Contract

EXHIBIT 10.1 PIPELINE LEASE AGREEMENT by and between MID-AMERICA PIPELINE COMPANY, as LESSOR, and NAVAJO PIPELINE COMPANY, as LESSEE PIPELINE LEASE AGREEMENT THIS PIPELINE LEASE AGREEMENT (this “Lease” or this “Agreement”) isentered into by and between MID-AMERICA PIPELINE COMPANY, a Delaware corporation(“Lessor”) and NAVAJO PIPELINE COMPANY, a Delaware corporation (“Lessee”). R-E-C-I-T-A-L-S A. Lessor is the owner of an 8″ natural gas liquids pipeline currentlyrunning from Lessor’s Kutz Station in San Juan County, New Mexico to Lessor’sHobbs Station in Gaines County, Texas. Lessor currently uses the 8″ pipeline totransport NGL south from its Kutz Station past White Lakes Station to its HobbsStation. B. Lessee, and/or its affiliates, is engaged in the business ofrefining crude oil into gasoline and other petroleum products and thetransportation and sale of such products. Lessor and Lessee desire to enter intoa transaction in which Lessee will lease the 8″ pipeline from White LakesStation to Kutz Station running from Milepost 80.65 through Milepost 415.29, asencompassed in the Alignment Sheets attached hereto as Exhibit A, together withall attendant equipment and systems (hereinafter collectively referred to as the”Pipeline System”) and 100% of its capacity on an exclusive basis, subject tocommon carrier requirements, for the purpose of transporting petroleum productsfrom White Lakes Station to Kutz Station. The origin of the Pipeline System willbe Lessor’s White Lakes Station and the terminus will be at Lessor’s KutzStation. W-I-T-N-E-S-S-E-T-H NOW THEREFORE, for good and valuable consideration, the receipt andsufficiency of which being hereby acknowledged, Lessor and Lessee agree asfollows: 1. DEMISE. Lessor, for and in consideration of the covenants andagreements hereinafter set forth to be kept and performed by both parties, doeshereby demise and lease to Lessee for the Lease Term (hereinafter defined) thePipeline System and 100% of its capacity for transporting petroleum productsand/or crude oil from White Lakes Station to Kutz Station (provided; however, ifLessee elects to transport crude oil: (1) it may do so only subject to anyApplicable Laws, which, at Lessee’s expense, Lessor shall take reasonable stepsto address; and (2) if NGLs shipped on the Pipeline System by Lessor aftersurrender of the Pipeline System by Lessee as referenced in Paragraph 18 arecrude-contaminated in excess of Lessor’s specifications in an amount in excessof 5,000 barrels, Lessor shall notify Lessee and Lessor and Lessee inconsultation and at Lessee’s expense shall decontaminate all contaminated NGLsand take such other steps as are reasonably necessary to resolve thecontamination.). 2. LESSOR’S WORK. Attached to this Lease as Exhibit “B” is adescription ofPIPELINE LEASE AGREEMENT–PAGE 1work to be performed by Lessor, at its sole cost and expense (hereinafter,”Lessor’s Work”). Such work involves reversing and converting the PipelineSystem from its current use to transportation of petroleum products with aminimum capacity of 16,000 barrels per day. Lessor covenants and agrees toperform Lessor’s Work as described on Exhibit “B” in a good and workmanlikemanner, in accordance with Applicable Laws (hereinafter defined) and industrystandards and within 180 days of Lessee’s providing Lessor written notice toproceed on Lessor’s Work. Lessor may continue to use the Pipeline System untilthe onset of Lessor’s Work prohibits it. 3. LEASE TERM. A. Initial Term. While the Lease will be effective uponexecution, the “Initial Term” of the Lease will commence on the CommencementDate (hereinafter defined) and expire on that day that is the tenth (10th)anniversary thereof. The “Commencement Date” will be the earlier to occur of (i)that date that is the first (1st) day of the sixteenth calendar (16th) monthfollowing the date of this Lease, (ii) one hundred eighty (180) days afterLessee has provided written notice to Lessor that Lessee desires to commenceshipments on the Pipeline System, or (iii) such earlier date as Lessee actuallycommences shipments on the Pipeline System. In the event upon the occurrence of(i) or (ii) above Lessee’s shipments cannot commence by virtue of Lessor nothaving fulfilled its obligations hereunder, the Commencement Date shall bedelayed until such time as Lessee is able to commence shipments. B. Option to Renew. Provided that Lessee is not in default underthis Lease beyond applicable notice and cure periods at the time of the exerciseof the Option granted herein, Lessee is granted the option (the “Option”) torenew this Lease for one (1) additional term of ten (10) years (the “RenewalTerm”) commencing on the next day after the expiration of the Initial Term.Lessee shall exercise the Option, if at all, by delivering Lessor written noticeof the exercise of the Option at least one year prior to the expiration of theInitial Term. Lessee’s lease of the Pipeline System during the Renewal Term willbe upon the same terms as for the Initial Term, except that the Base Rent(hereinafter defined) will adjust as hereinafter provided and during the RenewalTerm Lessee will have no further right to renew this Lease. C. Lease Term. The “Lease Term” shall initially be the InitialTerm and, if Lessee exercises the Option, the “Lease Term” will also include theRenewal Term. D. Lease Year. As used in this Lease, a “Lease Year” shallinitially mean the twelve (12) month period commencing on the Commencement Dateand ending on the first anniversary thereof. The term “Lease Year” willthereafter mean the successive twelve (12) month periods ending on theanniversary of the Commencement Date. 4. BASE RENT. A. Initial Term. Lessee agrees to pay to Lessor rent for thePipeline SystemPIPELINE LEASE AGREEMENT–PAGE 2during the Initial Term in one hundred twenty (120) monthly installments, inadvance, beginning on the Commencement Date (“Base Rent”), as follows: – Lease Year 1: $316,666.67 per month ($3,800,000.00 total); – Lease Year 2: $341,666.67 per month ($4,100,000.00 total); – Lease Year 3: $375,000.00 per month ($4,500,000.00 total); – Lease Year 4: $408,333.33 per month ($4,900,000.00 total); – Lease Year 5: $441,666.67 per month ($5,300,000.00 total);Commencing Lease Year 6 of the Initial Term, and for each Lease Year of theInitial Term thereafter, the Base Rent shall be the greater of (1) the Base Rentfor Lease Year 5 of the Initial Term or, (2) an amount determined by multiplyingthe Base Rent for the immediately preceding Lease Year by the Base RentAdjuster. The “Base Rent Adjuster” shall be determined by dividing the ProducerPrice Index for Finished Goods (as found in Table 1 of the Product Prices andPrice Indexes published by the U.S. Department of Labor, Bureau of LaborStatistics) (“PPIFG”) for the last month of the immediately preceding Lease Yearfor which such index has been published by the United States Government by thePPIFG published for the same month of the second immediately preceding LeaseYear and subtracting one one-hundredth (0.01) from the quotient so obtained. Inthe event the United States Government should no longer publish the PPIFG, thenthe parties shall mutually agree upon an alternative index that most nearlycaptures the change in prices reflected therein for purposes of calculating theBase Rent Adjuster. B. Renewal Term. Base Rent for the first Lease Year of theRenewal Term (the eleventh (11th) Lease Year) shall be the greater of (1)$441,666.67, multiplied by the quotient obtained by dividing Lessor’s postedtariff for NGL movement from Group 110 to Hobbs in effect on the day the InitialTerm expires by Lessor’s posted tariff for NGL movement from Group 110 to Hobbson the last day of the fifth (5th) Lease Year of the Initial Term, or (2) theBase Rent in effect during the tenth (10th) Lease Year of the Initial Termmultiplied by the Base Rent Adjuster; provided, however, in no event shall theBase Rent be less than $441,666.67. The Base Rent in effect for each subsequentLease Year of the Renewal Term shall be the greater of (1) the Base Rent ineffect for the first (1st) Lease Year of the Renewal Term, or (2) the Base Rentin effect for the immediately preceding Lease Year of the Renewal Termmultiplied by the Base Rent Adjuster. C. Payment of Base Rent. Each installment of Base Rent shall bedue and payable on the first day of each month. Any installment of Base Rent duefor any fractional month shall be prorated based upon the actual number of daysin that month. All obligations of Lessee measured by Lease Years shall beprorated as appropriate based upon the number of days in the applicable LeaseYear during the term of this Lease divided by the actual number of days in suchLease Year. Base Rent shall be paid at the times and in the amounts provided forherein in legal tender of the United States of America to Lessor by wiretransfer of immediately available funds at the address specified in Paragraph 21hereof or to such other person or at such otherPIPELINE LEASE AGREEMENT–PAGE 3address as Lessor may from time to time designate in writing. 5. OPERATION OF THE PIPELINE. Lessor shall at all times during theLease Term use all reasonable efforts to operate the Pipeline System for thebenefit of Lessee, subject to common carrier requirements as more specificallydiscussed herein. Lessor shall operate the Pipeline System and Lessee shalloperate its related facilities in accordance with all Applicable Laws and inaccordance with industry standards. As used herein, the term “Applicable Laws”means and includes any and all federal, state and local laws, ordinances,orders, easements and right-of-way agreements of record, rules, and regulationsof all governmental bodies (state, federal, tribal and municipal) applicable toor having jurisdiction over the use, occupancy, operation and maintenance of thePipeline System, as such may be amended or modified from time to time. Lessorshall not be responsible for measurement “overs and shorts” other than forproduct losses arising from fault or failure of Lessor to satisfy itsobligations hereunder. 6. SHIPMENTS AND TARIFFS. Lessee shall at all times during the LeaseTerm be solely responsible for shipments of product and will publish and filetariffs in its own name and in accordance with Applicable Laws covering capacityin the Pipeline System. Lessor shall have the right to review and approve suchtariffs prior to filing, with such approval not to be unreasonably withheld.Lessee agrees that it will not impair and at its expense will take allreasonable steps to protect Lessor’s rights under all Applicable Laws respectingthe Pipeline System to the extent such rights are materially threatened byvirtue of any act or failure to act of Lessee hereunder. In the event counseljointly retained by Lessor and Lessee is of the opinion that such rights arematerially threatened by virtue of an act or failure to act of Lessee, Lesseemust take all the reasonable steps as referenced above in this paragraph 6.Lessee shall collect for its own account all revenues payable by shippersapplicable to the Pipeline System. From and after the Commencement Date,Lessee’s designated shipper(s) will be responsible for all linefill in thePipeline System. 7. ALTERATIONS BY LESSEE. Except as expressly permitted hereby, Lesseemay not alter or make any modifications to the Pipeline System without Lessor’sprior written consent, such consent not to be unreasonably withheld. Lessee may,however, without Lessor’s prior written consent, but with notice to Lessor andat Lessee’s sole cost and expense, increase the capacity of the Pipeline Systemthrough the introduction of drag reducing agents, increased horsepower or acombination thereof. If Lessee desires to increase capacity through any othermeans it must obtain the consent of Lessor, with such consent not to beunreasonably withheld. Lessee may elect to undertake to increase the capacity ofthe Pipeline System itself, in which event Lessor shall have the right tooversee the increase in capacity, or request that Lessor perform such, in whichevent Lessee and Lessor shall mutually agree upon a reasonable cost for suchincrease in capacity. 8. MAINTENANCE AND REPAIR. Lessor, at its sole cost and expense, shallmaintain all aspects of the Pipeline System in good condition and repair, inaccordance with Applicable Laws and in accordance with industry standards. Ifany changes, modifications orPIPELINE LEASE AGREEMENT–PAGE 4alterations to the Pipeline System are required during the Lease Term due to theenactment or amendment of Applicable Laws, then Lessor shall promptly make suchchanges, modifications or alterations and will bear the cost thereof.Notwithstanding Lessor’s obligation to repair and maintain the Pipeline Systemat its sole cost and expense, Lessee shall be responsible for the incrementalcost of maintaining and repairing those aspects of the Pipeline System relatingsolely to alterations or modifications to the Pipeline System requested or madeby Lessee for the sole purpose of increasing the capacity of the Pipeline Systemas provided in Paragraph 7 above. Such costs shall be paid by Lessee withinfifteen (15) days of receipt of invoice from Lessor. 9. ADDITIONAL PIPELINE CONNECTIONS. Lessor hereby grants Lesseepermission to connect petroleum terminals and pipeline connections to thePipeline System at points at or between Lessor’s White Lakes Station and KutzStation provided that the construction, connection, operation and maintenance ofsuch will be at Lessee’s sole cost and expense and subject to the terms andprovisions of Exhibit B attached hereto. 10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR. Lessorrepresents, warrants and covenants to Lessee that: A. Title. Lessor has good, marketable and indefeasible title tothe Pipeline System, subject only to the easements/rights-of-way on which thePipeline System exists and the agreements creating same. B. Organization. Lessor is duly organized, validly existing andin good standing under the laws of the state of its organization, and is dulyqualified to transact business in the state in which the Pipeline System issituated. C. Authority. Lessor has all requisite power and authority, hastaken all actions required by its organizational documents and applicable law,and has obtained all necessary consents, to execute and deliver this Lease andto consummate the transactions contemplated in this Lease. D. Other Agreements, etc. Neither the execution of this Agreementnor the confirmation by Lessor of the transactions contemplated hereby will (i)conflict with or result in any breach of the terms, conditions or provisions of,or constitute a default under, or result in any termination of easement orright-of-way on which the Pipeline Systems is located; (ii) violate anyrestriction to which Lessor or the Pipeline System is subject; (iii) constitutethe violation of any Applicable Laws; or (iv) result in the creation of anylien, charge or encumbrance upon the Pipeline System or any part thereof. E. Proceedings. There are no attachments, executions, assignmentsfor the benefit of creditors, or voluntary or involuntary bankruptcyproceedings, or under any debtor relief laws, contemplated by or pending orthreatened against Lessor or the Pipeline System.PIPELINE LEASE AGREEMENT–PAGE 5 F. Litigation. Lessor is not now a party to any materiallitigation, arbitration or administrative proceeding (i) with any person orentity having or claiming any interest in the Pipeline System, or (ii) affectingor questioning Lessor’s title to the Pipeline System or Lessor’s ability toperform its obligations under this Lease. Lessor knows of no presently pendingor threatened material litigation, arbitration or administrative proceedingaffecting or questioning Lessor’s title to, or use of, the Pipeline System orany part thereof, or Lessor’s ability to perform its obligations under thisLease. G. Compliance with Laws. To the best of Lessor’s knowledge andbelief, all Applicable Laws bearing on the construction or operation of thePipeline System have been complied with, the Pipeline System currently complieswith all Applicable Laws, and the operation of the Pipeline System ascontemplated by this Lease will not violate any such Applicable Laws. H. Consents. As of the Commencement Date, no consent to theexecution or implementation of this Lease is required from any third party,including the grantor of any easement on which the Pipeline System is locatedand the owner of any right-of-way on which the Pipeline System is located. I. Administrative Notices. Lessor has not received notice of, andhas no other knowledge or information of, any pending or contemplated change inany Applicable Laws applicable to the Pipeline System, or any pending orthreatened judicial or administrative action, or any action pending orthreatened, or of any natural or artificial condition upon or affecting thePipeline System, or any part thereof, any of which would result in any materialchange in the condition of the Pipeline System, or any part thereof, or would inany way limit or impede the operation of the Pipeline System. J. Licenses. Lessor possesses all licenses, certificates andpermits that are required to fulfill all of its obligations hereunder. K. Taxes. There are no unpaid taxes, assessments or chargesagainst the Pipeline System. L. Condemnation. Lessor has no knowledge of any condemnation,eminent domain or similar proceedings having been instituted or threatenedagainst the Pipeline System. M. Encumbrances. Lessor may not further encumber the PipelineSystem or any part thereof without the prior written consent of Lessee, whichconsent shall not be unreasonably withheld. N. True and Correct. To Lessor’s best knowledge, after reasonableinquiry, all information and other items heretofore or hereafter submitted toLessee by or on behalf of Lessor are true, correct and complete. Lessor is notaware of any omission to supply Lessee with any material information or otheritems with respect to the Pipeline System, its history, prospects orPIPELINE LEASE AGREEMENT–PAGE 6operations, or any information which may be required to prevent the informationor other items already supplied from being misleading.Lessor acknowledges that the execution of this Lease by Lessee has been made,and the lease of the Pipeline System by Lessee will have been made, in materialreliance by Lessee on Lessor’s representations and warranties contained in thisParagraph 10. 11. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lesseerepresents, warrants and covenants to Lessor that: A. Organization. Lessee is duly organized, validly existing andin good standing under the laws of the state of its organization, and is dulyqualified to transact business in the state in which the Pipeline System issituated. B. Authority. Lessee has all requisite power and authority, hastaken all actions required by its organizational documents and Applicable Laws,and has obtained all necessary consents, to execute and deliver this Lease andto consummate the transactions contemplated in this Lease. C. Proceedings. There are no attachments, executions, assignmentsfor the benefit of creditors, or voluntary or involuntary bankruptcyproceedings, or under any debtor relief laws, contemplated by or pending orthreatened against Lessee. D. Consents. No consent to the execution or implementation ofthis Lease is required from any third party. E. Licenses. Lessee possesses or will possess all licenses,certificates and permits that are required to fulfill its obligations hereunder. F. Liens. Lessee has no authority, express or implied, and willnot create or place any lien or encumbrance of any kind or nature whatsoeverupon, or in any manner bind the interest of Lessor or Lessee in the PipelineSystem or charge the Rent payable hereunder for any claim in favor of any persondealing with Lessee, including those who may furnish materials or perform laborfor any construction or repairs. G. Litigation. Lessee is not now a party to any materiallitigation, arbitration or administrative proceeding affecting or questioningLessee’s ability to perform its obligation under this Lease. H. True and Correct. To Lessee’s best knowledge, after reasonableinquiry, all information and other items heretofore or hereafter submitted toLessor by or on behalf of Lessee are true, correct and complete.PIPELINE LEASE AGREEMENT–PAGE 7Lessee acknowledges that the execution of this Lease by Lessor has been made,and the lease of the Pipeline System by Lessor will have been made, in materialreliance by Lessor on Lessee’s representations and warranties contained in thisParagraph 11. 12. CONTINGENCY FOR REVIEW OF RIGHT OF WAY AGREEMENTS. Lessor agrees toprovide Lessee with copies of all easement, license and right-of-way agreementsand other documents and information pertaining to the Pipeline System, its rightto exist and be operated in its current location and condition and the impactthereof on the rights of the parties defined under this Lease. As soon aspracticable, if Lessee in good faith determines based upon a review of suchdocuments and information that the intent and purpose of this Lease cannot berealized, Lessee will give Lessor written notice thereof. The parties will thenundertake to use their best efforts to overcome the impediment discovered byLessee to realizing the intent and purpose of this Lease. If such cannot beresolved to Lessee’s reasonable satisfaction prior to the 180 day noticereferenced in paragraph 2 above, Lessee, at its option, may elect to terminatethis Lease. 13. INDEMNIFICATION. Each party hereto shall indemnify, defend, protectand hold the other free and harmless from and against any and all claims,liabilities, damages, costs, penalties, forfeitures, losses or expenses(including attorneys’ fees) for death or injury to any person or damage to anyproperty whatsoever arising or resulting in whole or in part, directly orindirectly, out of the acts or omissions of the indemnifying party or itsemployees, contractors or agents or arising out of any breach by theindemnifying party of this Lease. 14. POWER COSTS. Lessee will be responsible for paying all power costsassociated with the Pipeline System in accordance with Exhibit B hereto and themethod of allocation to be agreed upon within sixty (60) days of execution ofthis Agreement. Such costs shall be paid by Lessee within fifteen (15) days ofreceipt of invoice from Lessor. 15. TAXES AND ASSESSMENTS. Lessor shall be solely responsible for andshall timely pay all taxes, charges, royalties, levies, assessments and similarfees and charges which arise from federal or state governmental authorities,tribal authorities, or private action (collectively, “Taxes”) applicable to thePipeline System or the easements/rights-of-ways on which the Pipeline System islocated. However, if after the date of this Lease new Taxes are levied againstthe Pipeline System or such easements/rights-of-ways, by statute or otherwise,Lessee will reimburse Lessor for Lessee’s appropriate share of such additionalTaxes. Furthermore, Lessor will not agree to any new Taxes without firstconferring with and seeking the input of Lessee. 16. INSURANCE. A. Maintenance of Existing Coverage. Lessor and Lessee willmaintain such or similar insurance coverages in place as exist at the time ofexecution of this Agreement to the extent pertinent to the respectiveobligations of each herein.PIPELINE LEASE AGREEMENT–PAGE 8 B. Waiver of Subrogation. Lessor and Lessee and all partiesclaiming under them mutually release and discharge each other from all claimsand liabilities arising from or caused by any casualty or hazard which iscovered by insurance carried on the Pipeline System or carried in connectionwith property on or activities conducted on the easements/rights-of-ways onwhich the Pipeline Systems is located, and waive any right of subrogation whichmight otherwise exist in or accrue to any person on account thereof. 17. ASSIGNMENT. This Lease may not be assigned by either party withoutthe prior written consent of the other party, with such consent not to beunreasonably withheld, conditioned or delayed. The foregoing restrictions onassignment shall not apply to (a) a transfer by a party to an affiliate; (b) atransfer that is part of a merger or consolidation of a party or an affiliate ofa party with another entity in which the aggregate consideration for such mergeror consolidation is at least $100 million; or (c) a transfer that is part of abroader sale of assets by a party or an affiliate of a party in which theaggregate purchase price of such assets sold is at least $100 million. Anyassignment or purported assignment in violation of this paragraph 17 shall bevoid. 18. SURRENDER UPON TERMINATION. Upon the expiration of the Lease Term,Lessee shall surrender up the Pipeline System to Lessor with all of Lessee’sobligations hereunder fully performed. To the extent that Lessee has made (orpaid for) any alterations, improvements or modifications to the Pipeline Systemthat can be removed without damage to the Pipeline System, at Lessee’s optionsuch shall remain the property of Lessee and Lessee may remove such at its solecost; provided that Lessee shall promptly repair any damage to the PipelineSystem caused thereby and ensure that after the removal of such equipment thePipeline System has a minimum capacity of 16,000 barrels per day. If suchimprovements cannot readily be removed by Lessee without substantial damage toor deprivation of the Pipeline System, such shall become the property of Lessorupon the expiration of the Lease and Lessor shall pay an amount to be agreedupon by Lessor and Lessee within thirty (30) days after the expiration of theLease, with such agreed upon amount not to exceed the depreciated value. 19. EVENTS OF DEFAULT A. Events of Default by Lessor. The occurrence of any of thefollowing shall constitute a material default and breach of this Lease byLessor. (1) A failure by Lessor to observe and perform any material provision or covenant of this Lease to be observed or performed by the Lessor, where such failure continues for thirty (30) days after written notice thereof by Lessee to Lessor, except that this thirty (30) day period shall be extended for a reasonable period of time if the alleged default is not reasonably capable of cure within said thirty (30) day period and Lessor proceeds to diligently cure the default.PIPELINE LEASE AGREEMENT–PAGE 9 (2) Any failure of Lessor’s representations or warranties to remain true and correct throughout the Lease Term; provided that no event of default shall occur if such representation or warranty is again true and correct within thirty (30) days after receipt of written notice from Lessee. (3) The making by Lessor of any general assignment for the benefit of creditors, the filing by or against Lessor of a petition to have Lessor adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessor, the same is dismissed within sixty (60) days), the appointment of a trustee or receiver to take possession that is not restored to Lessor within thirty (30) days. B. Events of Default by Lessee. The occurrence of any of thefollowing shall constitute a material default and breach of this Lease byLessee: (1) Any failure by Lessee to pay Rent or make any other payment required to be made by Lessee hereunder, where such failure continues for thirty (30) days after receipt of written notice from the Lessor, subject to the right of Lessee, reasonably exercised, to contest any such payment. In the event Lessee withholds any such payment, and it is determined that such withholding was wrongful, Lessee shall pay interest to Lessor on such monies wrongfully withheld at the rate of 15% per annum or the maximum amount allowed by law, whichever is less. (2) A failure by Lessee to observe and perform any other material provision or covenant of this Lease to be observed or performed by the Lessee, where such failure continues for thirty (30) days after written notice thereof by Lessor to Lessee, except that this thirty (30) day period shall be extended for a reasonable period of time if the alleged default is not reasonably capable of cure within said thirty (30) day period and Lessee proceeds to diligently cure the default. (3) Any failure of Lessee’s representations or warranties to remain true and correct throughout the Lease Term; provided that no event of default shall occur if such representation or warranty is again true and correct within thirty (30) days after receipt of written notice from Lessor. (4) The making by Lessee of any general assignment for the benefit of creditors, the filing by or against Lessee of a petition to have Lessee adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days), the appointment of a trustee or receiver to take possession that is not restored to Lessee within thirty (30) days. 20. ESTOPPELS. Each party agrees, from time to time, within ten (10)days afterPIPELINE LEASE AGREEMENT–PAGE 10request of the other, to deliver to the requesting party, or its designee, anestoppel certificate stating whether or not this Lease is in full force andeffect, the date to which Base Rent has been paid, the unexpired term of thisLease and such other factual matters pertaining to this Lease as deemedreasonably necessary by the requesting party. 21. NOTICES. Any notice or communication required or permitted in thisLease shall be given in writing, sent by (a) personal delivery, or (b) expediteddelivery service with proof of delivery, or (c) United States mail, postageprepaid, registered or certified mail, return receipt requested, addressed: if to Lessor, as follows: Mid-America Pipeline Company 1800 South Baltimore Tulsa, OK 74119 Attn: President and, if to Lessee, as follow Navajo Pipeline Company P. O. Box 159 Artesia, NM 88210 Attn: Presidentor to such other address or to the attention of such other person as shall bedesignated by the applicable party and on fifteen (15) days notice from time totime in writing and sent in accordance herewith. Any such notice orcommunication shall be deemed to have been given either at the time of personaldelivery or, in the case of delivery service or mail, upon receipt. 22. RIGHT OF FIRST REFUSAL. If during the Lease Term (or any extensionthereof) or upon the termination of the Lease Lessee should receive a bona fidethird party offer expressing all material terms for the acquisition of any ofits terminals and pipelines connected to or used solely in connection with thePipeline System (herein the “Assets”) that Lessee wishes to accept, then priorto accepting such offer, Lessee shall first provide Lessor with notice of theoffer and its terms. Lessor will have thirty (30) days from its receipt of suchoffer to elect to acquire the Assets on the same terms and conditions as are setforth in the third party offer. If Lessor elects to purchase the Assets on suchterms, then the parties will promptly enter into a formal asset sale agreementembodying the terms contained in the third party offer. If Lessor fails to electin writing to purchase the assets on the terms of the third party offer withinthis thirty (30) day time period, then Lessor will have forever waived the rightof first refusal with respect to this offer. The right of first refusal grantedherein applies only to a contemplated sale of assets of Lessee in which theAssets constitute all or substantially all of the assets subject to the sale.Additionally, the right of first refusal shall not apply to any sale or transferof the Assets to anPIPELINE LEASE AGREEMENT–PAGE 11affiliate of Lessee. Notwithstanding the above, the term “Assets” specifically excludes anypipeline or terminals and related equipment constructed by Lessee and runningfrom Lessee’s Artesia, New Mexico refinery to the Lessor’s White Lakes Station.Such pipeline, terminals and related equipment will at all times not be subjectto the foregoing right of first refusal. 23 NO RENT ABATEMENT FOR PROBLEM AT LESSEE’S FACILITIES. In no eventshall a problem at Lessee’s facilities, either its refining facilities or thepetroleum terminals and pipeline connections referenced in paragraph 9 above,excuse Lessee’s obligations to pay rent hereunder, unless and to the extent suchproblem was caused or contributed to by Lessor. 24. LIMITATION OF LIABILITY. Neither party shall be liable for punitiveor consequential damages of any kind arising out of or in any way connected withthe performance of or failure to perform this Agreement. 25. MISCELLANEOUS. A. Confidentiality. Provided that express consent of both partieshas been given, the parties may discuss the existence of this Agreement, but notthe particulars of its terms and conditions. B. Headings/Gender. Words of any gender used in this Lease shallbe held and construed to include any other gender, and words in the singularnumber shall be held to include the plural, unless the context otherwiserequires. The captions inserted in this Lease are for convenience only and in noway define, limit or otherwise describe the scope or intent of this Lease, orany provision hereof, or in any way affect the interpretation of this Lease. C. Successors and Assigns. Without limiting the terms ofParagraph 17 above, the terms, provisions and covenants and conditions containedin this Lease shall apply to, inure to the benefit of, and be binding upon, theparties hereto and upon their respective heirs, executors, personalrepresentatives, legal representatives, successors and assigns, except asotherwise herein expressly provided. D. Entire Agreement. This Lease constitutes the entireunderstanding and agreement of the Lessor and Lessee with respect to the subjectmatter of this Lease, and contains all of the covenants and agreements of Lessorand Lessee with respect thereto. Lessor and Lessee each acknowledge that norepresentations, inducements, promises or agreements, oral or written, have beenmade by Lessor or Lessee, or anyone acting on behalf of Lessor or Lessee, whichare not contained herein, and any prior agreements, promises, negotiations, orrepresentations not expressly set forth in this Lease are of no force or effect.This Lease may not be altered, changed or amended except by an instrument inwriting signed by both parties hereto.PIPELINE LEASE AGREEMENT–PAGE 12 E. Severability. If any clause or provision of this Lease isillegal, invalid, or unenforceable under present or future laws effective duringthe term of this Lease, then and in that event, it is the intention of theparties hereto that the remainder of this Lease shall not be affected thereby,and it is also the intention of the parties to this Lease that in lieu of eachclause or provision of this Lease that is illegal, invalid or unenforceable,there be added, as a part of this Lease, a clause or provision as similar interms to such illegal, invalid or unenforceable clause or provision as may bepossible and be legal, valid and enforceable. F. Date of Lease. All references in this Lease to “the datehereof” or similar references shall be deemed to refer to the last date, inpoint of time, on which all parties hereto have executed this Lease. G. Counterparts. This Lease may be executed in counterparts, eachbeing deemed an original, but together constituting only one instrument. H. Time for Performance TIME IS OF THE ESSENCE WITH RESPECT TOALL PERFORMANCE OBLIGATIONS CONTAINED IN THIS LEASE. I. Attorneys’ Fees. In the event it becomes necessary for eitherparty hereto to file a suit respecting the subject matters of this Leaseincluding without limitation to enforce this Lease or any provisions containedherein, the party prevailing in such action shall be entitled to recover, inaddition to all other remedies or damages, reasonable attorneys’ fees incurredin such suit. J. Law Governing and Venue. THIS LEASE SHALL BE GOVERNED BY THELAWS OF THE STATE OF NEW MEXICO WITHOUT REGARD TO ITS CONFLICT OF LAWS, ANDVENUE AND JURISDICTION FOR ANY ACTION OR PROCEEDING RESPECTING THE SUBJECTMATTERS OF THIS LEASE INCLUDING WITHOUT LIMITATION TO ENFORCE THIS LEASE OR ANYPROVISIONS CONTAINED HEREIN SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTSLOCATED IN ALBUQUERQUE, NEW MEXICO. K. Waiver. No waiver by either party of any provision of thisLease or of any default, event of default or breach hereunder shall be deemed tobe a waiver of any other provision of this Lease, or of any subsequent default,event of default or breach of the same or any other provision. Either party’sconsent to or approval of any act requiring consent or approval shall not bedeemed to render unnecessary the obtaining of consent to or approval of anysubsequent act requiring consent. No act or thing done by Lessor or Lessor’sagents during the term of this Lease shall be deemed an acceptance of asurrender of the Pipeline System, unless done in writing signed by Lessor. L. Interpretation. The parties hereto agree that it is theirintention hereby toPIPELINE LEASE AGREEMENT–PAGE 13create only the relationship of Lessor and Lessee, and no provision hereof, oract of either party hereunder, shall ever be construed as creating therelationship of principal and agent, or a partnership, or a joint venture orenterprise between the parties hereto. M. Amendments. This Lease may not be modified or amended, exceptby an agreement in writing signed by Lessor and Lessee. The parties may waiveany of the conditions contained herein or any of the obligations of the otherparty hereunder, but any such waiver shall be effective only if in writing andsigned by the party waiving such conditions or obligations, except asspecifically set forth herein. N. Exhibits. All exhibits referenced herein as being attachedhereto are hereby incorporated herein by reference as if set forth in full inthis Lease EXECUTED BY LESSOR, this 11th day of March, 1996. MID-AMERICA PIPELINE COMPANY, a Delaware corporation By: /s/ Robert G. Sachse ——————– Name: Robert G. Sachse Title: Chairman EXECUTED BY LESSEE, this 8th day of March, 1996. NAVAJO PIPELINE COMPANY, a Delaware corporation By: /s/ Christopher L. Cebla ———————— Name: Christopher L. Cebla Title: V.P. and SecretaryExhibits:Exhibit A: Alignment SheetsExhibit B: Scope of Work & Operating ProceduresPIPELINE LEASE AGREEMENT–PAGE 14 EXHIBIT A ALIGNMENT SHEETS

ALIGNMENT SHEET MILE POSTS COUNTY STATIONS- ————— ———- —— ——– 5818-AL-16 M.P. 79.96 to M.P. 84.89 Chaves White Lakes (M.P. 80.65)5818-AL-17 M.P. 84.89 to M.P. 90.38 Chaves5818-AL-18 M.P. 90.38 to M.P. 95.30 Chaves5818-AL-19 M.P. 95.30 to M.P. 100.80 Chaves5818-AL-20 M.P. 100.80 to M.P. 106.29 Chaves5818-AL-21 M.P. 106.29 to M.P. 111.40 Chaves5818-AL-22 M.P. 111.40 to M.P. 116.53 Chaves5818-AL-23 M.P. 116.53 to M.P. 121.63 Chaves5818-AL-24 M.P. 121.63 to M.P. 126.89 Chaves5818-AL-25 M.P. 126.89 to M.P. 132.50 Chaves & DeBaca5818-AL-26 M.P. 132.50 to M.P. 137.99 Debaca5818-AL-27 M.P. 137.99 to M.P. 143.47 Debaca5818-AL-28 M.P. 143.47 to M.P. 148.58 Debaca5818-AL-29 M.P. 148.58 to M.P. 153.69 Debaca & Lincoln5818-AL-30 M.P. 153.69 to M.P. 158.81 Lincoln5818-AL-31 M.P. 158.81 to M.P. 164.30 Lincoln5818-AL-32 M.P. 164.30 to M.P. 169.81 Lincoln & Guadalupe5818-AL-33 M.P. 169.81 to M.P. 175.38 Guadalupe5818-AL-34 M.P. 175.38 to M.P. 180.53 Guadalupe

EXHIBIT A-1

ALIGNMENT SHEET MILE POSTS COUNTY STATIONS- ————— ———- —— ——– 5818-AL-35 M.P. 180.53 to M.P. 185.64 Guadalupe & Torrance5818-AL-36 M.P. 185.64 to M.P. 191.16 Torrance5818-AL-37 M.P. 191.16 to M.P. 196.46 Torrance5818-AL-38 M.P. 196.46 to M.P. 201.57 Torrance5818-AL-39 M.P. 201.57 to M.P. 206.88 Torrance5818-AL-40 M.P. 206.88 to M.P. 211.99 Torrance5818-AL-41 M.P. 211.99 to M.P. 217.25 Torrance5818-AL-42 M.P. 217.25 to M.P. 222.58 Torrance5818-AL-43 M.P. 222.58 to M.P. 228.07 Torrance5818-AL-44 M.P. 228.07 to M.P. 233.35 Torrance5818-AL-45 M.P. 233.35 to M.P. 239.38 Torrance5818-AL-46 M.P. 239.4 to M.P. 245.9 Torrance & Sante Fe5818-AL-47 M.P. 245.9 to M.P. 250.3 Sante Fe5818-AL-47A M.P. 250.3 to M.P. 252.3 Sante Fe5818-AL-47B M.P. 252.2 to M.P. 255.3 Sante Fe5818-AL-48 M.P. 255.3 to M.P. 259.6 Sante Fe & Bernalillo5818-AL-49 M.P. 259.6 to M.P. 265.3 Sandoval & Bernalillo5818-AL-50 M.P. 265.3 to M.P. 271.0 Sandoval5818-AL-51 M.P. 271.0 to M.P. 276.5 Sandoval5818-AL-52 M.P. 276.5 to M.P. 281.8 Sandoval

EXHIBIT A-2

ALIGNMENT SHEET MILE POSTS COUNTY STATIONS- ————— ———- —— ——– 5818-AL-53 M.P. 281.8 to M.P. 287.2 Sandoval5818-AL-54 M.P. 287.2 to M.P. 292.4 Sandoval5818-AL-55 M.P. 292.4 to M.P. 298.1 Sandoval5818-AL-56 M.P. 298.1 to M.P. 304.5 Sandoval5818-AL-57 M.P. 304.5 to M.P. 310.6 Sandoval5818-AL-58 M.P. 310.6 to M.P. 316.4 Sandoval5818-AL-59 M.P. 316.4 to M.P. 322.5 Sandoval5818-AL-60 M.P. 322.5 to M.P. 328.7 Sandoval5818-AL-61 M.P. 328.7 to M.P. 334.7 Sandoval5818-AL-62 M.P. 334.7 to M.P. 340.6 Sandoval5818-AL-63 M.P. 340.6 to M.P. 346.3 Sandoval & McKinley5818-AL-64 M.P. 346.3 to M.P. 352.1 Sandoval & McKinley5818-AL-65 M.P. 352.1 to M.P. 357.9 Sandoval5818-AL-66 M.P. 357.9 to M.P. 363.8 Sandoval5818-AL-67 M.P. 363.8 to M.P. 369.8 Sandoval & Rio Arriba5818-AL-68 M.P. 369.8 to M.P. 374.5 Rio Arriba58195819-AL-69 M.P. 374.5 to M.P. 380.3 San Juan & Rio Arriba5819-AL-70 M.P. 380.3 to M.P. 386.3 San Juan5819-AL-71 M.P. 386.3 to M.P. 392.1 San Juan

EXHIBIT A-3

ALIGNMENT SHEET MILE POSTS COUNTY STATIONS- ————— ———- —— ——– 5819-AL-72 M.P. 392.1 to 398.1 San Juan5819-AL-73 M.P. 398.1 to 403.7 San Juan5819-AL-74 M.P. 403.7 to 409.8 San Juan5819-AL-75 M.P. 409.8 to 415.6 San Juan Kutz (M.P. 415.29)

EXHIBIT A-4 EXHIBIT B SCOPE OF WORK & OPERATING PROCEDURES SCOPE OF WORK & OPERATING PROCEDURES FOUR CORNERS 8″ CONVERSION TO REFINED PRODUCTSSummaryThe Four Corners 8″ pipeline from Kutz Station to White Lakes Station will beconverted from LPG service to refined products service. Flow of the line will bereversed with product entering the line at White Lakes Station and flowingnorthwest to Kutz Station.HistoryThe 8″ Four Corners line was installed in 1972 to transport LPG from northwestNew Mexico to Gaines County, Texas. This line is currently paralleled with 10″and 12″ pipelines, all transporting LPG.Future ServiceNavajo Pipeline Company will transport refined products and/or crude oil fromArtesia, New Mexico to the White Lakes Station. The 8″ Four Corners line willtransport the refined products to Navajo terminals which may be constructed atpoints between White Lakes Station and Kutz Station.Pump StationsThere is one existing pump at each of four existing pump stations on the 8″ linewhich will be dedicated to refined products service. The pumps are located atWhite Lakes, Duran, Edgewood, and San Luis pump stations. All pumps are drivenby gas turbines with the exception of Edgewood which is powered by an electricmotor. MAPL will continue to operate two pumps in LPG service at each station.Energy costs for the dedicated pumps utilized by Navajo will be paid by Navajoand measured with dedicated meters. Energy use for shared services (electricityfor air compressors, motorized valve operators, controls, lights, etc.) will beallocated 1/3 Navajo and 2/3 MAPL.MeasurementNavajo will be responsible for operations and maintenance of receipt anddelivery meters on the system. MAPL will receive pressure, temperature, flow andgravity information from the measurement facilities for use in pipeline control.Operation and MaintenanceMAPL will continue to operate and maintain the existing 8″ line from White LakesStation to Kutz Station in accordance with DOT Part 195 regulations, and Navajowill also comply with all DOT Part 195 regulations with respect to anyconnections Navajo may make to the 8″ Four Corners Line, MAPL Pipeline Controlin Tulsa will continue to operate and schedule the line. Navajo will operate andmaintain the line to White Lakes Station as well as any delivery terminals andrelated facilities it may have constructed. EXHIBIT B-1Over Pressure ProtectionNavajo will provide adequate over pressure safety devices to protect anydelivery terminals. MAPL will deliver products at pressures not to exceed 1650psig. MAPL will provide over pressure devices for the protection of its system.Receipt pressure at White Lakes shall not exceed 1650 psig nor shall it be lessthan 150 psig.MAPL ModificationsMAPL will make the following modifications to its system at its own expense: Pipeline: The existing 8″ line will be reversed to allow for flows from White Lakes Station to Kutz Station. LPG will be displaced from the line with nitrogen, check valves will be removed and the line blinded off from the existing LPG system. Connections: Receipt and delivery connections will be in the form of a 8″, 900# ANSI block valve at the White Lakes Station fence and on the mainline and at the edge of the ROW at terminals constructed by Navajo. Pumps: Piping will be modified at White Lakes, Duran, Edgewood and San Luis pump stations to allow for a dedicated pump on the 8″ line to pump products from White Lakes Station to Kutz Station. These pumps are currently identified as the “#1 blue unit” at each pump station SCADA: A communications system will be installed to transmit data from the delivery and receipt meters to Tulsa. Energy: Meters will be installed to measure the energy used by each dedicated pump.Navajo ModificationsNavajo will make the following installations at its expense: Pipeline: A products pipeline may be installed to the receipt connection at White Lakes Station and to the delivery connections at terminals constructed by Navajo. Connections: Pipeline connections to the receipt and delivery block valves will include cathodic insulation kits for electrical isolation. Meters: Receipt and delivery meters will be installed at Artesia and at terminal interconnects constructed by Navajo.March 7, 1996 EXHIBIT B-2 SCADA: Flow, temperature, pressure and gravity information will be provided at the delivery and receipt meters for MAPL’s use in pipeline control. Adequate space and location will be given within the facility for locating MAPL’s equipment. Electrical power will be provided to power the SCADA equipment. Safety: Over pressure protection devices to protect downstream equipment will be installed at terminal interconnects constructed by Navajo.LinefillLinefill from White Lakes Station to Kutz Station is approximately 116,860 bbland will be provided by Navajo. Navajo will also be responsible for all costsand expense (pigs, product, inhibitors, etc.) associated with the linefill. MAPLwill perform all venting, pigging and other operational activities.Product QualityAll products shipped within the line will meet the specifications as requiredunder applicable tariffs. MAPL assumes no liability for the quality of productdelivered.BatchingProduct batches will not be separated by pigs, spheres or other physicaldevices. MAPL will use its best efforts to minimize interfaces or contaminationof products shipped.Capacity ExpansionShould Navajo desire to expand the capacity of the 8″ pipeline beyond itsexisting 100% capacity, Navajo will bear all expenses associated with thedesign, engineering, procurement, construction, fabrication, installation andcommissioning of such equipment or modifications. All modifications and orequipment installed shall be overseen by, with the approval of and in accordancewith the specifications of MAPL.MAPL shall operate and maintain any and all equipment installed on the 8″pipeline or at any of the pumping stations. Should any equipment ormodifications provided for capacity expansion require additional operations ormaintenance resources or manpower above current requirements, or require anyadditional utilities, consumables or chemicals, or result in an increase inoperating or maintenance expense, these additional or increased expenses shallbe the sole responsibility of Navajo and shall be reimbursed as invoiced byMAPL. All of these costs and expenses shall be identified and agreed to duringthe design phase of any such modifications or installation.March 7, 1996 EXHIBIT B-3