THIS PLEDGE AGREEMENT ("Agreement") is made as of the 15th day of May, 2001, by Arabian American Development Company, a Delaware corporation, and American Shield Refining Company, a Delaware corporation (hereinafter collectively called "Pledgor", whether one or more), in favor of Fahad Al-Athel, Hatem El-Khalidi, Ingrid El-Khalidi and Preston Peak (hereinafter collectively called "Secured Party", whether one or more). Pledgor hereby agrees with Secured Party as follows:

1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings indicated below:

(a) The term "Code" shall mean the Uniform Commercial Code as in effect in the State of Texas on the date of this Agreement or as it may hereafter be amended from time to time.

(b) The term "Collateral" shall mean all property specifically described on Schedule "A" attached hereto and made a part hereof. The term Collateral, as used herein, shall also include (i) all certificates, instruments and/or other documents evidencing the foregoing, (ii) all renewals, replacements and substitutions of all of the foregoing, (iii) all Additional Property (as hereinafter defined), and (iv) all PRODUCTS and PROCEEDS of all of the foregoing. The designation of proceeds does not authorize Pledgor to sell, transfer or otherwise convey any of the foregoing property. The delivery at any time by Pledgor to Secured Party of any property as a pledge to secure payment or performance of any indebtedness or obligation whatsoever shall also constitute a pledge of such property as Collateral hereunder.

(c) The term "Guaranty Documents" shall mean this Agreement, all documents and instruments evidencing all deferred compensation and retirement benefits owed by Pledgor to Hatem El-Khalidi and all letter agreements and other loan documents evidencing Indebtedness of Pledgor to Secured Party and all other instruments and documents evidencing, securing, governing, guaranteeing and/or pertaining to the Indebtedness, the aggregate principal amount of such Indebtedness as of the date hereof being as follows: Fahad Al-Athel, $445,000; Hatem El-Khalidi, $1,055,000; Ingrid El-Khalidi, $100,000; and Preston Peak,$100,000.

(d) The term "Indebtedness" shall mean (i) all indebtedness, obligations and liabilities of Pledgor to Secured Party of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several, now existing or hereafter arising under the Guaranty Documents, (ii) all accrued but unpaid interest on any of the indebtedness described in (i) above, (iii) all obligations of Pledgor to Secured Party under the Guaranty Documents or any documents evidencing, securing, governing and/or pertaining to all or any part of the indebtedness described in (i) and (ii) above, (iv) all costs and expenses incurred by Secured Party in connection with the collection and administration of all or any part of the indebtedness and obligations described in (i), (ii) and (iii) above or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including, without limitation, all reasonable attorneys' fees and (v) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in (i), (ii), (iii) and (iv) above.

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