UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 19, 2016 (July 13, 2016)
HOLLY ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware | 001-32225 | 20-0833098 | ||
(State or
Incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification Number) |
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
(Address of Principal Executive Offices)
(214) 871-3555
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 | Entry into a Material Definitive Agreement. |
On July 19, 2016, Holly Energy Partners, L.P. (the Partnership) and its wholly-owned subsidiary Holly Energy Finance Corp. (together with the Partnership, the Issuers) closed their previously announced offering (the Offering) of $400 million aggregate principal amount of 6% Senior Notes due 2024 (the Notes), pursuant to a Purchase Agreement, dated July 13, 2016 (the Purchase Agreement), among the Issuers and each of the Guarantors (defined herein), and Citigroup Global Markets Inc., as representative of the several initial purchasers named in Schedule I thereto (the Initial Purchasers). The Notes were issued pursuant to a private placement transaction conducted under Rule 144A and Regulation S of the Securities Act of 1933, as amended.
The Purchase Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions whereby the Partnership and the Guarantors, on the one hand, and the Initial Purchasers, on the other, have agreed to indemnify each other against certain liabilities.
A copy of the Purchase Agreement is filed herewith as Exhibit 10.1. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.
Notes and Indenture
The Notes were issued under and are governed by an indenture, dated July 19, 2016 (the Indenture), by and among the Issuers, U.S. Bank National Association, as trustee (Trustee), and the Partnerships existing wholly-owned domestic subsidiaries (the Guarantors). The Indenture contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of dividends or similar restricted payments, undertaking transactions with the Issuers unrestricted affiliates, and limitations on asset sales.
At any time prior to August 1, 2019, the Issuers may redeem up to 35% of the aggregate principal amount of the Notes at a redemption price equal to 106% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with an amount of cash not greater than the net proceeds from certain equity offerings. At any time prior to August 1, 2019, the Issuers may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes plus a make-whole premium plus accrued and unpaid interest, if any, to the redemption date. The Issuers may also redeem some or all of the Notes at any time on or after August 1, 2019, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to the redemption date. If the Issuers experience a change of control, the Issuers may be required to offer to purchase the Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the purchase date.
The Notes are the senior unsecured obligations of the Issuers. The Issuers obligations under the Notes are currently fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Partnerships existing wholly-owned domestic subsidiaries (other than Holly Energy Finance Corp.) and will be so guaranteed by its future wholly-owned domestic subsidiaries, in each case that guarantee certain of the Partnerships indebtedness (the Guarantees). If the Issuers cannot make payments on the Notes when they are due, the Guarantors must make them instead. The Notes and the Guarantees rank equally in right of payment with all of the Issuers and the Guarantors existing and future senior indebtedness and senior to all of the Issuers and the Guarantors future subordinated indebtedness. The Notes and the Guarantees are effectively subordinated in right of payment to all of the Issuers and the Guarantors existing and future secured debt, including debt under the Partnerships revolving credit agreement, to the extent of the value of the assets securing such debt, and are structurally subordinated to all liabilities of the Partnerships subsidiaries (other than Holly Energy Finance Corp.) that do not guarantee the Notes.
The foregoing summaries of the Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the Indenture, which includes the form of the certificate for the Notes, a copy of which is filed as Exhibit 4.1 to this Form 8-K and incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information regarding the Indenture and the Notes set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit
|
Description |
|
4.1 | Indenture, dated July 19, 2016, among Holly Energy Partners, L.P., Holly Energy Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as Trustee. | |
10.1 | Purchase Agreement, dated July 13, 2016, among Holly Energy Partners, L.P., Holly Energy Finance Corp., and each of the guarantors party thereto and Citigroup Global Markets Inc., as representative of the initial purchasers named therein. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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/ Richard L. Voliva III |
|
Richard L. Voliva III | ||
Vice President and Chief Financial Officer |
Date: July 19, 2016
EXHIBIT INDEX
Exhibit
|
Description |
|
4.1 | Indenture, dated July 19, 2016, among Holly Energy Partners, L.P., Holly Energy Finance Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association, as Trustee. | |
10.1 | Purchase Agreement, dated July 13, 2016, among Holly Energy Partners, L.P., Holly Energy Finance Corp., and each of the guarantors party thereto and Citigroup Global Markets Inc., as representative of the initial purchasers named therein. |
Exhibit 4.1
HOLLY ENERGY PARTNERS, L.P.,
HOLLY ENERGY FINANCE CORP.
AND EACH OF THE GUARANTORS PARTY HERETO
6% SENIOR NOTES DUE 2024
INDENTURE
Dated as of July 19, 2016
U.S. BANK NATIONAL ASSOCIATION
Trustee
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 | ||||||
DEFINITIONS AND INCORPORATION | ||||||
BY REFERENCE | ||||||
Section 1.01 |
Definitions |
1 | ||||
Section 1.02 |
Other Definitions |
25 | ||||
Section 1.03 |
Incorporation by Reference of Trust Indenture Act |
25 | ||||
Section 1.04 |
Rules of Construction |
26 | ||||
ARTICLE 2 | ||||||
THE NOTES | ||||||
Section 2.01 |
Form and Dating |
26 | ||||
Section 2.02 |
Execution and Authentication |
27 | ||||
Section 2.03 |
Registrar and Paying Agent |
27 | ||||
Section 2.04 |
Paying Agent to Hold Money in Trust |
28 | ||||
Section 2.05 |
Holder Lists |
28 | ||||
Section 2.06 |
Transfer and Exchange |
28 | ||||
Section 2.07 |
Replacement Notes |
38 | ||||
Section 2.08 |
Outstanding Notes |
38 | ||||
Section 2.09 |
Treasury Notes |
39 | ||||
Section 2.10 |
Temporary Notes |
39 | ||||
Section 2.11 |
Cancellation |
39 | ||||
Section 2.12 |
Defaulted Interest |
39 | ||||
ARTICLE 3 | ||||||
REDEMPTION AND PREPAYMENT | ||||||
Section 3.01 |
Notices to Trustee |
39 | ||||
Section 3.02 |
Selection of Notes to Be Redeemed |
40 | ||||
Section 3.03 |
Notice of Redemption |
40 | ||||
Section 3.04 |
Effect of Notice of Redemption |
41 | ||||
Section 3.05 |
Deposit of Redemption or Purchase Price |
41 | ||||
Section 3.06 |
Notes Redeemed or Purchased in Part |
42 | ||||
Section 3.07 |
Optional Redemption |
42 | ||||
Section 3.08 |
Mandatory Redemption |
43 | ||||
Section 3.09 |
Offer to Purchase by Application of Excess Proceeds |
43 | ||||
ARTICLE 4 | ||||||
COVENANTS | ||||||
Section 4.01 |
Payment of Notes |
45 | ||||
Section 4.02 |
Maintenance of Office or Agency |
45 | ||||
Section 4.03 |
Reports |
45 | ||||
Section 4.04 |
Compliance Certificate |
46 | ||||
Section 4.05 |
Taxes |
46 | ||||
Section 4.06 |
Stay, Extension and Usury Laws |
47 | ||||
Section 4.07 |
Restricted Payments |
47 | ||||
Section 4.08 |
Dividend and Other Payment Restrictions Affecting Subsidiaries |
50 |
i
Section 4.09 |
Incurrence of Indebtedness and Issuance of Disqualified Equity |
52 | ||||
Section 4.10 |
Asset Sales |
55 | ||||
Section 4.11 |
Transactions with Affiliates |
57 | ||||
Section 4.12 |
Liens |
59 | ||||
Section 4.13 |
Limitations on Finance Corp. Activities |
60 | ||||
Section 4.14 |
Corporate Existence |
60 | ||||
Section 4.15 |
Offer to Repurchase Upon Change of Control |
60 | ||||
Section 4.16 |
[Reserved.] |
62 | ||||
Section 4.17 |
[Reserved.] |
62 | ||||
Section 4.18 |
Additional Guarantees |
62 | ||||
Section 4.19 |
Designation of Restricted and Unrestricted Subsidiaries |
62 | ||||
Section 4.20 |
Termination of Covenants |
63 | ||||
ARTICLE 5 | ||||||
SUCCESSORS | ||||||
Section 5.01 |
Merger, Consolidation or Sale of Assets |
63 | ||||
Section 5.02 |
Successor Corporation Substituted |
65 | ||||
ARTICLE 6 | ||||||
DEFAULTS AND REMEDIES | ||||||
Section 6.01 |
Events of Default |
65 | ||||
Section 6.02 |
Acceleration |
67 | ||||
Section 6.03 |
Other Remedies |
67 | ||||
Section 6.04 |
Waiver of Past Defaults |
68 | ||||
Section 6.05 |
Control by Majority |
68 | ||||
Section 6.06 |
Limitation on Suits |
68 | ||||
Section 6.07 |
Rights of Holders of Notes to Receive Payment |
68 | ||||
Section 6.08 |
Collection Suit by Trustee |
69 | ||||
Section 6.09 |
Trustee May File Proofs of Claim |
69 | ||||
Section 6.10 |
Priorities |
69 | ||||
Section 6.11 |
Undertaking for Costs |
70 | ||||
ARTICLE 7 | ||||||
TRUSTEE | ||||||
Section 7.01 |
Duties of Trustee |
70 | ||||
Section 7.02 |
Rights of Trustee |
71 | ||||
Section 7.03 |
Individual Rights of Trustee |
71 | ||||
Section 7.04 |
Trustees Disclaimer |
71 | ||||
Section 7.05 |
Notice of Defaults |
72 | ||||
Section 7.06 |
Reports by Trustee to Holders of the Notes |
72 | ||||
Section 7.07 |
Compensation and Indemnity |
72 | ||||
Section 7.08 |
Replacement of Trustee |
73 | ||||
Section 7.09 |
Successor Trustee by Merger, etc. |
74 | ||||
Section 7.10 |
Eligibility; Disqualification |
74 | ||||
Section 7.11 |
Preferential Collection of Claims Against the Issuers |
74 | ||||
ARTICLE 8 | ||||||
LEGAL DEFEASANCE AND COVENANT DEFEASANCE | ||||||
Section 8.01 |
Option to Effect Legal Defeasance or Covenant Defeasance |
74 | ||||
Section 8.02 |
Legal Defeasance and Discharge |
74 | ||||
Section 8.03 |
Covenant Defeasance |
75 |
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Section 8.04 |
Conditions to Legal or Covenant Defeasance |
75 | ||||
Section 8.05 |
Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions |
77 | ||||
Section 8.06 |
Repayment to the Issuers |
77 | ||||
Section 8.07 |
Reinstatement |
77 | ||||
ARTICLE 9 | ||||||
AMENDMENT, SUPPLEMENT AND WAIVER | ||||||
Section 9.01 |
Without Consent of Holders of Notes |
78 | ||||
Section 9.02 |
With Consent of Holders of Notes |
79 | ||||
Section 9.03 |
Revocation and Effect of Consents |
80 | ||||
Section 9.04 |
Notation on or Exchange of Notes |
80 | ||||
Section 9.05 |
Trustee to Sign Amendments, etc. |
81 | ||||
ARTICLE 10 | ||||||
NOTE GUARANTEES | ||||||
Section 10.01 |
Guarantee |
81 | ||||
Section 10.02 |
Limitation on Guarantor Liability |
82 | ||||
Section 10.03 |
Execution and Delivery of Notation of Note Guarantee |
82 | ||||
Section 10.04 |
Guarantors May Consolidate, etc., on Certain Terms |
82 | ||||
Section 10.05 |
Releases |
83 | ||||
ARTICLE 11 | ||||||
SATISFACTION AND DISCHARGE | ||||||
Section 11.01 |
Satisfaction and Discharge |
84 | ||||
Section 11.02 |
Application of Trust Money |
85 | ||||
ARTICLE 12 | ||||||
MISCELLANEOUS | ||||||
Section 12.01 |
[Reserved.] |
85 | ||||
Section 12.02 |
Notices |
85 | ||||
Section 12.03 |
Communication by Holders of Notes with Other Holders of Notes |
86 | ||||
Section 12.04 |
Certificate and Opinion as to Conditions Precedent |
87 | ||||
Section 12.05 |
Statements Required in Certificate or Opinion |
87 | ||||
Section 12.06 |
Rules by Trustee and Agents |
87 | ||||
Section 12.07 |
No Personal Liability of Directors, Officers, Employees and Stockholders |
87 | ||||
Section 12.08 |
Governing Law |
87 | ||||
Section 12.09 |
No Adverse Interpretation of Other Agreements |
88 | ||||
Section 12.10 |
Successors |
88 | ||||
Section 12.11 |
Severability |
88 | ||||
Section 12.12 |
Counterpart Originals |
88 | ||||
Section 12.13 |
Table of Contents, Headings, etc. |
88 | ||||
Section 12.14 |
Payment Date Other Than a Business Day |
88 | ||||
Section 12.15 |
Evidence of Action by Holder |
88 |
EXHIBITS
Exhibit A | FORM OF GLOBAL NOTE | |
Exhibit B | FORM OF CERTIFICATE OF TRANSFER | |
Exhibit C | FORM OF CERTIFICATE OF EXCHANGE |
iii
Exhibit D | FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR | |
Exhibit E | FORM OF NOTATION OF GUARANTEE | |
Exhibit F | FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS |
iv
THIS INDENTURE dated as of July 19, 2016, is among Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp. ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the Guarantors (as defined) and U.S. Bank National Association, as trustee.
The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 6% Senior Notes due 2024 (the Notes ):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
144A Global Note means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 144A.
Acquired Debt means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person, but excluding Indebtedness which is extinguished, retired or repaid in connection with such Person merging with or becoming a Subsidiary of such specific Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Additional Notes means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms controlling, controlled by and under common control with have correlative meanings.
Agent means any Registrar or Paying Agent.
Applicable Premium means, with respect to any Note at the time of determination, the greater of:
(1) 1.00% of the principal amount of the Note; or
(2) the excess of: (a) the present value at such time of (i) the redemption price of the Note at August 1, 2019 (such redemption price being set forth in the table appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the Note through August 1, 2019 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater.
1
Applicable Procedures means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
Asset Sale means:
(1) the sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Holly Energy Partners and its Restricted Subsidiaries taken as a whole will be governed by Section 4.15 hereof and/or Section 5.01 hereof and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of Holly Energy Partners Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
(1) any sale, assignment, lease, license, transfer, abandonment or other disposition of (A) damaged, worn-out, unserviceable or other obsolete or excess equipment or other property or (B) other property no longer necessary for the proper conduct of the business of Holly Energy Partners or any of its Restricted Subsidiaries;
(2) any single transaction or series of related transactions that: (a) involves assets having a Fair Market Value of less than $30.0 million or (b) results in net proceeds to Holly Energy Partners and its Restricted Subsidiaries of less than $30.0 million;
(3) a transfer of assets between or among Holly Energy Partners and its Restricted Subsidiaries;
(4) an issuance of Equity Interests by a Restricted Subsidiary of Holly Energy Partners to Holly Energy Partners or to a Restricted Subsidiary of Holly Energy Partners;
(5) the sale or lease of products, services or accounts receivable in the ordinary course of business;
(6) the sale or other disposition of cash or Cash Equivalents, Hedging Obligations or other financial instruments in the ordinary course of business;
(7) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted Investment;
(8) any trade or exchange by Holly Energy Partners or any Restricted Subsidiary of properties or assets of any type for properties or assets of any type owned or held by another Person, including any disposition of some but not all of the Equity Interests of a Restricted Subsidiary in exchange for assets or properties and after which the Person whose Equity Interests have been so disposed of continues to be a Restricted Subsidiary, provided that the Fair Market Value of the properties or assets traded or exchanged by Holly Energy Partners or such Restricted Subsidiary (together with any cash or Cash Equivalent together with the liabilities assumed) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash or Cash Equivalent together with liabilities assumed) to be received by Holly Energy Partners or such Restricted Subsidiary; and provided further that any cash received must be applied in accordance with Section 4.10 hereof;
2
(9) the creation or perfection of a Lien that is not prohibited by Section 4.12 hereof;
(10) surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;
(11) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property; and
(12) any disposition of defaulted receivables that arose in the ordinary course of business for collection.
Attributable Debt in respect of a sale-and-leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale-and-leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. As used in the preceding sentence, net rental payments under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated. For purposes of this definition, present value shall be calculated using a discount rate equal to the rate of interest implicit in the subject transaction, determined in accordance with GAAP; provided , however , that if such sale-and-leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capital Lease Obligation.
Available Cash has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date.
Bankruptcy Law means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.
Beneficial Owner has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular person (as that term is used in Section 13(d)(3) of the Exchange Act), such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms Beneficially Owns and Beneficially Owned have a corresponding meaning.
Board of Directors means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors or Board of Managers of the general partner of the partnership, or in the case of Holly Energy Partners, the Board of Directors of Holly Logistic Services, L.L.C., the general partner of HEP Logistics Holdings, L.P.;
3
(3) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a similar function.
Business Day means any day other than a Legal Holiday.
Capital Lease Obligation means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
Cash Equivalents means:
(1) United States dollars;
(2) securities issued or fully guaranteed or insured by the United States government or any agency thereof having maturities of not more than twenty-four (24) months from the date of acquisition thereof;
(3) time deposits with, certificates of deposit, bankers acceptances or Eurodollar time deposits of, any commercial bank that (a) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia or any United States branch of a foreign bank, and is a member of the Federal Reserve System, (b) issues long term securities with a rating of at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with a stable outlook) by Moodys at the time of acquisition and (c) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than twenty-four (24) months from the date of acquisition thereof;
4
(4) commercial paper of an issuer rated at least A-2 (or the then equivalent grade) by S&P or P-2 (or the then equivalent grade) by Moodys at the time of acquisition or guaranteed by a letter of credit issued by a financial institution rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moodys at the time of acquisition and such financial institution otherwise meets the requirements of subsections (a) and (c) of clause (3) of this definition, in each case having a tenor of not more than 270 days;
(5) taxable and tax-exempt municipal securities rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moodys, including variable rate municipal securities, having maturities or put rights of not more than twenty-four (24) months from the date of acquisition;
(6) corporate or bank debt of an issuer rated at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moodys at the time of acquisition and having maturities of not more than twenty-four (24) months from the date of acquisition;
(7) repurchase agreements relating to any of the investments listed in clauses (1) through (6) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital and surplus of not less than $500,000,000 whose long term securities are rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moodys at the time of acquisition;
(8) asset-backed securities having as the underlying asset securities issued or guaranteed by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with case with stable outlook) by Moodys at the time of acquisition and having maturities of not more than twenty-four (24) months from the date of acquisition; and
(9) Investments, classified in accordance with GAAP as current assets of Holly Energy Partners or any of its Subsidiaries, in money market mutual or similar funds having assets in excess of $100,000,000, at least 95% of the assets of which are comprised of assets specified in clauses (1) through (8) above of this definition.
Change of Control means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Holly Energy Partners and its Subsidiaries taken as a whole to any person (as that term is used in Section 13(d) of the Exchange Act), which occurrence is followed by a Rating Decline;
(2) the adoption of a plan relating to the liquidation or dissolution of Holly Energy Partners or the removal of the General Partner by the limited partners of Holly Energy Partners; or
(3) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any person (as defined above), other than a Qualified Owner, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the General Partner or of Holly Logistic Services L.L.C., measured by voting power rather than number of shares, which occurrence is followed by a Rating Decline.
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Notwithstanding the preceding, (a) a conversion of Holly Energy Partners from a limited partnership to a corporation, limited liability company or other form of entity or an exchange of all of the outstanding limited partnership interests for capital stock in a corporation, for member interests in a limited liability company or for Equity Interests in such other form of entity shall not constitute a Change of Control, so long as following such conversion or exchange the persons (as defined above) who Beneficially Owned the Capital Stock of Holly Energy Partners immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity and (b) a person or group shall not be deemed to Beneficially Own securities subject to a stock or asset purchase agreement, merger agreement or similar agreement (or voting or option of similar agreement related thereto) until the consummation of the transactions contemplated by such agreement.
Clearstream means Clearstream Banking, S.A.
Code means the Internal Revenue Code of 1986, as amended.
Consolidated Cash Flow means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
(1) an amount (to the extent not included in Consolidated Net Income) equal to the dividends or distributions paid during such period in cash or Cash Equivalents to such Person or any of its Restricted Subsidiaries by a Person that is not a Restricted Subsidiary of such Person; plus
(2) an amount equal to any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale or the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries to the extent such loss was deducted in computing such Consolidated Net Income; plus
(3) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
(4) the Fixed Charges of such Person and its Restricted Subsidiaries for such period(together with items excluded from the definition of Fixed Charges pursuant to Hedging Obligations), to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
(5) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
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Consolidated Net Income means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:
(1) the aggregate Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, partners or members;
(3) the cumulative effect of a change in accounting principles will be excluded;
(4) unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including, without limitation those resulting from the application of Accounting Standards Codification No. 815 will be excluded;
(5) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any Asset Sale (including dispositions pursuant to sale-and-leaseback transactions) or (b) the disposition of any securities by such Person or the extinguishment of any Indebtedness of such Person shall be excluded;
(6) any impairment charge or asset write-off pursuant to Accounting Standards Codification No. 350 Goodwill and Other Intangible Assets shall be excluded;
(7) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards shall be excluded;
(8) any unusual or nonrecurring gain, loss or charge, together with any related provision for taxes on such unusual or nonrecurring gain, loss or charge, shall be excluded; and
(9) any non-cash or other charges relating to any premium or penalty paid, write-off of deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity shall be excluded.
Consolidated Net Tangible Assets means, with respect to any Person at any date of determination, the aggregate amount of total assets included in such Persons most recent quarterly or annual consolidated balance sheet prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after deducting the following amounts: (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet, with such pro forma adjustments to total assets, reserves, current liabilities, goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.
Corporate Trust Office of the Trustee will be at the address of the Trustee specified in Section 12.02 hereof (except with respect to payments on the Notes, in which case this address will be U.S. Bank National Association, 100 Wall Street, Suite 1600, New York, New York 10005) or such other address as to which the Trustee may give notice to the Issuers.
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Credit Agreement means that certain Second Amended and Restated Credit Agreement, dated as of February 14, 2011, by and among HEP Operating Company, L.P., Wells Fargo Bank, N.A., as administrative agent, Union Bank, N.A., as syndication agent, BBVA Compass Bank and U.S. Bank N.A., as co-documentation agents, Wells Fargo Securities, LLC and Union Bank, N.A., as joint lead arrangers and joint bookrunners, and the financial institutions party thereto, providing for revolving credit borrowings and letters of credit, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
Credit Facilities means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities or Debt Issuances, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders, other financiers or to special purpose entities formed to borrow from (or sell such receivables to) such lenders or other financiers against such receivables), letters of credit, bankers acceptances, other borrowings or Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced (in each case, without limitation as to amount), in whole or in part from time to time (including through one or more Debt Issuances) and any agreements and related documents governing Indebtedness or Obligations incurred to refinance amounts then outstanding or permitted to be outstanding, whether or not with the original administrative agent, lenders, investment banks, insurance companies, mutual funds, other lenders, investors or any of the foregoing and whether provided under the original agreement, indenture or other documentation relating thereto.
Custodian means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.
Debt Issuances means, with respect to Holly Energy Partners or any of its Restricted Subsidiaries, one or more issuances after the Issue Date of Indebtedness evidenced by the notes, debentures, bonds or other similar securities or instruments.
Default means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
Definitive Note means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the Schedule of Exchanges of Interests in the Global Note attached thereto.
Depositary means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
Disqualified Equity means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes
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mature, except such Equity Interest that is solely redeemable with, or solely exchangeable for, any Equity Interest of such Person that is not Disqualified Equity. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Equity solely because the holders of the Equity Interest have the right to require Holly Energy Partners to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale will not constitute Disqualified Equity if the terms of such Equity Interest provide that Holly Energy Partners may not repurchase or redeem any such Equity Interest pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof.
Domestic Subsidiary means any Restricted Subsidiary of Holly Energy Partners that was formed under the laws of the United States or any state of the United States or the District of Columbia.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
Equity Offering means any public or private sale of Equity Interests (other than Disqualified Equity) made for cash on a primary basis by Holly Energy Partners after the Issue Date that has not been applied to redeem, prepay or refinance any other Indebtedness (other than the temporary repayment of Indebtedness under a revolving facility).
Euroclear means Euroclear Bank SA/NV, as operator of the Euroclear system.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Existing Indebtedness means the aggregate principal amount of Indebtedness of Holly Energy Partners and its Subsidiaries (other than Indebtedness under the Credit Agreement, but including Indebtedness in respect of the Existing Senior Notes) in existence on the Issue Date, until such amounts are repaid.
Existing Senior Notes means the $300.0 million in aggregate principal amount of 6.50% senior notes of the Issuers due 2020, issued under the indenture, dated as of March 12, 2012, among the Issuers, the guarantors party thereto and U.S. Bank National Association, as trustee, as amended or supplemented from time to time.
Fair Market Value means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by (a) an executive officer of Holly Energy Partners if the value is less than $50.0 million or (b) the Board of Directors of Holly Energy Partners if the value is $50.0 million or more.
Finance Corp. has the meaning assigned to it in the preamble to this Indenture, and includes any successors thereto.
Fixed Charge Coverage Ratio means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date ), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable Reference Period.
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In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions (including, without limitation, a single asset, a division or segment or an entire company) that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, asset purchase transactions or consolidations and including any related financing transactions during the Reference Period or subsequent to such Reference Period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred on the first day of the Reference Period, including any Consolidated Cash Flow and any pro forma expense and cost reductions that have occurred or are reasonably expected to occur, in the reasonable judgment of the chief financial or accounting officer of Holly Energy Partners (regardless of whether those cost savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto);
(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
(4) except as provided in clause (5) below, if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate in effect from the beginning of the applicable period to the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and
(5) if any Indebtedness is incurred under a revolving credit facility and is being given pro forma effect, the interest on such indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation.
Fixed Charges means, with respect to any specified Person for any period, (A) the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letters of credit or bankers acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus
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(3) any interest on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
(4) an amount equal to all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Equity of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of Holly Energy Partners (other than Disqualified Equity) or to Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners (such amount, the Disqualified Dividend Amount); provided that, in the event such Person is not treated as a partnership or other pass-through entity for U.S. federal income tax purposes, the amount included in Fixed Charges as a result of this clause (4) shall be the product of (i) the Disqualified Dividend Amount, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP; minus
(B) to the extent included in (A) above, write-off of non-recurring deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium or penalty paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time. Notwithstanding the foregoing, the characterization of leases as operating or capital leases shall be determined in accordance with GAAP as in effect on the date of entry into the applicable lease.
If there occurs a change in generally accepted accounting principles relating to revenue recognition resulting from the joint revenue recognition standard of the Financial Accounting Standards Board and the International Accounting Standards Board, and such change would cause a change in the method of calculation of standards or terms as determined in good faith by Holly Energy Partners (an Accounting Change), then Holly Energy Partners may elect, as evidenced by a written notice of Holly Energy Partners to the Trustee, that such standards or terms shall be calculated as if such Accounting Change has not occurred. Any such election with respect to such Accounting Change may not thereafter be changed.
General Partner means HEP Logistics Holdings, L.P., a Delaware limited partnership, and its successors and permitted assigns as general partner of Holly Energy Partners or as the business entity with the ultimate authority to manage the business and operations of Holly Energy Partners.
Global Note Legend means the legend set forth in Section 2.06(f)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.
Global Notes means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the Schedule of Exchanges of Interests in the Global Note attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4) or 2.06(d)(2) hereof.
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Government Securities means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged.
Guarantee means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness, and the term Guaranteed has a correlative meaning.
Guarantors means each of:
(1) the Subsidiaries of Holly Energy Partners other than Finance Corp, executing this Indenture as initial Guarantors;
(2) each of the Restricted Subsidiaries of Holly Energy Partners that becomes a guarantor of the Notes pursuant to Section 4.18 hereof; and
(3) each other Person executing a supplemental indenture in which such Person agrees to be a Guarantor of the Notes and to be bound by the terms of this Indenture
provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its Note Guarantee is released in accordance with the terms of this Indenture.
Hedging Obligations means, with respect to any specified Person, the obligations of such Person incurred in the ordinary course of business and not for speculative purposes under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements entered into with one or more financial institutions and designed to reduce costs of borrowing or to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
Holder means a Person in whose name a Note is registered.
Holly Energy Partners has the meaning assigned to it in the preamble to this Indenture, and includes any successors thereto.
IAI Global Note means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes transferred to Institutional Accredited Investors .
Indebtedness means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:
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(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers acceptances;
(4) representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term Indebtedness includes all Indebtedness of others secured by a Lien on any asset (other than Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners, in each case, securing Indebtedness of such Unrestricted Subsidiary or Joint Venture, as applicable) of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.
Notwithstanding the foregoing, the following shall not constitute Indebtedness:
(1) accrued expenses and trade accounts payable arising in the ordinary course of business;
(2) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety, appeal, payment, insurance contracts and similar bonds issued for the account of Holly Energy Partners and any of its Restricted Subsidiaries in the ordinary course of business, including Guarantees and obligations of Holly Energy Partners or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(3) any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or Government Securities (in an amount sufficient to satisfy all such Indebtedness obligations at Stated Maturity or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness and subject to no other Liens, and the other applicable terms of the instrument governing such Indebtedness;
(4) any obligation arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such obligation is extinguished within five Business Days of its incurrence; and
(5) any obligation arising from any agreement providing for indemnities, Guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets.
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Indenture means this Indenture, as amended or supplemented from time to time.
Indirect Participant means a Person who holds a beneficial interest in a Global Note through a Participant.
Initial Notes means the first $400,000,000 aggregate principal amount of Notes issued under this Indenture on the date hereof.
Institutional Accredited Investor means an institution that is an accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.
Investment Grade Rating of the notes, means that the notes shall have been assigned a Moodys rating of Baa3 or higher and an S&P rating of BBB- or higher, or if one of such rating agencies shall not make a rating on the notes publicly available for reasons outside the control of the Issuers, then Investment Grade Rating shall mean that the notes shall have been assigned such a rating by one of such rating agencies and an equivalent investment grade credit rating from any other nationally recognized statistical rating organization registered under Section 15E of the Exchange Act selected by the Issuers.
Investments means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Holly Energy Partners or any Subsidiary of Holly Energy Partners sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of Holly Energy Partners such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of Holly Energy Partners, Holly Energy Partners will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of Holly Energy Partners Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07(b) hereof.
Issue Date means the first date on which the Notes are issued, authenticated and delivered under this Indenture.
Joint Venture means any Person that is not a direct or indirect Subsidiary of Holly Energy Partners in which Holly Energy Partners or any of its Restricted Subsidiaries makes any Investment.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at another place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction, other than a precautionary financing statement respecting a lease not intended as a security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.
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Moodys means Moodys Investors Service, Inc., or any successor to the rating agency business thereof.
Net Income means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries.
Net Proceeds means the aggregate cash proceeds received by Holly Energy Partners or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:
(1) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale,
(2) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,
(3) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and all distributions and payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, and
(4) any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by Holly Energy Partners or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to Holly Energy Partners or its Restricted Subsidiaries from such escrow arrangement, as the case may be.
Non-Recourse Debt means Indebtedness:
(1) as to which neither Holly Energy Partners nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of Holly Energy Partners or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity.
For purposes of determining compliance with Section 4.09 hereof, in the event that any Non-Recourse Debt of any of Holly Energy Partners Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Holly Energy Partners.
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Non-U.S. Person means a Person who is not a U.S. Person.
Note Guarantee means the Guarantee by each Guarantor of the Issuers obligations under this Indenture and the Notes, which may be evidenced by a notation thereof executed pursuant to the provisions of this Indenture.
Notes has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single series for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offer to purchase, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
Offering Memorandum means the final Offering Memorandum of the Issuers, dated July 13, 2016 with respect to the Notes.
Officer means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person (or, if such Person is a limited partnership, the general partner of such Person).
Officers Certificate means a certificate signed on behalf of Holly Energy Partners by two Officers of Holly Energy Partners or the General Partner, one of whom in the case of any Officers Certificate delivered to the Trustee pursuant to Section 4.04(a), must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Holly Energy Partners, that meets the requirements of Section 12.05 hereof.
Operating Surplus has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date.
Opinion of Counsel means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or counsel to Holly Energy Partners, the General Partner, any Subsidiary of Holly Energy Partners or the General Partner or the Trustee.
Participant means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
Partnership Agreement means the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P., dated as of July 13, 2004, as such may be further amended, modified or supplemented from time to time.
Permitted Acquisition Indebtedness means Indebtedness or Disqualified Equity of Holly Energy Partners or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Equity was Indebtedness or Disqualified Equity of (i) a Subsidiary prior to the date on which such Subsidiary became a Restricted Subsidiary or (ii) a Person that merged with or consolidated with Holly Energy Partners or a Restricted Subsidiary; provided that on the date such Subsidiary became a Restricted
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Subsidiary or the date such Person was merged with or consolidated with Holly Energy Partners or a Restricted Subsidiary, as applicable, after giving pro forma effect thereto, (a) Holly Energy Partners would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09(a) hereof or (b) the Fixed Charge Coverage Ratio for Holly Energy Partners would be equal to or greater than the Fixed Charge Coverage Ratio for Holly Energy Partners immediately prior to such transaction; provided that such Indebtedness was not incurred in contemplation of, or in connection with, such acquisition, merger or consolidation.
Permitted Business means either (1) marketing, gathering, transporting (by barge, pipeline, ship, truck or other modes of hydrocarbon transportation), terminalling, storing, producing, acquiring, developing, exploring for, exploiting, producing, processing, dehydrating and otherwise handling crude oil, gas, casinghead gas, drip gasoline, natural gasoline, condensates, distillates, liquid hydrocarbons, asphalt, gaseous hydrocarbons and all other constituents, elements, compounds or products refined or processed from any of the foregoing, which activities shall include, for the avoidance of doubt, constructing pipeline, platform, dehydration, processing, storing and other energy-related facilities, and activities or services reasonably related or ancillary thereto, including entering into purchase and sale agreements, supply agreements and Hedging Obligations related to these businesses, (2) any other business that generates gross income at least 90% of which constitutes qualifying income under Section 7704(d) of the Code or (3) any activity that is ancillary, complementary or incidental to or necessary or appropriate for the activities described in clauses (1) and (2) of this definition.
Permitted Business Investments means Investments by Holly Energy Partners or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of Holly Energy Partners or in any Joint Venture, provided that:
(1) either (a) at the time of such Investment and immediately thereafter, Holly Energy Partners could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) such Investment does not exceed the aggregate amount of Incremental Funds (as defined in Section 4.07 hereof) not previously expended at the time of making such Investment;
(2) if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at the time of such Investment, either (a) all such Indebtedness is Non-Recourse Debt or (b) any such Indebtedness of such Unrestricted Subsidiaries or Joint Venture that is recourse to Holly Energy Partners or any of its Restricted Subsidiaries could, at the time such Investment is made, be incurred at that time by Holly Energy Partners and its Restricted Subsidiaries under Section 4.09(a) hereof; and
(3) such Unrestricted Subsidiarys or Joint Ventures activities are not outside the scope of the Permitted Business.
Permitted Investments means:
(1) any Investment in Holly Energy Partners or in a Restricted Subsidiary of Holly Energy Partners;
(2) any Investment in Cash Equivalents;
(3) any Investment by Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Holly Energy Partners; or
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(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its properties or assets to, or is liquidated into, Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners;
(4) any Investment made as a result of the receipt of non-cash consideration from:
(a) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; or
(b) a disposition of assets deemed not to be an Asset Sale under the definition of Asset Sale;
(5) any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of Holly Energy Partners;
(6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of Holly Energy Partners or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure, perfection or enforcement by Holly Energy Partners or any of its Restricted Subsidiaries with respect to any secured Investment in default; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;
(7) Investments represented by Hedging Obligations permitted to be incurred;
(8) loans or advances to employees made in the ordinary course of business of Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners in an aggregate principal amount not to exceed $2.5 million at any one time outstanding;
(9) repurchases of the Notes;
(10) any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers compensation and performance and other similar deposits and prepaid expenses made in the ordinary course of business;
(11) Permitted Business Investments; and
(12) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (12) that are at the time outstanding not to exceed the greater of (a) $75.0 million and (b) 5.0% of Holly Energy Partners Consolidated Net Tangible Assets; provided, however, that any Investment pursuant to this clause (12) made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to be made pursuant to this clause (12) for so long as such Person continues to be a Restricted Subsidiary;
provided, however, that with respect to any Investment, Holly Energy Partners may, in its sole discretion, allocate all or any portion of any Investment and later re-allocate all or any portion of any investment to one or more of the above clauses (1) through (12) so that the entire Investment would be a Permitted Investment.
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Permitted Liens means:
(1) Liens securing any Indebtedness under any of the Credit Facilities and all Obligations and Hedging Obligations relating to such Indebtedness;
(2) Liens in favor of Holly Energy Partners or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with Holly Energy Partners or any Subsidiary of Holly Energy Partners; provided that such Liens were in existence prior to such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with Holly Energy Partners or the Subsidiary;
(4) Liens on property existing at the time of acquisition of the property by Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition;
(5) Liens and deposits to secure the performance of statutory obligations, surety or appeal bonds, workers compensation obligations, reimbursement obligations owed to insurers, bids, performance bonds, true leases, other types of social security or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);
(6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of Section 4.09(b) hereof covering only the assets acquired and proceeds thereof with or financed by such Indebtedness;
(7) Liens existing on the Issue Date (other than Liens securing the Credit Facilities);
(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(9) Liens imposed by law, such as carriers, warehousemens, landlords, repairmans, mechanics and other like Liens, in each case, incurred in the ordinary course of business;
(10) defects, irregularities and deficiencies in title of any rights of way, survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(11) inchoate Liens arising under the Employee Retirement Income Security Act of 1974, and any amendments thereto ( ERISA );
(12) Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);
(13) Liens on any property or asset acquired, constructed or improved by Holly Energy Partners or any of its Restricted Subsidiaries (a Purchase Money Lien), which (a) are in favor of the seller of such property or assets, in favor of the Person developing, constructing, repairing
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or improving such asset or property, or in favor of the Person that provided the funding for the acquisition, development, construction, repair or improvement cost, as the case may be, of such asset or property, (b) are created within 360 days after the acquisition, development, construction, repair or improvement, (c) secure the purchase price or development, construction, repair or improvement cost, as the case may be, of such asset or property in an amount up to 100% of the Fair Market Value of such acquisition, construction or improvement of such asset or property, and (d) are limited to the asset or property so acquired, constructed or improved (including the proceeds thereof, accessions thereto and upgrades thereof);
(14) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners to the extent securing Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;
(15) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of Holly Energy Partners or any of its Restricted Subsidiaries on deposit with or in possession of such bank;
(16) Liens to secure performance of Hedging Obligations of Holly Energy Partners or any of its Restricted Subsidiaries;
(17) Liens on pipelines or pipeline facilities that arise by operation of law;
(18) Liens incurred in the ordinary course of business of Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners with respect to obligations that at any one time outstanding do not exceed the greater of (a) $75.0 million and (b) 5.0% of Consolidated Net Tangible Assets;
(19) Liens in favor of Alon USA, L.P. and/or its Affiliates pursuant to a mortgage and deed of trust which secures certain rights pursuant to a related pipelines and terminals agreement and which are subordinated to the Obligations of the Obligors, if any, under the Credit Agreement and substantially similar subordinated Liens that are incurred after the Issue Date to secure services with respect to future acquired assets and which do not secure Indebtedness, and Liens securing industrial development, pollution control or similar bonds;
(20) Liens resulting from the deposit of money or other cash equivalents in trust for the purpose of defeasing Indebtedness of Holly Energy Partners or any of its Restricted Subsidiaries;
(21) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the indenture; provided, however, that:
(a) the new Lien is limited to all or part of the same property or assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;
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(22) Liens relating to future escrow arrangements securing Indebtedness incurred in accordance with this Indenture; and
(23) Liens renewing, extending, refinancing or refunding a Lien permitted by clauses (1) through (22) above; provided that (a) the principal amount of Indebtedness secured by such Lien does not exceed the principal amount of such Indebtedness outstanding immediately prior to the renewal, extension, refinance or refund of such Lien, plus all accrued interest on the Indebtedness secured thereby and the amount of all fees, expenses and premiums incurred in connection therewith, and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby.
Permitted Refinancing Indebtedness means any Indebtedness of Holly Energy Partners or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of Holly Energy Partners or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;
(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes or the Note Guarantees, on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and
(4) such Indebtedness is not incurred by a Restricted Subsidiary (other than Finance Corp. or a Guarantor) if Holly Energy Partners or a Guarantor is the issuer or the primary obligor of the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.
Person means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
Prior Issue Date means March 12, 2012.
Private Placement Legend means the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
QIB means a qualified institutional buyer as defined in Rule 144A.
Qualified Owner means Holly Corporation and any Subsidiary of Holly Corporation as of the Issue Date.
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Rating Agencies means Moodys and S&P.
Rating Categories means:
(1) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); and
(2) with respect to Moodys, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories).
Rating Decline means the occurrence of a decrease in the rating of the Notes by one or more gradations by each of Moodys and S&P (including gradations within the rating categories, as well as between categories), within 60 days before or after the earlier of (x) a Change of Control, (y) the date of public notice of the occurrence of a Change of Control or (z) public notice of the intention of Holly Energy Partners to effect a Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moodys or S&P); provided, however , that a Rating Decline otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Decline for purposes of the definition of Change of Control) unless each of Moodys and S&P making the reduction in rating to which this definition would otherwise apply announces or publicly confirms or informs the Trustee in writing at the request of Holly Energy Partners or the Trustee that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the Rating Decline).
Reference Period means, with respect to any date of determination, the four most recent fiscal quarters of Holly Energy Partners for which internal financial statements are available.
Regulation S means Regulation S promulgated under the Securities Act.
Regulation S Global Note means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, initially issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
Responsible Officer, when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
Restricted Definitive Note means a Definitive Note bearing the Private Placement Legend.
Restricted Global Note means a Global Note bearing the Private Placement Legend.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Period means the 40-day distribution compliance period as defined in Regulation S.
Restricted Subsidiary of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. References to Restricted Subsidiaries are to Restricted Subsidiaries of Holly Energy Partners unless otherwise indicated.
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Rule 144 means Rule 144 promulgated under the Securities Act.
Rule 144A means Rule 144A promulgated under the Securities Act.
Rule 903 means Rule 903 promulgated under the Securities Act.
Rule 904 means Rule 904 promulgated under the Securities Act.
S&P means S&P Global Ratings, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Senior Indebtedness means with respect to any Person, Indebtedness of such Person, unless the instrument creating or evidencing such Indebtedness provides that such Indebtedness is subordinate in right of payment to the Notes or the Note Guarantee of such Person, as the case may be.
Significant Subsidiary means any Subsidiary that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.
Stated Maturity means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Issue Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Subsidiary means, with respect to any specified Person:
(1) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of shares of the Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (whether general or limited) or limited liability company (a) the sole general partner or managing member of which is such Person or a Subsidiary of such Person, or (b) if there are more than a single general partner or member, either (x) the only general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company, respectively.
TIA means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).
Treasury Rate means, as of the time of computation, the yield to maturity as of such time of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to August 1, 2019; provided, however, that if the period from the Redemption Date to August 1, 2019, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
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Trustee means U.S. Bank National Association until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
Unrestricted Definitive Note means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
Unrestricted Global Note means a Global Note that does not bear and is not required to bear the Private Placement Legend.
Unrestricted Subsidiary means (i) UNEV Pipeline and (ii) any other Subsidiary of Holly Energy Partners (other than Finance Corp. or any successor to it) that is designated by the Board of Directors of Holly Energy Partners as an Unrestricted Subsidiary pursuant to a resolution of such Board of Directors, but only to the extent that UNEV Pipeline or such other Subsidiary (as the case may be):
(1) except to the extent permitted by subclause (2)(b) of the definition of Permitted Business Investments has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted under clauses (b)(3) and (b)(4) of Section 4.11 hereof, is not party to any agreement, contract, arrangement or understanding with Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Holly Energy Partners or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Holly Energy Partners;
(3) is a Person with respect to which neither Holly Energy Partners nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Holly Energy Partners or any of its Restricted Subsidiaries.
All Subsidiaries of an Unrestricted Subsidiary shall be also Unrestricted Subsidiaries. Any designation of a Subsidiary of Holly Energy Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and an Officers Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Holly Energy Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, Holly Energy Partners will be in default of such covenant.
U.S. Person means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.
Voting Stock of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person.
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Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
Section 1.02 Other Definitions.
Term |
Defined in
Section |
|
Affiliate Transaction | 4.11 | |
Asset Sale Offer | 3.09 | |
Authentication Order | 2.02 | |
Change of Control Offer | 4.15 | |
Change of Control Payment | 4.15 | |
Change of Control Payment Date | 4.15 | |
Covenant Defeasance | 8.03 | |
DTC | 2.03 | |
Event of Default | 6.01 | |
Excess Proceeds | 4.10 | |
incur | 4.09 | |
Incremental Funds | 4.07 | |
Legal Defeasance | 8.02 | |
Offer Amount | 3.09 | |
Offer Period | 3.09 | |
Paying Agent | 2.03 | |
Payment Default | 6.01 | |
Permitted Debt | 4.09 | |
Purchase Date | 3.09 | |
Redemption Date | 3.07 | |
Registrar | 2.03 | |
Restricted Payments | 4.07 | |
Termination Date | 4.20 |
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture expressly refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
indenture securities means the Notes;
indenture security Holder means a Holder of a Note;
indenture to be qualified means this Indenture;
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indenture trustee or institutional trustee means the Trustee; and
obligor on the Notes and the Note Guarantees means the Issuers and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) or is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) will shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the TIA, the Exchange Act or the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General . The Notes and the Trustees certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Issuers, the Guarantor and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes . Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the Schedule of Exchanges of Interests in the Global Note attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the Schedule of Exchanges of Interests in the Global Note attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the
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aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, repurchases and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the Operating Procedures of the Euroclear System and Terms and Conditions Governing Use of Euroclear and the General Terms and Conditions of Clearstream Banking and Customer Handbook of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for each of the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Issuers signed by two Officers of each Issuer (an Authentication Order ), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuers pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent.
The Issuers will maintain an office or agency where Notes may be presented for registration of transfer or for exchange ( Registrar ) and an office or agency where Notes may be presented for payment ( Paying Agent ). The Registrar will keep a register of the Notes and of their transfer and exchange. The Issuers may appoint one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrar and the term Paying Agent includes any additional paying agent. The Issuers may change any Paying Agent or Registrar without notice to any Holder. The Issuers will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. Holly Energy Partners, Finance Corp. or any of Holly Energy Partners other Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ( DTC ) to act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent at its Corporate Trust Office and to act as Custodian with respect to the Global Notes.
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Section 2.04 Paying Agent to Hold Money in Trust.
The Issuers will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuers in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than Holly Energy Partners or a Subsidiary) will have no further liability for the money. If Holly Energy Partners or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to Holly Energy Partners, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Issuers for Definitive Notes if:
(1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuers within 90 days;
(2) the Issuers, at their option but subject to the Depositarys rules, determine that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and deliver a written notice to such effect to the Trustee; or
(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes, and the Depositary notifies the Trustee of its decision to exchange the Global Notes for Definitive Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c) hereof.
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(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above.
Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.
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(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to this subsection at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this subsection.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
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(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to Holly Energy Partners or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Issuers shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
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(2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Issuers will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
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(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to Holly Energy Partners or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
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and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (2) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holders compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
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(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend .
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE RESALE RESTRICTION TERMINATION DATE) THAT IS ONE YEAR (IN THE CASE OF RULE 144A SECURITIES) AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
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SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS AND THE TRUSTEES RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUERS ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.
(2) Global Note Legend . Each Global Note will bear a legend in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (DTC), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
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REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(g) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for beneficial interests in another Global Note or Definitive Notes, or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(h) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Issuers will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrars request.
(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer or exchange tax or similar governmental charge payable in connection therewith (other than any such transfer or exchange taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.04 hereof).
(3) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(4) Neither the Registrar nor the Issuers will be required:
(A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
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(5) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary.
(6) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(7) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustees requirements are met. If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of each of the Issuers and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held by Holly Energy Partners or a Subsidiary of Holly Energy Partners shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than Holly Energy Partners, a Subsidiary or an Affiliate of any thereof) holds, by 11:00 a.m., Eastern Time, on a Redemption Date or other maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
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Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Issuers consider appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes will be delivered to the Issuers. The Issuers may not issue new Notes to replace Notes that they have paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, they will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Issuers will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) will send or cause to be sent to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, they must furnish to the Trustee, at least five Business Days (unless a shorter period is satisfactory to the Trustee) before a notice of such redemption is given pursuant to Section 3.03, an Officers Certificate setting forth the information to be stated in such notice as provided in Section 3.03.
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Section 3.02 Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:
(1) | if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or |
(2) | if the Notes are not listed on any national securities exchange, on a pro rata basis; or |
(3) | in the case of Notes in global form, by such other method as DTC may prescribe. |
No Notes of $2,000 or less can be redeemed in part. In the event of partial redemption, the particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 15 nor more than 60 days prior to the redemption by the Trustee from the outstanding Notes not previously called for redemption.
The Trustee will promptly notify the Issuers in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption.
At least 15 days but not more than 60 days before a Redemption Date, the Issuers will mail or cause to be mailed, by first class mail, (or sent electronically in the case of notices to DTC) a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article 8 or 11 hereof. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completed of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied.
The notice will identify the Notes to be redeemed and will state:
(1) the Redemption Date;
(2) the redemption price, if then determinable and, if not, the manner of its determination;
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(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued in the name of the Holder thereof upon cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(8) any condition precedent to the redemption; and
(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers request, the Trustee will give the notice of redemption in the Issuers names and at their expense; provided, however , that the Issuers have delivered to the Trustee an Officers Certificate in accordance with Section 3.01 requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is given in accordance with Section 3.03 hereof, Notes called for redemption without condition will become irrevocably due and payable on the Redemption Date at the redemption price.
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to 11:00 a.m., Eastern Time, on the redemption or purchase date, the Issuers will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on all Notes to be redeemed or purchased.
If the Issuers comply with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or accepted for purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or tendered for purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
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Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Issuers will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to August 1, 2019, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture, upon prior notice in accordance with Section 3.02 hereof, at a redemption price of 106% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by Holly Energy Partners; provided that:
(1) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by Holly Energy Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
(2) the redemption occurs within 180 days of the date of the closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph, subsection (d) of this Section 3.07, and Section 4.15(d) hereof, the Notes will not be redeemable at the Issuers option prior to August 1, 2019.
(c) On or after August 1, 2019, the Issuers may redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 hereof, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on August 1 of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:
Year |
Percentage | |||
2019 |
104.500 | % | ||
2020 |
103.000 | % | ||
2021 |
101.500 | % | ||
2018 and thereafter |
100.000 | % |
(d) At any time prior to August 1, 2019, the Issuers may also redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 hereof, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the date of redemption (the Redemption Date ), subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date. The notice need not set forth the Applicable Premium but only the manner of calculation of the redemption price. With respect to any redemption pursuant to this Section 3.07(d), Holly Energy Partners will (i) calculate the Treasury Rate on the second Business Day preceding the applicable Redemption Date and (ii) prior to such Redemption Date file with the Trustee an Officers Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail. The Trustee shall not be responsible for any such calculation.
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(e) Any redemption pursuant to this Section 3.07 or Section 4.15(d) shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
(f) Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.
Section 3.08 Mandatory Redemption.
The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers are not prohibited from acquiring the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of this Indenture.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Issuers are required to commence an offer to all Holders to purchase Notes (an Asset Sale Offer ), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the Offer Period ). No later than three Business Days after the termination of the Offer Period (the Purchase Date ), the Issuers will apply all Excess Proceeds (the Offer Amount ) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Issuers will send, in the manner prescribed in Section 12.02, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue to accrue interest;
(4) that, unless the Issuers default in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;
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(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only;
(6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled Option of Holder to Elect Purchase attached to the Notes completed, or transfer by book-entry transfer, to the Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Notes and other pari passu Indebtedness to be purchased will be selected on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Issuers so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers Certificate stating that such Notes or portions thereof were accepted for payment by the Issuers in accordance with the terms of this Section 3.09. The Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuers for purchase, and the Issuers will promptly issue a new Note, and the Trustee, upon written request from the Issuers, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.05 and 3.06 hereof.
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ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Issuers will pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest will be considered paid on the date due if the Paying Agent, if other than the Holly Energy Partners or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
Section 4.02 Maintenance of Office or Agency.
The Issuers will maintain in the City of New York an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served. The Issuers will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers fail to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however , that no such designation or rescission will in any manner relieve the Issuers of their obligation to maintain an office or agency in the City of New York for such purposes. The Issuers will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, Holly Energy Partners shall furnish (whether through hard copy or internet access) to the Holders of Notes or cause the Trustee to furnish to the Holders of Notes, within the time periods specified in the SECs rules and regulations:
(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if Holly Energy Partners were required to file such reports; and
(2) all current reports that would be required to be filed with the SEC on Form 8-K if Holly Energy Partners were required to file such reports.
All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on Holly Energy Partners consolidated financial statements by Holly Energy Partners independent registered public accounting firm. In addition, Holly Energy Partners will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.
If, at any time Holly Energy Partners is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Holly Energy Partners will nevertheless continue filing the reports specified in the preceding paragraphs with the SEC within the time periods specified above unless the SEC will not accept such a filing; provided that, for so long as Holly Energy Partners is not subject to the periodic reporting requirements of the Exchange Act for any reason, the time period for filing reports on
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Form 8-K shall be five (5) Business Days after the event giving rise to the obligation to file such report. Holly Energy Partners will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept Holly Energy Partners filings for any reason, Holly Energy Partners will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if Holly Energy Partners were required to file those reports with the SEC.
Any and all Defaults or Events of Default arising from a failure to comply with this Section 4.03 shall be deemed cured (and Holly Energy Partners shall be deemed to be in compliance with this Section 4.03) upon furnishing or filing such information or report as contemplated by this covenant (but without regard to the date on which such information or report is so furnished or filed); provided that such cure shall not otherwise affect the rights of Holders under Section 6.01 hereof if all outstanding Notes shall have been accelerated in accordance with the terms of the Indenture and such acceleration has not been rescinded or cancelled prior to such cure.
(b) For so long as any Notes remain outstanding, if at any time none of Holly Energy Partners and the Guarantors is required to file with the SEC the reports required by paragraph (a) of this Section 4.03, Holly Energy Partners and the Guarantors will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Issuers and each Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers Certificate (at least one of the signatories of which shall be the principal executive officer, the principal financial officer, or the principal accounting officer of Holly Energy Partners) stating that a review of the activities of the Issuers and Holly Energy Partners Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuers are taking or propose to take with respect thereto).
(b) So long as any of the Notes are outstanding, the Issuers will deliver to the Trustee, promptly upon any Officer becoming aware of any Default or Event of Default, an Officers Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto.
Section 4.05 Taxes.
Holly Energy Partners will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.
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Section 4.06 Stay, Extension and Usury Laws.
The Issuers and each of the Guarantors covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuers and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenants that they will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) Holly Energy Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of Holly Energy Partners or any of its Restricted Subsidiaries Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Holly Energy Partners or any of its Restricted Subsidiaries) or to the direct or indirect holders of Holly Energy Partners or any of its Restricted Subsidiaries Equity Interests in their capacity as such (other than distributions or dividends payable in Equity Interests of Holly Energy Partners (other than Disqualified Equity) and other than distributions or dividends payable to Holly Energy Partners or a Restricted Subsidiary);
(2) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving Holly Energy Partners) any Equity Interests of Holly Energy Partners or any direct or indirect parent of Holly Energy Partners;
(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of Holly Energy Partners or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding intercompany Indebtedness between or among Holly Energy Partners and any of its Restricted Subsidiaries), except a payment of interest or principal within one year of the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as Restricted Payments ),
unless, at the time of and after giving effect to such Restricted Payment, no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment and either:
(1) if the Fixed Charge Coverage Ratio for Holly Energy Partners Reference Period is not less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holly Energy Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4), payments are made other than to Holly Energy Partners or a Restricted Subsidiary), (5), (6), (7), (9) and (10) of Section 4.07(b) hereof) during the quarter in which such Restricted Payment is made, is less than the sum, without duplication, of:
(A) Available Cash from Operating Surplus as of the end of the immediately preceding quarter; plus
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(B) 100% of the aggregate net cash proceeds received by Holly Energy Partners (including the Fair Market Value of any Permitted Business or long-term assets that are used or useful in a Permitted Business to the extent acquired in consideration of Equity Interests of Holly Energy Partners (other than Disqualified Equity)) since the Prior Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of Holly Energy Partners (other than Disqualified Equity) or from the issue or sale of convertible or exchangeable Disqualified Equity or convertible or exchangeable debt securities of Holly Energy Partners that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Equity or debt securities) sold to a Subsidiary of Holly Energy Partners); plus
(C) to the extent that any Restricted Investment that was made after the Prior Issue Date is sold for cash or Cash Equivalents or otherwise liquidated or repaid for cash or Cash Equivalents, the return of capital or similar payment made in cash or Cash Equivalents with respect to such Restricted Investment (less the cost of disposition, if any); plus
(D) the net reduction in Restricted Investments made after the Prior Issue Date resulting from dividends, repayments of loans or advances, or other transfers of assets in each case to Holly Energy Partners or any of its Restricted Subsidiaries from any Person (including, without limitation, Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not been included in Available Cash from Operating Surplus for any period commencing on or after the Prior Issue Date (items (b), (c) and (d) being referred to as Incremental Funds ); minus
(E) the aggregate amount of Incremental Funds previously expended pursuant to this clause (1) and clause (2) below; or
(2) if the Fixed Charge Coverage Ratio for Holly Energy Partners Reference Period is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Holly Energy Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4), payments are made other than to Holly Energy Partners or a Restricted Subsidiary), (5), (6), (7), (9) and (10) of Section 4.07(b) hereof) during the quarter in which such Restricted Payment is made (such Restricted Payments for purposes of this clause (2) meaning only distributions on common units and subordinated units of Holly Energy Partners, plus the related distribution on the general partner interest), is less than the sum, without duplication, of:
(A) $200.0 million less the aggregate amount of all Restricted Payments made by Holly Energy Partners and its Restricted Subsidiaries pursuant to this clause (2)(A) during the period ending on the last day of the fiscal quarter immediately preceding the date of such Restricted Payment and beginning on the Prior Issue Date; plus
(B) Incremental Funds to the extent not previously expended to this clause (2) or clause (1) above.
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(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or distribution or the consummation of an irrevocable redemption of subordinated Indebtedness within 60 days after the date of the declaration of such dividend or distribution, or the delivery of the irrevocable notice of redemption, as the case may be, if at the date of declaration or the date on which such irrevocable notice is delivered, such dividend, distribution or redemption would have complied with the provisions of this Indenture (assuming, in the case of a redemption payment, the giving of the notice of such redemption payment would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time);
(2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of, a substantially concurrent (a) capital contribution to Holly Energy Partners from any Person (other than a Restricted Subsidiary of Holly Energy Partners) or (b) sale (other than to a Restricted Subsidiary of Holly Energy Partners) of Equity Interests (other than Disqualified Equity) of Holly Energy Partners, with a sale being deemed substantially concurrent if such Restricted Payment occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded or deducted from the calculation of Available Cash from Operating Surplus and Incremental Funds;
(3) the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness of Holly Energy Partners or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any distribution or dividend by a Restricted Subsidiary of Holly Energy Partners to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners held by any current or former officer, director, consultant or employee of the General Partner (or its general partner), Holly Energy Partners or any of Holly Energy Partners Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock or unit option agreement, shareholders agreement, employment agreement or similar agreement; provided, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any twelve-month period; provided further, that Holly Energy Partners may carry over and make in subsequent twelve-month periods, in addition to the amounts permitted for such twelve-month period, up to $2.0 million of unutilized capacity under this clause (5) attributable to the immediately preceding twelve-month period; provided further, that such amount in any calendar year may be increased by an amount not to exceed (a) the cash proceeds received by Holly Energy Partners from the sale of Equity Interests of Holly Energy Partners to members of management, employees or directors of the General Partner, Holly Energy Partners or its Restricted Subsidiaries that occurs after the Prior Issue Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clauses 1(B) or 2(B) of Section 4.07(a) hereof), plus (b) the cash proceeds of key man life insurance policies received by Holly Energy Partners after the Prior Issue Date, less (c) the amount of any Restricted Payments made pursuant to clauses (a) and (b) of this clause (5);
(6) so long as no Default has occurred and is continuing or would be caused thereby, payments of dividends on Disqualified Equity issued pursuant to Section 4.09 hereof;
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(7) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price of such options, warrants or other convertible securities;
(8) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of Holly Energy Partners; or arising from stock dividends, splits or business combinations;
(9) in connection with an acquisition by Holly Energy Partners or any of its Restricted Subsidiaries, the return to Holly Energy Partners or any of its Restricted Subsidiaries of Equity Interests of Holly Energy Partners or any of its Restricted Subsidiaries constituting a portion of the purchase consideration in settlement of any indemnification claims or pursuant to any purchase price adjustments under the acquisition agreement; and
(10) so long as no Default or Event of Default has occurred and is continuing, the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness pursuant to Sections 4.10 or 4.15; provided that all Notes tendered by Holders in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been purchased, redeemed, defeased or otherwise acquired or retired for value;
The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Holly Energy Partners or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment, except that the amount of any non-cash dividend or distribution paid in accordance with clause (1) of Section 4.07(b) hereof shall be the Fair Market Value as of the date on which such dividend or distribution is declared. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in the manner prescribed in the definition of that term. For the purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (10), Holly Energy Partners will be permitted to classify (or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) Holly Energy Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:
(1) pay dividends or make any other distributions on its Equity Interests to Holly Energy Partners or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to Holly Energy Partners or any of its Restricted Subsidiaries; provided that priority of any preferred equity or similar Equity Interest in receiving dividends or liquidating distributions prior to the payment of dividends or liquidating distributions on common equity shall not be deemed to be a restriction on the ability to make distributions on Capital Stock;
(2) make loans or advances to Holly Energy Partners or any of its Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to Holly Energy Partners or any of its Restricted Subsidiaries.
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(b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:
(1) agreements as in effect on the Issue Date and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements or the Indebtedness to which they relate; provided that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and other payment restrictions than those contained in those agreements on the Issue Date;
(2) this Indenture, the Notes and the Note Guarantees;
(3) agreements governing other Indebtedness permitted to be incurred under the provisions of the covenant described above under Section 4.09 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of such agreements; provided that the restrictions therein are not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees;
(4) applicable law, rule, regulation or order;
(5) any instrument governing Indebtedness or Equity Interest of a Person acquired by Holly Energy Partners or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Equity Interest was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;
(6) customary non-assignment provisions in transportation agreements or purchase and sale or exchange agreements, pipeline and terminals agreements, or similar operational agreements or in licenses or leases, in each case entered into in the ordinary course of business;
(7) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of Section 4.08(a) hereof;
(8) any agreement for the sale or other disposition of a Restricted Subsidiary that contains any such restrictions on that Restricted Subsidiary pending its sale or other disposition;
(9) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(10) Liens permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;
(11) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;
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(12) any agreement or instrument relating to any property or assets acquired after the Issue Date, so long as such encumbrance or restriction relates only to the property or assets so acquired and is not and was not created in anticipation of such acquisitions;
(13) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and
(14) encumbrances or restrictions contained in, or in respect of, Hedging Obligations permitted under this Indenture from time to time.
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Equity.
(a) Holly Energy Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur ) any Indebtedness (including Acquired Debt), and Holly Energy Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided , however , that Holly Energy Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and Holly Energy Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for the Holly Energy Partners Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such Reference Period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, Permitted Debt ):
(1) the incurrence by Holly Energy Partners, Finance Corp. and any Guarantor of additional Indebtedness and letters of credit and the guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Holly Energy Partners and its Restricted Subsidiaries thereunder) not to exceed the greater of (a) $1.2 billion and (b) the sum of $850.0 million and 30% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);
(2) the incurrence by Finance Corp., Holly Energy Partners and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the Issue Date;
(4) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Holly Energy Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), at any time outstanding not to exceed the greater of (a) $75.0 million and (b) 5.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);
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(5) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4) or (10) of this Section 4.09(b) or this clause (5);
(6) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Holly Energy Partners and any of its Restricted Subsidiaries; provided, however , that:
(A) if Holly Energy Partners or any Guarantor is the obligor on such Indebtedness and the payee is not Holly Energy Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Holly Energy Partners, or the Note Guarantee, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners,
will be deemed, in each case, to constitute an incurrence of such Indebtedness by Holly Energy Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the Guarantee by Holly Energy Partners, or any of the Guarantors of (a) Indebtedness of Holly Energy Partners, or a Restricted Subsidiary of Holly Energy Partners that was permitted to be incurred by another provision of this Section 4.09 or (b) Indebtedness incurred by Joint Ventures, provided that such Guarantee constitutes a Permitted Investment; and provided further , in each case, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu , as applicable, to the same extent as the Indebtedness Guaranteed;
(9) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing;
(10) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
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(11) the issuance by Holly Energy Partners or any of its Restricted Subsidiaries of Disqualified Equity to Holly Energy Partners or any of its Restricted Subsidiaries, as the case may be; provided , however , that:
(A) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held, directly or indirectly, by a Person other than Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners; and
(B) any sale or other transfer of any such Disqualified Equity to a Person that is not either Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners;
will be deemed, in each case, to constitute an issuance of such Disqualified Equity by Holly Energy Partners or such Restricted Subsidiary that was not permitted by this clause:
(12) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by Holly Energy Partners or any of its Restricted Subsidiaries; and
(13) the incurrence by Holly Energy Partners or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, not to exceed the greater of (a) $75.0 million and (b) 5.0 % of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom).
Holly Energy Partners will not incur, and will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Holly Energy Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however , that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Holly Energy Partners, Finance Corp. or any such Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Holly Energy Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.
The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 4.09; provided , in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of Holly Energy Partners as accrued to the extent
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required by the definition of such term. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that Holly Energy Partners or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
Section 4.10 Asset Sales.
Holly Energy Partners will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) Holly Energy Partners (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale and which shall give effect to the assumption by another Person of any liabilities as provided for in (2)(A) below; and
(2) at least 75% of the consideration received in the Asset Sale by Holly Energy Partners or such Restricted Subsidiary, together with the consideration received in all other Asset Sales by Holly Energy Partners or any Restricted Subsidiary since the Issue Date (on a cumulative basis) is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following shall be deemed to be cash:
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(A) any liabilities, as shown on Holly Energy Partners most recent consolidated balance sheet, of Holly Energy Partners or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantees) that are assumed by the transferee of any such assets pursuant to a novation agreement that releases Holly Energy Partners or such Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations received by Holly Energy Partners or any such Restricted Subsidiary from such transferee that are within 90 days after the Asset Sale (subject to ordinary settlement periods), converted by Holly Energy Partners or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion;
(C) any stock or assets of the kind referred to in clauses (2) or (4) of the next succeeding paragraph; and
(D) accounts receivable of a business retained by Holly Energy Partners or any of its Restricted Subsidiaries, as the case may be, following the sale of such business, provided such accounts receivable (i) are not past due more than 60 days and (ii) do not have a payment date greater than 90 days from the date of the invoices creating such accounts receivable.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Holly Energy Partners (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:
(1) to repay Senior Indebtedness of Holly Energy Partners and/or its Restricted Subsidiaries (or to make an offer to repurchase or redeem such Indebtedness, provided that such repurchase or redemption closes within 45 days after the end of such 365-day period);
(2) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of Holly Energy Partners;
(3) to make a capital expenditure; or
(4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business.
Notwithstanding the foregoing, if within 365 days after the receipt of any Net Proceeds from an Asset Sale, Holly Energy Partners (or the applicable Restricted Subsidiary, as the case may be) enters into a binding written agreement irrevocably committing Holly Energy Partners or such Restricted Subsidiary to an application of funds of the kind described in clause (2), (3) or (4) of the preceding paragraph, and as to which the only condition to closing is the receipt of required governmental approvals or, in the case of clause (3), the completion of required construction of the applicable asset(s), Holly Energy Partners or such Restricted Subsidiary shall be deemed not to be in violation of the preceding paragraph. Any Net Proceeds that are applied pursuant to clause (2) or (4) of the preceding paragraph pursuant to any such binding agreement shall be deemed to have been applied for such purpose within such 365-day period so long as they are so applied within two years after the date of receipt of such Net Proceeds.
Pending the final application of any Net Proceeds, Holly Energy Partners or any Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.
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Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 4.10 will constitute Excess Proceeds . When the aggregate amount of Excess Proceeds exceeds $30.0 million, within five days thereof, the Issuers will make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Holly Energy Partners may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
Holly Energy Partners will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.09 hereof or this Section 4.10, Holly Energy Partners will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance.
Section 4.11 Transactions with Affiliates.
(a) Holly Energy Partners will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Holly Energy Partners (each an Affiliate Transaction ), if such Affiliate Transaction involves aggregate consideration in excess of $25.0 million, unless:
(1) the Affiliate Transaction is on terms that are no less favorable to Holly Energy Partners or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by Holly Energy Partners or such Restricted Subsidiary with an unrelated Person or, if in the good faith judgment of the Board of Directors of Holly Energy Partners, no comparable transaction is available with which to compare such Affiliate Transaction, such Affiliate Transaction is fair and reasonable to Holly Energy Partners or the relevant Restricted Subsidiary from a financial or commercial point of view; and
(2) Holly Energy Partners delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50.0 million, a resolution of the Board of Directors of Holly Energy Partners set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a) and that such Affiliate Transaction has been approved by either a Conflicts Committee of the Board of Directors of Holly Energy Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of Holly Energy Partners
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(b) The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a) hereof:
(1) reasonable fees and compensation paid to or for the benefit of any employee, officer or director of Holly Energy Partners, any of its Restricted Subsidiaries or the General Partner (or its general partner), and any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by Holly Energy Partners or any of its Restricted Subsidiaries existing on the Issue Date, or entered into thereafter in the ordinary course of business, and any indemnities or other transactions permitted or required by bylaw, statutory provisions or any of the foregoing agreements, plans or arrangements;
(2) transactions between or among Holly Energy Partners and/or its Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted Subsidiary of Holly Energy Partners) that is an Affiliate of Holly Energy Partners solely because Holly Energy Partners owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4) any issuance of Equity Interests (other than Disqualified Equity) of Holly Energy Partners to Affiliates of Holly Energy Partners;
(5) Restricted Payments or Permitted Investments that do not violate Section 4.07 hereof;
(6) customary compensation, indemnification and other benefits made available to officers, directors or employees of Holly Energy Partners, a Restricted Subsidiary of Holly Energy Partners or the General Partner, including reimbursement or advancement of out-of-pocket expenses and provisions of officers and directors liability insurance;
(7) in the case of processing, gathering, transportation, marketing, hedging, production handling, operating, construction, terminalling, storage, lease, platform use, or other operational contracts, any such contracts are entered into in the ordinary course of business on terms substantially similar to those contained in similar contracts entered into by Holly Energy Partners or any Restricted Subsidiary and third parties, or if neither Holly Energy Partners nor any Restricted Subsidiary has entered into a similar contract with a third party, that the terms are no less favorable than those available from third parties on an arms-length basis, as determined in good faith by either the Conflicts Committee of the Board of Directors of Holly Energy Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of Holly Energy Partners;
(8) loans or advances to employees in the ordinary course of business not to exceed $5.0 million in the aggregate at any one time outstanding;
(9) the existence of, or the performance by Holly Energy Partners or any Restricted Subsidiary of its obligations under the terms of, any agreements that are described in the Holly Energy Partners Annual Report on Form 10-K for the fiscal year ended December 31, 2015 under the heading Certain Relationships and Related Transactions, and Director Independence to which it is a party as of the date of the Offering Memorandum and any amendments thereto and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Holly Energy Partners or any Restricted Subsidiary of its obligations under, any future amendment to such agreements or under any such similar
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agreements shall only be permitted by this clause (9) to the extent that the terms of any such amendment or new agreement, taken as a whole, are not less favorable to the Holders in any material respect as determined in good faith by either the Conflicts Committee of the Board of Directors of Holly Energy Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of Holly Energy Partners;
(10) Guarantees of performance by Holly Energy Partners or any of its Restricted Subsidiaries in the ordinary course of business, except for guarantees of Indebtedness in respect of borrowed money;
(11) (A) Guarantees by Holly Energy Partners or any of its Restricted Subsidiaries of the performance of obligations of Unrestricted Subsidiaries or Joint Ventures in the ordinary course of business, except for Guarantees of Indebtedness in respect of borrowed money, and (B) pledges by Holly Energy Partners or any Restricted Subsidiary of Capital Stock in Unrestricted Subsidiaries or Joint Ventures for the benefit of lenders or other creditors of Unrestricted Subsidiaries or Joint Ventures as contemplated by clause (14) of the definition of Permitted Liens so long as any such transaction described in this clause (B), if involving aggregate if involving aggregate consideration in excess of $50.0 million, has been approved by either the Conflicts Committee of the Board of Directors of Holly Energy Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of Holly Energy Partners; and
(12) any transactions between Holly Energy Partners or any Restricted Subsidiary and any Person, a director of which is also a director of Holly Energy Partners or a Restricted Subsidiary, provided that such director abstains from voting as a director of Holly Energy Partners or the Restricted Subsidiary, as applicable, in connection with the approval of the transaction.
Section 4.12 Liens.
Holly Energy Partners will not and will not permit any Guarantor to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) securing Indebtedness, upon any of their property or assets, now owned or hereafter acquired, unless:
(1) in the case of Liens securing Indebtedness of Holly Energy Partners or a Guarantor, the Notes or Note Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on a senior basis to the subordinated Indebtedness so secured with the same priority that the Notes or Note Guarantees, as applicable, have to such subordinated Indebtedness until such time as such subordinated Indebtedness are no longer so secured by a Lien; and
(2) in the case of Liens securing Senior Indebtedness of Holly Energy Partners or a Guarantor, the Notes or Note Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on an equal and ratable basis with the Senior Indebtedness so secured until such time as such Senior Indebtedness is no longer so secured by a Lien.
Any Lien on property or assets of Holly Energy Partners or a Guarantor created for the benefit of Holders of the Notes pursuant to the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged at such time as there are no other Liens of any kind (other than Permitted Liens) on such property or assets securing such Indebtedness.
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Section 4.13 Limitations on Finance Corp. Activities.
Finance Corp. will not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided, that Finance Corp. may be a co-obligor or guarantor with respect to Indebtedness if Holly Energy Partners is an obligor on such Indebtedness and the net proceeds of such Indebtedness are received by Holly Energy Partners, Finance Corp. or one or more Guarantors. At any time after Holly Energy Partners is a corporation, Finance Corp. may consolidate or merge with or into Holly Energy Partners or any Restricted Subsidiary.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, Holly Energy Partners shall do or cause to be done all things necessary to preserve and keep in full force and effect:
(1) its limited partnership existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of Holly Energy Partners or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of Holly Energy Partners and its Subsidiaries; provided, however, that Holly Energy Partners shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the General Partner shall determine that the preservation thereof is no longer desirable in the conduct of the business of Holly Energy Partners and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers will make an offer (a Change of Control Offer ) to each Holder of Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holders Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but excluding, the date of purchase (the Change of Control Payment ), subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the date of purchase. Within 30 days following any Change of Control, the Issuers will send a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is sent (the Change of Control Payment Date );
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Issuers Default in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled Option of Holder to Elect Purchase attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
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(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.
The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change in Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Issuers will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuers.
The Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities of DTC), and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided , that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Issuers will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Issuers to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of this Indenture are applicable.
(c) Notwithstanding anything to the contrary in this Section 4.15, the Issuers will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price.
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(d) With respect to the Notes, in the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes tender and do not withdraw such Notes in a Change of Control Offer and Holly Energy Partners (or the third party making the Change of Control Offer as provided above) purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuers will have the right, upon not less than 15 nor more than 60 days prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to 101% of the aggregate principal amount of such Notes, plus accrued and unpaid interest on the Notes that remain outstanding to, but excluding, the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date).
Section 4.16 [Reserved.]
Section 4.17 [Reserved.]
Section 4.18 Additional Guarantees.
If, after the Issue Date, any wholly-owned Domestic Subsidiary (other than Finance Corp.) of Holly Energy Partners that is not already a Guarantor Guarantees any other Indebtedness of either of the Issuers under a Credit Facility in an aggregate principal amount in excess of $50.0 million, then that Subsidiary will become a Guarantor by executing and delivering a supplemental indenture to this Indenture to the Trustee within 30 Business Days of the date on which it Guaranteed or incurred such Indebtedness; provided that the preceding shall not apply to Subsidiaries of Holly Energy Partners that have been properly designated as Unrestricted Subsidiaries in accordance with this Indenture for so long as they continue to constitute Unrestricted Subsidiaries. Notwithstanding the preceding, any Note Guarantee of a Domestic Subsidiary that was incurred pursuant to this Section 4.18 will be released in accordance with Section 10.05 hereof.
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of Holly Energy Partners may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Holly Energy Partners and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will either reduce the amount available for Restricted Payments under Section 4.07 hereof or qualify as a Permitted Investment under one or more clauses of the definition of Permitted Investments, as determined by Holly Energy Partners; provided that any designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any designation of a Subsidiary of Holly Energy Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Holly Energy Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, Holly Energy Partners will be in default of such covenant. The Board of Directors of Holly
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Energy Partners may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of Holly Energy Partners; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Holly Energy Partners of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the Reference Period; and (2) no Default or Event of Default would be in existence following such designation.
Section 4.20 Termination of Covenants.
(a) If at any time (i) the Notes are assigned an Investment Grade Rating from both Rating Agencies and (ii) no Default or Event of Default has occurred and is continuing under this Indenture (the Termination Date ), Holly Energy Partners and its Restricted Subsidiaries will no longer be subject to the following provisions of this Indenture:
(1) Section 4.10;
(2) Section 4.07;
(3) Section 4.09;
(4) Section 4.18;
(5) Section 4.11;
(6) Section 4.13;
(7) Clause 4 of Section 5.01; and
(8) Section 4.08.
(b) However, Holly Energy Partners and its Restricted Subsidiaries will remain subject to the provisions of this Indenture:
(1) Section 4.03;
(2) Section 4.12; and
(3) Section 5.01 (with the exception of clause (4) thereof).
No Subsidiary may be designated as an Unrestricted Subsidiary after the Termination Date.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets.
(a) Neither of the Issuers may: (1) consolidate or merge with or into another Person (whether or not such Issuer is the surviving entity); or (2) directly or indirectly sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of the Issuers and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:
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(1) either:
(A) such Issuer is the surviving entity; or
(B) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a Person organized or existing under the laws of the United States, any state of the United States or the District of Columbia; provided, however, that Finance Corp. may not consolidate or merge with or into any Person other than a corporation satisfying such requirement so long as Holly Energy Partners is not a corporation;
(2) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made assumes all the obligations of such Issuer under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of Default exists; and
(4) in the case of a transaction involving Holly Energy Partners and not Finance Corp., Holly Energy Partners or the Person formed by or surviving any such consolidation or merger (if other than Holly Energy Partners), or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made, will:
(A) on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Reference Period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or
(B) have a Fixed Charge Coverage Ratio, on the date of such transaction and after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Reference Period, not less than the Fixed Charge Coverage Ratio of Holly Energy Partners immediately prior to such transaction; and
(5) such Issuer has delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger or disposition and such supplemental indenture (if any) comply with this Indenture and all conditions precedent therein relating to such transaction have been satisfied.
provided that this Section 5.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among Holly Energy Partners and its Restricted Subsidiaries, provided further that Sections 5.01(a)(3) and (4) will not apply to any merger or consolidation of Holly Energy Partners (A) with or into one of its Restricted Subsidiaries for any purpose or (B) with or into an Affiliate solely for the purpose of reorganizing Holly Energy Partners in another jurisdiction.
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(b) Notwithstanding Section 5.01(a), Holly Energy Partners will be permitted to reorganize as any other form of entity in accordance with the procedures established in this Indenture; provided that:
(1) the reorganization involves the conversion (by merger, sale, contribution or exchange of assets or otherwise) of Holly Energy Partners into a form of entity other than a limited partnership formed under Delaware law;
(2) the entity so formed by or resulting from such reorganization is an entity organized or existing under the laws of the United States, any state thereof or the District of Columbia;
(3) the entity so formed by or resulting from such reorganization assumes all the Obligations of Holly Energy Partners under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee;
(4) immediately after such reorganization no Default or Event of Default exists; and
(5) such reorganization is not adverse to the Holders of the Notes (for purposes of this clause (5) it is stipulated that such reorganization shall not be considered adverse to the Holders of the Notes solely because the successor or survivor of such reorganization (a) is subject to federal or state income taxation as an entity or (b) is considered to be an includible corporation of an affiliated group of corporations within the meaning of Section 1504(b)(i) of the Code or any similar state or local law).
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of Holly Energy Partners in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which Holly Energy Partners is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the Holly Energy Partners shall refer instead to the successor Person and not to Holly Energy Partners), and may exercise every right and power of Holly Energy Partners under this Indenture with the same effect as if such successor Person had been named as Holly Energy Partners herein.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an Event of Default :
(1) default for 30 days in the payment when due of interest with respect to the Notes;
(2) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;
(3) failure by Holly Energy Partners or any of its Restricted Subsidiaries to make a Change of Control Offer or an Asset Sale Offer within the timer periods set forth, or consummate a purchase of Notes when required pursuant to the terms described in Section 4.15 or Sections 3.09 and 4.10 or to comply with the provisions of Section 5.01 hereof;
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(4) failure by Holly Energy Partners for 90 days after written notice to Holly Energy Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03(a);
(5) failure by Holly Energy Partners or any of its Restricted Subsidiaries for 60 days after written notice to Holly Energy Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of the other agreements in the Indenture; or
(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Holly Energy Partners or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by Holly Energy Partners or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:
(A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a Payment Default ); or
(B) results in the acceleration of such Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more, provided, however, that if, prior to any acceleration of the Notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded, or (iii) such Indebtedness is repaid during the 10 Business Day period commencing upon the end of any applicable grace period for such Payment Default or the occurrence of such acceleration, as applicable, any Default or Event of Default (but not any acceleration) caused by such Payment Default or acceleration shall automatically be rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;
(7) failure by an Issuer or any of Holly Energy Partners Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;
(8) an Issuer or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a custodian of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors, or
(E) generally is not paying its debts as they become due;
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(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against an Issuer or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Holly Energy Partners that, taken together, would constitute a Significant Subsidiary in an involuntary case;
(B) appoints a custodian of an Issuer or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of an Issuer or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary; or
(C) orders the liquidation of an Issuer or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days; and
(10) except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of Section 6.01 hereof, with respect to Finance Corp., Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest, or premium, if any, on, or the principal of, the Notes.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium or interest on the Notes (including in connection with an offer to purchase); provided, however , that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the Notes only if:
(1) such Holder gives to the Trustee written notice that an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and
(5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and interest and on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
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Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), their creditors or their property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:
First : to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
Second : to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and
Third : to the Issuers or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
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Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has furnished to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
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(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers will be sufficient if signed by an Officer of each of the Issuers.
(f) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have furnished to the Trustee reasonable indemnity or security against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as such term is defined in the TIA) it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustees Disclaimer.
The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
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Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will send to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will send to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee will also transmit, in the manner prescribed in Section 12.02, all reports as required by TIA § 313(c).
(b) A copy of each report at the time it is sent to the Holders of Notes will be sent by the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Issuers will promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Issuers will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustees compensation will not be limited by any law on compensation of a trustee of an express trust. The Issuers will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustees agents and counsel.
(b) The Issuers and the Guarantors will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuers and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuers, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee will notify the Issuers promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuers will not relieve the Issuers or any of the Guarantors of their obligations hereunder. The Issuers or such Guarantor will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and the Issuers will pay the reasonable fees and expenses of such counsel. Neither the Issuers nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.
(c) The obligations of the Issuers and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Issuers and the Guarantors payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture.
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(e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustees acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will send a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.
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Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).
Section 7.11 Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may at their option and at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and Note Guarantees upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Issuers exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, Legal Defeasance ). For this purpose, Legal Defeasance means that the Issuers and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be outstanding only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:
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(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;
(2) the Issuers obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers and the Guarantors obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Issuers may exercise their option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Issuers exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.18 and 4.19 hereof and clause (4) of Section 5.01 hereof with respect to the outstanding Notes, and the Guarantors will be released from their obligations with respect to the Note Guarantees, on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, Covenant Defeasance ), and the Notes will thereafter be deemed not outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed outstanding for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes to the extent permitted by GAAP). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Issuers and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Issuers exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(7) inclusive hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:
(1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding Notes on the stated date for payment thereof or on the applicable Redemption Date, as the case may be, and the Issuers must specify whether the Notes are being defeased to such stated date for payment or to a particular Redemption Date;
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(2) in the case of an election under Section 8.02 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:
(A) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or
(B) since the Issue Date, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or other borrowing of funds or the grant of Liens securing such Indebtedness or other borrowing, all or a portion of the proceeds of which will be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which Holly Energy Partners or any of its Subsidiaries is a party or by which Holly Energy Partners or any of its Subsidiaries is bound;
(6) the Issuers must deliver to the Trustee an Officers Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders of Notes over the other creditors of the Issuers with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuers or others; and
(7) the Issuers must deliver to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
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Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the Trustee ) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest but such money need not be segregated from other funds except to the extent required by law.
The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Issuers from time to time upon the request of the Issuers any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to the Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Issuers on their request or (if then held by the Issuers) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuers as trustee thereof, will thereupon cease; provided, however , that, if any Definitive Note is then outstanding, the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuers cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuers.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers and the Guarantors obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however , that, if the Issuers make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuers will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of any Holder of Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;
(3) to provide for the assumption of the Issuers or a Guarantors obligations to the Holders of the Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuers or such Guarantors assets, as applicable;
(4) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder;
(5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the Description of Notes section of the Issuers Offering Memorandum to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the Note Guarantees;
(7) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the Issue Date;
(8) to allow any Guarantor to execute a supplemental indenture and/or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture;
(9) to secure the Notes and/or the Note Guarantees;
(10) to comply with the rules of any applicable securities depository; or
(11) to provide for the reorganization of Holly Energy Partners as any other form of entity, in accordance with
Section 5.01(a).
Upon the request of the Issuers, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture (including, without limitation, Sections 3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes, and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes. (Section 2.08 hereof shall determine which Notes are considered to be outstanding for purposes of this Section 9.02.) However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes; provided, however, that any purchase or repurchase of Notes, including pursuant to Sections 3.09 and 4.10 or Section 4.15 hereof, shall not be deemed a redemption of the Notes;
(3) reduce the rate of or change the time for payment of interest, including default interest on any Note;
(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of, principal of, or interest or premium, if any, on, the Notes (other than as permitted by clause (7) below);
(7) waive a redemption payment with respect to any Note (other than a payment required by Sections 3.09 and 4.10 or Section 4.15 hereof);
(8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
Upon the request of the Issuers accompanied by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee
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will join with the Issuers and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustees own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuers will send to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
Section 9.03 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holders Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms (except as provided in the second succeeding paragraph) and thereafter binds every Holder.
The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the second to last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies) and only those Persons, shall be entitled to consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of the clauses (1) through (9) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holders Note.
Section 9.04 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuers in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.
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Section 9.05 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
NOTE GUARANTEES
Section 10.01 Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that:
(1) the principal of, premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that its Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuers or the Guarantors, any amount paid by either to the Trustee or such Holder, each Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Section 10.01,
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notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purposes of this Section 10.01. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirm that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03 Execution and Delivery of Notation of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture (including any supplement thereto) will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the notation of its Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such notation of its Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Issuers or any of Holly Energy Partners Restricted Subsidiaries creates or acquires any wholly-owned Domestic Subsidiary after the date of this Indenture, if required by Section 4.18 hereof, the Issuers will cause such Domestic Subsidiary to comply with the provisions of Section 4.18 hereof and this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Issuers or another Guarantor, unless:
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(1) immediately after giving effect to such transaction, no Default or Event of Default exists; and
(2) either:
(A) the Person acquiring the properties or assets in any such sale or disposition or the Person formed by or surviving any such consolidation or merger is a Guarantor, or unconditionally assumes all the obligations of that Guarantor under this Indenture and its Note Guarantee on the terms set forth herein or therein, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; or
(B) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture, including without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the notations of Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuers and delivered to the Trustee. All the Note Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.
Section 10.05 Releases.
(a) In the event of any sale or other disposition (i) of all or substantially all of the properties or assets of any Guarantor, by way of merger, consolidation or otherwise, to a Person that is not (either before or after giving effect to such transactions) Holly Energy Partners or a Restricted Subsidiary of Holly Energy Partners, or (ii) of all of the Capital Stock of any Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary of Holly Energy Partners, then such Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other obligations under this Indenture; provided that such sale or other disposition does not violate the applicable provisions of Section 4.10 hereof. Upon delivery by the Issuers to the Trustee of an Officers Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Issuers in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee and all of its other obligations under this Indenture.
(b) Upon designation of any Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, such Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other obligations under this Indenture.
(c) Upon release or discharge of the Guarantee by any Guarantor with respect to Indebtedness under a Credit Facility or the Guarantee that resulted in the creation of a Note Guarantee, such Guarantor will be released and relieved of any obligations under its Note Guarantee and its other obligations under this Indenture; provided, however , that release or discharge of the Guarantee by such Guarantor with respect to Indebtedness under the Existing Senior Notes occurs prior to or
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contemporaneously therewith; provided, further, however that if, at any time following such release, that Guarantor later Guarantees Indebtedness of either Issuer under a Credit Facility, then such Guarantor shall be required to provide a Note Guarantee at such time if required in accordance with Section 4.18 hereof.
(d) Upon Legal or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance with Article 11 hereof, each Guarantor will be released and relieved of any obligations under its Note Guarantee and all of its other obligations under this Indenture.
(e) Upon the merger, amalgamation or consolidation of any Guarantor with and into an Issuer or another Guarantor that is the surviving Person in such merger, amalgamation or consolidation, or upon the liquidation or dissolution of such Guarantor, such Guarantor will be relieved of any obligations under its Note Guarantee and all of its other obligations under this Indenture.
Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of and interest, and premium, if any, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when:
(1) either:
(A) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuers, have been delivered to the Trustee for cancellation; or
(B) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the sending of a notice of redemption or otherwise or will become due and payable within one year and the Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest, if any, to the date of Stated Maturity or redemption;
(2) in the case of clause (1)(b) above, no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which any Issuer or any Guarantor is a party or by which any Issuer or any Guarantor is bound;
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(3) the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and
(4) the Issuers have delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or on the Redemption Date, as the case may be.
In addition, the Issuers must deliver (a) an Officers Certificate stating that all conditions precedent set forth in clauses (1) through (4) above have been satisfied, and (b) an Opinion of Counsel to the Trustee (which Opinion of Counsel may be subject to customary assumptions and qualifications), stating that all conditions precedent to satisfaction and discharge set forth in Section 11.01(2) and (4) have been satisfied; provided that the Opinion of Counsel with respect to 11.01(2) above may be to the knowledge of such counsel.
Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers and any Guarantors obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 11.01; provided that if the Issuers have made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 12
MISCELLANEOUS
Section 12.01 [Reserved.]
Section 12.02 Notices.
Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others address:
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If to the Issuers and/or any Guarantor:
Holly Energy Partners, L.P.
Holly Energy Finance Corp.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Facsimile No.: (214) 615-9380
Attention: Chief Financial Officer
With a copy to:
Vinson & Elkins L.L.P.
2001 Ross, Suite 3700
Dallas, Texas 75201-2975
Facsimile No.: (214) 999-7857
Attention: Alan J. Bogdanow
If to the Trustee:
U.S. Bank National Association
13737 Noel Road, Suite 800
Dallas, Texas 75240
Facsimile No.: (972) 581-1660
Attention: Global Corporate Trust Services
The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar; provided, however, that any notice or communication to a Holder of a Global Note will be given in the manner prescribed by DTC or other Depositary. Failure to give a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.
If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers send a notice or communication to Holders, they will send a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate with other Holders with respect to their rights under this Indenture or the Notes.
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Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:
(1) a statement that the person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders.
No past, present or future director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.
Section 12.08 Governing Law.
THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
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Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of Holly Energy Partners or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 12.10 Successors.
All agreements of the Issuers in this Indenture and the Notes will bind their respective successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
Section 12.14 Payment Date Other Than a Business Day.
If any payment with respect to any principal of, premium, if any, on, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.
Section 12.15 Evidence of Action by Holder.
Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Notes may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with procedures approved by the Trustee, (c) by a combination of
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such instrument or instruments and any such record of such a meeting of Holders or (d) in the case of Notes evidenced by a Global Note, by any electronic transmission or other message, whether or not in written format, that complies with the Depositarys applicable procedures.
[Signatures on following page]
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SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of the date first written above.
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 / S TEPHEN D. W ISE |
|||
Stephen D. Wise | ||||
Vice President and Treasurer |
HOLLY ENERGY FINANCE CORP. | ||
By: |
/ S / S TEPHEN D. W ISE |
|
Stephen D. Wise | ||
Vice President and Treasurer |
[ S IGNATURE P AGE TO THE I NDENTURE ]
GUARANTORS : |
EL DORADO OPERATING LLC , a Delaware limited liability company |
HEP CASPER SLC LLC , a Delaware limited liability company |
HEP EL DORADO LLC , a Delaware limited liability company |
HEP LOGISTICS GP, L.L.C. , a Delaware limited liability company |
HOLLY ENERGY PARTNERS-OPERATING, L.P. , a Delaware limited partnership |
HOLLY ENERGY STORAGE-LOVINGTON LLC , a Delaware limited liability company |
CHEYENNE LOGISTICS LLC , a Delaware limited liability company |
EL DORADO LOGISTICS LLC , a Delaware limited liability company |
EL DORADO OSAGE LLC , a Delaware limited liability company |
HEP PIPELINE GP, L.L.C. , a Delaware limited liability company |
HEP REFINING GP, L.L.C. , a Delaware limited liability company |
HEP REFINING, L.L.C. , a Delaware limited liability company |
HEP TULSA LLC , a Delaware limited liability company |
LOVINGTON-ARTESIA, L.L.C. , a Delaware limited liability company |
ROADRUNNER PIPELINE, L.L.C. , a Delaware limited liability company |
[ S IGNATURE P AGE TO THE I NDENTURE ]
HEP CHEYENNE LLC, a Delaware limited liability company | ||
HEP SLC, LLC , a Delaware limited liability company | ||
HEP UNEV HOLDINGS LLC , a Delaware limited liability company | ||
HEP UNEV PIPELINE LLC , a Delaware limited liability company | ||
By: |
/ S / S TEPHEN D. W ISE |
|
Stephen D. Wise | ||
Vice President and Treasurer |
[ S IGNATURE P AGE TO THE I NDENTURE ]
HEP MOUNTAIN HOME, L.L.C. , a Delaware limited liability company | ||
HEP PIPELINE, L.L.C. , a Delaware limited liability company | ||
HEP WOODS CROSS, L.L.C. , a Delaware limited liability company | ||
Each by: Holly Energy PartnersOperating, L.P., a Delaware limited partnership, its Sole Member |
||
By: |
/ S / S TEPHEN D. W ISE |
|
Stephen D. Wise | ||
Vice President and Treasurer |
[ S IGNATURE P AGE TO THE I NDENTURE ]
HEP FIN-TEX/TRUST RIVER, L.P. , a Texas limited partnership | ||
HEP NAVAJO SOUTHERN, L.P., a Delaware limited partnership | ||
HEP PIPELINE ASSETS, LIMITED PARTNERSHIP , a Delaware limited partnership | ||
Each by: HEP Pipeline GP, L.L.C., a Delaware limited liability company, its General Partner |
||
By: |
/ S / S TEPHEN D. W ISE |
|
Stephen D. Wise | ||
Vice President and Treasurer |
[ S IGNATURE P AGE TO THE I NDENTURE ]
HEP REFINING ASSETS, L.P., a Delaware limited partnership | ||
By: | HEP Refining GP, L.L.C., a Delaware limited liability company, its General Partner | |
By: |
/ S / S TEPHEN D. W ISE |
|
Stephen D. Wise | ||
Vice President and Treasurer |
[ S IGNATURE P AGE TO THE I NDENTURE ]
U.S. BANK NATIONAL ASSOCIATION | ||
By: |
/s/ Brad A. Hounsel |
|
Name: Brad A. Hounsel | ||
Title: Vice President |
[ S IGNATURE P AGE TO THE I NDENTURE ]
EXHIBIT A
FORM OF GLOBAL NOTE
CUSIP [TO BE INSERTED]
6% Senior Notes due 2024
No. | $ |
HOLLY ENERGY PARTNERS, L.P.
and
HOLLY ENERGY FINANCE CORP.
promises to pay to , or registered assigns,
the principal sum of DOLLARS [or such greater or lesser amount as may be specified on the attached schedule]* on August 1, 2024.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated: , 20
HOLLY ENERGY PARTNERS, L.P. | ||||
By: | HEP Logistics Holdings, L.P., | |||
its general partner | ||||
By: | Holly Logistic Services, L.L.C., | |||
its general partner | ||||
By: |
|
|||
Name: | ||||
Title: | ||||
HOLLY ENERGY FINANCE CORP. | ||||
By: |
|
|||
Name: | ||||
Title: |
This is one of the Notes referred to | ||
in the within-mentioned Indenture: | ||
U.S. BANK NATIONAL ASSOCIATION, as Trustee |
||
By: |
|
|
Authorized Signatory |
* | To be included only if the Note is issued in global form . |
[Form of Face of Note]
6% Senior Notes due 2024
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (DTC), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE RESALE RESTRICTION TERMINATION DATE) THAT IS ONE YEAR (IN THE CASE OF RULE 144A SECURITIES) AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES), ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS
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DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS AND THE TRUSTEES RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUERS ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.
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EXHIBIT A
[Form of Reverse of Note]
6% Senior Notes due 2024
Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
(1) I NTEREST . Holly Energy Partners, L.P., a Delaware limited partnership (Holly Energy Partners), and Holly Energy Finance Corp., a Delaware corporation (Finance Corp. and, together with Holly Energy Partners, the Issuers), promise to pay interest on the principal amount of this Note at 6% per annum from July 19, 2016 until maturity. The Issuers will pay interest semi-annually in arrears on February 1 and August 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an Interest Payment Date ). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be February 1, 2017. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
(2) M ETHOD OF P AYMENT . The Issuers will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the January 15 or July 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and interest at the office or agency of the Issuers maintained for such purpose within or without the City and State of New York, or, at the option of the Issuers, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuers or the Paying Agent to an account in the United States. Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
(3) P AYING A GENT AND R EGISTRAR . Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar without notice to any Holder. Holly Energy Partners or any of its Subsidiaries may act in any such capacity.
(4) I NDENTURE . The Issuers issued the Notes under an Indenture dated as of July 19, 2016 (the Indenture ) among the Issuers, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the Issuers. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.
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(5) O PTIONAL R EDEMPTION .
(a) Except pursuant to paragraphs (b), (c) and (d) of this Section 5, the Notes will not be redeemable at the Issuers option prior to August 1, 2019. On or after August 1, 2019, the Issuers may redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 of the Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on August 1 of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:
Year |
Percentage | |||
2019 |
104.500 | % | ||
2020 |
103.000 | % | ||
2021 |
101.500 | % | ||
2022 and thereafter |
100.000 | % |
Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to August 1, 2019, the Issuers may on any one or more occasions redeem, upon prior notice in accordance with Section 3.02 of the Indenture, up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture at a redemption price of 106% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by Holly Energy Partners; provided that at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by Holly Energy Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and the redemption occurs within 180 days of the date of the closing of such Equity Offering.
(c) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to August 1, 2019, the Issuers may also redeem all or a part of the Notes, upon prior notice in accordance with Section 3.02 of the Indenture, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on prior to the Redemption Date.
(d) The Issuers may also redeem the Notes as provided in Section 4.15(d) of the Indenture, on the terms and subject to the conditions set forth therein.
For purposes of this Paragraph 5, Applicable Premium means, with respect to any Note at the time of determination, the greater of: (1) 1.00% of the principal amount of the Note; or (2) the excess of: (a) the present value at such time of (i) the redemption price of the Note at August 1, 2019 (such redemption price being set forth in the table appearing in Section 3.07 of the Indenture) plus (ii) all required interest payments due on the Note through August 1, 2019 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater. Treasury Rate means, as of the time of computation, the yield to maturity as of such time of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to August 1, 2019; provided, however, that if the period from the Redemption Date to August 1, 2019, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
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(6) M ANDATORY R EDEMPTION .
The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers may acquire the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of the Indenture.
(7) R EPURCHASE AT THE O PTION OF H OLDER .
(a) If there is a Change of Control, the Issuers will be required to make an offer (a Change of Control Offer ) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holders Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase (the Change of Control Payment ). Within 30 days following any Change of Control, the Issuers will send a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Issuers or a Restricted Subsidiary of Holly Energy Partners consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $30.0 million, the Issuers will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in Section 4.10 of the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an Asset Sale Offer ) to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in Section 3.09 of the Indenture. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Holly Energy Partners (or any Restricted Subsidiary) may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis. Holders of Notes that are the subject of an Asset Sale Offer will receive an offer to purchase from the Issuers prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled Option of Holder to Elect Purchase attached to the Notes.
(8) N OTICE OF R EDEMPTION . Notice of redemption will be mailed (or sent electronically in the case of notices to DTC), at least 15 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 and in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completed of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers discretion, the Redemption
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Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied
(9) D ENOMINATIONS , T RANSFER , E XCHANGE . The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any transfer tax or similar governmental charge required by law or permitted by the Indenture. The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.
(10) P ERSONS D EEMED O WNERS . The registered Holder of a Note may be treated as its owner for all purposes, and only such Holders have rights under the Indenture.
(11) A MENDMENT , S UPPLEMENT AND W AIVER . Subject to certain exceptions, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any. Without the consent of any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Issuers or a Guarantors obligations to Holders of the Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuers or such Guarantors assets, as applicable, to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to conform the text of the Indenture, the Notes or the Note Guarantees to any provision of the Description of Notes section of the Issuers Offering Memorandum to the extent that such provision was intended to be a verbatim recitation of a provision of the Indenture, the Notes or Note Guarantee, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the Issue Date, to allow any Guarantor to execute a supplemental indenture and/or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture, to secure the Notes and/or the Note Guarantees, to comply with the rules of any applicable securities depository or to provide for the reorganization of Holly Energy Partners in any other form or entity, in accordance with Section 5.01(b) of the Indenture.
(12) D EFAULTS AND R EMEDIES . Events of Default include: (i) default for 30 days in the payment when due of interest on, with respect to the Notes; (ii) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes; (iii) failure by Holly Energy Partners or any of its Restricted Subsidiaries to timely consummate repurchase offers under Section 4.15 or Sections 3.09 and 4.10 of the Indenture or to comply with Section 5.01 of the Indenture; (iv) failure by Holly Energy Partners for 90 days after written notice to Holly Energy
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Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 4.03(a) of the Indenture, (v) failure by Holly Energy Partners or any of its Restricted Subsidiaries for 60 days after written notice to Holly Energy Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of the other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of Holly Energy Partners or its Restricted Subsidiaries which default (A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a Payment Default ) or (B) results in the acceleration of such Indebtedness prior to its express maturity, in each case subject to a minimum threshold and cure period; (vii) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (viii) certain events of bankruptcy or insolvency with respect to the Issuers or any of Holly Energy Partners Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor or any Person acting on its behalf denies or disaffirms its obligations under such Guarantors Note Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Finance Corp., Holly Energy Partners or any Restricted Subsidiary of Holly Energy Partners that is a Significant Subsidiary or any group of Restricted Subsidiaries of Holly Energy Partners that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest, or premium, if any. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes. The Issuers and the Guarantors are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuers and the Guarantors are required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.
(13) T RUSTEE D EALINGS WITH THE I SSUERS . The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee.
(14) N O R ECOURSE A GAINST O THERS . A director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner or any Guarantor, as such, will not have any liability for any obligations of the Issuers or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees.
(15) A UTHENTICATION . This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
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(16) A BBREVIATIONS . Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(17) CUSIP N UMBERS . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.
(18) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.
The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:
H OLLY E NERGY P ARTNERS , L.P.
Holly Energy Finance Corp.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: Chief Financial Officer
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A SSIGNMENT F ORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: |
|
|
(Insert assignees legal name) |
(Insert assignees soc. sec. or tax I.D. no.)
(Print or type assignees name, address and zip code)
and irrevocably appoint |
|
|
to transfer this Note on the books of the Issuers. The agent may substitute another to act for him. |
Date:
Your Signature: |
|
|||
(Sign exactly as your name appears on the face of this Note) |
Signature Guarantee*:
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A-1
O PTION OF H OLDER TO E LECT P URCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
¨ Section 4.10 ¨ Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:
$
Date:
Your Signature: |
|
|||
(Sign exactly as your name appears on the face of this Note) |
||||
Tax Identification No.: |
Signature Guarantee*:
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A-2
S CHEDULE OF E XCHANGES OF I NTERESTS IN THE G LOBAL N OTE *
The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Date of Exchange |
Amount of decrease in
of this Global Note |
Amount of increase in
Principal Amount of this Global Note |
Principal Amount
of this Global Note following such decrease (or increase) |
Signature of authorized
officer of Trustee or Custodian |
* | This schedule should be included only if the Note is issued in global form . |
A-3
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Holly Energy Partners, L.P.
Holly Energy Finance Corp.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
U.S. Bank National Association
13737 Noel Road, Suite 800
Dallas, Texas 75240
Re: 6% Senior Notes due 2024
Reference is hereby made to the Indenture, dated as of July 19, 2016 (the Indenture ), among Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp., a Delaware corporation ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the Guarantors party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
, (the Transferor ) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the Transfer ), to (the Transferee ), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A . The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the Securities Act ), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S . The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
B-1
S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an initial purchaser of the Notes). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S . The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
(b) ¨ such Transfer is being effected to the Issuers or a subsidiary thereof;
or
(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;
or
(d) ¨ such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.
B-2
4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note .
(a) ¨ Check if Transfer is pursuant to Rule 144 . (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) ¨ Check if Transfer is Pursuant to Regulation S . (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) ¨ Check if Transfer is Pursuant to Other Exemption . (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your benefit.
[Insert Name of Transferor] |
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By: |
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Name: | ||
Title: |
Dated:
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ANNEX A TO CERTIFICATE OF TRANSFER
1. | The Transferor owns and proposes to transfer the following: |
[CHECK ONE OF (a) OR (b)]
(a) | ¨ a beneficial interest in the: |
(i) ¨ | 144A Global Note (CUSIP ), or |
(ii) ¨ | Regulation S Global Note (CUSIP ), or |
(iii) ¨ | IAI Global Note (CUSIP ); or |
(b) | ¨ a Restricted Definitive Note. |
2. | After the Transfer the Transferee will hold: |
[CHECK ONE]
(a) | ¨ a beneficial interest in the: |
(i) ¨ | 144A Global Note (CUSIP ), or |
(ii) ¨ | Regulation S Global Note (CUSIP ), or |
(iii) ¨ | IAI Global Note (CUSIP ); or |
(iv) ¨ | Unrestricted Global Note (CUSIP ); or |
(b) | ¨ a Restricted Definitive Note; or |
(c) | ¨ an Unrestricted Definitive Note, |
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Holly Energy Partners, L.P.
Holly Energy Finance Corp.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
U.S. Bank National Association
13737 Noel Road, Suite 800
Dallas, Texas 75240
Re: 6% Senior Notes due 2024
(CUSIP 435765 AG7 1 )
Reference is hereby made to the Indenture, dated as of July 19, 2016 (the Indenture ), among Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp., a Delaware corporation ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the Guarantors party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
, (the Owner ) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $ in such Note[s] or interests (the Exchange ). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the Securities Act ), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note . In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
1 | The CUSIP No. is U4377T AD2 for the Regulation S Note |
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(c) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note . In connection with the Owners Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note . In connection with the Owners Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owners own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note . In connection with the Exchange of the Owners Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note, ¨ Regulation S Global Note, ¨ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit.
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[Insert Name of Transferor] | ||
By: | ||
Name: | ||
Title: |
Dated:
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Holly Energy Partners, L.P.
Holly Energy Finance Corp.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
U.S. Bank National Association
13737 Noel Road, Suite 800
Dallas, Texas 75240
Re: 6% Senior Notes due 2024
Reference is hereby made to the Indenture, dated as of July 19, 2016 (the Indenture ), among Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp., a Delaware corporation ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the Guarantors party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $ aggregate principal amount of:
(a) ¨ a beneficial interest in a Global Note, or
(b) ¨ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the Securities Act ).
2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to Holly Energy Partners or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a qualified institutional buyer (as defined therein), (C) to an institutional accredited investor (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Issuers to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Issuers such certifications, legal opinions and other information as you and the Issuers may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional accredited investor) as to each of which we exercise sole investment discretion.
You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
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[Insert Name of Accredited Investor] | ||
By: | ||
Name: | ||
Title: |
Dated:
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, dated as of July 19, 2016 (the Indenture ), among Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp., a Delaware corporation ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the Guarantors party thereto and U.S. Bank National Association, as trustee (the Trustee ), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at Stated Maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuers to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.
Capitalized terms used but not defined herein have the meanings given to them in the Indenture.
[N AME OF G UARANTOR ( S )] | ||
By: | ||
Name: | ||
Title: |
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
S UPPLEMENTAL I NDENTURE (this Supplemental Indenture ), dated as of , 200 , is among (the Guaranteeing Subsidiary ), Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners ), and Holly Energy Finance Corp. ( Finance Corp. and, together with Holly Energy Partners, the Issuers ), the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the Indenture referred to below (the Trustee ).
W I T N E S S E T H:
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an indenture (the Indenture ), dated as of July 19, 2016 providing for the issuance of 6% Senior Notes due 2024 (the Notes );
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the Note Guarantee ); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. C APITALIZED T ERMS . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. A GREEMENT TO G UARANTEE . The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.
4. N O R ECOURSE A GAINST O THERS . No past, present or future director, officer, partner, member, employee, incorporator, manager, unit holder or other owner of an Equity Interest of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Issuers or the Guarantors under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.
5. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
6. C OUNTERPARTS . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
7. E FFECT OF H EADINGS . The Section headings herein are for convenience only and shall not affect the construction hereof.
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8. T HE T RUSTEE . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Issuers.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.
[G UARANTEEING S UBSIDIARY ] | ||||
By: |
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Name: | ||||
Title: | ||||
HOLLY ENERGY PARTNERS, L.P. | ||||
By: |
HEP Logistics Holdings, L.P., its general partner |
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By: |
Holly Logistic Services, L.L.C., its general partner |
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By: |
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Name: | ||||
Title: | ||||
HOLLY ENERGY FINANCE CORP. | ||||
By: |
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Name: | ||||
Title: | ||||
[E XISTING G UARANTORS ] | ||||
By: |
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Name: | ||||
Title: | ||||
U.S. BANK NATIONAL ASSOCIATION, as Trustee |
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By: |
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Authorized Signatory |
F-3
Exhibit 10.1
HOLLY ENERGY PARTNERS, L.P.
HOLLY ENERGY FINANCE CORP.
$400,000,000 6.000% Senior Notes due 2024
Purchase Agreement
July 13, 2016
New York, New York
Citigroup Global Markets Inc.
as representative of the several Initial Purchasers
named in Schedule I hereto
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Holly Energy Partners, L.P., a Delaware limited partnership ( Holly Energy Partners or the Partnership ) and Holly Energy Finance Corp., a Delaware corporation ( Finance Corp. and, together with Holly Energy Partners, the Issuers ) , and each of the Guarantors (defined herein) agree with you as follows:
1. Issuance of Notes . The Issuers propose to issue and sell to Citigroup Global Markets Inc., (the Representative ) and the other initial purchasers listed on Schedule I hereto (together with the Representative, the Initial Purchasers ) $400,000,000 in aggregate principal amount of 6.000% Senior Notes due 2024 (the Notes ). The Issuers obligations under the Notes and the Indenture (as defined below) will be, jointly and severally, unconditionally guaranteed (the Guarantees and, together with the Notes, the Securities ), on a senior basis, by each of the Subsidiaries (as defined below) listed on the signature pages hereto (each individually, a Guarantor and collectively, the Guarantors ). The Securities will be issued pursuant to an indenture (the Indenture ), to be dated as of the Closing Date (as defined herein) by and among the Issuers, the Guarantors and U.S. Bank National Association, as trustee (the Trustee ).
The Securities will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the Act ). The Issuers have prepared a preliminary offering memorandum, dated as of July 12, 2016 (the Preliminary Offering Memorandum ), and a pricing supplement thereto dated the date hereof (the Pricing Supplement ). The Preliminary Offering Memorandum and the Pricing Supplement are herein referred to as the Pricing Disclosure Package . Promptly after the execution of this Purchase Agreement (this Agreement ), the Issuers will prepare a final offering memorandum dated the date hereof (the Final Offering Memorandum ). Unless stated to the contrary, any references herein to the terms Pricing Disclosure Package and Final Offering Memorandum shall be deemed to refer to and include any information filed under the Securities Exchange Act of 1934, as amended (the Exchange Act ), prior to the date hereof and incorporated by reference therein, and any references herein to the terms amend, amendment or supplement with respect to the Final Offering Memorandum shall be deemed to refer to and include any information filed under the Exchange Act subsequent to the date hereof that is incorporated by reference therein. All references in this Agreement to financial statements and schedules
and other information which is contained, included or stated (or other references of like import) in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or Final Offering Memorandum shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Pricing Disclosure Package or Final Offering Memorandum, as the case may be.
The Initial Purchasers have advised the Issuers that the Initial Purchasers intend, as soon as they deem practicable after this Agreement has been executed and delivered, to resell (the Exempt Resales ) the Securities in private sales exempt from registration under the Act on the terms set forth in the Pricing Disclosure Package, solely to (i) persons whom the Initial Purchasers reasonably believe to be qualified institutional buyers ( QIBs ), as defined in Rule 144A under the Act ( Rule 144A ), in accordance with Rule 144A and (ii) other eligible purchasers pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Act ( Regulation S ) in accordance with Regulation S (the persons specified in clauses (i) and (ii), the Eligible Purchasers ).
This Agreement, the Notes and the Indenture are hereinafter sometimes referred to collectively as the Note Documents . The issuance and sale of the Securities is referred to as the Offering .
For the avoidance of doubt, references in this Agreement to the Subsidiaries (as defined below) shall be deemed to include Finance Corp. and the Guarantors.
2. Agreements to Sell and Purchase . On the basis of the representations, warranties and covenants contained in this Agreement, the Issuers and Guarantors agree to issue and sell to the Initial Purchasers, and on the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions contained in this Agreement, each of the Initial Purchasers, severally and not jointly, agrees to purchase from the Issuers and Guarantors, the aggregate principal amount of the Notes set forth opposite its name on Schedule I attached hereto. The purchase price for the Securities shall be 98.50% of their principal amount.
3. Delivery and Payment . Delivery of, and payment of the purchase price for, the Securities shall be made at 10:00 A.M., New York time, on July 19, 2016 (such date and time, the Closing Date ) at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022. The Closing Date and the location of delivery of and the form of payment for the Securities may be varied by mutual agreement between the Initial Purchasers and the Issuers.
The Securities shall be delivered by the Issuers and Guarantors to the Initial Purchasers (or as the Initial Purchasers direct) through the facilities of The Depository Trust Company ( DTC ) against payment by the Initial Purchasers of the purchase price therefor by means of wire transfer of immediately available funds to such account or accounts specified by the Partnership in accordance with Section 8(j) on or prior to the Closing Date, or by such means as the parties hereto shall agree prior to the Closing Date. The Securities shall be evidenced by one or more certificates in global form registered in the name of Cede & Co., as DTCs nominee, and having an aggregate principal amount corresponding to the aggregate principal amount of the Notes.
4. Agreements of the Issuers and Guarantors . Each of the Issuers and Guarantors, jointly and severally, covenants and agrees with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons identified by the Initial Purchasers, without charge, as many copies of the Preliminary Offering Memorandum, the Pricing Supplement, any Issuer Written Communication (as defined below) and the Final
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Offering Memorandum, and any amendments or supplements thereto, as the Initial Purchasers may reasonably request. The Issuers consent to the use of the Preliminary Offering Memorandum, the Pricing Supplement and the Final Offering Memorandum, and any amendments or supplements thereto, by the Initial Purchasers in connection with Exempt Resales.
(b) As promptly as practicable following the execution and delivery of this Agreement and in any event not later than the second business day following the date hereof, to prepare and deliver to the Initial Purchasers the Final Offering Memorandum, which shall consist of the Preliminary Offering Memorandum as modified only by the information contained in the Pricing Supplement. Not to amend or supplement the Preliminary Offering Memorandum or the Pricing Supplement. Not to amend or supplement the Final Offering Memorandum prior to the Closing Date unless the Initial Purchasers shall previously have been advised of such proposed amendment or supplement at least two business days prior to the proposed use, and shall not have objected to such amendment or supplement.
(c) Subject to Section 4(p), if, prior to the later of (x) the Closing Date and (y) the time that the Initial Purchasers have completed their distribution of the Securities, any event shall occur that, in the judgment of the Issuers or in the judgment of counsel to the Initial Purchasers, makes any statement of a material fact in the Final Offering Memorandum, as then amended or supplemented, untrue or that requires the making of any additions to or changes in the Final Offering Memorandum in order to make the statements in the Final Offering Memorandum, as then amended or supplemented, in the light of the circumstances under which they are made, not misleading, or if it is necessary to amend or supplement the Final Offering Memorandum to comply with all applicable laws, the Issuers shall promptly notify the Initial Purchasers of such event and (subject to Section 4(b)) prepare an appropriate amendment or supplement to the Final Offering Memorandum so that (i) the statements in the Final Offering Memorandum, as amended or supplemented, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances at the Closing Date and at the time of sale of Securities, not misleading and (ii) the Final Offering Memorandum will comply with applicable law.
(d) To qualify or register the Securities under the securities laws of such jurisdictions as the Initial Purchasers may request and to continue such qualification in effect so long as required for the Exempt Resales. Notwithstanding the foregoing, no Issuer shall be required to qualify as a foreign corporation or limited partnership in any jurisdiction in which it is not so qualified or to execute a general consent to service of process in any such jurisdiction or subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject.
(e) To advise the Initial Purchasers promptly, and if requested by the Initial Purchasers, to confirm such advice in writing, of the issuance by any securities commission of any stop order suspending the qualification or exemption from qualification of any of the Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any securities commission or other regulatory authority. The Issuers shall use their reasonable best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of any of the Securities under any securities laws, and if at any time any securities commission or other regulatory authority shall issue an order suspending the qualification or exemption of any of the Securities under any securities laws, the Issuers shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time.
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(f) Whether or not the transactions contemplated by this Agreement are consummated, to pay all costs, expenses, fees and disbursements (including fees and disbursements of counsel and accountants for the Issuers) incurred and stamp, documentary or similar taxes incident to and in connection with: (i) the preparation, printing and distribution of the Preliminary Offering Memorandum, the Pricing Supplement, any Issuer Written Communication (as defined below) and the Final Offering Memorandum and any amendments and supplements thereto, (ii) all expenses (including travel expenses) of the Issuers and the Initial Purchasers in connection with any meetings with prospective investors in the Securities, (iii) the preparation, notarization (if necessary) and delivery of the Note Documents and all other agreements, memoranda, correspondence and documents prepared and delivered in connection with this Agreement and with the Exempt Resales, (iv) the issuance, transfer and delivery of the Securities by the Issuers and Guarantors to the Initial Purchasers, (v) the qualification or registration of the Securities for offer and sale under the securities laws of the several states of the United States or provinces of Canada (including, without limitation, the cost of printing and mailing preliminary and final Blue Sky or legal investment memoranda and fees and disbursements of counsel (including local counsel) to the Initial Purchasers relating thereto), (vi) the inclusion of the Securities in the book-entry system of DTC, (vii) the rating of the Securities by rating agencies, (viii) the fees and expenses of the Trustee and its counsel and (ix) the performance by the Issuers and the Guarantors of their other obligations under the Note Documents.
(g) To use the proceeds from the sale of the Notes in the manner described in the Preliminary Offering Memorandum under the caption Use of Proceeds.
(h) To do and perform all things required to be done and performed under this Agreement by them prior to or after the Closing Date and to satisfy all conditions precedent on their part to the delivery of the Securities.
(i) Not to, and not to permit any Subsidiary to, sell, offer for sale or solicit offers to buy any security (as defined in the Act) that would be integrated with the sale of the Securities in a manner that would require the registration under the Act of the sale of the Securities to the Initial Purchasers or any Eligible Purchasers.
(j) Not to, and to cause its affiliates (as defined in Rule 144 under the Act) not to, in each case, during the one year period following the Closing Date, resell any of the Securities that have been reacquired by any of them, other than pursuant to an effective registration statement under the Act.
(k) Not to engage, not to allow any Subsidiary to engage, and to cause its other affiliates and any person acting on their behalf (other than, in any case, the Initial Purchasers and any of their affiliates, as to whom the Issuers and the Guarantors make no covenant) not to engage, in any form of general solicitation or general advertising (within the meaning of Regulation D under the Act) in connection with any offer or sale of the Securities in the United States.
(l) Not to engage, not to allow any Subsidiary to engage, and to cause its other affiliates and any person acting on their behalf (other than, in any case, the Initial Purchasers and any of their affiliates, as to whom the Issuers and the Guarantors make no covenant) not to engage, in any directed selling effort with respect to the Securities, and to comply with the offering restrictions requirement of Regulation S. Terms used in this paragraph have the meanings given to them by Regulation S.
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(m) From and after the Closing Date, for so long as any of the Securities remain outstanding and are restricted securities within the meaning of Rule 144(a)(3) under the Act and during any period in which the Partnership is not subject to Section 13 or 15(d) of the Exchange Act, to make available upon request the information required by Rule 144A(d)(4) under the Act to (i) any holder or beneficial owner of Securities in connection with any sale of such Securities and (ii) any prospective purchaser of such Securities from any such holder or beneficial owner designated by the holder or beneficial owner. The Partnership will pay the expenses of preparing, printing and distributing such documents.
(n) To comply with their obligations under the letter of representations to DTC relating to the approval of the Securities by DTC for book-entry transfer and to use their commercially reasonable efforts to obtain approval of the Securities by DTC for book-entry transfer.
(o) Prior to the Closing Date, to furnish without charge to the Initial Purchasers, (i) as soon as they have been prepared by the Partnership, a copy of any regularly prepared internal financial statements of the Partnership and the Subsidiaries for any period subsequent to the period covered by the financial statements appearing in the Pricing Disclosure Package, (ii) all other reports and other communications (financial or otherwise) that the Partnership mails or otherwise makes available to its security holders and (iii) such other information as the Initial Purchasers shall reasonably request.
(p) Not to, and not to permit any of its affiliates or anyone acting on its or its affiliates behalf to (other than the Initial Purchasers and their affiliates), distribute prior to the Closing Date any offering material in connection with the offer and sale of the Securities other than the Preliminary Offering Memorandum, the Pricing Supplement, any electronic roadshow and the Final Offering Memorandum. Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication (as defined below), the Partnership will furnish to the Representative and counsel for the Initial Purchasers a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Representative reasonably objects, or any amendment or supplement thereto prepared in accordance with Section 4(b).
(q) During the period of two years after the Closing Date or, if earlier, until such time as the Securities are no longer restricted securities (as defined in Rule 144 under the Act), not to be or become a closed-end investment company required to be registered, but not registered, under the Investment Company Act of 1940.
(r) In connection with the offering, until the Initial Purchasers shall have notified the Issuers of the completion of the distribution of the Securities, not to, and not to permit any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Act) to, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest, for the purpose of creating actual or apparent active trading in, or of raising the price of, the Securities.
(s) During the period from the date hereof through and including the date that is 60 days after the date hereof, without prior written consent of the Representative, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Partnership or any Subsidiary and having a tenor of more than one year.
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(t) The Issuers will, for a period of twelve months following the Execution Time, furnish to the Representative all reports or other communications (financial or other) generally made available to the Partnerships unitholders, and deliver such reports and communications to the Representative as soon as they are available, unless such documents are furnished to or filed with the Securities and Exchange Commission (the Commission ) or any securities exchange on which any class of securities of the Issuers are listed or are disclosed in accordance with Regulation FD and generally made available to the public.
5. Representations and Warranties . (a) Each of the Issuers and Guarantors, jointly and severally, represents and warrants to the Initial Purchasers that, as of the date hereof and as of the Closing Date (references in this Section 5 to the Offering Memorandum are to (x) the Pricing Disclosure Package in the case of representations and warranties made as of the date hereof and (y) the Final Offering Memorandum in the case of representations and warranties made as of the Closing Date):
(i) Neither the Pricing Disclosure Package, as of the date hereof or as of the Closing Date, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 4(b), if applicable) as of the Closing Date, contains or represents any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Issuers and Guarantors make no representation or warranty with respect to information relating to the Initial Purchasers contained in or omitted from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto in reliance upon and in conformity with information furnished to the Issuers in writing by or on behalf of any Initial Purchaser through the Representative expressly for inclusion in the Pricing Disclosure Package, the Final Offering Memorandum or amendment or supplement thereto, as the case may be. No order preventing the use of the Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering Memorandum, or any amendment or supplement thereto, or any order asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the Act, has been issued or, to the knowledge of the Issuers, has been threatened.
(ii) The Issuers (including their agents and representatives, other than the Initial Purchasers in their capacity as such) have not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Issuers or their agents and representatives an Issuer Written Communication ) other than (i) the Pricing Disclosure Package, (ii) the Final Offering Memorandum, (iii) the documents listed on Annex I hereto, including a term sheet substantially in the form of Exhibit A hereto and (iv) any electronic road show or other written communications, in each case used in accordance with Section 4(p). Each such Issuer Written Communication, when taken together with the Pricing Disclosure Package as of the date hereof, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The documents incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission complied and will comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder (the Exchange Act Regulations ).
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(iii) There are no securities of the Issuers or Guarantors that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated interdealer quotation system of the same class within the meaning of Rule 144A as the Securities.
(iv) Neither the Issuers nor any of the Subsidiaries (as defined below) has sustained, since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, any material loss (with regard to the Partnership and its Subsidiaries taken as a whole) or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum; and, since the respective dates as of which information is given in the Offering Memorandum, there has not been any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the general affairs, management, financial position, partners or stockholders equity or results of operations of the Issuers and the Subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Offering Memorandum.
(v) Holly Energy PartnersOperating, L.P., a Delaware limited partnership (the Operating Partnership ) and the Subsidiaries, as the case may be, have good and indefeasible title to all real property and good title to all personal property described in the Offering Memorandum as owned by the Operating Partnership and the Subsidiaries, as the case may be, free and clear of all (A) liens and security interests or (B) other claims and other encumbrances (other than liens or security interests) except (i) as provided in the Credit Agreement (as defined below), mortgages and deeds of trust granted in favor of Alon USA, LP, a Texas limited partnership, and HollyFrontier Corporation, a Delaware corporation, in connection with the use of pipelines and/or terminals by those entities or their affiliates, or as otherwise described, and subject to the limitations contained, in the Offering Memorandum or (ii) such as do not materially interfere with the use of such properties taken as a whole as they have been used in the past and are proposed to be used in the future as described in the Offering Memorandum, provided that, with respect to any real property and buildings held under lease by the Operating Partnership and the other Subsidiaries, such real property and buildings are held under valid and subsisting and enforceable leases with such exceptions as do not materially interfere with the use of such properties, taken as a whole, as they have been used in the past as described in the Offering Memorandum and are proposed to be used in the future as described in the Offering Memorandum.
(vi) Each of the Issuers and each Subsidiary (as such term is defined below) (A) is a corporation, limited liability company, partnership or other entity duly organized and validly existing under the laws of the jurisdiction of its organization; (B) has all requisite corporate, limited liability company, partnership, or other power and authority necessary to own its property and carry on its business as now being conducted and proposed to be conducted in the future as described in the Offering Memorandum; and (C) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it or its ownership of property makes such qualification necessary, in each case in all material respects as described in the Offering Memorandum, except where the failure to be so qualified and be in good standing, individually or in the aggregate, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. A Material Adverse Effect means a material adverse effect on the business, condition (financial or other), result of operations, properties or prospects of the Partnership and the Subsidiaries, taken as a whole.
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(vii) HEP Logistics Holdings, L.P., a Delaware limited partnership (the General Partner ), (A) has been duly formed and is validly existing and in good standing as a limited partnership under the laws of the State of Delaware; (B) has all requisite partnership power and authority necessary to own its property and carry on its business as now being conducted; and (C) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it or its ownership of property makes such qualification necessary, except where the failure to be so qualified and be in good standing, individually or in the aggregate, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. At the date hereof, and at the Closing Date, the General Partner will be the sole general partner of the Partnership.
(viii) Holly Logistic Services, L.L.C., a Delaware limited liability company ( GP L.L.C. ) (A) has been duly formed and is validly existing and in good standing as a limited liability company under the laws of the State of Delaware; (B) has all requisite limited liability company power and authority necessary to own its property and carry on its business as now being conducted; and (C) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it or its ownership of property makes such qualification necessary, except where the failure to be so qualified and be in good standing, individually or in the aggregate, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. At the date hereof, and at the Closing Date, GP L.L.C. will be the sole general partner of General Partner.
(ix) The issued and outstanding limited partner interests of the Partnership consist of the common units and incentive distribution rights as set forth in the Offering Memorandum. All of the Partnerships outstanding common units and incentive distribution rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnerships First Amended and Restated Agreement of Limited Partnership dated as of July 13, 2004, as amended (the Partnership Agreement ), and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the DRULPA ) and as otherwise described in the Offering Memorandum).
(x) The Partnership owns 100% of the issued and outstanding shares of capital stock of Finance Corp.; such capital stock has been duly authorized and validly issued in accordance with the certificate of incorporation and by-laws of Finance Corp., as amended to date (the Finance Corp. Organizational Documents ), and is fully paid and nonassessable, were not issued in violation of any preemptive or similar right and, except as set forth in the Offering Memorandum, are owned by the Partnership free and clear of all liens (other than transfer restrictions imposed by the Act and the securities or Blue Sky laws of certain jurisdictions).
(xi) All of the issued and outstanding partnership interests of the General Partner have been duly authorized and validly issued and are fully paid (to the extent required under the General Partners partnership agreement) and the limited partner interests in the General Partner are nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804 of the DRULPA and as otherwise described in the Offering Memorandum).
(xii) All of the issued and outstanding membership interests of GP L.L.C. have been duly authorized and validly issued, are fully paid (to the extent required under the limited liability company agreement of GP L.L.C.) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 17-804 of the Delaware Limited Liability Act (the Delaware LLC Act ) and as otherwise described in the Offering Memorandum).
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(xiii) The consolidated capitalization of the Partnership as of March 31, 2016, is, on an adjusted basis, as set forth in the As Adjusted column under the heading Capitalization in the Offering Memorandum. Attached as Schedule II is a true and complete list of each entity in which the Partnership has a direct or indirect majority equity or voting interest (each a Subsidiary and, together, the Subsidiaries ), their jurisdictions of organization, name of equityholder(s) and percentage held by each equityholder. All of the issued and outstanding equity interests of each Subsidiary have been duly authorized and validly issued, are fully paid (to the extent required by such Subsidiarys limited liability company or partnership agreement) and (except (i) as such nonassessability may be affected by the Delaware LLC Act or the DRULPA and (ii) with respect to any general partner interests) nonassessable, were not issued in violation of any preemptive or similar right and, except as set forth in the Offering Memorandum, are owned, directly or indirectly through Subsidiaries, by the Partnership free and clear of all liens (other than transfer restrictions imposed by the Act, any applicable joint venture agreements for non-wholly-owned Subsidiaries, the securities or Blue Sky laws of certain jurisdictions and security interests granted pursuant to the Second Amended and Restated Credit Agreement, dated as of February 14, 2011, as amended as of the date hereof (the Credit Agreement ), among the Operating Partnership, the Partnership and the Subsidiaries party thereto as guarantors and the financial institutions party thereto). Except as set forth in the Offering Memorandum, there are no outstanding options, warrants or other rights to acquire or purchase, or instruments convertible into or exchangeable for, any equity interests of the Issuers or any of the Subsidiaries.
(xiv) Other than as set forth on Schedule II, the Issuers, the Guarantors and the Subsidiaries do not own, and at the Closing Date, will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. The General Partner, HEP Logistics GP, L.L.C. ( OLP GP ) and GP L.L.C. do not own and at the Closing Date, will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity other than their respective partnership interests in the Partnership, the Operating Partnership and the General Partner.
(xv) This Agreement has been duly authorized, executed and delivered by each Issuer, the General Partner, GP L.L.C. and each Guarantor and conforms in all material respects to the description thereof contained in the Offering Memorandum. Each Issuer and each Guarantor has all requisite corporate, partnership or limited liability company power and authority to execute and deliver each of the Note Documents, to consummate the transactions contemplated hereby and thereby, to issue, sell and deliver the Notes or the Guarantees (as applicable) and to perform its obligations under this Agreement and the other Note Documents, as applicable. At the Closing Date, all corporate, partnership and limited liability company action, as the case may be, required to be taken by the Partnership, Finance Corp., the General Partner, GP L.L.C., the Operating Partnership, OLP GP, the Guarantors or the Subsidiaries or any of their stockholders, members or partners for the authorization, issuance, sale and delivery of the Securities and the consummation of the transactions contemplated hereby and by the other Note Documents, shall have been validly taken.
(xvi) The Indenture has been duly and validly authorized by each Issuer and each Guarantor and, when duly executed and delivered by the Issuers and each Guarantor (assuming the due authorization, execution and delivery thereof by the Trustee), will be a legally binding and valid obligation of each such Issuer and Guarantor, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditors rights generally and by general principles of equity and the discretion of the court
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before which any proceeding therefor may be brought (the Bankruptcy Exceptions ). The Indenture, when executed and delivered, will conform in all material respects to the description thereof in the Offering Memorandum.
(xvii) The Notes have been duly and validly authorized for issuance and sale to the Initial Purchasers by the Issuers, and when duly issued, authenticated, executed and delivered by the Issuers against payment therefor by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, the Notes will be legally binding and valid obligations of the Issuers, entitled to the benefits of the Indenture and enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions. The Notes, when issued, authenticated, executed and delivered, will conform in all material respects to the description thereof in the Offering Memorandum.
(xviii) The Guarantees have been duly and validly authorized by each of the Guarantors and, when the Notes are duly issued, authenticated by the Trustee and executed and delivered by the Issuers against payment by the Initial Purchasers in accordance with the terms of this Agreement and the Indenture, will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except that enforceability thereof may be limited by the Bankruptcy Exceptions. The Guarantees, when issued will conform in all material respects to the description thereof in the Offering Memorandum.
(xix) None of the Issuers nor any Subsidiary is in (A) violation of its certificate or agreement of limited partnership, limited liability company agreement, certificate or articles of incorporation or bylaws or other organizational documents, (B) violation of any law, statute, ordinance, administrative or governmental rule or regulation applicable to it or of any decree of any court or governmental agency or body having jurisdiction over it or (C) breach, default (or an event which, with notice or lapse of time or both, would constitute such default) or violation in performance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of its properties may be bound, which breach, default or violation, in the case of clauses (B) or (C), would, if continued, reasonably be expected to have a Material Adverse Effect. To the knowledge of the Issuers and the Guarantors, no third party to any indenture, mortgage, deed of trust, loan agreement or other agreement to which either Issuer or any Subsidiary is a party or by which any of them is bound or to which any of their respective properties is subject, is in default under any such agreement, which breach, default or violation would, if continued, reasonably be expected to have a Material Adverse Effect.
(xx) The execution, delivery and performance of this Agreement and the other Note Documents and the consummation of the transactions contemplated hereby and thereby do not and will not (A) violate the certificate of limited partnership, agreement of limited partnership, certificate of formation, limited liability company agreement, certificate or articles of incorporation, or bylaws of the Issuers or any Subsidiary, (B) conflict with or constitute a breach of or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which either Issuer or any Subsidiary is a party or by which any of them or any of their respective properties may be bound, (C) violate any statute, law or regulation or any order, judgment, decree or injunction of any court or governmental agency or body having authority over either Issuer or any Subsidiary or any of their properties in a proceeding to which any of them or their property is a party or (D) result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of either Issuer or any Subsidiary, which conflicts, breaches, violations or defaults, in the case of clauses (B), (C) or (D), would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(xxi) No consent, approval, authorization, order, registration, filing or qualification of or with any court, governmental agency or body is required for the offering, issuance and sale by the Issuers of the Notes, the issuance of the Guarantees by the Guarantors, the execution, delivery and performance of this Agreement and the other Note Documents by the Issuers and the Guarantors or the consummation by the Issuers and the Guarantors of the transactions contemplated hereby or thereby, except (i) for such consents, approvals and similar authorizations required under the Securities Act, the Exchange Act and state securities or Blue Sky laws, and (ii) for such consents which, if not obtained would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(xxii) The public accountants whose reports appear or are incorporated by reference in the Offering Memorandum are independent public accountants with respect to the Partnership within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and as required by the Public Company Accounting Oversight Board (the PCAOB ). The historical financial statements (including the notes thereto) included or incorporated by reference in the Offering Memorandum present fairly in all material respects the consolidated combined financial position, results of operations, cash flows and changes in partners equity of the entities to which they relate at the respective dates and for the respective periods indicated. All such financial statements have been prepared in accordance with generally accepted accounting principles in the United States ( GAAP ) applied on a consistent basis throughout the periods presented (except as disclosed therein) and in compliance with Regulation S-X ( Regulation S-X ) under the Exchange Act, except that the interim financial statements do not include full footnote disclosure. The financial information set forth under the captions Summary Summary Historical Financial and Operating Data and Selected Financial Data included in or incorporated by reference in the Offering Memorandum has been prepared on a basis consistent with that of the audited and unaudited financial statements from which it is derived.
(xxiii) Since the date as of which information is given in the Offering Memorandum, except as set forth or contemplated in the Offering Memorandum, (A) neither Issuer nor any Subsidiary has (1) incurred any liabilities or obligations, direct or contingent, that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, or (2) entered into any material transaction not in the ordinary course of business and (B) except for the Partnerships regular distribution of $0.575 per unit, announced on April 22, 2016 and payable on May 13, 2016 to holders of record of the Partnerships common units on May 2, 2016, there has been no dividend or distribution of any kind declared, paid or made by the Partnership on any of its equity interests. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Offering Memorandum fairly presents the information called for in all material respects and have been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(xxiv) Except as set forth in the Offering Memorandum, there are no legal or governmental proceedings pending to which either Issuer or any Subsidiary is a party or of which any property of either Issuer or any Subsidiary is the subject which, if determined adversely to such Issuer or Subsidiary, as the case may be, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect and, to the best knowledge of the Issuers and the Guarantors, no such proceedings are threatened.
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(xxv) No labor dispute with the employees of the Issuers or any Subsidiary exists or, to the knowledge of the Issuers and the Guarantors, is imminent and the Issuers are not aware of any existing or imminent labor disturbance by the employees of any of their or the Subsidiaries principal suppliers, contractors or customers, in each case, that is reasonably likely to result in a Material Adverse Effect.
(xxvi) Except as disclosed in the Offering Memorandum, the Partnership and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety and the environment or imposing liability or standards of conduct, including the transport of, concerning any Hazardous Material (as defined below) ( Environmental Laws ), (ii) have received, and maintain in full force and effect, all Permits (as defined below) required of them under applicable Environmental Laws to conduct their respective businesses, (iii) are in compliance with the terms and conditions of any such Permits, and (iv) to the knowledge of the Partnership, do not have any liability in connection with either noncompliance with Environmental Laws or with the release into the environment of any Hazardous Materials, and (v) are not subject to any pending or, to the knowledge of the Partnership, threatened claim or other legal proceeding under any Environmental Laws, except where such noncompliance with the Environmental Laws, failure to receive required Permits, failure to comply with the terms and conditions of such Permits or liability in connection with such noncompliance, releases, claims or legal proceedings would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. The term Hazardous Material means (A) any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (B) any hazardous waste as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law.
(xxvii) In the ordinary course of its business, the Partnership periodically reviews the effect of Environmental Laws on the business, operations and properties of the Partnership and its Subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Partnership has concluded that such associated costs and liabilities as of the date hereof would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(xxviii) Each of the Issuers and the Subsidiaries has such permits, consents, licenses, franchises, certificates and authorizations of governmental or regulatory authority ( Permits ) as are necessary to own its properties and to conduct its business in the manner described in the Offering Memorandum, subject to such qualifications as may be set forth in the Offering Memorandum (exclusive of any amendment or supplement thereto) and except for such Permits which, if not obtained, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; each of the Issuers and the Subsidiaries has fulfilled and performed all its material obligations with respect to such Permits which are due to have been fulfilled and performed and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any impairment of the rights of the holder of any such Permit, except for such revocations, terminations and impairments that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, subject in each case to such qualifications as may be set forth in the Offering Memorandum
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(exclusive of any amendment or supplement thereto); and except as described in the Offering Memorandum, none of the Permits contains any restriction that is materially burdensome to the Partnership and the Subsidiaries, taken as a whole.
(xxix) The Operating Partnership and the other Subsidiaries have such consents, easements, rights-of-way, permits or licenses from each person (collectively, rights-of-way ) as are necessary to conduct its business in the manner described, and subject to the limitations contained, in the Offering Memorandum, except for (A) qualifications, reservations and encumbrances which would not reasonably be expected to have a Material Adverse Effect upon the ability of the Partnership and its Subsidiaries, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Offering Memorandum to be conducted and (B) such rights-of-way that, if not obtained, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect upon the ability of the Partnership and its Subsidiaries, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Offering Memorandum to be conducted; other than as set forth, and subject to the limitations contained, in the Offering Memorandum, each of the Partnership and its Subsidiaries has fulfilled and performed all its material obligations with respect to such rights-of-way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such rights-of-way, except for such revocations, terminations and impairments that would not have a Material Adverse Effect upon the ability of the Partnership and its Subsidiaries, taken as a whole, to conduct their businesses in all material respects as currently conducted and as contemplated by the Offering Memorandum to be conducted; and, except as described in the Offering Memorandum, none of such rights-of-way contains any restriction that is materially burdensome to the Partnership and its Subsidiaries, taken as a whole.
(xxx) The Issuers and the Subsidiaries have filed (or have obtained extensions with respect to) all federal, state and foreign income and franchise tax returns required to be filed through the date hereof, which returns are complete and correct in all material respects, and have timely paid all taxes shown to be due pursuant to such returns, other than those (A) which, if not paid, would not reasonably be expected to have a Material Adverse Effect or (B) which are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles.
(xxxi) There is and has been no failure on the part of the Partnership or any member, officer or director of the Partnership, the General Partner or GP L.L.C., in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the Sarbanes-Oxley Act ), including Section 402 relating to loans and Sections 302 and 906 relating to certifications.
(xxxii) None of the Partnership or any of its Subsidiaries nor, to the knowledge of the Partnership, any member, officer, agent, employee or affiliate of the Partnership or any of its Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation or a sanction for violation by such persons of (i) the Foreign Corrupt Practices Act of 1977, as amended, or the rules or regulations thereunder (the FCPA ), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA, (ii)
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the U.K. Bribery Act 2010, as amended, or the rules or regulations thereunder (together with the FCPA, the Anti-Bribery Laws ) or (iii) any similar law of any other relevant jurisdiction or the rules or regulations thereunder; the Partnership, the Subsidiaries and, to the knowledge of the Partnership, their affiliates, have conducted their businesses in compliance with the Anti-Bribery Laws and similar laws of any other relevant jurisdiction and the rules and regulations thereunder, and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith; and no part of the proceeds from the sale of the Securities will be used, directly or indirectly, in violation of the Anti-Bribery Laws or any similar law of any other relevant jurisdiction, or the rules or regulations thereunder.
(xxxiii) The operations of the Partnership and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws ) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Partnership or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Partnership, threatened.
(xxxiv) Neither the Partnership nor any of its Subsidiaries nor, to the knowledge of the Partnership, any member, officer, agent, employee or affiliate of the Partnership or any of its Subsidiaries (i) is, or is controlled or 50% or more owned by or is acting on behalf of, an individual or entity that is currently subject to any sanctions administered or enforced by the United States (including any administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of State, or the Bureau of Industry and Security of the U.S. Department of Commerce) or other relevant sanctions authority (collectively, Sanctions and such persons, Sanctioned Persons ), (ii) is located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively, Sanctioned Countries and each a Sanctioned Country ) or (iii) will directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity for the purpose of financing the activities of any Sanctioned Person, or in any other manner that would result in a violation of any Sanctions by, or could result in the imposition of Sanctions against, any individual or entity (including any individual or entity participating in the offering, whether as underwriter, advisor, investor or otherwise).
(xxxv) Except as has been disclosed to the Initial Purchasers or is not material to the analysis under any Sanctions, neither the Partnership nor any of the Subsidiaries has engaged in any dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding 3 years, nor does the Partnership or any of the Subsidiaries have any plans to increase its dealings or transactions with or for the benefit of Sanctioned Persons, or with or in Sanctioned Countries.
(xxxvi) The statements set forth in the Offering Memorandum under the caption Description of Notes, insofar as they purport to constitute a summary of the terms of the Notes, under the caption Certain Material U.S. Federal Income Tax Considerations, and under the caption Plan of Distribution, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Partnership by or on behalf of any Initial Purchaser through the Representative expressly for use therein.
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(xxxvii) None of the Issuers or the Guarantors is, nor, after giving effect to the Offering and the application of the proceeds thereof, will be, an investment company or a company controlled by an investment company as such terms are defined in the Investment Company Act of 1940, as amended.
(xxxviii) The Partnership and the Subsidiaries maintain a system of internal control over financial reporting (as such term is defined in Rule 13(a)-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Partnerships principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and that the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Offering Memorandum fairly presents the information called for in all material respects and is prepared in accordance with the Commissions rules and guidelines applicable thereto. The Partnerships internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and the Partnership is not aware of any material weaknesses in its internal controls over financial reporting.
(xxxix) Since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, there has been no change in the Partnerships internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Partnerships internal control over financial reporting.
(xl) The Partnership maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Partnership and the Subsidiaries is made known to the Partnerships principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
(xli) The Issuers and the Subsidiaries maintain, or are entitled to the benefits of, insurance in such amounts and covering such risks as the Issuers reasonably believe is adequate for the conduct of the business of the Partnership and the Subsidiaries. Neither the Partnership nor any of the Subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force at Closing Date.
(xlii) The Partnership is a partnership for U.S. federal income tax purposes.
(xliii) The assumptions used in the preparation of the adjusted financial information included in the Offering Memorandum (including EBITDA and distributable cash flow) are reasonable, and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein.
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(xliv) No Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Partnership, from making any other distribution on such Subsidiarys capital stock (or other ownership interests, as the case may be), from repaying to the Partnership any loans or advances to such Subsidiary from the Partnership or from transferring any of such Subsidiarys property or assets to the Partnership or any other Subsidiary, except as described in or contemplated in the Offering Memorandum.
(xlv) Except as described in the section entitled Plan of Distribution in the Offering Memorandum, there are no contracts, agreements or understandings between either Issuer or any Subsidiary and any other person other than the Initial Purchasers pursuant to this Agreement that would give rise to a valid claim against either Issuer, any Subsidiary or any of the Initial Purchasers for a brokerage commission, finders fee or like payment in connection with the issuance, purchase and sale of the Securities.
(xlvi) None of the Issuers, the Guarantors or any of their affiliates (as defined in Rule 501(b) of Regulation D under the Act) has, directly or through any person acting on its or their behalf (other than any Initial Purchaser, as to which no representation is made), (A) taken, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of any security of any Issuer to facilitate the sale or resale of the Securities, (B) sold, bid for, purchased or paid any person any compensation for soliciting purchases of the Securities in a manner that would require registration of the Securities under the Act or paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of any Issuer in a manner that would require registration of the Securities under the Act, (C) sold, offered for sale, contracted to sell, pledged, solicited offers to buy or otherwise disposed of or negotiated in respect of any security (as defined in the Act) that is currently or will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Act or (D) engaged in any directed selling effort (as defined by Regulation S) with respect to the Securities, and each of them has complied with the offering restrictions requirement of Regulation S.
(xlvii) No form of general solicitation or general advertising (prohibited by the Act in connection with offers or sales such as the Exempt Resales) was used by the Issuers or any person acting on its behalf (other than any Initial Purchaser, as to which no representation is made) in connection with the offer and sale of any of the Securities or in connection with Exempt Resales, including, but not limited to, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio or the Internet, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising within the meaning of Regulation D under the Act. Neither the Issuers nor any of their affiliates has entered into, or will enter into, any contractual arrangement with respect to the distribution of the Securities except for this Agreement.
(xlviii) Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Issuers as described in the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
Each certificate signed by any officer of either Issuer or any Guarantor and delivered to the Initial Purchasers or counsel for the Initial Purchasers pursuant to, or in connection with, this Agreement shall be deemed to be a representation and warranty by the Issuers and Guarantors to the Initial Purchasers as to the matters covered by such certificate.
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The Issuers acknowledge that the Initial Purchasers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 8 of this Agreement, counsel to the Partnership and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations and the Issuers hereby consent to such reliance.
(b) Each Initial Purchaser represents that it is a QIB and acknowledges that it is purchasing the Securities pursuant to a private sale exemption from registration under the Act, and that the Securities have not been registered under the Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from the registration requirements of the Act. Each Initial Purchaser, severally and not jointly, represents, warrants and covenants to the Issuers and Guarantors that:
(i) Neither it, nor any person acting on its behalf, has or will solicit offers for, or offer or sell, the Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act, and it has and will solicit offers for the Securities only from, and will offer and sell the Securities only to, (1) persons whom such Initial Purchaser reasonably believes to be QIBs or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to such Initial Purchaser that each such account is a QIB to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in reliance on the exemption from the registration requirements of the Act pursuant to Rule 144A, or (2) persons other than U.S. persons outside the United States in reliance on, and in compliance with, the exemption from the registration requirements of the Act provided by Regulation S.
(ii) With respect to offers and sales outside the United States, such Initial Purchaser has offered the Securities and will offer and sell the Securities (1) as part of its distribution at any time and (2) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date, only in accordance with Rule 903 of Regulation S or another exemption from the registration requirements of the Act. Accordingly, neither such Initial Purchasers nor any person acting on their behalf has engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities, and any such persons have complied and will comply with the offering restrictions requirements of Regulation S. Terms used in this Section 5(b)(ii) have the meanings given to them by Regulation S.
Each Initial Purchaser severally agrees that, at or prior to confirmation of a sale of Securities pursuant to Regulation S it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it or through it during the restricted period a confirmation or notice to substantially the following effect:
The Securities covered hereby have not been registered under the United States Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold within the United States or to or for the account or benefit of, U.S. persons (i) as part of their distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commenced and the date of closing, except in either case in accordance with Regulation S or Rule 144A under the Securities Act. Terms used above have the meaning given to them by Regulation S.
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The Initial Purchasers understand that the Issuers and Guarantors and, for purposes of the opinions to be delivered to them pursuant to Section 8 hereof, counsel to the Issuers and Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations, and each Initial Purchaser hereby consents to such reliance.
6. Indemnification . (a) The Issuers and Guarantors, jointly and severally, agree to indemnify and hold harmless the Initial Purchasers, each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors of any Initial Purchaser and the agents, employees, officers and directors of any such controlling person from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including, but not limited, to reasonable attorneys fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable amounts paid in settlement of any claim or litigation) (collectively, Losses ) to which they or any of them may become subject under the Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing Disclosure Package, any Issuer Written Communication (including, but not limited to, any electronic roadshow), the Final Offering Memorandum, or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that none of the Issuers and Guarantors will be liable in any such case to the extent, but only to the extent, that any such Loss arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission relating to an Initial Purchaser made therein in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Initial Purchaser through the Representative expressly for use therein. This indemnity agreement will be in addition to any liability that the Issuers and Guarantors may otherwise have, including, but not limited to, liability under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Issuers and Guarantors, and each person, if any, who controls any of the Issuers and Guarantors within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors of any of the Issuers and Guarantors and of any such controlling person from and against any and all Losses to which they or any of them may become subject under the Act, the Exchange Act or otherwise insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Pricing Disclosure Package or the Final Offering Memorandum, or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that any such Loss arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission relating to such Initial Purchaser made therein in reliance upon and in conformity with information furnished in writing to the Partnership by or on behalf of such Initial Purchaser through the Representative expressly for use therein. The Issuers and Guarantors and the Initial Purchasers acknowledge that the information described in Section 9 is the only information furnished in writing by the Initial Purchasers to the Issuers expressly for use in the Preliminary Offering Memorandum or the Final Offering Memorandum.
(c) Promptly after receipt by an indemnified party under subsection 6(a) or 6(b) above of notice of the commencement of any action, suit or proceeding (collectively, an action ), such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement of such action (but the failure so to notify the indemnifying party will not relieve it from
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liability under paragraph (a) or (b) above unless and to the extent it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement of such action, the indemnifying party will be entitled to participate in such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense of such action with counsel satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such action, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) the named parties to such action (including any impleaded parties) include such indemnified party and the indemnifying parties (or such indemnifying parties have assumed the defense of such action), and such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such reasonable fees and expenses of counsel shall be borne by the indemnifying parties. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel (together with appropriate local counsel) at any time for all indemnified parties in connection with any one action or separate but substantially similar or related actions arising in the same jurisdiction out of the same general allegations or circumstances. An indemnifying party shall not be liable for any settlement of any claim or action effected without its written consent, which consent may not be unreasonably withheld. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
7. Contribution . In order to provide for contribution in circumstances in which the indemnification provided for in Section 6 of this Agreement is for any reason held to be unavailable from the indemnifying party, or is insufficient to hold harmless a party indemnified under Section 6 of this Agreement, each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such aggregate Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuers and Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities or (ii) if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Issuers and Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the Issuers and Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be deemed to be in the same proportion as (x) the total proceeds from the offering of Securities (net of discounts and commissions but before deducting expenses) received by the Issuers and Guarantors are to (y) the total discount and commissions received by the Initial Purchasers. The relative fault of the Issuers and Guarantors, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by an Issuer or the Initial Purchasers and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission.
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The Issuers and Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 7, (i) in no case shall any Initial Purchaser be required to contribute any amount in excess of the amount by which the total discount and commissions applicable to the Securities purchased by such Initial Purchaser pursuant to this Agreement exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as the Initial Purchasers, and each person, if any, who controls an Issuer or a Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each director, officer, employee and agent of an Issuer or a Guarantor shall have the same rights to contribution as the Issuers and Guarantors. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made against another party or parties under this Section 7, notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 7 or otherwise, but the failure so to notify the contributing party will not relieve it from liability under this Section 7 unless and to the extent it has been prejudiced in any material respect by such failure; provided , however , that no additional notice shall be required with respect to any action for which notice has been given under Section 6 for purposes of indemnification. Anything in this section to the contrary notwithstanding, no party shall be liable for contribution with respect to any action or claim settled without its written consent; provided , however , that such written consent was not unreasonably withheld. The contribution obligations of the Initial Purchasers under this Section 7 are several in proportion to their respective purchase obligations with respect to the Securities and not joint.
8. Conditions of Initial Purchasers Obligations . The obligations of the Initial Purchasers to purchase and pay for the Securities, as provided for in this Agreement, shall be subject to satisfaction of the following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuers and the Guarantors contained in this Agreement shall be true and correct on the date of this Agreement and on the Closing Date. The Issuers and the Guarantors shall have performed or complied with all of the agreements and covenants contained in this Agreement and required to be performed or complied with by them at or prior to the Closing Date. The Initial Purchasers shall have received a certificate, dated the Closing Date, signed by the Chief Financial Officer and Treasurer of the Issuers, certifying as to the foregoing and to the effect in Section 8(c);
(b) The Final Offering Memorandum shall have been printed and copies distributed to the Initial Purchasers as required by Section 4(b). No stop order suspending the qualification or exemption from qualification of the Securities in any jurisdiction shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened;
(c) Since the execution of this Agreement, there shall not have been any decrease in the rating of any debt of the Issuers or any Subsidiary by any nationally recognized statistical rating organization (as defined in Section 3(a)(62) of the Exchange Act), or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change;
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(d) The Initial Purchasers shall have received on the Closing Date opinions dated the Closing Date, addressed to the Initial Purchasers, of (i) Vinson & Elkins LLP, counsel to the Issuers and the Guarantors and (ii) Denise C. McWatters, general counsel of the Issuers and the Guarantors, substantially in the form of Annex II(a) and Annex II(b) attached hereto;
(e) The Initial Purchasers shall have received on the Closing Date an opinion dated the Closing Date of Latham & Watkins LLP, counsel to the Initial Purchasers, in form and substance satisfactory to the Representative. Such counsel shall have been furnished with such certificates and documents as they may reasonably request to enable them to review or pass upon the matters referred to in this Section 8 and in order to evidence the accuracy, completeness or satisfaction in all material respects of any of the representations, warranties or conditions contained in this Agreement;
(f) The Issuers, the Guarantors and the Trustee shall have executed and delivered the Indenture and the Initial Purchasers shall have received copies thereof;
(g) On the date hereof, the Initial Purchasers shall have received a comfort letter from the independent public accountants for the Partnership, dated the date of this Agreement, addressed to the Initial Purchasers and in form and substance satisfactory to the Representative and counsel to the Initial Purchasers, covering the financial and accounting information in the Pricing Disclosure Package. In addition, the Initial Purchasers shall have received a bring-down comfort letter from the independent public accountants for the Partnership, dated as of the Closing Date, addressed to the Initial Purchasers and in the form of the comfort letter delivered on the date hereof, except that (i) it shall cover the financial and accounting information in the Final Offering Memorandum and any amendment or supplement thereto and (ii) procedures shall be brought down to a date no more than 3 business days prior to the Closing Date, and otherwise in form and substance satisfactory to the Representative and counsel to the Initial Purchasers;
(h) (i) Neither the Partnership nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Final Offering Memorandum any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any court or governmental action, order or decree, otherwise than as set forth or contemplated in the Final Offering Memorandum (exclusive of any amendment or supplement thereto), and (ii) since the respective dates as of which information is given in the Final Offering Memorandum there shall not have been any change in the capital stock or long-term debt of the Partnership or any of its Subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, partners or stockholders equity or results of operations of the Partnership or any of its Subsidiaries, otherwise than as set forth or contemplated in the Final Offering Memorandum (exclusive of any amendment or supplement thereto), the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Final Offering Memorandum (exclusive of any amendment or supplement thereto);
(i) The Initial Purchasers shall have been furnished with written instructions for the application of the proceeds of the Securities in accordance with this Agreement and such other information as they may reasonably request; and
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(j) All agreements set forth in the blanket representation letter of the Issuers to DTC relating to the approval of the Notes by DTC for book-entry transfer shall have been complied with.
If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement to be fulfilled (or waived by the Initial Purchasers), this Agreement may be terminated by the Initial Purchasers on notice to the Issuers at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party, except to the extent set forth in Section 11(d) hereof.
The documents required to be delivered by this Section 8 will be delivered at the office of counsel for the Initial Purchasers on the Closing Date.
9. Initial Purchasers Information . The Issuers, the Guarantors and the Initial Purchasers severally acknowledge that, for all purposes (including Sections 5(a)(i) and 6), that (a) the statements relating to stabilization transactions and penalty bids set forth in the ninth and tenth paragraphs, and the fourth and fifth sentences of the eighth paragraph, each under Plan of Distribution in the Preliminary Offering Memorandum and the Final Offering Memorandum and (b) the name and contact information of the Initial Purchasers in the Preliminary Offering Memorandum and the Final Offering Memorandum, constitute the only information furnished in writing by or on behalf of any Initial Purchaser expressly for use in the Pricing Disclosure Package or the Final Offering Memorandum.
10. Survival of Representations and Agreements . All representations and warranties, covenants and agreements contained in this Agreement, including the agreements contained in Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and the contribution agreements contained in Section 7, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Initial Purchasers or any controlling person thereof or by or on behalf of the Issuers, the Guarantors or any controlling person thereof, and shall survive delivery of and payment for the Notes to and by the Initial Purchasers. The agreements contained in Sections 4(f), 6, 7, 9 and 11(d), and in Sections 13 through 19 shall survive the termination of this Agreement, including any termination pursuant to Sections 8, 11 or 12.
11. Effective Date of Agreement; Termination . (a) This Agreement shall become effective upon execution and delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this Agreement at any time prior to the Closing Date by notice to the Partnership from the Initial Purchasers, without liability (other than with respect to Sections 6 and 7) on the Initial Purchasers part to the Partnership or any affiliate thereof if, on or prior to such date, (i) the Partnership shall have failed, refused or been unable to perform any agreement on its part to be performed under this Agreement when and as required; (ii) any other condition to the obligations of the Initial Purchasers under this Agreement to be fulfilled by the Issuers and Guarantors pursuant to Section 8 is not fulfilled when and as required; (iii) trading in any securities of the Partnership shall be suspended or limited by the Commission or the New York Stock Exchange, or trading in securities generally on the New York Stock Exchange, the NYSE MKT LLC or the Nasdaq Global Market shall have been suspended or materially limited, or minimum prices shall have been established thereon by the Commission, or by such exchange or other regulatory body or governmental authority having jurisdiction; (iv) a general moratorium shall have been declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States shall have occurred; (v) there is an outbreak or escalation of hostilities or national or international calamity in any case involving the United States, on or after the date of this Agreement, or if there has been a declaration by the United States of a national
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emergency or war or other national or international calamity or crisis (economic, political, financial or otherwise) which affects the U.S. and international markets, making it, in the Representatives judgment, impracticable to proceed with the offering or delivery of the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package; or (vi) there shall have been such a material adverse change in general economic, political or financial conditions or the effect (or potential effect if the financial markets in the United States have not yet opened) of international conditions on the financial markets in the United States shall be such as, in the Representatives judgment, to make it inadvisable or impracticable to proceed with the offering or delivery of the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package.
(c) Any notice of termination pursuant to this Section 11 shall be given at the address specified in Section 13 below by telephone or facsimile, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to Section 11(b)(i) or (ii), the Issuers and Guarantors, jointly and severally, will reimburse the Initial Purchasers for all of their reasonable out-of-pocket expenses (including, without limitation, the fees and expenses of the Initial Purchasers counsel) incurred in connection with this Agreement and the transactions contemplated hereby.
12. Default by an Initial Purchaser. If any one or more Initial Purchasers shall fail to purchase and pay for any of the Securities agreed to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate principal amount of Notes set forth opposite the names of all the remaining Initial Purchasers) the Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided , however , that in the event that the aggregate principal amount of Notes which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Notes set forth in Schedule I hereto, the remaining Initial Purchasers shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Initial Purchasers do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Initial Purchaser or the Partnership. In the event of a default by any Initial Purchaser as set forth in this Section 12, the Closing Date shall be postponed for such period, not exceeding seven Business Days, as the Representative shall determine in order that the required changes in the Final Offering Memorandum or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the Partnership or any nondefaulting Initial Purchaser for damages occasioned by its default hereunder.
13. Notices . In all dealings hereunder, you shall act on behalf of each of the Initial Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Initial Purchaser made or given jointly by Citigroup Global Markets Inc., as the Representative, except as otherwise provided herein. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Initial Purchasers shall be delivered or sent by mail or facsimile transmission to (i) you as the Representative in care of Citigroup Global Markets Inc. at 388 Greenwich Street, New York, New York 10013, Facsimile: (212) 816-7912, Attention: General Counsel; and (ii) Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022 (fax number: 212-751-4864), Attention: Jonathan R. Rod, Esq.; and if sent to the Issuers and Guarantors, shall be mailed, delivered or telecopied and confirmed in writing to Holly Energy Partners, L.P., 2828 N. Harwood, Suite 1300, Dallas, Texas, 75201, (fax: 214-237-3051), Attention: Stephen D. Wise, Vice President and Treasurer, with a copy for information purposes only to Vinson & Elkins LLP, Trammell Crow Center, 2001 Ross Avenue, Suite 2700, Dallas, Texas 75201-2975, Attention: Alan Bogdanow, Esq.
23
All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged by telecopier machine, if telecopied; and one business day after being timely delivered to a next day air courier.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Partnership, which information may include the name and address of their respective clients, as well as other information that will allow the initial purchasers to properly identify their respective clients.
14. Parties . This Agreement shall inure solely to the benefit of, and shall be binding upon, the Initial Purchasers, the Issuers and Guarantors and the other indemnified parties referred to in Sections 6 and 7, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. The term successors and assigns shall not include a purchaser, in its capacity as such, of Securities from the Initial Purchasers.
15. CONSTRUCTION; GOVERNING LAW . THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW).
16. Submission to Jurisdiction; Waiver of Jury Trial . No proceeding related to this Agreement or the transactions contemplated hereby may be commenced, prosecuted or continued in any court other than the courts of competent subject matter jurisdiction of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Issuers and Guarantors hereby consent to the jurisdiction of such courts and personal service with respect thereto. The Issuers and Guarantors hereby waive all right to trial by jury in any proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Issuers and Guarantors agree that a final judgment in any such proceeding brought in any such court shall be conclusive and binding upon the Issuers and Guarantors and may be enforced in any other courts in the jurisdiction of which the Issuers and Guarantors are or may be subject, by suit upon such judgment.
17. Captions . The captions included in this Agreement are included solely for convenience of reference and are not to be considered a part of this Agreement.
18. Counterparts . This Agreement may be executed in various counterparts that together shall constitute one and the same instrument.
19. No Fiduciary Relationship . The Issuers and Guarantors hereby acknowledge that the Initial Purchasers are acting solely as initial purchasers in connection with the purchase and sale of the Securities. The Issuers and Guarantors further acknowledge that each of the Initial Purchasers is acting pursuant to a contractual relationship created solely by this Agreement entered into on an arms length basis and in no event do the parties intend that any Initial Purchaser act or be responsible as a fiduciary to the Issuers and Guarantors, their management, stockholders, creditors or any other person in connection with any activity that such Initial Purchaser may undertake or has undertaken in furtherance of the
24
purchase and sale of the Securities, either before or after the date hereof. The Initial Purchasers hereby expressly disclaim any fiduciary or similar obligations to the Issuers and Guarantors, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Issuers and Guarantors hereby confirm their understanding and agreement to that effect. The Issuers and Guarantors and each Initial Purchaser agree that they are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by any Initial Purchaser to the Issuers and Guarantors regarding such transactions, including but not limited to any opinions or views with respect to the price or market for the Securities, do not constitute advice or recommendations to the Issuers and Guarantors. The Issuers and Guarantors hereby waive and release, to the fullest extent permitted by law, any claims that such Issuers and Guarantors may have against the Initial Purchasers with respect to any breach or alleged breach of any fiduciary or similar duty to the Issuers and Guarantors in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.
[Signature Pages Follow]
25
If the foregoing Purchase Agreement correctly sets forth the understanding among the Issuers and Guarantors and the Initial Purchasers, please so indicate in the space provided below for the purpose, whereupon this letter and your acceptance shall constitute a binding agreement among the Issuers and the Guarantors and the Initial Purchasers.
Very truly yours, | ||||||
ISSUERS: | ||||||
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 / M ARK A. P LAKE |
|||||
Mark A. Plake | ||||||
President | ||||||
HOLLY ENERGY FINANCE CORP. | ||||||
By: |
/ S / M ARK A. P LAKE |
|||||
Mark A. Plake | ||||||
President |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
GUARANTORS : | ||||||
EL DORADO OPERATING LLC, a Delaware limited liability company | ||||||
HEP CASPER SLC LLC, a Delaware limited liability company | ||||||
HEP EL DORADO LLC, a Delaware limited liability company | ||||||
HEP LOGISTICS GP, L.L.C., a Delaware limited liability company | ||||||
HOLLY ENERGY PARTNERS-OPERATING, L.P., a Delaware limited partnership | ||||||
HOLLY ENERGY STORAGE-LOVINGTON LLC, a Delaware limited liability company | ||||||
CHEYENNE LOGISTICS LLC, a Delaware limited liability company | ||||||
EL DORADO LOGISTICS LLC, a Delaware limited liability company | ||||||
EL DORADO OSAGE LLC, a Delaware limited liability company | ||||||
HEP PIPELINE GP, L.L.C., a Delaware limited liability company | ||||||
HEP REFINING GP, L.L.C., a Delaware limited liability company | ||||||
HEP REFINING, L.L.C., a Delaware limited liability company | ||||||
HEP TULSA LLC, a Delaware limited liability company | ||||||
LOVINGTON-ARTESIA, L.L.C., a Delaware limited liability company | ||||||
ROADRUNNER PIPELINE, L.L.C., a Delaware limited liability company |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
HEP CHEYENNE LLC, a Delaware limited liability company | ||||||
HEP SLC, LLC, a Delaware limited liability company | ||||||
HEP UNEV HOLDINGS LLC, a Delaware limited liability company | ||||||
HEP UNEV PIPELINE LLC, a Delaware limited liability company | ||||||
By: |
/ S / M ARK A. P LAKE |
|||||
Mark A. Plake | ||||||
President |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
HEP MOUNTAIN HOME, L.L.C., a Delaware limited liability company | ||||||
HEP PIPELINE, L.L.C., a Delaware limited liability company | ||||||
HEP WOODS CROSS, L.L.C., a Delaware limited liability company | ||||||
Each by: | Holly Energy PartnersOperating, L.P., a Delaware limited partnership, its Sole Member | |||||
By: |
/ S / M ARK A. P LAKE |
|||||
Mark A. Plake | ||||||
President |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
HEP FIN-TEX/TRUST RIVER, L.P., a Texas limited partnership | ||||||||
HEP NAVAJO SOUTHERN, L.P., a Delaware limited partnership | ||||||||
HEP PIPELINE ASSETS, LIMITED PARTNERSHIP, a Delaware limited partnership | ||||||||
Each by: | HEP Pipeline GP, L.L.C., a Delaware limited liability company, its General Partner | |||||||
By: |
/ S / M ARK A. P LAKE |
|||||||
Mark A. Plake | ||||||||
President |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
HEP REFINING ASSETS, L.P., a Delaware limited partnership | ||||||||
By: | HEP Refining GP, L.L.C., a Delaware limited liability company, its General Partner | |||||||
By: |
/ S / M ARK A. P LAKE |
|||||||
Mark A. Plake | ||||||||
President |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
Accepted as of the date hereof on its own behalf | ||
and as Representative of the several Initial Purchasers listed on Schedule I : | ||
CITIGROUP GLOBAL MARKETS INC. | ||
By: |
/s/ Scott Schlossel |
Name/Title: | Scott Schlossel, Managing Director |
[S IGNATURE P AGE TO P URCHASE A GREEMENT ]
SCHEDULE I
Initial Purchaser |
Principal Amount
of Notes to be Purchased |
|||
Citigroup Global Markets Inc. |
$ | 104,000,004 | ||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
46,000,000 | |||
MUFG Securities Americas Inc. |
46,000,000 | |||
Wells Fargo Securities, LLC |
46,000,000 | |||
BBVA Securities Inc |
16,000,000 | |||
Goldman, Sachs & Co. |
16,000,000 | |||
PNC Capital Markets LLC |
16,000,000 | |||
Scotia Capital (USA) Inc. |
16,000,000 | |||
SunTrust Robinson Humphrey, Inc. |
16,000,000 | |||
TD Securities (USA) LLC |
16,000,000 | |||
U.S. Bancorp Investments, Inc |
16,000,000 | |||
BNP Paribas Securities Corp. |
7,666,666 | |||
Capital One Securities, Inc. |
7,666,666 | |||
Citizens Capital Markets, Inc. |
7,666,666 | |||
Comerica Securities, Inc. |
7,666,666 | |||
Fifth Third Securities, Inc. |
7,666,666 | |||
SMBC Nikko Securities America, Inc. |
7,666,666 | |||
|
|
|||
Total | $ | 400,000,000 | ||
|
|
SCHEDULE II
Subsidiary |
Jurisdiction of
Organization |
Equity Holder and % Held by Each |
||
Cheyenne Logistics LLC |
Delaware | Holly Energy Partners Operating, L.P. (100%) | ||
El Dorado Logistics LLC |
Delaware | Holly Energy Partners Operating, L.P. (100%) | ||
El Dorado Operating LLC |
Delaware | Holly Energy Partners Operating, L.P. (100%) | ||
El Dorado Osage LLC |
Delaware | Holly Energy Partners Operating, L.P. (100%) | ||
HEP Casper SLC LLC |
Delaware | Holly Energy Partners Operating, L.P. (100%) | ||
HEP El Dorado LLC |
Delaware | El Dorado Logistics LLC (100%) | ||
HEP Fin-Tex/Trust-River, L.P. |
Texas |
Holly Energy PartnersOperating, L.P. (99.999% limited partner) HEP Pipeline GP, L.L.C. (0.001% general partner) |
||
HEP Logistics GP, L.L.C. |
Delaware | Holly Energy Partners, L.P. (100%) | ||
HEP Mountain Home, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Navajo Southern, L.P. |
Delaware |
Holly Energy PartnersOperating, L.P. (99.999% limited partner) HEP Pipeline GP, L.L.C. (0.001% general partner) |
||
HEP Pipeline, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Pipeline Assets, Limited Partnership |
Delaware |
Holly Energy PartnersOperating, L.P. (99.999% limited partner) HEP Pipeline GP, L.L.C. (0.001% general partner) |
||
HEP Pipeline GP, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Refining, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Refining Assets, L.P. |
Delaware |
Holly Energy PartnersOperating, L.P. (99.999% limited partner) HEP Refining GP, L.L.C. (0.001% general partner) |
||
HEP Refining GP, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP SLC, LLC |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Tulsa LLC |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP UNEV Holdings LLC |
Delaware |
Holly Energy Partners, L.P. (100% class A units) HollyFrontier Holdings LLC (100% class B units) |
||
HEP UNEV Pipeline LLC |
Delaware | HEP UNEV Holdings (100%) | ||
HEP Woods Cross, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
Holly Energy Storage-Lovington LLC |
Delaware | HEP Refining, L.L.C. (100%) | ||
Holly Energy Finance Corp. |
Delaware | Holly Energy Partners, L.P. (100%) | ||
Holly Energy PartnersOperating, L.P. |
Delaware |
Holly Energy Partners, L.P. (99.999% limited partner) HEP Logistics GP, L.L.C. (0.001% general partner) |
Subsidiary |
Jurisdiction of
Organization |
Equity Holder and % Held by Each |
||
Lovington-Artesia, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
Roadrunner Pipeline, L.L.C. |
Delaware | Holly Energy PartnersOperating, L.P. (100%) | ||
HEP Cheyenne LLC |
Delaware | Holly Energy PartnersOperating, L.P. (100%) |
Joint Venture |
Jurisdiction of
|
Equity Holder and % Held by Each |
||
Frontier Aspen LLC |
Delaware |
HEP Casper SLC LLC (50%) Plains Pipeline, L.P. (50%) |
||
Osage Pipe Line Company, LLC |
Delaware |
El Dorado Osage LLC (50%) CHS McPherson Refinery Inc. (50%) |
||
SLC Pipeline LLC |
Delaware |
HEP SLC, LLC (25%) Rocky Mountain Pipeline System LLC (75%) |
||
UNEV Pipeline, LLC |
Delaware |
HEP UNEV Pipeline LLC (75%) Sinclair Transportation Company (25%) |
||
Cheyenne Pipeline LLC |
Texas |
HEP Cheyenne LLC (50%) Rocky Mountain Pipeline System LLC (50%) |
ANNEX I
List each document provided as an amendment or supplement to the Preliminary Offering Memorandum:
1. | Term sheet containing the terms of the securities, substantially in the form of Exhibit A . |
ANNEX II(a)
FORM OF OPINION OF COUNSEL TO THE ISSUERS
The opinion of Vinson & Elkins LLP, counsel for the Issuers and the Guarantors (capitalized terms not otherwise defined herein shall have the meanings provided in the Purchase Agreement, to which this is an Annex), to be delivered pursuant to Section 8(d) of the Purchase Agreement shall be to the effect that:
1. | Each of the Partnership, the General Partner and the Partnership Guarantors has been duly formed and is validly existing in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act ( DRULPA ) or the Texas Revised Limited Partnership Act (the TRLPA ), as applicable, with all necessary limited partnership power and authority to own or lease its properties and to conduct its business, and, in the case of the General Partner, to serve as the general partner of the Partnership, in each case in all material respects as described in the Pricing Disclosure Package and the Final Offering Memorandum. Each of the Partnership, the General Partner and each of the Partnership Guarantors is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of the jurisdictions set forth beside its name on Annex A . |
2. | Each of GP LLC and the LLC Guarantors has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act (the Delaware LLC Act ) with all necessary limited liability company power and authority to own or lease its properties and to conduct its business, and, in the case of OLP GP and GP LLC, to serve as the general partner of the Operating Partnership and the General Partner, respectively, in each case in all material respects as described in the Pricing Disclosure Package and the Final Offering Memorandum. Each of GP LLC and the LLC Guarantors is duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of the jurisdictions set forth beside its name on Annex A . |
3. | Finance Corp. has been duly formed and is validly existing in good standing as a corporation under the Delaware General Corporation Law (the DGCL ) with all necessary corporate power and authority to own or lease its properties and to conduct its business in all material respects as described in the Pricing Disclosure Package and the Final Offering Memorandum. Finance Corp. is duly registered or qualified as a foreign corporation for the transaction of business under the laws of the jurisdictions set forth beside its name on Annex A . |
4. | (i) The General Partner is the sole general partner of the Partnership, owning of record, and to our knowledge, beneficially, a 2.0% general partner interest in the Partnership; (ii) such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; (iii) such general partner interest is free and clear of all liens, claims, charges, encumbrances, or security interests ( Liens ) that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Uniform Commercial Code of the State of Delaware (the Delaware UCC ), of a financing statement, naming the General Partner as debtor and properly describing such general partner interest; and (iv) to our knowledge, such general partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion) and (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the Partnership Agreement. |
5. |
(i) OLP GP is the sole general partner of the Operating Partnership, owning of record, and to our knowledge, beneficially, a 0.001% general partner interest in the Operating Partnership; (ii) such |
general partner interest has been duly authorized and validly issued in accordance with the partnership agreement of the Operating Partnership (the Operating Partnership Agreement ); (iii) such general partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming OLP GP as debtor and properly describing such general partner interest, except for those arising or created in connection with the Second Amended and Restated Credit Agreement, dated as of February 14, 2011, as amended by Amendment No. 1 to the Second Amended and Restated Credit Agreement, dated as of February 3, 2012, Agreement and Amendment No. 2 to the Second Amended and Restated Credit Agreement, dated as of June 29, 2012, Amendment No. 3 to the Second Amended and Restated Credit Agreement, and Amendment No. 1 to the Second Amended and Restated Security Agreement, dated as of November 22, 2013, Agreement and Amendment No. 4 to the Second Amended and Restated Credit Agreement, dated as of April 28, 2015, and Agreement and Amendment No. 5 to the Second Amended and Restated Credit Agreement, dated as of March 10, 2016 (as so amended, the Credit Agreement ); and (iv) to our knowledge, such general partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the Operating Partnership Agreement, and (C) for restrictions arising in connection with the Credit Agreement. |
6. | (i) The Partnership owns, to our knowledge, 100% of the issued and outstanding shares of capital stock of Finance Corp.; (ii) such capital stock has been duly authorized and validly issued and is fully paid and nonassessable; (iii) such capital stock, except as set forth in the Final Offering Memorandum, is owned by the Partnership free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming the Partnership as debtor and properly describing such capital stock, except for those arising or created in connection with the Credit Agreement; (iv) such capital stock was not issued in violation of any statutory preemptive or, to our knowledge, any similar right; and (v) to our knowledge, such capital stock is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the Finance Corp. Organizational Documents, and (C) for restrictions arising in connection with the Credit Agreement. |
7. | (i) The Partnership is the sole limited partner of the Operating Partnership, owning of record, and to our knowledge, beneficially, a 99.999% limited partner interest in the Operating Partnership; (ii) such limited partner interest has been duly authorized and validly issued in accordance with the Operating Partnership Agreement and is fully paid (to the extent required under the Operating Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804 of the DRULPA); (iii) such limited partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming the Partnership as debtor and properly describing such limited partner interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such limited partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the Operating Partnership Agreement and (C) for restrictions arising in connection with the Credit Agreement. |
8. |
(i) GP LLC is the sole general partner of the General Partner, owning of record, and to our knowledge, beneficially, a 0.001% general partner interest in the General Partner; (ii) such general partner interest has been duly authorized and validly issued in accordance with the partnership agreement of the General Partner (the General Partner Partnership Agreement ); (iii) such general |
partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming GP LLC as debtor and properly describing such general partner interest; and (iv) to our knowledge, such general partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion) and (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the General Partner Partnership Agreement. |
9. | (i) Navajo Pipeline is the sole limited partner of the General Partner, owning of record, and to our knowledge, beneficially, a 99.999% limited partner interest in the General Partner; (ii) such limited partner interest has been duly authorized and validly issued in accordance with the General Partner Partnership Agreement and is fully paid (to the extent required under the General Partner Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804 of the DRULPA); (iii) such limited partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming Navajo Pipeline as debtor and properly describing such limited partner interest; and (iv) to our knowledge, such limited partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion) and (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the General Partner Partnership Agreement. |
10. | (i) Navajo Pipeline is the sole member of GP LLC, owning of record, and to our knowledge, beneficially, a 100% membership interest in GP LLC; (ii) such membership interest has been duly authorized and validly issued in accordance with the GP LLC Agreement and is fully paid (to the extent required under the GP LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming Navajo Pipeline as debtor and properly describing such membership interest; and (iv) to our knowledge, such membership interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion) and (B) for restrictions created by or arising under the Delaware LLC Act and restrictions on transferability set forth in the GP LLC Agreement. |
11. | (i) The Operating Partnership is the sole member of each of the LLC Guarantors, excluding OLP GP, UNEV Holdings, UNEV Pipeline, Storage-Lovington and HEP El Dorado (the Excluded LLCs ), owning of record, and to our knowledge, beneficially, a 100% membership interest in each of the LLC Guarantors, excluding the Excluded LLCs; (ii) such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreements of each of such LLC Guarantors (the LLC Guarantors Agreements ) and are fully paid (to the extent required under the LLC Guarantors Agreements) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interests are free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming the Operating Partnership as debtor and properly describing such membership interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such membership interests are not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the Delaware LLC Act and restrictions on transferability set forth in the LLC Guarantors Agreements and (C) for restrictions arising in connection with the Credit Agreement. |
12. | (i) Pipeline GP is the sole general partner of each of Pipeline Assets LP and Navajo Southern, owning of record, and to our knowledge, beneficially, a .001% general partner interest in each of Pipeline Assets LP and Navajo Southern, respectively, (ii) such general partner interests have been duly authorized and validly issued in accordance with the partnership agreements of Pipeline Assets LP and Navajo Southern; (iii) such general partner interests are free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming Pipeline GP as debtor and properly describing such general partner interests, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such general partner interests are not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the respective partnership agreements of Pipeline Assets LP and Navajo Southern and (C) for restrictions arising in connection with the Credit Agreement. |
13. | (i) Refining GP is the sole general partner of Refining Assets LP, owning of record, and to our knowledge, beneficially, a .001% general partner interest in Refining Assets LP; (ii) such general partner interest has been duly authorized and validly issued in accordance with the partnership agreements of Refining Assets LP; (iii) such general partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming Refining GP as debtor and properly describing such general partner interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such general partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the partnership agreement of Refining Assets LP and (C) for restrictions arising in connection with the Credit Agreement. |
14. | (i) Pipeline GP is the sole general partner of Fin-Tex, owning of record, and to our knowledge, beneficially, a .001% general partner interest in Fin-Tex; (ii) such general partner interest has been duly authorized and validly issued in accordance with the partnership agreement of Fin-Tex; (iii) such general partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Texas pursuant to the Uniform Commercial Code of the State of Texas (the Texas UCC ), of a financing statement, naming Pipeline GP as debtor and properly describing such general partner interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such general partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the TRLPA and restrictions on transferability set forth in the partnership agreement of Fin-Tex and (C) for restrictions arising in connection with the Credit Agreement. |
15. |
(i) The Operating Partnership is the sole limited partner of each of Pipeline Assets LP, Navajo Southern and Refining Assets LP, owning of record, and to our knowledge, beneficially, a 99.999% limited partner interest in each of Pipeline Assets LP, Navajo Southern, and Refining Assets LP; (ii) such limited partner interests have been duly authorized and validly issued in accordance with the partnership agreements of Pipeline Assets LP, Navajo Southern and Refining Assets LP, respectively, and are fully paid (to the extent required under each such partnership agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804 of the DRULPA); (iii) each such limited partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming the Operating Partnership as debtor and properly describing such limited partner interest, except for those arising or created in connection with the Credit Agreement; |
and (iv) to our knowledge, such limited partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the partnership agreements of Pipeline Assets LP, Navajo Southern and Refining Assets LP, as applicable and (C) for restrictions arising in connection with the Credit Agreement. |
16. | (i) The Operating Partnership is the sole limited partner of Fin-Tex, owning of record, and to our knowledge, beneficially, a 99.999% limited partner interest in Fin-Tex; (ii) such limited partner interest has been duly authorized and validly issued in accordance with the partnership agreement of Fin-Tex and is fully paid (to the extent required under the partnership agreement of Fin-Tex) and nonassessable (except as such nonassessability may be affected by Sections 6.07 and 8.05 of the TRLPA); (iii) such limited partner interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Texas pursuant to the Texas UCC, of a financing statement, naming the Operating Partnership as debtor and properly describing such limited partner interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such limited partner interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the TRLPA and restrictions on transferability set forth in the partnership agreement of Fin-Tex and (C) for restrictions arising in connection with the Credit Agreement. |
17. | (i) The Partnership is the sole Class A member of UNEV Holdings, owning of record, and to our knowledge, beneficially, all of the Class A units in UNEV; (ii) such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreement of UNEV Holdings (as amended, the UNEV Holdings LLC Agreement ) and are fully paid (to the extent required under the UNEV LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interests are free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming the Partnership as debtor and properly describing such membership interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such membership interests are not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the UNEV Holdings LLC Agreement and (C) for restrictions arising in connection with the Credit Agreement. |
18. | (i) HollyFrontier Holdings is the sole Class B member of UNEV Holdings, owning of record, and to our knowledge, beneficially, all of the Class B units in UNEV; (ii) such membership interests have been duly authorized and validly issued in accordance with the UNEV Holdings LLC Agreement and are fully paid (to the extent required under the UNEV LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interests are free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming HollyFrontier Holdings as debtor and properly describing such membership interest; and (iv) to our knowledge, such membership interests are not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion) and (B) for restrictions created by or arising under the DRULPA and restrictions on transferability set forth in the UNEV Holdings LLC Agreement. |
19. | (i) UNEV Holdings is the sole member of UNEV Pipeline, owning of record, and to our knowledge, beneficially, a 100% membership interest in UNEV Pipeline; (ii) such membership interest has been duly authorized and validly issued in accordance with the limited liability company agreement of UNEV Pipeline (as amended, the UNEV Pipeline LLC Agreement ) and is fully paid (to the extent required under the UNEV Pipeline LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming UNEV Holdings as debtor and properly describing such membership interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such membership interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the Delaware LLC Act and restrictions on transferability set forth in the UNEV Pipeline LLC Agreement and (C) for restrictions arising in connection with the Credit Agreement. |
20. | (i) HEP Refining is the sole member of Storage-Lovington, owning of record, and to our knowledge, beneficially, a 100% membership interest in Storage-Lovington; (ii) such membership interest has been duly authorized and validly issued in accordance with the limited liability company agreement of Storage-Lovington (as amended, the Storage-Lovington LLC Agreement ) and is fully paid (to the extent required under the Storage-Lovington LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming HEP Refining as debtor and properly describing such membership interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such membership interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the Delaware LLC Act and restrictions on transferability set forth in the Storage-Lovington LLC Agreement and (C) for restrictions arising in connection with the Credit Agreement. |
21. | (i) El Dorado Logistics is the sole member of HEP El Dorado, owning of record, and to our knowledge, beneficially, a 100% membership interest in HEP El Dorado; (ii) such membership interest has been duly authorized and validly issued in accordance with the limited liability company agreement of HEP El Dorado (as amended, the HEP El Dorado LLC Agreement ) and is fully paid (to the extent required under the HEP El Dorado LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act); (iii) such membership interest is free and clear of all Liens that may be perfected solely by the filing, with the Secretary of State of the State of Delaware pursuant to the Delaware UCC, of a financing statement, naming El Dorado Logistics as debtor and properly describing such membership interest, except for those arising or created in connection with the Credit Agreement; and (iv) to our knowledge, such membership interest is not subject to any other restrictions on transfer, except (A) as may arise under applicable federal or state securities laws (as to which we express no opinion), (B) for restrictions created by or arising under the Delaware LLC Act and restrictions on transferability set forth in the HEP El Dorado LLC Agreement and (C) for restrictions arising in connection with the Credit Agreement. |
22. |
Each Issuer and each Guarantor has all requisite corporate, partnership, or limited liability company power and authority (as applicable) to execute, deliver, and perform all of its obligations under the Note Documents and to consummate the transactions contemplated thereby and, without limitation, |
each Issuer and Guarantor has all requisite corporate, partnership or limited liability company power and authority (as applicable) to issue, sell and deliver and perform its obligations under the Notes and the Guarantees. |
23. | The Purchase Agreement has been duly and validly authorized, executed, and delivered by each Issuer and each Guarantor. |
24. | The Indenture has been duly and validly authorized, executed and delivered by the Issuers and each Guarantor and (assuming the due authorization, execution, and delivery thereof by the Trustee) is a legally binding and valid obligation of the Issuers and the Guarantors, enforceable against each of them in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditors rights generally and by general principles of equity and the discretion of the court before which any proceeding therefor may be brought (the Bankruptcy Exceptions ). |
25. | The Notes have been duly and validly authorized for issuance and sale to the Initial Purchasers by the Issuers, and when the Notes are duly issued, authenticated by the Trustee and executed and delivered by the Issuers against payment by the Initial Purchasers in accordance with the terms of the Purchase Agreement and the Indenture, the Notes will be legally binding and valid obligations of the Issuers, entitled to the benefits of the Indenture and enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions. |
26. | The Guarantees have been duly and validly authorized by each of the Guarantors and, when the Notes are duly issued, authenticated by the Trustee and executed and delivered by the Issuers against payment by the Initial Purchasers in accordance with the terms of the Purchase Agreement and the Indenture, the Guarantees will be legally binding and valid obligations of the Guarantors, enforceable against each of them in accordance with their terms, except as the enforcement thereof may be limited by the Bankruptcy Exceptions. |
27. | The execution, delivery, and performance of the Note Documents and the consummation of the transactions contemplated thereby do not and will not (A) violate the certificate of limited partnership, agreement of limited partnership, certificate of formation, limited liability company agreement, certificate or articles of incorporation, or bylaws of the Issuers or any Guarantor, (B) conflict with or constitute a breach of or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), any indenture, mortgage, deed of trust, loan agreement, lease, or other agreement or instrument filed by the Partnership as an exhibit to its Annual Report on Form 10-K for the year ended December 31, 2015, its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, or any Current Report on Form 8-K filed during 2016 and prior to the delivery of this opinion and to which either Issuer or any Guarantor is a party or by which any of them or any of their respective properties may be bound or (C) violate the DRULPA, the Delaware LLC Act, the DGCL, the TRLPA, or other laws of the State of Texas, the laws of the State of New York, or United States federal law (other than federal and state securities laws or Blue Sky laws, as to which we express no opinion (except as specifically set forth in paragraphs (31) and (32) below)), which breach or default in the cases of clauses (B) or (C) would reasonably be expected to have a Material Adverse Effect. |
28. |
No consent, approval, authorization, order, registration, filing, or qualification ( Consent ) under the DRULPA, the Delaware LLC Act, the DGCL, the TRLPA or any other Texas law, New York law or federal law is required for the offering, issuance and sale by the Issuers of the Notes; the execution, delivery, and performance of the Purchase Agreement and the other Note Documents by the Issuers and the Guarantors or the consummation by the Issuers and the Guarantors of the transactions |
contemplated thereby, except (i) for such Consents required under the Securities Act, the Exchange Act, and state securities or Blue Sky laws, as to which we express no opinion, (ii) for such Consents that have been obtained or made, (iii) for such Consents that, if not obtained, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or (iv) as disclosed in the Pricing Disclosure Package and the Final Offering Memorandum. |
29. | The statements set forth in the Pricing Disclosure Package and the Final Offering Memorandum under the caption Description of Notes, insofar as they purport to constitute a summary of the terms of the Notes, are accurate and complete in all material respects. |
30. | Subject to the assumptions, qualifications and limitations set forth in the discussion in the Pricing Disclosure Package and the Final Offering Memorandum under the caption Certain Material U.S. Federal Income Tax Considerations (the Discussion ) and based on the accuracy of the facts set forth in the Pricing Disclosure Package and the Final Offering Memorandum and the representations made by the Partnership in the Purchase Agreement, the Discussion, insofar as it purports to describe or summarize the United States federal income tax laws or legal conclusions with respect thereto, is accurate and complete in all material respects. |
31. | None of the Issuers or the Guarantors is, nor, after giving effect to the Offering and the application of the proceeds thereof, will be an investment company or a company controlled by an investment company as such terms are defined in the Investment Company Act of 1940, as amended. |
32. | Assuming the accuracy of the representations of the Issuers, each Guarantor and the Initial Purchasers in the Purchase Agreement and the due performance thereof by all such parties, no registration of the Notes or the Guarantees under the Securities Act and no qualification of the Indenture under the Trust Indenture Act of 1939, as amended, is required for the purchase of the Notes by you or the initial resale of the Notes by you, in each case, in the manner contemplated by the Purchase Agreement and the Final Offering Memorandum. |
In addition, such counsel shall state that they have participated in conferences with officers and other representatives of the Issuers, the Guarantors, the General Partner and GP LLC, representatives of Ernst & Young LLP, the current independent registered public accounting firm of the Partnership, and representatives of and counsel for the Initial Purchasers, at which the contents of the Pricing Disclosure Package and the Final Offering Memorandum, and related matters, were discussed. Although such counsel is not passing upon and do not assume any responsibility for or express any opinion regarding, the accuracy, completeness or fairness of the statements contained in the Pricing Disclosure Package and the Final Offering Memorandum, except for those referred to in paragraphs (29) and (30) above, based on such counsels participation described above (relying with respect to factual matters to the extent such counsel deemed appropriate upon statements by officers and other representatives of the Issuers, the Guarantors, the General Partner, or GP LLC), no facts have come to such counsels attention to cause such counsel to believe that any part of the Pricing Disclosure Package, as of July 13, 2016, or the Final Offering Memorandum, as of its date and as of the date of this letter, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided that such counsel need express no view, belief, or comment with respect to the financial statements and the other financial or accounting data included or incorporated by reference in or omitted from the Pricing Disclosure Package or the Final Offering Memorandum.
ANNEX II(b)
FORM OF OPINION OF GENERAL COUNSEL FOR THE ISSUERS
General Counsel Opinion
The opinion of Denise C. McWatters, general counsel for the Issuers and the Guarantors (capitalized terms not otherwise defined herein shall have the meanings provided in the Purchase Agreement, to which this is an Annex), to be delivered pursuant to Section 8(d) of the Purchase Agreement shall be to the effect that:
1. to the knowledge of such counsel, none of the offering, issuance and sale by the Issuers and the Guarantors of the Securities, the execution, delivery and performance by each Issuer and each Guarantor of the Note Documents, or the consummation of the transactions contemplated thereby constitutes or will constitute a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a default), or require consent or waiver under any agreement or lease or other instrument to which either Issuer or any Guarantor is a party or by which any of their respective properties may be bound, which breach, violation or default, or failure to acquire consent or waiver would, if continued, reasonably be expected to have a Material Adverse Effect (as defined in the Purchase Agreement), other than such consents and waivers as have been obtained or will be obtained prior to the Closing Date and which, on the Closing Date, will be in full force and effect;
2. to the knowledge of such counsel, none of the offering, issuance and sale by the Issuers and the Guarantors of the Securities, the execution, delivery and performance by each Issuer and each Guarantor of the Note Documents to which it is a party, or the consummation of the transactions contemplated thereby constitutes or will constitute a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a default), or require consent or waiver under, any order, judgment, decree or injunction of any federal, Texas or Delaware court or government agency or body directed to either Issuer or any Guarantor or any of their respective properties in a proceeding to which any of them or any such property is a party, which breach, violation or default would reasonably be expected to have a Material Adverse Effect;
3. to the knowledge of such counsel, neither Issuer nor any Guarantor is in (i) violation of its certificate or agreement of limited partnership, certificate of formation or limited liability company agreement, articles of incorporation or bylaws or other organizational documents, or (ii) violation of any law, statute, ordinance, administrative or governmental rule or regulation applicable to it or of any decree of any court or governmental agency or body having jurisdiction over it, or in breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any obligation, agreement or condition contained in any bond, debenture, note, or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of its properties may be bound, which violation or breach, default or violation would, if continued, reasonably be expected to have a Material Adverse Effect; and
4. to the knowledge of such counsel, there are no pending or threatened actions, suits or proceedings against or affecting either Issuer or any Guarantor or any of their respective properties that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon information obtained from officers and employees of GP L.L.C., the General Partner, the Partnership and the Subsidiaries and from public officials, (B) assume that all documents submitted to her as originals are authentic, that all copies submitted to her conform to the originals thereof, and that the signatures on all
documents examined by such counsel are genuine, (C) state that such counsels opinion is limited to federal laws, the DRULPA, the Delaware LLC Act, the DGCL, the TRLPA and the laws of the State of Texas and (D) state that such counsel expresses no opinion with respect to state or local taxes or tax statutes.
Additionally, such counsel shall state that she (or an attorney in her department who reports to her) has participated in conferences with officers and other representatives of the Issuers, the Guarantors, the General Partner and GP LLC, representatives of Ernst & Young LLP, the current independent registered public accounting firm of the Partnership, and representatives of and counsel for the Initial Purchasers, at which the contents of the Pricing Disclosure Package and the Final Offering Memorandum, and related matters, were discussed. Although such counsel is not passing upon and does not assume any responsibility for or express any opinion regarding, the accuracy, completeness or fairness of the statements contained in the Pricing Disclosure Package and the Final Offering Memorandum, no facts have come to her attention to cause her to believe that any part of the Pricing Disclosure Package, as of July 13, 2016, or the Final Offering Memorandum, as of its date and as of the date of this letter, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided that such counsel need express no view, belief, or comment with respect to the financial statements and related schedules and the other financial or accounting data included or incorporated by reference in or omitted from the Pricing Disclosure Package or the Final Offering Memorandum.
EXHIBIT A
HOLLY ENERGY PARTNERS, L.P.
HOLLY ENERGY FINANCE CORP.
Pricing Term Sheet
Summary of Terms | ||||
Issuers: | Holly Energy Partners, L.P. and Holly Energy Finance Corporation | |||
Issue: | Senior Unsecured Notes | |||
Distribution: | 144A/Reg. S (without registration rights) | |||
Ratings (I) : | B1 / BB (Moodys / S&P) | |||
Maturity: | August 1, 2024 | |||
Principal Amount: | $400,000,000 | |||
Net Proceeds: | $393,100,000 (after initial purchaser discounts and expenses) | |||
Coupon: | 6.000% | |||
Yield: | 6.000% | |||
Spread: | 469 b.p. | vs. TSY 1.375% due 6/30/2023 | ||
Price at Issue: | 100.000% | |||
Interest Payment Dates: | February 1 & August 1 | |||
1st Interest Payment Date: | February 1, 2017 | |||
Call Schedule: |
Non-Callable until August 1, 2019 subject to makewhole August 1, 2019 104.500% August 1, 2020 103.000% August 1, 2021 101.500% August 1, 2022 and thereafter 100.000% |
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Equity Clawback: | 35% at 106.000% prior to August 1, 2019 | |||
Change of Control: | Investor put at 101% | |||
Make Whole: | T+50 b.p. | |||
Denominations: |
Minimum denominations of $2,000 and higher integral multiples of $1,000 in excess thereof |
|||
Bookrunners: |
Citigroup, BofA Merrill Lynch, BBVA, MUFG, US Bancorp, Wells Fargo Securities |
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Senior Co-Managers: |
Goldman, Sachs & Co., PNC Capital Markets LLC, Scotiabank, SunTrust Robinson Humphrey, TD Securities |
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Co-Managers: |
BNP Paribas, Capital One Securities, Citizens Capital Markets, Inc., Comerica Securities, Fifth Third Securities, SMBC Nikko |
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Trade Date: | July 13, 2016 | |||
Settlement Date (T + 4): | July 19, 2016, which will be the fourth business day following the date of the pricing of the notes. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the notes initially will settle in T+4, to specify alternative settlement arrangements to prevent a failed settlement. Purchasers of notes who wish to trade notes prior to settlement should consult their own advisors. | |||
CUSIP / ISIN: 144A: RegS: |
435765 AG7 / US435765AG70 U4377T AD2 / USU4377TAD29 |
Changes from Preliminary Memorandum
The aggregate principal amount of notes to be issued in the offering has been increased from $300,000,000 to $400,000,000. As a result, all corresponding references in the Companys preliminary offering memorandum, dated July 12, 2016 (the Preliminary Memorandum), relating to these amounts will be adjusted accordingly.
In addition, the Company expects to utilize the additional proceeds to repay indebtedness under the Companys revolving credit agreement. As a result, the amount of indebtedness that would have been outstanding under the Companys revolving credit agreement as of March 31, 2016, on an as adjusted basis, has been correspondingly decreased from $470,200,000 to $371,900,000.
(I) A securities rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. The rating is subject to revision or withdrawal at any time by the assigning rating organization.
These securities have not been registered under the Securities Act of 1933, as amended, and may only be sold to qualified institutional buyers pursuant to Rule 144A or pursuant to another applicable exemption from registration.
The information in this term sheet supplements the (Preliminary Memorandum and supercedes the information in the Preliminary Memorandum to the extent inconsistent with the information in the Preliminary Memorandum. This term sheet is qualified in its entirety by reference to the Preliminary Memorandum. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Memorandum.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
A copy of the final offering memorandum covering Holly Energy Partners, L.P. and Holly Energy Finance Corporation may be obtained by contacting Citis Prospectus Department (1-800-831-9146).