WAIVER AND AMENDMENT NO. 3
This WAIVER AND AMENDMENT NO. 3 (this
“ Agreement ”) dated as of June 17, 2005 is
among Holly Energy Partners — Operating, L.P., successor to
HEP Operating Company, L.P. (the “ Borrower ”),
the Guarantors (as defined below), the Banks (as defined in the
Credit Agreement (as defined below)), and Union Bank of California,
N.A., as administrative agent for such Banks (in such capacity, the
“ Administrative Agent ”).
A. The Borrower, the Banks, and
the Administrative Agent are parties to the Credit Agreement dated
as of July 7, 2004, as amended by the Consent and Omnibus
Amendment dated as of July 30, 2004 and the Consent, Waiver
and Amendment No. 2 dated as of February 28, 2005 (as so
amended, the “ Credit Agreement ”).
B. In connection with such
Credit Agreement, the undersigned Affiliates of the Borrower (the
“ Guarantors ”) are parties to the Guaranty
Agreement dated as of July 13, 2004, as supplemented by the
Guaranty Agreement Supplement No. 1 dated as of
February 28, 2005, Guaranty Agreement Supplement No. 2
dated as of February 28, 2005, Guaranty Agreement Supplement
No. 3 dated as of March 1, 2005, and Guaranty Agreement
Supplement No. 4 dated as of March 1, 2005 (as so
supplemented, the “ Guaranty ”) in favor of the
Administrative Agent for the benefit of the Beneficiaries (as
defined therein).
C. The Borrower recently
purchased certain assets and entered into the Alon Pipelines and
Terminals Agreement (as defined in the Credit Agreement) as more
particularly described in the Consent, Waiver and Amendment
No. 2 referred to above. At the time of closing of such
transaction, the Borrower’s accountants had not determined
the allocation of the purchase price associated with such
acquisition. Since the closing, such accountants have preliminarily
allocated a larger percentage of such purchase price to the value
attributable to the Alon Pipelines and Terminals Agreement than was
originally anticipated, thereby resulting in a Default under
Section 6.12 for the calendar quarter ended March 31,
2005.
D. The Borrower, the
Administrative Agent and the Banks wish to, subject to the terms
and conditions of this Agreement, (1) acknowledge the
existence of certain Defaults and Events of Default (each as
defined in the Credit Agreement), (2) provide for a waiver of
such existing Defaults and Events of Default as set forth below,
and (3) make certain other changes to the Credit
Agreement.
THEREFORE, the Borrower, the
Guarantors, the Banks, and the Administrative Agent hereby agree as
follows:
Section 1.01 Terms
Defined Above . As used in this Agreement, each of the
terms defined in the opening paragraph and the Recitals above shall
have the meanings assigned to such terms therein.
Section 1.02 Terms
Defined in the Credit Agreement . Each term defined in the
Credit Agreement and used herein without definition shall have the
meaning assigned to such term in the Credit Agreement, unless
expressly provided to the contrary.
Section 1.03 Other
Definitional Provisions . The words “hereby”,
“herein”, “hereinafter”,
“hereof”, “hereto” and
“hereunder” when used in this Agreement shall refer to
this Agreement as a whole and not to any particular Article,
Section, subsection or provision of this Agreement. Section,
subsection and Exhibit references herein are to such Sections,
subsections and Exhibits to this Agreement unless otherwise
specified. All titles or headings to Articles, Sections,
subsections or other divisions of this Agreement or the exhibits
hereto, if any, are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect
to the other content of such Articles, Sections, subsections, other
divisions or exhibits, such other content being controlling as the
agreement among the parties hereto. Whenever the context requires,
reference herein made to the single number shall be understood to
include the plural; and likewise, the plural shall be understood to
include the singular. Words denoting sex shall be construed to
include the masculine, feminine and neuter, when such construction
is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative. Definitions of terms
defined in the singular or plural shall be equally applicable to
the plural or singular, as the case may be, unless otherwise
indicated.
ARTICLE II.
WAIVER AND AMENDMENT
(a) The
Borrower hereby acknowledges the existence of the following
Defaults and Events of Default (collectively, the “Waiver
Defaults”): (i) the Borrower’s failure to timely
comply with the requirement of Section 5.06(b)(ii) of
the Credit Agreement for the fiscal quarter ending March 31,
2005, and (ii) the Borrower’s failure to comply with the
requirement of Section 6.12 of the Credit Agreement for
the fiscal quarter ending March 31, 2005.
(b) The
Banks hereby agree, subject to the terms of this Agreement, to
waive the Waiver Defaults. The waiver and agreement by the Banks
described in the preceding sentences are contingent upon the
satisfaction of the conditions precedent set forth below in this
Agreement. The waiver is limited to the Waiver Defaults and to the
extent described herein and shall not be construed to be a consent
to, or a permanent waiver of, the Sections covered by the Waiver
Defaults or any other terms, provisions, covenants, warranties or
agreements contained in the Credit Agreement or in any of the other
Credit Documents. The Banks and the Administrative Agent reserve
the right to exercise any rights and remedies available to them
in
-2-
connection with any other present or future defaults with respect
to the Credit Agreement or any other provision of any Credit
Document.
Section 2.02 Amendment to
Credit Agreement . Effective as of the Effective Date (as
defined below), the definition of “Tangible Net Worth”
in Section 1.01 of the Credit Agreement is amended and
restated to read in its entirety as follows:
" Tangible Net Worth
” means for any Person at any time, the total assets of such
Person (other than goodwill and all other intangible assets of such
Person) at such time minus the total liabilities of such
Person at such time; provided that, (a) other than as provided
in clause (b) of this definition of Tangible Net Worth, it is
understood that the account entry on the Borrower’s
consolidated balance sheet entitled “Transportation
Agreements, Net” shall be treated as an intangible asset, and
(b) such portion of the account entry on the Borrower’s
consolidated balance sheet entitled “Transportation
Agreements, Net” in an amount not to exceed $60,000,000 shall
be treated as a tangible asset if, and only to the extent, such
portion is directly attributable to the Alon Pipelines and
Terminals Agreement.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01 Borrower
Representations and Warranties . The Borrower represents
and warrants that: (a) after giving effect to this Agreement
and the amendments to the Credit Agreement contained herein, the
representations and warranties contained in the Credit Agreement
and the representations and warranties contained in the other
Credit Documents are true and correct in all material respects on
and as of the Effective Date as if made on as and as of such date,
except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date; (b) after giving
effect to this Agreement and the amendments to the Credit Agreement
contained herein, no Default has occurred which is continuing;
(c) the execution, delivery and performance of this Agreement
are within the partnership power and authority of the Borrower and
have been duly authorized by appropriate partnership action and
proceedings; (d) this Agreement constitutes the legal, valid,
and binding obligation of the Borrower enforceable in accordance
with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity;
(e) there are no governmental or other third party consents,
licenses and approvals required to be obtained by the Borrower in
connection with the execution, delivery, performance of this
Agreement by the Borrower or the validity and enforceability of
this Agreement against the Borrower; and (f) the Liens under
the Security Documents are valid and subsisting and secure
Borrower’s obligations under the Credit Documents.
Section 3.02
Guarantors’ Representations and
|
