Document:

exv10w1

Exhibit 10.1

 

 

LLC INTEREST PURCHASE AGREEMENT

by and among

HOLLY CORPORATION,

NAVAJO PIPELINE CO., L.P.

as Seller,

and

HOLLY ENERGY PARTNERS — OPERATING, L.P.

as Buyer

Dated as of June 1, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I

	DEFINED TERMS

	 
	 	 	 	 	 	 
	1.1
	 	Defined Terms	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II

	PURCHASE OF LLC INTERESTS

	 
	 	 	 	 	 	 
	2.1
	 	Transfer of LLC Interests	 	 	6	 
	2.2
	 	Consideration	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE III

	CLOSING

	 
	 	 	 	 	 	 
	3.1
	 	Closing	 	 	6	 
	3.2
	 	Deliveries by the Seller	 	 	6	 
	3.3
	 	Deliveries by the Buyer	 	 	7	 
	3.4
	 	Closing Costs; Transfer Taxes and Fees	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE IV

	REPRESENTATIONS AND WARRANTIES OF THE SELLER

	 
	 	 	 	 	 	 
	4.1
	 	Organization	 	 	8	 
	4.2
	 	Authorization	 	 	8	 
	4.3
	 	Company Status	 	 	8	 
	4.4
	 	No Conflicts or Violations; No Consents or Approvals Required	 	 	9	 
	4.5
	 	Absence of Litigation	 	 	9	 
	4.6
	 	Title to LLC Interests; Capitalization	 	 	10	 
	4.7
	 	No Undisclosed Liabilities	 	 	10	 
	4.8
	 	No Employees	 	 	10	 
	4.9
	 	Taxes	 	 	11	 
	4.10
	 	Brokers and Finders	 	 	11	 
	4.11
	 	Condition of 16” Pipeline	 	 	11	 
	4.12
	 	Title to Assets	 	 	11	 
	4.13
	 	Banking Relationships	 	 	11	 
	4.14
	 	WAIVERS AND DISCLAIMERS	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE V

	REPRESENTATIONS AND WARRANTIES OF THE BUYER

	 
	 	 	 	 	 	 
	5.1
	 	Organization	 	 	12	 
	5.2
	 	Authorization	 	 	13	 
	5.3
	 	No Conflicts or Violations; No Consents or Approvals Required	 	 	13	 
	5.4
	 	Absence of Litigation	 	 	13	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	5.5
	 	Brokers and Finders	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VI

	REPRESENTATIONS AND WARRANTIES OF HOLLY

	 
	 	 	 	 	 	 
	6.1
	 	Organization	 	 	14	 
	6.2
	 	Authorization	 	 	14	 
	6.3
	 	No Conflicts or Violations; No Consents or Approvals Required	 	 	14	 
	6.4
	 	Absence of Litigation	 	 	14	 
	6.5
	 	Brokers and Finders	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE VII

	COVENANTS

	 
	 	 	 	 	 	 
	7.1
	 	Cooperation	 	 	15	 
	7.2
	 	Additional Agreements	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	ADDITIONAL AGREEMENTS

	 
	 	 	 	 	 	 
	8.1
	 	Further Assurances	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	INDEMNIFICATION

	 
	 	 	 	 	 	 
	9.1
	 	Indemnification of Buyer and Seller	 	 	15	 
	9.2
	 	Defense of Third-Party Claims	 	 	15	 
	9.3
	 	Direct Claims	 	 	17	 
	9.4
	 	Limitations	 	 	17	 
	9.5
	 	Tax Related Adjustments	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE X

	MISCELLANEOUS

	 
	 	 	 	 	 	 
	10.1
	 	Expenses	 	 	17	 
	10.2
	 	Notices	 	 	17	 
	10.3
	 	Severability	 	 	18	 
	10.4
	 	Governing Law; Waiver of Jury Trial	 	 	19	 
	10.5
	 	Parties in Interest	 	 	19	 
	10.6
	 	Assignment of Agreement	 	 	19	 
	10.7
	 	Captions	 	 	19	 
	10.8
	 	Counterparts	 	 	19	 
	10.9
	 	Director and Officer Liability	 	 	19	 
	10.10
	 	Integration	 	 	20	 
	10.11
	 	Effect of Agreement	 	 	20	 
	10.12
	 	Amendment; Waiver	 	 	20	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE XI

	GUARANTEE

	 
	 	 	 	 	 	 
	11.1
	 	Payment and Performance Guaranty	 	 	20	 
	11.2
	 	Guaranty Absolute	 	 	20	 
	11.3
	 	Waiver	 	 	21	 
	11.4
	 	Subrogation Waiver	 	 	21	 
	11.5
	 	Reinstatement	 	 	21	 
	11.6
	 	Continuing Guaranty	 	 	22	 
	11.7
	 	No Duty to Pursue Others	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE XII

	INTERPRETATION

	 
	 	 	 	 	 	 
	12.1
	 	Interpretation	 	 	22	 
	12.2
	 	References, Gender, Number	 	 	23	 

	 	 	 	 	 
	Exhibits:	 	 	 	 
	Exhibit A
	 	—	 	Assignment
	Exhibit B
	 	—	 	Restated Intermediate Pipelines Agreement
	Exhibit C
	 	—	 	Restated Omnibus Agreement
	Exhibit D
	 	—	 	Mortgages and Deeds of Trust

	 	 	 	 	 
	Schedules:	 	 	 	 
	Schedule 4.3(a)
	 	—	 	Company Foreign Qualifications
	Schedule 4.4(a)
	 	—	 	Seller No Conflicts or Violations
	Schedule 4.4(b)
	 	—	 	Company No Conflicts or Violations
	Schedule 4.5
	 	—	 	Seller Litigation
	Schedule 4.6(a)
	 	—	 	Title to LLC Interests
	Schedule 4.12
	 	—	 	Title to Assets
	Schedule 4.13
	 	—	 	Banking Relationships
	Schedule 5.3
	 	—	 	Buyer No Conflicts or Violations
	Schedule 5.4
	 	—	 	Buyer Litigation
	Schedule 6.3
	 	—	 	Holly No Conflicts or Violations
	Schedule 6.4
	 	—	 	Holly Litigation

 

 

LLC INTEREST PURCHASE AGREEMENT

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

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

     WHEREAS, the Company is the owner of a newly constructed 16” pipeline (the “16” Pipeline”)
currently running 65 miles from Holly’s crude oil distillation and vacuum distillation facilities
in Lovington, New Mexico to Holly’s petroleum refinery in Artesia, New Mexico;

     WHEREAS, the Operating Partnership wishes to purchase all of the issued and outstanding
membership interests of the Company (the “LLC Interests”) and thereby acquire the 16” Pipeline; and

     WHEREAS, the Parties wish to amend certain provisions of the Omnibus Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein
and in the Omnibus Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby
agree as follows:

ARTICLE I

DEFINED TERMS

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

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

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

     “affiliate” means, with respect to a specified person, any other person controlling,
controlled by or under common control with that first person. As used in this definition, the term
“control” includes (i) with respect to any person having voting securities or the equivalent and
elected directors, managers or persons performing similar functions, the ownership of or power

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

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

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

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

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

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

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

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

     “Buyer Consents” shall have the meaning set forth in Section 5.3.

     “Buyer Indemnified Costs” means (a) any and all damages, losses, claims, liabilities, demands,
charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys’
fees and expenses incurred in investigating and preparing for any litigation or proceeding) that
any of the Buyer Indemnified Parties incurs and that arise out of or relate to (i) any breach of a
representation, warranty or covenant of Seller under this Agreement, or (ii) any obligations or
duties of the Company under any Contract relating to the original planned construction of the 16”
Pipeline, as such Contract is in effect as of the Effective Time (including any change orders
agreed to by the parties to such Contracts prior to the Effective Time, whether or not such change
order has properly been documented as of the Effective Time) (collectively, the “Construction
Contracts”) (including, without limitation, the Company’s payment obligations under such
Construction Contracts and the cost to complete construction of the 16” Pipeline as set forth in
such Construction Contracts), and (b) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and expenses, incident
to any of the foregoing. Notwithstanding anything in the foregoing to the contrary, Buyer
Indemnified Costs shall exclude (i) any and all punitive, exemplary or special damages and (ii) any
and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs, and
expenses (including court costs and reasonable attorneys’ fees and expenses incurred in
investigating and preparing for any litigation or proceeding) that any of the Buyer Indemnified
Parties incurs and that arise out of or relate to any matter that is covered

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

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by a warranty under a Construction Contract (including, without limitation, defects in the construction
of the 16” Pipeline which are covered by a warranty under a Construction Contract).

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

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

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

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

     “Company Consents” shall have the meaning set forth in Section 4.4(b).

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

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

     “Credit Facility” means the Amended and Restated Credit Agreement, dated as of August 27, 2007
and as amended from time to time, between the Operating Partnership, as borrower, Union Bank of
California, as administrative agent, issuing bank and sole lead arranger, Bank of America, N.A., as
syndication agent, Guaranty Bank, as documentation agent and certain other lenders identified
therein.

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

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

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

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

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     “Holly Consents” shall have the meaning set forth in Section 6.3.

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

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

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

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

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

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

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

     “Mortgages and Deeds of Trust” shall have the meaning set forth in Section 3.3(e).

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

     “Omnibus Agreement” means that certain agreement entered into and effective as of July 13,
2004 and as amended on July 6, 2005 and February 29, 2008, by and among Holly, Navajo Pipeline,
Holly Logistic Services, L.L.C., a Delaware limited liability company, the Partnership, the
Operating Partnership, HEP Logistics GP, L.L.C., a Delaware limited liability company and HEP
Logistics Holdings, L.P., a Delaware limited partnership, and as amended and restated as of the
Closing Date.

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

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

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

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

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

     “Permits” means all material permits, licenses, variances, exemptions, Orders, franchises and
approvals of all Governmental Entities necessary for the lawful ownership and operation of the
Company’s business, including the 16” Pipeline.

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

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

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

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

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

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

     “Seller Consents” has the meaning set forth in Section 4.4(a).

     “Seller Indemnified Costs” means (a) any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable
attorneys’ fees and expenses incurred in investigating and preparing for any litigation or
proceeding) that any of the Seller Indemnified Parties incurs and that arise out of or relate to any

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

5

 

breach of a representation, warranty or covenant of Buyer under this Agreement, and (b) any and
all actions, suits, proceedings, claims, demands, assessments, judgments, costs, and expenses,
including reasonable legal fees and expenses, incident to any of the foregoing. Notwithstanding
anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all
punitive, exemplary or special damages.

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

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

ARTICLE II

PURCHASE OF LLC INTERESTS

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

     2.2 Consideration.

          (a) The aggregate consideration to be paid by the Operating Partnership for the LLC Interests
shall be $34,200,000 (the “Purchase Price”).

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

ARTICLE III

CLOSING

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

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

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

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

6

 

          (c) A counterpart of the amended and restated intermediate pipelines agreement substantially
in the form of Exhibit B attached hereto (the “Restated Intermediate Pipelines Agreement”),
duly executed by Holly and each applicable subsidiary of Holly (excluding subsidiaries of the
Partnership).

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

          (e) Evidence in form and substance reasonably satisfactory to the Buyer of each Seller
Consent, each Company Consent and each Holly Consent.

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

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

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

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

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

          (c) A counterpart of the Restated Intermediate Pipelines Agreement, duly executed by the
Partnership and each applicable subsidiary of the Partnership.

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

          (e) Each of the mortgages and deeds of trust substantially in the form of Exhibit D
attached hereto (the “Mortgages and Deeds of Trust”), duly executed by the Buyer.

          (f) Evidence in form and substance reasonably satisfactory to the Seller of each Buyer
Consent.

     3.4 Closing Costs; Transfer Taxes and Fees.

          (a) Allocation of Costs. The Buyer shall pay the cost of all sales, transfer and use
taxes arising out of the transfer of the LLC Interests and all costs and expenses (including

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

7

 

recording fees and real estate transfer taxes and real estate transfer stamps) incurred in
connection with obtaining or recording title to the Company’s assets.

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

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

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

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

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

     4.3 Company Status.

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

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

          (c) The Company has not engaged in any business other than the construction of the 16”
Pipeline. The Company has no assets except the 16” Pipeline and the associated rights and
obligations under the Construction Contracts.

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

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

          (a) Except as set forth in Seller Disclosure Schedule 4.4(a), the execution, delivery
and performance by the Seller of this Agreement and the other Seller Ancillary Documents to which
it is a party does not, and the consummation of the transactions contemplated hereby and thereby
will not, (i) violate, conflict with, or result in any breach of any provision of the Seller’s
organizational documents or (ii) subject to obtaining the Consents or making the registrations,
declarations or filings set forth in the next sentence, violate in any material respect any
applicable Law or material contract binding upon the Seller. No Consent of any Governmental Entity
or any other person is required for the Seller in connection with the execution, delivery and
performance of this Agreement and the Seller Ancillary Documents to which the Seller is a party or
the consummation of the transactions contemplated hereby or thereby, except as set forth in
Seller Disclosure Schedule 4.4(a) (collectively, the “Seller Consents”).

          (b) Except as set forth in Seller Disclosure Schedule 4.4(b), the consummation of the
transactions contemplated by this Agreement and the other Seller Ancillary Documents will not, (i)
violate, conflict with, or result in any breach of any provision of the Company’s organizational
documents or (ii) subject to obtaining the Consents or making the registrations, declarations or
filings set forth in the next sentence, violate in any material respect any applicable Law or
material contract binding upon the Company. No Consent of any Governmental Entity or any other
person is required for the Company in connection with the performance of this Agreement and the
Seller Ancillary Documents or the consummation of the transactions contemplated hereby or thereby,
except as set forth in Seller Disclosure Schedule 4.4(b) (collectively, the “Company
Consents”).

     4.5 Absence of Litigation. Except as set forth in Seller Disclosure Schedule
4.5, there is no Action pending or, to the knowledge of the Seller, threatened against (i) the
Company or the Company’s assets or (ii) the Seller or any of its affiliates relating to the
transactions contemplated by this Agreement or the Ancillary Documents or which, if adversely
determined, would reasonably be expected to materially impair the ability of the Seller to perform its

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obligations and agreements under this Agreement or the Seller Ancillary Documents and to
consummate the transactions contemplated hereby and thereby.

     4.6 Title to LLC Interests; Capitalization.

          (a) Except as set forth in Seller Disclosure Schedule 4.6(a), Seller is the record
owner of and has good and valid title to the LLC Interests, free and clear of all Encumbrances, and
sole and unrestricted voting power and power of disposition with respect to all of such LLC
Interests. Except for any claims arising under this Agreement and any other agreement entered into
by the Seller in connection with this Agreement, the Seller and its affiliates have no claims of
any kind against the Company, or any of its officers, managers, directors or employees. The LLC
Interests have been duly authorized and validly issued in accordance with applicable Laws and the
limited liability company agreement of the Company and are fully paid (to the extent required by
the limited liability company agreement of the Company) and nonassessable (except to the extent
such nonassessability may be affected by Sections 18-607 and 18-804 of DLLCA).

          (b) There are no options or rights to purchase or acquire, or agreements, arrangements,
commitments or understandings relating to, any of the LLC Interests or the 16” Pipeline except
pursuant to this Agreement and the Omnibus Agreement. There are no (i) authorized or outstanding
securities of or equity interests in the Company of any kind other than the LLC Interests, (ii)
there are no outstanding options, warrants, subscriptions, puts, calls or other rights, agreements,
arrangements or commitments (preemptive, contingent or otherwise) obligating Seller or the Company
to offer, issue, sell, redeem, repurchase, otherwise acquire or transfer, pledge or encumber any
securities of equity interest in the Company; and (iii) there are no outstanding securities or
obligations of any kind of any of the Company that are convertible into or exercisable or
exchangeable for any equity interest in the Company.

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

     4.7 No Undisclosed Liabilities. The Company has no indebtedness or liability (whether
absolute, accrued, contingent or otherwise) of any nature other than its obligations under the
Construction Contracts and the Guarantee and Collateral Agreement referred to on Seller
Disclosure Schedule 4.13 (the “Guarantee Agreement”). The Company and its assets will be
released from the Company’s obligations under the Guarantee Agreement and the related loan
documents following the Closing and delivery of certain documents to the agent for the lenders
under the Second Amended and Restated Credit Agreement referred to on Seller Disclosure
Schedule 4.13. The Company is not currently in material breach of its obligations under the
Construction Contracts.

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

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

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

     4.11 Condition of 16” Pipeline. To the Seller’s knowledge, the 16” Pipeline is in
good operating condition and repair (normal wear and tear excepted), is free from material defects
(patent and latent), is suitable for the purposes for which it is currently used and is not in need
of material maintenance or repairs except for ordinary routine maintenance and repairs.

     4.12 Title to Assets. Except as disclosed in Seller Disclosure Schedule 4.12,
the Company owns, leases or has the legal right to use all the properties and assets used by the
Company in the operation of its business, in each case subject to no Encumbrances, except
Permitted Encumbrances. The Company’s assets consist of the 16” Pipeline and the associated rights
and obligations under the Construction Contracts relating to the construction of the 16” Pipeline.
Except as disclosed in Seller Disclosure Schedule 4.12, the Company owns the 16” Pipeline
free and clear of all Encumbrances other than Permitted Encumbrances.

     4.13 Banking Relationships. Seller Disclosure Schedule 4.13 sets forth a
complete and accurate list of all accounts, including checking accounts, cash contribution
accounts, safe deposit boxes, borrowing arrangements and certificates of deposit that the Company
has with any banks, savings and loan associations or other financial institutions, indicating in
each case account numbers, if applicable, and the person or persons authorized to act or sign on
behalf of the Company in respect of the foregoing. No person holds any power of attorney or
similar authority from the Company with respect to such accounts.

     4.14 WAIVERS AND DISCLAIMERS. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS AGREEMENT, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND
AGREEMENTS MADE BY THE PARTIES IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS AND THE OMNIBUS
AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT
MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES,
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS,
IMPLIED OR STATUTORY, ORAL OR

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WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE, NATURE, QUALITY OR
CONDITION OF THE 16” PIPELINE INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR
ENVIRONMENTAL CONDITION OF THE 16” PIPELINE GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS
SUBSTANCES OR OTHER MATTERS ON THE 16” PIPELINE AND RELATED RIGHTS-OF-WAY, (II) THE INCOME TO BE
DERIVED FROM THE 16” PIPELINE, (III) THE SUITABILITY OF THE 16” PIPELINE FOR ANY AND ALL ACTIVITIES
AND USES THAT MAY BE CONDUCTED THEREON, (IV) THE COMPLIANCE OF OR BY THE 16” PIPELINE OR ITS
OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION,
POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (V) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE 16”
PIPELINE. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS
AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE LLC INTERESTS, THE COMPANY OR THE 16”
PIPELINE FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED
IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT, EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE TRANSFER AND CONVEYANCE OF THE
COMPANY AND ITS ASSETS SHALL BE
MADE IN AN “AS IS,” “WHERE IS” CONDITION WITH ALL FAULTS, AND THE COMPANY AND ITS ASSETS ARE
TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION
SHALL SURVIVE THE TRANSFER AND CONVEYANCE OF THE LLC INTERESTS OR THE TERMINATION OF THIS
AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE
CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE LLC INTERESTS, THE COMPANY
OR THE 16” PIPELINE THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE,
EXCEPT AS SET FORTH IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

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

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

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

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

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

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

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ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF HOLLY

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

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

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

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

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

     6.5 Brokers and Finders. No investment banker, broker, finder, financial advisor or
other intermediary has been retained by or is authorized to act on behalf of Holly who is entitled

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to receive from the Buyer any fee or commission in connection with the transactions contemplated by
this Agreement.

ARTICLE VII

COVENANTS

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

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

ARTICLE VIII

ADDITIONAL AGREEMENTS

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

ARTICLE IX

INDEMNIFICATION

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

     9.2 Defense of Third-Party Claims. An Indemnified Party shall give prompt written
notice to Seller or Buyer, as applicable (the “Indemnifying Party”), of the commencement or
assertion of any action, proceeding, demand, or claim by a third party (collectively, a
“third-party action”) in respect of which such Indemnified Party seeks indemnification
hereunder. Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability that it, he, or she may have to such Indemnified Party under this
Article IX unless the

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failure to give such notice materially and adversely prejudices the
Indemnifying Party. The Indemnifying Party shall have the right to assume control of the defense
of, settle, or otherwise dispose of such third-party action on such terms as it deems appropriate;
provided, however, that:

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

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

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

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

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

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

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

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

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

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

ARTICLE X

MISCELLANEOUS

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

     10.2 Notices.

          (a) Any notice or other communication given under this Agreement or the Omnibus Agreement
shall be in writing and shall be (i) delivered personally, (ii) sent by documented overnight
delivery service, (iii) sent by facsimile 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 (w) on the date of the delivery, if delivered personally,

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(x) on the business day after dispatch by documented overnight delivery service, if sent in
such manner, (y) on the date of facsimile transmission, if so transmitted on a business day during
normal business hours, otherwise on the next business day, or (z) on the fifth business day after
sent by first class mail, postage prepaid, if sent in such manner. Notices or other communications
shall be directed to the following addresses:

Notices to Holly:

Holly Corporation

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Facsimile No.: (214) 871-3523

Notices to the Seller:

Navajo Pipeline Co., L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: General Counsel

Facsimile No.: (214) 871-3523

Notices to the Buyer:

Holly Energy Partners — Operating, L.P.

c/o Holly Energy Partners, L.P.

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Attention: Conflicts Committee

Facsimile No.: (214) 871-3523

with copies to:

David G. Blair

100 Crescent Court, Suite 1600

Dallas, Texas 75201-6927

Facsimile No.: (214) 871-3441

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

     10.3 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced under applicable Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the

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economic or legal substance of the transactions contemplated herein are not affected in any
manner adverse to any Party. Upon such determination that any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the Parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated herein are
consummated as originally contemplated to the fullest extent possible.

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

     10.5 Parties in Interest. This Agreement shall be binding upon and inure solely to
the benefit of each Party hereto and their successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.

     10.6 Assignment of Agreement. At any time, the Parties may make a collateral
assignment of their rights under this Agreement to any of their bona fide lenders or debt holders,
or a trustee or a representative for any of them, and the non-assigning Parties shall execute
an acknowledgment of such collateral assignment in such form as may from time to time be reasonably
requested; provided, however, that unless written notice is given to the non-assigning Parties that
any such collateral assignment has been foreclosed upon, such non-assigning Parties shall be
entitled to deal exclusively with Holly, the Buyer or the Seller, as the case may be, as to any
matters arising under this Agreement, the Ancillary Documents or the Omnibus Agreement (other than
for delivery of notices required by any such collateral assignment). Except as otherwise provided
in this Section 10.6, neither this Agreement nor any of the rights, interests, or
obligations hereunder may be assigned by any Party without the prior written consent of the other
Parties hereto.

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

     10.8 Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

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

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     10.10 Integration. This Agreement, the Ancillary Documents and the Omnibus Agreement
supersede any previous understandings or agreements among the Parties, whether oral or written,
with respect to their subject matter. This Agreement, the Ancillary Documents and the Omnibus
Agreement contain the entire understanding of the Parties with respect to the subject matter hereof
and thereof. No understanding, representation, promise or agreement, whether oral or written, is
intended to be or shall be included in or form part of this Agreement, the Ancillary Documents or
the Omnibus Agreement unless it is contained in a written amendment hereto or thereto and executed
by the Parties hereto or thereto after the date of this Agreement, the Ancillary Documents or the
Omnibus Agreement.

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

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

     11.13 Survival of Representations and Warranties. The representations and warranties
set forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time on, on
the anniversary of the Closing Date, except that the representations and warranties contained in
Sections 4.1 (Organization), 4.2 (Authorization), 4.6 (Title to LLC
Interests; Capitalization), 4.9 (Taxes), 4.14 (Waivers and Disclaimers),
5.1 (Organization), 5.2 (Authorization), 6.1 (Organization), and
6.2 (Authorization) shall survive until the expiration of the applicable statute of
limitations; provided, however, that any representation and warranty that is the subject of a claim
for indemnification hereunder which claim was timely made pursuant to Section 9.4(a) shall
survive with respect to such claim until such claim is finally paid or adjudicated.

ARTICLE XI

GUARANTEE

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

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

20

 

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

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

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

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

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

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

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

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

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

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

21

 

other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of the Indemnifying Party or such other entity, or for any other
reason, all as though such payment had not been made.

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

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

ARTICLE XII

INTERPRETATION

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

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

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

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

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

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

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

22

 

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

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

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

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

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

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

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

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

[The Remainder of this Page is Intentionally Left Blank]

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

23

 

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

	 	 	 	 	 
	 	HOLLY:

HOLLY CORPORATION

 	 
	 	By:  	/s/ Bruce R. Shaw
 	 
	 	 	Bruce R. Shaw 	 
	 	 	Senior Vice President and

Chief Financial Officer 	 
	 
	 
	 	BUYER:

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 	 
	 
	 
	 	SELLER:

NAVAJO PIPELINE CO., L.P.

 	 
	 	By:  	NAVAJO PIPELINE GP, L.L.C.,
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	 	 
	 	By:  	     /s/ Bruce R. Shaw
 	 
	 	 	Bruce R. Shaw 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

Signature Page

Holly Corporation

Navajo Pipeline Co., L.P.

Holly Energy Partners — Operating, L.P.

LLC Interest Purchase Agreement

 

 

EXHIBIT A

Form of Assignment

ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS

     This Assignment of Limited Liability Company Interests (“Assignment”) is effective as
of 12:01 a.m., Dallas, Texas time, on June 1, 2009 (the “Effective Time”), by and between
Navajo Pipeline Co., L.P., a Delaware limited partnership (“Seller”), and Holly Energy
Partners — Operating, L.P., a Delaware limited partnership (“Buyer”). Buyer and Seller
are referred to collectively herein as the “Parties.”

RECITALS

     Reference is made to that certain LLC Interest Purchase Agreement dated June 1, 2009, among
Holly Corporation, Seller and Buyer wherein Seller has agreed to assign all of the membership
interests in Lovington-Artesia, L.L.C., a Delaware limited liability company (the
“Company”), in accordance with the terms of such LLC Interest Purchase Agreement (such
agreement, as the same may be amended, the “Purchase Agreement”).

     This Assignment is delivered by Seller pursuant to the Purchase Agreement.

ASSIGNMENT

     Now, therefore, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

     1. Subject to the representations, warranties and covenants of the parties contained in the
Purchase Agreement, Seller hereby assigns to Buyer all of the limited liability company interests
in the Company, and any income, distributions, or other value associated therewith or deriving
therefrom on and after the Effective Time (collectively, the “Membership Interests”).

     2. Subject to the representations, warranties and covenants of the parties contained in the
Purchase Agreement, Buyer hereby assumes, from and after the Effective Time, all obligations and
liabilities of Seller with respect to the Membership Interests arising from and after the Effective
Time.

     3. Seller hereby agrees to promptly execute and deliver any corrective assignments and other
legal documents or notification reasonably requested by Buyer to give effect to the intent of this
Assignment.

     4. Seller hereby acknowledges and agrees that, as a result of this Assignment, it no longer
has any limited liability company interest or equity interest in the Company, and it resigns as a
member of the Company effective as of the Effective Time.

     5. This Assignment shall be binding upon the Parties and their respective successors and
assigns.

     6. This Assignment shall be governed by and construed in accordance with the internal laws of
the State of Delaware.

A-1

 

     7. This Assignment is subject to the terms and conditions of the Purchase Agreement, and in
the event of any conflict between the terms of this Assignment and the terms of the Purchase
Agreement, the terms of the Purchase Agreement shall control.

     8. This Assignment may be executed in one or more counterparts, each of which shall be deemed
an original but all of which together will constitute one and the same instrument.

[Remainder of Page Intentionally Left Blank]

A-2

 

     IN WITNESS WHEREOF, this Assignment is executed as of this ___ day of June, 2009, but shall be
effective as of the Effective Time.

	 	 	 	 	 
	 	Seller:

NAVAJO PIPELINE CO., L.P.

 	 
	 	By:  	NAVAJO PIPELINE GP, L.L.C.,
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Bruce R. Shaw 	 
	 	 	Vice President and Chief Financial Officer 	 
	 
	 
	 	Buyer:

HOLLY ENERGY PARTNERS — OPERATING, L.P.

 	 
	 	By:  	HEP LOGISTICS GP, L.L.C.,
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	David G. Blair 	 
	 	 	Senior Vice President 	 
	 

[Signature Page to Assignment of Limited Liability Company Interests]

 

EXHIBIT B

Form of Restated Intermediate Pipelines Agreement

(Incorporated by reference to Exhibit 10.2 of Holly Energy Partners, L.P.’s Current Report on

Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

B-1

 

EXHIBIT C

Form of Restated Omnibus Agreement

(Incorporated by reference to Exhibit 10.3 of Holly Energy Partners, L.P.’s Current Report on

Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

C-1

 

EXHIBIT D

Form of Mortgages and Deeds of Trust

(Incorporated by reference to Exhibit 10.4 of Holly Energy Partners, L.P.’s Current

Report on Form 8-K filed with the Securities and Exchange Commission on June 5, 2009.)

D-1

 

DISCLOSURE SCHEDULES

TO LLC INTEREST PURCHASE AGREEMENT

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

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

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

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

 

 

SCHEDULE 4.3(a)

Company Foreign Qualifications

New Mexico

Schedule 4.3(a) - 1

 

 

SCHEDULE 4.4(a)

Seller No Conflicts or Violations

	1.	 	Violations of the Seller’s Organizational Documents.

     None.

	2.	 	Violations or conflicts with material contracts.

     None.

	3.	 	Consents of Governmental Entities.

     None.

Schedule 4.4(a) - 1

 

 

SCHEDULE 4.4(b)

Company No Conflicts or Violations

	1.	 	Violations of the Company’s Organizational Documents.

     None.

	2.	 	Violations or conflicts with material contracts.

     None.

	3.	 	Consents of Governmental Entities.

     None.

Schedule 4.4(b) - 1

 

 

SCHEDULE 4.5

Seller Litigation

None.

Schedule 4.5 - 1

 

 

SCHEDULE 4.6(a)

Title to LLC Interests

None.

Schedule 4.6(a) - 1

 

 

SCHEDULE 4.12

Title to Assets

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

Schedule 4.12 - 1

 

 

SCHEDULE 4.13

Banking Relationships

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

Schedule 4.13 - 1

 

 

SCHEDULE 5.3

Buyer No Conflicts or Violations

None.

Schedule 5.3 - 1

 

 

SCHEDULE 5.4

Buyer Litigation

None.

Schedule 5.4 - 1

 

 

SCHEDULE 6.3

Holly No Conflicts or Violations

	1.	 	Violations of Holly’s Organizational Documents.

     None.

	2.	 	Violations or conflicts with material contracts.

     None.

	3.	 	Consents of Governmental Entities.

     None.

Schedule 6.3 - 1

 

 

SCHEDULE 6.4

Holly Litigation

None.

Schedule 6.4 - 1exv10w2

Exhibit 10.2

AMENDED AND RESTATED

INTERMEDIATE PIPELINES AGREEMENT

     This Amended and Restated Intermediate Pipelines Agreement (this “Agreement”) is dated
as of June 1, 2009, by and among Holly Corporation, a Delaware corporation (“Holly”),
Navajo Refining Company, L.L.C., a Delaware limited liability company (formerly Navajo Refining
Company, L.P.) (“Navajo Refining” and, together with Holly, the “Holly Entities”),
Holly Energy Partners, L.P., a Delaware limited partnership (the “Partnership”), Holly
Energy Partners-Operating, L.P., a Delaware limited partnership (the “Operating
Partnership”), HEP Pipeline, L.L.C., a Delaware limited liability company (“HEP
Pipeline”), Lovington-Artesia, L.L.C., a Delaware limited liability company
(“Lovington-Artesia”), HEP Logistics Holdings, L.P., a Delaware limited partnership (the
“General Partner”), Holly Logistic Services, L.L.C., a Delaware limited liability company
(“Holly GP”), and HEP Logistics GP, L.L.C., a Delaware limited liability company (“OLP
GP” and, together with the Partnership, the Operating Partnership, HEP Pipeline,
Lovington-Artesia, the General Partner and Holly GP, the “Partnership Entities”), and
amends and restates in its entirety the Pipelines Agreement dated July 8, 2005 (the “Original
Pipelines Agreement”), among the Holly Entities and the Partnership Entities other than
Lovington-Artesia. Each of the Holly Entities and the Partnership Entities are individually
referred to herein as a “Party” and collectively as the “Parties.”

RECITALS:

     WHEREAS, Pursuant to that certain Purchase and Sale Agreement dated as of July 6, 2005 (the
“2005 Purchase Agreement”) by and among Holly, Navajo Refining, Navajo Pipeline Co., L.P.
(“Navajo Pipeline”), the Partnership, the Operating Partnership and HEP Pipeline, Navajo
Pipeline and Navajo Refining transferred and conveyed to HEP Pipeline, and HEP Pipeline acquired,
certain of the Intermediate Product Pipelines which historically were utilized by the Holly
Entities to transport Intermediate Products;

     WHEREAS, in connection with the closing of the transactions contemplated by the 2005 Purchase
Agreement the Parties entered into the Original Pipelines Agreement pursuant to which the Holly
Entities continued to transport Intermediate Products in the Intermediate Product Pipelines and the
Partnership provides transportation services to the Holly Entities;

     WHEREAS, Lovington-Artesia is the owner of a newly constructed 16” pipeline (the “16”
Pipeline”) currently running 65 miles from Holly’s crude oil distillation and vacuum
distillation facilities in Lovington, New Mexico to Holly’s petroleum refinery in Artesia, New
Mexico;

     WHEREAS, pursuant to that certain LLC Interest Purchase Agreement dated as of June 1, 2009
(the “2009 Purchase Agreement”) by and among Holly, Navajo Pipeline and the Operating
Partnership, Navajo Pipeline has agreed to transfer and convey to the Operating Partnership, and
the Operating Partnership has agreed to acquire, all of the membership interests of
Lovington-Artesia, and thereby acquire the 16” Pipeline;

 

 

     WHEREAS, as of the date hereof, the Holly Entities and the Partnership Entities desire to
amend and restate the Original Pipelines Agreement to, among other things, include the 16”
Pipeline.

     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.

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

     “2005 Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

     “2009 Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

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

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

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

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

     “Artesia Refinery” means the refining facilities owned by Navajo Refining in Artesia,
New Mexico.

     “bpd” means barrels per day.

2

 

     “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 11(f).

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

     “Contract Quarter” means a three-month period that commences on July 1, October 1,
January 1, or April 1, and ends on September 30, December 31, March 31 or June 30, respectively,
except that the initial Contract Quarter commenced on July 8, 2005.

     “Contract Year” means a year that commences on July 1 and ends on the last day of
June, except that the initial Contract Year commenced on July 8, 2005.

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

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

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

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

     “Effective Date” means July 8, 2005.

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

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

3

 

     “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.

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

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

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

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

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

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

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

     “Lovington-Artesia” has the meaning set forth in the recitals to this Agreement.

     “Lovington Refinery” means the crude oil distillation and vacuum distillation
facilities owned by Navajo Refining near Lovington, New Mexico.

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

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

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

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

     “Omnibus Agreement” means the Amended and Restated Omnibus Agreement, dated as of June
1, 2009, among Holly, the Partnership, the Operating Partnership, the General Partner, Holly GP,
OLP GP and Navajo Pipeline, as amended.

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

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

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

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

4

 

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

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

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

     “Refineries” means, collectively, the Artesia Refinery and the Lovington Refinery.

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

     “Respondent”
has the meaning set forth in Section 11(f).

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

     Section 2. Agreement to Use Services Relating to Pipelines.

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

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

     (i) Subject to Section 3, during the Term the Holly Entities will transport on
the Intermediate Product Pipelines an amount of Intermediate Products in the aggregate that
will produce revenue to the Partnership Entities in an amount at least equal to $2,956,500
per Contract Quarter as such amount may be revised pursuant to Section 2(a)(ii) and
Schedule I attached hereto (the “Minimum Revenue Commitment”).
Notwithstanding the foregoing, in the event that the Effective Date is any date other than
the first day of a calendar quarter, then the Minimum Revenue Commitment for the initial
Contract Quarter shall be prorated based upon the number of days actually in such calendar
quarter and the initial Contract Quarter.

5

 

     (ii) The Minimum Revenue Commitment shall be adjusted on July 1 of each Contract Year
commencing July 1, 2010, by an amount equal to 75% of 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. The series ID is WPUSOP3000 as of December 31, 2007 — 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 2006
change is: [PPI (2005) — PPI (2004)] / PPI (2004) or (155.7 — 148.5) / 148.5 or .0485 or
4.85%. If the PPI index change is negative in a given year then the annual change will be
deemed to be “zero.” If the above index is no longer published, the Holly Entities and the
Partnership Entities shall negotiate in good faith to agree on a new index that gives
comparable protection against inflation, and the same method of adjustment for increases in
the new index shall be used to calculate increases in the Minimum Revenue Commitment. If
the Holly Entities and the Partnership Entities are unable to agree, a new index will be
determined by binding arbitration in accordance with Section 11(f), and the same
method of adjustment for increases in the new index shall be used to calculate increases in
the Minimum Revenue Commitment. To evidence the parties’ agreement to each adjusted Minimum
Revenue Commitment, Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the
Partnership Entities) 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, except as specified
therein.

     (iii) If the Holly Entities are unable for a period in excess of thirty (30)
consecutive days to transport on the Intermediate Product Pipelines the volumes of
Intermediate Products required to meet the Minimum Revenue Commitment as a result of the
Partnership Entities’ operational difficulties, prorationing, or inability to provide the
100,000 bpd capacity, then upon written notice by the Holly Entities to the Partnership
Entities, the Minimum Revenue Commitment will be reduced for such period of time by an
amount equal to: (1) the volume of Intermediate Products that the Holly Entities are unable
to transport on the Intermediate Product Pipelines as a result of the Partnership Entities’
operational difficulties, prorationing or inability to provide the 100,000 bpd capacity
multiplied by (2) the applicable tariffs. This Section 2(a)(iii) shall not apply in
the event HEP gives notice of a Force Majeure event in accordance with Section 3, in
which case the Holly Entities’ Minimum Revenue Commitment shall be suspended in accordance
with and as provided in Section 3.

     (b) Tariffs.

     (i) The tariff rates, and the rules and regulations applicable to intrastate service on
the Intermediate Product Pipelines shall be as set forth in Exhibit B attached
hereto and made a part hereof for all purposes, as such exhibit may be amended from
time-to-time in accordance with this Agreement. The non-incentive tariff rate as of June 1,
2009 of 0.5664 shall be adjusted on July 1 of each Contract Year commencing July 1, 2010, by
an amount equal to 75% of the percentage change, if any, rounded to four

6

 

decimal places of the PPI calculated in accordance with the method set forth in
Section 2(a)(ii); provided, however, that if the PPI index change is
negative in a given year, then the non-incentive tariff rate shall be decreased by an amount
equal to 75% of such percentage change. If the PPI is no longer published, the Holly
Entities and the Partnership Entities shall negotiate in good faith to agree on a new index
that gives comparable protection against inflation or deflation, and the same method of
adjustment for increases or decreases in the new index shall be used to calculate increases
or decreases in the non-incentive tariff rates. If the Holly Entities and the Partnership
Entities are unable to agree, a new index will be determined by binding arbitration in
accordance with Section 11(f), and the same method of adjustment for increases or
decreases in the new index shall be used to calculate increases or decreases in the
non-incentive tariff rates. To evidence the parties agreement to each adjusted tariff rate,
Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities)
shall execute an amended, modified, revised or updated Exhibit B and attach it to
this Agreement. Such amended, modified, revised or updated Exhibit B shall be
sequentially numbered (e.g. Exhibit B-1, Exhibit B-2, etc.), dated and
appended as an additional exhibit to this Agreement and shall replace the prior version of
Exhibit B in its entirety, except as specified therein.

     (ii) Holly shall pay the Partnership an incentive tariff (the “Incentive
Tariff”) equal to $0.2981 per barrel, as of June 1, 2009, for barrels shipped in excess
of 100,000 bpd; provided, that the Partnership will receive its full base tariff of
$0.5664 per barrel escalated annually at PPI for any and all non-Holly-owned barrels shipped
on the Intermediate Product Pipelines. The Incentive Tariff shall be adjusted on July 1 of
each Contract Year, commencing July 1, 2010, as provided in Section 2(b)(i).

     (c) Obligations of the Partnership Entities. During the Term and subject to the terms
and conditions of this Agreement, including Section 11(c), the Partnership Entities agree
to own or lease, operate and maintain the assets necessary to accept the deliveries from the Holly
Entities and to provide the services required under this Agreement. Notwithstanding the preceding
sentence, subject to Section 11(c) of this Agreement and Article V of the Omnibus
Agreement, the Partnership Entities are free to sell any of their assets, including assets that
provide services under this Agreement, and the Partnership or any of the Partnership Entities are
free to merge with another entity (whether or not the Partnership or any of the Partnership
Entities is the surviving entity in such merger) and are free to sell all of their assets or all of
their equity to another entity at any time. At the request of the Holly Entities, and subject in
each case to any applicable common carrier proration duties, the Partnership Entities agree to use
commercially reasonable efforts to transport by pipeline for the Holly Entities each month during
the Term 100,000 bpd of Intermediate Products on the Intermediate Product Pipelines. To the extent
that the Holly Entities are entitled to an exception under Section 3 to their obligations
under Section 2(a), the corresponding obligations of the Partnership Entities under this
Section 2(c) will be proportionately reduced.

     (d) Pour Point Depressant and Additives. The Partnership Entities shall add pour
point depressant to the Intermediate Products as may be requested by the Holly Entities or as may
be otherwise required to move certain Intermediate Products in the quantities necessary to meet the
Holly Entities schedule. The Holly Entities agree to reimburse the Partnership Entities

7

 

for the cost of adding pour point depressant to those certain Intermediate Products. All fuel
additives, dyes and other additives (“Additives”) requested to be added to the Holly
Entities’ Intermediate Products will be provided by the Holly Entities at no cost to the
Partnership Entities or, if the Partnership Entities provide Additives, then the Holly Entities
agree to promptly reimburse the Partnership Entities for the costs of the Additives. The
Partnership Entities will use commercially reasonable efforts to limit the use of pour point
depressant and Additives to the Intermediate Products to the amounts requested by the Holly
Entities.

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

     (f) Timing of Payments. The Holly Entities will make payments to the Partnership
Entities by wire transfer of immediately available funds on a monthly basis during the Term with
respect to services rendered by the Partnership Entities under this Agreement in the prior month.
Payments not received by the Partnership Entities on or prior to the applicable payment date will
accrue interest at the Prime Rate from the applicable payment date until paid.

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

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

     (i) Scheduling of Product Movements. The Partnership Entities will use their
reasonable commercial efforts to schedule Intermediate Products movements and accept

8

 

deliveries of Intermediate Products hereunder in a manner that is consistent with the
historical dealings between the Parties, as such dealings may change from time to time.

     (j) Increases in Pipeline Tariff Rates. If new Applicable Laws are enacted that
require the Partnership Entities to make substantial and unanticipated capital expenditures with
respect to the Intermediate Product Pipelines, the Partnership Entities may amend the tariff rates
in order to recover the Partnership Entities’ cost of complying with these Applicable Laws
(including a reasonable return). The Holly Entities and the Partnership Entities 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 the Holly Entities and the Partnership Entities are unable to agree on the amount of the
new tariff rates that the Partnership Entities will charge, such tariff rates will be determined by
binding arbitration in accordance with Section 11(f). Exhibit B 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(j).

     Section 3. Exceptions to Obligations

     Force Majeure. In the event that any Party is rendered unable, wholly or in part, by
a Force Majeure event from performing its obligations under this Agreement for a period of more
than 30 days, then upon the delivery of notice and full particulars of the Force Majeure event in
writing within a reasonable time after the occurrence of the Force Majeure event relied on, the
obligations of the Parties, so far as they are affected by the Force Majeure event, shall be
suspended for the duration of any inability so caused. Any suspension of the obligations of the
Parties as a result of this Section 3 shall extend the Term. The Holly Entities will be
required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure
event. The cause of the Force Majeure event shall so far as possible be remedied with all
reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or
other industrial disputes other than as it shall determine to be in its best interests. In the
event a Force Majeure event prevents the Partnership Entities or the Holly Entities from performing
their respective obligations under this Agreement for a period of more than one year, this
Agreement may be terminated by the Partnership Entities or the Holly Entities. Nothing in this
Section 3 shall alter the liability of the Partnership Entities as set forth in the rules
and regulations tariffs for the Intermediate Product Pipelines attached hereto as Exhibit
B.

     Section 4. Agreement to Remain Shipper

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

9

 

     Section 5. Agreement Not to Challenge Tariffs

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

     Section 6. Effectiveness and Term

     This Agreement shall be effective as of the Effective Date, and shall terminate at 12:01 a.m.
Dallas, Texas, time on June 1, 2024, unless extended by written mutual agreement of the Parties
hereto or as set forth in Section 7 (the “Term”); provided, however, that
Section 5 shall survive the termination of this Agreement; and provided, further,
that the Parties agree and acknowledge that the 16” Pipeline was added as an Intermediate Product
Pipeline under this Agreement as of the closing date of the 2009 Purchase Agreement. The Party
desiring to extend this Agreement pursuant to this Section 6 shall provide prior written
notice to the other Party 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 the other
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. The Holly Entities shall deliver
written notice to the Partnership Entities, not more than twenty-four (24) months prior to the date
of termination 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 the Partnership Entities (which request
may be delivered no earlier than twelve (12) months prior to the date of termination) to provide
such notice or lose such right, notifying the Partnership Entities as to whether the Holly Entities
desire to extend this Agreement beyond the date of termination.

     Section 7. Right to Enter into a New Agreement

     (a) In the event that the Holly Entities provide prior written notice to the Partnership
Entities of the desire of the Holly Entities 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 the Partnership Entities shall
have the right to negotiate to enter into one or more pipeline agreements with one or more third
parties to begin after the date of termination, provided that until the end of one year following

10

 

termination without renewal of this Agreement, the Holly Entities will have the right to enter
into a new pipelines agreement with the Partnership Entities on commercial terms that substantially
match the terms upon which the Partnership Entities propose to enter into an agreement with a third
party for similar services with respect to all or a material portion of the Intermediate Product
Pipelines. In such circumstances, the Partnership Entities shall give the Holly Entities
forty-five (45) days prior written notice of any proposed new pipelines agreement with a third
party, and such notice shall inform the Holly Entities of the fee schedules, tariffs, duration and
any other terms of the proposed third party agreement and the Holly Entities shall have forty-five
(45) days following receipt of such notice to agree to the terms specified in the notice or the
Holly Entities 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 the Holly Entities fail to provide prior written notice to the
Partnership Entities of the desire of the Holly Entities to extend this Agreement by written mutual
agreement of the Parties pursuant to Section 6, the Partnership Entities shall have the
right, during the period from the date of the Holly Entities’ 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 agreement with a third party, provided however that at any time during the
twelve (12) months prior to the expiration of the Term, the Holly Entities will have the right to
enter into a new pipelines agreement with the Partnership Entities on commercial terms that
substantially match the terms upon which the Partnership Entities propose to enter into an
agreement with a third party for similar services with respect to all or a material portion of the
Intermediate Product Pipelines. In such circumstances, the Partnership Entities shall give the
Holly Entities forty-five (45) days prior written notice of any proposed new pipelines agreement
with a third party, and such notice shall inform the Holly Entities of the fee schedules, tariffs,
duration and any other terms of the proposed third party agreement and the Holly Entities shall
have forty-five (45) days following receipt of such notice to agree to the terms specified in the
notice or the Holly Entities 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

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

11

 

if to the Holly Entities:

Holly Corporation

100 Crescent Court

Suite 1600

Dallas, Texas 75201

Attn: David L. Lamp

Facsimile: 214-615-9379

if to the Partnership Entities:

Holly Energy Partners, L.P.

100 Crescent Court

Suite 1600

Dallas, Texas 75201

Attn: David G. Blair

Facsimile: 214-871-3441

     Section 9. Deficiency Payments

     (a) As soon as practicable following the end of each Contract Quarter under this Agreement,
the Partnership Entities shall deliver to the Holly Entities a written notice (the “Deficiency
Notice”) detailing any failure of the Holly Entities to meet their obligations under
Section 2(a)(i); provided that the Holly Entities’ obligations pursuant to the Minimum
Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Section
9. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency
and (ii) specify the approximate dollar amount that the Partnership Entities believe would have
been paid by the Holly Entities to the Partnership Entities if the Holly Entities had complied with
their respective obligations pursuant to Section 2(a)(i) (the “Deficiency
Payment”). The Holly Entities shall pay the Deficiency Payment to the Partnership Entities
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 the Holly Entities disagree with the Deficiency Notice, then, following the payment of
the Deficiency Payment to the Partnership Entities, a senior officer of Holly (on behalf of the
Holly Entities) and a senior officer of Holly GP (on behalf of the Partnership Entities) shall meet
or communicate by telephone at a mutually acceptable time and place, and thereafter as often as
they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any
differences that they may have with respect to matters specified in the Deficiency Notice. During
the 30-day period following the payment of the Deficiency Payment, the Holly Entities shall have
access to the working papers of the Partnership Entities relating to the Deficiency Notice. If
such differences are not resolved within thirty (30) days following the payment of the Deficiency
Payment, the Holly Entities and the Partnership Entities shall, within forty-five (45) days
following the payment of the Deficiency Payment, submit any and all matters which remain in dispute
and which were properly included in the Deficiency Notice to arbitration in accordance with
Section 11(f).

12

 

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

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

     Section 10. Right of First Refusal The Parties acknowledge the right of first
refusal of the Holly Entities with respect to the Intermediate Product Pipelines provided in the
Omnibus Agreement.

     Section 11. Miscellaneous

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

     (b) Amendments and Waivers. No amendment or modification of this Agreement shall be
valid unless it is in writing and signed by the Parties and, in the case of any amendment or
modification adverse to the Partnership Entities, approved by the Conflicts Committee. No waiver
of any provision of this Agreement shall be valid unless it is in writing and signed by the Party
against whom the waiver is sought to be enforced, and, in the case of any waiver by the Partnership
Entities, approved by the Conflicts Committee. Except to the extent adverse to the Partnership
Entities (in which case the approval of the Conflicts Committee shall also be required), any of the
exhibits or schedules to this Agreement may be amended, modified, revised or updated by the Parties
if each of Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership
Entities) execute an amended, modified, revised or updated exhibit or schedule, as applicable, and
attach it to this Agreement. Such amended, modified, revised or updated exhibits or schedules
shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-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.

     (c) Successors and Assigns. This Agreement shall inure to the benefit of, and shall
be binding upon, the Holly Entities, the Partnership Entities and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be
assigned without the prior written consent of Holly (in the case of any assignment by the
Partnership Entities) or the Conflicts Committee (in the case of any assignment by the Holly
Entities), in each case, such consent is not to be unreasonably withheld or delayed;
provided,

13

 

however, that (i) the Partnership Entities may make such an assignment (including a
partial pro rata assignment) to an Affiliate of the Partnership Entities without Holly’s consent,
(ii) the Holly Entities may make such an assignment (including a pro rata partial assignment) to an
Affiliate of the Holly Entities without the consent of the Conflicts Committee, (iii) the Holly
Entities may make a collateral assignment of their rights and obligations hereunder and/or grant a
security interest in all or a portion of the Intermediate Product Pipelines to any bona fide third
party lender or debt holder, or trustee or representative for any of them, and (iv) the Partnership
Entities may make a collateral assignment of their rights hereunder and/or grant a security
interest in all or a portion of the Intermediate Product Pipelines to a bona fide third party
lender or debt holder, or trustee or representative for any of them, if such third party lender,
debt holder or trustee shall have executed and delivered to the Holly Entities a non-disturbance
agreement in such form as is reasonably satisfactory to the Holly Entities and the Holly Entities
execute an acknowledgement of such collateral assignment in such form as may from time to time be
reasonably requested. Any attempt to make an assignment otherwise than as permitted by the
foregoing shall be null and void. The Parties agree to require their respective successors, if
any, to expressly assume, in a form of agreement acceptable to the other Parties, their obligations
under this Agreement.

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

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

     (f) Arbitration Provision. Any and all Arbitrable Disputes must be resolved through
the use of binding arbitration using three arbitrators, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary
to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United
States Code). If there is any inconsistency between this Section 11(f) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 11(f) 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

14

 

arbitrators must (i) be neutral parties who have never been officers, directors or employees
of any of the Holly Entities, the Partnership Entities or any of their Affiliates and (ii) have not
less than seven (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.
The Holly Entities, the Partnership Entities and the arbitrators shall proceed diligently and in
good faith in order that the award may be made as promptly as possible. Except as provided in the
Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by
the Parties hereto. The arbitrators shall have no right to grant or award indirect, consequential,
punitive or exemplary damages of any kind.

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

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

     (i) 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.

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

15

 

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

	 	 	 	 	 
	 	HOLLY CORPORATION

 	 
	 	By:  	/s/ David L. Lamp
 	 
	 	 	David L. Lamp, 	 
	 	 	President 	 
	 
	 	NAVAJO REFINING COMPANY, L.L.C.

 	 
	 	By:  	/s/ David L. Lamp
 	 
	 	 	David L. Lamp, 	 
	 	 	Executive Vice President 	 
	 
	 	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 	 
	 
	 	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 1 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

 

 

	 	 	 	 	 
	 	HEP PIPELINE, L.L.C.

 	 
	 	By:  	 HOLLY ENERGY PARTNERS — OPERATING, L.P., 
     its sole member
 
	 	 	 
	 	By:  	                         HEP LOGISTICS GP, LLC, 
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	LOVINGTON-ARTESIA, L.L.C.

 	 
	 	By:  	 HOLLY ENERGY PARTNERS — OPERATING, L.P.,
its sole member
 	 
	 	 	 
	 	By:  	   HEP LOGISTICS GP, LLC, 
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	HEP LOGISTICS HOLDINGS, L.P.

 	 
	 	By:  	   HOLLY LOGISTIC SERVICES, L.L.C.,
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	HOLLY LOGISTIC SERVICES, L.L.C.

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

[Signature Page 2 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

 

 

	 	 	 	 	 
	 	HEP LOGISTICS GP, L.L.C.

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

[Signature Page 3 of 3 to the Amended and Restated Intermediate Pipelines Agreement]

 

 

SCHEDULE I

MINIMUM REVENUE COMMITMENT

	 	 	 
	 	 	Minimum Revenue Commitment
	Contract Year	 	per Contract Quarter
	 	 	 
	July 8, 2005   	 	$2,956,500
	July 1, 2006   
	 	$3,099,846
	July 1, 2007   
	 	$3,193,418
	July 1, 2008   
	 	$3,316,853
	June 1, 2009(1)
	 	$5,168,400
	July 1, 2009(1)
	 	$5,168,400

 

			
	(1)	 	The Minimum Revenue Commitment per Contract
Quarter is a number agreed to by the Parties in connection
with the amendment and restatement to the Original Pipelines
Agreement and does not represent a mere PPI adjustment from
the Minimum Revenue Commitment per Contract Quarter for the
July 1, 2008 Contract Year.

Schedule I-1

 

 

EXHIBIT A

INTERMEDIATE PRODUCT PIPELINES

“Intermediate Product Pipelines” means (i) approximately 65 miles of 8” feedstock pipeline and 10”
feedstock pipeline, each of which begins at the inlet flange of the delivery manifold motor
operated valves at the Lovington Refinery, near Lovington, New Mexico and ends at the outlet flange
of the turbine meter at the Artesia Refinery in Artesia, New Mexico, along with any and all
connection facilities, including the Enterprise/MAPL connection, field booster pump stations, spare
parts, pipes, valves, motors and miscellaneous equipment directly associated with the 8” inch and
10” feedstock pipelines and (ii) approximately 65 miles of 16” feedstock pipeline which begins at
the inlet flange of the delivery manifold motor operated valves at the Lovington Refinery, near
Lovington, New Mexico and ends at the downstream flange of the motor operated valve header that is
immediately downstream of the positive displacement meter at the Artesia Refinery in Artesia, New
Mexico, along with can booster pump at Lovington, mainline booster pumps at Lovington, spare parts,
pipes, valves, motors, and miscellaneous equipment directly associated with the 16 inch feedstock
pipeline.

A-1

 

EXHIBIT B

Attached to and made

Part of the Amended and Restated Intermediate Pipelines Agreement,

dated June 1, 2009

RATES, RULES AND REGULATIONS

TABLE OF RATES

RATES IN CENTS PER BARREL OF 42 UNITED STATES GALLONS

	 	 	 	 	 	 	 
	ORIGIN	 	 	 	 	 	RATE
	CARRIER’S RECEIVING POINT	 	DESTINATION	 	RATE	 	TYPE
	Beeson Station and 

Lovington, New Mexico
	 	Artesia, New Mexico
	 	0.5664
	 	Non-Incentive
	 	 	0.2981
	 	Incentive
	Barnsdal Station
	 	Lovington, New Mexico
	 	0.5664
	 	Flow Reversal
	Artesia, New Mexico
	 	Lovington, New Mexico
	 	0.5664
	 	Flow Reversal

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

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

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

 

 

RULES AND REGULATIONS

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

	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	5	 	 	Definitions
	 	As used in these rules and regulations, the following terms have the following meanings:

	 	 	 	 	 	 	“Barrels” means 42 United States gallons at sixty degrees (60°) Fahrenheit.

	 	 	 	 	 	 	“Carrier” means Holly Energy Partners — Operating, L.P.

	 	 	 	 	 	 	“Company” means Holly Energy Partners — Operating, L.P.

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

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

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

	 	 	 	 	 	 	
“Shipment” means a volume of Intermediate Products offered to and accepted by Carrier
for transportation.

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

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

	 	 	 	 	 	 	 

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

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

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

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

	 	 	 	 	 	 	 

	 	15	 	 	Shipments-
Nominations and
Minimum
Tender
	 	Shipper will be required to schedule its Intermediate Products for delivery into
Carrier’s receiving tanks or suction manifold at the origin to meet the cycle within
which Carrier schedules the Intermediate Products to move. Intermediate Products shall
be available for shipment 24 hours before the scheduled date for movement into the
Carrier’s pipeline system. Shipper shall deliver Intermediate Products to Carrier at a
pressure no greater than 256 psig and at a flowing pressure of at least 100 psig, at a
temperature of no greater than 135 degrees Fahrenheit.

B-2

 

	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	20	 	 	Mixing with

Other

Refined

Petroleum

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

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

	 	 	 	 	 	 	 

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

	 	 	 	 	 	 	 

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

	 	 	 	 	 	 	 

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

	 	 	 	 	 	 	 

	 	45	 	 	Gauging,
Testing,
and
Volume
Corrections
	 	Shipments tendered to Carrier for transportation shall be tested by a representative of
Carrier, and gauged or measured by automatic equipment approved by Carrier or by other
methods acceptable in the industry, at locations designated by Carrier. The Shipper
shall have the privilege of being present or represented at the gauging and testing.
Quantities will be computed from correctly compiled tank tables or by Carrier approved
meters. Corrections will be made for temperature from observed degrees Fahrenheit to
sixty degrees (60°) Fahrenheit.

	 	 	 	 	 	 	Shipper shall bear the actual product losses for shrinkage and evaporation incident to
pipeline transportation up to a maximum of twenty-five hundredths (0.25) of a percent.
Carrier shall offset such product losses with any product gains and shall determine the
net product losses on a calendar quarterly basis.

	 	 	 	 	 	 	 

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

B-3

 

	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	65	 	 	Claims,

Suits,

Time

for

Filing
	 	As a condition precedent to recovery, claims must be filed in writing with Carrier
within nine (9) months after delivery of the property, or in case of failure to make
delivery, then within nine (9) months after a reasonable time for delivery has elapsed;
and suits shall be instituted against Carrier only within two (2) years and one (1) day
from the day when notice in writing is given by Carrier to the claimant that Carrier
has disallowed the claim or any part or parts thereof specified in the notice. Where
claims are not filed or suits are not instituted thereon in accordance with the
foregoing provisions, Carrier shall not be liable, and such claims will not be paid.

B-4

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