSERTION MADE BY OR ON BEHALF OF ANY OF BUYER's AFFILIATES.

Section 6.9 Supplement to Disclosure Schedules .

(a) Seller may from time to time prior to the Closing, by written notice to Buyer, supplement or amend the Disclosure Schedules (including adding new Sections to the Disclosure Schedules related to provisions of this Agreement that currently do not contemplate qualification by the Disclosure Schedules) with new or updated information with respect to matters that occur or arise after the Execution Date to correct any matter that would constitute a breach of any representation or warranty of Seller in Article III or Article IV as of the Closing Date (such new or additional information being " New Seller Information "). For purposes herein "New Seller Information" shall not include information that is updated in the ordinary course of business during the Interim Period ( e.g ., updated lists of Employees) and is provided to Buyer prior to the Closing.

(b) For purposes of determining whether Buyer's conditions set forth in Section 8.3 have been fulfilled, the Disclosure Schedules shall be deemed to include only that information contained therein on the Execution Date and shall be deemed to exclude the New Seller Information. If Buyer has a right to terminate this Agreement pursuant to Section 10.1(c) as a result of the conditions set forth in Section 8.3 not being satisfied but Buyer elects to proceed with the Closing and the Closing does occur, then the New Seller Information shall be deemed to be accepted by Buyer, and Buyer shall be deemed to have waived and not be entitled to make a Claim thereon under this Agreement (including pursuant to Article XI ) or otherwise. If, however, Buyer does not have such a right to terminate this Agreement pursuant to Section 10.1(c) as a result of the conditions set forth in Section 8.3 being satisfied and the Closing does occur, then the New Seller Information shall not be deemed to be accepted or waived by Buyer, and Buyer shall be entitled to make a Claim thereon under this Agreement (including pursuant to Article XI ) or otherwise.

Section 6.10 Financing Matters .

(a) During the Interim Period, Seller and the Companies shall use Commercially Reasonable Efforts to, and shall cause its and their respective accountants, legal counsel, officers and employees to use Commercially Reasonable Efforts to, provide, at Buyer's expense, reasonable cooperation as may be requested by Buyer in connection with Buyer's efforts to obtain the Financing provided that (a) the Companies shall not be required to pay any commitment or other similar fee or incur any Obligation in connection with the Financing, except following the Closing, (b) such cooperation does not unreasonably interfere with the ongoing operations of Seller or of the Business, (c) Seller shall not have any Obligation for any statements, materials or information provided by Seller or the Companies or their representatives to Buyer and (d) prior to the Closing, the Companies shall not have any liability for any statements, materials or information provided by the Companies or their representatives to Buyer. For the avoidance of doubt, neither Seller nor the Companies will be requested or required to prepare projections, pro forma statements, information memoranda, offering memoranda or similar documents that may be required of Buyer in connection with the Financing. The foregoing provisions shall not alter or amend Buyer's Obligation to consummate the transactions contemplated by this Agreement and a breach or purported breach of this Section 6.10(a) shall not be treated as a provision of Section 8.3 .

(b) During the Interim Period, Buyer shall keep Seller reasonably informed regarding the status of Buyer's activities (including status of negotiations and documentation) to obtain the Financing.

Section 6.11 Company Monthly Financial Statements . During the Interim Period, the Company shall deliver to Buyer, as soon as reasonably practicable, but in no event later than twenty (20) Business Days after the end of each calendar month, the unaudited consolidated interim balance sheet and statement of operations and cash flows of the Company and the Acquired Subsidiary as of and for the period for each calendar month ended after the Execution Date (the " Company Monthly Financial Statements "). The Company Monthly Financial Statements shall be prepared on a basis consistent with manner in which the Financial Statements of Section 4.6(a)(iii) were prepared.

Section 6.12 Title Insurance and Surveys . Buyer, at its sole cost and expense, may procure owner's title insurance policies (the " Title Policies ") from Title Company with respect to the Owned Real Property or the Leased Real Property insuring title subject only to the Permitted Liens and such other general title exceptions as may be raised by the Title Company; provided , that Buyer's ability or inability to obtain title insurance from the Title Company on the Owned Real Property or the Leased Real Property shall not result in an adjustment to the Purchase Price. If Buyer requests extended coverage policies or any endorsements to the Title Policies, Buyer shall also be responsible for the cost of such extended coverage and endorsements and the delivery of any documentation required by the Title Company in connection with the issuance of such extended coverage and endorsements (including surveys or zoning reports), however, Seller shall deliver the documentation required by the Title Company in connection therewith as described below. At Buyer's request, Seller and its Affiliates shall cooperate with and assist Buyer with any reasonable request in Buyer's efforts to obtain the Title Policies and shall execute and deliver to the Title Company such affidavits, certificates and other documentation as are customary and reasonably requested to cause the Title Company to issue CLTA Standard Coverage Policy " 1990 for the Owned Real Property or the Leased Real Property (including assistance to obtain a "non-imputation" or similar endorsement), provided that no such cooperation or assistance and nothing in such affidavits, certificates or documentation shall require Seller or its Affiliates to incur any Obligations to any Person that are not otherwise expressly set forth in this Agreement. Notwithstanding the preceding, Seller shall use Commercially Reasonable Efforts to provide, in support of any such "non-imputation" or similar endorsement, a legal opinion to the Title Company from the general counsel of the Company, subject to customary assumptions and qualifications, as to such counsel's opinion, without additional inquiry, as to

the status of the title rights of the Company to the Owned Real Property lying within the boundary fence of the Refinery. In no event shall Seller be obligated to seek estoppel certificates in connection with any of the Leased Real Properties. Prior to Closing, Buyer may, at its sole cost and expense, obtain and update any surveys pertaining to the Owned Real Property or the Leased Real Property; provided, however , that any such surveys and survey updates shall be performed by a surveyor acceptable to Seller, the approval of which shall not be unreasonably withheld, conditioned or delayed. Neither Buyer's or any of its lenders" receipt of any new or updated surveys shall constitute a condition to Closing or form the basis for delaying Closing; however, Seller agrees to reasonably cooperate with Buyer prior to the Closing to permit Buyer to attempt to procure any surveys of the Real Property Interests that Buyer reasonably deems necessary, all at Buyer's sole risk, cost and expense.

Section 6.13 Cooperation with Respect to Financial Statements . During the Interim Period and after the Closing, Seller shall (and shall cause the Companies during the Interim Period to) provide such reasonable cooperation as may be requested by Buyer with respect to preparation, at Buyer's expense, of such other financial information in such form and for such periods as may be required pursuant to the requirements of Regulation S-X of the SEC or other applicable U.S. federal securities Laws relating to Buyer's acquisition of the TH Interest. Any such cooperation shall be provided at Buyer's expense for third party fees and expenses.

Section 6.14 Closing Date Feedstock Inventory .

(a) During the Interim Period as Buyer may reasonably request, Seller shall meet with Buyer and its representatives to discuss Seller's plans for nominations for and purchases of Feedstock Inventory in anticipation of the Closing. Seller shall meet with and advise Buyer at least thirty (30) days prior to the anticipated Closing Date regarding Seller's then operational plan for the Refinery (the " Refinery Operational Plan ") including the minimum levels of Feedstock Inventory, Undelivered Refinery Inventory and Committed Refinery Inventory expected to be at the Refinery, in transit to the Refinery or committed in each case as of the anticipated Measurement Time. At or prior to such meeting, Buyer may propose changes to the Refinery Operational Plan and to Seller's ordinary course of business of handling the Committed Refinery Inventory in order to support Buyer's planned operation of the Refinery after the Closing. Seller shall take actions during the Interim Period as are necessary to cause the Feedstock Inventory plus the Undelivered Refinery Inventory and the Committed Refinery Inventory, as of the Measurement Time, to include a supply chain of crude oil, feedstock and blendstock in quantities that Seller reasonably expects are sufficient to continue to support the Refinery Operational Plan for sixty (60) days after the Closing Date.

(b) Buyer understands and agrees that it is the intent of the Parties to make Buyer ultimately responsible, regardless of whether the Closing occurs and regardless of any reason that the Closing does not occur, for the cost of all Undelivered Refinery Inventory and Committed Refinery Inventory under the terms hereof, as well as all Taxes, incidental costs and expenses, and other Obligations, Claims and Losses arising out of, incurred in connection with or relating to activities relating to the Undelivered Refinery Inventory and the Committed Refinery Inventory; provided, however , such understanding does not apply in the event (i) all of the conditions to Closing pursuant to Article VIII are satisfied (other than those conditions that by their nature are to be performed at Closing) and Seller defaults in its Obligation to consummate the Closing or (ii) Buyer terminates this Agreement pursuant to Section 10.1(c) solely due to the breach by Seller of its Fundamental Representations (excluding representations and warranties contained in Section 4.15 ) provided that all of the other conditions to Closing pursuant to Article VIII were satisfied at the time of Buyer's termination (other than those conditions that by their nature were to be performed at Closing).

(c) Seller shall use Commercially Reasonable Efforts to nominate shipments of Committed Refinery Inventory for delivery to the Refinery, and shall provide Buyer with confirmations of the scheduled shipments promptly upon receipt by Seller and its Affiliates.

Section 6.15 Hawaii Consent Decree . During the Interim Period Seller anticipates continuing discussions to enter into final binding settlement(s) whether by judicial decree, judgment, agreement or otherwise, memorializing Seller's settlement with the United States Environmental Protection Agency and the United States Department of Justice and other applicable entities or agencies, if any, regarding alleged violations of the Clean Air Act related to the ownership and operation of multiple facilities owned by Seller and its Affiliates, including air emissions originating from the Refinery (to the extent such settlement(s) relate to air emissions originating from the Refinery such settlement(s) are referred to herein as the " Hawaii Consent Decree ").

Section 6.16 Personnel Credentials . Prior to the Closing, Buyer shall discuss with and provide information to Seller relating to the credentials, experience and training of personnel employed and expected to be employed by Buyer and its Affiliates to manage and operate the Refinery from and after the Closing.

Section 6.17 Data Room Documentation . As promptly as practicable after the date of this Agreement (and in any event within five (5) Business Days after the date of this Agreement), Seller shall, at its expense, authorize Intralinks, Inc. to copy to DVDs all documents posted to the Data Room as of the Execution Date and deliver ten (10) copies of such DVDs to Buyer.

ARTICLE VII
POST-CLOSING COVENANTS; TAX AND EMPLOYEE MATTERS

Section 7.1 Retention of Employees .

(a) Continued Employment .

(i) Buyer shall cause the Company to continue to employ each Employee (excluding Long-Term Inactive Employees, except as set forth in Section 7.1(a)(iii) ), and subject to the severance provisions in Section 7.7(a) .

(ii) Seller shall assume or retain responsibility and liability, if any, for all Long-Term Inactive Employees, except to the extent that any Long-Term Inactive Employee becomes re-employed by the Company under Section 7.1(a)(iii) and Buyer shall assume and retain responsibility and liability, if any, for all Short-Term Inactive Employees, except to the extent Seller may be responsible for providing long-term disability benefits with respect to the disability of any Post-Closing Employee in any case in which the onset of the disability occurred on or prior to the Closing. Any such Short-Term Employee who then becomes eligible for long-term disability benefits provided by Seller as contemplated in the foregoing sentence shall in no event be considered an Employee of Seller after Closing and shall not otherwise be eligible for any other benefits offered to eligible employees of Seller after the Closing. Moreover, such individual shall not be considered a Long-Term Inactive Employee as defined herein.

(iii) Buyer shall cause the Company to re-employ each Long-Term Inactive Employee on the date such employee is able to return to work, provided such return to work is within twelve (12) months of the initial date of disability. Notwithstanding any provision herein to the contrary, upon re-employment, each such employee shall be considered a Post-Closing Employee for all purposes herein and shall no longer be considered a Long-Term Inactive Employee.

(iv) The provisions of this Section 7.1(a) do not create any new or additional right or expectation of continued employment for Employees with the Company, Buyer, Seller or any of their respective Affiliates or otherwise modifies any employment at will status of any individual.

(b) Employment Data . Seller shall, as of thirty (30) days prior to the Closing Date, provide Buyer with employment data, including the name, title, employment history (including years of service), and current salary, base wages, bonus and incentive opportunity, sick or short-term disability pay, exempt or non-exempt status, and the job grade of each Employee that is employed by the Company as of the Closing Date and Company Plans and Company Benefit Obligations in which each such Employee participates.

(c) Orderly Transition . Each Employee who continues employment with the Company after the Closing as described above is referred to herein as a " Post-Closing Employee ."

(d) Employment Terms Assurances . Buyer shall cause benefits to be provided to each Post-Closing Employee who is a not a Represented Employee for a period of at least twelve (12) months beginning on the Closing Date (unless earlier terminated for cause or by resignation) pursuant to Buyer's employee benefit plans as will be established as of the Closing Date (" Buyer's Plans "). The terms of the Buyer's Plans, as well as the compensation terms applicable to each such Post-Closing Employee, shall be, in the aggregate, comparable to those offered by the Company, Seller or Seller's Affiliates, as applicable, to such Post-Closing Employee prior to the Closing Date.

(e) Union Recognition . Buyer shall cause the Company to continue to recognize the Union as the exclusive representative of the bargaining unit at the Refinery and adopt the current CBA including existing Memoranda Agreement.

Section 7.2 Service Recognition for Post-Closing Employees . Except as provided in this Section 7.2 , Buyer shall ensure that all of Buyer's Plans in which the Post-Closing Employees participate after the Closing recognize the years of service with the Company or its Affiliates and predecessor employers prior to the Closing of any such Post-Closing Employees (to the extent such past service as reflected in the employment data furnished to Buyer pursuant to Section 7.1 ) for eligibility, vesting and benefit determination purposes to the same extent as such Post-Closing Employee was entitled, before the Closing, to credit for such service under any similar Seller's Plans, but Buyer shall have no Obligation to recognize such years of service for benefit accrual purposes. Without limiting the foregoing none of the Company, Buyer or their respective Affiliates shall have any Obligation to recognize such past service for the determination of benefit amounts payable under a defined benefit pension plan but will recognize such service for eligibility and vesting purposes under the Buyer's Plans.

Section 7.3 Pension Plan Coverage .

(a) On and after the Closing, Post-Closing Employees shall become participants in a tax-qualified pension plan to be established or maintained by Buyer as of the Closing Date (" Buyer's Pension Plan ") with full credit for eligibility, vesting and benefit entitlement purposes (but not for benefit accrual) for service with the Company or its Affiliates and predecessor employers prior to the Closing as provided for in Section 7.2 . For the avoidance of doubt, Buyer's Pension Plan may be a defined contribution plan. As of the Closing Date, Post-Closing Employees who are participants in the Tesoro Corporation Retirement Plan or the Tesoro Corporation Restoration Retirement Plan (collectively, the 's eller's Pension Plans ") shall be fully vested in their accrued benefits under the Seller's Pension Plans, and all Obligations under the Seller's Pension Plans shall remain the obligations of Seller, and none of Buyer, the Company or any of their respective Affiliates shall have any Obligation with respect to Seller's Pension Plans.

(b) Buyer shall permit each Post-Closing Employee to elect on the Closing Date (or as soon thereafter as reasonably practicable) a direct rollover of his or her eligible rollover distributions, except to the extent of any outstanding plan loans or as prohibited by applicable Law, under the Tesoro Corporation Thrift Plan, the Tesoro Corporation Retail Savings Plan, and the Tesoro Corporation Executive Deferred Compensation Plan (collectively, the 's eller's Savings Plans ") to a tax-qualified deferred contribution plan to be established by Buyer as of the Closing Date (the " Buyer's Savings Plan "). Any such rollovers shall be made to the Buyer's Savings Plan in cash. Seller represents, covenants and agrees with respect to the Seller's Savings Plans, and Buyer represents, covenants and agrees with respect to the Buyer's Savings Plan, that, as of each date of a rollover described in this paragraph, such plan (i) is intended to satisfy the requirements of Section 401 (a) and (k) of the Code, and (ii) will have received, or an application will be timely filed for, a favorable determination letter from the Internal Revenue Service regarding such qualified status. Buyer will have no Obligation with respect to amounts attributable to Seller's Savings Plans other than acceptance of the rollovers requested by Post-Closing Employees. Seller shall take (or shall cause its Affiliates to take) any action required to ensure that Post-Closing Employees who are participants in the Seller's Savings Plans shall be fully vested in their accounts in the Seller's Savings Plans.

Section 7.4 Welfare Plan Coverage .

(a) With respect to each Post-Closing Employee who elects to participate in Welfare Plans to be established by Buyer prior to the expiration of the transition period as contemplated under the Transition Services Agreement, Buyer shall, to the extent allowed under Buyer's Welfare Plans, waive any pre-existing condition exclusions to coverage, any evidence of insurability provisions, any active at work requirement and any waiting period or service requirements that did not exist or had been waived or otherwise satisfied under Seller's Welfare Plans, provided the Post-Closing Employee enrolls within the period of time required under the terms of the plan after first becoming eligible to enroll.

(b) Buyer shall establish a flexible spending plan (" Buyer's FSP ") prior to the Closing. Post-Closing Employees shall be eligible to participate in Buyer's FSP following the Closing. Buyer and Seller agree to determine an appropriate transition strategy for outstanding balances held by Post-Closing Employees under Seller's flexible spending plan and the reimbursement of claims thereunder to the extent necessary.

Section 7.5 Post-Retirement Welfare Benefits . Seller and its Affiliates shall be responsible for all post-retirement medical, dental and life insurance (" Retiree Welfare Benefit ") coverage for any Employees eligible for retirement as of the Closing Date or eligible former employees who do not become Post-Closing Employees and none of Buyer, the Company or any of their respective Affiliates will have any Obligation with respect thereto. For the avoidance of doubt, Buyer shall be responsible for all Retiree Welfare Benefit coverage for all Post-Closing Employees that are not eligible for retirement, pursuant to Company Plans, as of the Closing Date under the plan established by the Company or Buyer after the Closing Date.

Section 7.6 Other Benefits .

(a) Vacation . Promptly following the Closing Date, Seller shall pay Post-Closing Employees for vacation that the Post-Closing Employees have accumulated under Seller's vacation policy up to and including the Closing Date. Post-Closing Employees shall be covered by Buyer's vacation policy/schedule following the Closing Date and going forward but with recognition of past service to determine vacation entitlement levels such that no Post-Closing Employee shall be provided an annual vacation entitlement less than that provided under Seller's vacation policy, which shall be pro-rated for the 2013 calendar year for their time of employment with Buyer or its Affiliates. Within thirty (30) days after the Closing Date, Seller will provide to Buyer a list of the annual vacation entitlement for the Post- Closing Employees.

(b) Bonuses . Promptly following the Closing Date, Seller shall pay (or cause its Affiliates to pay) to eligible Post-Closing Employees at the time of Closing a pro rata portion of any bonuses payable for 2013 based on the number of days prior to the Closing that the Post-Closing Employees were covered under Tesoro's bonus plan, such payments to be based on targeted bonus amounts for such employees under Tesoro's bonus plan.

(c) Tuition Reimbursement . Buyer agrees to reimburse Post-Closing Employees for tuition payments incurred by such Employees after the Closing for courses that began before the Closing, but only if such courses qualified for reimbursement under Seller's Educational Assistance plan.

Section 7.7 Liabilities and Indemnities .

(a) Post-Closing Severance . Buyer shall provide severance in accordance with Section 7.7(a) of the Disclosure Schedules for Post-Closing Employees terminated by the Company or any of its Affiliates. Buyer and the Company shall be responsible for, and Buyer shall indemnify the Seller Indemnitees from and against all Claims and Losses arising out of the notification or other requirements of the Worker Adjustment and Retraining Notification Act of 1988, as amended (the " WARN Act ") or any state or local law equivalent incurred with respect to Post-Closing Employees after the Closing. However, Seller shall be responsible for, and shall indemnify the Buyer Indemnitees from and against all Claims and Losses arising out of the notification or other requirements of the WARN Act or any state or local law equivalent with respect to Employees who do not become Post-Closing Employees, whether or not the termination occurs prior to, on, or after the Closing.

(b) Workers" Compensation . Seller shall be responsible for workers" compensation claims with respect to any Post-Closing Employee to the extent the incident or alleged incident giving rise to the claim occurred at or prior to the Closing. Buyer and the Company shall be responsible for any workers" compensation claims with respect to any Post-Closing Employee to the extent the incident or alleged incident giving rise to the claim occurs after the Closing. In the event of doubt as to the date of the occurrence of the incident or alleged incident, Buyer shall process the claim. With respect to all workers" compensation or similar claims (hereinafter " Compensation Claims ") filed with an appropriate agency by or on behalf of any Post-Closing Employee (such employees are, for purposes of this paragraph, hereinafter collectively referred to as a " Claiming Employee "), or by the spouse, dependent(s) or personal representative of such Claiming Employee which is first filed after the Closing, (i) Seller shall process, defend and be responsible for, and shall indemnify the Buyer Indemnitees from and against any such Compensation Claim if the incident or alleged incident giving rise to the claim is alleged to have occurred on or prior to the Closing, (ii) Buyer shall process, defend and be responsible for, and shall indemnify the Seller Indemnitees from and against any such Compensation Claim if the incident or alleged incident giving rise to the claim is alleged to have occurred subsequent to the Closing, and (iii) in the event any such Compensation Claim is filed after the Closing and the incident or alleged incident giving rise to the claim is alleged to have occurred both prior and subsequent to the Closing, Buyer shall, in consultation with Seller and taking into account Seller's reasonable suggestions, process such claim (and Seller shall reimburse Buyer for its allocable portion of the reasonable cost of defense), and the liability for such claim as between the Parties shall be based upon the length of exposure to such incident or alleged incident while employed by the Company before and after the Closing. Thus, as between the Parties, the proportionate share of liability shall equal a fraction the denominator of which shall be the Claiming Employee's total length of exposure to such incident or alleged incident, and the numerator of which shall be in the case of Buyer, the Claiming Employee's total length of exposure while employed after the Closing, and in the case of Seller, the Claiming Employee's total length of exposure while employed prior to the Closing.

(c) None of Buyer, the Company or Affiliates shall have any liability or obligation with respect to any Company Plan or Company Benefit Obligation, and Seller shall take all necessary actions to remove the Company as a participating employer under all such plans after the Closing Date.

Section 7.8 No Third Party Beneficiaries . No provision of Section 7.1 through Section 7.7 , whether express or implied, shall create any third-party beneficiary rights in any Person, including any employee or former employee (and any beneficiaries, dependents or representatives thereof) of the Company, Seller or Buyer or any of their respective Affiliates, and no provision of Section 7.1 through Section 7.7 , whether express or implied, shall create such third-party beneficiary rights in any Person (including the Union or any Represented Employee), in either case in respect of any compensation or benefits that may be provided, directly or indirectly, under any employee benefit plan or arrangement of Buyer or its Affiliates or to claim any right to employment or recall, any right to continued employment or any other right of any kind or nature whatsoever and shall not be interpreted to amend any employee benefit plan, policy or program.

Section 7.9 Insurance .

(a) Seller and Buyer acknowledge that Seller participates in a program of property and liability insurance coverage for itself and its Affiliates. This program has been designed to achieve a coordinated risk-management package for Seller and all of its Affiliates. The program consists of various types of policies including: (i) policies issued to Seller or its predecessors; (ii) policies issued directly to Affiliates by one of Seller's wholly-owned insurance companies ('s eller Captive Insurers "); (iii) policies issued to Affiliates by one of the Seller Captive Insurers that may or may not be reinsured by third party insurers; and (iv) policies issued under a fronting arrangement policy (or its equivalent) by third party insurers that may or may not be reinsured (including through a guarantee, indemnity, letter of credit or similar undertaking) by Tesoro or its Affiliates. All of the insurance policies through which the program of coverage is presently or has previously been provided by or to Seller, its predecessors or Affiliates (including the Company and the Acquired Subsidiary) are herein referred to collectively as the 's eller Policies . " It is understood and agreed by Buyer that from and after the Closing:

(i) No insurance coverage shall be provided under the Seller Policies to Buyer, the Company or the Acquired Subsidiary;

(ii) Any and all policies insured or reinsured by any of the Seller Captive Insurers which, but for this provision, would have insured the Refinery shall be deemed terminated, commuted and cancelled ab initio as to the Refinery, the Business, Buyer and its Affiliates (including the Company and the Acquired Subsidiary), but without prejudice to Seller's and its Affiliates" rights thereunder; and

(iii) No Claims regarding any matter whatsoever, whether or not arising from events occurring prior to the Closing, shall be made by Buyer, the Company or the Acquired Subsidiary against or with respect to any of the Seller Policies, regardless of their date of issuance.

(b) Buyer shall procure, pay for and maintain in effect its own policies of insurance with respect to the Business and the Assets and shall indemnify and defend Seller and its Affiliates against, and shall hold them harmless from, any Orders, Claims, Losses or other Obligations arising out of claims made after the Closing against any of the Seller Policies by the Company, the Acquired Subsidiary, Buyer, any Affiliate of Buyer or any Person claiming to be subrogated to Buyer's or any of its Affiliates" rights. Such indemnity shall cover, without limitation, any claim by an insurer for reinsurance, retrospective premium payments, prospective premium increases or any other restitution or funding requirements attributable to any such claim or policy requirements.

Section 7.10 Tax Matters .

(a) Straddle Period Allocation . In the case of any taxable period that includes (but does not end on) the Closing Date (a 's traddle Period "), the amount of any Taxes (other than Property, Motor Fuels, and Sales Taxes) of the Company and the Acquired Subsidiary for the portion of the Straddle Period that relates to the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of and including the Closing Date (with exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) apportioned between the Pre-Closing Tax Period and the portion of such Straddle Period after the Pre-Closing Tax Period based on the number of days in each such period), and the amount of any real property, personal property, ad valorem or similar Taxes, motor fuels Taxes, Hawaii general excise Taxes or sales or use Taxes of the Company and the Acquired Subsidiary (" Property, Motor Fuels, and Sales Taxes ") for the portion of the Straddle Period that relates to the Pre-Closing Tax Period shall be deemed to be the amount of such Property, Motor Fuels, and Sales Taxes for the entire Straddle Period, multiplied by a fraction, the numerator of which is the number of days in the Straddle Period ending on the Closing Date, and the denominator of which is the number of days in such Straddle Period. For the avoidance of doubt, no election shall be made under Treasury Regulations Section 1.1502-76(b)(2)(ii) to ratably allocate income with respect to Acquired Subsidiary or the transactions or matters contemplated herein.

(b) Tax Returns . Except as otherwise provided in Section 7.10(g) :

(i) Seller shall prepare and timely file (taking into account all valid extensions), or shall cause to be prepared and timely filed (taking into account all valid extensions), all Tax Returns of the Company or the Acquired Subsidiary covering a taxable period ending on or prior to the Closing Date that are required to be filed after the Closing Date (each, a " Pre-Closing Tax Return "), and each such Pre-Closing Tax Return shall be prepared in a manner consistent with past custom and practice except as otherwise required by applicable Law or fact. Seller shall provide a copy of each such Pre-Closing Tax Return, together with all supporting documentation and workpapers, to Buyer for Buyer's review and reasonable comment at least thirty (30) days prior to the due date (taking into account all valid extensions) for filing such Pre-Closing Tax Return, and Seller shall include any reasonable comments provided in writing by Buyer to Seller at least five (5) days prior to the due date (taking into account all valid extensions) for filing such Pre-Closing Tax Return; provided , that in the case of a Pre-Closing Tax Return which filing deadline (including extensions) is within thirty (30) days after the Closing Date, the Seller (Y) shall in good faith attempt (but shall not have any obligation) to provide a copy of such Pre-Closing Tax Return to Buyer for Buyer's review and (Z) does not have any obligation to accept any of Buyer's comments with respect to such Pre-Closing Tax Return. Subject to Seller's obligations pursuant to Section 7.10(b)(iii) and the indemnification obligations of the Seller pursuant to Section 11.2(a)(iv) , the Company or the Acquired Subsidiary, as applicable, shall be responsible for timely paying (taking into account all valid extensions) all Taxes reflected on a Pre-Closing Tax Return to the applicable Taxing Authority.

(ii) Buyer shall prepare and timely file (taking into account all valid extensions), or shall cause to be prepared and timely filed (taking into account all valid extensions), all Tax Returns of the Company or the Acquired Subsidiary covering a Straddle Period (each, a 's traddle Tax Return "), and each such Straddle Tax Return shall be prepared in a manner consistent with past custom and practice except as otherwise required by applicable Law or fact. Buyer shall provide a copy of each such Straddle Tax Return, together with all supporting documentation and workpapers, to Seller for Seller's review and reasonable comment at least thirty (30) days prior to the due date (taking into account all valid extensions) for filing such Straddle Tax Return, and Buyer shall include any reasonable comments provided in writing by Seller to Buyer at least five (5) days prior to the due date (taking into account all valid extensions) for filing such Straddle Tax Return; provided , that in the case of a Straddle Tax Return which filing deadline (including extensions) is within thirty (30) days after the Closing Date, Buyer (Y) shall in good faith attempt (but shall not have any obligation) to provide a copy of such Straddle Tax Return to Seller for Seller's review and (Z) does not have any obligation to accept any of Seller's comments with respect to such Straddle Tax Return. Subject to Seller's obligations pursuant to Section 7.10(b)(iii) and the indemnification obligations of Seller pursuant to Section 11.2(a)(iv) , the Company or the Acquired Subsidiary, as applicable, shall be responsible for timely paying (taking into account all valid extensions) all Taxes reflected on a Straddle Tax Return to the applicable Taxing Authority.

(iii) To the extent the Taxes reflected on a Pre-Closing Tax Return are the obligation of Seller pursuant to Section 11.2(a)(iv) , Seller will pay to Buyer the amount of Taxes reflected on such Pre-Closing Tax Return on the date that such Pre-Closing Tax Return is filed with the applicable Taxing Authority. To the extent Taxes reflected on a Straddle Tax Return are the obligation of Seller pursuant to Section 11.2(a)(iv) , Seller will pay to Buyer the amount of Taxes reflected on such Straddle Tax Return, as applicable, that are the obligation of Seller pursuant to Section 11.2(a)(iv) within five (5) Business Days after the later of (i) a written request by Buyer, or (ii) the date that such Straddle Tax Return was filed with the applicable Taxing Authority.

(iv) For the avoidance of doubt, the term Pre-Closing Tax Return and Straddle Tax Return shall not include, and this Section 7.10(b) shall not apply to, any Tax Return that is not required under applicable Law to be filed by the Company or the Acquired Subsidiary, such as (x) the consolidated U.S. federal income tax return of the Seller Affiliated Group or (y) any state, local or foreign consolidated, combined, affiliated, unitary or aggregate group income or franchise Tax Return of an applicable group or groups of taxable entities which includes or include one or more members of the Seller Affiliated Group and which is required under applicable Law to be filed by a member of the Seller Affiliated Group other than the Company or the Acquired Subsidiary.

(c) Amended Tax Returns . Buyer shall not, and shall not cause or permit any of its Affiliates, the Company, or the Acquired Subsidiary to (i) amend any Tax Return of the Company or the Acquired Subsidiary that covers a Pre-Closing Tax Period or (ii) make any Tax election that has retroactive effect to any Pre-Closing Tax Period, in each case without the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed.

(d) Tax Contests .

(i) Buyer shall notify Seller in writing within ten (10) days of receipt by Buyer (or any Buyer Indemnitee) of written notice of any pending or threatened audits, adjustments, claims, examinations, assessments or other administrative or judicial proceedings with the purpose or effect of re-determining Taxes of or with respect to the Company or the Acquired Subsidiary (including any administrative or judicial review of any claim for refund) for which Seller may be required to provide indemnification pursuant to this Agreement (a " Tax Contest "), and shall provide Seller with a copy of any such written notice. Seller shall notify Buyer in writing within ten (10) days of receipt by Seller of written notice of any pending or threatened Tax Contest, and shall provide Buyer with a copy of any such written notice. The failure of either Buyer or Seller to provide a notification described in this Section 7.10(d)(i) shall not release Seller or Buyer, respectively, from its obligations hereunder except to the extent, and only to the extent, that the party that was supposed to receive the notification is prejudiced as a result of such failure.

(ii) Seller shall have the right to control and defend the conduct of any Tax Contest covering any taxable period ending on or prior to the Closing Date (a " Pre-Closing Tax Contest ") with counsel (including, for the avoidance of doubt, accountants) of its choice; provided, however , that (A) Seller shall keep Buyer reasonably informed regarding the progress and substantive aspects of the Pre-Closing Tax Contest, (B) Buyer may retain separate co-counsel at its sole cost and expense, and participate in the defense of with respect to the Pre-Closing Tax Contest, including having an opportunity to review and reasonably comment on any written materials prepared in connection with such Pre-Closing Tax Contest and the right to attend and participate in any conferences relating thereto, and (C) Seller will not settle or consent to the entry of any Order or other similar determination or finding with respect to such Pre-Closing Tax Contest without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed).

(iii) Buyer shall have the right to control and defend (x) any Tax Contest covering any Straddle Period, (y) any Tax Contest that is not a Pre-Closing Tax Contest, and (z) any Pre-Closing Tax Contest for which Seller has not assumed its right to control and defend such Pre-Closing Tax Contest as contemplated by Section 7.10(d)(ii) (each, an " Other Tax Contest ") with counsel (including, for the avoidance of doubt, accountants) of its choice, provided , that, with respect to any Tax items in the Other Tax Contest for which the resulting Tax liability Seller would be required to provide indemnification pursuant to this Agreement, (A) Buyer shall keep Seller reasonably informed regarding the progress and substantive aspects of such Tax items in the Other Tax Contest, (B) Seller may retain separate co-counsel at its sole cost and expense, and participate in the defense of such Tax items in the Other Tax Contest, including having an opportunity to review and reasonably comment on any written materials prepared in connection with such Tax items in the Other Tax Contest and the right to attend and participate in any conferences relating thereto, and (C) Buyer will not settle or consent to the entry of any Order or other similar determination or finding with respect to such Tax items in the Other Tax Contest without the prior written consent of Seller (which consent shall not to be unreasonably withheld, conditioned, or delayed).

(iv) For the avoidance of doubt, the term Tax Contest shall not include, and this Section 7.10(d) shall not apply to, any audits, adjustments, claims, examinations, assessments or other administrative or judicial proceedings with the purpose or effect of re-determining Taxes of or with respect to any Tax Return of the Seller Affiliated Group (which includes the consolidated U.S. federal income tax return of the Seller Affiliated Group).

(e) Refunds . The amount or economic benefit of any refund (whether in cash or as a credit against or offset to any Tax) in respect of any Tax of the Company or the Acquired Subsidiary attributable to any Pre-Closing Tax Period received by Buyer, the Company, the Acquired Subsidiary or any of their respective Affiliates shall be for the account of Seller, and the recipient thereof shall pay such amount (including any interest received thereon) over to the Seller within ten (10) days after any such refund is received, credited or applied as an offset, as the case may be.

(f) Cooperation . Each of Buyer and Seller, and each of their respective Affiliates, shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns of or with respect to the Company or the Acquired Subsidiary and/or during the course of any audit, litigation or other proceeding with respect to Taxes of or attributable to the Company or the Acquired Subsidiary. Such cooperation shall include the retention and (upon the other Party's request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Each of Seller and Buyer agrees, (i) that Seller shall retain all books and records with respect to Tax matters pertaining to the Company and the Acquired Subsidiary relating to any taxable period beginning on or before the Closing Date until the expiration of the applicable statute of limitations (and, to the extent notified by Buyer, any extensions thereof) of the respective taxable periods; shall provide copies of the foregoing to Buyer upon Buyer's request; and shall abide by all record retention agreements entered into with any Taxing Authority, and (ii) to give the other Party (and following the Closing, Buyer agrees to cause the Company and the Acquired Subsidiary to give the Seller) reasonable written notice prior to transferring, destroying or discarding any such books and records and, on receipt of such notice, if the other Party so requests, Seller or Buyer shall, as applicable, allow the other Party to take possession of such books and records. Buyer and Seller further agree, upon request, to use Commercially Reasonable Efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated hereby).

(g) Transfer Taxes . All transfer, documentary, sales, Hawaii general excise, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest), incurred in connection with the transactions contemplated by this Agreement (" Transfer Taxes ") shall be paid by Buyer when due, and Buyer will file, or cause to be filed all necessary Tax Returns and other documents with respect to all such Taxes, fees and charges; provided that Seller shall reimburse Buyer for 50% of any such Transfer Taxes (excluding any penalties or interest incurred by Buyer).

(h) Tax Treatment . For all U.S. federal income Tax purposes (and state, local, and foreign Tax purposes where applicable), each of Seller and Buyer intend for the purchase of the TH Interest to be treated as a sale of all the Assets (and the Subsidiary Stock), subject to all the Company Assumed Liabilities. Seller and Buyer shall each report, and shall cause each of their Affiliates where applicable to report, the purchase of the TH Interest pursuant to this Agreement consistent with such intended treatment for all U.S. federal income Tax purposes (and state, local, and foreign Tax purposes where applicable). Except as otherwise required by applicable Law, each of Seller and Buyer agrees that it will not, and will not permit its Affiliates to, take any position for Tax purposes (whether on any Tax Return, in any Tax proceeding, or otherwise) that is inconsistent with such intended treatment.

(i) Section 338(h)(10) Elections .

(i) Because of the intended treatment set forth in Section 7.10(h) , each of Seller and Buyer intend for the deemed purchase and sale of the Assets to result in the deemed purchase and sale of the Subsidiary Shares and, therefore, intend for such deemed purchase and sale of the Subsidiary Shares to qualify as a "qualified stock purchase" within the meaning of Treasury Regulations Section 1.338(h)(10)-1(c). Seller and Buyer shall make a joint election under Section 338(h)(10) of the Code and under any comparable provision of applicable state,

local, and foreign Law with respect to Buyer's deemed purchase of the Subsidiary Shares (collectively, the 's ection 338(h)(10) Elections "). Buyer and Seller shall take all necessary steps and cooperate in good faith, including the exchange of information, to effect and preserve valid and timely Section 338(h)(10) Elections. Except as otherwise required by applicable Law, each of Seller and Buyer agrees that (A) it shall, and shall cause each of its Affiliates, to report, act and file all Tax Returns in all respects and for all purposes consistent with the Section 338(h)(10) Elections, and (B) it will not, and will not permit its Affiliates to, take any position that is inconsistent with the Section 338(h)(10) Elections.

(ii) At least three (3) Business Days prior to the Closing Date, Buyer shall prepare and deliver an Internal Revenue Service Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases, and any corresponding forms under comparable provisions of applicable state, local or foreign tax Law, in substance reasonably satisfactory to Seller (collectively, the 's ection 338(h)(10) Election Forms "). At the Closing, Seller shall deliver to Buyer such Section 338(h)(10) Election Forms, duly executed. Seller authorizes Buyer to file each Section 338(h)(10) Election Form with the appropriate Taxing Authority on behalf of Seller and Buyer. Promptly following each such filing, Buyer shall provide Seller with a copy of such filed Section 338(h)(10) Election Forms. As reasonably requested from time to time by Buyer, Seller shall assist Buyer in, and shall provide the necessary information to Buyer, in connection with the preparation of any other forms and documentation required to effect valid and timely Section 338(h)(10) Elections.

(j) Purchase Price Allocations .

(i) Within ninety (90) days after the Final Net Working Capital is finally determined pursuant to Section 2.6 Buyer shall deliver to Seller an allocation schedule (the " Asset Purchase Allocation Schedule ") allocating the Purchase Price (together with the Company Assumed Liabilities and other amounts required to be treated as part of the purchase price for U.S. federal income tax purposes) among the Assets (and the Subsidiary Stock) in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder.

(ii) Within ninety (90) days after the Final Net Working Capital is finally determined pursuant to Section 2.6 , Buyer shall deliver to Seller an allocation schedule (the 's ection 338 Allocation Schedule ") allocating the "aggregate deemed sales price" and the "adjusted grossed-up basis" (as defined under applicable Treasury Regulations) that results from the Section 338(h)(10) Elections among the assets of the Acquired Subsidiary in accordance with Sections 338 and 1060 of the Code and the Treasury Regulations promulgated thereunder.

(iii) Each of the Asset Purchase Allocation Schedule and the Section 338 Allocation Schedule (each, an " Allocation Schedule ," and collectively, the " Allocation Schedules ") delivered by Buyer shall become final and binding upon Buyer and Seller on the fifteenth (15th) day following the date that such Allocation Schedule was delivered by Buyer to Seller, unless prior to such date Seller notifies Buyer of any reasonable objections to such Allocation Schedule (an " Allocation Schedule Notice of Disagreement "). An Allocation Schedule Notice of Disagreement shall specifically set forth all of Seller's disputed items to the applicable Allocation Schedule, together with Seller's proposed changes thereto, including an explanation in reasonable detail of the basis on which Seller proposes such changes. If Seller has delivered a timely Allocation Schedule Notice of Disagreement with respect to an Allocation Schedule, then Buyer and Seller shall use their good faith efforts to reach agreement on the disputed items to determine the final and binding Allocation Schedule. If all of Seller's disputed items with respect to an Allocation Schedule have not been resolved by Buyer and Seller by the

thirtieth (30th) day following the date that Buyer receives the Allocation Schedule Notice of Disagreement with respect to such Allocation Schedule, then the items that are still disputed shall be submitted to binding arbitration to be determined by the Arbiter. The Arbiter's determination of the disputed issues shall in no event be more favorable to Buyer than reflected on such Allocation Schedule as proposed by Buyer or more favorable to Seller than reflected in the proposed changes to such Allocation Schedule delivered by Seller in the Allocation Schedule Notice of Disagreement. Following the determination by the Arbiter, such Allocation Schedule shall be revised to include the determination of the Arbiter on the disputed issues, and such revised Allocation Schedule shall be final and binding upon Buyer and Seller. The fees and expenses of any such arbitration shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Seller.

(iv) Any adjustment of the Purchase Price, and to any other items of consideration, cost or expense taken into account in the Allocation Schedules for U.S. federal income tax purposes, will be allocated in a manner consistent with the Allocation Schedules that has become final and binding pursuant to this Section 7.10(j) . Except as otherwise required by applicable Law, (A) each of Buyer and Seller shall, and shall cause each of its Affiliates, to report, act and file all Tax Returns in all respects and for all purposes consistent with the Allocation Schedules determined to be final and binding pursuant to this Section 7.10(j) , and (B) each of Buyer and Seller will not, and will not permit of any of its Affiliates to, take any position that is inconsistent with such final and binding Allocation Schedules.

(k) Tax Treatment of Indemnity Payments . Except as otherwise required by applicable Law, each of Buyer and Seller agree that any indemnification payments made under this Agreement shall be treated as Purchase Price adjustments for U.S. federal income tax purposes (and state, local, and foreign Tax purposes where applicable).

(l) Tax Sharing Agreements . All Tax sharing agreements or similar agreements with respect to or involving the Company or the Acquired Subsidiary shall be terminated as of the Closing Date, and after the Closing Date, the Company and the Acquired Subsidiary shall not be bound thereby or have any liability thereunder.

(m) Consolidated Returns for Periods Through the Closing Date . For the avoidance of doubt, Seller shall include the income of the Acquired Subsidiary (including any deferred items triggered into income by Treasury Regulations Section 1.1502-12 and any excess loss account taken into income under Treasury Regulations Section 1.1502-19) on the Seller Affiliated Group's consolidated U.S. federal income tax return for all periods through the end of the Closing Date and pay any U.S. federal income taxes attributable to such income, subject to indemnification by Buyer as may be herein provided. The Company and the Acquired Subsidiary shall furnish Tax information to the Seller as necessary or helpful with respect to the foregoing.

(n) Tax Withholding . With respect to any amount of Taxes deducted or withheld by Buyer pursuant to Section 2.5(a)(i)(7) , Buyer shall timely pay the full amount of any such Taxes deducted or withheld to the applicable Taxing Authority and provide written notice to Seller of such payments when made.

(o) Conflict . In the event of conflict between any of the provisions of this Section 7.10 and any other provision of this Agreement, the provisions of this Section 7.10 shall control.

Section 7.11 No Solicitation/Non-Competition .

(a) To the extent not prohibited by Law, for a period of five (5) years after the Closing, Buyer shall not, and shall not permit any of its Affiliates to, hire, employ or engage, or seek to hire, employ or engage, any employee of Seller or any of its Affiliates without the prior written consent of Seller, which consent may be withheld in the sole discretion of Seller; provided , that the provisions of this Section 7.11 shall not apply to general solicitations not specifically targeted towards such employees, nor shall they apply to Post-Closing Employees.

(b) In (i) consideration for the purchase by Buyer of the TH Interests and the goodwill, if any, associated therewith, with which Seller is associated and which Seller is causing to be sold, (ii) order to protect the goodwill obtained by Buyer as a result of the acquisition of the TH Interests, and (iii) order to satisfy certain conditions to the consummation of the transactions contemplated by this Agreement, Seller expressly covenants and agrees that, during the Prohibited Period, Seller will refrain from carrying on or engaging directly in the Business (as conducted as of the Closing Date) in the State of Hawaii (the " Restricted Area "). Seller agrees and covenants that, because the following conduct would effectively constitute carrying on or engaging in the Business, Seller will not, in the Restricted Area during the Prohibited Period, (1) own, manage, operate or directly participate in any business or Person which, to Seller's Knowledge, engages in the Business (as conducted as of the Closing Date) or (2) directly loan money (excluding purchase money indebtedness) to any business or Person which, to Seller's Knowledge, engages in the Business where the purpose of such loan is to promote the Business (as conducted as of the Closing Date) in the Restricted Area. For the avoidance of doubt, the preceding sentence shall not prohibit sales by Seller to wholesale customers of products similar to the Hydrocarbon Inventory that are ultimately resold or used in the Restricted Area by Persons other than Seller or its Affiliates. As used in this Agreement, " Prohibited Period " means the period beginning on the Closing Date and ending on the fifth (5 th ) anniversary of the Closing Date.

(c) To the extent that any part of this Section 7.11 may be invalid, illegal or unenforceable for any reason, it is intended that such part shall be enforceable to the extent that a court of competent jurisdiction shall determine that such part, if more limited in scope, would have been enforceable, such part shall be deemed to have been so written and the remaining parts shall as written be effective and enforceable in all events and the Parties agree to request that such court enforce this Section 7.11 as if so written.

(d) The Parties agree that the limitations as to time, geographic area and scope of activity to be restrained as set forth in this Section 7.11 are reasonable and do not impose any greater restraint than is necessary to protect the goodwill, if any, that Seller is selling and causing to be sold pursuant to this Agreement and are necessary to protect the legitimate business interests of Buyer and that these limitations are intended to comply with all Laws. The Parties agree that, in the event of a breach or threatened breach of any of the provisions of this Section 7.11 , Buyer shall be entitled to immediate injunctive relief, as any such breach may cause Buyer irreparable injury for which it would have no adequate remedy at law. Nothing herein shall be construed so as to prohibit Buyer from pursuing or realizing any other remedies available to it under this Agreement, at law or in equity for any such breach or threatened breach.

(e) Seller acknowledges that the geographic scope and duration of the covenants contained in this Section 7.11 are the result of arm's-length bargaining and are fair and reasonable in light of (i) the nature and wide geographic scope of the operations of the Business (as conducted as of the Closing Date), (ii) Seller's level of control over, contact with, and association with the goodwill of, the Business (as conducted as of the Closing Date) in all jurisdictions in which it is conducted, (iii) the fact that the Business (as conducted as of the Closing Date) is conducted by the Companies throughout the Restricted Area, and (iv) the consideration that Seller is receiving in connection with the transactions contemplated by this Agreement and the amount of goodwill for which Buyer is paying. It is the desire and intent of the Parties that the provisions of this Agreement be enforced to the fullest extent permitted under Law, whether now or hereafter in effect and therefore, to the extent permitted by Law, the parties waive any provision of Law that would render any provision of this Section 7.11 invalid or unenforceable.

Section 7.12 Third Person Consents Not Obtained Prior To Closing .

(a) Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to assign any Seller Contract or any benefit arising under or resulting from such Seller Contract if an attempted assignment thereof, without a required Third Person Consent or Authorization, would constitute a breach or other contravention of the rights of such third party, would be ineffective with respect to any party to an agreement concerning such Seller Contract, would violate or otherwise is not permitted by Law or would in any way adversely affect the rights of Seller or, upon transfer, of the Company under or in respect of such Seller Contract. If any transfer or assignment by Seller to, or any assumption by the Company of, any interest in, or Obligation under, any Seller Contract, requires any Third Person Consent or Authorization, then no such assignment or assumption shall be made without such Third Person Consent or Authorization being obtained. To the extent any Seller Contract may not be assigned to the Company by reason of the absence of any such Third Person Consent or Authorization, the Company shall not be required to assume any Obligations arising under such Seller Contract; provided, however , that upon the receipt of any such Third Person Consent or Authorization after the Closing, such Seller Contract shall be assigned to the Company and the Company shall assume such Seller Contract.

(b) If any such Third Person Consent or Authorization is not obtained prior to the Closing Date, Seller shall, to the extent not prohibited by the terms of any applicable Seller Contract or Law and until the receipt of such Third Person Consent or Authorization, hold the Seller Contract, subject to such Third Person Consent or Authorization, together with any proceeds therefrom, in trust for the Company, and Seller and the Company shall cooperate (each at its own expense) in any mutually acceptable, lawful and reasonable arrangement under which the Company shall obtain, to the extent practicable, the economic rights and benefits under such Seller Contract with respect to which the Third Person Consent or Authorization has not been obtained in accordance with this Agreement. Such reasonable arrangement may include the entering into of a subcontract, sublicense, sublease or other similar arrangement between Seller and the Company. During the period from Closing until such Third Person Consent or Authorization is obtained, Seller will use Commercially Reasonable Efforts to enforce such Seller Contracts for the benefit of the Company, on the condition that the Company shall bear all costs and expenses (including legal expenses) related to such enforcement. If the Company is able to receive the economic rights and benefits under such Seller Contract, such economic rights and benefits shall constitute an Asset, and the Obligations, if any, related to such economic rights and benefits under such Asset shall constitute Obligations of the Company (other than any Obligations arising out of or relating to a breach or any operation of the Business or the ownership or operation of the Assets that occurred prior to the Effective Time), as applicable. Seller's Obligations under this Section 7.12(b) shall expire as of the second (2 nd ) anniversary of the Closing Date.

(c) In the event that any Third Person Consent is not obtained prior to the Closing Date related to those certain Leased Real Properties set forth in the electronic folder titled 'specified Leased Real Property Consents" located in the Data Room and the lack of such Third Person Consents results in a termination of the leases related to such Leased Real Properties within ninety (90) days after the Closing Date, then Seller agrees to negotiate in good faith with Buyer after the Closing for a refund/reduction in the Purchase Price in an amount equal to the combined discounted value to the Company of the anticipated lost net income associated with the termination of such leases.

Section 7.13 Multi-Site Contracts . Section 7.13 of the Disclosure Schedules sets forth a list of certain "master" contracts and agreements that the Company or the Acquired Subsidiary is a party to, or otherwise authorized to utilize, and which pertain to multiple refineries and facilities owned by Seller and its Affiliates in addition to the Assets (each, a " Multi-Site Contract " and collectively, the " Multi-Site Contracts ") . Some of those Multi-Site Contracts may constitute Seller Contracts or Material Company Contracts. With respect to all Multi-Site Contracts, Buyer acknowledges and agrees that the Company shall not be entitled to remain or become a party thereto, or otherwise make use thereof, after Closing, and it is Seller's intention to terminate all Multi-Site Contracts as to the Company effective as of Closing. Notwithstanding such termination, the Company shall be obligated to honor any work releases, purchase commitments or other similar commitments made by them under any Multi-Site Contracts prior to Closing, but not yet fully performed or satisfied as of Closing, so long as such commitments were not made in violation of Seller's Obligations under Section 6.2 . To the extent a Multi-Site Contract by its terms is not terminable as to the Company, Buyer covenants and agrees to (i) negotiate in good faith with the counterparty(ies) to such Multi-Site Contract in an effort to enter into a new agreement between such counterparty(ies) and the Company as soon as reasonably practicable as possible following Closing, and (ii) until such new agreement becomes effective, honor the terms of the Multi-Site Contract and not make any elective purchases or other elective commitments thereunder. Buyer acknowledges that the terms and conditions of Multi-Site Contracts that relate to other facilities of Seller and its Affiliates other than the Refinery (including rate sheets and other commercial terms and conditions covering such other facilities) are confidential and proprietary information of Seller and its Affiliates, and Buyer shall destroy any such information it may inadvertently obtain, and shall not use such information for any purpose. Without limiting any of Buyer's other indemnification Obligations under this Agreement, Buyer shall indemnify, defend and hold harmless the Seller Indemnitees against any and all Claims and Losses arising out of Buyer's breach or utilization of any Multi-Site Contract after Closing.

Section 7.14 Operation of Business . During the period commencing at the Closing and ending at the Measurement Time, Buyer (with respect to the Companies and the Business) shall, and shall cause the Companies to operate and maintain the properties and assets of the Companies and the Business in the ordinary course of business (including maintenance of appropriate insurance coverages with respect to the assets to be measured hereunder as of the Measurement Time) and not enter into or effect any transaction outside the ordinary course of business; provided that the Companies shall be permitted to enter into financing arrangements during such period and the Parties agree that the impact of such financing arrangements shall not be taken into account in the determination of Net Working Capital.

Section 7.15 Seller's Names; Removal of Logos and Signs .

(a) Except as provided in this Section 7.15 or the License Agreement, following the Measurement Time, Buyer will not (and will cause the Companies not to) use or otherwise exploit the Tesoro Marks in the operation of the Business. As promptly as practicable following the Closing Date, but in no event later than one hundred eighty (180) days after the Closing Date, Buyer will stop (and will cause the Companies to stop) using the Tesoro Marks in any form in the operation of the Business except as permitted pursuant to the License Agreement, including by removing, permanently obliterating or covering all references to the Tesoro Marks that appear on any Assets, including all signage, storage containers, uniforms and clothing, promotional or advertising literature, stationery, purchase order forms, office forms and labels, packaging, manuals, policy books, reference materials and other such documents (including signs displaying Seller's or its Affiliates" emergency contact telephone numbers or otherwise using or displaying the Tesoro Marks or the phrase "Tesoro" in whole or in part). As promptly as practical after the Closing Date, Buyer shall post Buyer's emergency contact telephone numbers in place of any of Seller's or its Affiliates" emergency contact telephone numbers. Without limiting the foregoing restrictions, until such time as the Tesoro Marks are removed or covered by Buyer or the Companies as provided above, in no event will Buyer or the Companies use or display the Tesoro Marks in any way

other than in the same manner used by the Business immediately prior to the Closing Date and all signs and graphics incorporating any of the Tesoro Marks shall be maintained by Buyer and the Companies in keeping with a first class operation. During any period that the Company is using the Tesoro Marks as provided in this Section 7.15 , the Company shall use Commercially Reasonable Efforts to inform customers, suppliers and contractors that Buyer and the Companies are not part of or Affiliates of Seller and that the Companies are using the Tesoro Marks with permission solely to facilitate the transition of the Business or as permitted pursuant to the License Agreement. Notwithstanding anything to the contrary, neither Buyer nor the Companies shall have any right to create any new materials to be used in the operation of the Business containing the Tesoro Marks or any right to transfer, assign, license or sublicense any of the Tesoro Marks except as permitted pursuant to the License Agreement. Neither Buyer nor the Companies shall contest the validity of the Tesoro Marks, claim adversely to Seller or its Affiliates any right, title or interest in or to the Tesoro Marks, or the distinctive features of the designs used in connection with the Tesoro Marks, and shall not register, apply to register or aid a third party in registering any of the Tesoro Marks or a confusingly similar trademark or service mark.

(b) Within ten (10) days following the Closing Date, Buyer shall (a) cause the Company to file appropriate documentation with the applicable Governmental Authorities to change the legal name of the Company to remove the name "Tesoro" and any name that would reasonably be expected to be confused therewith; (b) provide Seller evidence of such filings; and (c) take such other actions as required to cause the Company and the Acquired Subsidiary to abandon the name "Tesoro" and any derivation thereof that would reasonably be expected to be confused therewith except to the extent expressly permitted pursuant to the License Agreement.

Section 7.16 Further Assurances . Without limiting Section 6.3 , Seller and Buyer each agree that from time to time after the Closing Date they will execute and deliver and will cause their respective Affiliates to execute and deliver such further instruments, and take, and cause their respective Affiliates to take, such other actions as may be reasonably necessary to carry out the purposes and intents of this Agreement and the Related Agreements, including with respect to any consent, authorization, order or approval sought from, or exemption, review, investigation or inquiry conducted by, any Governmental Authority in connection with this Agreement and the transactions contemplated hereby; provided , however that the provisions of this Section 7.16 shall not impose any Obligation on any Party or its Affiliates greater than (and shall be subject to limitations similar to) the Obligations imposed on the Parties during the Interim Period pursuant to Section 6.3 .

Section 7.17 Retention of and Access to Books and Records .

(a) As promptly as practicable after the Closing Date, Seller will deliver or cause to be delivered to Buyer the Books and Records that are in the possession or control of Seller or its Affiliates other than Books and Records in the possession of the Company. Buyer agrees (and shall cause the Company to agree) to hold and maintain the Books and Records that are transferred to Buyer or the Company so that they may be reasonably retrievable and not to destroy or dispose of any portion thereof for a period of five (5) years from the Closing Date or such longer time as may be required by applicable Law, provided, that, if Buyer or the Company desires to destroy or dispose of such Books and Records during such period, they will first offer in writing at least ninety (90) days before such destruction or disposition to surrender them to Seller, and if Seller does not accept such offer within sixty (60) days after receipt of such offer, Buyer or the Company, as applicable, may proceed with the destruction of such Books and Records.

(b) Unless in violation of Law, each Party agrees (and shall cause its Affiliates to agree) to afford the other Party and its Affiliates and their respective accountants and counsel, during normal business hours, upon reasonable request, at a mutually agreeable time, full access to and the right to make copies of the Books and Records delivered to Buyer or other information that Seller retains that relates to the Assets or the Business (including those that are not "Books and Records") at no cost to such Party or its Affiliates (other than for reasonable out-of-pocket copying expenses); provided, however , that in the event of any litigation, nothing herein shall limit any Party's rights of discovery under applicable Law. Without limiting the generality of the preceding sentences, each Party agrees to provide the other Party and its Affiliates reasonable access to and the right to make copies of the Books and Records or other information (excluding confidential, privileged or proprietary information) that Seller retains that relates to the Assets or the Business (including those that are not "Books and Records") after the Closing Date, for the purposes of assisting such Party and its Affiliates (i) in complying with the Obligations under this Agreement or the Related Agreements (including to comply with any indemnity obligations), (ii) in preparing and delivering any accounting statements provided for under this Agreement or the Related Agreements and adjusting, prorating and settling the charges and credits provided for in this Agreement or the Related Agreements, (iii) in the case of the Seller, in owning or operating the Excluded Assets or Retained Liabilities, (iv) in preparing Tax Returns or in responding to or disputing any Tax audit, Tax appeal, other Tax proceeding, (v) in asserting, defending or otherwise dealing with any Claim, known or unknown, under this Agreement or the Related Agreements or, in the case of the Seller, with respect to Excluded Assets or Retained Liabilities or (vii) in asserting, defending or otherwise dealing with any Third-Party Claim or dispute by or against a Party or its Affiliates relating to the Business or the Assets.

Section 7.18 Intellectual Property .

(a) Grants to Intellectual Property Owned by Seller . Seller shall grant and hereby does grant to the Company effective as of the Closing Date, for use by the Company solely in the internal operations of the Refinery in a manner substantially similar to the operations prior to Closing, a non-exclusive, irrevocable royalty-free, paid-up license (without a right to sublicense or transfer except as expressly provided in this Section 7.18 ) to any Intellectual Property that is owned by Seller or any of its Affiliates, which exists at the Closing Date and which is or has been in use in the operation of the Refinery as currently operated or as operated immediately prior to the Closing ('s eller IP "). Such grant is made without representation, recourse or warranty, and any warranties which may be implied by Law are hereby disclaimed. The sole purpose of this paragraph is to prevent Seller or any of its Affiliates from hereafter bringing any Claims against Buyer or the Company seeking payment of royalties for the use of, or alleging unauthorized use by Buyer or the Company of, any Seller IP, so long as such use is solely in the internal operations of the Refinery in a manner substantially similar to the operations prior to the Closing. Buyer and the Company shall have no obligation to grant back to Seller or its Affiliates or otherwise make available to Seller or any of its Affiliates any improvements or enhancement to any Seller IP that may be developed by Buyer or the Company after the Closing.

(b) Subsequent Transfer of Intellectual Property . In the event the Company transfers or pledges to any Person, ownership of the Refinery, or any part thereof, the license granted in Section 7.18(a) may be extended to such transferee or lender subject to outstanding obligations to third parties and subject to an assumption in writing by such transferee or lender of all relevant duties and obligations under the applicable portions of this Agreement.

(c) Seller Process Licenses . Seller shall transfer to the Company or cause the transfer of (A) all licenses of Intellectual Property held by Seller or its Affiliates that are used exclusively in connection with the operation of the Refinery process units or other Assets as currently operated or as operated immediately prior to the Closing, and (B) that portion of any license agreement covering the Refinery or other Assets as well as other facilities or assets owned by Seller or its Affiliates (a " Multi-Site License ") that is allocable to the operation of the Refinery process units or other Assets as currently operated or as operated immediately prior to the Closing (the interests in the foregoing clauses (A) and (B)

being herein collectively referred to as the " Licensed Technology Rights "), in all cases only to the extent that such Licensed Technology Rights are freely transferable or to the extent that the licensor otherwise agrees to such transfer, it being understood that Seller makes no representations or warranties as to the assignability or transferability of any Licensed Technology Rights. Buyer shall be solely responsible for seeking the consent of the licensor(s) of any such Licensed Technology Rights and for paying any costs associated with the transfer of such Licensed Technology Rights or the issuance of replacement licenses; provided, however , that Seller agrees to (i) reasonably cooperate in requesting such transfers and in executing any reasonable transfer or assignment documents that do not impose any Obligations on Seller, and (ii) pay any accrued and unpaid royalties arising out of Seller's use of the Licensed Technology Rights at the Refinery prior to Closing. Without limiting the foregoing, Buyer agrees that Seller shall not be obligated to transfer any Licensed Technology Rights to the Company where such transfer would require Seller or its Affiliates to surrender any paid-up capacity or other rights allocable to other facilities owned by Seller or its Affiliates (but for the avoidance of doubt, Seller will agree to release any Licensed Technology Rights allocable to the Refinery or other Assets under a Multi-Site License). Effective as of and related to the period on and after the Closing Date, Buyer or the Company shall be solely responsible for complying with all Obligations (including non-disclosure, export control and grant-back obligations) under Licensed Technology Rights used by the Company after Closing and shall indemnify, defend and hold the Seller Indemnitees harmless in accordance with Section 11.3 against any Losses they may suffer by reason of Buyer's or the Company's failure to do so. Without limiting the foregoing, Buyer shall indemnify, defend and hold the Seller Indemnitees harmless in accordance with Section 11.3 against any Losses they may suffer by reason of Buyer's or the Company's use of Licensed Technology Rights beyond the use of such rights by the Company as of the Closing.

(d) Seller's obligations under this Section 7.18 shall expire on the second (2 nd ) anniversary of the Closing Date.

Section 7.19 Releases .

(a) Simultaneously with the Closing, Seller, on behalf of itself and its Affiliates (other than the Companies), hereby unconditionally and irrevocably releases and forever discharges, effective as of and forever after the Closing Date, to the fullest extent permitted by Law, each of the Companies from any and all debts, Obligations, Claims, Proceedings, judgments or controversies of any kind whatsoever (collectively, " Pre-Transaction Claims ") that Seller and its Affiliates (other than the Companies), may possess, if any, against the Companies to the extent arising out of or based upon any agreement or understanding or act or failure to act (INCLUDING ANY ACT OR FAILURE TO ACT THAT CONSTITUTES ORDINARY OR GROSS NEGLIGENCE OR RECKLESS OR WILLFUL, WANTON MISCONDUCT), misrepresentation, omission, transaction, fact, event or other matter occurring prior to the Closing Date (whether based at law or in equity or otherwise, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued) (collectively, " Pre-Transaction Matters "), including: (a) claims by Seller with respect to repayment of loans or other indebtedness; (b) any rights, titles and interests in, to or under any agreements, arrangements or understandings to which Seller or any of its Affiliates (other than the Companies), is a party; and (c) Claims by Seller and its Affiliates (other than the Companies), with respect to dividends, distributions, violations of preemptive rights and Seller's status as a stockholder, option holder or other security holder of the Companies; provided, however , that this Section 7.19(a) shall not apply to any Claim or Obligation pursuant to this Agreement or the Related Agreements or any Obligation of the Companies that is taken into account as a liability of the Companies for purposes of the Final Net Working Capital. Seller, on behalf of itself and its Affiliates (other than the Companies), hereby further agrees, from and after the Closing Date, not to file or initiate any Proceeding before any Governmental Authority on the basis of or respecting any Pre-Transaction Claim concerning any Pre-Transaction Matter that is released under this Section 7.19(a) .

(b) Simultaneously with the Closing, Buyer, on behalf of the Companies, hereby unconditionally and irrevocably releases and forever discharges, effective as of and forever after the Closing Date, to the fullest extent permitted by Law, Seller and its Affiliates from any and all Pre-Transaction Claims that the Companies may possess, if any, against Seller and its Affiliates to the extent arising out of or based upon any Pre-Transaction Matters, including: (a) claims by the Companies with respect to repayment of loans or other indebtedness; (b) any rights, titles and interests in, to or under any agreements, arrangements or understandings to which either of the Companies, is a party; and (c) Claims by the Companies with respect to dividends and distributions; provided, however , that this Section 7.19(b) shall not apply to any Claim or Obligation pursuant to this Agreement or the Related Agreements or any Obligation of Seller that is taken into account as an asset of the Companies for purposes of the Final Net Working Capital. Buyer, on behalf of the Companies, hereby further agrees, from and after the Closing Date, not to file or initiate any Proceeding before any Governmental Authority on the basis of or respecting any Pre-Transaction Claim concerning any Pre-Transaction Matter that is released under this Section 7.19(b) .

ARTICLE VIII
CLOSING CONDITIONS

Section 8.1 Conditions to Obligations of Each Party Under this Agreement . The respective Obligations of Buyer and Seller to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived by the Parties, in whole or in part, to the extent permitted by Law:

(a) Any waiting or review period applicable to the transactions contemplated by this Agreement under applicable antitrust, trade regulation or foreign investment Laws and regulations, including the HSR Act, shall have expired or been terminated;

(b) No temporary restraining Order, preliminary or permanent injunction or other Order issued by any court of competent jurisdiction or other statute, rule or legal restraint of a Governmental Authority shall be in effect preventing the consummation of the transactions contemplated hereby; and

(c) There shall not be pending or threatened in writing any Proceeding instituted by any Governmental Authority to materially restrain, prohibit or otherwise materially interfere with or obtain substantial monetary damages in connection with the consummation of the transactions contemplated by this Agreement.

Section 8.2 Additional Conditions to Seller's Obligations . The Obligations of Seller to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived by Seller, in whole or in part, to the extent permitted by Law:

(a) The representations and warranties of Buyer made in Section 5.1 (Organization and Qualification) and Section 5.2 (Authority; Enforceability) shall be complete and correct in all respects when made and on and as of the Closing Date, as though made on and as of the Closing Date (except for representations and warranties that speak only as of a specific date or time, which need be so complete and correct only as of such date or time). The other representations and warranties of Buyer made in Article V shall, when read without any qualification as to "materiality" or "material adverse effect" or another similar qualifier shall be complete and correct in all respects when made and on and as of the Closing Date, as though made on and as of the Closing Date (except for representations and warranties that speak as of a specific date or time, which need be so complete and correct only as of such date or time) except where the failure to be so complete and correct, individually and in the aggregate, has not had and is not reasonably likely to have a material adverse effect on the ability of Buyer to consummate the transactions contemplated by this Agreement or to perform its Obligations under this Agreement, and Seller shall have received a certificate of an executive officer of Buyer, dated the Closing Date, to such effect;

(b) Buyer shall have performed or complied in all material respects with all Obligations required by this Agreement to be performed or complied with by it on or prior to the Closing Date, and Seller shall have received a certificate of an executive officer of Buyer, dated the Closing Date, to such effect;

(c) All Third Person Consents and all Authorizations specified in Section 8.2(c) of the Disclosure Schedules shall have been obtained;

(d) Since the Execution Date, there must not have been any event or series of events which has had or would reasonably be expected to have a Material Adverse Effect; and

(e) Buyer shall have provided to Seller reasonable confirmation (which shall include an unaudited balance sheet and bank statements of Buyer) that the Adjusted Net Worth of Buyer immediately prior to the Closing shall equal or exceed an amount equal to One Hundred Fifty Million Dollars ($150,000,000).

Section 8.3 Additional Conditions to Buyer's Obligations . The Obligations of Buyer to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived by Buyer, in whole or in part, to the extent permitted by Law:

(a) The representations and warranties of Seller and the Company, as applicable, made in Section 3.1 and Section 4.1 (Organization and Qualification), Section 3.2 and Section 4.2 (Authority; Enforceability), Section 3.5 (Ownership of the TH Interest), Section 4.4 (Capitalization of the Company), and Section 4.5 (Capitalization of the Acquired Subsidiary) shall be complete and correct in all respects when made and on and as of the Closing Date, as though made on and as of the Closing Date (except for representations and warranties that speak only as of a specific date or time, which need be so complete and correct only as of such date or time). The other representations and warranties of Seller and the Company, as applicable, made in Article III and Article IV shall, when read without any qualification as to "materiality" or "Material Adverse Effect" or another similar qualifier shall be complete and correct in all respects when made and on and as of the Closing Date, as though made on and as of the Closing Date (except for representations and warranties that speak as of a specific date or time, which need be so complete and correct only as of such date or time) except where the failure to be so complete and correct, individually and in the aggregate, has not had and is not reasonably likely to have a Material Adverse Effect or a material adverse effect on the ability of Seller to consummate the transactions contemplated by this Agreement or to perform its Obligations under this Agreement, and Buyer shall have received a certificate of an executive officer of Seller, dated the Closing Date, to such effect;

(b) Seller shall have performed or complied in all material respects with all Obligations required by this Agreement to be performed or complied with by it on or prior to Closing Date, and Buyer shall have received a certificate of an executive officer of Seller, dated the Closing Date, to such effect;

(c) All Third Person Consents and all Authorizations specified in Section 8.2(c) of the Disclosure Schedules shall have been obtained;

(d) Since the Execution Date, there must not have been any event or series of events which has had or would reasonably be expected to have a Material Adverse Effect;

(e) The Startup Criteria shall have been met in all material respects; and

(f) Seller (or its Affiliates) shall have successfully created a functional SAP "clone" of Seller's current Hawaii operating system pursuant to the Pre-Closing Transition Services Agreement which shall be hosted and managed by Seller (or its Affiliates) at its datacenter and without any modifications by Buyer.

ARTICLE IX
CASUALTY OR CONDEMNATION

Section 9.1 Notice . In the event that, prior to the Closing Date, all or any portion of the tangible Assets are damaged or destroyed by fire, theft, vandalism, flood, wind, hurricane, explosion or other casualty for which the associated repair or replacement costs (excluding insurance or other potential third party reimbursements) would reasonably be expected to exceed $5,000,000 (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.

Section 9.2 Repair or Replacement .

(a) In the event of a Casualty or Taking during the Interim Period affecting the tangible Assets, Seller shall elect (i) to repair or replace or make adequate provision for the repair or replacement of the affected Asset 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 shall be deferred until three (3) Business Days after repairs or replacement have been completed and the affected Asset has been restored to performance substantially comparable in all material respects to that prior to the Casualty or Taking 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 Assets, as may be mutually agreed to by Buyer and Seller (the " Repair Costs "), in which case, in the event of a Repair Cost Dispute, the Closing Date and the Termination Date shall be deferred as provided in Section 9.5 . Notwithstanding the foregoing, Seller's election in clause (i) of this Section 9.2(a) shall be unavailable and clause (ii) of this Section 9.2(a) shall apply if the required repairs or replacements would reasonably be expected to result in an extension of the Closing Date for more than forty-five (45) days.

(b) If Seller and Buyer agree on the Repair Costs within fifteen (15) days of Buyer's receipt of Seller's notice of the Casualty or Taking (the " Repair Negotiation Period "), Buyer's Obligation to effect the Closing shall not be affected, but the Purchase Price shall be reduced by the amount of the Repair Costs so agreed that exceeds $5,000,000.

(c) If Seller and Buyer do not agree on the Repair Costs within the Repair Negotiation Period (a " Repair Cost Dispute "), either party may request an engineering company that shall be mutually agreed to by Buyer and Seller to evaluate the affected Assets and deliver to Buyer and Seller its written estimate of the Repair Costs (the " Third-Party Estimate ") within fifteen (15) days after the end of the Repair Negotiation Period.

(i) If the Third-Party Estimate is equal to or less than $5 million, Buyer's Obligation to effect the Closing shall not be affected and the Parties shall submit the Repair Cost Dispute to binding arbitration for resolution after the Closing, with a post-Closing adjustment to the Purchase Price equal to the amount by which the finally-determined Repair Costs exceed $5 million in the aggregate.

(ii) If the Third-Party Estimate is equal to or greater than $5 million but less than $20 million, Buyer's Obligation to effect the Closing shall not be affected, but the Closing Date Payment shall be reduced by the amount that the Third-Party Estimate exceeds $5 million in the aggregate and the Parties shall submit the Repair Cost Dispute to binding arbitration after the Closing, with a post-Closing adjustment of the Purchase Price equal to the amount by which the difference between the Third-Party Estimate and the finally-determined Repair Costs exceed $5 million in the aggregate.

(iii) If the Third-Party Estimate is equal to or greater than $20 million, either Seller or Buyer may elect, by giving the other Party written notice of election within fifteen (15) days of receipt of the Third-Party Estimate, to terminate this Agreement pursuant to Section 10.1(e) ; provided, however, that if within such time period, Buyer is ready and able to proceed to Closing and agrees in writing to (x) waive the closing condition set forth in Section 8.3(e) with respect to the Refinery Turnaround and Startup Activities and satisfaction of the Startup Criteria and (y) to hold the Closing within five (5) Business Days of such agreement, then Seller shall not elect to terminate this Agreement pursuant to this Section or Section 10.1(e) .

Section 9.3 Condemnation Awards . In the event of any reduction in the Purchase Price in connection with a Taking at the Refinery, as provided in Section 9.2(a) , Buyer shall be entitled to collect from any condemnor the entire award(s) that may be made in any such Proceeding, without deduction, to be paid out as follows: subject to actual receipt of such award(s) by Buyer, (a) Buyer shall pay to Seller all such amounts, up to the amount of such Purchase Price reduction, and (b) Buyer shall be entitled to retain the balance (if any) of such award(s).

Section 9.4 Purchase Price Adjustment . Any adjustment of the Purchase Price pursuant to Section 9.2(c) which is necessary to reflect a final determination of Repair Costs after the Closing shall be made as follows: (a) an adjustment in favor of Buyer shall be paid in cash by Seller; and (b) an adjustment in favor of Seller shall be paid in cash to the extent the Purchase Price had been reduced pursuant to this Article IX . Any such reduction, refund or payment shall be made within ten (10) Business Days after such final determination.

Section 9.5 Deferral of Closing Date and Termination Date . In the event of a Repair Cost Dispute, the Closing Date and the Termination Date shall be deferred until (a) three (3) Business Days after receipt of the Third-Party Estimate, or (b) if Seller elects the option in Section 9.2(c)(i) , as provided therein.

ARTICLE X
TERMINATION

Section 10.1 Termination . This Agreement may be terminated at any time prior to the Closing:

(a) by mutual written consent of Seller and Buyer;

(b) by Seller upon notice to Buyer, if any of the conditions in Section 8.1 or Section 8.2 shall not have been fulfilled by the Closing Date or are or shall have become incapable of fulfillment on or prior to the Termination Date, provided that in each such case the failure to Close is not due, inter alia , to any breach by Seller of any of its representations, warranties, covenants or other Obligations contained in this Agreement;

(c) by Buyer upon notice to Seller, if any of the conditions in Section 8.1 or Section 8.3 shall not have been fulfilled by the Closing Date or are or shall have become incapable of fulfillment on or prior to the Termination Date, provided that in each such case the failure to Close is not due, inter alia , to any breach by Buyer of any of its representations, warranties, covenants or other Obligations contained in this Agreement;

(d) by Seller or Buyer upon notice to the other Party, if the Closing contemplated hereby shall not have occurred (other than through the failure of any Party seeking to terminate this Agreement to comply with its Obligations under this Agreement) on or before September 30, 2013 (the " Termination Date "), provided that in each such case the failure to Close is not due, inter alia, to any breach by the Party seeking to terminate this Agreement of any of its representations, warranties, covenants or other Obligations contained in this Agreement; or

(e) by Seller or Buyer upon notice to the other Party, pursuant to Section 9.2(c)(iii) .

Section 10.2 Deferral of Closing Date and Termination Date . Notwithstanding the Termination Date being September 30, 2013 as provided pursuant to Section 10.1(d) , Buyer may defer the Termination Date to a date no later than October 31, 2013 solely due to Buyer's efforts to obtain the Financing provided that Buyer provides written notice to Seller of such election on or before September 16, 2013.

Section 10.3 Effect of Termination . Except for this Section 10.3 , Section 2.11 , Section 2.12 , Section 6.1(d)(vii) , Section 6.1(h) , Section 6.6 , Section 6.14 , Section 11.7(c) , Section 11.8 , Section 11.9 , Section 12.2 , Section 12.3 and Section 12.4 , this Agreement shall, upon termination hereof pursuant to Section 10.1 , forthwith become of no further force or effect and (a) except as provided in this Section 10.3 and by Section 2.2 , there shall be no liability on the part of Seller, the Company, the Acquired Subsidiary or Buyer or any of their respective Affiliates, or any of their respective officers, directors or managers, to any other party and (b) all rights and Obligations of any Party shall cease; provided, however , that any such termination shall not relieve Seller, the Company, the Acquired Subsidiary or Buyer from liability for any intentional and material breach of this Agreement occurring prior to such termination. The termination of this Agreement shall have no effect on the provisions of the Confidentiality Agreement.

ARTICLE XI
INDEMNIFICATION AND REMEDIES

Section 11.1 Survival . Subject to the limitations and other provisions of this Agreement, (a) the representations and warranties of the Parties contained in this Agreement shall survive the Closing and shall remain in full force and effect for a period of eighteen (18) months after the Closing Date (except for those contained in Section 3.1 , Section 4.1 and Section 5.1 (Organization and Qualification), Section 3.2 , Section 4.2 and Section 5.2 (Authority; Enforceability), Section 3.5 (Ownership of the TH Interest), Section 4.4 (Capitalization of the Company), Section 4.5 (Capitalization of the Acquired Subsidiary), and Section 3.6 and Section 5.5 (Brokers), and Section 4.15 (Taxes) (the foregoing representations hereinafter referred to as the " Fundamental Representations "), which shall survive the Closing until the thirtieth (30 th ) day following the expiration of the applicable statute of limitations, and until the resolution of the indemnification Claims received by the Indemnifying Party in accordance with the provisions hereof prior to the expiration of the relevant time period, (b) each covenant and agreement of the Parties contained in this Agreement which by its terms requires performance after the Closing Date shall survive the Closing and shall remain in full force and effect until such covenant or agreement is fully performed, and (c) the provisions of Section 6.7 and Section 6.8 shall survive the Closing without limit as to time.

Section 11.2 Indemnification Provisions for the Benefit of Buyer .

(a) If the Closing occurs and subject to the other provisions of this Article XI , Seller shall indemnify, defend, save and hold the Buyer Indemnitees harmless from and against any Claims and Losses actually suffered or incurred by them to the extent arising out of or related to:

(i) the breach of any representation or warranty of Seller or the Company contained in this Agreement when made or at and as of the Closing Date (or at and as of such different date or period specified for such representation or warranty) as though such representation and warranty were made at and as of the Closing Date (or such different date or period);

(ii) the breach of any covenants or agreements of Seller contained in this Agreement (other than with respect to the Retained Liabilities and for Taxes, which are covered by clauses (iii) and (iv) below);

(iii) the Retained Liabilities; and

(iv) any and all Taxes, without duplication, (A) imposed on the Company or the Acquired Subsidiary for any Pre-Closing Tax Period (as determined in accordance with Section 7.10(a) for Straddle Periods); (B) for which the Company or the Acquired Subsidiary becomes liable by reason of being a member of any affiliated group (within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of state, local or foreign Tax Law) on or prior to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6 or any analogous or similar state, local, or foreign Tax Law; (C) for which the Company or the Acquired Subsidiary becomes liable by reason of being a transferee or successor of any Person (other than the Company or the Acquired Subsidiary), by contract or pursuant to any Law, with respect to an event or transaction occurring on or before the Closing Date; and (D) which are the responsibility of Seller as described in Section 7.10(g) ; provided, however , (Y) in the case of subclauses (A), (B), (C), or (D), only if and to the extent that such Taxes are in excess of the amount, if any, of such Taxes that are included as a liability and taken into account in the Final Net Working Capital that has been finally determined pursuant to Section 2.6 , and (Z) that Seller shall have no obligation to indemnify the Buyer Indemnitees from and against any Claims and Losses arising out of or related to Taxes described in subclause (A) if such Taxes are attributable to transactions occurring after the Closing outside the ordinary course of business (other than any such transactions specifically contemplated by this Agreement).

Notwithstanding anything in this Agreement to the contrary, all Claims and Losses of the Buyer Indemnitees arising under or related to Environmental Laws (including Third-Party Claims arising under or related to Environmental Laws) shall be governed by the Environmental Agreement and not this Agreement.

(b) No Claim may be asserted nor may any Proceeding be commenced against Seller pursuant to this Section 11.2 unless written notice of such Claim or Proceeding is received by Seller describing in reasonable detail the facts and circumstances with respect to the subject matter of such Claim or Proceeding, and with respect to Claims or Proceedings based on the breach of any representation or warranty, on or prior to the date such representation or warranty ceases to survive as set forth in Section 11.1 ; provided, however , that no Claim may be asserted nor may any Proceeding be commenced by Buyer against Seller arising out of or related to a breach of any representation or warranty of which Buyer had Knowledge on or prior to the Closing Date and for which Buyer failed to deliver a Breach Notice in accordance with Section 6.4 . If a Buyer Indemnitee has recovered any Losses pursuant to one subsection of this Section 11.2(a) , such Buyer Indemnitee shall not be entitled to recover the same Losses under another subsection of this Section 11.2(a) . Notwithstanding the foregoing, a Buyer Indemnitee shall be entitled to seek recovery under such provisions of this Agreement that maximizes its recovery.

(c) No Claim may be made against Seller for indemnification pursuant to clauses (i) or (ii) of Section 11.2(a) with respect to any individual action, occurrence or event subject to the indemnifications thereunder (or group of related actions, occurrences or events) unless (i) such individual action, occurrence or event exceeds $5,000 for a Retail Asset, $25,000 for a Logistics Asset and $100,000 for an asset related to the Refinery (individually, each as applicable, the " De Minimis Amount ") (and in such case, no Loss below such De Minimis Amounts be applied to or considered for purposes of calculating the aggregate amount of the Buyer Indemnitees" Losses) or (ii) such Claim relates to the breach of a Fundamental Representation by Seller.

(d) No Claim may be made against Seller for indemnification pursuant to clauses (i) or (ii) of Section 11.2(a) unless the aggregate amount of all Claims and Losses of the Buyer Indemnitees with respect to clauses (i) and (ii) of Section 11.2(a) (excluding individual Claims and Losses less than the De Minimis Amounts) shall exceed an amount equal to $500,000 (the " Indemnification Deductible "), after which point Seller shall be obligated only to indemnify the Buyer Indemnitees from and against such aggregate Claims and Losses (excluding individual Claims and Losses less than the De Minimis Amounts) in excess of the Indemnification Deductible, provided , that the Indemnification Deductible shall not apply with respect to Losses arising under Section 11.2(a)(i) with respect to a breach of a Fundamental Representation by Seller or the Company.

(e) The maximum amount that Seller shall be required to pay pursuant to clauses (i) and (ii) of Section 11.2(a) in respect of all Claims and Losses by all Buyer Indemnitees shall equal $2,500,000 (the " Indemnification Cap "), after which point Seller will have no Obligation to indemnify the Buyer Indemnitees from and against further such Claims and Losses; provided , however , that with respect to a breach of a Fundamental Representation made by Seller or the Company, the maximum amount of Losses that Buyer will be able to recover from Seller pursuant to Section 11.2(a)(i) shall not be limited by the Indemnification Cap but shall be limited to an amount not to exceed the Base Amount. In addition, Seller shall have as an affirmative defense to any claim for indemnity under Section 11.2(a)(i) arising out of or related to a breach of any representation or warranty of Seller or the Company that Buyer had Knowledge of such breach on or prior to the Closing Date and Buyer failed to deliver a Breach Notice in accordance with Section 6.4 .

(f) Amounts paid by Seller that are counted against or applied toward the Indemnification Deductible or the Indemnification Cap shall not count against and be applied toward the Environmental Deductible and the Indemnification Cap (as such terms are defined in the Environmental Agreement) and vice versa , amounts paid by Seller that are counted against or applied toward the Environmental Deductible or the Environmental Cap shall not count against and be applied toward the Indemnification Deductible and the Indemnification Cap.

(g) Seller's indemnification obligations pursuant to this Agreement shall be reduced in the event and to the extent amounts for such indemnified obligations are taken into account as a liability for purposes of the Final Net Working Capital.

Section 11.3 Indemnification Provisions for the Benefit of Seller .

(a) If the Closing occurs and subject to the other provisions of this Article XI , Buyer agrees to indemnify, defend, save and hold the Seller Indemnitees harmless from and against any Claims and Losses actually suffered or incurred by them to the extent arising out of or related to:

(i) the breach of any representation or warranty of Buyer contained in this Agreement when made or at and as of the Closing Date (or at and as of such different date or period specified for such representation or warranty) as though such representation and warranty were made at and as of the Closing Date (or such different date or period);

(ii) the breach of any covenants or agreements of Buyer contained in this Agreement (other than with respect to employees and employee benefits, Taxes, Multi-Site Contracts, Earnout Payments and Startup Activities, which are covered by clauses (v) through (ix) below, respectively);

(iii) the Company Assumed Liabilities;

(iv) the ownership of the TH Interest, the Company, the Acquired Subsidiary, or the Assets after the Effective Time, or the operation of the Business after the Effective Time (in each case excluding the Excluded Assets and the Retained Liabilities and to the extent such Losses are not indemnifiable by Seller pursuant to Section 11.2 );

(v) any Obligations of Buyer with respect to employees and employee benefits as provided in Section 7.1 through Section 7.7 ;

(vi) (A) the breach of any covenants or agreements of Buyer (or any Affiliate of Buyer, which includes the Companies post-Closing) with respect to Taxes contained in this Agreement, or (B) any Obligations of Buyer (or any Affiliate of Buyer, which includes the Companies post-Closing) with respect to Taxes which are the responsibility of Buyer (or any Affiliate of Buyer, which includes the Companies post-Closing) as provided in Section 7.10 ;

(vii) any Obligations of Buyer with respect to Multi-Site Contracts as provided in Section 7.13 ;

(viii) any Obligations of Buyer with respect to Earnout Payments as provided in Section 2.8 ;

(ix) any Obligations of Buyer with respect to Undelivered Refinery Inventory (including Feedstock Inventory) and Committed Refinery Inventory as provided in Section 2.11 and Section 2.12 .

(x) any Obligations of Buyer with respect to Refinery Turnaround and Startup Activities as provided in Section 6.1 .

Notwithstanding anything in this Agreement to the contrary, all Claims and Losses of the Seller Indemnitees arising under or related to Environmental Laws (including Third-Party Claims arising under or related to Environmental Laws) shall be governed by the Environmental Agreement and not this Agreement.

(b) No Claim may be asserted nor may any Proceeding be commenced against Buyer pursuant to this Section 11.3 unless written notice of such Claim or Proceeding is received by Buyer describing in reasonable detail the facts and circumstances with respect to the subject matter of such Claim or Proceeding, and with respect to Claims or Proceedings based on the breach of representation or warranty, on or prior to the date such representation or warranty ceases to survive as set forth in Section 11.1 . If a Seller Indemnitee has recovered any Losses pursuant to one subsection of Section 11.3(a) , such Seller Indemnitee shall not be entitled to recover the same Losses under another subsection of Section 11.3(a) . Seller and Buyer acknowledge and agree that, with respect to any failure by Buyer to comply with its Obligations with respect to Post-Closing Employees as set forth in Section 7.1 through Section 7.7 , Seller shall be entitled to specific performance of such Obligations by Buyer and immediate injunctive relief, without the necessity of proving the inadequacy of money damages as a remedy.

(c) No Claim may be made against Buyer for indemnification pursuant to clauses (i) or (ii) of Section 11.3(a) : (i) with respect to any individual action, occurrence or event subject to the indemnifications thereunder (or group of related actions, occurrences or events), except for Claims relating to the breach of a Fundamental Representation, unless the aggregate Claims and Losses of Seller Indemnitees with respect thereto exceeds $10,000 (nor shall any Claim or Loss below such threshold be applied to or considered for purposes of calculating the aggregate amount of Seller Indemnitees" Losses) and (ii) unless the aggregate amount of all Claims and Losses of Seller Indemnitees with respect to clauses (i) and (ii) of Section 11.3(a) shall exceed the Indemnification Deductible (after which Buyer shall be obligated only to indemnify Seller Indemnitees from and against aggregate Losses in excess of the Indemnification Deductible), provided , that the Indemnification Deductible shall not apply with respect to Losses arising under Section 11.3(a)(i) with respect to a breach of a Fundamental Representation by Buyer. The maximum amount that Buyer shall be required to pay pursuant to clauses (i) and (ii) of Section 11.3(a) in respect of all Claims and Losses by all Seller Indemnitees shall equal the Indemnification Cap, after which point Buyer will have no Obligation to indemnify Seller Indemnitees from and against further such Claims or Losses; provided , however , that with respect to a breach of a Fundamental Representation made by Buyer, the maximum amount of Losses that Seller will be able to recover from Buyer pursuant to Section 11.3(a)(i) shall not be limited by the Indemnification Cap but shall be limited to an amount not to exceed the Base Amount. Notwithstanding the preceding sentences to the contrary, the provisions of this Section 11.3(c) shall not apply to the indemnification Obligations of Buyer set forth in Section 2.12 , Section 6.6 , Section 6.8 , Section 7.7 , Section 7.9 , Section 7.13 , and Section 7.18 . Additionally, for the avoidance of doubt, any Claims or Losses to be paid by Buyer pursuant to Section 11.3(a)(iii) through Section 11.3(a)(vii) are not subject to the limitations of this Section 11.3(c) .

Section 11.4 Indemnification Procedures; Matters Involving Third Parties .

(a) A Seller Indemnitee or Buyer Indemnitee, as the case may be (for purposes of this Section 11.4 , an " Indemnified Party "), shall give the indemnifying party under Section 11.2 and Section 11.3 , as applicable (for purposes of this Section 11.4 , an " Indemnifying Party "), prompt written notice of any matter which it has determined has given or could give rise to a right of indemnification under this Agreement stating the nature of the Claim and an estimated or actual amount of the Loss, if known, and method of computation thereof, containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however , that the failure to provide such notice shall not release the Indemnifying Party from its Obligations under this Article XI except to the extent, and only to the extent, the Indemnifying Party is prejudiced by such failure or to the extent the survival period, if applicable, expires pursuant to Section 11.1 prior to the giving of such notice.

(b) If any third party shall notify an Indemnified Party with respect to any matter (a " Third-Party Claim ") that may give rise to a claim for indemnification against the Indemnifying Party under this Article XI , then the Indemnified Party shall promptly (and in any event within twenty (20) days after receiving notice of the Third-Party Claim) notify the Indemnifying Party thereof in writing; provided, however , that the failure to provide such notice shall not release the Indemnifying Party from its Obligations under this Article XI except to the extent, and only to the extent, the Indemnifying Party is prejudiced by such failure.

(c) The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume and thereafter conduct the defense of any Third-Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense. In the event that the Indemnifying Party assumes the defense of any Third-Party Claim, subject to Section 11.4(d) , it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party. The Parties shall cooperate in a manner to preserve in full (to the extent possible) the attorney-client and work-product privileges.

(d) The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party unless the judgment or proposed settlement (i) involves only the payment of money damages and does not impose an injunction or other equitable relief upon the Indemnified Party or would not reasonably be expected to have a material adverse effect on the Indemnified Party and (ii) includes as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party a complete release from all liability in respect of such Third-Party Claim and does not involve any admission of wrongdoing by the Indemnified Party or any of its Affiliates.

(e) Unless and until the Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 11.4(c) , the Indemnified Party may defend against the Third- Party Claim in any manner it may reasonably deem appropriate.

(f) In no event will the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld).

(g) If a claim for indemnification against the Indemnifying Party under this Article XI does not relate to a Third-Party Claim (a " Direct Claim "), the Indemnifying Party shall have thirty (30) days after its receipt of notice to respond in writing to such Direct Claim. If the Indemnifying Party does not so respond within such thirty (30) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement with respect to the Losses specified in such notice.

(h) The provisions of Section 11.4(b) through (g) shall not apply to Third Party Claims pertaining to Taxes.

Section 11.5 Determination of Losses .

(a) The Losses giving rise to any indemnification Obligation hereunder shall be reduced by any insurance proceeds actually received by the Indemnified Party as a result of the events giving rise to the claim for indemnification, net of any expenses related to the receipt of such proceeds, including retrospective premium adjustments, if any. The amount of the indemnity payment shall be computed by taking into account the timing of the loss or payment, as applicable, at the Applicable Rate from the date the Indemnified Party provides notice of the Loss to the Indemnifying Party until the date paid. Upon the request of the Indemnifying Party, the Indemnified Party shall provide the Indemnifying Party with information sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section 11.5 .

(b) An Indemnified Party shall take all reasonable steps to mitigate damages in respect of any claim for which it is seeking indemnification and shall use reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof; provided , that an Indemnified Party shall have no Obligation to make a claim for recovery against any insurer of such Indemnified Party with respect to any such Losses.

(c) For purposes of determining whether a breach has occurred and calculating a Loss in connection with a claim for indemnification under this Article XI , each of the representations and warranties that contains any qualifications as to materiality or "Material Adverse Effect" will be determined with regard to such materiality or "Material Adverse Effect" qualifier contained in the terms of such representation and warranty; provided, however , that if the representation or warranty is breached (after taking into consideration such materiality or "Material Adverse Effect" qualifier) then the amount of Losses arising out of such breach will be determined without regards to such materiality or "Material Adverse Effect" qualifier.

Section 11.6 No Multiple Recoveries . Any liability for indemnification hereunder shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty or covenant.

Section 11.7 Limitations on Liability/Exclusive Remedies .

(a) BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR ACTUAL FRAUD, INTENTIONAL MISREPRESENTATION AND INTENTIONAL BREACH, THE REMEDIES SET FORTH IN ARTICLE VII , ARTICLE X , THIS ARTICLE XI (INCLUDING THE LIABILITY LIMITS AND SURVIVAL PERIODS SET FORTH ABOVE AND SUBJECT TO THE DISCLAIMERS SET FORTH IN SECTION 6.7 AND SECTION 6.8 ) AND THE ENVIRONMENTAL AGREEMENT, ARE INTENDED TO BE, AND SHALL BE, THE SOLE AND EXCLUSIVE REMEDIES OF THE BUYER INDEMNITEES WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. IF THE CLOSING OCCURS, EXCEPT FOR THE REMEDIES SET FORTH IN ARTICLE VII , ARTICLE X , AND THIS ARTICLE XI , BUYER HEREBY IRREVOCABLY WAIVES, DISCHARGES AND RELEASES (ON BEHALF OF ITSELF AND THE OTHER BUYER INDEMNITEES), TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL OTHER CLAIMS, OBLIGATIONS AND LOSSES (INCLUDING RIGHTS OF CONTRIBUTION, IF ANY) WHICH EXIST OR MAY ARISE IN THE FUTURE, THAT THE BUYER INDEMNITEES MAY HAVE AGAINST SELLER OR ITS AFFILIATES, AS THE CASE MAY BE, ARISING UNDER OR BASED UPON ANY LAW (INCLUDING ANY SUCH LAW RELATING TO ENVIRONMENTAL LAW OR ARISING UNDER OR BASED UPON ANY SECURITIES LAW, COMMON OR CIVIL LAW OR OTHERWISE) THAT ARE ATTRIBUTABLE TO OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE BUSINESS, THE ASSETS, THE TH INTEREST, THE COMPANY OR THE ACQUIRED SUBSIDIARY.

(b) SELLER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR ACTUAL FRAUD, INTENTIONAL MISREPRESENTATION AND INTENTIONAL BREACH, THE REMEDIES SET FORTH IN ARTICLE VII , ARTICLE X , THIS ARTICLE XI (INCLUDING THE LIABILITY LIMITS AND SURVIVAL PERIODS SET FORTH ABOVE) AND THE ENVIRONMENTAL AGREEMENT, ARE INTENDED TO BE, AND SHALL BE, THE SOLE AND EXCLUSIVE REMEDIES OF THE SELLER INDEMNITEES WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

(c) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR THE ENVIRONMENTAL AGREEMENT, NO PARTY HERETO SHALL BE ENTITLED TO RECOVER FROM ANY OTHER PARTY HERETO OR ANY OF SUCH PARTY's AFFILIATES ANY AMOUNT IN RESPECT OF EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS; EXCEPT , HOWEVER , WITH RESPECT TO ANY OF THE FOREGOING PAID OR OWING TO A THIRD PARTY WITH RESPECT TO A THIRD PARTY CLAIM, WHICH DAMAGES SHALL BE CONSIDERED PART OF LOSSES AND SHALL BE COVERED BY THE INDEMNIFICATIONS SET FORTH IN THIS ARTICLE XI AND THE ENVIRONMENTAL AGREEMENT, AS APPLICABLE.

(d) ALL RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY AND INDEMNITIES IN THIS AGREEMENT AND THE ENVIRONMENTAL AGREEMENT, INCLUDING THOSE IN THIS ARTICLE XI , SHALL APPLY EVEN IN THE EVENT OF THE SOLE, JOINT OR CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF THE PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED OR INDEMNIFIED.

Section 11.8 Governing Law . This Agreement shall be construed (both as to validity and performance), interpreted and enforced in accordance with, and governed by, the Laws of the State of Texas, without regard to conflicts of laws rules or principles as applied in Texas.

Section 11.9 Jurisdiction; Consent to Service of Process; Waiver . Each of the Parties agrees that it shall bring any Proceeding in respect of any claim arising out of or related to this Agreement, whether in tort or contract or at law or in equity, exclusively in any Federal or state court in Harris County, Texas and solely in connection with claims arising under such agreement or instrument or the transactions contained in or contemplated by such agreement or instrument, (i) irrevocably submits to the exclusive jurisdiction of such courts, (ii) waives any objection to laying venue in any such Proceeding in such courts, (iii) waives any objection that such courts are an inconvenient forum or do not have jurisdiction over it and (iv) agrees that service of process upon it may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address specified in Section 12.2 . The foregoing consents to jurisdiction and service of process shall not constitute general consents to service of process in the State of Texas for any purpose except as provided herein and shall not be deemed to confer rights on any Person other than the Parties. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY DISPUTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE RELATED AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 11.9 .

ARTICLE XII
MISCELLANEOUS

Section 12.1 Amendment . This Agreement (including this Section 12.1 ) may not be amended except by an instrument in writing executed and delivered by the Parties. The failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any Party of any condition, or of any breach of any term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other term, covenant, representation or warranty. No course of dealing between or among any Persons having any interest in this Agreement shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.

Section 12.2 Notices . All notices and other communications that are required to be or may be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or by courier or mailed by registered or certified mail (postage prepaid, return receipt requested) or by a national overnight delivery service to the relevant Party at the following addresses or sent by facsimile (with transmission confirmation) to the following numbers:

If to Seller or to the Company (prior to the Closing for the Company), to :

Tesoro Corporation
19100 Ridgewood Parkway
San Antonio, Texas 78259
Attention: Executive Vice President and General Counsel

Fax: (210) 745-4659

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

Norton Rose Fulbright
1301 McKinney, Suite 5100
Houston, Texas 77010
Attention: Daniel L. Mark

Fax: (713) 651-5246

If to Buyer or to the Company (after the Closing for the Company), to :

Par Petroleum Corporation
1301 McKinney, Suite 2025
Houston, Texas 77010
Attention: Chief Financial Officer

Fax: (713) 650-0502

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

Porter Hedges LLP
1000 Main, 36th Floor
Houston, Texas 77002
Attention: E. James Cowen

Fax: (713) 228-1331

or to such other address or facsimile number as any party may, from time to time, designate in a written notice given in accordance with this Section 12.2 . Any such notice or communication shall be effective (i) if delivered in person or by courier, upon actual receipt by or on behalf of the intended recipient, (ii) if sent by facsimile transmission, upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next Business Day after receipt if not received during recipient's normal business hours, or (iii) if mailed in accordance with the foregoing provisions, upon the earlier of the third (3 rd ) Business Day after deposit in the mail or the date of delivery as shown by the return receipt therefor.

Section 12.3 Public Announcements . No Party shall issue or make any press releases or similar public announcements concerning the transactions contemplated hereby or by the Related Agreements without the written consent of Buyer and Seller (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by Law or the rules or regulations of any applicable United States securities exchange or Governmental Authority to which the relevant Party is subject, wherever situated. In the event that a Party believes it is required to issue or make any press release or public announcement, such Party shall (a) give prompt notice thereof to the other Parties, (b) allow such other Parties reasonable opportunity to review and provide comments with respect to the content of such press release or public announcement and (c) use Commercially Reasonable Efforts to incorporate any reasonable comment from any other Party prior to any release or public announcement.

Section 12.4 Expenses . Except as otherwise expressly provided herein, all costs and expenses incurred by Seller or its Affiliates in connection with this Agreement and the transactions contemplated hereby shall be paid by Seller, and all costs and expenses incurred by Buyer or its Affiliates in connection with this Agreement and the transactions contemplated hereby shall be paid by Buyer. For the avoidance of doubt, in the event Buyer elects to obtain title insurance based upon the Title Commitments then all costs and expenses related to such title insurance shall be paid by Buyer.

Section 12.5 Headings . The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 12.6 No Strict Construction . The Parties acknowledge that each of them has been represented by counsel in connection with this Agreement and the transactions contemplated hereby. Notwithstanding the fact that this Agreement has been drafted or prepared by one of the Parties, the Parties confirm that they and their respective counsel have reviewed, negotiated and adopted this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Person and any rule of Law that would require interpretation of any claimed ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived.

Section 12.7 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect, and the invalid, illegal or unenforceable provision shall be reformed to the minimum extent required to render such provision valid, legal and enforceable and in a manner so as to preserve the economic and legal substance of the transactions contemplated hereby to the fullest extent permitted by Law. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

Section 12.8 Assignment . This Agreement shall not be assigned by any Party (including by operation of Law or otherwise) except with the prior written consent of the other Parties. Any purported assignment of this Agreement in violation of this Section 12.8 shall be null and void.

Section 12.9 Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of each Party and its permitted successors and assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; except, that the Seller Indemnitees and the Buyer Indemnitees shall be third party beneficiaries of the indemnifications provided for in Article XI .

Section 12.10 Failure or Indulgence Not Waiver . No failure or delay on the part of any Party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.

Section 12.11 Disclosure Schedules . Any matter disclosed by Seller in the Disclosure Schedules pursuant to any Section of this Agreement shall be deemed to have been disclosed by Seller for purposes of each other Section of this Agreement to which such disclosure is relevant as and to the extent that the relevance of such matter to such other Section is readily apparent on the face of such disclosure. The listing (or inclusion of a copy) of a document or other item in the Disclosure Schedules shall be adequate to disclose an exception to a representation or warranty made herein if the nature and relevance of such exception is readily apparent from the listing (or inclusion of a copy) of such document.

Section 12.12 Time of the Essence . Time is of the essence in this Agreement. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

Section 12.13 Entire Agreement . This Agreement and the Related Agreements (together with the Exhibits, the Disclosure Schedules and the other Schedules hereto and thereto) constitute the entire agreement of the parties hereto and thereto, and supersede all prior agreements and undertakings, both written and oral, among the Parties, with respect to the subject matter hereof (other than the Confidentiality Agreement, which shall continue in full force and effect).

Section 12.14 Confidentiality . For a period of three (3) years following the Closing Date, Seller shall, and shall cause its Affiliates to, hold, and shall use Commercially Reasonable Efforts to cause its or their respective representatives to hold, in confidence any and all information, whether written or oral, that primarily relates to the Companies or the Business, except to the extent that Seller can show that such information (a) is generally available to or known by the public through no fault of Seller, any of its Affiliates or their respective representatives; or (b) is lawfully acquired by Seller, any of its Affiliates or their respective representatives from and after the Closing from sources which are not prohibited, to Seller's Knowledge, from disclosing such information by a legal, contractual or fiduciary obligation. If Seller or any of its Affiliates or their respective representatives are compelled to disclose any such information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information which Seller is advised by its counsel in writing is legally required to be disclosed.

Section 12.15 Specific Performance . Each Party acknowledges that the breach of this Agreement by the other Parties would cause irreparable damage to such Party and that money damages or other legal remedies would not be an adequate remedy for any such damages. Therefore, the Obligations of each Party under this Agreement, including Seller's obligation to sell the TH Interest to Buyer and Buyer's obligation to purchase the TH Interest from Seller, shall be enforceable by a decree of specific performance and appropriate injunctive relief may be applied for and granted in connection therewith, without the requirement to post any bond or security in connection therewith. Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any Party may have under this Agreement or otherwise.

Section 12.16 Counterparts . This Agreement may be executed in multiple counterparts and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Signed counterparts of this Agreement may be delivered by facsimile and by scanned pdf image; provided that each Party uses Commercially Reasonable Efforts to deliver to each other Party original signed counterparts as soon as possible thereafter.

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	TESORO CORPORATION

	By:	/s/ Gregory J. Goff
		Gregory J. Goff,
		President and Chief Executive Officer

	HAWAII PACIFIC ENERGY, LLC
	by PAR PETROLEUM CORPORATION, as its sole member

	By:	/s/ R. Seth Bullock
		R. Seth Bullock,
		Chief Financial Officer

	For the limited purpose of agreeing to be bound by the provisions of Section 2.8 , Section 2.9 , Section 6.15 , Article IV and Article VII to the extent applicable to the Company:

	TESORO HAWAII, LLC

	By:	/s/ Daniel R. Romasko
		Daniel R. Romasko,
		Executive Vice President, Operations

Exhibit 10.2

FIFTH AMENDMENT TO DELAYED

DRAW TERM LOAN CREDIT AGREEMENT

FIFTH AMENDMENT TO DELAYED DRAW TERM LOAN CREDIT AGREEMENT (this “ Amendment ”), dated June 4, 2013 but effective as of 4:00 pm ET on June 4, 2013, by and among Par Petroleum Corporation, a Delaware corporation (the “ Borrower ”), the Guarantors party hereto (the “ Guarantors ” and together with the Borrower, each a “ Credit Party ” and collectively, the “ Credit Parties ”), the undersigned Lenders party hereto, and Jefferies Finance LLC, as administrative agent (the “ Administrative Agent ”).

WHEREAS, the Credit Parties, Jefferies Finance LLC, as administrative agent, and the Lenders party thereto from time to time, entered into that certain Delayed Draw Term Loan Credit Agreement dated as of August 31, 2012 (as amended by the First Amendment dated as of September 28, 2012, as amended by the Second Amendment dated as of November 29, 2012, as amended by the Third Amendment dated as of December 28, 2012, as amended by the Fourth Amendment dated as of April 19, 2013, and as may be further amended, amended and restated, modified, supplemented, extended, renewed, restated or replaced from time to time, the “ Credit Agreement ”);

WHEREAS, the Borrower would like to form a new Subsidiary named Hawaii Pacific Energy, LLC, a Delaware limited liability company (“ NewCo ”), in connection with a contemplated acquisition to occur later this year (“ New Acquisition ”) pursuant to a Target Purchase Agreement (hereinafter defined) and has asked the Lenders for various consents, amendments and waivers to the Loan Documents in connection therewith;

WHEREAS, the Requisite Lenders and the Requisite Tranche B Lenders have agreed to such consents, amendments and waivers subject to the terms and conditions hereof.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms . All capitalized terms used herein (including the recitals hereto) shall have the respective meaning assigned to such terms in the Credit Agreement as amended by this Amendment, unless otherwise defined herein.

2. Amendments .

(a) Amendments to Loan Documents . Notwithstanding any other provisions set forth in the Credit Agreement, the Pledge and Security Agreement and the other Loan Documents, (i) NewCo shall not be required to (A) become a Guarantor or Credit Party under the Credit Agreement or the Loan Documents or otherwise guarantee any of the Obligations under the Credit Agreement and the Loan Documents (or be required to take any action in regards to joining the Loan Documents as a Guarantor, including without limitation, under Section 5.12 of the Credit Agreement), or (B) become a Grantor under the Pledge and Security Agreement or any other Security Instrument or otherwise grant a lien or security interest in any of its property or assets to secure the Obligations (or be required take any action in regards to granting or perfecting such

liens, including without limitation, under Section 5.12 of the Credit Agreement); and (ii) Borrower shall not be required to pledge any of the Equity Interests issued by NewCo to Borrower to secure the Obligations (or be required to take any action in regards to pledging such Equity Interests, including without limitation, under Section 5.12 of the Credit Agreement), provided that, in each case, (A) the New Acquisition is consummated in accordance with the Target Purchase Agreement (hereinafter defined) on or before September 30, 2013 (“ Target Closing ”) and immediately prior to the consummation of the Target Closing, the Administrative Agent shall have received a certificate from a Responsible Officer of Borrower that the Exclusion Conditions (as defined below) all remain satisfied at the time of, and immediately after giving effect to, the Target Closing, (B) NewCo obtains secured financing on terms and conditions satisfactory to the Requisite Lenders and the Requisite Tranche B Lenders and such financing is evidenced by documentation in form and substance satisfactory to Requisite Lenders and the Requisite Tranche B Lenders in conjunction with the Target Closing (“ NewCo Financing ”), (C) after the Target Closing, the NewCo Financing remains in full force and effect or is refinanced with secured financing on terms and conditions and evidenced by documentation satisfactory to Requisite Lenders and the Requisite Tranche B Lenders, (D) the Credit Parties shall not remit any identifiable proceeds of the Tranche B Loans and any other Loans to NewCo for any purpose, (E) none of the Credit Parties shall be permitted to make loans, advances, or capital contributions to, guaranty any obligations of, or make any investment in, or purchase or commit to purchase any stock or other securities or evidences of Debt of or interests in NewCo other than as expressly contemplated to occur at or prior to the Target Closing in accordance with the Target Purchase Agreement, and (F) NewCo does not own any right, title or interest in property and/or assets having a fair market value of in excess of $50,000 at any time prior to the Target Closing (excluding NewCo’s rights and interests under the Target Purchase Agreement and any financing commitment letters that it enters into in connection therewith) (the conditions in clauses (A), (B), (C), (D), (E) and (F) above, collectively, the “ Exclusion Conditions ”). If any of the Exclusion Conditions are not satisfied on or before the date required or are no longer satisfied at any time thereafter, this Section 2 shall immediately become null and void ab initio and the Credit Parties and NewCo shall be required to comply with all applicable provisions in the Loan Documents, including without limitation Section 5.12 of the Credit Agreement, in regards to Borrower’s obligation to pledge NewCo’s Equity Interests to secure the Obligations and NewCo’s obligation to become a Guarantor and Credit Party under the Credit Agreement and the other Loan Documents and a Grantor under the Pledge and Security Agreement and to grant a security interest under each applicable Security Instrument. For purposes hereof, the “ Target Purchase Agreement ” shall mean that certain Membership Interest Purchase Agreement, in the form approved by the Borrower’s board of directors (or a special committee thereof) and consented to by the Requisite Lenders and Requisite Tranche B Lenders, in each case, after the date hereof but prior to the execution of the Membership Interest Purchase Agreement, which Membership Interest Purchase Agreement shall not be amended, restated, modified or supplemented without the consent of the Requisite Lenders and the Requisite Tranche B Lenders.

(b) Amendments to Pledge and Security Agreement . The definition of “Excluded Property” in Section 2 to the Pledge and Security Agreement is hereby amended to include the Equity Interests issued by NewCo, subject to the Exclusion Conditions.

(c) The Lenders’ entry into this Amendment shall not obligate or commit any Lender(s) to provide any other consents or waivers under the Credit Agreement or the other Loan Documents in the future, whether for purposes similar to those described herein or otherwise.

3. Consent.

(a) Administrative Agent, the Requisite Lenders and the Requisite Tranche B Lenders hereby consent to the Borrower’s formation of NewCo, as a new Subsidiary, for the sole purpose of consummating the New Acquisition.

(b) Administrative Agent, the Requisite Lenders and the Requisite Tranche B Lenders waive any notice requirements under Sections 5.17(a)(iii) and 6.16 of the Credit Agreement related to the formation of NewCo.

4. Representations and Warranties . Each of the Borrower and each of the Guarantors hereby confirms, reaffirms and restates the representations and warranties made by it in the Credit Agreement, as amended hereby, and confirms that all such representations and warranties are true and correct in all material respects as of the date hereof. The Borrower and each Guarantor further represent and warrant (which representations and warranties shall survive the execution and delivery of this Amendment) to the Lenders that:

(a) The execution, delivery, and performance by each Credit Party of this Amendment and the consummation of the transactions contemplated hereby, (i) are within such Credit Party’s governing powers, (ii) have been duly authorized by all necessary governing action, (iii) do not contravene (x) such Credit Party’s Organizational Documents or (y) any law or any contractual restriction binding on or affecting such Credit Party, and (iv) will not result in or require the creation or imposition of any Lien prohibited by the Loan Documents;

(b) No consent, order, authorization, or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required for the due execution, delivery, and performance by any Credit Party of this Amendment, or the consummation of the transactions contemplated hereby, except for those consents and approvals that have been obtained, made or waived on or prior to the date hereof and that are in full force and effect;

(c) This Amendment has been duly executed and delivered by such Credit Party and is the legal, valid, and binding obligation of each Credit Party enforceable against such Credit Party in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer, or similar law affecting creditors' rights generally and by general principles of equity; and

(d) No Default or Event of Default has occurred and is continuing.

5. Effect of this Amendment . Except as expressly amended, consented to or waived hereby, the Credit Agreement and the other Loan Documents are ratified and confirmed in all respects and shall remain in full force and effect in accordance with their respective terms. Except as expressly set forth herein, the terms of this Amendment shall not be deemed (i) a waiver of any Default or Event of Default, (ii) a consent, waiver or modification with respect to any term, condition, or obligation of the Borrower or any other Credit Party in the Credit Agreement or any other Loan Document, (iii) a consent, waiver or modification with respect to any other event, condition (whether now existing or hereafter occurring) or provision of the Loan Documents or (iv) to prejudice any right or remedy which the Administrative Agent or any Lender may now or in the future have under or in connection with the Credit Agreement or any other Loan Document.

6. Conditions Precedent .

(a) To Effectiveness of this Amendment . This Amendment shall become effective when, and only when, all Requisite Lenders and Requisite Tranche B Lenders shall have executed this Amendment and the Administrative Agent has received counterparts of this Amendment, duly executed by each Requisite Lender and Requisite Tranche B Lender, the Borrower and each Guarantor (" Amendment Effective Date ").

7. Miscellaneous .

(a) Survival of Representations and Warranties . All representations and warranties made in this Amendment or any other document furnished in connection with this Amendment shall survive the execution and delivery of this Amendment and such other documents, and no investigation by the Administrative Agent or the Lenders or any closing of any transaction shall affect the representations and warranties or the right of the Administrative Agent or the Lenders to rely upon them.

(b) Notices . All notices required to be made under this Amendment shall be made in the manner and at the address set forth in Section 10.2 of the Credit Agreement.

(c) Expenses . The Borrower agrees to pay or reimburse the Administrative Agent and the Lenders for all reasonable fees and out-of-pocket disbursements incurred by the Administrative Agent or the Lenders in connection with the preparation, execution, delivery, administration and enforcement of this Amendment, including without limitation the reasonable fees and disbursements of counsel for the Administrative Agent and the Lenders, to the same extent that the Borrower would be required to do so pursuant to Section 10.4 of the Credit Agreement.

(d) Reference to Credit Agreement . From and after the effectiveness of this Amendment, all references herein to the Credit Agreement shall mean the Credit Agreement as amended hereby and as hereafter modified, amended, restated or supplemented from time to time, and each reference in any other Loan Document to the Credit Agreement shall mean the Credit Agreement as amended hereby and as hereafter modified, amended, restated or supplemented from time to time. The Amendment shall constitute a Loan Document under the Credit Agreement for all purposes.

(e) Reference to Pledge and Security Agreement . From and after the effectiveness of this Amendment, all references herein to the Pledge and Security Agreement shall mean the Pledge and Security Agreement as amended hereby and as hereafter modified, amended, restated or supplemented from time to time, and each reference in any other Loan Document to the Pledge and Security Agreement shall mean the Pledge and Security Agreement as amended hereby and as hereafter modified, amended, restated or supplemented from time to time.

(f) Severability . If any provision of this Amendment is held by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be inapplicable to the extent of such invalidity without affecting the validity or enforceability of the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

(g) Section Headings . Section headings herein are included for convenience of reference only and shall not affect the meaning or interpretation of this Amendment.

(h) Entire Agreement . This Amendment shall be deemed to be a Loan Document and, together with the other Loan Documents and the agreements, documents and instruments contemplated hereby, constitutes the entire understanding of the parties with respect to the subject matter hereof and thereof, and any other prior or contemporaneous agreements, whether written or oral, with respect hereto or thereto are expressly superseded hereby and thereby.

(i) Counterparts . This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by facsimile or .pdf shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by facsimile or .pdf also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

(j) Successors and Assigns . This Amendment shall be binding on and inure to the benefit of the parties hereto and their heirs, beneficiaries, successors and assigns. The Credit Parties may not assign this Amendment or any of their respective rights or obligations hereunder to any Person without the prior written consent of the Requisite Lenders and the Requisite Tranche B Lenders, which consent may be withheld or given in each such Lender’s sole discretion.

(k) Governing Law; Venue; Jury Trial . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE CHOICE OF LAW AND VENUE PROVISIONS SET FORTH IN SECTION 10.12 OF THE CREDIT AGREEMENT, AND SHALL BE SUBJECT TO THE JURY TRIAL WAIVER SET FORTH IN SECTION 10.14 OF THE CREDIT AGREEMENT.

(l) Guarantors . Each Guarantor, for value received, hereby expressly consents and agrees to the Borrower’s execution and delivery of this Amendment, and to the performance by the Borrower of its agreements and obligations hereunder. This Amendment and the performance or consummation of any transaction or matter contemplated under this Amendment, shall not limit, restrict, extinguish or otherwise impair any Guarantor’s liability to the Administrative Agent and Lenders with respect to the payment and other performance obligations of such Guarantor pursuant to the Guarantees. Each Guarantor hereby ratifies, confirms and approves its Guarantee and acknowledges that it is unconditionally liable to the Administrative Agent and Lenders for the full and timely payment of the Guaranteed Obligations (on a joint and several basis with the other Guarantors). Each Guarantor hereby acknowledges that it has no defenses, counterclaims or set-offs with respect to the full and timely payment of any or all Guaranteed Obligations.

[ Remainder of Page Intentionally Left Blank; Signature Pages to Follow ]

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Fifth Amendment to Delayed Draw Term Loan Credit Agreement as of the date first written above.

	BORROWER : PAR PETROLEUM CORPORATION, a Delaware corporation By: R. Seth Bullock R. Seth Bullock Chief Financial Officer
	GUARANTORS : TEXADIAN ENERGY, INC., a Delaware corporation By: R. Seth Bullock R. Seth Bullock Vice President and Treasurer
	PAR PICEANCE ENERGY EQUITY LLC, a Delaware limited liability company PAR UTAH LLC, a Delaware limited liability company EWI LLC, a Delaware limited liability company PAR WASHINGTON LLC, a Delaware limited liability company PAR NEW MEXICO LLC, a Delaware limited liability company HEWW EQUIPMENT LLC, a Delaware limited liability company PAR POINT ARGUELLO LLC, a Delaware limited liability company By: PAR PETROLEUM CORPORATION, a Delaware corporation, as Sole Member of each of the foregoing companies By: /s/ R. Seth Bullock R. Seth Bullock Chief Financial Officer

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

ADMINISTRATIVE AGENT :
JEFFERIES FINANCE LLC By: /s/ J. Paul McDonnell Name: J. Paul McDonnell Title: Managing Director

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

LENDERS(EACH EXECUTING WITH RESPECT TO ITS LOANS AND TRANCHE B LOANS):

WB DELTA, LTD.,

as a Lender

By: /s/ Mark Strefling

Name: Mark Strefling

Title: Director

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

ZCOF PAR PETROLEUM HOLDINGS, L.L.C.,

as a Lender

By: /s/ Jon Wasserman

Name: Jon Wasserman

Title: Vice President

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

WATERSTONE OFFSHORE ER FUND, LTD.,

as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

PRIME CAPITAL MASTER SPC, GOT WAT

MAC SEGREGATED PORTFOLIO, as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE MARKET NEUTRAL MAC51, LTD.,

as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE MARKET NEUTRAL MASTER

FUND, LTD., as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE MF FUND, LTD., as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

NOMURA WATERSTONE MARKET

NEUTRAL FUND LTD., as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE OFFSHORE BLR FUND, LTD.,

as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE DISTRESSED OPPORTUNITIES BLR FUND, LTD.,

as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

WATERSTONE OFFSHORE AD BLR FUND LTD.,

as a Lender

By: Waterstone Capital Management, L.P.

By: /s/ Jeffrey C. Erb

Name: Jeffrey C. Erb

Title: General Counsel

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

HIGHBRIDGE INTERNATIONAL, LLC,

as a Lender

By: Highbridge Capital Management, LLC,

as Trading Manager

By: /s/ Jonathan Segal

Name: Jonathan Segal

Title: Managing Director

Signature Page to Fifth Amendment to Delayed Draw Term Loan Credit Agreement

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)/15d-14(a) PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, William Monteleone, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Par Petroleum Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013

/s/ William Monteleone

William Monteleone

Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, R. Seth Bullock, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Par Petroleum Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013

/s/ R. Seth Bullock

R. Seth Bullock

Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Par Petroleum Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, William Monteleone, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William Monteleone

William Monteleone

Chief Executive Officer

August 14, 2013

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Par Petroleum Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, R. Seth Bullock, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ R. Seth Bullock

R. Seth Bullock

Chief Financial Officer

August 14, 2013