Item 1.01 Entry into a Material Definitive Agreement.
On May 5, 2009, Holly Energy Partners, L.P. (the "Partnership") entered into
an Underwriting Agreement (the "Underwriting Agreement") with Goldman, Sachs &
Co. and UBS Securities LLC, as representatives of the several underwriters named
therein (the "Underwriters"), with respect to the issuance and sale in an
underwritten public offering (the "Common Units Offering") by the Partnership of
2,000,000 common units representing limited partner interests in the Partnership
(the "Common Units") at $27.80 per common unit. The Partnership has granted the
Underwriters a 30-day option to purchase up to an additional 300,000 Common
Units. The Common Units to be sold in the Common Units Offering were registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a registration statement on Form S-3 (Registration No. 333-155537). The closing
of the Common Units Offering is expected to occur on May 8, 2009 (the "Closing
Date"). Legal opinions related to the Common Units are filed as Exhibits 5.1 and
8.1 to this Current Report on Form 8-K.
In the Underwriting Agreement, the Partnership agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the Underwriters may be required to
make because of any of those liabilities. A copy of the Underwriting Agreement
is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated
herein by reference. The description of the Underwriting Agreement in this
Current Report on Form 8-K is qualified in its entirety by the terms of the
Underwriting Agreement.
The Partnership intends to use the net proceeds from the Common Units
Offering of approximately $53.2 million (or approximately $61.2 million if the
Underwriters exercise in full their over-allotment option) and the general
partner contribution described in the following paragraph, (i) to repay
$28.0 million of bank debt incurred to fund its purchase of a 25% interest in
the joint venture (the remaining 75% of which is owned by Plains All American
Pipeline, L.P.) that owns the Salt Lake City Pipeline, (ii) to repay bank debt
incurred to date to fund capital projects, which consist primarily of the
expansion of the Partnership's Artesia, New Mexico to El Paso, Texas refined
products pipeline and terminal system (referred to as the "South System") and
(iii) for general partnership purposes.
In connection with the Common Units Offering, on the Closing Date, HEP
Logistics Holdings, L.P., the general partner of the Partnership, will
contribute $1.1 million (or $1.2 million if the Underwriters exercise in full
their option to purchase additional Common Units) to the Partnership in order to
maintain its 2% general partner interest in the Partnership.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
1.1 - Underwriting Agreement, dated May 5, 2009, between Holly Energy
Partners, L.P., and Goldman, Sachs & Co. and UBS Securities LLC, as
representatives of the several underwriters named therein.
5.1 - Opinion of Vinson & Elkins L.L.P.
8.1 - Opinion of Vinson & Elkins L.L.P. relating to tax matters.
23.1 - Consent of Vinson & Elkins L.L.P. (included in Exhibits 5.1 and 8.1).
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