AGREEMENT AND PLAN OF MERGER

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

Dated as of September 20, 2007

among

SUSSER HOLDINGS CORPORATION,

TCFS ACQUISITION CORPORATION,

TCFS HOLDINGS, INC.

and

DAVID LLOYD NORRIS,

as the Shareholder Representative

and

DEVIN LEE BATES, JAMES RANDAL BROOKS,

WYLIE ALVIN NEW and DAVID LLOYD NORRIS

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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LIST OF EXHIBITS

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of September 20, 2007 (this “ Agreement ”), is among Susser Holdings Corporation, a Delaware corporation (“ Parent ”), TCFS Acquisition Corporation, a Texas corporation and an indirect wholly-owned subsidiary of Parent (“ Merger Sub ”), TCFS Holdings, Inc., a Texas corporation (“ Company ”), David Lloyd Norris (the “ Shareholder Representative ”) and Devin Lee Bates, James Randal Brooks, Wylie Alvin New and David Lloyd Norris (the “ Major Shareholders ”).

WHEREAS, Company has an authorized capital of 10,000,000 shares of Common Stock, par value $0.01 per share (“ Company Common Stock ”), of which 4,537,490 shares are issued and outstanding as of the date hereof;

WHEREAS, Merger Sub has an authorized capital of 100 shares of common stock, par value $0.01 per share, all of which shares are issued and outstanding and held by Parent;

WHEREAS, the Board of Directors of Company has received the opinion of Houlihan, Lokey, Howard & Zukin Financial Advisors, Inc. (“ Houlihan Lokey ”) as to the fairness to the Company Shareholders from a financial point of view of the Merger (as defined below);

WHEREAS, the Boards of Directors of each of Parent, Merger Sub, and Company believe that the merger of Merger Sub with and into Company would be advantageous and beneficial to their respective corporations and shareholders;

WHEREAS, prior to the execution and delivery of this Agreement, the requisite shareholders of Merger Sub and Company have, through a written consent, validly approved this Agreement and the transactions contemplated hereby;

WHEREAS, concurrently with the execution and delivery of this Agreement, each of the Major Shareholders shall have entered into a Transition and Noncompetition Agreement with Parent and Company to be effective upon the consummation of the transactions contemplated by this Agreement, substantially in the form of Exhibit A; and

WHEREAS, pursuant to the terms of this Agreement, Merger Sub shall be merged with and into Company and Company shall be the surviving entity (the “ Merger ”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used herein the following terms not otherwise defined have the following respective meanings:

“ Acquisition Proposal ” means any agreement, offer or proposal, including any proposal to Company’s shareholders, relating to or involving (i) any direct or indirect acquisition or purchase from Company or its Subsidiaries or any acquisition by any Person or group of more than a 30% interest in the total issued and outstanding Company Common Stock or any tender offer or exchange offer, recapitalization, share exchange or reorganization that if consummated would result in any Person or group beneficially owning 30% or more of the total issued and outstanding Company Common Stock, (ii) any merger, consolidation, business combination or similar transaction involving Company or its Subsidiaries, or (iii) any sale or disposition of 30% or more of the consolidated assets of Company and its Subsidiaries in any single transaction or series of related transactions (other than in the ordinary course of business and other than dispositions pursuant to sale-leaseback arrangements or similar financing arrangements); provided, however, the term Acquisition Proposal does not include (x) this Agreement, (y) the merger contemplated hereby, or (z) any other offer or proposal by Parent to acquire the businesses and operations contemplated by this Agreement.

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“ Alcohol Filings ” means any application, consent or filing required to be submitted to the Texas Alcohol and Beverage Commission or the New Mexico Regulation and Licensing Department, Alcohol and Gaming Division in order to maintain a license to sell alcohol.

“ Book Value of Undeveloped Land ” means the book value of the undeveloped land as recorded in Company’s most recent balance sheet prepared prior to the Closing, which shall be prepared in accordance with GAAP applied consistently with the application thereof used in the preparation of each of the balance sheets included in the Financial Statements (provided that such amounts will be included in this definition only to the extent not in excess of 5% the estimated amounts set forth on Schedule 1.1 or, if in excess of 5% of such amounts, only to the extent the purchase of such undeveloped land has been consented to in writing by Parent, such consent not to be unreasonably withheld).

“ Business Day ” means any day other than a Saturday, Sunday or a day in which either the Federal Reserve Bank of Dallas, Texas or New York, New York is closed.

“ Capital Expenditure for New/Raze & Rebuild Stores ” means the sum of (i) the amount of the funded cash capital expenditures spent by Company following June 2, 2006 and prior to the Closing Date for new stores, raze and rebuilding of existing stores, and acquisitions of existing stores, which amount shall be determined consistently with the manner in which Company has determined the amount of such funded cash capital expenditures as set forth on Schedule 1.2 (provided that such amounts will be included in this clause (i) only to the extent not in excess of 5% of the estimated amounts set forth on Schedule 1.2 or, if in excess of 5% of such amounts, only to the extent such funded cash expenditures have been consented to in writing by Parent, such consent not to be unreasonably withheld).

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“ Certificates ” means the stock certificates which, immediately prior to the Effective Time, represented shares of Company Common Stock other than Dissenting Shares.

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

“ Company Shareholder ” means any holder of record of shares of Company Common Stock outstanding immediately prior to the Effective Time; provided , however , that the term “Company Shareholder” shall not include any holder of Dissenting Shares.

“ Company Termination Fee ” means the greater of (i) $7,500,000 or (ii) 80% of the amount by which the consideration provided for in an applicable Superior Offer exceeds the aggregate consideration to shareholders of Company pursuant to this Agreement. To the extent the applicable Superior Proposal provides for purchase of less than 100% of Company, such aggregate consideration for purposes of this definition shall be increased such that it will represent the consideration amount implied by such Superior Offer if such Superior Offer were to contemplate the purchase of 100% of Company.

“ Company Transaction Expenses ” means, except as otherwise expressly set forth in this Agreement, the aggregate amount of all out-of-pocket costs, fees and expenses, incurred by or at the direction of, or paid or required to be paid by, Company or any of its Subsidiaries in connection with the process of selling Company or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the transactions contemplated hereby, including (A) any fees associated with filings required by the HSR Act, (B) any fees and expenses associated with obtaining necessary or appropriate waivers, consents or approvals of any Governmental Entity or third parties on behalf of Company or any of its Subsidiaries, (C) any fees or expenses associated with obtaining the release and termination of any Encumbrances; (D) all brokers’ or finders’ fees; and (E) fees and expenses of counsel, advisors, consultants, investment bankers, accountants, and auditors and experts.

“ Contract ” means any contract, agreement, indenture, note, bond, mortgage, loan, lease, license, commitment or other legally binding commitment or obligation, whether written or oral.

“ Debt Payoff Amount ” means the amount of all outstanding Indebtedness of Company for borrowed money under the facilities set forth or required to be set forth in Schedule 4.7(d)(i) of the Company Disclosure Schedule.

“ Electronic Data Room ” means the proprietary extranet(s) or other internet-based network(s), as the same existed as of the date of this Agreement, providing for an online repository of data and information related to Company.

“ Employees ” means any current or former employees of Company or any of the Subsidiaries.

“ Encumbrance ” means any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, proxy, voting trust or agreement, transfer

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restriction under any shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.

“ Environmental Costs and Liabilities ” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages (including punitive damages and consequential damages) reasonable costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or otherwise, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, Order arising under Environmental Law or agreement with any Governmental Entity or other Person, which relates to Environmental Law.

“ Environmental Law ” means any Law relating to the protection of human health and safety, the environment, natural resources or underground or above ground storage tanks, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq .), the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq .), the Clean Water Act (33 U.S.C. § 1251 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .) the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq .), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq .), as each has been or may be amended and the regulations promulgated pursuant thereto, and any regulations or requirements of the Texas Commission on Environmental Quality with respect to properties in Texas, including those at 30 Texas Administrative Code, Chapter 334, and the New Mexico Environmental Department, Petroleum Storage Tank Bureau, including those at 20 New Mexico Annotated Code, Chapter 5.

“ Environmental Permit ” means any Permit required by Environmental Laws for the operation of Company and its Subsidiaries.

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

“ For Cause ” means:

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“ GAAP ” means United States generally accepted accounting principles which are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the applicable fiscal year.

“ Governmental Entity ” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether federal, state, local or foreign, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).

“ Hazardous Material ” means any substance, material or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “ hazardous, ” “ toxic, ” “ pollutant, ” “ contaminant, ” or “ radioactive, ” including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon and urea formaldehyde insulation.

“ Indebtedness ” of any Person means, without duplication, (i) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities arising in the Ordinary Course of Business (other than the current liability portion of any indebtedness for borrowed money)); (iii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (v) all obligations of such Person under interest rate or currency swap transactions (valued at the termination value thereof); (vi) the liquidation value, accrued and unpaid dividends, prepayment or redemption premiums and penalties (if any), unpaid fees or expenses and other monetary obligations in respect of any redeemable preferred stock of such Person; (vii) all obligations of the type referred to in clauses (i) through (vi) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (viii) all obligations of the type referred to in clauses (i) through (vii) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Encumbrance on any property or asset of such Person (whether or not such obligation is assumed by such Person).

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“ Intellectual Property ” means all: (i) patents and patent applications, registrations and disclosures and all related continuations, divisionals, continuations-in-part, reissues, reexaminations, utility models, certificates of invention and design patents, and all improvements thereon, (ii) trademarks, service marks, trade dress, logos, corporate names, trade names and Internet domain names, together with the goodwill associated with any of the foregoing, and all applications and registrations therefor, (iii) copyrights and registrations and applications therefor, works of authorship and moral rights, (iv) confidential and proprietary information, including trade secrets, discoveries, concepts, ideas, research and development, financial, marketing and business data, pricing and cost information, business and marketing plans, algorithms, know-how, formulae, inventions (whether or not patentable), processes, techniques, technical data, designs, drawings, specifications, databases, and customer and supplier lists and information, in each case excluding any rights in respect of any of the items described in this clause (iv) that comprise or are protected by patents and (v) Software.

“ IRS ” means the Internal Revenue Service.

“ Knowledge ” means, (i) with respect to Company, the actual knowledge of Devin Lee Bates, James Randal Brooks, Wylie Alvin New and David Lloyd Norris, (ii) with respect to Parent, the actual knowledge of Sam L. Susser, E.V. Bonner, Jr., Roger D. Smith, Rocky B. Dewbre, Mary E. Sullivan or Ronald D. Coben, (iii) with respect to any other Person that is not an individual, the actual knowledge of such Person’s directors and executive officers and any other manager having primary responsibility relating to the applicable matter or (iv) in the case of an individual, the actual knowledge of such individual.

“ Law ” means any foreign, federal, state or local law (including common law), statute, code, ordinance, rule, regulation, Order or other requirement.

“ Legal Proceeding ” means any judicial, administrative or arbitral action, suit, mediation, investigation, inquiry, proceeding or claim (including any counterclaim) by or before a Governmental Entity.

“ Liability ” means any debt, loss, damage, adverse claim, fines, penalties, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, matured or unmatured, determined or determinable, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise), and including all costs and expenses relating thereto including all fees, disbursements and expenses of legal counsel, experts, engineers and consultants and costs of investigation.

“ Lottery Filings ” means any application, consent or filing required to be submitted to the Texas Lottery Commission or the New Mexico Lottery Authority in order to maintain a license to sell lottery or “ scratch-off ” tickets.

“ Material Adverse Effect ” means a material adverse effect on (i) the business, assets, properties, results of operations or financial condition of Company and its Subsidiaries (taken as a whole) or (ii) the ability of Company to consummate the transactions contemplated by this Agreement, other than an effect resulting from an Excluded Matter. “ Excluded Matter ” means any one or more of the following, except to the extent any of the following may reasonably be

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expected to impact Company and its Subsidiaries disproportionately as compared to other companies in the same industry: (i) the effect of any change in the United States or foreign economies or securities or financial markets in general; (ii) the effect of any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (iii) any effect resulting from any party hereto taking any action contemplated or required by this Agreement (except that the “ Excluded Matters ” described in this clause (iii) shall not apply with respect to the consummation of the transactions contemplated by this Agreement in the case of any representation, warranty or covenant that relates specifically to the consummation of the transactions contemplated by this Agreement) or (iv) any effect resulting from the public announcement of this Agreement or the public announcement of the transactions contemplated hereby.

“ Order ” means any order, injunction, judgment, doctrine, decree, ruling, writ, assessment or arbitration award of a Governmental Entity.

“ Ordinary Course of Business ” means the ordinary and usual course of day-to-day operations of the business of Company and its Subsidiaries through the date hereof consistent with past practice.

“ Permits ” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Entity.

“ Permitted Encumbrances ” means (i) all defects, exceptions, restrictions, easements, rights of way and Encumbrances disclosed in schedule B of policies of title insurance that have been delivered to Parent (other than liens securing Indebtedness); (ii) customary and routine minor title defects, exceptions, restrictions, easements, rights of way and other similar encumbrances that would be listed as exceptions on a policy of title insurance, provided such Encumbrances do not and will not adversely affect the current use of the Owned Property affected thereby or the future continued use thereof and do not constitute liens for the future payment of money or claims for unpaid money; (iii) statutory liens for current Taxes, levies, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings provided an appropriate reserve has been established therefor in the Financial Statements in accordance with GAAP; (iv) mechanics’, materialmans’, suppliers’, vendors’, carriers’, workers’, and repairers’ Encumbrances arising or incurred in the Ordinary Course of Business that are not material to the business, operations and financial condition of Company Property so encumbered and that are not resulting from a breach, default or violation by Company or any of its Subsidiaries of any Contract or Law; (v) roadway, highway, zoning, building, entitlement and other land use and environmental regulations, laws or ordinances relating to the use or occupancy of the Owned Property by any Governmental Entity, provided that such regulations, laws or ordinances are not violated by the current use or occupancy of such Owned Property; (vi) unrecorded leases, licenses and operating agreements affecting the Owned Property which do not, individually or in the aggregate, materially and adversely affect the current use of the Owned Property by Company or its Subsidiaries; (vii) worker’s or unemployment compensation liens arising in the Ordinary Course of Business;

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(viii) all valid restrictions, easements, rights of way and encumbrances (other than liens securing Indebtedness) granted by Company or any of its Subsidiaries that affect the Owned Property, or any portion thereof, and which are filed of record in the real property records of the counties where the Owned Property is located and (ix) Encumbrances listed on Schedule 4.11(a) (other than those noted on Schedule 4.11(a) as being discharged prior to Closing).

“ Person ” means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Entity or other entity.

“ Prepayment Penalties and Debt Defeasance Costs ” means all prepayment penalties, debt defeasance costs or other amounts required to be paid (other than principal and accrued interest) by Company or any of its Subsidiaries in order to extinguish the Debt Payoff Amount in full on the Closing Date and any fees or other payments required for the release (and recording thereof) of any security interest securing the Debt Payoff Amount.

“ Release ” means, with respect to Hazardous Materials, any release, spill, emission, leaking, pumping, poring, injection, deposit, dumping, emptying, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, or into or out of any property.

“ Remedial Action ” means all actions including any capital expenditures undertaken to (i) clean up, remove, treat or in any other way address any Hazardous Material; (ii) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material so it does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (iv) to correct a condition of noncompliance with Environmental Laws.

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

“ Software ” means any and all computer programs, whether in source code or object code; databases and compilations, whether machine readable or otherwise; descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and all documentation including user manuals and other training documentation related to any of the foregoing.

“ Storage Tank Filings ” means any application, consent or filing required to be submitted to the Texas Commission on Environmental Quality or the New Mexico Environment Department in order to maintain the oil and gas storage tank registrations of Company.

“ Subsidiary ” means any Person of which (i) a majority of the outstanding share capital, voting securities or other equity interests are owned, directly or indirectly, by Company or (ii) Company is entitled, directly or indirectly, to appoint a majority of the board of directors, board of managers or comparable body of such Person.

“ Superior Offer ” means, with respect to Company, an unsolicited, bona fide written offer made by a third party for an Acquisition Proposal (except that references to “ 30% ” in clauses (i) and (iii) of the definition of “ Acquisition Proposal ” shall be deemed to be a reference to

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“ 50% ”) on terms that the Company Board has in good faith concluded (after consultation with its outside legal counsel and its financial advisor), taking into account, among other things, all legal, financial, regulatory and other aspects of the offer and the Person making the offer, to be more favorable to Company’s shareholders (in their capacities as shareholders) from a financial point of view than those contemplated by this Agreement (including any proposed alterations to this Agreement submitted in writing by Parent in response thereto) and is reasonably capable of being consummated without undue delay.

“ Taxes ” means (i) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, escheat, abandoned/unclaimed property, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority in connection with any item described in clause (i) and (iii) any liability in respect of any item described in clause (i) or (ii) payable by reason of contract, assumption, transferee liability, operation of Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision of Law) or otherwise.

“ Taxing Authority ” means the IRS and any other Governmental Entity responsible for the administration of any Tax.

“ Tax Return ” means any return, report or statement filed or required to be filed with respect to any Tax (including any elections, declarations and schedules and attachments thereto) including any information return, claim for refund, amended return or declaration of estimated Tax.

“ Unamortized Loan Costs ” means the unamortized loan costs that remain on Company’s books for income Tax purposes from debt incurrence by Company in 1999 that, in the reasonable opinion of counsel for Parent, are currently deductible for income Tax purposes.

Section 1.2 Terms Defined Elsewhere in this Agreement . For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

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Section 1.3 Other Definitional and Interpretive Matters .

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(i) Calculation of Time Period . When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

(ii) Dollars . Any reference in this Agreement to “ $ ” shall mean U.S. dollars.

(iii) Exhibits/Schedules . The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

(iv) Gender and Number . Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(v) Headings . The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Article” or “Section” are to the corresponding Article or Section, respectively, of this Agreement unless otherwise specified.

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(vi) Herein . The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

(vii) Including . The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

ARTICLE II

THE MERGER

Section 2.1 Closing and Effective Date of Merger . Subject to and upon the terms and conditions set forth in this Agreement, the closing of the transactions contemplated under this Agreement (the “ Closing ”) will be held at 10:00 a.m. (Dallas time) on a date to be specified by the parties, which date shall be no later than the third Business Day after satisfaction or waiver of the conditions set forth in Articles 8 , 9 and 10 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), at the offices of Weil, Gotshal & Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201, unless another time, date or place is agreed to in writing by the parties hereto (the date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date ”). On the Closing Date, Company shall cause to be definitively executed the Articles of Merger substantially in the form of Exhibit B attached hereto (the “ Articles of Merger ”), and cause such document to be filed with the Secretary of State of the State of the Texas in order to cause the Merger to become effective under, and in accordance with, the applicable provisions of the Texas Business Corporation Act (the “ TBCA ”) and this Agreement. The Merger shall become effective on the date and at the time of filing of the Articles of Merger with the Secretary of State of the State of Texas (the “ Effective Time ”). For all purposes, all of the document deliveries and other actions to occur at the Closing will be conclusively presumed to have occurred at the same time, immediately before the Effective Time.

Section 2.2 Terms and Conditions of Merger . At the Effective Time, pursuant to this Agreement and the Articles of Merger, automatically and without further action:

(a) Merger Sub shall be merged with and into Company and the separate existence of Merger Sub shall cease.

(b) Company shall continue as the surviving corporation in the Merger (the “ Surviving Corporation ”).

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(c) The Merger shall have the effects set forth in this Agreement and the applicable provisions of the TBCA.

(d) All of the estate, properties, rights, privileges, powers and franchises of Company and Merger Sub and all of their property, real, personal and mixed, and all debts due on whatever account to either of Company or Merger Sub shall vest in the Surviving Corporation, without further act or deed, except as contemplated by this Agreement.

(e) The Surviving Corporation shall be responsible for all of the liabilities and obligations of each of Company and Merger Sub and the liabilities of Company and Merger Sub shall not be affected nor shall the rights of creditors thereof or of any Persons dealing with Company or Merger Sub be impaired.

(f) The Articles of Incorporation of Company, as in effect immediately prior to the Effective Time, shall be amended in the Merger to be in the form of Exhibit C hereto and, as so amended, such Articles of Incorporation shall be the Articles of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

(g) At or prior to the Effective Time, Company shall cause its by-laws to be amended, as of the Effective Time, to read in their entirety as set forth in Exhibit D hereto and, as so amended, such by-laws shall be the by-laws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

(h) From and after the Effective Time, the Board of Directors of the Surviving Corporation will consist of the individuals set forth on Schedule 2.2(h) . Each such Director will hold office, subject to the applicable provisions of the Articles of Incorporation and the By-Laws of the Surviving Corporation, until the next annual meeting of shareholders of the Surviving Corporation and until his or her successor shall be duly elected or appointed and shall duly qualify. If, at or after the Effective Time, a vacancy shall exist in the Board of Directors by reason of death or inability to act, or for any other reason, such vacancy may be filled in the manner provided in the By-Laws of the Surviving Corporation.

(i) The individuals to be identified in writing by Parent prior to the Closing shall be the officers of the Surviving Corporation and shall act as such and hold the offices set forth opposite their names until their respective successors are duly elected or appointed and qualified. If, at or after the Effective Time, a vacancy shall exist in any of the offices of the Surviving Corporation by reason of death or inability to act, or for any other reason, such vacancy may be filled in the manner provided in the By-Laws of the Surviving Corporation.

(j) Each issued and outstanding share of the capital stock of Merger Sub shall be converted into and represent the right to receive one share of common stock, par value $0.01 per share, of the Surviving Corporation, whereupon Parent shall own all of the issued and outstanding capital stock of the Surviving Corporation.

(k) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) any Dissenting Shares and (ii) any shares of Company Common Stock held as treasury stock by Company) shall become and be converted into the right

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to receive (A) an amount in cash equal to the Per Share Closing Purchase Price, plus (B) (subject to the provisions of Section 2.5 below and the Escrow Agreement) an amount in cash equal to the Per Share Escrow Amount and the Per Share Initial Escrow Release Amount.

(l) Each share of Company Common Stock held as treasury stock by Company shall be cancelled, retired and cease to exist, and no payment shall be made with respect thereto.

Section 2.3 Calculation of Per Share Closing Purchase Price . For purposes of this Agreement, the term “ Per Share Closing Purchase Price ” means (a) $188,670,430 plus (i) the Book Value of Undeveloped Land plus (ii) the Capital Expenditures for New/Raze & Rebuild Stores, plus (iii) an amount equal to twenty-five percent (25%) of the sum of the Prepayment Penalties and Debt Defeasance Costs and the Unamortized Loan Costs (but in no event will the amount determined pursuant to this clause (iii) be more than $10,000,000), minus (iv) the Company Transaction Expenses, minus (v) the Prepayment Penalties and Debt Defeasance Costs, minus (vi) the amount expended for any equity repurchases or shareholder distributions by Company after June 2, 2007 (except that if the Closing has not occurred on or before December 21, 2007, other than any shareholder distributions made after December 21, 2007 not in excess in the aggregate of $0.35 per share, reduced appropriately on a per share basis to the extent any additional shares of Company Common Stock are issued following the execution and delivery of this Agreement) and prior to the Closing, minus (vii) income Taxes of Company and the Subsidiaries accrued through June 2, 2007 but not yet paid as of such date (such amount calculated pursuant to clause (a) of this Section 2.3 being the “ Closing Purchase Price ”) divided by (b) the total number of shares of Company Common Stock outstanding immediately prior to the Effective Time (the “ Total Company Shares ”). No later than two (2) Business Days prior to the Closing Date, Company shall deliver to Parent a certificate executed by Company’s chief executive officer and chief financial officer, setting forth a calculation of each item referred to in the immediately preceding sentence which is relevant for purposes of determining the Closing Purchase Price. Such certificate shall be accompanied by such documentation and other evidence (including, in the case of the Company Transaction Expenses, releases or other documentation from third party providers as to the total amounts due to such providers in connection with the transactions contemplated hereby; provided, that Company shall not be required to deliver documentation containing attorney-client privileged information), reasonably satisfactory to Parent to enable Parent to confirm such calculations. The Closing Purchase Price will be based on such certified calculations as reasonably confirmed by Parent.

Section 2.4 Payment for Stock; Payment of Debt Payoff Amount; Procedures .

(a) At the Closing, Parent, the Surviving Corporation, the Shareholder Representative and third party agent reasonably satisfactory to Parent, Company and the Shareholder Representative that is in the business of functioning as a cash exchange agent, in its capacity as cash exchange agent (in such capacity, the “ Exchange Agent ”), shall execute and deliver a Cash Exchange Agreement in a form that is reasonably acceptable to Parent and the Shareholder Representative (the “ Cash Exchange Agreement ”).

(b) If the Merger is consummated, then, at the Closing Parent shall deliver to the Exchange Agent an amount equal to the Closing Purchase Price, and the Exchange Agent shall, as soon as practicable after the Effective Time, pay and distribute to each Company Shareholder

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the portion of the Closing Purchase Price to which such Company Shareholder is entitled pursuant to Section 2.2(k) hereof. The payment and distribution by the Exchange Agent of the Closing Purchase Price shall be effected pursuant to, and in accordance with, the provisions of this Section 2.4 and the Cash Exchange Agreement.

(c) No later than three (3) Business Days prior to the contemplated Closing Date, Company shall use its commercially reasonable efforts to deliver to Parent a debt pay-off letter from each lender under the Contracts set forth or required to be set forth in Schedule 4.7(d)(i) as of Closing in a form reasonably satisfactory to Parent, providing for full release of all obligations of Company and its Subsidiaries and of all applicable security interests, upon payment at Closing of such amounts specified therein (the “ Pay-Off Letters ”), and at Closing, Parent shall deliver to such lenders an amount equal to the Debt Payoff Amount, by wire transfer in immediately available funds, in each case pursuant to the terms of the Pay-Off Letter provided;

(d) As soon as practicable after the Effective Time, Parent and the Surviving Corporation shall cause the Exchange Agent to mail, to each Company Shareholder (i) a notice and a form letter of transmittal (which shall specify that delivery of the Certificate or Certificates held by such Company Shareholder shall be effected, and risk of loss and title to such Certificate or Certificates shall pass, only upon proper delivery of such Certificate or Certificates to the Exchange Agent) and (ii) instructions for use in effecting the surrender of such Certificate or Certificates in order to obtain payment in respect of the shares of Company Common Stock represented thereby. Each Certificate so surrendered shall be duly endorsed or otherwise accompanied by a stock power or other instrument of transfer, in either case in form reasonably satisfactory to the Exchange Agent and Parent. Each Company Shareholder that is the registered holder of a Certificate shall be entitled to receive from the Exchange Agent, upon surrender of such Certificate (together with any other required documents) to the Exchange Agent, payment without interest, of the portion of the Closing Purchase Price to which such Company Shareholder is entitled pursuant to Section 2.2(k) hereof in respect of the number of shares of Company Common Stock represented by such Certificate. Each Certificate that is surrendered pursuant to this Section 2.4(d) shall forthwith be canceled.

(e) In the event any Certificate shall have been lost, stolen or destroyed, upon receipt of appropriate evidence as to such loss, theft or destruction and to the ownership of such Certificate by the Company Shareholder claiming such Certificate to be lost, stolen or destroyed, the receipt by the Exchange Agent of appropriate and customary indemnification, and the receipt by the Exchange Agent of any other required documents (in each case, as reasonably satisfactory to the Exchange Agent and Parent), the Exchange Agent will pay and distribute to such Company Shareholder, without interest, the portion of the Closing Purchase Price to which such Company Shareholder is entitled pursuant to Section 2.2(k) hereof in respect of the number of shares of Company Common Stock represented by such lost, stolen or destroyed Certificate.

(f) Notwithstanding anything in this Agreement to the contrary, in the event that, prior to the Effective Time, any Company Shareholder transfers all of his, her or its beneficial ownership and interest of and in any shares of Company Common Stock to another Person, then any payment to which such Company Shareholder would otherwise be entitled pursuant to the Merger in respect of such shares of Company Common Stock shall be paid to such other person

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and not to such Company Shareholder; provided that (i) such Person surrenders the appropriate Certificate representing such shares of Company Common Stock, duly endorsed or otherwise in proper form for transfer, and (ii) such Company Shareholder shall pay any transfer or other Taxes required by reason of making any such payment to any such Person and such Person not being the registered holder of such Certificate, or such Company Shareholder shall establish to the satisfaction of the Exchange Agent and Parent that any such transfer or other Taxes have been paid or are not applicable.

(g) If any shareholders of Company exercise, perfect and/or reserve their appraisal or dissenters rights pursuant to, and in accordance with, the TBCA and if such shareholders of Company do not withdraw such shareholders’ demand for appraisal prior to the expiration of the period of time during which such shareholders of Company are permitted to effect such withdrawal under the TBCA, then, upon the first anniversary of the Closing Date, the Exchange Agent shall release to Parent the amount by which the Closing Purchase Price exceeds the portion of the Closing Purchase Price to which all Company Shareholders are entitled pursuant to Section 2.2(k) hereof.

Section 2.5 Escrow .

(a) At the Closing Parent shall deposit two letters of credit (each a “ Letter of Credit ”) issued by a bank or other reputable financial institution, each of which Letters of Credit may be drawn upon in the amount of $10,000,000 as described below (the $20,000,000 total amount to be drawn upon under the Letters of Credit being referred to herein as the “ Escrow Amount ”) in escrow pursuant to the terms of an Escrow Agreement in the form of Exhibit E hereto, with such changes thereto as may reasonably be required by the escrow agent thereunder (the “ Escrow Agreement ”) among Parent, Company, the Shareholder Representative and a bank or other financial institution reasonably satisfactory to Parent, Company and the Shareholder Representative, as escrow agent thereunder (in such capacity, the “ Escrow Agent ”).

(b) If any shareholders of Company exercise, perfect and/or reserve their appraisal or dissenters rights pursuant to, and in accordance with, the TBCA and if such shareholders of Company do not withdraw such shareholders’ demand for appraisal prior to the expiration of the period of time during which such shareholders of Company are permitted to effect such withdrawal under the TBCA, then, immediately after the first anniversary of the Closing Date, the Escrow Agent shall deliver to Parent the amount by which the Escrow Amount exceeds the Escrow Funds.

(c) For purposes of this Agreement, the term “ Escrow Funds ” shall mean an amount equal to the product obtained by multiplying the Escrow Amount, without interest, by a fraction, the numerator of which shall be equal to the Total Company Shares less the Dissenting Shares, and the denominator of which shall be equal to the Total Company Shares.

(d) On the first anniversary of the Closing Date, the Escrow Agent will draw upon the first Letter of Credit in the amount of $10,000,000 and will release to the Shareholder Representative (for redistribution to the Company Shareholders, as provided herein), in accordance with the provisions of the Escrow Agreement, an amount in cash equal to .5 multiplied by the Escrow Funds (the “ Initial Escrow Release Amount ”), less the total amount of

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settled and/or pending claims that have been made against the Escrow Funds pursuant to, and in accordance with, the provisions of Article 11 hereof and the Escrow Agreement. In the event that any of the Initial Escrow Release Amount is released to the Shareholder Representative pursuant to the provisions of this Section 2.5(d) , then each Company Shareholder shall be entitled to receive from the Shareholder Representative that portion of any such Initial Escrow Release Amount as shall be equal to (i) the quotient obtained by dividing the amount of any such Initial Escrow Release Amount so distributed by the number of shares of Company Common Stock held by all of the Company Shareholders at the Effective Time (the “ Per Share Initial Escrow Release Amount ”) multiplied by (ii) the total number of shares of Company Common Stock held by such Company Shareholder at the Effective Time. The Shareholder Representative shall be responsible to properly distribute any such amounts to the Company Shareholders, and none of Parent, the Surviving Corporation or the Escrow Agent shall have any responsibility for such distribution, and the Company Shareholders shall look only to the Shareholder Representative with respect to such distribution.

(e) On the second anniversary of the Closing Date, the Escrow Agent will draw upon the second Letter of Credit in the amount of $10,000,000 and will release to the Shareholder Representative (for redistribution to the Company Shareholders, as provided herein), in accordance with the provisions of the Escrow Agreement, an amount in cash equal to the Escrow Funds less the total amount of the Initial Escrow Release Amount and less the total amount of settled and/or pending claims that have been made against the Escrow Funds pursuant to, and in accordance with, the provisions of Article 12 hereof and the Escrow Agreement. In addition, at such time as all claims pending as of the second anniversary of the Effective Time are resolved or paid, if any Escrow Funds remain the Escrow Agent will release such remaining Escrow Funds to the Shareholder Representative (for redistribution to the Company Shareholders, as provided herein) in accordance with the provisions of the Escrow Agreement and this Section 2.5(e) . In the event that any of the Escrow Funds are released to the Shareholder Representative pursuant to the provisions of the first two sentences of this Section 2.5(e) , then each Company Shareholder shall be entitled to receive that portion of any such Escrow Funds as shall be equal to (i) the quotient obtained by dividing the amount of any such Escrow Funds so distributed by the number of shares of Company Common Stock held by all of the Company Shareholders at the Effective Time (the “ Per Share Escrow Amount ”) multiplied by (ii) the total number of shares of Company Common Stock held by such Company Shareholder at the Effective Time. The Shareholder Representative shall be responsible to properly distribute any such amounts to the Company Shareholders, and none of Parent, the Surviving Corporation or the Escrow Agent shall have any responsibility for such distribution, and the Company Shareholders shall look only to the Shareholder Representative with respect to such distribution.

Section 2.6 Dissenting Shares . Notwithstanding any provision of this Agreement to the contrary, with respect to any shares of Company Common Stock held by shareholders of Company who have exercised and perfected and/or reserved their appraisal or dissenters rights (the “ Dissenting Shares ”) in accordance with the TBCA, such Dissenting Shares shall not be converted into or represent the right to receive the consideration payable pursuant to this Agreement upon consummation of the Merger (or any amounts pursuant to Section 2.5 hereof), but, instead, the holders of Dissenting Shares shall be entitled to payment of the appraised value of such Dissenting Shares in accordance with the provisions of the TBCA, unless and to the

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extent that any such holder of Dissenting Shares shall have irrevocably forfeited his, her or its right to appraisal under the TBCA or irrevocably withdrawn his, her or its demand for appraisal. If any such holder of Dissenting Shares has so irrevocably forfeited or withdrawn his, her or its right to appraisal of Dissenting Shares, then, as of the occurrence of such event, such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive the consideration payable in respect of such shares pursuant to this Agreement, which payments shall be made pursuant to the terms of this Agreement, and Parent and Merger Sub shall set aside such amounts as needed to make such payments.

Section 2.7 No Further Transfers . After the Effective Time, there shall be no further registration of transfer on the stock transfer books of Company of any shares of Company Common Stock. If, after the Effective Time, any Certificate is presented (for transfer or otherwise) to the Surviving Corporation or its transfer agent, such Certificate shall be canceled and, subject to the procedures provided for in Section 2.4 hereof, payment shall be made of the consideration provided for in this Agreement in respect of the number of shares of Company Common Stock represented by such Certificate.

Section 2.8 Termination of Rights . After the Effective Time, holders of Company Common Stock will cease to be, and will have no rights as, shareholders of Company, and such holders’ rights will consist only of (a) in the case of shares other than Dissenting Shares, the right to receive the consideration provided for in this Agreement in respect of such shares, and (b) in the case of Dissenting Shares, the rights afforded to the holders thereof under the applicable provisions of the TBCA. Until surrendered for cancellation in accordance with the provisions of this Article 2, each stock certificate representing shares of Company Common Stock shall, from and after the Effective Time, represent (i) in the case of shares other than Dissenting Shares, the right to receive the consideration provided for in this Agreement in respect of such shares and (ii) in the case of Dissenting Shares, the rights afforded to the holders thereof under the applicable provisions of the TBCA.

Section 2.9 No Liability . Notwithstanding anything to the contrary in this Agreement, none of the Exchange Agent, the Surviving Corporation or any party hereto shall be liable to a holder of shares of Company Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

Section 2.10 Appointment of Shareholder Representative .

(a) In order to efficiently administer the transactions contemplated hereby, Company hereby designates David Lloyd Norris as the Shareholder Representative. The right of any Company Shareholder to receive all or any portion of the Per Share Initial Escrow Release Amount or the Per Share Escrow Amount is subject in all cases to the provisions of this Section 2.10 . In addition, by virtue of the adoption of this Agreement and the approval of the Merger by the Company Shareholders by written consent in lieu of a meeting pursuant to, and in accordance with, the applicable provisions of the TBCA, each Company Shareholder (regardless of whether or not such Company Shareholder has voted in favor of the approval of this Agreement and the approval of the Merger) that is not a holder of Dissenting Shares hereby agrees that:

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(i) Parent and the Escrow Agent shall be able to rely conclusively on the instructions and decisions of the Shareholder Representative as to the settlement of any claims against the Escrow Funds pursuant to Articles 2 and 11 hereof and the Escrow Agreement, or as to any other actions required or permitted to be taken by the Shareholder Representative hereunder or under the Escrow Agreement or the Cash Exchange Agreement, and no party hereunder shall have any cause of action against Parent, the Escrow Agent or the Exchange Agent to the extent Parent, the Escrow Agent or the Exchange Agent, respectively, has relied upon the instructions or decisions of the Shareholder Representative;

(ii) all actions, decisions and instructions of the Shareholder Representative shall be conclusive and binding upon all of the Company Shareholders and no Company Shareholder shall have any cause of action against the Shareholder Representative for any action taken, decision made or instruction given by the Shareholder Representative under this Agreement, except for fraud or willful misconduct by the Shareholder Representative;

(iii) the provisions of this Section 2.10 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Company Shareholder may have in connection with the transactions contemplated by this Agreement;

(iv) remedies available at law for any breach of the provisions of this Section 2.10 are inadequate; therefore, Parent, Merger Sub and/or the Surviving Corporation shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if either Parent, Merger Sub and/or the Surviving Corporation brings an action to enforce the provisions of this Section 2.10 ; and

(v) the provisions of this Section 2.10 shall be binding upon the executors, heirs, legal representatives, personal representatives, successor trustees, and successors of each Company Shareholder, and any references in this Agreement to a Company Shareholder or Company Shareholders shall mean and include the successors to the Company Shareholders’ rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.

(b) The Company Shareholders hereby authorize the Shareholder Representative to take any and all action as is contemplated to be taken by or on behalf of the Company Shareholders, and to assert the Company Shareholders’ rights granted, pursuant to the terms of this Agreement, the Cash Exchange Agreement and the Escrow Agreement.

(c) The Shareholder Representative may resign such position at any time, effective with respect to each Company Shareholder immediately upon written notice of such resignation delivered to Company by such resigning Shareholder Representative. In the event that David Lloyd Norris, dies, becomes unable or unwilling to perform his responsibilities hereunder or resigns from such position, James Randal Brooks shall fill such vacancy and shall be deemed to be the Shareholder Representative for all purposes of this Agreement and the documents delivered pursuant hereto. In the event that James Randal Brooks, dies, becomes unable or

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unwilling to perform his responsibilities hereunder or resigns from such position, the Shareholder Representative shall by appointed by the Major Shareholders (voting on a per-share-owned-immediately-prior-to-closing basis).

(d) The Shareholder Representative will not be liable to the Company Shareholders for any act taken or omitted by Shareholder Representative as permitted under this Agreement and the post-Closing transactions contemplated hereby, except if such act is taken or omitted in bad faith or by willful misconduct. The Shareholder Representative will also be fully protected against the Company Shareholders in relying upon any written notice, demand, certificate or document that it in good faith believes to be genuine (including facsimiles thereof).

(e) The Company Shareholders agree to indemnify, from and after the Closing, the Shareholder Representative for, and to hold the Shareholder Representative harmless against, any loss, liability or expense incurred without willful misconduct or bad faith on the part of the Shareholder Representative, arising out of or in connection with the Shareholder Representative duties under this Agreement and the transactions contemplated hereby, including costs and expenses of successfully defending the Shareholder Representative against any claim of liability with respect thereto. The Shareholder Representative may consult with counsel of its own choice and will be fully protected for any action taken and suffered by it in good faith and in accordance with the opinion of such counsel.

Section 2.11 Withholding Rights . The Exchange Agent and Parent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of shares of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or under any provision of any state or foreign Law with respect to Taxes. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by the Exchange Agent or Parent, as the case may be.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE MAJOR SHAREHOLDERS

Each Major Shareholder, severally and not jointly, hereby represents and warrants to Merger Sub and Parent that:

Section 3.1 Execution and Delivery of Agreement and Major Shareholder Documents . This Agreement has been, and each of the documents to be executed by such Major Shareholder in connection with the consummation of the transactions contemplated by this Agreement (the “ Major Shareholder Documents ”) will be at or prior to the Closing, duly and validly executed and delivered by such Major Shareholder and, assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement constitutes, and such Major Shareholder Documents when so executed and delivered will constitute, legal, valid and binding obligations of such Major Shareholder, enforceable against such Major Shareholder in accordance with their terms.

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Section 3.2 Conflicts; Consents of Third Parties .

(a) Assuming that all consents, approvals, authorizations and Permits described in Section 3.2(b) have been obtained and all filings and notifications described in Section 3.2(b) have been made and any waiting periods thereunder have terminated or expired, none of the execution and delivery by a Major Shareholder of this Agreement or the Major Shareholder Documents, the consummation by such Major Shareholder of the transactions contemplated hereby or thereby, or compliance by such Major Shareholder with any of the provisions hereof or thereof will conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under any provision of (i) any Contract, or Permit to which such Major Shareholder or Company is a party or by which any of the properties or assets of such Major Shareholder or Company are bound; (ii) any Order of any Governmental Entity applicable to such Major Shareholder or Company or by which any of the properties or assets of such Major Shareholder or Company are bound; or (iii) any applicable Law, except in the case of clauses (i) through (iii), where such conflicts, violations, breaches, defaults, losses or rights would not cause a material adverse impact on the ability of a Major Shareholder to perform his obligations hereunder.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Entity is required on the part of such Major Shareholder in connection with the execution and delivery of this Agreement, the Major Shareholder Documents, the compliance by such Major Shareholder with any of the provisions hereof, or the consummation by such Major Shareholder of the transactions contemplated hereby, except for (i) compliance with the applicable requirements of the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “ HSR Act ”), (ii) Alcohol Filings, (iii) Lottery Filings and (iv) Storage Tank Filings.

Section 3.3 Ownership . Such Major Shareholder is the record and beneficial owner of Company Common Stock indicated as being owned by such Major Shareholder on Schedule 3.3 . Such Major Shareholder has the power and authority to vote such Company Common Stock to authorize this Agreement and the transactions contemplated hereby including the Merger.

Section 3.4 Financial Advisors . Except for Houlihan Lokey, Morgan, Keegan & Co, Inc. and Trefethen & Company, LLC, no Person has acted, directly or indirectly, as a broker, finder or financial advisor for such Major Shareholder in connection with the transactions contemplated by this Agreement and no Person is or will be entitled to any fee or commission or like payment in respect thereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company and the Major Shareholders hereby jointly and severally represent and warrant to Merger Sub and Parent that, except as set forth in the disclosure schedule of Company attached hereto (the “ Company Disclosure Schedule ”):

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Section 4.1 Organization; Good Standing . Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted and as currently proposed to be conducted. Company is duly qualified or authorized to do business as a foreign corporation and is in good standing under the laws of each jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing would not reasonably be expected to have a Material Adverse Effect.

Section 4.2 Authorization of Agreement . Company has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, or instrument or certificate contemplated by this Agreement or to be executed by Company in connection with the transactions contemplated by this Agreement (the “ Company Documents ”), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each of the Company Documents, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized and approved by all required action on the part of Company. This Agreement has been, and each of the Company Documents will be at or prior to the Closing, duly and validly executed and delivered by Company and (assuming due authorization, execution and delivery by the other parties hereto and thereto (other than the Major Shareholders)) this Agreement constitutes, and each of the Company Documents when so executed and delivered will constitute, legal, valid and binding obligations of Company, enforceable against Company in accordance with their respective terms, subject only to the effect, if any, of (i) applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally and (ii) rules of Law governing specific performance, injunctive relief and other equitable remedies. The Company Documents have been duly authorized by unanimous vote of those directors of Company’s Board of Directors. Company’s Board of Directors has unanimously resolved to and has recommended that the shareholders of Company approve this Agreement and has directed (prior to shareholder approval) that this Agreement be submitted to the shareholders of Company for their approval. Further, this Agreement and the agreement and transactions contemplated hereby have been approved by written consent by holders of two-thirds the Company Common Stock. The affirmative approval of two-thirds the holders of the Company Common Stock is the only vote of the holders of any class or series of capital stock of Company necessary to approve or adopt this Agreement and approve the transactions contemplated hereby, including the Merger. Such affirmative vote of the requisite holders of the Company Common Stock has been validly obtained. No other corporate proceedings on the part of Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.

Section 4.3 Conflicts; Consents of Third Parties .

(a) Assuming that all consents, approvals, authorizations and Permits described in Section 4.3(b) have been obtained and all filings and notifications described in Section 4.3(b) have been made and any waiting periods thereunder have terminated or expired, none of the execution and delivery by Company of this Agreement or the Company Documents, the

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consummation of the transactions contemplated hereby or thereby, or compliance by Company with any of the provisions hereof or thereof will conflict with, or result in any violation or breach of, conflict with or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a material benefit under, or give rise to any obligation of Company to make any payment under, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Encumbrance upon any of the properties or assets of Company or any Subsidiary under, any provision of (i) the articles of incorporation and by-laws or comparable organizational documents of Company or any Subsidiary; (ii) any material Contract, or material Permit to which Company or any Subsidiary is a party or by which any of the properties or assets of Company or any Subsidiary are bound; (iii) any Order applicable to Company or any Subsidiary or any of the properties or assets of Company or any Subsidiary; or (iv) any applicable Law, except to the extent such conflict, violation, breach, default, loss or right as would cause a material adverse impact on Company and its Subsidiaries.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Entity is required on the part of Company or any Subsidiary in connection with (i) the execution and delivery of this Agreement, the Company Documents, the compliance by Company with any of the provisions hereof, or the consummation by Company or any subsidiary of the transactions contemplated hereby, or (ii) the continuing validity and effectiveness immediately following the Closing of any material Permit or material Contract of Company or any Subsidiary, except for (A) compliance with the applicable requirements of the HSR Act, (B) the filing of the Articles of Merger with the Secretary of State of the State of Texas pursuant to the TBCA and Section 2.1 hereof, (C) Alcohol Filings, (D) Lottery Filings and (E) Storage Tank Filings.

Section 4.4 Capitalization .

(a) The authorized capital stock of Company consists of 10,000,000 shares of Company Common Stock. As of the date hereof, there are 4,537,490 shares of Company Common Stock issued and outstanding and 1,462,510 shares of Company Common Stock are held by Company as treasury stock. All of the issued and outstanding shares of Company Common Stock were duly authorized for issuance and are validly issued, fully paid and non-assessable and were not issued in violation of any purchase or call option, right of first refusal, subscription right, preemptive right or any similar rights. All of the outstanding shares of Company Common Stock are owned of record by the holders and in the respective amounts as are set forth on Schedule 4.4(a) .

(b) There are no existing option, warrant, call, right or Contract to which any Company Shareholder or Company is a party requiring, and there are no securities of Company outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional shares of capital stock or other equity securities of Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock or other equity securities of Company. There are no obligations, contingent or otherwise, of Company or any Subsidiary to (i) repurchase, redeem or otherwise acquire any shares of Company Common Stock or the capital stock or other equity interests of any

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Subsidiary, or (ii) provide material funds to, or make any material investment in (in the form of a loan, capital contribution or otherwise), or provide any guarantee with respect to the obligations of, any Person. There are no outstanding stock appreciation, phantom stock, profit participation or similar rights with respect to Company or any of its Subsidiaries. There are no bonds, debentures, notes or other Indebtedness of Company or its Subsidiaries having the right to vote or consent (or, convertible into, or exchangeable for, securities having the right to vote or consent) on any matters on which shareholders (or other equityholders) of Company of its Subsidiaries may vote. There are no voting trusts, irrevocable proxies or other Contracts or understandings to which Company or any Subsidiary or any Company Shareholder is a party or is bound with respect to the voting or consent of any shares of Company Common Stock or the equity interests of any Subsidiary.

Section 4.5 Subsidiaries . Schedule 4.5 sets forth the name of each Subsidiary, and, with respect to each Subsidiary, the jurisdiction in which it is incorporated or organized, the jurisdictions, if any, in which it is qualified to do business, the number of shares of its authorized capital stock, the number and class of shares thereof duly issued and outstanding, the names of all shareholders or other equity owners and the number of shares of stock owned by each such shareholder or the amount of equity owned by each such equity owner. Each Subsidiary is a duly organized and validly existing corporation, partnership or other entity in good standing under the laws of the jurisdiction of its incorporation or organization and is duly qualified or authorized to do business as a foreign corporation or entity and is in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing has not had and would not reasonably be expected to have a Material Adverse Effect. Each Subsidiary has all requisite corporate or entity power and authority to own its properties and carry on its business as presently conducted. The outstanding shares of capital stock or equity interests of each Subsidiary are validly issued, fully paid and non-assessable and were not issued in violation of any purchase or call option, right of first refusal, subscription right, preemptive right or any similar right. All such shares or other equity interests represented as being owned by Company or any of its Subsidiaries are owned by them free and clear of any and all Encumbrances. No shares of capital stock are held by any Subsidiary as treasury stock. There is no existing option, warrant, call, right or Contract to which any Subsidiary is a party requiring, and there are no convertible securities of any Subsidiary outstanding which upon conversion would require, the issuance of any shares of capital stock or other equity interests of any Subsidiary or other securities convertible into shares of capital stock or other equity interests of any Subsidiary. Company does not own, directly or indirectly, any capital stock or equity securities of any Person other than its Subsidiaries. There are no material restric