Document:

exv10w1

Exhibit 10.1

Execution Version

 

LLC INTEREST PURCHASE AGREEMENT

by and among

HOLLY CORPORATION,

NAVAJO PIPELINE CO., L.P.

as Seller,

and

HOLLY ENERGY PARTNERS – OPERATING, L.P.

as Buyer

Dated as of December 1, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINED TERMS
	 	 	1	 
	 
	 	 	 	 
	1.1 Defined Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II PURCHASE OF LLC INTERESTS
	 	 	6	 
	 
	 	 	 	 
	2.1 Transfer of LLC Interests
	 	 	6	 
	2.2 Consideration
	 	 	6	 
	 
	 	 	 	 
	ARTICLE III CLOSING
	 	 	6	 
	 
	 	 	 	 
	3.1 Closing
	 	 	6	 
	3.2 Deliveries by the Seller
	 	 	6	 
	3.3 Deliveries by the Buyer
	 	 	7	 
	3.4 Closing Costs; Transfer Taxes and Fees
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	8	 
	 
	 	 	 	 
	4.1 Organization
	 	 	8	 
	4.2 Authorization
	 	 	8	 
	4.3 Company Status
	 	 	9	 
	4.4 No Conflicts or Violations; No Consents or Approvals Required
	 	 	9	 
	4.5 Absence of Litigation
	 	 	10	 
	4.6 Title to LLC Interests; Capitalization
	 	 	10	 
	4.7 No Undisclosed Liabilities
	 	 	10	 
	4.8 No Employees
	 	 	10	 
	4.9 Taxes
	 	 	10	 
	4.10 Brokers and Finders
	 	 	11	 
	4.11 Condition of Pipeline
	 	 	11	 
	4.12 Title to Assets
	 	 	11	 
	4.13 Permits
	 	 	11	 
	4.14 Banking Relationships
	 	 	11	 
	4.15 WAIVERS AND DISCLAIMERS
	 	 	11	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER
	 	 	12	 
	 
	 	 	 	 
	5.1 Organization
	 	 	12	 
	5.2 Authorization
	 	 	12	 
	5.3 No Conflicts or Violations; No Consents or Approvals Required
	 	 	13	 
	5.4 Absence of Litigation
	 	 	13	 
	5.5 Brokers and Finders
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF HOLLY
	 	 	13	 
	 
	 	 	 	 
	6.1 Organization
	 	 	13	 
	6.2 Authorization
	 	 	13	 
	6.3 No Conflicts or Violations; No Consents or Approvals Required
	 	 	14	 
	6.4 Absence of Litigation
	 	 	14	 
	6.5 Brokers and Finders
	 	 	14	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	ARTICLE VII COVENANTS
	 	 	14	 
	 
	 	 	 	 
	7.1 Cooperation
	 	 	14	 
	7.2 Additional Agreements
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VIII ADDITIONAL AGREEMENTS
	 	 	15	 
	 
	 	 	 	 
	8.1 Further Assurances
	 	 	15	 
	 
	 	 	 	 
	ARTICLE IX INDEMNIFICATION
	 	 	15	 
	 
	 	 	 	 
	9.1 Indemnification of Buyer and Seller
	 	 	15	 
	9.2 Defense of Third-Party Claims
	 	 	15	 
	9.3 Direct Claims
	 	 	16	 
	9.4 Limitations
	 	 	16	 
	9.5 Tax Related Adjustments
	 	 	17	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	17	 
	 
	 	 	 	 
	10.1 Expenses
	 	 	17	 
	10.2 Notices
	 	 	17	 
	10.3 Severability
	 	 	18	 
	10.4 Governing Law; Waiver of Jury Trial
	 	 	18	 
	10.5 Arbitration Provision
	 	 	18	 
	10.6 Parties in Interest
	 	 	19	 
	10.7 Assignment of Agreement
	 	 	19	 
	10.8 Captions
	 	 	19	 
	10.9 Counterparts
	 	 	19	 
	10.10 Director and Officer Liability
	 	 	20	 
	10.11 Integration
	 	 	20	 
	10.12 Effect of Agreement
	 	 	20	 
	10.13 Amendment; Waiver
	 	 	20	 
	10.14 Survival of Representations and Warranties
	 	 	20	 
	 
	 	 	 	 
	ARTICLE XI GUARANTEE
	 	 	20	 
	 
	 	 	 	 
	11.1 Payment and Performance Guaranty
	 	 	20	 
	11.2 Guaranty Absolute
	 	 	20	 
	11.3 Waiver
	 	 	21	 
	11.4 Subrogation Waiver
	 	 	21	 
	11.5 Reinstatement
	 	 	21	 
	11.6 Continuing Guaranty
	 	 	22	 
	11.7 No Duty to Pursue Others
	 	 	22	 
	 
	 	 	 	 
	ARTICLE XII INTERPRETATION
	 	 	22	 
	 
	 	 	 	 
	12.1 Interpretation
	 	 	22	 
	12.2 References, Gender, Number
	 	 	23	 

-ii-

 

	 	 	 	 	 
	Exhibits:
	 	 	 	 
	Exhibit A — Assignment
	 	 	 	 
	Exhibit B — Throughput Agreement
	 	 	 	 
	Exhibit C — Restated Omnibus Agreement
	 	 	 	 
	Exhibit D — Subordinate Mortgages
	 	 	 	 
	 
	 	 	 	 
	Schedules:
	 	 	 	 
	Schedule 4.3(a) —  Company Foreign Qualifications
	 	 	 	 
	Schedule 4.12  —  Title to Assets
	 	 	 	 
	Schedule 4.14  —  Banking Relationships
	 	 	 	 

iii

 

LLC INTEREST PURCHASE AGREEMENT

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

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

     WHEREAS, the Company is the owner of a 16" crude oil pipeline (the “Pipeline”) currently
running approximately 65 miles from the Slaughter Station in Texas to Holly’s Lovington, New Mexico
petroleum refinery;

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

     WHEREAS, contemporaneously with the execution and delivery of this Agreement, (i) Seller has
entered into an Asset Purchase Agreement pursuant to which Seller has agreed to sell the assets
constituting a pipeline known as the Beeson pipeline (the “Beeson Pipeline”) to an affiliate of
Buyer, and (ii) an affiliate of Seller has agreed to amend the Amended and Restated Crude Pipelines
and Tankage Agreement to add the Beeson Pipeline to that agreement without any other changes in the
terms and tariffs payable thereunder (the “Restated Crude Agreement”);

     WHEREAS, in connection with the acquisition of the LLC Interests, the Parties wish to (i)
amend certain provisions of the Omnibus Agreement (as defined below), and (ii) to enter into a
throughput agreement regarding the Pipeline in the form attached hereto as Exhibit B (the
“Throughput Agreement”).

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein
and in the Omnibus Agreement (as well as (i) the execution and delivery of the Restated Crude
Agreement by an affiliate of Seller and (ii) the execution and delivery of the Throughput Agreement
by an affiliate of Seller), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:

ARTICLE I

DEFINED TERMS

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

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

     “affiliate” means, with respect to a specified person, any other person controlling,
controlled by or under common control with that first person. As used in this definition, the term
“control” includes (i) with respect to any person having voting securities or the equivalent and
elected directors, managers or persons performing similar functions, the ownership of or power to
vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the
power to vote in the election of directors, managers or persons performing similar functions, (ii)
ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability
to direct the business and affairs of any person by acting as a general partner, manager or
otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the Seller, on the one
hand, and the Buyer, on the other hand, shall not be considered affiliates of each other.

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

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

     “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 Entity 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 Entity), as interpreted and enforced at the time in question.

     “Arbitrable Dispute” means any and all disputes, Claims, controversies and other matters in
question between Seller, on the one hand, and Buyer, 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.

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

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

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

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

     “Buyer Indemnified Costs” means (a) any and all damages, losses, claims, liabilities, demands,
charges, suits, penalties, costs, and expenses (including court costs and reasonable

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attorneys’ fees and expenses incurred in investigating and preparing for any litigation or
proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to (i)
any breach of a representation, warranty or covenant of Seller under this Agreement, or (ii) any
obligations or duties of the Company under any Construction Contract (including, without
limitation, the Company’s payment obligations under such Construction Contracts and the cost to
complete construction of the Pipeline as set forth in such Construction Contracts), and (b) any and
all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding
anything in the foregoing to the contrary, Buyer Indemnified Costs shall exclude (i) any and all
indirect, consequential, punitive, or exemplary damages (other than those that are a result of (x)
a third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the
gross negligence or willful misconduct of Seller) and (ii) any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and
reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation
or proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to
any matter that is covered by a warranty under a Construction Contract (including, without
limitation, defects in the construction of the Pipeline which are covered by a warranty under a
Construction Contract).

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

     “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” shall have the meaning set forth in Section 10.5.

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

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

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

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

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

     “Construction Contract” any Contract relating to the original planned construction of the
Pipeline, as such Contract is in effect as of the Effective Time (including any change orders
agreed to by the parties to such Contracts prior to the Effective Time, whether or not such change
order has properly been documented as of the Effective Time).

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

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

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

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

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

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

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

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

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

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

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

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

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effective third-party indemnifications with respect to such change, circumstance, effect or
condition.

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

     “Omnibus Agreement” means that certain Second Amended and Restated Omnibus Agreement entered
into and effective as of August 1, 2009, 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 the other Holly affiliates and Partnership affiliates signatory
thereto, and as amended and restated as of the Closing Date.

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

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

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

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

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

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

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

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

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

     “Respondent” shall have the meaning set forth in Section 10.5.

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

     “Seller Ancillary Documents” shall mean each agreement, document, instrument or certificate to
be delivered by the Seller, or its affiliates, at the Closing pursuant to Section 3.2

5

 

hereof and each other document or Contract entered into by the Seller, or its affiliates, in
connection with this Agreement or the Closing.

     “Seller Indemnified Costs” means (a) any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable
attorneys’ fees and expenses incurred in investigating and preparing for any litigation or
proceeding) that any of the Seller Indemnified Parties incurs and that arise out of or relate to
any breach of a representation, warranty or covenant of Buyer under this Agreement, and (b) any and
all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding
anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all
indirect, consequential, punitive or exemplary damages (other than those that are a result of (x) a
third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the gross
negligence or willful misconduct of Buyer).

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

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

     “Throughput Agreement” shall have the meaning set forth in the recitals.

ARTICLE II

PURCHASE OF LLC INTERESTS

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

     2.2 Consideration.

          (a) The aggregate consideration to be paid by the Operating Partnership for the LLC Interests
shall be $35,500,000 (the “Purchase Price”).

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

ARTICLE III

CLOSING

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

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

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

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

          (c) A counterpart of the Throughput Agreement, duly executed by Navajo Refining Company,
L.L.C. and Holly.

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

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

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

          (g) A properly executed certificate, in the form prescribed by Treasury regulations under
Section 1445 of the Code, stating that Navajo Holdings, Inc. (the person from whom Seller is
disregarded as an entity for U.S. federal in come tax purposes) is not a “foreign person” within
the meaning of Section 1445 of the Code.

     3.3 Deliveries by the Buyer. At the Closing (or such later date as may be set forth below),
the Buyer shall deliver, or cause to be delivered, to the Seller the following:

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

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

          (c) A counterpart of the Throughput Agreement, duly executed by Buyer and the Partnership.

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

          (e) Simultaneous with the delivery of senior mortgages by Buyer as required under its credit
facility (but in no event later than 30 days following the Closing Date), the Buyer shall execute
and deliver to the Seller the subordinate mortgages and deeds of trust substantially in the form of
Exhibit D attached hereto.

7

 

     3.4 Closing Costs; Transfer Taxes and Fees.

          (a) Allocation of Costs. The Buyer shall pay the cost of all sales, transfer and use
taxes arising out of the transfer of the LLC Interests and all costs and expenses (including
recording fees and real estate transfer taxes and real estate transfer stamps) incurred in
connection with obtaining or recording title to the Company’s assets.

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

          (c) 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, if any, and
personal property taxes, water, gas, electricity and other utilities with respect to the Pipeline
and the real estate interests and rights associated with the Pipeline and local business or other
license fees to the extent assigned and other similar periodic charges payable with respect to the
Pipeline or the Company shall be prorated between the Buyer, on the one hand, and the Seller, on
the other hand, effective as of the Effective Time with the Seller being responsible for amounts
related to the period prior to but excluding the Effective Time and the Buyer being responsible for
amounts related to the period at and after the Effective Time. If the final 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.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

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

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

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

8

 

     4.3 Company Status.

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

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

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

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

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

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

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

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     4.5 Absence of Litigation. There is no Action pending or, to the knowledge of the Seller,
threatened against (i) the Company or the Company’s assets or (ii) the Seller or any of its
affiliates relating to the transactions contemplated by this Agreement or the Ancillary Documents
or which, if adversely determined, would reasonably be expected to materially impair the ability of
the Seller to perform its obligations and agreements under this Agreement or the Seller Ancillary
Documents and to consummate the transactions contemplated hereby and thereby.

     4.6 Title to LLC Interests; Capitalization.

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

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

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

     4.7 No Undisclosed Liabilities. The Company has no indebtedness or liability (whether
absolute, accrued, contingent or otherwise) of any nature other than its obligations under the
Construction Contracts and the Guarantee and Collateral Agreement referred to on Seller
Disclosure Schedule 4.14 (the “Guarantee Agreement”). The Company and its assets will be
released from the Company’s obligations under the Guarantee Agreement and the related loan
documents following the Closing and delivery of certain documents to the agent for the lenders
under the Second Amended and Restated Credit Agreement referred to on Seller Disclosure
Schedule 4.14. The Company is not currently in material breach of its obligations under the
Construction Contracts.

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

     4.9 Taxes. The Company has filed, on or before the applicable due date (including any
extensions thereof), all material tax returns that it was required to file, and all such tax

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

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

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

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

     4.13 Permits. Seller or Company owns or holds all franchises, licenses, permits, consents,
approvals and authorizations of any Governmental Entity necessary for the ownership and operation
of the Pipeline (collectively, the “Permits”). Each Permit is in full force and effect,
and Company is in compliance with all of its obligations with respect thereto. To the knowledge of
Seller, no event has occurred that causes, or upon the giving of notice or the lapse of time or
otherwise would cause, revocation or termination of any Permit. All Permits shall be, subject to
Permitted Encumbrances, owned or held by Company at Closing.

     4.14 Banking Relationships. Seller Disclosure Schedule 4.14 sets forth a complete and
accurate list of all accounts, including checking accounts, cash contribution accounts, safe
deposit boxes, borrowing arrangements and certificates of deposit that the Company has with any
banks, savings and loan associations or other financial institutions, indicating in each case
account numbers, if applicable, and the person or persons authorized to act or sign on behalf of
the Company in respect of the foregoing. No person holds any power of attorney or similar
authority from the Company with respect to such accounts.

     4.15 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,

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

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

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

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

     5.2 Authorization. The Buyer has full partnership power and authority to execute, deliver,
and perform this Agreement and any Buyer Ancillary Documents to which it is a party. The
execution, delivery, and performance by the Buyer of this Agreement and the Buyer Ancillary
Documents and the consummation by the Buyer of the transactions contemplated hereby and thereby,
have been duly authorized by all necessary partnership action of the Buyer.

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This Agreement has been duly executed and delivered by the Buyer and constitutes, and each
such Buyer Ancillary Document executed or to be executed the Buyer has been, or when executed will
be, duly executed and delivered by the Buyer and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of the Buyer, enforceable against it in
accordance with their terms, except to the extent that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other
similar Laws affecting creditors’ rights and remedies generally and (ii) equitable principles which
may limit the availability of certain equitable remedies (such as specific performance) in certain
instances.

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

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

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

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF HOLLY

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

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

     6.2 Authorization. Holly has full corporate power and authority to execute, deliver, and
perform this Agreement and any Ancillary Documents to which it is a party. The execution,
delivery, and performance by Holly of this Agreement and the Ancillary Documents and the
consummation by Holly of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action of Holly. This Agreement has been duly executed and
delivered by Holly and constitutes, and each such Ancillary Document executed or to be executed by
Holly has been, or when executed will be, duly executed and delivered by Holly and

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constitutes, or when executed and delivered will constitute, a valid and legally binding
obligation of Holly, enforceable against it in accordance with their terms, except to the extent
that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar Laws affecting creditors’ rights and remedies
generally and (ii) equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances.

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

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

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

ARTICLE VII

COVENANTS

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

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

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ARTICLE VIII

ADDITIONAL AGREEMENTS

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

ARTICLE IX

INDEMNIFICATION

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

     9.2 Defense of Third-Party Claims. An Indemnified Party shall give prompt written notice to
Seller or Buyer, as applicable (the “Indemnifying Party”), of the commencement or assertion
of any action, proceeding, demand, or claim by a third party (collectively, a “third-party
action”) in respect of which such Indemnified Party seeks indemnification hereunder. Any
failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it, he, or she may have to such Indemnified Party under this Article IX
unless the failure to give such notice materially and adversely prejudices the Indemnifying Party.
The Indemnifying Party shall have the right to assume control of the defense of, settle, or
otherwise dispose of such third-party action on such terms as it deems appropriate;
provided, however, that:

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

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

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

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

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

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

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

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

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

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

ARTICLE X

MISCELLANEOUS

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

     10.2 Notices.

          (a) Any notice or other communication given under this Agreement or the Omnibus Agreement
shall be in writing and shall be (i) delivered personally, (ii) sent by documented overnight
delivery service, (iii) sent by email 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 (x) if received, on the date of the delivery, with a receipt for delivery, (y)
if refused, on the date of the refused delivery, with a receipt for refusal, or (z) with respect to
email transmissions, on the date the recipient confirms receipt. Notices or other communications
shall be directed to the following addresses:

Notices to Holly:

Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: David L. Lamp

Email address: president@hollycorp.com

Notices to the Seller:

Navajo Pipeline Co., L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: David L. Lamp

Email address: president@hollycorp.com

with a copy, which shall not constitute notice, but is required in order to

give proper notice, to:

Navajo Pipeline Co., L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Email address: generalcounsel@hollycorp.com

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Notices to the Buyer:

Holly Energy Partners-Operating, L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: David G. Blair

Email address: SVP-HEP@hollyenergy.com

with a copy, which shall not constitute notice, but is required in order to

give proper notice, to:

Holly Energy Partners-Operating, L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Email address: generalcounsel@hollycorp.com

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

     10.3 Severability. If any term or other provision of this Agreement is invalid, illegal, or
incapable of being enforced under applicable Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not affected in any manner
adverse to any Party. Upon such determination that any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties as closely as possible in
a mutually acceptable manner in order that the transactions contemplated herein are consummated as
originally contemplated to the fullest extent possible.

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

     10.5 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 10.5 and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 10.5 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

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Party (“Claimant”) serving written notice on the other Party (“Respondent”) that the Claimant
elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating
binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall
respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the
arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator
within the 30-day period, Claimant shall petition the American Arbitration Association for
appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select
a third arbitrator within thirty (30) days after the second arbitrator has been appointed. The
Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent
will pay the compensation and expenses of the arbitrator named by or for it. The costs of
petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The
Claimant and Respondent will each pay one-half of the compensation and expenses of the third
arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or
employees of any of Seller, Buyer or any of their Affiliates and (ii) have not less than seven (7)
years experience in the petroleum transportation industry. The hearing will be conducted in
Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator.
Seller, Buyer 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. The Arbitrable Disputes may be arbitrated in a common proceeding along with
disputes under other agreements between Seller, Buyer or their Affiliates to the extent that the
issues raised in such disputes are related. Without the written consent of the Parties, no
unrelated disputes or third party disputes may be joined to an arbitration pursuant to this
Agreement.

     10.6 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.

     10.7 Assignment of Agreement. At any time, the Parties may make a collateral assignment of
their rights under this Agreement to any of their bona fide lenders or debt holders, or a trustee
or a representative for any of them, and the non-assigning Parties shall execute an acknowledgment
of such collateral assignment in such form as may from time to time be reasonably requested;
provided, however, that unless written notice is given to the non-assigning Parties that any such
collateral assignment has been foreclosed upon, such non-assigning Parties shall be entitled to
deal exclusively with Holly, the Buyer or the Seller, as the case may be, as to any matters arising
under this Agreement, the Ancillary Documents or the Omnibus Agreement (other than for delivery of
notices required by any such collateral assignment). Except as otherwise provided in this
Section 10.7, neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by any Party without the prior written consent of the other Parties
hereto.

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

     10.9 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.

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

     10.11 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.

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

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

     10.14 Survival of Representations and Warranties. The representations and warranties set
forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time on, on the
anniversary of the Closing Date, except that the representations and warranties contained in
Sections 4.1 (Organization), 4.2 (Authorization), 4.6 (Title to LLC
Interests; Capitalization), 4.9 (Taxes), 4.15 (Waivers and Disclaimers),
5.1 (Organization), 5.2 (Authorization), 6.1 (Organization), and
6.2 (Authorization) shall survive until the expiration of the applicable statute of
limitations; provided, however, that any representation and warranty that is the subject of a claim
for indemnification hereunder which claim was timely made pursuant to Section 9.4(a) shall
survive with respect to such claim until such claim is finally paid or adjudicated.

ARTICLE XI

GUARANTEE

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

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

20

 

collectibility. The liability of Holly under this Agreement shall be absolute, unconditional,
present, continuing and irrevocable irrespective of:

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

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

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

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

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

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

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

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

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

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

21

 

or reorganization of the Indemnifying Party or such other entity, or for any other reason, all
as though such payment had not been made.

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

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

ARTICLE XII

INTERPRETATION

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

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

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

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

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

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

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

22

 

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

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

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

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

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

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

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

[The Remainder of this Page is Intentionally Left Blank]

23

 

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

	 	 	 	 	 
	 	HOLLY:

HOLLY CORPORATION

 	 
	 	By:  	/s/ David L. Lamp
 	 
	 	 	David L. Lamp 	 
	 	 	President 	 
	 
	 	BUYER:

HOLLY ENERGY PARTNERS — OPERATING, L.P.

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

NAVAJO PIPELINE CO., L.P.

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

	 	 	 	 	 
	 	By:  	 /s/ George J. Damiris
 	 
	 	 	George J. Damiris 	 
	 	 	Vice President, Supply & Marketing 	 

[Signature Page to LLC Interest Purchase Agreement]

 

	 	 	 	 	 

EXHIBIT A

Form of Assignment

A - 1

 

EXHIBIT B

Form of Throughput Agreement

B - 1

 

EXHIBIT C

Form of Restated Omnibus Agreement

C - 1

 

EXHIBIT D

Form of Subordinate Mortgages

D - 1

 

DISCLOSURE SCHEDULES

TO LLC INTEREST PURCHASE AGREEMENT

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

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

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

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

 

SCHEDULE 4.3(a)

Company Foreign Qualifications

     New Mexico and Texas

Schedule 4.3(a)
- 1

 

 

SCHEDULE 4.12

Title to Assets

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

Schedule 4.12
- 1

 

 

SCHEDULE 4.14

Banking Relationships

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

Schedule 4.14
- 1exv10w2

Exhibit 10.2

Execution Version

 

ASSET PURCHASE AGREEMENT

(Beeson Pipeline)

between

HOLLY CORPORATION,

NAVAJO PIPELINE CO., L.P.

as Seller,

and

HEP PIPELINE, L.L.C.

as Buyer

Dated as of December 1, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINED TERMS
	 	 	1	 
	 
	 	 	 	 
	1.1 Defined Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II TRANSFER OF ASSETS, ASSUMPTION OF LIABILITIES AND AGGREGATE
CONSIDERATION
	 	 	6	 
	 
	 	 	 	 
	2.1 Sale of Assets and Assumption of Liabilities
	 	 	6	 
	2.2 Consideration
	 	 	7	 
	 
	 	 	 	 
	ARTICLE III CLOSING
	 	 	7	 
	 
	 	 	 	 
	3.1 Closing
	 	 	7	 
	3.2 Deliveries by the Seller
	 	 	7	 
	3.3 Deliveries by the Buyer
	 	 	7	 
	3.4 Prorations
	 	 	8	 
	3.5 Closing Costs; Transfer Taxes and Fees
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	8	 
	 
	 	 	 	 
	4.1 Organization
	 	 	9	 
	4.2 Authorization
	 	 	9	 
	4.3 No Conflicts or Violations; No Consents or Approvals Required
	 	 	9	 
	4.4 Absence of Litigation
	 	 	9	 
	4.5 Title to Transferred Assets
	 	 	9	 
	4.6 Condition of Pipeline
	 	 	10	 
	4.7 Brokers and Finders
	 	 	10	 
	4.8 Permits
	 	 	10	 
	4.9 WAIVERS AND DISCLAIMERS
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER
	 	 	11	 
	 
	 	 	 	 
	5.1 Organization
	 	 	11	 
	5.2 Authorization
	 	 	11	 
	5.3 No Conflicts or Violations; No Consents or Approvals Required
	 	 	11	 
	5.4 Absence of Litigation
	 	 	12	 
	5.5 Brokers and Finders
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF HOLLY
	 	 	12	 
	 
	 	 	 	 
	6.1 Organization
	 	 	12	 
	6.2 Authorization
	 	 	12	 
	6.3 No Conflicts or Violations; No Consents or Approvals Required
	 	 	12	 
	6.4 Absence of Litigation
	 	 	12	 
	6.5 Brokers and Finders
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VII COVENANTS
	 	 	13	 
	 
	 	 	 	 
	7.1 Cooperation
	 	 	13	 
	7.2 Additional Agreements
	 	 	13	 
	7.3 Post Closing Consents
	 	 	13	 

-i- 

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	ARTICLE VIII ADDITIONAL AGREEMENTS
	 	 	13	 
	 
	 	 	 	 
	8.1 Further Assurances
	 	 	13	 
	 
	 	 	 	 
	ARTICLE IX INDEMNIFICATION
	 	 	13	 
	 
	 	 	 	 
	9.1 Indemnification of Buyer and Seller
	 	 	13	 
	9.2 Defense of Third-Party Claims
	 	 	14	 
	9.3 Direct Claims
	 	 	15	 
	9.4 Limitations
	 	 	15	 
	9.5 Tax Related Adjustments
	 	 	15	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	15	 
	 
	 	 	 	 
	10.1 Expenses
	 	 	15	 
	10.2 Notices
	 	 	15	 
	10.3 Severability
	 	 	16	 
	10.4 Governing Law; Waiver of Jury Trial
	 	 	17	 
	10.5 Arbitration Provision
	 	 	17	 
	10.6 Parties in Interest
	 	 	18	 
	10.7 Assignment of Agreement
	 	 	18	 
	10.8 Captions
	 	 	18	 
	10.9 Counterparts
	 	 	18	 
	10.10 Director and Officer Liability
	 	 	18	 
	10.11 Integration
	 	 	18	 
	10.12 Effect of Agreement
	 	 	18	 
	10.13 Amendment; Waiver
	 	 	18	 
	10.14 Survival of Representations and Warranties
	 	 	19	 
	 
	 	 	 	 
	ARTICLE XI GUARANTEE
	 	 	19	 
	 
	 	 	 	 
	11.1 Payment and Performance Guaranty
	 	 	19	 
	11.2 Guaranty Absolute
	 	 	19	 
	11.3 Waiver
	 	 	19	 
	11.4 Subrogation Waiver
	 	 	20	 
	11.5 Reinstatement
	 	 	20	 
	11.6 Continuing Guaranty
	 	 	20	 
	11.7 No Duty to Pursue Others
	 	 	20	 
	 
	 	 	 	 
	ARTICLE XII INTERPRETATION
	 	 	20	 
	 
	 	 	 	 
	12.1 Interpretation
	 	 	20	 
	12.2 References, Gender, Number
	 	 	21	 

-ii- 

 

	 	 	 	 	 
	Exhibits:
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Assignment and Assumption Agreement
	Exhibit B

	 	—
	 	Form of Bill of Sale
	Exhibit C

	 	—
	 	Form of Restated Crude Pipelines Agreement
	Exhibit D

	 	—
	 	Form of Restated Omnibus Agreement
	Exhibit E

	 	—
	 	Form of Subordinate Mortgage

	 	 	 	 	 
	Schedules:
	 	 	 	 
	Schedule 2.1(a)(i)

	 	—
	 	Real Property
	 
	 	 	 	 
	Schedule 2.1(a)(iv)

	 	—
	 	Construction Contracts
	 
	 	 	 	 
	Schedule 4.3

	 	—
	 	Consents
	 
	 	 	 	 
	Schedule 4.8

	 	—
	 	Permits

-iii- 

 

ASSET PURCHASE AGREEMENT

(Beeson Pipeline)

     THIS ASSET PURCHASE AGREEMENT (this “Agreement”) dated as of December 1, 2009, is made and
entered into by and among Holly Corporation, a Delaware corporation (“Holly”), Navajo Pipeline Co.,
L.P., a Delaware limited partnership (the “Seller”), and HEP Pipeline, L.L.C., a Delaware limited
liability company (the “Buyer”). The above-named entities are sometimes referred to in this
Agreement each as a “Party” and collectively as the “Parties.”

     WHEREAS, Buyer wishes to purchase the Seller’s crude oil pipeline having a diameter of 8” and
extending approximately 37 miles from Beeson station to Lovington, New Mexico (the
“Pipeline”), as well as the associated right of way and rights under any construction
contracts relating to the original construction of such pipeline; and

     WHEREAS, contemporaneously with the execution and delivery of this Agreement, (i) Seller has
entered into an LLC Interest Purchase Agreement pursuant to which Seller has agreed to sell all of
the limited liability company interests of Roadrunner Pipeline, L.L.C. (“Roadrunner LLC”)
to an affiliate of Buyer, which Roadrunner LLC owns a pipeline known as the Roadrunner Pipeline
(the “Roadrunner Pipeline”), and (ii) an affiliate of Seller has entered into a throughput
agreement with an affiliate of Buyer regarding it and its affiliates’ use of and tariffs payable
with regard to the Roadrunner Pipeline (the “Roadrunner Throughput Agreement”);

     WHEREAS, the Parties wish to (i) amend certain provisions of the Omnibus Agreement (as defined
below) and (ii) amend certain provisions of the Crude Pipelines Agreement (as defined below).

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein
and in the Restated Omnibus Agreement (as well as (i) the execution and delivery of the Roadrunner
Throughput Agreement by an affiliate of Seller and (ii) the execution and delivery of the Restated
Crude Pipelines Agreement to add the Pipeline to that agreement without any other changes in the
terms or tariffs payable thereunder), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby
agree as follows:

ARTICLE I

DEFINED TERMS

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

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

     “affiliate” means, with respect to a specified person, any other person controlling,
controlled by or under common control with that first person. As used in this definition, the term
“control” includes (i) with respect to any person having voting securities or the equivalent and

1

 

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

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

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

     “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 Entity 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 Entity), as interpreted and enforced at the time in question.

     “Arbitrable Dispute” means any and all disputes, Claims, controversies and other matters in
question between Seller, on the one hand, and Buyer, 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.

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

     “Assumed Liabilities” means all obligations and liabilities of the Seller with respect to the
Transferred Assets.

     “Bill of Sale” shall have the meaning set forth in Section 3.2(b).

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

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

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

     “Buyer Indemnified Costs” means (a) any and all damages, losses, claims, liabilities, demands,
charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys’
fees and expenses incurred in investigating and preparing for any litigation or

2

 

proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate
to (i) any breach of a representation, warranty or covenant of Seller under this Agreement or (ii)
any obligations or duties of Seller under any Construction Contract (including any change orders
agreed to by the parties to such Construction Contracts prior to the Effective Time, whether or not
such change order has properly been documented as of the Effective Time) and also including the
Seller’s payment obligations under such Construction Contracts and the cost to complete
construction of the Pipeline as set forth in such Construction Contracts, and (b) any and all
actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding
anything in the foregoing to the contrary, Buyer Indemnified Costs shall exclude any and all
indirect, consequential, punitive or exemplary damages (other than those that are a result of (x) a
third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the gross
negligence or willful misconduct of Seller).

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

     “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” shall have the meaning set forth in Section 10.5.

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

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

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

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

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

     “Construction Contracts” means the Contracts relating to the original construction of the
Pipeline.

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

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

3

 

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

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

     “Holly” means Holly Corporation, a Delaware corporation.

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

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

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

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

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

     “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.

     “Omnibus Agreement” means that certain Second Amended and Restated Omnibus Agreement entered
into and effective as of August 1, 2009, by and among Holly, Navajo Pipeline, Holly Logistic
Services, L.L.C., a Delaware limited liability company, the Partnership, Holly Energy
Partners-Operating, L.P., HEP Logistics GP, L.L.C., a Delaware limited liability company and HEP
Logistics Holdings, L.P., a Delaware limited partnership, and the other Holly affiliates and
Partnership affiliates signatory thereto, and as amended and restated as of the Closing Date.

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

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

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

     “Payment Obligations” shall have the meanings set forth in Section 12.1.

     “Permits” shall have the meaning set forth in Section 4.8.

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

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

     “Pipeline” shall have the meaning set forth in the recitals.

     “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 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.

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

     “Real Property” shall have the meaning set forth in Section 2.1(a)(i)

     “Respondent” shall have the meaning set forth in Section 10.5.

     “Restated Omnibus Agreement” shall have the meaning set forth in Section 3.2(d).

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

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

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     “Seller Indemnified Costs” means (a) any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable
attorneys’ fees and expenses incurred in investigating and preparing for any litigation or
proceeding) that any of the Seller Indemnified Parties incurs and that arise out of or relate to
any breach of a representation, warranty or covenant of Buyer under this Agreement, and (b) any and
all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding
anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all
indirect, consequential, punitive or exemplary damages (other than those that are a result of (x) a
third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the gross
negligence or willful misconduct of Buyer).

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

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

     “Transferred Assets” shall have the meaning set forth in Section 2.1(a).

ARTICLE II

TRANSFER OF ASSETS, ASSUMPTION OF

LIABILITIES AND AGGREGATE CONSIDERATION

     2.1 Sale of Assets and Assumption of Liabilities.

          (a) Subject to all of the terms and conditions of this Agreement, Seller hereby sells,
assigns, transfers and conveys to the Buyer, and the Buyer hereby purchases and acquires from the
Seller, the following assets (the “Transferred Assets”), free and clear of all
Encumbrances, other than Permitted Encumbrances:

               (i) all of Seller’s right, title, and interest in real property, rights-of-way, easements, and
pipelines related to the Pipeline (the “Real Property”), as more particularly described in
Schedule 2.1(a)(i); provided, however, that the Parties acknowledge that
some of the easements constituting the Real Property were issued to and are in the name of the
Buyer or an affiliate of Buyer as grantee, and, notwithstanding anything to the contrary herein,
Seller has no right, title and interests in such easements to convey;

               (ii) all of Seller’s equipment, machinery, fixtures and other tangible personal property and
improvements located on the Real Property or used or held for use primarily in connection with the
operation of the Pipeline;

               (iii) the Permits, including, but not limited to, those set forth on Schedule 4.8;

               (iv) the Construction Contracts, including, but not limited to, those set forth on
Schedule 2.1(a)(iv); and

               (v) all other assets used or held for use primarily in connection with or constituting the
Pipeline.

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          (b) Buyer hereby assumes all of the Assumed Liabilities.

     2.2 Consideration.

          (a) The aggregate consideration to be paid by the Buyer for the Transferred Assets shall be
$11,000,000 (the “Purchase Price”).

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

ARTICLE III

CLOSING

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

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

          (a) A counterpart of the Assignment and Assumption Agreement relating to the Construction
Contracts substantially in the form of Exhibit A attached hereto (the “Assignment and
Assumption Agreement”), duly executed by the Seller.

          (b) The Assignment, Conveyance and Bill of Sale substantially in the form of Exhibit B
attached hereto (the “Bill of Sale”), duly executed by the Seller.

          (c) A counterpart of the Amended and Restated Crude Pipelines and Tankage Agreement
substantially in the form of Exhibit C attached hereto (the “Crude Pipelines Agreement”),
duly executed by Navajo Refining Company, L.L.C., Holly Refining & Marketing Company — Woods Cross,
and Holly Refining & Marketing Company.

          (d) A counterpart of the Third Amended and Restated Omnibus Agreement substantially in the
form of Exhibit D attached hereto (the “Restated Omnibus Agreement”), duly executed by
Holly and each applicable subsidiary of Holly (excluding the Partnership, HEP Logistics Holdings,
L.P., Holly Logistic Services, L.L.C. and their subsidiaries).

          (e) Evidence in form and substance reasonably satisfactory to the Buyer of the release and
termination of all Encumbrances on the Transferred Assets, other than Permitted Encumbrances.

          (f) A properly executed certificate, in the form prescribed by Treasury regulations under
Section 1445 of the Code, stating that Navajo Holdings, Inc. (the person from whom Seller is
disregarded as an entity for U.S. federal in come tax purposes) is not a “foreign person” within
the meaning of Section 1445 of the Code.

     3.3 Deliveries by the Buyer. At the Closing (or such later date as may be set forth
below), the Buyer shall deliver, or cause to be delivered, to the Seller the following:

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          (a) A counterpart of the Assignment and Assumption Agreement duly executed by the Buyer.

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

          (c) A counterpart to the Crude Pipelines Agreement, duly executed by the Holly Energy
Partners-Operating, L.P., Buyer, and HEP Woods Cross, L.L.C.

          (d) A counterpart of the Restated Omnibus Agreement, duly executed by the Partnership, HEP
Logistics Holdings, L.P., Holly Logistic Services, L.L.C. and each applicable subsidiary of such
entities.

          (e) Simultaneous with the delivery of a senior mortgage by Buyer as required under its credit
facility (but in no event later than 30 days following the Closing Date), the Buyer shall execute
and deliver to the Seller the subordinate mortgage and deed of trust substantially in the form of
Exhibit E attached hereto.

     3.4 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, if any, 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
Transferred Assets shall be prorated between the Buyer, on the one hand, and the Seller, on the
other hand, effective as of the Effective Time with the Seller being responsible for amounts
related to the period prior to but excluding the Effective Time and the Buyer being responsible for
amounts related to the period at and after the Effective Time. If the final 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.

     3.5 Closing Costs; Transfer Taxes and Fees.

          (a) Allocation of Costs. The Buyer shall pay the cost of all sales, transfer and use
taxes arising out of the transfer of the Transferred Assets pursuant to this Agreement, and all
costs and expenses (including recording fees and real estate transfer taxes and real estate
transfer stamps) incurred in connection with obtaining or recording title to the Company’s assets.

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

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

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

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

     4.3 No Conflicts or Violations; No Consents or Approvals Required. The execution,
delivery and performance by the Seller of this Agreement and the other Seller Ancillary Documents
to which it is a party does not, and the consummation of the transactions contemplated hereby and
thereby will not, (a) violate, conflict with, or result in any breach of any provision of the
Seller’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 the Seller. No Consent of any
Governmental Entity or any other person is required for the Seller in connection with the
execution, delivery and performance of this Agreement and the Seller Ancillary Documents to which
the Seller is a party or the consummation of the transactions contemplated hereby or thereby,
except as set forth in Schedule 4.3 and except for Post Closing Consents.

     4.4 Absence of Litigation. There is no Action pending or, to the knowledge of the
Seller, threatened against the Seller or any of its affiliates relating to the transactions
contemplated by this Agreement or the Ancillary Documents or the Transferred Assets or which, if
adversely determined, would reasonably be expected to materially impair the ability of the Seller
to perform its obligations and agreements under this Agreement or the Seller Ancillary Documents
and to consummate the transactions contemplated hereby and thereby or that would constitute Assumed
Liabilities.

     4.5 Title to Transferred Assets.

          (a) Except as expressly set forth herein, the Seller has good and indefeasible title to the
Transferred Assets, free and clear of all Encumbrances other than Permitted Encumbrances.

          (b) There has not been granted to any person, and no person possesses, any right of first
refusal to purchase any of the Transferred Assets, except pursuant to this Agreement and the
Omnibus Agreement.

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

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

     4.8 Permits. Seller owns or holds all permits, licenses, variances, exemptions,
Orders, franchises and approvals of all Governmental Entities necessary for the lawful ownership
and operation of the Transferred Assets (collectively, the “Permits”) including, without
limitation, those identified in Schedule 4.8. Each Permit is in full force and effect, and
Seller is in compliance with all of its obligations with respect thereto. To the knowledge of
Seller, no event has occurred that causes, or upon the giving of notice or the lapse of time or
otherwise would cause, revocation or termination of any Permit. Upon execution and delivery of the
Bill of Sale, all Permits shall be, subject to Permitted Encumbrances, owned or held by Buyer at
Closing.

     4.9 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 TRANSFERRED ASSETS INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR
ENVIRONMENTAL CONDITION OF THE TRANSFERRED ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF
HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE TRANSFERRED ASSETS, (II) THE INCOME TO BE DERIVED FROM
THE TRANSFERRED ASSETS, (III) THE SUITABILITY OF THE TRANSFERRED ASSETS FOR ANY AND ALL ACTIVITIES
AND USES THAT MAY BE CONDUCTED THEREON, (IV) THE COMPLIANCE OF OR BY THE TRANSFERRED 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
TRANSFERRED 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 TRANSFERRED 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,

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EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
TRANSFER AND CONVEYANCE OF THE TRANSFERRED ASSETS SHALL BE MADE IN AN “AS IS,” “WHERE IS” CONDITION
WITH ALL FAULTS, AND THE TRANSFERRED ASSETS ARE TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE
MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE THE TRANSFER AND CONVEYANCE OF THE
TRANSFERRED ASSETS 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 TRANSFERRED 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.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

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

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

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

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

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

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

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF HOLLY

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

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

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

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

     6.4 Absence of Litigation. There is no Action pending or, to the knowledge of Holly,
threatened against Holly or any of its affiliates relating to the transactions contemplated by this
Agreement or which, if adversely determined, would reasonably be expected to

12

 

materially impair the ability of Holly to perform its obligations and agreements under this
Agreement or the Ancillary Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby.

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

ARTICLE VII

COVENANTS

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

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

     7.3 Post Closing Consents. With respect to any Consent set forth in Schedule
4.3 not obtained by the Seller on or before the Closing, the Seller 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.

ARTICLE VIII

ADDITIONAL AGREEMENTS

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

ARTICLE IX

INDEMNIFICATION

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

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to indemnify and hold harmless the Seller Indemnified Parties from and against any and all
Seller Indemnified Costs.

     9.2 Defense of Third-Party Claims. An Indemnified Party shall give prompt written
notice to Seller or Buyer, as applicable (the “Indemnifying Party”), of the commencement or
assertion of any action, proceeding, demand, or claim by a third party (collectively, a
"third-party action”) in respect of which such Indemnified Party seeks indemnification hereunder.
Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it, he, or she may have to such Indemnified Party under this Article IX
unless the failure to give such notice materially and adversely prejudices the Indemnifying Party.
The Indemnifying Party shall have the right to assume control of the defense of, settle, or
otherwise dispose of such third-party action on such terms as it deems appropriate;
provided, however, that:

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

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

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

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

14

 

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

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

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

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

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

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

ARTICLE X

MISCELLANEOUS

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

     10.2 Notices.

          (a) Any notice or other communication given under this Agreement shall be in writing and shall
be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by
email 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

15

 

given (x) if received, on the date of the delivery, with a receipt for delivery, (y) if
refused, on the date of the refused delivery, with a receipt for refusal, or (z) with respect to
email transmissions, on the date the recipient confirms receipt. Notices or other communications
shall be directed to the following addresses:

Notices to the Seller:

Navajo Pipeline Co., L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: David L. Lamp

Email address: president@hollycorp.com

with a copy, which shall not constitute notice, but is required in order to give proper notice, to:

Navajo Pipeline Co., L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Email address: generalcounsel@hollycorp.com

Notices to the Buyer:

HEP Pipeline, L.L.C.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: David G. Blair

Email address: SVP-HEP@hollyenergy.com

with a copy, which shall not constitute notice, but is required in order to give proper notice, to:

HEP Pipeline, L.L.C.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Email address: generalcounsel@hollycorp.com

          (b) Either Party 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

16

 

possible in a mutually acceptable manner in order that the transactions contemplated herein
are consummated as originally contemplated to the fullest extent possible.

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

     10.5 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 10.5 and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 10.5 will
control the rights and obligations of the Parties. Arbitration must be initiated within the time
limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or
the time period allowed by the applicable statute of limitations. Arbitration may be initiated by
a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that the Claimant
elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating
binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall
respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the
arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator
within the 30-day period, Claimant shall petition the American Arbitration Association for
appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select
a third arbitrator within thirty (30) days after the second arbitrator has been appointed. The
Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent
will pay the compensation and expenses of the arbitrator named by or for it. The costs of
petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The
Claimant and Respondent will each pay one-half of the compensation and expenses of the third
arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or
employees of any of Seller, Buyer or any of their Affiliates and (ii) have not less than seven (7)
years experience in the petroleum transportation industry. The hearing will be conducted in
Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator.
Seller, Buyer 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. The Arbitrable Disputes may be arbitrated in a common proceeding along with
disputes under other agreements between Seller, Buyer or their Affiliates to the extent that the
issues raised in such disputes are related. Without the written consent of the Parties, no
unrelated disputes or third party disputes may be joined to an arbitration pursuant to this
Agreement.

     10.6 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.

17

 

     10.7 Assignment of Agreement. At any time, the Parties may make a collateral
assignment of their rights under this Agreement to any of their bona fide lenders or debt holders,
or a trustee or a representative for any of them, and the non-assigning Parties shall execute an
acknowledgment of such collateral assignment in such form as may from time to time be reasonably
requested; provided, however, that unless written notice is given to the
non-assigning Party that any such collateral assignment has been foreclosed upon, such
non-assigning Party shall be entitled to deal exclusively with the Buyer or the Seller, as the case
may be, as to any matters arising under this Agreement, the Ancillary Documents or the Omnibus
Agreement (other than for delivery of notices required by any such collateral assignment). Except
as otherwise provided in this Section 10.7, neither this Agreement nor any of the rights,
interests, or obligations hereunder may be assigned by any Party without the prior written consent
of the other Party hereto.

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

     10.9 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.

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

     10.11 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.

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

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

     10.14 Survival of Representations and Warranties. The representations and warranties
set forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time, on the
anniversary of the Closing Date, except that the representations and warranties contained in
Sections 4.1 (Organization), 4.2 (Authorization), 4.5 (Title to Transferred
Assets),

18

 

4.9 (Waivers and Disclaimers), 5.1 (Organization) and 5.2
(Authorization) shall survive until the expiration of the applicable statute of limitations;
provided, however, that any representation and warranty that is the subject of a
claim for indemnification hereunder which claim was timely made pursuant to Section 9.4(a)
shall survive with respect to such claim until such claim is finally paid or adjudicated.

ARTICLE XI

GUARANTEE

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

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

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

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

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

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

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

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

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

     11.3 Waiver. Holly hereby waives promptness, diligence, all setoffs, presentments, protests
and notice of acceptance and any other notice relating to any of the Payment Obligations

19

 

and any requirement for Buyer to protect, secure, perfect or insure any security interest or
lien or any property subject thereto or exhaust any right or take any action against the
Indemnifying Party, any other entity or any collateral.

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

     11.5 Reinstatement. The obligations of Holly under this Article XI shall continue to
be effective or shall be reinstated, as the case may be, if at any time any payment of any of the
Payment Obligations is rescinded or must otherwise be returned to the Indemnifying Party or any
other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or
reorganization of the Indemnifying Party or such other entity, or for any other reason, all as
though such payment had not been made.

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

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

ARTICLE XII

INTERPRETATION

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

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

20

 

          (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

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

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

[The Remainder of this Page is Intentionally Left Blank]

21

 

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

	 	 	 	 	 	 	 
	 	 	HOLLY:	 	 
	 
	 	 	 	 	 	 
	 	 	HOLLY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David L. Lamp
 

David L. Lamp
	 	 
	 

	 	 	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 
	 	 	NAVAJO PIPELINE CO., L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Navajo Pipeline G.P., L.L.C

Its General Partner	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ George J. Damiris
 

George J. Damiris
	 	 
	 

	 	 	 	Vice President, Supply and Marketing	 	 

	 	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 
	 	 	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	 	 

[Signature Page to Asset Purchase Agreement (Beeson)]

 

 

EXHIBIT A

Form of Assignment and Assumption Agreement

A - 1

 

EXHIBIT B

Form of Bill of Sale

B - 1

 

EXHIBIT C

Form of Crude Pipelines Agreement

C - 1

 

EXHIBIT D

Form of Restated Omnibus Agreement

D - 1

 

EXHIBIT E

Form of Subordinate Mortgage

E - 1

 

SCHEDULE 2.1(a)(i)

Real Property

Beeson Pipeline — an 8 inch 37 mile pipeline originating at Beeson pump station in Eddy County, NM
and terminating at the Holly Corporation Refining facilities in Lea County, NM.

Easements 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Document	 	Recording	 	 	 	 
	Original Grantor	 	Original Grantee	 	Document Type	 	Date	 	Date	 	County	 	Book/Page
	State of New Mexico

	 	Navajo Pipeline
Co., L.P.
	 	Grant of
Right-of-Way
	 	3/16/2009
	 	N/R
	 	Eddy & Lea, NM
	 	N/R
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Eidson Ranch, Inc.

	 	Navajo Pipeline
Co., L.P.
	 	Right-of-Way & Easement
	 	5/5/2009
	 	5/27/2009
	 	Lea
	 	1632/756

 

 

SCHEDULE 2.1(a)(iv)

Construction Contracts

1. That certain “Construction Specifications for 8” Beeson Crude Pipeline from Loco Hills, N.M. to
Lovington, N.M.” by and between Navajo Pipeline Company, LLC and D&D Pipeline Construction, Inc.
dated February 27, 2009.

 

 

SCHEDULE 4.3

Consents and Post-Closing Consents

Easements

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Original	 	 	 	Document	 	 	 	 	 	 
	Original Grantor	 	Grantee	 	Document Type	 	Date	 	Recording Date	 	County	 	Book/Page
	State of New Mexico

	 	Navajo Pipeline
Co., L.P.
	 	Grant of
Right-of-Way
	 	3/16/2009
	 	N/R
	 	Eddy & Lea, NM
	 	N/R

Permits

	 	 	 	 	 	 	 	 	 	 	 
	Agency	 	Location	 	Permit Type	 	Permit Date	 	Permit #	 	Term
	Lea County Board of
Commissioners

	 	C.R. 126 (Maljamar Road)
	 	Application for
Permit to Install
Utility Facilities
within Public Right
of Way
	 	3/17/2009
	 	RX090310
	 	25 years
	 
	 	 	 	 	 	 	 	 	 	 
	Lea County Board of
Commissioners

	 	Hummingbird Road (L-122)
	 	Application for
Permit to 
Install
Utility Facilities 

within Public Right
of Way
	 	3/17/2009
	 	RX030909
	 	25 years
	 
	 	 	 	 	 	 	 	 	 	 
	Lea County Board of
Commissioners

	 	Williams Road (L-101)
	 	Application for
Permit to Install
Utility Facilities
within Public Right
of Way
	 	3/17/2009
	 	RX090311
	 	25 years

 

 

SCHEDULE 4.8

Permits

	 	 	 	 	 	 	 	 	 	 	 
	Agency	 	Location	 	Permit Type	 	Permit Date	 	Permit #	 	Term
	Lea County Board of
Commissioners

	 	C.R. 126 (Maljamar Road)
	 	Application for
Permit to 
Install
Utility Facilities
within Public Right
of Way
	 	3/17/2009
	 	RX090310
	 	25 years
	 
	 	 	 	 	 	 	 	 	 	 
	Lea County Board of
Commissioners

	 	Hummingbird Road (L-122)
	 	Application for
Permit to Install
Utility Facilities
within Public Right
of Way
	 	3/17/2009
	 	RX030909
	 	25 years
	 
	 	 	 	 	 	 	 	 	 	 
	Lea County Board of
Commissioners

	 	Williams Road (L-101)
	 	Application for
Permit to Install
Utility Facilities
within Public Right
of Way
	 	3/17/2009
	 	RX090311
	 	25 years

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