exv10w1



 





Exhibit 10.1




FIFTH AMENDMENT TO PIPELINES AND TERMINALS AGREEMENT



This Amendment to the Pipelines and Terminals Agreement dated as of July 13, 2004 by and among
Holly Corporation (“Holly”), Navajo Refining Company, L.P. (which is the predecessor of Navajo
Refining Company, L.L.C.), and Holly Refining and Marketing Company (together with Holly and Navajo
Refining Company, L.L.C., the “Holly Entities”) on the one hand, and Holly Energy Partners, L.P.,
Holly Energy Partners — Operating, L.P. (whose prior name was HEP Operating Company, L.P.), HEP
Logistics Holdings, L.P., Holly Logistic Services, L.L.C., and HEP Logistics GP, L.L.C. (the
“Partnership Entities”), on the other (the “Pipelines and Terminals Agreement”), is entered into
effective as of the 15th day of October, 2007, by and between the Holly Entities and the
Partnership Entities (the “Amendment”).



For purposes of this Amendment, the term “Holly Group” shall mean Holly, Navajo Refining Company,
L.L.C. and Holly Refining and Marketing Company and any Subsidiary of Navajo Refining Company,
L.L.C. or Holly Refining and Marketing Company, treated as a single consolidated entity, and the
term “Partnership Group” shall mean Holly Energy Partners, L.P., Holly Energy Partners —
Operating, L.P. and any Subsidiary of either partnership, treated as a single consolidated entity.
Capitalized terms not otherwise defined herein shall have the meanings set forth in the Pipelines
and Terminals Agreement.



Whereas, the Holly Group has requested that the Partnership Group expand the Partnership Group’s
Artesia, New Mexico to El Paso, Texas refined products pipeline system (the “South System”),
construct additional storage at the Phelps Dodge Terminal, and enhance the tie-in to the Kinder
Morgan El Paso Pump Station (together with all related modifications the “South System Expansion);



Whereas the Partnership Group agrees to incur all necessary costs to effectuate the South System
Expansion, which costs are expected to be approximately $48,300,000; and



Whereas the Holly Group agrees to compensate the Partnership Group for its investment in the South
System Expansion through a tariff increase on all shipments on the Refined Product Pipelines.



NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby amend the Pipelines and Terminals Agreement as follows:





	 	1.	 	The Partnership Group shall carry out a project (the “Project”) to expand the South
System by (A) replacing approximately 85 miles of 8” pipe with 12” pipe, (B) adding
150,000 barrels of refined product storage at the El Paso Terminal, (C) improving pumps
on the South System, (D) adding a tie-in to the Kinder-Morgan pipeline to Tucson and
Phoenix, Arizona, and (E) making related modifications to the South System.
	 
	 	2.	 	The Partnership Group shall carry out the Project as expeditiously as reasonably
possible so that the Project will be completed not later than January 31, 2009.
	 
	 	3.	 	The current base and incentive tariffs rates on the Refined Product Pipelines shall
be increased by $0.17 per barrel effective May 1, 2008.
	 
	 	4.	 	In the event that the capital investment required for the Project, other than
actual pipe costs and tank construction costs, exceeds $35,398,000, the base and
incentive tariffs on the Refined Product Pipelines shall, effective as of the first day
of the month immediately following the month in which the Project is completed, be
increased from the amount determined under paragraph 3 by an amount equal to $0.0005 per
$100,000 of such excess, with the resulting tariff rounded to the nearest 1/10 of a cent
per barrel.





 









 






	 	5.	 	In the event that the Project is completed prior to January 31, 2009, the Holly
Group shall pay to the Partnership Group an amount equal to $12,240 times the number of
days that the completion of the Project occurs earlier than January 31, 2009. In the
event that the Project is completed after January 31, 2009, the Partnership Group shall
pay to the Holly Group an amount equal to $12,240 times the number of days that the
completion of the Project is delayed beyond January 31, 2009. For purposes of this
Amendment, the date that the Project is completed is the date that the Partnership Group
provides notice to the Holly Group that the construction, testing and commissioning of
the expanded pipeline, additional El Paso tankage and related improvements that are
included in the Project have been accomplished and that such pipeline, tankage and
related improvements are ready to commence operations.
	 
	 	6.	 	The tariff rates for interstate and intrastate service on the Refined Product
Pipelines as provided under the Agreement as previously amended shall be amended in
accordance with this Amendment to be effective May 1, 2008.
	 
	 	7.	 	Tariff rates as increased under the terms of this Amendment shall be filed at the
Federal Energy Regulatory Commission and the appropriate state agency and shall be
adjusted on July 1 of each year based on the amount of increase in the PPI as provided in
Section 2(a)(ii) of the Pipelines and Terminals Agreement.
	 
	 	8.	 	All terms, conditions and provisions of the Pipelines and Terminals Agreement as
previously amended are continued in full force and effect and shall remain unaffected and
unchanged except as specifically amended hereby. The Pipelines and Terminals Agreement,
as previously amended and as amended hereby, is hereby ratified and reaffirmed by the
parties hereto, who specifically acknowledge the validity and enforceability thereof.
	 
	 	9.	 	This Amendment shall be governed by and construed in accordance with the laws of
the State of Texas. In the event that the terms of the Pipelines and Terminals Agreement
as previously amended conflict or are inconsistent with those of this Amendment, the
terms of this Amendment shall govern. The provisions of this Amendment shall be binding
upon, and shall inure to the benefit of, the parties hereto and each of their respective
representatives, successors, and assigns. This Amendment may not be modified or changed
in whole or in part in any manner other than by an instrument in writing duly signed by
all parties hereto. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the
same agreement.





     IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as of October 15,
2007.



	 	 	 	 	 
	HOLLY CORPORATION

 	 
	By:  	 	 
	 	David L. Lamp 	 
	 	Executive Vice President, Refining and Marketing 
	 




 









 





	 	 	 	 	 
	NAVAJO REFINING COMPANY, L.L.C.

 	 
	By:  	 	 
	 	David L. Lamp 	 
	 	Executive Vice President 	 
	 
	 
	HOLLY REFINING AND MARKETING COMPANY

 
	By:  	 	 
	 	David L. Lamp 	 
	 	Vice President 	 
	 
	 
	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:  	HEP LOGISTICS GP, L.L.C.,
 	 
	 	its general partner 	 



	 	 	 	 	 
	 	By:  	
 	 
	 	 	David G, Blair 	 
	 	 	Senior Vice President 	 
	 



	 	 	 	 	 
	HEP LOGISTICS HOLDINGS, L.P.

 	 
	By:  	HOLLY LOGISTIC SERVICES, L.L.C.,
 	 
	 	its general partner 	 



	 	 	 	 	 
	 	By:  	
 	 
	 	 	David G, Blair 	 
	 	 	Senior Vice President 	 
	 



	 	 	 	 	 
	HOLLY LOGISTIC SERVICES, L.L.C.

 	 
	By:  	 	 
	 	David G, Blair 	 
	 	Senior Vice President 	 
	 
	 
	HEP LOGISTICS GP, L.L.C.

 	 
	By:  	 	 
	 	David G, Blair 	 
	 	Senior Vice President