HOLLY ENERGY PARTNERS LP (Form: 8-K, Received: 02/27/2008 16:15:10)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2008 (February 25, 2008)

HOLLY ENERGY PARTNERS, L.P.

(Exact name of Registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)	001-32225 (Commission File Number)	20-0833098 (I.R.S. Employer Identification Number)

100 Crescent Court, Suite 1600 Dallas, Texas (Address of principal executive offices)		75201-6915 (Zip code)

Registrant’s telephone number, including area code: (214) 871-3555

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Purchase and Sale Agreement

As of February 25, 2008, Holly Energy Partners, L.P. (the “ Partnership ”) and Holly Corporation ( “Holly, ” and together with the Partnership, the “ Parties ”), entered into a definitive purchase and sale agreement (the “ Purchase Agreement ”) for the Partnership to acquire certain pipeline and tankage assets from Holly for a purchase price of $180 million (the “ Acquisition ”). The purchase price consists of approximately $171,000,000 in cash and common units of the Partnership valued at approximately $9,000,000. The pipeline and tankage assets primarily consist of certain crude oil trunk lines and gathering lines, product and crude oil pipelines and tankage that service Holly’s Lovington and Artesia, New Mexico refining facilities and Woods Cross refining facilities, near Salt Lake City, Utah, as well as a leased jet fuel terminal. The crude oil trunk line assets consist of the Lovington Delivery System, which is an 80 mile system composed of five separate pipelines that service the Lovington refining facility and several associated crude oil storage tanks, and the Artesia Delivery System, which is a 56 mile system composed of eight separate pipelines that service the Artesia refining facility and several associated crude oil storage tanks. The crude gathering operations are located in West Texas and Southeast New Mexico and consist of 47 miles of crude gathering pipelines, over 675 miles of lease connection pipelines, and an additional 22 crude oil tanks. The products pipeline assets consist of a 36 mile pipeline currently dedicated to jet fuel transportation between the Artesia refining facility and a leased jet fuel terminal at Roswell, New Mexico, a 4 mile pipeline dedicated to transporting refined products from the Woods Cross refining facility to the Chevron Pipeline, and a 2 mile pipeline currently dedicated to transporting refined products from the Woods Cross refining facility to the Pioneer Pipeline. The assets also include a 4 mile pipeline dedicated to crude oil transportation from the Chevron Pipeline to the Woods Cross refining facility. The leased jet fuel terminal that is included in the pipeline and tankage assets is leased from the City of Roswell pursuant to a lease agreement expiring in September 2011 that may be renewed for an additional five year term.

Historically, the pipeline and tankage assets that the Partnership has agreed to acquire from Holly have been operated as part of its more extensive transportation, terminalling, crude oil and refined and intermediate products operations. As a result, Holly has not maintained separate financial statements for these assets.

The Partnership will finance the Acquisition by borrowing approximately $171 million under its credit facility and the issuance of common units of the Partnership, valued at approximately $9 million, to subsidiaries of Holly. Pursuant to the terms of the Purchase Agreement, at the closing of the Acquisition the Parties will enter into a 15-year pipelines and tankage agreement (the “ Pipelines and Tankage Agreement ”) containing minimum annual revenue commitments from Holly, and the Partnership will grant Holly a second mortgage on the transferred assets to secure the Partnership’s performance under the Pipelines and Tankage Agreement. Holly controls the general partner of the Partnership and owns a 45% interest in the Partnership (before the issuance of the common units of the Partnership to Holly at the closing of the Acquisition), including the general partner interest.

The description of the Purchase Agreement and Pipelines and Tankage Agreement herein is qualified by reference to the copies of the Purchase Agreement and Pipelines and Tankage Agreement, including exhibits, filed as Exhibits 2.1 and 99.1, respectively, to this report, which are incorporated by reference into this report in their entirety.

Amendment to Credit Agreement

On February 25, 2008, Holly Energy Partners — Operating, L.P., as the Borrower (the “ Borrower ”), the Guarantors party thereto, Union Bank of California, N.A., as the Administrative Agent (the “ Agent ”), and the Banks party thereto (the “ Banks ”), entered into that certain Agreement and Amendment No. 1 to Amended and Restated Credit Agreement (the “ Amendment ”) which amended certain terms of the Amended and Restated Credit Agreement among the Borrower, the Agent and the Banks dated as of August 27, 2007. Primarily, the Amendment increased the maximum amount of the revolving credit facility from $100,000,000 to $300,000,000 (which amount can, upon Borrower’s request and upon the satisfaction of certain conditions, be increased by an additional $70,000,000). The Amended and Restated Credit Agreement will be used to finance the cash payment of $171,000,000 for the Acquisition.

The description of the Amendment herein is qualified by reference to the copy of the Amendment, including exhibits, filed as Exhibit 10.1 to this report, which is incorporated by reference into this report in its entirety.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The Partnership is a guarantor under the Amendment described in Item 1.01 of this report. Upon execution of the Amendment, the Partnership became obligated on a direct financial obligation that is material to the Partnership. The information provided above in the last two paragraphs of Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.

Item 7.01 Regulation FD Disclosure.

Furnished as Exhibit 99.2 and incorporated herein by reference in its entirety is a copy of a press release issued by the Parties on February 26, 2008, announcing the signing of the Purchase Agreement.

In accordance with General Instruction B.2 of Form 8-K, the information furnished in this report on Form 8-K pursuant to Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“ Exchange Act ”), or otherwise subject to the liabilities of that section, unless the Partnership specifically incorporates it by reference in a document filed under the Exchange Act or the Securities Act. By filing this report on Form 8-K and furnishing the information pursuant to Item 7.01, the Partnership makes no admission as to the materiality of any information in this report furnished pursuant to Item 7.01, including Exhibit 99.2, or that any such information includes material investor information that is not otherwise publicly available.

The information furnished in this report on Form 8-K pursuant to Item 7.01, including the information contained in Exhibit 99.2, is summary information that is intended to be considered in the context of the Partnership’s Securities and Exchange Commission (“ SEC ”) filings and other public announcements that the Partnership may make, by press release or otherwise, from time to time. The Partnership disclaims any current intention to revise or update the information furnished in this report on Form 8-K pursuant to Item 7.01, including the information contained in Exhibit 99.2, although the Partnership may do so from time to time as its management believes is warranted. Any such updating may be made through the furnishing or filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01 Financial Statements and Exhibits .


2.1		—		Purchase and Sale Agreement dated as of February 25, 2008 by and among Holly Corporation, Navajo Pipeline Co., L.P., Woods Cross Refining Company, L.L.C.,


		Navajo Refining Company, L.L.C., Holly Energy Partners, L.P., Holly Energy Partners — Operating, L.P., HEP Woods Cross, L.L.C. and HEP Pipeline, L.L.C.*

10.1	—	Agreement and Amendment No. 1 to Amended and Restated Credit Agreement dated as of February 25, 2008 by and among Holly Energy Partners — Operating, L.P., as the Borrower, the Guarantors party thereto, Union Bank of California, N.A., as the Administrative Agent, and the Banks party thereto.

99.1	—	Form of Pipelines and Tankage Agreement to be entered into among Holly Corporation, Navajo Pipeline Co., L.P., Navajo Refining Company, L.L.C., Woods Cross Refining Company, L.L.C., Holly Energy Partners, L.P., Holly Energy Partners — Operating, L.P., HEP Pipeline, L.L.C., and HEP Woods Cross, L.L.C. in connection with the closing of the Purchase Agreement.

99.2	—	Joint Press Release of Holly Corporation and Holly Energy Partners, L.P. issued February 26, 2008.**


*		Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Partnership agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

**		Furnished pursuant to Regulation FD.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


HOLLY ENERGY PARTNERS, L.P.

By:	HEP Logistics Holdings, L.P.
	its General Partner

	By:	Holly Logistic Services, L.L.C.
		its General Partner

		By:	/s/ Bruce R. Shaw Bruce R. Shaw
			Senior Vice President and Chief Financial Officer

Date: February 27, 2008

EXHIBIT INDEX


Exhibit
Number		Exhibit Title
2.1	—	Purchase and Sale Agreement dated as of February 25, 2008 by and among Holly Corporation, Navajo Pipeline Co., L.P., Woods Cross Refining Company, L.L.C., Navajo Refining Company, L.L.C., Holly Energy Partners, L.P., Holly Energy Partners — Operating, L.P., HEP Woods Cross, L.L.C. and HEP Pipeline, L.L.C.*

10.1	—	Agreement and Amendment No. 1 to Amended and Restated Credit Agreement dated as of February 25, 2008 by and among Holly Energy Partners - Operating, L.P., as the Borrower, the Guarantors party thereto, Union Bank of California, N.A., as the Administrative Agent, and the Banks party thereto.

99.1	—	Form of Pipelines and Tankage Agreement to be entered into among Holly Corporation, Navajo Pipeline Co., L.P., Navajo Refining Company, L.L.C., Woods Cross Refining Company, L.L.C., Holly Energy Partners, L.P., Holly Energy Partners — Operating, L.P., HEP Pipeline, L.L.C., and HEP Woods Cross, L.L.C. in connection with the closing of the Purchase Agreement.

99.2	—	Joint Press Release of Holly Corporation and Holly Energy Partners, L.P. issued February 26, 2008.**


*		Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Partnership agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

**		Furnished pursuant to Regulation FD.

EXHIBIT 2.1

EXECUTION VERSON

PURCHASE AND SALE AGREEMENT

by and among

HOLLY CORPORATION,
NAVAJO PIPELINE CO., L.P.,
WOODS CROSS REFINING COMPANY, L.L.C.,
AND
NAVAJO REFINING COMPANY, L.L.C.
as Seller Parties,
and
HOLLY ENERGY PARTNERS, L.P.,
HOLLY ENERGY PARTNERS – OPERATING, L.P.,
HEP WOODS CROSS, L.L.C.
and
HEP PIPELINE, L.L.C.
as Buyer Parties

Dated as of February 25, 2008

TABLE OF CONTENTS


		Page
	ARTICLE I
	TRANSFER OF ASSETS, ASSUMPTION OF LIABILITIES AND AGGREGATE
	CONSIDERATION

1.1	Contribution of Assets and Assumption of Liabilities		1
1.2	Consideration		1

	ARTICLE II
	CLOSING

2.1	Closing		2
2.2	Deliveries by the Seller Parties		2
2.3	Deliveries by the Buyer Parties		3
2.4	Receipts and Credits		4
2.5	Prorations		4
2.6	Closing Costs; Transfer Taxes and Fees.		4

	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

3.1	Organization		5
3.2	Authorization		5
3.3	No Conflicts or Violations; No Consents or Approvals Required		5
3.4	Absence of Litigation		6
3.5	Title to Drop-Down Assets		6
3.6	Brokers and Finders		6
3.7	Sufficiency and Condition of Assets		6
3.8	Representations Relating to the Unit Consideration		6
3.9	WAIVERS AND DISCLAIMERS		7

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

4.1	Organization		8
4.2	Authorization		8
4.3	No Conflicts or Violations; No Consents or Approvals Required		8
4.4	Absence of Litigation		8
4.5	Brokers and Finders		9
4.6	Validity of Unit Consideration		9


		Page
	ARTICLE V
	COVENANTS

5.1	Conduct of the Operations		9
5.2	Access		9
5.3	Rights		10
5.4	Cooperation		10
5.5	Additional Agreements		10
5.6	HSR Matters		11
5.7	Agreements Regarding Certain Crude Oil Tanks		11

	ARTICLE VI
	CONDITIONS TO CLOSING

6.1	Conditions to Each Party’s Obligation to Close		11
6.2	Conditions to the Buyer Parties’ Obligation to Close		12
6.3	Conditions to the Seller Parties’ Obligation to Close		13

	ARTICLE VII
	TERMINATION

7.1	Termination		14
7.2	Effect of Termination		14

	ARTICLE VIII
	INTERPRETATION; DEFINED TERMS

8.1	Interpretation		15
8.2	References, Gender, Number		16
8.3	Defined Terms		16

	ARTICLE IX
	ADDITIONAL AGREEMENTS

9.1	Further Assurances		21
9.2	Post Closing Tax Covenants.		21

	ARTICLE X
	MISCELLANEOUS

10.1	Expenses		22
10.2	Notices.		22
10.3	Severability		23
10.4	Governing Law		23
10.5	Parties in Interest		24
10.6	Assignment of Agreement		24
10.7	Captions		24
10.8	Counterparts		24


		Page
10.9	Director and Officer Liability		24
10.10	Integration		24
10.11	Effect of Agreement; Ratification of Omnibus Agreement		24
10.12	Confirmation of Agreement		25

	ARTICLE XI
	AMENDMENTS TO OMNIBUS AGREEMENT

11.1	Permitted Exceptions		25
11.2	Environmental Indemnification		25
11.3	Limitations Regarding Environmental Indemnification		27
11.4	Right of Way Indemnification		28
11.5	Definitions		28


Exhibits:
Exhibit A	-	Contribution Agreement
Exhibit B	-	Drop-Down Assets Conveyances
Exhibit C	-	Bills of Sale
Exhibit D	-	Pipelines and Tankage Agreement
Exhibit E	-	Assignment and Assumption Agreement
Exhibit F	-	Lease and Access Agreements
Exhibit G	-	Site Services Agreements
Exhibit H	-	Mortgages and Deeds of Trust

Schedules:
Schedule 3.3	-	Seller Parties No Conflicts or Violations
Schedule 3.4	-	Seller Parties Litigation
Schedule 3.5(a)	-	Title to Drop-Down Assets
Schedule 4.3	-	Buyer Parties No Conflicts or Violations
Schedule 4.4	-	Buyer Parties Litigation
Schedule 6.2(a)	-	Seller Parties Consents
Schedule 6.3(a)	-	Buyer Parties Consents
Schedule 8.3	-	Drop-Down Assets

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) dated as of February 25, 2008, 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 ”), Woods Cross Refining Company, L.L.C., a Delaware limited liability company (“ Woods Cross Refining ”), Navajo Refining Company, L.L.C., a Delaware limited liability company (“ Navajo Refining ,” and, together with Holly, Navajo Pipeline and Woods Cross Refining, the “ Seller Parties ”), 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 Woods Cross, L.L.C., a Delaware limited liability company (“ HEP Woods Cross ”), and HEP Pipeline, L.L.C., a Delaware limited liability company (“ HEP Pipeline ,” and, together with the Partnership, the Operating Partnership and HEP Woods Cross, the “ Buyer Parties ”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

WHEREAS , the Buyer Parties wish to purchase the Drop-Down Assets (as defined herein) 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
TRANSFER OF ASSETS, ASSUMPTION OF
LIABILITIES AND AGGREGATE CONSIDERATION

1.1 Contribution of Assets and Assumption of Liabilities . At the closing of the transactions contemplated hereby (the “ Closing ”), the Drop-Down Assets shall be transferred and conveyed, and the Liabilities shall be assumed, as set forth in that certain contribution agreement to be entered into by and among the Parties at the Closing (the “ Contribution Agreement ”) in substantially the form of Exhibit A attached hereto.

1.2 Consideration .

(a) The aggregate consideration to be paid by the Buyer Parties for the Drop-Down Assets shall be $180,000,000 and shall consist of (i) the Cash Consideration and (ii) the Unit Consideration.

(b) The Cash Consideration shall be paid by the Partnership at the Closing by wire transfer of immediately available funds to the accounts specified by Holly in or pursuant to the Contribution Agreement.

Holly Corporation
Holly Energy Partners , L.P.

(c) The Unit Consideration shall be paid by the Partnership at the Closing by delivery of a letter to the Partnership’s transfer agent (the “ Instruction Letter ”) instructing such transfer agent to promptly deliver certificates representing the Unit Consideration issued in the name of Holly or its designees (the “ Certificates ”), as provided in or pursuant to the Contribution Agreement.

ARTICLE II
CLOSING

2.1 Closing . The Closing shall be held at the offices of Vinson & Elkins L.L.P., 3700 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201 at 10:00 a.m. on the third business day following the satisfaction or waiver of the conditions set forth in Article VI (other than those conditions relating to the execution of the applicable Ancillary Documents and the receipt of the Cash Consideration and the Certificates, which will be satisfied at the Closing), or such other place, time or date as may be agreed upon by the Parties. The date on which the Closing takes place is referred to herein as the “ Closing Date .” If the Closing occurs, the Closing shall be deemed to be effective as of 12:01 a.m., Dallas, Texas time, on March 1, 2008 (the “ Effective Time ”); provided , however , that if the Closing occurs on or after March 1, 2008, the Effective Time shall be such time as the Parties mutually agree. Notwithstanding anything in this Agreement to the contrary, title and risk of loss with respect to the Drop-Down Assets shall pass at the Closing.

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

(a) A counterpart of the Contribution Agreement, duly executed by each Seller Party.

(b) A counterpart to each of the conveyance, assignment and bills of sale substantially in the forms of Exhibit B attached hereto (the “ Drop-Down Assets Conveyances ”), duly executed by each applicable Seller Party.

(c) Each of the bills of sale and assignment substantially in the forms of Exhibit C attached hereto (the “ Bills of Sale ”), duly executed by each applicable Seller Party.

(d) A counterpart of the pipelines and tankage agreement substantially in the form of Exhibit D attached hereto (the “ Pipelines and Tankage Agreement ”), duly executed by each applicable Seller Party.

(e) A counterpart of the assignment and assumption agreement substantially in the form of Exhibit E attached hereto (the “ Assignment and Assumption Agreement ”), duly executed by each applicable Seller Party.

(f) A counterpart to each of the lease and access agreements substantially in the forms of Exhibit F attached hereto (the “ Lease and Access Agreements ”), duly executed by each applicable Seller Party.

Holly Corporation
Holly Energy Partners , L.P.

(g) A counterpart to each of the site services agreements substantially in the forms of Exhibit G attached hereto (the “ Site Services Agreements ”), duly executed by each applicable Seller Party.

(h) The Seller Party Closing Certificate, duly executed by an officer of Holly.

(i) An amount, by wire transfer of immediately available funds to an account specified by the Partnership, equal to the product of the number of Holly Units multiplied by the closing price for the common units of the Partnership on the New York Stock Exchange on the trading day immediately prior to the Closing Date.

(j) An amount, by wire transfer of immediately available funds to an account specified by the Partnership, equal to the sum of (i) the Additional GP Interest and (ii) the Holly Units GP Interest, to increase the capital account of HEP Logistics Holdings, L.P., a Delaware limited partnership (“ HEP GP ”).

(k) Such other certificates, instruments of conveyance and documents as may be reasonably requested by the Buyer Parties prior to the Closing Date to carry out the intent and purposes of this Agreement and the Omnibus Agreement.

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

(a) The Cash Consideration as provided in Section 1.2(b) .

(b) The Instruction Letter as provided in Section 1.2(c) , which letter shall also instruct the Partnership’s transfer agent to promptly deliver a certificate representing the Holly Units issued in the name of Holly.

(d) A counterpart to each of the Drop-Down Assets Conveyances, duly executed by each applicable Buyer Party.

(e) A counterpart of the Pipelines and Tankage Agreement, duly executed by each Buyer Party.

(f) A counterpart of the Assignment and Assumption Agreement, duly executed by each applicable Buyer Party.

(g) The Buyer Party Closing Certificate, duly executed by an officer of the Partnership.

(h) A counterpart to each of the Lease and Access Agreements, duly executed by each applicable Buyer Party.

Holly Corporation
Holly Energy Partners , L.P.

(i) A counterpart to each of the Site Services Agreements, duly executed by each applicable Buyer Party.

(j) Each of the mortgages and deeds of trust substantially in the form of Exhibit H attached hereto (the “ Mortgages and Deeds of Trust ”), duly executed by each applicable Buyer Party.

(k) Such other certificates, instruments of conveyance and documents as may be reasonably requested by the Seller Parties prior to the Closing Date to carry out the intent and purposes of this Agreement and the Omnibus Agreement.

2.4 Receipts and Credits . Subject to the terms hereof, all monies, proceeds, receipts, credits and income attributable to the Drop-Down Assets (as determined in accordance with generally accepted accounting principles) (i) for all periods of time at, from and after the Effective Time, shall be the sole property and entitlement of the Buyer Parties, and, to the extent received by any Seller Party or one of its affiliates, shall be promptly accounted for and transmitted to the appropriate Buyer Party and (ii) for all periods of time prior to the Effective Time, shall be the sole property and entitlement of the Seller Parties and, to the extent received by any Buyer Party, shall be promptly accounted for and transmitted to the appropriate Seller Party. In addition, subject to the terms hereof, all invoices, costs, expenses, disbursements and payables attributable to the Drop-Down Assets (as determined in accordance with generally accepted accounting principles), (A) for all periods of time at, from and after the Effective Time, shall be the sole obligation of the Buyer Parties, and the Buyer Parties shall promptly pay, or if paid by any Seller Party, promptly reimburse such Seller Party for same and (B) for all periods of time prior to the Effective Time, shall be the sole obligation of the Seller Parties, and the Seller Parties shall promptly pay, or if paid by any Buyer Party, promptly reimburse such Buyer Party for same.

2.5 Prorations . On the Closing Date, or as promptly as practicable following the Closing Date, but in no event later than 60 calendar days thereafter, the real and personal property taxes, water, gas, electricity and other utilities, local business or other license fees to the extent assigned and other similar periodic charges payable with respect to the Drop-Down Assets shall be prorated between the Buyer Parties, on the one hand, and the Seller Parties, on the other hand, effective as of the Effective Time with the Seller Parties being responsible for amounts related to the period prior to but excluding the Effective Time and the Buyer Parties being responsible for amounts related to the period at and after the Effective Time. If the final real property tax rate or final assessed value for the current tax year is not established by the Closing Date, the prorations shall be made on the basis of the rate or assessed value in effect for the preceding tax year and shall be adjusted when the exact amounts are determined. All such prorations shall be based upon the most recent available assessed value available prior to the Closing Date.

2.6 Closing Costs; Transfer Taxes and Fees .

(a) Allocation of Costs . The Buyer Parties shall pay the cost of all sales, transfer and use taxes arising out of the transfer of the Drop-Down Assets and all costs and

Holly Corporation
Holly Energy Partners , L.P.

expenses (including recording fees and real estate transfer taxes and real estate transfer stamps) incurred in connection with obtaining or recording title to the Drop-Down Assets.

(b) Reimbursement. If any Buyer Party, on the one hand, or any Seller Party, 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 III
REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

The Seller Parties, jointly and severally, hereby represent and warrant to the Buyer Parties as follows:

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

3.2 Authorization . Each Seller Party has full corporate, partnership or limited liability company 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 each Seller Party of this Agreement and the Seller Ancillary Documents and the consummation by such Seller Party of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate, partnership or limited liability company action of the Seller Parties. This Agreement has been duly executed and delivered by each Seller Party and constitutes, and each such Seller Ancillary Document executed or to be executed by each Seller Party has been, or when executed will be, duly executed and delivered by such Seller Party and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Seller Party, enforceable against it in accordance with their terms, except 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.

3.3 No Conflicts or Violations; No Consents or Approvals Required . Except as set forth in Seller Disclosure Schedule 3.3 , the execution, delivery and performance by each Seller Party 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, (a) violate, conflict with, or result in any breach of any provision of such Seller Party’s organizational documents or (b) 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 any Seller Party or the Drop-Down Assets. No Consent of any Governmental Entity or any other person is required for any Seller Party in connection with the execution, delivery and performance of this Agreement and the Seller Ancillary Documents to which such Seller Party is a party or the consummation of the

Holly Corporation
Holly Energy Partners , L.P.

transactions contemplated hereby or thereby, except as set forth in Seller Disclosure Schedule 3.3 and except for Post Closing Consents.

3.4 Absence of Litigation . Except as set forth in Seller Disclosure Schedule 3.4 , there is no Action pending or, to the knowledge of the Seller Parties, threatened against any Seller Party or any of its affiliates relating to the transactions contemplated by this Agreement or the Drop-Down Assets or which, if adversely determined, would reasonably be expected to materially impair the ability of the Seller Parties to perform their obligations and agreements under this Agreement or the Seller Ancillary Documents and to consummate the transactions contemplated hereby and thereby.

3.5 Title to Drop-Down Assets .

(a) Except as set forth in Seller Disclosure Schedule 3.5(a) , each applicable Seller Party has good and indefeasible title to the Drop-Down Assets, subject to all recorded and unrecorded matters and all physical conditions and other matters in existence on the Closing Date, plus any other such matters as the Partnership may approve, which approval will not be unreasonably withheld; provided , however , that except as set forth in this Seller Disclosure Schedule 3.5(a) , each applicable Seller Party does hereby represent that it knows of no material title defect affecting any of the Drop-Down Assets, arising by, through or under such Seller Party.

(b) There has not been granted to any person, and no person possesses, any right of first refusal to purchase any of the Drop-Down Assets.

3.6 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 any of the Seller Parties who is entitled to receive from any Buyer Party any fee or commission in connection with the transactions contemplated by this Agreement. For the avoidance of doubt, Howard Frazier Barker Elliot, Inc. has been retained to advise the Audit Committee of the Board of Directors of Holly.

3.7 Sufficiency and Condition of Assets . To the Seller Parties’ knowledge, the assets being purchased pursuant to this Agreement are all of the physical assets material to the operation of the Drop-Down Assets in accordance with the Seller Parties’ (and their affiliates’) historical practice, are in good operating condition and repair (normal wear and tear excepted), are free from material defects (patent and latent), are suitable for the purposes for which they are currently used and are not in need of material maintenance or repairs except for ordinary routine maintenance and repairs.

3.8 Representations Relating to the Aggregate Units . Each applicable Seller Party is acquiring its portion of the Aggregate Units for its own account for investment, and not with a view to any distribution or resale thereof in violation of the Securities Act of 1933, as amended, or any other applicable domestic or foreign securities Law.

Holly Corporation
Holly Energy Partners , L.P.

3.9 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 WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE, NATURE, QUALITY OR CONDITION OF THE DROP-DOWN ASSETS INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE DROP-DOWN ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE DROP-DOWN ASSETS, (II) THE INCOME TO BE DERIVED FROM THE DROP-DOWN ASSETS, (III) THE SUITABILITY OF THE DROP-DOWN ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (IV) THE COMPLIANCE OF OR BY THE DROP-DOWN ASSETS OR THEIR 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 DROP-DOWN ASSETS. 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 DROP-DOWN ASSETS 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 DROP-DOWN ASSETS SHALL BE MADE IN AN “AS IS,” “WHERE IS” CONDITION WITH ALL FAULTS, AND THE DROP-DOWN ASSETS ARE TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH TRANSFER AND CONVEYANCE 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 DROP-DOWN ASSETS 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.

Holly Corporation
Holly Energy Partners , L.P.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

The Buyer Parties, jointly and severally, hereby represent and warrant to the Seller Parties as follows:

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

4.2 Authorization . Each Buyer Party has full partnership or limited liability company 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 each Buyer Party of this Agreement and the Buyer Ancillary Documents and the consummation by such Buyer Party of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership or limited liability company action of the Buyer Parties. This Agreement has been duly executed and delivered by each Buyer Party and constitutes, and each such Buyer Ancillary Document executed or to be executed each Buyer Party has been, or when executed will be, duly executed and delivered by such Buyer Party and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Buyer Party, enforceable against it in accordance with their terms, except 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 No Conflicts or Violations; No Consents or Approvals Required . Except as set forth in Buyer Disclosure Schedule 4.3 , the execution, delivery and performance by each Buyer Party 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 such Buyer Party’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 any Buyer Party. No Consent of any Governmental Entity or any other person is required for any Buyer Party in connection with the execution, delivery and performance of this Agreement and the other Buyer Ancillary Documents to which such Buyer Party is a party or the consummation of the transactions contemplated hereby and thereby, except for Post Closing Consents.

4.4 Absence of Litigation . Except as set forth in Buyer Disclosure Schedule 4.4 , there is no Action pending or, to the knowledge of the Buyer Parties, threatened against any Buyer Party 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 the Buyer Parties to perform their obligations and agreements under this Agreement or the Buyer Ancillary Documents and to consummate the transactions contemplated hereby and thereby.

Holly Corporation
Holly Energy Partners , L.P.

4.5 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 any of the Buyer Parties who is entitled to receive from any Seller Party any fee or commission in connection with the transactions contemplated by this Agreement. For the avoidance of doubt, Sanders Morris Harris Inc. has been retained to advise the Conflicts Committee of HEP Logistics GP, L.L.C., the general partner of HEP Logistics Holdings, L.P., the general partner of Holly Energy Partners, L.P.

4.6 Validity of Aggregate Units . The common units comprising the Aggregate Units and the limited partner interests represented thereby have been duly and validly authorized by the Partnership’s organizational documents and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required under the Partnership’s organizational documents) and nonassessable (except as such nonassessability may be affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act).

ARTICLE V
COVENANTS

5.1 Conduct of the Operations . Except as specifically provided in this Agreement, the Seller Ancillary Documents or the Omnibus Agreement, during the period from the date of this Agreement until the Closing Date, each Seller Party shall (i) conduct its operations according to its ordinary course of business and (ii) use reasonable efforts to preserve, maintain, and protect its material assets, rights, and properties, to the extent each such action in clause (i) or (ii) would materially affect the Drop-Down Assets; provided , however , that any Seller Party shall not, to the extent commercially unreasonable, be required to make any payments or enter into or amend any contractual agreements, arrangements, or understandings to satisfy the foregoing obligation. The Parties acknowledge and agree that, notwithstanding the passage of title and risk of loss with respect to the Drop-Down Assets pursuant to this Agreement, the Seller Parties shall continue to otherwise operate the Drop-Down Assets for their own account until the Effective Time.

5.2 Access . From the date of this Agreement until the Closing Date, each Seller Party shall, upon reasonable advance notice by the Partnership, (i) provide each Buyer Party and its representatives reasonable access, during normal business hours, to the Drop-Down Assets and (ii) furnish to each Buyer Party such documents and information concerning the Drop-Down Assets as the Partnership from time to time may reasonably request. Following any such request, each Seller Party shall use its reasonable efforts to make such requested information available to the Buyer Parties to the extent the requested information relates to the Drop-Down Assets.

Holly Corporation
Holly Energy Partners , L.P.

5.3 Rights .

(a) If any Consent set forth in Seller Disclosure Schedule 3.3 is not obtained by the Seller Parties on or before the Closing, then, on and after the Closing unless and until such Consent is obtained, as to the rights, assets, benefits or remedies (collectively, the “ Rights ”) not assignable to the Buyer Parties because such Consent has not been obtained:

(i) the applicable Seller Party shall hold the Rights in trust for the benefit of the Buyer Parties;

(ii) subject to clause (iv), the applicable Seller Party shall, at the request and under the direction of the Partnership, take all such actions and do all such things, at such Seller Party’s expense, as shall in the opinion of the Partnership, be reasonably necessary or desirable in order that the obligations of the applicable Seller Party under such Rights may be performed in a manner such that the value of the Rights shall be preserved and shall inure to the benefit of the applicable Buyer Party and such that all such Rights may be received by the applicable Buyer Party;

(iii) the applicable Seller Party shall promptly tender over to the applicable Buyer Party all such Rights received by such Seller Party in respect of such Rights; and

(iv) the applicable Buyer Party shall make all payment obligations under such Rights and, unless prohibited by the third party, shall perform the non-payment obligations under such Rights on behalf of the applicable Seller Party.

(b) With respect to any Consent set forth in Seller Disclosure Schedule 3.3 not obtained by the Seller Parties on or before the Closing, the Seller Parties shall use commercially reasonable efforts to obtain such Consent following the Closing. The Parties shall reasonably cooperate with each other in obtaining such Consents and shall keep each other reasonably informed of the status of and any developments with respect to obtaining such Consents. The commercially reasonable costs of obtaining such Consents shall be for the account of the Seller Parties.

5.4 Cooperation . Each Seller Party shall cooperate with each Buyer Party and assist such Buyer Party in identifying all licenses, authorizations, permissions or Permits necessary to own and operate the Drop-Down Assets from and after the Closing Date and, where permissible, transfer existing Permits to such Buyer Party, or, where not permissible, assist the Buyer Party in obtaining new Permits at no cost, fee or liability to such Seller Party.

5.5 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, including the fulfillment of the conditions set forth in Article VI , to the extent that the fulfillment of such conditions are within

Holly Corporation
Holly Energy Partners , L.P.

the control of such Party; provided , however , that in no event shall any Party or its affiliates be required to divest any interest that they may have in any material assets or business. 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.

5.6 HSR Matters . The Buyer Parties and the Seller Parties shall pay in equal amounts all filing fees associated with filings under the HSR Act.

5.7 Agreements Regarding Certain Crude Oil Tanks .

(a) Relocated Crude Oil Tank 437 in the Artesia Refinery Complex . Crude Oil Tank 437 in the Artesia refinery complex is being relocated within the refinery and the relocated tank is part of the Drop-Down Assets. The Parties agree that if the relocation of Crude Oil Tank 437 in the Artesia refinery complex is not complete prior to Closing, then following the Closing the Partnership shall take title to such relocated tank upon completion of the relocation. Risk of loss for such relocated tank will not transfer to the Partnership until completion of the relocation and transfer of title, which Holly agrees to pursue in a reasonably expeditious manner at Holly’s sole cost and expense, including, but not limited to, any maintenance or refurbishing work associated with such relocation. Notwithstanding the foregoing, upon payment of the consideration set forth in Section 1.2 , the Partnership will have paid for the relocated Crude Oil Tank 437 and shall receive revenue from the fees provided by the Pipelines and Tankage Agreement for such relocated tank from the Effective Time forward (prior to completion of the relocation and the Partnership taking title to the relocated tank).

(b) Replacement Tank for Crude Oil Tank 439 in the Artesia Refinery Complex . Crude Oil Tank 439 in the Artesia refinery complex will be converted to naptha service after completion of a new replacement crude oil tank. Holly agrees that it shall complete the new replacement crude oil tank for Tank 439. The Parties agree that if construction of the new replacement tank is not complete prior to Closing, then following the Closing the Partnership will take title to the new replacement tank upon completion of construction. Risk of loss for the new replacement tank will not transfer to the Partnership until completion of construction of such tank and transfer of title, which Holly agrees to pursue in a reasonably expeditious manner at Holly’s sole cost and expense. Notwithstanding the foregoing, upon payment of the consideration set forth in Section 1.2 , the Partnership will have paid for the replacement tank for Crude Oil Tank 439 and shall receive revenue from the fees provided by the Pipelines and Tankage Agreement for such replacement tank from the Effective Time forward (prior to completion of construction and the Partnership taking title to the replacement tank).

ARTICLE VI
CONDITIONS TO CLOSING

6.1 Conditions to Each Party’s Obligation to Close . The obligations of the Parties to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

Holly Corporation
Holly Energy Partners , L.P.

(a) No Restraint . No temporary restraining order, preliminary or permanent injunction or other Order issued by any Governmental Entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement shall be in effect.

(b) Legality of Transactions . No Action shall have been taken nor any Law shall have been enacted by any Governmental Entity that makes the consummation of the transactions contemplated by this Agreement illegal.

6.2 Conditions to the Buyer Parties’ Obligation to Close . The obligation of the Buyer Parties to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction (or waiver by the Partnership), at or prior to the Closing, of each of the following conditions:

(a) Consents . The authorizations, consents, Orders or approvals described in Schedule 6.2(a) shall have been filed, occurred, or been obtained.

(b) Representations and Warranties . The representations and warranties of the Seller Parties set forth in this Agreement shall be true and correct (without giving effect to any materiality standard or Material Adverse Effect qualification) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure of such representations and warranties to be true and correct would not, in the aggregate, result in a Material Adverse Effect on Holly or the Drop-Down Assets, and the Buyer Parties shall have received a certificate to such effect signed on behalf of the Seller Parties by an officer of Holly.

(c) Performance of Obligations . The Seller Parties shall have performed in all material respects (provided that any covenant or agreement of the Seller Parties contained herein that is qualified by a materiality standard shall not be further qualified hereby) all obligations required to be performed by the Seller Parties under this Agreement prior to the Closing Date, and the Buyer Parties shall have received a certificate to such effect signed on behalf of the Seller Parties by an officer of Holly (such certificate, together with the certificate described in clause (b) above, the “ Seller Party Closing Certificate ”).

(d) Seller Ancillary Documents . The Seller Parties shall have delivered, or caused to be delivered, to the Buyer Parties the Seller Ancillary Documents pursuant to Section 2.2 .

(e) Permits . Each of the Permits held by the Seller Parties which are assignable by the Seller Parties shall have been assigned to the applicable Buyer Party in accordance with applicable Law, and for Permits held by the Seller Parties which are not so assignable, the applicable Buyer Party shall have been issued a new replacement Permit with terms and conditions reasonably satisfactory to the Buyer Parties except for Permits that, in transactions similar to the transactions contemplated by this Agreement, are normally obtained by the acquirer thereunder after the consummation thereof.

Holly Corporation
Holly Energy Partners , L.P.

(f) No Material Adverse Effect . Since September 30, 2007, no event or occurrence shall have taken place which has had, or is reasonably likely to have, a Material Adverse Effect on Holly or the Drop-Down Assets.

(g) Financing . The Partnership shall have received net proceeds in an amount at least equal to the Financing Proceeds from any source of financing acceptable (including with respect to all terms and conditions thereof) to the Conflicts Committee in its sole discretion.

6.3 Conditions to the Seller Parties’ Obligation to Close . The obligation of the Seller Parties to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction (or waiver by Holly), at or prior to the Closing, of each of the following conditions:

(a) Consents . The authorizations, consents, Orders or approvals described in Schedule 6.3(a) shall have been filed, occurred, or been obtained.

(b) Representations and Warranties . The representations and warranties of the Buyer Parties set forth in this Agreement shall be true and correct (without giving effect to any materiality standard or Material Adverse Effect qualification) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure of such representations and warranties to be true and correct would not, in the aggregate, result in a Material Adverse Effect on the Partnership, and the Seller Parties shall have received a certificate to such effect signed on behalf of the Buyer Parties by an officer of the Partnership.

(c) Performance of Obligations . The Buyer Parties shall have performed in all material respects (provided that any covenant or agreement of the Buyer Parties contained herein that is qualified by a materiality standard shall not be further qualified hereby) all obligations required to be performed by the Buyer Parties under this Agreement prior to the Closing Date, and the Seller Parties shall have received a certificate to such effect signed on behalf of the Buyer Parties by an officer of the Partnership (such certificate, together with the certificate described in clause (b) above, the “ Buyer Party Closing Certificate ”).

(d) The Buyer Ancillary Documents . The Buyer Parties shall have delivered, or caused to be delivered, to the Seller Parties the Buyer Ancillary Documents pursuant to Section 2.3 .

(e) Cash Consideration . The Buyer Parties shall have delivered the Cash Consideration in accordance with Section 1.2(b) .

(f) Certificates . The Buyer Parties shall have delivered the Instruction Letter in accordance with Sections 1.2(c) and 2.3(b) .

(g) Capital Account . The Seller Parties shall have received evidence, in form and substance reasonably satisfactory to the Seller Parties, that the capital account of HEP GP has been increased by the amount of the Additional GP Interest and Holly Units GP Interest.

Holly Corporation
Holly Energy Partners , L.P.

(h) NYSE Listing . The Aggregate Units shall have been approved for listing by the New York Stock Exchange subject to official notice of issuance.

(i) No Material Adverse Effect . Since September 30, 2007, no event or occurrence shall have taken place which has had, or is reasonably likely to have, a Material Adverse Effect on the Partnership.

ARTICLE VII
TERMINATION

7.1 Termination .

(a) Right to Terminate . This Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

(i) by mutual written consent of Holly and the Partnership;

(ii) by either Holly or the Partnership if the Closing has not occurred within 90 days of the date of this Agreement (the “ Termination Date ”), provided , however , that this right to terminate this Agreement shall not be available to any Party whose breach of this Agreement or whose affiliate’s breach of this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;

(iii) by either Holly or the Partnership if a Governmental Entity shall have issued an Order or taken any other action, in each case permanently restraining, enjoining, or otherwise prohibiting the transactions contemplated by this Agreement; or

(iv) by either Holly or the Partnership in the event of a breach by any Buyer Party or Seller Party, as applicable, of any representation, warranty, covenant or other agreement contained in this Agreement which (A) would give rise to the failure of a condition set forth in Sections 6.2(b) or 6.2(c) or Sections 6.3(b) or 6.3(c) , as applicable, and (B) cannot be or has not been cured within the shorter of (1) 20 days following receipt by the breaching party of written notice of such breach or (2) the business day immediately preceding the Termination Date.

(b) Effect of Investigation . The right of any Party to terminate this Agreement pursuant to this Section 7.1 shall remain operative and in full force and effect regardless of the actual or constructive knowledge of such Party regarding the subject matter giving rise to such right of termination.

7.2 Effect of Termination . Upon termination of this Agreement pursuant to Section 7.1 , the undertakings of the Parties set forth in this Agreement shall forthwith be of no further force and effect; provided , however , that no such termination shall relieve any party of any intentional material breach of any term or provision hereof.

Holly Corporation
Holly Energy Partners , L.P.

ARTICLE VIII
INTERPRETATION; DEFINED TERMS

8.1 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;

(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

Holly Corporation
Holly Energy Partners , L.P.

(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).

8.2 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.

8.3 Defined Terms . Unless the context expressly requires otherwise, the respective terms defined in this Section 8.3 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.

“ 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.

“ Additional GP Interest ” means an amount equal to the product of (i) 2/98 multiplied by (ii) the product of (x) the closing price for the common units of the Partnership on the New York Stock Exchange on the trading day immediately prior to the Closing Date multiplied by (y) the Unit Consideration.

“ 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 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 Parties, on the one hand, and the Buyer Parties, on the other hand, shall not be considered affiliates of each other.

“ Aggregate Units ” means the number of common units of the Partnership equal to $9,000,000 divided by the closing price for the common units of the Partnership on the New York Stock Exchange on the trading day immediately prior to the Closing Date; provided, however, that such number of common units of the Partnership shall be rounded up to the nearest multiple of 5,000.

Holly Corporation
Holly Energy Partners , L.P.

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

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

“ Assignment and Assumption Agreement ” shall have the meaning set forth in Section 2.2(e) .

“ Bill of Sale ” shall have the meaning set forth in Section 2.2(c) .

“ Board of Directors ” means the Board of Directors of Holly Logistic Services, L.L.C., which is the general partner of HEP Logistics Holdings, L.P., the general partner of Holly Energy Partners, L.P.

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

“ Buyer Ancillary Documents ” means each agreement, document, instrument or certificate to be delivered by the Buyer Parties, or their affiliates, at the Closing pursuant to Section 2.3 hereof and each other document or Contract entered into by any Buyer Party, or their affiliates, in connection with this Agreement or the Closing.

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

“ Buyer Party Closing Certificate ” shall have the meaning given such term in Section 6.3(c) .

“ Cash Consideration ” means an amount in cash equal to $171,000,000.

“ Certificates ” shall have the meaning given such term in Section 1.2(c) .

“ Closing ” shall have the meaning set forth in Section 1.1 .

“ Closing Date ” shall have the meaning set forth in Section 2.1 .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Conflicts Committee ” means the Conflicts Committee of the Board of Directors.

“ Consents ” means all authorizations, consents, Orders or approvals of, or registrations, declarations or filings with, or expiration of waiting periods imposed by, any Governmental Entity, and any 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,

Holly Corporation
Holly Energy Partners , L.P.

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.

“ Contribution Agreement ” shall have the meaning set forth in Section 1.1 .

“ 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, and the lenders identified therein.

“ Debt Financing ” shall have the meaning set forth in Section 9.2(a) .

“ DOJ ” means the United States Department of Justice.

“ Drop-Down Assets ” means the assets described in Schedule 8.3 .

“ Drop-Down Assets Conveyances ” shall have the meaning set forth in Section 2.2(b) .

“ Effective Time ” shall have the meaning set forth in Section 2.1 .

“ Financing Proceeds ” means an amount in cash equal to approximately $171,000,000.00.

“ FTC ” means the United States Federal Trade Commission.

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

“ HEP GP ” shall have the meaning set forth in Section 2.2(j) .

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

“ HEP Woods Cross ” shall have the meaning set forth in the preamble.

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

“ Holly Units ” means the number of common units of the Partnership equal to (i) the Aggregate Units minus (ii) the Unit Consideration.

“ Holly Units GP Interest ” means an amount equal to the product of (i) 2/98 multiplied by (ii) the product of (x) the closing price for the common units of the Partnership on the New York Stock Exchange on the trading day immediately prior to the Closing Date multiplied by (y) the Holly Units.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Holly Corporation
Holly Energy Partners , L.P.

“ knowledge ” and any variations thereof or words to the same effect shall mean (i) with respect to the Seller Parties, actual knowledge after reasonable inquiry of the following persons: Matthew P. Clifton, Bruce Shaw and W. John Glancy; and (ii) with respect to the Buyer Parties, actual knowledge after reasonable inquiry of the following persons: Charles M. Darling, IV, Jerry W. Pinkerton, David G. Blair, James G. Townsend and William P. Stengel.

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

“ Liabilities ” means, collectively, the Navajo Pipeline Liabilities, the Navajo Refining Liabilities and the Woods Cross Refining Liabilities.

“ 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 given such term in Section 2.3(h) .

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

“ Navajo Pipeline Liabilities ” shall have the meaning given such term in the Contribution Agreement.

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

“ Navajo Refining Liabilities ” shall have the meaning given such term in the Contribution Agreement.

“ Omnibus Agreement ” means that certain agreement entered into and effective as of July 13, 2004 and as amended on July 6, 2005, 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 amended as of the date hereof.

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

Holly Corporation
Holly Energy Partners , L.P.

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

“ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, as further amended on July 6, 2005.

“ 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 Drop-Down Assets.

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

“ Pipelines and Tankage Agreement ” shall have the meaning set forth in Section 2.2(d) .

“ Post Closing Consents ” means (i) any consent, approval or permit of, or filing with or notice to, any Governmental Entity, railroad company or public utility which has issued or granted any permit, license, right of way, lease or other authorizations permitting any part of any pipeline included in the Drop-Down Assets to cross or be placed on land owned or controlled by such Governmental Entity, railroad company or public utility and (ii) any consent, approval or permit of, or filing with or notice to, any Governmental Entity or other third party that, in the case of both clause (i) and (ii), is customarily obtained or made after closing in connection with transactions similar in nature to the transactions contemplated hereby.

“ Rights ” shall have the meaning set forth in Section 5.3(a) .

“ Seller Ancillary Documents ” shall mean each agreement, document, instrument or certificate to be delivered by the Seller Parties at the Closing pursuant to Section 2.2 hereof and each other document or Contract entered into by any Seller Party in connection with this Agreement or the Closing.

“ Seller Party Closing Certificate ” shall have the meaning set forth in Section 6.2(c) .

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

“ Termination Date ” shall have the meaning set forth in Section 7.1(a)(ii) .

“ Transfer ” shall have the meaning set forth in Section 9.2(a) .

“ Unit Consideration ” means the number of common units of the Partnership equal to (x) $9,000,000 divided by (y) the closing price for the common units of the Partnership on the New

Holly Corporation
Holly Energy Partners , L.P.

York Stock Exchange on the trading day immediately prior to the Closing Date, and rounded up to the nearest whole number.

“ Woods Cross Refining ” shall have the meaning set forth in the preamble.

“Woods Cross Refining Liabilities” shall have the meaning given such term in the Contribution Agreement.

ARTICLE IX
ADDITIONAL AGREEMENTS

9.1 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.

9.2 Post Closing Tax Covenants .

(a) Restrictions . The Buyer Parties agree (i) not to sell, exchange or otherwise dispose (collectively, a “ Transfer ”) of any ownership interest in and to the Drop-Down Assets prior to March 1, 2018, and (ii) not to repay prior to March 1, 2018, other than any required repayment pursuant to its terms, any debt financing incurred to fund a portion of the Cash Consideration (the " Debt Financing ”).

(b) Exceptions to Restrictions . Notwithstanding the provisions of Section 9.2(a) , a Transfer of any Drop-Down Asset may occur by reason of (i) a Transfer that constitutes a like-kind exchange under Section 1031 of the Code, (ii) an involuntary sale pursuant to foreclosure of any mortgage secured by the Drop-Down Assets or otherwise, (iii) a deed in lieu of foreclosure (provided that any Buyer Party may not execute any deed in lieu of foreclosure unless the maturity of the indebtedness secured by the Drop-Down Assets has occurred, whether by reason of acceleration or otherwise), (iv) a proceeding in connection with a bankruptcy or other similar involuntary debt reorganization of the Buyer Parties, (v) an event described in Section 1033 of the Code, provided the Drop-Down Assets are converted into assets qualifying under Section 1033 of the Code (in the period provided therein), (vi) a condemnation or other taking by a Governmental Entity or a mandatory conveyance to a Governmental Entity, (vii) a transfer involving (A) a merger or consolidation of any Buyer Party with or into another entity that is treated as a partnership for tax purposes, provided such is a tax free transaction, (B) a “Change of Control” as defined in the Credit Facility in which the successor entity owning the interests in such Buyer Party is a partnership for tax purposes, or (C) sales of assets in any calendar year for aggregate consideration which does not exceed $5,000,000, and (viii) any other Transfer that would not accelerate any Seller Party’s recognition of gain under Section 704(c) of the Code with respect to the Drop-Down Assets.

Likewise, a repayment of the Debt Financing may occur (i) if such repayment is made in connection with a refinancing of the Debt Financing for indebtedness in an amount not less than

Holly Corporation
Holly Energy Partners , L.P.

the then outstanding principal amount of the Debt Financing and for which the Seller Parties are provided the opportunity to bear the economic risk of loss (as described in Treasury Regulation Section 1.704-2(i)), (ii) if such repayment is made after an event of default and the acceleration thereof in accordance with the terms of the Debt Financing, (iii) in an amount equal to the aggregate income or gain under Section 704(c) of the Code that has been allocated to any Seller Party in accordance with the “remedial method” as described in Treasury Regulation Section 1.704-3(d) pursuant to Section 6.2(b)(iii) of the Partnership’s First Amended and Restated Agreement of Limited Partnership, as amended, (iv) if such repayment would not accelerate any Seller Party’s recognition of gain under Section 704(c) of the Code with respect to the Drop-Down Assets, or (v) if such full or partial repayment is made in connection with a “Change of Control” permitted above and such full or partial repayment is funded by indebtedness in an amount not less than the amount of such repayment and for which any Seller Party is provided the opportunity to bear the economic risk of loss (as described in Treasury Regulation Section 1.704-2(i)).

ARTICLE X
MISCELLANEOUS

10.1 Expenses . Except as provided in Sections 2.6 and 5.6 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, (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 any of the Seller Parties:

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

Holly Corporation
Holly Energy Partners, L.P.

with copies to:

Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Attention: Alan J. Bogdanow
Facsimile No.: (214) 999-7857

Notices to any of the Buyer Parties:

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:

Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Ave, NW
Washington, D.C. 20036
Attention: Rick Burdick
Facsimile No.: (202) 955-7778

(b) Either Holly or the Partnership may at any time change its address for service from time to time by giving notice to the other Party 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 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 . 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. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Dallas, Texas.

Holly Corporation
Holly Energy Partners, L.P.

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, any of the Buyer Parties or the Seller 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 the applicable Buyer Parties or Seller Parties, 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 Seller Parties and the Buyer Parties.

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 . Except to the extent that they are an individual signatory party hereto, the directors, managers, officers, partners and stockholders of the Buyer Parties, the Seller Parties 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.

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; Ratification of Omnibus Agreement . Except as amended or supplemented by Article XI hereby, the terms and provisions of the Omnibus Agreement shall remain in full force and effect and are hereby in all respects ratified and confirmed by the Parties. The Parties further 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

Holly Corporation
Holly Energy Partners, L.P.

provisions of the Omnibus Agreement shall control. Without limiting the generality of the foregoing, the Parties confirm that the provisions of Article III and Article VI of the Omnibus Agreement, except as amended pursuant to Article XI hereof, apply to the Drop-Down Assets and the Parties as if fully set forth herein.

10.12 Confirmation of Agreement . Certain parties to the Omnibus Agreement have set forth their signatures on Annex A hereto for the sole purpose of evidencing their agreement to amend and supplement the agreements of the parties contained in the Omnibus Agreement pursuant to the terms and provisions of this Agreement, and confirm the provisions of Section 10.11 hereof.

ARTICLE XI
AMENDMENTS TO OMNIBUS AGREEMENT

The Parties hereby agree that effective upon the consummation of the transactions contemplated hereby, the Omnibus Agreement shall be amended as follows:

11.1 Permitted Exceptions . Section 2.2 of the Omnibus Agreement shall be amended by deleting clause (b) of such section in its entirety and re-lettering clauses (c), (d), (e) and (f) of such section as clauses (b), (c), (d) and (e) respectively:

11.2 Environmental Indemnification . Section 3.1 of the Omnibus Agreement shall be amended to read as follows:

“ 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 Drop-Down 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

Holly Corporation
Holly Energy Partners, L.P.

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 Drop-Down 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 (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 Drop-Down 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.

Holly Corporation
Holly Energy Partners, L.P.

(d) The Partnership Group shall indemnify, defend and hold harmless Holly 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 Holly 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.”

11.3 Limitations Regarding Environmental Indemnification . Section 3.2 of the Omnibus Agreement shall be amended to read as follows:

“ 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 (i) $15.0 million plus an additional $2.5 million in the case of Covered Environmental Losses related to the Intermediate Pipelines (for clarity, the first $15,000,000 million limit would apply to Covered Environmental Losses associated with both the Intermediate Pipelines and the assets contributed to the Partnership by Holly at the time of the Partnership’s initial public offering, while the limit between $15,000,000 and $17,500,00 would

Holly Corporation
Holly Energy Partners, L.P.

apply only to Covered Environmental Losses associated with the Intermediate Pipelines) and (ii) $7.5 million in the case of Covered Environmental Losses related to the Drop-Down Assets. Holly will not have any obligation under Section 3.1 until the Covered Environmental Losses of the Partnership Group exceed $200,000.”

11.4 Right of Way Indemnification . Section 3.3 of the Omnibus Agreement shall be amended to read as follows:

“ 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 Drop-Down Assets, 15 years after the Closing Date, as applicable.”

11.5 Definitions .

(a) The definition of “Assets” in the Omnibus Agreement shall be amended to read as follows:

“Assets” means all of the following assets conveyed, contributed, or otherwise transferred by the Holly Entities to the Partnership Group: (i) the assets transferred under the July 13, 2004 Contribution, Conveyance and Assumption Agreement, (ii) the Intermediate Pipelines, and (iii) the Drop-Down Assets.

(b) The definition of “Closing Date” in the Omnibus Agreement shall be amended to read as follows:

“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

Holly Corporation
Holly Energy Partners, L.P.

mean (i) with respect to the Intermediate Pipelines, the closing date of the purchase of the Intermediate Pipelines by a Partnership Group Member and (ii) with respect to the Drop-Down Assets, the effective date of the purchase of the Drop-Down Assets by a Partnership Group Member.

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

(d) Section 1.1 of the Omnibus Agreement shall be amended to include the following definition:

“Drop-Down Assets” has the meaning given to such term in the Purchase and Sale Agreement, dated February 25, 2008, by and among Holly Corporation, a Delaware corporation (“ Holly ”), Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Navajo Pipeline ”), Woods Cross Refining Company, L.L.C., a Delaware limited liability company (“ Woods Cross Refining ”), Navajo Refining Company, L.L.C., a Delaware limited liability company (“ Navajo Refining ,” and, together with Holly, Navajo Pipeline and Woods Cross Refining, the “ Seller Parties ”), 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 Woods Cross, L.L.C., a Delaware limited liability company (“ HEP Woods Cross ”), and HEP Pipeline, L.L.C., a Delaware limited liability company (“ HEP Pipeline ,” and, together with the Partnership, the Operating Partnership and HEP Woods Cross, the “ Buyer Parties ”).

[The Remainder of this Page is Intentionally Blank]

Holly Corporation
Holly Energy Partners, L.P.

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


BUYER PARTIES :

HOLLY ENERGY PARTNERS, L.P.

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

HOLLY ENERGY PARTNERS — OPERATING, L.P.

By:	/s/ David G. Blair

	David G. Blair
	Senior Vice President

HEP WOODS CROSS, L.L.C.

By:	HOLLY ENERGY PARTNERS — OPERATING, L.P.
	its Sole Member

	By:	/s/ David G. Blair David G. Blair
		Senior Vice President

Signature Page
Holly Corporation
Holly Energy Partners, L.P.
Purchase and Sale Agreement


HEP PIPELINE, L.L.C.

By:	HOLLY ENERGY PARTNERS — OPERATING, L.P.
	its Sole Member

	By:	/s/ David G. Blair David G. Blair
		Senior Vice President

SELLER PARTIES:

HOLLY CORPORATION

By:	/s/ Bruce R. Shaw

	Bruce R. Shaw
	Senior Vice President and Chief Financial Officer

NAVAJO PIPELINE CO., L.P.

By:	NAVAJO PIPELINE GP, L.L.C.,
	Its General Partner

	By:	/s/ Bruce R. Shaw Bruce R. Shaw
		Vice President and Chief Financial Officer

WOODS CROSS REFINING COMPANY, L.L.C.

By:	NAVAJO REFINING COMPANY, L.L.C.,
	Its sole Member

	By:	/s/ Bruce R. Shaw Bruce R. Shaw
		Vice President and Chief Financial Officer

Signature Page
Holly Corporation
Holly Energy Partners, L.P.
Purchase and Sale Agreement


	NAVAJO REFINING COMPANY, L.L.C.
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Vice President and Chief Financial Officer

Signature Page
Holly Corporation
Holly Energy Partners, L.P.
Purchase and Sale Agreement

ANNEX A

As evidenced by their signatures below, the following parties to the Omnibus Agreement hereby confirm their desire to supplement the agreements contained in the Omnibus Agreement pursuant to the terms and provisions contained in this Agreement.


	HOLLY LOGISTIC SERVICES, L.L.C.
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

	HEP LOGISTICS HOLDINGS, L.P.
	By:	HOLLY LOGISTIC SERVICES, L.L.C.,
		Its General Partner


		By:		/s/ David G. Blair David G. Blair
				Senior Vice President


		HEP LOGISTICS GP, L.L.C.

		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

Annex A- 1

EXHIBIT 10.1

AGREEMENT AND AMENDMENT NO. 1 TO
AMENDED AND RESTATED CREDIT AGREEMENT

This AGREEMENT AND AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Agreement ”) dated as of February 25, 2008 (the “ Effective Date ”) is among Holly Energy Partners — Operating, L.P. (the “ Borrower ”), the Guarantors (as defined below), the parties that are “Banks” under and as defined in the Credit Agreement referred to below (the “ Existing Banks ”), the parties that are New Banks (as defined below; and together with the Existing Banks, the “ Banks ” and individually, a “ Bank ”), Union Bank of California, N.A., as administrative agent for such Banks (in such capacity, the “ Administrative Agent ”) and as Sole Lead Arranger, Bank of America, N.A. as Syndication Agent, and Guaranty Bank as Documentation Agent.

RECITALS

A. The Borrower, the Existing Banks, and the Administrative Agent are parties to the Amended and Restated Credit Agreement dated as of August 27, 2007 (the “ Credit Agreement ”).

B. In connection with such Credit Agreement, the undersigned Subsidiaries of the Borrower (the “ Guarantors ”) executed and delivered that certain Amended and Restated Guaranty Agreement dated as of August 27, 2007 (as the same may be further amended, modified or supplemented from time to time, the “ Guaranty ”) in favor of the Administrative Agent for the benefit of the Beneficiaries (as defined therein).

C. The Borrower, Holly Energy Partners, L.P., a Delaware limited partnership (the “ Limited Partner ”), HEP Pipeline, L.L.C., a Delaware limited liability company (“ HEP ”), and HEP Woods Cross, L.L.C., a Delaware limited liability company (“ HEP Woods Cross ”), as buyer parties (collectively, the “ Purchasers ”) will enter into a Purchase and Sale Agreement dated on or about February 29, 2008 (the “ Navajo/Woods Cross PSA ”) with Holly Corporation, a Delaware corporation (“ Parent ”), Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Navajo Pipeline ”), Navajo Refining Company, L.P., a Delaware limited partnership (“ Navajo Refining ”) and Woods Cross Refining Company, L.L.C., a Delaware limited liability company (“ Woods Cross Refining ”) as seller parties (collectively, the “ Sellers ”), pursuant to which the Limited Partner and/or certain of its Subsidiaries will acquire (the “ Navajo/Woods Cross Acquisition ”) certain pipelines and related assets (the “ Navajo/Woods Cross Assets ”).

D. Pursuant to a Contribution Agreement dated on or about February 29, 2008 (the “ Navajo/Woods Cross Contribution Agreement ”) among the Borrower, the Limited Partner, HEP and HEP Woods Cross, as transferee parties, and Parent, Navajo Pipeline, Navajo Refining, and Woods Cross Refining as transferor parties, a portion of the Navajo/Woods Cross Assets will be contributed to and owned by HEP after the Navajo/Woods Cross Acquisition and the remaining portion of the Navajo/Woods Cross Assets will be contributed to and owned by HEP Woods Cross after the Navajo/Woods Cross Acquisition.

E. To fund the Navajo/Woods Cross Acquisition, the Borrower has requested an increase in the aggregate Commitments under, and as defined in, the Credit Agreement.

F. To effect the increase to the Commitments and subject to the terms set forth herein, certain Existing Banks have agreed to increase their respective Commitments and certain other financial institutions have agreed to enter into the Credit Agreement as Banks (such new banks being referred to herein as “ New Banks ”).

G. The Borrower has also requested that the Existing Banks and the New Banks amend the Credit Agreement to make certain other changes to the Credit Agreement.

THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I.
DEFINITIONS

Section 1.01 Terms Defined Above . As used in this Agreement, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein.

Section 1.02 Terms Defined in the Credit Agreement . Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary.

Section 1.03 Other Definitional Provisions . The words “hereby”, “herein”, “hereinafter”, “hereof”, “hereto” and “hereunder” when used in this Agreement shall refer to this Agreement as a whole and not to any particular Article, Section, subsection or provision of this Agreement. Section, subsection and Exhibit references herein are to such Sections, subsections and Exhibits to this Agreement unless otherwise specified. All titles or headings to Articles, Sections, subsections or other divisions of this Agreement or the exhibits hereto, if any, are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such Articles, Sections, subsections, other divisions or exhibits, such other content being controlling as the agreement among the parties hereto. Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular. Words denoting sex shall be construed to include the masculine, feminine and neuter, when such construction is appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative. Definitions of terms defined in the singular or plural shall be equally applicable to the plural or singular, as the case may be, unless otherwise indicated.

ARTICLE II.
NEW BANKS

Section 2.01 New Banks Agreements. Each New Bank:

(a) represents and warrants that it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to become a Bank under the Credit Agreement;

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(b) agrees that, from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Bank thereunder and, subject to its Commitment, shall have the obligations of a Bank thereunder;

(c) represents and warrants that it is sophisticated with respect to decisions to enter into the Credit Agreement as a Bank and either it, or the person exercising discretion in making its decision to enter into the Credit Agreement, is experienced in making credit decisions as a lender in the type of transaction evidenced by the Credit Agreement;

(d) represents and warrants that it has received a copy of the Credit Agreement and such other Credit Documents it has requested, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.06 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Agreement and the Credit Agreement;

(e) represents and warrants that it has, independently and without reliance upon the Administrative Agent or any other Existing Bank or New Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to become a Bank under the Credit Agreement,

(f) if it is not incorporated under the laws of the United States of America or a state thereof, has delivered or shall deliver simultaneously with the execution of this Agreement, any documentation required to be delivered by it as a Bank pursuant to the terms of the Credit Agreement, duly completed and executed by such New Bank;

(g) agrees that (i) it will, independently and without reliance on the Administrative Agent or any other Existing Bank or New Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Bank; and

(h) appoints and authorizes Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers and discretion under the Credit Documents as are delegated to the Administrative Agent thereby, together with such powers and discretion as are reasonably incidental thereto.

ARTICLE III.
AMENDMENTS

Section 3.01 Amendments to Credit Agreement . Effective as of the Effective Date, the Credit Agreement shall hereby be amended as follows:

(a) The reference to “$100,000,000” on the cover page to the Credit Agreement is hereby replaced with a reference to “$300,000,000.”

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(b) The following definitions found in Section 1.01 (Certain Defined Terms) of the Credit Agreement are hereby amended to read in their entirety as follows:

“ Bank ” means a party to this Agreement that (a) became a party hereto as a lender on the date hereof, (b) is identified as new lender entering into this Agreement under and as provided in Amendment No. 1, or (c) is an Eligible Assignee that became a party hereto pursuant to Sections 2.14, 2.15 or 9.06.

(c) The following new definitions are added to Section 1.01 (Certain Defined Terms) of the Credit Agreement to appear therein in alphabetical order:

“ Amendment No. 1 ” means the Agreement and Amendment No. 1 to Amended and Restated Credit Agreement dated as of February 25, 2008 among the Borrower, the Banks and the other parties thereto which amends this Agreement.

“ Navajo/Woods Cross Acquisition ” means the “Navajo/Woods Cross Acquisition” as defined in Amendment No. 1

“ Navajo/Woods Cross Assets ” means the “Navajo/Woods Cross Assets” as defined in Amendment No. 1.

“ Navajo/Woods Cross Contribution Agreement ” means the “Navajo/Woods Cross Contribution Agreement” as defined in Amendment No. 1.

“ Navajo/Woods Cross Effective Date ” means the date notified by the Administrative Agent to the Banks which shall be the date on or prior to which all of the conditions precedent that are listed on Schedule 3.03 to this Agreement have been satisfied (or will be satisfied contemporaneously with the consummation of the Navajo/Woods Cross Acquisition) or waived.

“ Navajo/Woods Cross PSA ” means the “Navajo/Woods Cross PSA” as defined in Amendment No. 1.

(d) Section 2.01 (Making the Advances) of the Credit Agreement is hereby amended by replacing clause (a) thereof in its entirety with the following:

(a) Advances . Each Bank having a Commitment severally agrees, on the terms and conditions set forth in this Agreement, to make Advances to the Borrower from time to time on any Business Day during the period from the date of this Agreement until the Revolver Termination Date in an aggregate outstanding amount up to but not to exceed at any time outstanding its Commitment, as such amount may be reduced pursuant to Section 2.03, 7.02, and 7.03 or increased pursuant to Section 2.14 or pursuant to Amendment No. 1; provided , however that (i) the aggregate outstanding principal amount of all Advances plus the aggregate Letter of Credit Exposure shall not at any time exceed the aggregate Commitments, and (ii) prior to the Navajo/Woods Cross Effective Date, the aggregate outstanding principal amount of all Advances plus the aggregate Letter of Credit Exposure shall not exceed $150,000,000.

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(e) Section 2.02(c) (Certain Limitations) of the Credit Agreement is hereby amended by replacing sub-clause (i) thereof in its entirety with the following:

(i) at no time shall there be more than twelve (12) Interest Periods applicable to outstanding Eurodollar Rate Advances and the Borrower may not select Eurodollar Rate Advances for any Borrowing at any time that an Event of Default has occurred and is continuing;

(f) Section 2.06 (Fees) of the Credit Agreement is hereby amended by replacing clauses (a) and (b) thereof in their entirety with the following:

(a) Commitment Fees . The Borrower agrees to pay to the Administrative Agent for the account of each Bank:

(i) prior to the Navajo/Woods Cross Effective Date, a commitment fee on the daily amount by which such Bank’s Pro Rata Share of $150,000,000 exceeds such Bank’s outstanding Advances plus its Pro Rata Share of the aggregate Letter of Credit Exposure, at a rate equal to the Applicable Margin for commitment fees from the date of this Agreement until the Revolver Termination Date; and

(ii) on and after the Navajo/Woods Cross Effective Date, a commitment fee on the daily amount by which such Bank’s Commitment exceeds such Bank’s outstanding Advances plus its Pro Rata Share of the aggregate Letter of Credit Exposure, at a rate equal to the Applicable Margin for commitment fees from the date of this Agreement until the Revolver Termination Date.

All commitment fees required hereunder shall be due and payable quarterly in arrears on the last day of each March, June, September and December commencing on September 30, 2007 and continuing thereafter through the Revolver Termination Date and on the Revolver Termination Date.

(b) Administrative Agent Fees . The Borrower agrees to pay to the Administrative Agent for the benefit of the Administrative Agent the fees described in (i) the letter dated August 27, 2007 from the Administrative Agent to the Borrower, and (ii) the letter dated February 25, 2008 from the Administrative Agent to the Borrower (such letters being collectively, the “ Administrative Agent’s Fee Letter ”).

(g) Section 2.14 (Commitment Increase) of the Credit Agreement is hereby amended by replacing the reference to “$200,000,000” found in clause (a) therein with a reference to “$370,000,000.”

(h) Article III (Conditions of Lending) of the Credit Agreement is hereby amended by adding a new Section to the end thereof as follows:

Section 3.03 Conditions Precedent to Borrowings Above $150,000,000 . Notwithstanding anything herein to the contrary, the obligation of each Bank to make an Advance on the occasion of any Borrowing (and of an Issuing Bank to issue, increase, or

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extend any Letter of Credit) that would result in the sum of the aggregate outstanding Advances hereunder plus the aggregate Letter of Credit Exposure exceeding $150,000,000, shall be subject to the further conditions precedent that on or prior to the date of such Borrowing (or the date of such issuance, increase, or extension of such Letter of Credit) each of the conditions precedent set forth on Schedule 3.03 shall have been satisfied or waived in writing by all of the Banks.

(i) Schedule 1.01 (a) — Commitments and Schedule 1.01(b) — Notice Addresses and Applicable Lending Offices which are attached to the Credit Agreement are hereby replaced in their entirety with the corresponding Schedule 1.01(a) and Schedule 1.01(b) that are attached hereto.

(j) The Credit Agreement is further amended by adding the Schedule 3.03 attached to this Agreement as a new Schedule 3.03 to the end thereof.

ARTICLE IV.
AGREEMENTS

Section 4.01 Commitments . Each Existing Bank and each New Bank hereby acknowledges and confirms that, as of the date hereof and after giving effect to this Agreement its respective Commitment is as set forth next to its name on Schedule 1.01(a) attached hereto.

Section 4.02 Breakage Costs . If, as a result of increase in the aggregate Commitments effected hereby, including the introduction of the New Banks under the Credit Agreement, any Existing Bank incurs any losses, out-of-pocket costs or expenses as a result of any payment of Eurodollar Rate Advances prior to the last day of the Interest Period applicable thereto (whether by the Borrower or as a result of the reallocation of the outstandings of the Eurodollar Rate Advances under the Credit Agreement due to the changes in the Existing Banks’ Pro Rata Share resulting from the non-pro rata increases in the Commitments and the introduction of New Banks into the Credit Agreement) and such Existing Bank makes a request for compensation, the Borrower shall, within 10 days of any written demand sent by such Existing Bank to the Borrower through the Administrative Agent, pay to the Administrative Agent for the account of such Existing Bank any amounts required to compensate such Existing Bank for such losses, out-of-pocket costs or expenses which it may reasonably incur as a result of such payment or reallocation, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Existing Bank to fund or maintain such Advances.

Section 4.03 Upfront Fees. On the Effective Date, the Borrower shall pay to the Administrative Agent (a) for each Existing Bank, an upfront fee equal to .20% of the increase in its Commitment which is effected hereby, and (b) for each New Bank, an upfront fee equal to .20% of its Commitment after giving effect to this Agreement. Such fee shall be non-refundable and deemed to be fully earned when paid.

Section 4.04 Pro Forma EBITDA Adjustments . The Existing Banks and the New Banks hereby acknowledge that the pro forma adjustments to EBITDA under the Credit Agreement that would result from the Navajo/Woods Cross Acquisition may exceed 30%.

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Based on the pro forma calculations of EBITDA previously delivered to the Administrative Agent, such pro forma calculations resulting from the Navajo/Woods Cross Acquisition are acceptable to the Administrative Agent and otherwise comply with the terms of the Credit Agreement (it being agreed that to the extent such calculations differ in any material respect (as determined solely by the Administrative Agent in its reasonable discretion) with the pro forma adjustments to EBITDA which the Borrower includes in its Compliance Certificate delivered under the Credit Agreement, such differing calculations must be reasonably acceptable to the Administrative Agent in accordance with the definition of “EBITDA” set forth in the Credit Agreement.

ARTICLE V.
REPRESENTATIONS AND WARRANTIES

Section 5.01 Borrower Representations and Warranties . The Borrower represents and warrants that: (a) the representations and warranties contained in the Credit Agreement and the representations and warranties contained in the other Credit Documents are true and correct in all material respects on and as of the Effective Date as if made on as and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; (b) no Default has occurred which is continuing; (c) the execution, delivery and performance of this Agreement are within the partnership power and authority of the Borrower and have been duly authorized by appropriate partnership action and proceedings; (d) this Agreement constitutes the legal, valid, and binding obligation of the Borrower enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; (e) there are no governmental or other third party consents, licenses and approvals required to be obtained by the Borrower in connection with the execution, delivery, performance of this Agreement by the Borrower or the validity and enforceability of this Agreement against the Borrower; and (f) the Liens under the Security Documents are valid and subsisting and secure Borrower’s obligations under the Credit Documents.

Section 5.02 Guarantors’ Representations and Warranties . Each Guarantor represents and warrants that: (a) the representations and warranties of such Guarantor contained in the Guaranty and the representations and warranties contained in the other Credit Documents to which such Guarantor is a party are true and correct in all material respects on and as of the Effective Date as if made on as and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date; (b) no Default has occurred which is continuing; (c) the execution, delivery and performance of this Agreement are within the corporate or other organizational power and authority of such Guarantor and have been duly authorized by appropriate action and proceedings; (d) this Agreement constitutes the legal, valid, and binding obligation of such Guarantor enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; (e) there are no governmental or other third party consents, licenses and approvals required to be obtained by such Guarantor in connection with the execution, delivery or performance of this Agreement by such Guarantor or the validity and enforceability of this Agreement against such Guarantor; (f) it has no defenses to the

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enforcement of its Guaranty (other than the indefeasible payment in full of the Obligations); and (g) the Liens under the Security Documents to which such Guarantor is a party are valid and subsisting and secure such Guarantor’s obligations under the Credit Documents.

ARTICLE VI.
CONDITIONS

The consent provided herein shall become effective and enforceable against the parties hereto, and the Credit Agreement shall be amended as provided herein, upon the date all of the following conditions precedent have been met (the “ Effective Date ”):

Section 6.01 Documents. The Administrative Agent shall have received each of the following:

(a) this Agreement duly and validly executed and delivered by duly authorized officers of the Borrower, the Guarantors, the Administrative Agent, the Existing Banks and the New Banks;

(b) a fee letter from the Administrative Agent to the Borrower and dated the date hereof;

(c) new Notes for the Existing Banks which increase their Commitments under this Agreement and the New Banks, in each case, in the amount of their respective Commitments after giving effect to this Agreement;

(d) favorable opinions of the Borrower’s and the Guarantors’ counsel dated as of the date of this Agreement in form and substance satisfactory to the Administrative Agent and covering such matters as the Administrative Agent may reasonably request;

(e) a secretary’s or a Responsible Officer’s certificate for the Borrower dated the date hereof and certifying (i) copies of the resolutions of the board of directors of the General Partner authorizing this Amendment and the increase in the aggregate Commitments effected hereby, (ii) the Borrower Partnership Agreement and the other organizational documents of the Borrower, (iii) the General Partner’s Certificate of Organization and Regulations, (iv) all other documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement, the new Notes delivered in connection herewith, and the other Credit Documents delivered in connection herewith, and (v) the names and true signatures of the officers of the General Partner authorized to sign this Agreement, the new Notes, and the other Credit Documents to which the Borrower is a party;

(f) a secretary’s or a Responsible Officer’s certificate for each Guarantor dated the date hereof and covering the matters set forth in clause (h) above as to such Guarantor; and

(g) certificates of good standing and existence for the Borrower and each Guarantor in each state in which each such Person is organized, which certificate shall be dated a date not sooner than 30 days prior to Effective Date.

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Section 6.02 No Default . No Default shall have occurred which is continuing as of the Effective Date.

Section 6.03 Representations . The representations and warranties in this Agreement shall be true and correct in all material respects as of the Effective Date.

Section 6.04 Fees . The Borrower shall have paid or reimbursed the Administrative Agent for (a) all of its reasonable out-of-pocket costs and expenses incurred in connection with this Agreement and the increases in the aggregate Commitments effected hereby, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the fees and disbursements of the Administrative Agent’s outside legal counsel, in each case, pursuant to all invoices of the Administrative Agent and/or such counsel presented to the Borrower for payment not less than one Business Day prior to the Effective Date, (b) all fees required to be paid under the fee letter referenced in Section 6.01(b) above, and (c) all upfront fees required to be paid under Section 4.03 above.

ARTICLE VII.
MISCELLANEOUS

Section 7.01 Effect on Credit Documents ; Acknowledgments .

(a) The Borrower acknowledges that on the date hereof all Obligations are payable without defense, offset, counterclaim or recoupment.

(b) The Administrative Agent, the Issuing Banks, the Existing Banks and the New Banks hereby expressly reserve all of their rights, remedies, and claims under the Credit Documents. Nothing in this Agreement shall constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Credit Documents, (ii) any of the agreements, terms or conditions contained in any of the Credit Documents, (iii) any rights or remedies of the Administrative Agent, the Issuing Bank, any Existing Bank or any New Bank with respect to the Credit Documents, or (iv) the rights of the Administrative Agent, any Issuing Bank, any Existing Bank or any New Bank to collect the full amounts owing to them under the Credit Documents.

(c) Each of the Borrower, the Guarantors, Administrative Agent, Issuing Banks, the Existing Banks and the New Banks does hereby adopt, ratify, and confirm the Credit Agreement and each other Credit Document, as amended hereby, and acknowledges and agrees that the Credit Agreement and each other Credit Document, as amended hereby, is and remains in full force and effect, and the Borrower and the Guarantors acknowledge and agree that their respective liabilities under the Credit Agreement and the other Credit Documents are not impaired in any respect by this Agreement.

(d) From and after the Effective Date, all references to the Credit Agreement and the Credit Documents shall mean such Credit Agreement and such Credit Documents as amended by this Agreement.

(e) This Agreement is a Credit Document for the purposes of the provisions of the other Credit Documents. Without limiting the foregoing, any breach of representations,

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warranties, and covenants under this Agreement shall be a Default or Event of Default, as applicable, under the Credit Agreement.

Section 7.02 Reaffirmation of the Guaranty . Each Guarantor hereby ratifies, confirms, acknowledges and agrees that its obligations under the Guaranty are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed Obligations may have been amended by this Agreement, and its execution and delivery of this Agreement does not indicate or establish an approval or consent requirement by such Guarantor under the Guaranty in connection with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the other Credit Documents (other than the Guaranty or any other Credit Document to which such Guarantor is a party).

Section 7.03 Counterparts . This Agreement may be signed in any number of counterparts, each of which shall be an original and all of which, taken together, constitute a single instrument. This Agreement may be executed by facsimile signature and all such signatures shall be effective as originals.

Section 7.04 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

Section 7.05 Invalidity . In the event that any one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

Section 7.06 Governing Law . This Agreement shall be deemed to be a contract made under and shall be governed by and construed in accordance with the laws of the State of Texas.

Section 7.07 Additional Agents . Neither the Syndication Agent nor the Documentation Agent referred herein shall have any duties, obligations or liabilities in their respective capacities as agents. The Sole Lead Arranger shall have no duties, obligations or liabilities in its capacity as such under this Agreement or under any other Credit Document but shall be entitled to the indemnities provided for it in the Credit Documents.

Section 7.08 Patriot Act . Each Existing Bank, New Bank and the Administrative Agent (for itself and not on behalf of any other Person) hereby notifies the Borrower and the Guarantors that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information includes the names and addressed of the Borrower and the Guarantors and other information that will allow such Existing Bank, New Bank or the Administrative Agent, as applicable, to identify the Borrower and the Guarantors in accordance with the Act.

Section 7.09 Entire Agreement . THIS AGREEMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AGREEMENT, THE NOTES, AND THE

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OTHER CREDIT DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[SIGNATURES BEGIN ON NEXT PAGE]

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EXECUTED effective as of the date first above written.


	BORROWER : HOLLY ENERGY PARTNERS — OPERATING, L.P., a Delaware limited partnership By: HEP Logistics GP, L.L.C., a Delaware limited liability company, its General Partner By: Holly Energy Partners, L.P., a Delaware limited partnership, its Sole Member By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	GUARANTORS: HEP PIPELINE GP, L.L.C. , a Delaware limited liability company HEP REFINING GP, L.L.C. , a Delaware limited liability company HEP MOUNTAIN HOME, L.L.C. , a Delaware limited liability company HEP PIPELINE, L.L.C. , a Delaware limited liability company HEP REFINING, L.L.C. , a Delaware limited liability company HEP WOODS CROSS, L.L.C. , a Delaware limited liability company Each by: Holly Energy Partners — Operating, L.P., a Delaware limited partnership and its Sole Member By: HEP Logistics GP, L.L.C., a Delaware limited liability company, its General Partner By: Holly Energy Partners, L.P., a Delaware limited partnership, its Managing Member By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

	HOLLY ENERGY FINANCE CORP. , a Delaware corporation
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Vice President and Chief Financial Officer

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	HEP NAVAJO SOUTHERN, L.P. , a Delaware limited partnership HEP PIPELINE ASSETS, LIMITED PARTNERSHIP, a Delaware limited partnership HEP FIN-TEX/TRUST-RIVER, L.P., a Texas limited partnership Each by: HEP Pipeline GP, L.L.C., a Delaware limited liability company and its General Partner By: Holly Energy Partners — Operating, L.P., a Delaware limited partnership and its Sole Member By: HEP Logistics GP, L.L.C., a Delaware limited liability company, its General Partner By: Holly Energy Partners, L.P., a Delaware limited partnership, its Managing Member By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	HOLLY ENERGY PARTNERS, L.P., a Delaware limited partnership By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

	HEP REFINING ASSETS, L.P., a Delaware limited partnership By: HEP Refining GP, L.L.C., a Delaware limited liability company and its General Partner By: Holly Energy Partners — Operating, L.P., a Delaware limited partnership and its Sole Member By: HEP Logistics GP, L.L.C., a Delaware limited liability company, its General Partner By: Holly Energy Partners, L.P., a Delaware limited partnership, its Managing Member By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	HEP LOGISTICS GP, L.L.C., a Delaware limited liability company By: Holly Energy Partners, L.P., a Delaware limited partnership, its Managing Member By: HEP Logistics Holdings, L.P., a Delaware limited partnership, its General Partner By: Holly Logistic Services, L.L.C., a Delaware limited liability company, its General Partner
	By:	/s/ Bruce R. Shaw
		Bruce R. Shaw
		Senior Vice President and Chief Financial Officer

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	ADMINISTRATIVE AGENT : UNION BANK OF CALIFORNIA, N.A., as Administrative Agent and Sole Lead Arranger
	By:	/s/ Sean Murphy
		Sean Murphy, Senior Vice President

	EXISTING BANKS : UNION BANK OF CALIFORNIA, N.A., as an Existing Bank
	By:	/s/ Sean Murphy
		Sean Murphy, Senior Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


BANK OF AMERICA, N.A., as an Existing Bank and as Syndication Agent
By:	/s/ Ronald E. McKaig
	Name:	Ronald E. McKaig
	Title:	Senior Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


GUARANTY BANK, as an Existing Bank and as Documentation Agent
By:	/s/ Jim R. Hamilton
	Name:	Jim R. Hamilton
	Title:	Senior Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


FORTIS CAPITAL CORP., as an Existing Bank
By:	/s/ Darrel Holey
	Name:	Darrel Holey
	Title:	Managing Director


By:	/s/ Farhan Iqbal
	Name:	Farhan Iqbal
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


WELLS FARGO BANK, NATIONAL ASSOCIATION, as an Existing Bank
By:	/s/ Dustin Hansen
	Name:	Dustin Hansen
	Title:	Vice President

By:	/s/ Matt Coleman
	Name:	Matt Coleman
	Title:	Portfolio Manager

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


U.S. BANK NATIONAL ASSOCIATION, as an Existing Bank
By:	/s/ Tyler Fauerbach
	Name:	Tyler Fauerbach
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


	NEW BANKS : PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY, as a New Bank
	By:	Prudential Investment Management, Inc., as investment manager


	By:	/s/ Timothy M. Laczkowski
		Timothy M. Laczkowski
		Vice President

	PRUCO LIFE INSURANCE COMPANY, as a New Bank
	By:	/s/ Timothy M. Laczkowski
		Timothy M. Laczkowski
		Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


COMPASS BANK, as a New Bank
By:	/s/ Murray E. Brasseux
	Name:	Murray E. Brasseux
	Title:	Executive Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


BANK OF SCOTLAND plc, as a New Bank
By:	/s/ Karen Weich
	Name:	Karen Weich
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


CAPITAL ONE, N.A., as a New Bank
By:	/s/ Stan G. Weiser Jr.
	Name:	Stan G. Weiser Jr.
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


COMERICA BANK, as a New Bank
By:	/s/ Gerald R. Finney, Jr.
	Name:	Gerald R. Finney, Jr.
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


NATIXIS, as a New Bank
By:	/s/ Daniel Payer
	Name:	Daniel Payer
	Title:	Director


By:	/s/ Louis P. Laville, III
	Name:	Louis P. Laville, III
	Title:	Managing Director

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement


PNC BANK, NATIONAL ASSOCIATION, as a New Bank
By:	/s/ Robert Rease
	Name:	Robert Rease
	Title:	Vice President

Signature page to Agreement and Amendment No. 1 to Amended and Restated Credit Agreement

SCHEDULE 1.01(a)

COMMITMENTS


Bank	Commitment

Union Bank of California, N.A.	$	40,000,000
Bank of America, N.A.	$	25,000,000
Guaranty Bank	$	20,000,000
Fortis Capital Corp.	$	30,000,000
Wells Fargo Bank, National Association	$	30,000,000
U.S. Bank National Association	$	30,000,000
Compass Bank	$	22,500,000
Prudential Retirement Insurance and Annuity Company	$	17,450,000
Pruco Life Insurance Company	$	5,050,000
Bank of Scotland plc	$	20,000,000
Capital One, N.A.	$	15,000,000
Comerica Bank	$	15,000,000
Natixis	$	15,000,000
PNC Bank, National Association	$	15,000,000
Total:	$	300,000,000

Schedule 1.01(a)
Page 1 of 1

SCHEDULE 1.01(b)

NOTICE ADDRESSES AND APPLICABLE LENDING OFFICES


Borrower:		Office:
Holly Energy Partners — Operating, L.P.		Address for Notices:
		100 Crescent Court, Suite 1600
		Dallas, TX 75201-6927

		Telecopier Number: (214) 237-3051
		Attention: Stephen D. Wise

Administrative Agent:		Applicable Lending Offices:
Union Bank of California, N.A.		Address for Notices:
		445 South Figueroa Street, 15th Floor
		Los Angeles, California 90071

		Telecopier Number: 213-236-6823
		Attention: Don Smith

Banks:		Applicable Lending Offices:
Union Bank of California, N.A.		U.S. Domestic Lending Office:
		445 South Figueroa Street, 15th Floor
		Los Angeles, California 90071

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 213-236-6823
		Attention: Don Smith

Bank of America, N.A.		U.S. Domestic Lending Office:
		901 Main St.
		Dallas, TX 75202-3714

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (214) 290-9644
		Attention: Taelitha Harris

Schedule 1.01(b)
Page 1 of 3


Guaranty Bank		U.S. Domestic Lending Office:
		1100 NE Loop 410, Suite 700
		San Antonio, TX 78209

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (210) 930-1783
		Attention: Jim Hamilton

Fortis Capital Corp.		U.S. Domestic Lending Office:
		15455 North Dallas Parkway, Suite 1400
		Addison, TX 75001

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (214) 754-5982
		Attention: Casey Lowary

Wells Fargo Bank, National Association		U.S. Domestic Lending Office:
		1445 Ross Avenue #2360
		MAC: T5303-233
		Dallas, TX 75202

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (303) 863-2729
		Attention: Tanya Ivie

U.S. Bank National Association		U.S. Domestic Lending Office:
		950 17 ^th Street DN-CO-T8E
		Denver, CO 80202

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		555 SW Oak, PDORP7LS
		Portland, OR 97208

		Telecopier Number: (503) 973-6900
		Attention: Tony Wong

Schedule 1.01(b)
Page 2 of 3


Prudential Retirement Insurance and Annuity Company		U.S. Domestic Lending Office:
		c/o Prudential Capital Group
		2200 Ross Avenue, Suite 4200E
		Dallas, TX 75201

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (800) 224-2278
		Attention: Tracey Schwarmann and Syeda Kaptan

Pruco Life Insurance Company		U.S. Domestic Lending Office:
		c/o Prudential Capital Group
		2200 Ross Avenue, Suite 4200E
		Dallas, TX 75201

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: (800) 224-2278
		Attention: Tracey Schwarmann and Syeda Kaptan

Compass Bank		U.S. Domestic Lending Office:
		24 Greenway Plaza, Suite 1400A
		Houston, Texas 77046

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 713-968-8292
		Attention: Greg Determann

Bank of Scotland plc		U.S. Domestic Lending Office:
		565 Fifth Avenue
		New York, New York 10017

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		1021 Main Street, Suite 1370
		Houston, Texas 77002

		Telecopier Number: 713-651-9714
		Attention: Val Gibbs / Jarrod Stallings

Schedule 1.01(b)
Page 3 of 3


Capital One, N.A.		U.S. Domestic Lending Office:
		313 Carondelet St., 10 ^th Floor
		New Orleans, Louisiana 70112

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 504-533-5594
		Attention: Nancy Moragas / Hope Ignelzi

Comerica Bank		U.S. Domestic Lending Office:
		4100 Spring Valley Rd. Suite 400
		Dallas, Texas 75244

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 972-361-2550
		Attention: Gerald R. Finney, Jr.

Natixis		U.S. Domestic Lending Office:
		333 Clay Street, Suite 4340
		Houston, Texas 77002

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 713-571-6167
		Attention: Daniel Payer

PNC Bank, National Association		U.S. Domestic Lending Office:
		Two Tower Center Blvd. 8 ^th Floor
		East Brunswick, New Jersey 08816

		Eurodollar Lending Office:
		Same as U.S. Domestic Lending Office

		Address for Notices:
		Same as U.S. Domestic Lending Office

		Telecopier Number: 732-220-3268
		Attention: Gurdatt Jagnanan

Schedule 1.01(b)
Page 4 of 3

Schedule 3.03

Navajo/Woods Cross Conditions Precedent

(I) Documents. The Administrative Agent shall have received each of the following (or evidence that, contemporaneously with the consummation of the Navajo/Woods Cross Acquisition, the Administrative Agent shall receive the following):

(a) a fully executed copy, certified by the Limited Partner, of the Navajo/Woods Cross Contribution Agreement and the Navajo/Woods Cross PSA, together with all of their respective exhibits, schedules, and amendments thereto and any material bills of sale, material assignments, and other material documents or agreements executed in connection with the Navajo/Woods Cross Acquisition;

(b) new Mortgages or supplements to existing Mortgages by HEP Pipeline, L.L.C., a Delaware limited liability company (“ HEP ”), and HEP Woods Cross, L.L.C., a Delaware limited liability company (“ Woods Cross ”) in form and substance substantially similar to the Mortgages previously approved by the Administrative Agent (with such revisions thereto necessary to address issues particular to the jurisdictions in which such new Mortgages will be filed) and in favor of the Administrative Agent for the benefit of the Secured Parties covering all real property assets included in the applicable Navajo/Woods Cross Assets to the extent required under Section 5.11 of the Credit Agreement;

(c) copies of the subordinated mortgages executed in favor of the Parent by any of the purchasers under the Navajo/Woods Cross PSA and encumbering the Navajo/Woods Cross Assets in form and substance substantially similar to the subordinated mortgages previously approved by the Administrative Agent and subordination, non-disturbance and attornment agreements executed by the Parent and such applicable purchasers covering such mortgages and in form and substance substantially similar to the Subordination, Non-Disturbance and Attornment Agreement dated as of July 8, 2005 executed by the Administrative Agent and the Parent;

(d) legal opinions of Parr Waddoups Brown Gee & Loveless as Utah local counsel, of Scheuer, Yost & Patterson as New Mexico local counsel and of Vinson & Elkins LLP as Texas counsel (or such other Utah and/or New Mexico local counsel reasonably acceptable to the Administrative Agent) in each case, with respect to the Mortgages described in the preceding clause (b) in form and substance reasonably satisfactory to the Administrative Agent, and including, without limitation, opinions regarding the enforceability of such Mortgages and the validity and perfection of the Liens created thereby; and

(e) a certificate dated as of the Navajo/Woods Cross Effective Date from a Responsible Officer and containing therein a representation and warranty that (i) Navajo/Woods Cross Acquisition complies with Section 6.04 of this Agreement, (ii) the conditions in this Schedule 3.03 have been satisfied or waived by all of the Banks, (iii) the Borrower has provided to the Administrative Agent, true, correct, and complete copies of all Material Contracts which affect the Navajo/Woods Cross Assets and which are in effect as of the Navajo/Woods Cross Effective Date, (iv) the assets which are being acquired under the Navajo/Woods Cross PSA are substantially the same assets as those listed in Schedule 8.03 of the draft of the Navajo/Woods Cross PSA provided by the Borrower to the Administrative Agent for its due diligence review

Schedule 3.03
Page 1 of 2

performed on or prior to February 25, 2008, and (iv) since February 25, 2008, no event, circumstance, action, or other condition has occurred or exists which could reasonably be expected to (A) result in a Material Adverse Effect or (B) result in a material adverse affect on the Navajo/Woods Cross Assets.

II. Fees . The Borrower shall have paid or reimbursed the Administrative Agent for all of its reasonable out-of-pocket costs and expenses for which the Borrower has received an invoice not less than one Business Day prior to the Navajo/Woods Cross Effective Date and which are payable pursuant to Section 9.04(a) of this Agreement.

III. Acquisition . The Administrative Agent shall have received evidence reasonably satisfactory to it that all actions and consents necessary to consummate the Navajo/Woods Cross Acquisition (other than the payment of the purchase price) shall have been received or taken in accordance with all Legal Requirements, all applicable material third party agreements, and in accordance with the terms of the Navajo/Woods Cross PSA, without amendment or waiver of any material provision thereof from the form of the Navajo/Woods Cross PSA provided to and reviewed by the Administrative Agent on or prior to February 25, 2008 other than any amendment or waiver that could not reasonably be expected to result in an adverse consequence or otherwise have an adverse affect on the Borrower, any Guarantor, the Administrative Agent, the Issuing Bank, or any Bank.

Schedule 3.03
Page 2 of 2

EXHIBIT 99.1

PIPELINES AND TANKAGE AGREEMENT

This Pipelines and Tankage Agreement (this “ Agreement ”) is dated as of February [___], 2008, by and among Holly Corporation, a Delaware corporation (“ Holly ”), Navajo Pipeline Co., L.P., a Delaware limited partnership (“ Navajo Pipeline ”), Navajo Refining Company, L.L.C., a Delaware limited liability company (“ Navajo Refining ”), and Woods Cross Refining Company, L.L.C., a Delaware limited liability company (“ Woods Cross Refining ”, together with Holly, Navajo Pipeline and Navajo Refining, 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, LLC, a Delaware limited liability company (“ HEP Pipeline ”) and HEP Woods Cross, L.L.C., a Delaware limited liability company (“ HEP Woods Cross ”, together with the Partnership, the Operating Partnership and HEP Pipeline, the “ Partnership Entities ”). Each of the Holly Entities and the Partnership Entities are individually referred to herein as a “ Party ” and collectively as the “ Parties .”

RECITALS:

Pursuant to that certain Purchase and Sale Agreement dated as of February 25, 2008 (the “ Purchase Agreement ”) by and among Holly, Navajo Refining, Navajo Pipeline and Woods Cross Refining (collectively, the “ Seller Parties ”) and the Partnership, the Operating Partnership, HEP Pipeline and HEP Woods Cross (collectively, the “ Buyer Parties ”), the Seller Parties have agreed to transfer and convey to the Buyer Parties, and the Buyer Parties have agreed to purchase, certain assets, including the Drop-Down Assets.

The Holly Entities desire to continue to utilize the Drop-Down Assets and the Partnership desires to provide transportation and storage services to the Holly Entities, all on the terms set forth in this Agreement.

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.

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

“Affiliate” means, with to 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 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 Holly Entities, on

the one hand, and the Partnership Entities, on the other hand, shall not be considered affiliates of each other.

“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 Crude Oil Pipeline Tankage” means the following crude oil tankage associated with the Artesia Delivery System: (i) Abo Station Tank 1007; (ii) Artesia Station Tank 970; (iii) Barnsdall Station Tank 1028; (iv) Beeson Station Tanks 972 and 973; (v) Maljamar Park Station Tanks 46, 47 and 48; and (vi) Henshaw Station Tanks 1048 and 1049.

“Artesia Delivery System” means the following crude oil pipelines: (i) the Beeson to North Artesia pipeline (6-inch) — 11 miles; (ii) the Barnsdall to North Artesia pipeline (4/6-inch) — 7 miles; (iii) the Barnsdall jumper pipeline to Lovington pipeline (8-inch) — 2 miles; (iv) the Artesia Station to North Artesia pipeline (4-inch) — 4 miles; (v) the North Artesia to Evans Junction pipeline (8-inch) — 6 miles; (vi) the Abo to Evans Junction pipeline (6-inch) — 1.2 miles; (vii) the Evans Junction to Artesia pipeline (8-inch) — 11.5 miles; and (viii) the Artesia to Bad Luck pipeline (12-inch) — 13 miles.

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

“bpd” means barrels per day.

“bpq” means barrels per quarter.

“Buyer Parties” has the meaning set forth in the recitals to this Agreement.

“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(e).

“Conflicts Committee” means the Conflicts Committee of Holly GP.

“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 shall commence on the Effective Time.

“Contract Year” means a year that commences on July 1 and ends on the last day of June, except that the initial Contract Year shall commence on the Effective Time.

“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.

“Crude Oil Gathering Lease Connection Pipelines” means the following pipelines: (i) Barnsdall Station lease connection pipelines; (ii) Maljamar Park lease connection pipelines; (iii) Beeson Station lease connection pipelines; (iv) Burton Flats lease connection pipelines; (v) Abo Station lease connection pipelines; (vi) Artesia Station lease connection pipelines; (vii) Eagle lease connection pipelines; (viii) North Monument lease connection pipelines; (ix) South Monument lease connection pipelines; (x) Monument Sweet lease connection pipelines; (xi) Russell Station lease connection pipelines; (xii) Riley Station lease connection pipelines; (xiii) Wood Station (Seminole Gathering) lease connection pipelines; (xiv) Baumgart Station lease connection pipelines; and (xv) Chevron Lacts at Lovington Station 126 lease connection pipelines.

“Crude Oil Gathering Pipelines” means the following pipelines: (i) Abo Station to BP Sweet System (4 inch) — 1.2 miles; (ii) Artesia Station to Abo Trunk Line (6 inch) — 6.5 miles; (iii) Maljamar Park to Beeson Station (4 inch) — approximately 14 miles; (iv) Wood Station to Russell Station (6 inch) — 13.5 miles; (v) Riley Station to Russell Station (6 inch) — 5 miles; (vi) Baumgart Station to Riley Station (6 inch) — 7 miles, and the Crude Oil Gathering Lease Connection Pipelines.

“Crude Oil” means the direct liquid product of oil wells, oil processing plants, the indirect liquid petroleum products of oil or gas wells, oil sands or a mixture of such products, but does not include natural gas liquids or Refined Products.

“Crude Oil Trunk Pipelines” means the Artesia Delivery System and the Lovington Delivery System.

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

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

“Drop-Down Assets” means, collectively, the Pipeline Assets and Tankage Assets.

“Effective Time” has the meaning set forth in the Purchase Agreement.

“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.

“Force Majeure Notice” has the meaning set forth in Section 3.

“Gathering Pipeline Minimum Capacity” has the meaning set forth in Section 2(a)(iii).

“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.

“Holly GP” means Holly Logistic Services, L.L.C, the general partner of HEP Logistics Holdings, L.P., which is the sole partner of the Partnership.

“Lovington Crude Oil Pipeline Tankage” means the following crude oil tankage associated with the Lovington Delivery System: (i) Crouch Station Tank 1038; (ii) Monument Junction Tank; (iii) Hobbs Station Tanks 5201 and 5202; (iii) Russell Station Tanks 5101, 5102 and 5103; (iv) Wood Station Tanks 5301 and 5302; (v) Riley Station Tanks 5001 and 5003; and (vi) Baumgart Station Tank 5002.

“Lovington Delivery System” means the following crude oil pipelines: (i) the Russell to Lovington pipeline (12-inch) — 23 miles; (ii) the Hobbs to Lovington pipeline (8-inch) — 20 miles; (iii) the Crouch to Lovington pipeline (6/8-inch) — 11 miles; (iv) the Russell to Hobbs pipeline (6-inch) — 20 miles; and (v) the Gaines to Hobbs pipeline (6-inch) — 6 miles.

“Lovington Refinery” means the refining facilities owned by Navajo Refining near Lovington, New Mexico.

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

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

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

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

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

“Omnibus Agreement” means the Omnibus Agreement, dated as of July 13, 2004, as amended on July 6, 2005, and subsequently amended effective as of the Effective Time, by and among Holly, the Partnership, the Operating Partnership, Navajo Pipeline, Holly GP, HEP Logistics GP, L.L.C. and HEP Logistics Holdings, L.P.

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

“Pipeline Assets” means, collectively: (i) the Crude Oil Trunk Pipelines; (ii) the Crude Oil Gathering Pipelines; (iii) the Woods Cross Pipelines; and (iv) the Roswell Products Pipeline.

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

“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.

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

“Refined Product” means jet fuel, gasoline, kerosene and diesel fuel.

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

“Refinery Tankage” means, collectively: (i) the crude oil tanks 1201A and 1201B at the Lovington Refinery; (ii) the crude oil tanks 103, 121 and 126 at the Woods Cross Refinery; and (iii) Replacement Tank 439 and Relocated Tank 437 at the Artesia Refinery.

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

“Relocated Tank 437” means the crude oil tank 437 at such time as Holly completes relocation of the tank within the Artesia Refinery.

“Replacement Tank 439” means the crude oil tank which will replace the current crude oil tank 439 at the Artesia Refinery, upon such time as Holly completes construction of the replacement tank.

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

“Roswell Pipeline Minimum Capacity” has the meaning set forth in Section 2(a)(iii).

“Roswell Products Pipeline” means the Artesia to Roswell (4-inch) — 36 mile pipeline that is currently dedicated to the transport of jet fuel.

“Roswell Terminal” means the terminal leased by Navajo Refining from the City of Roswell, and located in the Roswell International Air Center in Roswell, New Mexico and Tanks 1216, 1218 and 1219.

“Roswell Terminal Payment” has the meaning set forth in Section 2(d).

“Seller Parties” has the meaning set forth in the recitals to this Agreement.

“Tankage Assets” means, collectively, (i) the Refinery Tankage; (ii) the Artesia Crude Oil Pipeline Tankage; and (iii) the Lovington Crude Oil Pipeline Tankage.

“Tankage Revenue Commitment” has the meaning set forth in Section 2(c).

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

“Trunk Pipeline Minimum Capacity” has the meaning set forth in Section 2(a)(iii).

“Woods Cross Crude Oil Pipeline” means the 4 mile pipeline from Chevron to the Woods Cross Refinery (12 inch).

“Woods Cross Minimum Capacity” has the meaning set forth in Section 2(a)(iii).

“Woods Cross Pipeline Tankage” means the crude oil tankage associated with the Wood Cross Pipelines.

“Woods Cross Pipelines” means, collectively: (i) the Woods Cross Crude Oil Pipeline; (ii) the Woods Cross Product Pipeline (Woods Cross-Chevron); and (iii) the Woods Cross Product Pipeline (Woods Cross-Pioneer).

“Woods Cross Product Pipeline (Woods Cross-Chevron)” means the 4 mile pipeline from Woods Cross Refinery to Chevron (8 inch).

“Woods Cross Product Pipeline (Woods Cross-Pioneer)” means the 2 mile pipeline from Woods Cross Refinery to Pioneer Pipeline (10 inch).

“Woods Cross Refinery” means the refining facilities located in Woods Cross, Utah, and operated by Woods Cross Refining.

Section 2. Agreement to Use Services Relating to Pipelines and Tankage .

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 sets forth revenues to the Partnership Entities to be paid by the Holly Entities and requires the Partnership Entities to provide certain transportation and storage services to the Holly Entities. The principal objective of the Partnership Entities is for the Holly Entities to meet or exceed their obligations with respect to the Minimum Pipeline Revenue Commitment, and to meet their obligations with respect to the Tankage Revenue Commitment and the Roswell Terminal Payment. 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 as favorably as their historical practice when the Holly Entities were the owners of the Drop-Down Assets.

(a) Minimum Pipeline 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, commencing on the Effective Time, the Holly Entities will ship (1) on the Crude Oil Trunk Pipelines an amount of Crude Oil in the aggregate having a quantity and consistency that will produce revenue to the Partnership Entities in an amount at least equal to $13,552,450 annually (the “ Minimum Trunk Pipeline Revenue Commitment ”); (2) on the Crude Oil Gathering Pipelines and store at the Artesia Crude Oil Pipeline Tankage and the Lovington Crude Oil Pipeline Tankage, an amount of Crude Oil in the aggregate that will produce revenue to the Partnership Entities in an amount at least equal to $8,688,750 annually (the “ Minimum Gathering Pipeline Revenue Commitment ”); (3) on the Woods Cross Pipelines an amount of Crude Oil and Refined Product that will, in the aggregate, produce revenue to the Partnership Entities in an amount at least equal to $730,000 annually (the “ Minimum Woods Cross Pipeline Revenue Commitment ”); and (4) on the Roswell Products Pipeline an amount of Refined Product in the aggregate that will produce revenue to the Partnership Entities in an amount at least equal to $35,000 per Contract Quarter (the “ Minimum Roswell Pipeline Revenue Commitment”, together with the Minimum Trunk Pipeline Revenue Commitment, the Minimum Gathering Pipeline Revenue Commitment and the Minimum Woods Cross Pipeline Revenue Commitment, collectively, the “ Minimum Pipeline Revenue Commitment ”). Notwithstanding the foregoing, in the event that the Effective Time is any date other than the first day of a Contract Year or Contract Quarter, then the Minimum Trunk Pipeline Revenue Commitment, Minimum Gathering Pipeline Revenue Commitment and Minimum Woods Cross Pipeline Revenue Commitment for the initial Contract Year shall each be prorated based upon the number of days actually in such contract year and the initial Contract Year, and the Minimum Roswell Pipeline 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 Pipeline Revenue Commitment shall be adjusted on July 1 of each Contract Year commencing on July 1, 2008, by an amount equal to the percentage increase, if any, between the two (2) preceding calendar years, in the Producer Price Index for Finished Goods, seasonally adjusted, as published by the Department of Labor (“ PPI ”); provided, however , that the Minimum Pipeline Revenue Commitment will not decrease as a result of any decrease in the PPI. If that 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 Pipeline Revenue Commitments. 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(e) of this Agreement and the same method of adjustment for increases in the new index shall be used to calculate increases in the Minimum Pipeline Revenue Commitment.

(iii) If the Holly Entities are unable for a period in excess of thirty (30) consecutive days to transport on the Crude Oil Trunk Pipelines, the Crude Oil Gathering Pipelines, the Woods Cross Pipelines or the Roswell Product Pipeline the respective volumes of Crude Oil and Refined Product required to meet the Minimum Pipeline Revenue Commitment as a result of the Partnership Entities’ operational difficulties, prorationing, or, (1) with respect to the Crude Oil Trunk Pipelines, the inability to provide 79,000 bpd capacity (the “ Trunk Pipeline Minimum Capacity ”); (2) with respect to the Crude Oil Gathering Pipelines (including storage in the Artesia Crude Oil Pipeline Tankage and Lovington Crude Oil Pipeline Tankage, but excluding storage in the Refinery Tankage), the inability to provide: (A) from the Effective Date until the fifth anniversary of the Effective Date: 50,000 bpd; (B) from the fifth anniversary of the Effective Date until the tenth anniversary of the Effective Date: 47,500 bpd; and (C) from the tenth anniversary of the Effective Date until the expiration of the Term: 45,000 bpd (collectively, the “ Gathering Pipeline Minimum Capacity ”); (3) with respect to the Woods Cross Pipelines, the inability to provide 8,000 bpd capacity (the “ Woods Cross Minimum Capacity ”); or (4) with respect to the Roswell Products Pipeline, the inability to provide 36,000 bpq capacity (the “ Roswell Pipeline Minimum Capacity ”), then upon written notice by the Holly Entities to the Partnership Entities, the Minimum Pipeline Revenue Commitment, as affected, will be reduced for such period of time by an amount equal to: (A) the volume of Crude Oil or Refined Product that the Holly Entities are unable to transport on the Crude Oil Trunk Pipelines, the Crude Oil Gathering Pipelines, the Woods Cross Pipelines or the Roswell Product Pipeline, as applicable, as a result of the Partnership Entities’ operational difficulties, prorationing or inability to provide the Trunk Pipeline Minimum Capacity, the Gathering Pipeline Minimum Capacity, the Woods Cross Minimum Capacity or the Roswell Pipeline Minimum Capacity, as applicable, multiplied by (B) the applicable tariffs.

(b) Tariffs and Tankage Fees .

(i) The tariff rates applicable to (A) service on the Crude Oil Trunk Pipelines shall be as set forth in Exhibit A attached hereto and made a part hereof for all purposes; (B) service on the Crude Oil Gathering Pipelines shall be as set forth in Exhibit B attached hereto and made a part hereof for all purposes; (C) service on the Woods Cross Pipelines shall be as set forth in Exhibit C attached hereto and made a part hereof for all purposes; and (D) service on Roswell Product Pipeline shall be as set forth in Exhibit D attached hereto and made a part hereof for all purposes. The rules and regulations governing service on the Pipeline Assets shall be as set forth in the applicable rules and regulations tariffs with respect to such service. The tariff rates shall be adjusted on July 1 of each Contract Year commencing on July 1, 2008, by an amount equal to the percentage change, if any, between the two (2) immediately preceding calendar years, in the FERC Oil Pipeline Index. If that 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 or deflation and the same method of adjustment for increases in the new index shall be used to calculate increases in the 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(e) of this Agreement and the same method of adjustment for increases in the new index shall be used to calculate increases in the tariff rates. Notwithstanding that the Minimum Pipeline Revenue Commitment will be determined on a Contract Year basis, the applicable initial fees, tariff rates and other charges provided for in this Agreement will become effective as of the Effective Time. The Partnership Entities shall have the right to change the tariff rates applicable to the Crude Oil Trunk Pipelines, the Crude Oil Gathering Pipelines, the Woods Cross Pipelines and the Roswell Product Pipeline in the event that the Partnership Entities incur increased expenses (or lower revenues) or capital costs, as a direct result of a change in the quality and/or consistency of the Crude Oil or Refined Product, as applicable, and to the extent thereof.

(ii) In the event that Crude Oil throughput at the Navajo Refinery exceeds 110,000 bpd or if Crude Oil viscosity exceeds 50 SSU on greater than 10,000 bpd of such Crude Oil throughput, and the Partnership Entities incur increased expenses (or lower revenues) or capital costs, as a direct result thereof, the Parties will renegotiate the tariff rates in good faith in order to compensate the Partnership Entities on account of such incremental expenses (or lower revenues) or capital costs, which capital costs shall also include a reasonable rate of return. If the Holly Entities and the Partnership Entities are unable to agree upon renegotiated tariff rates, the renegotiated tariff rates will be determined by binding arbitration in accordance with Section 11(e) of this Agreement.

(c) Tankage Revenue Commitment . During the Term of this Agreement, upon the Effective Time, the Holly Entities shall pay the Partnership Entities throughput fees associated with the Refinery Tankage in the amount of $184,000 per month (the “ Tankage Revenue Commitment ”) in exchange for the Partnership Entities providing to the Holly Entities 613,333 barrels per month of crude oil storage capacity at the Refinery Tankage. The amount of the Tankage Revenue Commitment shall be adjusted upward on July 1 of each Contract Year commencing on July 1, 2008, by an amount equal to the percentage change, if any, between the two (2) immediately preceding calendar years, in the FERC Oil Pipeline Index. If that 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 Tankage 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(e) of this Agreement and the same method of adjustment for increases in the new index shall be used to calculate increases in the Tankage Revenue Commitment. Notwithstanding that the Tankage Revenue Commitment will be determined on a Contract Year basis, the applicable fees, tariff rates and other charges provided for in this Agreement will become effective as of the Effective Time.

(d) Roswell Terminal Operating Expenses and Payment . During the Term and subject to the terms and conditions of this Agreement, the Holly Entities shall (i) reimburse all

operating expenses incurred by the Partnership Entities in their operation of the Roswell Terminal in an economic and prudent manner, in accordance with the normal and customary practices in the industry and Applicable Laws, and consistent with the historical operation of the Roswell Terminal by the Holly Entities, and (ii) make annual payment to the Partnership Entities in the amount of $100,000 (such annual payment, the “ Roswell Terminal Payment ”) which shall be adjusted upward on July 1 of each Contract Year commencing on July 1, 2008, by an amount equal to the percentage increase, if any, between the two (2) preceding calendar years, in the PPI; provided , however , that the Roswell Terminal Payment will not decrease as a result of any decrease in the PPI. If that 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 Roswell Terminal Payment. 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(e) of this Agreement and the same method of adjustment for increases in the new index shall be used to calculate increases in the Roswell Terminal Payment. The Partnership Entities shall exercise the same level of care in the operation of the Roswell Terminal as they exercise in the operation of their own terminals and pipeline assets.

(e) Volumetric Gains and Losses . The Holly Entities shall, during the Term, (i) absorb all volumetric gains in the Crude Oil Trunk Pipelines and Crude Oil Gathering Pipelines, and (ii) be responsible for all volumetric losses in the Crude Oil Trunk Pipelines and the Crude Oil Gathering Pipelines up to a maximum of 0.5%. The Partnership Entities shall be responsible for all volumetric losses in excess of 0.5% in the Crude Oil Trunk Pipelines and Crude Oil Gathering Pipelines during the Term.

(f) Obligations of the Partnership Entities . During the Term and subject to the terms and conditions of this Agreement, including Section 11(b), 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(b) of this Agreement and Article VI 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. The Partnership Entities shall, upon six (6) months’ prior written notice to the Holly Entities, except in the event of an emergency or in order to comply with Applicable Law, have the right to discontinue operation with respect to any of the Gathering Pipelines in the event that such operation becomes (i) mechanically unreliable or (ii) uneconomical due to a decline in volume. 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: (i) 79,000 bpd of Crude Oil on the Crude Oil Trunk Pipelines; (ii) (A) from the Effective Date until the fifth anniversary of the Effective Date: 50,000 bpd of Crude Oil on the Crude Oil Gathering Pipelines; (B) from the fifth anniversary of the Effective Date until the tenth anniversary of the Effective Date: 47,500 bpd of Crude Oil on the Crude Oil Gathering Pipelines; and (C) from the tenth anniversary of the Effective Date until the expiration of the

Term: 45,000 bpd of Crude Oil on the Crude Oil Gathering Pipelines (in each case, including storage in the Artesia Crude Oil Pipeline Tankage or Lovington Crude Oil Refinery Tankage, but not in the Refinery Tankage); (iii) 8,000 bpd of Crude Oil and Refined Product, collectively, on the Woods Cross Pipelines; and (iv) 36,000 bpq of Refined Product on the Roswell Products Pipeline. To the extent that the Holly Entities are entitled to an exception under Section 3 of this Agreement to their obligations under Section 2(a) of this Agreement, the corresponding obligations of the Partnership Entities under this Section 2(f) will be proportionately reduced.

(g) Drag Reducing Agents and Additives . If the Partnership Entities determine that adding drag reducing agents (“ DRA ”) and additives to the Crude Oil and Refined Products is reasonably required to move Crude Oil and Refined Product in the quantities necessary to meet the Holly Entities’ schedule or as may be otherwise be required to safely move such quantities of Crude Oil and Refined Product, the Partnership Entities shall provide the Holly Entities with an analysis of the proposed cost and benefits thereof. In the event that the Holly Entities agree to use such additives as proposed by the Partnership Entities, the Holly Entities shall reimburse the Partnership Entities for the costs of adding any additive, including DRA and/or other additives to the Crude Oil and Refined Product. All fuel additives, anti-icers and DRA (collectively, “ Additives ”) added to the Crude Oil and Refined Product pursuant to this Section 2(g) 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 reimburse the Partnership Entities for the costs of the Additives.

(h) Reimbursement for Initial Tank Inspections . The Holly Entities will, during the period that commences on the Effective Time and ends five (5) years thereafter (the “ Initial Tank Inspection Period ”), reimburse the Partnership Entities for the actual costs incurred by the Partnership Entities in performing the first regularly scheduled API 653 inspection conducted after the Effective Time of the tanks included within the Tankage Assets (the “ Initial Tank Inspections ”), and any repairs or tests or consequential remediation that may be required to be made to such Tankage Assets as a result of any discovery made during the Initial Tank Inspections; provided , however , that (i) the Holly Entities are not obligated to reimburse the Partnership Entities for any costs associated with or arising from any inspection of Relocated Tank 437 or Replacement Tank 439, and (ii) upon expiration of the Initial Tank Inspection Period, all of the obligations of the Holly Entities pursuant to this Section 5(h) shall terminate, except that the Initial Tank Inspection Period shall be extended if, and only to the extent that (a) inaccessibility of the Tankage Assets during the Initial Tank Inspection Period caused the delay of an Initial Tank Inspection originally scheduled to be performed during the Initial Tank Inspection Period, and (b) the Holly Entities received notice from the Partnership Entities regarding such delay at the time it occurred.

(i) 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 Crude Oil and Refined Product delivered by the Holly Entities for transportation by the Partnership Entities in the Crude Oil Trunk 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(i) the proper Party shall promptly reimburse the other Party therefor.

(j) Timing of Payments . The Holly Entities will make payments to the Partnership Entities by electronic payment with 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.

(k) Marketing of Transportation and Storage Services . The Partnership may market transportation and storage services to third parties on the Crude Oil Trunk Pipelines or the Crude Oil Gathering Pipelines, provided that (i) the Partnership provides the Holly Entities with prior written notice describing the purported transportation and/or storage services to the extent permitted by law; and (ii) the Holly Entities remain satisfied that such transportation and storage services marketed by the Partnership has not negatively affected the Holly Entities’ ability to utilize the Drop-Down Assets in any material respect and the quality and quantity of the Crude Oil has not been materially degraded or otherwise impaired.

(l) Change in Pipeline Direction; Product Service or Origination and Destination . Without Holly’s prior written consent, which shall not be unreasonably withheld, the Partnership Entities shall not (i) reverse the direction of any of the Pipeline Assets; (ii) change, alter or modify the product service of any of the Pipeline Assets; or (iii) change, alter or modify the origination or destination of any of the Pipeline Assets; provided , however , that the Partnership Entities may take any necessary emergency action to prevent or remedy a release of Crude Oil or Refined Product, as applicable, from any of the Pipeline Assets without obtaining the consent required by this Section 2(l). The Holly Entities shall have the right to reverse the direction of any of the Pipeline Assets if the Holly Entities agree to (i) reimburse the Partnership Entities for the additional costs and expenses incurred by the Partnership Entities as a result of such change in direction (both to reverse and re-reverse); (ii) reimburse the Partnership Entities for all costs arising out of the Partnership Entities’ inability to perform under any transportation service contract due to the reversal of the direction of the Pipeline Assets; and (iii) pay the flow reversal rates as set forth on Exhibit E. The tariff rates applicable to any such flow reversal shall be as set forth on Exhibit E and shall be adjusted each year as provided in Section 2(a)(ii).

(m) Notification of Utilization . Upon request 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 any of the Drop-Down Assets.

(n) Scheduling and Accepting Deliveries . The Partnership Entities will use their reasonable commercial efforts to schedule movement and accept deliveries of Crude Oil and Refined Product in a manner that is consistent with the historical dealings between the Parties, as such dealings may change from time to time.

(o) Increases in Pipeline Tariff Rates and Tankage Fees . If new laws or regulations are enacted that require the Partnership Entities to make capital expenditures with respect to the Drop-Down Assets, the Partnership Entities may amend the tariff rates in order to recover the Partnership Entities’ cost of complying with these laws or regulations (including a reasonable return). The Holly Entities and the Partnership Entities shall use their reasonable commercial efforts to comply with these laws and regulations, and shall negotiate in good faith to mitigate the impact of these laws and regulations 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(e) of this Agreement.

Section 3. 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 thirty (30) consecutive 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 (“ Force Majeure Notice ”), 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 (to the extent so affected) for a period equivalent to the duration of the inability set forth in the Force Majeure Notice. 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 substantially all of their respective obligations under this Agreement for a period of more than one (1) year, this Agreement may be terminated by the Partnership Entities or the Holly Entities. Nothing in this Section 3(a) shall alter the liability of the Partnership Entities as set forth in the applicable rules and regulations tariffs for the Pipeline Assets.

Section 4. Agreement to Remain Shipper

With respect to any Refined Product that is produced at a Refinery and transported in the Roswell Products Pipeline or any Crude Oil that is acquired by the Holly Entities and transported on the Crude Oil Trunk Pipelines and stored in the Artesia Crude Oil Pipeline Tankage or Lovington Crude Oil Pipeline Tankage, the Holly Entities agree that they will continue their historical commercial practice of owning such Crude Oil or Refined Product, as applicable, from such point as (i) the Refined Product leaves the Refinery until at least such point as it will not be further transported in the Roswell Products Pipeline and to continue acting in the capacity of the shipper of such Refined Product for their own account at all times that such Refined Product is in the Roswell Products Pipeline; and (ii) the Crude Oil is received into the Crude Oil Gathering Pipelines by the Partnership Entities until such time that it is delivered to the Artesia Refinery or delivered to the Lovington Crude Oil Pipeline Tankage at the Lovington Refinery.

Section 5. Agreement Not to Challenge Tariffs

The Holly Entities agree to any tariff rate changes for the Pipeline Assets 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, 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 the Crude Oil or Refined Product, 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 tariffs (including joint tariffs) for transportation of Crude Oil or Refined Product 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 Time, and shall terminate at 12:01 a.m. Dallas, Texas, time on February 28, 2023, 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. 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 and tankage 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 and tankage 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 Drop-Down Assets. In such circumstances, the Partnership Entities shall give the Holly Entities forty-five (45) days prior written notice of any proposed new pipelines and tankage 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 and tankage 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 and tankage 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 Drop-Down Assets. In such circumstances, the Partnership Entities shall give the Holly Entities forty-five (45) days prior written notice of any proposed new pipelines and tankage 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: Matthew P. Clifton
Facsimile: 214-615-9372

if to the Partnership Entities :

Holly Energy Partners
100 Crescent Court
Suite 1600
Dallas, TX 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), Section 2(c) or Section 2(d) of this Agreement, provided that the Holly Entities’ obligations pursuant to the Minimum Trunk Pipeline Revenue Commitment, Minimum Gathering Pipeline Revenue Commitment, Minimum Woods Cross Pipeline Revenue Commitment and the Minimum Roswell Pipeline Revenue Commitment shall, in each case, 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), Section 2(c) or Section 2(d) of this Agreement, as applicable (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(e).

(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) The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Pipeline Revenue Commitment.

(e) The Parties acknowledge and agree that the Minimum Pipeline Revenue Commitment shall not be aggregated for purposes of determining any deficiency pursuant to this Section 9.

(f) No Party shall have a right to setoff revenue in excess of the minimum revenue commitment of the Minimum Trunk Pipeline Revenue Commitment, the Minimum Gathering Pipeline Revenue Commitment, the Minimum Woods Cross Pipeline Revenue Commitment or the Minimum Roswell Pipeline Revenue Commitment with respect to any deficiency under the Minimum Trunk Pipeline Revenue Commitment, the Minimum Gathering Pipeline Revenue Commitment, the Minimum Woods Cross Pipeline Revenue Commitment or the Minimum Roswell Pipeline Revenue Commitment.

Section 10. Right of First Refusal The Parties acknowledge that the Holly Entities shall, at any time during the twelve (12) months prior to the expiration of the Term, have a right of first refusal with respect to the Drop-Down Assets to the extent provided by the Omnibus Agreement and made applicable to the Drop-Down Assets pursuant to Section 11.4(a) of the Purchase Agreement.

Section 11. Miscellaneous

(a) Amendments and Waivers . 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 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. 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.

(b) 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 Drop-Down Assets 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 Drop-Down Assets 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.

(c) 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.

(d) 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.

(e) 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(e) and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 11(e) 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 or for 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.

(f) 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.

(g) 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.

[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.


	HOLLY ENERGY PARTNERS, L.P.
	By:	HEP LOGISTICS HOLDINGS, L.P.
		its General Partner



	By:	HOLLY LOGISTIC SERVICES, L.L.C.
		its General Partner



	By:
		David G. Blair
		Senior Vice President

	HOLLY ENERGY PARTNERS — OPERATING, L.P.
	By:
		David G. Blair
		Senior Vice President

Signature Page 1 of 4 to the Pipelines and Tankage Agreement


	HEP WOODS CROSS, L.L.C.
	By:	HOLLY ENERGY PARTNERS — OPERATING, L.P.
		its Sole Member



	By:
		David G. Blair
		Senior Vice President

	HEP PIPELINE, L.L.C.
	By:	HOLLY ENERGY PARTNERS — OPERATING, L.P.
		its Sole Member



	By:
		David G. Blair
		Senior Vice President

	HOLLY CORPORATION
	By:
		Bruce Shaw
		Senior Vice President and Chief Financial Officer

	NAVAJO PIPELINE CO., L.P.
	By:	NAVAJO PIPELINE GP, L.L.C.,
		Its General Partner



	By:
		Bruce Shaw
		Vice President and Chief Financial Officer

	WOODS CROSS REFINING COMPANY, L.L.C.
	By:	NAVAJO REFINING COMPANY, L.L.C.,
		Its sole Member

Signature Page 2 of 4 to the Pipelines and Tankage Agreement



	By:
		Bruce Shaw
		Vice President and Chief Financial Officer

	NAVAJO REFINING COMPANY, L.L.C.
	By:
		Bruce Shaw
		Vice President and Chief Financial Officer

Signature Page 3 of 4 to the Pipelines and Tankage Agreement

EXHIBIT A

Attached to and made
Part of the Pipelines and Tankage Agreement,
dated February [ ], 2008

Crude Oil Trunk Pipeline Tariff Rate: $0.47 per barrel on all volumes less than 85,000 bpd average volume in any month

If the average volume is equal to or in excess of 85,000 bpd in any month:
$0.40 per barrel on the first 85,000 bpd average volume in any month
$0.30 per barrel on the next 7,500 bpd average volume in any month
$0.20 per barrel on any excess up to a maximum of 110,000 bpd average volume in any month

The rate on any excess above 110,000 bpd average volume in any month shall be as mutually agreed upon by the Parties.

Exhibit A — Page 1 to Pipelines and Tankage Agreement

EXHIBIT B

Attached to and made
Part of the Pipelines and Tankage Agreement,
dated February [ ], 2008

Crude Oil Gathering Pipelines Tariff Rate: $0.50 per barrel (which includes storage in the Artesia Crude Oil Pipeline Tankage and Lovington Crude Oil Pipeline Tankage)

Exhibit B — Page 1 to Pipelines and Tankage Agreement

EXHIBIT C

Attached to and made
Part of the Pipelines and Tankage Agreement,
dated February [ ], 2008

Woods Cross Pipelines Tariff Rate: $0.25 per barrel

Exhibit C — Page 1 to Pipelines and Tankage Agreement

EXHIBIT D

Attached to and made
Part of the Pipelines and Tankage Agreement,
dated February [ ], 2008

Roswell Product Pipeline Tariff Rate: $0.45 per barrel with a $0.50 per barrel capital recovery surcharge (to be indexed and which expires after 5 years)

Exhibit D — Page 1 to Pipelines and Tankage Agreement

EXHIBIT E

Attached to and made
Part of the Pipelines and Tankage Agreement,
Dated February [ ], 2008

The flow reversal rate is $0.40 per barrel.

Exhibit E — Page 1 to Pipelines and Tankage Agreement

Exhibit 99.2

Holly Energy Partners and Holly Corporation Announce Definitive Agreement for Acquisition of Pipeline and Tankage Assets

DALLAS, TX, February 26, 2008 — Holly Energy Partners, L.P. (NYSE:HEP) and Holly Corporation (NYSE:HOC) today announced a definitive agreement for the acquisition by Holly Energy from Holly of certain pipeline and tankage assets for approximately $180 million. The purchase price of $180 million consists of approximately $171 million in cash and Holly Energy common units valued at approximately $9 million. It is anticipated that this transaction will close on February 29, 2008, and will become effective March 1, 2008. Completion of the transaction is subject to certain closing conditions.

Holly Energy expects the assets being acquired will result in approximately $20 million of incremental EBITDA (earnings before interest, taxes, depreciation and amortization) to HEP. The estimated annual maintenance capital required for these assets is approximately $1.5 million. In connection with the closing of the proposed transaction, Holly and Holly Energy will enter into a 15-year pipelines and tankage agreement containing minimum annual revenue commitments from Holly. The initial minimum annual revenue guarantee is set at $25.3 million, and will increase annually based on a formula using the Producer Price Index (PPI).

Holly Energy has arranged to finance the $171 million cash portion of the acquisition through the Partnership’s revolving credit facility. This facility has been increased from $100 million to $300 million pursuant to an amendment to the credit facility which was signed yesterday. Union Bank of California is administrative agent for this facility. This facility terminates in August 2011. Additionally, Holly Energy anticipates entering into floating-to-fixed rate interest rate swaps for all or a portion of the $171 million borrowed under the revolving credit facility.

This transaction has been approved by the Boards of Directors for both Holly Energy and Holly after approvals by the Conflicts Committee for Holly Energy, which is comprised solely of independent outside directors for Holly Energy, and the Holly Audit Committee, which is composed solely of outside directors of Holly. The Boards of Directors for both companies have obtained fairness opinions from financial advisory firms in connection with this proposed transaction.

These assets being acquired consist of:

•

The Navajo Refinery crude oil delivery system—Approximately 136 miles of crude oil trunk lines delivering crude to the Navajo refining facility in Southeast New Mexico.

	•		Western Permian Basin crude gathering lines plus lease connection lines—Approximately 725 miles of gathering and connection pipelines located in West Texas and New Mexico. These lines primarily connect to the acquired crude oil refinery delivery system.

	•		Refinery on-site crude tankage located within the Navajo and Woods Cross refinery complexes, with approximately 600,000 barrels per day of storage capacity.

	•		Artesia to Roswell, New Mexico jet fuel products pipeline and terminal (terminal leased through September 2011).

	•		Woods Cross Refinery pipelines—Approximately 10 miles of crude oil and product pipelines.

“As we noted when we originally announced this transaction in November, 2007, this acquisition fits well into Holly Energy’s strategy of disciplined growth through the addition or expansion of steady income generating assets. As with all of Holly Energy’s existing assets, this acquisition consists of assets generating 100% fee based transportation and terminal revenues. We expect this transaction will be immediately positive for Holly Energy’s distributable cashflow. These assets, coupled with Holly Energy’s current set of organic projects, should allow Holly Energy to continue with its strong track record of providing growth to its limited partners. We’re especially pleased to be able to finance this transaction with our bank credit facility and anticipate being able to secure a very favorable fixed interest rate with the addition of the interest rate swap”, said Matt Clifton, Chairman and CEO of Holly and Holly Energy.

About Holly Energy Partners L.P.:

Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides petroleum product transportation and terminal services to the petroleum industry, including Holly Corporation, which currently owns a 45% interest in the Partnership. The Partnership owns and operates product pipelines and terminals primarily in Texas, New Mexico, Oklahoma, Arizona, Washington, Idaho and Utah. In addition, the Partnership owns a 70% interest in Rio Grande Pipeline Company, a transporter of LPGs from West Texas to Northern Mexico.

About Holly Corporation:

Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel and jet fuel. Holly operates through its subsidiaries an 85,000 barrels per stream day (“bpsd”) refinery located in Artesia, New Mexico and a 26,000 bpsd refinery in

Woods Cross, Utah. Holly also currently owns a 45% interest (including the general partner interest) in Holly Energy Partners, L.P.

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. These statements are based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove correct. Therefore, actual outcomes and results could differ materially from what is expressed, implied or forecast in these statements. Any differences could be caused by a number of factors, including, but not limited to:

	•		Risks and uncertainties with respect to the actual quantities of refined petroleum products shipped on our pipelines and/or terminalled in our terminals;

	•		The economic viability of Holly Corporation, Alon USA, Inc. and Holly Energy’s other customers;

	•		The demand for refined petroleum products in markets we serve;

	•		The ability of Holly Energy to complete this acquisition from Holly Corporation as well as previously announced pending or contemplated acquisitions;

	•		The availability and cost of financing;

	•		The possibility of reductions in production or shutdowns at refineries utilizing Holly Energy pipeline and terminal facilities;

	•		The effects of current and future government regulations and policies;

	•		Our operational efficiency in carrying out routine operations and capital construction projects;

	•		The possibility of terrorist attacks and the consequences of any such attacks;

	•		General economic conditions; and

	•		Other financial, operations and legal risks and uncertainties detailed from time to time in our Securities and Exchange Commission filings.

The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

FOR FURTHER INFORMATION, Contact:

Bruce R. Shaw,
Senior Vice President and Chief Financial Officer,
Holly Corporation / Holly Energy Partners
214-871-3555

M. Neale Hickerson,
Vice President-Investor Relations,
Holly Corporation / Holly Energy Partners
214-871-3555