Amendment and Supplement to Pipeline Lease Agreement
Exhibit 10.1
Amendment and Supplement to Pipeline Lease Agreement
This Amendment and Supplement to Pipeline Lease Agreement (this “Amendment”) is made and
entered into effective August 31, 2007, by and between HEP Pipeline Assets, Limited Partnership, a
Delaware limited partnership (“HEP”), and Alon USA, LP, a Texas limited partnership (“Alon”). HEP
and Alon sometimes shall be referred to herein, collectively, as the “Parties.”
RECITALS
A. On February 21, 1997, Navajo Pipeline Company, a Delaware corporation (“Navajo”), and
American Petrofina Pipe Line Company, a Delaware corporation (“American Petrofina”), executed that
certain Pipeline Lease Agreement pursuant to which Navajo leased to American Petrofina certain
undivided interests in the capacity of Navajo’s 12” — 8” petroleum products pipeline that extends
between Orla, Texas and El Paso, Texas (said Pipeline Lease Agreement shall be hereinafter referred
to as the “Pipeline Lease Agreement”).
B. Effective July 13, 2004, HEP became the owner of the pipeline that is the subject of the
Pipeline Lease Agreement and the successor-in-interest to all of Navajo’s rights, interests, and
obligations under the Pipeline Lease Agreement.
C. Effective July 31, 2000, Alon became the successor-in-interest to all of American
Petrofina’s rights, interests, and obligations under the Pipeline Lease Agreement.
D. HEP and Alon desire to amend and supplement certain provisions of the Pipeline Lease
Agreement that address leased pipeline capacity, lease terms, and rent.
NOW, THEREFORE, in exchange for the mutual covenants and other considerations described in
this Amendment, the receipt and sufficiency of which are hereby acknowledged, HEP and Alon agree as
follows:
1. Definitions. As used in this Amendment, the term the “pipeline” shall have the
meaning ascribed to such term in Recital Paragraph A of the Pipeline Lease Agreement. All other
terms used, but not otherwise defined in this Amendment, shall have the meanings ascribed to such
terms in the Pipeline Lease Agreement.
2. Recitals Paragraphs. The Parties acknowledge and agree that the recital
paragraphs above are an integral part of this Amendment.
3. Amendment to Initial Lease. The Parties acknowledge that, prior to this
Amendment, the Initial Lease was for a lease of an undivided interest in the capacity of the
pipeline equal to 7,500 barrels per day, and that the Initial Lease Term would expire on August 31,
2008. The Parties agree that, effective September 1, 2007 (hereinafter referred to as the
“Amendment Date”), the Initial Lease is amended such that, from the Amendment Date, the Initial
Lease shall be a lease of an undivided interest in the capacity of the pipeline equal to 5,000
barrels per day. The Parties further agree that the Initial Lease Term is amended such that the
expiration of the Initial Lease Term shall occur on August 31, 2018. The Parties acknowledge and
agree that the Initial Lease Renewal Option provided for in Section 4.A.2 of the Pipeline Lease
Agreement shall continue to exist following the Amendment Date, but that
the second sentence of Section 4.A.2 of the Pipeline Lease Agreement shall be amended to read as
follows: “Lessee may exercise the Initial Lease Renewal Option by delivering Lessor written notice
of the exercise of the Initial Lease Renewal Option no later than August 31, 2017.”
4. Option for Expansion Lease. Prior to the expiration of the Initial Lease Term (as
amended in the immediately preceding section of this Amendment), Alon shall have the option to
lease an additional undivided interest in the capacity of the pipeline equal to 2,500 barrels per
day. The option described in the preceding sentence shall be hereinafter referred to as the
“Expansion Option.” In order to exercise the Expansion Option, Alon shall provide HEP with notice
of the exercise of such option at least sixty (60) days in advance of the date on which Alon
desires to commence the additional lease (hereinafter referred to as the “Expansion Lease”) of an
additional undivided interest in the capacity of the pipeline equal to 2,500 barrels per day . The
commencement date of the term of any such Expansion Lease shall be hereinafter referred to as the
“Expansion Date,” and must be on the first day of a calendar month. In the event that Alon
exercises the Expansion Option, the term of the Expansion Lease shall commence on the Expansion
Date and expire on the last day of the calendar month that immediately precedes the tenth
(10th) anniversary of the Expansion Date. For the sake of clarity, the Expansion Lease
provided for in this Section 4 of the Amendment would be in addition to the Initial Lease (as
amended in this Amendment), the Second Lease, and the Option Lease provided for in the Pipeline
Lease Agreement.
5. Amendments to Rent Amount. Effective on the Amendment Date, the Base Rent and the
Rent Amount for the Initial Lease shall be reduced to the amounts that are two-thirds the Base Rent
and Rent Amount, respectively, that were in effect for the Initial Lease on July 31, 2007. In the
event that Alon exercises the Expansion Option, Alon shall pay to HEP rent for the Expansion Lease,
in monthly installments in advance, beginning on the Expansion Date, as follows: The Base Rent and
the Rent Amount for the Expansion Lease shall, effective on the Expansion Date, be equal to the
amounts that are fifty percent (50%) of the Base Rent and Rent Amount, respectively, in effect for
the Initial Lease during the month when the Expansion Date occurs. The Rent Amount for the Initial
Lease, the Second Lease, the Option Lease, and any Expansion Lease shall be adjusted on each
anniversary of the Execution Month as provided in Section 5.B of the Pipeline Lease Agreement
(which is entitled “Base Rent Adjuster”).
6. Exercise of Second Lease Renewal Option. Pursuant to Section 4(B)(2) of the
Pipeline Lease Agreement (which is entitled “Option to Renew”), Alon hereby exercises the
Second Lease Renewal Option, and the Second Lease Renewal Term shall expire on July 31, 2020.
7. Deletion of Section 24. Section 24 of the Pipeline Lease Agreement (which is
entitled “EARLIER TERMINATION”) is hereby deleted in its entirety from the Pipeline Lease
Agreement.
8. Effect of Amendment. Except as provided herein, all of the provisions of the
Pipeline Lease Agreement shall be and remain in full force and effect.
IN WITNESS WHEREOF, HEP and Alon have caused this Amendment to be executed effective as of
August 31, 2007.
| HEP PIPELINE ASSETS, LIMITED PARTNERSHIP | ||||
| By: | HEP Pipeline GP, L.L.C. its General Partner, |
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| By: | Xxxxx Energy Partners — Operating, L.P. its Sole Member |
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| By: | ||||
| Xxxxx X. Xxxxx Senior Vice President |
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| ALON USA, LP | ||||
| By: | ALON USA, GP, LLC, a Delaware limited liability company, its General Partner |
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| By: | ||||
