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                                                                    EXHIBIT 10.7
                            Pipeline Lease Agreement

THIS PIPELINE LEASE AGREEMENT (this "Lease" or this "Agreement") is entered into
by and between NAVAJO PIPELINE COMPANY, a Delaware corporation ("Lessor") and
AMERICAN PETROFINA PIPE LINE COMPANY, a Delaware corporation ("Lessee").

                                 R-E-C-I-T-A-L-S

         A. Lessor is the owner of a 12" - 8" petroleum products pipeline (the
"pipeline") that extends between Orla, Texas and El Paso, Texas, where the
pipeline terminates prior to entering a petroleum products pipeline terminal
owned by Navajo Refining Company.

         B. Lessee, and/or its affiliates, desire to enter into a transaction in
which Lessee will lease certain undivided interests in the pipeline from Orla
Station to El Paso, Texas running from Milepost 81.6 through Milepost 214.6, as
encompassed in the System Map attached hereto as Exhibit A (hereinafter referred
to as the "Lessee's Pipeline"), subject to any applicable common
carrier requirements, so as to create its own proprietary product pipeline
system for the shipment of Fina Oil and Chemical Company ("Fina") gasoline and
low-sulfur diesel fuel meeting the specifications of the El Paso, Tucson and
Phoenix markets produced at its refineries in Big Spring and/or Port Arthur,
Texas to El Paso, Texas. This proprietary pipeline system (the "Pipeline
System") shall originate at Fina's West Texas Pipeline Terminal and the terminus
will be at El Paso, Texas prior to entry into Navajo Refining Company's
terminal.

                               W-I-T-N-E-S-S-E-T-H

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, Lessor and Lessee agree as
follows:

1. DEMISE

         Lessor, for and in consideration of the covenants and agreements
hereinafter set forth to be kept and performed by both parties, does hereby
demise and lease to Lessee for the Lease Term (hereinafter defined) certain
undivided interests in the capacity (as specified herein) of the pipeline for
transporting petroleum products from Orla Station to El Paso, Texas.

         This agreement encompasses two separate lease commitments running for
different terms and one lease option.

         The first lease (Initial Lease) will be for a lease of an undivided
interest in the capacity of the pipeline equal to 7,500 barrels per day ("BPD),
commencing on a date and for a term specified herein. The second lease (Second
Lease) is for the lease of an additional undivided interest in the capacity of
the pipeline equal to 7,500 BPD commencing August 1, 2000 and for a term
specified herein. Lessee shall have an option to lease an additional undivided
interest in the capacity of the pipeline equal to

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Pipeline Lease Agreement

5,000 BPD (Lease Option) for a term specified herein. Said option must be
exercised by giving written notice at anytime from August 1, 2000 through July
31, 2005.

2. LESSOR'S WORK

         Lessor will provide a valve and custody transfer metering facility at
Orla, Texas on the pipeline to permit the tie-in to the Lessee's Work, described
herein and to make such additional modifications as necessary to effect its
obligations hereunder.

3. LESSEE'S WORK

         Lessee, at its sole cost and expense (hereinafter "Lessee's Work"), and
in accordance with specifications reasonably approved by Lessor, shall perform
such work necessary to deliver petroleum products to Lessee's Pipeline at Orla
at a design pressure of 1,400 psi and at initial minimum delivery rates of 1,700
barrels per hour (BPH) with ultimate expandability to 3,000 BPH. Lessee's Work
shall include SCADA system controllable by Lessor, meters, tankage and all other
necessary work to insure optimum capacity utilization of that portion of the
pipeline running from Artesia, New Mexico to Orla, Texas and the pipeline.
Lessor shall have final approval of Lessee's Work to insure this optimum
utilization. Lessee covenants and agrees to perform Lessee's Work as herein
described in a good and workmanlike manner, in accordance with applicable laws
and industry standards.

4. LEASE TERM

A. INITIAL LEASE

         1.       Initial Lease Term. While the "Initial Lease" will be
effective upon execution, the "Initial Lease Term" of the Initial Lease will
commence on the Commencement Date (hereinafter defined) and expire on that day
that is the last day of the calendar month during which the tenth (10th)
anniversary thereof occurs. The "Commencement Date" will be the earlier to occur
of (i) that date that is the first (1st) day of the eighteenth (18th) calendar
month following the execution of this Lease, or (ii) that date the Lessee
actually commences shipments on the Pipeline System, which cannot be prior to
the completion of Lessor's Work.

         2.       Option to Renew. Provided that Lessee is not in default under
this Lease beyond applicable notice and cure periods at the time of the exercise
of the Renewal Option granted herein, Lessee shall have the option (the "Initial
Lease Renewal Option") to renew the Initial Lease for one (1) additional term of
ten (10) years (the "Initial Lease Renewal Term") commencing on the first day of
the calendar month immediately following the expiration of the Initial Term.
Lessee may exercise the Initial Lease Renewal Option by delivering Lessor
written notice of the exercise of the Renewal Option no less than one year prior
to the expiration of the Initial Lease Term. Lessee's lease during the Initial
Lease Renewal Term will be upon the same terms as for the Initial Lease Term,
except that the Base Rent (hereinafter defined) will adjust as hereinafter
provided and during the Renewal Term Lessee will have no further right to renew
this Initial Lease.

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Pipeline Lease Agreement

         3.       Lease Term. The "Lease Term" shall initially be the Initial
Term and, if Lessee exercises the Option, the "Lease Term" shall also include
the Renewal Term.

         4.       Lease Year. As used in the Initial Lease, the first "Lease
Year" shall initially mean the twelve (12) month period commencing on the
Commencement Date and ending on the last day of the calendar month in which the
first anniversary thereof occurs. The term "Lease Year" shall thereafter mean
the successive twelve (12) month periods commencing on the first day of the
calendar month following the ending date of the previous Lease Year and ending
on the last day of the 12th calendar month thereafter.

B. SECOND LEASE

         1.       Second Lease Initial Term. The Initial Term of the Second
Lease will commence on August 1, 2000 and expire on July 31, 2010.

         2.       Option to Renew. Provided that Lessee is not in default under
this Lease beyond applicable notice and cure periods at the time of the exercise
of the Renewal Option granted herein, Lessee shall have the option ( the "Second
Lease Renewal Option") to renew the Second Lease for one (1) additional term of
ten (10) years (the "Second Lease Renewal Term") commencing on August 1, 2010.
Lessee shall exercise the Second Lease Renewal Option by delivering Lessor
written notice of the exercise of the Second Lease Renewal Option no less than
one year prior to the expiration of the Second Lease Initial Term. Lessee's
lease during the Second Lease Renewal Term shall be upon the same terms as for
the Second Lease Initial Term, except that the Base Rent (hereinafter defined)
will adjust as hereinafter provided and at the Second Lease Renewal Term, Lessee
will have no further right to renew this Second Lease, and the Second Lease
shall terminate.

C. LEASE OPTION

         1.       Initial Term. In the event the Lessee exercise the Lease
Option, the Initial Term of the Option Lease ("Third Initial Term") will
commence eighteen months after the Lessor receives written notice of the
Lessee's exercise of the Lease Option (Option Commencement Date) provided such
notice is received during the period commencing August 1, 2000 and ending August
1, 2005, and such Initial Term will expire on the last day of the calendar month
in which the tenth (10th) anniversary thereof occurs.

         2.       Option to Renew. Provided that Lessee is not in default under
this Lease beyond applicable notice and cure periods at the time of the exercise
of the Renewal Option granted herein, Lessee is granted the option (the 'Third
Renewal Option") to renew the Option Lease for one (1) additional term of ten
(10) years (the "Third Renewal Term") commencing on the next day after the
expiration of the Third Initial Term. Lessee shall exercise the Third Renewal
Option by delivering Lessor written notice of the exercise of the Third Renewal
Option at least one year prior to the expiration of the Third Initial Term.
Lessee's lease of the Option Lease during the Third Renewal Term will be upon
the same terms as for the Third Initial Term, except that the

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Base Rent (hereinafter defined) will adjust as hereinafter provided and at the
end of the Third Renewal Term, Lessee will have no further right to renew this
Option Lease.

5. RENTAL AMOUNT

A.       Base Rent. Lessee agrees to pay to Lessor rent for the respective
leases in monthly installment, in advance, beginning on the Commencement Date
(Base Rent), as follows:

        -    Initial Lease                                  $225,000 per month
        -    Second Lease                                    187,000 per month
        -    Option Lease
             -   If exercised by 7/31/2002                   100,000 per month
             -   If exercised on or after 8/1/2002           116,667 per month

B.       Base Rent Adjuster. On each annual anniversary date after the execution
of the Agreement (the "Execution Month") the base rent for each of the
respective leases, whether or not then exercised, for the ensuing year will be
adjusted by an amount determined by multiplying the Base Rent for the
immediately preceding year by the Base Rent Adjuster. The "Base Rent Adjuster"
shall be determined for the first year after the execution date by dividing the
Producer Price Index for Finished Goods [as found in Table 1 of the Product
Prices and Price Indexes published by the U.S. Department of Labor, Bureau of
Labor Statistics] ("PPIFG") for the first anniversary of the Execution Month by
the PPIFG published for the Execution Month and subtracting one one-hundredth
(0.01) from the quotient so obtained. Base Rent Adjuster for subsequent years
will be calculated in a similar manner using the same months as with the
original Base Rent Adjuster for each respective year in the calculation. The
addition of the Base Rent and the Base Rent Adjuster for any given year will
hereinafter be referred to as the Rent Amount.

C.       Payment of Rent. Each installment of the Rent Amount shall be due and
payable on the first day of each month. Any installment of Rent Amount due for
any fractional month shall be prorated based upon the actual number of days in
that month.

6. OPERATION OF THE PIPELINE

         Lessor shall be responsible for operating the pipeline and the Lessee's
pump which delivers product into the pipeline. Lessee shall operate its related
facilities upstream of the pump in accordance with all Applicable Laws and in
accordance with industry standards. As used herein, the "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 regulations of all
governmental bodies (state, federal, tribal and municipal) applicable to or
having jurisdiction over the use, occupancy, operation and maintenance of the
pipeline, as such may be amended or modified from time to time. Lessee shall
provide nominations of pipeline deliveries to Lessor for movement on Lessee's
leased capacity by the tenth day of the month prior to the month of such
scheduled deliveries. Lessee shall provide a minimum batch size of 10,000
barrels for delivery to Lessor and shall limit product shipped to low sulfur
diesel and gasoline meeting the specifications of El Paso, Tucson or Phoenix and
shall meet

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any and all quality certification requirement's of federal, state or other
jurisdictions prior to delivery to Lessor. In the event Lessee desires to
transport jet fuel, the parties shall meet in good faith to endeavor to reach
mutually agreeable arrangements Treatment of transmix and over/shorts on the
pipeline will be handled pursuant to procedures specified in Exhibits B and C.

7. SHIPMENT AND TARIFFS

         Lessee shall at all times during the Lease Term be solely responsible
for shipments of product and will publish and file any applicable tariffs in its
own name and in accordance with Applicable Laws covering its leased capacity in
the pipeline, except that Lessee shall assure that its tariffs are consistent
with Lessor's filed tariffs. Lessor shall have the right to review and approve
such tariffs prior to filing, with such approval not to be unreasonably withheld
so long as the terms of Lessee's tariffs including prorationing, are consistent
with Lessor's tariffs. Lessee agrees that it will not impair and at its expense
will take all reasonable steps to protect Lessor's rights under all Applicable
Laws respecting the pipeline to the extent such rights are materially threatened
by virtue of any act or failure to act of Lessee hereunder. In the event counsel
jointly retained by Lessor and Lessee is of the opinion that such rights are
materially threatened by virtue of an act of Lessee, Lessee must take all the
reasonable steps as referenced above in this paragraph 7. Lessee shall collect
for its own account all revenues payable by shippers applicable to its Pipeline
System. From and after the Commencement Date, Lessee or its designated
shipper(s) shall be responsible for all linefill in its Pipeline System.

8. ALTERATIONS BY LESSEE

         Lessee shall not alter or make any modifications to the pipeline and
shall not alter any of Lessee's Work to the extent if would affect operation of
the pipeline.

9. MAINTENANCE AND REPAIR

         Lessor, at its sole cost and expense, shall maintain all aspects of the
pipeline and Lessee shall maintain all aspects of the Pipeline System not part
of Lessee's Pipeline in good condition and repair, in accordance with Applicable
Laws and in accordance with industry standards.

10. LESSOR AMDEL PIPELINE RIGHTS

         In the event that the Lessee activates its Amdel pipeline system to
move petroleum products from the Gulf Coast to West Texas during the term of the
Lease, Lessor shall have the right to move product on this system to the Orla
Station for delivery into the pipeline at Lessee's published tariffs or in the
event there are not published tariffs at rates approximating the level of
regulated tariffs, except that nothing contained herein shall be deemed to
modify the intention of the parties that the Pipeline System is intended by
Lessee to transport only product refined by Fina at its refineries in Big Spring
and/or Port Arthur, Texas to El Paso, Texas.

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11. REPRESENTATION, WARRANTIES AND COVENANTS OF LESSOR

         Lessor represents, warrants and covenants to Lessee that:

A.       Title. Lessor has good, marketable and indefeasible title to the
Pipeline System, subject only to the easements/rights-of-way on which the
Pipeline System exists and the agreements creating same.

B.       Organization. Lessor is duly organized, validly existing and in good
standing under the laws of the state of its organization, and is duly qualified
to transact business in the state in which the Lessee's Pipeline is situated.

C.       Authority. Lessor has all requisite power and authority, has taken all
actions required by its organizational documents and applicable law, and has
obtained all necessary consents, to execute and deliver this Lease and to
consummate the transactions contemplated in this Lease.

D.       Other Agreements, etc. Neither the execution of this Agreement nor 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 or
right-of-way on which Lessee's Pipeline is located; or (ii) violate any
restriction to which Lessor or Lessee's Pipeline is subject; (iii) constitute
the violation of any Applicable Laws.

E.       Proceedings. There are no attachments, executions, assignments for the
benefit of creditors, or voluntary or involuntary bankruptcy proceedings, or
under any debtor relief laws, contemplated by or pending or threatened against
Lessor or Lessee's Pipeline.

F.       Litigation. Lessor is not now a party to any material litigation,
arbitration or administrative proceeding (i) with any person or entity having or
claiming any interest in Lessee's Pipeline, or (ii) affecting or questioning
Lessor's title to Lessee's Pipeline or Lessor's ability to perform its
obligations under this Lease. Lessor knows of no presently pending or threatened
material litigation, arbitration or administrative proceeding affecting or
questioning Lessor's title to, or use of, Lessee's Pipeline or any part thereof,
or Lessor's ability to perform its obligations under this Lease.

G.       Compliance with Laws. To the best of Lessor' knowledge and belief, all
Applicable Laws bearing on the construction or operation of Lessee's Pipeline
have been complied with, Lessee's Pipeline currently complies with all
Applicable Laws, and the operation of Lessee's Pipeline as contemplated by this
Lease will not violate any such Applicable Laws.

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H.       Administrative Notices. Lessor has not received notice of, and has no
other knowledge or information of, any pending or contemplated change in any
Applicable Laws applicable to Lessee's Pipeline, or any pending or threatened
judicial or administrative action, or any action pending or threatened, or of
any natural or artificial condition upon or affecting the Lessee's Pipeline or
any part thereof, any of which would result in any material change in the
condition of the Lessee's Pipeline, or any part thereof, or would in any way
limit or impede the operation of the Lessee's Pipeline.

I.       Licenses. Lessor possesses all licenses, certificates and permits that
are required to fulfill all of its obligations hereunder.

J.       Taxes. There are no unpaid taxes, assessments or charges against
Lessee's Pipeline System.

K.       Condemnation. Lessor has no knowledge of any condemnation, eminent
domain or similar proceedings having been instituted or threatened against the
Pipeline System.

L.       True and Correct. To Lessor's best knowledge, after reasonable inquiry,
all information and other items heretofore or hereafter submitted to Lessee by
or on behalf of Lessor are true, correct and complete. Lessor is not aware of
any omission to supply Lessee with any material information or other items with
respect to Lessee's Pipeline, its history, prospects or operations, or any
information which may be required to prevent the information of other items
already supplied from being misleading.

Lessor acknowledges that the execution of this Lease by Lessee has been made,
and the lease of Lessee's Pipeline by Lessee will have been made, in material
reliance by Lessee on Lessor's representations and warranties contained in this
Paragraph 11.

12. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

         Lessee represents, warrants and covenants to Lessor that:

A.       Organization. Lessee is duly organized, validly existing and in good
standing under the laws of the state of its organization, and is duly qualified
to transact business in the state in which Lessee's Pipeline is situated.

B.       Authority. Lessee has all requisite power and authority, has taken all
actions required by its organizational documents and Applicable Laws, and has
obtained all necessary consents, to execute and deliver this Lease and to
consummate the transactions contemplated in this Lease.

C.       Proceedings. There are no attachments, executions, assignments for the
benefit of creditors, or voluntary or involuntary bankruptcy proceedings, or
under any debtor relief laws, contemplated by or pending or threatened against
Lessee.

D.       Licenses. Lessee possesses or will posses all licenses, certificates
and permits that are required to fulfill its obligations hereunder.

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E.       Liens. Lessee has no authority, express or implied, and will not create
or place any lien or encumbrance of any kind or nature whatsoever upon, or in
any manner bind the interest of Lessor or Lessee in Lessee's Pipeline or charge
the Rent payable hereunder for any claim in favor of any person dealing with
Lessee, including those who may furnish materials or perform labor for any
construction or repairs.

F.       Litigation. Lessee is not now a party to any material litigation,
arbitration or administrative proceeding affecting or questioning Lessee's
ability to perform its obligation under this Lease.

G.       True and Correct. To Lessee's best knowledge, after reasonable inquiry,
all information and other items heretofore or hereafter submitted to Lessor by
or on behalf of Lessee are true, correct and complete.

Lessee acknowledges that the execution of this Lease by Lessor has been made,
and the lease of Lessee's Pipeline by Lessor will have been made, in material
reliance by Lessor on Lessee's representations and warranties contained in this
Paragraph 12.

13. INDEMNIFICATION

         Each party hereto shall indemnify, defend, protect and hold the other
free and harmless from and against any and all claims, liabilities, damages,
costs, penalties, forfeitures, losses or expenses (including attorney's fees)
for death or injury to any person or damage to any property whatsoever arising
or resulting in whole or in part, directly or indirectly, out of the acts or
omissions of the indemnifying party or its employees, contractors or agents or
arising out of any breach by the indemnifying party of this Lease, including the
shipment of "off-spec" petroleum products.

14. INSURANCE

A.       Maintenance of Existing Coverage. Lessor and Lessee shall maintain such
or similar insurance coverages in place to cover the respective obligations of
each herein.

B.       Waiver of Subrogation. Lessor and Lessee and all parties claiming under
them mutually release and discharge each other from all claims and liabilities
arising from or caused by any casualty or hazard which is covered by insurance
carried on Lessee's Pipeline or carried in connection with property on or
activities conducted on the easements/right-of-ways on which Lessee's Pipeline
is located, and waive any right of subrogation which might otherwise exist in or
accrue to any person on account thereof.

15. ASSIGNMENT.

         This Lease may not be assigned by either party without the prior
written consent of the other party. The foregoing restrictions on assignment
shall not apply: with respect to Lessor, to (a) a transfer by Lessor to an
affiliate (affiliate defined as an entity in which Lessor or a parent of Lessor
has at least a 50% ownership interest or a class or classes of parent
shareholders existing prior to or contemporaneously with the transfer); (b) a
transfer that is part of a merger or consolidation of Lessor or an affiliate

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of Lessor with another entity in which the aggregate consideration for such
merger or consolidation is at least $100 million; or (c) a transfer that is part
of a broader sale of assets by Lessor or an affiliate of Lessor in which the
aggregate purchase price of such assets sold is at least $100 million; and, with
respect to Lessee, to (a) a transfer by the Lessee to an affiliate (affiliate
defined as an entity in which Lessee or a parent of Lessee has at least a 50%
ownership interest); (p) a transfer that is part of a merger or consolidation of
the Lessee or an affiliate of the Lessee with another entity provided (i) the
aggregate consideration for such merger or consolidation is at least $100
million and (ii) the resulting entity would own and operate at least one of the
Big Spring or Port Arthur refineries in order to supply the Lessee's Pipeline;
or (c) a transfer that is part of a broader sale of assets by the Lessee or an
affiliate of the Lessee in which (i) the aggregate purchase price of such assets
sold is at least $100 million and (ii) the new entity would own and operate at
least one of the Big Spring or Port Arthur refineries in order to supply the
Lessee's Pipeline. Nothing contained in this paragraph shall restrict either
Lessor or Lessee in their ability to sell, hypothecate, transfer, pledge or
assign the cash flow/income stream arising out of or resulting from the Lease.
Any assignment or purported assignment in violation of this paragraph 15 shall
be void.

16. SURRENDER UPON TERMINATION

         Upon the expiration or other termination of all of the Lease Terms,
Lessee shall disconnect from Lessor's Pipeline System.

17. TEMPORARY REDUCTION IN CAPACITY

         In the event of any reductions in throughput capability of the pipeline
each of Lessor and Lessee shall bear such reductions as follows:

         Average Daily                      Reduced           Total Lessee's
         Throughput Obligation          x   Line         =    Throughput
         of Lessee for Prior                Capacity          Availability
         Twelve Months
         Average Daily pipeline
         Throughput for Prior Twelve
         Months

Total Lessor's Throughput Availability shall be the Amount of Remaining Capacity
less the Total Lessee's Throughput Availability. Lessor shall take all
reasonable steps to restore such capacity so long as it is economical to do so,
in Lessor's sole judgment. If the reduction in capacity should continue for
longer than 90 days, then Lessee shall have its lease payments reduced pro rata
to the reduction in capacity and in turn increased pro rata as capacity is
restored.

18. LESSOR'S RIGHT TO TEMPORARILY SUSPEND OPERATIONS

         If Lessor requires that the pipeline be shut down, in whole or in part,
or operations otherwise reduced, in order to effect construction on or repairs
to and or maintenance of the pipeline by Lessor, Lessor shall have the right to
do so, except that;

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(a) Lessor shall attempt to schedule such repairs, maintenance or construction
so as to minimize interference with shipping schedules; (b) Lessor shall give
Lessee 3 months notice of such work to the extent it is scheduled, as opposed to
unscheduled, work; and (c) Lessor shall complete such work as expeditiously as
possible.

19. EVENTS OF DEFAULT

A.       Events of Default by Lessor. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Lessor.

         (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.

         (2)      Any failure of Lessor's representatives 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 the following
shall constitute a material default and breach of this Lease by Lessee.

         (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 representatives or warranties to
remain true and correct throughout the Lease Term; provided that no event of
default shall occur is such

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representation of 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 after
request of the other, to deliver to the requesting party, or its designee, an
estoppel certificate stating whether or not this Lease is in full force and
effect, the date to which Base Rent has been paid, the unexpired term of this
Lease and such other factual matters pertaining to this Lease as deemed
reasonably necessary by the requesting party.

21. NOTICES

         Any notice or communication required or permitted in this Lease shall
be given in writing, sent by (a) personal delivery, or (b) expedited delivery
service with proof of delivery, or (c) United States mail, postage prepaid,
registered or certified mail, return receipt requested, addressed:

         if to Lessee, as follows:

                                    American Petrofina Pipe Line Company
                                    P.O. Box 2159
                                    Dallas, Texas 75221
                                    Attn: President

         and, if to Lessor, as follows:

                                    Navajo Pipeline Company
                                    P.O. Box 159
                                    Artesia, New Mexico 88211-0159
                                    Attn: President

or to such other address or to the attention of such other person as shall be
designated by the applicable party and on fifteen (15) days notice from time to
time in writing and sent in accordance herewith. Any such notice or
communication shall be deemed to have been given either at the time of personal
delivery or, in the case of delivery service or mail, upon receipt.

22. NO RENT ABATEMENT FOR PROBLEM AT LESSEE'S FACILITIES

         In no event shall a problem at Lessee's facilities, either its refining
facilities or the petroleum terminal and Lessee's pipeline connections , excuse
Lessee's obligations

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to pay rent hereunder, unless and to the extent such problem was caused or
contributed to by Lessor.

23. LIMITATION OF LIABILITY

         Neither party shall be liable for punitive,, consequential or special
damages of any kind arising out of or in any way connected with the performance
of or failure to perform this Agreement.

24. EARLIER TERMINATION

         Notwithstanding anything else contained herein, in the event the
Product Exchange Agreement executed contemporaneously herewith should terminate,
this Agreement shall terminate simultaneously with no party having any rights
vis-a-vis the other.

25. MISCELLANEOUS

A.       Confidentiality. Provided that express consent of both parties has been
given, the parties may discuss the existence of this Agreement, but not the
particulars of its terms and conditions.

B.       Headings/Gender. Words of any gender used in this Lease shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise requires. The
captions inserted in this Lease are for convenience only and in no way define,
limit or otherwise describe the scope or intent of this Lease, or any provision
hereof, or in any way affect the interpretation of this Lease.

C.       Successors and Assigns. Without limiting the terms of Paragraph 15
above, the terms, provisions and covenants and conditions contained in this
Lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, executors, personal representatives,
legal representative, successors and assigns, except as otherwise herein
expressly provided.

D.       Entire Agreement. This Lease constitutes the entire understanding and
agreement of the Lessor and Lessee with respect to the subject matter of this
Lease, and contains all of the covenants and agreements of Lessor and Lessee
with respect thereto. Lessor and Lessee each acknowledge that no
representations, inducements, promises or agreements, oral or written, have been
made by Lessor or Lessee, or anyone acting on behalf of Lessor or Lessee, which
are not contained herein, and any prior agreements, promises, negotiations, or
representations 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 in
writing signed by both parties hereto.

                                       12
<PAGE>

Pipeline Lease Agreement

E.       Severability. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Lease then and in that event, it is the intention of the parties 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 each clause of
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 in terms to
such illegal, invalid or unenforceable clause or provision as may be possible
and be legal, valid and enforceable.

F.       Date of Lease. All references in this Lease to "the date hereof" or
similar reference shall be deemed to refer to the last date, in point of time,
on which all parties hereto have executed this Lease.

G.       Counterparts. This Lease may be executed in counterparts, each being
deemed an original, both together constituting only one instrument.

H.       Time For Performance. TIME IS OF THE ESSENCE WITH RESPECT TO ALL
PERFORMANCE OBLIGATIONS CONTAINED IN THIS LEASE.

I.       Attorney's Fees. In the event it becomes necessary for either party
hereto to file a suit respecting the subject matters of this Lease including
without limitation to enforce this Lease or any provisions contained herein, the
party prevailing in such action shall be entitled to recover, in addition to all
other remedies or damages, reasonable attorney's fees incurred in such suit.

J.       Law Governing and Venue. THIS LEASE SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF TEXAS WITHOUT REGARD TO ITS CONFLICT OF LAWS, AND VENUE AND
JURISDICTION FOR ANY ACTION OR PROCEEDING RESPECTING THE SUBJECT MATTERS OF THIS
LEASE INCLUDING WITHOUT LIMITATION TO ENFORCE THIS LEASE OR ANY PROVISIONS
CONTAINED HEREIN SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS LOCATED IN
DALLAS, TEXAS.

K.       Waiver. No waiver by either party of any provision of this Lease or of
any default, event of default or breach hereunder shall be deemed to be a waiver
or 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's consent to
or approval of any act requiring consent or approval shall not be deemed to
render unnecessary the obtaining of consent to or approval of any subsequent act
requiring consent. No act or thing done by Lessor or Lessor's agents during the
term of this Lease shall be deemed an acceptance of a surrender of Lessee's
Pipeline, unless done in writing signed by Lessor.

L.       Interpretation. The parties hereto agree that it is their intention
hereby to create only the relationship of Lessor and Lessee, and no provision
hereof, or act or either party hereunder, shall aver be construed as creating
the relationship of principal and agent, or a partnership, or a joint venture or
enterprise between the parties hereto.

                                       13
<PAGE>

Pipeline Lease Agreement

M.       Amendments. This Lease may not be modified or amended, except by an
agreement in writing signed by Lessor and Lessee. The parties may waive any of
the conditions contained herein or any of the obligations of the other party
hereunder, but any such waiver shall be effective, only if in writing and signed
by the party waiving such conditions or obligations, except as specifically set
forth herein.

N.       Exhibits. All exhibits referenced herein as being attached hereto are
hereby incorporated herein by reference as if set forth in full in this Lease.

         EXECUTED BY LESSOR, this 21st day of February, 1997

                                           NAVAJO PIPELINE COMPANY,
                                           a Delaware corporation

                                           By: /s/ WILLIAM J. GRAY
                                              ---------------------------------
                                           Name: William J. Gray
                                           Title: President

         EXECUTED BY LESSEE, this 21st day of February, 1997

                                           AMERICAN PETROFINA PIPE LINE COMPANY,
                                           a Delaware corporation

                                           By: /s/ Jeff D. Morris
                                              ---------------------------------
                                           Name: JEFF D. MORRIS
                                           Title: President

Exhibits:

Exhibit A:      System Map

Exhibit B:      Transmix Handling

Exhibit C:      Settlement Pricing Policy

                                       14

<PAGE>

                                    EXHIBIT A

                      [NAVAJO PIPELINE COMPANY SYSTEMS MAP]

<PAGE>

                                    EXHIBIT B

                               TRANSMIX HANDLING

TRANSMIX ALLOCATION

Transmix shall be allocated to all shippers on both the Lessor's and the
Lessee's pipeline on a monthly basis in proportion to each shipper's volume of
all products transported on the Lessor and Lessee's pipeline. Each shipper may
not physically receive their allocated share of transmix each cycle, therefore,
an accounting of transmix debited and credited to each shipper's account shall
be carried forward and distributed/balanced on a future pipeline delivery.
Transmix distribution balances shall be reconciled as appropriate to minimize
the time lag between allocation and the physical delivery of such transmix.
Transmix shall be delivered into Navajo Refining Company's storage facilities
and generally consists of two dissimilar products, such as gasoline/diesel or
turbine/gasoline. Distribution of shipper's transmix shall be made in accordance
with shipper's direction, by shipper's written authorization.

NAVAJO REFINING TERMINAL

Limited facilities at Navajo Refining Company's terminal shall be available for
storage of transmix products received for the account of shippers. To avoid
interfering with Navajo's pipeline operations, shippers shall be notified by
Navajo when removal of shipper's transmix is required. Such notification shall
include the required compliance date for removal of all such transmix.

TRANSMIX REMOVAL/DEMURRAGE CHARGES

Upon notification to shipper that removal of transmix from Navajo storage is
required, shipper shall promptly arrange for removal of shipper's transmix.
Shipper shall pay a five (5.0) cents per barrel, per day, demurrage charge for
each day such transmix is not removed, from and after six (6) days following
notification by Navajo that removal of transmix is required.

<PAGE>

                                    EXHIBIT C

                           SETTLEMENT PRICING POLICY

Settlement prices used for payment or collection on pipeline losses or gains by
Lessor are listed in the Oil Price Information Service (OPIS) publication.
Prices indicated on the last publishing day of a given month for "PAD 4/5
Report" will be used for that month's settlement.

The following indicates product prices that will be used. Because premium
gasoline require "safe cuts" to protect octanes, with interfaces being delivered
into unleaded regular gasoline, all gasoline will be settled at the published
price for unleaded regular gasoline.

Product                                Product Price Used

Diesel (all grades)                    No. 2 Diesel

Unleaded Regular Gasoline              Unleaded Regular Gasoline

Unleaded Premium Gasoline              Unleaded Regular Gasoline

Transmix                               Combined One-half (1/2)
                                       Unleaded Regular Gasoline and
                                       One-half (1/2) No. 2 Dieselexv10w33

 

Exhibit 10.33

FOURTH AMENDMENT TO RESTATED

CREDIT AND SECURITY AGREEMENT

     THIS FOURTH AMENDMENT TO RESTATED CREDIT AND SECURITY AGREEMENT (the
“Fourth Amendment”) by and between EDUCATIONAL DEVELOPMENT CORPORATION, a
Delaware corporation, as borrower (the “Company”), and ARVEST BANK, successor
via name change to Arvest State Bank, Tulsa, Oklahoma, as lender (the “Bank”),
is entered into effective as of the 30th day of June, 2003.

     WITNESSETH:

     WHEREAS, pursuant to the Restated Credit and Security Agreement dated as
of June 30, 1999, as amended by the First Amendment thereto dated as of June
30, 2000, as further amended by the Second Amendment thereto dated as of June
30, 2001, and as further amended by the Third Amendment thereto dated as of
June 30, 2002 (collectively the “Restated Credit Agreement”), the Bank extended
a Three Million Five Hundred Thousand Dollars ($3,500,000) revolving line of
credit (the “Revolving Credit Loan”) to the Company upon the terms and
conditions therein set forth, the Revolving Credit Loan being secured by the
Collateral defined and described in Section 7.1 of the Restated Credit
Agreement and in the Security Agreement more particularly described and defined
therein;

     WHEREAS, the Company has requested the Bank to extend and renew the
revolving credit facility for one (1) year until June 30, 2004 in the maximum
principal amount of $3,500,000; and

     WHEREAS, subject to the terms, provisions and conditions hereinafter set
forth, the Bank is willing to so extend, amend and modify the Revolving Credit
Loan facility established pursuant to the Restated Credit Agreement in the
maximum principal amount of $3,500,000 until June 30, 2004.

     NOW, THEREFORE, for good and valuable consideration and for the extension
and amendment of the Restated Credit Agreement, the Company and the Bank hereby
agree as follows:

     1. The maturity date of the Revolving Credit Loan shall be extended from
June 30, 2003 to June 30, 2004, and Revolving Credit Loan advances shall be
evidenced by that certain replacement Revolving Credit Note of even date
herewith in the original principal amount of Three Million Five Hundred
Thousand Dollars ($3,500,000) payable to the order of the Bank and bearing
interest at a variable annual rate equal from day to day to Prime Rate (as
therein defined) minus one-quarter of one percentage point (0.25%). References
to such Prime Rate and the applicable interest rate in Sections 2.1 and 2.2 of
the Restated Credit Agreement are modified accordingly. A true and correct
copy of the replacement Revolving Credit Note is annexed hereto as Exhibit A
and made a part hereof (the “Replacement Note”).

     2. The remaining terms, provisions and conditions set forth in the
Restated Credit Agreement shall remain in full force and effect for all
purposes. The Company restates,

 

 

confirms and ratifies the warranties, covenants and representations set forth
therein and further represents to the Bank that no defaults or Events of
Default exist under the Restated Credit Agreement as of the date hereof. The
Company further confirms, ratifies, continues, grants and re-grants to and in
favor of the Bank, as secured party, a continuous and continuing first and
prior security interest in all of the items and types of Collateral more
particularly described in Section 7.1 of the Restated Credit Agreement and in
Section 2 of the Security Agreement described therein without any interruption
thereof, all of which such terms and provisions are incorporated herein by
reference with the same force and effect as if set forth and restated herein
verbatim.

     3. The Company represents and warrants to the Bank that it is a
corporation duly organized and validly existing and in good standing under the
laws of the State of Delaware and that the Company is duly licensed, qualified
and in good standing under the laws of the State of Oklahoma as a foreign
corporation. The Company will not change the jurisdiction or state of its
incorporation or otherwise re-incorporate without prior notification thereof to
the Bank, including authorization to the Bank to file amended or supplemental
financing statements and execution by the Company of such supplemental or
amended security agreements and/or financing statements as deemed appropriate
by the Bank.

     4. The Company agrees to pay the Bank’s legal fees incurred in connection
with the negotiation, preparation and closing of this Fourth Amendment.

     IN WITNESS WHEREOF, this Fourth Amendment is executed and delivered to the
Bank in Tulsa, Oklahoma, by the undersigned duly authorized corporate officer
of the Company, which officer has full power and authority to do so on behalf
and in the name of the Company by virtue of all necessary corporate action of
the Board of Directors of the Company, effective as of the 30th day of June,
2003.

	 	 	 	 	 
	 	EDUCATIONAL DEVELOPMENT

CORPORATION

 	 
	 	By
 	 
	 	Randall White 	 
	 	President 	 
	 

	 	 	 	 	 
	 

	 	“Company”
	 	 

	 	 	 	 	 
	 	ARVEST BANK

 	 
	 	By
 	 
	 	Dennis Colvard 	 
	 	Senior Vice President 	 
	 

	 	 	 	 	 
	 

	 	“Bank”
	 	 

 

 

REVOLVING CREDIT NOTE

	 	 	 
	$3,500,000

	 	Tulsa, Oklahoma
	

	 	June 30, 2003

     FOR VALUE RECEIVED, the undersigned (the “Maker”) promises to pay to the
order of ARVEST BANK, successor via name change to Arvest State Bank (the
“Payee”), at the Payee’s main banking office in Tulsa, Oklahoma, the principal
sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000), or
so much thereof as shall have been advanced by Payee to Maker and remains
unpaid, on June 30, 2004, together with interest thereon from the date funds
are advanced hereon on the unpaid balances of principal from time to time
outstanding, at the variable annual rate of interest hereinafter specified,
which interest is payable in monthly installments due and payable on the last
day of each calendar month, commencing July 31, 2003, and at final maturity on
June 30, 2004.

     The rate of interest payable upon the indebtedness evidenced by this note
shall be a variable annual rate of interest equal from day to day to Prime
Rate, as hereinafter defined, minus one-quarter of one percentage point
(0.25%). Prime Rate of interest shall be effective with respect to this note
as of the date upon which any change in such rate of interest shall occur.
Interest shall be computed on the basis of a year of 360 days but assessed only
for the actual number of days elapsed.

     For the purposes of this note, Prime Rate shall mean, as of the date upon
which such rate of interest is to be determined, the prime rate of interest
published in the Money Rates column of The Wall Street Journal (Southwest
Edition) or a similar rate as determined by Payee if such rate ceases to be
published.

     All parties (maker, endorsers, sureties, guarantors and all others now or
hereafter liable for payment of the indebtedness evidenced by this note) waive
presentment and diligence in collection and agree that without notice to, and
without discharging the liability of any party, this note may be extended or
renewed from time to time and for any term or terms by agreement between the
holder of this note and any of such parties and all parties shall remain liable
on each such extension or renewal.

     If the principal or any installment of interest due upon this note is not
paid as and when the same becomes due and payable (whether by extension,
acceleration or otherwise), or any party now or hereafter liable (directly or
indirectly) for payment of this note makes an assignment for benefit of
creditors, becomes insolvent, has an order for relief under the United States
Bankruptcy Code, as amended, entered against it, or any receiver, trustee,
custodian or like officer is appointed to take custody, possession or control
of any property of any such party, the holder hereof may, without notice,
declare all of the unpaid balance hereof to be immediately due and payable.
Such right of acceleration is cumulative and in addition to any other right or
rights of acceleration under the Restated Credit and Security Agreement between
the Maker and the Payee dated as of June 30, 1999, as amended by the First
Amendment thereto dated as of June 30, 2000, as further amended by the Second
Amendment thereto dated as of June 30, 2001,

1

 

as further amended by the Third Amendment thereto dated as of June 30, 2002,
and as further amended by the Fourth Amendment thereto dated as of even date
herewith (collectively the “Credit Agreement”) and any other writing now or
hereafter evidencing or securing payment of any of the indebtedness evidenced
hereby. After maturity, whether by acceleration, extension or otherwise, this
note shall bear interest at a variable annual rate equal to Prime Rate plus
four percentage points (4.0%). Maker and all other parties liable hereon shall
pay all reasonable attorney fees and all court costs and other costs and
expenses of collection incurred by the holder hereof.

     This is the Revolving Credit Note defined in the Credit Agreement and
constitutes an extension and renewal of that certain $3,500,000 Revolving
Credit Note dated as of June 30, 2002. Reference is made to the Credit
Agreement and to the Security Agreement and Assignment dated as of June 10,
1996, for the provisions with respect to acceleration, description of
collateral securing payment of the indebtedness evidenced hereby, rights and
remedies in respect thereof and other matters.

     This note is executed and delivered to the order of the Payee in Tulsa,
Oklahoma, by the undersigned duly authorized corporate officer of the Maker
pursuant to all necessary corporate action and shall be governed by and
construed in accordance with the laws of the State of Oklahoma.

	 	 	 	 	 
	 	EDUCATIONAL DEVELOPMENT

CORPORATION, a Delaware corporation

 	 
	 	By
 	 
	 	Randall White 	 
	 	President 	 
	 

	 	 	 	 	 
	 

	 	“Maker”
	 	 

Due: June 30, 2004

2

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