Document:

exv10w1

Exhibit
10.1

PIPELINES, TANKAGE AND LOADING RACK

THROUGHPUT AGREEMENT

(TULSA EAST)

     This Pipelines, Tankage and Loading Rack Throughput Agreement (this “Agreement”) is
dated as of December 1, 2009, by and between Holly Refining & Marketing-Tulsa, LLC (“Holly
Tulsa”) and HEP Tulsa LLC (“HEP Tulsa”). Each of Holly Tulsa and HEP Tulsa are
individually referred to herein as a “Party” and collectively as the “Parties.”

RECITALS:

     WHEREAS, pursuant to that certain Asset Sale and Purchase Agreement dated as of October 1,
2009 (the “Purchase Agreement”) by and among Holly Tulsa, HEP Tulsa and Sinclair Tulsa
Refining Company, Holly Tulsa acquired certain refining assets and other related assets located in
Tulsa, Oklahoma and HEP Tulsa acquired certain assets related to the refining assets acquired by
Holly Tulsa (the “HEP Purchased Assets”);

     WHEREAS, in connection with the closing of the transactions contemplated by the Purchase
Agreement, Holly Tulsa and HEP Tulsa desire to enter into this Agreement to, among other things,
set forth the terms and conditions under which HEP Tulsa will provide certain transportation,
storage and loading services for Holly Tulsa.

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

     Section 1.
Definitions

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

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

     “Agreement” has the meaning set forth in the preamble to this Agreement.

     “Applicable Law” means any applicable statute, law, regulation, ordinance, rule,
judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license,
agreement, requirement, or other governmental restriction or any similar form of decision of, or
any provision or condition of any permit, license or other operating authorization issued under any
of the foregoing by, or any determination of, any Governmental Authority having or

 

 

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

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

     “Assumed OPEX” means the amount set forth on Schedule IV attached hereto.

     “bpd” means barrels per day.

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

     “Claimant” has the meaning set forth in Section 13(e).

     “Closing Date” has the meaning for such term contained in the Purchase Agreement.

     “Contract Quarter” means a three-month period that commences on January 1, April 1,
July 1, or October 1 and ends on March 31, June 30, September 30, or December 31, respectively.

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

     “Covered Environmental Losses” has the meaning set forth in Section 10(a).

     “Damaged Party” has the meaning set forth in Section 12(b).

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

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

     “DRA” has the meaning set forth in Section 2(f).

     “Effective Time” means 12:01 a.m., Dallas, Texas time, on December 1, 2009.

     “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

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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.

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

     “Force Majeure Notice” has the meaning set forth in Section 4(b).

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

     “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, crude oil, gasoline, natural gas, fuel oil,
motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.

     “Heavy Products” means fuel oil, asphalt, coker feed, vacuum tower bottoms,
atmospheric tower bottoms, pitch, or roofing flux.

     “HEP Purchased Assets” has the meaning set forth in the recitals to this Agreement.

     “HEP Tulsa” has the meaning set forth in the preamble to this Agreement.

     “HEP Tulsa Payment Obligations” has the meaning set forth in Section 15(a).

     “Holly” means Holly Corporation, a Delaware corporation.

     “Holly Tulsa” has the meaning set forth in the preamble to this Agreement.

     “Holly Tulsa Payment Obligations” has the meaning set forth in Section 14(a).

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     “Indemnified Party” means the Persons seeking indemnification in accordance with
Section 10.

     “Indemnifying Party” means the Person from whom indemnification may be required in
accordance with Section 10.

     “LPG Products” means propane, refinery grade propylene, normal butane, and isobutane.

     “Loading Racks” means the light products, asphalt and propane loading racks located at
the Refinery and more specifically described in the Purchase Agreement.

     “Loading Racks Tariff” means the amount set forth on Schedule III attached
hereto.

     “Minimum Loading Racks Revenue Commitment” has the meaning set forth in Section
2(c)(i).

     “Minimum Loading Racks Throughput” means 26,000 bpd of Refined Products, LPG Products,
and Heavy Products, in the aggregate, on average for each Contract Quarter.

     “Minimum Pipeline Revenue Commitment” has the meaning set forth in Section
2(a)(i).

     “Minimum Pipeline Throughput” means 60,000 bpd of Refined Products, in the aggregate,
on average for each Contract Quarter.

     “Minimum Tankage Revenue Commitment” has the meaning set forth in Section
2(b)(i).

     “Minimum Tankage Throughput” means 80,000 bpd of Refined Products, in the aggregate,
on average for each Contract Quarter.

     “Omnibus Agreement” means the Second Amended and Restated Omnibus Agreement, dated as
of August 1, 2009, by and among Holly, the Partnership and certain of their respective
subsidiaries.

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

     “OPEX Recovery Amount” means an amount equal to (a) the difference between the
percentage increase in PPI for a given year minus seven percent (7%) multiplied by (b) the
then-current Assumed OPEX.

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

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

     “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.

     “Pipeline Tariff” means the amount set forth on Schedule I attached hereto.

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     “Pipelines” means those two (2) product delivery lines extending from the Tankage to
interconnection points with the Magellan pipeline.

     “PPI” has the meaning set forth in Section 2(a)(ii).

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

     “Products” means Refined Products, LPG Products and Heavy Products.

     “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 Holly Tulsa and its Affiliates in the performance of
similar tasks or projects, or by HEP Tulsa and its Affiliates in the performance of similar tasks
or projects.

     “Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

     “Refined Products” means gasoline, kerosene, ethanol, naphtha, gas oil, LEF (lube
extraction feedstocks), and diesel fuel, except high sulfur diesel fuel that Holly Tulsa may
transport from its existing Tulsa refinery through the Tankage for processing in the Refinery’s
distillate hydrotreater. For the avoidance of doubt, any such high sulfur diesel fuel movements
shall not be subject to any Tankage tariff, but the resulting ultra low sulfur diesel fuel produced
from the high sulfur diesel fuel and then shipped from the Refinery via either the Pipelines or the
Loading Racks shall be subject to the applicable Tankage tariffs.

     “Refinery” means the refinery formerly owned by Sinclair Tulsa Refining Company
located in Tulsa, Oklahoma.

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

     “Related Indemnified Parties” means, with respect to each Party hereto, such Party’s
Affiliates, such Party and its Affiliates’ successors and assigns, and each of the respective
directors and officers (or Persons in any similar capacity if such Person is not a corporation),
employees, consultants and agents of such Party, its Affiliates and their respective successors and
assigns.

     “Respondent” has the meaning set forth in Section 13(e).

     “Tankage” means the tanks set forth on Exhibit A attached hereto.

     “Tankage Base Tariff” means the amount set forth on Schedule II attached
hereto.

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     “Tankage Excess Throughput” means 120,000 bpd of Refined Products, in the aggregate,
on average for each Contract Quarter.

     “Tankage Excess Tariff” means the amount set forth on Schedule II attached
hereto.

     “Tankage Incentive Tariff” means the amount set forth on Schedule II attached
hereto.

     “Term” has the meaning set forth in Section 6.

     “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.

     Section 2. Agreement to Use Services Relating to Pipelines, Tankage and Loading
Racks.

     The Parties intend to be strictly bound by the terms set forth in this Agreement, which sets
forth revenues to HEP Tulsa to be paid by Holly Tulsa and requires HEP Tulsa to provide certain
transportation, storage and loading services to Holly Tulsa. The principal objective of HEP Tulsa
is for Holly Tulsa to meet or exceed its obligations with respect to the Minimum Pipeline Revenue
Commitment, to meet or exceed its obligations with respect to the Minimum Tankage Revenue
Commitment, and to meet or exceed its obligations with respect to the Minimum Loading Racks Revenue
Commitment. The principal objective of Holly Tulsa is for HEP Tulsa to provide services to Holly
Tulsa in a manner that enables Holly Tulsa to operate the Refinery.

     (a) Minimum Pipeline Revenue Commitment. During the Term and subject to the terms and
conditions of this Agreement, Holly Tulsa agrees as follows:

     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees
associated with the Pipelines that will satisfy the Minimum Pipeline Revenue Commitment in
exchange for HEP Tulsa providing Holly Tulsa a minimum of 60,000 barrels per day of
aggregate capacity in the Pipelines. The “Minimum Pipeline Revenue Commitment”
shall be an amount of revenue to HEP Tulsa for each Contract Quarter determined by
multiplying the Minimum Pipeline Throughput by the Pipeline Tariff as such Pipeline Tariff
may be revised pursuant to Section 2(a)(ii). Holly Tulsa will pay HEP Tulsa the
Pipeline Tariff for all quantities of Refined Products shipped on the Pipelines.
Notwithstanding the foregoing, in the event that the Effective Time is any date other than
the first day of a Contract Quarter, then the Minimum Pipeline Revenue Commitment for the
initial Contract Quarter shall be prorated based upon the number of days actually in such
contract quarter and the initial Contract Quarter.

     (ii) The Pipeline Tariff shall be adjusted on July 1 of each calendar year commencing
on July 1, 2011, by an amount equal to the upper change in the annual change rounded to four
decimal places of the Producers Price Index-Commodities- Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of
Labor, Bureaus of Labor Statistics; provided that the Pipeline Tariff shall never be
increased by

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more than 3% for any such calendar year. The series ID is WPUSOP3000 as of
September 7, 2009 — located at
http://www.bls.gov/data/. The change factor shall be
calculated as follows: annual PPI index (most current year) less annual PPI index
(most current year minus 1) divided by annual PPI index (most current year minus 1).
An example for year 2009 change is: [PPI (2008) — PPI (2007)] / PPI (2007) or (177.1 —
166.6) / 166.6 or .063 or 6.3%. If the PPI index change is negative in a given year then
there will be no change in the Pipeline Tariff. If the above index is no longer published,
then Holly Tulsa and HEP Tulsa shall negotiate in good faith to agree on a new index that
gives comparable protection against inflation, and the same method of adjustment for
increases in the new index shall be used to calculate increases in the Pipeline Tariff. If
Holly Tulsa and HEP Tulsa are unable to agree, a new index will be determined by binding
arbitration in accordance with Section 13(e), and the same method of adjustment for
increases in the new index shall be used to calculate increases in the Pipeline Tariff. To
evidence the Parties’ agreement to each adjusted Pipeline Tariff, the Parties shall execute
an amended, modified, revised or updated Schedule I and attach it to this Agreement.
Such amended, modified, revised or updated Schedule I shall be sequentially
numbered (e.g. Schedule I-1, Schedule I-2, etc.), dated and appended as an
additional schedule to this Agreement and shall replace the prior version of Schedule
I in its entirety.

     (iii) If Holly Tulsa is unable to transport on the Pipelines the volumes of Refined
Products required to meet the Minimum Pipeline Revenue Commitment as a result of HEP Tulsa’s
operational difficulties, prorationing, or the inability to provide sufficient capacity for
the Minimum Pipeline Throughput, then the Minimum Pipeline Revenue Commitment applicable to
the Contract Quarter during which Holly Tulsa is unable to transport such volumes of Refined
Products will be reduced by an amount equal to: (A) the volume of Refined Products that
Holly Tulsa was unable to transport on the Pipelines (but not to exceed the Minimum Pipeline
Throughput), as a result of HEP Tulsa’s operational difficulties, prorationing or inability
to provide sufficient capacity on the Pipelines to achieve the Minimum Pipeline Throughput,
multiplied by (B) the Pipeline Tariff. This Section 2(a)(iii) shall not apply in
the event HEP Tulsa gives notice of a Force Majeure event in accordance with Section
4, in which case the Minimum Pipeline Revenue Commitment shall be suspended in
accordance with and as provided in Section 4.

     (b) Minimum Tankage Revenue Commitment; Tankage Tariffs. During the Term and subject
to the terms and conditions of this Agreement, Holly Tulsa agrees as follows:

     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees
associated with the Tankage that will satisfy the Minimum Tankage Revenue Commitment in
exchange for HEP Tulsa providing Holly Tulsa a minimum of 1,362,500 barrels of aggregate
capacity in the Tankage. The “Minimum Tankage Revenue Commitment” shall be an
amount of revenue to HEP Tulsa for each Contract Quarter determined by multiplying the
Minimum Tankage Throughput by the Tankage Base Tariff as such Tankage Base Tariff may be
revised pursuant to Section 2(b)(iii). Notwithstanding the foregoing, in the event that the Effective Time is any date other
than the first day of a Contract Quarter, then the Minimum Tankage Revenue Commitment for

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the initial Contract Quarter shall be prorated based upon the number of days actually in
such contract quarter and the initial Contract Quarter. Subject to (i) any Applicable Law
and (ii) technical specifications of the Tankage, Holly Tulsa may request that HEP Tulsa
change the service of any of the Tankage from storage of one Product to storage of a
different Product; provided, however, that Holly Tulsa shall indemnify and hold HEP Tulsa
harmless from and against all costs and expenses associated with any such changing of
service including but not limited to costs of complying with any Applicable Law affecting
such change of service.

     (ii) Tankage throughput shall be determined by the sum of Refined Products shipped on
the Pipelines and loaded at the Loading Racks. If the average throughput for any Contract
Quarter exceeds the Minimum Tankage Throughput attributable to such Contract Quarter then,
(i) for each throughput barrel in excess of the Minimum Tankage Throughput but less than or
equal to the Tankage Excess Throughput, Holly Tulsa shall pay HEP Tulsa throughput fees in
the amount of the Tankage Incentive Tariff as such amount may be revised pursuant to
Section 2(b)(iii) and (ii) for each throughput barrel in excess of the Tankage
Excess Throughput, Holly Tulsa shall pay HEP Tulsa throughput fees in the amount of the
Tankage Excess Tariff as such amount may be revised pursuant to Section 2(b)(iii).

     (iii) The Tankage Base Tariff, Tankage Incentive Tariff, and Tankage Excess Tariff
shall each be adjusted on July 1 of each calendar year commencing on July 1, 2011, by an
amount equal to the upper change in the annual change rounded to four decimal places of the
PPI following the same procedure as set forth in Section 2(a)(ii) above (including
the provisions regarding binding arbitration); provided that the Tankage Base Tariff,
Tankage Incentive Tariff, and Tankage Excess Tariff shall never be increased by more than 3%
for any such calendar year. To evidence the Parties’ agreement to each adjusted Tankage
Base Tariff, Tankage Incentive Tariff, and Tankage Excess Tariff, the Parties shall execute
an amended, modified, revised or updated Schedule II and attach it to this
Agreement. Such amended, modified, revised or updated Schedule II shall be
sequentially numbered (e.g. Schedule II-1, Schedule II-2, etc.), dated and
appended as an additional schedule to this Agreement and shall replace the prior version of
Schedule II in its entirety.

     (iv) If Holly Tulsa is unable to deliver to the Tankage the volumes of Refined Products
required to meet the Minimum Tankage Revenue Commitment as a result of HEP Tulsa’s
operational difficulties, prorationing or the inability to provide sufficient capacity, then
the Minimum Tankage Revenue Commitment applicable to the Contract Quarter during which Holly
Tulsa is unable to deliver such volumes of Refined Products will be reduced by an amount
equal to: (A) the volume of Refined Products that Holly Tulsa was unable to deliver to the
Tankage (but not to exceed the Minimum Tankage Throughput), as a result of HEP Tulsa’s
operational difficulties, prorationing or inability to provide sufficient capacity to
achieve the Minimum Tankage Throughput, multiplied by (B) the Tankage Base Tariff. This
Section 2(b)(iv) shall not apply in the event HEP Tulsa gives notice of a Force
Majeure event in accordance with Section 4, in which case
the Minimum Tankage Revenue Commitment shall be suspended in accordance with and as
provided in Section 4.

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     (c) Minimum Loading Racks Revenue Commitment.

     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees
associated with the Loading Racks that will satisfy the Minimum Loading Racks Revenue
Commitment in exchange for HEP Tulsa providing Holly Tulsa a minimum of 26,000 barrels per
day of aggregate capacity at the Loading Racks. The “Minimum Loading Racks Revenue
Commitment” shall be an amount of revenue to HEP Tulsa for each Contract Quarter
determined by multiplying the Minimum Loading Racks Throughput by the Loading Racks Tariff
as such Loading Racks Tariff may be revised pursuant to Section 2(c)(ii). Holly
Tulsa will pay HEP Tulsa the Loading Racks Tariff for all quantities of Refined Products ,
LPG Products, and Heavy Products loaded at the Loading Racks. Notwithstanding the foregoing,
in the event that the Effective Time is any date other than the first day of a Contract
Quarter, then the Minimum Loading Racks Revenue Commitment for the initial Contract Quarter
shall be prorated based upon the number of days actually in such contract quarter and the
initial Contract Quarter.

     (ii) The Loading Racks Tariff shall be adjusted on July 1 of each calendar year
commencing on July 1, 2011, by an amount equal to the upper change in the annual change
rounded to four decimal places of the PPI following the same procedure as set forth in
Section 2(a)(ii) above (including the provisions regarding binding arbitration);
provided that the Loading Racks Tariff shall never be increased by more than 3% for any such
calendar year. To evidence the Parties’ agreement to each adjusted Loading Racks Tariff,
the Parties shall execute an amended, modified, revised or updated Schedule III and
attach it to this Agreement. Such amended, modified, revised or updated Schedule
III shall be sequentially numbered (e.g. Schedule III-1, Schedule III-2,
etc.), dated and appended as an additional schedule to this Agreement and shall replace the
prior version of Schedule III in its entirety.

     (iii) If Holly Tulsa is unable to load at the Loading Racks the volumes of Refined
Products, LPG Products, or Heavy Products, in the aggregate, required to meet the Minimum
Loading Racks Revenue Commitment as a result of HEP Tulsa’s operational difficulties,
prorationing or the inability to provide sufficient capacity, then the Minimum Loading Racks
Revenue Commitment applicable to the Contract Quarter during which Holly Tulsa is unable to
load such volumes of Refined Products, LPG Products, or Heavy Products will be reduced for
such period of time by an amount equal to: (A) the volume of Refined Products, LPG Products,
or Heavy Products, in the aggregate, that Holly Tulsa was unable to load at the Loading
Racks (but not to exceed the Minimum Loading Racks Throughput), as a result of HEP Tulsa’s
operational difficulties, prorationing or inability to provide sufficient capacity to
achieve the Minimum Loading Racks Throughput, multiplied by (B) the Loading Racks Tariff.
This Section 2(c)(iii) shall not apply in the event HEP Tulsa gives notice of a
Force Majeure event in accordance with Section 4, in which case the Minimum Loading
Racks Revenue Commitment shall be suspended in accordance with and as provided in
Section 4.

     (d) Volumetric Gains and Losses. Holly Tulsa shall, during the Term, (i) absorb all
volumetric gains in the Pipelines, and (ii) be responsible for all volumetric losses in the
Pipelines

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up to a maximum of 0.5%. HEP Tulsa shall be responsible for all volumetric losses in
excess of 0.5% in the Pipelines during the Term.

     (e) Obligations of HEP Tulsa. During the Term and subject to the terms and conditions
of this Agreement, including Section 13(b), HEP Tulsa agrees to: (i) own or lease, operate
and maintain the Pipelines, Tankage, and Loading Racks and all related assets necessary to handle
the Products from Holly Tulsa; (ii) provide the services required under this Agreement and perform
all operations relating the Pipelines, Tankage, and Loading Racks including, but not limited to,
tank gauging, tank maintenance, tank dike maintenance, loading trucks, interaction with third party
pipelines, and customer interface for access agreements; and (iii) maintain adequate property and
liability insurance covering the Pipelines, Tankage, Loading Racks and any related assets owned by
HEP and necessary for the operation of the Pipelines, Tankage, and Loading Racks. Notwithstanding
the preceding sentence, subject to Section 13(b) of this Agreement and Article V of the
Omnibus Agreement, HEP Tulsa is free to sell any of its assets, including assets that provide
services under this Agreement, and Holly Tulsa is free to merge with another entity and to sell all
of its assets or equity to another entity at any time.

     (f) Drag Reducing Agents and Additives. If HEP Tulsa determines that adding drag
reducing agents (“DRA”) to the Refined Products is reasonably required to move Refined
Products in the quantities necessary to meet Holly Tulsa’s schedule or as may be otherwise be
required to safely move such quantities of Refined Products, HEP Tulsa shall provide Holly Tulsa
with an analysis of the proposed cost and benefits thereof. In the event that Holly Tulsa agrees
to use such additives as proposed by HEP Tulsa, Holly Tulsa shall reimburse HEP Tulsa for the costs
of adding any DRA to the and Refined Products.

     (g) Change in Pipeline Direction; Product Service or Origination and Destination.
Without Holly Tulsa’s prior written consent, HEP Tulsa shall not (i) reverse the direction of any
of the Pipelines; (ii) change, alter or modify the product service of any of the Pipelines; or
(iii) change, alter or modify the origination or destination of any of the Pipelines; provided,
however, that HEP Tulsa may take any necessary emergency action to prevent or remedy a release of
Refined Products from any of the Pipelines without obtaining the consent required by this
Section 2(g). Holly Tulsa shall have the right to reverse the direction of any of the
Pipelines if Holly Tulsa agrees to (i) reimburse HEP Tulsa for the additional costs and expenses
incurred by HEP Tulsa as a result of such change in direction (both to reverse and re-reverse);
(ii) reimburse the HEP Tulsa for all costs arising out of HEP Tulsa’s inability to perform under
any transportation service contract due to the reversal of the direction of the Pipelines; and
(iii) pay the Pipeline Tariff set forth on Schedule I, as it may be amended from
time-to-time in accordance with this Agreement, for any such flow reversal.

     (h) Notification of Utilization. Upon request by HEP Tulsa, Holly Tulsa will provide
to HEP Tulsa written notification of Holly Tulsa’s reasonable good faith estimate of their
anticipated future utilization of Pipelines, Tankage, and Loading Racks as soon as reasonably
practicable after receiving such request.

     (i) Scheduling and Accepting Movement. HEP Tulsa will use its reasonable commercial
efforts to schedule movement and accept movements of Products in a manner that is

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consistent with the historical dealings between the Parties, as such dealings may change from time to time.

     (j) Taxes. Holly Tulsa will pay all taxes, import duties, license fees and other
charges by any Governmental Authority levied on or with respect to the Products handled by Holly
Tulsa for transportation, storage or loading by HEP Tulsa. Should any Party be required to pay or
collect any taxes, duties, charges and or assessments pursuant to any Applicable Law or authority
now in effect or hereafter to become effective which are payable by the any other Party pursuant to
this Section 2(j) the proper Party shall promptly reimburse the other Party therefor.

     (k) Timing of Payments. Holly Tulsa will make payments to HEP Tulsa by electronic
payment with immediately available funds on a monthly basis during the Term with respect to
services rendered or reimbursable costs or expenses incurred by HEP Tulsa under this Agreement in
the prior month. Payments not received by HEP Tulsa on or prior to the applicable payment date
will accrue interest at the Prime Rate from the applicable payment date until paid.

     (l) Increases in Tariff Rates. If new Applicable Laws are enacted that require HEP
Tulsa to make capital expenditures with respect to the Pipelines, Tankage or Loading Racks, HEP
Tulsa may amend the Pipeline Tariff, Tankage Base Tariff, and Loading Racks Tariff, as applicable,
in order to recover HEP Tulsa’s cost of complying with these Applicable Laws (as determined in good
faith and including a reasonable return); provided, however, that HEP Tulsa may not
amend the Pipeline Tariff, Tankage Base Tariff, or Loading Racks Tariff pursuant to this
Section 2(l) unless and until HEP Tulsa has made capital expenditures of $2,000,000.00 in
the aggregate with respect to the Pipelines, Tankage or Loading Racks in order to comply with such
new Applicable Laws. Holly Tulsa and HEP Tulsa shall use their reasonable commercial efforts to
comply with these Applicable Laws, and shall negotiate in good faith to mitigate the impact of
these Applicable Laws and to determine the amount of the new tariff rates. If Holly Tulsa and HEP
Tulsa are unable to agree on the amount of the new tariff rates that HEP Tulsa will charge, such
tariff rates will be determined by binding arbitration in accordance with Section 13(e).
Schedule I, Schedule II, Schedule III or any other applicable exhibit or
schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with
this Agreement to reflect any changes in tariff rates agreed to in accordance with this Section
2(l).

     (m) Reimbursement of Operating Expenses. At the end of the first four (4) Contract
Quarters, HEP Tulsa shall calculate its aggregate operating expenses incurred in the operation of
the Pipelines, Tankage and Loading Racks pursuant to this Agreement. In the event that such
aggregate operating expenses exceed the Assumed OPEX, (i) Holly Tulsa shall reimburse HEP Tulsa for
such operating expenses incurred in excess of the Assumed OPEX, and (ii) HEP Tulsa shall increase
the Tankage Base Tariff by the amount necessary to increase the Minimum Tankage Revenue Commitment
by an amount equal to such aggregate operating expenses in excess of the Assumed OPEX for the
remainder of the Term, and the Parties shall execute an amended, modified, revised or updated
Schedule IV reflecting such aggregate operating expenses as the new Assumed OPEX. In the
event that such aggregate operating expenses are less than the Assumed OPEX, HEP Tulsa shall
decrease the Tankage Base Tariff by the amount necessary to decrease the Minimum Tankage Revenue
Commitment by an amount equal to the difference between the Assumed OPEX and such actual operating expenses for the remainder of
the Term, and the Parties shall execute an amended, modified, revised or updated Schedule
IV

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reflecting such aggregate operating expenses as the new Assumed OPEX. In the event that the
PPI increase for any given year is greater than seven percent (7%), then, in addition to any other
applicable increases during such year, HEP Tulsa shall increase the Tankage Base Tariff by an
additional amount necessary to increase the Minimum Tankage Revenue Commitment by the OPEX Recovery
Amount. Such OPEX Recovery Amount shall be added to the then-current Assumed OPEX, and the Parties
shall execute an amended, modified, revised or updated Schedule IV reflecting the addition
of such OPEX Recovery Amount to the Assumed OPEX.

     Section 3. Agreement to Remain Shipper

     With respect to any Products that are transported, stored or handled in connection with the
Pipelines, Tankage or Loading Racks, as applicable, Holly Tulsa agrees that it will continue acting
in the capacity of the shipper of any such Products for its own account at all times that such
Products are being transported, stored or handled in the Pipelines, Tankage, or Loading Racks, as
the case may be.

     Section 4. Notification of Shut-down or Reconfiguration; Force Majeure

     (a) Holly Tulsa must deliver to HEP Tulsa at least six months advance written notice of any
planned shut down or reconfiguration (excluding planned maintenance turnarounds) of the Refinery or
any portion of the Refinery that would reduce the Refinery’s output. Holly Tulsa will use its
commercially reasonable efforts to mitigate any reduction in revenues or throughput obligations
under this Agreement that would result from such a shut down or reconfiguration. If Holly Tulsa
shuts down or reconfigures the Refinery or any portion of the Refinery (excluding planned
maintenance turnarounds) and reasonably believes in good faith that such shut down or
reconfiguration will jeopardize its ability to satisfy its Minimum Pipeline Revenue Commitment,
Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this
Agreement, then within 90 days of the delivery of the written notice of the planned shut down or
reconfiguration, Holly Tulsa shall (i) propose a new Minimum Pipeline Revenue Commitment, Minimum
Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement, as
applicable, such that the ratio of the new Minimum Pipeline Revenue Commitment, Minimum Tankage
Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement over the
anticipated production level following the shut down or reconfiguration will be approximately equal
to the ratio of the original Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue
Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement over the original
production level and (ii) propose the date on which the new Minimum Pipeline Revenue Commitment,
Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this
Agreement shall take effect. Unless objected to by HEP Tulsa within 60 days of receipt by HEP
Tulsa of such proposal, such new Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue
Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement shall become effective
as of the date proposed by Holly Tulsa. To the extent that HEP Tulsa does not agree with Holly
Tulsa’s proposal, any changes in Holly Tulsa’s obligations under this Agreement, or the date on
which such changes will take effect, will be determined by binding arbitration in accordance with
Section 13(e). Schedule I, Schedule II, or Schedule III or any other applicable exhibit or schedule to this Agreement
will be updated, amended or revised, as applicable, in accordance
with this Agreement to reflect any

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change in the Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or
Minimum Loading Racks Revenue Commitment under this Agreement agreed to in accordance with this
Section 4(a).

     (b) In the event that any Party is rendered unable, wholly or in part, by a Force Majeure
event from performing its obligations under this Agreement for a period of more than thirty (30)
consecutive days, then, upon the delivery of notice and full particulars of the Force Majeure event
in writing within a reasonable time after the occurrence of the Force Majeure event relied on
(“Force Majeure Notice”), the obligations of the Parties, so far as they are affected by
the Force Majeure event, shall be suspended for the duration of any inability so caused. Any
suspension of the obligations of the Parties as a result of this Section 4(b) shall extend
the Term (to the extent so affected) for a period equivalent to the duration of the inability set
forth in the Force Majeure Notice. Holly Tulsa will be required to pay any amounts accrued and due
under this Agreement at the time of the Force Majeure event. The cause of the Force Majeure event
shall so far as possible be remedied with all reasonable dispatch, except that no Party shall be
compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall
determine to be in its best interests. In the event a Force Majeure event prevents HEP Tulsa or
Holly Tulsa from performing substantially all of their respective obligations under this Agreement
for a period of more than one (1) year, this Agreement may be terminated by HEP Tulsa or Holly
Tulsa by providing written notice thereof to the other Party.

     Section 5. Agreement Not to Challenge Tariffs

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

     Section 6. Effectiveness and Term

     This Agreement shall be effective as of the Effective Time, and shall terminate at 12:01 a.m.
Dallas, Texas, time on December 1, 2024, unless extended by written mutual agreement of the Parties
or as set forth in Section 7 (the “Term). The Party(ies) desiring to extend this
Agreement pursuant to this Section 6 shall provide prior written notice to the other
Parties of its desire to so extend this Agreement; such written notice shall be provided not more
than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of
termination or ten (10) days after receipt of a written request from another Party (which request
may be delivered no earlier than twelve (12) months prior to the date of termination) to provide any
such notice or lose such right.

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     Section 7. Right to Enter into a New Agreement

     (a) In the event that Holly Tulsa provides prior written notice to HEP Tulsa of the desire of
Holly Tulsa to extend this Agreement by written mutual agreement of the Parties, the Parties shall
negotiate in good faith to extend this Agreement by written mutual agreement, but, if such
negotiations fail to produce a written mutual agreement for extension by a date six months prior to
the termination date, then HEP Tulsa shall have the right to negotiate to enter into one or more
pipelines, tankage and loading agreements with one or more third parties to begin after the date of
termination, provided that until the end of one year following termination without renewal of this
Agreement, Holly Tulsa will have the right to enter into a new pipelines, tankage and loading
agreement with HEP Tulsa on commercial terms that substantially match the terms upon which HEP
Tulsa propose to enter into an agreement with a third party for similar services with respect to
all or a material portion of the Pipelines, Tankage, or Loading Racks. In such circumstances, HEP
Tulsa shall give Holly Tulsa forty-five (45) days prior written notice of any proposed new
pipelines, tankage and loading agreement with a third party, and such notice shall inform Holly
Tulsa of the fee schedules, tariffs, duration and any other terms of the proposed third party
agreement and Holly Tulsa shall have forty-five (45) days following receipt of such notice to agree
to the terms specified in the notice or Holly Tulsa shall lose the rights specified by this
Section 7(a) with respect to the assets that are the subject of such notice.

     (b) In the event that Holly Tulsa fails to provide prior written notice to HEP Tulsa of the
desire of Holly Tulsa to extend this Agreement by written mutual agreement of the Parties pursuant
to Section 6, HEP Tulsa shall have the right, during the period from the date of Holly
Tulsa’s failure to provide written notice pursuant to Section 6 to the date of termination
of this Agreement, to negotiate to enter into a new pipelines, tankage and loading agreement with a
third party; provided, however, that at any time during the twelve (12) months prior to the
expiration of the Term, Holly Tulsa will have the right to enter into a new pipelines, tankage and
loading agreement with HEP Tulsa on commercial terms that substantially match the terms upon which
HEP Tulsa propose to enter into an agreement with a third party for similar services with respect
to all or a material portion of the Pipelines, Tankage, or Loading Racks. In such circumstances,
HEP Tulsa shall give Holly Tulsa forty-five (45) days prior written notice of any proposed new
pipelines, tankage and loading agreement with a third party, and such notice shall inform Holly
Tulsa of the fee schedules, tariffs, duration and any other terms of the proposed third party
agreement and Holly Tulsa shall have forty-five (45) days following receipt of such notice to agree
to the terms specified in the notice or Holly Tulsa shall lose the rights specified by this
Section 7(b) with respect to the assets that are the subject of such notice.

     Section 8. Notices

     (a) Any notice or other communication given under this Agreement shall be in writing and shall
be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by
email transmission, or (iv) sent by first class mail, postage prepaid (certified or registered
mail, return receipt requested). Such notice shall be deemed to have been duly given (x) if
received, on the date of the delivery, with a receipt for delivery, (y) if refused, on the date
of the refused delivery, with a receipt for refusal, or (z) with respect to email
transmissions, on the date the recipient confirms receipt. Notices or other communications shall
be directed to the following addresses:

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Notices to Holly Tulsa:

c/o Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: David L. Lamp

Email address: president@hollycorp.com

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

c/o Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: General Counsel

Email address: generalcounsel@hollycorp.com

Notices to HEP Tulsa:

c/o Holly Energy Partners, L.P.

100 Crescent Court, Suite 1600

Dallas, TX 75201

Attn: David G. Blair

Email address: SVP-HEP@hollyenergy.com

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

c/o Holly Energy Partners, L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: General Counsel

Email address: generalcounsel@hollycorp.com

     (b) Any Party may at any time change its address for service from time to time by giving
notice to the other Parties in accordance with this Section 8.

     Section 9. Deficiency Payments

     (a) As soon as practicable following the end of each Contract Quarter under this Agreement,
HEP Tulsa shall deliver to Holly Tulsa a written notice (the “Deficiency Notice”) detailing
any failure of Holly Tulsa to meet their obligations under Section 2(a)(i), Section
2(b)(i), and Section 2(c)(i); provided, however, that Holly Tulsa’s
obligations pursuant to the Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, and the Minimum
Loading Racks Revenue Commitment shall, in each case, be assessed on a quarterly basis for the
purposes of this Section 9. Notwithstanding the previous sentence, any deficiency owed by
Holly Tulsa due to its failure to satisfy the Minimum Pipeline Revenue Commitment,

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 Minimum Tankage
Revenue Commitment, or the Minimum Loading Racks Revenue Commitment in any Contract Quarter shall
be offset by any revenue owed to HEP Tulsa in excess of the Minimum Pipeline Revenue Commitment,
Minimum Tankage Revenue Commitment, or the Minimum Loading Racks Revenue Commitment for such
Contract Quarter. The Deficiency Notice shall (i) specify in reasonable detail the nature of any
deficiency and (ii) specify the approximate dollar amount that HEP Tulsa believes would have been
paid by Holly Tulsa to HEP Tulsa if Holly Tulsa had complied with its obligations pursuant to
Section 2(a)(i), Section 2(b)(i), and Section 2(c)(i), as applicable (the
“Deficiency Payment”). Holly Tulsa shall pay the Deficiency Payment to HEP Tulsa upon the
later of: (A) ten (10) days after their receipt of the Deficiency Notice and (B) thirty (30) days
following the end of the related Contract Quarter.

     (b) If Holly Tulsa disagrees with the Deficiency Notice, then, following the payment of the
undisputed portion of the Deficiency Payment to HEP Tulsa, if any, Holly Tulsa shall send written
notice thereof regarding the disputed portion of the Deficiency Payment to HEP Tulsa and a senior
officer of Holly (on behalf of Holly Tulsa) and a senior officer of the Partnership (on behalf of
HEP Tulsa) shall meet or communicate by telephone at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt
to resolve any differences that they may have with respect to matters specified in the Deficiency
Notice. During the 30-day period following the payment of the Deficiency Payment, Holly Tulsa
shall have access to the working papers of HEP Tulsa relating to the Deficiency Notice. If such
differences are not resolved within thirty (30) days following Holly Tulsa’s receipt of the
Deficiency Notice, Holly Tulsa and HEP Tulsa shall, within forty-five (45) days following Holly
Tulsa’s receipt of the Deficiency Notice, submit any and all matters which remain in dispute and
which were properly included in the Deficiency Notice to arbitration in accordance with Section
13(e).

     (c) If it is finally determined pursuant to this Section 9 that Holly Tulsa is
required to pay any or all of the disputed portion of the Deficiency Payment, Holly Tulsa shall
promptly pay such amount to HEP Tulsa, together with interest thereon at the Prime Rate, in
immediately available funds.

     (d) The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes
with respect to the Minimum Pipeline Revenue Commitment, the Minimum Tankage Revenue Commitment, or
Minimum Loading Racks Revenue Commitment.

     (e) The Parties acknowledge and agree that the Minimum Pipeline Revenue Commitment, the
Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment shall not be
aggregated for purposes of determining any deficiency pursuant to this Section 9.

     Section 10. Indemnification

     (a) Environmental Indemnification

     (i) Indemnification of HEP Tulsa. From and after the Closing Date, Holly Tulsa
shall indemnify, defend and hold harmless HEP Tulsa and its Related Indemnified

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Parties 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 HEP
Tulsa or its Related Indemnified Parties or any third party to the extent arising out of:

(A) any violation or correction of violation of Environmental Laws
associated with the ownership or operation of the HEP Purchased
Assets, or

(B) any event or condition associated with ownership or operation of
the HEP Purchased Assets (including, without limitation, the presence
of Hazardous Substances on, under, about or migrating to or from the
HEP Purchased Assets or the disposal or release of Hazardous
Substances generated by operation of the HEP Purchased Assets at
non-HEP Purchased Asset locations), including, without limitation,
(1) 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, (2) 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 (3) 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 10(a)(i)(A)
or such events or conditions included under Section 10(a)(i)(B) occurred before the
Closing Date (collectively, “Covered Environmental Losses”); or

     (ii) Burden of Proof for Tank Claims. To the extent that a good faith claim by
HEP Tulsa or its Related Indemnified Parties for indemnification under Section
10(a)(i)(A) or Section 10(a)(i)(B) arises from events or conditions at the tanks
included in the HEP Purchased Assets or the soil immediately underneath such tanks or such
tanks’ secondary containment, and Holly Tulsa refuses to provide such indemnification, then
the burden of proof shall be on Holly Tulsa to demonstrate that the events or conditions
giving rise to the claim arose after the Closing Date.

     (iii) Indemnification of Holly Tulsa. HEP Tulsa shall indemnify, defend and
hold harmless Holly Tulsa and its Related Indemnified Parties from and against environmental
and Toxic Tort losses (including, without limitation, economic losses, diminution in value
and lost profits suffered by third parties), damages, injuries (including, without
limitation, personal injury and death), liabilities, claims, demands, causes of action,
judgments, settlements, fines, penalties, costs, and expenses (including,

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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 Holly Tulsa and
its Related Indemnified Parties or any third party to the extent arising out of:

(A) any violation or correction of violation of Environmental Laws
associated with the operation of the HEP Purchased Assets by a Person
other than a Holly Entity or ownership and operation of the HEP
Purchased Assets by a Person other than a Holly Entity, or

(B) any event or condition associated with the operation of the HEP
Purchased Assets by a Person other than Holly Tulsa and its
Affiliates or ownership and operation of the HEP Purchased Assets by
a Person other than Holly Tulsa and its Affiliates (including, but
not limited to, the presence of Hazardous Substances on, under, about
or migrating to or from the HEP Purchased Assets or the disposal or
release of Hazardous Substances generated by operation of the HEP
Purchased Assets at non-HEP Purchased Asset locations) except, where
Holly Tulsa or one of its Affiliates is operating an HEP Purchased
Asset, to the extent resulting from the negligent acts or omissions
or willful misconduct of Holly Tulsa or such Affiliate including,
without limitation, (1) 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, (2) 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 (3) 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 such violation complained of under Section 10(a)(iii)(A) or
such events or conditions included under Section 10(a)(iii)(B) occurred after the
Closing Date; provided, however, that nothing stated above shall make HEP
Tulsa responsible for any post-Closing Date negligent actions or omissions or willful
misconduct by Holly Tulsa or its Affiliates.

(b) Indemnification Procedures.

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

     (ii) 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

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Indemnified Party that are covered by the indemnification under this Agreement, 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.

     (iii) 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 Agreement, 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 10(b). 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 Agreement; provided, however, that the Indemnified Party may, at its
own option, cost and expense, hire and pay for counsel in 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.

     (iv) 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 all amounts recovered by the Indemnified Party under
contractual indemnities (other than insurance policies) from third Persons. An Indemnified
Party shall be obligated to pursue all contractual indemnities that such Indemnified Party
has with third Persons outside of this Agreement, provided, however, if the
Indemnified Party’s right to such indemnification is assignable, the Indemnified Party may,
in its sole discretion and in lieu of pursuing such claim, elect to assign such
indemnification claim to the Indemnifying Party to pursue and shall reasonably cooperate
with the Indemnifying Party (including, without limitation, making its relevant books,
records, officers, information and testimony reasonably available to
the Indemnifying Party) in the Indemnifying Party’s pursuit of such claim. In the
event the Indemnified Party recovers under a contractual indemnity from a third Person
outside of this Agreement, the amount recovered, less the reasonable out-of-pocket fees and
expenses incurred by the Indemnified Party in recovering such amounts, shall reduce the
amount such Indemnified Party may recover under this Agreement and if the Indemnified Party
receives any such amounts subsequent to an indemnification payment by the Indemnifying Party
in respect of such losses, then such Indemnified Party shall promptly

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reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in
connection with providing such indemnification payment up to the amount so received by the
Indemnified Party.

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

     (c) Survival of Indemnification. The provisions of this Section 10 shall
survive the termination of this Agreement (including any termination following the sale of the HEP
Purchased Assets).

     Section 11. Right of First Refusal. The Parties acknowledge the right of
first refusal of Holly Tulsa with respect to the Pipelines, Tankage, and Loading Racks provided in
the Omnibus Agreement.

     Section 12. Limitation of Damages.

     (a) NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS
AGREEMENT AND EXCEPT FOR CLAIMS MADE BY THIRD PARTIES WHICH SHALL NOT BE LIMITED BY THIS PARAGRAPH,
THE PARTIES AGREE THAT THE RECOVERY BY ANY PARTY OF ANY LIABILITIES, DAMAGES, COSTS OR OTHER
EXPENSES SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH OR NONFULFILLMENT BY A PARTY OF ANY
OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS OR OTHER OBLIGATIONS UNDER THIS
AGREEMENT, SHALL BE LIMITED TO ACTUAL DAMAGES AND SHALL NOT INCLUDE OR APPLY TO, NOR SHALL ANY
PARTY BE ENTITLED TO RECOVER, ANY INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES
(INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS
INTERRUPTION OR DIMINUTION IN VALUE) SUFFERED OR INCURRED BY ANY PARTY; PROVIDED,
HOWEVER, THAT SUCH RESTRICTION AND LIMITATION SHALL NOT APPLY (x) AS A RESULT OF A THIRD
PARTY CLAIM FOR SUCH INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES OR (y) TO INDIRECT,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT
OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) THAT ARE A RESULT
OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BREACHING OR NONFULFILLING PARTY OR ITS
AFFILIATES.

     (b) Notwithstanding anything in this Agreement to the contrary and solely for the purpose of
determining which of Holly Tulsa or HEP Tulsa, as applicable, shall be liable in a particular
circumstance, no Party shall be liable to another Party for any loss, damage, injury, judgment,
claim, cost, expense or other liability suffered or incurred by such Party (the “Damaged
Party”) except to the extent that the Party causes such loss, damage, injury, judgment, claim,
cost, expense or other liability suffered or incurred by the Damaged Party or owns or operates the
Pipelines, Tankage, or Loading Racks or other property in question responsible for

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causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the
Damaged Party.

     Section 13. Miscellaneous

     (a) Amendments and Waivers. No amendment or modification of this Agreement shall be valid
unless it is in writing and signed by the Parties. No waiver of any provision of this Agreement
shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to
be enforced. Any of the exhibits or schedules to this Agreement may be amended, modified, revised
or updated by the Parties if each of the Parties executes an amended, modified, revised or updated
exhibit or schedule, as applicable, and attaches it to this Agreement. Such amended, modified,
revised or updated exhibits or schedules shall be sequentially numbered (e.g. Schedule I-1,
Schedule I-2, etc.), dated and appended as an additional exhibit or schedule to this Agreement and
shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified
therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall
operate as a waiver of any provision of this Agreement. No single or partial exercise of a right
hereunder shall preclude further or complete exercise of that right or any other right hereunder.

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

     (c) 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.

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

Pipelines,
Tankage and Loading Rack Throughput Agreement (Tulsa East)

21

 

     (e) Arbitration Provision. Any and all Arbitrable Disputes must be resolved through
the use of binding arbitration using three arbitrators, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary
to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United
States Code). If there is any inconsistency between this Section 13(e) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 13(e) will
control the rights and obligations of the Parties. Arbitration must be initiated within the time
limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or
the time period allowed by the applicable statute of limitations. Arbitration may be initiated by
a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that
the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice
initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent
shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying
the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an
arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association
for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall
select a third arbitrator within thirty (30) days after the second arbitrator has been appointed.
The Claimant will pay the compensation and expenses of the arbitrator named by it, and the
Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs
of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The
Claimant and Respondent will each pay one-half of the compensation and expenses of the third
arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or
employees of any of Holly Tulsa, HEP Tulsa or any of their Affiliates and (ii) have not less than
seven (7) years experience in the petroleum transportation industry. The hearing will be conducted
in Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator.
Holly Tulsa, HEP Tulsa and the arbitrators shall proceed diligently and in good faith in order that
the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act,
the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The
arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary
damages of any kind. The Arbitrable Disputes may be arbitrated in a common proceeding along with
disputes under other agreements between Holly Tulsa, HEP Tulsa or their Affiliates to the extent
that the issues raised in such disputes are related. Without the written consent of the Parties,
no unrelated disputes or third party disputes may be joined to an arbitration pursuant to this
Agreement.

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

     (g) 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.

Pipelines,
Tankage and Loading Rack Throughput Agreement (Tulsa East)

22

 

     (h) Headings. Headings of the Sections of this Agreement are for convenience of the
Parties only and shall be given no substantive or interpretative effect whatsoever. All references
in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.

     Section 14. Guarantee by Holly

     (a) Payment and Performance Guaranty. Holly unconditionally, absolutely, continually
and irrevocably guarantees, as principal and not as surety, to HEP Tulsa the punctual and complete
payment in full when due of all amounts due from Holly Tulsa under the Agreement (collectively, the
“Holly Tulsa Payment Obligations”). Holly agrees that HEP Tulsa shall be entitled to
enforce directly against Holly any of the Holly Tulsa Payment Obligations.

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

     (i) any assignment or other transfer of the Agreement or any of the rights thereunder
of HEP Tulsa;

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

     (iii) any acceptance by HEP Tulsa of partial payment or performance from Holly Tulsa;

     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Holly Tulsa or any action
taken with respect to the Agreement by any trustee or receiver, or by any court, in any such
proceeding;

     (v) any absence of any notice to, or knowledge of, Holly, of the existence or
occurrence of any of the matters or events set forth in the foregoing subsections (i)
through (iv); or

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

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

     (c) Waiver. Holly hereby waives promptness, diligence, all setoffs, presentments,
protests and notice of acceptance and any other notice relating to any of the Holly Tulsa Payment
Obligations and any requirement for HEP Tulsa to protect, secure, perfect or insure any security

Pipelines,
Tankage and Loading
Rack Throughput
Agreement (Tulsa
East)

23

 

interest or lien or any property subject thereto or exhaust any right or take any action
against Holly Tulsa, any other entity or any collateral.

     (d) Subrogation Waiver. Holly agrees that for so long as there is a current or
ongoing default or breach of this Agreement by Holly Tulsa, Holly shall not have any rights (direct
or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of
payment or recovery from Holly Tulsa for any payments made by Holly under this Section 14,
and Holly hereby irrevocably waives and releases, absolutely and unconditionally, any such rights
of subrogation, contribution, reimbursement, indemnification and other rights of payment or
recovery it may now have or hereafter acquire against Holly Tulsa during any period of default or
breach of this Agreement by Holly Tulsa until such time as there is no current or ongoing default
or breach of this Agreement by Holly Tulsa.

     (e) Reinstatement. The obligations of Holly under this Section 14 shall
continue to be effective or shall be reinstated, as the case may be, if at any time any payment of
any of the Holly Tulsa Payment Obligations is rescinded or must otherwise be returned to Holly
Tulsa or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of Holly Tulsa or such other entity, or for any other reason, all as
though such payment had not been made.

     (f) Continuing Guaranty. This Section 14 is a continuing guaranty and shall
(i) remain in full force and effect until the first to occur of the indefeasible payment in full of
all of the Holly Tulsa Payment Obligations, (ii) be binding upon Holly, its successors and assigns
and (iii) inure to the benefit of and be enforceable by HEP Tulsa and its respective successors,
transferees and assigns.

     (g) No Duty to Pursue Others. It shall not be necessary for HEP Tulsa (and Holly
hereby waives any rights which Holly may have to require HEP Tulsa), in order to enforce such
payment by Holly, first to (i) institute suit or exhaust its remedies against Holly Tulsa or others
liable on the Holly Tulsa Payment Obligations or any other person, (ii) enforce HEP Tulsa’s rights
against any other guarantors of the Holly Tulsa Payment Obligations, (iii) join Holly Tulsa or any
others liable on the Holly Tulsa Payment Obligations in any action seeking to enforce this
Section 14, (iv) exhaust any remedies available to HEP Tulsa against any security which
shall ever have been given to secure the Holly Tulsa Payment Obligations, or (v) resort to any
other means of obtaining payment of the Holly Tulsa Payment Obligations.

     Section 15. Guarantee by the Partnership and Operating Partnership.

     (a) Payment and Performance Guaranty. Each of the Partnership and the Operating
Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and
not as surety, to Holly Tulsa the punctual and complete payment in full when due of all amounts due
from HEP Tulsa under the Agreement (collectively, the “HEP Tulsa Payment Obligations”).
Each of the Partnership and the Operating Partnership agrees that Holly Tulsa shall be entitled to
enforce directly against the Partnership and the Operating Partnership any of the HEP Tulsa Payment
Obligations.

Pipelines,
Tankage and Loadings Racks Throughput Agreement
(Tulsa East)

24

 

     (b) Guaranty Absolute. Each of the Partnership and the Operating Partnership hereby
guarantees that the HEP Tulsa Payment Obligations will be paid strictly in accordance with the
terms of the Agreement. The obligations of each of the Partnership and the Operating Partnership
under this Agreement constitute a present and continuing guaranty of payment, and not of collection
or collectability. The liability of each of the Partnership and the Operating Partnership under
this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective
of:

     (i) any assignment or other transfer of the Agreement or any of the rights thereunder
of Holly Tulsa;

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

     (iii) any acceptance by Holly Tulsa of partial payment or performance from HEP Tulsa;

     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment,
dissolution, liquidation or other like proceeding relating to HEP Tulsa or any action taken
with respect to the Agreement by any trustee or receiver, or by any court, in any such
proceeding;

     (v) any absence of any notice to, or knowledge of, the Partnership or the Operating
Partnership, of the existence or occurrence of any of the matters or events set forth in the
foregoing subsections (i) through (iv); or

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

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

     (c) Waiver. Each of the Partnership and the Operating Partnership hereby waives
promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other
notice relating to any of the HEP Tulsa Payment Obligations and any requirement for Holly Tulsa to
protect, secure, perfect or insure any security interest or lien or any property subject thereto or
exhaust any right or take any action against HEP Tulsa, any other entity or any collateral.

     (d) Subrogation Waiver. Each of the Partnership and the Operating Partnership agrees
that for so long as there is a current or ongoing default or breach of this Agreement by HEP Tulsa,
the Partnership and the Operating Partnership shall not have any rights (direct or indirect) of
subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery
from HEP Tulsa for any payments made by the Partnership or the Operating Partnership under this
Section 15, and each of the Partnership and the Operating Partnership

Pipelines,
Tankage and Loadings Racks Throughput Agreement
(Tulsa East)

25

 

hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of
subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery
it may now have or hereafter acquire against HEP Tulsa during any period of default or breach of
this Agreement by HEP Tulsa until such time as there is no current or ongoing default or breach of
this Agreement by HEP Tulsa.

     (e) Reinstatement. The obligations of the Partnership and the Operating Partnership
under this Section 15 shall continue to be effective or shall be reinstated, as the case
may be, if at any time any payment of any of the HEP Tulsa Payment Obligations is rescinded or must
otherwise be returned to HEP Tulsa or any other entity, upon the insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation or reorganization of HEP Tulsa or such other
entity, or for any other reason, all as though such payment had not been made.

     (f) Continuing Guaranty. This Section 15 is a continuing guaranty and shall
(i) remain in full force and effect until the first to occur of the indefeasible payment in full of
all of the HEP Tulsa Payment Obligations, (ii) be binding upon the Partnership, the Operating
Partnership, and each of their respective successors and assigns and (iii) inure to the benefit of
and be enforceable by Holly Tulsa and their respective successors, transferees and assigns.

     (g) No Duty to Pursue Others. It shall not be necessary for Holly Tulsa (and each of
the Partnership and the Operating Partnership hereby waives any rights which the Partnership or the
Operating Partnership, as applicable, may have to require Holly Tulsa), in order to enforce such
payment by the Partnership or the Operating Partnership, first to (i) institute suit or exhaust its
remedies against HEP Tulsa or others liable on the HEP Tulsa Payment Obligations or any other
person, (ii) enforce Holly Tulsa’ rights against any other guarantors of the HEP Tulsa Payment
Obligations, (iii) join HEP Tulsa or any others liable on the HEP Tulsa Payment Obligations in any
action seeking to enforce this Section 15, (iv) exhaust any remedies available to Holly
Tulsa against any security which shall ever have been given to secure the HEP Tulsa Payment
Obligations, or (v) resort to any other means of obtaining payment of the HEP Tulsa Payment
Obligations.

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

Pipelines,
Tankage and Loadings Racks Throughput Agreement
(Tulsa East)

26

 

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

	 	 	 	 	 
	 	HEP TULSA:

HEP TULSA LLC

 	 
	 	By:  	/s/ David G. Blair 	 
	 	 	David G. Blair 	 
	 	 	Senior Vice President 	 
	 
	 	HOLLY TULSA:

HOLLY REFINING & MARKETING
— TULSA LLC

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

ACKNOWLEDGED AND AGREED

FOR PURPOSES OF Section 9(b)

AND Section 14:

	 	 	 	 	 
	HOLLY CORPORATION

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

Signature Page 1 of 2 to the Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

 

 

ACKNOWLEDGED AND AGREED

FOR PURPOSES OF Section 9(b)

AND Section 15:

	 	 	 
	HOLLY ENERGY PARTNERS, L.P.
	 
	 	 
	By:

	 	HEP Logistics Holdings, L.P.,
	 

	 	its General Partner
	 
	 	 
	By:

	 	Holly Logistic Services, L.L.C.,
	 

	 	its General Partner

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

ACKNOWLEDGED AND AGREED

FOR PURPOSES OF Section 15:

	 	 	 
	HOLLY ENERGY PARTNERS-OPERATING, L.P.
	 
	 	 
	By:

	 	HEP Logistics GP, L.L.C.,
	 

	 	its General Partner

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

Signature Page 2 of 2 to the Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

 

 

SCHEDULE I

PIPELINE TARIFF

Pipeline Tariff

 

$0.10 per barrel

Schedule I-1

 

 

SCHEDULE II

TANKAGE TARIFFS

Tankage Base Tariff

 

$0.30 per barrel

Tankage Incentive Tariff

 

$0.10 per barrel

Tankage Excess Tariff

 

$0.22 per barrel

Schedule II-1

 

 

SCHEDULE III

LOADING RACKS TARIFF

Loading Racks Tariff

 

$0.30 per barrel

Schedule III-1

 

 

SCHEDULE IV

ASSUMED OPEX

Assumed OPEX

 

$1,702,000.00

Schedule IV-1

 

 

EXHIBIT A

TANKAGE

	 	 	 	 	 	 	 
	TANK ID	 	REFINED PRODUCT	 	CAPACITY (BBLS)	 
	10
	 	ULSD #2 (XT)	 	 	37,500	 
	11
	 	ULSD #2 (XT)	 	 	37,500	 
	102
	 	Kerosene	 	 	37,500	 
	103
	 	Kerosene	 	 	37,500	 
	104
	 	ULSD #2 (XT)	 	 	37,500	 
	110
	 	ULSD #1	 	 	37,500	 
	111
	 	Kerosene	 	 	37,500	 
	115A
	 	ULSD #2 (XT)	 	 	151,000	 
	115B
	 	ULSD #2 (XT)	 	 	151,000	 
	116
	 	Kerosene	 	 	37,500	 
	117
	 	ULSD #2 (XT)	 	 	63,000	 
	450
	 	Premium Unleaded	 	 	12,000	 
	451
	 	USLD #2 (XT)	 	 	12,000	 
	452
	 	USLD #2 (XT)	 	 	12,000	 
	464
	 	Unleaded Regular	 	 	80,000	 
	465
	 	Unleaded Regular	 	 	74,000	 
	466
	 	Unleaded Regular	 	 	80,000	 
	467
	 	Unleaded Regular	 	 	80,000	 
	470
	 	Unleaded Regular	 	 	80,000	 
	472
	 	Unleaded Regular	 	 	151,000	 
	473
	 	Premium Unleaded (ST)	 	 	80,000	 
	601
	 	Unleaded Regular	 	 	19,000	 
	602
	 	Premium Unleaded (ST)	 	 	10,000	 
	603
	 	USLD #2 (XT)	 	 	2,000	 
	605
	 	Ethanol	 	 	5,000	 
	606
	 	Empty	 	 	500	 

Exhibit Aexv10w2

Exhibit
10.2

INDEMNIFICATION PROCEEDS AND PAYMENTS

ALLOCATION AGREEMENT

     This Indemnification Proceeds and Payments Allocation Agreement (this “Agreement”) is
dated as of December 1, 2009, by and between Holly Refining & Marketing-Tulsa, LLC (“Holly
Tulsa”) and HEP Tulsa LLC (“HEP Tulsa”). Each of Holly Tulsa and HEP Tulsa are
individually referred to herein as a “Party” and collectively as the “Parties.”

RECITALS:

     WHEREAS, pursuant to that certain Asset Sale and Purchase Agreement dated as of October 19,
2009 (as the same may be amended or supplemented from time-to-time hereafter, the “Purchase
Agreement”) by and among Holly Tulsa, HEP Tulsa and Sinclair Tulsa Refining Company
(“Sinclair”), Holly Tulsa and HEP Tulsa each acquired certain refining assets and other
related assets located in Tulsa, Oklahoma;

     WHEREAS, the Purchase Agreement has provisions under which (i) Sinclair has agreed to
indemnify HEP Tulsa and Holly Tulsa and certain of related Persons for certain damages and losses
that any of them may suffer or incur, subject to caps and deductibles, and (ii) HEP Tulsa and Holly
Tulsa have agreed to indemnify Sinclair and certain of its related Persons for certain damages and
losses that any of them may suffer or incur, subject to caps and deductibles, all as set forth in
the Purchase Agreement;

     WHEREAS, after negotiation, Sinclair has refused to provide for caps and deductibles that
would apply separately to HEP Tulsa and its related Persons and Holly Tulsa and its related
Persons; and

     WHEREAS, in order to avoid conflicts of interests that may arise in the process of HEP Tulsa
and Holly Tulsa paying or seeking payment for indemnification claims as the result of the
application of the single caps and deductibles set forth in the Purchase Agreement, Holly Tulsa and
HEP Tulsa desire to enter into this Agreement to, among other things, set forth in advance the
terms and conditions under which each will allocate indemnification proceeds received from Sinclair
and allocate indemnification amounts paid to Sinclair.

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

     Section 1. Definitions

     As used in this Agreement, the following terms shall have the meanings indicated below.
Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the
meaning given them in the Purchase Agreement.

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

 

 

elected directors, managers or persons performing similar functions, the ownership of or power
to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of
the power to vote in the election of directors, managers or persons performing similar functions,
(ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii)the
ability to direct the business and affairs of any person by acting as a general partner, manager or
otherwise. Notwithstanding the foregoing, for purposes of this Agreement, Holly Tulsa, on the one
hand, and HEP Tulsa, on the other hand, shall not be considered affiliates of each other and
subsidiaries of HEP Tulsa shall not be considered affiliates of Holly Tulsa.

     “Agreement” has the meaning set forth in the preamble to this Agreement.

     “Applicable Law” means any applicable statute, law, regulation, ordinance, rule,
judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license,
agreement, requirement, or other governmental restriction or any similar form of decision of, or
any provision or condition of any permit, license or other operating authorization issued under any
of the foregoing by, or any determination of, any Governmental Authority having or asserting
jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each
case as amended (including, without limitation, all of the terms and provisions of the common law
of such Governmental Authority), as interpreted and enforced at the time in question.

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

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

     “Claimant” has the meaning set forth in Section 10(e).

     “Fundamental Representation Payments” has the meaning set forth in Section
2(b)(iii).

     “Fundamental Representation Proceeds” has the meaning set forth in Section
2(b)(i).

     “General Payments” has the meaning set forth in Section 2(b)(iv).

     “General Proceeds” has the meaning set forth in Section 2(b)(ii).

     “Governmental Authority” means any federal, state, local or foreign government or any
provincial, departmental or other political subdivision thereof, or any entity, body or authority
exercising executive, legislative, judicial, regulatory, administrative or other governmental

Indemnification Proceeds and Payments Allocation Agreement

2

 

functions or any court, department, commission, board, bureau, agency, instrumentality or
administrative body of any of the foregoing.

     “HEP Tulsa” has the meaning set forth in the preamble to this Agreement.

     “HEP Tulsa Payment Obligations” has the meaning set forth in Section 12(a).

     “Holly” means Holly Corporation, a Delaware corporation.

     “Holly Tulsa” has the meaning set forth in the preamble to this Agreement.

     “Holly Tulsa Payment Obligations” has the meaning set forth in Section 11(a).

     “Measurement Period” has the meaning set forth in Section 2(a).

     “Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

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

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

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

     “Payments” means any and all payments made by a Party pursuant to the indemnification
provisions of the Purchase Agreement. For all purposes under this Agreement, including for the
purposes of calculating or reporting Payments, any amounts paid by an Affiliate of such Party in
its capacity as a guarantor or other surety of such Party for its indemnification obligations under
the Purchase Agreement shall constitute payments made by such Party.

     “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.

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

     “Proceeds” means any and all indemnification payments received by a Party or its
Related Indemnified Parties (to the extent such payment was received by such Related Indemnified
Party in its capacity as a Related Indemnified Party of such Party in accordance with
the definition of Related Indemnified Parties) pursuant to the indemnification provisions of the
Purchase Agreement.

     “Related Indemnified Parties” means, with respect to each Party hereto, such Party’s
Affiliates, such Party and its Affiliates’ successors and assigns, and each of the respective

Indemnification Proceeds and Payments Allocation Agreement

3

 

directors and officers (or Persons in any similar capacity if such Person is not a corporation),
employees, consultants and agents of such Party, its Affiliates and their respective successors and
assigns; provided, however, that if any Related Indemnified Party is a Related
Indemnified Party of both Holly Tulsa and HEP Tulsa, then, for the purposes of reporting and
calculating the Proceeds received by a Party hereto and its Related Indemnified Parties under
Section 2 of this Agreement, then such Person shall be deemed to be a Related Indemnified
Party of such Party to the extent of the Proceeds received by such Person as a result of it acting
in its capacity as a director, officer, employee, consultant, agent or other capacity for or on
behalf of such Party.

     “Refinery” means the refinery located at Tulsa, Oklahoma and formerly owned by
Sinclair.

     “Respondent” has the meaning set forth in Section 10(e).

     “Retention Amount” has the meaning set forth in Section 6(d).

     “Sinclair” has the meaning set forth in the recitals to this Agreement.

     “Term” has the meaning set forth in Section 7.

      Section 2.  Measurement Periods and Reporting.

     (a) Measurement Periods. Each one-year period during the Term (each being a
“Measurement Period”) shall begin on the Effective Date or anniversary of the Effective
Date, as applicable, and shall end at midnight on the day immediately preceding the next
anniversary of the Effective Date. The final day of each Measurement Period shall be referred to
as a “Measurement Date.”

     (b) Reporting of Proceeds Received and Payments Made. On the fifth (5th)
business day following each Measurement Date during the Term, if a Party or its Related Indemnified
Parties have, during the Measurement Period ending on such Measurement Date, (x) received any
Proceeds, (y) made any Payments, or (z) made or received a claim for indemnification for Damages
under the Purchase Agreement during such Measurement Period that was not paid as a result of the
operation of the caps, baskets, deductibles or similar limitations imposed under the Purchase
Agreement, such Party shall notify the other Party in writing of the total amount of all such
Payments or Proceeds (or the amounts that would have constituted Payments or Proceeds but for the
operation of the caps, baskets, deductibles or similar limitations imposed under the Purchase
Agreement) and shall specify:

     (i) the amount of any such Proceeds constituting payments received for breaches of
Fundamental Representations (such Proceeds being “Fundamental Representation
Proceeds”);

     (ii) the amount of any such Proceeds that were other than Fundamental Representation
Proceeds (any such other Proceeds being “General Proceeds”);

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     (iii) the amount of any such Payments constituting payments made for breaches of
Fundamental Representations (such Payments being “Fundamental Representation
Payments”);

     (iv) the amount of any such Payments that were other than Fundamental Representation
Payments (any such other Payments being “General Payments”); and

     (v) the amount by which such Proceeds or Payments described in (i) through (iv) above
were reduced by the application of caps, baskets, deductibles or similar limitations imposed
pursuant to the Purchase Agreement.

     (c) Disregard of Minor Claims and Certain Proceeds. Any (i) Minor Claims, and (ii)
Proceeds received as a result of indemnification payments that are not subject to any caps, baskets
or thresholds pursuant to Section 8.4.10 of the Purchase Agreement, shall be disregarded
for all purposes in this Agreement, including for the purpose of calculating payments to be made
pursuant to this Agreement.

     Section 3. Re-Allocation Payments Regarding Indemnification Proceeds Received.

     (a) Reallocation of Fundamental Representation Proceeds. If, as of any Measurement
Date, the total amount of all Fundamental Representation Proceeds received by any Party and its
Related Indemnified Parties since the Effective Date (including any prior amounts received by such
Party and its Related Indemnified Parties pursuant to this Section 3(a)) exceeds such
Party’s and its Related Indemnified Parties’ Pro-Rata Portion of such Fundamental Representation
Proceeds, then such Party shall pay such excess amount to the other Party.

     (b) Reallocation of General Proceeds. If, as of any Measurement Date, the total
amount of all General Proceeds received by any Party and its Related Indemnified Parties since the
Effective Date (including any prior amounts received by such Party and its Related Indemnified
Parties pursuant to this Section 3(b)) exceeds such Party’s and its Related Indemnified
Parties’ Pro-Rata Portion of such General Proceeds, then such Party shall pay such excess amount to
the other Party.

     (c) Calculation of Pro-Rata Portion of Proceeds.

     (i) Calculation of Pro-Rata Portion of Fundamental Representation Proceeds. A
Party’s and its Related Indemnified Parties’ “Pro-Rata Portion” of the Fundamental
Representation Proceeds as of any Measurement Date means the amount obtained by using the
following formula:

     FPr = A x (B/C)

     where:

     FPr is a Party’s and its Related Indemnified Parties’ Pro-Rata Portion
of the Fundamental Representation Proceeds;

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     A = the total amount of all Fundamental Representation Proceeds
received by all Parties and their Related Indemnified Parties from the
Seller (or paid on behalf of or for the account of Seller) since the
Effective Date;

     B = the total value of all Damages attributable to breaches of
Fundamental Representations for which such Party and its Related Indemnified
Parties would be entitled to indemnification pursuant to the Purchase
Agreement if no deductibles, caps, baskets or similar limitations were
imposed under the Purchase Agreement; and

     C = the total value of all Damages attributable to breaches of
Fundamental Representations for which all Parties and their Related
Indemnified Parties are entitled to indemnification pursuant to the Purchase
Agreement if no deductibles, caps, baskets or similar limitations were
imposed under the Purchase Agreement.

     (ii) Calculation of Pro-Rata Portion of General Proceeds. A Party’s and its
Related Indemnified Parties’ “Pro-Rata Portion” of the General Proceeds as of any
Measurement Date means the amount obtained by using the following formula:

     GPr = D x (E/F)

     where:

     GPr is a Party’s and its Related Indemnified Parties’ Pro-Rata Portion of the
General Proceeds;

     D = the total amount of all General Proceeds received by all Parties and their
Related Indemnified Parties from the Seller (or paid on behalf of or for the account
of Seller) since the Effective Date;

     E = the total value of all Damages attributable to matters for which such Party
and its Related Indemnified Parties would be entitled to indemnification pursuant to
the Purchase Agreement if no deductibles, caps, baskets or similar limitations were
imposed under the Purchase Agreement, other than Damages for breaches of Fundamental
Representations; and

     F = the total value of all Damages attributable to matters for which all
Parties and their Related Indemnified Parties would be entitled to indemnification
pursuant to the Purchase Agreement if no deductibles, caps, baskets or similar
limitations were imposed under the Purchase Agreement, other than Damages for
breaches of Fundamental Representations.

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     Section 4. Re-Allocation Payments Regarding Indemnification Payments Made.

     (a) Reallocation of Fundamental Representation Payments. If, as of any Measurement
Date, the total amount of all Fundamental Representation Payments paid by any Party since the
Effective Date (including any prior amounts paid by such Party pursuant to this Section
4(a)) is less than such Party’s Pro-Rata Portion of such Fundamental Representation Payments,
then such Party shall pay the amount of such shortfall to the other Party.

     (b) Reallocation of General Payments. If, as of any Measurement Date, the total
amount of all General Payments paid by any Party since the Effective Date (including any prior
amounts paid by such Party pursuant to this Section 4(b)) is less than such Party’s
Pro-Rata Portion of such General Payments, then such Party shall pay the amount of such shortfall
to the other Party.

     (c) Calculation of Pro-Rata Portion of Payments.

     (i) Calculation of Pro-Rata Portion of Fundamental Representation Payments. A
Party’s “Pro-Rata Portion” of the Fundamental Representation Payments as of any
Measurement Date means the amount obtained by using the following formula:

     FPa = H x (I/J)

     where:

     FPa is a Party’s Pro-Rata Portion of the Fundamental Representation
Payments;

     H = the total amount of all Fundamental Representation Payments made by
all Parties (or paid on behalf of or for the account of a Party) to the
Seller Indemnified Parties since the Effective Date;

     I = the total value of all Damages attributable to breaches of
Fundamental Representations for which such Party would be required to
indemnify the Seller Indemnified Parties pursuant to the Purchase Agreement
if no deductibles, caps, baskets or similar limitations were imposed under
the Purchase Agreement; and

     J = the total value of all Damages attributable to breaches of
Fundamental Representations for which all Parties would be required to
indemnify the Seller Indemnified Parties pursuant to the Purchase Agreement
if no deductibles, caps, baskets or similar limitations were imposed under
the Purchase Agreement.

     (ii) Calculation of Pro-Rata Portion of General Payments. A Party’s
“Pro-Rata Portion” of the General Payments as of any Measurement Date means the
amount obtained by using the following formula:

     GPa = K x (L/M)

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     where:

     GPa is a Party’s Pro-Rata Portion of the General Payments;

     K = the total amount of all General Payments made by all Parties (or paid on
behalf of or for the account of a Party) to the Seller Indemnified Parties since the
Effective Date;

     L = the total value of all Damages for which such Party would be required to
indemnify the Seller Indemnified Parties pursuant to the Purchase Agreement if no
deductibles, caps, baskets or similar limitations were imposed under the Purchase
Agreement, other than Damages for breaches of Fundamental Representations; and

     M = the total value of all Damages for which all Parties would be required to
indemnify the Seller Indemnified Parties pursuant to the Purchase Agreement if no
deductibles, caps, baskets or similar limitations were imposed under the Purchase
Agreement, other than Damages for breaches of Fundamental Representations.

     Section 5. Cooperation to Calculate Payment Amounts; Valuation of Claims; Dispute
of Payment Amounts.

     (a) Cooperation to Calculate Payments. The Parties shall use commercially reasonable
efforts and shall act in good faith to calculate any payments due under Section 3 or
Section 4, and shall provide to the other Party and its Representatives evidence and
records reasonably requested by the other Party and shall makes its personnel reasonably available
in such effort. Unless otherwise agreed by the Parties, representatives of the Parties shall meet
or communicate promptly following delivery of the notices required under Section 2 to
calculate the amounts due to each Party, if any, pursuant to Section 3 or Section
4.

     (b) Valuation of Damages.

     (i) If a claim for Damages under the Purchase Agreement is paid in full and not reduced
or limited by the operation of the caps, baskets, deductibles or similar limitations imposed
under the Purchase Agreement, the value of such Damages for the purposes of calculating the
amounts due under Section 3 or Section 4 shall be the amount so paid or
received by the Parties and their Related Indemnified Parties, as applicable.

     (ii) If a claim for Damages under the Purchase Agreement is not paid in full as
a result of the operation of the caps, baskets, deductibles or similar limitations imposed
under the Purchase Agreement, then the Parties shall negotiate in good faith to calculate
the total value of such Damages for the purposes of calculating the amounts due under
Section 3 or Section 4 and shall cooperate in such efforts and provide to
the other Party and its Representatives evidence and records reasonably requested by the
other Party and make its personnel reasonably available for such purpose. In the event the
Parties are unable to agree to such value by the date a payment required by Section
3 or Section 4

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would normally be due pursuant to Section 6, the parties shall submit the
valuation of such Damages to a mutually agreed damages valuation expert, who shall act as an
expert and not as an arbitrator and whose valuation shall be final and binding on the
parties hereto. If the parties are unable to agree upon a damages valuation expert by the
fifteenth (15th) business day following the Measurement Date for which a notice
has been delivered pursuant to Section 2, then the Parties shall submit the
selection of a damages valuation expert to arbitration pursuant to Section 10(e).

     (c) Disputes. If the Parties are unable to agree to the amount of any payment due
under this Agreement by the time such payment would normally be due pursuant to Section 6
and the dispute relates solely to the inability to agree upon the value of Damages not paid in
full, then such dispute shall be resolved in accordance with Section 5(b) above. If
parties are unable to agree to the amount of any payment due under this Agreement by the time such
payment would normally be due under Section 6, and the dispute is other than one
relating solely to the inability to agree upon the value of Damages not paid in full, then the
Parties shall negotiate in good faith to resolve such dispute. If the dispute referred to in the
immediately preceding sentence is not resolved by the fifteenth (15th) day following the
Measurement Date to which such payment relates, then the parties shall resolve such dispute in
accordance with Section 10(e).

     Section 6. Timing and Method of Payments; Offset; Obligation to Retain Certain
Proceeds.

     (a) Timing and Method. If any payments are required to be made with respect to a
Measurement Period, all such payments shall be made on the tenth (10th) business day
following the Measurement Date on which such Measurement Period ends in immediately available funds
by wire transfer to an account specified by the receiving Party, or by such other method as the
Parties may agree, unless the amount of such payments is being disputed in accordance with
Section 5(b) or Section 5(c), in which case the payment shall be made promptly
following resolution of the amount to be paid.

     (b) Offset of Current Amounts. If the total amount of any undisputed payments owed by
a Party under Section 3 and Section 4 with respect to a Measurement Period exceed
the amount of undisputed payments that it owes to the other Party with respect to such Measurement
Period at the time such payments are being made, then, in lieu of each party making payments to
each other in the amounts owed, the amount so owed by the party owing the most shall be reduced by
the amount that it is so owed and it shall pay the difference to the other Party and the other
Party shall make no payment, though it shall be deemed for all purposes under this Agreement and
otherwise that each Party hereto paid the full amount of undisputed payments that it so owed prior
to such reduction and offset as provided in this Section 6(b).

     (c) Interest on Delayed Payments. In the event a payment that would ordinarily be due
on the tenth (10th) business day following the Measurement Date is not paid by such
tenth (10th) business day, whether the delay in payment is due to the dispute of the
amount of such payment or otherwise, then all unpaid amounts shall earn interest at the Prime Rate
from such tenth (10th) business day through and including the date of payment, but such
interest shall not constitute liquidated damages or the sole remedy available to a Party as a
result of a failure to

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timely pay amounts due hereunder, or an election of remedies by the Party receiving such
interest payment.

     (d) Obligation to Retain Certain Proceeds. In the event a Party receives Proceeds and
those Proceeds, along will all other Proceeds received by such Party and its Related Indemnified
Parties since the Effective Date (including Proceeds received from the other Party pursuant to
Section 3 of this Agreement), exceeds the Retention Amount for such Party, then such Party
shall reserve and retain such excess amounts by depositing them in a segregated account at a
nationally recognized banking institution with deposit assets in excess of $1 billion and shall
remove and release such amounts so deposited from such account only (i) in order to make payments
to the other Party pursuant to this Agreement; or (ii) upon the expiration of the Term. For the
purposes of this Section 6(d), the term “Retention Amount” shall mean $15 million with
respect to HEP Tulsa, and shall mean $30 million with respect to Holly Tulsa.

     Section 7. Effectiveness and Term

     This Agreement shall be effective as of the Effective Time, and shall terminate at 12:01 a.m.
Dallas, Texas, time on the ninetieth (90th) day following final payment of all amounts
due with respect to the fourth (4th) full Measurement Period (the “Term).

     Section 8. Taxes.

     Any reallocation payments made under this Agreement shall be treated as purchase price
adjustments under the Purchase Agreement for tax purposes to the extent permitted under applicable
laws and regulations.

     Section 9. Notices

     (a) Any notice or other communication given under this Agreement shall be in writing and shall
be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by
email transmission, or (iv) sent by first class mail, postage prepaid (certified or registered
mail, return receipt requested). Such notice shall be deemed to have been duly given (x) if
received, on the date of the delivery, with a receipt for delivery, (y) if refused, on the date of
the refused delivery, with a receipt for refusal, or (z) with respect to email transmissions, on
the date the recipient confirms receipt. Notices or other communications shall be directed to the
following addresses:

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Notices to Holly Tulsa:

c/o Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: David L. Lamp

Email address: president@hollycorp.com

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

c/o Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: General Counsel

Email address:generalcounsel@hollycorp.com

Notices to HEP Tulsa:

c/o Holly Energy Partners, L.P.

100 Crescent Court, Suite 1600

Dallas, TX 75201

Attn: David G. Blair

Email address: SVP-HEP@hollyenergy.com

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

c/o Holly Energy Partners, L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attn: General Counsel

Email address: generalcounsel@hollycorp.com

     (b) Any Party may at any time change its address for service from time to time by giving
notice to the other Parties in accordance with this Section 9.

     Section 10. Miscellaneous

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

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     (b) Successors and Assigns. This Agreement shall inure to the benefit of, and shall
be binding upon, Holly Tulsa, HEP Tulsa and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the
prior written consent of Holly Tulsa (in the case of any assignment by HEP Tulsa) or HEP Tulsa (in
the case of any assignment by Holly Tulsa), in each case, such consent is not to be unreasonably
withheld or delayed; provided, however, that (i) HEP Tulsa may make such an
assignment (including a partial pro rata assignment) to an Affiliate of HEP Tulsa without Holly
Tulsa’s consent, (ii) Holly Tulsa may make such an assignment (including a pro rata partial
assignment) to an Affiliate of Holly Tulsa without HEP Tulsa’s consent, (iii) Holly Tulsa may make
a collateral assignment of its rights and obligations hereunder to a bona fide third party lender
or debt holder, or trustee or representative of any of them, without HEP Tulsa’s consent, and (iv)
HEP Tulsa may make a collateral assignment of its rights hereunder, to a bona fide third party
lender or debt holder, or trustee or representative for any of them, without Holly Tulsa’s consent.
Any attempt to make an assignment otherwise than as permitted by the foregoing shall be null and
void. The Parties agree to require their respective successors, if any, to expressly assume, in a
form of agreement reasonably acceptable to the other Parties, their obligations under this
Agreement.

     (c) 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.

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

     (e) Arbitration Provision. Any and all Arbitrable Disputes must be resolved through
the use of binding arbitration using three arbitrators, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary
to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United
States Code). If there is any inconsistency between this Section 10(e) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 10(e) will
control the rights and obligations of the Parties. Arbitration must be initiated within the time
limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or
the time period allowed by the applicable statute of limitations. Arbitration may be initiated by
a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that
the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice
initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent
shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying
the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an
arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association
for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall
select a third arbitrator within thirty (30) days after the second arbitrator has been appointed.
The Claimant will pay the compensation and expenses of the arbitrator named by it, and the
Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs
of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The
Claimant and

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Respondent will each pay one-half of the compensation and expenses of the third arbitrator.
All arbitrators must (i) be neutral parties who have never been officers, directors or employees of
any of Holly Tulsa, HEP Tulsa or any of their Affiliates and (ii) have not less than seven (7)
years experience in the energy industry. The hearing will be conducted in Dallas, Texas and
commence within thirty (30) days after the selection of the third arbitrator. Holly Tulsa, HEP
Tulsa and the arbitrators shall proceed diligently and in good faith in order that the award may be
made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of
the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall
have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind.
The Arbitrable Disputes may be arbitrated in a common proceeding along with disputes under other
agreements between Holly Tulsa, HEP Tulsa or their Affiliates to the extent that the issues raised
in such disputes are related. Without the written consent of the Parties, no unrelated disputes or
third party disputes may be joined to an arbitration pursuant to this Agreement.

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

     (g) 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.

     (h) Headings. Headings of the Sections of this Agreement are for convenience of the
Parties only and shall be given no substantive or interpretative effect whatsoever. All references
in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.

     Section 11. Guarantee by Holly

     (a) Payment and Performance Guaranty. Holly unconditionally, absolutely, continually
and irrevocably guarantees, as principal and not as surety, to HEP Tulsa the punctual and complete
payment in full when due of all amounts due from Holly Tulsa under the Agreement (collectively, the
“Holly Tulsa Payment Obligations”). Holly agrees that HEP Tulsa shall be entitled to
enforce directly against Holly any of the Holly Tulsa Payment Obligations.

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

     (i) any assignment or other transfer of the Agreement or any of the rights thereunder
of HEP Tulsa;

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

     (iii) any acceptance by HEP Tulsa of partial payment or performance from Holly Tulsa;

     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Holly Tulsa or any action
taken with respect to the Agreement by any trustee or receiver, or by any court, in any such
proceeding;

     (v) any absence of any notice to, or knowledge of, Holly, of the existence or
occurrence of any of the matters or events set forth in the foregoing subsections (i)
through (iv); or

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

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

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

     (d) Subrogation Waiver. Holly agrees that for so long as there is a current or
ongoing default or breach of this Agreement by Holly Tulsa, Holly shall not have any rights (direct
or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of
payment or recovery from Holly Tulsa for any payments made by Holly under this Section 11,
and Holly hereby irrevocably waives and releases, absolutely and unconditionally, any such rights
of subrogation, contribution, reimbursement, indemnification and other rights of payment or
recovery it may now have or hereafter acquire against Holly Tulsa during any period of default or
breach of this Agreement by Holly Tulsa.

     (e) Reinstatement. The obligations of Holly under this Section 11 shall
continue to be effective or shall be reinstated, as the case may be, if at any time any payment of
any of the Holly Tulsa Payment Obligations is rescinded or must otherwise be returned to Holly
Tulsa or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of Holly Tulsa or such other entity, or for any other reason, all as
though such payment had not been made.

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     (f) Continuing Guaranty. This Section 11 is a continuing guaranty and shall
(i) remain in full force and effect until the first to occur of the indefeasible payment in full of
all of the Holly Tulsa Payment Obligations, (ii) be binding upon Holly, its successors and assigns
and (iii) inure to the benefit of and be enforceable by HEP Tulsa and its respective successors,
transferees and assigns.

     (g) No Duty to Pursue Others. It shall not be necessary for HEP Tulsa (and Holly
hereby waives any rights which Holly may have to require HEP Tulsa), in order to enforce such
payment by Holly, first to (i) institute suit or exhaust its remedies against Holly Tulsa or others
liable on the Holly Tulsa Payment Obligations or any other person, (ii) enforce HEP Tulsa’s rights
against any other guarantors of the Holly Tulsa Payment Obligations, (iii) join Holly Tulsa or any
others liable on the Holly Tulsa Payment Obligations in any action seeking to enforce this
Section 11, (iv) exhaust any remedies available to HEP Tulsa against any security which
shall ever have been given to secure the Holly Tulsa Payment Obligations, or (v) resort to any
other means of obtaining payment of the Holly Tulsa Payment Obligations.

     Section 12. Guarantee by the Partnership and Operating Partnership.

     (a) Payment and Performance Guaranty. Each of the Partnership and the Operating
Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and
not as surety, to Holly Tulsa the punctual and complete payment in full when due of all amounts due
from HEP Tulsa under the Agreement (collectively, the “HEP Tulsa Payment Obligations”).
Each of the Partnership and the Operating Partnership agrees that Holly Tulsa shall be entitled to
enforce directly against the Partnership and the Operating Partnership any of the HEP Tulsa Payment
Obligations.

     (b) Guaranty Absolute. Each of the Partnership and the Operating Partnership hereby
guarantees that the HEP Tulsa Payment Obligations will be paid strictly in accordance with the
terms of the Agreement. The obligations of each of the Partnership and the Operating Partnership
under this Agreement constitute a present and continuing guaranty of payment, and not of collection
or collectability. The liability of each of the Partnership and the Operating Partnership under
this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective
of:

     (i) any assignment or other transfer of the Agreement or any of the rights thereunder
of Holly Tulsa;

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

     (iii) any acceptance by Holly Tulsa of partial payment or performance from HEP Tulsa;

     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment,
dissolution, liquidation or other like proceeding relating to HEP Tulsa or any action taken
with respect to the Agreement by any trustee or receiver, or by any court, in any such
proceeding;

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     (v) any absence of any notice to, or knowledge of, the Partnership or the Operating
Partnership, of the existence or occurrence of any of the matters or events set forth in the
foregoing subsections (i) through (iv); or

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

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

     (c) Waiver. Each of the Partnership and the Operating Partnership hereby waives
promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other
notice relating to any of the HEP Tulsa Payment Obligations and any requirement for Holly Tulsa to
protect, secure, perfect or insure any security interest or lien or any property subject thereto or
exhaust any right or take any action against HEP Tulsa, any other entity or any collateral.

     (d) Subrogation Waiver. Each of the Partnership and the Operating Partnership agrees
that for so long as there is a current or ongoing default or breach of this Agreement by HEP Tulsa,
the Partnership and the Operating Partnership shall not have any rights (direct or indirect) of
subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery
from HEP Tulsa for any payments made by the Partnership or the Operating Partnership under this
Section 12, and each of the Partnership and the Operating Partnership hereby irrevocably
waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution,
reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter
acquire against HEP Tulsa during any period of default or breach of this Agreement by HEP Tulsa.

     (e) Reinstatement. The obligations of the Partnership and the Operating Partnership
under this Section 12 shall continue to be effective or shall be reinstated, as the case
may be, if at any time any payment of any of the HEP Tulsa Payment Obligations is rescinded or must
otherwise be returned to HEP Tulsa or any other entity, upon the insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation or reorganization of HEP Tulsa or such other
entity, or for any other reason, all as though such payment had not been made.

     (f) Continuing Guaranty. This Section 12 is a continuing guaranty and shall
(i) remain in full force and effect until the first to occur of the indefeasible payment in full of
all of the HEP Tulsa Payment Obligations, (ii) be binding upon the Partnership, the Operating
Partnership, and each of their respective successors and assigns and (iii) inure to the benefit of
and be enforceable by Holly Tulsa and their respective successors, transferees and assigns.

     (g) No Duty to Pursue Others. It shall not be necessary for Holly Tulsa (and each of
the Partnership and the Operating Partnership hereby waives any rights which the Partnership or the
Operating Partnership, as applicable, may have to require Holly Tulsa), in order to enforce

Indemnification Proceeds and Payments Allocation Agreement

16

 

such payment by the Partnership or the Operating Partnership, first to (i) institute suit or
exhaust its remedies against HEP Tulsa or others liable on the HEP Tulsa Payment Obligations or any
other person, (ii) enforce Holly Tulsa’ rights against any other guarantors of the HEP Tulsa
Payment Obligations, (iii) join HEP Tulsa or any others liable on the HEP Tulsa Payment Obligations
in any action seeking to enforce this Section 12, (iv) exhaust any remedies available to
Holly Tulsa against any security which shall ever have been given to secure the HEP Tulsa Payment
Obligations, or (v) resort to any other means of obtaining payment of the HEP Tulsa Payment
Obligations.

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

Indemnification Proceeds and Payments Allocation Agreement

17

 

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

	 	 	 	 	 
	 	HEP TULSA:

HEP TULSA LLC

 	 
	 	By:  	/s/ David G. Blair 	 
	 	 	David G. Blair 	 
	 	 	Senior Vice President 	 
	 
	 	HOLLY TULSA:

HOLLY REFINING & MARKETING

— TULSA LLC

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

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED

FOR PURPOSES OF AND Section 11:

HOLLY CORPORATION

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

Signature Page to Indemnification Proceeds and Payments Allocation Agreement

 

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED

FOR PURPOSES OF Section 12:

HOLLY ENERGY PARTNERS, L.P.

	 
	By:  	HEP Logistics Holdings, L.P.,

its General Partner

	 
	By:  	Holly Logistic Services, L.L.C.,

its General Partner

	 
	By:  	/s/ David G. Blair 	 
	 	David G. Blair 	 
	 	Senior Vice President 	 
	 
	ACKNOWLEDGED AND AGREED

FOR PURPOSES OF Section 12:

HOLLY ENERGY PARTNERS-OPERATING, L.P.

	 
	By:  	HEP Logistics GP, L.L.C.,

its General Partner

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

Signature Page to Indemnification Proceeds and Payments Allocation Agreement

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