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<PAGE>
EXHIBIT 10.7
EXECUTION VERSION
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CONTRIBUTION AGREEMENT
by and among
HOLLY ENERGY PARTNERS, L.P.
and
HOLLY ENERGY PARTNERS - OPERATING, L.P.
as Transferee Parties,
and
T & R ASSETS, INC.
FIN-TEX PIPE LINE COMPANY
ALON USA REFINING, INC.
as Transferors,
and
ALON PIPELINE ASSETS, LLC
ALON PIPELINE LOGISTICS, LLC
ALON USA, INC.
and
ALON USA, LP
Dated as of January 25, 2005
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TABLE OF CONTENTS
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Page
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ARTICLE I
TRANSFER OF ASSETS, ASSUMPTION OF
LIABILITIES AND AGGREGATE CONSIDERATION
1.1 Contribution of Property and
Assets..................................... 2
1.2 Excluded
Assets.........................................................
5
1.3 Assumed Liabilities; Retained
Liabilities............................... 6
1.4 Contribution to Newco
2................................................. 8
1.5 Contribution to
Transferee.............................................. 8
1.6 Contributions to HEP Opco and Conversion of Newco
1..................... 8
1.7
Consideration...........................................................
9
1.8 Contribution to
Partnership............................................. 9
ARTICLE II
CLOSING
2.1
Closing.................................................................
10
2.2 Deliveries by the Alon
Parties.......................................... 10
2.3 Deliveries by
Transferee................................................ 12
2.4 Casualty and
Condemnation............................................... 12
2.5
Prorations..............................................................
14
2.6 Closing Costs; Transfer Taxes and
Fees.................................. 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR PARTIES
3.1
Organization............................................................
15
3.2
Authorization...........................................................
16
3.3 No Conflicts or Violations; No Consents or Approvals
Required........... 16
3.4 Compliance With Laws and
Permits........................................ 17
3.5 Absence of
Litigation...................................................
17
3.6 Operating Statements; Absence of
Changes................................ 17
3.7 Title to Contributed
Assets............................................. 18
3.8 Newco 1 and Newco
2..................................................... 19
3.9
Contracts...............................................................
20
3.10 Prohibited Persons
Transactions......................................... 20
3.11 Intellectual
Property................................................... 21
3.12 Software
Products.......................................................
21
3.13
Taxes...................................................................
21
3.14 Sufficiency and Condition of Assets; Entire
Operations................. 22
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HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
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3.15 Collective Bargaining Agreements; Labor
Relations....................... 22
3.16 Employees; Employee Benefit
Matters..................................... 22
3.17 Performance Of Pipelines; Performance of
Terminals...................... 23
3.18
Insurance...............................................................
24
3.19 Status of Transferor
Parties............................................ 24
3.20 Environmental
Matters................................................... 24
3.21 Brokers and
Finders..................................................... 25
3.22 Representations Relating to the Class B
Units........................... 25
3.23 WAIVERS AND
DISCLAIMERS................................................. 25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
4.1
Organization............................................................
27
4.2
Authorization...........................................................
27
4.3 No Violations; No Consents or Approvals
Required........................ 27
4.4 Absence of
Litigation...................................................
28
4.5 Validity of Class B
Units............................................... 28
4.6 Transferee Public
Documents............................................. 28
4.7 Brokers and
Finders..................................................... 29
ARTICLE V
COVENANTS
5.1 Conduct of the
Operations............................................... 29
5.2
Access..................................................................
30
5.3 Supplemental Operating
Statements....................................... 30
5.4
Notification............................................................
31
5.5
Injunctions.............................................................
31
5.6 Payments
Received.......................................................
31
5.7
Rights..................................................................
31
5.8
Insurance...............................................................
33
5.9
Cooperation.............................................................
33
5.10 Additional
Agreements...................................................
33
5.11 HSR
Matters.............................................................
34
5.12 Access to Financial
Information......................................... 34
5.13 Bank
Consents...........................................................
34
ARTICLE VI
EMPLOYMENT MATTERS
6.1 Offers of
Employment....................................................
35
6.2 Transferors' Employee
Liabilities....................................... 36
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HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
<PAGE>
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ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Each Party's Obligation to
Close.......................... 36
7.2 Conditions to Transferee's Obligation to
Close.......................... 37
7.3 Conditions to the Alon Parties' and Newco 1's Obligation to
Close....... 38
ARTICLE VIII
TERMINATION
8.1
Termination.............................................................
39
8.2 Effect of
Termination...................................................
39
ARTICLE IX
INDEMNIFICATION
9.1 Obligations to
Indemnify................................................ 40
9.2 Third Party
Claims...................................................... 41
9.3 Direct
Claims...........................................................
43
9.4 Dispute Resolution -
Indemnification.................................... 44
9.5 Limits of
Liability.....................................................
46
9.6 Survival of Covenants, Representations and
Warranties................... 47
9.7 Exclusive
Remedy........................................................
47
9.8
Payments................................................................
48
9.9 Administration of Indemnity
Claims...................................... 48
ARTICLE X
INTERPRETATION; DEFINED TERMS
10.1
Interpretation..........................................................
48
10.2 References, Gender,
Number.............................................. 49
10.3 Defined
Terms...........................................................
49
ARTICLE XI
ADDITIONAL AGREEMENTS
11.1 Access to
Information...................................................
62
11.2 Public
Announcements....................................................
62
11.3
Confidentiality.........................................................
62
11.4 Notice of Certain
Events................................................ 63
11.5 Further
Assurances......................................................
63
11.6 Post-Closing Tax
Covenants.............................................. 63
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HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
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ARTICLE XII
MISCELLANEOUS
12.1
Expenses................................................................
64
12.2
Notices.................................................................
64
12.3 Entire Agreement; Amendment;
Waiver..................................... 65
12.4
Severability............................................................
66
12.5 Parties in
Interest.....................................................
66
12.6 Governing
Law...........................................................
66
12.7 Assignment to Lenders; Assignment of Agreement to
Subsidiary............ 66
12.8 No Waiver Relating to Claims for
Fraud.................................. 67
12.9 Dispute Resolution -
General............................................ 68
12.10 Captions 69
12.11
Counterparts............................................................
69
12.12 Director and Officer
Liability.......................................... 69
12.13 Specific
Performance....................................................
70
</TABLE>
EXHIBITS:
Exhibit A - Special Warranty Deed
Exhibit B - Pipeline Conveyance
Exhibit C - Bills of Sale
Exhibit D - Pipelines and Terminals Agreement
Exhibit E - Environmental Agreement
Exhibit F - Right of First Offer Agreement
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Services Agreement
Exhibit I - Subordination, Non-Disturbance and Attornment
Agreement
Exhibit J - Class B Amendment
Exhibit K - Mortgage and Deed of Trust
Exhibit L - Consent Agreement
ANNEXES:
Annex A-1 - Pipelines
Annex A-2 - Pipeline Maps
Annex A-3 - Pipeline Fee Land
Annex A-4 - Pipeline Leases
Annex A-5 - Pipeline Easements
Annex B-1 - Terminals
Annex B-2 - Terminal Fee Land
Annex B-3 - Terminal Leases
iv
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
<PAGE>
SCHEDULES:
Schedule 7.2(a) - Transferee Governmental Consents
Schedule 7.2(e) - Transferee Third Party Consents
Schedule 7.3(a) - Alon Governmental Consents
Schedule 7.3(e) - Alon Third Party Consents
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HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
<PAGE>
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") dated as of
January 25,
2005, is made and entered into by and among Holly Energy
Partners, L.P., a
Delaware limited partnership ("Transferee"), Holly Energy
Partners - Operating,
L.P., a Delaware limited partnership and a wholly-owned
subsidiary of Transferee
("HEP Opco" and, together with Transferee, the "Transferee
Parties"), T&R
Assets, Inc., a Texas corporation ("T&R"), Fin-Tex Pipe Line
Company, a Texas
corporation ("Fin-Tex"), Alon USA Refining, Inc., a Delaware
corporation ("Alon
Refining", and together with T&R and Fin-Tex, collectively,
the "Transferors",
and each individually, a "Transferor"), Alon Pipeline Assets,
LLC, a Texas
limited liability company ("Newco 1"), Alon Pipeline Logistics,
LLC, a Delaware
limited liability company ("Newco 2", and together with the
Transferors, the
"Transferor Parties"), Alon USA, Inc., a Delaware corporation
and the parent of
the Transferors ("Alon USA"), and Alon USA, LP, a Texas limited
partnership
("Alon LP", and together with the Transferor Parties and Alon
USA, the "Alon
Parties").
WHEREAS, for the purpose of effecting the transactions
contemplated by
this Agreement, the Transferors have formed Newco 1 and
collectively directly
own all of the issued and outstanding equity interest therein
(the "Newco 1
Equity Interests").
WHEREAS, for the purpose of effecting the transactions
contemplated by
this Agreement, the Transferors have formed Newco 2 and
collectively directly
own all of the issued and outstanding equity interest therein
(the "Newco 2
Equity Interests").
WHEREAS, the Transferors wish to contribute to Newco 1, and
Newco 1 wishes
to acquire from the Transferors (a) certain refined petroleum
products
pipelines, (b) certain refined petroleum products terminals, and
(c) certain
other specified rights and assets used primarily in connection
with the
ownership and operation of the Pipelines (as defined herein) and
the Terminals
(as defined herein), all on the terms and conditions of this
Agreement.
WHEREAS, in connection with such contribution and acquisition
Newco 1
shall assume certain liabilities and obligations of the
Transferors as more
fully described herein, all on the terms and conditions of this
Agreement.
WHEREAS, the Transferors wish to contribute to Newco 2 all of
the Newco 1
Equity Interests; and
WHEREAS, Newco 2 wishes to contribute to Transferee, and
Transferee wishes
to acquire from Newco 2, all of the Newco 1 Equity
Interests.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
and agreements contained herein, and other good and valuable
consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto
hereby agree as follows:
1
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
<PAGE>
ARTICLE I
TRANSFER OF ASSETS, ASSUMPTION OF
LIABILITIES AND AGGREGATE CONSIDERATION
1.1 CONTRIBUTION OF PROPERTY AND ASSETS. On the terms and
subject to the
conditions set forth in this Agreement, at the Closing each
Transferor shall
contribute, transfer, assign and deliver to Newco 1, as a
capital contribution,
all of such Transferor's right, title and interest in and to the
properties and
assets (other than the Excluded Assets) used primarily in
connection with the
ownership and operation of the Pipelines and the Terminals
(collectively, the
"Operations") (all of such assets, properties and rights are
collectively
referred to as the "Contributed Assets"), including the
following:
(a) All of the assets, properties and rights, whether real,
personal or mixed, which are owned or held for use by such
Transferor primarily
in connection with the ownership or operation of the refined
petroleum product
pipelines described in Annex A-1 (the "Pipelines") and the maps
depicted in
Annex A-2, including the following (collectively, the "Pipeline
Assets"):
(i) The parcels of fee simple real property described in
Annex A-3 (collectively, the "Pipeline Fee Land");
(ii) The lessee's interest in the leases described in Annex
A-4 (collectively, the "Pipeline Leases"), together with all the
leasehold
estate described in the Pipeline Leases;
(iii) All easements, rights-of-way, property use agreements,
line rights and real property licenses and permits (including
rights-of-way
permits from railroads and road crossing permits or other
rights-of-way permits
from Governmental Entities) relating to the real property
described in clauses
(i) and (ii) above, including those described in Annex A-5 (the
"Pipeline
Easements"); and
(iv) All buildings, structures, fixtures, facilities,
improvements and appurtenances to the real property described in
clauses (i),
(ii) and (iii) above (collectively, the "Pipeline
Improvements"). The Pipeline
Improvements shall be treated as real property for all purposes
of this
Agreement.
(b) All of the properties and assets, whether real, personal
or
mixed, which are owned or held for use by such Transferor
primarily in
connection with the ownership or operation of those certain
refined petroleum
product terminals described in Annex B-1 (the "Terminals"),
including the
following (collectively, the "Terminal Assets"):
(i) The parcels of fee simple real property described in
Annex B-2 (collectively, the "Terminal Fee Land");
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
2
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(ii) The lessee's interest in the leases described in Annex
B-3 (collectively, the "Terminal Leases") together with all the
leasehold estate
described in the Terminal Leases;
(iii) All easements, rights-of-way, property use agreements,
line rights and real property licenses and permits (including
rights-of-way
permits from railroads and road crossing permits or other
rights-of-way permits
from Governmental Entities) relating to the real property
described in clauses
(i) and (ii) above, including those described in Annex B-2 or
Annex B-3 (the
"Terminal Easements"); and
(iv) All buildings, structures, fixtures, facilities,
improvements and appurtenances to the real property described in
clauses (i),
(ii) and (iii) above (collectively, the "Terminal
Improvements"). The Terminal
Improvements shall be treated as real property for all purposes
of this
Agreement.
(c) To the extent the same do not constitute Pipeline
Improvements
or Terminal Improvements, all fittings, cathodic protection
ground beds,
rectifiers, other cathodic or electric protection devices,
machinery, engines,
pipes, pipelines, valves, valve boxes, connections, gates,
scraper trap
extenders, telecommunication facilities and equipment (including
microwave and
other transmission towers), lines, wires, computer hardware,
fixed or mobile
machinery and equipment, vehicle refueling tanks, pumps, heating
and
non-pipeline pumping stations, fittings, tools, furniture and
metering equipment
(collectively, the "Equipment") that (i) are not by their nature
consumed in the
ordinary course of business such that they constitute Supplies
(as defined in
Section 1.1(e) below), (ii) are used, owned or leased by such
Transferor as of
the Closing Date, (iii) are used in connection with the
Operations, and (iv) in
the ordinary course of the Operations either (A) are permanently
located on the
Real Property for use primarily in connection with the ownership
and operation
of the Pipeline and Terminal Assets or the conduct of the
Operations, or (B)
have historically been part of such Transferor's centralized or
regional
maintenance operations for the Pipeline and Terminal Assets and
have been
allocated by such Transferor to such assets for purposes of
their divestiture.
All such items of Equipment (other than furnishings or office
equipment) having
a net book value of $10,000 or more as of the close of the most
recent fiscal
quarter ended at least one month prior to the date of this
Agreement are
identified on Transferor Disclosure Schedule 1.1(c).
(d) All Rolling Stock listed on Transferor Disclosure
Schedule
1.1(d).
(e) All inventories of spare parts intended to be consumed in
the
ordinary course of the ownership and operation of the Pipeline
and Terminal
Assets or the conduct of the Operations, maintenance, shop and
office supplies,
and other similar items of tangible personal property on hand as
of the Closing
and intended to be consumed in the ordinary course of the
ownership and
operation of the Pipeline and Terminal Assets or the conduct of
the Operations,
as well as chemicals or drag reducing agents, if any, on hand
(the "Supplies").
(f) To the extent assignable, all permits, licenses,
certificates,
authorizations, registrations, Orders, waivers, variances,
exemptions,
franchises and approvals granted by any
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
3
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Governmental Entity to such Transferor or its respective
predecessors in
interest in connection with the Operations, including those set
forth in Seller
Disclosure Schedule 1.1(f).
(g) Such records and documents relating to the ownership,
condition or operation of the Pipeline and Terminal Assets as
the parties may
determine pursuant to Section 2.6(c) to be a part of the
Pipeline and Terminal
Assets (the "Records"); provided, however, that such Transferor
shall be
entitled to retain a copy of any Records and that the Records
shall not include
any records or documents that are covered by the attorney-client
privilege or
work product doctrine.
(h) Subject to Section 5.7, all rights under (i) Contracts
and
other legally binding rights and obligations of such Transferor
relating
primarily to the conduct of the Operations and set forth in
Transferor
Disclosure Schedule 1.1(h) and (ii) Contracts relating primarily
to the conduct
of the Operations and entered into by such Transferor after the
date of this
Agreement in the ordinary course of business and in accordance
with the terms
and conditions of this Agreement, but excluding those Contracts
constituting
Leases or Easements (collectively, the "Assumed Contracts").
(i) The trademarks, trademark applications, trademark
registrations, trade names and service marks described in
Transferor Disclosure
Schedule 1.1(i), together with the goodwill associated therewith
and all rights
deriving therefrom (collectively, the "Trademarks").
(j) The registered copyrights or unregistered copyrights and
all
rights deriving therefrom described in Transferor Disclosure
Schedule 1.1(j)
(collectively, the "Copyrights").
(k) The patents, patent applications and other patent rights
described in Transferor Disclosure Schedule 1.1(k)
(collectively, the
"Patents").
(l) The software (other than standard off-the-shelf
software),
unpatented formulas, know-how, inventions, discoveries, trade
secrets,
improvements, web sites, domain names and other technology
described in
Transferor Disclosure Schedule 1.1(l) and all rights deriving
therefrom
(together with the Trademarks, Copyrights and Patents, the
"Intellectual
Property").
(m) All goodwill related to the Operations, if any.
(n) All rights under manufacturers' and vendors' warranties
relating to items included in the Operations and all rights
against third
parties relating to items included in the Operations.
(o) Any and all other rights, titles and interests of such
Transferor in any and all other properties and assets (whether
real, personal or
mixed, tangible or intangible), used or held for use primarily
in connection
with the Operations.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
4
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1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in
this Agreement, each Transferor shall retain all of its right,
title and
interest in and to, and there shall be excluded from the
contribution, transfer,
assignment and delivery of the Contributed Assets to Newco 1
hereunder, the
following assets and properties (collectively, the "Excluded
Assets"):
(a) All rights under this Agreement and the Ancillary
Documents.
(b) All cash, accounts receivable, pre-paid expenses, bank
accounts, cash equivalents and other similar types of
investments, certificates
of deposit, U.S. Treasury bills and other marketable
securities.
(c) (i) The names or marks "Alon," "Alon USA," "Fina," and
any
variations or derivations thereof, and (ii) any logo, service
mark, copyright,
trade name or trademark of or associated with such Transferor or
any of its
affiliates, not used or held for use primarily in connection
with the
Operations.
(d) Tangible personal property located at the Real Property
that
is (i) owned (or leased from third parties) by contractors or
service providers
doing work or providing services at the Real Property or (ii)
owned (or leased
from third parties) by employees of such Transferor.
(e) Improvements, fixtures, equipment and tangible personal
property located on any easement, right-of-way, lease, license
or similar land
use right which encumbers the Real Property insofar as such
improvements,
fixtures, equipment and tangible personal property are owned (or
leased from
third parties) by the holder of such easement, right-of-way,
lease, license or
similar land use right which encumbers the Real Property.
(f) Improvements, fixtures and items of equipment and
tangible
personal property located on the Real Property insofar as such
improvements,
fixtures, equipment and tangible personal property are owned (or
leased from
third parties) by such Transferor or any affiliate thereof and
are not used or
held for use primarily in connection with the Operations,
including such of the
foregoing as are described in Transferor Disclosure Schedule
1.2(f).
(g) All crude oil, refined petroleum products or other
petroleum
or petrochemical products.
(h) Any refund, rebate, credit or similar claim for Taxes paid
by
such Transferor, whether known or unknown on the Closing Date,
relating to the
Operations for any period or portion thereof ending prior to the
Closing Date.
(i) Any refund, rebate, credit or similar claim relating to
an
Excluded Asset or Retained Liability, whether known or unknown
on the Closing
Date.
(j) All claims, causes of action, choses in action, rights
of
recovery and rights of set off of any kind against any person
arising out of or
relating to (i) the Operations for any period or portion thereof
ending prior to
the Closing Date, (ii) any Excluded Asset, or (iii) any
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
5
<PAGE>
Retained Liability; provided that to the extent that any of the
foregoing arise
out of or relate to an Assumed Liability and are not otherwise
expressly
identified as an Excluded Asset in this Section 1.2 (including
in any Transferor
Disclosure Schedule relating to this Section 1.2), such shall
not be an Excluded
Asset but shall rather be part of the Contributed Assets.
(k) Subject to Section 2.4 and Section 5.8, all rights under
(i)
the insurance policies of such Transferor (including all claims
and other rights
thereunder or relating thereto with respect to the Contributed
Assets and the
Excluded Assets) and (ii) any premium returns or refunds or
other amounts
associated with any tail policy, COBRA policy or other policy
(whether in
existence on the date of this Agreement or hereafter purchased
by such
Transferor) relating to the provision of COBRA benefits or other
benefits to the
employees of such Transferor (or any subgroup thereof).
(l) Any other properties and assets (real, personal, mixed,
tangible or intangible) which are described in Transferor
Disclosure Schedule
1.2(l).
1.3 ASSUMED LIABILITIES; RETAINED LIABILITIES.
(a) Assumed Liabilities. Subject to Section 1.3(b) and
Section
2.5, at the Closing, each Transferor shall assign to Newco 1 and
Newco 1 shall
assume and thereafter pay, perform and discharge when due the
following
liabilities, obligations and commitments of such Transferor
(collectively, the
"Assumed Liabilities"):
(i) all liabilities, obligations and commitments of such
Transferor accruing with respect to periods commencing on and
after the
Effective Time under the Assumed Contracts, Leases and Easements
and which
relate solely to the performance of the Assumed Contracts,
Leases and Easements
after the Effective Time; and
(ii) except for liabilities, obligations and commitments
described in Section 1.3(a)(i), all other liabilities,
obligations and
commitments occurring, arising out of or related to the
ownership, use,
construction, maintenance or operation of the Contributed Assets
on and after
the Effective Time, including all liabilities, obligations and
commitments
incurred or imposed as a result of any event or occurrence
(including any
injury, death or damage to person or property of a third party,
or any claim for
repair, improvement, modification, replacement or maintenance of
any Contributed
Asset) on or after the Effective Time to the extent arising out
of or
attributable to the ownership or use of any portion of the
Contributed Assets on
or after the Effective Time; provided that in no event shall the
foregoing
include any liability, obligation, or commitment to the extent
that in respect
thereof any Transferee Indemnified Party has the right to seek
indemnification
from any Alon Party pursuant to Section 9.1(a)(ii), 9.1(a)(iii)
or 9.1(a)(iv) of
this Agreement or the terms of the Environmental Agreement.
(b) Retained Liabilities. Subject to Section 2.5, Newco 1 does
not
assume or agree to pay, honor, satisfy, discharge or perform,
and shall not be
deemed by virtue of the execution and delivery of this Agreement
or any
Ancillary Document or as a result of the consummation of the
transactions
contemplated hereby or thereby, to have assumed, or to have
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
6
<PAGE>
agreed to pay, honor, satisfy, discharge or perform, any
liability of any
Transferor (other than the Assumed Liabilities), whether primary
or secondary,
direct or indirect, known or unknown, fixed, accrued or
contingent, existing
prior to the Effective Time (the "Retained Liabilities"),
including the
following:
(i) any liability of any Transferor not specifically assumed
pursuant to Section 1.3(a);
(ii) any liability arising prior to the Effective Time out
of
any breach by any Transferor of any provisions of any Assumed
Contract,
including liabilities arising out of any Transferor's failure to
perform any
Assumed Contract in accordance with its terms prior to the
Effective Time;
(iii) any liability arising out of any breach by any
Transferor of any provisions of any Contract (other than an
Assumed Contract and
other than as described in Section 1.3(b)(ii)), including
liabilities arising
out of any Transferor's failure to perform any Contract (other
than an Assumed
Contract and other than as described in Section 1.3(b)(ii)) in
accordance with
its terms;
(iv) any liability of any Transferor under any Employee
Benefit Plan or Benefit Arrangement arising from the operation
of such
Transferor's businesses; (v) any liability for any Taxes payable
with respect to
the Contributed Assets or the Operations for any period or
portion thereof
ending on or prior to the Closing Date;
(vi) any liability under or in connection with any Excluded
Assets;
(vii) any liability with respect to (A) any employees or any
collective bargaining representatives of any employees, agents
or independent
contractors, in each case incurred while such person was
employed by or
affiliated with any Transferor or any of its respective
affiliates, whether or
not such employees, collective bargaining representatives,
agents or independent
contractors are employed by or are affiliated with Newco 1 after
the Effective
Time, (B) any Laws relating to plant closings, mass layoffs or
employment
termination occurring at or prior to the Effective Time, (C) any
liabilities
arising under or with respect to any collective bargaining
agreement or Employee
Plans to which any Transferor or any of its respective
affiliates is or was a
party prior to the Effective Time, (D) any liabilities arising
at or prior to
the Effective Time for wages, salaries, severance (and notice
thereof),
termination pay, vacation, individual or group life or health
insurance,
property or personal injury claims or termination claims, and
(E) any liability
arising on or prior to the Effective Time with respect to any
employees of any
Transferor, applicants for employment with such Transferor or
collective
bargaining agents arising from any unfair labor practice
charges, charges of
employment discrimination, other federal and state
administrative charges of any
kind, workers' compensation claims, arbitration awards, claims
under the WARN
Act, claims for severance pay or other claims or causes of
action of any kind;
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
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(viii) any liability of any Transferor arising out of or
incurred in connection with the negotiation, preparation and
execution of this
Agreement and the Ancillary Documents and the transactions
contemplated hereby
and thereby and fees and expenses of any and all counsel,
accountants and other
experts or advisers;
(ix) any intercompany liability between any Transferor and
any affiliate thereof;
(x) any liabilities retained by any Transferor under Section
6.2;
(xi) any accounts payable or other payables due and owing by
any Transferor;
(xii) any liability resulting from any Action, whether or
not
pending or threatened prior to the Effective Time, arising out
of or relating to
any other Retained Liability specified in this Section
1.3(b);
(xiii) any liability arising under any Contract that is not
an
Assumed Contract; and
(xiv) any fines or penalties imposed on any Transferor as a
result of the Notice of Probable Violation disclosed on
Transferor Disclosure
Schedule 3.4, Item 1.a.
(c) Environmental Liabilities. Notwithstanding anything to
the
contrary in this Section 1.3, the parties expressly acknowledge
and agree that
this Section 1.3 shall not apply to Environmental Costs and
Liabilities, which
shall be exclusively governed by the provisions of the
Environmental Agreement.
1.4 CONTRIBUTION TO NEWCO 2. Effective as of immediately
following the
contribution of the Contributed Assets to and the assumption of
the Assumed
Liabilities by Newco 1 as required by Sections 1.1 and 1.3
hereof, each
Transferor shall contribute, transfer, assign and convey to
Newco 2, as a
capital contribution, all of the Newco 1 Equity Interests held
beneficially and
of record by such Transferor, free and clear of any Liens and
Encumbrances.
1.5 CONTRIBUTION TO TRANSFEREE. Effective as of immediately
following the
contribution of the Newco 1 Equity Interests to Newco 2 as
required by Section
1.4 hereof and contemporaneously with the receipt by Newco 2 of
the
consideration set forth in Section 1.7 hereof, Newco 2 shall, by
virtue of this
Agreement and without any further action by any party,
contribute, transfer,
assign and convey to Transferee, as a capital contribution, all
of the Newco 1
Equity Interests, free and clear of any Liens and
Encumbrances.
1.6 CONTRIBUTIONS TO HEP OPCO AND CONVERSION OF NEWCO 1.
(a) Immediately following the contribution of the Newco 1
Equity
Interests to Transferee as required by Section 1.5 hereof,
Transferee shall
contribute, transfer, assign and convey to HEP Opco, as a
capital contribution,
the Newco 1 Equity Interests.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
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(b) Immediately following the contribution of the Newco 1
Equity
Interests to HEP Opco as required by Section 1.6(a) hereof, HEP
Opco shall
contribute, transfer, assign and convey to HEP Pipeline, as a
capital
contribution, a portion of the Newco 1 Equity Interests.
(c) Immediately following the contribution of the Newco 1
Equity
Interests to HEP Pipeline as required by Section 1.6(b) hereof,
HEP shall cause
HEP Opco and HEP Pipeline to convert Newco 1 into a Texas
limited partnership
with HEP Opco being the limited partner thereof and HEP Pipeline
being the
general partner thereof.
1.7 CONSIDERATION.
(a) The aggregate consideration (the "Aggregate
Consideration")
for the contribution of Newco 1 shall consist of (i) the Cash
Consideration and
(ii) the Unit Consideration.
(b) The Closing Cash Consideration shall be paid by Transferee
at
the Closing by wire transfer of immediately available funds to
the account
specified by Newco 2 in writing at least three business days
prior to the
Closing Date.
(c) The Unit Consideration shall be paid to Newco 2 at the
Closing
by delivery of the Certificates.
1.8 CONTRIBUTION TO PARTNERSHIP. It is the express intent of
Transferee
and the Transferor Parties that the transactions contemplated by
Section 1.5
hereof constitute a tax free contribution to a partnership under
Section 721 of
the Code. The Transferor Parties and Transferee shall negotiate
in good faith a
determination of the fair market value of each of the respective
Contributed
Assets as soon as reasonably practicable following the date of
this Agreement
and, in any event, no later than 60 days after the Closing. If
the determination
is not agreed upon within 60 days after the Closing, then
Transferee and the
Transferor Parties agree that the determination shall be made
based upon an
asset valuation supplied by an independent accounting firm or
appraiser, in
either case with substantial experience in valuing petroleum
product pipelines
and terminals and mutually acceptable to Transferee and the
Transferor Parties.
The cost of such appraisal shall be shared equally by Transferee
and the
Transferor Parties. The appraisal, if required, shall be
procured and provided
to Transferee and the Transferor Parties within 120 days after
the Closing.
Transferee and the Transferor Parties agree that the
determination of the fair
market value of the Contributed Assets pursuant to this Section
1.8 shall be
used for purposes of applying Section 704(c) of the Code to the
Contributed
Assets, and that the variation between the fair market value of
the Contributed
Assets and the adjusted tax basis of the Contributed Assets will
be taken into
account under the "remedial method" as described in Treasury
Regulation Section
1.704-3(d). Transferee and the Transferor Parties further agree
that they shall
report the federal, state, municipal, local and other Tax
consequences of the
contribution and acquisition hereunder in a manner consistent
with this Section
1.8 and they shall not take any position inconsistent therewith
in connection
with any Tax return, refund claim, litigation or otherwise. The
parties hereby
acknowledge that none of the parties has made, or is making in
this Agreement,
any representation to any other party concerning any of the Tax
effects or
consequences of the transactions provided for in this Agreement
and that each
party has obtained
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
9
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independent Tax advice with respect thereto and upon which it
has solely relied;
provided that this sentence shall not limit the obligations of
any party hereto
with respect to any covenants of such party expressly set forth
herein or the
remedies of any party hereto with respect to a failure to comply
with any such
covenants.
ARTICLE II
CLOSING
2.1 CLOSING. The closing of the transactions contemplated hereby
(the
"Closing") shall be held at the offices of Vinson & Elkins
L.L.P., 3700 Trammell
Crow Center, 2001 Ross Avenue, Dallas, Texas 75201 at 10:00 a.m.
on the fifth
business day following the satisfaction or waiver of the
conditions set forth in
Article VII (other than those conditions relating to execution
of the Ancillary
Documents, which will be satisfied at the Closing), or such
other place, time or
date as may be agreed upon by the parties; provided, however,
that Transferee,
by means of prior notice to Transferors, shall have the right
from time to time
to postpone the date for the Closing to such later date as may
be specified in
such notice; and provided, further, that Transferee may not
postpone such date
beyond the later of (i) February 28, 2005 or (ii) the first
business day after
the date that the consents contemplated by Section 5.13 are
actually obtained by
the Alon Parties. The date on which the Closing takes place is
referred to
herein as the "Closing Date." The Closing shall be deemed to be
effective as of
12:01 a.m. on the Closing Date (the "Effective Time").
2.2 DELIVERIES BY THE ALON PARTIES. At the Closing, the
applicable Alon
Parties shall deliver, or cause to be delivered, to Transferee
the following:
(a) A special warranty deed from each Transferor substantially
in
the form of Exhibit A attached hereto (the "Special Warranty
Deeds"), conveying
the Fee Land and all appurtenances thereto, including any
Pipeline Improvements
or Terminal Improvements located on such Fee Land, as
applicable, held by such
Transferor to Newco 1, subject only to Permitted Liens.
(b) A conveyance, assignment, bill of sale, and shared
easement
agreement from each Transferor substantially in the form of
Exhibit B attached
hereto (the "Pipeline Conveyance"), conveying all Real Property
(other than the
Fee Land and all appurtenances thereto, including any Pipeline
Improvements or
Terminal Improvements located on such Fee Land) held by such
Transferor to Newco
1, subject only to Permitted Liens and the reservation of an
easement for
Transferor for the operation and maintenance of a parallel
pipeline with respect
to Easements designated as "Shared" on Annex A-5, as more
specifically provided
therein.
(c) A bill of sale and assignment from each Transferor
substantially in the form of Exhibit C attached hereto (the
"Bills of Sale"),
conveying to Newco 1 all of the Contributed Assets held by such
Transferor
(other than the Real Property), subject only to Permitted
Liens.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
10
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(d) A counterpart of the pipelines and terminals agreement
substantially in the form attached as Exhibit D (the "Pipelines
and Terminals
Agreement"), duly executed by Alon LP.
(e) A counterpart of the environmental agreement substantially
in
the form attached as Exhibit E (the "Environmental Agreement"),
duly executed by
each Alon Party listed as a signatory thereto.
(f) A counterpart of the right of first offer agreement
substantially in the form attached as Exhibit F (the "Right of
First Offer
Agreement"), duly executed by Alon USA.
(g) A counterpart of the assignment and assumption
agreement,
substantially in the form attached as Exhibit G (the "Assignment
and Assumption
Agreement"), duly executed by each Transferor and Newco 1.
(h) All Consents required to be obtained by the Alon Parties
pursuant to Section 7.2(e).
(i) A counterpart of the services agreement, substantially in
the
form attached as Exhibit H (the "Services Agreement"), duly
executed by Alon LP.
(j) A certificate of non-foreign status substantially in the
form
specified in Treasury Regulation 1.1445-2(b)(2)(iii) for each
Transferor.
(k) A commitment for an TLTA Owner's Policy of Title Insurance
for
each tract of Terminal Fee Land as set forth in Annex B-1,
issued in the name of
Newco 1 at the Transferor Parties' cost and expense by the Title
Company in the
amounts set forth on Transferor Disclosure Schedule 2.2(k) for
each tract of
Terminal Fee Land, subject only to the standard printed
exceptions set out on a
standard form Owner's Policy of Title Insurance issued by the
Title Company and
the Permitted Liens applicable to each such tract of Terminal
Fee Land, provided
that Transferee may at its sole cost and expense obtain any
endorsements or
extended coverage which may be available, including but not
limited to any
endorsement to delete survey exceptions or to provide coverage
to any lender of
Transferee.
(l) The Alon Party Closing Certificate, duly executed by an
executive officer of each Transferor Party.
(m) A counterpart of the subordination, non-disturbance and
attornment agreement, substantially in the form attached as
Exhibit I, with
Transferee's senior secured lenders at Closing, duly executed by
Alon LP.
(n) An executed perpetual easement agreement for the benefit
of
Transferee and its successors and assigns, granting an easement
of at least 50
feet in width across Transferor's Hawley Terminal for operation
and maintenance
of the Trust Pipelines crossing such terminal property, which
easement agreement
shall include rights of ingress and egress as reasonably
necessary for the
operation and maintenance of said Pipelines.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
11
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(o) Such other documents in a form and substance reasonably
acceptable to Transferee that (i) are duly executed by each
Transferor and
reflect the contribution, transfer, assignment and conveyance
required by
Section 1.4 hereof and (ii) are duly executed by Newco 2 and
reflect the
contribution, transfer, assumption and conveyance required by
Section 1.5
hereof.
2.3 DELIVERIES BY TRANSFEREE. At the Closing, Transferee shall
deliver, or
cause to be delivered, to Alon USA the following:
(a) After the receipt of the contribution required by Section
1.5
hereof, a counterpart of the Pipelines and Terminals Agreement,
duly executed by
Transferee.
(b) After the receipt of the contribution required by Section
1.5
hereof, a counterpart of the Environmental Agreement, duly
executed by
Transferee.
(c) After the receipt of the contribution required by Section
1.5
hereof, a counterpart of the Right of First Offer Agreement,
duly executed by
Transferee.
(d) After the receipt of the contribution required by Section
1.5
hereof, a counterpart of the Services Agreement, duly executed
by Transferee.
(e) An amendment to the Transferee Party Organizational
Documents,
in substantially the form attached as Exhibit J (the "Class B
Amendment").
(f) Certificates representing the Unit Consideration and issued
in
the name of Newco 2 or its designee (the "Certificates").
(g) The Transferee Closing Certificate, duly executed by an
executive officer of Transferee.
(h) After the receipt of the contribution required by Section
1.5
hereof, a counterpart of the mortgage and deed of trust,
substantially in the
form attached as Exhibit K, duly executed by Newco 1.
(i) A counterpart of the documents effecting the
contribution
required by Section 1.6(b) hereof and the conversion of Newco 1
into a limited
partnership as required by Section 1.6(b) hereof.
2.4 CASUALTY AND CONDEMNATION.
(a) Material Casualty. Transferors shall notify Transferee
in
writing on the next business day, and in no event later than 24
hours, if, after
the date of this Agreement and prior to the Closing, all or any
part of a
Pipeline and Terminal Asset is damaged or destroyed by fire or
other casualty
and such damage or destruction, individually or in the
aggregate, constitutes a
Material Damage or Condemnation. Transferee shall have the
option, exercisable
within ten days after receipt of such written notice from
Transferors (but
before Closing), to elect
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
12
<PAGE>
by written notice to Transferors to terminate this Agreement;
provided, however,
that such election by Transferee to terminate this Agreement
shall not be
effective if:
(i) such damaged or destroyed Pipeline and Terminal Asset
can be repaired or replaced to the state in which such asset
existed immediately
preceding such damage or destruction within 120 days from the
date of
Transferors' receipt of Transferee's notice of termination;
and
(ii) within ten days after Transferors' receipt of
Transferee's notice of termination, Transferors give Transferee
written notice
of Transferors' election to repair or replace such damaged or
destroyed Pipeline
and Terminal Asset at Transferors' sole expense (including any
insurance
proceeds attributable thereto under insurance policies of
Transferors or any of
their respective affiliates).
If Transferors elect to repair or replace such damaged Pipeline
and Terminal
Asset pursuant to the foregoing, Transferors shall be obligated
to proceed in
good faith to diligently repair or replace such damaged or
destroyed Pipeline
and Terminal Asset to the state in which such asset existed
immediately
preceding such damage or destruction and the Closing Date shall
be extended
until the third business day following the date on which
Transferors and
Transferee mutually agree that such damaged Pipeline and
Terminal Asset has been
so repaired or replaced, such mutual agreement not to be
unreasonably withheld,
conditioned or delayed; provided, however, this Agreement shall
terminate, at
Transferee's option, if such damaged asset is not so repaired or
replaced by the
earlier of (x) 120 days from the date of Transferor's receipt of
Transferee's
aforesaid notice of termination or (y) the Termination Date.
(b) Material Condemnation. Transferors shall notify Transferee
in
writing on the next business day, and in no event later than 24
hours, if, after
the date of this Agreement and prior to the Closing, all or any
part of a
Pipeline and Terminal Asset is taken in condemnation or if
proceedings for such
purpose shall be pending, and such taking, individually or in
the aggregate,
constitutes or would constitute a Material Damage or
Condemnation. Transferee
shall have the option, exercisable within ten days following
receipt of such
written notice from Transferors (but before Closing), to elect
by written notice
to Transferors to terminate this Agreement.
(c) Other Casualty and Condemnation. If after the date of
this
Agreement and prior to the Closing:
(i) all or any part of a Pipeline and Terminal Asset shall
be damaged or destroyed by fire or other casualty and either (A)
such damage or
destruction does not, individually or in the aggregate,
constitute a Material
Damage or Condemnation or (B) Transferee does not elect to
terminate this
Agreement pursuant to Section 2.4(a); or
(ii) all or any part of a Pipeline and Terminal Asset shall
be taken in condemnation or under the right of eminent domain or
if proceedings
for such purposes shall be pending and either (A) such taking
does not,
individually or in the aggregate, constitute a
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
13
<PAGE>
Material Damage or Condemnation or (B) Transferee does not elect
to terminate
this Agreement pursuant to Section 2.4(b);
then this Agreement shall remain in full force and effect
notwithstanding any
such damage, destruction, taking or proceeding or the threat
thereof.
(d) Insurance Proceeds, Condemnation Awards or Other Proceeds.
To
the extent insurance proceeds (excluding any insurance proceeds
payable through
self-insurance programs of Transferors or their respective
affiliates),
condemnation awards or other payments are not committed, used or
applied by
Transferors prior to the Closing Date to repair, restore or
replace such
damaged, destroyed or taken Pipeline and Terminal Asset,
Transferors shall at
the Closing (i) assign to Transferee Transferors' rights to
receive all
insurance or condemnation proceeds, awards or payments
(excluding any insurance
proceeds payable through self-insurance programs of Transferors
or their
respective affiliates) owed to Transferors in respect of such
Pipeline and
Terminal Asset by reason of such damage, destruction or taking,
less any
reasonable costs and expenses incurred by Transferors in
collecting same or in
connection with such proceedings or the threat thereof, and (ii)
pay to
Transferee all insurance or condemnation proceeds, awards or
payments (excluding
any insurance proceeds payable through self-insurance programs
of Transferors or
their respective affiliates) theretofore paid to Transferors in
respect of such
Pipeline and Terminal Asset by reason of such damage,
destruction or taking,
less any reasonable costs and expenses incurred by Transferors
in collecting
same or in connection with such proceedings or the threat
thereof. Further, to
the extent Transferors do not repair, restore or replace any
such damaged or
destroyed Pipeline and Terminal Asset at least substantially to
the condition in
which such asset existed prior to such damage or destruction
(taking into
account the age of any individual asset and its use, if any, in
the Operations
immediately prior to such damage or destruction), and any
insurance proceeds
paid to Transferee pursuant to Section 2.4(c) are insufficient
to cover the
diminution in value of such damaged or destroyed Pipeline and
Terminal Asset
resulting from such damage or destruction and Transferors'
failure to repair,
restore or replace the same as provided above, then the Cash
Consideration shall
be reduced by the amount of such deficiency as shall be mutually
agreed by
Transferee and Transferors in good faith (such amount, the
"Deficiency Amount").
2.5 PRORATIONS. On the Closing Date, or as promptly as
practicable
following the Closing Date, but in no event later than 60
calendar days
thereafter, the real and personal property Taxes, water, gas,
electricity and
other utilities, local business or other license fees to the
extent assigned and
other similar periodic charges payable with respect to the
Contributed Assets
shall be prorated between Transferee, on the one hand, and
Transferors, on the
other hand, effective as of the Effective Time with Transferors
being
responsible for amounts related to the period prior to but
excluding the
Effective Time and Transferee being responsible for amounts
related to the
period at and after the Effective Time. The Parties shall take
all actions
necessary to cause utility meter readings to be determined as of
the Effective
Time or as close thereto as reasonably practicable. If the final
real property
Tax rate or final assessed value for the current Tax year is not
established by
the Closing Date, the prorations shall be made on the basis of
the rate or
assessed value in effect for the preceding Tax year and shall be
adjusted when
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
14
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the exact amounts are determined. All such prorations shall be
based upon the
most recent available assessed value available prior to the
Closing Date.
2.6 CLOSING COSTS; TRANSFER TAXES AND FEES.
(a) Allocation of Costs. Transferee shall pay the cost of
all
sales, transfer and use Taxes arising out of the transfer of the
Contributed
Assets pursuant to this Agreement and, subject to Section
2.2(k), all costs and
expenses (including recording fees and real estate transfer
Taxes and real
estate transfer stamps) incurred in connection with obtaining or
recording title
to the Contributed Assets. The sales, use and transfer Tax
returns required by
reason of said transfer shall be timely prepared and filed by
the party normally
obligated by Law or regulation to make such filing. Transferors
and Transferee
agree to cooperate with each other in connection with the
preparation and filing
of such returns, in obtaining all available exemptions from such
sales, use and
transfer Taxes, and in timely providing each other with resale
certificates and
any other documents necessary to satisfy any such
exemptions.
(b) Reimbursement. If Transferee, on the one hand, or any
Transferor, on the other hand, pays any Tax agreed to be borne
by the other
party under this Agreement, such other party shall promptly
(within five
business days) reimburse the paying party for the amounts so
paid. If any party
receives any Tax refund or credit applicable to a Tax paid by
another party
hereunder, the receiving party shall promptly (within five
business days) pay
such amounts to the party entitled thereto.
(c) Agreement Regarding Records. Prior to Closing, Transferee
and
Transferors shall identify those records and documents that
shall constitute a
part of the Records. On or before the 60th day following the
Closing,
Transferors shall provide originals of the applicable records
and documents to
Transferee to the extent Transferors or their respective
affiliates have such
originals in their possession. Transferors shall deliver any
records and
documents that constitute a part of the Records that are
discovered by
Transferors to be in their possession or the possession of any
of their
respective affiliates after the date on which the Records are
delivered to
Transferee pursuant to the provisions hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR PARTIES
The Alon Parties, jointly and severally, hereby represent and
warrant to
Transferee as follows:
3.1 ORGANIZATION. Each Alon Party and Newco 1 is an entity duly
organized,
validly existing and in good standing under the laws of its
state of
organization and has the requisite power to own, lease and
operate its
properties and assets and to carry on its business as now being
conducted. Each
Alon Party and Newco 1 is duly qualified to do business and in
good standing as
a foreign entity in each of the states in which it has assets or
conducts
activities which require it to be so qualified or in good
standing, except where
the failure to be so qualified or in good standing could not
reasonably be
expected to have a Material Adverse Effect. The Alon Parties
have furnished to
Transferee a true, correct and complete copy of the
organizational
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
15
<PAGE>
documents for each Alon Party and Newco 1 (collectively, the
"Alon Party
Organizational Documents"). The Alon Party Organizational
Documents are in full
force and effect and constitute all of the organizational and
governing
documents for each Alon Party and Newco 1. There are no
proceedings or actions
pending or contemplated to dissolve any Alon Party or Newco
1.
3.2 AUTHORIZATION. Each Alon Party and Newco 1 has full power
and
authority to (a) execute and deliver this Agreement and the Alon
Ancillary
Documents to be executed and delivered by such Alon Party or
Newco 1 and (b)
consummate the transactions contemplated hereby and thereby.
Each Alon Party and
Newco 1 has taken all action required by its applicable Alon
Party
Organizational Documents to authorize (i) the execution,
delivery and
performance of this Agreement and the applicable Alon Ancillary
Documents and
(ii) the consummation of the transactions contemplated hereby
and thereby. This
Agreement has been duly and validly executed and delivered by
each Alon Party
and Newco 1 and is a legal, valid and binding obligation of such
Alon Party or
Newco 1, enforceable against such Alon Party or Newco 1 in
accordance with its
terms, except as enforcement may be limited by applicable
bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar
Laws now or hereafter in effect relating to creditors' rights
generally and
general principles of equity (regardless of whether
enforceability is considered
in a proceeding at law or in equity). All Alon Ancillary
Documents to be
executed and delivered by each Alon Party and Newco 1 shall, on
the Closing
Date, be duly and validly executed by each Alon Party and Newco
1, as
applicable, and be legal, valid and binding obligations of such
Alon Party and
Newco 1, enforceable against such Alon Party and Newco 1 in
accordance with
their respective terms, except as enforcement may be limited by
applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or
other similar Laws now or hereafter in effect relating to
creditors' rights
generally and general principles of equity (regardless of
whether enforceability
is considered in a proceeding at law or in equity).
3.3 NO CONFLICTS OR VIOLATIONS; NO CONSENTS OR APPROVALS
REQUIRED. Except
as set forth in Transferor Disclosure Schedule 3.3, the
execution, delivery and
performance by each Alon Party and Newco 1 of this Agreement and
the other Alon
Ancillary Documents to which such Alon Party or Newco 1 is a
party do not, and
the consummation of the transactions contemplated hereby and
thereby will not,
(a) violate, conflict with, or result in any breach of any
provision of the Alon
Organizational Documents, (b) violate, conflict with or result
in a violation or
breach of, or constitute a default (with or without due notice
or lapse of time
or both) under, any of the material terms, conditions or
provisions of any
Material Contract, or (c) subject to obtaining the Consents or
making the
registrations, declarations or filings set forth in the next
sentence, violate
in any material respect any applicable Law binding upon any Alon
Party or Newco
1 or the Pipeline and Terminal Assets or the Operations. No
Consent of any
Governmental Entity or any other person is required for any Alon
Party or Newco
1 in connection with the execution, delivery and performance of
this Agreement
and the Alon Ancillary Documents to which such Alon Party or
Newco 1 is a party
or the consummation of the transactions contemplated hereby or
thereby, except
as set forth in Transferor Disclosure Schedule 3.3 and except
for (i)
requirements under the HSR Act, (ii) Environmental Permits and
(iii)
Post-Closing Consents.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
16
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3.4 COMPLIANCE WITH LAWS AND PERMITS. Except as set forth on
Transferor
Disclosure Schedule 3.4, (a) Transferors hold, and upon the
contributions by the
Transferors, Newco 1 will hold, all permits, licenses,
variances, exemptions,
orders, franchises and approvals of all Governmental Entities
necessary for the
lawful ownership or material to the operation of the Pipeline
and Terminal
Assets and the conduct of the Operations (the "Permits") and (b)
the Operations
comply with, and the Transferors and their respective affiliates
have owned and
operated the Pipeline and Terminal Assets and conducted the
Operations in
material compliance with, all applicable Laws and Permits.
Except as set forth
on Transferor Disclosure Schedule 3.4, no investigation or
review by any
Governmental Entity with respect to any Transferor or any of its
affiliates and
relating to the Pipeline and Terminal Assets or the Operations
is pending or, to
the knowledge of the Alon Parties, threatened which, if resolved
adversely to
such Transferor or any of its affiliates, could reasonably be
expected to have a
Material Adverse Effect. For purposes of this Section 3.4, the
term "applicable
Laws," as used in clause (a) above, shall not include any
Environmental Laws or
the subject matter of Section 3.20.
3.5 ABSENCE OF LITIGATION. Except as set forth on Transferor
Disclosure
Schedule 3.5, there is no Action pending or, to the knowledge of
the Alon
Parties, threatened against any Transferor or any its affiliates
by or before
any arbitrator or Governmental Entity and relating to or against
the Pipeline
and Terminal Assets or the Operations or challenging the
transactions
contemplated hereby, nor are there any reviews or investigations
relating to any
Transferor or any of its affiliates and the Pipeline and
Terminal Assets or the
Operations pending or, to the knowledge of the Alon Parties,
threatened by or
before any arbitrator or any Governmental Entity.
3.6 OPERATING STATEMENTS; ABSENCE OF CHANGES.
(a) Operating Statements. Transferors have provided to
Transferee
true, correct and complete copies of statements of operating
expenses and
throughput volumes for the operations of the Pipeline and
Terminal Assets for
the twelve months ended December 31, 2004, 2003 and 2002, and
property and
equipment ledgers, including Tax basis and Tax depreciation
information, for the
Contributed Assets which ledgers are in substantially the form
maintained by
Transferors or their respective affiliates in the ordinary
course of business
(collectively, the "Operating Statements"). The Operating
Statements (i) are
consistent in all material respects with the books and records
of Transferors or
their respective affiliates relating to the conduct of the
Operations, (ii)
reflect in all material respects on an accrual basis expenses
for the periods
indicated that were incurred in the operation of the Pipelines
and the Terminal
Assets, (iii) were prepared by management of Transferors or
their respective
affiliates in good faith and based upon reasonable judgments and
assumptions and
(iv) do not include or relate to any assets other than the
Contributed Assets.
Transferors do not maintain any financial statements specific to
the Contributed
Assets other than internally prepared monthly balance sheets and
statements of
income for management control areas consisting of individual
pipeline systems
and terminals.
(b) Absence of Changes. Since December 31, 2004, (i)
Transferors
and their respective affiliates have operated the Pipeline and
Terminal Assets
and conducted the Operations in the ordinary course of business
consistent with
past practice, (ii) Transferors and their respective affiliates
have not
incurred or suffered any change, circumstance, result,
effect,
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
17
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event or fact, which has had or could reasonably be expected to
have a material
adverse change on the Operations and (iii) there has not
occurred, and
Transferors and their respective affiliates have not incurred or
suffered, any
change, circumstance, result, effect, event or fact that could
reasonably be
expected to have a Material Adverse Effect.
(c) Conduct of Operations. Except as set forth in Transferor
Disclosure Schedule 3.6(c), from and after December 31, 2004,
nothing has
occurred that would have violated the terms of Sections 5.1(d),
5.1(i), 5.1(l)
and 5.1(m) hereof if the terms thereof had been in effect from
and after
December 31, 2004.
3.7 TITLE TO CONTRIBUTED ASSETS.
(a) Except as set forth on Transferor Disclosure Schedule
3.7(a),
Transferors have, and at the Closing Newco 1 shall receive and
own, good and
marketable title to the Fee Land and all of the Contributed
Assets that
constitute personal property and good and indefeasible title to
or valid
leasehold interests in all of the other Contributed Assets, in
each case free
and clear of any Liens, other than Permitted Liens.
(b) Each tract of Fee Land is owned in fee simple by the
applicable Transferor, subject only to the Permitted Liens, and
except as set
forth on Transferor Disclosure Schedule 3.7(b), none of the Fee
Land is subject
to any lease or other possessory interest of any person other
than the
applicable Transferor. Except for the Leases, and except as
described in
Transferor Disclosure Schedule 3.7(b), Transferors do not lease
any parcels,
tracts of land, buildings, fixtures or improvements that are
used or held for
use primarily in connection with the Operations.
(c) Except as set forth in Transferor Disclosure Schedule
3.7(c),
the Real Property constitutes all the parcels, tracts of land,
buildings,
fixtures and improvements that are used or held for use
primarily in connection
with the Operations.
(d) Except as set forth in Transferor Disclosure Schedule
3.7(d),
(i) other than Transferors, there are no parties in possession
of any portion of
the Real Property as lessees, subtenants or tenants at
sufferance or
trespassers; (ii) there is no pending, or to the knowledge of
the Alon Parties,
threatened condemnation, eminent domain or similar proceeding or
special
assessment affecting the Real Property, and (iii) to the
knowledge of the Alon
Parties, (A) there is no pending Action to modify or terminate
the present
zoning of the Real Property or any aspect thereof, and (B)
certificates of
occupancy and all other Permits, and any requisite certificates
of the local
board of fire underwriters (or other body exercising similar
functions), have
been issued, if required by any Governmental Entity, for each of
the
Improvements located on the Real Property and all such Permits
have been paid
for and are in full force and effect. Except as set forth on
Transferor
Disclosure Schedule 3.7(d), no commitments have been made to any
Governmental
Entity, utility company, school board, church or other religious
body or any
homeowners or homeowners' association, or any other
organization, group or
individual, relating to the Real Property that would impose an
obligation on
Transferee, its affiliates or their respective successors or
assigns to make any
contribution or dedications of money or land or to construct,
install or
maintain any improvements of a public or private nature on or
off of the Real
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
18
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Property. Except as set forth on Transferor Disclosure Schedule
3.7(d), since
December 31, 2004 the Improvements have been maintained in
accordance with
historical practices (but in no event at less than prudent
industry standards
and practices), other than deferred maintenance projects set
forth on Transferor
Disclosure Schedule 3.7(d) or deferred maintenance projects
that, individually
or in the aggregate, do not exceed $50,000. To the knowledge of
the Alon
Parties, the compliance in all respects of the Real Property and
all aspects
thereof with all applicable zoning and similar Laws does not
depend on, and no
Operating Permit for such real property depends on, any other
real property or
other rights appurtenant thereto.
(e) Each parcel of Real Property is adequately serviced by
all
public utilities and services, including electricity, water,
sewage and
telecommunications, to the extent necessary to continue the
operation of the
Contributed Assets located thereon consistent with operation by
the applicable
Transferor prior to the date of this Agreement.
(f) Except as provided in Transferor Disclosure Schedule
3.7(f),
(i) neither any Alon Party nor Newco 1 is a party to any
Contract regarding the
sale, conveyance, transfer, lease or disposition of any portion
of the Real
Property (except for this Agreement or as contemplated hereby);
(ii) there has
not been granted to any person and no person possesses, any
option to purchase
or right of first refusal to purchase any portion of the Real
Property; and
(iii) neither any Alon Party nor Newco 1 is a party to any
occupancy Contract,
lease or similar arrangement with respect to any portion of the
Real Property.
(g) Except as set forth in Transferor Disclosure Schedule
3.7(g),
(i) no Transferor is in material default under any Easement or
Lease to which it
is a party, nor to the knowledge of the Alon Parties, is there
any event or
circumstance that solely with the giving of notice or the lapse
of time or both
would constitute a material default under any such Easement or
Lease, (ii) there
are no easement gaps in the "Trust Pipeline" or the "River
Pipeline," and to the
knowledge of the Alon Parties, the "Fin-Tex Pipeline" and (iii)
the Easements
are in full force and effect and are sufficient to allow the
applicable
Transferor and Newco 1 to continue to operate the Pipelines
therein or thereon
(without interruption) as currently operated. All Pipelines are
located fully
within the land constituting or encumbered by the Pipeline
Easements. All
Easements and Leases represent valid, binding and enforceable
agreements of the
applicable Transferor and, to the knowledge of the Alon Parties,
each of the
parties thereto and there is no pending modification or
cancellation of same.
(h) The applicable Transferor has a valid and subsisting
leasehold
estate in and the right to quiet enjoyment of the real property
leased to it
under the Pipeline Leases and Terminal Leases for the full term
thereof, subject
to the Permitted Liens.
3.8 NEWCO 1 AND NEWCO 2.
(a) As of the date of this Agreement and as of immediately
prior
to the Closing, all of the issued and outstanding Newco 1 Equity
Interests and
Newco 2 Equity Interests are owned by the Transferors, free and
clear of all
Liens or Encumbrances and such Newco 1 Equity Interests shall
constitute all of
the issued and outstanding equity interests of Newco 1.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
19
<PAGE>
(b) Immediately following the contribution required by Section
1.4
hereof, Newco 2 shall receive legal and beneficial title to all
of the issued
and outstanding Newco 1 Equity Interests, free and clear of all
Liens and
Encumbrances.
(c) Immediately following the contribution required by Section
1.5
hereof, Transferee shall receive legal and beneficial title to
all of the issued
and outstanding Newco 1 Equity Interests, free and clear of all
Liens and
Encumbrances.
(d) Newco 1 has conducted no business or activity and has no
assets or liabilities other than its liabilities and obligations
under this
Agreement, and as of the Closing Newco 1 shall have no assets or
liabilities
other than the Contributed Assets, Assumed Liabilities and the
liabilities and
obligations under this Agreement which it shall hold immediately
following the
contribution required by Sections 1.1, 1.2 and 1.3 hereof.
3.9 CONTRACTS.
(a) True, correct and complete copies of all Assumed
Contracts have been delivered to Transferee. Except as disclosed
in Transferor
Disclosure Schedule 3.9(a), (i) each Assumed Contract is in full
force and
effect and constitutes a valid and binding agreement,
enforceable in accordance
with its terms, of the applicable Transferor and, to the
knowledge of the Alon
Parties, each other party thereto, (ii) neither the applicable
Transferor nor
any of its affiliates is in breach of or default, in any
material respect, under
any Assumed Contract involving or relating to any of the
Pipeline and Terminal
Assets, and (iii) to the knowledge of the Alon Parties, there
does not exist
under any provision of any Assumed Contract any event that, with
the giving of
notice or the lapse of time or both, would constitute such a
breach or default
by the applicable Transferor or any of its affiliates under such
contract.
Except as disclosed in Transferor Disclosure Schedule 3.9(a), no
other party to
any Assumed Contract is, to the knowledge of the Alon Parties,
in breach of or
default under such Assumed Contract in any material respect. No
Alon Party nor
any affiliate thereof has received any notice from any other
party to any
Assumed Contract that alleges any violation, breach or default
by any Transferor
of any Assumed Contract in any material respect.
(b) Assuming the Consents set forth on Transferor Disclosure
Schedule 3.3 are obtained prior to Closing, each Assumed
Contract shall not be
cancelable by the other party due to the consummation of the
transactions
contemplated hereby.
3.10 PROHIBITED PERSONS TRANSACTIONS. Each Alon Party and Newco
1 is
currently in compliance with, and shall at all times during the
term of this
Agreement (including any extension thereof) remain in compliance
with, the
regulations of the Office of Foreign Asset Control ("OFAC") of
the Department of
the Treasury (including those named on OFAC's Specially
Designated and Blocked
Persons List) and any statute, executive order (including the
September 24,
2001, Executive Order Blocking Property and Prohibiting
Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other
governmental action relating thereto.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
20
<PAGE>
3.11 INTELLECTUAL PROPERTY. All Intellectual Property used or
held for use
primarily in connection with the Operations is listed in
Transferor Disclosure
Schedules 1.1(i), 1.1(j), 1.1(k) and 1.1(l). Transferors own or
hold pursuant to
valid licenses to use such Intellectual Property free and clear
of all Liens,
and no Transferor nor any affiliate of any Transferor has
granted to any third
party any license or other right to any of such Intellectual
Property and no
Transferor is a party to or bound by any Contract or any other
obligation
whatsoever that limits or impairs its ability to use, sell,
transfer, assign or
convey the Intellectual Property, except for restrictions on
assignment included
within licenses to use the Intellectual Property. Except as set
forth in
Transferor Disclosure Schedule 3.11, none of the Trademarks that
constitute the
Intellectual Property are being used by any Transferor or any
affiliate thereof
in connection with the conduct of any business other than the
Operations. Except
as set forth in Transferor Disclosure Schedule 3.11, no claim is
pending or, to
the knowledge of the Alon Parties, threatened against any
Transferor or any
affiliate thereof asserting that its use of the Intellectual
Property infringes
the patent, trademark, copyright or other intellectual property
rights of any
person and, to the knowledge of the Alon Parties, the use of
such Intellectual
Property does not infringe any such rights. To the knowledge of
the Alon
Parties, no person is infringing any Transferor's rights in its
Intellectual
Property. All registrations and certificates issued by any
Governmental Entity
relating to any of such Intellectual Property and all Contracts
pursuant to
which any Transferor uses any of the Intellectual Property are
valid and
subsisting, have been properly maintained and no Transferor nor
any other person
is in default or violation thereunder.
3.12 SOFTWARE PRODUCTS. Except for Excluded Assets, Transferor
Disclosure
Schedule 3.12 contains a true, complete and correct list of all
software
products and custom software that Transferors own or license
from a third party
that is used primarily in connection with the Operations. To the
knowledge of
the Alon Parties, the use of such software products and custom
software by the
applicable Transferor does not violate any rights of any other
person, and no
Transferor nor any affiliate of any Transferor has received any
communication
alleging such a violation. Except as set forth in Transferor
Disclosure Schedule
3.12, no Transferor is obligated to compensate any person for
the licensing of
such software products or custom software.
3.13 TAXES. Each Transferor and any consolidated, combined or
unitary
group of which such Transferor is or has been a member has
timely filed with the
appropriate Taxing Authorities all Tax returns required to be
filed on or prior
to the date of this Agreement. All such Tax returns are true,
correct and
complete in all material respects and the applicable Transferor
or an affiliate
of such Transferor has timely paid all Taxes shown as due and
payable on all Tax
returns. No Taxing Authority has raised any issues relating to
Taxes for which a
Lien could otherwise be imposed after the Closing Date upon any
of the
Contributed Assets. Except as set forth in Transferor Disclosure
Schedule 3.13,
no audit or other proceeding by any Governmental Entity is
pending or, to the
knowledge of the Alon Parties, threatened with respect to any
Taxes due or any
Tax return filed by any Transferor or any affiliate of any
Transferor relating
to the Pipeline and Terminal Assets or the Operations. No
assessment of any Tax
(other than assessments of Taxes not yet due) is proposed
against any Transferor
or any of its affiliates relating to any of the Contributed
Assets. No
Transferor nor any affiliate of any Transferor has been and is
now in violation
(and with notice or lapse of time, or both, would be in
violation) of
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
21
<PAGE>
any applicable Law relating to the payment or withholding of
Taxes relating to
the Contributed Assets or the Operations.
3.14 SUFFICIENCY AND CONDITION OF ASSETS; ENTIRE OPERATIONS.
Except as set
forth in Transferor Disclosure Schedule 3.14, (a) the
Contributed Assets are in
adequate and sufficient operating condition and repair (normal
wear and tear
excepted) to enable Newco 1 after the Closing to conduct the
Operations as
currently conducted and are suitable for the purposes for which
they are
currently used, (b) the Contributed Assets constitute all of the
assets, real
and personal, tangible and intangible, necessary to conduct the
Operations in
the manner presently conducted and (c) the Contributed Assets
meet the legally
required mechanical integrity and other standards of the
Department of
Transportation and the Environmental Protection Agency in all
material respects.
Transferor Disclosure Schedule 3.14 sets forth the date of the
most recent
linalog testing for mechanical integrity performed on each of
the Pipelines and
true, correct and complete copies of the results of such testing
have been
provided to Transferee. Prior to the date of this Agreement
T&R has transferred,
conveyed and assigned all right, title and interest in the water
discharge
pipeline related to Alon Refining's management control area for
the Big Spring,
Texas refinery such that T&R has no right, title or interest
in, or is obligated
with respect to any liability or obligation associated with,
such pipeline, and
Newco 1 shall not receive any such right, title or interest, or
liability or
obligation, upon the contribution and assumption contemplated by
Sections 1.1
and 1.3 hereof.
3.15 COLLECTIVE BARGAINING AGREEMENTS; LABOR RELATIONS. Except
as
described in Transferor Disclosure Schedule 3.15:
(a) No Transferor nor any affiliate of any Transferor is a
party
to any collective bargaining agreement with any labor
organization relating to
employees involved in the operation of the Pipeline and Terminal
Assets.
(b) No Transferor nor any affiliate of any Transferor has
agreed
to recognize any union or other collective bargaining
representative, nor has
any union or other collective bargaining representative been
certified as the
exclusive bargaining representative of any employees involved in
the operation
of the Pipeline and Terminal Assets.
(c) Transferors have provided Transferee with copies of all
certifications, collective agreements, letters of understanding
and any
applicable orders of the National Labor Relations Board
pertaining to a labor
organization and which relate to the employment of any employee
involved in the
operation of the Pipeline and Terminal Assets.
(d) There is no pending or, to the knowledge of the Alon
Parties,
threatened, strike, slowdown, lock-out, work-stoppage,
representation petition
or other labor union organizing effort or other labor dispute,
labor board
proceeding, labor arbitration proceeding, or administrative
tribunal proceeding,
involving any employees involved in the operation of the
Pipeline and Terminal
Assets.
3.16 EMPLOYEES; EMPLOYEE BENEFIT MATTERS. (a) Transferor
Disclosure
Schedule 3.16 contains a true, correct and complete list of the
names of all
employees involved in the
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
22
<PAGE>
operation of the Pipeline and Terminal Assets as of the date of
this Agreement,
specifying each employee's job title and salary.
(b) Transferor Disclosure Schedule 3.16(b) lists each
Employee
Benefit Plan and material Benefit Arrangement maintained by any
Transferor or
any ERISA Affiliate of any Transferor immediately prior to the
Closing with
respect to any of the employees involved in the operation of the
Pipeline and
Terminal Assets and any Employee Benefit Plan maintained or
contributed to by
any Transferor or any ERISA Affiliate of any Transferor, that is
subject to
Title IV of ERISA.
(c) Transferors have delivered to Transferee true, correct
and
complete copies of all Employee Benefit Plans and material
Benefit Arrangements
listed in Transferor Disclosure Schedule 3.16(b).
(d) Transferors have made available for Transferee's inspection
a
list on a per employee basis and in reasonable detail of all
current annual
compensation expenditures for the employees involved in the
operation of the
Pipeline and Terminal Assets, including bonuses and similar
amounts.
(e) Except as otherwise set forth in Transferor Disclosure
Schedule 3.16(e):
(i) As to any Employee Benefit Plan listed in Transferor
Disclosure Schedule 3.16(b) and subject to Title IV of ERISA,
there has been no
event or condition which presents the risk of plan termination,
no accumulated
funding deficiency, whether or not waived, within the meaning of
Section 302 of
ERISA or Section 412 of the Code has been incurred, no
reportable event within
the meaning of Section 4043 of ERISA (for which the disclosure
requirements of
Regulation Section 4043.1 et seq., promulgated by the PBGC have
not been waived)
has occurred, no notice of intent to terminate the plan has been
given under
Section 4041 of ERISA and no proceeding has been instituted
under Section 4042
of ERISA to terminate the plan, no liability to the PBGC has
been incurred.
(ii) With respect to any Employee Benefit Plan, within the
meaning of Section 3(3) of ERISA, which is not listed in
Transferor Disclosure
Schedule 3.16(b) but which has been sponsored, maintained or
contributed to
within six years prior to the Closing Date by any Transferor or
any ERISA
Affiliate of any Transferor, (A) no withdrawal liability, within
the meaning of
Section 4201 of ERISA, has been incurred, which withdrawal
liability has not
been satisfied, (B) no liability to the PBGC has been incurred,
which liability
has not been satisfied, (C) no accumulated funding deficiency,
whether or not
waived, within the meaning of Section 302 of ERISA or Section
412 of the Code
has been incurred, and (D) all contributions (including
installments) to such
plan required by Section 302 of ERISA and Section 412 of the
Code have been
timely made.
3.17 PERFORMANCE OF PIPELINES; PERFORMANCE OF TERMINALS.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
23
<PAGE>
(a) Performance of Pipelines. Each of the Pipelines is
currently
capable, in accordance with all applicable Laws and Permits, of
transporting
refined products at the volumes set forth in Transferor
Disclosure Schedule
3.17(a).
(b) Performance of Terminals. Each of the Terminals is
currently
capable, in accordance with all applicable Laws and Permits, of
receiving,
delivering, storing, blending or otherwise handling refined
products at the
respective capacities set forth in Transferor Disclosure
Schedule 3.17(b).
3.18 INSURANCE. Transferor Disclosure Schedule 3.18 sets forth a
list
(including nature of coverage, limits, deductibles and premiums)
of all policies
or binders of fire, casualty, liability, burglary, fidelity,
workers'
compensation, vehicular and other non-ERISA related insurance
maintained, owned
or held by any Transferor or its affiliate on the date of this
Agreement and
covering the Contributed Assets.
3.19 STATUS OF TRANSFEROR PARTIES. None of the Alon Parties or
Newco 1 is
(a) a "public utility company" or a "holding company," or a
"subsidiary company"
of a "holding company," or an "affiliate" of either a "holding
company" or a
"subsidiary company" of a "holding company," in each case within
the meaning of
the Public Utility Holding Company Act of 1935 or (b) an
"investment company" or
a company "controlled" by an "investment company" within the
meaning of the
Investment Company Act of 1940.
3.20 ENVIRONMENTAL MATTERS.
(a) Actions. Except as set forth on Transferor Disclosure
Schedule
3.20(a), there are no Actions pending or, to the knowledge of
the Alon Parties,
threatened to which any Transferor or any of its affiliates is,
or is threatened
to be made, a party in which Environmental Costs or Liabilities
are being, or
are threatened to be, asserted or directed against such
Transferor or any of its
affiliates relating to any of the Pipeline and Terminal Assets
or the Operations
that (x) pertain or relate to (i) any remedial obligations
presently required
under any applicable Environmental Law, (ii) violations by such
Transferor or
any of its affiliates of any Environmental Law, (iii) personal
injury or
property damage claims relating to a release of Hazardous
Materials or (iv)
response, removal or remedial costs under any Environmental Law,
and (y) which
could reasonably be expected to have a Material Adverse
Effect.
(b) Compliance. Except as set forth on Transferor Disclosure
Schedule 3.20(b) or which could not be reasonably expected to
have a Material
Adverse Effect:
(i) No Transferor nor any affiliate of any Transferor has
caused or allowed the generation, use, treatment, storage or
disposal of
Hazardous Materials at or on any of the Pipeline and Terminal
Assets except in
accordance with all applicable Environmental Laws.
(ii) With respect to the current operation of the Pipeline
and Terminal Assets, each Transferor is in compliance, in all
material respects,
with all limitations, restrictions, standards and obligations
established under
Environmental Laws, except for violations that are or can be
remedied by routine
repair and maintenance in the ordinary course of business.
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
24
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(iii) Set forth in Transferor Disclosure Schedule
3.20(b)(iii)
is a true, correct and complete list of all Environmental
Permits held by each
Transferor in connection with the ownership and operation of the
Pipeline and
Terminal Assets in the manner they are currently operated. All
such
Environmental Permits have been duly obtained or filed and are
in full force and
effect, and the applicable Transferor is in compliance, in all
material
respects, with such Environmental Permits. The current operation
of the Pipeline
and Terminal Assets does not provide a basis for revocation or
suspension of any
Environmental Permit.
(iv) None of the Pipeline and Terminal Assets is encumbered
by a Lien arising or imposed under Environmental Laws.
(v) To the knowledge of the Alon Parties, there are no
Hazardous Materials present on any of the Real Property in
amounts that could
give rise to an obligation to perform remediation or other
corrective action
pursuant to Environmental Laws, except for remediation or
corrective action that
could not reasonably be expected to result in a material
liability or materially
impair the conduct of the Operations from and after the
Closing.
3.21 BROKERS AND FINDERS. No investment banker, broker, finder,
financial
advisor or other intermediary has been retained by or is
authorized to act on
behalf of any of the Alon Parties or Newco 1 who is entitled to
receive from
Transferee any fee or commission in connection with the
transactions
contemplated by this Agreement.
3.22 REPRESENTATIONS RELATING TO THE CLASS B UNITS.
(a) Each Transferor and Newco 2 is an "Accredited Investor"
as
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
(b) Each Transferor and Newco 2 is acquiring the Class B Units
for
its own account for investment, and not with a view to any
distribution or
resale thereof in violation of the Securities Act or any other
applicable
domestic or foreign securities law.
(c) Each Transferor and Newco 2 hereby acknowledges receipt of
a
copy of the First Amended and Restated Agreement of Limited
Partnership of
Transferee, as amended (the "Transferee Partnership Agreement"),
and the Class B
Amendment, and acknowledges access to the Transferee Public
Documents. Each
Transferor and Newco 2 and their attorneys, accountants and
other
representatives have had an opportunity to ask questions of and
receive answers
from Transferee or a person acting on behalf of Transferee
concerning the terms
and conditions of their investment in the Class B Units.
(d) Each Transferor and Newco 2 acknowledges and agrees
that,
based in part upon its representations contained herein and in
reliance upon
applicable exemptions, the Class B Units to be acquired by Newco
2 will not be
registered under the Securities Act or the securities Laws of
any other domestic
or foreign jurisdiction as of the Closing Date.
3.23 WAIVERS AND DISCLAIMERS. TRANSFEREE ACKNOWLEDGES THAT IT
HAS HAD AN
OPPORTUNITY TO INSPECT THE CONTRIBUTED ASSETS,
HOLLY ENERGY PARTNERS, L.P.
CONTRIBUTION AGREEMENT
25
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THAT TRANSFEREE HAS CONDUCTED ITS INDEPENDENT DUE DILIGENCE
INVESTIGATION AND
INSPECTION OF ALL ASPECTS OF SUCH CONTRIBUTED ASSETS AND THE
CLOSING OF THE
TRANSACTIONS CONTEMPLATED HEREBY IS NOT CONDITIONED ON
TRANSFEREE CONDUCTING
FURTHER DUE DILIGENCE. OTHER THAN AS EXPRESSLY SET OUT HEREIN OR
IN THE ALON
ANCILLARY DOCUMENTS, TRANSFEREE IS RELYING ON SUCH INDEPENDENT
INVESTIGATION AND
INSPECTION OF THE CONTRIBUTED ASSETS AND IS NOT RELYING ON ANY
INFORMATION
PROVIDED BY TRANSFERORS OR THEIR AGENTS AND REPRESENTATIVES IN
DETERMINING
WHETHER TO ACQUIRE THE CONTRIBUTED ASSETS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT,
EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER
COVENANTS AND
AGREEMENTS MADE BY THE ALON PARTIES IN THIS AGREEMENT AND THE
ALON ANCILLARY
DOCUMENTS, TRANSFEREE ACKNOWLEDGES AND AGREES THAT THE CONTR
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