ASSET PURCHASE AGREEMENT

Exhibit 2.1

Execution Copy

ASSET PURCHASE AGREEMENT

By and Between

EQUILON ENTERPRISES LLC
d/b/a
SHELL OIL PRODUCTS US
(Seller)

and

TESORO REFINING AND MARKETING COMPANY
(Buyer)

Purchase and Sale of the Shell Los Angeles Refinery and Related Assets

January 29, 2007

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SCHEDULES

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EXHIBITS

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ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT for the purchase and sale of assets (" Agreement "), is made and entered into as of January 29, 2007, by and between EQUILON ENTERPRISES LLC d/b/a Shell Oil Products US, a Delaware limited liability company (" Seller "), and TESORO REFINING AND MARKETING COMPANY, a Delaware company (" Buye r").

W I T N E S S E T H:

      WHEREAS, Seller is the owner of a crude oil refinery complex commonly known as the Los Angeles Refinery located in the cities of Los Angeles, California and Wilmington, California;

      WHEREAS, Seller desires to sell or cause the sale of the Purchased Assets, as hereinafter defined; and

      WHEREAS, Buyer desires to buy the Purchased Assets on the terms and conditions contained in this Agreement.

      NOW, THEREFORE, in consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, and subject to the conditions hereinafter set forth, the Parties agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATIONS

      1.01 Definitions. Terms that are defined in Sections other than this Section 1.01 of this Agreement shall have the meanings attributed to them where defined. As used in this Agreement, the following terms shall have the meanings set forth below, unless the context otherwise requires:

      "1031 Exchange" has the meaning set forth in Section 14.05.

      "AAA Rules" has the meaning set forth in Section 16.01.

      "Affiliate" means, with respect to any specified 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 specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. It is understood that (i) an entity (hereinafter referred to as the "parent entity") directly "controls" another entity (hereinafter referred to as the "controlled entity") if the parent entity holds shares or equivalent ownership interest or contractual rights carrying more than fifty percent (50%) of the votes exercisable at a general meeting (or its equivalent) of the controlled entity or the right to appoint a majority of the members of the board of directors (or its equivalent) of the controlled entity, and (ii) a parent entity indirectly "controls" a controlled entity if a series of entities can be specified beginning with the parent entity and ending with the controlled entity such that each entity of the series owns, either directly or through one or more entities in the series, more than a fifty percent (50%) interest in a later entity in the series or otherwise holds (directly or indirectly) the rights with respect to the controlled entity.

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      "Agreement" has the meaning set forth in the preamble.

      "Applicable Law" means any applicable statute, law, ordinance, code (including the Code), rule or regulation of any Governmental Authority and any applicable order, decision, injunction, judgment, award and decree or consent of or agreement with any Governmental Authority.

      "Arbitration Notice" has the meaning set forth in Section 16.01.

      "Assumed Liabilities" has the meaning set forth in Section 2.05(a) .

      "Blend Plant Assets" means the Blend Plant Real Property, the Blend Plant Improvements and the Blend Plant Personal Property.

      "Blend Plant Deed" has the meaning set forth in Section 2.08(c) .

      "Blend Plant Improvements" means any and all buildings, structures, fixtures or other improvements owned by or leased to Seller that are attached or affixed to the Blend Plant Real Property including blending units, storage tanks, control houses, loading racks and other facilities.

      "Blend Plant Lease" has the meaning set forth in Section 2.08(b)(v) .

      "Blend Plant Memorandum of Right to Reconveyance" has the meaning set forth in Section 2.08(e)

      "Blend Plant Personal Property" means the lube oil blend plant located on the Blend Plant Real Property and associated lube truck loading rack and lube tankage and all raw material, intermediate product and finished product inventories, all as more particularly described on Schedule 1.01 A, including furnishings, furniture, computer hardware, telecommunications equipment, fittings, machinery, tools, spare parts, apparatus, tanks, meters, pumps, engines, compressors, pipes, valves, connections, regulators, sewers, appliances, signs and all other articles of tangible personal property of every kind whatsoever in all cases owned by or leased to Seller that in the normal course of business are located on the Blend Plant Real Property or are used in or held for use by Seller primarily in the operations of such blend plant.

      "Blend Plant Real Property" has the meaning set forth in Section 2.08(a)(i).

      "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in Los Angeles, California are authorized by law to close.

      "Buyer" has the meaning set forth in the preamble.

      "Buyer Indemnified Party(ies)" has the meaning set forth in Section 13.02.

      "Casualty" means damage to or destruction by fire or other casualty to all or any portion of the Refinery.

      "Claim" means a dispute, claim, or controversy whether based on contract, tort, strict liability, statute or other legal or equitable theory (including any claim of fraud, misrepresentation or fraudulent inducement or any question of validity or effect of an agreement).

      "Claim Notice" has the meaning set forth in Section 13.05.

      "Closing" means the closing of the purchase and sale contemplated hereunder.

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      "Closing Date" means the time and date established for the Closing pursuant to Section 3.01.

      "Closing Date Payment" has the meaning set forth in Section 2.03.

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

      "Commercial Agreements" means the agreements listed in Section 3.02(c)(vii) .

      "Commitments" has the meaning set forth in Section 4.10.

      "Confidentiality Agreement" means that certain Confidentiality Agreement between Seller and Buyer dated August 7, 2006.

      "Confidential Information" has the meaning set forth in Section 17.14(a).

      "Contemplated Transactions" means all of the transactions contemplated by this Agreement, including: (A) the sale of the Purchased Assets to Buyer; (B) the execution and delivery of the Related Agreements; (C) the performance by the Parties of their respective covenants and obligations under this Agreement; and (D) Buyer’s acquisition and ownership of the Purchased Assets. The term "Contemplated Transactions" does NOT include the transactions contemplated by the Retail Asset Purchase Agreement.

      "Contract" means any contract, agreement, commitment, lease or other obligation or arrangement (whether written or oral), and any responsibility, liability, cost or expense of whatever kind or nature relating to the foregoing in all cases that arise out of, or is incurred in connection with, the ownership or use of the Purchased Assets or the Operations, but excluding any Employee Benefit Plan and any Excluded Contract.

      "Defaulting Party" has the meaning set forth in Section 15.06.

      "Deliverable Items" has the meaning set forth in Section 9.08.

      "Dispute" has the meaning set forth in Section 16.01.

      "DOJ" has the meaning set forth in Section 8.01.

      "Effective Time" has the meaning set forth in Section 3.03.

      "Electing Party" has the meaning set forth in Section 14.05.

      "Emissions Credits" means those emissions credits described on Schedule 1.01J .

      "Employee" has the meaning set forth in Section 10.01(c) on Schedule 10.01.

      "Employee Benefit Plan" means any "employee benefit plan", as such term is defined in Section 3(3) of ERISA, whether or not subject to ERISA, and any bonus, incentive or deferred compensation, severance, termination, retention, supplemental unemployment benefit, premium reduction, mortgage assistance, employee loan, change of control, stock option, stock appreciation, stock purchase, phantom stock or other equity-based, performance or other employee or retiree benefit or compensation plan, program, arrangement, agreement, policy or understanding, whether written or unwritten, funded or unfunded, registered or unregistered, that provides or may provide benefits or compensation in respect of any Employee or the beneficiaries or dependents of any such Employee or under which any Employee is

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or may become eligible to participate or derive a benefit and that is or has been established, maintained or contributed to by Seller or its Affiliates.

      "Employment Commencement Date" means the Effective Time, except that in the case of any Transferred Employee who is an Inactive Employee at the Effective Time, "Employment Commencement Date" shall mean the date, if ever, on which such Transferred Employee returns to active employment in the Operations.

      "Equipment" means all furnishings, furniture, computer hardware, telecommunications equipment, fittings, machinery, refining process units, tools, spare parts, apparatus, tanks, meters, pumps, engines, compressors, pipes, valves, connections, regulators, sewers, appliances, signs and all other articles of tangible personal property of every kind whatsoever (excluding Improvements), in all cases owned by or leased to Seller, that in the normal course of business are located on the Real Property or are used in or held for use by Seller primarily in the Operations.

      "ERISA" has the meaning set forth in Section 10.04(a) on Schedule 10.01 .

      "Excluded Assets" means those assets described on Schedule 1.01B.

      "Excluded Contracts" means those contracts described on Schedule 1.01C.

      "Field Inspector" has the meaning set forth in Section 2.06(b).

      "Field Inspector Report" has the meaning set forth in Section 2.06(b)

      "Financial Statements" has the meaning set forth in Section 6.04.

      "Force Majeure Event" means any (l)fire, explosion, casualty or accident; (2) act of God, including epidemic, hurricane, tornado, earthquake, cyclone or flood; (3) war, revolution, civil commotion, act of enemies, blockade, or embargo; or (4) other similar occurrences or acts beyond the reasonable control of a Party, which act or occurrence shall make it impossible for the Party concerned to carry out the obligations of such Party under this Agreement (but lack of financial ability shall not be a Force Majeure Event).

      "FTC" has the meaning set forth in Section 8.01.

      "Governmental Authority" means the United States and any foreign, state, county, city or other political subdivision and any department, commission, board, bureau, agency, commission, officer, official, court, tribunal, arbitrator, board or bureau or other instrumentality thereof and any self-regulatory organization, such as a securities exchange.

      "HGU Unit" means that certain 15 million standard cubic foot per day hydrogen generation unit located on the Refinery Real Property including the unit boiler, steam turbine generator, surface condenser and related equipment and all alterations or additions thereto and modifications or replacements thereof.

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

      "HSE Agreement" has the meaning set forth in Section 3.02(c)(iv).

      "HSE Claim" has the meaning set forth in the HSE Agreement.

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      "HSE Law" has the meaning as set forth in the HSE Agreement.

      "HSE Permit" has the meaning set forth in the HSE Agreement.

      "Hydrocarbon Inventories" means all hydrocarbon inventories owned by Seller as of the Effective Time for use in or resulting from the Operations including each of the following as of the Effective Time (i) all crude oil, blendstock, feedstock and intermediate petroleum products owned by Seller and that are located at the Refinery as of the Effective Time (in each case which shall be measured and valued for all purposes of this Agreement in accordance with Exhibits A-l and A-2) or, to the extent previously agreed in writing by the Parties, that are in transit to the Refinery or held in off-site storage as of the Effective Time but excluding hydrocarbons in process units or in interconnecting lines at the Refinery; (ii) all refined and intermediate product inventories, including petroleum coke and sulfur; and (iii) all additives (excluding additives used by Seller in finished products); but in all cases excluding all finished and unfinished products that have left the Refinery and are en route to any customer (including Seller’s Affiliate(s)) where title has passed to the customer. Hydrocarbon Inventories shall include tank bottoms and heels.

      "Improvements" means any and all buildings, structures, fixtures or other improvements owned by or leased to Seller that are attached or affixed to the Refinery Real Property, the SRP Real Property or the LBT Real Property including process units, storage tanks, control houses, office buildings, laboratory facilities, warehouses, boiler houses, power plants, waste water treatment facilities and other similar facilities (but excluding improvements comprising the Blend Plant Improvements).

      "Inactive Employee" means any Employee not actively at work in the Operations at the Effective Time on account of (1) illness or injury, occupational or otherwise, except where the Employee’s return to work from such illness or injury is reasonably expected at the Effective Time within twelve (12) months of onset of illness or injury, or (2) military service.

      "Indemnified Party" shall refer to the Person or Persons indemnified, or entitled, or claiming to be entitled to be indemnified, held harmless or defended pursuant to this Agreement including a Buyer Indemnified Party and a Seller Indemnified Party.

      "Indemnifying Party" shall refer to the Party having the obligation to indemnify, defend and hold harmless pursuant to this Agreement.

      "Inspector" has the meaning set forth in Section 2.06(c).

      "Intellectual Property" means intellectual and similar property of every kind and nature that is being used in the Operations as of the Effective Time (i) that was licensed by Texaco Inc. and certain of its Affiliates, or Shell Oil Company and certain of its Affiliates to Seller on a non-exclusive basis for Seller’s Use and for which Seller enjoys a right to grant a sublicense to a purchaser of the Purchased Assets or (ii) that is owned by Seller and that Seller has a right to grant a non-exclusive license to Use including patents, patent applications and divisions, continuations, continuations-in-part, extensions and reissues of same, inventions, invention disclosures, copyrights, including registrations and applications to register copyrights, moral rights, formulae, processes, engineering data, designs, know-how, show-how, confidential or proprietary technical information and trade secrets or other similar data or information and Software, but excluding Trademarks.

      "Interim Period" means the period of time from the date of this Agreement until the earlier of the Closing or the termination hereof.

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      "Inventories" means the Hydrocarbon Inventories and the Non-Hydrocarbon Inventories.

      "Inventory Balance" has the meaning set forth in Section 2.06(d).

      "Inventory Deposit" has the meaning set forth in Section 2.06(a).

      "Inventory Notice Date" has the meaning set forth in Section 2.06(c).

      "Inventory Statement" has the meaning set forth in Section 2.06(c).

      "Inventory Value" has the meaning set forth in Section 2.06(c).

      "Judgments" means any judgments, orders, decisions, injunctions, decrees or awards of any federal, state, local or foreign court, arbitrator or administrative or other Governmental Authority.

      "Kinder Morgan Pipeline Histories" means Seller’s rights to capacity on the Kinder Morgan product system to the extent such rights arise directly out of Seller’s historic use of such system, subject to applicable rules on file with appropriate Regulatory Agencies including FERC and CPUC, as follows:

Shell Colton Terminal — Seller’s line time shipping history consideration on the Kinder Morgan system to the Shell Colton Terminal required to support all volumes associated with the "Purchased Premises" and the "Open Dealer Premises" as such terms are defined in the Retail Asset Purchase Agreement, as determined by 2006 pipeline receipt and lifting patterns.

Shell San Diego Terminal — Seller’s line time shipping history consideration on the Kinder Morgan system to the Shell San Diego Terminal required to support all volumes associated with the "Purchased Premises" and the "Open Dealer Premises" as such terms are defined in the Retail Asset Purchase Agreement, as determined by 2006 pipeline receipt and lifting patterns.

      "Known" "Knowledge" or "To the Knowledge of" or "Within the knowledge of" means in the case of Seller, the actual knowledge after reasonable due inquiry of the indicated individuals listed on Schedule 1.01D and, in the case of Buyer, the actual knowledge after reasonable due inquiry of the indicated individuals listed on Schedule 1.01D . For the avoidance of doubt, none of the individuals listed on Schedule 1.01D is personally making any representations or warranties herein.

      "LBT Lease" means that certain Lease dated October 18, 1966 by and between the City of Long Beach and Texaco, Inc., as amended and extended, related to the lease of the LBT Real Property.

      "LBT Real Property" means the tract(s) (or parcel(s)) of land described on Schedule 4.04(c).

      "Licensed Technology Rights" means intellectual and similar property of every kind and nature, except Intellectual Property, licensed by third parties to Seller or its Affiliates before the Effective Time, for the Operations including patents, patent applications and divisions, continuations, continuations-in-part, extensions and reissues of same, inventions, invention disclosures, copyrights, including registrations and applications to register copyrights, moral rights, formulae, processes, engineering data, designs, know-how, show-how, confidential or proprietary technical information and trade secrets or other similar data or information and Software, but excluding all Trademarks.

      "Liens" means any and all liens, mortgages, charges, pledges, security interests, burdens, easements, rights of way, zoning ordinances, mineral exceptions, rights of first offer, rights of first

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refusal, purchase options or other encumbrances of any nature whatsoever, including such as has arisen under any Contracts.

      "Long Beach Terminal" means the docking terminal at the LBT Real Property for the loading or unloading of crude oil or products, all Improvements thereon and all other related Personal Property.

      "Losses" means any and all costs, Claims, losses (but excluding lost profits except to the extent awarded to a non-Affiliate third party), liabilities, fines, penalties, obligations (including corrective and remedial obligations), damages (but excluding any indirect, special, punitive, exemplary and consequential damages other than such damages as may be awarded to a non-Affiliate third party), and expenses (including reasonable legal fees and expenses and reasonable fees and expenses of other consultants, in each case as may be incurred in the investigation or defense of any of the same or in asserting any of their respective rights hereunder).

      "Material Adverse Effect" means the result of any act(s), omission(s), conduct, occurrence(s), condition(s) or situation(s), or any combination thereof, if the same have or could reasonably be expected to, individually or in the aggregate, (a) result in Losses with respect to the value of the Purchased Assets in excess of One Million Dollars ($1,000,000), or (b) if not quantifiable, materially impair the ownership or use of the Purchased Assets or the Operations, each taken as a whole.

      "Mediation Notice" has the meaning set forth in Section 16.01.

      "Non-Hydrocarbon Inventories" means the non-hydrocarbon inventories owned by Seller as of the Effective Time for use in the Operations consisting of (i) chemicals and catalyst inventories located at the Refinery, (ii) any precious metals and other non-hydrocarbon inventories located at the Refinery and held primarily for use in the Operations, and (iii) the stores inventories, including maintenance and capital spares, joints, valves and parts are located (A) at the Refinery and used primarily in the Operations, (B) at any off-site storage facility and used exclusively in the Operations or (C) at any off-site storage facility used in the Operations and at Seller’s other facilities to the extent that such off-site stores inventories can be allocated among the Refinery and Seller’s other facilities in a manner that is fair and equitable.

      "Non-Represented Employee" has the meaning set forth in Section 10.01(b) on Schedule 10.01.

      "Obligations" means any duties, responsibilities, liabilities and obligations, costs and expenses of whatever kind and nature, whether vested, absolute or contingent, primary or secondary, direct or indirect, known or unknown, asserted or unasserted, accrued or unaccrued, liquidated or unliquidated, due or to become due, and whether based in common law or statute or arising under Contract or by action of any Government Authority or otherwise.

      "Operations" means those activities conducted by Seller in the ordinary course of operating the Refinery including activities associated with the intake of crude oil and the distribution of refined products from the Refinery but excluding activities conducted in the operation of Excluded Assets.

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

      "Party" and "Parties" means each of Seller and Buyer and collectively Seller and Buyer.

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      "Permits" means any permits, temporary permits to construct or operate, licenses, approvals, registrations, rights of way, orders, waivers, variances or other authorizations issued or granted by any Governmental Authority.

      "Permitted Encumbrances" means, with respect to the Purchased Assets, any of the following matters:

     (a) such items as set forth in Schedule 1.01E;

     (b) any (i) undetermined or inchoate liens or charges constituting or securing the payment of expenses which were incurred incidental to the conduct of the Operations or the operation, repair, construction, improvement or maintenance of the Purchased Assets and (ii) materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’ or other similar liens, security interests or charges for liquidated amounts arising in the ordinary course of Operations incidental to the conduct of the Operations or the operation, repair, construction, improvement or maintenance of the Purchased Assets, securing amounts the payment of which is not delinquent and that will be paid by Seller in the ordinary course of Operations or, if delinquent, that are being contested in good faith with any action to foreclose or attach any of the Purchased Assets on account thereof properly stayed; provided, that, Seller shall be responsible for, and shall promptly pay when due, all amounts finally determined to be owed that are the subject of such contest, other than amounts which are the obligation of Buyer pursuant to this Agreement;

     (c) any Liens for Taxes not yet delinquent or, if delinquent, that are being contested by Seller or its Affiliates in good faith with any pending action to foreclose any of the Purchased Assets on account thereof properly stayed; provided, that, Seller shall be responsible for, and shall promptly pay when due, all amounts finally determined to be owed that are the subject of such contest, other than amounts which are the obligation of Buyer pursuant to this Agreement;

     (d) any Liens created by Law or which arise from leases, easements, rights-of-way or other real property interests for rental or for compliance with the terms of such leases, rights-of- way or other real property interests, provided all payments by Seller of the debt secured is not delinquent or, if delinquent, is being contested by Seller in good faith in the ordinary course of Operations with any action to foreclose or attach any of the Purchased Assets on account thereof properly stayed; provided, that, Seller shall be responsible for, and shall promptly pay or perform when due, all amounts or obligations finally determined to be owed that are the subject of such contest, other than amounts which are the obligation of Buyer pursuant to this Agreement;

     (e) all reservations of record of minerals (without right of surface entry) in and under or that may be produced from any of the lands constituting part of the Real Property or on which any of the Purchased Assets are located, other than mineral reservations that materially interfere with the Operations;

     (f) all easements, rights-of-way and restrictive covenants of record, and all discrepancies, shortages in area, conflicts in boundary lines, encroachments or protrusions, or overlapping of improvements, defects, irregularities and other matters affecting the Real Property or the Improvements which individually or in the aggregate do not (i) have a Material Adverse Effect on the ordinary operations of the Refinery as conducted by Seller on an historical basis for the twelve (12) months prior to the Closing Date or (ii) have a Material Adverse Effect on the value of the Refinery taken as a whole as of the Closing Date;

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     (g) any defect that has been cured by the applicable statutes of limitations or statutes for prescription;

     (h) any defect affecting (or the termination or expiration of) any easement, right-of-way, leasehold interest, license or other real property interest which has been replaced prior to Closing at Seller’s sole cost by an easement, right-of-way, leasehold interest, license or other real property interest of record constituting part of the Purchased Assets covering substantially the same rights to use the land or the portion thereof used by Seller in connection with the Operations;

     (i) rights reserved to or vested in any Governmental Authority to control or regulate any of the Purchased Assets or the Operations and all Applicable Laws of such authorities, including any building or zoning ordinances and all HSE Laws;

     (k) existing leases, licenses and similar agreements to the extent such constitute assumed Contracts;

     (l) the exposure restrictions contained in the deeds attached hereto as Exhibit B;

     (m) the limitations on use of certain parcels of the Real Property for, inter alia, residential, agricultural and day care uses, all as more particularly described in the deeds attached hereto as Exhibit B;

     (n) acts done or suffered to be done by, and judgments against, Buyer and those claiming by, through or under Buyer;

     (o) any agreement or contract entered into by the Parties in accordance with the terms of this Agreement or the Related Agreements; and

     (p) all matters of record as of the date hereof but excluding any monetary Liens, purchase options and rights of first refusal, excepting there from all Taxes and assessment liens which are not yet due and payable and which shall be prorated at the Closing pursuant to Section 14.02.

      "Person" means any individual, corporation, partnership, association, trust, limited liability company or any other entity or organization, including a Governmental Authority or instrumentality thereof.

      "Personal Property" means the Equipment, Rolling Stock, and other tangible personal property owned or leased by Seller and used or held for use primarily in the Operations (including idle personal property located at the Refinery that has been used primarily in the Operations), as of the Effective Time, including those items set forth in Schedule 1.01F.

      "Pipeline Assets" means (i) those certain intrastate pipelines currently operated by Seller and its Affiliates for the delivery or receipt of feedstock or product to or from the Refinery, whether owned by Seller or any of Seller’s Affiliates, set forth in Schedule 1.01G , and (ii) all related off-site meters and equipment (excluding meters located at Seller’s terminal located in Carson, California).

      "Pipeline Easements" means all easements, licenses and rights of way of Seller described in Schedule 4.04(d).

      "Post-Retirement Funds" has the meaning set forth in Section 10.04(f) on Schedule 10.01.

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      "Processing Unit Real Property" has the meaning set forth in Section 2.08(a)(ii).

      "Purchased Assets" means the properties, assets and rights of every nature, kind and description, tangible and intangible (including goodwill), whether real, personal or mixed, whether accrued, contingent or otherwise and whether now existing or hereafter acquired which are primarily used or held for use by Seller at the Refinery, or in connection with the Operations, as the same may exist on the date hereof and on the Closing Date. For the avoidance of doubt, the term "Purchased Assets" includes the Real Property, the Improvements, the Personal Property, the Pipeline Assets, the Refinery Records, the Emissions Credits, the Kinder Morgan Pipeline Histories, and the Inventories, but excludes the Excluded Assets.

      "Purchase Price" has the meaning set forth in Section 2.03.

      "Real Property" means the Refinery Real Property, the SRP Real Property, the LBT Real Property and the Pipeline Easements.

      "Receiving Party" has the meaning set forth in Section 17.14.

      "Refinery" means the crude oil refinery and related equipment and facilities of Seller located on the Real Property including the Improvements. For the avoidance of doubt, the term "Refinery" includes the Long Beach Terminal, the Wilmington Terminal and the Sulfur Plant, and excludes the Blend Plant Assets.

      "Refinery Collective Bargaining Agreement" has the meaning set forth in Section 10.02 on Schedule 10.01.

      "Refinery Real Property" means the tract(s) (or parcel(s)) of land described on Schedule 4.04(a) together with all easements, appurtenances, rights and leases, and other hereditaments appurtenant to such land and all the estates and rights of Seller in and to such land and all other easements, rights of way, licenses and similar rights used exclusively in connection with the Operations, in each case subject to Permitted Encumbrances. For the avoidance of doubt, the Blend Plant Real Property is not included in the definition of "Refinery Real Property" except to the extent appropriate for purposes of Section 2.08 .

      "Refinery Records" means all operating records and data in the possession of Seller or any of Seller’s Affiliates and relating primarily to and necessary for the Operations subject to Seller’s record retention policy, including all books, records, cost and pricing information, accounting records, supplier lists and records, training materials and equipment, training records (including certifications), maintenance and inspection reports, equipment lists, repair notes and archives, and technical drawings. Notwithstanding the preceding sentence, "Refinery Records" specifically excludes (i) any of Seller’s or its Affiliates’ business plans, strategies and financial records that address or reflect activities outside of the Operations; (ii) any of Seller’s or its Affiliates’ company minute books and records, Tax Returns or other materials that do not pertain to the Purchased Assets or ongoing day-to-day operation of the Operations; (iii) personnel or medical records for which the Transferred Employee’s written consent to the release of such record is not obtained; (iv) hiring exams for Refinery operators; and (v) materials that are subject to any applicable legal privileges.

      "Related Agreements" means the agreements listed in Section 3.02 and any other agreements or documents executed in connection with or as required under this Agreement but excluding the Retail Asset Purchase Agreement and any agreements or documents executed in connection with or as required under the Retail Asset Purchase Agreement.

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      "Represented Employee" has the meaning set forth in Section 10.01 (a) on Schedule 10.01.

      "Retail Asset Purchase Agreement" means that certain Asset Purchase Agreement dated as of even date herewith between Buyer and Seller and relating to the purchase by Buyer from Seller of Seller’s interest in and to approximately 250 retail gasoline stations located in the Southern California region.

      "Retail Closing" has the meaning set forth in Section 11.12.

      "Retained Liabilities" has the meaning set forth in Section 2.05(c).

      "Rolling Stock" means all vehicles, trucks, tractors, trailers, and rail cars, all whether owned, leased or subject to a contract of purchase and sale, or lease commitment, that are primarily used by Seller in the Operations, excluding trucks and trailers used for delivery of refined petroleum products to retail gasoline stations. The rail cars that are included in the term "Rolling Stock" are set forth in Schedule 1.01H.

      "Seller" has the meaning set forth in the preamble.

      "Seller Environmental Policies" has the meaning set forth in Section 7.06.

      "Seller Indemnified Party(ies)" has the meaning set forth in Section 13.01.

      "Seller Threshold Amount" has the meaning set forth in Section 13.09.

      "Severance Benefit" has the meaning set forth in Section 10.04(e) on Schedule 10.01.

      "Software" means computer software including computer programs, applications and databases in any form, including source code and object code, operating systems and specifications, firmware, data, databases, database management code, utilities, graphical user interfaces, menus, images, icons, forms, methods of processing, software engines, platforms, data formats, internet web sites, web content and links, all versions, updates, corrections, enhancements and modifications thereof, and all related documentation, developer notes, comments and annotations.

      "SRP Real Property" means the tract(s) (or parcel(s)) of land described on Schedule 4.04(b) together with all easements, appurtenances, rights and leases, and other hereditaments appurtenant to such land and all the estates and rights of Seller in and to such land, subject to Permitted Encumbrances.

      "Subsidiary" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.

      "Subdivision Condition" has the meaning set forth in Section 2.08(a)(iii).

      "Sulfur Plant" means the sulfur recovery plant at the SRP Real Property and all related Improvements and Personal Property.

      "Taking" means taken by condemnation or eminent domain or by agreement in lieu thereof with any Person authorized to exercise such rights.

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      "Tax Allocation" has the meaning set forth in Section 14.04.

      "Taxes" means all United States federal, state, local or foreign income, profits, gross receipts, windfall profits, severance, real or personal property, intangible property, occupation, production, franchise, capital gains, employment, withholding, social security (or similar), disability, registration, stamp, payroll, goods and services, alternative or add-on minimum tax, or any other taxes, charges, fees, imposts, duties, levies, withholdings or other assessments imposed by any governmental entity, including environmental taxes imposed pursuant to Chapter 38 of the Code, and similar state laws, excise taxes, customs duties, utility, property, sales, use, value added, transfer and fuel taxes, or other like assessment or charge of any kind whatsoever, together with any interest, fines, penalties or additions to tax attributable to or imposed on or in respect thereof imposed by any Governmental Authority, whether or not disputed, including all applicable sales, use, excise, business, occupation or other tax, if any, relating to this or any other service, supply or operating agreement.

      "Tax Return" means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules) including any information return, claim for refund, amended return and declaration of estimated Taxes.

      "Termination Date" has the meaning set forth in Section 15.01.

      "Title Company" has the meaning set forth in Section 8.11.

      "Title Policies" has the meaning set forth in Section 8.11.

      "Title Policy Exceptions" means, with respect to the Real Property:

     (a) all matters of record as of the date hereof that are set forth in Schedule B of the title commitments for the Title Policies but excluding any monetary Liens, purchase options and rights of first refusal, excepting there from all Taxes and assessment liens which are not yet due and payable and which shall be prorated at the Closing pursuant to Section 14.02;

     (b) all discrepancies, shortages in area, conflicts in boundary lines, encroachments or protrusions, or overlapping of improvements, defects, irregularities and other matters affecting the Real Property or the Improvements which individually or in the aggregate do not (i) have a Material Adverse Effect on the ordinary operations of the Refinery as conducted by Seller on an historical basis for the twelve (12) months prior to the Closing Date or (ii) have a Material Adverse Effect on the value of the Refinery taken as a whole as of the Closing Date;

     (c) existing leases, licenses and similar agreements to the extent such constitute Contracts assumed by Buyer;

     (d) acts done or suffered to be done by, and judgments against, Buyer and those claiming by, through or under Buyer; and

     (e) any agreement or contract entered into by the Parties in accordance with the terms of this Agreement or the Related Agreements.

      "Third Party Claim" has the meaning set forth in Section 13.06(a).

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      "Third Party Property" means improvements, equipment, inventory and any other tangible personal property located on the Real Property as of the Effective Time that arc not owned by or leased or rented to Seller, including those items listed on Schedule 1.011.

      "Trademarks" means with regard to Seller and Shell Trademark Management BV: (i) any and all trademarks, trademark registrations, trademark applications, service marks, service mark registrations, service mark applications, trade dress, word marks, word mark registrations, word mark applications and trade names owned by Seller or Shell Trademark Management BV, including the name Shell, and the Shell emblem and logos used by or licensed to Seller in connection with any of the Operations; and (ii) the goodwill of the Operations in connection with which such Trademarks have been used.

      "Transferred Employee" has the meaning set forth in Section 10.03(c) on Schedule 10.01.

      "Transition Services Agreement" has the meaning of Section 8.03.

      "TTA" has the meaning of Section 9.01.

      "Turnaround Activities" has the meaning set forth in Section 6.05.

      "Use" or its derivative words means make, use, have made and sell, offer to sell, import, export and reproduce, distribute, publicly perform, publicly display and make a derivative work.

      "USW" has the meaning set forth in Section 10.02 on Schedule 10.01.

      "WARN Act" has the meaning set forth in Section 10.05(a) on Schedule 10.01.

      "Wilmington Collective Bargaining Agreement" has the meaning set forth in Section 10.02 on Schedule 10.01.

      "Wilmington Terminal" means that certain refined products loading rack terminal commonly referred to as the "Wilmington Terminal" which is located on the Refinery Real Property.

      1.02 Interpretation. Unless expressly provided for elsewhere in this Agreement, this Agreement shall be interpreted in accordance with the following provisions:

               (a) All references herein to Articles, Sections, Exhibits and Schedules are to Articles and Sections of and Exhibits and Schedules attached to and forming part of this Agreement, unless the contrary is specifically stated;

               (b) The headings of the Articles, Sections and subsections of this Agreement and the headings contained in the Exhibits and Schedules hereto are inserted for convenience of reference only and shall not in any way define or affect the meaning, construction, or scope of any of the provisions hereof or thereof;

               (c) 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;

               (d) 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;

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               (e) Except where specifically stated otherwise, any reference to any statute, regulation, rule, or agreement shall be a reference to the same as amended, supplemented or re-enacted from time to time;

               (f) Whenever the words "include," "including." or "includes" appear in this Agreement, they shall be read as if followed by the words "without limitation" or words having similar import;

               (g) Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine, or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa;

               (h) A reference to any agreement or document (including a reference to this Agreement) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the extent prohibited by this Agreement or that other agreement or document;

               (i) A reference to any party to this Agreement or another agreement or document includes the party’s permitted successors and assigns;

               (j) A reference to a writing includes a facsimile transmission of it and any means of reproducing of its words in a tangible and permanently visible form;

               (k) A reference to a statute, regulation or law shall include any amendment thereof or any successor thereto and any rules and regulations promulgated thereunder;

               (1) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

               (m) The term "cost" includes expense and the term "expense" includes cost;

               (n) The word "or" will have the inclusive meaning represented by the phrase "and/or";

               (o) The phrase "and/or" when used in a conjunctive phrase, means any one or more of the Persons specified in or the existence or occurrence of any one or more of the events, conditions or circumstances set forth in that phrase; provided, however, that when used to describe the obligation of one or more Persons to do any act, it means that the obligation is the obligation of each of the Persons but that it may be satisfied by performance by any one or more of them;

               (p) "Shall" and "will" have equal force and effect;

               (q) Unless otherwise specified, 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 in Houston, Texas;

               (r) References to "$" or to "dollars" means the lawful currency of the United States of America; and

               (s) All references to "day" or "days" means calendar days unless specified as a "Business Day".

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ARTICLE II

PURCHASE AND SALE OF THE PURCHASED ASSETS

      2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign, convey, transfer and deliver (or make available pursuant to Section 8.02 or ARTICLE IX), or cause such sale, assignment, conveyance, transfer and delivery by Seller’s Affiliates, to Buyer, as of the Effective Time, and Buyer agrees to purchase and take assignment and delivery from Seller as of the Effective Time, of all of Seller’s right, title and interest in and to the Purchased Assets.

      2.2 Excluded Assets. The Purchased Assets shall not include any Excluded Assets. Without limiting the generality of the foregoing, Seller (or, as applicable, any Affiliate of Seller) shall retain and not sell, convey, transfer or deliver to Buyer, and Buyer shall not purchase or have any rights in, the Excluded Assets. To the extent that any Excluded Assets remain located at the Refinery or any other owned or leased real property constituting part of the Purchased Assets after the Closing Date, (a) with respect to those Excluded Assets Seller will remove from the Refinery, Buyer shall grant to Seller and its Affiliates and their respective representatives reasonable access to such property from and after the Closing Date for a reasonable period of time not to exceed one hundred-eighty (180) days to permit Seller and such persons to review and remove such Excluded Assets and make any other appropriate arrangements with respect thereto, and (b) with respect to those Excluded Assets that will remain at the Refinery, Buyer and Seller will enter into appropriate access agreements (pursuant to Section 7.03) for Seller’s access to such Excluded Assets. Seller agrees that it will consult with Buyer in advance of taking any such actions following the Closing Date with a view towards establishing a mutually agreeable plan for such review and removal so that these actions will not unreasonably interfere with the normal operation of the Refinery.

      2.3 Purchase Price. In consideration for the Purchased Assets and the assets sold and purchased pursuant to the Retail Asset Purchase Agreement: Buyer shall pay and perform the following (collectively, the "Purchase Price"):

          (A) Pay ONE BILLION SIX HUNDRED THIRTY MILLION DOLLARS ($1,630,000,000) (the "Closing Dale Payment"), subject to adjustment pursuant to Section 2.07: plus

          (B) Pay the purchase price for the Hydrocarbon Inventory which shall be determined and paid pursuant to Section 2.06; plus

          (C) Assume and agree to pay and perform and discharge when due the Assumed Liabilities as more particularly set forth in Section 2.05(a).

      2.4 Method of Payment. All amounts to be disbursed pursuant to the terms of this Agreement shall be made in immediately available U.S. funds, by wire transfer (i) to a U.S. bank account designated by Seller or by any other means acceptable to Seller if payable to Seller and (ii) to a U.S. bank account designated by Buyer or by any other means acceptable to by Buyer if payable to Buyer.

      2.5 Assumed Liabilities and Retained Liabilities.

               (a) As of the Effective Time, Buyer shall, without any further action on the part of Buyer or Seller, assume and agree to pay, perform and discharge when due, subject to the other provisions of this Agreement and the Related Agreements, each of the following Obligations

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(collectively, the "Assumed Liabilities" ) (provided that the Assumed Liabilities shall not include the Retained Liabilities):

          (i) all Obligations to the extent arising out of, incurred in connection with or related to the ownership or use of the Purchased Assets or the operation of the Refinery after the Effective Time (excluding all Obligations related to or arising from HSE Laws which are addressed in the HSE Agreement); and

          (ii) all Obligations of Seller or any of its Affiliates to the extent arising out of, incurred in connection with or related to the Contracts (excluding the Excluded Contracts) but only such Obligations for goods or services received by or on behalf of Buyer after the Effective Time or are otherwise performable on or after the Effective Time.

               (b) Buyer is not assuming, nor shall Buyer be deemed to have assumed, any Obligation of Seller or its Affiliates of any kind or nature whatsoever, except as expressly provided in this Section or as otherwise expressly provided for in this Agreement or in the Related Agreements. Without limiting the forgoing, Buyer is not assuming Contracts or Obligations that by their terms are not assignable to Buyer except that the process described in Section 8.02(b) shall be followed where permitted.

               (c) Seller shall retain and agree to pay, perform and discharge when due, subject to the other provisions of this Agreement and the Related Agreements, all Obligations of Seller not specifically assumed by Buyer herein (excluding all Obligations related to or arising from HSE Laws which are addressed in the HSE Agreement) (collectively, the "Retained Liabilities" ).

      2.06 Hydrocarbon Inventory.

               (a) Seller shall make a good faith estimate five (5) Business Days prior to the Closing Date of the estimated value of the Hydrocarbon Inventory as of such date and provide a copy thereof to Buyer setting forth the ownership, types, characteristics and volumes, on a tank, trunk, pipeline or other location basis, of all Hydrocarbon Inventory. Seller shall value the Hydrocarbon Inventory in accordance with the measurement procedures set forth in Exhibit A-l and in accordance with the valuation procedures set forth in Exhibit A-2. Buyer shall be permitted to have representatives present to observe any measurements taken by Seller. At the Closing, Buyer shall pay Seller an amount (the "Inventory Deposit" ) equal to 90% of such estimated Inventory Value as reasonably estimated by Seller five (5) Business Days prior to the Closing Date.

               (b) An independent inspector (the "Field Inspector" ) shall be engaged by agreement of Seller and Buyer. The Field Inspector shall measure the Hydrocarbon Inventory as of Effective Time at the respective locations of the Hydrocarbon Inventory on the Closing Date. The Hydrocarbon Inventory shall be measured by the Field Inspector in accordance with the procedures set forth in Exhibit A-l. The Field Inspector shall issue a written report (the "Field Inspector Report" ) to both Buyer and Seller within ten (10) Business Days after the Closing Date setting forth the volumes and quantities of the Hydrocarbon Inventory as of the Effective Time. The fees and expenses of the Field Inspector shall be borne fifty percent (50%) by Seller and fifty percent (50%) by Buyer.

               (c) As soon as practicable, but in any event no later than ten (10) days following receipt of the Field Inspector Report, Seller shall cause to be prepared and delivered to Buyer a statement, together with supporting calculations and information (the "Inventory Statement" ) setting forth the volume of the Hydrocarbon Inventory as measured by the Field Inspector as of the Effective Time and the value of the Hydrocarbon Inventory (the "Inventory Value" ), which shall be determined in

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accordance with the procedures set forth in Exhibit A-2. Buyer shall give Seller notice of its acceptance of or objection to the computations in the Inventory Statement no later than twenty (20) days following its receipt of the Inventory Statement (the date of Seller’s receipt of such acceptance or rejection, or the expiration of such 20 day period with no notice having been given, shall be the "Inventory Notice Date" ). If Buyer fails to give such notice before the end of such twenty (20) day period, then the Inventory Statement will be deemed final and binding upon the Parties. If Buyer gives such notice to Seller of Buyer’s objection within such twenty (20) days, and Buyer and Seller are unable to resolve the issues in dispute within seven (7) days after delivery of such notice of objection, each of Buyer’s and Seller’s positions with respect to the computation of the Inventory Value will be submitted to an independent and qualified party mutually selected by the Parties (the "Inspector" ) such as an accounting firm or independent inspector, for final resolution. If the computation of the Inventory Value is submitted to the Inspector for resolution, (x) each Party will furnish to the Inspector such work papers and other documents and information relating to the disputed issues as the Inspector may request and are available to that Party, and will be afforded the opportunity to present to the Inspector any material relating to such issues and to discuss the same with the Inspector; (y) the Inspector’s determination or computation of the Inventory Value shall be binding and conclusive on the Parties and will be deemed to be the final Inventory Value (and judgment thereupon may be entered in any court having jurisdiction over the Party against which the same is sought to be enforced); and (z) the fees and expenses of the Inspector for such determination will be borne fifty percent (50%) by Seller and fifty percent (50%) by Buyer.

               (d) If the sum of the Inventory Value minus the Inventory Deposit (the "Inventory Balance" ) is greater than zero, then Buyer shall pay to Seller, without offset or deduction, an amount equal to the Inventory Balance by wire transfer of immediately available funds to such account or accounts of Seller, as may be designated by Seller. If the amount of the Inventory Balance is less than zero, then Seller shall pay to Buyer, without offset or deduction, an amount equal to such deficit by wire transfer of immediately available funds to such account or accounts of Buyer, as may be designated by Buyer. All such undisputed amounts shall be paid by the relevant Party to the other Party within five (5) Business Days of the Inventory Notice Date. All disputed amounts shall be paid by the relevant Party to the other Party within five (5) Business Days of the resolution of such disputed amounts. All amounts payable pursuant to this Section 2.06 (both disputed and undisputed amounts) shall bear interest from and including the date payment is scheduled to be made to, but excluding, the date of payment at a rate per annum equal to ten percent (10%) for the first thirty (30) days such payment is past due and at a rate per annum equal to fifteen percent (15%) for all subsequent periods such payment is past due, in either event not to exceed the maximum rate permitted by Applicable Law. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due.

               (e) Each Party agrees that, following the Closing, it shall not take any actions with respect to the accounting books, records, policies and procedures of itself or its Affiliates that would obstruct or prevent the preparation of the Inventory Statement as provided in this Section 2.06. From the Closing through the final determination of the Inventory Value in accordance with this Section 2.0.6, (i) Seller shall provide Buyer with access at all reasonable times to the personnel and working papers utilized in determining the Inventory Statement for purposes of confirming Seller’s calculation of same and (ii) Seller and Buyer shall provide one another access at all reasonable times to the personnel, properties, and books and records of the Refinery for purposes of determining the Inventory Value, including permitting the Parties and their respective advisors to participate in the taking of the physical inventory. The Parties shall cooperate with each other in the preparation of the Inventory Statement, if requested by another Party.

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               (f) Except as expressly set forth in this Section 2.06 , Buyer and Seller shall each bear its own expenses incurred in connection with the preparation and review of the Inventory Statement.

      2.07 Closing Adjustments. At the Closing, the amount of the Closing Date Payment payable by Buyer shall be adjusted by the following:

               (a) Reduced by an amount equal to the credit, if any, payable pursuant to Section 8.07(b);

               (b) Increased or reduced, as applicable, by an amount, if any, equal to the pro- ration of lease and rental payments pursuant to Section 8.08(a);

               (c) Reduced by an amount, if any, equal to the pro-ration of property Taxes pursuant to Sections 14.02 and 14.03 ;

               (d) Increased or reduced, as applicable, as set forth in the Retail Asset Purchase Agreement; and

               (e) Increased or reduced, as applicable, by any other amounts agreed to in writing by the Parties.

      2.08 Conveyance/Re-Conveyance of Blend Plant Property.

               (a) As used in this Agreement, the following terms shall have the meanings set forth below:

          (i) "Blend Plant Real Property" means that certain portion of the Refinery Real Property labeled as "Parcel 1" on the subdivision map set forth in Schedule 2.08(a) that contains the Blend Plant Personal Property together with all easements, appurtenances, rights and leases, and other hereditaments appurtenant to such land and all the estates and rights of Seller in and to said land.

           (ii) "Processing Unit Real Property" means that portion of the Refinery Real Property other than the Blend Plant Real Property. The Processing Unit Real Property is the portion of the Refinery Real Property labeled as "Parcel 2" on the subdivision map set forth in Schedule 2.08(a) .

          (iii) "Subdivision Condition " means, and such condition shall be satisfied upon the occurrence of, either (i) the recordation of a map approved by the County of Los Angeles, State of California and any other applicable Governmental Authority that subdivides the Refinery Real Property into two parcels one of which shall consist of the Blend Plant Real Property and the other of which shall consist of the Processing Unit Real Property, or (ii) such other action as may be taken or approved by the County of Los Angeles and any other applicable Governmental Authority that allows the land comprising the Processing Unit Real Property to be conveyed independent of the Blend Plant Real Property, or the Blend Plant Real Property to be conveyed independent of the land comprising the Processing Unit Real Property, without violating the California Subdivision Map Act or any other Applicable Law.

               (b) During the Interim Period, Seller will prepare and file an application with the County of Los Angeles, State of California, or any other applicable Governing Authority to separately

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plat the Blend Plant Real Property and the Processing Unit Real Property. Buyer shall have the right to review and approve such application prior to filing (such approval not to be unreasonably withheld, conditioned or delayed). Because of certain public notice, hearing and other legal requirements, the platting process may not be completed by the Closing Date, and therefore, the Subdivision Condition may not be satisfied as of the Closing Date. In the event the Subdivision Condition has not been satisfied as of the Closing Date, then, notwithstanding any provision to the contrary contained in this Agreement, the entire Refinery Real Property (including the Blend Plant Real Property) shall be conveyed to Buyer at the Closing, subject, however to the following agreements:

          (i) from and after the Closing, each of Seller and Buyer shall use commercially reasonable efforts and cooperate with each other to facilitate the satisfaction of the Subdivision Condition as soon as practicable thereafter;

          (ii) Seller shall pay any filing fees and other governmental charges associated with completion of the platting process, including any incremental sales, use, transfer or similar Taxes, fees or charges that arise as a result of this Section 2.08, and shall be responsible for paying for and fulfilling any and all conditions to approval imposed by the County of Los Angeles, State of California, or any other applicable Governing Authority in connection with the subdivision;

          (iii) each Party shall promptly take such action, execute such documents, and do so other things as may be reasonably necessary or expedient to complete the platting requirement and satisfy the Subdivision Condition, provided Buyer shall not incur, except as otherwise provided herein, any costs or obligations in connection therewith;

          (iv) Buyer shall have the right to approve, which shall not be unreasonably withheld, conditioned or delayed, any restrictions or commitments that would materially affect Buyer’s use of the Refinery Real Property after the satisfaction of the Subdivision Condition;

          (v) Buyer and Seller shall enter into and execute and deliver a Blend Plant Lease, substantially in the form of Exhibit D (the "Blend Plant Lease" ) pursuant to which Buyer shall license the Blend Plant Real Property and lease the Blend Plant Improvements to Seller from the Closing Date until the Subdivision Condition has been satisfied; and

          (vi) the Blend Plant Personal Property will be Excluded Assets and the Blend Plant Real Property and the Blend Plant Improvements will not be Excluded Assets until the Subdivision Condition is satisfied.

               (c) Promptly after the Subdivision Condition has been satisfied, Buyer shall execute and deliver to Seller without additional consideration, and Seller shall accept from Buyer, a grant deed (the "Blend Plant Deed" ) covering the Blend Plant Real Property (including the Blend Plant Improvements) in form and content substantially similar to Exhibit B subject only to those matters to which the Blend Plant Real Property was subject on the Closing Date (as modified pursuant to real property rights granted pursuant to Section 2.08(f) and subject to matters created or caused by Seller or any agreement or contract entered into by the Parties pursuant to this Agreement) and such other documents or instruments reasonably requested by Seller to evidence and effect the transfer and assignment to Seller of the Blend Plant Real Property and Blend Plant Improvements. Seller shall pay all recording fees for recording the Blend Plant Deed and such other transfer Taxes and documents.

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               (d) Upon such recording of the Blend Plant Deed, the Blend Plant Lease shall terminate and the Blend Plant Real Property and the Blend Plant Improvements will automatically become Excluded Assets.

               (e) Buyer agrees that it shall not lease the Blend Plant Real Property or the Blend Plant Improvements or grant or create any right, Lien or other encumbrance thereon that cannot and are not removed upon satisfaction of the Subdivision Condition or that are prior to Seller’s right to purchase the Blend Plant Real Property and Blend Plant Improvements. In order to protect Seller’s interest in the Blend Plant Real Property and the Blend Plant Improvements, Buyer shall execute and deliver to Seller at Closing a Memorandum of Right to Reconveyance (the "Blend Plant Memorandum of Right to Reconveyance" ), substantially in the form of Exhibit E , to be recorded in the Official records of Los Angeles, California, immediately after the recordation of the Grant Deed that conveys the Refinery Real Property from Seller to Buyer and prior to any monetary Liens created by Buyer.

               (f) Prior to the conveyance of the Blend Plant Real Property to Seller as contemplated hereunder, Buyer and Seller shall grant to each other such easements and rights of way on the Blend Plant Real Property and the Processing Unit Real Property the other party reasonably requests in connection with its ownership and operation of the Processing Unit Real Property and the Blend Plant Real Property, respectively.

                (g)  Buyer and Seller each acknowledge that, subject to Section 2.08(b)(ii), the consideration for the conveyance and re-conveyance of the Blend Plant Real Property and the Blend Plant Improvements has been fully included in the Purchase Price, and that no further consideration shall be paid by Buyer to Seller in the event the Blend Plant Real Property is conveyed to Buyer at the Closing and no further consideration shall be paid by Seller to Buyer upon the re-conveyance of the Blend Plant Real Property and the Blend Plant Improvements upon satisfaction of the Subdivision Condition.

ARTICLE III

CLOSING

      3.01 Place and Time. Subject to the Parties’ satisfaction or waiver of the conditions precedent set forth in ARTICLE XI and ARTICLE XII, the Closing shall take place at 11:00 a.m., Central Time, at the offices of Seller’s counsel at 1301 McKinney, Suite 5100, Houston, TX 77002, on a Business Day that is either five (5) Business Days after the later of (i) the expiration of the waiting period, or any extension thereof (without challenge), provided for in the HSR Act or (ii) completion of the Turnaround Activities as provided pursuant to Section 11.11, or on any later date on or prior to the Termination Date as the Parties may otherwise agree.

      3.02 Transactions and Deliveries at or Prior to Closing.

               (a)  At the Closing, Seller shall deliver to Buyer the following:

          (i) duly-executed grant deed(s) for the Refinery Real Property and the SRP Real Property, substantially in the form of Exhibit B , conveying fee simple title to the Refinery Real Property and the SRP Real Property, respectively, subject to the Permitted Encumbrances (in the event the Subdivision Condition has not been satisfied as of the Closing Date then the grant deed for the Refinery Real Property shall include the Blend Plant Real Property);

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          (ii) appropriately executed instruments of sale, assignment, transfer and conveyance evidencing and effecting the sale and transfer to Buyer of the Purchased Assets (it being expressly understood by the Parties, however, that such instruments shall not require Seller or any other Person to make any additional representations, warranties or covenants, express or implied, not contained in this Agreement or the Related Agreements);

          (iii) a certificate dated as of the Closing Date and signed by an authorized officer of Seller, certifying as to (A) the fulfillment by Seller of the conditions set forth in Sections 11.01 and 11.02 and (B) the non-occurrence, to Seller’s Knowledge, of material adverse changes to the Purchased Assets or the Operations to the extent provided pursuant to Section 11.07;

          (iv) an instrument to transfer and assign to Buyer, effective as of the Closing, the Kinder Morgan Line Histories;

          (v) copies of the resolutions of Seller and each Affiliate that is a party to a Related Agreement, certified as being correct and complete and then in full force and effect, authorizing the execution of this Agreement and the Related Agreements to which it is a party and the consummation of the Contemplated Transactions and the Related Agreements to which it is a party (in each case to the extent required by such Person’s Organizational Documents);

          (vi) an incumbency certificate, duly executed by an authorized officer of Seller attesting to the due appointment and authorization of individuals signing this Agreement on behalf of Seller, any agreement contemplated hereby or any agreement related to the Contemplated Transactions;

          (vii) a short-form Good Standing Certificate issued by the Secretary of State for the State of Delaware in respect of Seller;

          (viii) a current certificate of Seller’s qualification to do business in California;

          (ix) the affidavit referred to in Section 1445(b)(2) of the Code in customary form;

          (x) copies of all consents and authorizations to assignments of Contracts and Permits, Intellectual Property and Licensed Technology Rights obtained by Seller as contemplated hereunder.

          (xi) grants of Intellectual Property as set forth in ARTICLE IX;

          (xii) any other documents, instruments or agreements contemplated hereby or reasonably necessary or appropriate to consummate the Contemplated Transactions (it being expressly understood by the Parties, however, that such instruments shall not require Seller or any other Person to make any additional representations, warranties or covenants, express or implied, not contained in or as contemplated by this Agreement or the Related Agreements); and

          (xiii) all rights of ownership and possession of the Purchased Assets.

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     (b)  At the Closing, Buyer shall deliver to Seller the following:

          (i) the payments specified in Section 2.03;

          (ii) instruments of assumption evidencing and effecting the assumption by Buyer of the Assumed Liabilities and such other documents as are required by this Agreement or the Related Agreements (it being expressly understood by the Parties, however, that such instruments shall not require Buyer or any other Person to make any additional representations, warranties or covenants, express or implied, not contained in or as contemplated by this Agreement or the Related Agreements);

          (iii) a certificate dated as of the Closing Date and signed by an authorized officer of Buyer, certifying as to the fulfillment of the conditions set forth in Sections 12.01 and 12.02;

          (iv) copies of the resolutions of Buyer and its Affiliate that is a party to a Related Agreement, certified as being correct and complete and then in full force and effect, authorizing the execution of this Agreement and the Related Agreements to which it is a party, and the consummation of the Contemplated Transactions to which it is a party (in each case to the extent required by such Person’s Organizational Documents);

          (v) an incumbency certificate, duly executed by authorized officers of Buyer attesting to the due appointment and authorization of individuals signing this Agreement on behalf of Buyer, any agreement contemplated hereby or any agreement related to the Contemplated Transactions;

          (vi) a short-form Good Standing Certificate issued by the Secretary of State for the State of Delaware in respect of Buyer:

          (vii) current certificates of Buyer’s qualification to do business and good standing in California;

          (viii) a resale certificate and any other certificates or instruments necessary for the sale and transfer of the Inventory without any sales, excise or use Taxes of any Governmental Authority all to be in form reasonably satisfactory to Seller; and

          (ix) any other documents, instruments or agreements contemplated hereby or reasonably necessary or appropriate to consummate the Contemplated Transactions (it being expressly understood by the Parties, however, that such instruments shall not require Buyer or any other Person to make any additional representations, warranties or covenants, express or implied, not contained in or as contemplated by this Agreement or the Related Agreements).

                (c)  At the Closing, Seller or Seller’s Affiliates and Buyer shall enter into and deliver to each other the following agreements:

          (i) an Assignment and Assumption of Lease, substantially in the form of Exhibit C, assigning and transferring the LBT Lease to Buyer;

           (ii) the Blend Plant Lease, substantially in the form of Exhibit D , in the event the Subdivision Condition has not been satisfied as of the Closing Date;

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          (iii) a Transition Services Agreement, substantially in the form of Exhibit F;

          (iv) an HSE Agreement, substantially in the form of Exhibit G (the "HSE Agreement" );

          (v) a Blend Plant Shared Services Agreement, substantially in the form of Exhibit H;

          (vi) the Blend Plant Memorandum of Right to Reconveyance;

          (vii) each of the following Commercial Agreements:

(A) a Crude Supply Agreement, substantially in the form of Exhibit I;

(B) a Product Purchase Agreement, substantially in the form of Exhibit J;

(C) a Terminalling Agreement, substantially in the form of Exhibit K;

(D) a Products Exchange Agreement, substantially in the form of Exhibit L; and

          (viii) any other documents, instruments or agreements contemplated hereby or reasonably necessary or appropriate to consummate the Contemplated Transactions.

               (d) All of the transactions identified in this Section 3.02 shall occur simultaneously, and none shall be deemed completed until all are completed.

      3.03 Possession and Control. Unless otherwise expressly provided for herein, possession and control of operations, risk of loss, and transfer of title to the Purchased Assets from Sellers to Buyer shall be effective as of 11:59:59 p.m. Pacific Time on the Closing Date (the "Effective Time" ).

ARTICLE IV

SELLER’S REPRESENTATIONS AND WARRANTIES

Except for matters set forth in the Schedules referred to below, subject to Section 17.08, Seller hereby represents and warrants to Buyer as follows:

      4.1 Organization and Good Standing. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with full limited liability company power and authority to carry on its business and to own or lease and to operate its properties as and in the places where such business is conducted and such properties are owned, leased or operated.

      4.2 Authority. Seller has full limited liability company power and authority to execute, deliver and enter into this Agreement, the Related Agreements and the Contemplated Transactions, to

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fully perform its obligations hereunder and thereunder and to consummate the Contemplated Transactions. The execution, delivery and performance of this Agreement, the Related Agreements and the Contemplated Transactions have been duly authorized by all requisite limited liability company action of Seller and this Agreement, the Related Agreements and the Contemplated Transactions have been duly executed and delivered by Seller and constitute legal, valid and binding agreements of Seller enforceable against Seller in accordance with respective terms, except as such enforceability is limited by general principles of equity and applicable provisions of bankruptcy, insolvency, moratorium, reorganization or similar laws (regardless of whether enforceability is considered in a proceeding at law or in equity).

      4.3 No Breach, Conflict. Except for (i) the HSR Act, (ii) obtaining the consents and waivers set forth in Schedule 4.03, (iii) as otherwise contemplated in this Agreement and in the Related Agreements, and (iv) such consents and waivers that, if not obtained prior to the Effective Time as would not have a Material Adverse Effect, then the execution, delivery and performance of this Agreement, the Related Agreements and the consummation of the Contemplated Transactions and the compliance by Seller with any of the provisions hereof and thereof does not and will not (A) violate or conflict with, or result in a breach of, any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in termination of, or accelerate the performance required by, or result in the creation of any Lien upon the Purchased Assets under any of the terms, conditions or provisions of the Organizational Documents of Seller or under any Contract to which Seller is a party, or by which the Purchased Assets are otherwise bound, (B) violate any Applicable Law to which Seller is subject, or by which Seller or its assets or properties may be bound or (C) require the consent or approval of any third party Person.

      4.4 Real Property.

               (a)  Schedule 4.04(a) sets forth a complete and correct legal description of the real property included in the Refinery Real Property.

               (b)  Schedule 4.04(b) sets forth a complete and correct legal description of the real property included in the SRP Real Property except for matters as would not have a Material Adverse Effect.

               (c)  Schedule 4.04(c) sets forth a complete and correct legal description of the real property included in the LBT Lease except for matters as would not have a Material Adverse Effect.

               (d)  Schedule 4.04(d) sets forth a complete and correct description of the easements, licenses and rights of way of Seller uses in the operation of the Pipeline Assets except for matters as would not have a Material Adverse Effect.

               (e) Schedules 4.04(a). 4.04(b). and 4.04(c) list of all the real property used or held for use in the Operations. No portion of the Real Property is leased by or to Seller except as set forth in the LBT Lease and as set forth in Schedule 1.01E.

               (f) All water, sewer, gas, electric, telephone and drainage facilities and all other utilities necessary for the Operations are adequately available to service the Real Property and the Operations (this is not a representation or warranty that such utilities will continue to be available to Buyer after the Closing).

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                    (g) The Real Property (excluding Pipeline Easements) has access to a public street adjoining such Real Property, and such access is not dependent upon any land or other real property interest that is not included in such Real Property.

                    (h) Seller has not received any written notice of any pending or, to Seller’s Knowledge, contemplated special assessment or reassessment of any parcel included in the Real Property that would result in a material increase in the real property Taxes with respect to such parcel excluding any reassessment of the parcels included in the Real Property related to the Contemplated Transactions.

                    (i) Except as set forth in Schedule 4.04(i), there are no pending, or to Seller’s Knowledge, threatened condemnation or eminent domain proceedings or contemplated sales in lieu thereof, involving a partial or total taking of any of the Real Property.

      4.05 Brokers. Seller has not retained any broker or finder or incurred any liability or obligation for any brokerage fees, commissions, finder’s fees or similar compensation with respect to this Agreement, the Related Agreements or the Contemplated Transactions.

      4.06 Title. Except as set forth in Schedule 4.06 , Seller has good and indefeasible title to, or a valid leasehold interest in, all of the Purchased Assets, except for Purchased Assets sold, consumed or otherwise disposed of in the ordinary course of business in accordance with the procedures set forth in Section 6.02 and consistent with past practices, free and clear of any Liens, other than Permitted Encumbrances. The Permitted Encumbrances and the matters set forth in Schedule 4.06 do not constitute a Material Adverse Effect.

      4.07 Compliance With Laws. Other than with respect to HSE Laws (which are addressed in the HSE Agreement), the Purchased Assets and the Operations are in compliance with all Applicable Laws, as they are currently enforced, except for violations, non-compliance or other matters, if any, that would not have a Material Adverse Effect.

      4.08 Permits. Schedule 4.08 contains a true and complete list of Seller’s material Permits (excluding HSE Permits) used in connection with the Purchased Assets or the Operations as of the date of this Agreement; provided, however, Seller is not making any representation or warranty that any such Permits can be transferred as of the Effective Time or can be maintained by Buyer from and after the Closing. The Permits set forth in Schedule 4.08 are all of the Permits (excluding HSE Permits) which are necessary for the Operations as of the date of this Agreement except for such Permits with respect to which the failure to possess would not, individually or in the aggregate, have a Material Adverse Effect. Seller has performed all obligations required to be performed by it to date under the Permits set forth in Schedule 4.08, and is not in default under any Obligation of any such Permits, except where such default would not have a Material Adverse Effect.

      4.09 Actions and Proceedings. Except for such matters as would not have a Material Adverse Effect, and except as set forth in the Schedule 4.09:

                    (a) there is no Claim (excluding HSE Claims which are addressed in the HSE Agreement), action, suit, demand, proceeding, arbitration, grievance, citation, summons, subpoena or, to Seller’s Knowledge, any inquiry or investigation, of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending, or to Seller’s Knowledge, threatened against Seller or any of Seller’s Affiliates involving or affecting the Purchased Assets or the Operations, and there are no Judgments (excluding Judgments related to HSE Laws which are addressed in the HSE Agreement) outstanding against Seller or any of Seller’s Affiliates relating to or affecting the Purchased Assets; and

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                    (b) no Claim, action, suit, demand, proceeding, arbitration, grievance, citation, summons, subpoena or to Seller’s Knowledge any inquiry or investigation, of any nature, civil, criminal, administrative, regulatory or otherwise, in law or in equity, that is pending, or to Seller’s Knowledge, threatened seeking to restrain or prohibit this Agreement, the Related Agreements or any agreement, instrument or transaction contemplated hereby or thereby, or to obtain damages, a discovery order or other relief in connection with this Agreement, the Related Agreements or the Contemplated Transactions.

      4.10 Contracts and Commitments. Schedule 4.10 contains an accurate and complete list of each Contract as of the date of this Agreement but not otherwise listed in Schedule 1.01 C — Excluded Contracts to which Seller or any of its Affiliates is a party and that requires total payments to or by Seller or any of its Affiliates of at least Five Hundred Thousand Dollars ($500,000) annually relating to the Operations or by which any of the Purchased Assets are bound (other than crude contracts, product contracts, and transportation contracts (the "Commitments"). The LBT Lease shall be deemed to be included in the definition of Commitments. Seller has delivered to Buyer accurate and complete copies of all written Commitments, together with all amendments thereto, and accurate descriptions of all material terms of all oral Commitments, set forth in Schedule 4.10 . Each Commitment is in full force and effect and is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms (and to the Knowledge of Seller, against each counterparty thereto), except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). Except as specified in Schedule 4.10 , Seller is not, nor, to Seller’s Knowledge, is any other party thereto, in default under any of the Commitments where such defaults would result in a Material Adverse Effect. Except as specified in Schedule 4.10, Seller has not received written notice of any actual or threatened cancellation or termination of any Commitment from any party thereto. Seller shall be permitted to supplement and amend Schedule 4.10 prior to the Closing with Commitments to which Seller has entered in the normal course of business between the date of this Agreement and the Closing.

      4.11 Condition of Purchased Assets. Subject to the provisions of Section 8.07, the tangible Purchased Assets will be as of the Closing in substantially the same condition and repair,ordinary wear and tear excepted, as of the date of this Agreement. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE, AND SELLER MAKES NO AND DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED,AND WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE, REGARDING ANY PURCHASED ASSET’S (I) QUALITY, CONDITION, OR OPERABILITY,(II) MERCHANTABILITY, (III) FITNESS FOR ANY PARTICULAR PURPOSE, OR(IV) CONFORMITY TO MODELS, SAMPLES OF MATERIALS OR MANUFACTURER DESIGN;ALL TANGIBLE PURCHASED ASSETS SHALL BE DELIVERED "AS IS, WHERE IS" IN THE CONDITION IN WHICH THE SAME EXISTS AS OF THE CLOSING DATE.

      4.12 Taxes. There are no tax Liens open, pending against or, to Seller’s Knowledge threatened against the Purchased Assets. Neither the IRS nor any other Governmental Authority is asserting or, to Seller’s Knowledge, threatening to assert against Seller or any of its Affiliates any deficiency or claim for additional Taxes or any adjustment of Taxes that could result in the placing of a tax Lien upon the Purchased Assets. Seller or its Affiliates have filed (or will cause to be filed on or before the Closing Date) all Tax Returns relating to the Operations and Purchased Assets that are required to be filed on or before the Closing Date, and such Tax Returns are (and will be) true, correct and complete in all material respects and were (and will be) prepared in conformity with all Applicable Law,and Seller or its Affiliates have paid (or will pay when due) all Taxes whether or not shown as due on such Tax Returns that are attributable to any taxable period or portion thereof that ends on or before the

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Closing Date except for amounts being contested in good faith by appropriate proceedings. Buyer will not be liable, as a result of the Contemplated Transactions, for Taxes of Seller whether by law, contract or otherwise except to the extent expressly provided in this Agreement or the Related Agreements.

      4.13 Affiliate Agreements. Except as set forth in Schedule 4.13, Seller is not currently a party to any material Contract with any Affiliate of Seller that provides for the purchase or sale of goods to or from, or the provision of services to or from, the Refinery excluding Contracts for hydrocarbons or Contracts for administrative services provided by Shell Oil Company in the areas of human resources, benefits management, legal, finance, risk and insurance, public and governmental affairs, and other such administrative functions.

      4.14 Employee Benefit Plans. No event has occurred and no condition exists with respect to any Employee Benefit Plan, or any plan, program, arrangement otherwise within the term "Employee Benefit Plan" but without regard to whether it benefits or may benefit an Employee, that will subject Buyer or the Purchased Assets subsequent to the Closing to any Tax, Lien or Loss under Applicable Laws.

      4.15 Labor Matters. Except as set forth in Schedule 4.15, Seller has not receiv