Document:

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                                                                    EXHIBIT 10.1

                         MEDIATION SETTLEMENT AGREEMENT

         This Mediation Settlement Agreement (this "Agreement") is made and
entered into as of November 15, 2002, by, between and among:

         A. Longhorn Partners Pipeline, L.P. ("Longhorn"); and

         B. Holly Corporation, Navajo Refining Company, L.P., and Black Eagle,
Inc. ("the Holly Entities").

         Longhorn and the Holly Entities are referred to herein collectively as
the "Parties." This Agreement is a binding contract, the terms of which are
delineated below.

         Reference to "the El Paso lawsuit" refers to the lawsuit brought by
Longhorn in the 120th State District Court in El Paso County, Texas and assigned
cause number 98-2991. Reference to "the New Mexico lawsuit" refers to the
lawsuit brought by Navajo Refining Company, L.P. and Holly Corporation assigned
cause number CV-2002-417 in the 5th Judicial District Court in Eddy County, New
Mexico.

         1. Legal Actions. The Parties have or may have claims against the other
and, without admitting any validity to those claims, the Parties wish to settle
their disputes and hereby enter into this Agreement for that purpose.

         2. Settlement. The Parties intend hereby to fully and finally settle
all disputes, claims, and causes of action which have been asserted in the El
Paso lawsuit and the New Mexico lawsuit, or which could have been asserted in
either lawsuit. The provisions of this Agreement set forth the terms of their
settlement.

         3. Closing. On or before November 26, 2002 ("Closing"), the parties who
are signatories to each of the following will execute:

MEDIATION SETTLEMENT AGREEMENT - PAGE 1

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                  A. A Throughput and Deficiency Agreement ("T&D Agreement")
         containing the terms specified in Exhibit A hereto (the "T&D Terms")
         and other terms and provisions customarily found in similar agreements
         of this type which are not inconsistent with the T&D Terms;

                  B. A Promissory Note (the "Note") in the form attached hereto
         at Exhibit B;

                  C. Mutual Releases of the El Paso and New Mexico lawsuits in
         the forms attached hereto at Exhibits C-1 and C-2, provided, however,
         that if an agreement is reached on or before November 25, 2002, to
         resolve the lawsuit styled and numbered Collins v. Longhorn Partners
         Pipeline, L.P., et al., Cause No. 98-2089, now pending in the 198th
         Judicial District Court of Kimble County, Texas, then the forms of
         release attached hereto at Exhibits C-1 and C-2 will be revised to
         include Marian Collins, the Estate of Lucien Collins, Max Renea Hicks,
         Ben J. Cunningham, and the George Donaldson law firm and its
         predecessors and its present and former partners, officers, and
         employees among the "Holly Released Parties," and the signatories
         (including Marian Collins, the Estate of Lucien Collins, Max Renea
         Hicks, Ben J. Cunningham, and R. James George, Jr., for the George
         Donaldson law firm) will execute the forms of Mutual Release as so
         revised, which shall contain an appropriate exclusion for (i) claims
         now pending or that could be brought in the case styled and numbered
         Spiller, et al. v. Walker, et al., No. A CA 255 SS in the United States
         District Court for the Western District of Texas, among those who are
         now parties to that case, and (ii) for any proposed signatories who do
         not sign the revised Mutual Releases; and

                  D. An Arbitration Agreement in the form attached hereto at
         Exhibit D. The documents referenced in subparagraphs A through D above
         are hereinafter referred to as the "Closing Documents."

MEDIATION SETTLEMENT AGREEMENT - PAGE 2

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         4. Dismissal of Lawsuits. Within five (5) days of Closing and the
execution of the Closing Documents by all signatory parties thereto: (a)
Longhorn and the Holly Entities will file a joint motion with the El Paso Court
seeking dismissal of the El Paso lawsuit with prejudice (including all claims
that could have been brought by those parties therein), and will thereafter
attempt to obtain an Order of Dismissal at the earliest practical date in
accordance with said motion; (b) the Holly Entities, Longhorn and those other
parties who have signed the Release in the form of Exhibit C-2, will file a
joint motion with the New Mexico Court seeking dismissal of the New Mexico
lawsuit with prejudice with respect to claims between and among those parties
(including all claims that could have been brought among those parties therein),
and will thereafter attempt to obtain an Order of Dismissal at the earliest
practical date in accordance with said motion; and (c) the Holly Entities will
file a withdrawal of their petition for review in their appeal from the El Paso
lawsuit to the Texas Supreme Court.

         5. Press Release. The Parties agree to issue a joint press release
relating to this Agreement in the form of Exhibit E hereto, as soon as practical
after execution of this Agreement by all Parties.

         6. Covenant Not To Sue. Longhorn covenants not to institute any
litigation or other legal proceedings relating to the facts, events or
occurrences that form the basis of the disputes which are the subject of the El
Paso litigation or the New Mexico litigation against (a) the George Donaldson
law firm or any of its present or former partners, officers or employees, or (b)
Marian Collins or the Lucien Collins Estate. However, notwithstanding the
foregoing, Longhorn reserves the right to respond in any manner it deems to be
necessary or appropriate, in its sole discretion, including the assertion and
prosecution of counterclaims, in any existing litigation or future litigation
brought by or on behalf of any of said parties (unless brought solely in the
capacity as counsel for others, and in accordance with pertinent procedural and
disciplinary rules governing the conduct of attorneys)

MEDIATION SETTLEMENT AGREEMENT - PAGE 3

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against Longhorn; any such counterclaims in any currently pending litigation,
however, shall be limited to (i) counterclaims previously asserted, (ii)
counterclaims in response to claims not asserted against Longhorn as of the date
of this Agreement, and (iii) counterclaims based on evidence discovered after
the date of this Agreement.

         7. Opposition Efforts. The Holly Entities and their affiliates will
immediately discontinue all direct and indirect opposition, and support of any
opposition (financial or otherwise), to the Longhorn Pipeline Project
(including, but not limited to, litigation, lobbying and public relations),
except to the extent, and only to the extent, Holly is contractually obligated
to provide such support. Holly will use its reasonable best efforts to negotiate
a termination of its (and any of its affiliates') existing contractual
obligations to provide such support at the earliest practical date and the Holly
Entities and Longhorn will use their reasonable best efforts to arrange for the
easement litigation (including all claims and counterclaims that have been or
could have been brought by any party in that action) currently pending against
Longhorn in Kimble County, Texas to be dismissed with prejudice at the earliest
practical date.

         8. Representations of Authority and Approval. Each of Longhorn and the
Holly Entities warrants and represents that it has the authority and has
obtained all approvals necessary to execute this Agreement and the Closing
Documents, and to perform its obligations thereunder.

         9. Consideration Acknowledged. The Parties acknowledge that the
covenants contained in this Agreement provide good and sufficient consideration
for every promise, duty, release, obligation, and right contained in this
Agreement.

         10. Notices. Any notice or other communication required or permitted
under the terms of this Agreement shall be in writing and shall be considered as
properly given or served if delivered

MEDIATION SETTLEMENT AGREEMENT - PAGE 4

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to or sent by certified mail, return receipt requested, postage and charges
prepaid and addressed to the address of record, which unless changed by
appropriate notice is as follows:

         (a) if to Longhorn: Jenkens & Gilchrist, P.C., 1445 Ross Avenue, Suite
3200, Dallas, Texas 75202; ATTN: Mr. Barry F. Cannaday.

         (b) if to the Holly Entities: Carrington, Coleman, Sloman & Blumenthal,
L.L.P., 200 Crescent Court, Suite 1500, Dallas, Texas 75201; ATTN: Mr. Ken
Carroll.

         11. Independent Judgment. In consideration of the above promises, the
undersigned represent and warrant that each has consulted counsel and has acted
on his own judgment as to all matters addressed herein, including the value of
any property or interest required to be transferred hereby, and has not been
induced to enter into this Agreement by any statement, act, or representation of
any kind or character on the part of any other entity or person.

         12. Denial of Liability. It is understood by the Parties that each of
them has denied and still denies the claims and allegations made against them by
the other and that this Agreement is being entered into purely as a compromise
of disputed matters for the purpose of avoiding the uncertainty of litigation,
costs of litigation, and the uncertainty of collection of any judgment which
might be obtained therein. The settlement of such claims and counterclaims which
might be asserted and the obligations created by this Agreement are not and
shall not be construed as an admission of liability by any of the Parties on any
claim or counterclaim.

         13. Entirety and Amendments. This Agreement and attached exhibits
embody the entire agreement among the Parties, and supersede all prior
agreements and understandings, if any, relating to the subject matter hereof,
except for agreed court orders. Any amendment hereto must be in writing and
signed by the Parties in order to be effective.

MEDIATION SETTLEMENT AGREEMENT - PAGE 5

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         14. Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts, all of which collectively constitute one agreement.
However, in making proof of this Agreement, it shall not be necessary to produce
or account for more than one such counterpart containing the signature of any
Party against which enforcement is sought.

         15. Dispute Resolution. All disputes relating to or arising out of this
Agreement and the documents to be executed in connection herewith at Closing
shall be first submitted to mediation in Dallas, Dallas County, Texas to the
Honorable Robert M. Parker or, if he is not available, to another mediator
mutually acceptable to the parties. In the event that any disputes cannot be
settled through mediation, those disputes will be resolved through arbitration
pursuant to the terms set forth in the form of arbitration agreement attached
hereto at Exhibit D. Nothing herein, however, shall prevent any party from
taking such measures as are necessary and appropriate to preserve the status quo
pending such mediation and/or arbitration.

         16. Non-Waiver. Failure of any party to exercise any right or option
arising out of a breach of this Agreement shall not be deemed a waiver of any
right or option with respect to any subsequent or different breach or the
continuance of any existing breach.

         17. Law Governing. This Agreement is to be performed in Dallas County,
Texas, and the substantive laws of such state shall govern the validity,
construction, enforcement, and interpretation of this Agreement.

         18. Parties Bound. This Agreement shall be binding upon and inure to
the benefit of the Parties, their respective heirs, successors, assigns,
employees, officers, directors, agents and affiliates.

         19. Binding Agreement. The Parties agree to proceed promptly toward the
negotiation and execution of a definitive T&D Agreement containing the T&D Terms
set forth in Exhibit A and to consummate the Closing of this Settlement on or
before November 26, 2002. The Parties agree that

MEDIATION SETTLEMENT AGREEMENT - PAGE 6

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this Agreement is intended to be a binding contract between the Parties. In the
event that for any reason any Party hereto attempts to withdraw from this
Agreement or refuses to acknowledge or comply with any material term hereof
prior to the execution and delivery of the Closing Documents, the other Party
may elect to either (a) enforce this Agreement or (b) terminate this Agreement
in its entirety.

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

LONGHORN PARTNERS PIPELINE, L.P.                HOLLY CORPORATION

By:  Longhorn Partners GP, L.L.C.
     Its: General Partner
                                                By:   /s/ LAMAR NORSWORTHY
                                                      --------------------------
                                                Its:  Chairman of the Board and
                                                      Chief Executive Officer
                                                      --------------------------
     By:  /s/ CARTER R. MONTGOMERY
         ------------------------------
         Carter R. Montgomery
         President and
           Chief Executive Officer
                                                NAVAJO REFINING COMPANY, L.P.

                                                By:   /s/ MATTHEW P. CLIFTON
                                                      --------------------------
                                                Its:  President
                                                      --------------------------

                                                BLACK EAGLE, INC.

                                                By:   /s/ MATTHEW P. CLIFTON
                                                      --------------------------
                                                Its:  President
                                                      --------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 7

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                                    EXHIBIT A

      PROPOSED TERMS AND CONDITIONS OF THROUGHPUT AND DEFICIENCY AGREEMENT

1.       The T&D Agreement to be executed by Navajo will cover the shipment of
         petroleum products from the origination of the Longhorn Pipeline at
         GATX Terminals Corporation's terminal at Galena Park, Texas to a point
         of destination in El Paso, Texas.

2.       The principal terms of the T&D Agreement are as follows:

         a.       The term of the T&D Agreement will be six (6) years and will
                  commence upon Startup of the Longhorn Pipeline Project (as
                  "Startup" is defined in the Promissory Note from Longhorn to
                  Navajo in the form attached as Exhibit B to the Settlement
                  Agreement (the "Note")).

         b.       Navajo Refining Company, L.P. will prepay Longhorn $25 million
                  at Closing in immediately available funds (the "Prepayment
                  Amount").

         c.       The tariff rate for shipments from the point of origin to El
                  Paso will be $.05 per gallon. Instead of billing Navajo for
                  volumes shipped through the pipeline, the amounts due from
                  Navajo for shipments from the point of origin to El Paso will
                  be deducted from the Prepayment Amount. Additionally,
                  terminalling charges due from Navajo at Longhorn's El Paso
                  terminal (21 cents per barrel) will be deducted from the
                  Prepayment Amount.

         d.       If during any 6 month (semi-annual)(1) time period, Navajo
                  does not ship at least an average of 7,000 barrels per day
                  (subject to adjustment for material curtailments and
                  prorationing), then the "deficiency" shall be deducted from
                  the Prepayment Amount at a rate of $2.10 per barrel.

         e.       If Navajo ships in excess of an average of 7,000 barrels per
                  day over a 6-month (semi-annual) period ("Excess Shipments"),
                  such Excess Shipments shall not be subject to the T&D
                  Agreement and shall not be deducted from the Prepayment
                  Amount, but shall instead be paid for at the spot price or
                  other mutually agreed price in effect on the date of shipment.
                  Notwithstanding the foregoing, if during prior periods Navajo
                  was prevented from shipping nominated volumes as a result of
                  material curtailments or prorationing ("Curtailed Nominated
                  Volumes"), then such Excess Shipments may used to recoup prior
                  Curtailed Nominated Volumes that have not been previously
                  recouped. Such recouped volumes shall be subject to the T&D
                  Agreement and shall be deducted from the Prepayment Amount.

----------

(1)      The first such semi-annual period will commence on the first day of the
month following the date of the startup of the Longhorn Pipeline Project.

MEDIATION SETTLEMENT AGREEMENT - PAGE 8

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         f.       The T&D Agreement shall terminate upon the earliest to occur
                  of (i) the last day of the calendar month in which Navajo has
                  exhausted its Prepayment Amount; (ii) Longhorn's exercise of
                  its "buy out" option specified in Paragraph 5 below; or (iii)
                  if Navajo so elects, upon any event that triggers the
                  obligation by Longhorn to pay the Contingent Payment Amount
                  under the Note.

3.       If the T&D Agreement terminates at the end of six years and at that
         time Navajo has not recouped all of its Prepayment Amount as a result
         of Curtailed Nominated Volumes, then Longhorn will be obligated to pay
         to Navajo the remaining balance of the Prepayment Amount plus interest
         on that amount at the rate of 5.5% per annum (from the date of the
         Closing of the Settlement to the date of payment).

4.       Navajo is not required to ship any barrels on the Longhorn Pipeline.
         However, in the event that Navajo does not ship an average of 7,000
         barrels per day, barrels not shipped will be credited against its
         Prepayment Amount, as provided in Paragraph 2(d) above. Additionally,
         Navajo has no obligation to furnish linefill for the startup of the
         pipeline.

5.       Longhorn shall have the right at any time, upon 60 days prior written
         notice, to "buy out" Navajo's prepaid T&D Agreement at a price equal to
         the unrecouped balance of the Prepayment Amount plus interest on the
         unrecouped balance of the Prepayment Amount at a rate of 5.5% per annum
         from the date of the Closing of the Settlement to the date of payment.

6.       The T&D Agreement shall contain such other terms and provisions as are
         customarily found in similar agreements of this type and which are not
         inconsistent with the terms described above.

7.       If Longhorn is obligated by law to offer third parties the opportunity
         to enter into a throughput and deficiency agreement with terms and
         conditions comparable to those being made available to Navajo
         ("Comparable T&D Agreements"), and in the further event that third
         party companies elect to enter into Comparable T&D Agreements, Navajo
         acknowledges that its 7,000 barrel per day shipping volume could be
         reduced. In the event of such reduction, the provisions of the T&D
         Agreement will be modified to reflect such reduction and Longhorn will
         promptly refund any portion of the Prepayment Amount attributable to
         such reduction, with interest on that amount at the rate of 5.5% per
         annum from the date of the Closing of the Settlement to the date of
         Payment.

8.       Prior to or contemporaneously with the execution of the definitive T&D
         Agreement, Navajo will enter into a Terminal Use and Access Agreement
         with Longhorn for Longhorn's El Paso Terminal in Longhorn's standard
         form of terminal use and access agreement generally used by Longhorn
         with shippers unrelated to Longhorn.

MEDIATION SETTLEMENT AGREEMENT - PAGE 9

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                                    EXHIBIT B

                                 PROMISSORY NOTE

$25,000,000                       Dallas, Texas               November ___, 2002

         This Promissory Note, dated as of November ____, 2002, is from LONGHORN
PARTNERS PIPELINE, L.P., a Delaware limited partnership ("Maker"), to NAVAJO
REFINING COMPANY, L.P. ("Payee").

                                    Recitals:

         A. Pursuant to a Mediation Settlement Agreement dated November ___,
2002 (the "Settlement Agreement") by and between Maker, Payee, Holly
Corporation, and Black Eagle, Inc., Maker and Payee entered into a Throughput
and Deficiency Agreement dated November ___, 2002 (the "T&D Agreement"),
pursuant to which Payee prepaid the amount of $25,000,000 (the "Prepayment
Amount") in return for certain shipping entitlements for Navajo through Maker's
petroleum products pipeline.

         B. Under the terms of Paragraph 3(B) of the Settlement Agreement, Maker
agreed to execute and deliver this Note to Payee to provide for Payee's
contingent repayment rights in the event that (1) Maker has not commenced
regular and ongoing transportation of refined petroleum products through its
pipeline to El Paso, Texas, on or before July 1, 2004, or prior thereto has
given unequivocal indication (by announcement or circumstance) that it will not
or cannot commence such operations, or if (2) Maker commences transporting
refined petroleum products through its pipeline on or before July 1, 2004, but
thereafter ceases transporting refined petroleum products through its pipeline
(i) for reasons other than Force Majeure, for a continuous period in excess of
180 days, or (ii) for a continuous period of more than one year for any reason
(regardless of Force Majeure), prior to the time the entire Prepayment Amount
has been recouped through transportation services under the terms of the T&D
Agreement, or if(3) an Event of Default occurs.

         C. Capitalized terms used in this Note which are not defined in
Paragraph 1 below shall have the meanings assigned to those terms in the
Settlement Agreement.

         NOW, THEREFORE, in consideration of the premises above and the mutual
covenants in the Settlement Agreement, Maker hereby agrees as follows:

         1.       Defined Terms. As used in this Note, the following terms have
                  the following meanings:

                  Applicable Rate means five and one-half percent (5.5%) per
                  annum.

                  Buyout means an exercise of Maker's rights provided for in the
                  T&D Agreement as described in Paragraph 5 of Exhibit A of the
                  Settlement Agreement to "buy out" the T&D Agreement by
                  repaying the remaining balance of the Prepayment Amount plus
                  interest thereon at the Applicable Rate.

MEDIATION SETTLEMENT AGREEMENT - PAGE 10

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                  Contingent Payment Amount means (a) in the event of a Failure
                  to Commence Operations, $25,000,000 plus interest thereon at
                  the Applicable Rate from the date of this Promissory Note, and
                  (b) in the event of a Permanent Cessation of Operations or an
                  Event of Default, the Remaining Balance plus interest thereon
                  at the Applicable Rate from the date of this Promissory Note.

                  Contingent Payment Date means (a) July 1, 2004, if there has
                  been a Failure to Commence Operations, and (b) five (5)
                  business days after any Permanent Cessation of Operations or
                  Event of Default.

                  Event of Default means (i) any repudiation or rejection by
                  Maker or any successor of its obligations under the Note or of
                  its obligation to provide the services to Payee specified in
                  the T&D Agreement, including the announcement by Maker that it
                  will not Startup transporting refined products through its
                  pipeline on or before July 1, 2004 (or the functional
                  equivalent), or the announcement by Maker that it will have a
                  Permanent Cessation of Operations (or the functional
                  equivalent); (ii) Maker has had entered against it a judgment,
                  decree, or order for relief in an involuntary proceeding
                  commenced under any bankruptcy, insolvency, or similar law, or
                  has any such proceeding commenced against it which remains
                  undismissed for a period of sixty (60) days; (iii) Maker or
                  any related entity has commenced a case regarding Maker under
                  any bankruptcy, insolvency, or similar law, or makes a general
                  assignment for the benefit of creditors; or (iv) Maker suffers
                  the appointment of or taking possession or control by a
                  receiver, liquidator, custodian, trustee, or similar official,
                  of all or any substantial part of its assets.

                  Failure to Commence Operations means a failure by Maker to
                  Startup on or before July 1, 2004.

                  Force Majeure means an event or events beyond the reasonable
                  control of the party unable to perform hereunder, and includes
                  without limitation, acts of God; storm, flood, extreme
                  weather, fire, explosion, war, invasion, hostilities,
                  rebellion, terrorism, insurrection, riots, strikes, picketing
                  or other labor stoppages, whether of carrier's or shipper's
                  employees, agents, or otherwise; electrical or electronic
                  failure or malfunction; communications failure or malfunction;
                  computer hardware and or software failure, malfunction, or
                  inaccuracy; breakage or accident to machinery or equipment;
                  temporary restraining orders, injunctions, or compliance
                  orders issued by courts or governmental agencies; seizure or
                  destruction under quarantine or customs regulations, or
                  confiscation by order of any government or public authority,
                  or risks of contraband or illegal transportation or trade; or
                  any cause not due to fault or negligence or any cause
                  reasonably beyond the control of the parties; provided
                  however, it shall not include economic or financial events or
                  circumstances of Maker or its affiliates (including, without
                  limitation, the circumstances described as Events of Default,
                  above). Nothing herein shall be construed to require
                  settlement of labor disputes against the better judgment of
                  the party having the dispute.

MEDIATION SETTLEMENT AGREEMENT - PAGE 11

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                 Permanent Cessation of Operations means a cessation of the
                 provision of transportation services for refined petroleum
                 products through Maker's pipeline for delivery to El Paso,
                 Texas, (i) for reasons other than Force Majeure, for a
                 continuous period in excess of 180 days, or (ii) for a
                 continuous period of more than one year for any reason
                 (regardless of Force Majeure), prior to the time the entire
                 Prepayment Amount has been recouped through transportation
                 services under the T&D Agreement, or the announcement by Maker
                 or any successor that such cessation will or is expected to
                 occur.

                 Remaining Balance means the amount of the Prepayment Amount
                 that still remains to be recovered by Payee under the T&D
                 Agreement at the time of a Permanent Cessation of Operations or
                 an Event of Default.

                 Senior Debt means all principal of, and any accrued and unpaid
                 interest, and all other amounts owing by Maker under the terms
                 of any financing obtained hereafter by Maker for the startup of
                 its Galena Park, Texas to El Paso, Texas petroleum products
                 pipeline project from any commercial banks, financial
                 institutions or other lenders, in an aggregate principal amount
                 not to exceed $150,000,000; provided, however, that no person
                 or entity holding any direct or indirect equity interest in
                 Maker ("Affiliated Parties") may provide financing as part of
                 the Senior Debt, except that (i) J. P. Morgan Chase may provide
                 financing of all or part of the Senior Debt, and (ii)
                 Affiliated Parties may provide up to 30% of the Senior Debt
                 financing if a party or parties other than an Affiliated Party
                 provides at least 70% of the Senior Debt financing.

                 Startup means for Maker to commence regular and ongoing
                 transportation of refined petroleum products through its
                 pipeline for delivery to El Paso, at a rate and on a basis
                 sufficient to ensure that Maker has the ability to perform
                 under the T&D Agreement.

         2. Payment. In the event of a Failure to Commence Operations or a
Permanent Cessation of Operations or an Event of Default, Maker hereby promises
to pay to the order of Payee the Contingent Payment Amount on or before the
applicable Contingent Payment Date. All payments on this Note shall be due and
payable in lawful money of the United States of America at Payee's address
located at 1600 Crescent Court, Suite 1600, Dallas Texas 75201-6927, or such
other address as the holder hereof may indicate in writing to Maker.

         3. Termination of This Note. This Note shall terminate and have no
further force or effect in the event of Buyout, or on the date that the entire
Prepayment Amount has been recouped by Payee under the T&D Agreement.

         4. Default Interest. In the event that a Failure to Commence Operations
or a Permanent Cessation of Operations occurs and Maker fails to pay the
Contingent Payment amount due on or before the Contingent Payment Date, then all
outstanding amounts due and payable under this Promissory Note shall thereafter
bear interest at a rate often percent (10%) per annum.

         5. Subordination. All payments of principal and interest under this
Note shall be fully subordinated to the prior payment in full of all Senior
Debt. Payee, by its acceptance hereof, agrees

MEDIATION SETTLEMENT AGREEMENT - PAGE 12

<PAGE>
to execute, at the request of Maker, a separate agreement with any holder of
Senior Debt setting out Payee's agreement to subordinate all payments of
principal and interest hereunder to such holder's Senior Debt and to take all
such other action as such holder of Senior Debt may reasonably request to enable
such holder of Senior Debt to enforce all claims relating to such Senior Debt in
a manner which is prior to and in preference to Payee's claims under this Note.
Maker's obligations and Payee's rights under this Note shall not be subordinated
to any debt of Maker other than the Senior Debt. Payee's rights under this Note
shall be pari passu with the rights of the Lenders who have advanced funds prior
to November 15, 2002 (and with respect to such advances) under that certain
Credit Agreement dated as of August 29, 2001, as amended as of November 15,
2002, by and among Longhorn Partners Pipeline, L.P., Chisholm Holdings, L.P.,
LPP Holdings, L.P., ELPP Holdings, Inc., Amoco Longhorn Pipeline Company and
Longhorn Enterprises of Texas, Inc.

         6. Governing Law. THIS NOTE SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF SUCH STATE AND
THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES
HERETO AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS
NOTE.

         7. Successors and Assigns. This Note shall bind Maker and its
successors and assigns and shall inure to the benefit of the holder and its
successors and assigns.

EXECUTED as of the day and year first written above.

                                     MAKER:

                                     LONGHORN PARTNERS PIPELINE, L.P.

                                     By: Longhorn Partners GP, L.L.C.

                                     By:
                                           -------------------------------------
                                           Carter R. Montgomery
                                           President and Chief Executive Officer

MEDIATION SETTLEMENT AGREEMENT - PAGE 13

<PAGE>
                                   EXHIBIT C-1

                                 MUTUAL RELEASE

         For and in consideration of the terms of the Mediation Settlement
Agreement (the "Settlement Agreement") entered into on the _________ day of
November, 2002, by and between Holly Corporation, Navajo Refining Company, L.P.,
Black Eagle, Inc. (collectively, the "Holly Entities") and Longhorn Partners
Pipeline, L.P. ("Longhorn"), as well as the covenants and/or promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, the Holly
Entities, on behalf of themselves and all who may claim by, through, or under
them, hereby fully, finally and forever RELEASE, ACQUIT and FOREVER DISCHARGE
Longhorn Partners Pipeline, L.P., its assigns, representatives, agents, and/or
heirs, if any, along with any successor companies, as well as its officers,
administrators, directors, employees and/or attorneys (collectively, the
"Longhorn Released Parties"), jointly and severally, from all claims, demands,
actions, causes of action, other liabilities, and/or damages, if any, known or
unknown, whether arising at law, by statute, or in equity, which the Holly
Entities, or any other person or entity claiming by, through or under them, may
have or claim to have, jointly or severally, against the Longhorn Released
Parties that in any way arise out of or are connected with acts, omissions,
conduct, relationships, occurrences, dealings, communications, events, and/or
transactions relating in any way to the Longhorn pipeline, or the litigation
filed by Longhorn in the 120th Judicial District Court, El Paso County, Texas
and given cause number 98-2991 in that court, or the litigation filed by Holly
Corporation and Navajo Refining Company, L.P. in the 5th Judicial District
Court, Eddy County, New Mexico, and given cause number CV-2002-417 in that
court, that have occurred on or before the date upon which the Holly Entities
execute this Agreement; provided, however, this release does not include any
claims the Holly Entities may have against the Longhorn Released Parties for any
failure to comply with or breach of any provision in this Mutual Release or the
Settlement Agreement or any documents executed in connection with the Settlement
Agreement.

         For and in consideration of the terms of the Settlement Agreement, as
well as the covenants and/or promises contained herein, the receipt and
sufficiency of which are hereby acknowledged, Longhorn, on behalf of itself and
all who may claim by, through, or under it, hereby fully, finally and forever
RELEASES, ACQUITS and FOREVER DISCHARGES the Holly Entities, and their assigns,
representatives, agents, and/or heirs along with any successor companies, as
well as their officers, administrators, directors, employees and/or attorneys
(collectively, the "Holly Released Parties"), jointly and severally, from all
claims, demands, actions, causes of action, other liabilities, and/or damages,
if any, known or unknown, whether arising at law, by statute, or in equity,
which Longhorn, or any other person or entity claiming by, through or under it,
may have or claim to have, jointly or severally, against the Holly Released
Parties that in any way arise out of or are connected with acts, omissions,
conduct, relationships, occurrences, dealings, communications, events, and/or
transactions relating in any way to the Longhorn pipeline, or the litigation
filed by Longhorn in the 120th Judicial District Court, El Paso County, Texas
and given cause number 98-2991 in that court, or the litigation filed by Holly
Corporation and Navajo Refining Company, L.P. in the 5th Judicial District
Court, Eddy County, New Mexico, and given cause number CV-2002-417 in that
court, that have occurred on or before the date upon which Longhorn executes
this Agreement; provided, however, this release does not include any claims
Longhorn may have against the Holly Released Parties for any failure to comply

MEDIATION SETTLEMENT AGREEMENT - PAGE 14

<PAGE>
with or breach of any provision in this Mutual Release or the Settlement
Agreement or any documents executed in connection with the Settlement Agreement;
nor does it include a release of any of the parties identified in Paragraph 6 of
the Settlement Agreement.

Longhorn Partners Pipeline, L.P.

By:
      -----------------------------
Its:
      -----------------------------

Holly Corporation

By:
      -----------------------------
Its:
      -----------------------------

Navajo Refining Company, L.P.

By:
      -----------------------------
Its:
      -----------------------------

Black Eagle, Inc.

By:
      -----------------------------
Its:
      -----------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 15

<PAGE>
                                   EXHIBIT C-2

                                 MUTUAL RELEASE

         For and in consideration of the terms of the Mediation Settlement
Agreement (the "Settlement Agreement") entered into on the _____ day of
November, 2002 by and between Holly Corporation, Navajo Refining Company, L.P.,
and Black Eagle, Inc. (collectively, the "Holly Entities") and Longhorn Partners
Pipeline, L.P., as well as the covenants and/or promises contained herein, the
receipt and sufficiency of which are hereby acknowledged, the Holly Entities, on
behalf of themselves and all who may claim by, through or under them, hereby
fully, finally and forever RELEASE, ACQUIT and FOREVER DISCHARGE each
of Longhorn Partners Pipeline GP, L.L.C., Exxon Mobil Pipeline Company, ELPP
Holdings, Inc., ELPP GP, Inc., Williams Pipeline Company, L.L.C., Longhorn
Enterprises of Texas, Inc., BP Pipeline (North America) Inc., Amoco Longhorn
Pipeline Company, Amoco Longhorn GP Pipeline Company, The Beacon Group Energy
Investment Fund L.P., and LPP Holdings, L.P., that signs this Mutual Release and
transmits such signed copy to Holly Corporation by 5:00 p.m. November 26, 2002,
and any of their assigns, representatives, agents, and/or heirs, if any, along
with any successor companies, as well as their officers, administrators,
directors, employees and/or attorneys (collectively, the "Longhorn Released
Parties"), jointly and severally, from all claims, demands, actions, causes of
action, other liabilities, and/or damages, if any, known or unknown, whether
arising at law, by statute, or in equity, which the Holly Entities, or any other
person or entity claiming by, through or under them, may have or claim to have,
jointly or severally, against the Longhorn Released Parties that in any way
arise out of or are connected with acts, omissions, conduct, relationships,
occurrences, dealings, communications, events, and/or transactions relating in
any way to the Longhorn pipeline, or the litigation filed by Longhorn Partners
Pipeline, L.P., in the 120th Judicial District Court, El Paso County, Texas, and
given cause number 98-2991 in that court, or the litigation filed by Holly
Corporation and Navajo Refining Company, L.P. in the 5th Judicial District
Court, Eddy County, New Mexico and given cause number CV-2002-417 in that court,
that have occurred on or before the date upon which the Holly Entities execute
this Agreement; provided, however, this release does not include any claims the
Holly Entities may have against the Longhorn Released Parties for any failure to
comply with or breach of any provision in this Mutual Release; provided further,
however that the "Longhorn Released Parties" excludes and does not include any
of Longhorn Partners Pipeline, G.P., L.L.C., Exxon Mobil Pipeline Company, ELPP
Holdings, Inc., ELPP G.P., Inc., Williams Pipeline Company, L.L.C., Longhorn
Enterprises of Texas, Inc., BP Pipeline (North America), Inc., Amoco Longhorn
Pipeline Company, Amoco Longhorn GP Pipeline Company, The Beacon Group Energy
Investment Fund, L.P., and/or LPP Holdings, L.P., that does not sign and
transmit to Holly Corporation a signed copy of this Mutual Release on or before
5:00 p.m. November 26, 2002, or their assigns, representatives, agents, and/or
heirs, if any, or any successor companies, officers, administrators, directors,
employees, and/or attorneys, and the benefits and obligations of this Mutual
Release and of the Mutual Release signed November ____, 2002, by and between the
Holly Entities and Longhorn Partners Pipeline, L.P., do not extend to them, or
any of them.

          For and in consideration of the terms of the Settlement Agreement, as
well as the covenants and/or promises contained herein, the receipt and
sufficiency of which are hereby acknowledged, the

MEDIATION SETTLEMENT AGREEMENT - PAGE 16

<PAGE>
Longhorn Released Parties, on behalf of themselves and all who may claim by,
through or under any of them, hereby fully, finally and forever RELEASE, ACQUIT
and FOREVER DISCHARGE the Holly Entities, and their members, assigns, general or
limited partners, representatives, agents, and/or heirs along with any affiliate
and/or successor companies, as well as their officers, administrators,
directors, employees and/or attorneys (collectively, the "Holly Released
Parties"), jointly and severally, from all claims, demands, actions, causes of
action, other liabilities, and/or damages, if any, known or unknown, whether
arising at law, by statute, or in equity, which the Longhorn Released Parties,
or any other person or entity claiming by, through or under them, may have or
claim to have, jointly or severally, against the Holly Released Parties that in
any way arise out of or are connected with acts, omissions, conduct,
relationships, occurrences, dealings, communications, events, and/or
transactions relating in any way to the Longhorn pipeline or the litigation
filed by Longhorn Partners Pipeline, L.P., in the 120th Judicial District Court,
El Paso County, Texas, and given cause number 98-2991 in that court, or the
litigation filed by Holly Corporation and Navajo Refining Company, L.P. in the
5th Judicial District Court, Eddy County, New Mexico and given cause number
CV-2002-417 in that court, that have occurred on or before the date upon which
the Longhorn Released Parties execute this Mutual Release, provided, however,
this Mutual Release does not include any claims the Longhorn Released Parties
may have against the Holly Released Parties for any failure to comply with or
breach of any provision in this Mutual Release. This Mutual Release does not
include a release of any of the parties identified in Paragraph 6 of the
Settlement Agreement but, not withstanding the foregoing, the Longhorn Released
Parties covenant not to institute any litigation or other legal proceedings
relating to the facts, events, or occurrences that form the basis of the
disputes which are the subject of the El Paso litigation or the New Mexico
litigation (referenced above) against (a) the George Donaldson law firm or any
of its present or former partners, officers, or employees or (b) Marian Collins
or the Estate of Lucien Collins; provided further that each of the Longhorn
Released Parties reserves the right to respond in any manner it deems to be
necessary or appropriate, in its sole discretion, including the assertion and
prosecution of counterclaims, in any existing litigation or future litigation
brought by or on behalf of any of said parties (unless brought solely in the
capacity as counsel for others, and in accordance with pertinent procedural and
disciplinary rules governing the conduct of attorneys) against said Longhorn
Released Party; any such counterclaims in any currently pending litigation,
however, shall be limited to (i) counterclaims previously asserted as of
November 15, 2002, (ii) counterclaims in response to claims not asserted against
such Longhorn Released Party as of the date of this Mutual Release, and (iii)
counterclaims based on evidence discovered after the date of this Mutual
Release.

          All disputes relating to or arising out of this Mutual Release and any
related documents shall be first submitted to mediation in Dallas, Dallas
County, Texas, to the Honorable Robert M. Parker, or, if he is not available, to
another mediator mutually acceptable to the Parties. In the event that any
disputes cannot be settled through mediation, those disputes will be resolved
through arbitration pursuant to the terms set forth in the form of Arbitration
Agreement attached hereto and Exhibit D to the Settlement Agreement.

LONGHORN PARTNERS PIPELINE GP, L.L.C.

By:
     ---------------------------------
Its:
      --------------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 17

<PAGE>
EXXON MOBIL PIPELINE COMPANY

By:
      -----------------------------
Its:
      -----------------------------

ELPP HOLDINGS, INC.

By:
      -----------------------------
Its:
      -----------------------------

ELPP GP, INC.

By:
      -----------------------------
Its:
      -----------------------------

WILLIAMS PIPE LINE COMPANY, L.L.C.

By:
      -----------------------------
Its:
      -----------------------------

LONGHORN ENTERPRISES OF TEXAS, INC.

By:
      -----------------------------
Its:
      -----------------------------

BP PIPELINE (NORTH AMERICA) INC.

By:
      -----------------------------
Its:
      -----------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 18

<PAGE>
AMOCO LONGHORN PIPELINE COMPANY

By:
      -----------------------------
Its:
      -----------------------------

AMOCO LONGHORN GP PIPELINE COMPANY

By:
      -----------------------------
Its:
      -----------------------------

THE BEACON GROUP ENERGY INVESTMENT FUND, L.P.

By:
      -----------------------------
Its:
      -----------------------------

LPP HOLDINGS, L.P.

By:
      -----------------------------
Its:
      -----------------------------

HOLLY CORPORATION

By:
      -----------------------------
Its:
      -----------------------------

NAVAJO REFINING COMPANY, L.P.

By:
      -----------------------------
Its:
      -----------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 19

<PAGE>
BLACK EAGLE, INC.

By:
      -----------------------------
Its:
      -----------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 20

<PAGE>
                                    EXHIBIT D

                              ARBITRATION AGREEMENT

         (a) Binding Arbitration. This Arbitration Agreement is attached to that
certain Mediation Settlement Agreement by and between Longhorn Partners
Pipeline, L.P. and Holly Corporation, Navajo Refining Company, L.P. and Black
Eagle, Inc. dated November ___, 2002 (the "Settlement Agreement"). Capitalized
terms used herein that are not otherwise defined shall have the meanings
assigned to those terms in the Settlement Agreement. Upon the demand of any
Party, any Dispute (as defined below) shall be resolved by binding arbitration
in accordance with the terms of this Arbitration Agreement. A "Dispute" shall
include any action, dispute, claim or controversy of any kind (e.g., whether in
contract or in tort, statutory or common law, legal or equitable or otherwise)
now existing or hereafter arising between the Parties in any way arising out of,
pertaining to or in connection with the Settlement Agreement or any agreement,
document or instrument executed in connection therewith or pursuant thereto (the
"Settlement Documents"). Any Party to this Arbitration Agreement, by summary
proceedings (e.g., a plea in abatement or motion to stay further proceedings),
may bring any action in court to compel arbitration of any Disputes. Any Party
who fails or refuses to submit to binding arbitration following a lawful demand
by the opposing Party shall bear all costs and expenses incurred by the opposing
party in compelling arbitration of any Dispute. The Parties agree that by
engaging in activities with or involving each other as described above, they are
participating in transactions involving interstate commerce.

         (b) Governing Rules. All Disputes between the Parties submitted to
arbitration shall be resolved by binding arbitration administered by the
American Arbitration Association (the "AAA") in accordance with, and in the
following order or priority: (1) the terms of this Arbitration Agreement, (2)
the Commercial Arbitration Rules of the AAA, (3) the Federal Arbitration Act
(Title 9 of the United States Code), and (4) to the extent the foregoing are
inapplicable, unenforceable or invalid, the laws of the State of Texas. The
validity and enforceability of this Arbitration Agreement shall be determined in
accordance with this same order of priority. In the event of any inconsistency
between this Arbitration Agreement and such rules and statutes, this Arbitration
Agreement shall control. Judgment upon any award rendered hereunder may be
entered in any court having jurisdiction.

         (c) Arbitrator Powers and Qualifications; Modification or Vacation of
Award. Arbitrators are empowered to resolve Disputes by summary rulings
substantially similar to summary judgments and motions to dismiss. Arbitrators
shall resolve all Disputes in accordance with the applicable substantive law.
Any arbitrator selected shall be required to be (i) neutral, (ii) a practicing
attorney licensed to practice law in the State of Texas, and (iii) experienced
and knowledgeable in the substantive laws applicable to the subject matter of
the Dispute. With respect to a Dispute in which the claims or amounts in
controversy do not exceed $250,000, a single arbitrator shall be chosen and
shall resolve the Dispute. In such case, the arbitrator shall be required to
make specific, written findings of fact and conclusions of law, and shall have
authority to render an award up to but not to exceed $250,000, including all
damages of any kind, including costs, fees and expenses. A Dispute involving
claims or amounts in controversy exceeding $250,000 or involving claims or
amounts in controversy where the parties cannot agree that the amount in
controversy is less than $250,000, shall

MEDIATION SETTLEMENT AGREEMENT - PAGE 21

<PAGE>
be decided by a majority vote of a panel of three arbitrators (an "Arbitration
Panel"), the determination of any two of the three arbitrators constituting the
determination of the Arbitration Panel, provided, however, that all three
Arbitrators on the Arbitration Panel must actively participate in all hearings
and deliberations. Arbitrators, including any Arbitration Panel, may grant any
remedy or relief deemed just and equitable and within the scope of this
Arbitration Agreement and may also grant such ancillary relief as is necessary
to make effective any award. Arbitration Panels shall be required to make
specific, written findings of fact and conclusions of law and shall be required
to render awards within 30 days after the conclusion of hearings, or within 30
days following the submission of final briefs of the Parties if a briefing
schedule is established following the hearings.

         (d) Consequential or Punitive Damages. The Parties agree that in no
event shall any Party be liable to another Party for consequential, incidental
or indirect damages or punitive damages of any kind and that the Arbitrator (or
the Arbitration Panel as appropriate) shall have no power to award any such
damages hereunder.

         (e) Timing and Discovery. To the maximum extent practicable, the AAA,
the Arbitrator (or the Arbitration Panel, as appropriate) and the Parties shall
take any action necessary to require that an arbitration proceeding hereunder
shall be concluded within 180 days of the filing of the Dispute with the AAA.
Hearings shall be limited to no more than 10 business days, which the Parties
shall endeavor to conduct consecutively. Arbitration proceedings hereunder shall
be conducted in Dallas, Texas. Arbitrators shall be empowered to impose
sanctions and to take such other actions as they deem necessary to the same
extent a judge could pursuant to the Federal Rules of Civil Procedure, the Texas
Rules of Civil Procedure and applicable law. With respect to any Dispute, each
Party agrees that all discovery activities shall be expressly limited to matters
directly relevant to the Dispute and any Arbitrator, Arbitration Panel and the
AAA shall be required to fully enforce this requirement. Document requests shall
be limited to no more than 15 items or categories of documents. The Parties
shall be allowed no more than five depositions per side in connection with any
Dispute with durations of not more than four hours each. Additional document
requests, depositions or extensions of time for depositions shall only be
allowed if (i) agreed to by the Parties, or (ii) permitted by the Arbitrator
(or the Arbitration Panel, as appropriate) upon an express finding that such
additional discovery is required as a result of a party's failure to participate
in the discovery process in good faith.

          (f) Other Matters and Miscellaneous. This Arbitration Agreement
constitutes the entire agreement of the Parties with respect to its subject
matter and supersedes all prior discussions, arrangements, negotiations and
other communications on dispute resolution. To the extent permitted by
applicable law, Arbitrators, including any Arbitration Panel, shall have the
power to award recovery of all costs and fees (including attorneys' fees,
administrative fees and arbitrators' fees) to the prevailing party. This
Arbitration Agreement may be amended, changed or modified only by the express
provisions of a writing which specifically refers to this Arbitration Agreement
and which is signed by all the Parties hereto. If any term, covenant, condition
or provision of this Arbitration Agreement is found to be unlawful, invalid or
unenforceable, such illegality, or invalidity or unenforceability shall not
affect the legality, validity or enforceability of the remaining parts of this
Arbitration Agreement, and all such remaining parts hereof shall be valid and
enforceable and have full force and effect as if the illegal, invalid or
unenforceable part had not been included. Each Party agrees to keep all Disputes
and arbitration proceedings strictly confidential, except for disclosure of

MEDIATION SETTLEMENT AGREEMENT - PAGE 22

<PAGE>
information required in the ordinary course of business of the parties or by
applicable law or regulation.

         Longhorn Partners Pipeline, L.P.

         By:      Longhorn Partners GP, L.L.C.
                  Its:    General Partner

                  By:
                          ---------------------------------
                          Carter R. Montgomery
                          President and
                             Chief Executive Officer

         Holly Corporation

         By:
                ----------------------------
         Its:
                ----------------------------

         Navajo Refining Company, L.P.

         By:
                ----------------------------
         Its:
                ----------------------------

         Black Eagle, Inc.

         By:
                ----------------------------
         Its:
                ----------------------------

MEDIATION SETTLEMENT AGREEMENT - PAGE 23

<PAGE>
                                    EXHIBIT E

                           FORM OF JOINT PRESS RELEASE

             HOLLY CORPORATION AND LONGHORN PARTNERS PIPELINE, L.P.
                        ANNOUNCE SETTLEMENT OF LITIGATION

         Dallas, Texas, November 15, 2002 -- Holly Corporation (AMEX "HOC") and
Longhorn Partners Pipeline, L.P. today jointly announced an agreement, developed
in voluntary mediation, to settle pending litigation.

         Holly and Longhorn Partners have entered into a binding agreement to
terminate litigation brought in August 1998 by Longhorn Partners against Holly
and certain subsidiaries in a state court in El Paso, Texas and to terminate
litigation brought in August 2002 by Holly and a subsidiary against Longhorn
Partners and related parties in a state court in Carlsbad, New Mexico.

         Under the agreement, Holly will pay $25 million to Longhorn Partners as
a prepayment for the transportation of 7,000 barrels per day of refined products
from the Gulf Coast to El Paso in a period of up to 6 years from the date of the
Longhorn Pipeline's start-up. The agreement provides that Longhorn Partners will
issue to Holly an unsecured promissory note, subordinated to certain other
indebtedness, that would become payable with interest in the event that the
Longhorn Pipeline does not begin operations by July 1, 2004 or to the extent
Longhorn Partners is unable to provide Holly the full amount of the agreed
transportation services.

         Final documentation to implement the settlement is expected to be
completed by late November, at which time the $25 million payment will be made
by Holly to Longhorn Partners.

         Holly Corporation, through its affiliates, Navajo Refining Company and
Montana Refining Company, is engaged in the refining, transportation,
terminalling and marketing of petroleum products.

         Longhorn Partners Pipeline, L.P., a limited partnership based in
Dallas, is developing the 700-mile Longhorn Pipeline to transport gasoline,
diesel and aviation fuel from the Texas Gulf Coast to Odessa and El Paso, Texas.

MEDIATION SETTLEMENT AGREEMENT - PAGE 24<PAGE>

                                                                    EXHIBIT 10.2

                               HOLLY CORPORATION

                     LONG-TERM INCENTIVE COMPENSATION PLAN
                            AS AMENDED AND RESTATED
       (FORMERLY DESIGNATED THE HOLLY CORPORATION 2000 STOCK OPTION PLAN)

     1.  Purpose.  The purpose of the Holly Corporation Long-Term Incentive
Compensation Plan as amended and restated (formerly designated the Holly
Corporation 2000 Stock Option Plan) (the "Plan") is to advance the interests of
Holly Corporation (the "Company") by strengthening the ability of the Company
and its subsidiaries to attract, retain and motivate able people of high caliber
as employees, directors and consultants through arrangements that relate the
compensation for such persons to the long-term performance of the Company.
Accordingly, the Plan provides for granting Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock Awards, Bonus Stock Awards, Stock
Appreciation Rights, Phantom Stock Awards, Performance Awards or any combination
of the foregoing, as the Committee shall determine.

     2.  Definitions.  For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:

     (a) "Amendment Effective Date" means December 12, 2002. The Plan prior to
amendment was effective January 1, 2001.

     (b) "Award" means any Option, Restricted Stock Award, Bonus Stock Award,
Stock Appreciation Right, Phantom Stock Award, or Performance Award, together
with any other right or interest granted to a Participant under the Plan.

     (c) "Beneficiary" means one or more persons, trusts or other entities that
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(d)
hereof. If, upon a Participant's death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the persons,
trusts or other entities entitled by will or the laws of descent and
distribution to receive such benefits.

     (d) "Board" means the Company's board of directors.

     (e) "Bonus Stock Award" means Shares granted to a Participant under Section
6(c) hereof.

     (f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations
thereto.

     (g) "Committee" means a committee of two or more directors designated by
the Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist solely of two or more
directors, each of whom shall be (i) a "nonemployee director" within the meaning
of Rule 16b-3 under the Exchange Act, and (ii) an "outside director" as defined
under Section 162(m) of the Code, unless administration of the Plan by "outside
directors" is not then required in order to qualify for tax deductibility under
Section 162(m) of the Code.

     (h) "Covered Employee" means an Eligible Person who is a Covered Employee
as specified in Section 8(b)(vi) of the Plan.

     (i) "Disability" means, as determined by the Board in the sole discretion
exercised in good faith of the Board, a physical or mental impairment of
sufficient severity that either the Participant is unable to continue performing
the duties he performed before such impairment or the Participant's condition
entitles him to disability benefits under any insurance or employee benefit plan
of the Company or its Subsidiaries and that impairment or condition is cited by
the Company as the reason for termination of the Participant's employment or
participation as a member of the Board.

                                       1
<PAGE>

     (j) "Eligible Person" means any current or proposed officer, director, or
key employee or consultant whose services are deemed to be of potential benefit
to the Company or any of its Subsidiaries. An employee on leave of absence may
be considered as still in the employ of the Company or a Subsidiary for purposes
of eligibility for participation in the Plan.

     (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, including rules thereunder and successor provisions and rules
relating thereto.

     (l) "Fair Market Value" means the fair market value as determined by the
Committee. Unless otherwise determined by the Committee, the Fair Market Value
of a Share shall be the closing price of a Share, on the date on which the
determination of Fair Market Value is being made or if no Shares were traded on
such date then the last trading date prior thereto, as quoted on the composite
transactions table for the American Stock Exchange or, if the Shares are not
then subject to trading on the American Stock Exchange, then as quoted in a
comparable manner on any other national stock exchange or, if not so quoted,
then as reported for the over-the-counter market on which the largest volume of
trading of Shares has occurred in the 30 trading days prior to the date for
which a determination is made.

     (m) "Incentive Stock Option" means any Option intended to be and designated
as an incentive stock option within the meaning of Section 422 of the Code or
any successor provision thereto.

     (n) "Non-Qualified Stock Option" means any Option that does not constitute
an Incentive Stock Option.

     (o) "Option" means a right granted to a Participant under Section 6(a)
hereof to purchase Shares or other Awards at a specified price during specified
time periods.

     (p) "Participant" means a person who has been granted an Award under the
Plan which remains outstanding, including a person who is no longer an Eligible
Person.

     (q) "Performance Award" means a right granted to a Participant under
Section 8 hereof to receive cash based on performance conditions, as provided in
Section 8, measured over a period of not less than one year nor more than ten
years.

     (r) "Phantom Stock Award" means a right granted to a Participant under
Section 7(b) hereof.

     (s) "Qualified Member" means a member of the Committee who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an "outside
director" within the meaning of regulation 1.162-27 under Section 162(m) of the
Code.

     (t) "Restricted Stock Award" means Shares granted to a Participant under
Section 6(b) hereof that are subject to certain restrictions and to a risk of
forfeiture.

     (u) "Rule 16b-3" means Rule 16b-3, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as from time to time
in effect and applicable to the Plan and Participants.

     (v) "Securities Act" means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may be amended
from time to time.

     (w) "Shares" means shares of the Company's common stock, par value $.01 per
share, and such other securities as may be substituted (or resubstituted) for
shares of the Company's common stock, par value $.01 per share, pursuant to
Section 10 hereof.

     (x) "Stock Appreciation Right" means a right granted to a Participant under
Section 7(a) hereof.

     (y) "Subsidiary" means with respect to the Company, any corporation or
other entity of which at least 50% of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by the Company
or any other entity determined by the Committee to constitute a Subsidiary due
to its relationship to the Company.

                                       2
<PAGE>
     3.  Administration.

     (a) Authority of the Committee.  The Plan shall be administered by the
Committee except to the extent the Board elects to administer all or part of the
Plan or except to the extent the Board appoints a separate committee other than
the Committee to administer all or part of the Plan, in which case references
herein to the "Committee" shall be deemed to include references to the "Board"
and/or such additional committee, as applicable. To the extent a portion of the
Plan is administered by the Committee, and another portion of the Plan is
administered by the Board and/or a separate committee, references herein to
"Committee" shall be deemed to be references to the "Board" or such additional
committee, as applicable, but only to the extent the Board or additional
committee administers a portion of the Plan and only with respect to those
portions of the Plan that the Board has elected to administer or over which the
separate committee has been delegated authority. Subject to the express
provisions of the Plan and Rule 16b-3, the Committee shall have the authority,
in its sole and absolute discretion, to (i) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the Plan; (ii)
determine the Eligible Persons to whom, and the time or times at which, Awards
shall be granted; (iii) determine the amount of cash and the number of Options,
Restricted Stock Awards, Bonus Stock Awards, Stock Appreciation Rights, Phantom
Stock Awards, or Performance Awards, or any combination thereof, that shall be
the subject of each Award; (iv) determine the terms and provisions of each Award
agreement (which need not be identical), including provisions defining or
otherwise relating to (A) the term and the period or periods and extent of
exercisability of Options, (B) the extent to which the transferability of Shares
and Awards is restricted, (C) the effect of termination of employment of a
Participant on the Award, and (D) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal Revenue Service);
(v) accelerate the time of exercisability of any Option that has been granted;
(vi) construe the respective Award agreements and the Plan; (vii) make
determinations of the Fair Market Value of the Shares pursuant to the Plan;
(viii) delegate its duties under the Plan to such agents as it may appoint from
time to time, provided that the Committee may not delegate its duties with
respect to making Awards to, or otherwise with respect to Awards granted to,
Eligible Persons who are subject to Section 16(b) of the Exchange Act or Section
162(m) of the Code; (ix) subject to ratification by the Board, terminate,
modify, or amend the Plan; and (x) make all other determinations, perform all
other acts, and exercise all other powers and authority necessary or advisable
for administering the Plan, including the delegation of those ministerial acts
and responsibilities as the Committee deems appropriate. Subject to Rule 16b-3
and Section 162(m) of the Code, the Committee may correct any defect, supply any
omission, or reconcile any inconsistency in the Plan, in any Award, or in any
Award agreement in the manner and to the extent it deems necessary or desirable
to carry the Plan into effect, and the Committee shall be the sole and final
judge of that necessity or desirability. The determinations of the Committee on
the matters referred to in this Section 3(a) shall be final and conclusive.

     (b) Manner of Exercise of Committee Authority.  At any time that a member
of the Committee is not a Qualified Member, any action of the Committee relating
to an Award granted or to be granted to a Participant who is then subject to
Section 16 of the Exchange Act in respect of the Company, or relating to an
Award intended by the Committee to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code and regulations thereunder, may
be taken either (i) by a subcommittee, designated by the Committee, composed
solely of two or more Qualified Members, or (ii) by the Committee but with each
such member who is not a Qualified Member abstaining or recusing himself or
herself from such action; provided, however, that, upon such abstention or
recusal, the Committee remains composed solely of two or more Qualified Members.
Such action, authorized by such a subcommittee or by the Committee upon the
abstention or recusal of such non-Qualified Member(s), shall be the action of
the Committee for purposes of the Plan. Any action of the Committee shall be
final, conclusive and binding on all persons, including the Company, its
Subsidiaries, stockholders, Participants, Beneficiaries, and transferees under
Section 10(d) hereof or other persons claiming rights from or through a
Participant. The express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed as limiting any
power or authority of the Committee. The Committee may delegate to officers or
managers of the Company or any Subsidiary, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such
functions, including administrative functions, as the Committee may determine,
to the extent that such delegation will not result in the loss of an exemption
under

                                       3
<PAGE>
Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the
Exchange Act in respect of the Company and will not cause Awards intended to
qualify as "performance-based compensation" under Section 162(m) of the Code to
fail to so qualify. The Committee may appoint agents to assist it in
administering the Plan.

     (c) Limitation of Liability.  The Committee and each member thereof shall
be entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the Company or a
Subsidiary, the Company's legal counsel, independent auditors, consultants or
any other agents assisting in the administration of the Plan. Members of the
Committee and any officer or employee of the Company or a Subsidiary acting at
the direction or on behalf of the Committee shall not be personally liable for
any action or determination taken or made in good faith with respect to the
Plan, and shall, to the fullest extent permitted by law, be indemnified and held
harmless by the Company with respect to any such action or determination.

     4.  Shares Subject to Plan.

     (a) Overall Number of Shares Available for Delivery.  Subject to adjustment
in a manner consistent with any adjustment made pursuant to Section 10 of the
Plan, the total number of Shares that may be delivered in connection with Awards
under the Plan shall not exceed 1,500,000, including all Shares delivered with
respect to Options granted under the Plan prior to the Amendment Effective Date.

     (b) Application of Limitation to Grants of Awards.  No Award may be granted
if (i) the number of Shares to be delivered in connection with such Award
exceeds (ii) the number of Shares remaining available under the Plan minus the
number of Shares issuable in settlement of or relating to then-outstanding
Awards. The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the case of
tandem or substitute awards) and make adjustments if the number of Shares
actually delivered differs from the number of Shares previously counted in
connection with an Award.

     (c) Availability of Shares Not Delivered under Awards.  Shares subject to
an Award under the Plan that expires or is canceled, forfeited, settled in cash
or otherwise terminated without a delivery of Shares to the Participant,
including (i) the number of Shares withheld in payment of any exercise price of
an Award or taxes relating to Awards, and (ii) the number of Shares surrendered
in payment of any exercise price of an Award or taxes relating to any Award,
will again be available for Awards under the Plan, except that if any such
Shares could not again be available for Awards to a particular Participant under
any applicable law or regulation, such Shares shall be available exclusively for
Awards to Participants who are not subject to such limitation.

     (d) Shares Offered.  The Shares to be delivered under the Plan shall be
made available from (i) authorized but unissued Shares, or (ii) previously
issued Shares reacquired by the Company.

     5.  Eligibility; Per Person Award Limitations.  Awards may be granted under
the Plan only to Eligible Persons. In each fiscal year or 12-month period, as
applicable, during any part of which the Plan is in effect, an Eligible Person
may not be granted (a) Awards, provided for in Sections 6 and 7 of the Plan,
relating to more than 150,000 Shares, subject to adjustment in a manner
consistent with any adjustment made pursuant to Section 10 of the Plan, or (b)
Awards, provided for in Section 8 of the Plan, with a value at the time of
payment which exceeds the Fair Market Value of 150,000 Shares as of the date of
the grant of the Award.

     6.  Options, Restricted Stock and Bonus Stock.

     (a) Options.  The Committee is authorized to grant Options to Participants
on the following terms and conditions:

          (i) Exercise Price.  The exercise price or prices for Shares under
     each Option shall be determined by the Committee at the time the Option is
     granted, and may be less than, equal to or greater than, the Fair Market
     Value of the Shares at the time of the granting of the Option, provided
     that the exercise price per Share for any Option that is intended to be
     performance-based compensation under Section 162(m)(4)(C) of the Code or an
     Incentive Stock Option under Section 422 of the Code shall not be less than
     the Fair Market Value of a Share as of the effective date of grant of the
     Option; provided,

                                       4

<PAGE>

     however, that in the case of an individual who owns stock possessing more
     than ten percent of the total combined voting power of all classes of stock
     of the Company or its parent or any Subsidiary, the exercise price per
     Share of any Incentive Stock Option under Section 422 of the Code shall not
     be less than 110% of the Fair Market Value of a Share as of the effective
     date of grant of the Incentive Stock Option.

          (ii) Time and Method of Exercise.  The Committee shall determine the
     time or times at which or the circumstances under which an Option may be
     exercised in whole or in part (including based on achievement of
     performance goals and/or future service requirements), the methods by which
     such exercise price may be paid or deemed to be paid, the form of such
     payment, including, without limitation, cash, Shares, other Awards or
     awards granted under other plans of the Company or any Subsidiary, or other
     property (including notes, to the extent permitted under applicable law, or
     other contractual obligations of Participants to make payment on a deferred
     basis), and the methods by or forms in which Shares will be delivered or
     deemed to be delivered to Participants, including, but not limited to, the
     delivery of Restricted Stock Awards subject to Section 6(b) hereof. In the
     case of an exercise whereby the exercise price is paid with Shares, the
     value of such Shares for purposes of calculating the exercise price paid
     shall be the Fair Market Value. Notwithstanding anything to the contrary
     herein, unless otherwise provided in any agreement evidencing an Option, in
     the event of the death of a Participant while in the employ of the Company
     or one of its Subsidiaries, an Option theretofore granted to the
     Participant shall be exercisable within the year succeeding such death
     (even if the Option would otherwise expire prior to one year from the date
     of death) but only to the extent that the optionee was entitled to exercise
     the Option as of the date of death.

          (iii) Incentive Stock Options.  The terms of any Incentive Stock
     Option granted under the Plan shall comply in all respects with the
     provisions of Section 422 of the Code. Anything in the Plan to the contrary
     notwithstanding, no term of the Plan relating to Incentive Stock Options
     (including any Stock Appreciation Right in tandem therewith) shall be
     interpreted, amended or altered, nor shall any discretion or authority
     granted under the Plan be exercised, so as to disqualify either the Plan or
     any Incentive Stock Option under Section 422 of the Code, unless the
     Participant has first requested the change that will result in such
     disqualification. Incentive Stock Options shall not be granted more than
     ten years after the earlier of the adoption of the Plan or the approval of
     the Plan by the Company's stockholders. Notwithstanding the foregoing, the
     Fair Market Value of Shares subject to an Incentive Stock Option and the
     aggregate Fair Market Value of shares of stock of any parent or Subsidiary
     corporation (within the meaning of Sections 424(e) and (f) of the Code)
     subject to any other incentive stock option (within the meaning of Section
     422 of the Code) of the Company or a parent or Subsidiary corporation
     (within the meaning of Sections 424(e) and (f) of the Code) that first
     becomes purchasable by a Participant in any calendar year may not (with
     respect to that Participant) exceed $100,000, or such other amount as may
     be prescribed under Section 422 of the Code or applicable regulations or
     rulings from time to time. As used in the previous sentence, Fair Market
     Value shall be determined as of the date the Incentive Stock Options are
     granted. Failure to comply with this provision shall not impair the
     enforceability or exercisability of any Option, but shall cause the excess
     amount of Shares to be reclassified in accordance with the Code. No
     Incentive Stock Option may be granted after December 13, 2010.

     (b) Restricted Stock Awards.  The Committee is authorized to grant
Restricted Stock Awards to Participants on the following terms and conditions:

          (i) Grant and Restrictions.  Restricted Stock Awards shall be subject
     to such restrictions on transferability, risk of forfeiture and other
     restrictions, if any, as the Committee may impose, which restrictions may
     lapse separately or in combination at such times, under such circumstances
     (including based on achievement of performance goals and/or future service
     requirements), in such installments or otherwise, as the Committee may
     determine at the date of grant or thereafter. Except to the extent
     restricted under the terms of the Plan and any Award agreement relating to
     the Restricted Stock Award, a Participant granted a Restricted Stock Award
     shall have all of the rights of a stockholder, including the right to vote
     the Restricted Stock Award and the right to receive dividends thereon
     (subject to any mandatory reinvestment or other requirement imposed by the
     Committee). During the restricted period

                                       5
<PAGE>

     applicable to the Restricted Stock Award, the Restricted Stock Award may
     not be sold, transferred, pledged, hypothecated, margined or otherwise
     encumbered by the Participant.

          (ii) Forfeiture.  Except as otherwise determined by the Committee,
     upon termination of employment during the applicable restriction period,
     Restricted Stock Awards that are at that time subject to restrictions shall
     be forfeited and reacquired by the Company; provided that the Committee may
     provide, by rule or regulation or in any Award agreement, or may determine
     in any individual case, that restrictions or forfeiture conditions relating
     to Restricted Stock Awards shall be waived in whole or in part in the event
     of terminations resulting from specified causes, and the Committee may in
     other cases waive in whole or in part the forfeiture of Restricted Stock
     Awards.

          (iii) Certificates for Shares.  Restricted Stock Awards granted under
     the Plan may be evidenced in such manner as the Committee shall determine.
     If certificates for Shares relating to Restricted Stock Awards are
     registered in the name of the Participant, the Committee may require that
     such certificates bear an appropriate legend referring to the terms,
     conditions and restrictions applicable to such Restricted Stock Awards,
     that the Company retain physical possession of the certificates, and that
     the Participant deliver a stock power to the Company, endorsed in blank,
     relating to such Shares.

          (iv) Dividends and Splits.  As a condition to the grant of a
     Restricted Stock Award, the Committee may require or permit a Participant
     to elect that any cash dividends paid on a Share related to the Restricted
     Stock Award be automatically reinvested in additional Shares related to the
     Restricted Stock Award or applied to the purchase of additional Awards
     under the Plan. Unless otherwise determined by the Committee, Shares
     distributed in connection with a stock split or stock dividend, and other
     property distributed as a dividend, shall be subject to restrictions and a
     risk of forfeiture to the same extent as the Restricted Stock Award with
     respect to which such Shares or other property has been distributed.

     (c) Bonus Stock Awards.  The Committee is authorized to grant Awards of
Shares as bonuses, provided that, in the case of Participants subject to Section
16 of the Exchange Act, the amount of such grants remains within the discretion
of the Committee to the extent necessary to ensure that such Awards are exempt
from liability under Section 16(b) of the Exchange Act. Bonus Stock Awards shall
be subject to such other terms as shall be determined by the Committee.

     (d) Performance Goals.  To the extent the Committee determines that any
Award granted pursuant to this Section 6 shall constitute performance-based
compensation for purposes of Section 162(m) of the Code, the grant or settlement
of the Award shall, in the Committee's discretion, be subject to the achievement
of performance goals determined and applied in a manner consistent with Section
8(b).

     7.  Stock Appreciation Rights and Phantom Stock.

     (a) Stock Appreciation Rights.  The Committee is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:

          (i) Right to Payment.  A Stock Appreciation Right shall confer on the
     Participant to whom it is granted a right to receive, upon exercise
     thereof, the excess of (A) the Fair Market Value of one Share on the date
     of exercise over (B) the grant price of the Stock Appreciation Right as
     determined by the Committee.

          (ii) Rights Related to Options.  A Stock Appreciation Right granted in
     connection with an Option shall entitle a Participant, upon exercise
     thereof, to surrender that Option or any portion thereof, to the extent
     unexercised, and to receive payment of an amount computed pursuant to
     Subsection 7(a)(i) hereof. That Option shall then cease to be exercisable
     to the extent surrendered. A Stock Appreciation Right granted in connection
     with an Option shall be exercisable only at such time or times and only to
     the extent that the related Option is exercisable and shall not be
     transferable except to the extent that the related Option is transferable.

                                       6
<PAGE>

          (iii) Right Without Option.  A Stock Appreciation Right granted
     independent of an Option shall be exercisable as determined by the
     Committee and set forth in the Award agreement governing the Stock
     Appreciation Right.

          (iv) Terms.  The Committee shall determine at the date of grant the
     time or times at which and the circumstances under which a Stock
     Appreciation Right may be exercised in whole or in part (including based on
     achievement of performance goals and/or future service requirements), the
     method of exercise, whether or not a Stock Appreciation Right shall be in
     tandem or in combination with any other Award, and any other terms and
     conditions of any Stock Appreciation Right.

     (b) Phantom Stock Awards.  The Committee is authorized to grant Phantom
Stock Awards to Participants, which are rights to receive cash at the end of a
specified deferral period, subject to the following terms and conditions:

          (i) Award and Restrictions.  Satisfaction of a Phantom Stock Award
     shall occur upon expiration of the deferral period specified for such
     Phantom Stock Award by the Committee (or, if permitted by the Committee, as
     elected by the Participant). In addition, Phantom Stock Awards shall be
     subject to such restrictions (which may include a risk of forfeiture), if
     any, as the Committee may impose, which restrictions may lapse at the
     expiration of the deferral period or at earlier specified times (including
     based on achievement of performance goals and/or future service
     requirements), separately or in combination, in installments or otherwise,
     as the Committee may determine.

          (ii) Forfeiture.  Except as otherwise determined by the Committee,
     upon termination of employment during the applicable deferral period or
     portion thereof to which forfeiture conditions apply (as provided in any
     Award agreement evidencing the Phantom Stock Awards), all Phantom Stock
     Awards that are at that time subject to deferral (other than a deferral at
     the election of the Participant) shall be forfeited; provided that the
     Committee may provide, by rule or regulation or in any Award agreement, or
     may determine in any individual case, that restrictions or forfeiture
     conditions relating to Phantom Stock Awards shall be waived in whole or in
     part in the event of terminations resulting from specified causes, and the
     Committee may in other cases waive in whole or in part the forfeiture of
     Phantom Stock Awards.

     (c) Performance Goals.  To the extent the Committee determines that any
Award granted pursuant to this Section 7 shall constitute performance-based
compensation for purposes of Section 162(m) of the Code, the grant or settlement
of the Award shall, in the Committee's discretion, be subject to the achievement
of performance goals determined and applied in a manner consistent with Section
8(b).

     8.  Performance Awards.

     (a) Performance Awards.  The Committee may grant Performance Awards based
on performance criteria measured over a period of not less than one year and not
more than ten years. The Committee may use such business criteria and other
measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to increase the amounts
payable under any Award subject to performance conditions except as limited
under Section 8(b) in the case of a Performance Award granted to a Covered
Employee.

     (b) Performance Goals.  The grant and/or settlement of a Performance Award
shall be contingent upon terms set forth in this Section 8(b).

          (i) General.  The performance goals for Performance Awards shall
     consist of one or more business criteria and a targeted level or levels of
     performance with respect to each of such criteria, as specified by the
     Committee. In the case of any Award granted to a Covered Employee,
     performance goals shall be designed to be objective and shall otherwise
     meet the requirements of Section 162(m) of the Code and regulations
     thereunder (including Treasury Regulation sec. 1.162-27 and successor
     regulations thereto), including the requirement that the level or levels of
     performance targeted by the Committee are such that the achievement of
     performance goals is "substantially uncertain" at the time of grant. The
     Committee may determine that such Performance Awards shall be granted
     and/or settled upon achievement of any one performance goal or that two or
     more of the performance goals must be achieved as a condition to the

                                       7
<PAGE>

     grant and/or settlement of such Performance Awards. Performance goals may
     differ among Performance Awards granted to any one Participant or for
     Performance Awards granted to different Participants.

          (ii) Business Criteria.  One or more of the following business
     criteria for the Company, on a consolidated basis, and/or for specified
     Subsidiaries, divisions or business or geographical units of the Company
     (except with respect to the total stockholder return and earnings per share
     criteria), shall be used by the Committee in establishing performance goals
     for Performance Awards granted to a Covered Employee: (A) earnings per
     share; (B) increase in revenues; (C)increase in cash flow; (D) increase in
     cash flow return; (E) return on net assets; (F) return on assets; (G)
     return on investment; (H) return on capital; (I) return on equity; (J)
     economic value added; (K) gross margin; (L) net income; (M) pretax
     earnings; (N) pretax earnings before interest, depreciation and
     amortization; (O) pretax operating earnings after interest expense and
     before incentives, service fees, and extraordinary or special items; (P)
     operating income; (Q) total stockholder return; (R) debt reduction; and (S)
     any of the above goals determined on an absolute or relative basis or as
     compared to the performance of a published or special index deemed
     applicable by the Committee including, but not limited to, the Standard &
     Poor's 500 Stock Index or a group of comparable companies.

          (iii) Performance Period; Timing for Establishing Performance
     Goals.  Achievement of performance goals in respect of Performance Awards
     shall be measured over a performance period of not less than one year and
     not more than ten years, as specified by the Committee. Performance goals
     in the case of any Award granted to a Covered Employee shall be established
     not later than 90 days after the beginning of any performance period
     applicable to such Performance Awards, or at such other date as may be
     required or permitted for "performance-based compensation" under Section
     162(m) of the Code.

          (iv) Settlement of Performance Awards; Other Terms.  After the end of
     each performance period, the Committee shall determine the amount, if any,
     of Performance Awards payable to each Participant based upon achievement of
     business criteria over a performance period. The Committee may not exercise
     discretion to increase any such amount payable in respect of a Performance
     Award designed to comply with Section 162(m) of the Code. The Committee
     shall specify the circumstances in which such Performance Awards shall be
     paid or forfeited in the event of termination of employment by the
     Participant prior to the end of a performance period or settlement of
     Performance Awards.

          (v) Written Determinations.  All determinations by the Committee as to
     the establishment of performance goals, the amount of any Performance
     Award, and the achievement of performance goals relating to Performance
     Awards shall be made in writing in the case of any Award granted to a
     Covered Employee. The Committee may not delegate any responsibility
     relating to such Performance Awards.

          (vi) Status of Performance Awards under Section 162(m) of the
     Code.  It is the intent of the Company that Performance Awards granted to
     persons who are designated by the Committee as likely to be Covered
     Employees within the meaning of Section 162(m) of the Code and regulations
     thereunder (including Treasury Regulation sec. 1.162-27 and successor
     regulations thereto) shall, if so designated by the Committee, constitute
     "performance-based compensation" within the meaning of Section 162(m) of
     the Code and regulations thereunder. Accordingly, the terms of this Section
     8(b) shall be interpreted in a manner consistent with Section 162(m) of the
     Code and regulations thereunder. The foregoing notwithstanding, because the
     Committee cannot determine with certainty whether a given Participant will
     be a Covered Employee with respect to a fiscal year that has not yet been
     completed, the term Covered Employee as used herein shall mean only a
     person designated by the Committee, at the time of grant of a Performance
     Award, who is likely to be a Covered Employee with respect to that fiscal
     year. If any provision of the Plan as in effect on the date of adoption or
     any agreements relating to Performance Awards that are designated as
     intended to comply with Section 162(m) of the Code does not comply or is
     inconsistent with the requirements of Section 162(m) of the Code or
     regulations thereunder, such provision shall be construed or deemed amended
     to the extent necessary to conform to such requirements.

                                       8
<PAGE>

     9.  Certain Provisions Applicable to All Awards.

     (a) General.  Awards may be granted on the terms and conditions set forth
in Sections 6, 7 and 8 hereof and this Section 9. In addition, the Committee may
impose on any Award or the exercise thereof, such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine, including terms requiring forfeiture of Awards in the event of
termination of employment by the Participant and terms permitting a Participant
to make elections relating to his or her Award. The Committee shall retain full
power and discretion to accelerate or waive, at any time, any term or condition
of an Award that is not mandatory under the Plan; provided, however, that the
Committee shall not have any discretion to accelerate or waive any term or
condition of an Award that is intended to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code if such discretion
would cause the Award not to so qualify. Except in cases in which the Committee
is authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must be paid to satisfy the requirements of
the Delaware General Corporation Law, no consideration other than services may
be required for the grant of any Award.

     (b) Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any Subsidiary, or
any business entity to be acquired by the Company or a Subsidiary, or any other
right of a Participant to receive payment from the Company or any Subsidiary.
Such additional, tandem and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award, the
Committee shall require the surrender of such other Award in consideration for
the grant of the new Award. In addition, Awards may be granted in lieu of cash
compensation, including in lieu of cash amounts payable under other plans of the
Company or any Subsidiary.

     (c) Term of Awards.  The term of each Award shall be for such period as may
be determined by the Committee; provided that in no event shall the term of any
Option or Stock Appreciation Right exceed a period of ten years (or such shorter
term as may be required in respect of an Incentive Stock Option under Section
422 of the Code).

     (d) Form and Timing of Payment under Awards; Deferrals.  Subject to the
terms of the Plan and any applicable Award agreement, payments to be made by the
Company or a Subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may, subject
to any limitations set forth in the Award agreement, be accelerated and cash
paid in lieu of Shares in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events. In the
discretion of the Committee, Awards granted pursuant to Sections 7 or 8 of the
Plan may be payable in Shares to the extent permitted by the terms of the
applicable Award agreement. Installment or deferred payments may be required by
the Committee (subject to Section 10(f) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of amounts in respect of installment or deferred payments denominated
in Shares. Any deferral shall only be allowed as is provided in a separate
deferred compensation plan adopted by the Company. The Plan shall not constitute
an "employee benefit plan" for purposes of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.

     (e) Exemptions from Section 16(b) Liability.  It is the intent of the
Company that the grant of any Awards to or other transaction by a Participant
who is subject to Section 16 of the Exchange Act shall be exempt from Section
16(b) of the Exchange Act pursuant to an applicable exemption (except for
transactions acknowledged by the Participant in writing to be non-exempt).
Accordingly, if any provision of this Plan or any Award agreement does not
comply with the requirements of Rule 16b-3 as then applicable to any such
transaction, such provision shall be construed or deemed amended to the extent
necessary to conform to the

                                       9
<PAGE>

applicable requirements of Rule 16b-3 so that such Participant shall avoid
liability under Section 16(b) of the Exchange Act.

     10.  General Provisions.

     (a) Company's Right to Terminate or Modify Awards in Certain
Circumstances.  Except to the extent that an Award agreement provides otherwise
with specific reference to this Section 10(a), in the event of (i) an
acquisition of substantially all of the assets of the Company or of a greater
than 80% stock interest in the Company by an entity in which the Company does
not have a 50% or greater interest prior to such acquisition, or (ii) a merger,
consolidation, or recapitalization involving a fundamental change in the capital
structure of the Company, the Company shall have the right to terminate any
Award upon the payment of an amount equal to the then value of the Award,
without regard to vesting or forfeiture provisions of the Award, as determined
by the Committee, taking into account to the extent determined by the Committee
to be appropriate the Fair Market Value of Shares at the time of termination and
the performance of the Company up to the time of termination. Upon tender of
payment by the Company to a holder of the amount determined by the Committee
pursuant to this provision, the Award held by such holder shall automatically
terminate. Alternatively, in such circumstances, the Company, in the discretion
of the Board, may make arrangements for the acquiring or surviving corporation
to assume any or all outstanding Awards and substitute on equitable terms Awards
relating to the stock or performance of such acquiring or surviving corporation.
The determinations of the Board and/or the Committee pursuant to this Section
10(a) shall be final, binding and conclusive.

     (b) No Limitation on Other Company Transactions.  The existence of the Plan
and the Awards granted hereunder shall not affect in any way the right or power
of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of debt or equity securities affecting Shares or the rights thereof,
the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other
corporate act or proceeding.

     (c) Dilution or Other Adjustments.  In the event that there is any change
in the Shares through merger, consolidation, reorganization or recapitalization
or in the event of any stock split or dividend to holders of Shares payable in
Shares or the issuance to such holders of rights to subscribe to Shares, or in
the event of any change in the capital structure of the Company, the Board
shall, subject to any requirements of applicable law, regulations and rules,
make such adjustments with respect to any provision or provisions of the Plan,
including but not limited to the limitations on Awards that may be granted under
the Plan as set forth in Sections 4 and 5, and with respect to Awards
theretofore granted under the Plan as the Board deems appropriate to prevent
dilution or enlargement of Award rights. The determinations of the Board
pursuant to this Section 10(b) shall be final, binding and conclusive. Except as
hereinbefore expressly provided, the issuance by the Company of shares of stock
of any class or securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares relating to Awards
theretofore granted or the exercise price per Share in the case of Options.

     (d) Transferability.

          (i) Permitted Transferees.  The Committee may, in its discretion,
     permit a Participant to transfer all or any portion of an Award or
     authorize all or a portion of an Award to be granted to an Eligible Person
     on terms which permit transfer by such Participant; provided that, in
     either case a transferee may only be a child, stepchild, grandchild,
     parent, stepparent, grandparent, spouse, former spouse, sibling, niece,
     nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
     brother-in-law, or sister-in-law, including adoptive relationships, in each
     case with respect to the Participant, a trust in which these persons have
     more than fifty percent of the beneficial interest, a foundation in which
     these persons (or the Participant) control the management of assets, and
     any other entity in which these persons (or the

                                       10
<PAGE>
     Participant) own more than fifty percent of the voting interests
     (collectively, "Permitted Transferees"); provided further that, (A) there
     may be no consideration for any such transfer and (B) subsequent transfers
     of Awards transferred as provided above shall be prohibited except
     subsequent transfers back to the original holder of the Award and transfers
     to other Permitted Transferees of the original holder. Agreements
     evidencing Awards with respect to which such transferability is authorized
     at the time of grant must be approved by the Committee, and must expressly
     provide for transferability in a manner consistent with this Subsection
     10(d)(i).

          (ii) Qualified Domestic Relations Orders.  An Award may be
     transferred, to a Permitted Transferee, pursuant to a domestic relations
     order entered or approved by a court of competent jurisdiction upon
     delivery to the Company of written notice of such transfer and a certified
     copy of such order.

          (iii) Other Transfers.  Except as expressly permitted by Subsections
     10(d)(i) and 10(d)(ii) above, Awards shall not be transferable other than
     by will or the laws of descent and distribution. Notwithstanding anything
     to the contrary in this Section 10, an Incentive Stock Option shall not be
     transferable other than by will or the laws of descent and distribution.

          (iv) Effect of Transfer.  Following the transfer of any Award as
     contemplated by Subsections 10(d)(i), 10(d)(ii) and 10(d)(iii) above, (A)
     such Award shall continue to be subject to the same terms and conditions as
     were applicable immediately prior to transfer, provided that the term
     "Participant" shall be deemed to refer to the Permitted Transferee, the
     recipient under a qualified domestic relations order, the estate or heirs
     of a deceased Participant, or other transferee, as applicable, to the
     extent appropriate to enable the Permitted Transferee to exercise the
     transferred Award in accordance with the terms of the Plan and applicable
     law and (B) the provisions of the Award relating to exercisability thereof
     shall continue to be applied with respect to the original Participant and,
     following the occurrence of any such events described therein, the Awards
     shall be exercisable by the Permitted Transferee, the recipient under a
     qualified domestic relations order, the estate or heirs of a deceased
     Participant, or other transferee, as applicable, only to the extent and for
     the periods that would have been applicable in the absence of the transfer.

          (v) Procedures and Restrictions.  Any Participant desiring to transfer
     an Award as permitted under Subsections 10(d)(i), 10(d)(ii) or 10(d)(iii)
     above shall make application therefor in the manner and time specified by
     the Committee and shall comply with such other requirements as the
     Committee may require to assure compliance with all applicable securities
     laws. The Committee shall not give permission for such a transfer if (A) it
     would give rise to short-swing liability under Section 16(b) of the
     Exchange Act or (B) it may not be made in compliance with all applicable
     federal, state and foreign securities laws.

          (vi) Registration.  To the extent the issuance to any Permitted
     Transferee of any Shares issuable pursuant to Awards transferred as
     permitted in this Section 10(d) is not registered pursuant to the effective
     registration statement of the Company generally covering the Shares to be
     issued pursuant to the Plan to initial holders of Awards, the Company shall
     not have any obligation to register the issuance of any such Shares to any
     such transferee.

     (e) Taxes.  The Company and any Subsidiary are authorized to withhold from
any Award granted, or any payment relating to an Award under the Plan, including
from a distribution of Shares, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and
to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.

     (f) Changes to the Plan and Awards.  The Board may amend, alter, suspend,
discontinue or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any amendment or alteration to the Plan, including any increase in any Share
limitation, shall be subject to the approval of the Company's stockholders not
later than the annual meeting

                                       11
<PAGE>

next following such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Shares may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes in this Plan to stockholders for approval; provided that, without the
consent of an affected Participant, no such Board action may materially and
adversely affect the rights of such Participant under any previously granted and
outstanding Award. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue or terminate any Award theretofore granted
and any Award agreement relating thereto, except as otherwise provided in the
Plan; provided that, without the consent of an affected Participant, no such
Committee action may materially and adversely affect the rights of such
Participant under such Award.

     (g) Limitation on Rights Conferred under Plan.  Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or a Subsidiary, (ii) interfering in any way
with the right of the Company or a Subsidiary to terminate any Eligible Person's
or Participant's employment or service at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or to be
treated uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a stockholder of the Company unless and until
the Participant is duly issued or transferred Shares in accordance with the
terms of an Award.

     (h) Nonexclusivity of the Plan.  Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable, including incentive arrangements and awards which do not qualify
under Section 162(m) of the Code. Nothing contained in the Plan shall be
construed to prevent the Company or any Subsidiary from taking any corporate
action which is deemed by the Company or such Subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No employee, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action.

     (i) Payments in the Event of Forfeitures; Fractional Shares; Share
Allotments.  Unless otherwise determined by the Committee, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or other
consideration to the Company in exchange for such Award, the Participant shall
be repaid the amount of such cash or other consideration. Unless otherwise
determined by the Committee, no fractional Shares, or Shares in lots of less
than 100 Shares, shall be issued or delivered pursuant to the Plan or any Award.
The Committee shall determine whether cash, other Awards or other property shall
be issued or paid in lieu of such fractional Shares, or lots of less than 100
Shares, and whether fractional Shares or any rights thereto shall be forfeited
or otherwise eliminated.

     (j) Severability.  If any provision of the Plan is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein. If any of the terms or provisions of the Plan or any
Award agreement conflict with the requirements of Rule 16b-3 (as those terms or
provisions are applied to Eligible Persons who are subject to Section 16(b) of
the Exchange Act) or Section 422 of the Code (with respect to Incentive Stock
Options), then those conflicting terms or provisions shall be deemed inoperative
to the extent they so conflict with the requirements of Rule 16b-3 (unless the
Board or the Committee, as appropriate, has expressly determined that the Plan
or such Award should not comply with Rule 16b-3) or Section 422 of the Code.
With respect to Incentive Stock Options, if the Plan does not contain any
provision required to be included herein under Section 422 of the Code, that
provision shall be deemed to be incorporated herein with the same force and
effect as if that provision had been set out at length herein; provided,
further, that, to the extent any Option that is intended to qualify as an
Incentive Stock Option cannot so qualify, such Option (to that extent) shall be
deemed a Non-Qualified Stock Option for all purposes of the Plan.

     (k) Governing Law.  All questions arising with respect to the provisions of
the Plan and Awards shall be determined by application of the laws of the State
of Texas, without giving effect to any conflict of law

                                       12
<PAGE>

provisions thereof, except to the extent Texas law is preempted by federal law
or where the law of the state of incorporation of the Company shall be
mandatorily applied. The obligation of the Company to sell and deliver Shares
hereunder is subject to applicable federal and state laws and to the approval of
any governmental authority required in connection with the authorization,
issuance, sale, or delivery of such Shares.

     (l) Conditions to Delivery of Shares.  Nothing herein or in any Award
granted hereunder or any Award agreement shall require the Company to issue any
Shares with respect to any Award if that issuance would, in the opinion of
counsel for the Company, constitute a violation of the Securities Act or any
similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award, Bonus Stock Award or Phantom Stock Award, the Company may, as a condition
precedent to the exercise of such Option or Stock Appreciation Right, vesting of
any Restricted Stock Award or Phantom Stock Award, or grant of any Bonus Stock
Award, require from the Participant (or in the event of his death, his legal
representatives, heirs, legatees, or distributees) such written representations,
if any, concerning the holder's intentions with regard to the retention or
disposition of the Shares being acquired pursuant to the Award and such written
covenants and agreements, if any, as to the manner of disposal of such Shares
as, in the opinion of counsel to the Company, may be necessary to ensure that
any disposition by that holder (or in the event of the holder's death, his legal
representatives, heirs, legatees, or distributees) will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, any
other applicable state or federal statute or regulation, or any rule of any
applicable securities exchange or securities association, as then in effect.

     (m) Plan Effective Date, Stockholder Approval and Plan Duration.  The Plan
has been adopted by the Board originally effective as of January 1, 2001 and as
amended and restated effective as of December 12, 2002 contingent upon the
approval of the stockholders of the Company. If the stockholders of the Company
do not approve the Plan as amended and restated, the Plan shall continue in
effect as originally adopted effective January 1, 2001. No Award, other than an
Incentive Stock Option, shall be granted under the Plan after December 31, 2010
and no Incentive Stock Option shall be granted under the Plan after December 13,
2010.

                                       13

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