LLC INTEREST PURCHASE AGREEMENT by and among

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

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.

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.

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.

     “ 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.

     “ 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.

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.

          (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.

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.

          (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

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

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.

Holly Corporation
Navajo Pipeline Co., L.P.
Holly Energy Partners — Operating, L.P.

     4.9 Taxes . The Company has filed, on or before the applicabl