SOUTHWEST BANK OF TEXAS, N.A

PURCHASE AND SALE AGREEMENT/SECURITY AGREEMENT

THIS PURCHASE AND SALE AGREEMENT/SECURITY AGREEMENT (this "Agreement") is made by and among SOUTHWEST BANK OF TEXAS, N.A., a national banking association ("Purchaser") and SOUTH HAMPTON REFINING CO. (whether one or more, "Seller").

WHEREAS, Seller desires from time to time to sell accounts receivable and other rights to Purchaser, thereby engaging in account purchase transactions as set forth in Chapter 339.004 of the Texas Finance Code; and

WHEREAS, the parties desire to enter into an agreement which will control their course of dealing with respect to the purchase and sale of such accounts receivable and other rights;

NOW, THEREFORE, Purchaser and Seller do hereby agree, in consideration of the mutual promises herein contained, as follows:

SECTION 1 
PURCHASE AND SALE OF ACCOUNTS RECEIVABLE AND OTHER RIGHTS.

Seller hereby sells, assigns, transfers, conveys and delivers to Purchaser, and Purchaser hereby purchases and receives from Seller, all rights, title and interests of Seller in the accounts receivable and other forms of rights to payment described on Schedule "A" attached hereto and made a part hereof (the specific accounts receivable and rights to payment described on Schedule "A" being herein called the "Receivables").Seller represents and warrants that true and correct copies of the invoices for the Receivables are attached to Schedule "A". Future purchases and sales of accounts receivable and other rights will be based on the completion and execution of additional schedules in form similar to Schedule "A". Upon execution by both Purchaser and Seller (or any one of Seller, if more than one) of such a schedule, the accounts receivable or other rights described therein shall become Receivables subject in all respects to the terms of this Agreement. Any amounts advanced by Purchaser pursuant to any future purchase and sale of accounts receivable and other items will be deemed to be a future advance by Purchaser, and the corresponding obligations of the Seller with respect to such accounts receivable and other rights shall be deemed to be an obligation covered by this Agreement.

SECTION 2
CHARGE-BACK; REPURCHASE OBLIGATION.

Purchaser shall have the right to charge back any Receivable to Seller and Seller shall have the obligation to repurchase such Receivable ("Charge-Back"), if (a) the Receivable is not paid to Purchaser within 90 days from date of purchase by Purchaser, or (b) any Dispute arises with respect to such Receivable, or (c) Seller or Purchaser discovers or determines that any representation or warranty made by Seller in this Agreement or in any document executed in connection with this Agreement (the "Purchase Documents") is false or misleading, or (d) Seller breaches any covenant or agreement contained in this Agreement or in any Purchase Document. "Dispute," as used herein, means any dispute, deduction, claim, offset, defense or counterclaim of any kind pertaining to the Receivable or to the goods or services giving rise thereto asserted by the party obligated thereon, regardless of the final outcome or merit thereof. Upon Charge-Back of any Receivable, Seller shall pay to Purchaser on demand an amount equal to the Gross amount of Receivable, less rebate of Discount, if any, less any payments made on such invoice to Purchaser. Purchaser may, in its discretion, subtract all or any portion of such amount from any refund, rebate or other obligation owed by Purchaser to Seller, subtract such amount from the Purchase Price for the next Receivable sold, or otherwise charge Seller for such amount. Upon Purchaser's receipt of the amount required by this Section, in collected funds, ownership of the Receivable shall re-vest in Seller, subject to Purchaser's security interest and rights of recoupment and/or setoff.

SECTION 3
INVOICES; COLLECTION; POWER OF ATTORNEY.

If requested by Purchaser, Purchaser shall mail all invoices to Seller's customers in each instance relating to any Receivable and any other accounts receivable of Seller, and Seller shall provide the original invoice and one copy to Purchaser ready for mailing to the customers. All invoices relating to any Receivable and any other accounts receivable of Seller shall plainly state on their face in language acceptable to Purchaser that the amounts payable thereunder are to be paid to a post office box owned and controlled by Purchaser, to be provided by Purchaser. If requested by Purchaser, Seller agrees to furnish the original purchase order from Seller's customer, evidence of shipment of the related merchandise or performance of services rendered and a written assignment of any Receivable, all in a form satisfactory to Purchaser.

If requested by Purchaser, all invoices relating to Receivables and any other accounts receivable shall plainly state on their faces in language acceptable to Purchaser that the amounts payable thereunder have been assigned to and are payable directly to Purchaser. If payment is made to Seller under any circumstance, such payment shall be held in trust by Seller for Purchaser and shall not be negotiated or commingled in any way with the Seller's funds. Within 24 hours after receipt thereof, Seller shall deliver any such payments to Purchaser in the original form as received by Seller, endorsed as required by Purchaser. Purchaser is hereby authorized, irrevocably to open, cash, endorse and otherwise collect all checks and other forms of payment tendered in payment of each Receivable and in payment of any other accounts receivable, in the name of and as attorney-in-fact for Seller, and to direct Seller's customers to make payment to a different name and/or location. This power of attorney is coupled with an interest.

SECTION 4
RECOUPMENT RIGHTS OF PURCHASER.

Regardless of whether Seller is in default under this Agreement, Purchaser shall have the right at all times, in its discretion, to recoup all or any designated portion of the Obligations or any other amounts which Seller mayo we to Purchaser in such a manner as Purchaser may determine, at any time and without notice to Seller from:

(a) any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing from Purchaser to Seller; and/or

(b) all or any portion of such amount from any refund, rebate or other obligation owed by Purchaser to Seller.

The rights and remedies of Purchaser hereunder are in addition to other rights and remedies (including, without limitation, to the rights of set off) which Purchaser may have.

SECTION 5
TRANSFER OF RELATED INTERESTS.

In addition to the Receivables, Seller hereby sells, assigns, transfers, conveys and delivers to Purchaser all other rights and interests (but not obligations) now or hereafter existing in connection with the Receivables, including, but not limited to liens, security interests and guarantees securing payment of the Receivables, Seller's interest in returned goods arising with respect to the Receivables, and other rights and remedies of Seller related to the Receivables such as rights of stoppage in transit, replevin, reclamation and lawsuits to collect the Receivables. If any Receivable is ever represented by a promissory note or other written evidence of obligation, Seller shall deliver the same to Purchaser duly endorsed by Seller to Purchaser.

SECTION 6
FURTHER ASSURANCES.

Seller agrees to execute and deliver to Purchaser such notices of assignment and other documents as Purchaser may request to further document the sale and assignment of Receivables hereunder.

SECTION 7
NO OBLIGATION TO PURCHASE FURTHER RECEIVABLES.

Notwithstanding anything to the contrary contained herein, Seller specifically acknowledges and agrees that Purchaser has the right to approve or reject future accounts receivable or other items of any kind proposed for sale under this Agreement IN ITS SOLE DISCRETION, and no course of conduct shall establish any commitment to purchase future accounts receivable or other items of any kind.

SECTION 8
TERMS- SELLER'S CUSTOMERS.

Except as may otherwise be agreed to from time to time, the terms of all Receivables shall not exceed thirty (30) days. Seller shall not modify or vary the terms of sale, terms of payment, or location of payment set forth in the invoice relating to any Receivable without Purchaser's written consent.

SECTION 9
PURCHASE PRICE; DISCOUNT.

The Purchase Price (herein so called) for the Receivables shall be the Gross Amount of the Invoice minus the Discount. The "Gross Amount of the Invoice" shall mean the total invoice amount, including any miscellaneous charges such as sales taxes and delivery charges, less any early payment or "special discounts offered to Seller's customer. "Discount" means 15% of the Gross Amount of the Invoice. The Purchase Price for any Receivable shall be paid only after execution by Seller and acceptance by Purchaser of a Schedule "A" covering such Receivable. The Discount shall be deemed fully earned upon purchase of each Receivable in consideration of the overall manpower, effort and expense associated with Purchaser's performance hereunder, which Seller acknowledges is fair and reasonable consideration for the Discount. Seller and Purchaser further agree that Purchaser will undertake considerable labor and effort in the monitoring and processing Seller's accounts receivable. However, the Seller agrees to be responsible for the collection of all Receivables. Inconsideration of the foregoing, Seller agrees to pay Purchaser a minimum monthly discount fee of five hundred dollars ($500.00), beginning the first full month after entering into this Purchase and Sale Agreement/Security Agreement and funding occurs.

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