Document:

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                                                                    EXHIBIT 10.1

                                                               EXECUTION VERSION

                               PIPELINES AGREEMENT

      This Pipelines Agreement (this "Agreement") is dated as of July 8, 2005,
by and among Holly Corporation, a Delaware corporation ("Holly"), Navajo
Refining Company, L.P., a Delaware limited partnership ("Navajo Refining" and,
together with Holly, the "Holly Entities"), Holly Energy Partners, L.P., a
Delaware limited partnership (the "Partnership"), Holly Energy
Partners-Operating, L.P., a Delaware limited partnership (the "Operating
Partnership"), HEP Pipeline, L.L.C., a Delaware limited liability company ("HEP
Pipeline"), HEP Logistics Holdings, L.P., a Delaware limited partnership (the
"General Partner"), Holly Logistic Services, L.L.C., a Delaware limited
liability company ("Holly GP"), and HEP Logistics GP, L.L.C., a Delaware limited
liability company ("OLP GP" and, together with the Partnership, the Operating
Partnership, HEP Pipeline, the General Partner and Holly GP, the "Partnership
Entities"). Each of the Holly Entities and the Partnership Entities are
individually referred to herein as a "Party" and collectively as the "Parties."

                                    RECITALS:

      Pursuant to that certain Purchase and Sale Agreement dated as of July 6,
2005 (the "Purchase Agreement") by and among Holly, Navajo Refining and Navajo
Pipeline Co., L.P. ("Navajo Pipeline"), and the Partnership, the Operating
Partnership and HEP Pipeline, Navajo Pipeline and Navajo Refining have agreed to
transfer and convey to HEP Pipeline, and HEP Pipeline has agreed to acquire, the
Intermediate Product Pipelines which historically have been utilized by the
Holly Entities to transport Intermediate Products.

      The Holly Entities desire to continue to transport Intermediate Products
in the Intermediate Product Pipelines and the Partnership desires to provide
transportation services to the Holly Entities, all on the terms set forth in
this Agreement.

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

      SECTION 1. DEFINITIONS

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

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

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

      "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

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any of the foregoing by, or any determination by any Governmental Authority
having or asserting jurisdiction over the matter or matters in question, whether
now or hereafter in effect and in each case as amended (including, without
limitation, all of the terms and provisions of the common law of such
Governmental Authority), as interpreted and enforced at the time in question.

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

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

      "bpd" means barrels per day.

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

      "Claimant" has the meaning set forth in Section 10(f).

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

      "Contract Quarter" means a three-month period that commences on July 1,
October 1, January 1, or April 1, and ends on September 30, December 31, March
31 or June 30, respectively, except that the initial Contract Quarter shall
commence on the Effective Date.

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

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

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

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

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

      "Effective Date" means the date of the closing of the Purchase Agreement.

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

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

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

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

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

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

      "Minimum Revenue Commitment" has the meaning set forth in Section 2(a).

      "Omnibus Agreement" means the Omnibus Agreement, dated as of the July 13,
2004, among Holly, the Partnership, the Operating Partnership, the General
Partner, Holly GP, OLP GP and Navajo Pipeline, as amended.

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

      "PPI" has the meaning set forth in Section 2(a).

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

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

      "Refineries" means, collectively, the Artesia Refinery and the Lovington
Refinery.

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

      "Respondent" has the meaning set forth in Section 10(f).

      SECTION 2. AGREEMENT TO USE SERVICES RELATING TO PIPELINES.

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

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

            (i) Subject to Section 3, for a term of 15 Contract Years commencing
      on the Effective Date, the Holly Entities will transport on the
      Intermediate Product Pipelines an amount of Intermediate Products in the
      aggregate that will produce revenue to the Partnership Entities in an
      amount at least equal to $2,956,500 per Contract Quarter (the "Minimum
      Revenue Commitment"). Notwithstanding the foregoing, in the event that the
      Effective Date is any date other than the first day of a calendar quarter,
      then the Minimum Revenue Commitment for the initial Contract Quarter shall
      be prorated based upon the number of days actually in such calendar
      quarter and the initial Contract Quarter.

            (ii) The Minimum Revenue Commitment shall be adjusted on July 1 of
      each Contract Year commencing on July 1, 2006, by an amount equal to the
      percentage increase, if any, between the two preceding calendar years, in
      the Producer Price Index for Finished Goods, seasonally adjusted, as
      published by the Department of Labor ("PPI"); provided, however, that the
      Minimum Revenue Commitment will not decrease as a result of any decrease
      in the PPI. If that index is no longer published, the Holly Entities and
      the Partnership Entities shall negotiate in good faith to agree on a new
      index that gives comparable protection against inflation and the same
      method of adjustment for increases in the new index shall be used to
      calculate increases in the Minimum Revenue Commitment. If the Holly
      Entities and the Partnership Entities are unable to agree, a new

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      index will be determined by binding arbitration in accordance with Section
      10(f) of this Agreement and the same method of adjustment for increases in
      the new index shall be used to calculate increases in the Minimum Revenue
      Commitment.

            (iii) If the Holly Entities are unable for a period in excess of
      thirty (30) consecutive days to transport on the Intermediate Product
      Pipelines the volumes of Intermediate Products required to meet the
      Minimum Revenue Commitment as a result of the Partnership Entities'
      operational difficulties, prorationing, or inability to provide the 72,000
      bpd capacity, then upon written notice by the Holly Entities to the
      Partnership Entities, the Minimum Revenue Commitment will be reduced for
      such period of time by an amount equal to: (1) the volume of Intermediate
      Products that the Holly Entities are unable to transport on the
      Intermediate Product Pipelines as a result of the Partnership Entities'
      operational difficulties, prorationing or inability to provide the 72,000
      bpd capacity multiplied by (2) the applicable tariffs.

      (b) Tariffs.

            (i) The initial tariff rates, and the rules and regulations
      applicable to intrastate service on the Intermediate Product Pipelines
      shall be as set forth in Exhibit B attached hereto and made a part hereof
      for all purposes. The initial non-incentive tariff rates shall be adjusted
      on July 1 of each Contract Year commencing on July 1, 2006, by an amount
      equal to the percentage change, if any, between the two immediately
      preceding calendar years, in the PPI. If that index is no longer
      published, the Holly Entities and the Partnership Entities shall negotiate
      in good faith to agree on a new index that gives comparable protection
      against inflation or deflation and the same method of adjustment for
      increases or decreases in the new index shall be used to calculate
      increases or decreases in the non-incentive tariff rates. If the Holly
      Entities and the Partnership Entities are unable to agree, a new index
      will be determined by binding arbitration in accordance with Section 10(f)
      of this Agreement and the same method of adjustment for increases or
      decreases in the new index shall be used to calculate increases or
      decreases in the non-incentive tariff rates. Notwithstanding that the
      Minimum Revenue Commitment will be determined on a Contract Year basis,
      the applicable fees, tariff rates and other charges provided for in this
      Agreement will become effective as of the date of this Agreement.

            (ii) Holly shall pay the Partnership an incentive tariff (the
      "Incentive Tariff") equal to $0.25 per barrel for barrels shipped in
      excess of 72,000 bpd up to and including 95,000 bpd; provided, that the
      Partnership will receive its full base tariff of $0.45 per barrel
      escalated annually at PPI for any and all non-Holly-owned barrels shipped
      on the Intermediate Product Pipelines. The Incentive Tariff shall be
      adjusted on July 1 of each Contract Year, commencing on July 1, 2006, as
      provided in Section 2(a)(ii).

            (iii) As soon as practicable following any Contract Year during
      which Incentive Tariffs paid to the Partnership did not provide the
      Partnership with a profit margin of at least 25% on its incremental costs
      for shipping such additional barrels, Holly shall pay to the Partnership
      an amount equal to the dollar amount that, when combined

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      with the Incentive Tariffs paid to the Partnership for such Contract Year,
      would have provided the Partnership a profit margin of 25% on its
      incremental costs for shipping such additional barrels.

      (c) Obligations of the Partnership Entities. During the term of this
Agreement and subject to the terms and conditions of this Agreement, including
Section 10(c), the Partnership Entities agree to own or lease, operate and
maintain the assets necessary to accept the deliveries from the Holly Entities
and to provide the services required under this Agreement. Notwithstanding the
preceding sentence, subject to Section 10(c) of this Agreement and Article VI of
the Omnibus Agreement, the Partnership Entities are free to sell any of their
assets, including assets that provide services under this Agreement, and the
Partnership or any of the Partnership Entities are free to merge with another
entity (whether or not the Partnership or any of the Partnership Entities is the
surviving entity in such merger) and are free to sell all of their assets or all
of their equity to another entity at any time. At the request of the Holly
Entities, and subject in each case to any applicable common carrier proration
duties, the Partnership Entities agree to use commercially reasonable efforts to
transport by pipeline for the Holly Entities each month during the term of this
Agreement 72,000 bpd of Intermediate Products on the Intermediate Product
Pipelines. To the extent that the Holly Entities are entitled to an exception
under Section 3 of this Agreement to their obligations under Section 2(a) of
this Agreement, the corresponding obligations of the Partnership Entities under
this Section 2(c) will be proportionately reduced.

      (d) Pour Point Depressant and Additives. The Partnership Entities shall
add pour point depressant to the Intermediate Products as may be requested by
the Holly Entities or as may be otherwise required to move certain Intermediate
Products in the quantities necessary to meet the Holly Entities schedule. The
Holly Entities agree to reimburse the Partnership Entities for the cost of
adding pour point depressant to those certain Intermediate Products. All fuel
additives, dyes and other additives ("Additives") requested to be added to the
Holly Entities' Intermediate Products will be provided by the Holly Entities at
no cost to the Partnership Entities or, if the Partnership Entities provide
Additives, then the Holly Entities agree to reimburse the Partnership Entities
for the costs of the Additives.

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

      (f) Timing of Payments. The Holly Entities will make payments to the
Partnership Entities by wire transfer of immediately available funds on a
monthly basis during the term of this Agreement with respect to services
rendered by the Partnership Entities under this

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Agreement in the prior month. Payments not received by the Partnership Entities
on or prior to the applicable payment date will accrue interest at the Prime
Rate from the applicable payment date until paid.

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

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

      (i) Scheduling of Product Movements. The Partnership Entities will use
their reasonable commercial efforts to schedule Intermediate Products movements
and accept deliveries of Intermediate Products hereunder in a manner that is
consistent with the historical dealings between the Parties, as such dealings
may change from time to time.

      (j) Increases in Pipeline Tariff Rates. If new laws or regulations are
enacted that require the Partnership Entities to make substantial and
unanticipated capital expenditures with respect to the Intermediate Product
Pipelines, the Partnership Entities may amend the tariff rates in order to
recover the Partnership Entities' cost of complying with these laws or
regulations (including a reasonable return). The Holly Entities and the
Partnership Entities shall use their reasonable commercial efforts to comply
with these laws and regulations, and shall negotiate in good faith to mitigate
the impact of these laws and regulations and to determine the amount of the new
tariff rates. If the Holly Entities and the Partnership Entities are unable to
agree on the amount of the new tariff rates that the Partnership Entities will
charge, such tariff rates will be determined by binding arbitration in
accordance with Section 10(f) of this Agreement.

      SECTION 3. EXCEPTIONS TO THE HOLLY ENTITIES' OBLIGATIONS

      (a) Intentionally Omitted.

      (b) Force Majeure. In the event that any Party is rendered unable, wholly
or in part, by a Force Majeure event from performing its obligations under this
Agreement for a period of more than 30 days, then upon the delivery of notice
and full particulars of the Force Majeure event in writing within a reasonable
time after the occurrence of the Force Majeure event relied on, the obligations
of the Parties, so far as they are affected by the Force Majeure event, shall be

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suspended for the duration of any inability so caused. Any suspension of the
obligations of the Parties as a result of this Section 3(b) shall extend the
term of this Agreement. The Holly Entities will be required to pay any amounts
accrued and due under this Agreement at the time of the Force Majeure event. The
cause of the Force Majeure event shall so far as possible be remedied with all
reasonable dispatch, except that no Party shall be compelled to resolve any
strikes, lockouts or other industrial disputes other than as it shall determine
to be in its best interests. In the event a Force Majeure event prevents the
Partnership Entities or the Holly Entities from performing their respective
obligations under this Agreement for a period of more than one year, this
Agreement may be terminated by the Partnership Entities or the Holly Entities.
Nothing in this Section 3(b) shall alter the liability of the Partnership
Entities as set forth in the rules and regulations tariffs for the Intermediate
Product Pipelines attached hereto as Exhibit B.

      SECTION 4. AGREEMENT TO REMAIN SHIPPER

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

      SECTION 5. AGREEMENT NOT TO CHALLENGE TARIFFS

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

      SECTION 6. EFFECTIVENESS AND TERM

      This Agreement shall be effective as of the Effective Date, and shall
terminate at 12:01 a.m. Dallas, Texas, time on July 8, 2020, unless extended by
written mutual agreement of the Parties hereto or as set forth in Section 7;
provided, however, that Section 5 shall survive the termination of this
Agreement. The Party desiring to extend this Agreement pursuant to this

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Section 6 shall provide at least 12 months prior written notice to the other
Party of its desire to so extend this Agreement.

      SECTION 7. RIGHT TO ENTER INTO A NEW AGREEMENT

      For a period of one year following termination without renewal of this
Agreement, the Holly Entities will have the right to enter into a new pipelines
agreement with the Partnership Entities on commercial terms that substantially
match the terms upon which the Partnership Entities propose to enter into an
agreement with a third party for similar services on the Intermediate Product
Pipelines. The Partnership Entities shall give the Holly Entities 45 days prior
written notice of any proposed new pipelines agreement with a third party, and
shall inform the Holly Entities of the fee schedules, tariffs, duration and any
other terms of the proposed third party agreement.

      SECTION 8. NOTICES

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

                           if to the Holly Entities:

                           Holly Corporation
                           100 Crescent Court
                           Suite 1600
                           Dallas, Texas  75201
                           Attn:  Matthew P. Clifton
                           Telecopy: 1-214-615-9372

                           if to the Partnership Entities:

                           Holly Energy Partners, L.P.
                           c/o Holly Logistic Services, L.L.C.
                           100 Crescent Court
                           Suite 1600
                           Dallas, Texas  75201
                           Attn:  James G. Townsend
                           Telecopy: 1-505-748-6827

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      SECTION 9. DEFICIENCY PAYMENTS

      (a) As soon as practicable following the end of each Contract Quarter
under this Agreement, the Partnership Entities shall deliver to the Holly
Entities a written notice (the "Deficiency Notice") detailing any failure of the
Holly Entities to meet any of their obligations under Section 2(a) of this
Agreement. The Deficiency Notice shall (i) specify in reasonable detail the
nature of any deficiency and (ii) specify the approximate dollar amount that the
Partnership Entities believe would have been paid by the Holly Entities to the
Partnership Entities if the Holly Entities had complied with Section 2(a) of
this Agreement (the "Deficiency Payment"). The Holly Entities shall pay the
Deficiency Payment to the Partnership Entities upon the later of: (1) 10 days
after their receipt of the Deficiency Notice and (2) 30 days following the end
of the related Contract Quarter.

      (b) If the Holly Entities disagree with the Deficiency Notice, then
following the payment of the Deficiency Payment to the Partnership Entities, the
chief financial officers of Holly (on behalf of the Holly Entities) and Holly GP
(on behalf of the Partnership Entities) shall meet or communicate by telephone
at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary and shall negotiate in good faith to attempt to
resolve any differences that they may have with respect to matters specified in
the Deficiency Notice. During the 30-day period following the payment of the
Deficiency Payment, the Holly Entities shall have access to the working papers
of the Partnership Entities relating to the Deficiency Notice. If such
differences are not resolved within 30 days following the payment of the
Deficiency Payment, the Holly Entities and the Partnership Entities shall,
within 45 days following the payment of the Deficiency Payment, submit any and
all matters which remain in dispute and which were properly included in the
Deficiency Notice to arbitration in accordance with Section 10(f).

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

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

      SECTION 10. MISCELLANEOUS

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

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      (b) Amendments and Waivers. No amendment or modification of this Agreement
shall be valid unless it is in writing and signed by the Parties hereto and, in
the case of any amendment or modification adverse to the Partnership Entities,
approved by the Conflicts Committee of Holly GP. No waiver of any provision of
this Agreement shall be valid unless it is in writing and signed by the Party
against whom the waiver is sought to be enforced, and, in the case of any waiver
by the Partnership Entities, approved by the Conflicts Committee of Holly GP. No
failure or delay in exercising any right hereunder, and no course of conduct,
shall operate as a waiver of any provision of this Agreement. No single or
partial exercise of a right hereunder shall preclude further or complete
exercise of that right or any other right hereunder.

      (c) Successors and Assigns. This Agreement shall inure to the benefit of,
and shall be binding upon, the Holly Entities, the Partnership Entities and
their respective successors and permitted assigns. Neither this Agreement nor
any of the rights or obligations hereunder shall be assigned without the prior
written consent of Holly (in the case of any assignment by the Partnership
Entities) or the Conflicts Committee of Holly GP (in the case of any assignment
by the Holly Entities), in each case, such consent is not to be unreasonably
withheld or delayed; provided, however, that (i) the Partnership Entities may
make such an assignment (including a partial pro rata assignment) to an
Affiliate of the Partnership Entities without Holly's consent, (ii) the Holly
Entities may make such an assignment (including a pro rata partial assignment)
to an Affiliate of the Holly Entities without the Conflicts Committee of Holly
GP's consent, (iii) the Holly Entities may make a collateral assignment of their
rights and obligations hereunder and/or grant a security interest in all or a
portion of the Intermediate Product Pipelines to any bona fide third party
lender or debt holder, or trustee or representative for any of them, and (iv)
the Partnership Entities may make a collateral assignment of their rights
hereunder and/or grant a security interest in all or a portion of the
Intermediate Product Pipelines to a bona fide third party lender or debt holder,
or trustee or representative for any of them, if such third party lender, debt
holder or trustee shall have executed and delivered to the Holly Entities a
non-disturbance agreement in such form as is reasonably satisfactory to the
Holly Entities and the Holly Entities execute an acknowledgement of such
collateral assignment in such form as may from time to time be reasonably
requested. Any attempt to make an assignment otherwise than as permitted by the
foregoing shall be null and void. The Parties agree to require their respective
successors, if any, to expressly assume, in a form of agreement acceptable to
the other Parties, their obligations under this Agreement.

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

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

      (f) Arbitration Provision. Any and all Arbitrable Disputes must be
resolved through the use of binding arbitration using three arbitrators, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, as supplemented to the extent necessary to determine any procedural
appeal questions by the Federal Arbitration Act (Title 9 of the United States
Code). If there is any inconsistency between this Section and the Commercial

                                       11
<PAGE>

Arbitration Rules or the Federal Arbitration Act, the terms of this Section will
control the rights and obligations of the Parties. Arbitration must be initiated
within the time limits set forth in this Agreement, or if no such limits apply,
then within a reasonable time or the time period allowed by the applicable
statute of limitations. Arbitration may be initiated by a Party ("Claimant")
serving written notice on the other Party ("Respondent") that the Claimant
elects to refer the Arbitrable Dispute to binding arbitration. Claimant's notice
initiating binding arbitration must identify the arbitrator Claimant has
appointed. The Respondent shall respond to Claimant within 30 days after receipt
of Claimant's notice, identifying the arbitrator Respondent has appointed. If
the Respondent fails for any reason to name an arbitrator within the 30-day
period, Claimant shall petition the American Arbitration Association for
appointment of an arbitrator for Respondent's account. The two arbitrators so
chosen shall select a third arbitrator within 30 days after the second
arbitrator has been appointed. The Claimant will pay the compensation and
expenses of the arbitrator named by or for it, and the Respondent will pay the
compensation and expenses of the arbitrator named by or for it. The costs of
petitioning for the appointment of an arbitrator, if any, shall be paid by
Respondent. The Claimant and Respondent will each pay one-half of the
compensation and expenses of the third arbitrator. All arbitrators must (i) be
neutral Parties who have never been officers, directors or employees of any of
the Holly Entities, the Partnership Entities or any of their affiliates and (ii)
have not less than seven years experience in the energy industry. The hearing
will be conducted in Dallas, Texas and commence within 30 days after the
selection of the third arbitrator. The Holly Entities, the Partnership Entities
and the arbitrators shall proceed diligently and in good faith in order that the
award may be made as promptly as possible. Except as provided in the Federal
Arbitration Act, the decision of the arbitrators will be binding on and
non-appealable by the Parties hereto. The arbitrators shall have no right to
grant or award indirect, consequential, punitive or exemplary damages of any
kind.

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

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

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

                                       12
<PAGE>

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

                           HOLLY CORPORATION

                           By:    /s/ Stephen H. McDonnell
                              --------------------------------------------
                                  Stephen J. McDonnell,
                                  Vice President and Chief Financial Officer

                           NAVAJO REFINING COMPANY, L.P.

                           By: NAVAJO REFINING GP, L.L.C.,
                               its general partner

                           By:    /s/ Stephen H. McDonnell
                               --------------------------------------------
                                  Stephen J. McDonnell,
                                  Vice President and Chief Financial Officer

                           HOLLY ENERGY PARTNERS, L.P.

                           By:   HEP LOGISTICS HOLDINGS, L.P.,
                                 its general partner

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

                           By:   /s/ Stephen J. McDonnell
                               ---------------------------------------
                                 Stephen J. McDonnell,
                                 Vice President and Chief Financial Officer

                Signature Page 1 of 3 to the Pipelines Agreement

<PAGE>

                           HOLLY ENERGY PARTNERS-OPERATING, L.P.

                           By: HEP LOGISTICS GP, L.L.C.,
                               its general partner

                           By: HOLLY ENERGY PARTNERS, L.P.
                               its sole member

                           By: HEP LOGISTICS HOLDINGS, L.P.,
                               its general partner

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

                           By:  /s/ Stephen J. McDonnell
                              -------------------------------------------
                                Stephen J. McDonnell,
                                Vice President and Chief Financial Officer

                           HEP PIPELINE, L.L.C.

                           By:  HOLLY ENERGY PARTNERS -- OPERATING, L.P.
                                its sole member

                           By:  HEP LOGISTICS GP, LLC.,
                                its general partner

                           By:  HOLLY ENERGY PARTNERS, L.P.,
                                its general partner

                           By: HEP LOGISTICS HOLDINGS, L.P.,
                               its general partner

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

                           By:    /s/ Stephen J. McDonnell
                               -------------------------------------------
                                Stephen J. McDonnell,
                                Vice President and Chief Financial
                                Officer

                Signature Page 2 of 3 to the Pipelines Agreement

<PAGE>

                           HEP LOGISTICS HOLDINGS, L.P.

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

                                 By:     /s/ Stephen J. McDonnell
                                      -----------------------------------------
                                         Stephen J. McDonnell,
                                         Vice President and Chief Financial
                                         Officer

                           HOLLY LOGISTIC SERVICES, L.L.C.

                           By:   /s/ Stephen J. McDonnell
                               --------------------------------------------
                                 Stephen J. McDonnell,
                                 Vice President and Chief Financial Officer

                           HEP LOGISTICS GP, L.L.C.

                           By:  HOLLY ENERGY PARTNERS, L.P.,
                                its general partner

                           By:  HEP LOGISTICS HOLDINGS, L.P.,
                                its general partner

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

                           By:  /s/ Stephen J. McDonnell
                                -------------------------------------------
                                Stephen J. McDonnell,
                                Vice President and Chief Financial Officer

                Signature Page 3 of 3 to the Pipelines Agreement

<PAGE>

                                    EXHIBIT A

                         INTERMEDIATE PRODUCT PIPELINES

"Intermediate Pipelines" means approximately 65 miles of 8" feedstock pipeline
and 10" feedstock pipeline, each of which begins at the inlet flange of the
delivery manifold motor operated valves at the Lovington Refinery, near
Lovington, New Mexico and ends at the outlet flange of the turbine meter at the
Artesia Refinery in Artesia, New Mexico, along with any and all connection
facilities, including the Enterprise/MAPL connection, field booster pump
stations, spare parts, pipes, valves, motors and miscellaneous equipment
directly associated with the 8" inch and 10" feedstock pipelines.

                                      A-1
<PAGE>

                                    EXHIBIT B

                              ATTACHED TO AND MADE
                        PART OF THE PIPELINES AGREEMENT,
                               DATED JULY 8, 2005

                          RATES, RULES AND REGULATIONS
================================================================================

                                 TABLE OF RATES
              RATES IN CENTS PER BARREL OF 42 UNITED STATES GALLONS

<TABLE>
<CAPTION>
       ORIGIN                                                                                  RATE
CARRIER'S RECEIVING POINT                    DESTINATION                    RATE               TYPE
-------------------------               ---------------------               -----          -------------
<S>                                     <C>                                 <C>            <C>
  Lovington, New Mexico                   Artesia, New Mexico               0.450          Non-Incentive
                                                                            0.250            Incentive
-  Barnsdal Station                     Lovington, New Mexico               0.450          Flow Reversal
-  Artesia, New Mexico                  Lovington, New Mexico               0.450          Flow Reversal
</TABLE>

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

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

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

<PAGE>

                              RULES AND REGULATIONS

Company will receive Intermediate Products for interstate transportation only to
established delivery stations on its own lines, and lines of connecting pipeline
companies, on the following conditions:

<TABLE>
<CAPTION>
ITEM NO.        SUBJECT                                              APPLICATION
--------    ---------------    ------------------------------------------------------------------------------------------------
<S>         <C>                <C>
                               As used in these rules and regulations, the following terms have the following meanings:

                               "Barrels" means 42 United States gallons at sixty degrees (60 degree) Fahrenheit.

                               "Carrier" means Holly Energy Partners - Operating, L.P.

                               "Company" means Holly Energy Partners - Operating, L.P.

                               "Consignee" means the party to whom a Shipper has ordered the delivery of Intermediate Products.

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

                               "Nomination" means an offer by a Shipper to Carrier of a stated quantity of Intermediate Products
                                 for transportation from origin to specified destination.

 5            Definitions      "Shipment" means a volume of Intermediate Products offered to and accepted by Carrier for
                                 transportation.

                               "Shipper" means the party who contracts with the Carrier for transportation of Intermediate
                                 Products under the terms of this tariff.

                               "Transmix" means the mixture that occurs in normal pipeline operations between non-compatible
                                 Intermediate Products.

                               Intermediate Products will be accepted for transportation at such time as Intermediate Products
                                 of same quality and specifications are currently being transported from receiving point to
                                 destination. Prior to acceptance of Intermediate Products for transportation the Company may
                                 require from the Shipper a certificate setting forth, in detail, the specifications of each
                                 shipment of Intermediate Products. Carrier may also make such tests as it deems necessary.

                               All additives and inhibitors to be included in Shipper's Intermediate Products must first be
            Specifications       approved by the Carrier before such Intermediate Products will be  accepted  for
                 and             transportation. If Intermediate Products tendered by Shipper do not contain corrosion
 10           Acceptance         inhibitor compound  which is satisfactory  to Carrier,  then  Carrier  may, at Shipper's
                  of             expense, inject corrosion inhibitor compound in the Intermediate Products to be
                Product          transported, and Shipper and  Consignee  will accept  delivery of shipments at destination
                                 containing portions of the corrosion inhibitor compound.

                               Intermediate Products will be accepted for transportation when Shipper has made necessary
                                 arrangements (a) to provide facilities to tender such Intermediate Products and deliver same at
                                 Carrier's receiving manifold at the origin at pumping rates and pressures as required by
                                 Carrier, and (b) to provide facilities at the destination to receive the Intermediate Products
                                 tendered for transportation at flow rates and pressures as required by Carrier.

                               Carrier may require Shipper to supply adequate buffer material when necessary for quality control
                                 purposes to maintain segregation of Shipments of Intermediate Products.

                               Shipper will be required to schedule its Intermediate Products for delivery into Carrier's
              Shipments-         receiving tanks or suction manifold at the origin to meet the cycle within which Carrier
  15        Nominations and      schedules the Intermediate Products to move.  Intermediate Products shall be available for
                Minimum          shipment 24 hours  before the scheduled  date for  movement into the Carrier's pipeline
                Tender           system.  Shipper  shall  deliver  Intermediate  Products to Carrier at a pressure no greater
                                 than 256 psig and at a  flowing pressure of at least 100 psig, at a temperature of no greater
                                 than 120 degrees Fahrenheit.
</TABLE>

                                       B-2
<PAGE>

<TABLE>
<CAPTION>
ITEM NO.        SUBJECT                                              APPLICATION
--------    ---------------    ------------------------------------------------------------------------------------------------
<S>         <C>                <C>

              Mixing with      Carrier will endeavor to deliver substantially the same Intermediate Products as received
                 Other           from Shipper to the extent permitted by Carrier's facilities. However, all shipments will
 20             Refined          be accepted for transportation only on condition that it shall be subject to such changes
               Petroleum         in gravity or quality while in transit as may result from the mixture with other
               Products          Intermediate Products in the pipelines.

                               Carrier will allocate all Transmix to Shipper. Shipper must accept delivery of Transmix from
                                 Carrier no later than 5 days after notification that Transmix is available for distribution to
                                 Shipper. Shipper will have sole responsibility for the disposition of its Transmix.

                Refined        Company shall have the right to decline to receive any Intermediate Products which may be
               Petroleum         involved in litigation or the title of which may be in dispute,  and it may require of the
               Products          Shipper satisfactory evidence of his perfect and unencumbered title or satisfactory
              to be Free         indemnity bond to protect Company.
 25           from Liens
                  and
                Charges

                               Company is engaged in the transportation of Intermediate Products exclusively and therefore
 30            Commodity         will not accept any other commodity for transportation.

                               Carrier shall not be liable for loss of Intermediate Products in its custody, damage thereto, or
                                 delay caused by fire, storm, flood, epidemics, Acts of God, riots, insurrection, rebellion,
                                 war, act of the public enemy, quarantine, nuclear or atomic explosion, strikes, picketing, or
                                 other labor stoppages, whether of Carriers employees or other, the authority of law,
                                 requisition or necessity of Government of the United States in time of war, default of Shipper
                                 or Shipper's Consignee or any other cause not due to the sole negligence of Carrier, whether
               Liability         similar or  dissimilar to the cause herein enumerated. In the event of such loss, Shipper
 40               of             shall bear the loss. Transportation charges will be assessed only on the quantity delivered
                Carrier          net of volume corrections as set forth in Item No. 45 herein.

                               Shipments tendered to Carrier for transportation shall be tested by a representative of
                                 Carrier, and gauged or measured by automatic equipment approved by Carrier or by other
                                 methods acceptable in the industry,  at locations designated by Carrier. The Shipper shall
               Gauging,          have the privilege of being present or represented at the gauging and testing. Quantities
               Testing,          will be computed from correctly compiled tank tables or by  Carrier approved meters.
 45              and             Corrections will be made for temperature from observed degrees Fahrenheit to sixty degrees
                Volume           (60 degrees) Fahrenheit.
              Corrections
                               Shipper shall bear the actual product losses for shrinkage and evaporation incident to pipeline
                                 transportation up to a maximum of twenty-five hundredths (0.25) of a percent. Carrier shall
                                 offset such product losses with any product gains and shall determine the net product losses on
                                 a calendar quarterly basis.

                               Either prior to or after the acceptance of Shipments for transportation through Carrier's
                                 pipeline system, Carrier may, upon reasonable notice, require each Shipper to provide a pro
 55            Line Fill         rata part of the volume of Intermediate Products necessary for pipeline fill. Intermediate
                                 Products provided by a Shipper for this purpose may be withdrawn from the system only with the
                                 prior approval of Carrier or after reasonable notice of such Shipper's intention.

</TABLE>

                                       B-3
<PAGE>

<TABLE>
<CAPTION>
ITEM NO.        SUBJECT                                              APPLICATION
--------    ---------------    ------------------------------------------------------------------------------------------------
<S>         <C>                <C>
                               As a condition precedent to recovery, claims must be filed in writing with Carrier within nine
                Claims,          (9) months after delivery of the property, or in case of failure to make delivery, then within
                Suits,           nine (9) months after a reasonable time for delivery has elapsed; and suits shall be instituted
 65              Time            against Carrier only within two (2) years and one (1) day from the day when notice in writing
                  for            is given by Carrier to the claimant that Carrier has disallowed the claim or any part or parts
                Filing           thereof specified in the notice. Where claims are not filed or suits are not instituted thereon
                                 in accordance with the foregoing provisions, Carrier shall not be liable, and such claims will
                                 not be paid.
</TABLE>

                                       B-4<PAGE>

                                                                    EXHIBIT 10.2

PREPARED BY AND WHEN
RECORDED RETURN TO:

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

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

                                       BY

                              HEP PIPELINE, L.L.C.,
                      A DELAWARE LIMITED LIABILITY COMPANY,
                                   AS GRANTOR

                                       TO

                               JOHN N. PATTERSON,
                                   AS TRUSTEE

                               FOR THE BENEFIT OF

                               HOLLY CORPORATION,
                             A DELAWARE CORPORATION
                                 AS BENEFICIARY

                            DATED AS OF JULY 8, 2005

THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A TRANSMITTING UTILITY.

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

<PAGE>

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

      THIS MORTGAGE AND DEED OF TRUST (WITH SECURITY AGREEMENT AND FINANCING
STATEMENT) (hereinafter referred to as this "DEED OF TRUST"), is entered into as
of the 8th day of July, 2005, by HEP Pipeline, L.L.C., a Delaware limited
liability company (hereinafter referred to as "GRANTOR"), a subsidiary of Holly
Energy Partners, L.P., a Delaware limited partnership ("HEP"), whose address for
notice hereunder is at 100 Crescent Court, Suite 1600, Dallas, Texas 75201-6927,
Attention: General Counsel, facsimile number (214) 871-3523, to John N.
Patterson, Trustee (hereinafter referred to in such capacity as "TRUSTEE"),
whose address is c/o Scheuer, Yost & Patterson, 125 Lincoln Avenue, Suite 223,
Drawer 9570, Santa Fe, New Mexico 87504-9570, for the benefit of the herein
below defined Beneficiary.

                                   WITNESSETH:

                                    ARTICLE 1

                                   DEFINITIONS

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

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

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

      (c) CONTRACTS: The Pipeline Contracts.

      (d) DEED OF TRUST: Shall have the meaning set forth in the introductory
      paragraph hereof.

      (e) EASEMENTS: The Pipeline Easements.

      (f) EVENT OF DEFAULT: Any happening or occurrence described in Article 7
      of this Deed of Trust.

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

                                       1
<PAGE>

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

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

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

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

      (k) IMPROVEMENTS: The Pipeline Improvements.

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

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

      (n) MORTGAGED PROPERTY: The Pipeline Assets, together with:

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

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

                                       2
<PAGE>

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

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

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

      (p) PERMITTED ENCUMBRANCES: Shall mean any of the following matters:

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

                                       3
<PAGE>

          to or vested in any Governmental Entity to control or regulate any
          of the Mortgaged Property or the Operations and all Legal
          Requirements of such authorities, including any building or zoning
          ordinances and all environmental laws; (vii) any contract, easement,
          instrument, lien, security instrument, permit, amendment, extension
          or other matter entered into by a party in accordance with the terms
          of the Purchase Agreement (as defined in the Pipelines Agreement) or
          in compliance with the approvals or directives of the other party
          made pursuant to such Purchase Agreement; (viii) all Post-Closing
          Consents (as defined in the Purchase Agreement); (ix) defects in the
          early chain of the title consisting of the mere failure to recite
          marital status in a document or omissions of successions of heirship
          proceedings, unless such failure or omission results in another
          Person's superior claim of title to the Pipeline Easements or
          relevant portion thereof; (x) any assertion of a defect based on a
          lack of a survey with respect to the Pipelines; (xi) any title
          defect affecting (or the termination or expiration of) any easement,
          right of way, leasehold interest or fee interest affecting property
          over which the Pipelines pass which has been replaced prior to the
          date of this Deed of Trust by an easement, right of way, leasehold
          interest or fee interest covering substantially the same land or the
          portion thereof used by Beneficiary or its Affiliates; and (xii) all
          Senior Liens.

      (q) PERMITS: The Pipeline Permits.

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

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

      (t) PIPELINE ASSETS: All of the following assets, properties and rights,
      whether real, personal or mixed, which are owned or held for use by
      Grantor solely in connection with the ownership or operation of those
      certain pipelines described on Exhibit B (the "PIPELINES"):

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

                                       4
<PAGE>

          (ii) All leases of real property now or hereafter entered into or
          acquired by Grantor on which all or a part of the Pipelines are
          located, including, without limitation, the leases described on
          Exhibit A, if any (the "PIPELINE LEASES");

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

          (iv) All structures, fixtures and appurtenances (A) located on the
          Pipeline Fee Land, (B) located on the land subject to the Pipeline
          Leases, or (C) located within the Pipeline Easements, and now or
          hereafter owned by Grantor, including, without limitation, any
          buildings, pipelines and pumping facilities described on Exhibit A
          (collectively, the "PIPELINE IMPROVEMENTS");

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

          (vi) The contracts, agreements, leases and other legally binding
          rights and obligations of Grantor described on Exhibit A, if any,
          but excluding those contracts and agreements constituting Pipeline
          Leases and Pipeline Easements (the "PIPELINE CONTRACTS");

          (vii) Intellectual property rights and related computer software;

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

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

                                       5
<PAGE>

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

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

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

      (x) PIPELINE FEE LAND: Shall have the meaning set forth in subsection (i)
      of the definition of Pipeline Assets.

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

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

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

      (bb) PIPELINE REAL PROPERTY: Collectively, the Pipeline Fee Land, the
      Pipeline Leases, the Pipeline Improvements and the Pipeline Easements.

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

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

      (ee) PIPELINES AGREEMENT: That certain Pipelines Agreement dated as of
      July __, 2005 by and among Beneficiary, HEP, Navajo Refining Company,
      L.P., a Delaware limited partnership, Holly Energy Partners-Operating,
      L.P., a Delaware limited partnership, Grantor, HEP Logistics Holdings,
      L.P., a Delaware limited partnership, Holly Logistic Services, L.L.C., a
      Delaware limited liability company, and HEP Logistics GP, L.L.C., a
      Delaware limited liability company, together with any amendments,
      restatements or modifications from time to time made thereto.

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

      (gg) PURCHASE AGREEMENT: That certain Purchase and Sale Agreement dated as
      of July 6, 2005 by and among Beneficiary, Navajo Pipeline Co., L.P., a
      Delaware limited partnership, Navajo Refining Company, L.P., a Delaware
      limited partnership, HEP, Holly Energy Partners - Operating, L.P., a
      Delaware limited partnership, and Grantor.

      (hh) REAL PROPERTY: The Pipeline Real Property.

                                       6
<PAGE>

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

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

      (kk) SENIOR CREDIT AGREEMENT: That certain Credit Agreement dated as of
      July 7, 2004 (as extended, amended, supplemented, restated, replaced or
      refinanced in whole or in part, from time to time) among Holly Energy
      Partners - Operating, L.P., a Delaware limited partnership, the banks
      party thereto from time to time, and Union Bank of California, N.A., in
      its capacity as administrative agent (or any assignee of or successor to
      such administrative agent).

      (ll) SENIOR LIEN: Collectively, the Senior Bank Liens and each other lien
      and security interest as to which the lien and security interest granted
      pursuant to this Deed of Trust has been subordinated thereto pursuant to
      the terms of a Subordination, Non-Disturbance and Attornment Agreement in
      substantially the form of Attachment 1 hereto executed by the Beneficiary
      and the holder of such lien and security interest and recorded in the
      Official Public Records of Real Property of Eddy and Lea Counties, New
      Mexico and (at the election of such holder) any or all of the other
      counties in New Mexico in which any of the Mortgaged Property is located.

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

                                    ARTICLE 2

                                      GRANT

2.1   GRANT. To secure and enforce the prompt performance and compliance by HEP
      of all obligations set forth for HEP in Section 2(c), Section 7, and
      Section 10(c) of the Pipelines Agreement, plus all claims (as such term is
      defined in the Bankruptcy Code) of or damages owed to the Beneficiary
      against HEP and/or the Mortgaged Property resulting from any rejection of
      the Pipelines Agreement by HEP in any bankruptcy or insolvency proceeding
      involving HEP, and any reasonable costs and expenses (including, but not
      limited to, attorneys' and experts' fees and court costs) incurred by
      Beneficiary in enforcing and exercising its rights hereunder
      (collectively, the "OBLIGATIONS"), Grantor has GRANTED, BARGAINED, SOLD
      and CONVEYED, and by these presents does GRANT, BARGAIN, SELL and CONVEY,
      unto Trustee the Mortgaged Property,

                                       7
<PAGE>

      subject, however, to the Permitted Encumbrances, TO HAVE AND TO HOLD the
      Mortgaged Property unto Trustee, forever, and Grantor does hereby bind
      itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title
      to the Mortgaged Property unto Trustee against every Person whomsoever
      lawfully claiming or to claim the same or any part thereof other than
      against any holder of any Senior Lien; provided, however, that this grant
      shall terminate upon the full performance and discharge of all of the
      Obligations and in accordance with the other terms set forth herein.

2.2   MAXIMUM SECURED INDEBTEDNESS. THE OUTSTANDING INDEBTEDNESS SECURED BY
      PROPERTY LOCATED IN NEW MEXICO SHALL NOT AT ANY ONE TIME EXCEED THE
      AGGREGATE MAXIMUM AMOUNT OF $100,000,000, WHICH SHALL CONSTITUTE THE
      MAXIMUM AMOUNT AT ANY TIME SECURED HEREBY.

                                    ARTICLE 3

                         WARRANTIES AND REPRESENTATIONS

      Grantor hereby unconditionally warrants and represents to Beneficiary as
      follows:

3.1   ORGANIZATION AND POWER. Grantor (a) is a limited liability company duly
      organized, validly existing and in good standing under the laws of the
      State of Delaware, and has complied with all conditions prerequisite to
      its doing business in the State of New Mexico and (b) has all requisite
      power and all governmental certificates of authority, licenses, permits,
      qualifications and documentation to own, lease and operate its properties
      and to carry on its business as now being, and as proposed to be,
      conducted.

3.2   VALIDITY OF SECURITY DOCUMENTS. The execution, delivery and performance by
      Grantor of the Security Documents (a) are within Grantor's powers and have
      been duly authorized by Grantor's Manager or other necessary parties, and
      all other requisite action for such authorization has been taken; (b) have
      received all (if any) requisite prior governmental approval in order to be
      legally binding and enforceable in accordance with the terms thereof; and
      (c) will not violate, be in conflict with, result in a breach of or
      constitute (with due notice or lapse of time, or both) a default under,
      any Legal Requirement or result in the creation or imposition of any lien,
      charge or encumbrance of any nature whatsoever upon any of Grantor's
      property or assets, except as contemplated by the provisions of the
      Security Documents. The Security Documents constitute the legal, valid and
      binding obligations of Grantor and others obligated under the terms of the
      Security Documents, in accordance with their respective terms.

3.3   LIEN OF THIS INSTRUMENT. Subject to the Senior Liens, this Deed of Trust
      constitutes a valid and subsisting deed of trust lien on the Real Property
      and the Fixtures and a valid, subsisting security interest in and to, and
      a valid assignment of, the Personalty and Leases, all in accordance with
      the terms hereof.

3.4   LITIGATION. There are no actions, suits or proceedings pending, or to the
      knowledge of Grantor threatened, against or affecting the Grantor as a
      result of or in connection with

                                       8
<PAGE>

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

                                    ARTICLE 4

                        AFFIRMATIVE COVENANTS OF GRANTOR

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

                                    ARTICLE 5

                          NEGATIVE COVENANTS OF GRANTOR

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

                                    ARTICLE 6

                      AFFIRMATIVE COVENANTS OF BENEFICIARY

      By its acceptance hereof, Beneficiary recognizes that (a) Grantor is
obligated or may hereafter become obligated to any of the Credit Parties (as
defined in the SNDA [defined below]) in connection with the Senior Credit
Agreement, and (b) Grantor and any future owner of the

                                       9
<PAGE>

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

                                    ARTICLE 7

                                EVENTS OF DEFAULT

      The term "EVENT OF DEFAULT", as used in the Security Documents, shall mean
the occurrence or happening, at any time and from time to time, of any one or
more of the following.

7.1   BREACH OF DEED OF TRUST. (a) Grantor shall (i) fail to perform or observe,
      in any material respect, any covenant, condition or agreement of this Deed
      of Trust to be performed or observed by Grantor, or (ii) breach any
      warranty or representation made by Grantor in this Deed of Trust, and such
      failure or breach shall continue unremedied for a period of thirty (30)
      days after receipt of written notice thereof to the Grantor from the
      Beneficiary; provided, however, that in the event such failure or breach
      cannot be reasonably cured within such thirty (30) day period and Grantor
      has diligently proceeded (and continues to proceed) to cure such breach,
      Grantor shall have an additional sixty (60) days to cure such failure or
      breach, or (b) HEP shall fail to perform all of the Obligations in full
      and on or before the dates same are to be performed (after giving effect
      to any applicable grace and cure periods).

7.2   VOLUNTARY BANKRUPTCY. Grantor shall (a) voluntarily be adjudicated a
      bankrupt or insolvent, (b) procure, permit or suffer the voluntary or
      involuntary appointment of a receiver, trustee or liquidator for itself or
      for all or any substantial portion of its property, (c) file any petition
      seeking a discharge, rearrangement, or reorganization of its debts
      pursuant to the bankruptcy laws or any other debtor relief laws of the
      United States or any state or any other competent jurisdiction, or (d)
      make a general assignment for the benefit of its creditors.

7.3   INVOLUNTARY BANKRUPTCY. If (a) a petition is filed against Grantor seeking
      to rearrange, reorganize or extinguish its debts under the provisions of
      any bankruptcy or other debtor relief law of the United States or any
      state or other competent jurisdiction, and such petition is not dismissed
      or withdrawn within sixty (60) days after its filing, or (b) a court

                                       10
<PAGE>

      of competent jurisdiction enters an order, judgment or decree appointing,
      without the consent of Grantor a receiver or trustee for it, or for all or
      any part of its property, and such order, judgment, or decree is not
      dismissed, withdrawn or reversed within sixty (60) days after the date of
      entry of such order, judgment or decree.

7.4   REJECTION OF PIPELINES AGREEMENT. A rejection, by or on behalf of Grantor
      or HEP, of the Pipelines Agreement in bankruptcy.

                                    ARTICLE 8

                                    REMEDIES

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

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

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

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

                                       11
<PAGE>

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

8.2   REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE. Beneficiary shall have
      all rights, remedies and recourses granted in the Pipelines Agreement and,
      subject to the rights of any Lienholder arising under or pursuant to the
      Senior Liens, and the terms and provisions of the SNDA, the Deed of Trust
      and same (a) shall be cumulative and concurrent; (b) may be pursued
      separately, successively or concurrently against Grantor or others
      obligated under this Deed of Trust, or against the Mortgaged Property, or
      against any one or more of them, at the sole discretion of Beneficiary;
      (c) may be exercised as often as occasion therefor shall arise, it being
      agreed by Grantor that the exercise or failure to exercise any of same
      shall in no event be construed as a waiver or release thereof or of any
      other right, remedy or recourse; and (d) are intended to be, and shall be,
      nonexclusive.

8.3   OBLIGATIONS. Neither Grantor, HEP nor any other Person hereafter obligated
      for performance or fulfillment of all or any of the Obligations shall be
      relieved of such obligation by reason of (a) the failure of Trustee to
      comply with any request of Grantor or any other Person to enforce any
      provisions of this Deed of Trust; (b) the release, regardless of
      consideration, of the Mortgaged Property or the addition of any other
      property to the Mortgaged Property; (c) any agreement or stipulation
      between any subsequent owner of the Mortgaged Property and Beneficiary
      extending, renewing, rearranging or in any other way modifying the terms
      of the Security Documents without first having obtained the consent of,
      given notice to or paid any consideration to Grantor or such other Person,
      and in such event Grantor and all such other Persons shall continue to be
      liable to make payment according to the terms of any such extension or
      modification agreement unless expressly released and discharged in writing
      by Beneficiary; or (d) by any other act or occurrence save and except the
      complete fulfillment of all of the Obligations.

8.4   RELEASE OF AND RESORT TO COLLATERAL. Beneficiary may release, regardless
      of consideration, any part of the Mortgaged Property without, as to the
      remainder, in any way impairing, affecting, subordinating or releasing the
      lien or security interest created in or evidenced by this Deed of Trust or
      their stature as a lien and security interest in and to the Mortgaged
      Property.

8.5   WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To the fullest
      extent permitted by law, Grantor hereby irrevocably and unconditionally
      waives and releases (a) all benefits that might accrue to Grantor by
      virtue of any present or future law exempting the Mortgaged Property from
      attachment, levy or sale on execution or providing for any appraisement,
      valuation, stay of execution, exemption from civil process, redemption or
      extension of time for payment; (b) all notices of any Event of Default or
      of Trustee's election to exercise or his actual exercise of any right,
      remedy or recourse provided for under this Deed of Trust; and (c) any
      right to a marshalling of assets or a sale in inverse order of alienation.

                                       12
<PAGE>

8.6   LIMITATION ON NEW MEXICO REDEMPTION. Pursuant to NMSA 1978, Section
      39-5-19 (1965), the redemption period after foreclosure sale for any
      Mortgaged Property situated in or otherwise subject to the laws of the
      State of New Mexico shall be limited to one (1) month.

8.7   DISCONTINUANCE OF PROCEEDINGS. In case Beneficiary shall have proceeded to
      invoke any right, remedy or recourse permitted under this Deed of Trust
      and shall thereafter elect to discontinue or abandon same for any reason,
      Beneficiary shall have the unqualified right so to do and, in such an
      event, Grantor and Beneficiary shall be restored to their former positions
      with respect to the Obligations, the Security Documents, the Mortgaged
      Property and otherwise, and the rights, remedies, recourses and powers of
      Beneficiary shall continue as if same had never been invoked.

8.8   APPLICATION OF PROCEEDS. Subject, in each case, to the rights of any
      Lienholder arising under or pursuant to the Senior Liens, and the terms
      and provisions of the SNDA (including, without limitation, the right to
      receive payments otherwise due to HEP under the terms of the Pipelines
      Agreement), the proceeds and other amounts generated by the holding,
      operating or other use of, the Mortgaged Property shall be applied by
      Trustee or Beneficiary (or the receiver, if one is appointed) to the
      extent that funds are so available therefrom in the following orders of
      priority:

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

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

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

      (d) fourth, to Grantor.

8.9   INDEMNITY. IN CONNECTION WITH ANY ACTION TAKEN BY TRUSTEE AND/OR
      BENEFICIARY PURSUANT TO THIS DEED OF TRUST, TRUSTEE AND/OR BENEFICIARY AND
      THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS,
      EMPLOYEES, AGENTS, REPRESENTATIVES, ATTORNEYS, ACCOUNTANTS AND EXPERTS
      (COLLECTIVELY THE "INDEMNIFIED PARTIES") SHALL NOT BE LIABLE FOR ANY LOSS
      SUSTAINED BY GRANTOR RESULTING FROM (i) AN

                                       13
<PAGE>

      ASSERTION THAT TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY HAS RECEIVED
      FUNDS FROM THE OPERATIONS OF THE MORTGAGED PROPERTY CLAIMED BY THIRD
      PERSONS OR (ii) ANY ACT OR OMISSION OF TRUSTEE, BENEFICIARY OR INDEMNIFIED
      PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE MORTGAGED
      PROPERTY, INCLUDING IN EITHER CASE SUCH LOSS WHICH MAY RESULT FROM THE
      ORDINARY NEGLIGENCE OF TRUSTEE, BENEFICIARY OR AN INDEMNIFIED PARTY OR
      WHICH MAY RESULT FROM STRICT LIABILITY, WHETHER UNDER APPLICABLE LAW OR
      OTHERWISE, UNLESS SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE, WILLFUL
      MISCONDUCT OR BAD FAITH OF TRUSTEE, BENEFICIARY OR ANY INDEMNIFIED PARTY
      NOR SHALL TRUSTEE, BENEFICIARY AND/OR ANY INDEMNIFIED PARTY BE OBLIGATED
      TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF GRANTOR.
      GRANTOR SHALL AND DOES HEREBY AGREE TO INDEMNIFY TRUSTEE, BENEFICIARY AND
      EACH OF THEIR RESPECTIVE INDEMNIFIED PARTIES FOR, AND TO HOLD THEM
      HARMLESS FROM, ANY AND ALL LOSSES WHICH MAY OR MIGHT BE INCURRED BY
      TRUSTEE, BENEFICIARY OR INDEMNIFIED PARTY BY REASON OF THIS DEED OF TRUST
      OR THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER, INCLUDING SUCH LOSSES
      WHICH MAY RESULT FROM THE ORDINARY NEGLIGENCE OF TRUSTEE, BENEFICIARY OR
      AN INDEMNIFIED PARTY OR WHICH MAY RESULT FROM STRICT LIABILITY, WHETHER
      UNDER APPLICABLE LAW OR OTHERWISE, UNLESS SUCH LOSS IS CAUSED BY THE GROSS
      NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF TRUSTEE, BENEFICIARY OR
      INDEMNIFIED PARTY. SHOULD TRUSTEE, BENEFICIARY AND/OR ANY INDEMNIFIED
      PARTY MAKE ANY EXPENDITURE ON ACCOUNT OF ANY SUCH LOSSES, THE AMOUNT
      THEREOF, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND REASONABLE
      ATTORNEYS' FEES, SHALL BE A DEMAND OBLIGATION (WHICH OBLIGATION GRANTOR
      HEREBY EXPRESSLY PROMISES TO PAY) OWING BY GRANTOR TO TRUSTEE AND/OR
      BENEFICIARY AND SHALL BEAR INTEREST FROM THE DATE EXPENDED UNTIL PAID AT
      THE HIGHEST RATE ALLOWED BY LAW, SHALL BE A PART OF THE OBLIGATIONS AND
      SHALL BE SECURED BY THIS DEED OF TRUST. THE LIABILITIES OF GRANTOR AS SET
      FORTH IN THIS SECTION 8.9 SHALL SURVIVE THE TERMINATION OF THIS DEED OF
      TRUST.

8.10  LIMITATIONS ON INDEMNIFICATIONS.

      (a) To the extent, if at all, but only to the extent, that NMSA 1978,
      Section 56-7-1 (1971), as amended from time to time, is applicable to this
      Deed of Trust or any indemnification agreements herein, any agreement to
      indemnify any indemnitee given in this Deed of Trust, regardless of
      whether such agreement to indemnify makes reference to this or any other
      limitation provision, will not extend to liability, claims, damages,
      losses or expenses, including attorneys' fees, arising out of (i) the
      preparation or approval

                                       14
<PAGE>

      of maps, drawings, opinions, reports, surveys, change orders, designs or
      specifications by such indemnitee, or the agents or employees of such
      indemnitee, or (ii) the giving of or the failure to give directions or
      instructions by such indemnitee, or the agents or employees of such
      indemnitee, where such giving or failure to give directions or
      instructions is the primary cause of bodily injury to persons or damage to
      property.

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

                                    ARTICLE 9

                               SECURITY AGREEMENT

9.1   SECURITY INTEREST. This Deed of Trust shall be construed as a deed of
      trust on real property and it shall (subject to the Senior Liens) also
      constitute and serve as a "Security Agreement" on personal property within
      the meaning of, and shall constitute a security interest under, the
      Uniform Commercial Code (as the same is codified and in effect in New
      Mexico) with respect to the Personalty, Fixtures and Leases. To this end,
      Grantor has GRANTED, BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED, AND SET
      OVER, and by these presents does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER
      AND SET OVER, unto Trustee and unto Beneficiary, a security interest in
      all of Grantor's right, title and interest in, to and under the
      Personalty, Fixtures and Leases to secure the full and timely performance
      and discharge of the Obligations, subject only to the Permitted
      Encumbrances.

9.2   FINANCING STATEMENTS. Grantor hereby authorizes Beneficiary to file such
      "Financing Statements," and Grantor hereby agrees to execute and deliver
      such further assurances as Beneficiary may, from time to time, consider
      reasonably necessary to create, perfect and preserve Beneficiary's
      security interest herein granted and Beneficiary may cause such statements
      and assurances to be recorded and filed, at such times and places as may
      be required or permitted by law to so create, perfect and preserve such
      security interest.

9.3   UNIFORM COMMERCIAL CODE REMEDIES. Subject, in each case, to the rights of
      any Lienholder under or pursuant to the Senior Liens, and the terms and
      provisions of the SNDA and this Deed of Trust, Beneficiary and/or Trustee
      shall have all the rights, remedies and recourses (other than auction and
      sale rights) with respect to the Personalty, Fixtures and Leases afforded
      to it by the aforesaid Uniform Commercial Code (as the

                                       15
<PAGE>

      same is codified and in effect in New Mexico) in addition to, and not in
      limitation of, the other rights, remedies and recourses afforded by this
      Deed of Trust.

9.4   NO OBLIGATION OF TRUSTEE OR BENEFICIARY. The assignment and security
      interest herein granted shall not be deemed or construed to constitute
      Trustee or Beneficiary as a trustee in possession of the Mortgaged
      Property, to obligate Trustee or Beneficiary to lease the Mortgaged
      Property or attempt to do same, or to take any action, incur any expense
      or perform or discharge any obligation, duty or liability whatsoever.

9.5   FIXTURE FILING. This Deed of Trust shall constitute a "fixture filing" for
      all purposes of Article 9 of the Uniform Commercial Code, as codified and
      in effect in New Mexico. All or part of the Mortgaged Property are or are
      to become fixtures; information concerning the security interest herein
      granted may be obtained at the addresses set forth on the first page
      hereof. The address of the Secured Party (Beneficiary) is the address set
      forth in Section 1.1(a) and the address of the Debtor (Grantor) is the
      address set forth in the opening recital of this Deed of Trust.

9.6   SATISFACTION AND RELEASE. If (a) all Obligations secured hereby shall be
      paid, performed and satisfied in full, the Mortgaged Property (or any
      portion thereof, in which case the provisions of clauses (i) through (iv)
      below shall be applicable only to such portion) shall be sold, consigned,
      conveyed or transferred in accordance with the provisions of the Pipelines
      Agreement, (c) the Pipelines Agreement shall be terminated, cancelled or
      otherwise expire, and the Obligations of HEP set forth in Section 2(c) of
      the Pipelines Agreement shall no longer be applicable, and/or (d) at any
      time Grantor's or HEP's (in the event Grantor does not have a stand-alone
      credit rating) senior unsecured debt has an Investment Grade Rating (as
      hereinafter defined) from both Moody's Investors Service, Inc. ("MOODY'S")
      and Standard & Poor's Ratings Group ("S&P") (or any successor to the
      rating business of either thereof), then this Deed of Trust shall be null
      and void, (ii) the liens and security interests created by this Deed of
      Trust shall be released as promptly as practicable, (iii) the Mortgaged
      Property shall revert to Grantor (or the transferee in the case of clause
      (b) above) free and clear of the liens and security interests created by
      this Deed of Trust, and Beneficiary and Trustee (as applicable) shall
      execute and deliver, or cause to be executed and delivered, instruments of
      satisfaction and release that are reasonably requested by Grantor.
      Otherwise, this Deed of Trust shall remain and continue in full force and
      effect. As used in this Section 9.6, the term "Investment Grade Rating"
      shall mean a rating equal to or higher than Baa3 (or the equivalent) by
      Moody's, or BBB- (or the equivalent) by S&P.

                                   ARTICLE 10

                             CONCERNING THE TRUSTEE

10.1  NO REQUIRED ACTION. Trustee shall not be required to take any action
      toward the execution and enforcement of the trust hereby created or to
      institute, appear in or defend any action, suit or other proceeding in
      connection therewith where in his opinion such action will be likely to
      involve him in expense or liability, unless requested so to do by a
      written instrument signed by Beneficiary and, if Trustee so requests,
      unless Trustee is

                                       16
<PAGE>

      tendered security and indemnity satisfactory to him against any and all
      costs, expense and liabilities arising therefrom. Trustee shall not be
      responsible for the execution, acknowledgment or validity of the Security
      Documents, or for the proper authorization thereof, or for the sufficiency
      of the lien and security interest purported to be created hereby, and
      makes no representation in respect thereof or in respect of the rights,
      remedies and recourses of Beneficiary.

10.2  CERTAIN RIGHTS. With the approval of Beneficiary, Trustee shall have the
      right to take any and all of the following actions: (a) to select, employ
      and advise with counsel (who may be, but need not be, counsel for
      Beneficiary) upon any matters arising hereunder, including the
      preparation, execution and interpretation of the Security Documents, and
      shall be fully protected in relying as to legal matters on the advice of
      counsel; (b) to execute any of the trusts and powers hereof and to perform
      any duty hereunder either directly or through his agents or attorneys; (c)
      to select and employ, in and about the execution of his duties hereunder,
      suitable accountants, engineers and other experts, agents and
      attorneys-in-fact, either corporate or individual, not regularly in the
      employ of Trustee, and Trustee shall not be answerable for any act,
      default or misconduct of any such accountant, engineer or other expert,
      agent or attorney-in-fact, if selected with reasonable care, or for any
      error of judgment or act done by Trustee in good faith, or be otherwise
      responsible or accountable under any circumstances whatsoever, except for
      Trustee's gross negligence or bad faith; and (d) to take any and all other
      lawful action as Beneficiary may instruct Trustee to take to protect or
      enforce Beneficiary's rights hereunder. Trustee shall not be personally
      liable in case of entry by him, or anyone entering by virtue of the powers
      herein granted him, upon the Mortgaged Property for debts contracted or
      liability or damages incurred in the management or operation of the
      Mortgaged Property. Trustee shall have the right to rely on any
      instrument, document or signature authorizing or supporting any action
      taken or proposed to be taken by him hereunder, believed by him in good
      faith to be genuine. Trustee shall be entitled to reimbursement for
      expenses incurred by him in the performance of his duties hereunder and to
      reasonable compensation for such of his services hereunder as shall be
      rendered. Grantor will, from time to time, pay the compensation due to
      Trustee hereunder and reimburse Trustee for, and save him harmless
      against, any and all liability and expenses which may be incurred by him
      in the performance of his duties.

10.3  RETENTION OF MONEYS. All moneys received by Trustee shall, until used or
      applied as herein provided, be held in trust for the purposes for which
      they were received, but need not be segregated in any manner from any
      other moneys (except to the extent required by law) and Trustee shall be
      under no liability for interest on any moneys received by him hereunder.

10.4  SUCCESSOR TRUSTEES. Trustee may resign by the giving of notice of such
      resignation in writing to Beneficiary. If Trustee shall die, resign or
      become disqualified from acting in the execution of this trust, or shall
      fail or refuse to execute the same when requested by Beneficiary so to do,
      or if, for any reason, Beneficiary shall prefer to appoint a substitute
      trustee to act instead of the aforenamed Trustee, Beneficiary shall have
      full power to appoint a substitute trustee and, if preferred, several
      substitute trustees in succession who shall succeed to all the estates,
      properties, rights, powers and duties of the aforenamed

                                       17
<PAGE>

      Trustee. Such appointment may be executed by any authorized agent of
      Beneficiary, and if such Beneficiary be a corporation and such appointment
      be executed in its behalf by any officer of such corporation, such
      appointment shall be conclusively presumed to be executed with authority
      and shall be valid and sufficient without proof of any action by the Board
      of Directors or any superior officer of the corporation. Grantor hereby
      ratifies and confirms any and all acts which the aforenamed Trustee, or
      his successor or successors in this trust, shall do lawfully by virtue
      hereof.

10.5  PERFECTION OF APPOINTMENT. Should any deed, conveyance or instrument of
      any nature be required from Grantor by any successor Trustee to more fully
      and certainly vest in and confirm to such new Trustee such estates,
      rights, powers and duties, then, upon request by such Trustee, any and all
      such deeds, conveyances and instruments shall be made, executed,
      acknowledged and delivered and shall be caused to be recorded and/or filed
      by Grantor.

10.6  SUCCESSION INSTRUMENTS. Any new Trustee appointed pursuant to any of the
      provisions hereof shall, without any further act, deed or conveyance,
      become vested with all the estates, properties, rights, powers and trusts
      of its or his predecessor in the rights hereunder with like effect as if
      originally named as Trustee herein; but nevertheless, upon the written
      request of Beneficiary or of the successor Trustee, the Trustee ceasing to
      act shall execute and deliver an instrument transferring to such successor
      Trustee, upon the trusts herein expressed, all the estates, properties,
      rights, powers and trusts of the Trustee so ceasing to act, and shall duly
      assign, transfer and deliver any of the property and moneys held by such
      Trustee to the successor Trustee so appointed in its or his place.

10.7  NO REPRESENTATION BY TRUSTEE. By accepting or approving anything required
      to be observed, performed or fulfilled or to be given to Trustee or
      Beneficiary pursuant to the Security Documents, including but not limited
      to, any officer's certificate, balance sheet, statement of profit and loss
      or other financial statement, survey, appraisal or insurance policy,
      neither Trustee nor Beneficiary shall be deemed to have warranted,
      consented to, or affirmed the sufficiency, legality, effectiveness or
      legal effect of the same, or of any term, provision or condition thereof,
      and such acceptance or approval thereof shall not be or constitute any
      warranty, consent or affirmation with respect thereto by Trustee or
      Beneficiary.

                                   ARTICLE 11

                                  MISCELLANEOUS

11.1  PERFORMANCE AT GRANTOR'S EXPENSE. The cost and expense of performing or
      complying with any and all of the Obligations shall be borne solely by
      Grantor and/or HEP to the extent provided in the Pipelines Agreement.

11.2  SURVIVAL OF OBLIGATIONS. Each and all of the Obligations shall survive the
      execution and delivery of the Security Documents and shall continue in
      full force and effect until the Obligations have been performed and
      discharged in full.

                                       18
<PAGE>

11.3  FURTHER ASSURANCES. Grantor, upon the request of Trustee or Beneficiary,
      will execute, acknowledge, deliver and record and/or file such further
      instruments and do such further acts as may be necessary, desirable or
      proper to carry out more effectively the purpose of the Security Documents
      and to subject to the liens and security interests thereof any property
      intended by the terms thereof to be covered thereby, including
      specifically but without limitation, any renewals, additions,
      substitutions, replacements, betterments or appurtenances to the then
      Mortgaged Property.

11.4  RECORDING AND FILING. Grantor will cause the Security Documents and all
      amendments and supplements thereto and substitutions therefor to be
      recorded, filed, re-recorded and refiled in such manner and in such places
      as Trustee or Beneficiary shall reasonably request, and will pay all such
      recording, filing, re-recording and refiling taxes, fees and other
      charges.

11.5  NOTICES. All notices or other communications required or permitted to be
      given pursuant to this Deed of Trust shall be in writing and shall be
      considered as properly given if mailed by first-class United States mail,
      postage prepaid, registered or certified with return receipt requested, or
      by delivering same in person to the intended addressee or by prepaid
      telegram. Notice so mailed shall be effective two days following its
      deposit. Notice given in any other manner shall be effective only if and
      when received by the addressee. For purposes of notice, the addresses of
      Beneficiary and Grantor shall be as set forth in Section 1.1(a) and the
      opening recital hereinabove, respectively; provided, however, that either
      party shall have the right to change its address for notice hereunder to
      any other location within the continental United States by the giving of
      thirty (30) days' notice to the other party in the manner set forth
      hereinabove.

11.6  NO WAIVER. Any failure by Trustee or Beneficiary to insist, or any
      election by Trustee or Beneficiary not to insist, upon strict performance
      by Grantor of any of the terms, provisions or conditions of the Security
      Documents shall not be deemed to be a waiver of same or of any other
      terms, provision or condition thereof and Trustee or Beneficiary shall
      have the right at any time or times thereafter to insist upon strict
      performance by Grantor of any and all of such terms, provisions and
      conditions.

11.7  BENEFICIARY'S RIGHT TO PERFORM THE OBLIGATIONS. If Grantor shall fail,
      refuse or neglect to make any payment or perform any act required by the
      Security Documents (after giving effect to any applicable notice and cure
      period), then at any time thereafter, and without further notice to or
      demand upon Grantor and without waiving or releasing any other right,
      remedy or recourse Beneficiary may have because of same, Beneficiary may
      (but shall not be obligated to) make such payment or perform such act for
      the account of and at the expense of Grantor, and shall have the right to
      enter upon or in the Real Property for such purpose and to take all such
      action thereon and with respect to the Mortgaged Property as it may deem
      necessary or appropriate but in any case subject to the rights of any
      Lienholder arising under or pursuant to the Senior Liens and the terms and
      provisions of the SNDA. If Beneficiary shall elect to pay any Imposition
      or other sums due with reference to the Mortgaged Property, Beneficiary
      may do so in reliance on any bill, statement or assessment procured from
      the appropriate Governmental Entity or other issuer thereof without
      inquiring into the accuracy or validity thereof. Similarly, in

                                       19
<PAGE>

      making any payments to protect the security intended to be created by the
      Security Documents, Beneficiary shall not be bound to inquire into the
      validity of any apparent or threatened adverse title, lien, encumbrance,
      claim or charge before making an advance for the purpose of preventing or
      removing the same. Grantor shall indemnify Beneficiary for all losses,
      expenses, damage, claims and causes of action, including reasonable
      attorneys' fees, incurred or accruing by reason of any acts performed by
      Beneficiary pursuant to the provisions of this Section 11.7 or by reason
      of any other provision in the Security Documents. All sums paid by
      Beneficiary pursuant to this Section 11.7 and all other sums expended by
      Beneficiary to which it shall be entitled to be indemnified, together with
      interest thereon at the maximum rate allowed by law from the date of such
      payment or expenditure, shall be secured by the Security Documents and
      shall be paid by Grantor to Beneficiary upon demand.

11.8  COVENANTS RUNNING WITH THE LAND. All Obligations contained in the Security
      Documents are intended by the parties to be, and shall be construed as,
      covenants running with the Mortgaged Property.

11.9  SUCCESSORS AND ASSIGNS. All of the terms of the Security Documents shall
      apply to, be binding upon and inure to the benefit of the parties thereto,
      their successors and assigns, and all other Persons claiming by, through
      or under them.

11.10 SEVERABILITY. The Security Documents are intended to be performed in
      accordance with, and only to the extent permitted by, all applicable Legal
      Requirements. If any provision of any of the Security Documents or the
      application thereof to any Person or circumstance shall, for any reason
      and to any extent, be invalid or unenforceable neither the remainder of
      the instrument in which such provision is contained nor the application of
      such provision to other Persons or circumstances nor the other instruments
      referred to hereinabove shall be affected thereby, but rather shall be
      enforced to the greatest extent permitted by law.

11.11 ENTIRE AGREEMENT AND MODIFICATION. The Security Documents contain the
      entire agreements between the parties relating to the subject matter
      hereof and thereof and all prior agreements relative thereto which are not
      contained herein or therein are terminated. Notwithstanding anything
      herein to the contrary, Grantor and, by its acceptance hereof, Beneficiary
      hereby acknowledge and agree that in the event that any of the terms or
      provisions of this Deed of Trust conflict with any terms or provisions of
      the Pipelines Agreement, the terms or provisions of the Pipelines
      Agreement shall govern and control for all purposes. The Security
      Documents may not be amended, revised, waived, discharged, released or
      terminated orally but only by a written instrument or instruments (a)
      executed by the party against which enforcement of the amendment,
      revision, waiver, discharge, release or termination is asserted, and (b)
      consented to by the Lienholders to the extent any such amendment,
      revision, waiver, discharge, release or termination would be materially
      adverse to the rights of any such Lienholder. Any alleged amendment,
      revision, waiver, discharge, release or termination which is not so
      documented shall not be effective as to any party.

                                       20
<PAGE>

11.12 COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which shall be an original but all of which together
      shall constitute but one instrument.

11.13 APPLICABLE LAW. The Security Documents shall be governed by and construed
      according to the laws of the State of New Mexico (excluding any conflicts
      of law, rule or principle that might refer such matters to the laws of
      another jurisdiction).

11.14 NO PARTNERSHIP. Nothing contained in the Security Documents is intended
      to, or shall be construed as, creating to any extent and in any manner
      whatsoever, any partnership, joint venture, or association between
      Grantor, Trustee and Beneficiary, or in any way make Beneficiary or
      Trustee coprincipals with Grantor with reference to the Mortgaged
      Property, and any inferences to the contrary are hereby expressly negated.

11.15 HEADINGS. The Article, Section and Subsection entitlements hereof are
      inserted for convenience of reference only and shall in no way alter,
      modify or define, or be used in construing, the text of such Articles,
      Sections or Subsections.

11.16 WAIVER OF STAY, MORATORIUM, AND SIMILAR RIGHTS. Grantor agrees, to the
      full extent that it may lawfully do so, that it will not at any time
      insist upon or plead or in any way take advantage of any appraisement,
      valuation, stay, marshalling of assets, extension, redemption or
      moratorium law now or hereafter in force and effect so as to prevent or
      hinder the enforcement of the provisions of this Deed of Trust or the
      indebtedness secured hereby, or any agreement between Grantor and
      Beneficiary or any rights or remedies Beneficiary may have thereunder,
      hereunder or by law.

11.17 TRANSFER OF MORTGAGED PROPERTY. No sale, lease, exchange, assignment,
      conveyance or other transfer (each, a "TRANSFER") of the Mortgaged
      Property will extinguish the lien or security interest created by this
      Deed of Trust, except to the extent provided in Section 9.6 of this Deed
      of Trust or in the Pipelines Agreement. As a condition to any Transfer,
      Beneficiary may (a) require the express assumption of the Obligations by
      the transferee (with or without the release of Grantor from liability in
      respect thereof), and (b) require the execution of an assumption
      agreement, modification agreements, supplemental security documents and
      financing statements satisfactory in form and substance to Beneficiary.

11.18 ESTOPPEL CERTIFICATES. Grantor and Beneficiary agree to execute and
      deliver from time to time, upon the request of the other party, a
      certificate regarding the status of the Pipelines Agreement, consisting of
      statements, if true (or if not, specifying why not), (a) that the
      Pipelines Agreement is in full force and effect, (b) the date through
      which payments have been paid, (c) the date of the commencement of the
      term of the Pipelines Agreement, (d) the nature of any amendments or
      modifications of the Pipelines Agreement, (e) to such party's actual
      knowledge without investigation, no default, or state of facts which with
      the passage of time or notice (or both) would constitute a default, exists
      under the Pipelines Agreement, (f) to such party's actual knowledge
      without investigation, no setoffs, recoupments, estoppels, claims or
      counterclaims exist against the other party under the Pipelines Agreement,
      and (g) such other factual matters as may be reasonably requested.

                                       21
<PAGE>

11.19 FINAL AGREEMENT. Grantor acknowledges receipt of a copy of this instrument
      at the time of execution hereof. Grantor acknowledges that, except as
      incorporated in writing in this Deed of Trust, there are not, and were
      not, and no persons are or were authorized to make any representations,
      understandings, stipulations, agreements or promises, oral or written,
      with respect to the matters addressed in this Deed of Trust. THE WRITTEN
      AGREEMENTS HEREIN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
      RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY
      EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
      PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

11.20 OTHER NEW MEXICO PROVISIONS.

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

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

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

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

      (e) For Security Agreement and Fixture Filing purposes, (1) the Debtor's
      name is HEP Pipeline, L.L.C., whose address is shown on the first page of
      this instrument; (2) the Secured Party's name is Holly Corporation, whose
      address is shown on the first page of this instrument; (3) this instrument
      covers materials, supplies, equipment, apparatus and other items that are,
      or are to become, fixtures; and (4) the real property to which such
      fixtures are related is attached to this instrument as Exhibit A.

                           [SIGNATURE PAGE TO FOLLOW]

                                       22
<PAGE>

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

                                    GRANTOR:

                         HEP PIPELINE, L.L.C., a Delaware limited liability
                         company
                         By: Holly Energy Partners - Operating, L.P., a
                             Delaware limited partnership, its sole member
                              By: HEP Logistics GP, L.L.C., a Delaware
                                  limited liability company, its general partner
                                  By: Holly Energy Partners, L.P., a Delaware
                                      limited partnership, its sole member
                                       By: HEP Logistics Holdings, L.P., a
                                           Delaware limited partnership, its
                                           general partner
                                           By: Holly Logistic Services, L.L.C.,
                                               a Delaware limited liability
                                               company, its general partner

                                               By: /s/ Stephen J. McDonnell
                                                   ----------------------------
                                                      Stephen J. McDonnell
                                                      Vice President and
                                                      Chief Financial Officer

EMPLOYER IDENTIFICATION NUMBER OF GRANTOR:                            71-0968296

ORGANIZATIONAL NUMBER OF GRANTOR:                                         381427

                                [Signature Page]

<PAGE>

THE STATE OF TEXAS

COUNTY OF DALLAS

      This instrument was acknowledged before me on July 8, 2005, by Stephen J.
McDonnell, Vice President and Chief Financial Officer of Holly Logistic
Services, L.L.C., a Delaware limited liability company, general partner of HEP
Logistics Holdings, L.P., a Delaware limited partnership, general partner of
Holly Energy Partners, L.P., a Delaware limited partnership, sole member of HEP
Logistics GP, L.L.C., a Delaware limited liability company, general partner of
Holly Energy Partners - Operating, L.P., a Delaware limited partnership, sole
member of HEP Pipeline, L.L.C., a Delaware limited liability company.

                                             /s/ Notary Public
                                             ----------------------------------
                                             Notary Public, State of Texas

My Commission Expires: 1/25/06
                      -----------------

                             [Acknowledgement Page]

<PAGE>

                                    EXHIBIT A

                                      A-1

<PAGE>

                                    EXHIBIT B

                            DESCRIPTION OF PIPELINES

Approximately 65 miles of 8" feedstock pipeline and 10" feedstock pipeline, each
of which begins at the inlet flange of the delivery manifold motor operated
valves at the Lovington Refinery, near Lovington, New Mexico and ends at the
outlet flange of the turbine meter at the Artesia Refinery in Artesia, New
Mexico, along with any and all connection facilities, including the
Enterprise/MAPL connection, field booster pump stations, spare parts, pipes,
valves, motors and miscellaneous equipment directly associated with the 8" inch
and 10" feedstock pipelines.

                                      B-1

<PAGE>

                                  ATTACHMENT 1

                     FORM OF SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

After recording, return to:
Vinson & Elkins L.L.P.
2001 Ross Avenue, Suite 3700
Dallas, Texas  75201
Attention:  Mark C. Anderson, Jr.

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

      This Subordination, Non-Disturbance and Attornment Agreement (this
"AGREEMENT") is executed as of July __, 2005, among Union Bank of California,
N.A., in its capacity as administrative agent (or any assignee of or successor
to such administrative agent) under the Credit Agreement (as defined below) and
on behalf of the Credit Parties (as defined below) ("ADMINISTRATIVE AGENT"), and
Holly Corporation, a Delaware corporation ("HOLLY").

                                    RECITALS:

      A. Holly Energy Partners - Operating, L.P., a Delaware limited partnership
("OPERATING"), the financial institutions party thereto from time to time
(individually, a "FINANCIAL INSTITUTION" and collectively, the "FINANCIAL
INSTITUTIONS"), the Financial Institutions issuing letters of credit thereunder
from time to time, if any (individually, an "ISSUING BANK" and collectively, the
"ISSUING BANKS"), the Financial Institutions or any affiliate thereof that have
entered into hedging arrangements with Operating or any subsidiary thereof from
time to time (individually, a "SWAP COUNTERPARTY" and collectively, the "SWAP
COUNTERPARTIES" and, together with Administrative Agent, the Financial
Institutions and the Issuing Banks, being collectively referred to herein as the
"CREDIT PARTIES") are parties to that certain Credit Agreement dated as of July
7, 2004 (as heretofore and hereafter renewed, extended, amended, supplemented,
replaced, modified and/or restated from time to time, the "CREDIT AGREEMENT").

      B. The Financial Institutions are the present owners and holders of
certain promissory notes dated July 7, 2004, executed by Operating and payable
to the order of each such Financial Institution (as heretofore and hereafter
renewed, extended, amended, supplemented, replaced, modified, and/or restated
from time to time and together with any additional notes issued under or
pursuant to the Credit Agreement, the "NOTES"). Administrative Agent, for the
ratable benefit of the Credit Parties, is the beneficiary of that certain (i)
Mortgage, Deed of Trust, Security Agreement, Assignment of Rents and Leases,
Fixture Filing and Financing Statement dated as of July __, 2005 (as heretofore
and hereafter renewed, extended, amended, supplemented, replaced, modified,
and/or restated from time to time, the "SENIOR MORTGAGE"), and the secured party
under certain other security agreements and documents

                                 Attachment 1-1
<PAGE>

entered into in connection with the Credit Agreement (as heretofore and
hereafter renewed, extended, amended, supplemented, replaced, modified, and/or
restated from time to time, the "SECURITY INSTRUMENTS" and, together with the
Credit Agreement, the Notes, the Senior Mortgage and any other documents,
instruments and agreements executed and/or delivered in connection with the
Credit Agreement, collectively, the "SENIOR LOAN DOCUMENTS").

      C. Pursuant to the Senior Loan Documents and to secure the Notes and the
other Secured Obligations (as defined in the Senior Mortgage), HEP Pipeline,
L.L.C., a Delaware limited liability company ("HEP PIPELINE") and a subsidiary
of Holly Energy Partners, L.P., a Delaware limited partnership ("HEP") granted a
security interest and mortgage lien to or for the benefit of Administrative
Agent, covering the right, title and interest of HEP Pipeline in certain
property described in Exhibit A attached hereto (the "PROPERTY").

      D. Holly is the current owner of certain rights and interests under and
pursuant to the provisions of that certain Pipelines Agreement dated as of July
__, 2005 by and among Holly, HEP, Navajo Refining Company, L.P., a Delaware
limited partnership, Operating, HEP Pipeline, HEP Logistics Holdings, L.P., a
Delaware limited partnership, Holly Logistic Services, L.L.C., a Delaware
limited liability company, and HEP Logistics GP, L.L.C., a Delaware limited
liability company (together with any amendments, restatements or modifications
from time to time made thereto, the "PIPELINES AGREEMENT").

      E. Holly is the current beneficiary of certain liens and security
interests in a portion of the Property (the "SUBORDINATED LIENS") under and
pursuant to the provisions of that certain Mortgage and Deed of Trust (with
Security Agreement and Financing Statement) (the "HOLLY MORTGAGE") dated as of
July __, 2005 executed by HEP Pipeline to John N. Patterson, Trustee, for the
benefit of Holly, securing the Obligations (as defined in the Holly Mortgage and
referred to herein as the "HEP OBLIGATIONS"), such Holly Mortgage being recorded
(or to be recorded) in various counties in the State of New Mexico.

      F. Holly has agreed to subordinate its Subordinated Lien under the Holly
Mortgage (but not, pursuant to this Agreement, any of its rights and interests
under the Pipelines Agreement) to (i) the Senior Mortgage and the other Senior
Loan Documents, and (ii) any other mortgage, deed of trust or security
instrument granted by a Purchaser (as defined below) or any subsequent purchaser
of any portion of the Mortgaged Property (as heretofore and hereafter renewed,
extended, amended, supplemented, replaced, modified, and/or restated from time
to time, a "FUTURE SENIOR MORTGAGE") that secures debt and obligations of, and
other extensions of credit to, such Purchaser or purchaser (together with the
Secured Obligations (as defined in the Senior Mortgage), referred to herein as
the "SENIOR SECURED OBLIGATIONS") and Administrative Agent has agreed that it
and any such Purchaser at foreclosure of the Senior Mortgage shall recognize and
not disturb or extinguish the Holly Mortgage, all on the terms and conditions
hereinafter set forth.

                                 Attachment 1-2

<PAGE>

                                   AGREEMENTS:

      NOW, THEREFORE, in consideration of Ten Dollars ($10) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Administrative Agent and Holly hereby covenants and agrees as
follows:

      1. SUBORDINATION OF HOLLY MORTGAGE.

            (a) Subject to the provisions of Section 3 and Section 4 hereof, the
Subordinated Liens of Holly under the Holly Mortgage and all of the terms,
covenants and provisions of the Holly Mortgage, and all rights, remedies and
options of Holly thereunder, are and shall at all times continue to be subject,
subordinate and inferior in all respects to the Senior Loan Documents and any
Future Senior Mortgage and to the liens and security interests thereof and to
all amendments, modifications, and replacements thereof, with the same force and
effect as if the Senior Loan Documents, or if applicable, the Future Senior
Mortgage, had been executed, delivered and recorded prior to the execution,
delivery and recordation of the Holly Mortgage. This Agreement is not intended,
and shall not be construed, to (i) subordinate the rights and interests of Holly
under the Pipelines Agreement (including Holly's right to quiet enjoyment under
the Pipelines Agreement or any claims, remedies or damages that may be due or
available to, or become due or available to, Holly under the Pipelines
Agreement), or subordinate the Holly Mortgage to any mortgage, deed of trust,
assignment, security agreement, financing statement or other security document,
other than, with respect to clause (ii), the Senior Loan Documents and the
Future Senior Mortgage. Nothing in this Agreement shall impair, as between HEP
or Operating, on the one hand, and Holly, on the other hand, the obligations of
HEP and Operating, which are absolute and unconditional, to perform the HEP
Obligations in accordance with their terms.

            (b) Notwithstanding anything herein or in the Holly Mortgage to the
contrary, Holly hereby acknowledges and agrees, and HEP Pipeline by its consent
to this Agreement acknowledges and agrees, that (i) in the event that any of the
terms or provisions of this Agreement conflict with any terms or provisions of
the Holly Mortgage, the terms or provisions of this Agreement shall govern and
control for all purposes; and (ii) without the written prior consent of the
Administrative Agent or the beneficiary of any Future Senior Mortgage (together
with the Credit Parties, the "SENIOR BENEFICIARIES"), neither Holly nor HEP
Pipeline (nor any future owner of the Mortgaged Property) will amend, revise,
supplement, replace, restate, or otherwise modify the Holly Mortgage if such
amendment, revision, supplement, replacement, restatement or other modification
would be materially adverse to the rights of any Senior Beneficiary.

      2. RELATIVE RIGHTS AND PRIORITIES. Subject to the provisions of Section 1,
Section 3 and Section 4 hereof:

            (a) Until the Senior Secured Obligations have been indefeasibly paid
in full, all commitments to extend credit under the Credit Agreement (or if
applicable, any agreement governing obligations secured by a Future Senior
Mortgage) have terminated, and all letters of credit issued thereunder have been
terminated and returned (the "SENIOR OBLIGATIONS PAYMENT

                                 Attachment 1-3

<PAGE>

DATE"), Holly will not (i) commence any foreclosure (whether a judicial
foreclosure or non-judicial foreclosure) of the Holly Mortgage, (ii) accept a
deed or assignment in lieu of foreclosure, (iii) otherwise exercise any of its
rights or remedies under the Holly Mortgage, or (iv) take any Enforcement
Action.

            (b) Holly agrees that, until the Senior Obligations Payment Date has
occurred:

                  (i) it will not take or cause to be taken any action, the
purpose or effect of which is to make any Subordinated Lien pari passu with or
senior to, or to give Holly any preference or priority relative to, the liens
and security interests with respect to the Senior Secured Obligations;

                  (ii) it will not oppose, object to, interfere with, hinder or
delay, in any manner, whether by judicial proceedings (including without
limitation the filing of an Insolvency Proceeding (as herein defined)) or
otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition
of the Mortgaged Property (as defined in the Holly Mortgage and with the same
meaning herein as therein defined) by any of the Senior Beneficiaries or any
other Enforcement Action taken by or on behalf of any of the Senior
Beneficiaries;

                  (iii) it has no right to (x) direct any of the Senior
Beneficiaries to exercise any right, remedy or power with respect to the
Mortgaged Property or pursuant to the Senior Loan Documents or any Future Senior
Mortgage or (y) consent or object to the exercise by any of the Senior
Beneficiaries of any right, remedy or power with respect to the Mortgaged
Property or pursuant to the Senior Loan Documents or any Future Senior Mortgage
or to the timing or manner in which any such right is exercised or not exercised
(or, to the extent they may have any such right described in this clause (iii),
whether as a junior lien creditor or otherwise, they hereby irrevocably waive
such right);

                  (iv) it will not institute any suit or other proceeding or
assert in any suit, Insolvency Proceeding or other proceeding any claim against
any of the Senior Beneficiaries seeking damages from or other relief by way of
specific performance, instructions or otherwise, with respect to, and none of
the Senior Beneficiaries shall be liable for any action taken or omitted to be
taken by any of the Senior Beneficiaries with respect to the Mortgaged Property
or pursuant to the Senior Loan Documents or any Future Senior Mortgage; and

                  (v) the Senior Beneficiaries shall have the prior right to
collect and receive any and all proceeds which may be paid or distributed in
respect of the Mortgaged Property in any Insolvency Proceeding or otherwise
arising from any sale or other disposition of the Mortgaged Property.

            (c) Until the Senior Obligations Payment Date has occurred, Holly
agrees that it shall not, in, or in connection with, any Insolvency Proceeding,
file any pleadings or motions, take any position at any hearing or proceeding of
any nature, or otherwise take any action whatsoever, in each case, that is
inconsistent with the terms or spirit of, or intent of the parties

                                 Attachment 1-4

<PAGE>

with respect to, this Agreement, including, without limitation, with respect to
the determination of any liens or claims held by any of the Senior Beneficiaries
(including the validity and enforceability thereof) or the value of any claims
of such parties under the United States Bankruptcy Code or otherwise; provided
that Holly may file a proof of claim in an Insolvency Proceeding, subject to the
limitations contained in this Agreement and only if consistent with the terms
and the limitations imposed hereby; provided further, that if no proof of claim
is filed in any Insolvency Proceeding with respect to the HEP Obligations by the
10th day prior to the bar date for such proof of claim, the Senior Beneficiaries
may (but shall have no duty or obligation to), after notice to Holly, file such
proof of claim, provided that the foregoing shall not confer to any Senior
Beneficiary the right to vote on behalf of Holly in any insolvency proceeding.

            (d) Until the Senior Obligations Payment Date has occurred, whether
or not an Insolvency Proceeding has been commenced by or against the owner of
the Mortgaged Property, any of the Senior Beneficiaries shall have the exclusive
right to take and continue any Enforcement Action with respect to the Mortgaged
Property, without any consultation with or consent of Holly. Upon the occurrence
and during the continuance of a default or an event of default under the Senior
Loan Documents or any Future Senior Mortgage, any of the Senior Beneficiaries
may take and continue any Enforcement Action with respect to the Senior Secured
Obligations and the Mortgaged Property in such order and manner as they may
determine in their sole discretion.

            (e) To the extent required, Holly hereby consents to the liens and
security interests created by the Senior Mortgage and any Future Senior
Mortgage, and Holly shall not object to or contest, or support any other person
or entity in contesting or objecting to, in any proceeding (including without
limitation, any Insolvency Proceeding), the validity, extent, perfection,
priority or enforceability of any lien or security interest in the Mortgaged
Property granted in favor of any of the Senior Beneficiaries. Notwithstanding
any failure by any of the Senior Beneficiaries or Holly or their respective
representatives to perfect their liens in the Mortgaged Property or any
avoidance, invalidation or subordination by any third party or court of
competent jurisdiction of the liens in the Mortgaged Property granted in favor
of any of the Senior Beneficiaries or Holly, the priority and rights as between
any of the Senior Beneficiaries and Holly and its representatives with respect
to the Mortgaged Property shall be as set forth herein.

      As used in this Section 2, the following terms shall have the following
meanings:

      "ENFORCEMENT ACTION" means any demand for payment or acceleration thereof,
the bringing of any lawsuit or other proceeding, the exercise of any rights and
remedies, directly or indirectly, with respect to any Mortgaged Property, any
enforcement or foreclosure of any lien or security interest, any sale in lieu of
foreclosure, the taking of possession, exercise of any offset, repossession,
garnishment, sequestration or execution, any collection of any Mortgaged
Property, any notice to account debtors on any Mortgaged Property or the
commencement or prosecution of enforcement of any of the rights and remedies
under the Senior Loan Documents or applicable law, including without limitation
the exercise of any rights of set-off or recoupment, and the exercise of any
rights or remedies of a secured creditor under the uniform commercial code of
any applicable jurisdiction, under the United States Bankruptcy Code, as amended
from time to

                                 Attachment 1-5

<PAGE>

time or otherwise; provided, that, neither the exercise or enforcement by Holly
of its rights under the Pipelines Agreement, nor the filing of a proof of claim
in an Insolvency Proceeding, shall constitute an Enforcement Action.

      "INSOLVENCY PROCEEDING" means any proceeding in respect of bankruptcy,
insolvency, winding up, receivership, dissolution or assignment for the benefit
of creditors, in each of the foregoing events whether under the United States
Bankruptcy Code, as amended from time to time or any similar federal, state or
foreign bankruptcy, insolvency, reorganization, receivership or similar law.

      3. RECOGNITION AND NON-DISTURBANCE OF HOLLY MORTGAGE. If Administrative
Agent, any other Credit Party or any other person (Administrative Agent, any
other Credit Party or such other person being herein called a "PURCHASER") shall
become the owner of any part of the Property by reason of the foreclosure
(whether a judicial foreclosure or non-judicial foreclosure) of the Senior
Mortgage or the acceptance of a deed or assignment in lieu of foreclosure or
otherwise (any of such being herein called a "FORECLOSURE EVENT"), then for so
long as the Pipelines Agreement is in effect, the Purchaser shall (i) recognize
the Holly Mortgage, and the Holly Mortgage shall not be terminated or affected
thereby, but shall continue in full force and effect upon all of the terms,
covenants and conditions set forth in the Holly Mortgage, and (ii) be bound by
and subject to all of the terms, provisions, covenants and conditions of the
Holly Mortgage; provided, that, the Holly Mortgage shall be subordinated to any
Future Senior Mortgage, regardless of whether such Future Senior Mortgage is a
direct replacement of an existing Senior Mortgage or Security Instrument, and
any such Future Senior Mortgage shall be considered a "Senior Mortgage" for
purposes of this Agreement and the Holly Mortgage. Administrative Agent shall
not claim, or seek adjudication, that the Holly Mortgage has been terminated or
otherwise adversely affected by any Foreclosure Event.

      4. PIPELINES AGREEMENT. Administrative Agent recognizes and confirms that
the Pipelines Agreement, and the rights and interests of Holly thereunder, shall
in no way be restricted, limited or otherwise affected by this Agreement, the
Holly Mortgage, the Senior Mortgage, any Future Senior Mortgage, the Security
Instruments or any liens or security interests thereof; provided, however, that,
Holly agrees that nothing in the Pipelines Agreement shall (a) prevent any
Purchaser or subsequent purchaser from owning or operating the Mortgaged
Property, so long as such Purchaser or subsequent purchaser shall have assumed,
and be in compliance with, HEP's obligations under the Pipelines Agreement and
shall have executed an "SNDA" as defined in, and in accordance with, Article 6
of the Holly Mortgage, or (b) be deemed to invalidate or require the release of
any Senior Beneficiary's liens in the Mortgaged Property in connection with the
exercise by Holly of a purchase option under the Pipelines Agreement or
otherwise. Holly shall not amend, modify or supplement the Pipelines Agreement
without the prior written consent of the Majority Banks (as defined in the
Credit Agreement); provided, that, such amendments, modifications or supplements
may be made without the consent of the Majority Banks if such amendments,
modifications or supplements (i) individually or in the aggregate, are not
materially adverse to the rights of the Administrative Agent or the Financial
Institutions, and (ii) individually or in the aggregate, do not materially
decrease the economic benefit that Operating would have otherwise received
pursuant to such agreement. Administrative Agent, both for itself and for any
Purchaser, further agrees that upon any

                                 Attachment 1-6

<PAGE>

Foreclosure Event, the Pipelines Agreement shall not be terminated or affected
thereby, nor shall Holly's right to ship or store petroleum products through the
pipelines or in the terminals, respectively, constituting a portion of the
Property in accordance with the provisions of the Pipelines Agreement (or any
other rights of Holly under the Pipelines Agreement) be affected or disturbed
because of the Foreclosure Event, but rather the Pipelines Agreement shall
continue in full force and effect as direct obligations between the Purchaser
and Holly, upon all of the terms, covenants and conditions set forth in the
Pipelines Agreement. Neither Administrative Agent nor any Purchaser shall claim,
or seek adjudication, that the Pipelines Agreement has been terminated or
otherwise adversely affected by any Foreclosure Event. Notwithstanding the
foregoing, in the event that the Pipelines Agreement is rejected in bankruptcy
or is otherwise terminated, the Purchaser shall, promptly upon request by Holly,
enter into a Pipelines Agreement with Holly on substantially the same terms (and
with tariffs and minimum volumes commensurate with those then applicable under
the Pipelines Agreement) and conditions as the rejected or terminated Pipelines
Agreement, but having a term commencing on the date on which Purchaser acquired
title to any portion of the Property. The immediately preceding sentence shall
be deemed to be a covenant running with the land and shall be binding on any
person or entity that acquires title to all or party of the Property by, through
or under the Senior Mortgage.

      5. ATTORNMENT WITH RESPECT TO THE PIPELINES AGREEMENT. Upon the occurrence
of any Foreclosure Event, Holly shall attorn to the Purchaser, the Purchaser
shall accept such attornment, and the Purchaser and Holly shall be bound to each
other under all of the terms, provisions, covenants and conditions of the
Pipelines Agreement; provided, that, except for Holly's express rights and
remedies under the Pipelines Agreement, in no event shall the Purchaser be
liable for any act, omission, default, misrepresentation, or breach of warranty
of HEP or HEP Pipeline (or any owner of the Mortgaged Property prior to such
Purchaser) or obligations accruing prior to Purchaser's actual ownership of the
Property. The provisions of this Agreement regarding attornment by Holly shall
be self-operative and effective without the necessity of execution of any new
document on the part of any party hereto or the respective heirs, legal
representatives, successors or assigns of any such party. Holly agrees, however,
to execute and deliver upon the request of Purchaser, any instrument or
certificate which in the reasonable judgment of Purchaser may be necessary or
appropriate to evidence such attornment.

      6. ESTOPPEL CERTIFICATE. Holly agrees to execute and deliver from time to
time, upon the request of any of the Senior Beneficiaries, a certificate
regarding the status of the Pipelines Agreement, consisting of statements, if
true (or if not, specifying why not), (a) that the Pipelines Agreement is in
full force and effect, (b) the date through which payments have been paid, (c)
the date of the commencement of the term of the Pipelines Agreement, (d) the
nature of any amendments or modifications of the Pipelines Agreement, (e) to
Holly's actual knowledge without investigation, no default, or state of facts
which with the passage of time or notice (or both) would constitute a default,
exists under the Pipelines Agreement, (f) to Holly's actual knowledge without
investigation, no setoffs, recoupments, estoppels, claims or counterclaims exist
against HEP under the Pipelines Agreement, and (g) such other factual matters as
may be reasonably requested.

      7. [INTENTIONALLY OMITTED].

                                 Attachment 1-7
<PAGE>

      8. RELIANCE ON NOTICES. HEP Pipeline agrees that Holly may rely upon any
and all notices from Administrative Agent or any Purchaser, even if such
conflict with notices from HEP Pipeline.

      9. NOTICES. All notices, consents and other communications pursuant to the
provisions of this Agreement shall be in writing and shall be sent by (a)
registered or certified mail, postage prepaid, return receipt requested, (b)
nationally recognized overnight delivery service, or (c) telecopier, addressed
as follows:

         If to Administrative Agent:  Union Bank of California, N.A.
                                      445 South Figueroa Street, 15th Floor
                                      Los Angeles, California  90071
                                      Attention: Don Smith
                                      Telecopy: (213) 236-6823

         If to Holly:                 Holly Corporation
                                      100 Crescent Court, Suite 1600
                                      Dallas, Texas 75201-6927
                                      Attention: General Counsel
                                      Telecopy: (214) 871-3523

      Notice sent by registered or certified mail, postage prepaid, return
receipt requested, shall be deemed given and received on the third Business Day
(hereinafter defined) after being deposited in the United States mail, notice
sent by nationally recognized overnight delivery service shall be deemed given
in conformity with this paragraph and received on the first Business Day after
being deposited with such delivery service, and notice given by telecopier shall
be deemed given and received upon actual receipt if received during the
recipient's normal business hours or at the beginning of the recipient's next
Business Day after receipt if not received during the recipient's normal
business hours. Each party may designate a change of address by notice to the
other party. "BUSINESS DAY" means a day upon which commercial banks are not
authorized or required by law to close in Dallas, Texas.

      10. BINDING EFFECT. This Agreement shall be binding upon Administrative
Agent, Holly and any Purchaser and inure to the benefit of the Senior
Beneficiaries and Holly and their respective successors and assigns. HEP
Pipeline has assigned to Administrative Agent its rights hereunder, and HEP has
assigned to Administrative Agent its rights under the Pipelines Agreement by way
of a collateral assignment. The parties agree that any person that shall become
the owner of any of the rights of HEP Pipeline hereunder, or any of the rights
of HEP under the Pipelines Agreement by reason of foreclosure (whether a
judicial foreclosure or non-judicial foreclosure and including, without
limitation, Administrative Agent) or the acceptance of a deed or assignment in
lieu of foreclosure or otherwise shall (i) have the same rights as HEP Pipeline
hereunder, and HEP under the Pipelines Agreement, including, without limitation,
under this Section 10, and (ii) be bound by and subject to all of the terms,
provisions, covenants and conditions of this Agreement.

                                 Attachment 1-8
<PAGE>

      11. GENERAL DEFINITIONS. The term "ADMINISTRATIVE AGENT" as used herein
shall include the successors and assigns of Administrative Agent. The term "HEP"
as used herein shall include the successors and assigns of HEP under the
Pipelines Agreement, but shall not mean or include Administrative Agent. The
term "Property" as used herein shall mean the Property, the improvements now or
hereafter located thereon and the estates therein encumbered by the Senior
Mortgage. The term "HOLLY" as used herein shall include the successors and
assigns of Holly hereunder and under the Pipelines Agreement including, without
limitation, any Holly Successor.

      12. MODIFICATIONS. This Agreement may not be modified in any manner or
terminated except by an instrument in writing executed by the parties hereto.

      13. GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State in which the Property is located.

      14. DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement may be executed in
any number of duplicate originals and each duplicate original shall be deemed to
be an original. This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument and all of such
together shall constitute a single Agreement.

      15. FURTHER ASSURANCES. Without unreasonable delay and to the extent
requested by HEP, subject to Section 4 hereof and Article 6 of the Holly
Mortgage, Holly will enter into new Subordination, Non-Disturbance and
Attornment Agreements, if necessary or advisable, to facilitate the extension,
amendment, supplement, restatement, replacement or refinancing of the
indebtedness under the Credit Agreement.

              [REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                 Attachment 1-9

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.

ADMINISTRATIVE AGENT:           UNION BANK OF CALIFORNIA, N.A., as
                                Administrative Agent

                                By:_____________________________________
                                   Sean Murphy, Vice President

HOLLY:                          HOLLY CORPORATION

                                By:____________________________________
                                   Stephen J. McDonnell, Vice President
                                   and Chief Financial Officer

                                 Attachment 1-10

<PAGE>

                             HEP PIPELINE'S CONSENT

The undersigned hereby consents to the foregoing Subordination, Non-Disturbance
and Attornment Agreement and, without limitation, agrees to the provisions of
Section 8 thereof.

                                    GRANTOR:

                         HEP PIPELINE, L.L.C., a Delaware limited liability
                         company
                         By: Holly Energy Partners - Operating, L.P., a Delaware
                             limited partnership, its sole member
                              By: HEP Logistics GP, L.L.C., a Delaware limited
                                  liability company, its general partner
                                  By: Holly Energy Partners, L.P., a Delaware
                                      limited partnership, its sole member
                                       By: HEP Logistics Holdings, L.P., a
                                           Delaware limited partnership, its
                                           general partner
                                           By: Holly Logistic Services, L.L.C.,
                                               a Delaware limited liability
                                               company, its general partner

                                               By:______________________________
                                                  Stephen J. McDonnell
                                                  Vice President  and
                                                  Chief Financial Officer

                                 Attachment 1-11

<PAGE>

THE STATE OF TEXAS

COUNTY OF DALLAS

      THIS INSTRUMENT was acknowledged before me on July ___, 2005 by Sean
Murphy, Vice President of Union Bank of California, N.A., a national banking
association, as Administrative Agent, on behalf of such banking association.

                                  ______________________________________________
                                  Notary Public in and for the State of Texas

____________________________     _______________________________________________
My Commission Expires            Printed Name of Notary

THE STATE OF TEXAS

COUNTY OF DALLAS

      THIS INSTRUMENT was acknowledged before me on July ___, 2005 by Stephen J.
McDonnell, Vice President and Chief Financial Officer of Holly Corporation, a
Delaware corporation, on behalf of such corporation.

                                    ____________________________________________
                                    Notary Public in and for the State of Texas

_____________________________       ____________________________________________
My Commission Expires               Printed Name of Notary

                                 Attachment 1-12

<PAGE>

THE STATE OF TEXAS

COUNTY OF DALLAS

      THIS INSTRUMENT was acknowledged before me on July ___, 2005 by Stephen J.
McDonnell, Vice President and Chief Financial Officer of Holly Logistic
Services, L.L.C., a Delaware limited liability company, general partner of HEP
Logistics Holdings, L.P., a Delaware limited partnership, general partner of
Holly Energy Partners, L.P., a Delaware limited partnership, sole member of HEP
Logistics GP, L.L.C., a Delaware limited liability company, general partner of
Holly Energy Partners - Operating, L.P., a Delaware limited partnership, sole
member of HEP Pipeline, L.L.C., a Delaware limited liability company, on behalf
of such limited liability company.

                                    ____________________________________________
                                    Notary Public in and for the State of Texas

__________________________          ____________________________________________
My Commission Expires               Printed Name of Notary

                                 Attachment 1-13

<PAGE>

                                    EXHIBIT A

                                    PROPERTY

                                 Attachment 1-14

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