exv4w2






EXHIBIT 4.2




 





HOLLY ENERGY PARTNERS, L.P.,




HOLLY ENERGY FINANCE CORP.




and




EACH OF THE SUBSIDIARY GUARANTORS PARTY HERETO




and




[                      ],




as Trustee




SUBORDINATED INDENTURE




Dated as of [            ]




Debt Securities




 





 









 








CROSS-REFERENCE TABLE*




			
	TIA Section Indenture	 	Section
	 	 	 
	310(a)
	 	7.10
	      (b)
	 	7.10
	      (c)
	 	N.A.
	311(a)
	 	7.11
	      (b)
	 	7.11
	      (c)
	 	N.A.
	312(a)
	 	5.01
	      (b)
	 	5.02
	      (c)
	 	5.02
	313(a)
	 	5.03
	      (b)
	 	5.03
	      (c)
	 	13.03
	      (d)
	 	5.03
	314(a)
	 	4.05
	      (b)
	 	N.A.
	      (c)(1)
	 	13.05
	      (c)(2)
	 	13.05
	      (c)(3)
	 	N.A.
	      (d)
	 	N.A.
	      (e)
	 	13.05
	      (f)
	 	N.A.
	315(a)
	 	7.01
	      (b)
	 	6.07 & 13.03
	      (c)
	 	7.01
	      (d)
	 	7.01
	      (e)
	 	6.08
	316(a)(last sentence)
	 	1.01
	      (a)(1)(A)
	 	6.06
	      (a)(1)(B)
	 	6.06
	      (a)(2)
	 	      9.01(d)
	      (b)
	 	6.04
	      (c)
	 	5.04
	317(a)(1)
	 	6.02
	      (a)(2)
	 	6.02
	      (b)
	 	4.04
	318(a)
	 	13.07








 




			
	
N.A. means Not Applicable




NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of this Indenture.




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitions
	 	 	8	 
	Section 1.03 Incorporation by Reference of Trust Indenture Act
	 	 	8	 
	Section 1.04 Rules of Construction
	 	 	9	 
	 
	 	 	 	 
	ARTICLE II DEBT SECURITIES
	 	 	9	 
	 
	 	 	 	 
	Section 2.01 Forms Generally
	 	 	9	 
	Section 2.02 Form of Trustee’s Certificate of Authentication
	 	 	9	 
	Section 2.03 Principal Amount; Issuable in Series
	 	 	10	 
	Section 2.04 Execution of Debt Securities
	 	 	12	 
	Section 2.05 Authentication and Delivery of Debt Securities
	 	 	13	 
	Section 2.06 Denomination of Debt Securities
	 	 	14	 
	Section 2.07 Registration of Transfer and Exchange
	 	 	14	 
	Section 2.08 Temporary Debt Securities
	 	 	16	 
	Section 2.09 Mutilated, Destroyed, Lost or Stolen Debt Securities
	 	 	16	 
	Section 2.10 Cancellation of Surrendered Debt Securities
	 	 	17	 
	Section 2.11 Provisions of the Indenture and Debt Securities for the Sole Benefit of the
Parties and the Holders
	 	 	17	 
	Section 2.12 Payment of Interest; Interest Rights Preserved
	 	 	18	 
	Section 2.13 Securities Denominated in Dollars
	 	 	18	 
	Section 2.14 Wire Transfers
	 	 	18	 
	Section 2.15 Securities Issuable in the Form of a Global Security
	 	 	18	 
	Section 2.16 Medium Term Securities
	 	 	21	 
	Section 2.17 Defaulted Interest
	 	 	21	 
	Section 2.18 CUSIP Numbers
	 	 	22	 
	 
	 	 	 	 
	ARTICLE III REDEMPTION OF DEBT SECURITIES
	 	 	22	 
	 
	 	 	 	 
	Section 3.01 Applicability of Article
	 	 	22	 
	Section 3.02 Notice of Redemption; Selection of Debt Securities
	 	 	23	 
	Section 3.03 Payment of Debt Securities Called for Redemption
	 	 	24	 
	Section 3.04 Mandatory and Optional Sinking Funds
	 	 	25	 
	Section 3.05 Redemption of Debt Securities for Sinking Fund
	 	 	25	 
	 
	 	 	 	 
	ARTICLE IV PARTICULAR COVENANTS OF THE ISSUERS
	 	 	27	 
	 
	 	 	 	 
	Section 4.01 Payment of Principal of, and Premium, If Any, and Interest on, Debt
Securities
	 	 	27	 
	Section 4.02 Maintenance of Offices or Agencies for Registration of Transfer, Exchange and
Payment of Debt Securities
	 	 	27	 
	Section 4.03 Appointment to Fill a Vacancy in the Office of Trustee
	 	 	28	 






i 









 






	 	 	 	 	 
	 	 	Page
	Section 4.04 Duties of Paying Agents, etc
	 	 	28	 
	Section 4.05 SEC Reports; Financial Statements
	 	 	29	 
	Section 4.06 Compliance Certificate
	 	 	30	 
	Section 4.07 Further Instruments and Acts
	 	 	30	 
	Section 4.08 Corporate, Partnership or Limited Liability Company Existence
	 	 	30	 
	Section 4.09 Maintenance of Properties
	 	 	31	 
	Section 4.10 Payment of Taxes and Other Claims
	 	 	31	 
	Section 4.11 Waiver of Certain Covenants
	 	 	31	 
	 
	 	 	 	 
	ARTICLE V HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE
	 	 	32	 
	 
	 	 	 	 
	Section 5.01 Issuers to Furnish Trustee Information as to Names and Addresses of Holders;
Preservation of Information
	 	 	32	 
	Section 5.02 Communications to Holders
	 	 	32	 
	Section 5.03 Reports by Trustee
	 	 	32	 
	Section 5.04 Record Dates for Action by Holders
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VI REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
	 	 	33	 
	 
	 	 	 	 
	Section 6.01 Events of Default
	 	 	33	 
	Section 6.02 Collection of Debt by Trustee, etc
	 	 	35	 
	Section 6.03 Application of Moneys Collected by Trustee
	 	 	37	 
	Section 6.04 Limitation on Suits by Holders
	 	 	38	 
	Section 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of
Default
	 	 	38	 
	Section 6.06 Rights of Holders of Majority in Principal Amount of Debt Securities to Direct
Trustee and to Waive Default
	 	 	39	 
	Section 6.07 Trustee to Give Notice of Defaults Known to It, but May Withhold Such Notice
in Certain Circumstances
	 	 	39	 
	Section 6.08 Requirement of an Undertaking to Pay Costs in Certain Suits under the
Indenture or Against the Trustee
	 	 	40	 
	 
	 	 	 	 
	ARTICLE VII CONCERNING THE TRUSTEE
	 	 	40	 
	 
	 	 	 	 
	Section 7.01 Certain Duties and Responsibilities
	 	 	40	 
	Section 7.02 Certain Rights of Trustee
	 	 	41	 
	Section 7.03 Trustee Not Liable for Recitals in Indenture or in Debt Securities
	 	 	42	 
	Section 7.04 Trustee, Paying Agent or Registrar May Own Debt Securities
	 	 	43	 
	Section 7.05 Moneys Received by Trustee to Be Held in Trust
	 	 	43	 
	Section 7.06 Compensation and Reimbursement
	 	 	43	 
	Section 7.07 Right of Trustee to Rely on an Officers’ Certificate Where No Other Evidence
Specifically Prescribed
	 	 	44	 
	Section 7.08 Separate Trustee; Replacement of Trustee
	 	 	44	 
	Section 7.09 Successor Trustee by Merger
	 	 	45	 
	Section 7.10 Eligibility; Disqualification
	 	 	45	 
	Section 7.11 Preferential Collection of Claims Against Issuers
	 	 	46	 
	Section 7.12 Compliance with Tax Laws
	 	 	46	 






ii 









 






	 	 	 	 	 
	 	 	Page
	ARTICLE VIII CONCERNING THE HOLDERS
	 	 	46	 
	 
	 	 	 	 
	Section 8.01 Evidence of Action by Holders
	 	 	46	 
	Section 8.02 Proof of Execution of Instruments and of Holding of Debt Securities
	 	 	46	 
	Section 8.03 Who May Be Deemed Owner of Debt Securities
	 	 	47	 
	Section 8.04 Instruments Executed by Holders Bind Future Holders
	 	 	47	 
	 
	 	 	 	 
	ARTICLE IX SUPPLEMENTAL INDENTURES
	 	 	48	 
	 
	 	 	 	 
	Section 9.01 Purposes for Which Supplemental Indenture May Be Entered into Without Consent
of Holders
	 	 	48	 
	Section 9.02 Modification of Indenture with Consent of Holders of Debt Securities
	 	 	50	 
	Section 9.03 Effect of Supplemental Indentures
	 	 	51	 
	Section 9.04 Debt Securities May Bear Notation of Changes by Supplemental Indentures
	 	 	52	 
	 
	 	 	 	 
	ARTICLE X CONSOLIDATION, MERGER, SALE OR CONVEYANCE
	 	 	52	 
	 
	 	 	 	 
	Section 10.01 Consolidations and Mergers of the Issuers
	 	 	52	 
	Section 10.02 Rights and Duties of Successor Company
	 	 	52	 
	 
	 	 	 	 
	ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
	 	 	53	 
	 
	 	 	 	 
	Section 11.01 Applicability of Article
	 	 	53	 
	Section 11.02 Satisfaction and Discharge of Indenture; Defeasance
	 	 	53	 
	Section 11.03 Conditions of Defeasance
	 	 	54	 
	Section 11.04 Application of Trust Money
	 	 	55	 
	Section 11.05 Repayment to Issuers
	 	 	56	 
	Section 11.06 Indemnity for U.S. Government Obligations
	 	 	56	 
	Section 11.07 Reinstatement
	 	 	56	 
	 
	 	 	 	 
	ARTICLE XII SUBORDINATION OF DEBT SECURITIES AND GUARANTEE
	 	 	56	 
	 
	 	 	 	 
	Section 12.01 Applicability of Article; Agreement To Subordinate
	 	 	56	 
	Section 12.02 Liquidation, Dissolution, Bankruptcy
	 	 	56	 
	Section 12.03 Default on Senior Indebtedness
	 	 	57	 
	Section 12.04 Acceleration of Payment of Debt Securities
	 	 	58	 
	Section 12.05 When Distribution Must Be Paid Over
	 	 	58	 
	Section 12.06 Subrogation
	 	 	58	 
	Section 12.07 Relative Rights
	 	 	59	 
	Section 12.08 Subordination May Not Be Impaired by Issuers or Subsidiary Guarantors
	 	 	59	 
	Section 12.09 Rights of Trustee and Paying Agent
	 	 	59	 
	Section 12.10 Distribution or Notice to Representative
	 	 	59	 
	Section 12.11 Article XII Not to Prevent Defaults or Limit Right to Accelerate
	 	 	60	 
	Section 12.12 Trust Moneys Not Subordinated
	 	 	60	 
	Section 12.13 Trustee Entitled to Rely
	 	 	60	 






iii 









 






	 	 	 	 	 
	 	 	Page
	Section 12.14 Trustee to Effectuate Subordination
	 	 	60	 
	Section 12.15 Trustee Not Fiduciary for Holders of Senior Indebtedness
	 	 	61	 
	Section 12.16 Reliance by Holders of Senior Indebtedness on Subordination Provisions
	 	 	61	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS PROVISIONS
	 	 	61	 
	 
	 	 	 	 
	Section 13.01 Successors and Assigns of Parties Bound by Indenture
	 	 	61	 
	Section 13.02 Acts of Board, Committee or Officer of Successor Company Valid
	 	 	61	 
	Section 13.03 Required Notices or Demands
	 	 	61	 
	Section 13.04 Indenture and Debt Securities to Be Construed in Accordance with the Laws of
the State of New York
	 	 	62	 
	Section 13.05 Officers’ Certificate and Opinion of Counsel to Be Furnished upon Application
or Demand by the Issuers
	 	 	63	 
	Section 13.06 Payments Due on Legal Holidays
	 	 	63	 
	Section 13.07 Provisions Required by TIA to Control
	 	 	63	 
	Section 13.08 Computation of Interest on Debt Securities
	 	 	63	 
	Section 13.09 Rules by Trustee, Paying Agent and Registrar
	 	 	64	 
	Section 13.10 No Personal Liability of Directors, Officers, Employees and Unitholders
	 	 	64	 
	Section 13.11 Severability
	 	 	64	 
	Section 13.12 Effect of Headings
	 	 	64	 
	Section 13.13 Indenture May Be Executed in Counterparts
	 	 	64	 
	 
	 	 	 	 
	ARTICLE XIV GUARANTEE
	 	 	64	 
	 
	 	 	 	 
	Section 14.01 Unconditional Guarantee
	 	 	64	 
	Section 14.02 Execution and Delivery of Notation of Guarantee
	 	 	66	 
	Section 14.03 Limitation on Liability of the Subsidiary Guarantors
	 	 	67	 
	Section 14.04 Release of Subsidiary Guarantors from Guarantee
	 	 	67	 
	Section 14.05 Contribution
	 	 	68	 
	 
	 	 	 	 
	Annexes
	 	 	 	 






Annex A            Notion of Guarantee




iv 









 





     THIS INDENTURE dated as of [            ] is among Holly Energy Partners, L.P., a Delaware
limited partnership (“Holly Energy Partners”), Holly Energy Finance Corp., a Delaware corporation
(“Holly Energy Finance” and, together with Holly Energy Partners, the “Issuers”), the Subsidiary
Guarantors (as defined), and [            ], a [            ], as trustee (the “Trustee”).



RECITALS OF THE ISSUERS AND THE SUBSIDIARY GUARANTORS




     The Issuers and the Subsidiary Guarantors have duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of the Issuers’ debentures, notes,
bonds or other evidences of indebtedness to be issued in one or more series unlimited as to
principal amount (herein called the “Debt Securities”), and the Guarantee by each of the Subsidiary
Guarantors of the Debt Securities, as in this Indenture provided.



     The Issuers and the Subsidiary Guarantors are members of the same consolidated group of
companies. The Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Debt Securities. Accordingly, each Subsidiary Guarantor has duly authorized the
execution and delivery of this Indenture to provide for its full, unconditional and joint and
several guarantee of the Debt Securities to the extent provided in or pursuant to this Indenture.



     All things necessary to make this Indenture a valid agreement of the Issuers, in accordance
with its terms, have been done.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH



     That in order to declare the terms and conditions upon which the Debt Securities are
authenticated, issued and delivered, and in consideration of the agreements and obligations set
forth herein and for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Issuers, the Subsidiary Guarantors and the Trustee hereby agree with each other,
for the equal and proportionate benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:



ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE




     Section 1.01 Definitions.



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing. The Trustee may request and may
conclusively rely upon an Officers’ Certificate to determine whether any Person is an Affiliate of
any specified Person.



     “Agent” means any Registrar or paying agent.



1









 





     “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.



     “Board of Directors” means (i) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such board, (ii) with
respect to a partnership, the Board of Directors or Board of Managers of the general partner of the
partnership, or in the case of Holly Energy Partners, the Board of Directors of Holly Logistic
Services, L.L.C., a Delaware limited liability company and the general partner of HEP Logistics
Holdings, L.P., (iii) with respect to a limited liability company, the managing member or members
or any controlling committee of managing members thereof and (iv) with respect to any other Person,
the board or committee of such Person serving a similar function. All references in this Indenture
to “Board of Directors” shall be deemed to refer to the Board of Directors of Holly Energy
Partners, unless otherwise expressly indicated or the context otherwise requires.



     “Board Resolution” means a copy of a resolution certified by the appropriate Person to have
been duly adopted by the Board of Directors and to be in full force and effect on the date of such
certification.



     “Business Day” means any day other than a Legal Holiday.



     “capital stock” means (i) in the case of a corporation, corporate stock, (ii) in the case of
an association or business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership interests (whether general or limited) or membership interests and
(iv) any other interest or participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing Person, but excluding from
all of the foregoing any debt securities convertible into capital stock, whether or not such debt
securities include any right of participation with capital stock.



     “Credit Facilities” means one or more debt facilities or commercial paper facilities, in each
case, with banks or other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables) or letters of credit,
in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including
by means of sales of debt securities to institutional investors) in whole or in part from time to
time.



     “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.



     “Debt” of any Person at any date means any obligation created or assumed by such Person for
the repayment of borrowed money and any guarantee thereof.



     “Debt Security” or “Debt Securities” has the meaning stated in the first recital of this
Indenture and more particularly means any debt security or debt securities, as the case may be, of
any series authenticated and delivered under this Indenture.



2









 





     “Default” means any event, act or condition that is, or after notice or the passage of time or
both would be, an Event of Default.



     “Depositary” means, unless otherwise specified by the Issuers pursuant to either Section 2.03
or 2.15, with respect to Debt Securities of any series issuable or issued in whole or in part in
the form of one or more Global Securities, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Exchange Act or other applicable
statute or regulations.



     “Designated Senior Indebtedness” means (i) any Senior Indebtedness which, at the date of
determination, has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $100,000,000 and (ii) any
other Senior Indebtedness designated, as provided in Section 2.03, in respect of any series of Debt
Securities.



     “Dollar” or “$” means such currency of the United States as at the time of payment is legal
tender for the payment of public and private debts.



     “equity interests” means capital stock and all warrants, options or other rights to acquire
capital stock (but excluding any debt security that is convertible into, or exchangeable for,
capital stock).



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute.



     “Floating Rate Security” means a Debt Security that provides for the payment of interest at a
variable rate determined periodically by reference to an interest rate index specified pursuant to
Section 2.03.



     “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect from time to time.



     “General Partner” means HEP Logistics Holdings, L.P., a Delaware limited partnership, and its
successors and permitted assigns as general partner of Holly Energy Partners or as the business
entity with the ultimate authority to manage the business and operations of Holly Energy Partners.



     “Global Security” means with respect to any series of Debt Securities issued hereunder, a Debt
Security which is executed by the Issuers and authenticated and delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instruction, all in accordance with this Indenture and
any Indentures supplemental hereto or the applicable Board Resolution and set forth in an Officers’
Certificate, which shall be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate principal amount of, all
the Outstanding Debt Securities of such series or any portion thereof, in either



3









 







case having the
same terms, including, without limitation, the same original issue date, date or dates on which
principal is due and interest rate or method of determining interest.



     “guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt or other obligation of any other Person and any obligation, direct
or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term “guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. The term “guarantee”
used as a verb has a corresponding meaning.



     “Holder,” “Holder of Debt Securities” or other similar terms means, a Person in whose name a
Debt Security is registered in the Debt Security Register (as defined in Section 2.07(a)).



     “Holly Energy Finance” means the Person named as “Holly Energy Finance” in the first paragraph
of this instrument until a successor Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Holly Energy Finance” shall mean such successor
Person.



     “Holly Energy Partners” means the Person named as “Holly Energy Partners” in the first
paragraph of this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter “Holly Energy Partners” shall mean such
successor Person.



     “Indenture” means this instrument as originally executed, or, if amended or supplemented as
herein provided, as so amended or supplemented and shall include the form and terms of particular
series of Debt Securities as contemplated hereunder, whether or not a supplemental Indenture is
entered into with respect thereto.



     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P.



     “Issuers” means Holly Energy Partners and Holly Energy Finance, and, subject to the applicable
provisions of this Indenture, shall also include their successors and assigns.



     “Issuer Order” means a written order of the Issuers signed by two Officers of each Issuer and
delivered to the Trustee.



     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City
of New York, New York or at a Place of Payment are authorized by law, regulation or executive order
to remain closed. If a payment date is a Legal Holiday at a Place of Payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.



4









 





     “Lien” means, with respect to any asset, any mortgage, lien, security interest, pledge, charge
or other encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law.



     “Moody’s” means Moody’s Investors Service, Inc., or any successor to the rating agency
business thereof.



     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary, any Vice President
or any Assistant Vice President of such Person (or, if such Person is a limited partnership, the
general partner of such Person). So long as Holly Energy Partners is a partnership, references
herein to its Officers shall be deemed to include the Officers of its General Partner or the
general partner of the General Partner, as appropriate.



     “Officers’ Certificate” means a certificate signed by two Officers of each of (i) Holly Energy
Partners and (ii) Holly Energy Finance; provided, however, one of each such Officers is the
principal executive officer, the principal financial officer, the treasurer, the principal
accounting officer, or any Person serving in a substantially similar position, of each of (A) Holly
Energy Partners or the General Partner, as the case may be, and (B) Holly Energy Finance.



     “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to Holly Energy Partners, the General
Partner, any Subsidiary of Holly Energy Partners or the General Partner, or the Trustee.



     “Original Issue Discount Debt Security” means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration of acceleration of
the maturity thereof pursuant to Section 6.01.



     “Outstanding,” when used with respect to any series of Debt Securities, means, as of the date
of determination, all Debt Securities of that series theretofore authenticated and delivered under
this Indenture, except:



          (a) Debt Securities of that series theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;




          (b) Debt Securities of that series for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any paying agent (other than Holly Energy
Partners, Holly Energy Finance or any Subsidiary of Holly Energy Partners) in trust or set aside
and segregated in trust by the Issuers (if Holly Energy Partners, Holly Energy Finance or any of
Holly Energy Partners’ Subsidiaries shall act as its own paying agent) for the Holders of such Debt
Securities; provided, that, if such Debt Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made; and




          (c) Debt Securities of that series which have been paid pursuant to Section 2.09 or in
exchange for or in lieu of which other Debt Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Debt Securities in respect of which



5









 






there shall
have been presented to the Trustee proof satisfactory to it that such Debt Securities are held by a
bona fide purchaser in whose hands such Debt Securities are valid obligations of the Issuers;




provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Debt Securities of any series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Debt Securities owned by the Issuers or any other obligor upon
the Debt Securities or any Affiliate of the Issuers or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Debt Securities which an officer of the Trustee actually knows to be so owned shall be
so disregarded. Debt Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Debt Securities and that the pledgee is not an Issuer or any other obligor
upon the Debt Securities or an Affiliate of the Issuers or of such other obligor. In determining
whether the Holders of the requisite principal amount of Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Debt Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and payable as of the date
of such determination upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.




     “Person” means any individual, corporation, partnership, joint venture, limited liability
company, incorporated or unincorporated association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof or other entity of any
kind.



     “Redemption Date,” when used with respect to any Debt Security to be redeemed, means the date
fixed for such redemption by or pursuant to this Indenture.



     “Reporting Failure” means the failure of Holly Energy Partners to deliver to the Trustee,
within the time periods specified in Section 4.05(a), the periodic reports, information, documents
or other reports which Holly Energy Partners is required to deliver to the Trustee pursuant to such
Section.



     “Representative” means the trustee, agent or representative (if any) for an issue of Senior
Indebtedness.



     “S&P” means Standards & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., or any successor to the rating agency business thereof.



     “SEC” means the Securities and Exchange Commission.



     “Securities Act” means the Securities Act of 1933, as amended, and any successor statute.



     “Senior Indebtedness” means, unless otherwise provided with respect to the Debt Securities of
a series as contemplated by Section 2.03, (i) all Debt of the Issuers or the Subsidiary Guarantors,
whether currently outstanding or hereafter issued, unless, by the terms of



6









 




the instrument creating
or evidencing such Debt, it is provided that such Debt is subordinate or not superior in right of
payment to the Subordinated Debt Securities, in the case of the Issuers, or a Guarantee thereof, in
the case of the Subsidiary Guarantors, or to other Debt which is pari passu with or subordinated to
the Subordinated Debt Securities, in the case of the Issuers, or a Guarantee thereof, in the case
of the Subsidiary Guarantors, and (ii) any modifications,
refunding, deferrals, renewals, or extensions of any such Debt or securities, notes or other
evidence of Debt issued in exchange for such Debt; provided that in no event shall “Senior
Indebtedness” include (A) Debt evidenced by the Subordinated Debt Securities or any Guarantee
thereof, (B) Debt of any of the Issuers or the Subsidiary Guarantors owed or owing to any
Subsidiary of the Issuers, (C) Debt of any of the Subsidiary Guarantors owed or owing to the
Issuers, (D) Debt to trade creditors, (E) any liability for taxes owed or owing by the Issuers or
the Subsidiary Guarantors or (F) Debt of any Subsidiary Guarantor in the event there is no series
of Debt Securities Outstanding that is entitled to the benefits of a Guarantee.




     “Significant Subsidiary Guarantor” means any Subsidiary Guarantor that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date of this Indenture.



     “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).



     “Subsidiary” of any Person means:



                         (i) any corporation, association or other business entity of which more than 50% of the total
voting power of equity interests entitled, without regard to the occurrence of any contingency, to
vote in the election of directors, managers, trustees or equivalent Persons thereof is at the time
of determination owned or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of such Person or combination thereof; or



                         (ii) in the case of a partnership, more than 50% of the partners’ equity interests,
considering all partners’ equity interests as a single class, is at such time of determination
owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or combination thereof.



     “Subsidiary Guarantors” means any Subsidiary of Holly Energy Partners who may execute this
Indenture, or a supplement thereto, for the purpose of providing a Guarantee of Debt Securities
pursuant to this Indenture, until such Guarantee is released in accordance with this Indenture.



     “TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. (S)77aaa-77bbbb), as in
effect on the date of this Indenture as originally executed and, to the extent required by law, as
amended.



7









 





     “Trustee” initially means [            ] and any other Person or Persons appointed as
such from time to time pursuant to Section 7.08, and, subject to the provisions of Article VII,
includes its or their successors and assigns. If at any time there is more than one such Person,
“Trustee” as used with respect to the Debt Securities of any series shall mean the Trustee with
respect to the Debt Securities of that series.



     “Trust Officer” means any officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.



     “United States” means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its jurisdiction.



     “U.S. Government Obligations” means direct obligations of the United States of America,
obligations on which the payment of principal and interest is fully guaranteed by the United States
of America or obligations or guarantees for the payment of which the full faith and credit of the
United States of America is pledged.



     “Yield to Maturity” means the yield to maturity, calculated at the time of issuance of a
series of Debt Securities, or, if applicable, at the most recent redetermination of interest on
such series and calculated in accordance with accepted financial practice.



     Section 1.02 Other Definitions.



	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Blockage Notice”

	 	 	12.03	 
	“Debt Security Register”

	 	 	2.07	 
	“Defaulted Interest”

	 	 	2.17	 
	“DTC”

	 	 	2.15	 
	“Event of Default”

	 	 	6.01	 
	“Funding Subsidiary Guarantor”

	 	 	14.05	 
	“Guarantee”

	 	 	14.01	 
	“Payment Blockage Period”

	 	 	12.03	 
	“Place of Payment”

	 	 	2.03	 
	“Registrar”

	 	 	2.07	 
	“Subordinated Debt Securities”

	 	 	12.01	 
	“Successor Company”

	 	 	10.01	 






     Section 1.03 Incorporation by Reference of Trust Indenture Act.



     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.



     All terms used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the TIA have the meanings so assigned to them.



8









 





     Section 1.04 Rules of Construction.



     Unless the context otherwise requires:



          (a) a term has the meaning assigned to it;




          (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;




          (c) “or” is not exclusive;




          (d) words in the singular include the plural, and in the plural include the singular;




          (e) provisions apply to successive events and transactions;




          (f) if the applicable series of Debt Securities is subordinated pursuant to Article XII,
unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of
its nature as unsecured Debt; and




          (g) the principal amount of any noninterest bearing or other discount security at any date
shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP.




ARTICLE II

DEBT SECURITIES




     Section 2.01 Forms Generally.



     The Debt Securities of each series shall be in substantially the form established without the
approval of any Holder by or pursuant to a Board Resolution of each of the Issuers or in one or
more Indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or endorsements placed
thereon as the Issuers may deem appropriate (and, if not contained in a supplemental Indenture
entered into in accordance with Article IX, as are not prohibited by the provisions of this
Indenture) or as may be required or appropriate to comply with any law or with any rules made
pursuant thereto or with any rules of any securities exchange on which such series of Debt
Securities may be listed, or to conform to general usage, or as may, consistently herewith, be
determined by the Officers executing such Debt Securities as evidenced by their execution of the
Debt Securities.



     The definitive Debt Securities of each series shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined by the Officers
executing such Debt Securities, as evidenced by their execution of such Debt.



     Section 2.02 Form of Trustee’s Certificate of Authentication.



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     The Trustee’s certificate of authentication on all Debt Securities authenticated by the
Trustee shall be in substantially the following form:



TRUSTEE’S CERTIFICATE OF AUTHENTICATION




     This is one of the Debt Securities of the series designated therein referred to in the
within-mentioned Indenture.



	 	 	 	 	 
	 	 	[                     ],

As Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Authorized Signatory






     Section 2.03 Principal Amount; Issuable in Series.



     The aggregate principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.



     The Debt Securities may be issued in one or more series in fully registered form. There shall
be established, without the approval of any Holders, in or pursuant to a Board Resolution of each
of the Issuers and set forth in an Officers’ Certificate, or established in one or more Indentures
supplemental hereto, prior to the issuance of Debt Securities of any series any or all of the
following:



          (a) the title of the Debt Securities of the series (which shall distinguish the Debt
Securities of the series from all other Debt Securities);




          (b) any limit upon the aggregate principal amount of the Debt Securities of the series which
may be authenticated and delivered under this Indenture (except for Debt Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);




          (c) the date or dates on which the principal and premium, if any, of the Debt Securities of
the series are payable;




          (d) the rate or rates (which may be fixed or variable) at which the Debt Securities of the
series shall bear interest, if any, or by which the Debt Securities will accrete in value, or the
method of determining such rate or rates, the date or dates from which such interest shall accrue,
the interest payment dates on which such interest shall be payable, or the method by which such
date will be determined, the record dates for the determination of Holders thereof to whom such
interest is payable, and the extent to which such interest may be paid in kind; and the basis upon
which interest will be calculated if other than that of a 360-day year of twelve thirty-day months;




          (e) the place or places, if any, in addition to or instead of the corporate trust office of
the Trustee, where the principal of, and premium, if any, and interest on, Debt Securities of the
series shall be payable (“Place of Payment”);




10









 








          (f) the price or prices at which, the period or periods within which and the terms and
conditions upon which Debt Securities of the series may be redeemed, in whole or in part, at the
option of the Issuers or otherwise;




          (g) whether Debt Securities of the series are (i) to be co-issued by Holly Energy Finance and
(ii) entitled to the benefits of any Guarantee of any Subsidiary Guarantors pursuant to this
Indenture;




          (h) the obligation, if any, of the Issuers to redeem, purchase or repay Debt Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof,
and the price or prices at which and the period or periods within which and the
terms and conditions upon which Debt Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligations;




          (i) the terms, if any, upon which the Debt Securities of the series may be convertible into or
exchanged for equity interests (which may be represented by depositary shares), other Debt
Securities or warrants for equity interests or Debt or other securities of any kind of the Issuers
or any other obligor and the terms and conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or rate, the conversion or exchange
period and any other provision in addition to or in lieu of those described herein;




          (j) if other than denominations of $1,000 and any integral multiple thereof, the denominations
in which Debt Securities of the series shall be issuable;




          (k) if the amount of principal of or any premium or interest on Debt Securities of the series
may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts will be determined;




          (l) if the principal amount payable at the Stated Maturity of Debt Securities of the series
will not be determinable as of any one or more dates prior to such Stated Maturity, the amount
which will be deemed to be such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity other than the Stated
Maturity or which will be deemed to be Outstanding as of any such date (or, in any such case, the
manner in which such deemed principal amount is to be determined);




          (m) any changes or additions to Article XI, including the addition of additional covenants
that may be subject to the covenant defeasance option pursuant to Section 11.02(b);




          (n) if other than the principal amount thereof, the portion of the principal amount of Debt
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01 or provable in bankruptcy pursuant to Section 6.02;




          (o) the terms, if any, of the transfer, mortgage, pledge or assignment as security for the
Debt Securities of the series of any properties, assets, moneys, proceeds, securities or other
collateral, including whether certain provisions of the TIA are applicable and any corresponding
changes to provisions of this Indenture as currently in effect;




11









 








          (p) any addition to or change in the Events of Default with respect to the Debt Securities of
the series and any change in the right of the Trustee or the Holders to declare the principal of,
and premium and interest on, such Debt Securities due and payable;




          (q) if the Debt Securities of the series shall be issued in whole or in part in the form of a
Global Security or Securities, the terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual Debt Securities in definitive
registered form; and the Depositary for such Global Security or Securities and the form of any
legend or legends to be borne by any such Global Security or Securities in addition to or in lieu
of the legend referred to in Section 2.15(a);




          (r) any trustees, authenticating or paying agents, transfer agents or registrars;




          (s) the applicability of, and any addition to or change in the covenants and definitions
currently set forth in this Indenture or in the terms currently set forth in Article X, including
conditioning any merger, conveyance, transfer or lease permitted by Article X upon the satisfaction
of any Debt coverage standard by the Issuers and any Successor Company (as defined in Article X);




          (t) the subordination, if any, of the Debt Securities of the series pursuant to Article XII
and any changes or additions to Article XII or designation of any Designated Senior Indebtedness;




          (u) with regard to Debt Securities of the series that do not bear interest, the dates for
certain required reports to the Trustee; and




          (v) any other terms of the Debt Securities of the series (which terms shall not be prohibited
by the provisions of this Indenture).




     All Debt Securities of any one series appertaining thereto shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant to such Board
Resolutions and as set forth in such Officers’ Certificate or in any such Indenture supplemental
hereto.



     Section 2.04 Execution of Debt Securities.



     The Debt Securities shall be signed by at least one Officer of each of the Issuers by manual
or facsimile signature of such present or any future Officers and may be imprinted or otherwise
reproduced on the Debt Securities.



     In case any Officer who shall have signed any of the Debt Securities shall cease to be such
Officer before the Debt Securities so signed shall have been authenticated and delivered by the
Trustee, or disposed of by the Issuers, such Debt Securities nevertheless may be authenticated and
delivered or disposed of as though the Person who signed such Debt Securities had not ceased to be
such Officer; and any Debt Security may be signed on behalf of the Issuers by such Persons as, at
the actual date of the execution of such Debt Security, shall be the proper Officers of the
Issuers, although at the date of such Debt Security or of the execution of this Indenture any such
Person was not such Officer.



12









 





     Only such Debt Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, signed manually by the Trustee, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Debt Security executed by the Issuers shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder.



     Section 2.05 Authentication and Delivery of Debt Securities.



     At any time and from time to time after the execution and delivery of this Indenture, the
Issuers may deliver Debt Securities of any series executed by the Issuers to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said Debt Securities to or
upon an Issuer Order. In authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the Trustee shall be
entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon:



          (a) a copy of a Board Resolution of each of the Issuers, certified by the Secretary or
Assistant Secretary of each of the Issuers, authorizing the terms of issuance of any series of Debt
Securities;




          (b) an executed supplemental Indenture, if any;




          (c) an Officers’ Certificate; and




          (d) an Opinion of Counsel prepared in accordance with Section 13.05 which shall also state:




                         (i) that the form of such Debt Securities has been established by or pursuant to a Board
Resolution of each of the Issuers or by a supplemental Indenture as permitted by Section 2.01 in
conformity with the provisions of this Indenture;



                         (ii) that the terms of such Debt Securities have been established by or pursuant to a Board
Resolution of each of the Issuers or by a supplemental Indenture as permitted by Section 2.03 in
conformity with the provisions of this Indenture;



                         (iii) that such Debt Securities, when authenticated and delivered by the Trustee and issued by
the Issuers in the manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Issuers, enforceable in accordance with
their terms except as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and rights of acceleration
and the availability of equitable remedies may be limited by equitable principles of general
applicability;



                         (iv) that Holly Energy Partners and Holly Energy Finance have the necessary partnership and
corporate power, respectively, to issue such Debt Securities and have duly taken all necessary
partnership and corporate action with respect to such issuance;



                         (v) that the issuance of such Debt Securities will not contravene the organizational documents
of either of the Issuers or result in any material violation of any of the terms or provisions of
any law or regulation or of any material indenture, mortgage or other agreement known to such
counsel by which the Issuers are bound;



13









 





                         (vi) that authentication and delivery of such Debt Securities and the execution and delivery
of any supplemental Indenture will not violate the terms of this Indenture; and



                         (vii) such other matters as the Trustee may reasonably request.



     Such Opinion of Counsel need express no opinion as to whether a court in the United States
would render a money judgment in a currency other than that of the United States.



     The Trustee shall have the right to decline to authenticate and deliver any Debt Securities
under this Section 2.05 if the Trustee, being advised by counsel, determines that such action may
not lawfully be taken or if the Trustee in good faith by its board of directors or trustees,
executive committee or a trust committee of directors, trustees or vice presidents (or any
combination thereof) shall determine that such action would expose the Trustee to personal
liability to existing Holders.



     The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to
authenticate Debt Securities of any series. Unless limited by the terms of such appointment, an
authenticating agent may authenticate any Debt Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as any Registrar, paying agent or agent for service of
notices and demands.



     Unless otherwise provided in the form of Debt Security for any series, each Debt Security
shall be dated the date of its authentication.



     Section 2.06 Denomination of Debt Securities.



     Unless otherwise provided in the form of Debt Security for any series, the Debt Securities of
each series shall be issuable only as fully registered Debt Securities in such Dollar denominations
as shall be specified or contemplated by Section 2.03. In the absence of any such specification
with respect to the Debt Securities of any series, the Debt Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.



     Section 2.07 Registration of Transfer and Exchange.



          (a) The Issuers shall keep or cause to be kept a register for each series of Debt Securities
issued hereunder (hereinafter collectively referred to as the “Debt Security Register”), in which,
subject to such reasonable regulations as they may prescribe, the Issuers shall provide for the
registration of all Debt Securities and the transfer of Debt Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for inspection by the
Trustee. Subject to Section 2.15, upon due presentment for registration of transfer of any Debt
Security at any office or agency to be maintained by the Issuers in accordance with the provisions
of Section 4.02, the Issuers shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Debt Security or Debt Securities of authorized
denominations for a like aggregate principal amount. In no event may Debt Securities be issued as,
or exchanged for, bearer securities.



14









 







     Unless and until otherwise determined by the Issuers pursuant to a Board Resolution of each of
the Issuers, the register of the Issuers for the purpose of registration, exchange or registration
of transfer of the Debt Securities shall be kept at the principal corporate trust office of the
Trustee and, for this purpose, the Trustee shall be designated “Registrar.”



     Debt Securities of any series (other than a Global Security, except as set forth below) may be
exchanged for a like aggregate principal amount of Debt Securities of the same series of other
authorized denominations. Subject to Section 2.15, Debt Securities to be exchanged shall be
surrendered at the office or agency to be maintained by the Issuers as provided in Section 4.02,
and the Issuers shall execute and the Trustee shall authenticate and deliver in exchange
therefor the Debt Security or Debt Securities which the Holder making the exchange shall be
entitled to receive.



          (b) All Debt Securities presented or surrendered for registration of transfer, exchange or
payment shall (if so required by the Issuers, the Trustee or the Registrar) be duly endorsed or be
accompanied by a written instrument or instruments of transfer, in form satisfactory to the
Issuers, the Trustee and the Registrar, duly executed by the Holder or his attorney duly authorized
in writing.




     All Debt Securities issued in exchange for or upon transfer of Debt Securities shall be the
valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under
this Indenture as the Debt Securities surrendered for such exchange or transfer.



     No service charge shall be made for any exchange or registration of transfer of Debt
Securities (except as provided by Section 2.09), but the Issuers may require payment of a sum
sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in
relation thereto, other than those expressly provided in this Indenture to be made at the Issuers’
own expense or without expense or without charge to the Holders.



     The Issuers shall not be required (i) to issue, register the transfer of or exchange any Debt
Securities for a period of 15 days next preceding any mailing of notice of redemption of Debt
Securities of such series or (ii) to register the transfer of or exchange any Debt Securities
selected, called or being called for redemption.



     Prior to the due presentation for registration of transfer of any Debt Security, the Issuers,
the Subsidiary Guarantors, the Trustee, any paying agent or any Registrar may deem and treat the
Person in whose name a Debt Security is registered as the absolute owner of such Debt Security for
the purpose of receiving payment of or on account of the principal of, and premium, if any, and
(subject to Section 2.12) interest on, such Debt Security and for all other purposes whatsoever,
whether or not such Debt Security is overdue, and none of the Issuers, the Subsidiary Guarantors,
the Trustee, any paying agent or any Registrar shall be affected by notice to the contrary.



     None of the Issuers, the Subsidiary Guarantors, the Trustee, any agent of the Trustee, any
paying agent or any Registrar will have any responsibility or liability for any aspect of the



15









 







records relating to, or payments made on account of, beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.



     Section 2.08 Temporary Debt Securities.



     Pending the preparation of definitive Debt Securities of any series, the Issuers may execute
and the Trustee shall authenticate and deliver temporary Debt Securities (printed, lithographed,
photocopied, typewritten or otherwise produced) of any authorized denomination, and substantially
in the form of the definitive Debt Securities in lieu of which they are issued, in registered form
with such omissions, insertions and variations as may be appropriate for temporary Debt Securities,
all as may be determined by the Issuers with the concurrence of the Trustee. Temporary Debt
Securities may contain such reference to any provisions of this Indenture as may be appropriate.
Every temporary Debt Security shall be executed by the
Issuers and be authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Debt Securities.



     If temporary Debt Securities of any series are issued, the Issuers will cause definitive Debt
Securities of such series to be prepared without unreasonable delay. After the preparation of
definitive Debt Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Issuers at a Place of Payment for such
series, without charge to the Holder thereof, except as provided in Section 2.07 in connection with
a transfer. Upon surrender for cancellation of any one or more temporary Debt Securities of any
series, the Issuers shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Debt Securities of the same series of authorized
denominations and of like tenor. Until so exchanged, temporary Debt Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities
of such series.



     Upon any exchange of a portion of a temporary Global Security for a definitive Global Security
or for the individual Debt Securities represented thereby pursuant to Section 2.07 or this Section
2.08, the temporary Global Security shall be endorsed by the Trustee to reflect the reduction of
the principal amount evidenced thereby, whereupon the principal amount of such temporary Global
Security shall be reduced for all purposes by the amount to be exchanged and endorsed.



     Section 2.09 Mutilated, Destroyed, Lost or Stolen Debt Securities.



     If (i) any mutilated Debt Security is surrendered to the Trustee at its corporate trust office
or (ii) the Issuers and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Debt Security, and there is delivered to the Issuers and the Trustee such security
or indemnity as may be required by them to save each of them and any paying agent harmless, and
neither the Issuers nor the Trustee receives notice that such Debt Security has been acquired by a
protected purchaser, then the Issuers shall execute and, upon an Issuer Order, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Debt Security, a new Debt Security of the same series of like tenor, form, terms and



16









 







principal amount, bearing a number not contemporaneously Outstanding. Upon the issuance of any
substituted Debt Security, the Issuers may require the payment of a sum sufficient to cover any
tax, fee, assessment or other governmental charge that may be imposed in relation thereto and any
other expenses connected therewith. In case any Debt which has matured or is about to mature or
which has been called for redemption shall become mutilated or be destroyed, lost or stolen, the
Issuers may, instead of issuing a substituted Debt Security, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Debt Security) if the applicant
for such payment shall furnish the Issuers and the Trustee with such security or indemnity as
either may require to save it harmless from all risk, however remote, and, in case of destruction,
loss or theft, evidence to the satisfaction of the Issuers and the Trustee of the destruction, loss
or theft of such Debt Security and of the ownership thereof.



     Every substituted Debt Security of any series issued pursuant to the provisions of this
Section 2.09 by virtue of the fact that any Debt Security is destroyed, lost or stolen shall
constitute an original additional contractual obligation of the Issuers, whether or not the
destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all other Debt
Securities of that series duly issued hereunder. All Debt Securities shall be held and owned upon
the express condition that the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debt Securities, and shall preclude any and all
other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments or other securities
without their surrender.



     Section 2.10 Cancellation of Surrendered Debt Securities.



     All Debt Securities surrendered for payment, redemption, registration of transfer or exchange
shall, if surrendered to the Issuers or any paying agent or a Registrar, be delivered to the
Trustee for cancellation by it, or if surrendered to the Trustee, shall be canceled by it, and no
Debt Securities shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. All canceled Debt Securities held by the Trustee shall be destroyed
(subject to the record retention requirements of the Exchange Act) and certification of their
destruction delivered to the Issuers, unless otherwise directed. On request of the Issuers, the
Trustee shall deliver to the Issuers canceled Debt Securities held by the Trustee. If the Issuers
shall acquire any of the Debt Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the Debt represented thereby unless and until the same are delivered
or surrendered to the Trustee for cancellation. The Issuers may not issue new Debt Securities to
replace Debt Securities they have redeemed, paid or delivered to the Trustee for cancellation.



     Section 2.11 Provisions of the Indenture and Debt Securities for the Sole Benefit of the
Parties and the Holders.



     Nothing in this Indenture or in the Debt Securities, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto, the Holders or any Registrar or
paying agent, any legal or equitable right, remedy or claim under or in respect of this Indenture,
or under any covenant, condition or provision herein contained; all its covenants, conditions and



17









 







provisions being for the sole benefit of the parties hereto, the Holders and any Registrar and
paying agents.



     Section 2.12 Payment of Interest; Interest Rights Preserved.



          (a) Interest on any Debt Security that is payable and is punctually paid or duly provided for
on any interest payment date shall be paid to the Person in whose name such Debt Security is
registered at the close of business on the regular record date for such interest notwithstanding
the cancellation of such Debt Security upon any transfer or exchange subsequent to the regular
record date. Payment of interest on Debt Securities shall be made at the corporate trust office of
the Trustee (except as otherwise specified pursuant to Section 2.03), or at the option of the
Issuers, by check mailed to the address of the Person entitled thereto as such address shall appear
in the Debt Security Register or, if provided pursuant to Section 2.03 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Holder by wire transfer to an
account designated by the Holder.




          (b) Subject to the foregoing provisions of this Section 2.12 and Section 2.17, each Debt
Security of a particular series delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Debt Security of the same series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other Debt Security.




     Section 2.13 Securities Denominated in Dollars.



     Except as otherwise specified pursuant to Section 2.03 for Debt Securities of any series,
payment of the principal of, and premium, if any, and interest on, Debt Securities of such series
will be made in Dollars.



     Section 2.14 Wire Transfers.



     Notwithstanding any other provision to the contrary in this Indenture, the Issuers may make
any payment of moneys required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to optional or mandatory
redemption payments, interest payments or otherwise) by wire transfer in immediately available
funds to an account designated by the Trustee before 11:00 a.m., New York City time, on the date
such moneys are to be paid to the Holders of the Debt Securities in accordance with the terms
hereof.



     Section 2.15 Securities Issuable in the Form of a Global Security.



          (a) If the Issuers shall establish pursuant to Sections 2.01 and 2.03 that the Debt Securities
of a particular series are to be issued in whole or in part in the form of one or more Global
Securities, then each of the Issuers shall execute and the Trustee or its agent shall, in
accordance with Section 2.05, authenticate and deliver, such Global Security or Securities, which
shall represent, and shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Debt Securities of such series to be represented by such Global Security or
Securities, or such portion thereof as the Issuers shall specify in an Officers’ Certificate, shall
be registered in the name of the Depositary for such Global Security or



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Securities or its nominee,
shall be delivered by the Trustee or its agent to the Depositary or pursuant to the Depositary’s
instruction and shall bear a legend substantially to the following effect:




     “UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



     TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO HEREIN.”


or such other legend as may then be required by the Depositary for such Global Security or
Securities.




          (b) Notwithstanding any other provision of this Section 2.15 or of Section 2.07 to the
contrary, and subject to the provisions of paragraph (c) below, unless the terms of a Global
Security expressly permit such Global Security to be exchanged in whole or in part for definitive
Debt Securities in registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee of the Depositary
for such Global Security, or by a nominee of the Depositary to the Depositary or another nominee of
the Depositary, or by the Depositary or a nominee of the Depositary to a successor Depositary for
such Global Security selected or approved by the Issuers, or to a nominee of such successor
Depositary.




          (c) (i) If at any time the Depositary for a Global Security or Securities notifies the Issuers
that it is unwilling or unable to continue as Depositary for such Global Security or Securities or
if at any time the Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or regulation, the
Issuers shall appoint a successor Depositary with respect to such Global Security or Securities.
If a successor Depositary for such Global Security or Securities is not appointed by the Issuers
within 90 days after the Issuers receive such notice or become aware of such ineligibility, the
Issuers shall execute, and the Trustee or its agent, upon receipt of an Issuer Order for the
authentication and delivery of such individual Debt Securities of such series in exchange for such
Global Security, will authenticate and deliver, individual Debt Securities of



19









 






such series of like
tenor and terms in definitive form in an aggregate principal amount equal to the principal amount
of the Global Security in exchange for such Global Security or Securities.




                         (ii) The Issuers may at any time and in their sole discretion determine that the Debt
Securities of any series or portion thereof issued or issuable in the form of one or more Global
Securities shall no longer be represented by such Global Security or Securities. In such event the
Issuers will execute, and the Trustee, upon receipt of an Issuer Order for the authentication and
delivery of individual Debt Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Debt Securities of such series of like
tenor and terms in definitive form in an aggregate principal amount equal to the principal amount
of such series or portion thereof in exchange for such Global Security or Securities.



                         (iii) If specified by the Issuers pursuant to Sections 2.01 and 2.03 with respect to Debt
Securities issued or issuable in the form of a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for individual Debt
Securities of such series of like tenor and terms in definitive form on such terms as are
acceptable to the Issuers, the Trustee and such Depositary. Thereupon the Issuers shall
execute, and the Trustee or its agent upon receipt of an Issuer Order for the authentication
and delivery of definitive Debt Securities of such series shall authenticate and deliver, without
service charge, (A) to each Person specified by such Depositary a new Debt Security or Securities
of the same series of like tenor and terms and of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for such Person’s beneficial interest
in the Global Security and (B) to such Depositary a new Global Security of like tenor and terms and
in an authorized denomination equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of Debt Securities delivered to
Holders thereof.



                         (iv) In any exchange provided for in any of the preceding three paragraphs, the Issuers will
execute and the Trustee or its agent will authenticate and deliver individual Debt Securities.
Upon the exchange of the entire principal amount of a Global Security for individual Debt
Securities, such Global Security shall be canceled by the Trustee or its agent. Except as provided
in the preceding paragraph, Debt Securities issued in exchange for a Global Security pursuant to
this Section 2.15 shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the Registrar. The Trustee or the
Registrar shall deliver such Debt Securities to the Persons in whose names such Debt Securities are
so registered.



                         (v) Payments in respect of the principal of and interest on any Debt Securities registered in
the name of the Depositary or its nominee will be payable to the Depositary or such nominee in its
capacity as the registered owner of such Global Security. The Issuers and the Trustee may treat
the Person in whose name the Debt Securities, including the Global Security, are registered as the
owner thereof for the purpose of receiving such payments and for any and all other purposes
whatsoever. None of the Issuers, the Trustee, any Registrar, the paying agent or any agent of the
Issuers or the Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of the beneficial



20









 




ownership interests of the Global
Security by the Depositary or its nominee or any of the Depositary’s direct or indirect
participants, or for maintaining, supervising or reviewing any records of the Depositary, its
nominee or any of its direct or indirect participants relating to the beneficial ownership
interests of the Global Security, the payments to the beneficial owners of the Global Security of
amounts paid to the Depositary or its nominee, or any other matter relating to the actions and
practices of the Depositary, its nominee or any of its direct or indirect participants. None of
the Issuers, the Trustee or any such agent will be liable for any delay by the Depositary, its
nominee, or any of its direct or indirect participants in identifying the beneficial owners of the
Debt Securities, and the Issuers and the Trustee may conclusively rely on, and will be protected in
relying on, instructions from the Depositary or its nominee for all purposes (including with
respect to the registration and delivery, and the respective principal amounts, of the Debt
Securities to be issued).




     Section 2.16 Medium Term Securities.



     Notwithstanding any contrary provision herein, if all Debt Securities of a series are not to
be originally issued at one time, it shall not be necessary for the Issuers to deliver to the
Trustee an Officers’ Certificate, a Board Resolution, a supplemental Indenture, an Opinion of
Counsel or written order or any other document otherwise required pursuant to Section 2.01, 2.03,
2.05 or
13.05 at or prior to the time of authentication of each Debt Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the authentication upon original
issuance of the first such Debt Security of such series to be issued; provided, that any subsequent
request by the Issuers to the Trustee to authenticate Debt Securities of such series upon original
issuance shall constitute a representation and warranty by the Issuers that, as of the date of such
request, the statements made in the Officers’ Certificate delivered pursuant to Section 2.05 or
13.05 shall be true and correct as if made on such date and that the Opinion of Counsel delivered
at or prior to such time of authentication of an original issuance of Debt Securities shall
specifically state that it shall relate to all subsequent issuances of Debt Securities of such
series that are identical to the Debt Securities issued in the first issuance of Debt Securities of
such series.



     An Issuer Order delivered by the Issuers to the Trustee in the circumstances set forth in the
preceding paragraph, may provide that Debt Securities which are the subject thereof will be
authenticated and delivered by the Trustee or its agent on original issue from time to time upon
the telephonic or written order of Persons designated in such written order (any such telephonic
instructions to be promptly confirmed in writing by such Person) and that such Persons are
authorized to determine, consistent with the Officers’ Certificate, supplemental Indenture or
applicable Board Resolution relating to such written order, such terms and conditions of such Debt
Securities as are specified in such Officers’ Certificate, supplemental Indenture or such Board
Resolution.



     Section 2.17 Defaulted Interest.



     Any interest on any Debt Security of a particular series which is payable, but is not
punctually paid or duly provided for, on the dates and in the manner provided in the Debt
Securities of such series and in this Indenture (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder thereof on the relevant record date by virtue of having
been



21









 




such Holder, and such Defaulted Interest may be paid by the Issuers, at their election in each
case, as provided in clause (a) or (b) below:




                    (a) The Issuers may elect to make payment of any Defaulted Interest to the Persons in whose
names the Debt Securities of such series are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Issuers shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debt Security of such series and the date of the proposed payment,
and at the same time the Issuers shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Issuers of such special record date and, in the name and at the expense of the Issuers, shall
cause notice of the proposed payment of such Defaulted Interest and the special record date
therefor to be mailed, first class postage pre-paid, to each Holder thereof at its address as it
appears in the Debt Security Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the special record
date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Debt Securities of such series are registered at the close of business on such special
record date.



                    (b) The Issuers may make payment of any Defaulted Interest on the Debt Securities of such
series in any other lawful manner not inconsistent with the requirements of any securities exchange
on which the Debt Securities of such series may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Issuers to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.



     Section 2.18 CUSIP Numbers.



     The Issuers in issuing the Debt Securities may use “CUSIP” numbers (if then generally in use),
and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made as to the accuracy
of such numbers either as printed on the Debt Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification numbers printed on the
Debt Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers. The Issuers will promptly notify the Trustee in writing of any change in the “CUSIP”
numbers.



ARTICLE III

REDEMPTION OF DEBT SECURITIES




     Section 3.01 Applicability of Article.



22









 





     The provisions of this Article shall be applicable to the Debt Securities of any series which
are redeemable before their Stated Maturity except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.



     Section 3.02 Notice of Redemption; Selection of Debt Securities.



     In case the Issuers shall desire to exercise the right to redeem all or, as the case may be,
any part of the Debt Securities of any series in accordance with their terms, a Board Resolution of
each Issuer or a supplemental Indenture, the Issuers shall fix a date for redemption and shall
instruct the Trustee or registrar to give notice of such redemption at least 30 and not more than
60 days prior to the date fixed for redemption to the Holders of Debt Securities of such series so
to be redeemed as a whole or in part, in the manner provided in Section 13.03. The notice if given
in the manner herein provided shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice. In any case, failure to give such notice or any defect in the
notice to the Holder of any Debt Security of a series designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any other Debt Security
of such series.



     Each such notice of redemption shall specify the date fixed for redemption, the redemption
price at which Debt Securities of such series are to be redeemed (or the method of calculating such
redemption price), the Place or Places of Payment that payment will be made
upon presentation and surrender of such Debt Securities, that any interest accrued to the date
fixed for redemption will be paid as specified in said notice, that the redemption is for a sinking
fund payment (if applicable), that, unless the Issuers default in making such redemption payment or
if the Debt Securities of that series are subordinated pursuant to the terms of Article XII, the
paying agent is prohibited from making such payment pursuant to the terms of this Indenture, on and
after said date any interest thereon or on the portions thereof to be redeemed will cease to
accrue, or in the case of Original Issue Discount Securities original issue discount accrued after
the date fixed for redemption will cease to accrue, the terms of the Debt Securities of that series
pursuant to which the Debt Securities of that series are being redeemed and that no representation
is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Debt Securities of that series. If less than all the Debt Securities of a series
are to be redeemed the notice of redemption shall specify the certificate numbers of the Debt
Securities of that series to be redeemed. In case any Debt Security of a series is to be redeemed
in part only, the notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such
Debt Security, a new Debt Security or Debt Securities of that series in principal amount equal to
the unredeemed portion thereof, will be issued.



     At least 45 days but not more than 60 days before the Redemption Date unless the Trustee
consents to a shorter period, the Issuers shall give written notice to the Trustee of the
Redemption Date, the principal amount of Debt Securities to be redeemed and the series and terms of
the Debt Securities pursuant to which such redemption will occur. Such notice shall be accompanied
by an Officers’ Certificate and an Opinion of Counsel to the effect that such redemption will
comply with the conditions herein. If fewer than all the Debt Securities of a series are to be
redeemed, the record date relating to such redemption shall be selected by the



23









 




Issuers and given in
writing to the Trustee, which record date shall be not less than 15 days after the date of notice
to the Trustee.




     By 11:00 a.m., New York City time, on the Redemption Date for any Debt Securities, the Issuers
shall deposit with the Trustee or with a paying agent (or, if either of the Issuers or any
Subsidiary of Holly Energy Partners is acting as its own paying agent, segregate and hold in trust)
an amount of money in Dollars (except as provided pursuant to Section 2.03) sufficient to pay the
redemption price of such Debt Securities or any portions thereof that are to be redeemed on that
date, together with any interest accrued to the Redemption Date.



     If less than all the Debt Securities of like tenor and terms of a series are to be redeemed
(other than pursuant to mandatory sinking fund redemptions), the Trustee shall select, on a pro
rata basis, by lot or by such other method as in its sole discretion it shall deem appropriate and
fair, the Debt Securities of that series or portions thereof (in multiples of $1,000) or such other
authorized denomination to be redeemed. In any case where more than one Debt Security of such
series is registered in the same name, the Trustee in its discretion may treat the aggregate
principal amount so registered as if it were represented by one Debt Security of such series. The
Trustee shall promptly notify the Issuers in writing of the Debt Securities selected for redemption
and, in the case of any Debt Securities selected for partial redemption, the principal amount
thereof to be redeemed. If any Debt Security called for redemption shall not be so paid upon
surrender thereof on such Redemption Date, the principal, premium, if any, and interest shall bear
interest until paid from the Redemption Date at the rate or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) borne by the Debt Securities of that series. If less than
all the Debt Securities of unlike tenor and terms of a series are to be redeemed, the
particular Debt Securities to be redeemed shall be selected by the Issuers. Provisions of this
Indenture that apply to Debt Securities called for redemption also apply to portions of Debt
Securities called for redemption.



     Section 3.03 Payment of Debt Securities Called for Redemption.



     If notice of redemption has been given as provided in Section 3.02, the Debt Securities or
portions of Debt Securities of the series with respect to which such notice has been given shall
become due and payable on the date and at the Place or Places of Payment stated in such notice at
the applicable redemption price, together with any interest accrued to the date fixed for
redemption, and on and after said date (unless the Issuers shall default in the payment of such
Debt Securities at the applicable redemption price, together with any interest accrued to said
date) any interest on the Debt Securities or portions of Debt Securities of any series so called
for redemption shall cease to accrue, and any original issue discount in the case of Original Issue
Discount Securities shall cease to accrue. On presentation and surrender of such Debt Securities
at the Place or Places of Payment in said notice specified, the said Debt Securities or the
specified portions thereof shall be paid and redeemed by the Issuers at the applicable redemption
price, together with any interest accrued thereon to the date fixed for redemption.



     Any Debt Security that is to be redeemed only in part shall be surrendered at the corporate
trust office or such other office or agency of the Trustee as is specified pursuant to Section 2.03
with, if the Issuers, the Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Issuers, the Registrar and the Trustee



24









 




duly
executed by, the Holder thereof or his attorney duly authorized in writing, and the Issuers shall
execute, and the Trustee shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Debt Security or Debt Securities of the same series, of like tenor and form,
of any authorized denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Debt Security so surrendered;
except that if a Global Security is so surrendered, the Issuers shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Security, without service charge,
a new Global Security in a denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered. In the case of a Debt Security providing
appropriate space for such notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a notation on such Debt
Security of the payment of the redeemed portion thereof.




     Section 3.04 Mandatory and Optional Sinking Funds.



     The minimum amount of any sinking fund payment provided for by the terms of Debt Securities of
any series, Board Resolution or a supplemental Indenture is herein referred to as a “mandatory
sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms
of Debt Securities of any series, Board Resolution or a supplemental Indenture is herein referred
to as an “optional sinking fund payment.”



     In lieu of making all or any part of any mandatory sinking fund payment with respect to any
Debt Securities of a series in cash, the Issuers may, at their option, (i) deliver to the Trustee
Debt Securities of that series theretofore purchased or otherwise acquired by the Issuers or
(ii) receive credit for the principal amount of Debt Securities of that series which have been
redeemed either at the election of the Issuers pursuant to the terms of such Debt Securities or
through the application of permitted optional sinking fund payments pursuant to the terms of such
Debt Securities, resolution or supplemental Indenture; provided, that such Debt Securities have not
been previously so credited. Such Debt Securities shall be received and credited for such purpose
by the Trustee at the redemption price specified in such Debt Securities, resolution or
supplemental Indenture for redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.



     Section 3.05 Redemption of Debt Securities for Sinking Fund.



     Not less than 60 days prior to each sinking fund payment date for any series of Debt
Securities, the Issuers will deliver to the Trustee an Officers’ Certificate specifying the amount
of the next ensuing sinking fund payment for that series pursuant to the terms of that series, any
resolution or supplemental Indenture, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by delivering and
crediting Debt Securities of that series pursuant to this Section 3.05 (which Debt Securities, if
not previously redeemed, will accompany such certificate) and whether the Issuers intend to
exercise their right to make any permitted optional sinking fund payment with respect to such
series. Such certificate shall also state that no Event of Default has occurred and is continuing
with respect to such series. Such certificate shall be irrevocable and upon its delivery the
Issuers shall be obligated to make the cash payment or payments therein referred to, if any, by
11:00



25









 




a.m., New York City time, on the next succeeding sinking fund payment date. Failure of the
Issuers to deliver such certificate (or to deliver the Debt Securities specified in this paragraph)
shall not constitute a Default, but such failure shall require that the sinking fund payment due on
the next succeeding sinking fund payment date for that series shall be paid entirely in cash and
shall be sufficient to redeem the principal amount of such Debt Securities subject to a mandatory
sinking fund payment without the option to deliver or credit Debt Securities as provided in this
Section 3.05 and without the right to make any optional sinking fund payment, if any, with respect
to such series.




     Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused
balance of any preceding sinking fund payments made in cash which shall equal or exceed $100,000
(or a lesser sum if the Issuers shall so request) with respect to the Debt Securities of any
particular series shall be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment date, on the sinking
fund payment date following the date of such payment) to the redemption of such Debt Securities at
the redemption price specified in such Debt Securities, resolution or supplemental Indenture for
operation of the sinking fund together with any accrued interest to the date fixed for redemption.
Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Debt
Securities shall be added to the next cash sinking fund payment received by the Trustee for such
series and, together with such payment, shall be applied in accordance with the provisions of this
Section 3.05. Any and all sinking fund moneys with respect to the Debt Securities of any
particular series held by the Trustee on the last sinking fund payment date with respect to Debt
Securities of such series and not held for the payment or redemption of particular Debt Securities
shall be applied by the Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the Debt Securities of that series
at its Stated Maturity.



     The Trustee shall select the Debt Securities to be redeemed upon such sinking fund payment
date in the manner specified in the last paragraph of Section 3.02 and the Issuers shall cause
notice of the redemption thereof to be given in the manner provided in Section 3.02 except that the
notice of redemption shall also state that the Debt Securities are being redeemed by operation of
the sinking fund. Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Section 3.03.



     At least one Business Day before each sinking fund payment date, the Issuers shall pay to the
Trustee (or, if the Issuers are acting as their own paying agents, the Issuers shall segregate and
hold in trust) in cash a sum equal to any interest accrued to the date fixed for redemption of the
Debt Securities or portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 3.05.



     The Trustee shall not redeem any Debt Securities of a series with sinking fund moneys or mail
any notice of redemption of such Debt Securities by operation of the sinking fund for such series
during the continuance of a Default in payment of interest on such Debt Securities or of any Event
of Default (other than an Event of Default occurring as a consequence of this paragraph) with
respect to such Debt Securities, except that if the notice of redemption of any such Debt
Securities shall theretofore have been mailed in accordance with the provisions hereof, the Trustee
shall redeem such Debt Securities if cash sufficient for that purpose shall be



26









 




deposited with the
Trustee for that purpose in accordance with the terms of this Article III. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any such Default or Event of
Default shall occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such Default or Event of Default, be held as security for the payment of such Debt
Securities; provided, however, that in case such Default or Event of Default shall have been cured
or waived as provided herein, such moneys shall thereafter be applied on the next sinking fund
payment date for such Debt Securities on which such moneys may be applied pursuant to the
provisions of this Section 3.05.




ARTICLE IV

PARTICULAR COVENANTS OF THE ISSUERS




     Section 4.01 Payment of Principal of, and Premium, If Any, and Interest on, Debt Securities.



     The Issuers, for the benefit of each series of Debt Securities, will duly and punctually pay
or cause to be paid the principal of, and premium, if any, and interest on, each of the Debt
Securities at the place, at the respective times and in the manner provided herein or in the Debt
Securities. Each installment of interest on the Debt Securities may, at the Issuers’ option, be
paid by mailing checks for such interest payable to the Person entitled thereto pursuant to Section
2.07(a) to the address of such Person as it appears on the Debt Security Register.



     Principal, premium and interest of Debt Securities of any series shall be considered paid on
the date due if, by 11:00 a.m., New York City time, on such date the Trustee or any paying agent
holds in accordance with this Indenture money sufficient to pay all principal, premium and interest
then due and, in the case of Debt Securities subordinated pursuant to the terms of Article XII, the
Trustee or such paying agent, as the case may be, is not prohibited from paying such money to the
Holders on that date pursuant to the terms of this Indenture.



     The Issuers shall pay interest on overdue principal or premium, if any, at the rate specified
therefor in the Debt Securities and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.



     Section 4.02 Maintenance of Offices or Agencies for Registration of Transfer, Exchange and
Payment of Debt Securities.



     The Issuers will maintain in each Place of Payment for any series of Debt Securities an office
or agency where Debt Securities of such series may be presented or surrendered for payment, and
will also maintain (in or outside such Place of Payment) an office or agency where Debt Securities
of such series may be surrendered for transfer or exchange and where notices and demands to or upon
the Issuers in respect of the Debt Securities of such series and this Indenture may be served. The
Issuers will give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuers shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the office of the Trustee
where its corporate trust business is principally administered in the United States,



27









 




and the
Issuers hereby appoint the Trustee as their agent to receive all presentations, surrenders, notices
and demands.




     The Issuers may also from time to time designate different or additional offices or agencies
to be maintained for such purposes (in or outside of such Place of Payment), and may from time to
time rescind any such designation; provided, however, that no such designation or rescission shall
in any manner relieve the Issuers of their obligations described in the preceding paragraph. The
Issuers will give prompt written notice to the Trustee of any such additional designation or
rescission of designation and any change in the location of any such different or additional office
or agency.



     Section 4.03 Appointment to Fill a Vacancy in the Office of Trustee.



     The Issuers, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a
Trustee hereunder with respect to each series of Debt Securities.



     Section 4.04 Duties of Paying Agents, etc.



          (a) The Issuers shall cause each paying agent, if any, other than the Trustee, to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section 4.04,




                         (i) that it will hold all sums held by it as such agent for the payment of the principal of,
and premium, if any, or interest on, the Debt Securities of any series (whether such sums have been
paid to it by the Issuers or by any other obligor on the Debt Securities of such series) in trust
for the benefit of the Holders of the Debt Securities of such series;



                         (ii) that it will give the Trustee notice of any failure by the Issuers (or by any other
obligor on the Debt Securities of such series) to make any payment of the principal of, and
premium, if any, or interest on, the Debt Securities of such series when the same shall be due and
payable; and



                         (iii) that it will at any time during the continuance of an Event of Default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held by it as such agent.



          (b) If either of the Issuers or any of the Subsidiaries of Holly Energy Partners act as paying
agent, it will, on or before each due date of the principal of, and premium, if any, or interest
on, the Debt Securities of any series, set aside, segregate and hold in trust for the benefit of
the Holders of the Debt Securities of such series a sum sufficient to pay such principal, premium,
if any, or interest so becoming due. The Issuers will promptly notify the Trustee of any failure
by the Issuers or the Subsidiaries of Holly Energy Partners, as applicable, to take such action or
the failure by any other obligor on such Debt Securities to make any payment of the principal of,
and premium, if any, or interest on, such Debt Securities when the same shall be due and payable.



28









 







          (c) Anything in this Section 4.04 to the contrary notwithstanding, either of the Issuers may,
at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying
agent, as required by this Section 4.04, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by the Issuers or such paying agent.




          (d) Whenever the Issuers shall have one or more paying agents with respect to any series of
Debt Securities, they will, prior to each due date of the principal of, and premium, if any, or
interest on, any Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such paying agent is the Trustee)
the Issuers will promptly notify the Trustee of their action or failure so to act.




          (e) Anything in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums
in trust as provided in this Section 4.04 is subject to the provisions of Section 11.05.




     Section 4.05 SEC Reports; Financial Statements.



          (a) Holly Energy Partners shall, so long as any of the Debt Securities are Outstanding, file
with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports
and the information, documents and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) that it is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If Holly Energy Partners is not subject
to the requirements of such Section 13 or 15(d), it shall file with the Trustee, within 15 days
after it would have been required to file the same with the SEC, financial statements, including
any notes thereto (and with respect to annual reports, an auditors’ report by a firm of established
national reputation), and a “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” both comparable to that which Holly Energy Partners would have been
required to include in such annual reports, information, documents or other reports if it had been
subject to the requirements of such Section 13 or 15(d). Holly Energy Partners shall also comply
with the provisions of TIA Section 314(a). The availability to the public of the foregoing reports
and other materials on the website of the SEC or Holly Energy Partners shall be deemed to satisfy
the delivery obligations of Holly Energy Partners under this Section 4.05(a).




          (b) If Holly Energy Partners is required to furnish annual or quarterly reports to the holders
of its common units pursuant to the Exchange Act, Holly Energy Partners shall, so long as any of
the Debt Securities are outstanding, cause any annual report furnished to the holders of its common
units generally and any quarterly or other financial reports furnished by it to its common
unitholders generally to be filed with the Trustee and mailed to the Holders in the manner and to
the extent provided in Section 5.03.




          (c) Delivery of reports and other materials to the Trustee under this Section 4.05 is for
informational purposes only and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein.



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          (d) Holly Energy Partners shall, so long as any of the Debt Securities are Outstanding,
deliver to the Trustee, within 30 days of any Officer of Holly Energy Partners becoming aware of
the occurrence of any Default or Event of Default, an Officers’ Certificate specifying such Default
or Event of Default and what action Holly Energy Partners is taking or proposing to take with
respect thereto.




     Section 4.06 Compliance Certificate.



          (a) The Issuers and each Subsidiary Guarantor (to the extent that such Subsidiary Guarantor is
so required under the TIA) shall, so long as any of the Debt Securities are outstanding, deliver to
the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating
that a review of the activities of the Issuers and Holly Energy Partners’ Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers have kept, observed, performed and fulfilled their obligations
under this Indenture, and further stating, as to each such Officer signing such certificate, that
to the best of his knowledge the Issuers have kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and are not in default in the performance or observance
of any of the terms, provisions and conditions hereof, without regard to any grace period or
requirement of notice required by this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which such Officer may have
knowledge and what action the Issuers are taking or propose to take with respect thereto) and, if
the Debt Securities of any series are subordinated pursuant to the terms of Article XII, that to
the best of his knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, or premium, if any, or interest, if any, on the Debt
Securities are prohibited or, if such event has occurred, a description of the event and what
action the Issuers are taking or propose to take with respect thereto. The Trustee shall be
entitled to assume the Issuer’s fiscal year ends on December 31 of each year unless the Issuer
provides written notice to the contrary.




          (b) The Issuers shall, so long as any of the Debt Securities are outstanding, deliver to the
Trustee within 30 days after the occurrence of any Default or Event of Default under this
Indenture, an Officers’ Certificate specifying such Default or Event of Default, the status thereof
and what action the Issuers are taking or propose to take with respect thereto.




     Section 4.07 Further Instruments and Acts.



     The Issuers will, upon request of the Trustee, execute and deliver such further instruments
and do such further acts as may reasonably be necessary or proper to carry out more effectually the
purposes of this Indenture.



     Section 4.08 Corporate, Partnership or Limited Liability Company Existence.



     Subject to Article X, the Issuers shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate, partnership or limited liability company
existence and related rights and franchises (charges and statutory) of Holly Energy Partners and
each of its Subsidiaries; provided, however, that Holly Energy Partners shall not be required to
preserve any such right or franchise for the corporate, partnership or limited liability company



30









 







existence of any such Subsidiary if the management of the General Partner or its general partner,
as appropriate, shall determine that the preservation thereof is no longer desirable in the conduct
of the business of Holly Energy Partners and its Subsidiaries as a whole and that the loss thereof
is not disadvantageous in any material respect to the Holders; and provided, further, however, that
the foregoing shall not prohibit a sale, transfer or conveyance of a Subsidiary of or any of its
assets in compliance with the terms of the Indenture.



     Section 4.09 Maintenance of Properties.



     Holly Energy Partners shall cause all properties owned by it or any of its Subsidiaries or
used or held for use in the conduct of its business or the business of any such Subsidiary to be
maintained and kept in good condition, repair and working order (reasonable wear and tear excepted)
and supplied with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the judgment of the
management of the General Partner or its general partner, as appropriate, may be necessary so that
the business carried on in connection therewith may be properly and advantageously conducted at all
times; provided that nothing in this Section shall prevent Holly Energy Partners from discontinuing
the operation or maintenance of any of such properties if such discontinuance is, in the judgment
of the management of the General Partner or its general partner, as appropriate, desirable in the
conduct of Holly Energy Partners’ business or the business of any of its Subsidiaries and not
disadvantageous in any material respect to the Holders.



     Section 4.10 Payment of Taxes and Other Claims.



     The Issuers shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges levied or imposed upon the
Issuers or any of Holly Energy Partners’ Subsidiaries or upon the income, profits or property of
the Issuers or any of Holly Energy Partners’ Subsidiaries, and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon the property of the
Issuers or any of Holly Energy Partners’ Subsidiaries; provided that the Issuers shall not be
required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings.



     Section 4.11 Waiver of Certain Covenants.



     The Issuers and the Subsidiary Guarantors may, with respect to the Debt Securities of any
series, omit in any particular instance to comply with any covenant set forth in this Article IV
(except Sections 4.01 through 4.04, 4.06 and 4.07) or made applicable to such Debt Securities
pursuant to Section 2.03, if, before or after the time for such compliance, the Holders of at least
a majority in aggregate principal amount of the Outstanding Debt Securities of each series
affected, waive such compliance in such instance with such covenant, except as otherwise required
by the TIA, but no such waiver shall extend to or affect such covenant except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations of the Issuers and
the Subsidiary Guarantors and the duties of the Trustee in respect of any such covenant shall
remain in full force and effect.



31









 





ARTICLE V

HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE




     Section 5.01 Issuers to Furnish Trustee Information as to Names and Addresses of Holders;
Preservation of Information.



     The Issuers covenant and agree that they will furnish or cause to be furnished to the Trustee
with respect to the Debt Securities of each series:



          (a) not more than 15 days after each record date with respect to the payment of interest, if
any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the
Holders as of such record date, and




          (b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Issuers of any such request, a list of similar form and contents as of a date not
more than 15 days prior to the time such list is furnished;



provided, however, that so long as the Trustee shall be the Registrar, such lists shall not be
required to be furnished.




     The Trustee shall preserve, in as current a form as is reasonably practicable, all information
as to the names and addresses of the Holders (i) contained in the most recent list furnished to it
as provided in this Section 5.01 or (ii) received by it in the capacity of paying agent or
Registrar (if so acting) hereunder.



     The Trustee may destroy any list furnished to it as provided in this Section 5.01 upon receipt
of a new list so furnished.



     Section 5.02 Communications to Holders.



     Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect
to their rights under this Indenture or the Debt Securities. The Issuers, the Trustee, the
Registrar and anyone else shall have the protection of Section 312(c) of the TIA.



     Section 5.03 Reports by Trustee.



     Within 60 days after each January 31, beginning with the first January 31 following the date
of this Indenture, and in any event on or before April 1 in each year, the Trustee shall mail to
Holders a brief report dated as of such January 31 that complies with TIA Section 313(a); provided,
however, that if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted. The Trustee also
shall comply with TIA Section 313(b).



     Reports pursuant to this Section 5.03 shall be transmitted by mail:



          (a) to all Holders, as the names and addresses of such Holders appear in the Debt Security
Register; and



32









 







          (b) except in the cases of reports under Section 313(b)(2) of the TIA, to each Holder of a
Debt Security of any series whose name and address appear in the information preserved at the time
by the Trustee in accordance with Section 5.01.




     A copy of each report at the time of its mailing to Holders shall be filed with the SEC and
each stock exchange (if any) on which the Debt Securities of any series are listed. The Issuers
agree to notify promptly the Trustee whenever the Debt Securities of any series become listed on
any stock exchange and of any delisting thereof.



     Section 5.04 Record Dates for Action by Holders.



     If the Issuers shall solicit from the Holders of Debt Securities of any series any action
(including the making of any demand or request, the giving of any direction, notice, consent or
waiver or the taking of any other action), the Issuers may, at their option, by Board Resolutions,
fix in advance a record date for the determination of Holders of Debt Securities entitled to take
such action, but the Issuers shall have no obligation to do so. Any such record date shall be
fixed at the Issuers’ discretion. If such a record date is fixed, such action may be sought or
given before or after the record date, but only the Holders of Debt Securities of record at the
close of business on such record date shall be deemed to be Holders of Debt Securities for the
purpose of determining whether Holders of the requisite proportion of Debt Securities of such
series Outstanding have authorized or agreed or consented to such action, and for that purpose the
Debt Securities of such series Outstanding shall be computed as of such record date.



ARTICLE VI

REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT




     Section 6.01 Events of Default.



     If any one or more of the following shall have occurred and be continuing with respect to Debt
Securities of any series (each of the following, an “Event of Default”):



          (a) default in the payment of any installment of interest upon any Debt Securities of that
series as and when the same shall become due and payable, whether or not such payment shall be
prohibited by Article XII, if applicable, and continuance of such default for a period of 30 days;
or




          (b) default in the payment of the principal of or premium, if any, on any Debt Securities of
that series as and when the same shall become due and payable, whether at Stated Maturity, upon
redemption, by declaration, upon required repurchase or otherwise, whether or not such payment
shall be prohibited by Article XII, if applicable; or




          (c) default in the payment of any sinking fund payment with respect to any Debt Securities of
that series as and when the same shall become due and payable; or




          (d) failure on the part of either of the Issuers, or if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of a Guarantee by the Subsidiary
Guarantors, any of the Subsidiary Guarantors, duly to observe or perform any other of the covenants
or agreements on the part of the Issuers, or if applicable, any of the Subsidiary



33









 






Guarantors, in
the Debt Securities of that series, in any Board Resolution authorizing the issuance of that series
of Debt Securities, in this Indenture with respect to such series or in any supplemental Indenture
with respect to such series (other than a covenant or an agreement, a default in the performance of
which is elsewhere in this Section specifically dealt with), continuing for a period of 60 days (or
180 days in the case of a Reporting Failure) after the date on which written notice specifying such
failure and requiring the Issuers, or if applicable, the Subsidiary Guarantors, to remedy the same
shall have been given, by registered or certified mail, to the Issuers, or if applicable, the
Subsidiary Guarantors, by the Trustee or to the Issuers, or if applicable, the Subsidiary
Guarantors, and the Trustee by the Holders of at least 25% in aggregate principal amount of the
Debt Securities of that series at the time Outstanding; or




          (e) either of the Issuers or, if any series of Debt Securities Outstanding under this
Indenture is entitled to the benefits of a Guarantee by any Subsidiary Guarantor, any such
Subsidiary Guarantor that is a Significant Subsidiary Guarantor or any group of Subsidiary
Guarantors that, taken together, would constitute a Significant Subsidiary Guarantor, pursuant to
or within the meaning of any Bankruptcy Law,




                         (i) commences a voluntary case,



                         (ii) consents to the entry of an order for relief against it in an involuntary case,



                         (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property; or



                         (iv) makes a general assignment for the benefit of its creditors;



          (f) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:




                         (i) is for relief against either of the Issuers or, if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of a Guarantee by any Subsidiary
Guarantor, any such Subsidiary Guarantor that is a Significant Subsidiary Guarantor or any group of
Subsidiary Guarantors that, taken together, would constitute a Significant Subsidiary Guarantor, as
debtor in an involuntary case,



                         (ii) appoints a Custodian of either of the Issuers or, if any series of Debt Securities
Outstanding under this Indenture is entitled to the benefits of a Guarantee by any Subsidiary
Guarantor, any such Subsidiary Guarantor that is a Significant Subsidiary Guarantor or any group of
Subsidiary Guarantors that, taken together, would constitute a Significant Subsidiary Guarantor, or
a Custodian for all or substantially all of the property of such Issuer or,
if applicable, any such Significant Subsidiary Guarantor or group of Subsidiary Guarantors
that, taken together, would constitute a Significant Subsidiary Guarantor



                         (iii) orders the liquidation of the Issuers or, if any series of Debt Securities Outstanding
under this Indenture is entitled to the benefits of a Guarantee by any Subsidiary Guarantor, any
such Subsidiary Guarantor that is a Significant Subsidiary Guarantor



34









 




or any group of Subsidiary
Guarantors that, taken together, would constitute a Significant Subsidiary Guarantor, and the order
or decree remains unstayed and in effect for 60 days; or




          (g) if any series of Debt Securities Outstanding under this Indenture is entitled to the
benefits of a Guarantee by the Subsidiary Guarantors, any such Guarantee ceasing to be in full
force and effect with respect to Debt Securities of that series (except as otherwise provided in
this Indenture) or is declared null and void in a judicial proceeding or any of the Subsidiary
Guarantors (if applicable) denies or disaffirms its obligations under this Indenture or such
Guarantee; or




          (h) any other Event of Default provided with respect to Debt Securities of that series;



then and in each and every case that an Event of Default described in clause (a), (b), (c), (d),
(g), or (h) with respect to Debt Securities of that series at the time Outstanding occurs and is
continuing, unless the principal of, premium, if any, and interest on all the Debt Securities of
that series shall have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Debt Securities of that series then Outstanding
hereunder, by notice in writing to the Issuers (and to the Trustee if given by Holders), may
declare the principal of (or, if the Debt Securities of that series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in the terms of that
series), premium, if any, and interest on all the Debt Securities of that series to be due and
payable immediately, and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Debt Securities of that series contained to
the contrary notwithstanding. If an Event of Default described in clause (e) or (f) occurs, then
and in each and every such case, unless the principal of and interest on all the Debt Securities
shall have become due and payable, the principal of (or, if any Debt Securities are Original Issue
Discount Debt Securities, such portion of the principal amount as may be specified in the terms
thereof), premium, if any, and interest on all the Debt Securities then Outstanding hereunder shall
ipso facto become and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders, anything in this Indenture or in the Debt Securities contained
to the contrary notwithstanding.




     The Holders of a majority in aggregate principal amount of the Debt Securities of a particular
series by written notice to the Trustee may waive all past Defaults (except with respect to the
nonpayment of principal, premium, if any, or interest) and rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction already rendered and if all existing Events of Default have been cured or
waived except nonpayment of principal, premium, if any, or interest that has become due solely
because of acceleration. Upon any such rescission, the parties hereto shall be restored
respectively to their several positions and rights hereunder, and all rights, remedies and powers
of the parties hereto shall continue as though no such proceeding had been taken.



     Section 6.02 Collection of Debt by Trustee, etc.



     If an Event of Default occurs and is continuing, the Trustee, in its own name and as trustee
of an express trust, shall be entitled and empowered to institute any action or proceedings



35









 




at law
or in equity for the collection of the sums so due and unpaid or enforce the performance of any
provision of the Debt Securities of the affected series or this Indenture, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such judgment or final
decree against the Subsidiary Guarantors, the Issuers or any other obligor upon the Debt Securities
of such series (and collect in the manner provided by law out of the property of the Subsidiary
Guarantors, the Issuers or any other obligor upon the Debt Securities of such series wherever
situated the moneys adjudged or decreed to be payable).




     In case there shall be pending proceedings for the bankruptcy or for the reorganization of any
Significant Subsidiary Guarantor or group of Subsidiary Guarantors that, taken together, would
constitute a Significant Subsidiary Guarantor, the Issuers or any other obligor upon the Debt
Securities of any series under any Bankruptcy Law, or in case a Custodian shall have been appointed
for the property of such Significant Subsidiary Guarantor or group of Subsidiary Guarantors that,
taken together, would constitute a Significant Subsidiary Guarantor, the Issuers or any other
obligor upon the Debt Securities, as the case may be, or in case of any other similar judicial
proceedings relative to the creditors or the property of any Subsidiary Guarantor or group of
Subsidiary Guarantors that, taken together, would constitute a Significant Subsidiary Guarantor,
the Issuers or any other obligor upon the Debt Securities of any series, the Trustee, irrespective
of whether the principal of Debt Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.02, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (or, if the Debt Securities of such series are
Original Issue Discount Debt Securities, such portion of the principal amount as may be specified
in the terms of such series) owing and unpaid in respect of the Debt Securities of such series, and
to file such other papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable compensation to the Trustee, its agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its negligence or bad faith) and of the Holders
thereof allowed in any such judicial proceedings relative to any Significant Subsidiary Guarantor
or group of Subsidiary Guarantors that, taken together, would constitute a Significant Subsidiary
Guarantor, the Issuers or any other obligor upon the Debt Securities of such series, their
creditors or their property, as the case may be, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute all amounts received with
respect to the claims of such Holders and of the Trustee on their behalf, and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by each of such Holders to
make payments to the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to such Holders, to pay to the Trustee such amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a
result of its negligence or bad faith.



     All rights of action and of asserting claims under this Indenture, or under any of the Debt
Securities of any series, may be enforced by the Trustee without the possession of any such Debt
Securities, or the production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment (except for any amounts payable to the
Trustee



36









 




pursuant to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt
Securities in respect of which such action was taken.




     In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.



     Section 6.03 Application of Moneys Collected by Trustee.



     Any moneys or other property collected by the Trustee pursuant to Section 6.02 with respect to
Debt Securities of any series shall be applied, after giving effect to the provisions of Article
XII, if applicable, in the order following, at the date or dates fixed by the Trustee for the
distribution of such moneys or other property, upon presentation of the several Debt Securities of
such series in respect of which moneys or other property have been collected, and the notation
thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:



     FIRST: To the payment of all money due the Trustee pursuant to Section 7.06;



     SECOND: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall not have become due, to the payment of interest on the Debt
Securities of such series in the order of the maturity of the installments of such interest, with
interest (to the extent that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate or Yield to Maturity (in the case of Original Issue Discount
Debt Securities) borne by the Debt Securities of such series, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;



     THIRD: In case the principal of the Outstanding Debt Securities in respect of which such
moneys have been collected shall have become due, by declaration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Debt Securities of such series for principal and
premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to
the extent that such interest has been collected by the Trustee) upon overdue installments of
interest at the rate or Yield to Maturity (in the case of Original Issue Discount Debt Securities)
borne by the Debt Securities of such series; and, in case such moneys shall be insufficient to pay
in full the whole amount so due and unpaid upon the Debt Securities of such series, then to the
payment of such principal and premium, if any, and interest, without preference or priority of
principal and premium, if any, over interest, or of interest over principal and premium, if any, or
of any installment of interest over any other installment of interest, or of any Debt Security of
such series over any Debt Security of such series, ratably to the aggregate of such principal and
premium, if any, and interest; and



     FOURTH: The remainder, if any, shall be paid to the Subsidiary Guarantors or the Issuers, as
applicable, their successors or assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.



37









 





     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.03. At least 15 days before such record date, the Issuers shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and amount to be paid.



     Section 6.04 Limitation on Suits by Holders.



     No Holder of any Debt Security of any series shall have any right by virtue or by availing of
any provision of this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise, upon or under or with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless such Holder previously shall have
given to the Trustee written notice of an Event of Default with respect to Debt Securities of that
same series and of the continuance thereof and unless the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debt Securities of that series shall have made written request
upon the Trustee to institute such action or proceedings in respect of such Event of Default in its
own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity or
security as it may require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity or security shall have failed to institute any such action or proceedings and no
direction inconsistent with such written request shall have been given to the Trustee pursuant to
Section 6.06; it being understood and intended, and being expressly covenanted by the Holder of
every Debt Security with every other Holder and the Trustee, that no one or more Holders shall have
any right in any manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any Holders, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of all such Holders.
For the protection and enforcement of the provisions of this Section 6.04, each and every Holder
and the Trustee shall be entitled to such relief as can be given either at law or in equity.



     Notwithstanding any other provision in this Indenture, however, the right of any Holder of any
Debt Security to receive payment of the principal of, and premium, if any, and (subject to Section
2.12) interest on, such Debt Security, on or after the respective due dates expressed in such Debt
Security, and to institute suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.



     Section 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of
Default.



     All powers and remedies given by this Article VI to the Trustee or to the Holders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the Holders, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or power
accruing upon any Default occurring and continuing as aforesaid, shall impair any such
right or power, or shall be construed to be a waiver of any such Default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy given by this



38









 




Article VI or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Holders.




     Section 6.06 Rights of Holders of Majority in Principal Amount of Debt Securities to Direct
Trustee and to Waive Default.



     The Holders of a majority in aggregate principal amount of the Debt Securities of any series
at the time Outstanding shall have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any right, trust or power
conferred on the Trustee, with respect to the Debt Securities of such series; provided, however,
that such direction shall not be otherwise than in accordance with law and the provisions of this
Indenture, and that subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel shall determine that
the action so directed may not lawfully be taken, or if the Trustee shall by a responsible officer
or officers determine that the action so directed would involve it in personal liability or would
be unduly prejudicial to Holders of Debt Securities of such series not taking part in such
direction; and provided, further, however, that nothing in this Indenture contained shall impair
the right of the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by such Holders. Prior to the acceleration of the maturity of the
Debt Securities of any series, as provided in Section 6.01, the Holders of a majority in aggregate
principal amount of the Debt Securities of that series at the time Outstanding may on behalf of the
Holders of all the Debt Securities of that series waive any past Default or Event of Default and
its consequences for that series or compliance with any restrictive provisions of this Indenture or
the Debt Securities of that series, except a Default in the payment of the principal of, and
premium, if any, or interest on, any of the Debt Securities and a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each Holder affected thereby. In
case of any such waiver, such Default shall cease to exist, any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture, and the Subsidiary
Guarantors, the Issuers, the Trustee and the Holders of the Debt Securities of that series shall be
restored to their former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent thereon.



     Section 6.07 Trustee to Give Notice of Defaults Known to It, but May Withhold Such Notice in
Certain Circumstances.



     The Trustee shall, within 90 days after the occurrence of a Default known to it, or if later,
within 30 days after the Trustee obtains actual knowledge of the Default, with respect to a series
of Debt Securities give to the Holders thereof, in the manner provided in Section 13.03, notice of
all Defaults with respect to such series known to the Trustee, unless such Defaults shall have been
cured or waived before the giving of such notice; provided, that, except in the case of Default in
the payment of the principal of, or premium, if any, or interest on, any of the Debt Securities of
such series or in the making of any sinking fund payment with respect to the Debt Securities of
such series, the Trustee shall be protected in withholding such notice if and so long as the board
of directors, the executive committee or a committee of directors or responsible
officers of the Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders thereof.



39









 





     Section 6.08 Requirement of an Undertaking to Pay Costs in Certain Suits under the Indenture
or Against the Trustee.



     All parties to this Indenture agree, and each Holder of any Debt Security by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit in the manner and to the extent provided in the TIA,
and that such court may in its discretion assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the provisions of this
Section 6.08 shall not apply to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 25 percent in principal amount of
the Outstanding Debt Securities of that series or to any suit instituted by any Holder for the
enforcement of the payment of the principal of, or premium, if any, or interest on, any Debt
Security on or after the due date for such payment expressed in such Debt Security.



ARTICLE VII

CONCERNING THE TRUSTEE




     Section 7.01 Certain Duties and Responsibilities.



     The Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of
all Events of Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of Default has occurred
(which has not been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his own affairs.



     No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, its own bad faith or its own willful
misconduct, except that:



          (a) this paragraph shall not be construed to limit the effect of the first paragraph of this
Section 7.01; and




          (b) prior to the occurrence of an Event of Default with respect to the Debt Securities of a
series and after the curing or waiving of all Events of Default with respect to such series which
may have occurred:




                         (i) the duties and obligations of the Trustee with respect to Debt Securities of any series
shall be determined solely by the express provisions of this Indenture, and the Trustee shall not
be liable except for the performance of such duties and obligations with respect to such series as
are specifically set forth in this Indenture, and no implied covenants or obligations with respect
to such series shall be read into this Indenture against the Trustee;



40









 





                         (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of this Indenture; but the
Trustee shall examine the evidence furnished to it pursuant to Sections 4.05 and 4.06 to determine
whether or not such evidence conforms to the requirement of this Indenture;



                         (iii) the Trustee shall not be liable for an error of judgment made in good faith by a
responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and



                         (iv) the Trustee shall not be liable with respect to any action taken or omitted to be taken
by it with respect to Debt Securities of any series in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt
Securities of that series relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to Debt Securities of such series.



     None of the provisions of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any personal financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.



     Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.



     Section 7.02 Certain Rights of Trustee.



     Except as otherwise provided in Section 7.01:



          (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or presented by the proper
party or parties;




          (b) any request, direction, order or demand of the Issuers mentioned herein shall be
sufficiently evidenced by an Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy
thereof certified by an appropriate Officer;




          (c) the Trustee may consult with counsel, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any



41









 






action taken or suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;




          (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders of Debt Securities of
any series pursuant to the provisions of this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby;




          (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;




          (f) prior to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, approval or other paper or document, unless requested
in writing to do so by the Holders of a majority in aggregate principal amount of the then
Outstanding Debt Securities of a series affected by such matter; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding, and the reasonable expense of every such investigation shall be paid by
the Issuers or, if paid by the Trustee, shall be repaid by the Issuers upon demand;




          (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed by it
with due care hereunder; and




          (h) if any property other than cash shall at any time be subject to a Lien in favor of the
Holders, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of
competent jurisdiction or by the supplemental instrument subjecting such property to such Lien,
shall be entitled to make advances for the purpose of preserving such property or of discharging
tax Liens or other prior Liens or encumbrances thereon.




     Section 7.03 Trustee Not Liable for Recitals in Indenture or in Debt Securities.



     The recitals contained herein and in the Debt Securities (except the Trustee’s certificate of
authentication) shall be taken as the statements of the Issuers, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities of any series, except that the
Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate
the Debt Securities and perform its obligations hereunder, and that the statements made by it or to
be made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Issuers
are true and accurate. The Trustee shall not be accountable for the use or application by the
Issuers



42









 




of any of the Debt Securities or of the proceeds thereof. The Trustee shall have no
responsibility or liability with respect to any information, statement or recital in any offering
memorandum or
other disclosure material prepared or distributed with respect to the issuance of the Debt
Securities.




     Section 7.04 Trustee, Paying Agent or Registrar May Own Debt Securities.



     The Trustee or any paying agent or Registrar, in its individual or any other capacity, may
become the owner or pledgee of Debt Securities and subject to the provisions of the TIA relating to
conflicts of interest and preferential claims may otherwise deal with the Issuers with the same
rights it would have if it were not Trustee, paying agent or Registrar.



     Section 7.05 Moneys Received by Trustee to Be Held in Trust.



     Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder. So long as no
Event of Default shall have occurred and be continuing, all interest allowed on any such moneys
shall be paid from time to time to the Issuers upon an Issuer Order.



     Section 7.06 Compensation and Reimbursement.



     The Issuers covenant and agree to pay in Dollars to the Trustee from time to time, and the
Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder
(which shall not be limited by any provision of law in regard to the compensation of a trustee of
an express trust), and, except as otherwise expressly provided herein, the Issuers will pay or
reimburse in Dollars the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its agents, attorneys
and counsel and of all Persons not regularly in its employ), including without limitation, Section
6.02, except any such expense, disbursement or advances as may arise from its negligence, willful
misconduct or bad faith. The Issuers also covenant to indemnify in Dollars the Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on the part of the Trustee, arising out of or in connection with the
acceptance or administration of this trust or trusts hereunder, including the reasonable costs and
expenses of defending itself against any claim of liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligations of the Issuers under this
Section 7.06 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional Debt hereunder and shall survive
the satisfaction and discharge of this Indenture. The Issuers and the Holders agree that such
additional Debt shall be secured by a Lien prior to that of the Debt Securities upon all property
and funds held or collected by the Trustee, as such, except funds held in trust for the payment of
principal of, and premium, if any, or interest on, particular Debt Securities.



     When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(e) or (f) occurs, the expenses and the compensation for the services are intended



43









 




to
constitute expenses of administration under any bankruptcy, insolvency, reorganization or other
similar law.




     Section 7.07 Right of Trustee to Rely on an Officers’ Certificate Where No Other Evidence
Specifically Prescribed.



     Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers’ Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted by it under the provisions of this Indenture upon the
faith thereof.



     Section 7.08 Separate Trustee; Replacement of Trustee.



     The Issuers may, but need not, appoint a separate Trustee for any one or more series of Debt
Securities. The Trustee may resign with respect to one or more or all series of Debt Securities at
any time by giving notice to the Issuers. The Holders of a majority in principal amount of the
Debt Securities of a particular series may remove the Trustee for such series and only such series
by so notifying the Trustee and may appoint a successor Trustee. The Issuers shall remove the
Trustee if:



          (a) the Trustee fails to comply with Section 7.10;




          (b) the Trustee is adjudged bankrupt or insolvent;




          (c) a Custodian takes charge of the Trustee or its property; or




          (d) the Trustee otherwise becomes incapable of acting.




     If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal
amount of the Debt Securities of a particular series and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly
appoint a successor Trustee. No resignation or removal of the Trustee and no appointment of a
successor Trustee shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this Section 7.08.



     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of Debt Securities of each applicable series. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in
Section 7.06.



44









 





     If a successor Trustee does not take office within 60 days after the retiring Trustee gives
notice of resignation or is removed, the retiring Trustee or the Holders of 25% in principal
amount of the Debt Securities of any applicable series may petition any court of competent
jurisdiction for the appointment of a successor Trustee for the Debt Securities of such series.



     If the Trustee fails to comply with Section 7.10, any Holder of Debt Securities of any
applicable series may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee for the Debt Securities of such series.



     Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers’
obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.



     In the case of the appointment hereunder of a separate or successor trustee with respect to
the Debt Securities of one or more series, the Issuers, any retiring Trustee and each successor or
separate Trustee with respect to the Debt Securities of any applicable series shall execute and
deliver an Indenture supplemental hereto (i) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Debt Securities of any series as to which any such retiring Trustee is
not retiring shall continue to be vested in such retiring Trustee and (ii) that shall add to or
change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supplemental Indenture shall constitute such Trustees co-trustees of the
same trust and that each such separate, retiring or successor Trustee shall be Trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other
such Trustee.



     Section 7.09 Successor Trustee by Merger.



     If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without any further act shall
be the successor Trustee.



     In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture any of the Debt Securities shall have
been authenticated but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Debt Securities so authenticated;
and in case at that time any of the Debt Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Debt Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Debt Securities or in this
Indenture provided that the certificate of the Trustee shall have.



     Section 7.10 Eligibility; Disqualification.



     The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The
Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. No obligor upon the Debt Securities of a particular



45









 







series or Person directly or indirectly controlling, controlled by or under common control with
such obligor shall serve as Trustee upon the Debt Securities of such series. The Trustee shall
comply with Section 310(b) of the TIA; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the TIA this Indenture or any indenture or indentures under
which other securities or certificates of interest or participation in other securities of the
Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of
the TIA are met.



     Section 7.11 Preferential Collection of Claims Against Issuers.



     The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship
listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the TIA to the extent indicated therein.



     Section 7.12 Compliance with Tax Laws.



     The Trustee hereby agrees to comply with all U.S. Federal income tax information reporting and
withholding requirements applicable to it with respect to payments of premium (if any) and interest
on the Debt Securities, whether acting as Trustee, Registrar, paying agent or otherwise with
respect to the Debt Securities.



ARTICLE VIII

CONCERNING THE HOLDERS




     Section 8.01 Evidence of Action by Holders.



     Whenever in this Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Debt Securities of any or all series may take action (including
the making of any demand or request, the giving of any direction, notice, consent or waiver or the
taking of any other action) the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (i) by any instrument or any number of
instruments of similar tenor executed by Holders in Person or by agent or proxy appointed in
writing, (ii) by the record of the Holders voting in favor thereof at any meeting of Holders duly
called and held in accordance with the provisions of Section 5.02, (iii) by a combination of such
instrument or instruments and any such record of such a meeting of Holders or (iv) in the case of
Debt Securities evidenced by Global Securities, by an electronic transmission or other message,
whether or not in written format, that complies with the applicable procedures of the Depositary.



     Section 8.02 Proof of Execution of Instruments and of Holding of Debt Securities.



     Subject to the provisions of Sections 7.01, 7.02 and 13.09, proof of the execution of any
instrument by a Holder or his agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Debt Securities of any series shall be proved by the
Debt Security Register or by a certificate of the Registrar for such series. The Trustee may
require such additional proof of any matter referred to in this Section 8.02 as it shall deem
necessary.



46









 





     Section 8.03 Who May Be Deemed Owner of Debt Securities.



     Prior to due presentment for registration of transfer of any Debt Security, the Issuers, the
Subsidiary Guarantors, the Trustee, any paying agent and any Registrar may deem and treat the
Person in whose name any Debt Security shall be registered upon the books of the Issuers as the
absolute owner of such Debt Security (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and premium, if any, and (subject to Section 2.12)
interest on such Debt Security and for all other purposes, and none of the Issuers, the Subsidiary
Guarantors, the Trustee or any paying agent or any Registrar shall be affected by any notice to the
contrary; and all such payments so made to any such Holder for the time being, or upon his order,
shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge
the liability for moneys payable upon any such Debt Security.



     None of the Issuers, the Subsidiary Guarantors, the Trustee, any agent of the Trustee, any
paying agent or any Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.



     Section 8.04 Instruments Executed by Holders Bind Future Holders.



     At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of
the Debt Securities of any series specified in this Indenture in connection with such action and
subject to the following paragraph, any Holder of a Debt Security which is shown by the evidence to
be included in the Debt Securities the Holders of which have consented to such action may, by
filing written notice with the Trustee at its corporate trust office and upon proof of holding as
provided in Section 8.02 (or, in the case of Debt Securities evidenced by Global Securities, by
complying with the applicable procedures of the Depositary), revoke such action so far as concerns
such Debt Security. Except as aforesaid any such action taken by the Holder of any Debt Security
shall be conclusive and binding upon such Holder and upon all future Holders and owners of such
Debt Security and of any Debt Security issued upon transfer thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made upon such Debt
Security or such other Debt Securities. Any action taken by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuers, the Subsidiary
Guarantors, the Trustee and the Holders of all the Debt Securities of such series.



     The Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of Debt Securities entitled to give their consent or take any other action
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were Holders of Debt
Securities at such record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to take any such action,
whether or not such Persons continue to be Holders of Debt Securities after such record



47









 




date. No
such consent shall be valid or effective for more than 120 days after such record
date
unless the consent of the Holders of the percentage in aggregate principal amount of the Debt
Securities of such series specified in this Indenture shall have been received within such 120-day
period.




ARTICLE IX

SUPPLEMENTAL INDENTURES




     Section 9.01 Purposes for Which Supplemental Indenture May Be Entered into Without Consent of
Holders.



     The Issuers, the Subsidiary Guarantors and the Trustee may from time to time, and at any time,
without the consent of Holders, enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions of the TIA as in force at the date of the execution thereof) for
one or more of the following purposes:



          (a) to evidence the succession pursuant to Article X of another Person to an Issuer, or
successive successions, and the assumption by the Successor Company (as defined in Section 10.01)
of the covenants, agreements and obligations of such Issuer in this Indenture and in the Debt
Securities;




          (b) to surrender any right or power herein conferred upon the Issuers or the Subsidiary
Guarantors, to add to the covenants of the Issuers or the Subsidiary Guarantors such further
covenants, restrictions, conditions or provisions for the protection of the Holders of all or any
series of Debt Securities (and if such covenants are to be for the benefit of less than all series
of Debt Securities, stating that such covenants are expressly being included solely for the benefit
of such series) as the Board of Directors shall consider to be for the protection of the Holders of
such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a Default
in any of such additional covenants, restrictions, conditions or provisions a Default or an Event
of Default permitting the enforcement of all or any of the several remedies provided in this
Indenture; provided, that in respect of any such additional covenant, restriction, condition or
provision such supplemental Indenture may provide for a particular period of grace after Default
(which period may be shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such Default or may limit the remedies available to the
Trustee upon such Default or may limit the right of the Holders of a majority in aggregate
principal amount of any or all series of Debt Securities to waive such default;




          (c) to cure any ambiguity or omission or to correct or supplement any provision contained
herein, in any supplemental Indenture or in any Debt Securities of any series that may be defective
or inconsistent with any other provision contained herein, in any supplemental Indenture or in the
Debt Securities of such series; to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or to make such other provisions in regard to matters or questions arising under
this Indenture as shall not adversely affect the interests of any Holders of Debt Securities of any
series;




          (d) to modify or amend this Indenture in such a manner as to permit the qualification of this
Indenture or any Indenture supplemental hereto under the TIA as then in



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effect, except that nothing
herein contained shall permit or authorize the inclusion in any Indenture supplemental hereto of
the provisions referred to in Section 316(a)(2) of the TIA;




          (e) to add to or change any of the provisions of this Indenture to change or eliminate any
restrictions on the payment of principal of, or premium, if any, on, Debt Securities; provided,
that any such action shall not adversely affect the interests of the Holders of Debt Securities of
any series in any material respect; or to permit or facilitate the issuance of Debt Securities of
any series in uncertificated form;




          (f) to comply with Article XIV;




          (g) in the case of any Debt Securities subordinated pursuant to Article XII, to make any
change in Article XII that would limit or terminate the benefits available to any holder of Senior
Indebtedness (or Representatives therefor) under Article XII;




          (h) to add Subsidiary Guarantors with respect to any or all of the Debt Securities or to
secure any or all of the Debt Securities;




          (i) to release Holly Energy Finance as an Issuer under this Indenture or any Indenture
supplemental hereto; provided, however, that at the time of such release no Default or Event of
Default has occurred and is continuing under this Indenture and either (i) the Debt Securities have
an Investment Grade Rating from both Rating Agencies or (ii) Holly Energy Partners or any successor
entity or permitted assign is a corporation; and provided, further, that the Issuers, the
Subsidiary Guarantors and the Trustee, as applicable, shall enter into an Indenture or Indentures
supplemental hereto to reflect the release of Holly Energy Finance as an Issuer;




          (j) to make any change that does not adversely affect the rights of any Holder;




          (k) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Debt Securities; provided, however, that any such addition, change or elimination
not otherwise permitted under this Section 9.01 shall neither apply to any Debt Security of any
series created prior to the execution of such supplemental Indenture and entitled to the benefit of
such provision nor modify the rights of the Holder of any such Debt Security with respect to such
provision, or shall become effective only when there is no such Debt Security Outstanding;




          (l) to evidence and provide for the acceptance of appointment hereunder by a successor or
separate Trustee with respect to the Debt Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee;




          (m) to conform the text of this Indenture or any Guarantee to any provision of the
“Description of Debt Securities” section of the Issuers’ prospectus or any prospectus supplement
with respect to the Debt Securities, to the extent that such provision was intended to be a
verbatim recitation of a provision of this Indenture or the Guarantee;



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          (n) to provide for the issuance of additional Debt Securities in accordance with the
limitations set forth in this Indenture as of the date hereof; and




          (o) to establish the form or terms of Debt Securities of any series as permitted by Sections
2.01 and 2.03.




     The Trustee is hereby authorized to join with the Issuers and the Subsidiary Guarantors in the
execution of any such supplemental Indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into
any such supplemental Indenture which affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.



     Any supplemental Indenture authorized by the provisions of this Section 9.01 may be executed
by the Issuers, the Subsidiary Guarantors and the Trustee without the consent of the Holders of any
of the Debt Securities at the time Outstanding, notwithstanding any of the provisions of Section
9.02.



     In the case of Debt Securities subordinated pursuant to Article XII, an amendment under this
Section 9.01 may not make any change that adversely affects the rights under Article XII of any
holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or Representative thereof authorized to give a consent) consent to such change.



     Section 9.02 Modification of Indenture with Consent of Holders of Debt Securities.



     Without notice to any Holder but with the consent (evidenced as provided in Section 8.01) of
the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt
Securities of each series affected by such supplemental Indenture (including consents obtained in
connection with a tender offer or exchange offer for any such series of Debt Securities), the
Issuers, the Subsidiary Guarantors, and the Trustee may from time to time and at any time enter
into an Indenture or Indentures supplemental hereto (which shall conform to the provisions of the
TIA as in force at the date of execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or of any
supplemental Indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of such series; provided, that no such supplemental Indenture, without the consent of
the Holders of each Debt Security so affected, shall (i) reduce the percentage in principal amount
of Debt Securities of any series whose Holders must consent to an amendment; (ii) reduce the rate
of or extend the time for payment of interest on any Debt Security; (iii) reduce the principal of
or extend the Stated Maturity of any Debt Security; (iv) reduce the premium payable upon the
redemption of any Debt Security or change the time at which any Debt Security may or shall be
redeemed in accordance with Article III; (v) make any Debt Security payable in currency other than
the Dollar; (vi) impair the right of any Holder to receive payment of premium, if any, principal of
and interest on such Holder’s Debt Securities on or after the due dates therefor or to institute
suit for the enforcement of any payment on or with respect to such Holder’s Debt Securities;
(vii) in the case of any Debt Security subordinated pursuant to Article XII, make any change in
Article XII that adversely affects the rights of any Holder under Article



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XII; (viii) release any
security that may have been granted in respect of the Debt Securities, except in accordance with
the provisions of this Indenture; (ix) make any change in Section 6.06 or this Section 9.02; or
(x) except as provided in Section 14.04, release any Subsidiary Guarantors or modify the Guarantee
in any manner adverse to the Holders.




     A supplemental Indenture which changes or eliminates any covenant or other provision of this
Indenture which has been expressly included solely for the benefit of one or more particular series
of Debt Securities or which modifies the rights of the Holders of Debt Securities of such series
with respect to such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debt Securities of any other series.



     Upon the request of the Issuers and the Subsidiary Guarantors, accompanied by copies of Board
Resolutions authorizing the execution of any such supplemental Indenture, and upon the filing with
the Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Issuers and any Subsidiary Guarantors in the execution of such supplemental Indenture unless such
supplemental Indenture affects the Trustee’s own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter
into such supplemental Indenture.



     It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed supplemental Indenture, but it shall be sufficient if such
consent shall approve the substance thereof.



     In the case of any Debt Securities subordinated pursuant to Article XII, an amendment under
this Section 9.02 may not make any change that adversely affects the rights under Article XII of
any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or Representative thereof authorized to give a consent) consents to such change.



     After an amendment under this Section 9.02 becomes effective, the Issuers shall mail to
Holders of Debt Securities of each series affected thereby a notice briefly describing such
amendment. The failure to give such notice to all such Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.



     Section 9.03 Effect of Supplemental Indentures.



     Upon the execution of any supplemental Indenture pursuant to the provisions of this Article
IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Issuers, the Subsidiary Guarantors and the Holders shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental Indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all purposes.



     The Trustee, subject to the provisions of Sections 7.01 and 7.02, may receive an Officers’
Certificate and an Opinion of Counsel as conclusive evidence that any such supplemental Indenture
complies with the provisions of this Article IX.



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     Section 9.04 Debt Securities May Bear Notation of Changes by Supplemental Indentures.



     Debt Securities of any series authenticated and delivered after the execution of any
supplemental Indenture pursuant to the provisions of this Article IX may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental Indenture. New Debt Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained
in any such supplemental Indenture may be prepared and executed by the Issuers, authenticated by
the Trustee and delivered in exchange for the Debt Securities of such series then Outstanding.
Failure to make the appropriate notation or to issue a new Debt Security of such series shall not
affect the validity of such amendment.



ARTICLE X

CONSOLIDATION, MERGER, SALE OR CONVEYANCE




     Section 10.01 Consolidations and Mergers of the Issuers.



     Neither of the Issuers may, directly or indirectly, consolidate or amalgamate with or merge
with or into any Person, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all its assets to any Person, whether in a single transaction or a series of related
transactions, unless: (i) either (a) such Issuer shall be the continuing Person in the case of a
merger or (b) the resulting, surviving or transferee Person if other than such Issuer (the
“Successor Company”), shall be a partnership, limited liability company or corporation organized
and existing under the laws of the United States, any State thereof or the District of Columbia and
the Successor Company shall expressly assume, by an Indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Issuer
under this Indenture and the Debt Securities according to their tenor; provided, however, that
Holly Energy Finance may not consolidate or amalgamate with or merge into any Person other than a
corporation satisfying such requirement so long as Holly Energy Partners is not a corporation; (ii)
immediately after giving effect to such transaction (and treating any Debt which becomes an
obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such Subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing; (iii) if such Issuer is
not the continuing Person, then any Subsidiary Guarantor, unless it has become the Successor
Company, shall confirm that its Guarantee shall continue to apply to the obligations under the Debt
Securities and this Indenture; and (iv) such Issuer shall have delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation,
amalgamation, merger or disposition and such supplemental Indenture (if any) comply with this
Indenture.



     Section 10.02 Rights and Duties of Successor Company.



     In case of any consolidation, amalgamation or merger where an Issuer is not the continuing
Person, or disposition of all or substantially all of the assets of an Issuer in accordance with
Section 10.01, the Successor Company shall succeed to and be substituted for such Issuer with the
same effect as if it had been named herein as the respective party to this



52









 




Indenture, and the
predecessor entity shall be released from all liabilities and obligations under this Indenture and
the Debt Securities, except that no such release will occur in the case of a lease of all or
substantially all of its assets. The Successor Company thereupon may cause to be signed, and may
issue either in its own name or in the name of the Issuer, any or all the Debt Securities issuable
hereunder which theretofore shall not have been signed by such Issuer and delivered to the Trustee;
and, upon the order of the Successor Company, instead of such Issuer,
and subject to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Debt Securities which previously shall have been
signed and delivered by the Officers of such Issuer to the Trustee for authentication, and any Debt
Securities which the Successor Company thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Debt Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debt Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all such Debt Securities had been issued
at the date of the execution hereof.




     In case of any such consolidation, amalgamation, merger, sale or disposition such changes in
phraseology and form (but not in substance) may be made in the Debt Securities thereafter to be
issued as may be appropriate.



ARTICLE XI

SATISFACTION AND DISCHARGE OF

INDENTURE; DEFEASANCE; UNCLAIMED MONEYS




     Section 11.01 Applicability of Article.



     The provisions of this Article XI relating to defeasance of Debt Securities shall be
applicable to each series of Debt Securities except as otherwise specified pursuant to Section 2.03
for Debt Securities of such series.



     Section 11.02 Satisfaction and Discharge of Indenture; Defeasance.



          (a) If at any time the Issuers shall have delivered to the Trustee for cancellation all Debt
Securities of any series theretofore authenticated and delivered (other than any Debt Securities of
such series which shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.09 and Debt Securities for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Issuers as provided in Section 11.05) or all Debt
Securities of such series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Issuers shall deposit with the Trustee as trust funds the
entire amount in cash sufficient to pay at maturity or upon redemption all Debt Securities of such
series not theretofore delivered to the Trustee for cancellation, including principal and premium,
if any, and interest due or to become due on such date of Stated Maturity or redemption date, as
the case may be, and if in either case the Issuers shall also pay or cause to be paid all other
sums payable hereunder by the Issuers with respect to the Debt Securities of such series, then this
Indenture shall cease to be of further effect (except as to any surviving rights of registration of
transfer or exchange of such Debt Securities herein expressly provided for) with respect to the
Debt Securities of such series, and the Trustee, on demand of the Issuers accompanied by an
Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Issuers, shall
execute proper instruments acknowledging satisfaction of and discharging this Indenture with
respect to the Debt Securities of such series.



53









 







          (b) Subject to Sections 11.02(c), 11.03 and 11.07, the Issuers at any time may terminate, with
respect to Debt Securities of a particular series, all their obligations under the Debt Securities
of such series and this Indenture with respect to the Debt Securities of such series
(“legal defeasance option”) or the operation of (i) any covenant made applicable to such Debt
Securities pursuant to Section 2.03, (ii) Sections 6.01(d), (g) and (h) and (iii), as they relate
to any Significant Subsidiary Guarantor or any group of Subsidiary Guarantors that, taken together,
constitute a Significant Subsidiary Guarantor only, Sections 6.01(e) and (f) (“covenant defeasance
option”). If the Issuers exercise either their legal defeasance option or their covenant
defeasance option, the Guarantee will terminate with respect to that series of Debt Securities.
The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of
their covenant defeasance option.




     If the Issuers exercise their legal defeasance option, payment of the Debt Securities of the
defeased series may not be accelerated because of an Event of Default with respect to the Debt
Securities of such series. If the Issuers exercise their covenant defeasance option, payment of
the Debt Securities of the defeased series may not be accelerated because of an Event of Default
with respect to such series specified in Sections 6.01(d), (g) and (h) and, with respect to any
Significant Subsidiary Guarantor or any group of Subsidiary Guarantors that, taken together,
constitute a Significant Subsidiary Guarantor only, Sections 6.01(e) and (f) (except to the extent
covenants or agreements referenced in such Sections remain applicable).



     Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the
Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.



          (c) Notwithstanding clauses (a) and (b) above, the Issuers’ obligations in Sections 2.07,
2.09, 4.02, 4.04, 5.01, 7.06, 11.05, 11.06 and 11.07 shall survive until the Debt Securities of the
defeased series have been paid in full. Thereafter, the Issuers’ obligations in Sections 7.06,
11.05 and 11.06 shall survive.




     Section 11.03 Conditions of Defeasance.



     The Issuers may exercise their legal defeasance option or their covenant defeasance option
with respect to Debt Securities of a particular series only if:



          (a) the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government
Obligations for the payment of principal of, and premium, if any, and interest on, the Debt
Securities of such series to Stated Maturity or redemption, as the case may be;




          (b) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of
independent accountants expressing their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts as



54









 






will be sufficient to pay
the principal, premium and interest when due on all the Debt Securities of such series to Stated
Maturity or redemption, as the case may be;




          (c) 91 days pass after the deposit is made and during the 91-day period no Default specified
in Section 6.01(e) or (f) with respect to the Issuers occurs which is continuing at the end of the
period;




          (d) no Default has occurred and is continuing on the date of such deposit and after giving
effect thereto;




          (e) the deposit does not constitute a default under any other agreement binding on the Issuers
and, if the Debt Securities of such series are subordinated pursuant to Article XII, is not
prohibited by Article XII;




          (f) the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;




          (g) in the event of the legal defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel stating that the Issuers have received from the Internal Revenue
Service a ruling, or since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case of the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;




          (h) in the event of the covenant defeasance option, the Issuers shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of Debt Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not occurred; and




          (i) the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent to the defeasance and discharge of the Debt Securities
of such series as contemplated by this Article XI have been complied with.




     Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for
the redemption of Debt Securities of such series at a future date in accordance with Article III.



     Section 11.04 Application of Trust Money.



     The Trustee shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article XI. It shall apply the deposited money and the money from U.S. Government
Obligations through any paying agent and in accordance with this Indenture to the payment of
principal of, and premium, if any, and interest on, the Debt Securities of the defeased



55









 




series. In
the event the Debt Securities of the defeased series are subordinated pursuant to Article XII,
money and securities so held in trust are not subject to Article XII.




     Section 11.05 Repayment to Issuers.



     The Trustee and any paying agent shall promptly turn over to the Issuers upon request any
excess money or securities held by them at any time.



     Subject to any applicable abandoned property law, the Trustee and any paying agent shall pay
to the Issuers upon request any money held by them for the payment of principal, premium
or interest that remains unclaimed for two years, and, thereafter, Holders entitled to such
money must look to the Issuers for payment as general creditors.



     Section 11.06 Indemnity for U.S. Government Obligations.



     The Issuers shall pay and shall indemnify the Trustee and the Holders against any tax, fee or
other charge imposed on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.



     Section 11.07 Reinstatement.



     If the Trustee or any paying agent is unable to apply any money or U.S. Government Obligations
in accordance with this Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or otherwise prohibiting such
application, the Issuers’ obligations under this Indenture and the Debt Securities of the defeased
series shall be revived and reinstated as though no deposit had occurred pursuant to this Article
XI until such time as the Trustee or any paying agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article XI.



ARTICLE XII

SUBORDINATION OF DEBT SECURITIES AND GUARANTEE




     Section 12.01 Applicability of Article; Agreement To Subordinate.



     The provisions of this Article XII shall only be applicable to the Debt Securities of any
series (Debt Securities of such series referred to in this Article XII as “Subordinated Debt
Securities”) designated, pursuant to Section 2.03, as subordinated to Senior Indebtedness and any
related Guarantee of such Subordinated Debt Securities. Each Holder by accepting a Subordinated
Debt Security agrees that the Debt evidenced by such Subordinated Debt Security and any related
Guarantee of such Subordinated Debt Security is subordinated in right of payment, to the extent and
in the manner provided in this Article XII, to the prior payment of all Senior Indebtedness and
that the subordination is for the benefit of and enforceable by the holders of Senior Indebtedness.
All provisions of this Article XII shall be subject to Section 12.12.



     Section 12.02 Liquidation, Dissolution, Bankruptcy.



56









 





     Upon any payment or distribution of the assets of the Issuers or the Subsidiary Guarantors, as
the case may be, to creditors, upon a liquidation or a dissolution of the Issuers or the Subsidiary
Guarantors, as the case may be, or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Issuers or the Subsidiary Guarantors, as the case may be, or
their respective property:



          (a) holders of Senior Indebtedness of the Issuers or any Subsidiary Guarantor, as the case may
be, shall be entitled to receive payment in full in cash of such Senior Indebtedness of such Person
(including interest (if any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against the Issuers or the Subsidiary Guarantors, as the case may
be, in such bankruptcy proceeding) before Holders of Subordinated Debt Securities and any related
Guarantee shall be entitled to receive any payment
of principal of, or premium, if any, or interest on, the Subordinated Debt Securities from the
Issuers, or any payment in respect of any Guarantee from the Subsidiary Guarantors; and




          (b) until the Senior Indebtedness of the Issuers or any Subsidiary Guarantor, as the case may
be, is paid in full, any distribution to which Holders of Subordinated Debt Securities and any
related Guarantee would be entitled but for this Article XII shall be made to holders of Senior
Indebtedness of the Issuers or the Subsidiary Guarantors, as the case may be, as their interests
may appear, except that such Holders may receive equity interests and any debt securities that are
subordinated to Senior Indebtedness of the Issuers or the Subsidiary Guarantors, as the case may
be, to at least the same extent as the Subordinated Debt Securities of the Issuers or the related
Guarantee of any Subsidiary Guarantor, respectively.




     Section 12.03 Default on Senior Indebtedness.



     The Issuers and the Subsidiary Guarantors may not pay the principal of, or premium, if any, or
interest on, the Subordinated Debt Securities or any related Guarantee or make any deposit pursuant
to Article XI and may not repurchase, redeem or otherwise retire (except, in the case of
Subordinated Debt Securities that provide for a mandatory sinking fund pursuant to Section 3.05, by
the delivery of Subordinated Debt Securities by the Issuers to the Trustee pursuant to the first
paragraph of Section 3.05) any Subordinated Debt Securities (collectively, “pay the Subordinated
Debt Securities”) if any principal, premium or interest in respect of Senior Indebtedness of such
Person is not paid within any applicable grace period (including at maturity) or any other default
on Senior Indebtedness of such Person occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms unless, in any case, the default has been cured or waived
and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in
cash; provided, however, that the Issuers and the Subsidiary Guarantors may make payments on the
Subordinated Debt Securities or any related Guarantee without regard to the foregoing if the
Issuers and the Trustee receive written notice approving such payment from the Representative of
each issue of Designated Senior Indebtedness. During the continuance of any other default with
respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be required to effect
such acceleration) or the expiration of any applicable grace periods, the Issuers and the
Subsidiary Guarantors may not pay the Subordinated Debt Securities for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Issuers and the Trustee (and if such
Designated Senior Indebtedness is Debt of a



57









 




Subsidiary Guarantor, the Subsidiary Guarantor) of
written notice of such default from the Representative of any Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period (a “Blockage Notice”) and ending 179
days thereafter (or earlier if such Payment Blockage Period is terminated by written notice to the
Trustee and the Issuers (and if such Designated Senior Indebtedness is Debt of a Subsidiary
Guarantor, the Subsidiary Guarantor) from the Person or Persons who gave such Blockage Notice, by
repayment in full in cash of such Designated Senior Indebtedness or because the default giving rise
to such Blockage Notice is no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in Section 12.02 and the
first sentence of this Section 12.03), unless the holders of such Designated Senior Indebtedness or
the Representative of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Issuers and the Subsidiary Guarantors may resume payments on the Subordinated
Debt Securities and related Guarantees after such Payment Blockage Period. Not
more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to any number of issues of Designated Senior Indebtedness
during such period, unless otherwise specified pursuant to Section 2.03 for the Subordinated Debt
Securities of a series; provided, however, that in no event may the total number of days during
which any Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any 360 consecutive day period. For purposes of this Section 12.03, no default or event of default
which existed or was continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or
be made, the basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.




     Section 12.04 Acceleration of Payment of Debt Securities.



     If payment of the Subordinated Debt Securities is accelerated because of an Event of Default,
the Issuers shall promptly notify the holders of the Designated Senior Indebtedness (or their
Representatives) of the acceleration.



     Section 12.05 When Distribution Must Be Paid Over.



     If a distribution is made to Holders of Subordinated Debt Securities or a related Guarantee
that because of this Article XII should not have been made to them, the Holders who receive such
distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as
their interests may appear.



     Section 12.06 Subrogation.



     After all Senior Indebtedness is paid in full and until the Subordinated Debt Securities are
paid in full, Holders thereof shall be subrogated to the rights of holders of Senior Indebtedness
to receive distributions applicable to Senior Indebtedness. A distribution made under this Article
XII to holders of Senior Indebtedness which otherwise would have been made to Holders of
Subordinated Debt Securities is not, as between the Issuers or the Subsidiary Guarantors, as the



58









 







case may be, and such Holders, a payment by the Issuers or the Subsidiary Guarantors, as the case
may be, on Senior Indebtedness.



     Section 12.07 Relative Rights.



     This Article XII defines the relative rights of Holders of Subordinated Debt Securities and
holders of Senior Indebtedness. Nothing in this Indenture shall:



          (a) impair, as between the Issuers or the Subsidiary Guarantors, as the case may be, and
Holders of either Subordinated Debt Securities or Debt Securities, the obligation of the Issuers or
the Subsidiary Guarantors, as the case may be, which is absolute and unconditional, to pay
principal of, and premium, if any, and interest on, the Subordinated Debt Securities and the Debt
Securities in accordance with their terms; or




          (b) prevent the Trustee or any Holder of either Subordinated Debt Securities or Debt
Securities from exercising its available remedies upon an Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders
of Subordinated Debt Securities.




     Section 12.08 Subordination May Not Be Impaired by Issuers or Subsidiary Guarantors.



     No right of any holder of Senior Indebtedness to enforce the subordination of the Debt
evidenced by the Subordinated Debt Securities and the Guarantee in respect thereof shall be
impaired by any act or failure to act by the Issuers or the Subsidiary Guarantors or by its failure
to comply with this Indenture.



     Section 12.09 Rights of Trustee and Paying Agent.



     Notwithstanding Sections 12.02 and 12.03, the Trustee or any paying agent may continue to make
payments on Subordinated Debt Securities and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less than two Business
Days prior to the date of such payment, a responsible officer of the Trustee receives notice
satisfactory to it that payments may not be made under this Article XII. The Issuers, the
Registrar, any paying agent, a Representative or a holder of Senior Indebtedness may give the
notice; provided, however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice on behalf of the Holders of the Senior Indebtedness of that
issue.



     The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same
rights it would have if it were not Trustee. The Registrar and any paying agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in this Article XII
with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.



     Section 12.10 Distribution or Notice to Representative.



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     Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the
distribution may be made and the notice given to their Representative (if any).



     Section 12.11 Article XII Not to Prevent Defaults or Limit Right to Accelerate.



     The failure to make a payment pursuant to the Subordinated Debt Securities, whether directly
or pursuant to the Guarantee, by reason of any provision in this Article XII shall not be construed
as preventing the occurrence of a Default. Nothing in this Article XII shall have any effect on
the right of the Holders or the Trustee to accelerate the maturity of either the Subordinated Debt
Securities or the Debt Securities, as the case may be.



     Section 12.12 Trust Moneys Not Subordinated.



     Notwithstanding anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article XI by the Trustee for the payment of
principal of, and premium, if any, and interest on, the Subordinated Debt Securities
or the Debt Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article XII, and none of the Holders
thereof shall be obligated to pay over any such amount to the Issuers, the Subsidiary Guarantors or
any holder of Senior Indebtedness of the Issuers or the Subsidiary Guarantors or any other creditor
of the Issuers or the Guarantor.



     Section 12.13 Trustee Entitled to Rely.



     Upon any payment or distribution pursuant to this Article XII, the Trustee and the Holders
shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which
any proceedings of the nature referred to in Section 12.02 are pending, upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution to the Trustee or
to such Holders or upon the Representatives for the holders of Senior Indebtedness for the purpose
of ascertaining the Persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other Debt of the Issuers or the Subsidiary Guarantors, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts pertinent to the rights of
such Person under this Article XII, and, if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of such Person to receive
such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article XII.



     Section 12.14 Trustee to Effectuate Subordination.



     Each Holder by accepting a Subordinated Debt Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders of Subordinated Debt Securities and the



60









 




holders of Senior
Indebtedness as provided in this Article XII and appoints the Trustee as attorney-in-fact for any
and all such purposes.




     Section 12.15 Trustee Not Fiduciary for Holders of Senior Indebtedness.



     The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders of Subordinated Debt Securities or the Issuers or the Subsidiary Guarantors
or any other Person, money or assets to which any holders of Senior Indebtedness shall be entitled
by virtue of this Article XII or otherwise.



     Section 12.16 Reliance by Holders of Senior Indebtedness on Subordination Provisions.



     Each Holder by accepting a Subordinated Debt Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement and a consideration
to each holder of any Senior Indebtedness, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Subordinated Debt Securities, to
acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.



ARTICLE XIII

MISCELLANEOUS PROVISIONS




     Section 13.01 Successors and Assigns of Parties Bound by Indenture.



     All the covenants, stipulations, promises and agreements in this Indenture contained by or in
behalf of the Issuers, the Subsidiary Guarantors or the Trustee shall bind their respective
successors and assigns, whether so expressed or not.



     Section 13.02 Acts of Board, Committee or Officer of Successor Company Valid.



     Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or Officer of the Issuers or any Subsidiary Guarantor shall and
may be done and performed with like force and effect by the like board, committee or Officer of any
Successor Company or Subsidiary Guarantor.



     Section 13.03 Required Notices or Demands.



     Any notice or communication by the Issuers, the Subsidiary Guarantors or the Trustee to the
others is duly given if in writing (in the English language) and delivered in Person or mailed by
registered or certified mail (return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the other’s address:



     If to the Issuers or the Subsidiary Guarantors:



Holly Energy Partners, L.P.


61









 




Holly Energy Finance Corp.

100 Crescent Court, Suite 1600

Dallas, Texas 75201

Attention: Chief Financial Officer

Telecopy No.: (214) 871-3580




     If to the Trustee:


[                       ]




     The Issuers, the Subsidiary Guarantors or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.



     All notices and communications shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; on the first Business Day on or after being sent, if telecopied and the
sender receives confirmation of successful transmission; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.



     Any notice required or permitted to a Holder by the Issuers, the Subsidiary Guarantors or the
Trustee pursuant to the provisions of this Indenture shall be deemed to be properly mailed by being
deposited postage prepaid in a post office letter box in the United States addressed to such Holder
at the address of such Holder as shown on the Debt Security Register. Any report pursuant to
Section 313 of the TIA shall be transmitted in compliance with subsection (c) therein.



     Notwithstanding the foregoing, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required pursuant to Section 2.03,
shall be sufficiently given if given in the manner specified pursuant to Section 2.03.



     In the event of suspension of regular mail service or by reason of any other cause it shall be
impracticable to give notice by mail, then such notification as shall be given with the approval of
the Trustee shall constitute sufficient notice for every purpose hereunder.



     In the event it shall be impracticable to give notice by publication, then such notification
as shall be given with the approval of the Trustee shall constitute sufficient notice for every
purpose hereunder.



     Failure to mail a notice or communication to a Holder or any defect in it or any defect in any
notice by publication as to a Holder shall not affect the sufficiency of such notice with respect
to other Holders. If a notice or communication is mailed or published in the manner provided
above, it is conclusively presumed duly given.



     Section 13.04 Indenture and Debt Securities to Be Construed in Accordance with the Laws of the
State of New York.



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     THIS INDENTURE, EACH DEBT SECURITY AND THE GUARANTEES SHALL BE DEEMED TO BE NEW YORK
CONTRACTS, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE.



     Section 13.05 Officers’ Certificate and Opinion of Counsel to Be Furnished upon Application or
Demand by the Issuers.



     Upon any application or demand by the Issuers to the Trustee to take any action under any of
the provisions of this Indenture, the Issuers shall furnish to the Trustee an Officers’ Certificate
stating that all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is specifically required by any
provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.



     Each certificate or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this Indenture shall include (i)
a statement that the Person making such certificate or opinion has read such covenant or condition,
(ii) a brief statement as to the nature and scope of the examination or investigation upon which
the statements or opinions contained in such certificate or opinion are based, (iii) a statement
that, in the opinion of such Person, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such covenant or condition has
been complied with and (iv) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.



     Section 13.06 Payments Due on Legal Holidays.



     In any case where the date of maturity of interest on or principal of and premium, if any, on
the Debt Securities of a series or the date fixed for redemption or repayment of any Debt Security
or the making of any sinking fund payment shall not be a Business Day at any Place of Payment for
the Debt Securities of such series, then payment of interest or principal and premium, if any, or
the making of such sinking fund payment need not be made on such date at such Place of Payment, but
may be made on the next succeeding Business Day at such Place of Payment with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period after such date. If a record date is not a Business Day, the record date
shall not be affected.



     Section 13.07 Provisions Required by TIA to Control.



     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included in this Indenture by
any of Sections 310 to 318, inclusive, of the TIA, such required provision shall control.



     Section 13.08 Computation of Interest on Debt Securities.



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     Interest, if any, on the Debt Securities shall be computed on the basis of a 360-day year of
twelve 30-day months, except as may otherwise be provided pursuant to Section 2.03.



     Section 13.09 Rules by Trustee, Paying Agent and Registrar.



     The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar
and any paying agent may make reasonable rules for their functions.



     Section 13.10 No Personal Liability of Directors, Officers, Employees and Unitholders.



     No past, present or future director, officer, partner, member, employee, incorporator, manager
or unitholder or other owner of any equity interest of the Issuers, the General Partner or any
Subsidiary Guarantor, as such, will have any liability for any obligations of the Issuers or the
Subsidiary Guarantors under the Debt Securities, this Indenture, the Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Debt
Securities by accepting a Debt Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Debt Securities and the Guarantees.



     Section 13.11 Severability.



     In case any provision in this Indenture or the Debt Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.



     Section 13.12 Effect of Headings.



     The article and section headings herein and in the Table of Contents are for convenience only
and shall not affect the construction hereof.



     Section 13.13 Indenture May Be Executed in Counterparts.



     This Indenture may be executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one and the same instrument.



ARTICLE XIV

GUARANTEE




     Section 14.01 Unconditional Guarantee.



          (a) Notwithstanding any provision of this Article XIV to the contrary, the provisions of this
Article XIV relating to the Subsidiary Guarantors shall be applicable only to, and inure solely to
the benefit of, the Debt Securities of any series designated, pursuant to Section 2.03, as entitled
to the benefits of the Guarantee of each of the Subsidiary Guarantors.




          (b) For value received, each of the Subsidiary Guarantors hereby fully, unconditionally and
absolutely guarantees (the “Guarantee”) to the Holders and to the Trustee the due and punctual
payment of the principal of, and premium, if any, and interest on the Debt



64









 






Securities and all other
amounts due and payable under this Indenture and the Debt Securities by the Issuers, when and as
such principal, premium, if any, and interest shall become due and payable, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise, according to the
terms of the Debt Securities and this Indenture, subject to the limitations set forth in Section
14.03 and, in the case of the Guarantee of the Subordinated Debt Securities, to the subordination
provisions contained in Article XII.




          (c) Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever
reason, each of the Subsidiary Guarantors will be jointly and severally
obligated to pay the same immediately, subject, in the case of the Guarantee of the
Subordinated Debt Securities, to the subordination provisions contained in Article XII. The
Guarantee hereunder is intended to be a general, unsecured obligation of each of the Subsidiary
Guarantors and, except in the case of the Guarantee of the Subordinated Debt Securities, will rank
pari passu in right of payment with all Debt of such Subsidiary Guarantor that is not, by its
terms, expressly subordinated in right of payment to the Guarantee. Each of the Subsidiary
Guarantors hereby agrees that its obligations hereunder shall be full, unconditional and absolute,
irrespective of the validity, regularity or enforceability of the Debt Securities, the Guarantee
(including the Guarantee of any Subsidiary Guarantor) or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Debt Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Issuers, or any Subsidiary
Guarantor, or any action to enforce the same or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of the Subsidiary Guarantors. Each of the
Subsidiary Guarantors hereby agrees that in the event of a default in payment of the principal of,
or premium, if any, or interest on the Debt Securities, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted
by the Trustee on behalf of the Holders or, subject to Section 6.04, by the Holders, on the terms
and conditions set forth in this Indenture, directly against such Subsidiary Guarantor to enforce
the Guarantee without first proceeding against the Issuers or any other Subsidiary Guarantor.




          (d) The obligations of each of the Subsidiary Guarantors under this Article XIV shall be as
aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited
by any occurrence or condition whatsoever, including, without limitation, (i) any compromise,
settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of the Issuers or any of the Subsidiary Guarantors contained
in the Debt Securities or this Indenture, (ii) any impairment, modification, release or limitation
of the liability of the Issuers, any of the Subsidiary Guarantors or any of their estates in
bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present
or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the
decision of any court, (iii) the assertion or exercise by the Issuers, any of the Subsidiary
Guarantors or the Trustee of any rights or remedies under the Debt Securities or this Indenture or
their delay in or failure to assert or exercise any such rights or remedies, (iv) the assignment or
the purported assignment of any property as security for the Debt Securities, including all or any
part of the rights of the Issuers or any of the Subsidiary Guarantors under this Indenture, (v) the
extension of the time for payment by the Issuers or any of the Subsidiary Guarantors of any
payments or other sums or any part thereof owing or payable under any of the terms and provisions
of the Debt Securities or this Indenture or of the time for performance by the Issuers or any of
the Subsidiary Guarantors of any other obligations under or arising out of



65









 






any such terms and
provisions or the extension or the renewal of any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the Issuers or any of the
Subsidiary Guarantors set forth in this Indenture, (vii) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the assets, marshaling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding
affecting, the Issuers or any of the Subsidiary Guarantors or any of their respective assets, or
the disaffirmance of the Debt Securities, the Guarantee or this Indenture in any such proceeding,
(viii) the release or discharge of the Issuers or any of the other Subsidiary Guarantors from the
performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the unenforceability of the
Debt Securities, the Guarantee or this Indenture or (x) any other circumstances (other than payment
in full or discharge of all amounts guaranteed pursuant to the Guarantee) which might otherwise
constitute a legal or equitable discharge of a surety or guarantor.




          (e) Each of the Subsidiary Guarantors hereby (i) waives diligence, presentment, demand of
payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the
Issuers or any of the Subsidiary Guarantors, and all demands whatsoever, (ii) acknowledges that any
agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit
of its obligations hereunder shall extend to each holder of any agreement, instrument or document
evidencing the Guarantee without notice to it and (iii) covenants that the Guarantee will not be
discharged except by complete performance of the Guarantee. Each of the Subsidiary Guarantors
further agrees that if at any time all or any part of any payment theretofore applied by any Person
to the Guarantee is, or must be, rescinded or returned for any reason whatsoever, including without
limitation, the insolvency, bankruptcy or reorganization of the Issuers or any of the Subsidiary
Guarantors, the Guarantee shall, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence notwithstanding such application, and the
Guarantee shall continue to be effective or be reinstated, as the case may be, as though such
application had not been made.




          (f) Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holders and the
Trustee against the Issuers in respect of any amounts paid by such Subsidiary Guarantor pursuant to
the provisions of this Indenture, provided, however, that such Subsidiary Guarantor shall not be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all of the Debt Securities and the Guarantee shall have been paid in full or
discharged.




     Section 14.02 Execution and Delivery of Notation of Guarantee.



     To further evidence the Guarantee set forth in Section 14.01, each of the Subsidiary
Guarantors hereby agrees that a notation relating to such Guarantee, substantially in the form
attached hereto as Annex A, shall be endorsed on each Debt Security entitled to the
benefits of the Guarantee authenticated and delivered by the Trustee and executed by either manual
or facsimile signature of an Officer of such Subsidiary Guarantor. Each of the Subsidiary
Guarantors hereby agrees that the Guarantee set forth in Section 14.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Debt Security a notation relating to the



66









 







Guarantee. If any Officer of any Subsidiary Guarantor whose signature is on this Indenture or a
Debt Security no longer holds that office at the time the Trustee authenticates such Debt Security
or at any time thereafter, the Guarantee of such Debt Security shall be valid nevertheless. The
delivery of any Debt Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantors.



     Section 14.03 Limitation on Liability of the Subsidiary Guarantors.



     Each Subsidiary Guarantor, and by its acceptance hereof each Holder of a Debt Security
entitled to the benefits of the Guarantee, hereby confirm that it is the intention of all such
parties that the guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Federal or state law. To effectuate the
foregoing intention, the Holders of a Debt Security entitled to the benefits of the Guarantee and
the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary
Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Subsidiary Guarantor and to any collections
from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the
obligations such other Subsidiary Guarantor under its Guarantee, result in the obligations of such
Subsidiary Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law.



     Section 14.04 Release of Subsidiary Guarantors from Guarantee.



          (a) Notwithstanding any other provisions of this Indenture, the Guarantee of any Subsidiary
Guarantor may be released upon the terms and subject to the conditions set forth in this Section
14.04. Provided that no Default shall have occurred and shall be continuing under this Indenture,
any Guarantee incurred by a Subsidiary Guarantor pursuant to this Article XIV shall be
unconditionally released and discharged (i) automatically upon (A) any sale, exchange or transfer,
whether by way of merger or otherwise, to any Person that is not an Affiliate of the Issuers, of
all of the Issuers’ direct or indirect equity interests in such Subsidiary Guarantor (provided such
sale, exchange or transfer is not prohibited by this Indenture) or (B) the merger of such
Subsidiary Guarantor into either of the Issuers or any other Subsidiary Guarantor or the
liquidation and dissolution of such Subsidiary Guarantor (in each case to the extent not prohibited
by this Indenture) or (ii) following delivery of a written notice of such release or discharge by
the Issuers to the Trustee, upon the release or discharge of all guarantees by such Subsidiary
Guarantor of any Debt of the Issuers under a Credit Facility, except a discharge or release by or
as a result of payment under such guarantees. If at any time following any release and discharge
of a Guarantee by a Subsidiary Guarantor pursuant to clause (ii) of this Section 14.04(a), such
Subsidiary Guarantor shall incur a Guarantee under a Credit Facility, then such Subsidiary
Guarantor shall be required to provide a Guarantee at such time.




          (b) The Trustee shall deliver an appropriate instrument evidencing any release of a Subsidiary
Guarantor from the Guarantee upon receipt of a written request of the Issuers accompanied by an
Officers’ Certificate and an Opinion of Counsel that the Subsidiary Guarantor is entitled to such
release in accordance with the provisions of this Indenture. Any Subsidiary Guarantor not so
released remains liable for the full amount of principal of (and



67









 






premium, if any, on) and interest
on the Debt Securities entitled to the benefits of such Guarantee as provided in this Indenture,
subject to the limitations of Section 14.03.




     Section 14.05 Contribution.



     In order to provide for just and equitable contribution among the Subsidiary Guarantors, the
Subsidiary Guarantors hereby agree, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a “Funding Subsidiary Guarantor”) under its Guarantee, such Funding
Subsidiary Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor in a
pro rata amount based on the net assets of each Subsidiary Guarantor (including the Funding
Subsidiary Guarantor) for all payments, damages and expenses incurred by that Funding Subsidiary
Guarantor in discharging the Issuers’ obligations with respect to the Debt Securities or any other
Subsidiary Guarantor’s obligations with respect to its Guarantee.



     The Trustee hereby accepts the trusts in this Indenture upon the terms and conditions herein
set forth.



[Remainder of This Page Intentionally Left Blank.]




68









 





     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.



	 	 	 
	 

	 	HOLLY ENERGY PARTNERS, L.P.
	 
	 	 
	 

	 	By: HEP Logistics Holdings, L.P., its general partner


By: Holly Logistic Services, L.L.C., its general
partner
	 
	 	 





	 	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Matthew P. Clifton 	 
	 	 	Title:  	Chairman of the Board and


Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	HOLLY ENERGY FINANCE CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	Matthew P. Clifton 	 
	 	 	Title:  	Director, President and


Chief Executive Officer 	 
	 




S-1









 








	 	 	 	 	 
	 	 	                                        , as trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





S-2









 








ANNEX A




NOTATION OF GUARANTEE




     Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Debt Securities and all other amounts due
and payable under the Indenture and the Debt Securities by the Issuers.



     The obligations of the Subsidiary Guarantors to the Holders of Debt Securities and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the
Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.



	 	 	 	 	 
	 	[NAME OF SUBSIDIARY GUARANTOR(S)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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