Document:

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                                                                    EXHIBIT 10.3

                           HOLLY ENERGY PARTNERS, L.P.
                            LONG-TERM INCENTIVE PLAN

         SECTION 1. Purpose of the Plan.

         The Holly Energy Partners, L.P. Long-Term Incentive Plan (the "Plan")
is intended to promote the interests of Holly Energy Partners, L.P., a Delaware
limited partnership (the "Partnership"), by providing to employees, consultants,
and directors of Holly Logistic Services, L.L.C., a Delaware limited liability
company (the "Company"), and its Affiliates who perform services for the
Partnership and its subsidiaries incentive compensation awards for superior
performance that are based on Units. The Plan is also contemplated to enhance
the ability of the Company and its Affiliates to attract and retain the services
of individuals who are essential for the growth and profitability of the
Partnership and to encourage them to devote their best efforts to advancing the
business of the Partnership and its subsidiaries.

         SECTION 2. Definitions.

         As used in the Plan, the following terms shall have the meanings set
forth below:

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

         "Award" means an Option, Restricted Unit, Phantom Unit or Unit
Appreciation Right granted under the Plan, and shall include any tandem DERs
granted with respect to a Phantom Unit.

         "Award Agreement" means the written agreement by which an Award shall
be evidenced.

         "Board" means the Board of Directors of the Company.

         "Change of Control" means, and shall be deemed to have occurred upon
the occurrence of one or more of the following events: (i) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of Holly, the
Partnership, the General Partner, or the Company to any Person and/or its
Affiliates, other than to Holly, the Partnership, the General Partner, the
Company and/or any of their Affiliates; or (ii) the consolidation,
reorganization, merger or other transaction pursuant to which more than 50% of
the voting power of the outstanding equity interests in Holly, the Partnership,
the General Partner, or the Company cease to be owned by the Persons who own
such interests as of the effective date of the initial public offering of Units.

         "Committee" means the Compensation Committee of the Board or such other
committee of the Board appointed by the Board to administer the Plan.

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         "Consultant" means an individual who performs services for the
Partnership and is not an Employee or a Director.

         "DER" means a contingent right, granted in tandem with a specific
Phantom Unit, to receive an amount in cash equal to, and at the same time as,
the cash distributions made by the Partnership with respect to a Unit during the
period such Phantom Unit is outstanding.

         "Director" means a member of the Board who is not an Employee.

         "Employee" means any employee of the Company or an Affiliate who
performs services for the Partnership.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Fair Market Value" means the closing sales price of a Unit on the date
of determination (or if there is no trading in the Units on such date, on the
next preceding date on which there was trading) as reported in The Wall Street
Journal (or other reporting service approved by the Committee). In the event
Units are not publicly traded at the time a determination of Fair Market Value
is required to be made hereunder, the determination of Fair Market Value shall
be made in good faith by the Committee.

         "General Partner" means HEP Logistics Holding, L.P., a Delaware limited
partnership.

         "Holly" means Holly Corporation, a Delaware corporation.

         "Option" means an option to purchase Units granted under the Plan.

         "Participant" means any Employee, Consultant or Director granted an
Award under the Plan.

         "Partnership Agreement" means the First Amended and Restated Agreement
of Limited Partnership of Holly Energy Partners, L.P., as it may be amended or
amended and restated from time to time.

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

         "Phantom Unit" means a phantom (notional) Unit granted under the Plan
which upon vesting entitles the Participant to receive a Unit or an amount of
cash equal to the Fair Market Value of a Unit, as determined by the Committee in
its discretion.

         "Restricted Period" means the period established by the Committee with
respect to an Award during which the Award remains subject to forfeiture and is
either not exercisable by or payable to the Participant, as the case may be.

         "Restricted Unit" means a Unit granted under the Plan that is subject
to a Restricted Period.

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         "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under the Exchange
Act, or any successor rule or regulation thereto as in effect from time to time.

         "SEC" means the Securities and Exchange Commission, or any successor
thereto.

         "UDR" means a distribution made by the Partnership with respect to a
Restricted Unit.

         "Unit" means a Common Unit of the Partnership.

         "Unit Appreciation Right" means an Award that, upon exercise, entitles
the holder to receive the excess of the Fair Market Value of Unit on the
exercise date over the exercise price established for such Unit Appreciation
Right. Such excess may be paid in cash and/or in Units as determined by the
Committee in its discretion.

         SECTION 3. Administration.

         The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following and any applicable law,
the Committee, in its sole discretion, may delegate any or all of its powers and
duties under the Plan, including the power to grant Awards under the Plan, to
the Chief Executive Officer of the Company, subject to such limitations on such
delegated powers and duties as the Committee may impose, if any. Upon any such
delegation all references in the Plan to the "Committee", other than in Section
7, shall be deemed to include the Chief Executive Officer; provided, however,
that such delegation shall not limit the Chief Executive Officer's right to
receive Awards under the Plan. Notwithstanding the foregoing, the Chief
Executive Officer may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer subject to Rule
16b-3 or who is a member of the Board. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to a Participant; (iii) determine the number of Units to be
covered by Awards; (iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances Awards may be
settled, exercised, canceled, or forfeited; (vi) interpret and administer the
Plan and any instrument or agreement relating to an Award made under the Plan;
(vii) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (viii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Award.

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         SECTION 4. Units.

         (a) Limits on Units Deliverable. Subject to adjustment as provided in
Section 4(c), the number of Units with respect to which Awards may be granted
under the Plan is __________. However, there shall not be any limitation on the
number of Awards that may be granted and paid in cash. If any Award is forfeited
or otherwise terminates or is canceled without the delivery of Units, then the
Units covered by such Award, to the extent of such forfeiture, termination, or
cancellation, shall again be Units with respect to which Awards may be granted.

         (b) Sources of Units Deliverable Under Awards. Any Units delivered
pursuant to an Award shall consist, in whole or in part, of Units acquired in
the open market, from any Affiliate, the Partnership or any other Person, or any
combination of the foregoing.

         (c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Units (or other securities or property) with
respect to which Awards may be granted, (ii) the number and type of Units (or
other securities or property) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided,
that the number of Units subject to any Award shall always be a whole number.

         SECTION 5. Eligibility.

         Any Employee, Consultant or Director shall be eligible to be designated
a Participant and receive an Award under the Plan.

         SECTION 6. Awards.

         (a) Options. The Committee shall have the authority to determine the
Employees, Consultants and Directors to whom Options shall be granted, the
number of Units to be covered by each Option, the purchase price therefor and
the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with the
provisions of the Plan.

                  (i) Exercise Price. The purchase price per Unit purchasable
         under an Option shall be determined by the Committee at the time the
         Option is granted and may be equal to, more than or less than its Fair
         Market Value as of the date of grant.

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                  (ii) Time and Method of Exercise. The Committee shall
         determine the Restricted Period, i.e., the time or times at which an
         Option may be exercised in whole or in part, which may include, without
         limitation, accelerated vesting upon the achievement of specified
         performance goals, and the method or methods by which payment of the
         exercise price with respect thereto may be made or deemed to have been
         made, which may include, without limitation, cash, check acceptable to
         the Company, a "cashless-broker" exercise through procedures approved
         by the Company, other securities or other property, or any combination
         thereof, having a Fair Market Value on the exercise date equal to the
         relevant exercise price.

                  (iii) Forfeiture. Except as otherwise provided in the terms of
         the Option grant, upon termination of a Participant's employment with
         or consulting services to the Company and its Affiliates or membership
         on the Board, whichever is applicable, for any reason during the
         applicable Restricted Period, all Options shall be forfeited by the
         Participant unless otherwise provided in a written employment agreement
         between the Participant and the Company or its affiliates. The
         Committee may, in its discretion, waive in whole or in part such
         forfeiture with respect to a Participant's Options.

         (b) Restricted Units and Phantom Units. The Committee shall have the
authority to determine the Employees, Consultants and Directors to whom
Restricted Units or Phantom Units shall be granted, the number of Restricted
Units or Phantom Units to be granted to each such Participant, the duration of
the Restricted Period, the conditions under which the Restricted Units or
Phantom Units may become vested or forfeited, which may include, without
limitation, the accelerated vesting upon the achievement of specified
performance goals, and such other terms and conditions as the Committee may
establish with respect to such Awards, including whether DERs are granted with
respect to the Phantom Units.

                  (i) DERs. To the extent provided by the Committee, in its
         discretion, a grant of Phantom Units may include a tandem DER grant,
         which may provide that such DERs shall be paid directly to the
         Participant, be credited to a bookkeeping account (with or without
         interest in the discretion of the Committee) subject to the same
         vesting restrictions as the tandem Phantom Unit Award, or be subject to
         such other provisions or restrictions as determined by the Committee in
         its discretion.

                  (ii) UDRs. To the extent provided by the Committee, in its
         discretion, a grant of Restricted Units may provide that distributions
         made by the Partnership with respect to the Restricted Units shall be
         subject to the same forfeiture and other restrictions as the Restricted
         Unit and, if restricted, such distributions shall be held, without
         interest, until the Restricted Unit vests or is forfeited with the UDR
         being paid or forfeited at the same time, as the case may be. Absent
         such a restriction on the UDRs in the grant agreement, UDRs shall be
         paid to the holder of the Restricted Unit without restriction.

                  (iii) Forfeitures. Except as otherwise provided in the terms
         of the Restricted Units or Phantom Units grant, upon termination of a
         Participant's employment with the Company and its Affiliates or
         membership on the Board, whichever is applicable, for any reason during
         the applicable Restricted Period, all outstanding Restricted Units and
         Phantom Units awarded the Participant shall be automatically forfeited
         on such

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         termination unless otherwise provided in a written employment agreement
         between the Participant and the Company or its Affiliates. The
         Committee may, in its discretion, waive in whole or in part such
         forfeiture with respect to a Participant's Restricted Units and/or
         Phantom Units.

                  (iv) Lapse of Restrictions.

                           (A) Phantom Units. Unless a different payment time is
                  specified in the Award agreement, upon or as soon as
                  reasonably practical following the vesting of each Phantom
                  Unit, subject to the provisions of Section 8(b), the
                  Participant shall be entitled to receive from the Company one
                  Unit or cash equal to the Fair Market Value of a Unit, as
                  determined by the Committee in its discretion.

                           (B) Restricted Units. Upon or as soon as reasonably
                  practical following the vesting of each Restricted Unit,
                  subject to the provisions of Section 8(b), the Participant
                  shall be entitled to have the restrictions removed from his or
                  her Unit certificate so that the Participant then holds an
                  unrestricted Unit.

         (c) Unit Appreciation Rights. The Committee shall have the authority to
determine the Employees, Consultants and Directors to whom Unit Appreciation
Rights shall be granted, the number of Units to be covered by each grant, the
exercise price therefor and the conditions and limitations applicable to the
exercise of the Unit Appreciation Right, including the following terms and
conditions and such additional terms and conditions, as the Committee shall
determine, that are not inconsistent with the provisions of the Plan.

                  (i) Exercise Price. The exercise price per Unit Appreciation
         Right shall be determined by the Committee at the time the Unit
         Appreciation Right is granted and may be more or less than its Fair
         Market Value as of the date of grant.

                  (ii) Time of Exercise. The Committee shall determine the
         Restricted Period, i.e., the time or times at which a Unit Appreciation
         Right may be exercised in whole or in part, which may include, without
         limitation, accelerated vesting upon the achievement of specified
         performance goals.

                  (iii) Forfeitures. Except as otherwise provided in the terms
         of the Unit Appreciation Right grant, upon termination of a
         Participant's employment with or services to the Company and its
         Affiliates or membership on the Board, whichever is applicable, for any
         reason during the applicable Restricted Period, all outstanding Unit
         Appreciation Rights awarded the Participant shall be automatically
         forfeited on such termination. The Committee may, in its discretion,
         waive in whole or in part such forfeiture with respect to a
         Participant's Unit Appreciation Rights.

         (d) General.

                  (i) Awards May Be Granted Separately or Together. Awards may,
         in the discretion of the Committee, be granted either alone or in
         addition to, in tandem with, or in substitution for any other Award
         granted under the Plan or any award granted under any other plan of the
         Company or any Affiliate. Awards granted in addition to or in

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         tandem with other Awards or awards granted under any other plan of the
         Company or any Affiliate may be granted either at the same time as or
         at a different time from the grant of such other Awards or awards.

                  (ii) Limits on Transfer of Awards.

                           (A) Except as provided in (C) below or as provided in
                  the Award Agreement, each Option and Unit Appreciation Right
                  shall be exercisable only by the Participant during the
                  Participant's lifetime, or by the person to whom the
                  Participant's rights shall pass by will or the laws of descent
                  and distribution.

                           (B) Except as provided in (C) below, no Award and no
                  right under any such Award may be assigned, alienated,
                  pledged, attached, sold or otherwise transferred or encumbered
                  by a Participant and any such purported assignment,
                  alienation, pledge, attachment, sale, transfer or encumbrance
                  shall be void and unenforceable against the Company, the
                  Partnership or any Affiliate.

                           (C) To the extent specifically provided by the
                  Committee with respect to an Option or Unit Appreciation Right
                  grant, an Option or Unit Appreciation Right may be transferred
                  by a Participant without consideration to immediate family
                  members or related family trusts, limited partnerships or
                  similar entities or on such terms and conditions as the
                  Committee may from time to time establish.

                  (iii) Term of Awards. The term of each Award shall be for such
         period as may be determined by the Committee.

                  (iv) Unit Certificates. All certificates for Units or other
         securities of the Partnership delivered under the Plan pursuant to any
         Award or the exercise thereof shall be subject to such stop transfer
         orders and other restrictions as the Committee may deem advisable under
         the Plan or the rules, regulations, and other requirements of the SEC,
         any stock exchange upon which such Units or other securities are then
         listed, and any applicable federal or state laws, and the Committee may
         cause a legend or legends to be put on any such certificates to make
         appropriate reference to such restrictions.

                  (v) Consideration for Grants. Awards may be granted for such
         consideration, including services, as the Committee determines.

                  (vi) Delivery of Units or other Securities and Payment by
         Participant of Consideration. Notwithstanding anything in the Plan or
         any grant agreement to the contrary, delivery of Units pursuant to the
         exercise or vesting of an Award may be deferred for any period during
         which, in the good faith determination of the Committee, the Company is
         not reasonably able to obtain Units to deliver pursuant to such Award
         without violating the rules or regulations of any applicable law or
         securities exchange. No Units or other securities shall be delivered
         pursuant to any Award until payment in full of any amount required to
         be paid pursuant to the Plan or the applicable Award grant agreement
         (including, without limitation, any exercise price or tax withholding)
         is received by the Company. Such payment may be made by such method or
         methods and in such form or forms as the Committee shall determine,
         including, without limitation,

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<PAGE>

         cash, other Awards, withholding of Units, cashless broker exercises
         with simultaneous sale, or any combination thereof; provided, however,
         that the combined value, as determined by the Committee, of all cash
         and cash equivalents and the Fair Market Value of any such Units or
         other property so tendered to the Company, as of the date of such
         tender, is at least equal to the full amount required to be paid to the
         Company pursuant to the Plan or the applicable Award agreement.

                  (vii) Change in Control. Unless specifically provided
         otherwise in the Award agreement, upon a Change of Control all
         outstanding Awards shall automatically vest and be payable or become
         exercisable in full, as the case may be. In this regard, all Restricted
         Periods shall terminate and all performance criteria, if any, shall be
         deemed to have been achieved at the maximum level.

         SECTION 7. Amendment and Termination.

         Except to the extent prohibited by applicable law:

                  (a) Amendments to the Plan. Except as required by the rules of
         the principal securities exchange on which the Units are traded and
         subject to Section 7(b) below, the Board or the Committee may amend,
         alter, suspend, discontinue, or terminate the Plan in any manner,
         including increasing the number of Units available for Awards under the
         Plan, without the consent of any partner, Participant, other holder or
         beneficiary of an Award, or other Person.

                  (b) Amendments to Awards. Subject to Section 7(a), the
         Committee may waive any conditions or rights under, amend any terms of,
         or alter any Award theretofore granted, provided no change, other than
         pursuant to Section 7(c), in any Award shall materially reduce the
         benefit to Participant without the consent of such Participant.

                  (c) Adjustment of Awards Upon the Occurrence of Certain
         Unusual or Nonrecurring Events. The Committee is hereby authorized to
         make adjustments in the terms and conditions of, and the criteria
         included in, Awards in recognition of unusual or nonrecurring events
         (including, without limitation, the events described in Section 4(c) of
         the Plan) affecting the Partnership or the financial statements of the
         Partnership, or of changes in applicable laws, regulations, or
         accounting principles, whenever the Committee determines that such
         adjustments are appropriate in order to prevent dilution or enlargement
         of the benefits or potential benefits intended to be made available
         under the Plan or such Award.

         SECTION 8. General Provisions.

         (a) No Rights to Award. No Person shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of treatment
of Participants. The terms and conditions of Awards need not be the same with
respect to each recipient.

         (b) Tax Withholding. The Company or any Affiliate is authorized to
withhold from any Award, from any payment due or transfer made under any Award
or from any compensation or other amount owing to a Participant the amount (in
cash, Units, other securities, Units that

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<PAGE>

would otherwise be issued pursuant to such Award or other property) of any
applicable taxes payable in respect of the grant of an Award, its exercise, the
lapse of restrictions thereon, or any payment or transfer under an Award or
under the Plan and to take such other action as may be necessary in the opinion
of the Company to satisfy its withholding obligations for the payment of such
taxes.

         (c) No Right to Employment or Services. The grant of an Award shall not
be construed as giving a Participant the right to be retained in the employ of
the Company or any Affiliate, to continue as a Consultant, or to remain on the
Board, as applicable. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment or terminate a consulting relationship,
free from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan, any Award agreement or other agreement.

         (d) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of [DELAWARE] without regard to its
conflict of laws principles.

         (e) Severability. If any provision of the Plan or any award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, person or award and the remainder of the Plan
and any such Award shall remain in full force and effect.

         (f) Other Laws. The Committee may refuse to issue or transfer any Units
or other consideration under an Award if, in its sole discretion, it determines
that the issuance or transfer of such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Partnership or an
Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.

         (g) No Trust or Fund Created. Neither the Plan nor any award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any participating Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any participating Affiliate pursuant to
an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.

         (h) No Fractional Units. No fractional Units shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Units or whether such fractional Units or any rights
thereto shall be canceled, terminated, or otherwise eliminated.

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<PAGE>

         (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

         (j) Facility Payment. Any amounts payable hereunder to any person under
legal disability or who, in the judgment of the Committee, is unable to properly
manage his financial affairs, may be paid to the legal representative of such
person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company and its Affiliates shall be relieved of
any further liability for payment of such amounts.

         (k) Participation by Affiliates. In making Awards to Consultants and
Employees employed by an entity other than by the Company, the Committee shall
be acting on behalf of the Affiliate, and to the extent the Partnership has an
obligation to reimburse the Company for compensation paid to Consultants and
Employees for services rendered for the benefit of the Partnership, such
payments or reimbursement payments may be made by the Partnership directly to
the Affiliate, and, if made to the Company, shall be received by the Company as
agent for the Affiliate.

         (l) Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.

         SECTION 9. Term of the Plan.

         The Plan shall be effective on the date of its approval by the Board
and shall continue until the earlier of the date terminated by the Board, the
date Units are no longer available for the payment of Awards under the Plan.
However, unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award granted prior to such termination, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date.

                                      -10-<PAGE>
                                                               V&E Draft 4/22/04

                                                                    EXHIBIT 10.4

================================================================================

                                OMNIBUS AGREEMENT

                                      among

                                HOLLY CORPORATION

                            NAVAJO PIPELINE CO., L.P.

                         HOLLY LOGISTIC SERVICES, L.L.C.

                          HEP LOGISTICS HOLDINGS, L.P.

                           HOLLY ENERGY PARTNERS, L.P.

                            HEP LOGISTICS GP, L.L.C.

                                       and

                           HEP OPERATING COMPANY, L.P.

================================================================================

<PAGE>

                                OMNIBUS AGREEMENT

         THIS OMNIBUS AGREEMENT ("Agreement") is entered into on, and effective
as of, the Closing Date (as defined herein) among Holly Corporation, a Delaware
corporation ("Holly"), Navajo Pipeline Co., L.P., a Delaware limited partnership
("Navajo Pipeline"), Holly Logistic Services, L.L.C., a Delaware limited
liability company ("Holly GP"), HEP Logistics Holdings, L.P., a Delaware limited
partnership (the "General Partner"), Holly Energy Partners, L.P., a Delaware
limited partnership (the "Partnership"), HEP Logistics GP, L.L.C., a Delaware
limited liability company ("Holly GP LLC"), and Holly Operating Company, L.P., a
Delaware limited partnership (the "Operating Partnership"). The above-named
entities are sometimes referred to in this Agreement each as a "Party" and
collectively as the "Parties."

                                    RECITALS:

         1. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article II, with respect to
those business opportunities that the Holly Entities (as defined herein) will
not engage in during the term of this Agreement unless the Partnership has
declined to engage in any such business opportunity for its own account.

         2. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article III, with respect to
certain indemnification obligations of the Parties to each other.

         3. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article IV, with respect to the
amount to be paid by the Partnership for the general and administrative services
to be performed by the General Partner and its Affiliates (as defined herein)
for and on behalf of the Partnership Group (as defined herein).

         4. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article V, with respect to the
Partnership Group's option to purchase the Option Assets (as defined herein).

         5. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VI, with respect to
Holly's right of first refusal relating to the Assets (as defined herein).

         In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:

<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

                  1.1 DEFINITIONS.

                           (a) As used in this Agreement, the following terms
         shall have the respective meanings set forth below:

                  "Acquisition Proposal" is defined in Section 6.2(a).

                  "Administrative Fee" is defined in Section 4.1(a).

                  "Affiliate" is defined in the Partnership Agreement.

                  "Assets" means all assets conveyed, contributed, or otherwise
         transferred by the Holly Entities to the Partnership Group prior to or
         on the Closing Date and any assets acquired by the Partnership Group
         pursuant to the exercise of the purchase option granted under Article
         V.

                  "Change of Control" means, with respect to any Person (the
         "Applicable Person"), any of the following events: (a) any sale, lease,
         exchange, or other transfer (in one transaction or a series of related
         transactions) of all or substantially all of the Applicable Person's
         assets to any other Person unless immediately following such sale,
         lease, exchange, or other transfer such assets are owned, directly or
         indirectly, by the Applicable Person; (b) the consolidation or merger
         of the Applicable Person with or into another Person pursuant to a
         transaction in which the outstanding Voting Securities of the
         Applicable Person are changed into or exchanged for cash, securities,
         or other property, other than any such transaction where (i) the
         outstanding Voting Securities of the Applicable Person are changed into
         or exchanged for Voting Securities of the surviving Person or its
         parent and (ii) the holders of the Voting Securities of the Applicable
         Person immediately prior to such transaction own, directly or
         indirectly, not less than a majority of the Voting Securities of the
         surviving Person or its parent immediately after such transaction; and
         (c) a "person" or "group" (within the meaning of Sections 13(d) or
         14(d)(2) of the Exchange Act) (in the case of Holly, other than a group
         consisting of some of all of the current control persons of Holly),
         being or becoming the "beneficial owner" (as defined in Rules 13d-3 and
         13d-5 under the Exchange Act) of more than 50% of all of the then
         outstanding Voting Securities of the Applicable Person, except in a
         merger or consolidation that would not constitute a Change of Control
         under clause (b) above.

                  "Closing Date" means the date of the closing of the
         Partnership's initial public offering of Common Units.

                  "Common Units" is defined in the Partnership Agreement.

                  "Conflicts Committee" is defined in the Partnership Agreement.

                                      -2-
<PAGE>

                  "Contribution Agreement" means that certain Contribution,
         Conveyance and Assumption Agreement, dated as of the Closing Date,
         among Holly, Navajo Pipeline, Holly GP, the General Partner, the
         Partnership, Holly GP LLC, the Operating Partnership and certain other
         parties, together with the additional conveyance documents and
         instruments contemplated or referenced thereunder.

                  "control" means the possession, directly or indirectly, of the
         power to direct or cause the direction of the management and policies
         of a Person, whether through ownership of voting securities, by
         contract, or otherwise.

                  "Covered Environmental Losses" is defined in Section 3.1.

                  "Disposition Notice" is defined in Section 6.2(a).

                  "Environmental Laws" means all federal, state, and local laws,
         statutes, rules, regulations, orders, and ordinances, now or hereafter
         in effect, relating to protection of the environment including, without
         limitation, the federal Comprehensive Environmental Response,
         Compensation, and Liability Act, the Superfund Amendments
         Reauthorization Act, the Resource Conservation and Recovery Act, the
         Clean Air Act, the Federal Water Pollution Control Act, the Toxic
         Substances Control Act, the Oil Pollution Act, the Safe Drinking Water
         Act, the Hazardous Materials Transportation Act, and other
         environmental conservation and protection laws, each as amended from
         time to time.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended.

                  "First ROFR Acceptance Deadline" is defined in Section 6.2(a).

                  "General Partner" is defined in the introduction to this
         Agreement.

                  "Hazardous Substance" means (a) any substance that is
         designated, defined, or classified as a hazardous waste, hazardous
         material, pollutant, contaminant, or toxic or hazardous substance, or
         that is otherwise regulated under any Environmental Law, including,
         without limitation, any hazardous substance as defined under the
         Comprehensive Environmental Response, Compensation, and Liability Act,
         and (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil,
         waste oil, diesel fuel, jet fuel, and other refined petroleum
         hydrocarbons.

                  "Holly Entities" means Holly and any Person controlled,
         directly or indirectly, by Holly other than the Partnership Group or
         the General Partner; and "Holly Entity" means any of the Holly
         Entities.

                  "Indemnified Party" means the Partnership Entities or the
         Holly Entities, as the case may be, in its capacity as the party
         entitled to indemnification in accordance with Article III.

                  "Indemnifying Party" means either the Partnership Entities or
         Holly, as the case may be, in its capacity as the party from whom
         indemnification may be sought in accordance with Article III.

                                      -3-
<PAGE>

                  "Intermediate Pipelines" means the 8-inch pipeline running
         from Lovington, New Mexico to Artesia, New Mexico and the 10-inch
         pipeline running from Lovington, New Mexico to Artesia, New Mexico,
         each owned by Navajo Pipeline.

                  "Limited Partner" is defined in the Partnership Agreement.

                  "Offer" is defined in Section 2.3(a).

                  "Offer Price" is defined in Section 6.2(a).

                  "Option Asset Owner" means, with respect to an Option Asset,
         the applicable Holly Entity set forth opposite such Option Asset on
         Schedule I to this Agreement.

                  "Option Assets" means the assets listed on Schedule I to this
         Agreement.

                  "Partnership Agreement" means the First Amended and Restated
         Agreement of Limited Partnership of Holly Energy Partners, L.P., dated
         as of the Closing Date, as such agreement is in effect on the Closing
         Date, to which reference is hereby made for all purposes of this
         Agreement. No amendment or modification to the Partnership Agreement
         subsequent to the Closing Date shall be given effect for the purposes
         of this Agreement unless consented to by each of the Parties to this
         Agreement.

                  "Partnership Entities" means Holly GP, the General Partner and
         each member of the Partnership Group.

                  "Partnership Entity" means any of the Partnership Entities.

                  "Partnership Group" means the Partnership, Holly GP LLC, the
         Operating Partnership and any Subsidiary of any such Person, treated as
         a single consolidated entity.

                  "Partnership Group Member" means any member of the Partnership
         Group.

                  "Party" and "Parties" are defined in the introduction to this
         Agreement.

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

                  "Proposed Transferee" is defined in Section 6.2(a).

                  "Prudent Industry Practice" means such practices, methods,
         acts, techniques, and standards as are in effect at the time in
         question that are consistent with (a) the standards generally followed
         by the United States pipeline and terminalling industries or (b) such
         higher standards as may be applied or followed by the Holly Entities in
         the performance of similar tasks or projects, or by the Partnership
         Entities in the performance of similar tasks or projects.

                                      -4-
<PAGE>

                  "Restricted Businesses" is defined in Section 2.1.

                  "Retained Assets" means the pipelines, terminals and other
         assets and investments owned by any of the Holly Entities that were not
         conveyed, contributed or otherwise transferred to the Partnership Group
         pursuant to the Contribution Agreement and other documents relating to
         the transactions referred to in the Contribution Agreement, including,
         without limitation, the Intermediate Pipelines.

                  "ROFR Acceptance Deadline" means the First ROFR Acceptance
         Deadline or the Second ROFR Acceptance Deadline, as applicable.

                  "Sale Assets" is defined in Section 6.2(a).

                  "Second ROFR Acceptance Deadline" is defined in Section
         6.2(a).

                  "Subject Assets" is defined in Section 2.2(d).

                  "Subsidiary" means, with respect to any Person, (a) a
         corporation of which more than 50% of the voting power of shares
         entitled (without regard to the occurrence of any contingency) to vote
         in the election of directors or other governing body of such
         corporation is owned, directly or indirectly, at the date of
         determination, by such Person, by one or more Subsidiaries of such
         Person or a combination thereof, (b) a partnership (whether general or
         limited) in which such Person or a Subsidiary of such Person is, at the
         date of determination, a general or limited partner of such
         partnership, but only if more than 50% of the partnership interests of
         such partnership (considering all of the partnership interests of the
         partnership as a single class) is owned, directly or indirectly, at the
         date of determination, by such Person, by one or more Subsidiaries of
         such Person, or a combination thereof, or (c) any other Person (other
         than a corporation or a partnership) in which such Person, one or more
         Subsidiaries of such Person, or a combination thereof, directly or
         indirectly, at the date of determination, has (i) at least a majority
         ownership interest or (ii) the power to elect or direct the election of
         a majority of the directors or other governing body of such Person.

                  "Toxic Tort" means a claim or cause of action arising from
         personal injury or property damage incurred by the plaintiff that is
         alleged to have been caused by exposure to, or contamination by,
         Hazardous Substances that have been released into the environment by or
         as a result of the actions or omissions of the defendant.

                  "Transfer" including the correlative terms "Transferring" or
         "Transferred" means any direct or indirect transfer, assignment, sale,
         gift, pledge, hypothecation or other encumbrance, or any other
         disposition (whether voluntary, involuntary or by operation of law) of
         the Assets.

                  "Units" is defined in the Partnership Agreement.

                  "Voting Securities" means securities of any class of a Person
         entitling the holders thereof to vote on a regular basis in the
         election of members of the board of directors or other governing body
         of such Person.

                                      -5-
<PAGE>

                                   ARTICLE II
                             BUSINESS OPPORTUNITIES

         2.1 RESTRICTED BUSINESSES. For so long as (i) Holly GP (or any
Affiliate of the Holly Entities) is the general partner of the General Partner
and (ii) the General Partner (or any Affiliate of the Holly Entities) is the
general partner of the Partnership, and except as permitted by Section 2.2, each
of the Holly Entities shall be prohibited from engaging in or acquiring or
investing in any business having assets engaged in the following businesses (the
"Restricted Businesses"): the ownership and/or operation of crude oil pipelines
or terminals, intermediate product pipelines or terminals, refined products
pipelines or terminals, truck racks or crude oil gathering systems in the
continental United States.

         2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1
to the contrary, the Holly Entities may engage in the following activities under
the following circumstances:

                  (a) the ownership and/or operation of any of the Retained
     Assets (including replacements of the Retained Assets);

                  (b) the ownership and/or operation of any crude oil pipeline
     or gathering system, acquired or constructed by a Holly Entity that is
     physically inter-connected to a Holly Entity's refinery by its assets;

                  (c) any Restricted Business conducted by a Holly Entity with
     the approval of the Conflicts Committee;

                  (d) the ownership and/or operation of any asset or group of
     related assets used in the activities described in Section 2.1 that are
     acquired or constructed by a Holly Entity after the date of this Agreement
     (the "Subject Assets") if, in the case of an acquisition, the fair market
     value of the Subject Assets (as determined in good faith by the Board of
     Directors of Holly), or, in the case of construction, the construction cost
     of the Subject Assets, is less than $5 million at the time of such
     acquisition by the Holly Entity or completion of construction, as the case
     may be;

                  (e) the ownership and/or operation of any Subject Assets
     acquired by a Holly Entity with a fair market value (as determined in good
     faith by the Board of Directors of Holly) greater than $5 million at the
     time of the acquisition; provided, the Partnership has been offered the
     opportunity to purchase the Subject Assets in accordance with Section 2.3
     and the Partnership (with the concurrence of the Conflicts Committee) has
     elected not to purchase the Subject Assets; and

                  (f) the ownership and/or operation of any Subject Assets
     constructed by a Holly Entity with a construction cost greater than $5
     million at the time of completion of construction that the Partnership has
     been offered the opportunity to purchase in accordance with Section 2.3 and
     the Partnership (with the concurrence of the Conflicts Committee) has
     elected not to purchase.

                                      -6-
<PAGE>

         2.3 PROCEDURES.

                  (a) If a Holly Entity acquires or constructs Subject Assets
     described in Section 2.2(e) or (f), then not later than six months after
     the consummation of the acquisition or the completion of construction by
     such Holly Entity of the Subject Assets, as the case may be, the Holly
     Entity shall notify the General Partner in writing of such acquisition or
     construction and offer the Partnership Group the opportunity to purchase
     such Subject Assets in accordance with this Section 2.3 (the "Offer"). The
     Offer shall set forth the terms relating to the purchase of the Subject
     Assets and, if any Holly Entity desires to utilize the Subject Assets, the
     Offer will also include the commercially reasonable terms on which the
     Partnership Group will provide services to the Holly Entity to enable the
     Holly Entity to utilize the Subject Assets. As soon as practicable, but in
     any event within 60 days after receipt of such written notification, the
     General Partner shall notify the Holly Entity in writing that either (i)
     the General Partner has elected, with the approval of the Conflicts
     Committee, not to cause a Partnership Group Member to purchase the Subject
     Assets, in which event the Holly Entity shall be forever free to continue
     to own or operate such Subject Assets, or (ii) the General Partner has
     elected to cause a Partnership Group Member to purchase the Subject Assets,
     in which event the procedures outlined in this Section 2.3 shall apply.

                  (b) If the Holly Entity and the General Partner (with the
     concurrence of the Conflicts Committee) within 60 days after receipt by the
     General Partner of the Offer are able to agree on the fair market value of
     the Subject Assets that are subject to the Offer and the other terms of the
     Offer including, without limitation, the terms, if any, on which the
     Partnership Group will provide services to the Holly Entity to enable the
     Holly Entity to utilize the Subject Assets, a Partnership Group Member
     shall purchase the Subject Assets for the agreed upon fair market value as
     soon as commercially practicable after such agreement has been reached and,
     if applicable, enter into an agreement with the Holly Entity to provide
     services in a manner consistent with the Offer. The purchase agreement for
     the Subject Assets will provide for the purchase price to be paid, at the
     option of the Holly Entity, in cash, Units, or an interest-bearing
     promissory note (the interest rate and other terms of which shall be
     mutually agreed upon by the Holly Entity and the General Partner).

                  (c) If the Holly Entity and the General Partner are unable to
     agree within 60 days after receipt by the General Partner of the Offer on
     the fair market value of the Subject Assets that are subject to the Offer
     or the other terms of the Offer including, if applicable, the terms on
     which the Partnership Group will provide services to the Holly Entity to
     enable the Holly Entity to utilize the Subject Assets, the Holly Entity and
     the General Partner will engage a mutually agreed upon investment banking
     firm to determine the fair market value of the Subject Assets and/or the
     other terms on which the Partnership Group and the Holly Entity are unable
     to agree. Such investment banking firm will determine the fair market value
     of the Subject Assets and/or the other terms on which the Partnership Group
     and the Holly Entity are unable to agree within 30 days of its engagement
     and furnish the Holly Entity and the General Partner its determination. The
     fees of the investment banking firm will be split equally between the Holly
     Entity and the Partnership Group. Once the investment banking firm has
     submitted

                                      -7-
<PAGE>

     its determination of the fair market value of the Subject Assets and/or the
     other terms on which the Partnership Group and the Holly Entity are unable
     to agree, the General Partner will have the right, but not the obligation,
     subject to the approval of the Conflicts Committee, to cause a Partnership
     Group Member to purchase the Subject Assets pursuant to the Offer as
     modified by the determination of the investment banking firm. The
     Partnership Group will provide written notice of its decision to the Holly
     Entity within 15 days after the investment banking firm has submitted its
     determination. Failure to provide such notice within such 15-day period
     shall be deemed to constitute a decision not to purchase the Subject
     Assets. If the General Partner elects to cause a Partnership Group Member
     to purchase the Subject Assets, then the Partnership Group Member shall
     purchase the Subject Assets pursuant to the Offer as modified by the
     determination of the investment banking firm as soon as commercially
     practicable after such determination and, if applicable, enter into an
     agreement with the Holly Entity to provide services in a manner consistent
     with the Offer, as modified by the determination of the investment banking
     firm, if applicable. The purchase agreement for the Subject Assets will
     provide for the purchase price to be paid, at the option of the Holly
     Entity, in cash, Units, or an interest-bearing promissory note (the
     interest rate and other terms of which shall be mutually agreed upon by the
     Holly Entity and the General Partner).

         2.4 SCOPE OF PROHIBITION. Except as provided in this Article II and the
Partnership Agreement, each Holly Entity shall be free to engage in any business
activity, including those that may be in direct competition with any Partnership
Group Member.

         2.5 ENFORCEMENT. The Holly Entities agree and acknowledge that the
Partnership Group does not have an adequate remedy at law for the breach by the
Holly Entities of the covenants and agreements set forth in this Article II, and
that any breach by the Holly Entities of the covenants and agreements set forth
in this Article II would result in irreparable injury to the Partnership Group.
The Holly Entities further agree and acknowledge that any Partnership Group
Member may, in addition to the other remedies which may be available to the
Partnership Group, file a suit in equity to enjoin the Holly Entities from such
breach, and consent to the issuance of injunctive relief under this Agreement.

                                   ARTICLE III
                                 INDEMNIFICATION

         3.1 ENVIRONMENTAL INDEMNIFICATION.

                  (a) Subject to Section 3.2, Holly shall indemnify, defend and
     hold harmless the Partnership Group for a period of 10 years after the
     Closing Date from and against environmental and Toxic Tort losses
     (including, without limitation, economic losses, diminution in value
     suffered by third parties, and lost profits), damages, injuries (including,
     without limitation, personal injury and death), liabilities, claims,
     demands, causes of action, judgments, settlements, fines, penalties, costs,
     and expenses (including, without limitation, court costs and reasonable
     attorney's and expert's fees) of any and every kind or character, known or
     unknown, fixed or contingent, suffered or incurred by the Partnership Group
     or any third party by reason of or arising out of:

                                      -8-
<PAGE>

                           (i) any violation or correction of violation of
     Environmental Laws, or

                           (ii) any event or condition associated with ownership
     or operation of the Assets (including, without limitation, the presence of
     Hazardous Substances on, under, about or migrating to or from the Assets or
     the disposal or release of Hazardous Substances generated by operation of
     the Assets at non-Asset locations) including, without limitation, (A) the
     cost and expense of any investigation, assessment, evaluation, monitoring,
     containment, cleanup, repair, restoration, remediation, or other corrective
     action required or necessary under Environmental Laws, (B) the cost or
     expense of the preparation and implementation of any closure, remedial,
     corrective action, or other plans required or necessary under Environmental
     Laws, and (C) the cost and expense for any environmental or Toxic Tort
     pre-trial, trial, or appellate legal or litigation support work;

     but only to the extent that such violation complained of under Section
     3.1(a)(i) or such events or conditions included under Section 3.1(a)(ii)
     occurred before the Closing Date (collectively, "Covered Environmental
     Losses").

                  (b) The Partnership Group shall indemnify, defend and hold
     harmless the Holly Entities from and against environmental and Toxic Tort
     losses (including, without limitation, economic losses, diminution in value
     suffered by third parties, and lost profits), damages, injuries (including,
     without limitation, personal injury and death), liabilities, claims,
     demands, causes of action, judgments, settlements, fines, penalties, costs,
     and expenses (including, without limitation, court costs and reasonable
     attorney's and expert's fees) of any and every kind or character, known or
     unknown, fixed or contingent, suffered or incurred by the Holly Entities or
     any third party by reason of or arising out of:

                           (i) any violation or correction of violation of
     Environmental Laws, or

                           (ii) any event or condition associated with ownership
     or operation of the Assets (including, but not limited to, the presence of
     Hazardous Substances on, under, about or migrating to or from the Assets or
     the disposal or release of Hazardous Substances generated by operation of
     the Assets at non-Asset locations) including, without limitation, (A) the
     cost and expense of any investigation, assessment, evaluation, monitoring,
     containment, cleanup, repair, restoration, remediation, or other corrective
     action required or necessary under Environmental Laws, (B) the cost or
     expense of the preparation and implementation of any closure, remedial,
     corrective action, or other plans required or necessary under Environmental
     Laws, and (C) the cost and expense for any environmental or Toxic Tort
     pre-trial, trial, or appellate legal or litigation support work;

     and regardless of whether such violation complained of under Section
     3.1(b)(i) or such events or conditions included under Section 3.1(b)(ii)
     occurred before or after the Closing Date, except to the extent that any of
     the foregoing are Covered Environmental Losses

                                      -9-
<PAGE>

     for which the Partnership Group is entitled to indemnification from Holly
     under this Article III.

         3.2 LIMITATIONS REGARDING ENVIRONMENTAL INDEMNIFICATION. The aggregate
liability of Holly in respect of all Covered Environmental Losses under Section
3.1(a) shall not exceed $15.0 million and Holly will not have any obligation
under Section 3.1(a) until the Covered Environmental Losses of the Partnership
Group exceed $200,000.

         3.3 RIGHT OF WAY INDEMNIFICATION. Holly shall indemnify, defend and
hold harmless the Partnership Group from and against any losses, damages,
liabilities, claims, demands, causes of action, judgments, settlements, fines,
penalties, costs, and expenses (including, without limitation, court costs and
reasonable attorney's and expert's fees) of any and every kind or character,
known or unknown, fixed or contingent, suffered or incurred by the Partnership
Group by reason of or arising out of (a) the failure of the applicable
Partnership Group Member to be the owner of such valid and indefeasible easement
rights or fee ownership interests in and to the lands on which any crude oil or
refined products pipeline or related pump station, tank farm or equipment
conveyed or contributed to the applicable Partnership Group Member on the
Closing Date is located as of the Closing Date; (b) the failure of the
applicable Partnership Group Member to have the consents, licenses and permits
necessary to allow any such pipeline referred to in clause (a) of this Section
3.3 to cross the roads, waterways, railroads and other areas upon which any such
pipeline is located as of the Closing Date; and (c) the cost of curing any
condition set forth in clause (a) or (b) above that does not allow any Asset to
be operated in accordance with Prudent Industry Practice, to the extent that
Holly is notified in writing of any of the foregoing within 10 years after the
Closing Date.

         3.4 ADDITIONAL INDEMNIFICATION.

                  (a) In addition to and not in limitation of the
     indemnification provided under Sections 3.1(a) and 3.3, Holly shall
     indemnify, defend, and hold harmless the Partnership Group from and against
     any losses, damages, liabilities, claims, demands, causes of action,
     judgments, settlements, fines, penalties, costs, and expenses (including,
     without limitation, court costs and reasonable attorney's and expert's
     fees) of any and every kind or character, known or unknown, fixed or
     contingent, suffered or incurred by the Partnership Group by reason of or
     arising out of (i) events and conditions associated with the operation of
     the Assets and occurring before the Closing Date (other than Covered
     Environmental Losses which are provided for under Sections 3.1 and 3.2) to
     the extent that Holly is notified in writing of any of the foregoing within
     five years after the Closing Date, (ii) the currently pending legal actions
     against the Holly Entities set forth on Schedule II attached hereto, (iii)
     the completion of remediation projects at the Partnership's El Paso,
     Albuquerque and Mountain Home terminals, (iv) events and conditions
     associated with the Retained Assets and whether occurring before or after
     the Closing Date, and (iv) all federal, state and local income tax
     liabilities attributable to the operation of the Assets prior to the
     Closing Date, including any such income tax liabilities of the Holly
     Entities that may result from the consummation of the formation
     transactions for the Partnership Group and the General Partner.

                                      -10-
<PAGE>

                  (b) In addition to and not in limitation of the
     indemnification provided under Section 3.1(b) or the Partnership Agreement,
     the Partnership Group shall indemnify, defend, and hold harmless the Holly
     Entities from and against any losses, damages, liabilities, claims,
     demands, causes of action, judgments, settlements, fines, penalties, costs,
     and expenses (including, without limitation, court costs and reasonable
     attorney's and expert's fees) of any and every kind or character, known or
     unknown, fixed or contingent, suffered or incurred by the Holly Entities by
     reason of or arising out of events and conditions associated with the
     operation of the Assets and occurring on or after the Closing Date (other
     than Covered Environmental Losses which are provided for under Section
     3.1), unless such indemnification would not be permitted under the
     Partnership Agreement by reason of one of the provisos contained in Section
     7.7(a) of the Partnership Agreement.

         3.5 INDEMNIFICATION PROCEDURES.

                  (a) The Indemnified Party agrees that promptly after it
     becomes aware of facts giving rise to a claim for indemnification under
     this Article III, it will provide notice thereof in writing to the
     Indemnifying Party, specifying the nature of and specific basis for such
     claim.

                  (b) The Indemnifying Party shall have the right to control all
     aspects of the defense of (and any counterclaims with respect to) any
     claims brought against the Indemnified Party that are covered by the
     indemnification under this Article III, including, without limitation, the
     selection of counsel, determination of whether to appeal any decision of
     any court and the settling of any such matter or any issues relating
     thereto; provided, however, that no such settlement shall be entered into
     without the consent of the Indemnified Party unless it includes a full
     release of the Indemnified Party from such matter or issues, as the case
     may be.

                  (c) The Indemnified Party agrees to cooperate fully with the
     Indemnifying Party, with respect to all aspects of the defense of any
     claims covered by the indemnification under this Article III, including,
     without limitation, the prompt furnishing to the Indemnifying Party of any
     correspondence or other notice relating thereto that the Indemnified Party
     may receive, permitting the name of the Indemnified Party to be utilized in
     connection with such defense, the making available to the Indemnifying
     Party of any files, records or other information of the Indemnified Party
     that the Indemnifying Party considers relevant to such defense and the
     making available to the Indemnifying Party of any employees of the
     Indemnified Party; provided, however, that in connection therewith the
     Indemnifying Party agrees to use reasonable efforts to minimize the impact
     thereof on the operations of the Indemnified Party and further agrees to
     maintain the confidentiality of all files, records, and other information
     furnished by the Indemnified Party pursuant to this Section 3.5. In no
     event shall the obligation of the Indemnified Party to cooperate with the
     Indemnifying Party as set forth in the immediately preceding sentence be
     construed as imposing upon the Indemnified Party an obligation to hire and
     pay for counsel in connection with the defense of any claims covered by the
     indemnification set forth in this Article III; provided, however, that the
     Indemnified Party may, at its own option, cost and expense, hire and pay
     for counsel in

                                      -11-
<PAGE>

     connection with any such defense. The Indemnifying Party agrees to keep any
     such counsel hired by the Indemnified Party informed as to the status of
     any such defense, but the Indemnifying Party shall have the right to retain
     sole control over such defense.

                  (d) In determining the amount of any loss, cost, damage or
     expense for which the Indemnified Party is entitled to indemnification
     under this Agreement, the gross amount of the indemnification will be
     reduced by (i) any insurance proceeds realized by the Indemnified Party,
     and such correlative insurance benefit shall be net of any incremental
     insurance premium that becomes due and payable by the Indemnified Party as
     a result of such claim and (ii) all amounts recovered by the Indemnified
     Party under contractual indemnities from third Persons.

                  (e) The date on which notification of a claim for
     indemnification is received by the Indemnifying Party shall determine
     whether such claim is timely made.

                                   ARTICLE IV
                       GENERAL AND ADMINISTRATIVE EXPENSES

         4.1 GENERAL.

                  (a) The Partnership will pay the General Partner an
     administrative fee (the "Administrative Fee") of $2.0 million per year for
     the provision by the General Partner and its Affiliates for the Partnership
     Group's benefit of all the general and administrative services that Holly
     and its Affiliates have traditionally provided in connection with the
     Assets including, without limitation, the general and administrative
     services listed on Schedule III to this Agreement. Holly may increase the
     Administrative Fee on the second and third anniversary date of this
     Agreement by an amount up to the greater of (i) 5.0% or (ii) the Consumer
     Price Index -- All Urban Consumers, U.S. City Average, Not Seasonally
     Adjusted for the applicable year. The General Partner, with the approval
     and consent of its Conflicts Committee, may agree on behalf of the
     Partnership to further increases in the Administrative Fee in connection
     with expansions of the operations of the Partnership Group through the
     acquisition or construction of new assets or businesses. After this
     three-year period, the General Partner will determine the amount of general
     and administrative expenses that will be properly allocated to the
     Partnership in accordance with the terms of the Partnership Agreement.

                  (b) At the end of each year, the Partnership will have the
     right to submit to the General Partner a proposal to reduce the amount of
     the Administrative Fee for that year if the Partnership believes, in good
     faith, that the general and administrative services performed by the
     General Partner and its Affiliates for the benefit of the Partnership Group
     for the year in question do not justify payment of the full Administrative
     Fee for that year. If the Partnership submits such a proposal to the
     General Partner, the General Partner agrees that it will negotiate in good
     faith with the Partnership to determine if the Administrative Fee for that
     year should be reduced and, if so, by how much.

                  (c) The Administrative Fee shall not include and the
     Partnership Group shall reimburse the General Partner for:

                                      -12-
<PAGE>

                           (i) salaries of employees of Holly GP, to the extent,
     but only to the extent, such employees perform services for the Partnership
     Group;

                           (ii) the cost of employee benefits relating to
     employees of Holly GP, such as 401(k), pension, and health insurance
     benefits, to the extent, but only to the extent, such employees perform
     services for the Partnership Group; and

                           (iii) all sales, use, excise, value added or similar
     taxes, if any, that may be applicable from time to time in respect of the
     services provided by the General Partner and its Affiliates to Holly
     pursuant to Section 4.1(a).

                                    ARTICLE V
                                PURCHASE OPTIONS

         5.1 OPTION TO PURCHASE CERTAIN ASSETS RETAINED BY HOLLY ENTITIES.

                  (a) Each Option Asset Owner hereby grants to the Partnership
     Group the unconditional right and option for a period of 3 years from the
     Closing Date to purchase for fair market value at the time of purchase all
     of such Option Asset Owner's right title and interest in, to and under the
     Option Asset(s) set forth next to its name on Schedule I.

                  (b) Holly will take all action required to cause the Option
     Asset Owners to comply with the terms of this Article V.

                  (c) The Parties acknowledge that all potential transfers of
     Option Assets pursuant to this Article V are subject to obtaining any and
     all written consents of governmental authorities and other third parties
     and to the terms of all existing agreements in respect of the Option Assets
     including, without limitation, any rights of first refusal of the parties
     to such agreements to purchase the Option Assets.

         5.2 PROCEDURES.

                  (a) If a Partnership Group Member decides to exercise the
     option to purchase an Option Asset, it will provide written notice to the
     applicable Option Asset Owner of such exercise, the fair market value it
     proposes to pay for the Option Asset, and the other terms of the purchase
     including, if requested by a Holly Entity, the terms on which the
     Partnership Group Member will provide services to the Holly Entity to
     enable the Holly Entity to utilize the Option Asset. The decision to
     purchase an Option Asset, the fair market value to be paid for the Option
     Asset, and the other terms of the purchase including, if applicable, the
     terms on which the Partnership Group Member will provide services to the
     Holly Entity to enable the Holly Entity to utilize the Option Asset shall
     be approved by the Conflicts Committee. If the Partnership Group Member and
     the applicable Option Asset Owner are unable to agree on the fair market
     value of the Option Asset or the other terms of the purchase including, if
     applicable, the terms on which the Partnership Group Member will provide
     services to the Holly Entity to enable the Holly Entity to utilize the
     Option Asset, the Partnership Group Member and the applicable Option Asset
     Owner will engage a mutually-agreed-upon investment banking firm to

                                      -13-
<PAGE>

     determine the fair market value of the Option Asset and/or the other terms
     on which the Partnership Group Member and the Holly Entity are unable to
     agree. The fees of the investment banking firm will be split equally
     between the applicable Option Asset Owner and the Partnership Group. Once
     the investment banking firm submits its determination of the fair market
     value of the Option Asset and/or the other terms on which the applicable
     Option Asset Owner and the Partnership Group Member are unable to agree,
     the Partnership Group Member will have the right, but not the obligation,
     to purchase the Option Asset on the terms as modified by the determination
     of the investment banking firm. The Partnership Group Member will provide
     written notice of its decision to the applicable Option Asset Owner within
     15 days after the investment banking firm has submitted its determination.
     Failure to provide such notice within such 15-day period shall be deemed to
     constitute a decision not to purchase the Option Asset.

                  (b) If a Partnership Group Member chooses to exercise its
     option to purchase an Option Asset under Section 5.2(a), this Agreement
     shall become a contract of sale and purchase for the Option Asset pursuant
     to which the applicable Option Asset Owner shall be obligated to sell the
     Option Asset to the Partnership Group Member and the Partnership Group
     Member shall be obligated to purchase the Option Asset from the applicable
     Option Asset Owner and, if applicable, the Partnership Group Member will
     enter into an agreement with the Holly Entity setting forth the terms on
     which the Partnership Group Member will provide services to the Holly
     Entity to enable the Holly Entity to utilize the Option Asset. The terms of
     the purchase and sale agreement will include the following:

                           (i) the Partnership Group Member will deliver a cash
     purchase price (unless the Partnership Group Member and the applicable
     Option Asset Owner agree that the consideration will be paid by means of
     Units or an interest-bearing promissory note);

                           (ii) the Partnership Group will be entitled to the
     benefit of the indemnification contained in Article III of this Agreement
     for the remaining term of such indemnification with respect to events or
     conditions associated with the operation of the Option Asset and occurring
     before the date of acquisition of the Option Asset by the Partnership Group
     Member;

                           (iii) the applicable Option Asset Owner will
     represent that it has good and indefeasible title to the Option Asset,
     subject to all recorded and unrecorded matters and all physical conditions
     and other matters in existence on the closing date for the purchase of the
     applicable Option Asset, plus any other such matters as the Partnership
     Group Member may approve, which approval will not be unreasonably withheld.
     If the Partnership Group Member desires to obtain any title insurance with
     respect to the Option Asset, the full cost and expense of obtaining the
     same (including but not limited to the cost of title examination, document
     duplication and policy premium) shall be borne by the Partnership Group
     Member;

                           (iv) the applicable Option Asset Owner will grant to
     the Partnership Group Member the right, exercisable at the Partnership
     Group Member's risk

                                      -14-
<PAGE>

     and expense, to make such surveys, tests and inspections of the Option
     Asset as the Partnership Group Member may deem desirable, so long as such
     surveys, tests or inspections do not damage the Option Asset or interfere
     with the activities of the applicable Option Asset Owner thereon and so
     long as the Partnership Group Member has furnished the applicable Option
     Asset Owner with evidence that adequate liability insurance is in full
     force and effect;

                           (v) the Partnership Group Member will have the right
     to terminate its obligation to purchase the Option Asset under this Article
     V if the results of any searches, surveys, tests or inspections conducted
     pursuant to Section 5.2(b)(iii) or (iv) above are, in the reasonable
     opinion of the Partnership Group, unsatisfactory;

                           (vi) the closing date for the purchase of the Option
     Asset shall occur no later than 90 days following receipt by Holly of
     written notice by the Partnership Group Member of its intention to exercise
     its option to purchase the Option Asset pursuant to Section 5.2(a);

                           (vii) the applicable Option Asset Owner shall
     execute, have acknowledged and deliver to the Partnership Group Member a
     special warranty deed, assignment of easement, or comparable document, as
     appropriate, in the applicable jurisdiction, on the closing date for the
     purchase of the Option Asset constituting a real property interest
     conveying the Option Asset unto the Partnership Group Member free and clear
     of all encumbrances created by the Option Asset Owner other than those set
     forth in Section 5.2(b)(iii) above;

                           (viii) the sale of any Option Asset shall be made on
     an "as is," "where is" and "with all faults" basis, and the instruments
     conveying such Option Asset shall contain appropriate disclaimers; and

                           (ix) neither the applicable Option Asset Owner nor
     the applicable Partnership Group Member shall have any obligation to sell
     or buy the applicable Option Asset if any of the material consents referred
     to in Section 5.1(c) have not been obtained.

                  (c) If a Partnership Group Member chooses or is deemed to have
     chosen not to exercise its option to purchase an Option Asset at the price
     determined by the investment banking firm under Section 5.2(a), all future
     rights to purchase such Option Asset by the Partnership Group will be
     extinguished.

                                   ARTICLE VI
                             RIGHT OF FIRST REFUSAL

         6.1 HOLLY RIGHT OF FIRST REFUSAL.

                  (a) The Partnership Group hereby grants to Holly a right of
     first refusal on any proposed Transfer [(other than a grant of a security
     interest to a bona fide third-party lender)] of the Assets that serve the
     Holly Entities' refineries.

                                      -15-
<PAGE>

                  (b) The Parties acknowledge that all potential Transfers of
     Sale Assets pursuant to this Article VI are subject to obtaining any and
     all written consents of governmental authorities and other third parties
     and to the terms of all existing agreements in respect of the Assets.

         6.2 PROCEDURES.

                  (a) If a Partnership Group Member desires to Transfer any of
     the Assets that serve the Holly Entities' refineries to any Person pursuant
     to a bona fide third-party offer (an "Acquisition Proposal"), then the
     Partnership shall promptly give written notice (a "Disposition Notice")
     thereof to Holly. The Disposition Notice shall set forth the following
     information in respect of the proposed Transfer: the name and address of
     the prospective acquiror (the "Proposed Transferee"), the Assets subject to
     the Acquisition Proposal (the "Sale Assets"), the purchase price offered by
     such Proposed Transferee (the "Offer Price"), reasonable detail concerning
     any non-cash portion of the proposed consideration, if any, to allow Holly
     to reasonably determine the fair market value of such non-cash
     consideration, the Partnership Group's calculation of the fair market value
     of any non-cash consideration and all other material terms and conditions
     of the Acquisition Proposal that are then known to the Partnership Group.
     To the extent the Proposed Transferee's offer consists of consideration
     other than cash (or in addition to cash) the Offer Price shall be equal to
     the amount of any such cash plus the fair market value of such non-cash
     consideration. In the event Holly and the Partnership Group are in
     agreement as to the fair market value of any non-cash consideration, Holly
     will provide written notice of its decision regarding the exercise of its
     right of first refusal to purchase the Sale Assets within 30 days of its
     receipt of the Disposition Notice (the "First ROFR Acceptance Deadline").
     Failure to provide such notice within such 30-day period shall be deemed to
     constitute a decision not to purchase the Sale Assets. In the event (i)
     Holly's determination of the fair market value of any non-cash
     consideration described in the Disposition Notice (to be determined by
     Holly within 30 days of receipt of such Disposition Notice) is less than
     the fair market value of such consideration as determined by the
     Partnership Group in the Disposition Notice and (ii) Holly and the
     Partnership Group are unable to mutually agree upon the fair market value
     of such non-cash consideration within 30 days after Holly notifies the
     Partnership Group of its determination thereof, the Partnership Group and
     Holly shall engage a mutually-agreed-upon investment banking firm to
     determine the fair market value of the non-cash consideration. Such
     investment banking firm shall be instructed to return its decision within
     30 days after all material information is submitted thereto, which decision
     shall be final. The fees of the investment banking firm will be split
     equally between Holly and the Partnership Group. Holly will provide written
     notice of its decision regarding the exercise of its right of first refusal
     to purchase the Sale Assets to the Partnership Group within 30 days after
     the investment banking firm has submitted its determination (the "Second
     ROFR Acceptance Deadline"). Failure to provide such notice within such
     30-day period shall be deemed to constitute a decision by Holly not to
     purchase the Sale Assets. If Holly fails to exercise a right during any
     applicable period set forth in this Section 6.2(a), Holly shall be deemed
     to have waived its rights with respect to such proposed disposition of the
     Sale Assets, but not with respect to any future offer of Assets.

                                      -16-
<PAGE>

                  (b) If Holly chooses to exercise its right of first refusal to
     purchase the Sale Assets under Section 6.2(a), Holly and the Partnership
     Group shall enter into a purchase and sale agreement for the Sale Assets
     which shall include the following terms:

                           (i) Holly will agree to deliver cash for the Offer
     Price (unless Holly and the Partnership Group agree that consideration will
     be paid by means of an interest-bearing promissory note or equity
     securities of Holly);

                           (ii) the Partnership Group will represent that it has
     good and indefeasible title to the Sale Assets, subject to all recorded and
     unrecorded matters and all physical conditions and other matters in
     existence on the closing date for the purchase of the Sale Assets, plus any
     other such matters as Holly may approve, which approval will not be
     unreasonably withheld. If Holly desires to obtain any title insurance with
     respect to the Sale Assets, the full cost and expense of obtaining the same
     (including but not limited to the cost of title examination, document
     duplication and policy premium) shall be borne by Holly;

                           (iii) the Partnership Group will grant to Holly the
     right, exercisable at Holly's risk and expense, to make such surveys, tests
     and inspections of the Sale Assets as Holly may deem desirable, so long as
     such surveys, tests or inspections do not damage the Sale Assets or
     interfere with the activities of the Partnership Group thereon and so long
     as Holly has furnished the Partnership Group with evidence that adequate
     liability insurance is in full force and effect;

                           (iv) Holly will have the right to terminate its
     obligation to purchase the Sale Assets under this Article VI if the results
     of any searches, surveys, tests or inspections conducted pursuant to
     Section 6.2(b)(ii) or (iii) above are, in the reasonable opinion of Holly,
     unsatisfactory;

                           (v) the closing date for the purchase of the Sale
     Assets shall occur no later than 90 days following receipt by the
     Partnership Group of written notice by Holly of its intention to exercise
     its option to purchase the Sale Assets pursuant to Section 6.2(a);

                           (vi) the Partnership Group shall execute, have
     acknowledged and deliver to Holly a special warranty deed, assignment of
     easement, or comparable document, as appropriate, in the applicable
     jurisdiction, on the closing date for the purchase of the Sale Assets
     constituting real property interests conveying the Sale Assets unto Holly
     free and clear of all encumbrances created by the Partnership Group other
     than those set forth in Section 6.2(b)(ii) above;

                           (vii) the sale of any Sale Assets shall be made on an
     "as is," "where is" and "with all faults" basis, and the instruments
     conveying such Sale Assets shall contain appropriate disclaimers; and

                           (viii) neither the Partnership Group nor Holly shall
     have any obligation to sell or buy the Sale Assets if any of the material
     consents referred to in Section 6.1(b) have not been obtained.

                                      -17-
<PAGE>

                  (c) Holly and the Partnership Group shall cooperate in good
     faith in obtaining all necessary governmental and other third Person
     approvals, waivers and consents required for the closing. Any such closing
     shall be delayed, to the extent required, until the third Business Day
     following the expiration of any required waiting periods under the
     Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided,
     however, that such delay shall not exceed 60 days and, if governmental
     approvals and waiting periods shall not have been obtained or expired, as
     the case may be, by such 60th day, then Holly shall be deemed to have
     waived its right of first refusal with respect to the Sale Assets described
     in the Disposition Notice and thereafter neither Holly nor the Partnership
     shall have any further obligation under this Article VI with respect to
     such Sale Assets unless such Sale Assets again become subject to this
     Article VI pursuant to Section 6.2(d).

                  (d) If the Transfer to the Proposed Transferee is not
     consummated in accordance with the terms of the Acquisition Proposal within
     the later of (A) 180 days after the later of the applicable ROFR Acceptance
     Deadline, and (B) 10 days after the satisfaction of all governmental
     approval or filing requirements, if any, the Acquisition Proposal shall be
     deemed to lapse, and the Partnership or member of the Partnership Group may
     not Transfer any of the Sale Assets described in the Disposition Notice
     without complying again with the provisions of this Article VI if and to
     the extent then applicable.

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
subject to and governed by the laws of the State of Texas, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another state. Each Party hereby
submits to the jurisdiction of the state and federal courts in the State of
Texas and to venue in Dallas, Texas.

         7.2 NOTICE. All notices or requests or consents provided for by, or
permitted to be given pursuant to, this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the Person to
be notified, postpaid, and registered or certified with return receipt requested
or by delivering such notice in person or by telecopier or telegram to such
Party. Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth
below such Party's signature to this Agreement or at such other address as such
Party may stipulate to the other Parties in the manner provided in this Section
7.2.

                                      -18-
<PAGE>

                  if to the Holly Entities:

                      Holly Corporation
                      100 Crescent Court
                      Suite 1600
                      Dallas, Texas 75201
                      Attention:  [President]
                      Fax:  214-____-_______

                      with a copy to:

                           John Glancy
                           General Counsel
                           Holly Corporation
                           100 Crescent Court
                           Suite 1600
                           Dallas, Texas 75201
                           Fax: 214-____-_______

                  if to the Partnership Group

                      Holly Energy Partners, L.P.
                      c/o Holly Logistic Services, L.L.C.
                      100 Crescent Court
                      Suite 1600
                      Dallas, Texas 75201
                      Attention:  President and Chief Executive Officer
                      Fax:  (214) ____-_______

                      with a copy to:

                           --------------------------
                           --------------------------
                           --------------------------
                           --------------------------
                           --------------------------
                           Fax:  (     ) ____-_______

         7.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the Parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein.

         7.4 TERMINATION OF ARTICLE II. The provisions of Article II of this
Agreement may be terminated by Holly upon a Change of Control of Holly.

         7.5 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the Parties
hereto; provided,

                                      -19-
<PAGE>

however, that the Partnership may not, without the prior approval of the
Conflicts Committee, agree to any amendment or modification of this Agreement
that, in the reasonable discretion of the General Partner, will adversely affect
the holders of Common Units. Each such instrument shall be reduced to writing
and shall be designated on its face an "Amendment" or an "Addendum" to this
Agreement.

         7.6 ASSIGNMENT. No Party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other Parties
hereto.

         7.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.

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

         7.9 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

         7.10 RIGHTS OF LIMITED PARTNERS. The provisions of this Agreement are
enforceable solely by the Parties to this Agreement, and no Limited Partner of
the Partnership shall have the right, separate and apart from the Partnership,
to enforce any provision of this Agreement or to compel any Party to this
Agreement to comply with the terms of this Agreement.

                                      -20-
<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.

                                        HOLLY CORPORATION

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                        NAVAJO PIPELINE CO., L.P.

                                        BY NAVAJO PIPELINE GP, L.L.C.,
                                        ITS GENERAL PARTNER

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                        HOLLY LOGISTIC SERVICES, L.L.C.

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                        HEP LOGISTIC HOLDINGS, L.P.

                                        BY HOLLY LOGISTIC SERVICES, L.L.C.,
                                        ITS GENERAL PARTNER

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                       Signature Page to Omnibus Agreement
<PAGE>

                                        HOLLY ENERGY PARTNERS, L.P.

                                        BY HEP LOGISTICS HOLDINGS, L.P.
                                        ITS GENERAL PARTNER

                                        BY HOLLY LOGISTIC SERVICES, L.L.C.
                                        ITS GENERAL PARTNER

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                        HEP LOGISTICS GP, L.L.C.

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                        HEP OPERATING COMPANY, L.P.

                                        BY HEP LOGISTICS GP, L.L.C.
                                        ITS GENERAL PARTNER

                                        By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                       Signature Page to Omnibus Agreement
<PAGE>

                                   SCHEDULE I

<Table>
<Caption>
OPTION ASSETS                                                              OPTION ASSET OWNER
-------------                                                              ------------------
<S>                                                                        <C>
1.  The 8-inch Artesia to Lovington intermediate products pipeline         Navajo Pipeline Co., L.P.

2.  The 10-inch Artesia to Lovington intermediate products pipeline        Navajo Pipeline Co., L.P.
</Table>

                                 SCHEDULE I - 1
<PAGE>

                                   SCHEDULE II

PENDING LITIGATION

                                 SCHEDULE II - 1
<PAGE>

                                  SCHEDULE III

GENERAL AND ADMINISTRATIVE SERVICES

         (1)      executive services

         (2)      finance and administration services

         (3)      information technology services

         (4)      legal services

         (5)      health, safety and environmental services

                                SCHEDULE III - 1

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