EXHIBIT 10.7
Execution Copy
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OMNIBUS AGREEMENT
among
HOLLY CORPORATION
NAVAJO PIPELINE CO., L.P.
HOLLY LOGISTIC SERVICES, L.L.C.
HEP LOGISTICS HOLDINGS, L.P.
HOLLY ENERGY PARTNERS, L.P.
HEP LOGISTICS GP, L.L.C.
and
HEP OPERATING COMPANY, L.P.
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OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT ("Agreement") is entered into on, and effective
as of, the Closing Date (as defined herein), and is by and among Holly
Corporation, a Delaware corporation ("Holly"), Navajo Pipeline Co., L.P., a
Delaware limited partnership ("Navajo Pipeline"), Holly Logistic Services,
L.L.C., a Delaware limited liability company ("Holly GP"), HEP Logistics
Holdings, L.P., a Delaware limited partnership (the "General Partner"), Holly
Energy Partners, L.P., a Delaware limited partnership (the "Partnership"), HEP
Logistics GP, L.L.C., a Delaware limited liability company (the "OLP GP"), and
HEP Operating Company, L.P., a Delaware limited partnership (the "Operating
Partnership"). The above-named entities are sometimes referred to in this
Agreement each as a "Party" and collectively as the "Parties."
R E C I T A L S:
1. The Parties desire by their execution of this Agreement to
evidence their agreement, as more fully set forth in Article II, with respect to
those business opportunities that the Holly Entities (as defined herein) and
Holly GP will not engage in during the term of this Agreement unless the
Partnership has declined to engage in any such business opportunity for its own
account.
2. The Parties desire by their execution of this Agreement to
evidence their agreement, as more fully set forth in Article III, with respect
to certain indemnification obligations of the Parties to each other.
3. The Parties desire by their execution of this Agreement to
evidence their agreement, as more fully set forth in Article IV, with respect to
the amount to be paid by the Partnership for the general and administrative
services to be performed by Holly and its Affiliates (as defined herein) for and
on behalf of the Partnership Group (as defined herein).
4. The Parties desire by their execution of this Agreement to
evidence their agreement, as more fully set forth in Article V, with respect to
the Partnership Group's option to purchase the Intermediate Pipelines (as
defined herein).
5. The Parties desire by their execution of this Agreement to
evidence their agreement, as more fully set forth in Article VI, with respect to
Holly's right of first refusal relating to the Assets (as defined herein).
In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
As used in this Agreement, the following terms shall
have the respective meanings set forth below:
"Acquisition Proposal" is defined in Section 6.2(a).
"Administrative Fee" is defined in Section 4.1(a).
"Affiliate" is defined in the Partnership Agreement.
"Assets" means all assets conveyed, contributed, or otherwise
transferred by the Holly Entities to the Partnership Group prior to or
on the Closing Date and any assets acquired by the Partnership Group
pursuant to the exercise of the purchase option granted under Article
V, including any such assets held by a Person whose ownership interests
are transferred by the Holly Entities to the Partnership Group prior to
or on the Closing Date by means of operation of law or otherwise.
"Change of Control" means, with respect to any Person (the
"Applicable Person"), any of the following events: (a) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the Applicable Person's
assets to any other Person unless immediately following such sale,
lease, exchange, or other transfer such assets are owned, directly or
indirectly, by the Applicable Person; (b) the consolidation or merger
of the Applicable Person with or into another Person pursuant to a
transaction in which the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for cash, securities,
or other property, other than any such transaction where (i) the
outstanding Voting Securities of the Applicable Person are changed into
or exchanged for Voting Securities of the surviving Person or its
parent and (ii) the holders of the Voting Securities of the Applicable
Person immediately prior to such transaction own, directly or
indirectly, not less than a majority of the Voting Securities of the
surviving Person or its parent immediately after such transaction; and
(c) a "person" or "group" (within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act) (in the case of Holly, other than a group
consisting of some of all of the current control persons of Holly),
being or becoming the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) of more than 50% of all of the then
outstanding Voting Securities of the Applicable Person, except in a
merger or consolidation that would not constitute a Change of Control
under clause (b) above.
"Closing Date" means the date of the closing of the
Partnership's initial public offering of Common Units. For purposes of
Article III, Closing Date shall mean, with respect to the Intermediate
Pipelines, the closing date of the purchase of the Intermediate
Pipelines by a Partnership Group Member pursuant to the option granted
pursuant to Section 5.1.
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"Common Units" is defined in the Partnership Agreement.
"Conflicts Committee" is defined in the Partnership Agreement.
"Contribution Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Closing Date,
among Holly, Navajo Pipeline, Holly GP, the General Partner, the
Partnership, the OLP GP, the Operating Partnership and certain other
parties, together with the additional conveyance documents and
instruments contemplated or referenced thereunder.
"control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities, by
contract, or otherwise.
"Covered Environmental Losses" is defined in Section 3.1.
"Disposition Notice" is defined in Section 6.2(a).
"Environmental Laws" means all federal, state, and local laws,
statutes, rules, regulations, orders, and ordinances, now or hereafter
in effect, relating to protection of the environment including, without
limitation, the federal Comprehensive Environmental Response,
Compensation, and Liability Act, the Superfund Amendments
Reauthorization Act, the Resource Conservation and Recovery Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Toxic
Substances Control Act, the Oil Pollution Act, the Safe Drinking Water
Act, the Hazardous Materials Transportation Act, and other
environmental conservation and protection laws, each as amended from
time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"First ROFR Acceptance Deadline" is defined in Section 6.2(a).
"General Partner" is defined in the introduction to this
Agreement.
"Hazardous Substance" means (a) any substance that is
designated, defined, or classified as a hazardous waste, hazardous
material, pollutant, contaminant, or toxic or hazardous substance, or
that is otherwise regulated under any Environmental Law, including,
without limitation, any hazardous substance as defined under the
Comprehensive Environmental Response, Compensation, and Liability Act,
and (b) petroleum, crude oil, gasoline, natural gas, fuel oil, motor
oil, waste oil, diesel fuel, jet fuel, and other refined petroleum
hydrocarbons.
"Holly Entities" means Holly and any Person controlled,
directly or indirectly, by Holly other than the Partnership Entities;
and "Holly Entity" means any of the Holly Entities.
"Indemnified Party" means the Partnership Group or Holly, as
the case may be, in their capacity as the parties entitled to
indemnification in accordance with Article III.
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"Indemnifying Party" means either the Partnership Group or
Holly, as the case may be, in their capacity as the parties from whom
indemnification may be required in accordance with Article III.
"Intermediate Pipelines" means the 8-inch pipeline running
from Lovington, New Mexico to Artesia, New Mexico and the 10-inch
pipeline running from Lovington, New Mexico to Artesia, New Mexico,
each owned by Navajo Pipeline.
"Limited Partner" is defined in the Partnership Agreement.
"Offer" is defined in Section 2.3(a).
"Offer Price" is defined in Section 6.2(a).
"Partnership Agreement" means the First Amended and Restated
Agreement of Limited Partnership of Holly Energy Partners, L.P., dated
as of the Closing Date, as such agreement is in effect on the Closing
Date, to which reference is hereby made for all purposes of this
Agreement. No amendment or modification to the Partnership Agreement
subsequent to the Closing Date shall be given effect for the purposes
of this Agreement unless consented to by each of the Parties to this
Agreement.
"Partnership Entities" means Holly GP, the General Partner and
each member of the Partnership Group.
"Partnership Entity" means any of the Partnership Entities.
"Partnership Group" means the Partnership, the OLP GP, the
Operating Partnership and any Subsidiary of any such Person, treated as
a single consolidated entity.
"Partnership Group Member" means any member of the Partnership
Group.
"Party" and "Parties" are defined in the introduction to this
Agreement.
"Person" means an individual or a corporation, limited
liability company, partnership, joint venture, trust, unincorporated
organization, association, government agency or political subdivision
thereof or other entity.
"Proposed Transferee" is defined in Section 6.2(a).
"Prudent Industry Practice" means such practices, methods,
acts, techniques, and standards as are in effect at the time in
question that are consistent with (a) the standards generally followed
by the United States pipeline and terminalling industries or (b) such
higher standards as may be applied or followed by the Holly Entities in
the performance of similar tasks or projects, or by the Partnership
Entities in the performance of similar tasks or projects.
"Restricted Businesses" is defined in Section 2.1.
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"Retained Assets" means the pipelines, terminals and other
assets and investments owned by any of the Holly Entities that were not
conveyed, contributed or otherwise transferred to the Partnership Group
pursuant to the Contribution Agreement, including, without limitation,
the Intermediate Pipelines.
"ROFR Acceptance Deadline" means the First ROFR Acceptance
Deadline or the Second ROFR Acceptance Deadline, as applicable.
"Sale Assets" is defined in Section 6.2(a).
"Second ROFR Acceptance Deadline" is defined in Section
6.2(a).
"Subject Assets" is defined in Section 2.2(d).
"Subsidiary" means, with respect to any Person, (a) a
corporation of which more than 50% of the voting power of shares
entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such
corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or
limited) in which such Person or a Subsidiary of such Person is, at the
date of determination, a general or limited partner of such
partnership, but only if more than 50% of the partnership interests of
such partnership (considering all of the partnership interests of the
partnership as a single class) is owned, directly or indirectly, at the
date of determination, by such Person, by one or more Subsidiaries of
such Person, or a combination thereof, or (c) any other Person (other
than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or
indirectly, at the date of determination, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.
"Toxic Tort" means a claim or cause of action arising from
personal injury or property damage incurred by the plaintiff that is
alleged to have been caused by exposure to, or contamination by,
Hazardous Substances that have been released into the environment by or
as a result of the actions or omissions of the defendant.
"Transfer" including the correlative terms "Transferring" or
"Transferred" means any direct or indirect transfer, assignment, sale,
gift, pledge, hypothecation or other encumbrance, or any other
disposition (whether voluntary, involuntary or by operation of law) of
the Assets.
"Units" is defined in the Partnership Agreement.
"Voting Securities" means securities of any class of a Person
entitling the holders thereof to vote on a regular basis in the
election of members of the board of directors or other governing body
of such Person.
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ARTICLE II
BUSINESS OPPORTUNITIES
2.1 RESTRICTED BUSINESSES. For so long as a Holly Entity
controls the Partnership, and except as permitted by Section 2.2, Holly GP and
each of the Holly Entities shall be prohibited from engaging in or acquiring or
investing in any business having assets engaged in the following businesses (the
"Restricted Businesses"): the ownership and/or operation of crude oil pipelines
or terminals, intermediate product pipelines or terminals, refined products
pipelines or terminals, truck racks or crude oil gathering systems in the
continental United States.
2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision
of Section 2.1 to the contrary, Holly GP and the Holly Entities may engage in
the following activities under the following circumstances:
(a) the ownership and/or operation of any of the
Retained Assets (including replacements of the Retained Assets);
(b) the ownership and/or operation of any crude
oil pipeline or gathering system, acquired or constructed by a Holly
Entity or Holly GP after the Closing Date that is physically
inter-connected to a refinery of a Holly Entity or Holly GP;
(c) any Restricted Business conducted by a Holly
Entity or Holly GP with the approval of the Conflicts Committee;
(d) the ownership and/or operation of any asset
or group of related assets used in the activities described in Section
2.1 that are acquired or constructed by a Holly Entity or Holly GP
after the Closing Date (the "Subject Assets") if, in the case of an
acquisition, the fair market value of the Subject Assets (as determined
in good faith by the Board of Directors of Holly), or, in the case of
construction, the estimated construction cost of the Subject Assets (as
determined in good faith by the Board of Directors of Holly), is less
than $5 million at the time of such acquisition or completion of
construction, as the case may be;
(e) the ownership and/or operation of any
Subject Assets acquired by a Holly Entity or Holly GP after the Closing
Date with a fair market value (as determined in good faith by the Board
of Directors of Holly) equal to or greater than $5 million at the time
of the acquisition; provided, the Partnership has been offered the
opportunity to purchase the Subject Assets in accordance with Section
2.3 and the Partnership (with the concurrence of the Conflicts
Committee) has elected not to purchase the Subject Assets; and
(f) the ownership and/or operation of any
Subject Assets constructed by a Holly Entity or Holly GP after the
Closing Date with a construction cost (as determined in good faith by
the Board of Directors of Holly) equal to or greater than $5 million at
the time of completion of construction that the Partnership has been
offered the opportunity to purchase in accordance with Section 2.3 and
the Partnership (with the concurrence of the Conflicts Committee) has
elected not to purchase.
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2.3 PROCEDURES.
(a) In the event that Holly GP or a Holly Entity
becomes aware of an opportunity to acquire Subject Assets with a fair
market value (as determined in good faith by the Board of Directors of
Holly) equal to or greater than $5 million, then subject to Section
2.3(b), then as soon as practicable, Holly GP or such Holly Entity
shall notify the General Partner of such opportunity and deliver to the
General Partner all information prepared by or on behalf of Holly GP or
such Holly Entity relating to such potential transaction. As soon as
practicable but in any event within 30 days after receipt of such
notification and information, the General Partner, on behalf of the
Partnership, shall notify Holly GP or the Holly Entity that either (i)
the General Partner, on behalf of the Partnership, has elected, with
the concurrence of the Conflicts Committee, not to cause a member of
the Partnership Group to pursue the opportunity to purchase the Subject
Assets, or (ii) the General Partner, on behalf of the Partnership, has
elected (with the concurrence of the Conflicts Committee) to cause a
member of the Partnership Group to pursue the opportunity to purchase
the Subject Assets. If, at any time, the General Partner abandons such
opportunity with the approval of the Conflicts Committee (as evidenced
in writing by the General Partner following the request of Holly GP or
the Holly Entity), Holly GP or the Holly Entity may pursue such
opportunity. Any Subject Assets which are permitted to be acquired by
Holly GP or a Holly Entity must be so acquired (i) within 12 months of
the later to occur of (A) the date that Holly GP or the Holly Entity
becomes able to pursue such acquisition in accordance with the
provisions of this Section 2.3(a), and (B) the date upon which all
required governmental approvals to consummate such acquisition have
been obtained, and (ii) on terms not materially more favorable to Holly
GP or the Holly Entity than were offered to the Partnership. If either
of these conditions are not satisfied, the opportunity must be
reoffered to the Partnership in accordance with this Section 2.3(a).
(b) Notwithstanding Section 2.3(a), in the event
that (i) Holly GP or a Holly Entity becomes aware of an opportunity to
make an acquisition that includes both Subject Assets and assets that
are not Subject Assets and the Subject Assets have a fair market value
(as determined in good faith by the Board of Directors of Holly) equal
to or greater than $5 million but comprise less than half of the fair
market value (as determined in good faith by the Board of Directors of
Holly) of the total assets being considered for acquisition or (ii)
Holly GP or a Holly Entity desires to construct Subject Assets with an
estimated construction cost (as determined in good faith by the Board
of Directors of Holly) equal to or greater than $5 million, then Holly
GP or the Holly Entity may make such acquisition without first offering
the opportunity to the Partnership or may construct such Subject Assets
as long as it complies with the following procedures:
(i) Within 90 days after the
consummation of the acquisition or the completion of
construction by Holly GP or a Holly Entity of the Subject
Assets, as the case may be, Holly GP or the Holly Entity shall
notify the General Partner in writing of such acquisition or
construction and offer the Partnership Group the opportunity
to purchase such Subject Assets in accordance with this
Section 2.3(b) (the "Offer"). The Offer shall set forth the
terms relating to the purchase of the Subject Assets and, if
Holly GP or any Holly Entity desires to
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utilize the Subject Assets, the Offer will also include the
commercially reasonable terms on which the Partnership Group
will provide services to Holly GP or the Holly Entity to
enable Holly GP or the Holly Entity to utilize the Subject
Assets. As soon as practicable, but in any event within 30
days after receipt of such written notification, the General
Partner shall notify Holly GP or the Holly Entity in writing
that either (x) the General Partner has elected, with the
concurrence of the Conflicts Committee, not to cause a
Partnership Group Member to purchase the Subject Assets, in
which event Holly GP or the Holly Entity shall be forever free
to continue to own or operate such Subject Assets, or (y) the
General Partner has elected (with the concurrence of the
Conflicts Committee) to cause a Partnership Group Member to
purchase the Subject Assets, in which event the following
procedures shall apply.
(ii) If Holly GP or the Holly Entity and
the General Partner (with the concurrence of the Conflicts
Committee) within 60 days after receipt by the General Partner
of the Offer are able to agree on the fair market value of the
Subject Assets that are subject to the Offer and the other
terms of the Offer including, without limitation, the terms,
if any, on which the Partnership Group will provide services
to Holly GP or the Holly Entity to enable it to utilize the
Subject Assets, a Partnership Group Member shall purchase the
Subject Assets for the agreed upon fair market value as soon
as commercially practicable after such agreement has been
reached and, if applicable, enter into an agreement with Holly
GP or the Holly Entity to provide services in a manner
consistent with the Offer.
(iii) If Holly GP or the Holly Entity and
the General Partner are unable to agree within 60 days after
receipt by the General Partner of the Offer on the fair market
value of the Subject Assets that are subject to the Offer or
the other terms of the Offer including, if applicable, the
terms on which the Partnership Group will provide services to
Holly GP or the Holly Entity to enable it to utilize the
Subject Assets, Holly GP or the Holly Entity and the General
Partner will engage a mutually agreed upon investment banking
firm to determine the fair market value of the Subject Assets
and/or the other terms on which the Partnership Group and
Holly GP or the Holly Entity are unable to agree. Such
investment banking firm will determine the fair market value
of the Subject Assets and/or the other terms on which the
Partnership Group and Holly GP or the Holly Entity are unable
to agree within 30 days of its engagement and furnish Holly GP
or the Holly Entity and the General Partner its determination.
The fees of the investment banking firm will be split equally
between Holly GP or the Holly Entity and the Partnership
Group. Once the investment banking firm has submitted its
determination of the fair market value of the Subject Assets
and/or the other terms on which the Partnership Group and
Holly GP or the Holly Entity are unable to agree, the General
Partner will have the right, but not the obligation, subject
to the approval of the Conflicts Committee, to cause a
Partnership Group Member to purchase the Subject Assets
pursuant to the Offer as modified by the determination of the
investment banking firm. The Partnership Group will provide
written notice of its decision to Holly GP or the Holly Entity
within 30 days after the investment banking firm has submitted
its determination.
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Failure to provide such notice within such 30-day period shall
be deemed to constitute a decision not to purchase the Subject
Assets. If the General Partner elects to cause a Partnership
Group Member to purchase the Subject Assets, then the
Partnership Group Member shall purchase the Subject Assets
pursuant to the Offer as modified by the determination of the
investment banking firm as soon as commercially practicable
after such determination and, if applicable, enter into an
agreement with Holly GP or the Holly Entity to provide
services in a manner consistent with the Offer, as modified by
the determination of the investment banking firm, if
applicable.
2.4 SCOPE OF PROHIBITION. Except as provided in this
Article II and the Partnership Agreement, Holly GP and each Holly Entity shall
be free to engage in any business activity, including those that may be in
direct competition with any Partnership Group Member.
2.5 ENFORCEMENT. Holly GP and the Holly Entities agree
and acknowledge that the Partnership Group does not have an adequate remedy at
law for the breach by Holly GP and the Holly Entities of the covenants and
agreements set forth in this Article II, and that any breach by Holly GP or the
Holly Entities of the covenants and agreements set forth in this Article II
would result in irreparable injury to the Partnership Group. Holly GP and the
Holly Entities further agree and acknowledge that any Partnership Group Member
may, in addition to the other remedies which may be available to the Partnership
Group, file a suit in equity to enjoin Holly GP and the Holly Entities from such
breach, and consent to the issuance of injunctive relief under this Agreement.
ARTICLE III
INDEMNIFICATION
3.1 ENVIRONMENTAL INDEMNIFICATION.
(a) Subject to Section 3.2, Holly shall
indemnify, defend and hold harmless the Partnership Group for a period
of 10 years after the Closing Date from and against environmental and
Toxic Tort losses (including, without limitation, economic losses,
diminution in value suffered by third parties, and lost profits),
damages, injuries (including, without limitation, personal injury and
death), liabilities, claims, demands, causes of action, judgments,
settlements, fines, penalties, costs, and expenses (including, without
limitation, court costs and reasonable attorney's and expert's fees) of
any and every kind or character, known or unknown, fixed or contingent,
suffered or incurred by the Partnership Group or any third party by
reason of or arising out of:
(i) any violation or correction of
violation of Environmental Laws associated with the ownership
or operation of the Assets, or
(ii) any event or condition associated
with ownership or operation of the Assets (including, without
limitation, the presence of Hazardous Substances on, under,
about or migrating to or from the Assets or the disposal or
release of Hazardous Substances generated by operation of the
Assets at non-Asset locations) including, without limitation,
(A) the cost and expense of any
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investigation, assessment, evaluation, monitoring,
containment, cleanup, repair, restoration, remediation, or
other corrective action required or necessary under
Environmental Laws, (B) the cost or expense of the preparation
and implementation of any closure, remedial, corrective
action, or other plans required or necessary under
Environmental Laws, and (C) the cost and expense for any
environmental or Toxic Tort pre-trial, trial, or appellate
legal or litigation support work;
but only to the extent that such violation complained of under Section
3.1(a)(i) or such events or conditions included under Section
3.1(a)(ii) occurred before the Closing Date (collectively, "Covered
Environmental Losses").
(b) The Partnership Group shall indemnify,
defend and hold harmless Holly from and against environmental and Toxic
Tort losses (including, without limitation, economic losses, diminution
in value suffered by third parties, and lost profits), damages,
injuries (including, without limitation, personal injury and death),
liabilities, claims, demands, causes of action, judgments, settlements,
fines, penalties, costs, and expenses (including, without limitation,
court costs and reasonable attorney's and expert's fees) of any and
every kind or character, known or unknown, fixed or contingent,
suffered or incurred by Holly or any third party by reason of or
arising out of:
(i) any violation or correction of
violation of Environmental Laws associated with the ownership
or operation of the Assets, or
(ii) any event or condition associated
with ownership or operation of the Assets (including, but not
limited to, the presence of Hazardous Substances on, under,
about or migrating to or from the Assets or the disposal or
release of Hazardous Substances generated by operation of the
Assets at non-Asset locations) including, without limitation,
(A) the cost and expense of any investigation, assessment,
evaluation, monitoring, containment, cleanup, repair,
restoration, remediation, or other corrective action required
or necessary under Environmental Laws, (B) the cost or expense
of the preparation and implementation of any closure,
remedial, corrective action, or other plans required or
necessary under Environmental Laws, and (C) the cost and
expense for any environmental or Toxic Tort pre-trial, trial,
or appellate legal or litigation support work;
and regardless of whether such violation complained of under Section
3.1(b)(i) or such events or conditions included under Section
3.1(b)(ii) occurred before or after the Closing Date, except to the
extent that any of the foregoing are Covered Environmental Losses for
which the Partnership Group is entitled to indemnification from Holly
under this Article III.
3.2 LIMITATIONS REGARDING ENVIRONMENTAL INDEMNIFICATION.
The aggregate liability of Holly in respect of all Covered Environmental Losses
under Section 3.1(a) shall not exceed $15.0 million and Holly will not have any
obligation under Section 3.1(a) until the Covered Environmental Losses of the
Partnership Group exceed $200,000.
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3.3 RIGHT OF WAY INDEMNIFICATION. Holly shall indemnify,
defend and hold harmless the Partnership Group from and against any losses,
damages, liabilities, claims, demands, causes of action, judgments, settlements,
fines, penalties, costs, and expenses (including, without limitation, court
costs and reasonable attorney's and expert's fees) of any and every kind or
character, known or unknown, fixed or contingent, suffered or incurred by the
Partnership Group by reason of or arising out of (a) the failure of the
applicable Partnership Group Member to be the owner of such valid and
indefeasible easement rights or fee ownership interests in and to the lands on
which any pipeline or related pump station, tank farm or equipment conveyed or
contributed or otherwise Transferred (including by way of a Transfer of the
ownership interest of a Person or by operation of law) to the applicable
Partnership Group Member on the Closing Date is located as of the Closing Date;
(b) the failure of the applicable Partnership Group Member to have the consents,
licenses and permits necessary to allow any such pipeline referred to in clause
(a) of this Section 3.3 to cross the roads, waterways, railroads and other areas
upon which any such pipeline is located as of the Closing Date; and (c) the cost
of curing any condition set forth in clause (a) or (b) above that does not allow
any Asset to be operated in accordance with Prudent Industry Practice, to the
extent that Holly is notified in writing of any of the foregoing within 10 years
after the Closing Date.
3.4 ADDITIONAL INDEMNIFICATION.
(a) In addition to and not in limitation of the
indemnification provided under Sections 3.1(a) and 3.3, Holly shall
indemnify, defend, and hold harmless the Partnership Group from and
against any losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs, and expenses
(including, without limitation, court costs and reasonable attorney's
and expert's fees) of any and every kind or character, known or
unknown, fixed or contingent, suffered or incurred by the Partnership
Group by reason of or arising out of (i) events and conditions
associated with the operation of the Assets and occurring before the
Closing Date (other than Covered Environmental Losses which are
provided for under Sections 3.1 and 3.2) to the extent that Holly is
notified in writing of any of the foregoing within five years after the
Closing Date, (ii) all currently pending legal actions against the
Holly Entities, (iii) the completion of currently ongoing or scheduled
remediation projects at the Partnership's El Paso, Albuquerque and
Mountain Home terminals, (iv) events and conditions associated with the
Retained Assets and whether occurring before or after the Closing Date,
and (iv) all federal, state and local income tax liabilities
attributable to the operation of the Assets prior to the Closing Date,
including any such income tax liabilities of the Holly Entities that
may result from the consummation of the formation transactions for the
Partnership Group and the General Partner.
(b) In addition to and not in limitation of the
indemnification provided under Section 3.1(b) or the Partnership
Agreement, the Partnership Group shall indemnify, defend, and hold
harmless Holly from and against any losses, damages, liabilities,
claims, demands, causes of action, judgments, settlements, fines,
penalties, costs, and expenses (including, without limitation, court
costs and reasonable attorney's and expert's fees) of any and every
kind or character, known or unknown, fixed or contingent, suffered or
incurred by Holly by reason of or arising out of events and conditions
associated with the operation of the Assets and occurring on or after
the
- 11 -
Closing Date (other than Covered Environmental Losses which are
provided for under Section 3.1), unless such indemnification would not
be permitted under the Partnership Agreement by reason of one of the
provisos contained in Section 7.7(a) of the Partnership Agreement.
3.5 INDEMNIFICATION PROCEDURES.
(a) The Indemnified Party agrees that promptly
after it becomes aware of facts giving rise to a claim for
indemnification under this Article III, it will provide notice thereof
in writing to the Indemnifying Party, specifying the nature of and
specific basis for such claim.
(b) The Indemnifying Party shall have the right
to control all aspects of the defense of (and any counterclaims with
respect to) any claims brought against the Indemnified Party that are
covered by the indemnification under this Article III, including,
without limitation, the selection of counsel, determination of whether
to appeal any decision of any court and the settling of any such matter
or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent of the Indemnified
Party (with the concurrence of the Conflicts Committee in the case of
the Partnership Group) unless it includes a full release of the
Indemnified Party from such matter or issues, as the case may be.
(c) The Indemnified Party agrees to cooperate
fully with the Indemnifying Party, with respect to all aspects of the
defense of any claims covered by the indemnification under this Article
III, including, without limitation, the prompt furnishing to the
Indemnifying Party of any correspondence or other notice relating
thereto that the Indemnified Party may receive, permitting the name of
the Indemnified Party to be utilized in connection with such defense,
the making available to the Indemnifying Party of any files, records or
other information of the Indemnified Party that the Indemnifying Party
considers relevant to such defense and the making available to the
Indemnifying Party of any employees of the Indemnified Party; provided,
however, that in connection therewith the Indemnifying Party agrees to
use reasonable efforts to minimize the impact thereof on the operations
of the Indemnified Party and further agrees to maintain the
confidentiality of all files, records, and other information furnished
by the Indemnified Party pursuant to this Section 3.5. In no event
shall the obligation of the Indemnified Party to cooperate with the
Indemnifying Party as set forth in the immediately preceding sentence
be construed as imposing upon the Indemnified Party an obligation to
hire and pay for counsel in connection with the defense of any claims
covered by the indemnification set forth in this Article III; provided,
however, that the Indemnified Party may, at its own option, cost and
expense, hire and pay for counsel in connection with any such defense.
The Indemnifying Party agrees to keep any such counsel hired by the
Indemnified Party informed as to the status of any such defense, but
the Indemnifying Party shall have the right to retain sole control over
such defense.
(d) In determining the amount of any loss, cost,
damage or expense for which the Indemnified Party is entitled to
indemnification under this Agreement, the gross amount of the
indemnification will be reduced by (i) any insurance proceeds
- 12 -
realized by the Indemnified Party, and such correlative insurance
benefit shall be net of any incremental insurance premiums that become
due and payable by the Indemnified Party as a result of such claim and
(ii) all amounts recovered by the Indemnified Party under contractual
indemnities from third Persons.
(e) The date on which notification of a claim
for indemnification is received by the Indemnifying Party shall
determine whether such claim is timely made.
ARTICLE IV
GENERAL AND ADMINISTRATIVE EXPENSES
4.1 GENERAL.
(a) The Partnership will pay Holly and its
Affiliates an administrative fee (the "Administrative Fee") of $2.0
million per year, payable in equal quarterly installments, for the
provision by Holly and its Affiliates for the Partnership Group's
benefit of all the general and administrative services that Holly and
its Affiliates have traditionally provided in connection with the
Assets including, without limitation, the general and administrative
services listed on Schedule I to this Agreement. Holly may increase the
Administrative Fee on the second and third anniversary date of this
Agreement by an amount up to the greater of (i) 5.0% or (ii) the then
current Administrative Fee times the percentage increase from the
immediately preceding year in the Consumer Price Index -- All Urban
Consumers, U.S. City Average, Not Seasonally Adjusted. The General
Partner, with the approval and consent of the Conflicts Committee, may
agree on behalf of the Partnership to further increases in the
Administrative Fee in connection with expansions of the operations of
the Partnership Group through the acquisition or construction of new
assets or businesses. After this three-year period, the General Partner
will determine the amount of general and administrative expenses that
will be properly allocated to the Partnership in accordance with the
terms of the Partnership Agreement.
(b) At the end of each year, the Partnership
will have the right to submit to Holly a proposal to reduce the amount
of the Administrative Fee for that year if the Partnership believes, in
good faith, that the general and administrative services performed by
Holly and its Affiliates for the benefit of the Partnership Group for
the year in question do not justify payment of the full Administrative
Fee for that year. If the Partnership submits such a proposal to Holly,
Holly agrees that it will negotiate in good faith with the Partnership
to determine if the Administrative Fee for that year should be reduced
and, if so, by how much.
(c) The Administrative Fee shall not include and
the Partnership Group shall reimburse Holly and its Affiliates for:
(i) salaries of employees of Holly GP,
to the extent, but only to the extent, such employees perform
services for the Partnership Group;
(ii) the cost of employee benefits
relating to employees of Holly GP, such as 401(k), pension,
and health insurance benefits, to the extent,
- 13 -
but only to the extent, such employees perform services for
the Partnership Group; and
(iii) all sales, use, excise, value added
or similar taxes, if any, that may be applicable from time to
time in respect of the services provided by the Holly and its
Affiliates to the Partnership pursuant to Section 4.1(a).
ARTICLE V
PURCHASE OPTIONS
5.1 OPTION TO PURCHASE CERTAIN ASSETS RETAINED BY THE
HOLLY ENTITIES.
(a) Navajo Pipeline hereby grants to the
Partnership Group the unconditional right and option for a period of 3
years from the Closing Date to purchase for fair market value at the
time of purchase (in accordance with Section 5.2) all of Navajo
Pipeline's right title and interest in, to and under the Intermediate
Pipelines.
(b) Holly will take all action required to cause
Navajo Pipeline to comply with the terms of this Article V.
(c) The Parties acknowledge that any potential
transfer of the Intermediate Pipelines pursuant to this Article V is
subject to obtaining any and all required written consents of
governmental authorities.
(d) Holly hereby represents and warrants that
(i) there are no rights of first refusal to purchase the Intermediate
Pipelines; and (ii) subject to Section 5.2(c), Holly will not Transfer
the Intermediate Pipelines, other than to a Partnership Group Member,
during a period of 3 years from the Closing Date.
5.2 PROCEDURES.
(a) If a Partnership Group Member decides to
exercise the option to purchase the Intermediate Pipelines, it will
provide written notice to Navajo Pipeline of such exercise, the fair
market value it proposes to pay for the Intermediate Pipelines, and the
other terms of the purchase including, if requested by a Holly Entity,
the terms on which the Partnership Group Member will provide services
to the Holly Entity to enable the Holly Entity to utilize the
Intermediate Pipelines. The decision to purchase the Intermediate
Pipelines, the fair market value to be paid for the Intermediate
Pipelines, and the other terms of the purchase including, if
applicable, the terms on which the Partnership Group Member will
provide services to the Holly Entity to enable the Holly Entity to
utilize the Intermediate Pipelines shall be approved by the Conflicts
Committee. If the Partnership Group Member and Navajo Pipeline are
unable to agree on the fair market value of the Intermediate Pipelines
or the other terms of the purchase including, if applicable, the terms
on which the Partnership Group Member will provide services to the
Holly Entity to enable the Holly Entity to utilize the Intermediate
Pipelines, the Partnership Group Member and Navajo Pipeline will engage
a mutually-agreed-upon investment banking firm to determine the fair
market value of the Intermediate Pipelines and/or the other terms on
which the Partnership Group Member and the Holly Entity are
- 14 -
unable to agree. The fees of the investment banking firm will be split
equally between Navajo Pipeline and the Partnership Group. Once the
investment banking firm submits its determination of the fair market
value of the Intermediate Pipelines and/or the other terms on which
Navajo Pipeline and the Partnership Group Member are unable to agree,
the Partnership Group Member will have the right, but not the
obligation, to purchase the Intermediate Pipelines on the terms as
modified by the determination of the investment banking firm. The
Partnership Group Member will provide written notice of its decision to
Navajo Pipeline within 30 days after the investment banking firm has
submitted its determination. Failure to provide such notice within such
30-day period shall be deemed to constitute a decision not to purchase
the Intermediate Pipelines.
(b) If a Partnership Group Member chooses to
exercise its option to purchase the Intermediate Pipelines under
Section 5.2(a), this Agreement shall become a contract of sale and
purchase for the Intermediate Pipelines pursuant to which Navajo
Pipeline shall be obligated to sell the Intermediate Pipelines to the
Partnership Group Member and the Partnership Group Member shall be
obligated to purchase the Intermediate Pipelines from the Navajo
Pipeline and, if applicable, the Partnership Group Member will enter
into an agreement with the Holly Entity setting forth the terms on
which the Partnership Group Member will provide services to the Holly
Entity to enable the Holly Entity to utilize the Intermediate
Pipelines. The terms of the purchase and sale agreement, unless
otherwise agreed to by the Partnership Group Member (with the consent
of the Conflicts Committee) and Navajo Pipeline, will include the
following:
(i) the Partnership Group Member will
deliver a cash purchase price (unless the Partnership Group
Member and Navajo Pipeline agree that the consideration will
be paid by means of Units or an interest-bearing promissory
note);
(ii) the Partnership Group will be
entitled to the benefit of the indemnification contained in
Article III of this Agreement with respect to events or
conditions associated with the operation of the Intermediate
Pipelines and occurring before the date of acquisition of the
Intermediate Pipelines by the Partnership Group Member;
(iii) Navajo Pipeline will represent that
it has good and indefeasible title to the Intermediate
Pipelines, subject to all recorded and unrecorded matters and
all physical conditions and other matters in existence on the
closing date for the purchase of the Intermediate Pipelines,
plus any other such matters as the Partnership Group Member
may approve, which approval will not be unreasonably withheld.
If the Partnership Group Member desires to obtain any title
insurance with respect to the Intermediate Pipelines, the full
cost and expense of obtaining the same (including but not
limited to the cost of title examination, document duplication
and policy premium) shall be borne by the Partnership Group
Member;
(iv) Navajo Pipeline will grant to the
Partnership Group Member the right, exercisable at the
Partnership Group Member's risk and
- 15 -
expense, to make such surveys, tests and inspections of the
Intermediate Pipelines as the Partnership Group Member may
deem desirable, so long as such surveys, tests or inspections
do not damage the Intermediate Pipelines or interfere with the
activities of Navajo Pipeline thereon and so long as the
Partnership Group Member has furnished Navajo Pipeline with
evidence that adequate liability insurance is in full force
and effect;
(v) the Partnership Group Member will
have the right to terminate its obligation to purchase the
Intermediate Pipelines under this Article V if the results of
any searches, surveys, tests or inspections conducted pursuant
to Section 5.2(b)(iii) or (iv) above are, in the reasonable
opinion of the Partnership Group, unsatisfactory;
(vi) the closing date for the purchase
of the Intermediate Pipelines shall occur no later than 90
days following receipt by Holly of written notice by the
Partnership Group Member of its intention to exercise its
option to purchase the Intermediate Pipelines pursuant to
Section 5.2(a);
(vii) Navajo Pipeline shall execute, have
acknowledged and deliver to the Partnership Group Member a
special warranty deed, assignment of easement, or comparable
document, as appropriate, in the applicable jurisdiction, on
the closing date for the purchase of the Intermediate
Pipelines constituting a real property interest conveying the
Intermediate Pipelines unto the Partnership Group Member free
and clear of all encumbrances created by Navajo Pipeline other
than those set forth in Section 5.2(b)(iii) above;
(viii) the sale of the Intermediate
Pipelines shall be made on an "as is," "where is" and "with
all faults" basis, and the instruments conveying the
Intermediate Pipelines shall contain appropriate disclaimers;
(ix) neither Navajo Pipeline nor the
applicable Partnership Group Member shall have any obligation
to sell or buy the Intermediate Pipelines if any of the
material consents referred to in Section 5.1(c) have not been
obtained; and
(x) Navajo Pipeline and the Partnership
Group shall cooperate in good faith in obtaining all necessary
governmental and other third Person approvals, waivers and
consents required for the closing. Any such closing shall be
delayed, to the extent required, until the third Business Day
following the expiration of any required waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended; provided, however, that such delay shall not exceed
60 days and, if governmental approvals and waiting periods
shall not have been obtained or expired, as the case may be,
by such 60th day, then the Partnership Group shall be deemed
to have waived its option to purchase the Intermediate
Pipelines and thereafter neither Navajo Pipeline nor the
Partnership shall have any further obligation under this
Article V with respect to the Intermediate Pipelines.
- 16 -
(c) If a Partnership Group Member chooses or is
deemed to have chosen not to exercise its option to purchase the
Intermediate Pipelines at the price determined by the investment
banking firm under Section 5.2(a), all future rights to purchase the
Intermediate Pipelines by the Partnership Group will be extinguished.
ARTICLE VI
RIGHT OF FIRST REFUSAL
6.1 HOLLY RIGHT OF FIRST REFUSAL.
(a) The Partnership Group hereby grants to Holly
a right of first refusal on any proposed Transfer (other than a grant
of a security interest to a bona fide third-party lender or a Transfer
to another Partnership Group Member) of the Assets that serve the Holly
Entities' refineries.
(b) The Parties acknowledge that all potential
Transfers of Sale Assets pursuant to this Article VI are subject to
obtaining any and all required written consents of governmental
authorities and other third parties and to the terms of all existing
agreements in respect of the Sale Assets.
6.2 PROCEDURES.
(a) If a Partnership Group Member proposes to
Transfer any of the Assets that serve the Holly Entities' refineries to
any Person pursuant to a bona fide third-party offer (an "Acquisition
Proposal"), then the Partnership shall promptly give written notice (a
"Disposition Notice") thereof to Holly. The Disposition Notice shall
set forth the following information in respect of the proposed
Transfer: the name and address of the prospective acquiror (the
"Proposed Transferee"), the Assets subject to the Acquisition Proposal
(the "Sale Assets"), the purchase price offered by such Proposed
Transferee (the "Offer Price"), reasonable detail concerning any
non-cash portion of the proposed consideration, if any, to allow Holly
to reasonably determine the fair market value of such non-cash
consideration, the Partnership Group's estimate of the fair market
value of any non-cash consideration and all other material terms and
conditions of the Acquisition Proposal that are then known to the
Partnership Group. To the extent the Proposed Transferee's offer
consists of consideration other than cash (or in addition to cash) the
Offer Price shall be deemed equal to the amount of any such cash plus
the fair market value of such non-cash consideration. In the event
Holly and the Partnership Group agree as to the fair market value of
any non-cash consideration, Holly will provide written notice of its
decision regarding the exercise of its right of first refusal to
purchase the Sale Assets within 30 days of its receipt of the
Disposition Notice (the "First ROFR Acceptance Deadline"). Failure to
provide such notice within such 30-day period shall be deemed to
constitute a decision not to purchase the Sale Assets. In the event (i)
Holly's determination of the fair market value of any non-cash
consideration described in the Disposition Notice (to be determined by
Holly within 30 days of receipt of such Disposition Notice) is less
than the fair market value of such consideration as determined by the
Partnership Group in the Disposition Notice and (ii) Holly and the
Partnership Group are unable to mutually agree upon the fair market
value of such non-cash
- 17 -
consideration within 30 days after Holly notifies the Partnership Group
of its determination thereof, the Partnership Group and Holly shall
engage a mutually-agreed-upon investment banking firm to determine the
fair market value of the non-cash consideration. Such investment
banking firm shall be instructed to return its decision within 30 days
after all material information is submitted thereto, which decision
shall be final. The fees of the investment banking firm will be split
equally between Holly and the Partnership Group. Holly will provide
written notice of its decision regarding the exercise of its right of
first refusal to purchase the Sale Assets to the Partnership Group
within 30 days after the investment banking firm has submitted its
determination (the "Second ROFR Acceptance Deadline"). Failure to
provide such notice within such 30-day period shall be deemed to
constitute a decision by Holly not to purchase the Sale Assets. If
Holly fails to exercise a right during any applicable period set forth
in this Section 6.2(a), Holly shall be deemed to have waived its rights
with respect to such proposed disposition of the Sale Assets, but not
with respect to any future offer of Assets.
(b) If Holly chooses to exercise its right of
first refusal to purchase the Sale Assets under Section 6.2(a), Holly
and the Partnership Group shall enter into a purchase and sale
agreement for the Sale Assets which shall include the following terms:
(i) Holly will agree to deliver cash
for the Offer Price (unless Holly and the Partnership Group
agree that consideration will be paid by means of an
interest-bearing promissory note or equity securities of
Holly);
(ii) the Partnership Group will
represent that it has good and indefeasible title to the Sale
Assets, subject to all recorded and unrecorded matters and all
physical conditions and other matters in existence on the
closing date for the purchase of the Sale Assets, plus any
other such matters as Holly may approve, which approval will
not be unreasonably withheld. If Holly desires to obtain any
title insurance with respect to the Sale Assets, the full cost
and expense of obtaining the same (including but not limited
to the cost of title examination, document duplication and
policy premium) shall be borne by Holly;
(iii) the Partnership Group will grant to
Holly the right, exercisable at Holly's risk and expense, to
make such surveys, tests and inspections of the Sale Assets as
Holly may deem desirable, so long as such surveys, tests or
inspections do not damage the Sale Assets or interfere with
the activities of the Partnership Group thereon and so long as
Holly has furnished the Partnership Group with evidence that
adequate liability insurance is in full force and effect;
(iv) Holly will have the right to
terminate its obligation to purchase the Sale Assets under
this Article VI if the results of any searches, surveys, tests
or inspections conducted pursuant to Section 6.2(b)(ii) or
(iii) above are, in the reasonable opinion of Holly,
unsatisfactory;
(v) the closing date for the purchase
of the Sale Assets shall occur no later than 90 days following
receipt by the Partnership Group of written
- 18 -
notice by Holly of its intention to exercise its option to
purchase the Sale Assets pursuant to Section 6.2(a);
(vi) the Partnership Group shall
execute, have acknowledged and deliver to Holly a special
warranty deed, assignment of easement, or comparable document,
as appropriate, in the applicable jurisdiction, on the closing
date for the purchase of the Sale Assets constituting real
property interests conveying the Sale Assets unto Holly free
and clear of all encumbrances created by the Partnership Group
other than those set forth in Section 6.2(b)(ii) above;
(vii) the sale of any Sale Assets shall
be made on an "as is," "where is" and "with all faults" basis,
and the instruments conveying such Sale Assets shall contain
appropriate disclaimers; and
(viii) neither the Partnership Group nor
Holly shall have any obligation to sell or buy the Sale Assets
if any of the material consents referred to in Section 6.1(b)
have not been obtained.
(c) Holly and the Partnership Group shall
cooperate in good faith in obtaining all necessary governmental and
other third Person approvals, waivers and consents required for the
closing. Any such closing shall be delayed, to the extent required,
until the third Business Day following the expiration of any required
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended; provided, however, that such delay shall not
exceed 60 days and, if governmental approvals and waiting periods shall
not have been obtained or expired, as the case may be, by such 60th
day, then Holly shall be deemed to have waived its right of first
refusal with respect to the Sale Assets described in the Disposition
Notice and thereafter neither Holly nor the Partnership shall have any
further obligation under this Article VI with respect to such Sale
Assets unless such Sale Assets again become subject to this Article VI
pursuant to Section 6.2(d).
(d) If the Transfer to the Proposed Transferee
is not consummated in accordance with the terms of the Acquisition
Proposal within the later of (A) 180 days after the later of the
applicable ROFR Acceptance Deadline, and (B) 10 days after the
satisfaction of all governmental approval or filing requirements, if
any, the Acquisition Proposal shall be deemed to lapse, and the
Partnership or member of the Partnership Group may not Transfer any of
the Sale Assets described in the Disposition Notice without complying
again with the provisions of this Article VI if and to the extent then
applicable.
ARTICLE VII
MISCELLANEOUS
7.1 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This
Agreement shall be subject to and governed by the laws of the State of Texas,
excluding any conflicts-of-law rule or principle that might refer the
construction or interpretation of this Agreement to the laws of
- 19 -
another state. Each Party hereby submits to the jurisdiction of the state and
federal courts in the State of Texas and to venue in Dallas, Texas.
7.2 NOTICE. All notices or requests or consents provided
for by, or permitted to be given pursuant to, this Agreement must be in writing
and must be given by depositing same in the United States mail, addressed to the
Person to be notified, postpaid, and registered or certified with return receipt
requested or by delivering such notice in person or by telecopier or telegram to
such Party. Notice given by personal delivery or mail shall be effective upon
actual receipt. Notice given by telegram or telecopier shall be effective upon
actual receipt if received during the recipient's normal business hours or at
the beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth
below such Party's signature to this Agreement or at such other address as such
Party may stipulate to the other Parties in the manner provided in this Section
7.2.
if to the Holly Entities:
Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: President
Fax: 214-615-9372
with a copy to:
John Glancy
General Counsel
Holly Corporation
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Fax: 214-615-9374
if to the Partnership Entities
Holly Energy Partners, L.P.
c/o Holly Logistic Services, L.L.C.
100 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: Vice President and Chief Financial Officer
Fax: (214) 615-9380
7.3 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the Parties relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written, relating
to the matters contained herein.
- 20 -
7.4 TERMINATION OF ARTICLE II. The provisions of Article
II of this Agreement may be terminated by Holly upon a Change of Control of
Holly.
7.5 AMENDMENT OR MODIFICATION. This Agreement may be
amended or modified from time to time only by the written agreement of all the
Parties hereto; provided, however, that the Partnership may not, without the
prior approval of the Conflicts Committee, agree to any amendment or
modification of this Agreement that, in the reasonable discretion of the General
Partner, will adversely affect the holders of Common Units. Each such instrument
shall be reduced to writing and shall be designated on its face an "Amendment"
or an "Addendum" to this Agreement.
7.6 ASSIGNMENT. No Party shall have the right to assign
any of its rights or obligations under this Agreement without the consent of the
other Parties hereto.
7.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts with the same effect as if all signatory parties had
signed the same document. All counterparts shall be construed together and shall
constitute one and the same instrument.
7.8 SEVERABILITY. If any provision of this Agreement
shall be held invalid or unenforceable by a court or regulatory body of
competent jurisdiction, the remainder of this Agreement shall remain in full
force and effect.
7.9 FURTHER ASSURANCES. In connection with this Agreement
and all transactions contemplated by this Agreement, each signatory party hereto
agrees to execute and deliver such additional documents and instruments and to
perform such additional acts as may be necessary or appropriate to effectuate,
carry out and perform all of the terms, provisions and conditions of this
Agreement and all such transactions.
7.10 RIGHTS OF LIMITED PARTNERS. The provisions of this
Agreement are enforceable solely by the Parties to this Agreement, and no
Limited Partner of the Partnership shall have the right, separate and apart from
the Partnership, to enforce any provision of this Agreement or to compel any
Party to this Agreement to comply with the terms of this Agreement.
- 21 -
IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.
HOLLY CORPORATION
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
NAVAJO PIPELINE CO., L.P.
BY NAVAJO PIPELINE GP, L.L.C.,
ITS GENERAL PARTNER
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
HOLLY LOGISTIC SERVICES, L.L.C.
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
HEP LOGISTIC HOLDINGS, L.P.
BY HOLLY LOGISTIC SERVICES, L.L.C.,
ITS GENERAL PARTNER
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
Signature Page to Omnibus Agreement
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/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
HEP LOGISTICS GP, L.L.C.
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
HEP OPERATING COMPANY, L.P.
BY HEP LOGISTICS GP, L.L.C.
ITS GENERAL PARTNER
By: /s/ Stephen J. McDonnell
-----------------------------------------
Stephen J. McDonnell
Vice President and Chief Financial Officer
Signature Page to Omnibus Agreement
SCHEDULE I
GENERAL AND ADMINISTRATIVE SERVICES
(1) executive services
(2) finance, including treasury, and administration services
(3) information technology services
(4) legal services
(5) health, safety and environmental services
(6) human resources services
SCHEDULE I - 1