CRUDE OIL SUPPLY AGREEMENT

THIS CRUDE OIL SUPPLY AGREEMENT entered into on February 27, 2007 for performance commencing as of July 1, 2007 (the “ Effective Date ”), is made by and between Berry Petroleum Company, a Delaware corporation (“ Supplier ”), and Holly Refining & Marketing Company - Woods Cross, a Delaware corporation (“ Refiner ”). Supplier and Refiner may each be referred to hereinafter individually as a “ Party ” or collectively as the “ Parties .”

A.   WHEREAS Refiner is investing significant capital in order to process increased volumes of black wax crude oil at its Woods Cross refinery (the “ Refinery ”) located at Salt Lake City, in the State of Utah and is therefore interested in securing a long term supply of black wax crude oil blend for the Refinery; and

B.   WHEREAS Supplier and Refiner have considered the mutual benefit of a long term black wax crude oil supply agreement containing price terms and volume commitments, all as set forth in this Agreement;

NOW THEREFORE , in consideration of the foregoing, the representations, warranties, covenants, agreements and undertakings contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.1   Definitions . Capitalized terms used in this Agreement and the Schedules hereto, unless otherwise defined herein, have the meanings given to those terms in Schedule 1.1 .

1.2   Attachments . The following Schedules are attached to this Agreement and are incorporated into this Agreement by this reference:

Schedule 1.1    Definitions

Schedule 2.1    Quality Ranges of Crude Oil

Schedule 2.3    Delivery Point

Schedule 3.2    Quality Testing Procedures

Schedule 3.3    Measurement Procedures

Schedule 7.8    Continuing Guaranty

Schedule 11.1(a)        Continuing Guaranty (For Extension Period)

1.3   Independent Contractor; No Partnership . Each Party’s duties and performance under this Agreement shall be those of an independent contractor, as defined by Applicable Laws. The Parties expressly agree and acknowledge that (a) nothing in this Agreement shall be deemed to make the Parties partners or joint venturers, and (b) neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party except as expressly provided herein.

2.1   Supply and Receipt of Base Daily Volumes. 

(a)   During the Term and subject to Section 2.1(b) , Supplier shall sell and deliver to Refiner at the Delivery Point, and Refiner shall buy and take delivery at the Delivery Point 3,200 Barrels of Crude Oil per Day (the “ Base Daily Volume ”).

(b)   If Refiner has delivered to Supplier a certificate certifying that the Refinery Modification Completion has occurred, as soon thereafter as reasonably possible for Supplier to accomodate but in any event within ninety (90) Days from the date of such delivery of the certificate (or such later date as may be specified in the certificate) the Base Daily Volume shall be increased to 5,000 Barrels of Crude Oil per Day.

(c)   A 50% Daily variation in the quantity of Crude Oil delivered pursuant to this Section 2.1 shall be permitted; provided that for each Month or portion thereof during the Term, the average Daily quantity delivered pursuant to this Section 2.1 shall equal the Base Daily Volume.

2.2   Supply and Receipt of Incremental Daily Volumes.

(a)   Not later than 120 Days prior to the start of any Contract Year, Supplier may provide a notice to Refiner indicating the Daily volume of Crude Oil production in addition to the Base Daily Volumes that Supplier and its Affiliates reasonably anticipate producing during such Contract Year. Within 30 Days following receipt of such notice by Refiner, Refiner shall notify Supplier of the portion, if any, of such additional Daily volume of Crude Oil that Refiner desires to purchase. Failure to deliver such notice shall be deemed an election by Refiner not to purchase any of such additional Daily volume. Such portion, if any, that Refiner elects to purchase in its notice to Supplier shall be referred to herein as the “ Incremental Daily Volume ”. For the Contract Year immediately following such notice from Refiner, but not for the remainder of the Term following such Contract Year, Supplier shall sell and deliver to Refiner at the Delivery Point, and Refiner shall buy and take delivery at the Delivery Point each Day the Incremental Daily Volume, in addition to the Base Daily Volume.

(b)   A 50% Daily variation in the quantity of Crude Oil delivered pursuant to this Section 2.2 shall be permitted; provided that for each Month or portion thereof during the Term, the average Daily quantity delivered pursuant to this Section 2.2 shall equal the Incremental Daily Volume.

2.3   Delivery Point . Supplier will tender delivery of all Crude Oil to be delivered to Refiner pursuant to this Agreement at the outlet flanges of Supplier’s lease tankage on wells identified on Supplier’s Uinta Basin, Utah, properties from time to time in writing by Supplier to Refiner as referenced on Schedule 2.3 (the “ Delivery Point ”). Refiner shall accept delivery of such Crude Oil at the Delivery Point.

2.4   Scheduling. 

(a)   The Parties shall coordinate to schedule the delivery and receipt of Crude Oil in accordance with the procedures and limitations of the relevant transport and delivery and receiving facilities; provided that this Section 2.4(a) shall not limit the obligations of the Parties pursuant to Sections 2.1 and 2.2 .

(b)   Notice of Significant Events . 180 Days in advance of any planned material events which impact the Refinery’s ability to process or Supplier’s ability to produce the Crude Oil to be delivered hereunder, such as a refinery turnaround or a production facility turnaround (a “ Significant Event ”) the affected Party shall notify the other Party regarding schedule and volume impacts of any Significant Event that may, in the case of Refiner, reduce its processing capabilities, or in the case of Supplier, reduce its supplying capabilities, by more than 10% of the Contract Daily Volume for more than seven Days. The Parties shall use commercially reasonable efforts to reduce the adverse impacts of all Significant Events on each Party. If the required notice has been provided, the Parties obligations under Sections 2.1 and 2.2 shall be excused during any such Significant Events. Each Party agrees to keep the other Party promptly advised of all developments in the status of any Significant Event. No Significant Event shall be scheduled during the Term which has the effect of reducing the Base Annual Volume in any one 12 month period by more than 10%.

2.5   Dedication of Production . Supplier will dedicate its (and its Affiliates’) first production of Crude Oil to satisfy the requirements of this Agreement. Without limiting the foregoing, Supplier agrees that any agreements by Supplier or its Affiliates to sell Crude Oil to a purchaser other than Refiner shall be satisfied only out of production in excess of the volumes to be sold to Refiner pursuant to this Agreement. In the event Supplier elects to market its production in excess of the Base Daily Volumes and Refiner chooses to bid for such volumes, Supplier will contract to sell the incremental volumes to Refiner if Refiner exceeds or matches the highest bid from other potential purchasers.

3.1   Quality

(a)   The crude oil delivered to Refiner shall conform to the Minimum Quality Specifications (“ Crude Oil ”). Without limiting any other provision of this Agreement, in no event shall Supplier inject any unsaturated stock or vis-broken stock, LPG, Natural Gasoline or Lube Oils as a part of Crude Oil delivered under this Agreement. If Refiner deems the quality of Crude Oil delivered pursuant to this Agreement to be inconsistent with Prudent Industry Practices, Supplier and Refiner shall work together to develop additional delivered quality management processes and specifications. If Supplier and Refiner are unable to develop such additional processes and specifications, the matter shall be resolved by arbitration in accordance with Section 13.7.

(b)   Supplier warrants that the Crude Oil delivered to the Refiner conforms to the minimum specifications set forth in Schedule 2.1 (the “ Minimum Quality Specifications ”) and is not contaminated by any foreign chemicals.

3.2   Evidence of Quality . For purposes of determining whether the crude oil delivered pursuant to this Agreement meets the Minimum Quality Specifications, Refiner will have 30 Days from the date that a delivery arrives at the Refinery to notify Supplier that it has tested the delivery and that the test results indicate that the delivery did not meet the Minimum Quality Specifications. Supplier will have 30 Days from receipt of such notification to provide the results of sample analysis performed by a reputable independent third party testing service using the testing methods described in Schedule 3.2 . Any rejection of volumes or price adjustment will be based on such injection sample test results.

3.3   Measurement . Measurement of Crude Oil shall be in accordance with the measurement procedures set forth on Schedule 3.3 .

3.4   Observation . Each Party shall have the right to have a representative witness all gauges, tests, or measurements performed in connection with this Agreement providing that reasonable advance notice is given. In the absence of the other party’s representative, such gauges, tests, and measurements shall be deemed to be correct absent manifest error.

4.1   Pricing Formula. The price (the “ Price Formula ”) for Crude Oil delivered pursuant to this Agreement shall be set as follows:

(a)   The price for Base Daily Volumes (US$/Barrel) shall equal *** multiplied by WTI, Cushing (US$/Barrel).

(b)   The price for Incremental Daily Volumes (US$/Barrel) shall equal *** multiplied by WTI, Cushing (US$/Barrel).

4.2   Non-Conforming Batch. If Supplier supplies a delivery which does not meet the Minimum Quality Specifications, Refiner shall be entitled either to reject such volumes (in which case Supplier shall be responsible for the costs associated with the redelivery to Supplier of such volumes) or to accept such volumes. In either case, the Parties agree to execute a price adjustment for volumes delivered in the non-conforming delivery, including a full refund of the purchase price and associated costs (e.g., transportation costs) incurred by Refiner for volumes that are rejected.

4.3   Change of Conventional Light Sweet Benchmark. The Parties agree that WTI, Cushing is intended to measure the fair market value of conventional light sweet crude oil on a North American based futures exchange. If at any time in the future WTI, Cushing ceases to be representative of the North American conventional light sweet crude oil markets, the Parties agree to determine a new light sweet crude oil benchmark for use in the Price Formula. In the event of such a cessation, either Party may declare an initiation date for the process of adjusting the Price Formula by giving notice to the other Party. The new benchmark shall be based on a

North American futures contract, if such contract exists. The Price Formula will be adjusted for quality, transportation and location for the new benchmark using the process outlined below:

(a)   Compare Historical Period Average Prices for the current benchmark versus the proposed new benchmark to determine a linear correlation (y=mx) between the fair market values of the current benchmark versus the proposed new benchmark and apply this correlation to the Price Formula.

(b)   After transition to the new light crude benchmark and establishing the revised Price Formula, either Party may request a review of the Price Formula after the elapse of 6 Months. Any changes to the Price Formula resulting from the review shall be effective immediately after the review is complete and agreed by both Parties. The review results shall not have any retroactive effect and only one review period shall be permitted during the Term.

5.1   Term. This term of this Agreement (“ Term ”) commences at midnight, Applicable Time, on the Effective Date, and expires at midnight, Applicable Time, on the date of termination provided in Section 11.1 .

6.1   Title Warranty. Supplier warrants that (a) all crude oil delivered pursuant to this Agreement will be free from encumbrances and other adverse interests and (b) Supplier has the right to sell and pass title to Refiner of all such crude oil.

6.2   Disclaimer . EXCEPT AS SPECIFICALLY PROVIDED IN SECTIONS 3.1(b) , 6.l AND ARTICLE 8 , SUPPLIER MAKES NO, AND HEREBY DISCLAIMS ANY, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ABOUT OR RELATING TO THE CRUDE OIL DELIVERED BY IT HEREUNDER INCLUDING, WITHOUT LIMITATION, WARRANTIES AS TO CONDITION, QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE.

6.3   Transfer of Title and Associated Risks Warranty. Title, custody and risk of loss to Crude Oil delivered hereunder shall pass from Supplier to Refiner when Supplier delivers Crude Oil to Refiner at the Delivery Point, it being understood and agreed that any casualty, loss, escape or contamination occurring before and to the Delivery Point shall be the responsibility of Supplier and after the Delivery Point shall be the responsibility of Refiner. Except as otherwise provided in this Agreement, Refiner shall be responsible for arranging and paying for all transportation from the Delivery Point to the Refinery.

7.1   Payment Per Warranty. Refiner agrees to pay Supplier the Purchase Price for each Barrel of Crude Oil Supplier delivers to the Delivery Point pursuant to this Agreement.

7.2   Monthly Invoices Warranty . Supplier shall invoice Refiner for Crude Oil delivered pursuant to this Agreement, on a Monthly basis. Such invoice shall include the following information: the Month of delivery under the transaction; the volume(s) of delivery; the Purchase Price; and the due date of payment pursuant to Section 7.4 .

7.3   Necessary Documents Warranty. Upon request, each Party agrees to furnish the other Party all source documents for each volume of crude oil delivered pursuant to this Agreement that are reasonably available to the furnishing Party; provided that furnishing source documents shall not be a precondition for payment unless expressly so agreed by the Parties. Source documents include delivery tickets, transfer settlements, or other shipping/loading documents provided by a pipeline or other carrier indicating the type, quality, volume, and other characteristics of the crude oil delivered.

7.4   Payment of Invoices Warranty . Refiner shall pay all amounts owed by it hereunder by electronic funds transfer to Supplier’s account designated in Section 13.3(c) with immediately available funds by the later of the 5th Business Day after the applicable invoice was received or the 20th Day of the Month following the Month of crude oil delivery. If payment falls due on a Saturday or a bank holiday of the bank where the designated account is located other than Monday, payment shall be due on the preceding banking day of such bank. If payment falls due on a Sunday or a Monday bank holiday of such bank, payment shall be due on the next banking day of such bank. Payment shall be deemed made on the date good funds are credited to Supplier's account at such bank.

7.5   Late Payments. Any payments that are not made when due under this Agreement pursuant to Section 7.4 shall bear interest at a per annum rate which shall be two percentage points above the U.S. prime rate as published in the Wall Street Journal (or such other publication as the parties may agree from time to time) in effect on the date payment was due from the date such payment is due until such payment is made paid in full.

7.6   Corrections; Disputes. Invoices and payments shall be subject to correction for billing errors for a period of 24 Months after the end of the Month prior to which the invoice was issued. No adjustment or correction shall be made and all records and payments shall be conclusively presumed to be final and shall not be subject to examination, unless notice specifying the error or inaccuracy is given within such 24-Month period. If Refiner disputes the correctness of any invoice, Refiner shall nevertheless pay the full amount of the invoice (including the disputed portion) and shall notify Supplier of the specific basis for disputing the correctness of the invoice as soon as practical after becoming aware of the basis for the dispute, and Refiner shall be entitled to a refund for overpayments plus interest at the rate described in Section 7.5 calculated from the date of payment until refunded.

7.7   Financial Responsibility. Notwithstanding anything in this Agreement, if at any time, Parent has a net worth of less than $200,000,000 or should Supplier reasonably believe that such Parent’s net worth is less than $200,000,000, Supplier may at anytime require, by written notice to Refiner, at Refiner’s choice, either 1) advance cash payment, or 2) satisfactory security in the form of a letter or letters of credit at Refiner’s expense in a form and from a bank reasonably acceptable to Supplier, to cover any and all deliveries of Crude Oil.  If, on or before the date specified in Supplier’s notice under this Section 7.7, Refiner does not prepay or provide the letter or letters of credit, or if Supplier does not accept another form of credit assurance agreeable to Supplier in Supplier’s sole discretion, Supplier may terminate this Agreement immediately and Refiner shall be considered to experience an Event of Default.  At any time Parent has a net worth of less than $200,000,000 or if Supplier reasonably believes that such net worth is less than $200,000,000, Seller shall not be obligated to schedule or complete delivery of the Crude Oil until advance cash payment is made or said letter or letters of credit, or if applicable, other credit assurance agreeable to Supplier, is delivered by Refiner to Supplier.  In any event if Parent or Refiner makes an advance cash payment to Supplier, so long as Refiner is not in default, Supplier will deposit said cash payment into an interest bearing investment earning interest at a rate equivalent to the equivalent yield of a thirty (30) day U.S. Treasury note and such earned interest shall be held for the benefit of Parent or Refiner.

7.8   Continuing Guaranty. As a material condition to this Agreement, Refiner shall concurrently deliver to Supplier a Continuing Guaranty, in the form attached to this Agreement as Schedule 7.8.

8.1   Supplier Representations and Warranties. Supplier represents and warrants to Refiner that:

(a)   It is duly organized, validly existing and in good standing under the laws of Delaware, and has all requisite power and authority to own and lease the properties and assets it currently owns and leases, and to conduct its activities as such activities are currently conducted and as contemplated by this Agreement;

(b)   Supplier has all requisite corporate power, authority and capacity to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by Supplier have been duly and validly authorized by all necessary corporate action on its part, and this Agreement has been duly and validly executed and delivered by Supplier, and is the valid and binding obligation of Supplier, enforceable against it in accordance with its terms, subject to Applicable Laws of bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally;

(c)   The execution, delivery and performance by Supplier of this Agreement does not and will not (i) conflict with or violate any provision of Supplier’s organizational documents; (ii)

violate any provision of any Applicable Laws; (iii) conflict with, violate, result in a breach of, constitute a default under (without regard to requirements of notice, lapse of time or elections of other Persons, or any combination thereof) or accelerate or permit the acceleration of the performance required by, any contracts or other instruments to which either Supplier is a party or by which Supplier is bound or affected; or (iv) require any consent, approval or authorization of, or filing of any certificate, notice, application, report, or other document with, any Governmental Authority or other Person;

(d)   Supplier is not subject to any Applicable Law that would preclude or prohibit its fulfillment of any of its obligations hereunder, all in accordance with the terms and conditions of this Agreement; and

(e)   Supplier has the requisite authority, ability, skills, technical support and capacity to perform all of its obligations hereunder with respect to the supply of Crude Oil and the operation of its production facilities, all in accordance with this Agreement in all material respects.

8.2   Refiner Representations and Warranties. Refiner represents and warrants to Supplier that:

(a)   Refiner is duly organized, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own and lease the properties and assets it currently owns and leases and to conduct its activities as such activities are currently conducted and as contemplated by this Agreement;

(b)   Refiner has all requisite corporate power, authority and capacity to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby by Refiner have been duly and validly authorized by all necessary action on the part of Refiner, and this Agreement has been duly and validly executed and delivered by Refiner, and is the valid and binding obligation of Refiner, enforceable against Refiner in accordance with its terms, subject to Applicable Laws of bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally;

(c)   The execution, delivery and performance by Refiner of this Agreement do not and will not (i) conflict with or violate any provision of its organizational documents; (ii) violate any provision of any Applicable Laws; (iii) conflict with, violate, result in a breach of, constitute a default under (without regard to requirements of notice, lapse of time or elections of other Persons, or any combination thereof) or accelerate or permit the acceleration of the performance required by, any contracts or other instruments to which it is a party or by which it or its properties may be bound or affected; or (iv) except in connection with the construction and operation of the Refinery Modifications, require any consent, approval or authorization of, or filing of any certificate, notice, application, report or other document with, any Governmental Authority or other Person;

(d)   Subject to obtaining any approvals from Governmental Authorities required to construct and operate the Refinery Modifications, Refiner is not subject to any Applicable Law

that would preclude or prohibit any of its obligations hereunder, all in accordance with the terms and conditions of this Agreement; and

(e)   Refiner has the requisite authority, ability, skills, technical support and capacity to perform all of its obligations hereunder, all in accordance with this Agreement in all material respects.

9.1   Events of Default . An event of default (“ Event of Default ”) with respect to a Party (the “ Defaulting Party ”) shall mean any of the following:

(a)   the failure of Defaulting Party to pay when due any payment under this Agreement, and such payment (and any interest accrued thereon pursuant to this Agreement) shall remain unpaid for 10 Days following receipt by the Defaulting Party of notice of failure to pay; or

(b)   the failure of the Defaulting Party to comply in any material respect with any of its other obligations under this Agreement, and such failure is not remedied in all material respects within 30 Days after notice thereof; or

(c)   any representation or warranty made by the Defaulting Party under this Agreement is or was untrue or misleading in any material respect when made and such breach is not cured within 30 Days after notice thereof; or

(d)   the entry of a decree or order by a court having jurisdiction in the premises resulting from the commencement of proceedings against the Defaulting Party by a third party and approving as properly filed a petition seeking dissolution or winding-up of the Defaulting Party under any bankruptcy, insolvency or analogous laws, or appointing a receiver of the Defaulting Party, and the continuance of any such decree or order unstayed, undischarged and in effect for a period of 20 Days from the date thereof; or

(e)   the institution by the Defaulting Party of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition, answer or consent seeking dissolution or winding-up under any bankruptcy, insolvency or analogous laws, or the consent by it to the filing of any such petition or to the appointment of a receiver of the Defaulting Party or the making by it of a general assignment for the benefit of creditors, or the Defaulting Party admitting in writing its inability to pay its debts generally as they become due.

9.2   Remedies . Upon the occurrence and during the continuation of an Event of Default as to the Defaulting Party, the other Party (the “ Non-Defaulting Party ”) may, in its sole discretion, (a) notify the Defaulting Party of an early termination date (which shall be no earlier than the date of such notice and no later than 30 Days after the date of such notice) on which date this Agreement shall terminate and declare that any amounts of money outstanding hereunder shall be due and payable immediately without any further notice or demand of any kind or (b) withhold performance of any of its obligations due to the Defaulting Party until such Event of

Default is cured. Any rights of a Nondefaulting Party under this Section 9.2 shall be in addition to any other rights or remedies such Nondefaulting Party may have under this Agreement, at law or in equity.

9.3   Right of Set-Off Warranty. Upon the occurrence and during the continuance of an Event of Default, the Non-Defaulting Party is hereby authorized at any time and from time to time thereafter, on reasonable notice to the Defaulting Party and to the fullest extent permitted by law, to set-off and apply any and all indebtedness at any time owing by the Non-Defaulting Party to or for the credit or the account of the Defaulting Party against any and all of the obligations of the Defaulting Party now or hereafter existing under this Agreement. The Non-Defaulting Party agrees to promptly notify the Defaulting Party after any such set-off and application.

9.4   Limitation on Damages . Liability for breach of any provision of this Agreement is limited to actual direct damages only (which in the case of a failure by Supplier to deliver Crude Oil that is not permitted by this Agreement shall be deemed to include lost margins on Refinery production and other costs (e.g., transportation costs) incidental to such failure), and such actual direct damages are the sole and exclusive monetary remedy under this Agreement for any such breach. Except as provided in the preceding sentence, neither Party is liable for incidental, punitive, exemplary, consequential, special or indirect damages of any nature (including damages associated with lost profits, business interruption and loss of goodwill) arising at any time, whether in tort (including negligence or gross negligence), warranty, strict liability, by contract or statute, under any indemnity provision (unless such damages are required to be paid to a third party) or otherwise.

10.1   General. Notwithstanding anything herein to the contrary, each Party shall be excused from performance of its obligations hereunder (other than any obligation to pay money then due or becoming due with respect to performance prior to the event) in the event and to the extent its performance is prevented by an event of Force Majeure.

10.2   Notice Requirements Warranty . If an event of Force Majeure occurs, the Party whose performance is prevented shall promptly provide notice to the other Party of the event of Force Majeure, the nature of the event, the extent to which the event of Force Majeure affects or delays the affected Party’s performance hereunder, the particular obligations so affected, the steps taken and proposed to be taken to lessen and cure the Force Majeure, and the estimated duration of the event of Force Majeure. If there is any material change, addition or alteration to the circumstances giving rise to, or the information provided pursuant to, the notice, the affected Party shall promptly provide the other Party with notice of the same.

10.3   Efforts to Remove Force Majeure . At all times during an event of Force Majeure, both Parties shall use commercially reasonable efforts to remove the event of Force Majeure and to avoid or minimize the consequences of the event of Force Majeure; provided that nothing contained in this Agreement shall be construed as requiring either Party hereto to accede to the demands of labor or labor unions it considers unreasonable in its sole discretion. The

.performance of this Agreement shall be resumed as soon as practicable after such disability has been removed.

11.1   Termination . This Agreement shall terminate on the