Exchange Offers and Consent Solicitations
On October 30, 2023, HF Sinclair Corporation (HF Sinclair) commenced private offers to all Eligible Holders (as defined in the
press release) to exchange (the Exchange Offers) any and all outstanding 6.375% Senior Notes due 2027 (the HEP 2027 Notes) and 5.000% Senior Notes due 2028 (the HEP 2028 Notes and together with the HEP 2027 Notes,
the HEP Notes) issued by Holly Energy Partners, L.P. (HEP) and Holly Energy Finance Corp. (Finance Corp. and together with HEP, the HEP Issuers), for new notes to be issued by HF Sinclair, with
registration rights, and cash, pursuant to the terms and subject to the conditions set forth in a confidential exchange offer memorandum and consent solicitation statement, dated October 30, 2023 (the Exchange Offer Memorandum).
Concurrently with the Exchange Offers, HF Sinclair is soliciting the consents (collectively, the Consent Solicitations) from the
Eligible Holders to adopt certain proposed amendments to the indentures governing the HEP Notes (the HEP Indentures and each, an HEP Indenture) to, among other things, eliminate from each HEP Indenture, as it relates to each
series of HEP Notes (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an Event of Default, (iii) the U.S. Securities and Exchange Commission (SEC) reporting covenant
and (iv) the requirement of HEP to offer to purchase the HEP Notes upon a change of control (collectively, the Proposed Amendments). The Proposed Amendments will become effective with respect to a particular series of HEP Notes to
the extent (i) participation in the Exchange Offer by the relevant series of HEP Notes exceeds 50% of the outstanding principal amount of such series and (ii) all tendered HEP Notes of such series are accepted for exchange in the related
Exchange Offer. Eligible Holders of HEP Notes that tender such HEP Notes will be deemed to have given consent to the Proposed Amendments (in respect of the applicable series of HEP Notes tendered).
Eligible Holders will not be permitted to tender their HEP Notes without delivering consents or to deliver consents without tendering their
HEP Notes. Tenders of HEP Notes may not be withdrawn after the earlier of (i) the Early Participation Date (as defined below), and (ii) the date on which the applicable supplemental indenture to the corresponding HEP Indenture implementing
the applicable Proposed Amendments is executed, unless extended (such date and time, as the same may be extended, the Withdrawal Deadline), except in the limited circumstances where additional withdrawal rights are required by law. A
valid withdrawal of tendered HEP Notes will also constitute the revocation of the related consent with respect to the applicable HEP Indenture. As used herein, a valid withdrawal means valid withdrawal prior to the Withdrawal Deadline.
The Exchange Offers and the Consent Solicitations will expire at 5:00 p.m., New York City time, on November 29, 2023, unless
extended or terminated (such time and date, as the same may be extended, the Expiration Date). However, Eligible Holders who validly tender and do not validly withdraw their HEP Notes at or prior to 5:00 p.m., New York City time, on
November 13, 2023, unless extended or terminated (as the same may be extended, the Early Participation Date), will be eligible to receive greater consideration for their HEP Notes than will be available for tenders made after the
Early Participation Date but at or prior to the Expiration Date, all as more fully described in the attached press release and in the Exchange Offer Memorandum.
HF Sinclair will return to the HEP Issuers all HEP Notes which are validly tendered and accepted pursuant to the Exchange Offers (the
Returned Notes), and such Returned Notes will be cancelled.
The Exchange Offers and Consent Solicitations are being made
solely pursuant to the conditions set forth in the Exchange Offer Memorandum in a private offering exempt from, or not subject to, registration under the Securities Act of 1933, as amended, and are subject to certain conditions set forth in the
Exchange Offer Memorandum, although HF Sinclair may generally waive any such conditions at any time. Notwithstanding the foregoing, HF Sinclair may not waive or modify the condition that the merger of a wholly-owned subsidiary of HF Sinclair with
and into HEP, with HEP surviving as an indirect, wholly-owned subsidiary of HF Sinclair (the Proposed Merger) shall have been consummated.
HF Sinclair and HEP are in discussions with the current lending group under HEPs Third Amended and Restated Credit Agreement, dated
July 27, 2017, by and among HEP, as borrower, and Wells Fargo Bank, National Association, in its capacity as administrative agent, and the lenders party thereto (as amended, restated,
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