Exhibit 10.1

 

 

LLC INTEREST PURCHASE AGREEMENT

by and among

HOLLY CORPORATION,
NAVAJO PIPELINE CO., L.P.
as Seller,
and
HOLLY ENERGY PARTNERS — OPERATING, L.P.
as Buyer

Dated as of June 1, 2009

 

 

TABLE OF CONTENTS

				Page
ARTICLE I
DEFINED TERMS
1.1		Defined Terms			1
ARTICLE II
PURCHASE OF LLC INTERESTS
2.1		Transfer of LLC Interests			6
2.2		Consideration			6
ARTICLE III
CLOSING
3.1		Closing			6
3.2		Deliveries by the Seller			6
3.3		Deliveries by the Buyer			7
3.4		Closing Costs; Transfer Taxes and Fees			7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
4.1		Organization			8
4.2		Authorization			8
4.3		Company Status			8
4.4		No Conflicts or Violations; No Consents or Approvals Required			9
4.5		Absence of Litigation			9
4.6		Title to LLC Interests; Capitalization			10
4.7		No Undisclosed Liabilities			10
4.8		No Employees			10
4.9		Taxes			11
4.10		Brokers and Finders			11
4.11		Condition of 16” Pipeline			11
4.12		Title to Assets			11
4.13		Banking Relationships			11
4.14		WAIVERS AND DISCLAIMERS			11
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
5.1		Organization			12
5.2		Authorization			13
5.3		No Conflicts or Violations; No Consents or Approvals Required			13
5.4		Absence of Litigation			13

				Page
5.5		Brokers and Finders			13
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HOLLY
6.1		Organization			14
6.2		Authorization			14
6.3		No Conflicts or Violations; No Consents or Approvals Required			14
6.4		Absence of Litigation			14
6.5		Brokers and Finders			14
ARTICLE VII
COVENANTS
7.1		Cooperation			15
7.2		Additional Agreements			15
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1		Further Assurances			15
ARTICLE IX
INDEMNIFICATION
9.1		Indemnification of Buyer and Seller			15
9.2		Defense of Third-Party Claims			15
9.3		Direct Claims			17
9.4		Limitations			17
9.5		Tax Related Adjustments			17
ARTICLE X
MISCELLANEOUS
10.1		Expenses			17
10.2		Notices			17
10.3		Severability			18
10.4		Governing Law; Waiver of Jury Trial			19
10.5		Parties in Interest			19
10.6		Assignment of Agreement			19
10.7		Captions			19
10.8		Counterparts			19
10.9		Director and Officer Liability			19
10.10		Integration			20
10.11		Effect of Agreement			20
10.12		Amendment; Waiver			20

				Page
ARTICLE XI
GUARANTEE
11.1		Payment and Performance Guaranty			20
11.2		Guaranty Absolute			20
11.3		Waiver			21
11.4		Subrogation Waiver			21
11.5		Reinstatement			21
11.6		Continuing Guaranty			22
11.7		No Duty to Pursue Others			22
ARTICLE XII
INTERPRETATION
12.1		Interpretation			22
12.2		References, Gender, Number			23

Exhibits:
Exhibit A		—		Assignment
Exhibit B		—		Restated Intermediate Pipelines Agreement
Exhibit C		—		Restated Omnibus Agreement
Exhibit D		—		Mortgages and Deeds of Trust

Schedules:
Schedule 4.3(a)		—		Company Foreign Qualifications
Schedule 4.4(a)		—		Seller No Conflicts or Violations
Schedule 4.4(b)		—		Company No Conflicts or Violations
Schedule 4.5		—		Seller Litigation
Schedule 4.6(a)		—		Title to LLC Interests
Schedule 4.12		—		Title to Assets
Schedule 4.13		—		Banking Relationships
Schedule 5.3		—		Buyer No Conflicts or Violations
Schedule 5.4		—		Buyer Litigation
Schedule 6.3		—		Holly No Conflicts or Violations
Schedule 6.4		—		Holly Litigation

LLC INTEREST PURCHASE AGREEMENT

      THIS LLC INTEREST PURCHASE AGREEMENT (this “ Agreement ”) dated as of June 1, 2009, is made and entered into by and among Holly Corporation, a Delaware corporation (“ Holly ”), Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Navajo Pipeline ” or, the “ Seller ”), and Holly Energy Partners — Operating, L.P., a Delaware limited partnership (the “ Operating Partnership ” or, the “ Buyer ”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

      WHEREAS , Navajo Pipeline is the sole member of Lovington-Artesia, L.L.C., a Delaware limited liability company (the “ Company ”);

      WHEREAS , the Company is the owner of a newly constructed 16” pipeline (the “ 16” Pipeline ”) currently running 65 miles from Holly’s crude oil distillation and vacuum distillation facilities in Lovington, New Mexico to Holly’s petroleum refinery in Artesia, New Mexico;

      WHEREAS , the Operating Partnership wishes to purchase all of the issued and outstanding membership interests of the Company (the “ LLC Interests ”) and thereby acquire the 16” Pipeline; and

      WHEREAS , the Parties wish to amend certain provisions of the Omnibus Agreement.

      NOW, THEREFORE , in consideration of the foregoing and the mutual covenants set forth herein and in the Omnibus Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I
DEFINED TERMS

     1.1 Defined Terms . Unless the context expressly requires otherwise, the respective terms defined in this Section 1.1 shall, when used in this Agreement, have the respective meanings herein specified, with each such definition to be equally applicable both to the singular and the plural forms of the term so defined.

     “ 16” Pipeline ” shall have the meaning set forth in the preamble.

     “ Action ” shall mean any claim, action, suit, investigation, inquiry, proceeding, condemnation or audit by or before any court or other Governmental Entity or any arbitration proceeding.

     “ affiliate ” means, with respect to a specified person, any other person controlling, controlled by or under common control with that first person. As used in this definition, the term “control” includes (i) with respect to any person having voting securities or the equivalent and elected directors, managers or persons performing similar functions, the ownership of or power

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability to direct the business and affairs of any person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the Seller, on the one hand, and the Buyer, on the other hand, shall not be considered affiliates of each other.

     “ Agreement ” shall have the meaning set forth in the preamble.

     “ Ancillary Documents ” means, collectively, the Buyer Ancillary Documents and the Seller Ancillary Documents.

     “ Assignment ” shall have the meaning set forth in Section 3.2(a) .

     “ business day ” means any day on which banks are open for business in Texas, other than Saturday or Sunday.

     “ Buyer ” shall have the meaning set forth in the preamble.

     “ Buyer Ancillary Documents ” means each agreement, document, instrument or certificate to be delivered by the Buyer, or its affiliates, at the Closing pursuant to Section 3.3 hereof and each other document or Contract entered into by the Buyer, or its affiliates, in connection with this Agreement or the Closing.

     “ Buyer Consents ” shall have the meaning set forth in Section 5.3 .

     “ Buyer Indemnified Costs ” means (a) any and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to (i) any breach of a representation, warranty or covenant of Seller under this Agreement, or (ii) any obligations or duties of the Company under any Contract relating to the original planned construction of the 16” Pipeline, as such Contract is in effect as of the Effective Time (including any change orders agreed to by the parties to such Contracts prior to the Effective Time, whether or not such change order has properly been documented as of the Effective Time) (collectively, the “ Construction Contracts ”) (including, without limitation, the Company’s payment obligations under such Construction Contracts and the cost to complete construction of the 16” Pipeline as set forth in such Construction Contracts), and (b) any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses, including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding anything in the foregoing to the contrary, Buyer Indemnified Costs shall exclude (i) any and all punitive, exemplary or special damages and (ii) any and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to any matter that is covered

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

by a warranty under a Construction Contract (including, without limitation, defects in the construction of the 16” Pipeline which are covered by a warranty under a Construction Contract).

     “ Buyer Indemnified Parties ” means Buyer and each officer, director, partner, manager, employee, consultant, stockholder, and affiliate of Buyer, including, without limitation, the Company.

     “ Closing ” shall have the meaning set forth in Section 3.1 .

     “ Closing Date ” shall have the meaning set forth in Section 3.1 .

     “ Company ” shall have the meaning set forth in the preamble.

     “ Company Consents ” shall have the meaning set forth in Section 4.4(b) .

     “ Consents ” means all notices to, authorizations, consents, Orders or approvals of, or registrations, declarations or filings with, or expiration of waiting periods imposed by, any Governmental Entity, and any notices to, consents or approvals of any other third party, in each case that are required by applicable Law or by Contract in order to consummate the transactions contemplated by this Agreement and the Ancillary Documents.

     “ Contract ” means any written or oral contract, agreement, indenture, instrument, note, bond, loan, lease, mortgage, franchise, license agreement, purchase order, binding bid or offer, binding term sheet or letter of intent or memorandum, commitment, letter of credit or any other legally binding arrangement, including any amendments or modifications thereof and waivers relating thereto.

     “ Credit Facility ” means the Amended and Restated Credit Agreement, dated as of August 27, 2007 and as amended from time to time, between the Operating Partnership, as borrower, Union Bank of California, as administrative agent, issuing bank and sole lead arranger, Bank of America, N.A., as syndication agent, Guaranty Bank, as documentation agent and certain other lenders identified therein.

     “ Effective Time ” shall have the meaning set forth in Section 3.1 .

     “ Encumbrance ” means any mortgage, pledge, charge, hypothecation, claim, easement, right of purchase, security interest, deed of trust, conditional sales agreement, encumbrance, interest, option, lien, right of first refusal, right of way, defect in title, encroachments or other restriction, whether or not imposed by operation of Law, any voting trust or voting agreement, stockholder agreement or proxy.

     “ Governmental Entity ” means any Federal, state, local or foreign court or governmental agency, authority or instrumentality or regulatory body.

     “ Holly ” shall have the meaning set forth in the preamble.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     “ Holly Consents ” shall have the meaning set forth in Section 6.3 .

     “ Indemnified Costs ” means the Buyer Indemnified Costs and the Seller Indemnified Costs, as applicable.

     “ Indemnified Party ” means the Buyer Indemnified Parties and the Seller Indemnified Parties.

     “ Indemnifying Party ” has the meaning set forth in Section 9.2 .

     “ knowledge ” and any variations thereof or words to the same effect shall mean (i) with respect to Holly, actual knowledge after reasonable inquiry of the following persons: David L. Lamp and George J. Damiris; (ii) with respect to the Seller, actual knowledge after reasonable inquiry of the following persons: David L. Lamp and George J. Damiris; and (iii) with respect to the Buyer, actual knowledge after reasonable inquiry of the following persons: David G. Blair and Mark Cunningham .

     “ Laws ” means all statutes, laws, rules, regulations, Orders, ordinances, writs, injunctions, judgments and decrees of all Governmental Entities.

     “ LLC Interests ” shall have the meaning set forth in the preamble.

     “ Material Adverse Effect ” means any adverse change, circumstance, effect or condition in or relating to the assets, financial condition, results of operations, or business of any person that materially affects the business of such person or that materially impedes the ability of any person to consummate the transactions contemplated hereby, other than any change, circumstance, effect or condition in the refining or pipelines industries generally (including any change in the prices of crude oil, natural gas, natural gas liquids, feedstocks or refined products or other hydrocarbon products, industry margins or any regulatory changes or changes in Law) or in United States or global economic conditions or financial markets in general. Any determination as to whether any change, circumstance, effect or condition has a Material Adverse Effect shall be made only after taking into account all effective insurance coverages and effective third-party indemnifications with respect to such change, circumstance, effect or condition.

     “ Mortgages and Deeds of Trust ” shall have the meaning set forth in Section 3.3(e) .

     “ Navajo Pipeline ” shall have the meaning set forth in the preamble.

     “ Omnibus Agreement ” means that certain agreement entered into and effective as of July 13, 2004 and as amended on July 6, 2005 and February 29, 2008, by and among Holly, Navajo Pipeline, Holly Logistic Services, L.L.C., a Delaware limited liability company, the Partnership, the Operating Partnership, HEP Logistics GP, L.L.C., a Delaware limited liability company and HEP Logistics Holdings, L.P., a Delaware limited partnership, and as amended and restated as of the Closing Date.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     “ Operating Partnership ” shall have the meaning set forth in the preamble.

     “ Order ” means any order, writ, injunction, decree, compliance or consent order or decree, settlement agreement, schedule and similar binding legal agreement issued by or entered into with a Governmental Entity.

     “ Partnership ” means Holly Energy Partners, L.P., a Delaware limited partnership.

     “ Party ” and “ Parties ” shall have the meanings set forth in the preamble.

     “ Permits ” means all material permits, licenses, variances, exemptions, Orders, franchises and approvals of all Governmental Entities necessary for the lawful ownership and operation of the Company’s business, including the 16” Pipeline.

     “ Permitted Encumbrances ” means (i) statutory liens for current taxes or assessments not yet due or delinquent or the validity of which are being contested in good faith by appropriate proceedings; (ii) mechanics’, carriers’, workers’, repairmen’s, landlord’s and other similar liens imposed by law arising or incurred in the ordinary course of business with respect to charges not yet due and payable; and (iii) such other encumbrances, if any, which were not incurred in connection with the borrowing of money or the advance of credit and which do not materially detract from the value of or interfere with the present use, or any use presently anticipated by the Company, of the property subject thereto or affected thereby, and including without limitation capital leases.

     “ person ” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

     “ Purchase Price ” shall have the meaning set forth in Section 2.2(a) .

     “ Restated Intermediate Pipelines Agreement ” shall have the meaning set forth in Section 3.2(c) .

     “ Seller ” shall have the meaning set forth in the preamble.

     “ Seller Ancillary Documents ” shall mean each agreement, document, instrument or certificate to be delivered by the Seller, or its affiliates, at the Closing pursuant to Section 3.2 hereof and each other document or Contract entered into by the Seller, or its affiliates, in connection with this Agreement or the Closing.

     “ Seller Consents ” has the meaning set forth in Section 4.4(a) .

     “ Seller Indemnified Costs ” means (a) any and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Seller Indemnified Parties incurs and that arise out of or relate to any

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

breach of a representation, warranty or covenant of Buyer under this Agreement, and (b) any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses, including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all punitive, exemplary or special damages.

     “ Seller Indemnified Parties ” means Seller and each officer, director, partner, manager, employee, consultant, stockholder, and affiliate of Seller, including, without limitation, Holly.

     “ third-party action ” has the meaning set forth in Section 9.2 .

ARTICLE II
PURCHASE OF LLC INTERESTS

     2.1 Transfer of LLC Interests . Subject to all of the terms and conditions of this Agreement, Navajo Pipeline hereby sells, transfers and conveys to the Operating Partnership, and the Operating Partnership hereby purchases and acquires from Navajo Pipeline, the LLC Interests, free and clear of all Encumbrances.

     2.2 Consideration .

          (a) The aggregate consideration to be paid by the Operating Partnership for the LLC Interests shall be $34,200,000 (the “ Purchase Price ”).

          (b) The Purchase Price shall be paid at the Closing by wire transfer of immediately available funds to the accounts specified by Navajo Pipeline.

ARTICLE III
CLOSING

     3.1 Closing . The closing of the transactions contemplated hereby (the “ Closing ”) shall take place simultaneously with the execution of this Agreement. The date of the Closing is referred to herein as the “ Closing Date ” and the Closing is deemed to be effective as of 12:01 a.m., Dallas, Texas time, on the Closing Date (the “ Effective Time ”).

     3.2 Deliveries by the Seller . At the Closing, the Seller shall deliver, or cause to be delivered, to the Buyer the following:

          (a) A counterpart to the assignment of limited liability company interests substantially in the form of Exhibit A attached hereto (the “ Assignment ”), duly executed by Navajo Pipeline.

          (b) The original minute books, company books and membership registers for the Company.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

          (c) A counterpart of the amended and restated intermediate pipelines agreement substantially in the form of Exhibit B attached hereto (the “ Restated Intermediate Pipelines Agreement ”), duly executed by Holly and each applicable subsidiary of Holly (excluding subsidiaries of the Partnership).

          (d) A counterpart of the amended and restated omnibus agreement substantially in the form of Exhibit C attached hereto (the “ Restated Omnibus Agreement ”), duly executed by Holly and each applicable subsidiary of Holly (excluding subsidiaries of the Partnership).

          (e) Evidence in form and substance reasonably satisfactory to the Buyer of each Seller Consent, each Company Consent and each Holly Consent.

          (f) Evidence in form and substance reasonably satisfactory to the Buyer of the release and termination of all Encumbrances on the LLC Interests and on the assets and properties of the Company.

          (g) To the extent applicable, assignment documents, duly executed by the Seller, assigning each of the Permits held by the Seller which are assignable by the Seller to the Buyer in accordance with applicable Law.

     3.3 Deliveries by the Buyer . At the Closing, the Buyer shall deliver, or cause to be delivered, to the Seller the following:

          (a) The Purchase Price as provided in Section 2.2(b) .

          (b) A counterpart to the Assignment, duly executed by the Operating Partnership.

          (c) A counterpart of the Restated Intermediate Pipelines Agreement, duly executed by the Partnership and each applicable subsidiary of the Partnership.

          (d) A counterpart of the Restated Omnibus Agreement, duly executed by the Partnership and each applicable subsidiary of the Partnership.

          (e) Each of the mortgages and deeds of trust substantially in the form of Exhibit D attached hereto (the “ Mortgages and Deeds of Trust ”), duly executed by the Buyer.

          (f) Evidence in form and substance reasonably satisfactory to the Seller of each Buyer Consent.

     3.4 Closing Costs; Transfer Taxes and Fees .

          (a) Allocation of Costs . The Buyer shall pay the cost of all sales, transfer and use taxes arising out of the transfer of the LLC Interests and all costs and expenses (including

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

recording fees and real estate transfer taxes and real estate transfer stamps) incurred in connection with obtaining or recording title to the Company’s assets.

          (b) Reimbursement. If the Buyer, on the one hand, or the Seller, on the other hand, pays any tax agreed to be borne by the other Party under this Agreement, such other Party shall promptly reimburse the paying Party for the amounts so paid. If any Party receives any tax refund or credit applicable to a tax paid by another Party hereunder, the receiving Party shall promptly pay such amounts to the Party entitled thereto.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER

     The Seller hereby represents and warrants to the Buyer that as of the date of this Agreement:

     4.1 Organization . Seller is an entity duly organized, validly existing and in good standing under the Laws of its state of organization.

     4.2 Authorization . Seller has full partnership power and authority to execute, deliver, and perform this Agreement and any Seller Ancillary Documents to which it is a party. The execution, delivery, and performance by the Seller of this Agreement and the Seller Ancillary Documents and the consummation by the Seller of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action of the Seller. This Agreement has been duly executed and delivered by the Seller and constitutes, and each such Seller Ancillary Document executed or to be executed by the Seller has been, or when executed will be, duly executed and delivered by the Seller and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Seller, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws affecting creditors’ rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

     4.3 Company Status .

          (a) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and (i) has all requisite limited liability company power and authority to own, operate, use or lease its properties and assets and to carry on its business as it is now being conducted, and (ii) is duly qualified to do business and is in good standing in each of the jurisdictions in which the ownership, operation or leasing of its properties and assets and the conduct of its business requires it to be so qualified, licensed or authorized, except, in the case of clause (ii), where the failure to have such power and authority or to be so qualified, licensed or authorized would not, individually or in the aggregate, be reasonably likely to cause a Material Adverse Effect. Seller Disclosure Schedule 4.3(a) lists all jurisdictions in which the Company is qualified to do business.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

          (b) The Company does not, directly or indirectly, own any interest in any corporation, partnership, limited liability company, limited partnership, joint venture or other business association or entity, foreign or domestic.

          (c) The Company has not engaged in any business other than the construction of the 16” Pipeline. The Company has no assets except the 16” Pipeline and the associated rights and obligations under the Construction Contracts.

          (d) The Company has made available to the Buyer a copy of the certificate of formation and limited liability company agreement of the Company, each copy being complete and correct and in full force and effect on the date hereof, and no amendment or modification of such documents has been filed, recorded or is pending or contemplated. The Company is not in violation of any provision of its certificate of formation or limited liability company agreement.

     4.4 No Conflicts or Violations; No Consents or Approvals Required .

          (a) Except as set forth in Seller Disclosure Schedule 4.4(a) , the execution, delivery and performance by the Seller of this Agreement and the other Seller Ancillary Documents to which it is a party does not, and the consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provision of the Seller’s organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate in any material respect any applicable Law or material contract binding upon the Seller. No Consent of any Governmental Entity or any other person is required for the Seller in connection with the execution, delivery and performance of this Agreement and the Seller Ancillary Documents to which the Seller is a party or the consummation of the transactions contemplated hereby or thereby, except as set forth in Seller Disclosure Schedule 4.4(a) (collectively, the “ Seller Consents ”).

          (b) Except as set forth in Seller Disclosure Schedule 4.4(b) , the consummation of the transactions contemplated by this Agreement and the other Seller Ancillary Documents will not, (i) violate, conflict with, or result in any breach of any provision of the Company’s organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate in any material respect any applicable Law or material contract binding upon the Company. No Consent of any Governmental Entity or any other person is required for the Company in connection with the performance of this Agreement and the Seller Ancillary Documents or the consummation of the transactions contemplated hereby or thereby, except as set forth in Seller Disclosure Schedule 4.4(b) (collectively, the “ Company Consents ”).

     4.5 Absence of Litigation . Except as set forth in Seller Disclosure Schedule 4.5 , there is no Action pending or, to the knowledge of the Seller, threatened against (i) the Company or the Company’s assets or (ii) the Seller or any of its affiliates relating to the transactions contemplated by this Agreement or the Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of the Seller to perform its

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

obligations and agreements under this Agreement or the Seller Ancillary Documents and to consummate the transactions contemplated hereby and thereby.

     4.6 Title to LLC Interests; Capitalization .

          (a) Except as set forth in Seller Disclosure Schedule 4.6(a) , Seller is the record owner of and has good and valid title to the LLC Interests, free and clear of all Encumbrances, and sole and unrestricted voting power and power of disposition with respect to all of such LLC Interests. Except for any claims arising under this Agreement and any other agreement entered into by the Seller in connection with this Agreement, the Seller and its affiliates have no claims of any kind against the Company, or any of its officers, managers, directors or employees. The LLC Interests have been duly authorized and validly issued in accordance with applicable Laws and the limited liability company agreement of the Company and are fully paid (to the extent required by the limited liability company agreement of the Company) and nonassessable (except to the extent such nonassessability may be affected by Sections 18-607 and 18-804 of DLLCA).

          (b) There are no options or rights to purchase or acquire, or agreements, arrangements, commitments or understandings relating to, any of the LLC Interests or the 16” Pipeline except pursuant to this Agreement and the Omnibus Agreement. There are no (i) authorized or outstanding securities of or equity interests in the Company of any kind other than the LLC Interests, (ii) there are no outstanding options, warrants, subscriptions, puts, calls or other rights, agreements, arrangements or commitments (preemptive, contingent or otherwise) obligating Seller or the Company to offer, issue, sell, redeem, repurchase, otherwise acquire or transfer, pledge or encumber any securities of equity interest in the Company; and (iii) there are no outstanding securities or obligations of any kind of any of the Company that are convertible into or exercisable or exchangeable for any equity interest in the Company.

          (c) Upon payment of the Purchase Price, the Buyer will have the entire record and beneficial ownership of the LLC Interests, free and clear of all Encumbrances.

     4.7 No Undisclosed Liabilities . The Company has no indebtedness or liability (whether absolute, accrued, contingent or otherwise) of any nature other than its obligations under the Construction Contracts and the Guarantee and Collateral Agreement referred to on Seller Disclosure Schedule 4.13 (the “ Guarantee Agreement ”). The Company and its assets will be released from the Company’s obligations under the Guarantee Agreement and the related loan documents following the Closing and delivery of certain documents to the agent for the lenders under the Second Amended and Restated Credit Agreement referred to on Seller Disclosure Schedule 4.13 . The Company is not currently in material breach of its obligations under the Construction Contracts.

     4.8 No Employees . The Company does not now have and has never had any employees.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     4.9 Taxes . The Company has filed, on or before the applicable due date (including any extensions thereof), all material tax returns that it was required to file, and all such tax returns were accurate, correct, and complete in all material respects. All taxes due and owing by the Company have been paid in full or are being properly contested. The Company is, and at all time since its formation has been, disregarded as an entity separate from the Seller for U.S. federal income tax purposes, and no election has been filed on or before the Closing Date that would change such classification on or after the Closing Date.

     4.10 Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of the Seller who is entitled to receive from the Buyer any fee or commission in connection with the transactions contemplated by this Agreement.

     4.11 Condition of 16” Pipeline . To the Seller’s knowledge, the 16” Pipeline is in good operating condition and repair (normal wear and tear excepted), is free from material defects (patent and latent), is suitable for the purposes for which it is currently used and is not in need of material maintenance or repairs except for ordinary routine maintenance and repairs.

     4.12 Title to Assets . Except as disclosed in Seller Disclosure Schedule 4.12 , the Company owns, leases or has the legal right to use all the properties and assets used by the Company in the operation of its business, in each case subject to no Encumbrances, except Permitted Encumbrances. The Company’s assets consist of the 16” Pipeline and the associated rights and obligations under the Construction Contracts relating to the construction of the 16” Pipeline. Except as disclosed in Seller Disclosure Schedule 4.12 , the Company owns the 16” Pipeline free and clear of all Encumbrances other than Permitted Encumbrances.

     4.13 Banking Relationships . Seller Disclosure Schedule 4.13 sets forth a complete and accurate list of all accounts, including checking accounts, cash contribution accounts, safe deposit boxes, borrowing arrangements and certificates of deposit that the Company has with any banks, savings and loan associations or other financial institutions, indicating in each case account numbers, if applicable, and the person or persons authorized to act or sign on behalf of the Company in respect of the foregoing. No person holds any power of attorney or similar authority from the Company with respect to such accounts.

     4.14 WAIVERS AND DISCLAIMERS . NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND AGREEMENTS MADE BY THE PARTIES IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS AND THE OMNIBUS AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE, NATURE, QUALITY OR CONDITION OF THE 16” PIPELINE INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE 16” PIPELINE GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE 16” PIPELINE AND RELATED RIGHTS-OF-WAY, (II) THE INCOME TO BE DERIVED FROM THE 16” PIPELINE, (III) THE SUITABILITY OF THE 16” PIPELINE FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (IV) THE COMPLIANCE OF OR BY THE 16” PIPELINE OR ITS OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (V) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE 16” PIPELINE. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE LLC INTERESTS, THE COMPANY OR THE 16” PIPELINE FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT, EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE TRANSFER AND CONVEYANCE OF THE COMPANY AND ITS ASSETS SHALL BE MADE IN AN “AS IS,” “WHERE IS” CONDITION WITH ALL FAULTS, AND THE COMPANY AND ITS ASSETS ARE TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE THE TRANSFER AND CONVEYANCE OF THE LLC INTERESTS OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE LLC INTERESTS, THE COMPANY OR THE 16” PIPELINE THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER

     The Buyer hereby represents and warrants to Holly and the Seller that as of the date of this Agreement:

     5.1 Organization . The Buyer is an entity duly organized, validly existing and in good standing under the Laws of its state of organization.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     5.2 Authorization . The Buyer has full partnership power and authority to execute, deliver, and perform this Agreement and any Buyer Ancillary Documents to which it is a party. The execution, delivery, and performance by the Buyer of this Agreement and the Buyer Ancillary Documents and the consummation by the Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action of the Buyer. This Agreement has been duly executed and delivered by the Buyer and constitutes, and each such Buyer Ancillary Document executed or to be executed the Buyer has been, or when executed will be, duly executed and delivered by the Buyer and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Buyer, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws affecting creditors’ rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

     5.3 No Conflicts or Violations; No Consents or Approvals Required . Except as set forth in Buyer Disclosure Schedule 5.3 , the execution, delivery and performance by the Buyer of this Agreement and the Buyer Ancillary Documents to which it is a party does not, and consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provisions of the Buyer’s organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate any applicable Law or material contract binding upon the Buyer. No Consent of any Governmental Entity or any other person is required for the Buyer in connection with the execution, delivery and performance of this Agreement and the other Buyer Ancillary Documents to which the Buyer is a party or the consummation of the transactions contemplated hereby and thereby, except as set forth in Buyer Disclosure Schedule 5.3 (collectively, the “ Buyer Consents ”).

     5.4 Absence of Litigation . Except as set forth in Buyer Disclosure Schedule 5.4 , there is no Action pending or, to the knowledge of the Buyer, threatened against the Buyer or any of its affiliates relating to the transactions contemplated by this Agreement or the Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of the Buyer to perform its obligations and agreements under this Agreement or the Buyer Ancillary Documents and to consummate the transactions contemplated hereby and thereby.

     5.5 Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of the Buyer who is entitled to receive from the Seller any fee or commission in connection with the transactions contemplated by this Agreement.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HOLLY

     Holly hereby represents and warrants to Buyer and Seller that as of the date of this Agreement:

     6.1 Organization . Holly is an entity duly organized, validly existing and in good standing under the Laws of its state of organization.

     6.2 Authorization . Holly has full corporate power and authority to execute, deliver, and perform this Agreement and any Ancillary Documents to which it is a party. The execution, delivery, and performance by Holly of this Agreement and the Ancillary Documents and the consummation by Holly of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Holly. This Agreement has been duly executed and delivered by Holly and constitutes, and each such Ancillary Document executed or to be executed by Holly has been, or when executed will be, duly executed and delivered by Holly and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Holly, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws affecting creditors’ rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

     6.3 No Conflicts or Violations; No Consents or Approvals Required . Except as set forth in Holly Disclosure Schedule 6.3 , the execution, delivery and performance by Holly of this Agreement and the Ancillary Documents to which it is a party does not, and consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provisions of Holly’s organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate any applicable Law or material contract binding upon Holly. No Consent of any Governmental Entity or any other person is required for Holly in connection with the execution, delivery and performance of this Agreement and the other Ancillary Documents to which t Holly is a party or the consummation of the transactions contemplated hereby and thereby, except as set forth in Holly Disclosure Schedule 6.3 (collectively, the “ Holly Consents ”).

     6.4 Absence of Litigation . Except as set forth in Holly Disclosure Schedule 6.4 , there is no Action pending or, to the knowledge of Holly, threatened against Holly or any of its affiliates relating to the transactions contemplated by this Agreement or which, if adversely determined, would reasonably be expected to materially impair the ability of Holly to perform its obligations and agreements under this Agreement or the Ancillary Documents to which it is a party and to consummate the transactions contemplated hereby and thereby.

     6.5 Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of Holly who is entitled

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

to receive from the Buyer any fee or commission in connection with the transactions contemplated by this Agreement.

ARTICLE VII
COVENANTS

     7.1 Cooperation . The Seller shall cooperate with the Buyer and assist the Buyer in identifying all licenses, authorizations, permissions or Permits necessary for the Company’s operations from and after the Closing Date and, where permissible, transfer existing Permits to the Buyer, or, where not permissible, assist the Buyer in obtaining new Permits at no cost, fee or liability to the Seller.

     7.2 Additional Agreements . Subject to the terms and conditions of this Agreement, the Ancillary Documents and the Omnibus Agreement, each of the Parties shall use its commercially reasonable efforts to do, or cause to be taken all action and to do, or cause to be done, all things necessary, proper, or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the Parties and their duly authorized representatives shall use commercially reasonable efforts to take all such action.

ARTICLE VIII
ADDITIONAL AGREEMENTS

     8.1 Further Assurances . After the Closing, each Party shall take such further actions, including obtaining consents to assignment from third parties, and execute such further documents as may be necessary or reasonably requested by the other Parties in order to effectuate the intent of this Agreement and the Ancillary Documents and to provide such other Parties with the intended benefits of this Agreement and the Ancillary Documents.

ARTICLE IX
INDEMNIFICATION

     9.1 Indemnification of Buyer and Seller . From and after the Closing and subject to the provisions of this Article IX , (i) Seller agrees to indemnify and hold harmless the Buyer Indemnified Parties from and against any and all Buyer Indemnified Costs and (ii) Buyer agrees to indemnify and hold harmless the Seller Indemnified Parties from and against any and all Seller Indemnified Costs.

     9.2 Defense of Third-Party Claims . An Indemnified Party shall give prompt written notice to Seller or Buyer, as applicable (the “ Indemnifying Party ”), of the commencement or assertion of any action, proceeding, demand, or claim by a third party (collectively, a “ third-party action ”) in respect of which such Indemnified Party seeks indemnification hereunder. Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it, he, or she may have to such Indemnified Party under this Article IX unless the

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

failure to give such notice materially and adversely prejudices the Indemnifying Party. The Indemnifying Party shall have the right to assume control of the defense of, settle, or otherwise dispose of such third-party action on such terms as it deems appropriate; provided , however , that:

          (a) The Indemnified Party shall be entitled, at its own expense, to participate in the defense of such third-party action ( provided , however , that the Indemnifying Party shall pay the attorneys’ fees of the Indemnified Party if (i) the employment of separate counsel shall have been authorized in writing by any the Indemnifying Party in connection with the defense of such third-party action, (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to have charge of such third-party action, (iii) the Indemnified Party shall have reasonably concluded that there may be defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, or (iv) the Indemnified Party’s counsel shall have advised the Indemnified Party in writing, with a copy delivered to the Indemnifying Party, that there is a material conflict of interest that could violate applicable standards of professional conduct to have common counsel);

          (b) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into or making any settlement, compromise, admission, or acknowledgment of the validity of such third-party action or any liability in respect thereof if, pursuant to or as a result of such settlement, compromise, admission, or acknowledgment, injunctive or other equitable relief would be imposed against the Indemnified Party or if, in the opinion of the Indemnified Party, such settlement, compromise, admission, or acknowledgment could have a material adverse effect on its business;

          (c) The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all liability in respect of such third-party action; and

          (d) The Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of), and the Indemnified Party shall be entitled to have sole control over, the defense or settlement, compromise, admission, or acknowledgment of any third-party action (i) as to which the Indemnifying Party fails to assume the defense within a reasonable length of time or (ii) to the extent the third-party action seeks an order, injunction, or other equitable relief against the Indemnified Party which, if successful, would materially adversely affect the business, operations, assets, or financial condition of the Indemnified Party; provided , however , that the Indemnified Party shall make no settlement, compromise, admission, or acknowledgment that would give rise to liability on the part of any Indemnifying Party without the prior written consent of such Indemnifying Party.

The parties hereto shall extend reasonable cooperation in connection with the defense of any third-party action pursuant to this Article IX and, in connection therewith, shall furnish such records, information, and testimony and attend such conferences, discovery proceedings, hearings, trials, and appeals as may be reasonably requested.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     9.3 Direct Claims . In any case in which an Indemnified Party seeks indemnification hereunder which is not subject to Section 9.2 because no third-party action is involved, the Indemnified Party shall notify the Indemnifying Party in writing of any Indemnified Costs which such Indemnified Party claims are subject to indemnification under the terms hereof. Subject to the limitations set forth in Section 9.4(a) , the failure of the Indemnified Party to exercise promptness in such notification shall not amount to a waiver of such claim unless the resulting delay materially prejudices the position of the Indemnifying Party with respect to such claim.

     9.4 Limitations . The following provisions of this Section 9.4 shall limit the indemnification obligations hereunder:

          (a) Limitation as to Time . The Indemnifying Party shall not be liable for any Indemnified Costs pursuant to this Article IX unless a written claim for indemnification in accordance with Section 9.2 or Section 9.3 is given by the Indemnified Party to the Indemnifying Party with respect thereto on or before 5:00 p.m., Dallas, Texas time, on the second anniversary of the Closing Date.

          (b) Sole and Exclusive Remedy . Each Party acknowledges and agrees that, after the Closing Date, notwithstanding any other provision of this Agreement to the contrary, the Buyer’s and the other Buyer Indemnified Parties’ and the Seller’s and the other Seller Indemnified Parties’ sole and exclusive remedy with respect to the Indemnified Costs shall be in accordance with, and limited by, the provisions set forth in this Article IX . The Parties further acknowledge and agree that the foregoing is not the remedy for and does not limit the Parties’ remedies for matters covered by the indemnification provisions contained in the Omnibus Agreement.

     9.5 Tax Related Adjustments . Seller and Buyer agree that any payment of Indemnified Costs made hereunder will be treated by the parties on their tax returns as an adjustment to the Purchase Price.

ARTICLE X
MISCELLANEOUS

     10.1 Expenses . Except as provided in Section 3.4 of this Agreement, or as provided in the Ancillary Documents or the Omnibus Agreement, all costs and expenses incurred by the Parties in connection with the consummation of the transactions contemplated hereby shall be borne solely and entirely by the Party which has incurred such expense.

     10.2 Notices .

          (a) Any notice or other communication given under this Agreement or the Omnibus Agreement shall be in writing and shall be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by facsimile transmission, or (iv) sent by first class mail, postage prepaid (certified or registered mail, return receipt requested). Such notice shall be deemed to have been duly given (w) on the date of the delivery, if delivered personally,

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

(x) on the business day after dispatch by documented overnight delivery service, if sent in such manner, (y) on the date of facsimile transmission, if so transmitted on a business day during normal business hours, otherwise on the next business day, or (z) on the fifth business day after sent by first class mail, postage prepaid, if sent in such manner. Notices or other communications shall be directed to the following addresses:

Notices to Holly:

Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Attention: General Counsel
Facsimile No.: (214) 871-3523

Notices to the Seller:

Navajo Pipeline Co., L.P.
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Attention: General Counsel
Facsimile No.: (214) 871-3523

Notices to the Buyer:

Holly Energy Partners — Operating, L.P.
c/o Holly Energy Partners, L.P.
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Attention: Conflicts Committee
Facsimile No.: (214) 871-3523

with copies to:

David G. Blair
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Facsimile No.: (214) 871-3441

          (b) Any Party may at any time change its address for service from time to time by giving notice to the other Parties in accordance with this Section 10.2 .

     10.3 Severability . If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced under applicable Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

economic or legal substance of the transactions contemplated herein are not affected in any manner adverse to any Party. Upon such determination that any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.

     10.4 Governing Law; Waiver of Jury Trial . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Dallas, Texas. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     10.5 Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

     10.6 Assignment of Agreement . At any time, the Parties may make a collateral assignment of their rights under this Agreement to any of their bona fide lenders or debt holders, or a trustee or a representative for any of them, and the non-assigning Parties shall execute an acknowledgment of such collateral assignment in such form as may from time to time be reasonably requested; provided , however , that unless written notice is given to the non-assigning Parties that any such collateral assignment has been foreclosed upon, such non-assigning Parties shall be entitled to deal exclusively with Holly, the Buyer or the Seller, as the case may be, as to any matters arising under this Agreement, the Ancillary Documents or the Omnibus Agreement (other than for delivery of notices required by any such collateral assignment). Except as otherwise provided in this Section 10.6 , neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties hereto.

     10.7 Captions . The captions in this Agreement are for purposes of reference only and shall not limit or otherwise affect the interpretation hereof.

     10.8 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     10.9 Director and Officer Liability . The directors, managers, officers, partners and stockholders of Holly, the Buyer, the Seller and their respective affiliates shall not have any personal liability or obligation arising under this Agreement (including any claims that another party may assert) other than as an assignee of this Agreement or pursuant to a written guarantee.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     10.10 Integration . This Agreement, the Ancillary Documents and the Omnibus Agreement supersede any previous understandings or agreements among the Parties, whether oral or written, with respect to their subject matter. This Agreement, the Ancillary Documents and the Omnibus Agreement contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement, the Ancillary Documents or the Omnibus Agreement unless it is contained in a written amendment hereto or thereto and executed by the Parties hereto or thereto after the date of this Agreement, the Ancillary Documents or the Omnibus Agreement.

     10.11 Effect of Agreement . The Parties ratify and confirm that except as otherwise expressly provided herein, in the event this Agreement conflicts in any way with the Omnibus Agreement, the terms and provisions of the Omnibus Agreement shall control.

     10.12 Amendment; Waiver . This Agreement may be amended only in a writing signed by all parties hereto. Any waiver of rights hereunder must be set forth in writing. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive any party’s rights at any time to enforce strict compliance thereafter with every term or condition of this Agreement.

     11.13 Survival of Representations and Warranties . The representations and warranties set forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time on, on the anniversary of the Closing Date, except that the representations and warranties contained in Sections 4.1 (Organization), 4.2 (Authorization), 4.6 (Title to LLC Interests; Capitalization), 4.9 (Taxes), 4.14 (Waivers and Disclaimers), 5.1 (Organization), 5.2 (Authorization), 6.1 (Organization), and 6.2 (Authorization) shall survive until the expiration of the applicable statute of limitations; provided, however, that any representation and warranty that is the subject of a claim for indemnification hereunder which claim was timely made pursuant to Section 9.4(a) shall survive with respect to such claim until such claim is finally paid or adjudicated.

ARTICLE XI
GUARANTEE

     11.1 Payment and Performance Guaranty . Holly unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to Buyer the punctual and complete payment in full when due of all Buyer Indemnified Costs by the Indemnifying Party under the Agreement (collectively, the “ Payment Obligations ”). Holly agrees that Buyer shall be entitled to enforce directly against Holly any of the Payment Obligations.

     11.2 Guaranty Absolute . Holly hereby guarantees that the Payment Obligations will be paid strictly in accordance with the terms of the Agreement. The obligations of Holly under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectibility. The liability of Holly under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     (a) any assignment or other transfer of the Agreement or any of the rights thereunder of the Buyer;

     (b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to the Agreement;

     (c) any acceptance by Buyer of partial payment or performance from the Indemnifying Party;

     (d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Indemnifying Party, or any action taken with respect to the Agreements by any trustee or receiver, or by any court, in any such proceeding;

     (e) any absence of any notice to, or knowledge of, Holly, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (a) through (d); or

     (f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.

     The obligations of Holly hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Payment Obligations or otherwise.

     11.3 Waiver . Holly hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the Payment Obligations and any requirement for Buyer to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against the Indemnifying Party, any other entity or any collateral.

     11.4 Subrogation Waiver . Holly agrees that it shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from the Indemnifying Party for any payments made by Holly under this Article XI until all Payment Obligations have been indefeasibly paid, and Holly hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against the Indemnifying Party until all Payment Obligations have been indefeasibly paid.

     11.5 Reinstatement . The obligations of Holly under this Article XI shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Payment Obligations is rescinded or must otherwise be returned to the Indemnifying Party or any

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of the Indemnifying Party or such other entity, or for any other reason, all as though such payment had not been made.

     11.6 Continuing Guaranty . This Article XI is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the Payment Obligations, (ii) be binding upon Holly, its successors and assigns and (iii) inure to the benefit of and be enforceable by Buyer and its successors, transferees and assigns.

     11.7 No Duty to Pursue Others . It shall not be necessary for Buyer (and Holly hereby waives any rights which Holly may have to require Buyer), in order to enforce such payment by Holly, first to (i) institute suit or exhaust its remedies against the Indemnifying Party or others liable on the Payment Obligations or any other person, (ii) enforce Buyer’s rights against any other guarantors of the Payment Obligations, (iii) join the Indemnifying Party or any others liable on the Payment Obligations in any action seeking to enforce this Article XI , (iv) exhaust any remedies available to Buyer against any security which shall ever have been given to secure the Payment Obligations, or (v) resort to any other means of obtaining payment of the Payment Obligations.

ARTICLE XII
INTERPRETATION

     12.1 Interpretation . It is expressly agreed that this Agreement shall not be construed against any Party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any particular provision hereof or who supplied the form of Agreement. Each Party agrees that this Agreement has been purposefully drawn and correctly reflects its understanding of the transaction that this Agreement contemplates. In construing this Agreement:

          (a) examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

          (b) the word “includes” and its derivatives means “includes, but is not limited to” and corresponding derivative expressions;

          (c) a defined term has its defined meaning throughout this Agreement and each Exhibit, Annex or Schedule to this Agreement, regardless of whether it appears before or after the place where it is defined;

          (d) each Exhibit, Annex and Schedule to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any Exhibit, Annex or Schedule, the provisions of the main body of this Agreement shall prevail;

          (e) the term “cost” includes expense and the term “expense” includes cost;

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

          (f) the headings and titles herein are for convenience only and shall have no significance in the interpretation hereof;

          (g) the inclusion of a matter on a Schedule in relation to a representation or warranty shall not be deemed an indication that such matter necessarily would, or may, breach such representation or warranty absent its inclusion on such Schedule;

          (h) any reference to a statute, regulation or Law shall include any amendment thereof or any successor thereto and any rules and regulations promulgated thereunder;

          (i) currency amounts referenced herein, unless otherwise specified, are in U.S. Dollars;

          (j) unless the context otherwise requires, all references to time shall mean time in Dallas, Texas;

          (k) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified; and

          (l) if a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).

     12.2 References, Gender, Number . All references in this Agreement to an “Article,” “Section,” “subsection,” “Exhibit” or “Schedule” shall be to an Article, Section, subsection, Exhibit or Schedule of this Agreement, unless the context requires otherwise. Unless the context clearly requires otherwise, the words “this Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar import shall refer to this Agreement as a whole and not to a particular Article, Section, subsection, clause or other subdivision hereof. Cross references in this Agreement to a subsection or a clause within a Section may be made by reference to the number or other subdivision reference of such subsection or clause preceded by the word “Section.” Whenever the context requires, the words used herein shall include the masculine, feminine and neuter gender, and the singular and the plural.

[The Remainder of this Page is Intentionally Left Blank]

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

      IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first set forth above.

Signature Page
Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.
LLC Interest Purchase Agreement

EXHIBIT A

Form of Assignment

ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS

     This Assignment of Limited Liability Company Interests (“ Assignment ”) is effective as of 12:01 a.m., Dallas, Texas time, on June 1, 2009 (the “ Effective Time ”), by and between Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Seller ”), and Holly Energy Partners — Operating, L.P., a Delaware limited partnership (“ Buyer ”). Buyer and Seller are referred to collectively herein as the “ Parties .”

RECITALS

     Reference is made to that certain LLC Interest Purchase Agreement dated June 1, 2009, among Holly Corporation, Seller and Buyer wherein Seller has agreed to assign all of the membership interests in Lovington-Artesia, L.L.C., a Delaware limited liability company (the “ Company ”), in accordance with the terms of such LLC Interest Purchase Agreement (such agreement, as the same may be amended, the “ Purchase Agreement ”).

     This Assignment is delivered by Seller pursuant to the Purchase Agreement.

ASSIGNMENT

     Now, therefore, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

     1. Subject to the representations, warranties and covenants of the parties contained in the Purchase Agreement, Seller hereby assigns to Buyer all of the limited liability company interests in the Company, and any income, distributions, or other value associated therewith or deriving therefrom on and after the Effective Time (collectively, the “ Membership Interests ”).

     2. Subject to the representations, warranties and covenants of the parties contained in the Purchase Agreement, Buyer hereby assumes, from and after the Effective Time, all obligations and liabilities of Seller with respect to the Membership Interests arising from and after the Effective Time.

     3. Seller hereby agrees to promptly execute and deliver any corrective assignments and other legal documents or notification reasonably requested by Buyer to give effect to the intent of this Assignment.

     4. Seller hereby acknowledges and agrees that, as a result of this Assignment, it no longer has any limited liability company interest or equity interest in the Company, and it resigns as a member of the Company effective as of the Effective Time.

     5. This Assignment shall be binding upon the Parties and their respective successors and assigns.

     6. This Assignment shall be governed by and construed in accordance with the internal laws of the State of Delaware.

     7. This Assignment is subject to the terms and conditions of the Purchase Agreement, and in the event of any conflict between the terms of this Assignment and the terms of the Purchase Agreement, the terms of the Purchase Agreement shall control.

     8. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

[ Remainder of Page Intentionally Left Blank ]

     IN WITNESS WHEREOF, this Assignment is executed as of this ___ day of June, 2009, but shall be effective as of the Effective Time.

[ Signature Page to Assignment of Limited Liability Company Interests ]

EXHIBIT B

Form of Restated Intermediate Pipelines Agreement

(Incorporated by reference to Exhibit 10.2 of Holly Energy Partners, L.P.’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

EXHIBIT C

Form of Restated Omnibus Agreement

(Incorporated by reference to Exhibit 10.3 of Holly Energy Partners, L.P.’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

EXHIBIT D

Form of Mortgages and Deeds of Trust

(Incorporated by reference to Exhibit 10.4 of Holly Energy Partners, L.P.’s Current
Report on Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

DISCLOSURE SCHEDULES
TO LLC INTEREST PURCHASE AGREEMENT

Each Disclosure Schedule attached to the LLC Interest Purchase Agreement (the “ Agreement ”) is qualified in its entirety by reference to the specific provisions of the Agreement to which such Disclosure Schedule is attached, and is not intended to constitute, and shall not be construed as constituting, representations or warranties except as and to the extent provided in the Agreement.

Matters referred to in each Disclosure Schedule are not necessarily limited to matters required by the Agreement to be reflected in such Disclosure Schedule. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. The inclusion of such matters in any Disclosure Schedules does not constitute an admission of materiality by any party to the Agreement.

A disclosure made by any party to the Agreement in any Disclosure Schedule that is sufficient on its face to reasonably inform another party to the Agreement of information required to be disclosed in another Disclosure Schedule in order to avoid a misrepresentation thereunder shall be deemed, for all purposes of the Agreement, to have been made with respect to such other Disclosure Schedule.

Headings have been inserted for convenience of reference only and shall to no extent have the effect of amending or changing the express description of the sections as set forth in the Agreement. All capitalized terms in any Disclosure Schedule that are defined in the Agreement that are not otherwise defined in such Disclosure Schedule shall have the meanings assigned to them in the Agreement.

SCHEDULE 4.3(a)

Company Foreign Qualifications

New Mexico

Schedule 4.3(a) - 1

SCHEDULE 4.4(a)

Seller No Conflicts or Violations

1.

Violations of the Seller’s Organizational Documents .

     None.

2.

Violations or conflicts with material contracts .

     None.

3.

Consents of Governmental Entities .

     None.

Schedule 4.4(a) - 1

SCHEDULE 4.4(b)

Company No Conflicts or Violations

1.

Violations of the Company’s Organizational Documents .

     None.

2.

Violations or conflicts with material contracts .

     None.

3.

Consents of Governmental Entities .

     None.

Schedule 4.4(b) - 1

SCHEDULE 4.5

Seller Litigation

None.

Schedule 4.5 - 1

SCHEDULE 4.6(a)

Title to LLC Interests

None.

Schedule 4.6(a) - 1

SCHEDULE 4.12

Title to Assets

The Company is a party to the Guarantee and Collateral Agreement, dated July 1, 2004, among Holly Corporation and certain of its Subsidiaries in favor of Bank of America, N.A., as administrative agent, pursuant to which the Company guarantees indebtedness under the Second Amended and Restated Credit Agreement dated as of April 7, 2009, among Holly Corporation, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, UBS Loan Finance LLC and U.S. Bank National Association, as co-documentation agents, Union Bank of California, N.A. and Compass Bank, as syndication agents, and certain other lenders from time to time party thereto. The Company and its assets will be released from the foregoing obligations promptly following the Closing.

Schedule 4.12 - 1

SCHEDULE 4.13

Banking Relationships

The Company is a party to the Guarantee and Collateral Agreement, dated July 1, 2004, among Holly Corporation and certain of its Subsidiaries in favor of Bank of America, N.A., as administrative agent, pursuant to which the Company guarantees indebtedness under the Second Amended and Restated Credit Agreement dated as of April 7, 2009, among Holly Corporation, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, UBS Loan Finance LLC and U.S. Bank National Association, as co-documentation agents, Union Bank of California, N.A. and Compass Bank, as syndication agents, and certain other lenders from time to time party thereto.

Schedule 4.13 - 1

SCHEDULE 5.3

Buyer No Conflicts or Violations

None.

Schedule 5.3 - 1

SCHEDULE 5.4

Buyer Litigation

None.

Schedule 5.4 - 1

SCHEDULE 6.3

Holly No Conflicts or Violations

1.

Violations of Holly’s Organizational Documents .

     None.

2.

Violations or conflicts with material contracts .

     None.

3.

Consents of Governmental Entities .

     None.

Schedule 6.3 - 1

SCHEDULE 6.4

Holly Litigation

None.

Schedule 6.4 - 1

Exhibit 10.2

AMENDED AND RESTATED

INTERMEDIATE PIPELINES AGREEMENT

     This Amended and Restated Intermediate Pipelines Agreement (this “ Agreement ”) is dated as of June 1, 2009, by and among Holly Corporation, a Delaware corporation (“ Holly ”), Navajo Refining Company, L.L.C., a Delaware limited liability company (formerly Navajo Refining Company, L.P.) (“ Navajo Refining ” and, together with Holly, the “ Holly Entities ”), Holly Energy Partners, L.P., a Delaware limited partnership (the “ Partnership ”), Holly Energy Partners-Operating, L.P., a Delaware limited partnership (the “ Operating Partnership ”), HEP Pipeline, L.L.C., a Delaware limited liability company (“ HEP Pipeline ”), Lovington-Artesia, L.L.C., a Delaware limited liability company (“ Lovington-Artesia ”), HEP Logistics Holdings, L.P., a Delaware limited partnership (the “ General Partner ”), Holly Logistic Services, L.L.C., a Delaware limited liability company (“ Holly GP ”), and HEP Logistics GP, L.L.C., a Delaware limited liability company (“ OLP GP ” and, together with the Partnership, the Operating Partnership, HEP Pipeline, Lovington-Artesia, the General Partner and Holly GP, the “ Partnership Entities ”), and amends and restates in its entirety the Pipelines Agreement dated July 8, 2005 (the “ Original Pipelines Agreement ”), among the Holly Entities and the Partnership Entities other than Lovington-Artesia. Each of the Holly Entities and the Partnership Entities are individually referred to herein as a “ Party ” and collectively as the “ Parties .”

RECITALS:

     WHEREAS, Pursuant to that certain Purchase and Sale Agreement dated as of July 6, 2005 (the “ 2005 Purchase Agreement ”) by and among Holly, Navajo Refining, Navajo Pipeline Co., L.P. (“ Navajo Pipeline ”), the Partnership, the Operating Partnership and HEP Pipeline, Navajo Pipeline and Navajo Refining transferred and conveyed to HEP Pipeline, and HEP Pipeline acquired, certain of the Intermediate Product Pipelines which historically were utilized by the Holly Entities to transport Intermediate Products;

     WHEREAS, in connection with the closing of the transactions contemplated by the 2005 Purchase Agreement the Parties entered into the Original Pipelines Agreement pursuant to which the Holly Entities continued to transport Intermediate Products in the Intermediate Product Pipelines and the Partnership provides transportation services to the Holly Entities;

     WHEREAS, Lovington-Artesia is the owner of a newly constructed 16” pipeline (the “ 16” Pipeline ”) currently running 65 miles from Holly’s crude oil distillation and vacuum distillation facilities in Lovington, New Mexico to Holly’s petroleum refinery in Artesia, New Mexico;

     WHEREAS, pursuant to that certain LLC Interest Purchase Agreement dated as of June 1, 2009 (the “ 2009 Purchase Agreement ”) by and among Holly, Navajo Pipeline and the Operating Partnership, Navajo Pipeline has agreed to transfer and convey to the Operating Partnership, and the Operating Partnership has agreed to acquire, all of the membership interests of Lovington-Artesia, and thereby acquire the 16” Pipeline;

     WHEREAS, as of the date hereof, the Holly Entities and the Partnership Entities desire to amend and restate the Original Pipelines Agreement to, among other things, include the 16” Pipeline.

     NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:

      Section 1. Definitions

     Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth below.

     “ 16” Pipeline ” has the meaning set forth in the recitals to this Agreement.

     “ 2005 Purchase Agreement ” has the meaning set forth in the recitals to this Agreement.

     “ 2009 Purchase Agreement ” has the meaning set forth in the recitals to this Agreement.

     “ Additives ” has the meaning set forth in Section 2(d) .

     “ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question, excluding, in the case of Holly, the Partnership Entities.

     “ Agreement ” has the meaning set forth in the preamble to this Agreement.

     “ Applicable Law ” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.

     “ Arbitrable Dispute ” means any and all disputes, Claims, controversies and other matters in question between any of the Partnership Entities, on the one hand, and any of the Holly Entities, on the other hand, arising out of or relating to this Agreement or the alleged breach hereof, or in any way relating to the subject matter of this Agreement regardless of whether (a) allegedly extra-contractual in nature, (b) sounding in contract, tort or otherwise, (c) provided for by Applicable Law or otherwise or (d) seeking damages or any other relief, whether at law, in equity or otherwise.

     “ Artesia Refinery ” means the refining facilities owned by Navajo Refining in Artesia, New Mexico.

     “ bpd ” means barrels per day.

     “ Claim ” means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.

     “ Claimant ” has the meaning set forth in Section 11(f) .

     “ Conflicts Committee ” means the Conflicts Committee of Holly Logistic Services, L.L.C., as general partner of HEP Logistics Holdings, L.P., the sole general partner of the Partnership.

     “ Contract Quarter ” means a three-month period that commences on July 1, October 1, January 1, or April 1, and ends on September 30, December 31, March 31 or June 30, respectively, except that the initial Contract Quarter commenced on July 8, 2005.

     “ Contract Year ” means a year that commences on July 1 and ends on the last day of June, except that the initial Contract Year commenced on July 8, 2005.

     “ Control ” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

     “ Controlled Affiliates ” means with respect to any Person, any other Person that directly or indirectly through one or more intermediaries is controlled by such Person, excluding in the case of Holly, the Partnership Entities.

     “ Deficiency Notice ” has the meaning set forth in Section 9(a) .

     “ Deficiency Payment ” has the meaning set forth in Section 9(a) .

     “ Effective Date ” means July 8, 2005.

     “ Force Majeure ” means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, storms, floods, washouts, arrests, the order of any court or Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, storage tanks or lines of pipe, inability to obtain or unavoidable delay in obtaining material or equipment, and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome. Notwithstanding anything in this Agreement to the contrary, inability of a Party to make payments when due, be profitable or to secure funds, arrange bank loans or other financing, obtain credit or have adequate capacity or production (other than for reasons of Force Majeure) shall not be regarded as events of Force Majeure.

     “ General Partner ” has the meaning set forth in the preamble to this Agreement.

     “ Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

     “ HEP Pipeline ” has the meaning set forth in the preamble to this Agreement.

     “ Holly ” has the meaning set forth in the preamble to this Agreement.

     “ Holly Entities ” has the meaning set forth in the preamble to this Agreement.

     “ Holly GP ” has the meaning set forth in the preamble to this Agreement.

     “ Incentive Tariff ” has the meaning set forth in Section 2(b)(ii) .

     “ Intermediate Products ” means crude oil, gas oil, diesel, kerosene, casinghead, naphtha, normal butane and isobutane, all of which should be characteristically equal to like products that have been transported on the Intermediate Product Pipelines after January 1, 2003.

     “ Intermediate Product Pipelines ” means the pipelines described on Exhibit A attached hereto.

     “ Lovington-Artesia ” has the meaning set forth in the recitals to this Agreement.

     “ Lovington Refinery ” means the crude oil distillation and vacuum distillation facilities owned by Navajo Refining near Lovington, New Mexico.

     “ Minimum Revenue Commitment ” has the meaning set forth in Section 2(a)(i) .

     “ Navajo Pipeline ” has the meaning set forth in the recitals to this Agreement.

     “ Navajo Refining ” has the meaning set forth in the preamble to this Agreement.

     “ OLP GP ” has the meaning set forth in the preamble to this Agreement.

     “ Omnibus Agreement ” means the Amended and Restated Omnibus Agreement, dated as of June 1, 2009, among Holly, the Partnership, the Operating Partnership, the General Partner, Holly GP, OLP GP and Navajo Pipeline, as amended.

     “ Operating Partnership ” has the meaning set forth in the preamble to this Agreement.

     “ Original Pipelines Agreement ” has the meaning set forth in the preamble to this Agreement.

     “ Parties ” or “ Party ” has the meaning set forth in the preamble to this Agreement.

     “ Partnership ” has the meaning set forth in the preamble to this Agreement.

     “ Partnership Entities ” has the meaning set forth in the preamble to this Agreement.

     “ PPI ” has the meaning set forth in Section 2(a)(ii) .

     “ Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

     “ Prime Rate ” means the prime rate per annum announced by Union Bank of California, N.A., or if Union Bank of California, N.A. no longer announces a prime rate for any reason, the prime rate per annum announced by the largest U.S. bank measured by deposits from time to time as its base rate on corporate loans, automatically fluctuating upward or downward with each announcement of such prime rate.

     “ Refineries ” means, collectively, the Artesia Refinery and the Lovington Refinery.

     “ Refund ” has the meaning set forth in Section 9(c) .

     “ Respondent ” has the meaning set forth in Section 11(f) .

     “ Term ” has the meaning set forth in Section 6 .

      Section 2. Agreement to Use Services Relating to Pipelines .

     This Agreement sets forth a commercial arrangement consistent with historical operational practices between the Holly Entities and the Partnership Entities as well as the objectives of the Parties. The Parties intend to be strictly bound by the terms set forth in this Agreement, which set forth the Minimum Revenue Commitment on the part of the Holly Entities and require the Partnership Entities to provide certain transportation services to the Holly Entities. The principal objective of the Partnership Entities is for the Holly Entities to meet or exceed the Minimum Revenue Commitment. The principal objective of the Holly Entities is for the Partnership Entities to provide services to the Holly Entities in a manner that enables the Holly Entities to operate their assets in a manner at least as favorably as their historical practice when the Holly Entities were the owners of the Intermediate Product Pipelines.

     (a)  Minimum Revenue Commitment . During the Term and subject to the terms and conditions of this Agreement, the Holly Entities agree as follows:

     (i) Subject to Section 3 , during the Term the Holly Entities will transport on the Intermediate Product Pipelines an amount of Intermediate Products in the aggregate that will produce revenue to the Partnership Entities in an amount at least equal to $2,956,500 per Contract Quarter as such amount may be revised pursuant to Section 2(a)(ii) and Schedule I attached hereto (the “ Minimum Revenue Commitment ”). Notwithstanding the foregoing, in the event that the Effective Date is any date other than the first day of a calendar quarter, then the Minimum Revenue Commitment for the initial Contract Quarter shall be prorated based upon the number of days actually in such calendar quarter and the initial Contract Quarter.

     (ii) The Minimum Revenue Commitment shall be adjusted on July 1 of each Contract Year commencing July 1, 2010, by an amount equal to 75% of the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“ PPI ”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUSOP3000 as of December 31, 2007 — located at http://www.bls.gov/data/ . The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2006 change is: [PPI (2005) — PPI (2004)] / PPI (2004) or (155.7 — 148.5) / 148.5 or .0485 or 4.85%. If the PPI index change is negative in a given year then the annual change will be deemed to be “zero.” If the above index is no longer published, the Holly Entities and the Partnership Entities shall negotiate in good faith to agree on a new index that gives comparable protection against inflation, and the same method of adjustment for increases in the new index shall be used to calculate increases in the Minimum Revenue Commitment. If the Holly Entities and the Partnership Entities are unable to agree, a new index will be determined by binding arbitration in accordance with Section 11(f) , and the same method of adjustment for increases in the new index shall be used to calculate increases in the Minimum Revenue Commitment. To evidence the parties’ agreement to each adjusted Minimum Revenue Commitment, Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities) shall execute an amended, modified, revised or updated Schedule I and attach it to this Agreement. Such amended, modified, revised or updated Schedule I shall be sequentially numbered (e.g. Schedule I-1 , Schedule I-2 , etc.), dated and appended as an additional schedule to this Agreement and shall replace the prior version of Schedule I in its entirety, except as specified therein.

     (iii) If the Holly Entities are unable for a period in excess of thirty (30) consecutive days to transport on the Intermediate Product Pipelines the volumes of Intermediate Products required to meet the Minimum Revenue Commitment as a result of the Partnership Entities’ operational difficulties, prorationing, or inability to provide the 100,000 bpd capacity, then upon written notice by the Holly Entities to the Partnership Entities, the Minimum Revenue Commitment will be reduced for such period of time by an amount equal to: (1) the volume of Intermediate Products that the Holly Entities are unable to transport on the Intermediate Product Pipelines as a result of the Partnership Entities’ operational difficulties, prorationing or inability to provide the 100,000 bpd capacity multiplied by (2) the applicable tariffs. This Section 2(a)(iii) shall not apply in the event HEP gives notice of a Force Majeure event in accordance with Section 3 , in which case the Holly Entities’ Minimum Revenue Commitment shall be suspended in accordance with and as provided in Section 3 .

     (b)  Tariffs .

     (i) The tariff rates, and the rules and regulations applicable to intrastate service on the Intermediate Product Pipelines shall be as set forth in Exhibit B attached hereto and made a part hereof for all purposes, as such exhibit may be amended from time-to-time in accordance with this Agreement. The non-incentive tariff rate as of June 1, 2009 of 0.5664 shall be adjusted on July 1 of each Contract Year commencing July 1, 2010, by an amount equal to 75% of the percentage change, if any, rounded to four

decimal places of the PPI calculated in accordance with the method set forth in Section 2(a)(ii) ; provided , however , that if the PPI index change is negative in a given year, then the non-incentive tariff rate shall be decreased by an amount equal to 75% of such percentage change. If the PPI is no longer published, the Holly Entities and the Partnership Entities shall negotiate in good faith to agree on a new index that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the non-incentive tariff rates. If the Holly Entities and the Partnership Entities are unable to agree, a new index will be determined by binding arbitration in accordance with Section 11(f) , and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the non-incentive tariff rates. To evidence the parties agreement to each adjusted tariff rate, Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities) shall execute an amended, modified, revised or updated Exhibit B and attach it to this Agreement. Such amended, modified, revised or updated Exhibit B shall be sequentially numbered (e.g. Exhibit B-1 , Exhibit B-2 , etc.), dated and appended as an additional exhibit to this Agreement and shall replace the prior version of Exhibit B in its entirety, except as specified therein.

     (ii) Holly shall pay the Partnership an incentive tariff (the “ Incentive Tariff ”) equal to $0.2981 per barrel, as of June 1, 2009, for barrels shipped in excess of 100,000 bpd; provided , that the Partnership will receive its full base tariff of $0.5664 per barrel escalated annually at PPI for any and all non-Holly-owned barrels shipped on the Intermediate Product Pipelines. The Incentive Tariff shall be adjusted on July 1 of each Contract Year, commencing July 1, 2010, as provided in Section 2(b)(i) .

     (c)  Obligations of the Partnership Entities . During the Term and subject to the terms and conditions of this Agreement, including Section 11(c) , the Partnership Entities agree to own or lease, operate and maintain the assets necessary to accept the deliveries from the Holly Entities and to provide the services required under this Agreement. Notwithstanding the preceding sentence, subject to Section 11(c) of this Agreement and Article V of the Omnibus Agreement, the Partnership Entities are free to sell any of their assets, including assets that provide services under this Agreement, and the Partnership or any of the Partnership Entities are free to merge with another entity (whether or not the Partnership or any of the Partnership Entities is the surviving entity in such merger) and are free to sell all of their assets or all of their equity to another entity at any time. At the request of the Holly Entities, and subject in each case to any applicable common carrier proration duties, the Partnership Entities agree to use commercially reasonable efforts to transport by pipeline for the Holly Entities each month during the Term 100,000 bpd of Intermediate Products on the Intermediate Product Pipelines. To the extent that the Holly Entities are entitled to an exception under Section 3 to their obligations under Section 2(a) , the corresponding obligations of the Partnership Entities under this Section 2(c) will be proportionately reduced.

     (d)  Pour Point Depressant and Additives . The Partnership Entities shall add pour point depressant to the Intermediate Products as may be requested by the Holly Entities or as may be otherwise required to move certain Intermediate Products in the quantities necessary to meet the Holly Entities schedule. The Holly Entities agree to reimburse the Partnership Entities

for the cost of adding pour point depressant to those certain Intermediate Products. All fuel additives, dyes and other additives (“ Additives ”) requested to be added to the Holly Entities’ Intermediate Products will be provided by the Holly Entities at no cost to the Partnership Entities or, if the Partnership Entities provide Additives, then the Holly Entities agree to promptly reimburse the Partnership Entities for the costs of the Additives. The Partnership Entities will use commercially reasonable efforts to limit the use of pour point depressant and Additives to the Intermediate Products to the amounts requested by the Holly Entities.

     (e)  Taxes . The Holly Entities will pay all taxes, import duties, license fees and other charges by any Governmental Authority levied on or with respect to the Intermediate Products delivered by the Holly Entities for transportation by the Partnership Entities in the Intermediate Product Pipelines including, but not limited to, any New Mexico gross receipts and compensating (use) taxes. The Holly Entities will reimburse the Partnership Entities for the New Mexico gross receipts tax, but not income tax, levied on or with respect to the transportation services provided by the Partnership Entities to the Holly Entities under this Agreement. Should any Party be required to pay or collect any taxes, duties, charges and or assessments pursuant to any federal, state, county or municipal law or authority now in effect or hereafter to become effective which are payable by the any other Party pursuant to this Section 2(e) the proper Party shall promptly reimburse the other Party therefor.

     (f)  Timing of Payments . The Holly Entities will make payments to the Partnership Entities by wire transfer of immediately available funds on a monthly basis during the Term with respect to services rendered by the Partnership Entities under this Agreement in the prior month. Payments not received by the Partnership Entities on or prior to the applicable payment date will accrue interest at the Prime Rate from the applicable payment date until paid.

     (g)  Pipeline Direction . Without Holly’s prior written consent, which shall not be unreasonably withheld, the Partnership Entities will not reverse the direction of any Intermediate Product Pipeline or connect any other pipeline to the Intermediate Product Pipelines; provided , however, that the Partnership Entities may take any necessary emergency action to prevent or remedy a release of Intermediate Products from an Intermediate Product Pipeline without obtaining the consent required by this Section 2(g) . The Holly Entities shall have the right to reverse the direction of any Intermediate Product Pipelines so long as the Holly Entities agree to reimburse the Partnership Entities for the additional costs and expenses incurred by the Partnership Entities as a result of changing the direction of any Intermediate Products on the Intermediate Product Pipelines (both to reverse and re-reverse), and (ii) to pay the flow reversal rates as set forth on Exhibit B , as it may be amended from time-to-time in accordance with this Agreement. The tariff rates applicable to any such flow reversal shall be as set forth on Exhibit B and shall be adjusted each year as provided in Section 2(a)(ii) .

     (h)  Notification of Utilization . When requested by the Partnership Entities, Holly will provide to the Partnership Entities written notification of Holly’s reasonable good faith estimate of its anticipated future utilization of the Intermediate Product Pipelines of the Partnership Entities.

     (i)  Scheduling of Product Movements . The Partnership Entities will use their reasonable commercial efforts to schedule Intermediate Products movements and accept

deliveries of Intermediate Products hereunder in a manner that is consistent with the historical dealings between the Parties, as such dealings may change from time to time.

     (j)  Increases in Pipeline Tariff Rates . If new Applicable Laws are enacted that require the Partnership Entities to make substantial and unanticipated capital expenditures with respect to the Intermediate Product Pipelines, the Partnership Entities may amend the tariff rates in order to recover the Partnership Entities’ cost of complying with these Applicable Laws (including a reasonable return). The Holly Entities and the Partnership Entities shall use their reasonable commercial efforts to comply with these Applicable Laws, and shall negotiate in good faith to mitigate the impact of these Applicable Laws and to determine the amount of the new tariff rates. If the Holly Entities and the Partnership Entities are unable to agree on the amount of the new tariff rates that the Partnership Entities will charge, such tariff rates will be determined by binding arbitration in accordance with Section 11(f) . Exhibit B or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any changes in tariff rates agreed to in accordance with this Section 2(j) .

      Section 3. Exceptions to Obligations

      Force Majeure . In the event that any Party is rendered unable, wholly or in part, by a Force Majeure event from performing its obligations under this Agreement for a period of more than 30 days, then upon the delivery of notice and full particulars of the Force Majeure event in writing within a reasonable time after the occurrence of the Force Majeure event relied on, the obligations of the Parties, so far as they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused. Any suspension of the obligations of the Parties as a result of this Section 3 shall extend the Term. The Holly Entities will be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests. In the event a Force Majeure event prevents the Partnership Entities or the Holly Entities from performing their respective obligations under this Agreement for a period of more than one year, this Agreement may be terminated by the Partnership Entities or the Holly Entities. Nothing in this Section 3 shall alter the liability of the Partnership Entities as set forth in the rules and regulations tariffs for the Intermediate Product Pipelines attached hereto as Exhibit B .

      Section 4. Agreement to Remain Shipper

     With respect to any Intermediate Products that are produced at a Refinery and transported in any Intermediate Product Pipeline, the Holly Entities agree that they will continue their historical commercial practice of owning such Intermediate Products from such point as such Intermediate Products leave the Refinery until at least such point as they will not be further transported in an Intermediate Product Pipeline and to continue acting in the capacity of the shipper of any such Intermediate Products for their own account at all times that such Intermediate Products are in an Intermediate Product Pipeline.

      Section 5. Agreement Not to Challenge Tariffs

     The Holly Entities agree to any tariff rate changes for the Intermediate Product Pipelines determined in accordance with this Agreement. The Holly Entities agree (a) not to challenge, nor to cause their Controlled Affiliates to challenge, nor to encourage or recommend to any other Person that it challenge, or voluntarily assist in any way any other Person in challenging, in any forum, intrastate tariffs (including joint tariffs) of the Partnership Entities that the Partnership Entities have filed or may file containing rates, rules or regulations that are in effect at any time during the Term and regulate the transportation of Intermediate Products, and (b) not to protest or file a complaint, nor cause their Controlled Affiliates to protest or file a complaint, nor encourage or recommend to any other Person that it protest or file a complaint, or voluntarily assist in any way any other Person in protesting or filing a complaint, with respect to regulatory filings that the Partnership Entities have made or may make at any time during the Term to change intrastate tariffs (including joint tariffs) for transportation of Intermediate Products in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.

      Section 6. Effectiveness and Term

     This Agreement shall be effective as of the Effective Date, and shall terminate at 12:01 a.m. Dallas, Texas, time on June 1, 2024, unless extended by written mutual agreement of the Parties hereto or as set forth in Section 7 (the “ Term ”); provided , however , that Section 5 shall survive the termination of this Agreement; and provided , further, that the Parties agree and acknowledge that the 16” Pipeline was added as an Intermediate Product Pipeline under this Agreement as of the closing date of the 2009 Purchase Agreement. The Party desiring to extend this Agreement pursuant to this Section 6 shall provide prior written notice to the other Party of its desire to so extend this Agreement; such written notice shall be provided not more than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of termination or ten (10) days after receipt of a written request from the other party (which request may be delivered no earlier than twelve (12) months prior to the date of termination) to provide any such notice or lose such right. The Holly Entities shall deliver written notice to the Partnership Entities, not more than twenty-four (24) months prior to the date of termination and not less than the later of twelve (12) months prior to the date of termination or ten (10) days after receipt of a written request from the Partnership Entities (which request may be delivered no earlier than twelve (12) months prior to the date of termination) to provide such notice or lose such right, notifying the Partnership Entities as to whether the Holly Entities desire to extend this Agreement beyond the date of termination.

      Section 7. Right to Enter into a New Agreement

     (a) In the event that the Holly Entities provide prior written notice to the Partnership Entities of the desire of the Holly Entities to extend this Agreement by written mutual agreement of the Parties, the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date, then the Partnership Entities shall have the right to negotiate to enter into one or more pipeline agreements with one or more third parties to begin after the date of termination, provided that until the end of one year following

termination without renewal of this Agreement, the Holly Entities will have the right to enter into a new pipelines agreement with the Partnership Entities on commercial terms that substantially match the terms upon which the Partnership Entities propose to enter into an agreement with a third party for similar services with respect to all or a material portion of the Intermediate Product Pipelines. In such circumstances, the Partnership Entities shall give the Holly Entities forty-five (45) days prior written notice of any proposed new pipelines agreement with a third party, and such notice shall inform the Holly Entities of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and the Holly Entities shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or the Holly Entities shall lose the rights specified by this Section 7(a) with respect to the assets that are the subject of such notice.

     (b) In the event that the Holly Entities fail to provide prior written notice to the Partnership Entities of the desire of the Holly Entities to extend this Agreement by written mutual agreement of the Parties pursuant to Section 6 , the Partnership Entities shall have the right, during the period from the date of the Holly Entities’ failure to provide written notice pursuant to Section 6 to the date of termination of this Agreement, to negotiate to enter into a new pipelines agreement with a third party, provided however that at any time during the twelve (12) months prior to the expiration of the Term, the Holly Entities will have the right to enter into a new pipelines agreement with the Partnership Entities on commercial terms that substantially match the terms upon which the Partnership Entities propose to enter into an agreement with a third party for similar services with respect to all or a material portion of the Intermediate Product Pipelines. In such circumstances, the Partnership Entities shall give the Holly Entities forty-five (45) days prior written notice of any proposed new pipelines agreement with a third party, and such notice shall inform the Holly Entities of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and the Holly Entities shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or the Holly Entities shall lose the rights specified by this Section 7(b) with respect to the assets that are the subject of such notice.

      Section 8. Notices

     All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by telecopier or telegram to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 8:

if to the Holly Entities :

Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: David L. Lamp
Facsimile: 214-615-9379

if to the Partnership Entities :

Holly Energy Partners, L.P.
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: David G. Blair
Facsimile: 214-871-3441

      Section 9. Deficiency Payments

     (a) As soon as practicable following the end of each Contract Quarter under this Agreement, the Partnership Entities shall deliver to the Holly Entities a written notice (the “ Deficiency Notice ”) detailing any failure of the Holly Entities to meet their obligations under Section 2(a)(i) ; provided that the Holly Entities’ obligations pursuant to the Minimum Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Section 9 . The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that the Partnership Entities believe would have been paid by the Holly Entities to the Partnership Entities if the Holly Entities had complied with their respective obligations pursuant to Section 2(a)(i) (the “ Deficiency Payment ”). The Holly Entities shall pay the Deficiency Payment to the Partnership Entities upon the later of: (A) ten (10) days after their receipt of the Deficiency Notice and (B) thirty (30) days following the end of the related Contract Quarter.

     (b) If the Holly Entities disagree with the Deficiency Notice, then, following the payment of the Deficiency Payment to the Partnership Entities, a senior officer of Holly (on behalf of the Holly Entities) and a senior officer of Holly GP (on behalf of the Partnership Entities) shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. During the 30-day period following the payment of the Deficiency Payment, the Holly Entities shall have access to the working papers of the Partnership Entities relating to the Deficiency Notice. If such differences are not resolved within thirty (30) days following the payment of the Deficiency Payment, the Holly Entities and the Partnership Entities shall, within forty-five (45) days following the payment of the Deficiency Payment, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to arbitration in accordance with Section 11(f) .

     (c) If it is finally determined pursuant to this Section 9 that the Holly Entities are not required to make any or all of the Deficiency Payment (the “ Refund ”), the Partnership Entities shall promptly pay to the Holly Entities the Refund, together with interest thereon at the Prime Rate, in immediately available funds.

     (d) Deficiency Payments will be credited against any payments owed by the Holly Entities in the following four Contract Quarters in excess of the Minimum Revenue Commitments established by this Agreement for such Contract Quarters; provided , however , that the Holly Entities will not receive credit for any Deficiency Payment in any of the following four Contract Quarters until it has met the Minimum Revenue Commitment in the succeeding Contract Quarter.

      Section 10. Right of First Refusal The Parties acknowledge the right of first refusal of the Holly Entities with respect to the Intermediate Product Pipelines provided in the Omnibus Agreement.

      Section 11. Miscellaneous

     (a)  Intention as to Refineries . The Holly Entities represent to the Partnership Entities that, as of the date of this Agreement, they are not considering a shut down of any of the Refineries or any changes to any of the Refineries that would have a material adverse effect on the operation of any of the Refineries.

     (b)  Amendments and Waivers . No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the Parties and, in the case of any amendment or modification adverse to the Partnership Entities, approved by the Conflicts Committee. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced, and, in the case of any waiver by the Partnership Entities, approved by the Conflicts Committee. Except to the extent adverse to the Partnership Entities (in which case the approval of the Conflicts Committee shall also be required), any of the exhibits or schedules to this Agreement may be amended, modified, revised or updated by the Parties if each of Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities) execute an amended, modified, revised or updated exhibit or schedule, as applicable, and attach it to this Agreement. Such amended, modified, revised or updated exhibits or schedules shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-2, etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.

     (c)  Successors and Assigns . This Agreement shall inure to the benefit of, and shall be binding upon, the Holly Entities, the Partnership Entities and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of Holly (in the case of any assignment by the Partnership Entities) or the Conflicts Committee (in the case of any assignment by the Holly Entities), in each case, such consent is not to be unreasonably withheld or delayed; provided ,

however , that (i) the Partnership Entities may make such an assignment (including a partial pro rata assignment) to an Affiliate of the Partnership Entities without Holly’s consent, (ii) the Holly Entities may make such an assignment (including a pro rata partial assignment) to an Affiliate of the Holly Entities without the consent of the Conflicts Committee, (iii) the Holly Entities may make a collateral assignment of their rights and obligations hereunder and/or grant a security interest in all or a portion of the Intermediate Product Pipelines to any bona fide third party lender or debt holder, or trustee or representative for any of them, and (iv) the Partnership Entities may make a collateral assignment of their rights hereunder and/or grant a security interest in all or a portion of the Intermediate Product Pipelines to a bona fide third party lender or debt holder, or trustee or representative for any of them, if such third party lender, debt holder or trustee shall have executed and delivered to the Holly Entities a non-disturbance agreement in such form as is reasonably satisfactory to the Holly Entities and the Holly Entities execute an acknowledgement of such collateral assignment in such form as may from time to time be reasonably requested. Any attempt to make an assignment otherwise than as permitted by the foregoing shall be null and void. The Parties agree to require their respective successors, if any, to expressly assume, in a form of agreement acceptable to the other Parties, their obligations under this Agreement.

     (d)  Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

     (e)  Choice of Law . This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

     (f)  Arbitration Provision . Any and all Arbitrable Disputes must be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 11(f) and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 11(f) will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed. The Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All

arbitrators must (i) be neutral parties who have never been officers, directors or employees of any of the Holly Entities, the Partnership Entities or any of their Affiliates and (ii) have not less than seven (7) years experience in the energy industry. The hearing will be conducted in Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator. The Holly Entities, the Partnership Entities and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind.

     (g)  Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties, and no limited partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to comply with the terms of this Agreement.

     (h)  Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

     (i)  Headings . Headings of the Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.

[Remainder of page intentionally left blank. Signature pages follow.]

     IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first written above.

[Signature Page 1 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

[Signature Page 2 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

[Signature Page 3 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

Schedule I-1

EXHIBIT A

INTERMEDIATE PRODUCT PIPELINES

“ Intermediate Product Pipelines ” means (i) approximately 65 miles of 8” feedstock pipeline and 10” feedstock pipeline, each of which begins at the inlet flange of the delivery manifold motor operated valves at the Lovington Refinery, near Lovington, New Mexico and ends at the outlet flange of the turbine meter at the Artesia Refinery in Artesia, New Mexico, along with any and all connection facilities, including the Enterprise/MAPL connection, field booster pump stations, spare parts, pipes, valves, motors and miscellaneous equipment directly associated with the 8” inch and 10” feedstock pipelines and (ii) approximately 65 miles of 16” feedstock pipeline which begins at the inlet flange of the delivery manifold motor operated valves at the Lovington Refinery, near Lovington, New Mexico and ends at the downstream flange of the motor operated valve header that is immediately downstream of the positive displacement meter at the Artesia Refinery in Artesia, New Mexico, along with can booster pump at Lovington, mainline booster pumps at Lovington, spare parts, pipes, valves, motors, and miscellaneous equipment directly associated with the 16 inch feedstock pipeline.

EXHIBIT B

Attached to and made
Part of the Amended and Restated Intermediate Pipelines Agreement,
dated June 1, 2009

RATES, RULES AND REGULATIONS

INCENTIVE RATE TERMS: See Section 2(b)(ii) of the Agreement for the Incentive Rate terms.

NON-INCENTIVE RATE TERMS: See Section 2(b)(i) of the Agreement for the Non-Incentive Rate terms.

FLOW REVERSAL RATE TERMS: See Section 2(g) of the Agreement for additional Flow Reversal terms.

Exhibit 10.3

EXECUTION VERSION

 

 

AMENDED AND RESTATED OMNIBUS AGREEMENT

among

HOLLY CORPORATION

NAVAJO PIPELINE CO., L.P.

HOLLY LOGISTIC SERVICES, L.L.C.

HEP LOGISTICS HOLDINGS, L.P.

HOLLY ENERGY PARTNERS, L.P.

HEP LOGISTICS GP, L.L.C.

and

HOLLY ENERGY PARTNERS — OPERATING, L.P.

 

 

TABLE OF CONTENTS

						Page
Article I		Definitions					2
		1.1		Definitions			2
Article II		Business Opportunities					7
		2.1		Restricted Businesses			7
		2.2		Permitted Exceptions			7
		2.3		Procedures			8
		2.4		Scope of Prohibition			10
		2.5		Enforcement			10
Article III		Indemnification					10
		3.1		Environmental Indemnification			10
		3.2		Limitations Regarding Environmental Indemnification			12
		3.3		Right of Way Indemnification			12
		3.4		Additional Indemnification			13
		3.5		Indemnification Procedures			14
Article IV		General and Administrative Expenses					15
		4.1		General			15
Article V		Right of First Refusal					15
		5.1		Holly Right of First Refusal			15
		5.2		Procedures			16
Article VI		Miscellaneous					18
		6.1		Choice of Law			18
		6.2		Arbitration Provision			18
		6.3		Notice			19
		6.4		Entire Agreement			20
		6.5		Termination of Article II			20
		6.6		Amendment or Modification			20
		6.7		Assignment			20
		6.8		Counterparts			20
		6.9		Severability			20
		6.10		Further Assurances			20
		6.11		Rights of Limited Partners			21
		6.12		Headings			21
		6.13		UNEV Option Agreement			21

AMENDED AND RESTATED

OMNIBUS AGREEMENT

     THIS AMENDED AND RESTATED OMNIBUS AGREEMENT is being entered into on June 1, 2009 (the “ Agreement ”), by and among Holly Corporation, a Delaware corporation (“ Holly ”), Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Navajo Pipeline ”), Holly Logistic Services, L.L.C., a Delaware limited liability company (“ Holly GP ”), HEP Logistics Holdings, L.P., a Delaware limited partnership (the “ General Partner ”), Holly Energy Partners, L.P., a Delaware limited partnership (the “ Partnership ”), HEP Logistics GP, L.L.C., a Delaware limited liability company (the “ OLP GP ”), and Holly Energy Partners — Operating, L.P., a Delaware limited partnership (the “ Operating Partnership ”), and amends and restates in its entirety the Omnibus Agreement entered into on July 13, 2004 (as amended, the “ Original Omnibus Agreement ”) among such parties. The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties .”

RECITALS:

          WHEREAS, the Parties entered into the Original Omnibus Agreement to evidence their agreement, as more fully set forth in Article II , with respect to those business opportunities that the Holly Entities (as defined herein) and Holly GP would not engage in during the term of the Original Omnibus Agreement unless the Partnership declined to engage in any such business opportunity for its own account;

          WHEREAS, the Parties entered into the Original Omnibus Agreement to evidence their agreement, as more fully set forth in Article III , with respect to certain indemnification obligations of the Parties to each other;

          WHEREAS, the Parties entered into the Original Omnibus Agreement to evidence their agreement, as more fully set forth in Article IV , with respect to the amount to be paid by the Partnership for the general and administrative services to be performed by Holly and its Affiliates (as defined herein) for and on behalf of the Partnership Group (as defined herein);

          WHEREAS, the Parties entered into the Original Omnibus Agreement to evidence their agreement, as more fully set forth in Article V , with respect to Holly’s right of first refusal relating to the Assets (as defined herein);

          WHEREAS, in connection with that certain LLC Interest Purchase Agreement dated as of June 1, 2009, by and among Holly, Navajo Pipeline and the Operating Partnership, pursuant to which Navajo Pipeline has agreed to transfer and convey to the Operating Partnership, and the Operating Partnership has agreed to acquire, all of the limited liability company interests of Lovington-Artesia, L.L.C., the entity that owns the 16” Lovington/Artesia Intermediate Pipeline (as defined herein), the Parties desire to amend and restate the Original Omnibus Agreement in its entirety as follows:

     In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I
Definitions

      1.1 Definitions .

     As used in this Agreement, the following terms shall have the respective meanings set forth below:

     “ 8” and 10” Lovington/Artesia Intermediate Pipelines ” means the 8-inch pipeline running from Lovington, New Mexico to Artesia, New Mexico and the 10-inch pipeline running from Lovington, New Mexico to Artesia, New Mexico, each owned by Navajo Pipeline.

     “ 16” Lovington/Artesia Intermediate Pipeline ” means the 16-inch pipeline running from Lovington, New Mexico to Artesia, New Mexico, owned by Lovington-Artesia, L.L.C.

     “ 2004 Product Pipelines, Terminal and Related Assets ” means the assets transferred under the July 13, 2004 Contribution, Conveyance and Assumption Agreement at the time of the Partnership’s initial public offering.

     “ 2008 Crude Pipelines, Tanks and Related Assets ” has the meaning given to such term in the Purchase and Sale Agreement, dated February 25, 2008, by and among Holly, Navajo Pipeline, Woods Cross Refining Company, L.L.C., a Delaware limited liability company, and Navajo Refining Company, L.L.C., a Delaware limited liability company, as the seller parties, and the Partnership, the Operating Partnership, HEP Woods Cross, L.L.C., a Delaware limited liability company, and HEP Pipeline, L.L.C., a Delaware limited liability company, as the buyer parties.

     “ Acquisition Proposal ” is defined in Section 5.2(a) .

     “ Administrative Fee ” is defined in Section 4.1(a) .

     “ Affiliate ” is defined in the Partnership Agreement.

     “ Agreement ” is defined in the introduction to this Agreement.

     “ Applicable Law ” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.

     “ Arbitrable Dispute ” means any and all disputes, Claims, controversies and other matters in question between any of the Partnership Entities, on the one hand, and any of the Holly Entities, on the other hand, arising out of or relating to this Agreement or the alleged breach

hereof, or in any way relating to the subject matter of this Agreement regardless of whether (a) allegedly extra-contractual in nature, (b) sounding in contract, tort or otherwise, (c) provided for by Applicable Law or otherwise or (d) seeking damages or any other relief, whether at law, in equity or otherwise.

     “ Assets ” means all of the following assets conveyed, contributed, or otherwise transferred by the Holly Entities to the Partnership Group: (i) the 2004 Product Pipelines, Terminal and Related Assets, (ii) the 8” and 10” Lovington/Artesia Intermediate Pipelines, (iii) the 2008 Crude Pipelines, Tanks and Related Assets, and (iv) the 16” Lovington/Artesia Intermediate Pipeline.

     “ Change of Control ” means, with respect to any Person (the “ Applicable Person ”), any of the following events: (a) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Person’s assets to any other Person unless immediately following such sale, lease, exchange, or other transfer such assets are owned, directly or indirectly, by the Applicable Person; (b) the consolidation or merger of the Applicable Person with or into another Person pursuant to a transaction in which the outstanding Voting Securities of the Applicable Person are changed into or exchanged for cash, securities, or other property, other than any such transaction where (i) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of the surviving Person or its parent and (ii) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Securities of the surviving Person or its parent immediately after such transaction; and (c) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) (in the case of Holly, other than a group consisting of some of all of the current control persons of Holly), being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation that would not constitute a Change of Control under clause (b) above.

     “ Claim ” means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.

     “ Claimant ” is defined in Section 6.2 .

     “ Closing Date ” means the date of the closing of the Partnership’s initial public offering of Common Units. For purposes of Article III , Closing Date shall mean (i) with respect to the 8” and 10” Lovington/Artesia Intermediate Pipelines, the closing date of the purchase of the 8” and 10” Lovington/Artesia Intermediate Pipelines by a Partnership Group Member, (ii) with respect to the 2008 Crude Pipelines, Tanks and Related Assets, the effective date of the purchase of the 2008 Crude Pipelines, Tanks and Related Assets by a Partnership Group Member, and (iii) with respect to the 16” Lovington/Artesia Intermediate Pipeline, the effective date of the purchase of all of the limited liability company interests of Lovington-Artesia, L.L.C., a Delaware limited liability company, by a Partnership Group Member.

     “ Common Units ” is defined in the Partnership Agreement.

     “ Conflicts Committee ” is defined in the Partnership Agreement.

     “ Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, dated as of July 13, 2004, among Holly, Navajo Pipeline, Holly GP, the General Partner, the Partnership, the OLP GP, the Operating Partnership and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

     “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

     “ Covered Environmental Losses ” is defined in Section 3.1 .

     “ Disposition Notice ” is defined in Section 5.2(a) .

     “ Environmental Laws ” means all federal, state, and local laws, statutes, rules, regulations, orders, and ordinances, now or hereafter in effect, relating to protection of the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ First ROFR Acceptance Deadline ” is defined in Section 5.2(a) .

     “ General Partner ” is defined in the introduction to this Agreement.

     “ Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

     “ Hazardous Substance ” means (a) any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, and (b) petroleum, crude oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.

     “ Holly ” is defined in the introduction to this Agreement.

     “ Holly Entities ” means Holly and any Person controlled, directly or indirectly, by Holly other than the Partnership Entities; and “ Holly Entity ” means any of the Holly Entities.

     “ Indemnified Party ” means the Partnership Group or Holly, as the case may be, in their capacity as the parties entitled to indemnification in accordance with Article III .

     “ Indemnifying Party ” means either the Partnership Group or Holly, as the case may be, in their capacity as the parties from whom indemnification may be required in accordance with Article III .

     “ Initial Tank Inspection ” is defined in Section 3.1(c) .

     “ Initial Tank Inspection Period ” is defined in Section 3.1(c) .

     “ Limited Partner ” is defined in the Partnership Agreement.

     “ Navajo Pipeline ” is defined in the introduction to this Agreement.

     “ Offer ” is defined in Section 2.3(b)(i) .

     “ Offer Price ” is defined in Section 5.2(a) .

     “ OLP GP ” is defined in the introduction to this Agreement.

     “ Operating Partnership ” is defined in the introduction to this Agreement.

     “ Original Omnibus Agreement ” is defined in the introduction to this Agreement.

     “ Partnership ” is defined in the introduction to this Agreement.

     “ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated July 13, 2004, as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated February 28, 2005, as amended by Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated July 6, 2005, as amended by Amendment No. 3 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated April 11, 2008, as such agreement is in effect on the date of this Agreement. No amendment or modification to the Partnership Agreement subsequent to the date of this Agreement shall be given effect for the purposes of this Agreement unless consented to by each of the Parties.

     “ Partnership Entities ” means Holly GP, the General Partner and each member of the Partnership Group.

     “ Partnership Entity ” means any of the Partnership Entities.

     “ Partnership Group ” means the Partnership, the OLP GP, the Operating Partnership and any Subsidiary of any such Person, treated as a single consolidated entity.

     “ Partnership Group Member ” means any member of the Partnership Group.

     “ Party ” and “ Parties ” are defined in the introduction to this Agreement.

     “ Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization association, government agency or political subdivision thereof or other entity.

     “ Proposed Transferee ” is defined in Section 5.2(a) .

     “ Prudent Industry Practice ” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with (a) the standards generally followed by the United States pipeline and terminalling industries or (b) such higher standards as may be applied or followed by the Holly Entities in the performance of similar tasks or projects, or by the Partnership Entities in the performance of similar tasks or projects.

     “ Respondent ” is defined in Section 6.2 .

     “ Restricted Businesses ” is defined in Section 2.1 .

     “ Retained Assets ” means the pipelines, terminals and other assets and investments owned by any of the Holly Entities on the date of the Contribution Agreement that were not conveyed, contributed or otherwise transferred to the Partnership Group pursuant to the Contribution Agreement or otherwise.

     “ ROFR Acceptance Deadline ” means the First ROFR Acceptance Deadline or the Second ROFR Acceptance Deadline, as applicable.

     “ Sale Assets ” is defined in Section 5.2(a) .

     “ Second ROFR Acceptance Deadline ” is defined in Section 5.2(a) .

     “ Subject Assets ” is defined in Section 2.2(c) .

     “ Subsidiary ” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

     “ Toxic Tort ” means a claim or cause of action arising from personal injury or property damage incurred by the plaintiff that is alleged to have been caused by exposure to, or contamination by, Hazardous Substances that have been released into the environment by or as a result of the actions or omissions of the defendant.

     “ Transfer ” including the correlative terms “ Transferring ” or “ Transferred ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition (whether voluntary, involuntary or by operation of law) of the Assets.

     “ Transferred Tanks ” is defined in Section 3.1(a)(iii) .

     “ Units ” is defined in the Partnership Agreement.

     “ Voting Securities ” means securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.

ARTICLE II
Business Opportunities

      2.1 Restricted Businesses . For so long as a Holly Entity controls the Partnership, and except as permitted by Section 2.2 , Holly GP and each of the Holly Entities shall be prohibited from engaging in or acquiring or investing in any business having assets engaged in the following businesses (the “ Restricted Businesses ”): the ownership and/or operation of crude oil pipelines or terminals, intermediate product pipelines or terminals, refined products pipelines or terminals, truck racks or crude oil gathering systems in the continental United States.

      2.2 Permitted Exceptions . Notwithstanding any provision of Section 2.1 to the contrary, Holly GP and the Holly Entities may engage in the following activities under the following circumstances:

          (a) the ownership and/or operation of any of the Retained Assets (including replacements of the Retained Assets);

          (b) any Restricted Business conducted by a Holly Entity or Holly GP with the approval of the Conflicts Committee;

          (c) the ownership and/or operation of any asset or group of related assets used in the activities described in Section 2.1 that are acquired or constructed by a Holly Entity or Holly GP after the Closing Date (the “ Subject Assets ”) if, in the case of an acquisition, the fair market value of the Subject Assets (as determined in good faith by the Board of Directors of Holly), or, in the case of construction, the estimated construction cost of the Subject Assets (as determined in good faith by the Board of Directors of Holly), is less than $5 million at the time of such acquisition or completion of construction, as the case may be;

          (d) the ownership and/or operation of any Subject Assets acquired by a Holly Entity or Holly GP after the Closing Date with a fair market value (as determined in good faith by the Board of Directors of Holly) equal to or greater than $5 million at the time of the

acquisition; provided , the Partnership has been offered the opportunity to purchase the Subject Assets in accordance with Section 2.3 and the Partnership (with the concurrence of the Conflicts Committee) has elected not to purchase the Subject Assets; and

          (e) the ownership and/or operation of any Subject Assets constructed by a Holly Entity or Holly GP after the Closing Date with a construction cost (as determined in good faith by the Board of Directors of Holly) equal to or greater than $5 million at the time of completion of construction that the Partnership has been offered the opportunity to purchase in accordance with Section 2.3 and the Partnership (with the concurrence of the Conflicts Committee) has elected not to purchase.

      2.3 Procedures .

          (a) In the event that Holly GP or a Holly Entity becomes aware of an opportunity to acquire Subject Assets with a fair market value (as determined in good faith by the Board of Directors of Holly) equal to or greater than $5 million, then subject to Section 2.3(b) , then as soon as practicable, Holly GP or such Holly Entity shall notify the General Partner of such opportunity and deliver to the General Partner, or provide the General Partner access to, all information prepared by or on behalf of, or material information submitted or delivered to, Holly GP or such Holly Entity relating to such potential transaction. As soon as practicable, but in any event within 30 days after receipt of such notification and information, the General Partner, on behalf of the Partnership, shall notify Holly GP or the Holly Entity that either (i) the General Partner, on behalf of the Partnership, has elected, with the concurrence of the Conflicts Committee, not to cause a Partnership Group Member to pursue the opportunity to purchase the Subject Assets, or (ii) the General Partner, on behalf of the Partnership, has elected (with the concurrence of the Conflicts Committee) to cause a Partnership Group Member to pursue the opportunity to purchase the Subject Assets. If, at any time, the General Partner abandons such opportunity with the approval of the Conflicts Committee (as evidenced in writing by the General Partner following the request of Holly GP or the Holly Entity), Holly GP or the Holly Entity under this Section 2.3(a) may pursue such opportunity. Any Subject Assets which are permitted to be acquired by Holly GP or a Holly Entity must be so acquired (i) within 12 months of the later to occur of (A) the date that Holly GP or the Holly Entity becomes able to pursue such acquisition in accordance with the provisions of this Section 2.3(a) , and (B) the date upon which all required governmental approvals to consummate such acquisition have been obtained, and (ii) on terms not materially more favorable to Holly GP or the Holly Entity than were offered to the Partnership. If either of these conditions are not satisfied, the opportunity must be reoffered to the Partnership in accordance with this Section 2.3(a) .

          (b) Notwithstanding Section 2.3(a) , in the event that (i) Holly GP or a Holly Entity becomes aware of an opportunity to make an acquisition that includes both Subject Assets and assets that are not Subject Assets and the Subject Assets have a fair market value (as determined in good faith by the Board of Directors of Holly) equal to or greater than $5 million but comprise less than half of the fair market value (as determined in good faith by the Board of Directors of Holly) of the total assets being considered for acquisition or (ii) Holly GP or a Holly Entity desires to construct Subject Assets with an estimated construction cost (as determined in good faith by the Board of Directors of Holly) equal to or greater than $5 million, then Holly GP or the Holly Entity may make such acquisition without first offering the opportunity to the

Partnership or may construct such Subject Assets as long as it complies with the following procedures:

               (i) Within 90 days after the consummation of the acquisition or the completion of construction by Holly GP or a Holly Entity of the Subject Assets, as the case may be, Holly GP or the Holly Entity shall notify the General Partner in writing of such acquisition or construction and offer the Partnership Group the opportunity to purchase such Subject Assets in accordance with this Section 2.3(b) (the “ Offer ”). The Offer shall set forth the terms relating to the purchase of the Subject Assets and, if Holly GP or any Holly Entity desires to utilize the Subject Assets, the Offer will also include the commercially reasonable terms on which the Partnership Group will provide services to Holly GP or the Holly Entity to enable Holly GP or the Holly Entity to utilize the Subject Assets. As soon as practicable, but in any event within 30 days after receipt of such written notification, the General Partner shall notify Holly GP or the Holly Entity in writing that either (x) the General Partner has elected, with the concurrence of the Conflicts Committee, not to cause a Partnership Group Member to purchase the Subject Assets, in which event Holly GP or the Holly Entity shall be forever free to continue to own or operate such Subject Assets, or (y) the General Partner has elected (with the concurrence of the Conflicts Committee) to cause a Partnership Group Member to purchase the Subject Assets, in which event the following procedures shall apply.

               (ii) If Holly GP or the Holly Entity and the General Partner (with the concurrence of the Conflicts Committee) within 60 days after receipt by the General Partner of the Offer are able to agree on the fair market value of the Subject Assets that are subject to the Offer and the other terms of the Offer including, without limitation, the terms, if any, on which the Partnership Group will provide services to Holly GP or the Holly Entity to enable it to utilize the Subject Assets, a Partnership Group Member shall purchase the Subject Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached and, if applicable, enter into an agreement with Holly GP or the Holly Entity to provide services in a manner consistent with the Offer.

               (iii) If Holly GP or the Holly Entity and the General Partner are unable to agree within 60 days after receipt by the General Partner of the Offer on the fair market value of the Subject Assets that are subject to the Offer or the other terms of the Offer including, if applicable, the terms on which the Partnership Group will provide services to Holly GP or the Holly Entity to enable it to utilize the Subject Assets, Holly GP or the Holly Entity and the General Partner will engage a mutually agreed upon investment banking firm to determine the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and Holly GP or the Holly Entity are unable to agree. Such investment banking firm will determine the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and Holly GP or the Holly Entity are unable to agree within 30 days of its engagement and furnish Holly GP or the Holly Entity and the General Partner its determination. The fees of the investment banking firm will be split equally between Holly GP or the Holly Entity and the Partnership Group. Once the investment banking firm has submitted its determination of the fair market value of the Subject Assets and/or the other terms on which the Partnership Group and Holly GP or the Holly Entity are unable to agree, the General Partner will have the right, but not the obligation, subject to the approval of the Conflicts Committee, to cause a Partnership Group Member to purchase the Subject Assets pursuant to the Offer as

modified by the determination of the investment banking firm. The Partnership Group will provide written notice of its decision to Holly GP or the Holly Entity within 30 days after the investment banking firm has submitted its determination. Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Subject Assets. If the General Partner elects to cause a Partnership Group Member to purchase the Subject Assets, then the Partnership Group Member shall purchase the Subject Assets pursuant to the Offer as modified by the determination of the investment banking firm as soon as commercially practicable after such determination and, if applicable, enter into an agreement with Holly GP or the Holly Entity to provide services in a manner consistent with the Offer, as modified by the determination of the investment banking firm, if applicable.

      2.4 Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, Holly GP and each Holly Entity shall be free to engage in any business activity, including those that may be in direct competition with any Partnership Group Member.

      2.5 Enforcement . Holly GP and the Holly Entities agree and acknowledge that the Partnership Group does not have an adequate remedy at law for the breach by Holly GP and the Holly Entities of the covenants and agreements set forth in this Article II , and that any breach by Holly GP or the Holly Entities of the covenants and agreements set forth in this Article II would result in irreparable injury to the Partnership Group. Holly GP and the Holly Entities further agree and acknowledge that any Partnership Group Member may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin Holly GP and the Holly Entities from such breach, and consent to the issuance of injunctive relief under this Agreement.

ARTICLE III
Indemnification

      3.1 Environmental Indemnification .

          (a) Subject to Section 3.2 , Holly shall indemnify, defend and hold harmless the Partnership Group for a period of 10 years after the Closing Date or, solely with respect to the 2008 Crude Pipelines, Tanks and Related Assets, 15 years after the Closing Date, as applicable, from and against environmental and Toxic Tort losses (including, without limitation, economic losses, diminution in value suffered by third parties, and lost profits), damages, injuries (including, without limitation, personal injury and death), liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Partnership Group or any third party by reason of or arising out of:

               (i) any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Assets, or

               (ii) any event or condition associated with ownership or operation of the Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated

by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work;

but only to the extent that such violation complained of under Section 3.1(a)(i) or such events or conditions included under Section 3.1(a)(ii) occurred before the Closing Date (collectively, “ Covered Environmental Losses ”); or

               (iii) the operation or ownership of any assets not transferred under this Agreement, including but not limited to underground pipelines retained by the Seller Parties which serve the refineries in Lovington, New Mexico, Artesia, New Mexico and Woods Cross, Utah or the tanks that are part of the 2008 Crude Pipelines, Tanks and Related Assets (the “ Transferred Tanks ”).

          (b) To the extent that a good faith claim by the Partnership Group for indemnification under Section 3.1(a)(ii) or Section 3.1(a)(iii) arises from events or conditions at the Transferred Tanks or the soil immediately underneath the Transferred Tanks or the Transferred Tanks’ secondary containment, and the Holly Entities refuse to provide such indemnification, then the burden of proof shall be on the Holly Entities to demonstrate that the events or conditions giving rise to the claim arose after the Closing Date.

          (c) The Holly Entities shall, during the period that commences on the Closing Date and ends five (5) years thereafter (the “ Initial Tank Inspection Period ”), reimburse the Partnership Group for the actual costs associated with the first regularly scheduled API 653 inspection (the “ Initial Tank Inspections ”) and the costs associated with the replacement of the tank mixers on each of the Transferred Tanks after the Closing Date and any repairs required to be made to the Transferred Tanks as a result of any discovery made during the Initial Tank Inspections; provided , however , that (i) the Holly Entities shall not reimburse the Partnership Group with respect to the relocated crude oil Tank 437 in the Artesia refinery complex and the new crude oil tank to replace crude oil Tank 439 in the Artesia refinery complex more particularly described in the definition of 2008 Crude Pipelines, Tanks and Related Assets, and (ii) upon expiration of the Initial Tank Inspection Period, all of the obligations of the Holly Entities pursuant to this Section 3.1(c) shall terminate, except that the Initial Tank Inspection Period shall be extended if, and only to the extent that (A) inaccessibility of the Transferred Tanks during the Initial Tank Inspection Period caused the delay of an Initial Tank Inspection originally scheduled to be preformed during the Initial Tank Inspection Period, and (B) the Holly Entities received notice from the Partnership Group regarding such delay at the time it occurred.

          (d) The Partnership Group shall indemnify, defend and hold harmless the Holly Entities from and against environmental and Toxic Tort losses (including, without limitation, economic losses, diminution in value suffered by third parties, and lost profits), damages, injuries (including, without limitation, personal injury and death), liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses

(including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Holly Entities or any third party by reason of or arising out of:

               (i) any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Assets, or

               (ii) any event or condition associated with ownership or operation of the Assets (including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work;

and regardless of whether such violation complained of under Section 3.1(d)(i) or such events or conditions included under Section 3.1(d)(ii) occurred before or after the Closing Date, except to the extent that any of the foregoing are Covered Environmental Losses for which the Partnership Group is entitled to indemnification from Holly under this Article III ; provided, however, that nothing stated above shall make the Partnership Group responsible for any post-Closing Date actions or omissions by the Holly Entities.

          (e) Notwithstanding anything in this Agreement to the contrary, as used in Section 3.1(a) the definition of Assets shall not include the 16” Lovington/Artesia Intermediate Pipeline.

      3.2 Limitations Regarding Environmental Indemnification . The aggregate liability of Holly in respect of all Covered Environmental Losses under Section 3.1(a) shall not exceed (1) with respect to Assets other than the 2008 Crude Pipelines, Tanks and Related Assets, $15.0 million plus an additional $2.5 million in the case of Covered Environmental Losses related to the 8” and 10” Lovington/Artesia Intermediate Pipelines (for clarity, the first $15,000,000 million limit would apply to Covered Environmental Losses associated with the 8” and 10” Lovington/Artesia Intermediate Pipelines and the 2004 Product Pipelines, Terminal and Related Assets, while the limit between $15,000,000 and $17,500,00 would apply only to Covered Environmental Losses associated with the 8” and 10” Lovington/Artesia Intermediate Pipelines) and (2) $7.5 million in the case of Covered Environmental Losses related to the 2008 Crude Pipelines, Tanks and Related Assets. Holly will not have any obligation under Section 3.1 with respect to any Assets until the Covered Environmental Losses of the Partnership Group exceed $200,000.

      3.3 Right of Way Indemnification . Holly shall indemnify, defend and hold harmless the Partnership Group from and against any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or

character, known or unknown, fixed or contingent, suffered or incurred by the Partnership Group by reason of or arising out of (a) the failure of the applicable Partnership Group Member to be the owner of such valid and indefeasible easement rights or fee ownership interests in and to the lands on which any pipeline or related pump station, tank farm or equipment conveyed or contributed or otherwise Transferred (including by way of a Transfer of the ownership interest of a Person or by operation of law) to the applicable Partnership Group Member on the Closing Date is located as of the Closing Date; (b) the failure of the applicable Partnership Group Member to have the consents, licenses and permits necessary to allow any such pipeline referred to in clause (a) of this Section 3.3 to cross the roads, waterways, railroads and other areas upon which any such pipeline is located as of the Closing Date; and (c) the cost of curing any condition set forth in clause (a) or (b) above that does not allow any Asset to be operated in accordance with Prudent Industry Practice, to the extent that Holly is notified in writing of any of the foregoing within 10 years after the Closing Date or, solely with respect to the 2008 Crude Pipelines, Tanks and Related Assets, 15 years after the Closing Date, as applicable.

      3.4 Additional Indemnification .

          (a) In addition to and not in limitation of the indemnification provided under Section 3.1(a) and Section 3.3 , Holly shall indemnify, defend, and hold harmless the Partnership Group from and against any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Partnership Group by reason of or arising out of (i) events and conditions associated with the operation of the Assets and occurring before the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.1 and Section 3.2 ) to the extent that Holly is notified in writing of any of the foregoing within five years after the Closing Date, (ii) all legal actions pending against the Holly Entities on July 13, 2004, (iii) the completion of remediation projects at the Partnership’s El Paso, Albuquerque and Mountain Home terminals that were ongoing or scheduled as of July 13, 2004, (iv) events and conditions associated with the Retained Assets and whether occurring before or after the Closing Date, and (iv) all federal, state and local tax liabilities attributable to the operation or ownership of the Assets prior to the Closing Date, including any such tax liabilities of the Holly Entities that may result from the consummation of the formation transactions for the Partnership Group and the General Partner.

          (b) In addition to and not in limitation of the indemnification provided under Section 3.1(b) or the Partnership Agreement, the Partnership Group shall indemnify, defend, and hold harmless the Holly Entities from and against any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Holly Entities by reason of or arising out of events and conditions associated with the operation of the Assets and occurring on or after the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.1 ), unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 7.7(a) of the Partnership Agreement.

      3.5 Indemnification Procedures .

          (a) The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a claim for indemnification under this Article III , it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.

          (b) The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article III , including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided , however , that no such settlement shall be entered into without the consent of the Indemnified Party (with the concurrence of the Conflicts Committee in the case of the Partnership Group) unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be.

          (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Article III , including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided , however , that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.5 . In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article III ; provided , however , that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

          (d) In determining the amount of any loss, cost, damage or expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premiums that become due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.

          (e) The date on which notification of a claim for indemnification is received by the Indemnifying Party shall determine whether such claim is timely made.

ARTICLE IV
General and Administrative Expenses

      4.1 General

          (a) The Partnership will pay Holly an administrative fee (the “ Administrative Fee ”) in the amount set forth on Schedule I to this Agreement, payable in equal quarterly installments, for the provision by Holly and its Affiliates for the Partnership Group’s benefit of all the general and administrative services that Holly and its Affiliates have traditionally provided in connection with the Assets including, without limitation, the general and administrative services listed on Schedule I to this Agreement. The General Partner, with the approval and consent of the Conflicts Committee, may agree on behalf of the Partnership to increases in the Administrative Fee in connection with expansions of the operations of the Partnership Group through the acquisition or construction of new assets or businesses.

          (b) At the end of each year, the Partnership will have the right to submit to Holly a proposal to reduce the amount of the Administrative Fee for that year if the Partnership believes, in good faith, that the general and administrative services performed by Holly and its Affiliates for the benefit of the Partnership Group for the year in question do not justify payment of the full Administrative Fee for that year. If the Partnership submits such a proposal to Holly, Holly agrees that it will negotiate in good faith with the Partnership to determine if the Administrative Fee for that year should be reduced and, if so, by how much.

          (c) The Administrative Fee shall not include and the Partnership Group shall reimburse Holly and its Affiliates for:

               (i) salaries of employees of Holly GP, to the extent, but only to the extent, such employees perform services for the Partnership Group;

               (ii) the cost of employee benefits relating to employees of Holly GP, such as 401(k), pension, and health insurance benefits, to the extent, but only to the extent, such employees perform services for the Partnership Group; and

               (iii) all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time in respect of the services provided by the Holly and its Affiliates to the Partnership pursuant to Section 4.1(a) .

          (d) Either Holly, on the one hand, or the Partnership, on the other hand, may terminate this Article IV , by providing the other with written notice of its election to do so at least one calendar year prior to the proposed date of termination.

ARTICLE V
Right of First Refusal

      5.1 Holly Right of First Refusal .

          (a) The Partnership Group hereby grants to Holly a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender

or a Transfer to another Partnership Group Member) of the Assets that serve the Holly Entities’ refineries.

          (b) The Parties acknowledge that all potential Transfers of Sale Assets pursuant to this Article V are subject to obtaining any and all required written consents of governmental authorities and other third parties and to the terms of all existing agreements in respect of the Sale Assets.

      5.2 Procedures .

          (a) If a Partnership Group Member proposes to Transfer any of the Assets that serve the Holly Entities’ refineries to any Person pursuant to a bona fide third-party offer (an “ Acquisition Proposal ”), then the Partnership shall promptly give written notice (a “ Disposition Notice ”) thereof to Holly. The Disposition Notice shall set forth the following information in respect of the proposed Transfer: the name and address of the prospective acquiror (the “ Proposed Transferee ”), the Assets subject to the Acquisition Proposal (the “ Sale Assets ”), the purchase price offered by such Proposed Transferee (the “ Offer Price ”), reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow Holly to reasonably determine the fair market value of such non-cash consideration, the Partnership Group’s estimate of the fair market value of any non-cash consideration and all other material terms and conditions of the Acquisition Proposal that are then known to the Partnership Group. To the extent the Proposed Transferee’s offer consists of consideration other than cash (or in addition to cash) the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event Holly and the Partnership Group agree as to the fair market value of any non-cash consideration, Holly will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets within 30 days of its receipt of the Disposition Notice (the “ First ROFR Acceptance Deadline ”). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Sale Assets. In the event (i) Holly’s determination of the fair market value of any non-cash consideration described in the Disposition Notice (to be determined by Holly within 30 days of receipt of such Disposition Notice) is less than the fair market value of such consideration as determined by the Partnership Group in the Disposition Notice and (ii) Holly and the Partnership Group are unable to mutually agree upon the fair market value of such non-cash consideration within 30 days after Holly notifies the Partnership Group of its determination thereof, the Partnership Group and Holly shall engage a mutually-agreed-upon investment banking firm to determine the fair market value of the non-cash consideration. Such investment banking firm shall be instructed to return its decision within 30 days after all material information is submitted thereto, which decision shall be final. The fees of the investment banking firm will be split equally between Holly and the Partnership Group. Holly will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets to the Partnership Group within 30 days after the investment banking firm has submitted its determination (the “ Second ROFR Acceptance Deadline ”). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision by Holly not to purchase the Sale Assets. If Holly fails to exercise a right during any applicable period set forth in this Section 5.2(a) , Holly shall be deemed to have waived its rights with respect to such proposed disposition of the Sale Assets, but not with respect to any future offer of Assets.

          (b) If Holly chooses to exercise its right of first refusal to purchase the Sale Assets under Section 5.2(a) , Holly and the Partnership Group shall enter into a purchase and sale agreement for the Sale Assets which shall include the following terms:

               (i) Holly will agree to deliver cash for the Offer Price (unless Holly and the Partnership Group agree that consideration will be paid by means of an interest-bearing promissory note or equity securities of Holly);

               (ii) the Partnership Group will represent that it has good and indefeasible title to the Sale Assets, subject to all recorded and unrecorded matters and all physical conditions and other matters in existence on the closing date for the purchase of the Sale Assets, plus any other such matters as Holly may approve, which approval will not be unreasonably withheld. If Holly desires to obtain any title insurance with respect to the Sale Assets, the full cost and expense of obtaining the same (including but not limited to the cost of title examination, document duplication and policy premium) shall be borne by Holly;

               (iii) the Partnership Group will grant to Holly the right, exercisable at Holly’s risk and expense, to make such surveys, tests and inspections of the Sale Assets as Holly may deem desirable, so long as such surveys, tests or inspections do not damage the Sale Assets or interfere with the activities of the Partnership Group thereon and so long as Holly has furnished the Partnership Group with evidence that adequate liability insurance is in full force and effect;

               (iv) Holly will have the right to terminate its obligation to purchase the Sale Assets under this Article V if the results of any searches, surveys, tests or inspections conducted pursuant to Section 5.2(b)(ii) or Section 5.2(b)(iii) above are, in the reasonable opinion of Holly, unsatisfactory;

               (v) the closing date for the purchase of the Sale Assets shall, unless otherwise agreed to by Holly and the Partnership Group, occur no later than 90 days following receipt by the Partnership Group of written notice by Holly of its intention to exercise its option to purchase the Sale Assets pursuant to Section 5.2(a) ;

               (vi) the Partnership Group shall execute, have acknowledged and deliver to Holly a special warranty deed, assignment of easement, or comparable document, as appropriate, in the applicable jurisdiction, on the closing date for the purchase of the Sale Assets constituting real property interests conveying the Sale Assets unto Holly free and clear of all encumbrances created by the Partnership Group other than those set forth in Section 5.2(b)(ii) above;

               (vii) the sale of any Sale Assets shall be made on an “as is,” “where is” and “with all faults” basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and

               (viii) neither the Partnership Group nor Holly shall have any obligation to sell or buy the Sale Assets if any of the material consents referred to in Section 5.1(b) have not been obtained.

          (c) Holly and the Partnership Group shall cooperate in good faith in obtaining all necessary governmental and other third Person approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided , however , that such delay shall not exceed 60 days and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such 60th day, then Holly shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter neither Holly nor the Partnership shall have any further obligation under this Article V with respect to such Sale Assets unless such Sale Assets again become subject to this Article V pursuant to Section 5.2(d) .

          (d) If the Transfer to the Proposed Transferee is not consummated in accordance with the terms of the Acquisition Proposal within the later of (A) 180 days after the later of the applicable ROFR Acceptance Deadline, and (B) 10 days after the satisfaction of all governmental approval or filing requirements, if any, the Acquisition Proposal shall be deemed to lapse, and the Partnership or member of the Partnership Group may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article V if and to the extent then applicable.

ARTICLE VI
Miscellaneous

      6.1 Choice of Law . This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

      6.2 Arbitration Provision . Any and all Arbitrable Disputes must be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section will control the rights and obligations of the parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a party (“ Claimant ”) serving written notice on the other party (“ Respondent ”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within 30 days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30 day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within 30 days after the second arbitrator has been appointed. The Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The Claimant and Respondent will each pay one-

half of the compensation and expenses of the third arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or employees of any of the Holly Entities, the Partnership Entities or any of their affiliates and (ii) have not less than seven years experience in the energy industry. The hearing will be conducted in Dallas, Texas and commence within 30 days after the selection of the third arbitrator. The Holly Entities, the Partnership Entities and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the parties hereto. The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind.

      6.3 Notice . All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by telecopier or telegram to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 6.3 .

          if to the Holly Entities:

Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: President
Fax: 214-615-9379

with a copy to (which shall not constitute notice):

Denise McWatters
General Counsel
Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Fax: 214-242-5063

          if to the Partnership Entities:

Holly Energy Partners, L.P.
c/o Holly Logistic Services, L.L.C.,
100 Crescent Court

Suite 1600
Dallas, Texas 75201
Attention: Vice President and Chief Financial Officer
Fax: (214) 615-9371

      6.4 Entire Agreement . This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

      6.5 Termination of Article II . The provisions of Article II of this Agreement may be terminated by Holly upon a Change of Control of Holly.

      6.6 Amendment or Modification . No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the parties hereto and, in the case of any amendment or modification adverse to the Partnership Group, approved by the Conflicts Committee of Holly GP . No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the party against whom the waiver is sought to be enforced, and, in the case of any waiver by the Partnership Entities, approved by the Conflicts Committee of Holly GP. Except to the extent adverse to the Partnership Group (in which case the approval of the Conflicts Committee of Holly GP shall also be required), any of the exhibits or schedules to this Agreement may be amended, modified, revised or updated by the parties hereto if each of Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities) execute an amended, modified, revised or updated exhibit or schedule, as applicable, and attach it to this Agreement. Such amended, modified, revised or updated exhibits or schedules shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-2, etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.

      6.7 Assignment . No Party shall have the right to assign any of its rights or obligations under this Agreement without the consent of the other Parties hereto.

      6.8 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

      6.9 Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

      6.10 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

      6.11 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

      6.12 Headings . Headings of the Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.

      6.13 UNEV Option Agreement . The Parties acknowledge and agree that, notwithstanding anything in this Agreement to the contrary, the terms and provisions of the Option Agreement, dated January 31, 2008, among Holly, Holly UNEV Pipeline Company, Navajo Pipeline, Holly GP, the General Partner, the Partnership, OLP GP and the Operating Partnership remain in full force and effect.

[Remainder of Page Intentionally Left Blank]

     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Closing Date.

[Signature Page 1 of 2 to Amended and Restated Omnibus Agreement]

[Signature Page 2 of 2 to Amended and Restated Omnibus Agreement]

General and Administrative Services

	(1)		executive services
	(2)		finance, including treasury, and administration services
	(3)		information technology services
	(4)		legal services
	(5)		health, safety and environmental services
	(6)		human resources services

Schedule I-1

Exhibit 10.4

PREPARED BY AND WHEN
RECORDED RETURN TO:

Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201-6927
Attn: General Counsel

MORTGAGE, LINE OF CREDIT MORTGAGE AND DEED OF TRUST
(WITH SECURITY AGREEMENT AND FINANCING STATEMENT)

BY

LOVINGTON-ARTESIA, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY,
AS GRANTOR

TO

JOHN N. PATTERSON,
AS TRUSTEE

FOR THE BENEFIT OF

HOLLY CORPORATION,
A DELAWARE CORPORATION
AS BENEFICIARY

DATED EFFECTIVE AS OF JUNE 1, 2009

THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A TRANSMITTING UTILITY.

THIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE MORTGAGES ON REAL ESTATE ARE RECORDED. ADDITIONALLY, THIS INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A MORTGAGE, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN. THE MAILING ADDRESSES OF THE GRANTOR (DEBTOR) AND BENEFICIARY (BENEFICIARY) ARE SET FORTH IN THIS INSTRUMENT.

MORTGAGE, LINE OF CREDIT MORTGAGE AND DEED OF TRUST
(WITH SECURITY AGREEMENT AND FINANCING STATEMENT)

     This MORTGAGE, LINE OF CREDIT MORTGAGE AND DEED OF TRUST (WITH SECURITY AGREEMENT AND FINANCING STATEMENT) (hereinafter referred to as this “ Deed of Trust ”), is entered into effective as of the 1st day of June, 2009, by LOVINGTON-ARTESIA, L.L.C., a Delaware limited liability company (hereinafter referred to as “ Grantor ”), a subsidiary of Holly Energy Partners, L.P., a Delaware limited partnership (“ HEP ”), whose address for notice hereunder is at 100 Crescent Court, Suite 1600, Dallas, Texas 75201-6927, Attention: General Counsel, facsimile number (214) 871-3523, to John N. Patterson, Trustee (hereinafter referred to in such capacity as “ Trustee ”), whose address is PO Box 9570, Santa Fe, New Mexico 87504, for the benefit of the herein below defined Beneficiary.

WITNESSETH :

ARTICLE 1

DEFINITIONS

1.1

Definitions . As used herein, the following terms shall have the following meanings:

(a) Affiliate : With respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (i) with respect to any Person having voting shares or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, shares or the equivalent representing more than 50% of the power to vote in the election of directors, managers or Persons performing similar functions, (ii) ownership of more than 50% of the equity or equivalent interest in any Person and (iii) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise.

(b) Beneficiary : Holly Corporation, a Delaware corporation whose address for notice hereunder is 100 Crescent Court, Suite 1600, Dallas, Texas 75201-6927, Attention: General Counsel.

(c) Contracts : The Pipeline Contracts.

(d) Deed of Trust : Shall have the meaning set forth in the introductory paragraph hereof.

(e) Easements : The Pipeline Easements.

(f) Event of Default : Any happening or occurrence described in Article 7 of this Deed of Trust.

(g) Fixtures : All materials, supplies, equipment, apparatus and other items now or hereafter acquired by Grantor and now or hereafter attached to, installed in or used in

connection with (temporarily or permanently) the Real Property or the Pipelines, together with all accessions, replacements, betterments and substitutions for any of the foregoing and the proceeds thereof.

(h) Governmental Entity : Any court, governmental department, commission, council, board, bureau, agency or other judicial, administrative, regulatory, legislative or other instrumentality of the United States of America or any foreign country, or any state, county, municipality or local governmental body or political subdivision or any such other foreign country.

(i) Grantor : The above defined Grantor, whether one or more, and any and all subsequent owners of the Mortgaged Property or any part thereof.

(j) Impositions : All real estate and personal property taxes; water, gas, sewer, electricity and other utility rates and charges; charges for any easement, license or agreement maintained for the benefit of the Mortgaged Property; and all other taxes, charges and assessments and any interest, costs or penalties with respect thereto, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever which at any time prior to or after the execution hereof may be assessed, levied or imposed upon the Mortgaged Property or the ownership, use, occupancy or enjoyment thereof.

(k) Improvements : The Pipeline Improvements.

(l) Leases : Any and all leases, subleases, licenses, concessions or other agreements (written or verbal, now or hereafter in effect) which grant a possessory interest in and to, or the right to use, the Mortgaged Property, and all other agreements, such as utility contracts, maintenance agreements and service contracts, which in any way relate to the use, occupancy, operation, maintenance, enjoyment or ownership of the Mortgaged Property, save and except any and all leases, subleases or other agreements pursuant to which Grantor is granted a possessory interest in the Real Property.

(m) Legal Requirements : (i) Any and all laws, statutes, codes, rules, regulations, ordinances, judgments, orders, writs, decrees, requirements or determinations of any Governmental Entity, and (ii) to the extent not covered by clause (i) immediately above, any and all requirements of permits, licenses, certificates, authorizations, concessions, franchises or other approvals granted by any Governmental Entity.

(n) Mortgaged Property : The Pipeline Assets, together with:

(i) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances in anywise appertaining thereto, and all right, title and interest of Grantor in and to any streets, ways, alleys, strips or gores of land adjoining the Real Property or any part thereof; and

(ii) all betterments, additions, alterations, appurtenances, substitutions, replacements and revisions thereof and thereto and all reversions and remainders therein; and

(iii) all other property and rights of Grantor of every kind and character to the extent specifically relating to and used or to be used solely in connection with the foregoing property, and all proceeds and products of any of the foregoing.

As used in this Deed of Trust, the term “ Mortgaged Property ” shall be expressly defined as meaning all or, where the context permits or requires, any portion of the above, and all or, where the context permits or requires, any interest therein. Notwithstanding anything to the contrary herein, in no event shall the term “ Mortgaged Property ” include any Product owned by third parties that may be shipped through or stored at or in any of the Mortgaged Property.

(o) Obligations : Shall have the meaning given such term in Section 2.1.

(p) Permits : The Pipeline Permits.

(q) Permitted Encumbrances : Any of the following matters:

(i) any (A) inchoate liens, security interests or similar charges constituting or securing the payment of expenses which were incurred incidental to the ownership and operation of the Pipelines (collectively, the “ Operations ”) or the operation, storage, transportation, shipment, handling, repair, construction, improvement or maintenance of the Mortgaged Property, and (B) materialman’s, mechanics’, repairman’s, employees’, contractors’, operators’, warehousemen’s, barge or ship owner’s and carriers’ liens or other similar liens, security interests or charges for liquidated amounts arising in the ordinary course of business incidental to the conduct of the Operations or the ownership and operation of the Mortgaged Property, securing amounts the payment of which is not delinquent and that will be paid in the ordinary course of business or, if delinquent, that are being contested in good faith with any action or proceeding to foreclose or attach any of the Mortgaged Property on account thereof properly stayed; (ii) any liens or security interests for Taxes not yet delinquent or, if delinquent, that are being contested in good faith in the ordinary course of business with any action or proceeding to foreclose or attach any of the Mortgaged Property on account thereof properly stayed; (iii) any liens or security interests reserved in leases, rights of way or other real property interests for rental or for compliance with the terms of such leases, rights of way or other real property interests, provided payment of the debt secured is not delinquent or, if delinquent, is being contested in good faith in the ordinary course of business with any action or proceeding to foreclose or attach any of the Mortgaged Property on account thereof properly stayed; (iv) all prior reservations of minerals in and under or that may be produced from any of the lands constituting part of the Mortgaged Property or on which any part of the Mortgaged Property is located; (v) all liens (other than liens for borrowed money), security interests, charges, easements, restrictive covenants, encumbrances, contracts, instruments, obligations, discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping of improvements, defects, irregularities and other matters affecting or encumbering title to the Mortgaged Property which individually or in the

aggregate are not such as to unreasonably or materially interfere with or prevent any material operations conducted on the Mortgaged Property; (vi) rights reserved to or vested in any Governmental Entity to control or regulate any of the Mortgaged Property or the Operations and all Legal Requirements of such authorities, including any building or zoning ordinances and all environmental laws; (vii) any contract, easement, instrument, lien, security instrument, permit, amendment, extension or other matter entered into by a party in accordance with the terms of the Purchase Agreement (as defined in the Pipelines Agreement) or in compliance with the approvals or directives of the other party made pursuant to such Purchase Agreement; (viii) all Post-Closing Consents (as defined in the Purchase Agreement); (ix) defects in the early chain of the title consisting of the mere failure to recite marital status in a document or omissions of successions of heirship proceedings, unless such failure or omission results in another Person’s superior claim of title to the Pipeline Easements or relevant portion thereof; (x) any assertion of a defect based on a lack of a survey with respect to the Pipelines; (xi) any title defect affecting (or the termination or expiration of) any easement, right of way, leasehold interest or fee interest affecting property over which the Pipelines pass which has been replaced prior to the date of this Deed of Trust by an easement, right of way, leasehold interest or fee interest covering substantially the same land or the portion thereof used by Beneficiary or its Affiliates; and (xii) all Senior Liens.

(r) Person : An individual, a corporation, a partnership, a limited liability company, an association, a trust, or any other entity or organization, including, without limitation, any Governmental Entity.

(s) Personalty : The Pipeline Equipment, and all other personal property (other than the Fixtures) and intangible assets of any kind or character as defined in and subject to the provisions of the Uniform Commercial Code Article 9 — Secured Transactions, as the same is codified and in effect in New Mexico, which are now or hereafter located or to be located upon, within or about the Real Property, or which are or may be used in or related to the planning, development, financing or operation of the Mortgaged Property, together with all accessories, replacements and substitutions thereto or therefor and the proceeds thereof.

(t) Pipeline Assets : All of the following assets, properties and rights, whether real, personal or mixed, which are owned or held for use by Grantor solely in connection with the ownership or operation of those certain pipelines described on Exhibit G (the “ Pipelines ”):

(i) All parcels of fee simple real property now or hereafter owned by Grantor on which any part of the Pipelines are located including, without limitation, the property held in fee by Grantor described on Exhibit A , if any (collectively, the “ Pipeline Fee Land ”);

(ii) All leases of real property now or hereafter entered into or acquired by Grantor on which all or a part of the Pipelines are located, including, without limitation, the leases described on Exhibit B , if any (the “ Pipeline Leases ”);

(iii) All easements, rights-of-way, property use agreements, line rights and real property licenses (including right-of-way permits from railroads and road crossing permits or other right-of-way permits from Governmental Entities) required to operate the Pipelines now or hereafter entered into or acquired by Grantor, including, without limitation, the easements, rights-of-way, property use agreements, line rights and real property licenses described on Exhibit C (the “ Pipeline Easements ”);

(iv) All structures, fixtures and appurtenances (A) located on the Pipeline Fee Land, (B) located on the land subject to the Pipeline Leases, or (C) located within the Pipeline Easements, and now or hereafter owned by Grantor, including, without limitation, any buildings, pipelines, pumping facilities, refinery tanks, crude oil tanks and crude oil pipeline tanks described on Exhibit D (collectively, the “ Pipeline Improvements ”);

(v) To the extent same do not constitute Pipeline Improvements, any and all fittings, cathodic protection ground beds, rectifiers, other cathodic or electric protection devices, tanks, machinery, engines, pipes, pipelines, valves, valve boxes, connections, gates, scraper trap extenders, telecommunication facilities and equipment (including microwave and other transmission towers), lines, wires, computer hardware, fixed or mobile machinery and equipment, vehicle refueling tanks, pumps, heating and non-pipeline pumping stations, fittings, tools, furniture and metering equipment now owned or hereafter acquired by Grantor (the “ Pipeline Equipment ”);

(vi) The contracts, agreements, leases and other legally binding rights and obligations of Grantor described on Exhibit E , if any, but excluding those contracts and agreements constituting Pipeline Leases and Pipeline Easements (the “ Pipeline Contracts ”);

(vii) Intellectual property rights and related computer software;

(viii) All permits, licenses, certificates, authorizations, registrations, orders, waivers, variances and approvals now or hereafter granted by any Governmental Entity to Grantor or its predecessors in interest pertaining solely to the ownership or operation of the Pipelines, including, without limitation, those permits, licenses, certificates, authorizations, registrations, orders, waivers, variances and approvals described on Exhibit C , in each case to the extent the same are assignable (the “ Pipeline Permits ”); and

(ix) All records and documents now or hereafter acquired by Grantor relating solely to the ownership, condition or operation of the Pipeline Assets (the “ Pipeline Records ”).

(u) Pipeline Contracts : Shall have the meaning set forth in subsection (vi) of the definition of Pipeline Assets.

(v) Pipeline Easements : Shall have the meaning set forth in subsection (iii) of the definition of Pipeline Assets.

(w) Pipeline Equipment : Shall have the meaning set forth in subsection (v) of the definition of Pipeline Assets.

(x) Pipeline Fee Land : Shall have the meaning set forth in subsection (i) of the definition of Pipeline Assets.

(y) Pipeline Improvements : Shall have the meaning set forth in subsection (iv) of the definition of Pipeline Assets.

(z) Pipeline Leases : Shall have the meaning set forth in subsection (ii) of the definition of Pipeline Assets.

(aa) Pipeline Permits : Shall have the meaning set forth in subsection (viii) of the definition of Pipeline Assets.

(bb) Pipeline Real Property : Collectively, the Pipeline Fee Land, the Pipeline Leases, the Pipeline Improvements and the Pipeline Easements.

(cc) Pipeline Records : Shall have the meaning set forth in subsection (ix) of the definition of Pipeline Assets.

(dd) Pipelines : Shall have the meaning set forth in the first paragraph of the definition of Pipeline Assets.

(ee) Pipelines Agreement : That certain Amended and Restated Intermediate Pipelines Agreement dated as of June 1, 2009, by and among Beneficiary, Navajo Refining Company, L.L.C., a Delaware limited liability company, HEP, Holly Energy Partners—Operating, L.P., a Delaware limited partnership, HEP Pipeline, L.L.C., a Delaware limited liability company, Grantor, HEP Logistics Holdings, L.P., a Delaware limited partnership, Holly Logistic Services, L.L.C., a Delaware limited liability company, and HEP Logistics GP, L.L.C., a Delaware limited liability company.

(ff) Product : Crude oil, gas oil, diesel, kerosene, casinghead, naphtha, normal butane and isobutane transported through the Pipelines.

(gg) Purchase Agreement : That certain LLC Interest Purchase Agreement dated as of June 1, 2009, by and between Navajo Pipeline Co., L.P., a Delaware limited partnership, and Holly Energy Partners — Operating, L.P., a Delaware limited partnership.

(hh) Real Property : The Pipeline Real Property.

(ii) Security Documents : This Deed of Trust and any and all other documents now or hereafter executed by Grantor or any other Person to evidence or secure the performance of the Obligations.

(jj) Senior Bank Liens : Collectively, (i) each lien and security interest in all or any portion of the Mortgaged Property heretofor or hereafter granted by Grantor or its Affiliates under the Senior Credit Agreement, and (ii) each lien and security interest in all or any portion of the Mortgaged Property hereafter granted by any Person who acquires an interest in all or any portion of the Mortgaged Property securing senior debt of such Person.

(kk) Senior Credit Agreement : That certain Amended and Restated Credit Agreement dated as of August 27, 2007 (as extended, amended, supplemented, restated, replaced or refinanced in whole or in part, from time to time) among Holly Energy Partners — Operating, L.P., a Delaware limited partnership, the banks party thereto from time to time, and Union Bank, N.A., in its capacity as administrative agent (or any assignee of or successor to such administrative agent).

(ll) Senior Lien : Collectively, the Senior Bank Liens and each other lien and security interest as to which the lien and security interest granted pursuant to this Deed of Trust shall be subordinated thereto pursuant to the terms of a Subordination, Non-Disturbance and Attornment Agreement in substantially the form of Attachment 1 hereto executed by the Beneficiary and the holder of such lien and security interest and recorded in the Official Public Records of Real Property of Lea County, New Mexico or Eddy County, New Mexico, as applicable.

(mm) Taxes : Any and all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, leases, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, or assessments.

ARTICLE 2

GRANT

2.1

Grant . To secure and enforce the prompt performance and compliance by the Partnership Entities (as defined in the Pipelines Agreement) of all obligations set forth for such Persons in Section 2(f), Section 7, and Section 11(b) of the Pipelines Agreement, plus all claims (as such term is defined in the Bankruptcy Code) of or damages owed to the Beneficiary against the Partnership Entities and/or the Mortgaged Property resulting from any rejection of the Pipelines Agreement by any such Person in any bankruptcy or insolvency proceeding involving any Partnership Entity, and any reasonable costs and expenses (including, but not limited to, attorneys’ and experts’ fees and court costs) incurred by Beneficiary in enforcing and exercising its rights hereunder (collectively, the “ Obligations ”), Grantor has GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents does GRANT, BARGAIN, SELL and CONVEY, unto Trustee the

		Mortgaged Property, subject, however, to the Permitted Encumbrances , TO HAVE AND TO HOLD the Mortgaged Property unto Trustee, forever, and Grantor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Trustee against every Person whomsoever lawfully claiming or to claim the same or any part thereof other than against any holder of any Senior Lien; provided, however, that this grant shall terminate upon the full performance and discharge of all of the Obligations and in accordance with the other terms set forth herein.
2.2		Maximum Secured Indebtedness . THE OUTSTANDING INDEBTEDNESS SECURED BY PROPERTY LOCATED IN NEW MEXICO SHALL NOT AT ANY ONE TIME EXCEED THE AGGREGATE MAXIMUM AMOUNT OF $45,000,000, WHICH SHALL CONSTITUTE THE MAXIMUM AMOUNT AT ANY TIME SECURED HEREBY.

ARTICLE 3

WARRANTIES AND REPRESENTATIONS

		Grantor hereby unconditionally warrants and represents to Beneficiary as follows:
3.1		Organization and Power . Grantor (a) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has complied with all conditions prerequisite to its doing business in the State of New Mexico and (b) has all requisite power and all governmental certificates of authority, licenses, permits, qualifications and documentation to own, lease and operate its properties and to carry on its business as now being, and as proposed to be, conducted.
3.2		Validity of Security Documents . The execution, delivery and performance by Grantor of the Security Documents (a) are within Grantor’s powers and have been duly authorized by Grantor’s Manager or other necessary parties, and all other requisite action for such authorization has been taken; (b) have received all (if any) requisite prior governmental approval in order to be legally binding and enforceable in accordance with the terms thereof; and (c) will not violate, be in conflict with, result in a breach of or constitute (with due notice or lapse of time, or both) a default under, any Legal Requirement or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of Grantor’s property or assets, except as contemplated by the provisions of the Security Documents. The Security Documents constitute the legal, valid and binding obligations of Grantor and others obligated under the terms of the Security Documents, in accordance with their respective terms.
3.3		Lien of this Instrument . Subject to the Senior Liens, this Deed of Trust constitutes a valid and subsisting mortgage and deed of trust lien on the Real Property and the Fixtures and a valid, subsisting security interest in and to, and a valid assignment of, the Personalty and Leases, all in accordance with the terms hereof.

3.4

Litigation . There are no actions, suits or proceedings pending, or to the knowledge of Grantor threatened, against or affecting the Grantor as a result of or in connection with Grantor’s entering into this Deed of Trust, or involving the validity or enforceability of this Deed of Trust or the priority of the liens and security interests created by the Security Documents, and no event has occurred (including specifically Grantor’s execution of the Security Documents) which will violate, be in conflict with, result in the breach of, or constitute (with due notice or lapse of time, or both) a default under, any Legal Requirement or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of Grantor’s property other than the liens and security interests created by the Security Documents.

ARTICLE 4

AFFIRMATIVE COVENANTS OF GRANTOR

     Grantor hereby unconditionally covenants and agrees with Beneficiary that, except for the Permitted Encumbrances, Grantor will protect the lien and security interest status of this Deed of Trust and except for the Permitted Encumbrances, will not, without the prior written consent of Beneficiary, place, or permit to be placed, or otherwise mortgage, hypothecate or encumber the Mortgaged Property with, any other lien or security interest of any nature whatsoever (statutory, constitutional or contractual) regardless of whether same is allegedly or expressly inferior to the lien and security interest created by this Deed of Trust, and, if any such lien or security interest is asserted against the Mortgaged Property, Grantor will promptly, at its own cost and expense, (a) pay the underlying claim in full or take such other action so as to cause same to be released and (b) within five days from the date such lien or security interest is so asserted, give Beneficiary notice of such lien or security interest. Such notice shall specify who is asserting such lien or security interest and shall detail the origin and nature of the underlying claim giving rise to such asserted lien or security interest.

ARTICLE 5

NEGATIVE COVENANTS OF GRANTOR

     Grantor hereby covenants and agrees with Beneficiary that, until the full performance and discharge of all of the Obligations, Grantor will not, without the prior written consent of Beneficiary, create, place or permit to be created or placed, or through any act or failure to act, acquiesce in the placing of, or allow to remain, any mortgage, pledge, lien (statutory, constitutional or contractual), security interest, encumbrance or charge on, or conditional sale or other title retention agreement, regardless of whether same are expressly subordinate to the liens of the Security Documents, with respect to, the Mortgaged Property, other than the Permitted Encumbrances.

ARTICLE 6

AFFIRMATIVE COVENANTS OF BENEFICIARY

     By its acceptance hereof, Beneficiary recognizes that (a) Grantor is obligated or may hereafter become obligated to any of the Credit Parties (as defined in the SNDA [defined below]) in connection with the Senior Credit Agreement, and (b) Grantor and any future owner of the Mortgaged Property may incur additional indebtedness or become otherwise obligated to one or more banks, insurance companies, investment banks or other financial institutions regularly engaged in commercial lending and/or bonds, debentures, notes and similar instruments evidencing obligations that may be secured by liens or security interests on some or all of Grantor’s property, including the Mortgaged Property (the holder of such liens or security interests being a “ Secured Lender ”). To the extent that any such Secured Lender notifies Beneficiary of Secured Lender’s desire to subordinate the lien and security interest held by Beneficiary pursuant to this Deed of Trust, Beneficiary, by its acceptance hereof, will agree to effect such subordination by promptly executing, in one or more counterparts, a Subordination, Non-Disturbance and Attornment Agreement in substantially the form of Attachment 1 hereto (the “ SNDA ”). The subordination of this Deed of Trust shall (i) not be effective unless and until the SNDA has been executed by the Secured Lender, and (ii) be subject to compliance by the Secured Lender with its obligations under Section 3 and Section 4 of the SNDA. Any Secured Lender who is a party to an SNDA and who is in compliance with its obligations under Section 3 and Section 4 of such SNDA is hereinafter referred to as a “ Lienholder .”

ARTICLE 7

EVENTS OF DEFAULT

     The term “ Event of Default ”, as used in the Security Documents, shall mean the occurrence or happening, at any time and from time to time, of any one or more of the following.

7.1		Breach of Deed of Trust . (a) Grantor shall (i) fail to perform or observe, in any material respect, any covenant, condition or agreement of this Deed of Trust to be performed or observed by Grantor, or (ii) breach any warranty or representation made by Grantor in this Deed of Trust, and such failure or breach shall continue unremedied for a period of thirty (30) days after receipt of written notice thereof to the Grantor from the Beneficiary; provided, however, that in the event such failure or breach cannot be reasonably cured within such thirty (30) day period and Grantor has diligently proceeded (and continues to proceed) to cure such breach, Grantor shall have an additional sixty (60) days to cure such failure or breach, or (b) HEP shall fail to perform all of the Obligations in full and on or before the dates same are to be performed (after giving effect to any applicable grace and cure periods).
7.2		Voluntary Bankruptcy . Grantor shall (a) voluntarily be adjudicated a bankrupt or insolvent, (b) procure, permit or suffer the voluntary or involuntary appointment of a receiver, trustee or liquidator for itself or for all or any substantial portion of its property, (c) file any petition seeking a discharge, rearrangement, or reorganization of its debts pursuant to the bankruptcy laws or any other debtor relief laws of the United States or

		any state or any other competent jurisdiction, or (d) make a general assignment for the benefit of its creditors.
7.3		Involuntary Bankruptcy . If (a) a petition is filed against Grantor seeking to rearrange, reorganize or extinguish its debts under the provisions of any bankruptcy or other debtor relief law of the United States or any state or other competent jurisdiction, and such petition is not dismissed or withdrawn within sixty (60) days after its filing, or (b) a court of competent jurisdiction enters an order, judgment or decree appointing, without the consent of Grantor a receiver or trustee for it, or for all or any part of its property, and such order, judgment, or decree is not dismissed, withdrawn or reversed within sixty (60) days after the date of entry of such order, judgment or decree.
7.4		Rejection of Pipelines Agreement . A rejection, by or on behalf of Grantor or any other Partnership Entity (as defined in the Pipelines Agreement), of the Pipelines Agreement in bankruptcy.

ARTICLE 8

REMEDIES

8.1

Remedies . Subject, in each case, to the rights of any Lienholder arising under or pursuant to the Senior Liens, and the terms and provisions of the SNDA, and provided no material default by the Holly Entities (as defined in the Pipelines Agreement) has occurred and is continuing, if an Event of Default shall occur and be continuing, Beneficiary may, at Beneficiary’s election and by or through Trustee or otherwise, exercise any or all of the following rights, remedies and recourses:

(a) Entry Upon Mortgaged Property . Enter upon the Mortgaged Property and take exclusive possession thereof and of all books, records and accounts relating thereto. If Grantor remains in possession of all or any part of the Mortgaged Property after an Event of Default and without Beneficiary’s prior written consent thereto, Beneficiary may invoke any and all legal remedies to dispossess Grantor, including specifically one or more actions for forcible entry and detainer, trespass to try title and writ of restitution. Nothing contained in the foregoing sentence shall, however, be construed to impose any greater obligation or any prerequisites to acquiring possession of the Mortgaged Property after an Event of Default than would have existed in the absence of such sentence.

(b) Operation of Mortgaged Property . Hold, lease, manage, operate or otherwise use or permit the use of the Mortgaged Property, either itself or by other Persons, firms or entities, in such manner, for such time and upon such other terms as Beneficiary may deem to be prudent and reasonable under the circumstances (making such repairs, alterations, additions and improvements thereto and taking any and all other action with reference thereto, from time to time, as Beneficiary shall deem necessary or desirable), and apply all amounts collected by Trustee or Beneficiary in connection therewith in accordance with the provisions of Section 8.8.

(c) Trustee or Receiver . Prior to, upon or at any time after, commencement of any legal proceedings hereunder, make application to a court of competent jurisdiction as a matter of strict right and without notice to Grantor or regard to the adequacy of the Mortgaged Property for the satisfaction of the Obligations for appointment of a receiver of the Mortgaged Property, and Grantor does hereby irrevocably consent to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain and otherwise operate the Mortgaged Property upon such terms as may be approved by the court.

(d) Other . Exercise any and all other rights, remedies and recourses granted under this Deed of Trust.

8.2		Remedies Cumulative, Concurrent and Nonexclusive . Beneficiary shall have all rights, remedies and recourses granted in the Pipelines Agreement and, subject to the rights of any Lienholder arising under or pursuant to the Senior Liens, and the terms and provisions of the SNDA, the Deed of Trust and same (a) shall be cumulative and concurrent; (b) may be pursued separately, successively or concurrently against Grantor or others obligated under this Deed of Trust, or against the Mortgaged Property, or against any one or more of them, at the sole discretion of Beneficiary; (c) may be exercised as often as occasion therefor shall arise, it being agreed by Grantor that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and (d) are intended to be, and shall be, nonexclusive.
8.3		Obligations . Neither Grantor, any other Partnership Entity (as defined in the Pipelines Agreement) nor any other Person hereafter obligated for performance or fulfillment of all or any of the Obligations shall be relieved of such obligation by reason of (a) the failure of Trustee to comply with any request of Grantor or any other Person to enforce any provisions of this Deed of Trust; (b) the release, regardless of consideration, of the Mortgaged Property or the addition of any other property to the Mortgaged Property; (c) any agreement or stipulation between any subsequent owner of the Mortgaged Property and Beneficiary extending, renewing, rearranging or in any other way modifying the terms of the Security Documents without first having obtained the consent of, given notice to or paid any consideration to Grantor or such other Person, and in such event Grantor and all such other Persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by Beneficiary; or (d) by any other act or occurrence save and except the complete fulfillment of all of the Obligations.
8.4		Release of and Resort to Collateral . Beneficiary may release, regardless of consideration, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interest created in or evidenced by this Deed of Trust or their stature as a lien and security interest in and to the Mortgaged Property.
8.5		Waiver of Redemption, Notice and Marshalling of Assets . To the fullest extent permitted by law, Grantor hereby irrevocably and unconditionally waives and releases (a)

all benefits that might accrue to Grantor by virtue of any present or future law exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment; (b) all notices of any Event of Default or of Trustee’s election to exercise or his actual exercise of any right, remedy or recourse provided for under this Deed of Trust; and (c) any right to a marshalling of assets or a sale in inverse order of alienation.

8.6		Limitation on New Mexico Redemption . Pursuant to NMSA 1978, Section 39-5-19 (1965), the redemption period after foreclosure sale for any Mortgaged Property situated in or otherwise subject to the laws of the State of New Mexico shall be limited to one (1) month.
8.7		Discontinuance of Proceedings . In case Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under this Deed of Trust and shall thereafter elect to discontinue or abandon same for any reason, Beneficiary shall have the unqualified right so to do and, in such an event, Grantor and Beneficiary shall be restored to their former positions with respect to the Obligations, the Security Documents, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Beneficiary shall continue as if same had never been invoked.
8.8		Application of Proceeds . Subject, in each case, to applicable law and the rights of any Lienholder arising under or pursuant to the Senior Liens, and the terms and provisions of the SNDA (including, without limitation, the right to receive payments otherwise due to HEP under the terms of the Pipelines Agreement), the proceeds and other amounts generated by the holding, operating or other use of, the Mortgaged Property shall be applied by Trustee or Beneficiary (or the receiver, if one is appointed) to the extent that funds are so available therefrom in the following orders of priority:

(a) first, to the payment of the costs and expenses of taking possession of the Mortgaged Property and of holding, using, leasing, repairing and improving the same, including without limitation (i) trustees’ and receivers’ fees, (ii) court costs, (iii) attorneys’ and accountants’ fees, and (iv) the payment of any and all Impositions, liens, security interests or other rights, titles or interests equal or superior to the lien and security interest of this Deed of Trust (except those to which the Mortgaged Property has been sold subject to and without in any way implying Beneficiary’s prior consent to the creation thereof);

(b) second, to the payment of all amounts which may be due to Beneficiary with respect to the Obligations;

(c) third, to the extent permitted by law, funds are available therefor out of the proceeds generated by the holding, operating or other use of the Mortgaged Property and known by Beneficiary, to the payment of any indebtedness or obligation secured by a subordinate deed of trust on or security interest in the Mortgaged Property; and

(d) fourth, to Grantor.

8.9

INDEMNITY . IN CONNECTION WITH ANY ACTION TAKEN BY TRUSTEE AND/OR BENEFICIARY PURSUANT TO THIS DEED OF TRUST, TRUSTEE AND/OR BENEFICIARY AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS, REPRESENTATIVES, ATTORNEYS, ACCOUNTANTS AND EXPERTS (COLLECTIVELY THE “INDEMNIFIED PARTIES”) SHALL NOT BE LIABLE FOR ANY LOSS SUSTAINED BY GRANTOR RESULTING FROM (i) AN ASSERTION THAT TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY HAS RECEIVED FUNDS FROM THE OPERATIONS OF THE MORTGAGED PROPERTY CLAIMED BY THIRD PERSONS OR (ii) ANY ACT OR OMISSION OF TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE MORTGAGED PROPERTY, INCLUDING IN EITHER CASE SUCH LOSS WHICH MAY RESULT FROM THE ORDINARY NEGLIGENCE OF TRUSTEE, BENEFICIARY OR AN INDEMNIFIED PARTY OR WHICH MAY RESULT FROM STRICT LIABILITY, WHETHER UNDER APPLICABLE LAW OR OTHERWISE, UNLESS SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF TRUSTEE, BENEFICIARY OR ANY INDEMNIFIED PARTY NOR SHALL TRUSTEE, BENEFICIARY AND/OR ANY INDEMNIFIED PARTY BE OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF GRANTOR. GRANTOR SHALL AND DOES HEREBY AGREE TO INDEMNIFY TRUSTEE, BENEFICIARY AND EACH OF THEIR RESPECTIVE INDEMNIFIED PARTIES FOR, AND TO HOLD THEM HARMLESS FROM, ANY AND ALL LOSSES WHICH MAY OR MIGHT BE INCURRED BY TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY BY REASON OF THIS DEED OF TRUST OR THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER, INCLUDING SUCH LOSSES WHICH MAY RESULT FROM THE ORDINARY NEGLIGENCE OF TRUSTEE, BENEFICIARY OR AN INDEMNIFIED PARTY OR WHICH MAY RESULT FROM STRICT LIABILITY, WHETHER UNDER APPLICABLE LAW OR OTHERWISE, UNLESS SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY. SHOULD TRUSTEE, BENEFICIARY AND/OR ANY INDEMNIFIED PARTY MAKE ANY EXPENDITURE ON ACCOUNT OF ANY SUCH LOSSES, THE AMOUNT THEREOF, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND REASONABLE ATTORNEYS’ FEES, SHALL BE A DEMAND OBLIGATION (WHICH OBLIGATION GRANTOR HEREBY EXPRESSLY PROMISES TO PAY) OWING BY GRANTOR TO TRUSTEE AND/OR BENEFICIARY AND SHALL BEAR INTEREST FROM THE DATE EXPENDED UNTIL PAID AT THE HIGHEST RATE ALLOWED BY LAW, SHALL BE A PART OF THE OBLIGATIONS AND SHALL BE SECURED BY THIS DEED OF TRUST. THE LIABILITIES OF GRANTOR AS SET FORTH IN THIS SECTION 8.9 SHALL SURVIVE THE TERMINATION OF THIS DEED OF TRUST.

8.10

Limitations on Indemnifications .

(a) To the extent, if at all, but only to the extent, that NMSA 1978, Section 56-7-1 (1971), as amended from time to time, is applicable to this Deed of Trust or any indemnification agreements herein, any agreement to indemnify any indemnitee given in this Deed of Trust, regardless of whether such agreement to indemnify makes reference to this or any other limitation provision, will not extend to liability, claims, damages, losses or expenses, including attorneys’ fees, arising out of (i) the preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications by such indemnitee, or the agents or employees of such indemnitee, or (ii) the giving of or the failure to give directions or instructions by such indemnitee, or the agents or employees of such indemnitee, where such giving or failure to give directions or instructions is the primary cause of bodily injury to persons or damage to property.

(b) To the extent, if at all, but only to the extent, that NMSA 1978, Section 56-7-2 (1999), as amended from time to time, is applicable to this Deed of Trust or any indemnification agreements herein, or agreement to indemnify any indemnitee given in this Deed of Trust, regardless of whether such undertaking or agreement to indemnify makes reference to this or any other limitation provision, this Deed of Trust does not purport to indemnify such indemnitee against loss or liability for damages arising from: (i) the sole or concurrent negligence of such indemnitee or the agents or employees of such indemnitee; (ii) the sole or concurrent negligence of an independent contractor who is directly responsible to such indemnitee; or (iii) an accident that occurs in operations carried on at the direction or under the supervision of such indemnitee, an employee or representative of such indemnitee or in accordance with methods and means specified by such indemnitee or the employees or representatives of such indemnitee.

ARTICLE 9

SECURITY AGREEMENT

9.1		Security Interest . This Deed of Trust shall be construed as a deed of trust on real property and it shall (subject to the Senior Liens) also constitute and serve as a “Security Agreement” on personal property within the meaning of, and shall constitute a security interest under, the Uniform Commercial Code (as the same is codified and in effect in New Mexico) with respect to the Personalty, Fixtures and Leases. To this end, Grantor has GRANTED, BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED, AND SET OVER, and by these presents does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER AND SET OVER, unto Trustee and unto Beneficiary, a security interest in all of Grantor’s right, title and interest in, to and under the Personalty, Fixtures and Leases to secure the full and timely performance and discharge of the Obligations, subject only to the Permitted Encumbrances.
9.2		Financing Statements . Grantor hereby authorizes Beneficiary to file such “Financing Statements,” and Grantor hereby agrees to execute and deliver such further assurances as Beneficiary may, from time to time, consider reasonably necessary to create, perfect and preserve Beneficiary’s security interest herein granted and Beneficiary may cause such

statements and assurances to be recorded and filed, at such times and places as may be required or permitted by law to so create, perfect and preserve such security interest.

9.3		Uniform Commercial Code Remedies . Subject, in each case, to the rights of any Lienholder under or pursuant to the Senior Liens, and the terms and provisions of the SNDA and this Deed of Trust, Beneficiary and/or Trustee shall have all the rights, remedies and recourses (other than auction and sale rights) with respect to the Personalty, Fixtures and Leases afforded to it by the aforesaid Uniform Commercial Code (as the same is codified and in effect in New Mexico) in addition to, and not in limitation of, the other rights, remedies and recourses afforded by this Deed of Trust.
9.4		No Obligation of Trustee or Beneficiary . The assignment and security interest herein granted shall not be deemed or construed to constitute Trustee or Beneficiary as a trustee in possession of the Mortgaged Property, to obligate Trustee or Beneficiary to lease the Mortgaged Property or attempt to do same, or to take any action, incur any expense or perform or discharge any obligation, duty or liability whatsoever.
9.5		Fixture Filing . This Deed of Trust shall constitute a “fixture filing” for all purposes of Article 9 of the Uniform Commercial Code, as codified and in effect in New Mexico. All or part of the Mortgaged Property are or are to become fixtures; information concerning the security interest herein granted may be obtained at the addresses set forth on the first page hereof. The address of the Secured Party (Beneficiary) is the address set forth in Section 1.1(b) and the address of the Debtor (Grantor) is the address set forth in the opening paragraph of this Deed of Trust.
9.6		Satisfaction and Release . If (a) all Obligations secured hereby shall be paid, performed and satisfied in full, (b) the Mortgaged Property (or any portion thereof, in which case the provisions of clauses (i) through (iv) below shall be applicable only to such portion) shall be sold, consigned, conveyed or transferred in accordance with the provisions of the Pipelines Agreement, and/or (c) the Pipelines Agreement shall be terminated, cancelled or otherwise expire, and the Obligations of the Partnership Entities (as defined in the Pipelines Agreement) set forth in Section 2(f) of the Pipelines Agreement shall no longer be applicable, and/or (d) at any time Grantor’s or HEP’s (in the event Grantor does not have a stand-alone credit rating) senior unsecured debt has an Investment Grade Rating (as hereinafter defined) from both Moody’s Investors Service, Inc. (“ Moody’s ”) and Standard & Poor’s Ratings Group (“ S&P ”) (or any successor to the rating business of either thereof), then (i) this Deed of Trust shall be null and void, (ii) the liens and security interests created by this Deed of Trust shall be released as promptly as practicable, (iii) the Mortgaged Property shall revert to Grantor (or the transferee in the case of clause (b) above) free and clear of the liens and security interests created by this Deed of Trust, and (iv) Beneficiary and Trustee (as applicable) shall execute and deliver, or cause to be executed and delivered, instruments of satisfaction and release that are reasonably requested by Grantor. Otherwise, this Deed of Trust shall remain and continue in full force and effect. As used in this Section 9.6, the term “Investment Grade Rating” shall mean a rating equal to or higher than Baa3 (or the equivalent) by Moody’s, or BBB- (or the equivalent) by S&P.

law) and Trustee shall be under no liability for interest on any moneys received by him hereunder.

giving effect to any applicable notice and cure period), then at any time thereafter, and without further notice to or demand upon Grantor and without waiving or releasing any other right, remedy or recourse Beneficiary may have because of same, Beneficiary may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Grantor, and shall have the right to enter upon or in the Real Property for such purpose and to take all such action thereon and with respect to the Mortgaged Property as it may deem necessary or appropriate but in any case subject to the rights of any Lienholder arising under or pursuant to the Senior Liens and the terms and provisions of the SNDA. If Beneficiary shall elect to pay any Imposition or other sums due with reference to the Mortgaged Property, Beneficiary may do so in reliance on any bill, statement or assessment procured from the appropriate Governmental Entity or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any payments to protect the security intended to be created by the Security Documents, Beneficiary shall not be bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same. Grantor shall indemnify Beneficiary for all losses, expenses, damage, claims and causes of action, including reasonable attorneys’ fees, incurred or accruing by reason of any acts performed by Beneficiary pursuant to the provisions of this Section 11.7 or by reason of any other provision in the Security Documents. All sums paid by Beneficiary pursuant to this Section 11.7 and all other sums expended by Beneficiary to which it shall be entitled to be indemnified, together with interest thereon at the maximum rate allowed by law from the date of such payment or expenditure, shall be secured by the Security Documents and shall be paid by Grantor to Beneficiary upon demand.

provisions of this Deed of Trust conflict with any terms or provisions of the Pipelines Agreement, the terms or provisions of the Pipelines Agreement shall govern and control for all purposes. The Security Documents may not be amended, revised, waived, discharged, released or terminated orally but only by a written instrument or instruments (a) executed by the party against which enforcement of the amendment, revision, waiver, discharge, release or termination is asserted, and (b) consented to by the Lienholders to the extent any such amendment, revision, waiver, discharge, release or termination would be materially adverse to the rights of any such Lienholder. Any alleged amendment, revision, waiver, discharge, release or termination which is not so documented shall not be effective as to any party.

(with or without the release of Grantor from liability in respect thereof), and (b) require the execution of an assumption agreement, modification agreements, supplemental security documents and financing statements satisfactory in form and substance to Beneficiary.

(a) In addition to the requirements for giving notice set forth elsewhere in this instrument, all notices shall be sent by regular, first-class United States mail, postage prepaid.

(b) Notwithstanding anything to the contrary contained in this instrument, the appointment of a receiver for the Mortgaged Property shall be in accordance with the New Mexico Receivership Act, §44-8-1, et seq., NMSA 1978.

(c) To the extent this instrument constitutes a deed of trust, it is subject to the New Mexico Deed of Trust Act, §48-10-1, et seq., NMSA 1978.

(d) To the extent this instrument constitutes a mortgage, the grant of the mortgage is made with mortgage covenants and upon the statutory mortgage condition, for the breach of which, except as otherwise provided herein, this instrument is subject to foreclosure as provided by law.

(e) For Security Agreement and Fixture Filing purposes, (i) the Debtor’s name is Lovington-Artesia, L.L.C., whose address is shown on the first page of this instrument; (ii) the Secured Party’s name is Holly Corporation, whose address is shown in Section 1.1(b) of this instrument; (iii) this instrument covers materials, supplies, equipment, apparatus and other items that are, or are to become, fixtures; and (iv) the real property to which such fixtures are related is attached to this instrument as Exhibit A .

[SIGNATURE PAGE TO FOLLOW]

     WITNESS THE EXECUTION HEREOF as of the date first above written.

		LOVINGTON-ARTESIA, L.L.C.
		By:		HOLLY ENERGY PARTNERS — OPERATING, L.P., its sole member
		By:		HEP LOGISTICS GP, L.L.C., its general partner
		By:		HOLLY ENERGY PARTNERS, L.P., its sole member
		By:		HEP LOGISTICS HOLDINGS, L.P., its general partner
		By:		HOLLY LOGISTIC SERVICES, L.L.C., its general partner
		By:		/s/ David G. Blair
				David G. Blair,
				Senior Vice President

THE STATE OF TEXAS		§
		§
COUNTY OF DALLAS		§

     This instrument was acknowledged before me on May 28 , 2009, by David G. Blair, Senior Vice President of Holly Logistic Services, L.L.C., a Delaware limited liability company, general partner of HEP Logistics Holdings, L.P., a Delaware limited partnership, general partner of Holly Energy Partners, L.P., a Delaware limited partnership, sole member o HEP Logistics GP, L.L.C., a Delaware limited liability company, general partner of Holly Energy Partners — Operating, L.P., a Delaware limited partnership, sole member of Lovington-Artesia, L.L.C., a Delaware limited liability company, on behalf of said limited liability companies and limited partnership.

My Commission Expires:

4.4.2010

Acknowledgment Page — Subordinated Mortgage

EXHIBIT A

PIPELINE FEE LAND

None.

EXHIBIT B

PIPELINE LEASES

None

EXHIBIT D

PIPELINE IMPROVEMENTS

•		Lovington Station, including all mainline pump equipment, metering equipment, suction manifold, and other associated equipment.
•		Receipt manifold and meter equipment at the Navajo Refinery in Eddy County, New Mexico.
•		A sixteen-inch pipeline, approximately sixty-five miles in length. Running from Lovington Station in Lea County, New Mexico to the Navajo Refinery in Eddy County, New Mexico.

EXHIBIT E

PIPELINE CONTRACTS

None.

EXHIBIT G

PIPELINES

•

A sixteen-inch pipeline, approximately sixty-five miles in length. Running from Lovington Station in Lea County, New Mexico to the Navajo Refinery in Eddy County, New Mexico

ATTACHMENT 1

FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT