Item 1.01
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Entry into a Material Definitive Agreement
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Asset Purchase Agreement
Effective September 23, 2016, Green Plains Partners LP (the Partnership) entered into an Asset Purchase Agreement (the
Purchase Agreement) with its parent Green Plains Inc. (GPRE), Green Plains Madison LLC (Green Plains Madison), Green Plains Mount Vernon LLC (Green Plains Mount Vernon), Green Plains York LLC
(Green Plains York and collectively with GPRE, Green Plains Madison and Green Plains Mount Vernon, the GPRE Sellers), Green Plains Holdings LLC, the Partnerships general partner (the General Partner), Green
Plains Operating Company LLC, a wholly owned subsidiary of the Partnership (the Operating Company), Green Plains Ethanol Storage LLC, a wholly owned subsidiary of the Partnership (Green Plains Storage), and Green Plains
Logistics LLC, a wholly owned subsidiary of the Partnership (Green Plains Logistics and collectively with the Partnership, the General Partner, Green Plains Storage and the Operating Company, the Partnership Parties),
pursuant to which the GPRE Sellers sold certain ethanol storage assets located in Madison, Illinois, Mount Vernon, Indiana and York, Nebraska (the Storage Assets) to wholly owned subsidiaries of the Partnership (the Drop
Down Transaction) for cash consideration of $90 million.
The Storage Assets consist of the ethanol storage assets acquired in
GPREs purchase of three ethanol plants from Abengoa BioEnergy Company, LLC, Abengoa BioEnergy of Illinois, LLC and Abengoa BioEnergy of Indiana, LLC (collectively, the Abengoa Sellers) on September 23, 2016, as described in
Item 2.01 of this Current Report on Form 8-K. Under the terms of the Purchase Agreement, the GPRE Sellers and Partnership Parties intend that the Partnership Parties shall be deemed to have purchased and/or received the Storage Assets directly
from the Abengoa Sellers. However, for the ease of closing with the Abengoa Sellers and facilitating the transfer to the Partnership Parties, the GPRE Sellers initially owned the Storage Assets.
The Purchase Agreement provided for the closing of the Drop Down Transaction to occur immediately following the GPRE Sellers purchase
from the Abengoa Sellers. The cash consideration used in the Drop Down Transaction was financed through borrowings made under the Operating Companys 5-year, $155 million revolving credit facility with Bank of America, N.A. as administrative
agent, and certain other commercial lending institutions as lenders and letter of credit issuing banks.
Pursuant to the Purchase
Agreement, and subject to certain limitations, the Partnership Parties and the GPRE Sellers agreed to certain indemnification provisions with each other and their respective affiliates.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the
Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form
8-K,
and is incorporated into this Item 1.01 by reference.
Relationships
Each of the parties
to the Purchase Agreement is a direct or indirect subsidiary of GPRE. As a result, certain individuals, including officers of GPRE and officers and directors of the General Partner, serve as officers and/or directors of one or more such
entities. GPRE currently (as of the date of this Current Report on Form 8-K) owns 4,389,642 common units of the Partnership (Common Units) and 15,889,642 subordinated units of the Partnership (Subordinated Units),
collectively representing a 62.5% limited partner interest in the Partnership as of September 23, 2016. GPRE also owns a 2% general partner interest in the Partnership and all of the Partnerships incentive distribution rights through
its ownership of the General Partner.
The terms and conditions of the Purchase Agreement were approved on behalf of the Partnership by the
conflicts committee and the board of directors of the General Partner. The conflicts committee, which is comprised of independent members of the board of directors of the General Partner, retained independent legal and financial advisors to
assist it in evaluating and negotiating the Drop Down Transaction. In approving the terms of the Drop Down Transaction, the conflicts committee based its decision in part on an opinion from the independent financial advisor that the
consideration to be paid by the Partnership Parties pursuant to the Purchase Agreement is fair, from a financial point of view, to the Partnership and the common unitholders (other than GPRE).
Second Amendment to Omnibus Agreement
Effective September 23, 2016, in connection with the Drop Down Transaction, the Partnership entered into the Second Amendment to the
Omnibus Agreement with GPRE, the General Partner, and the Operating Company that provides for the Partnerships obligation to reimburse GPRE for certain direct or allocated costs and expenses incurred by GPRE in providing general and
administrative services in connection with assets acquired or developed by the Partnership and its subsidiaries from time to time, which includes the Storage Assets. The Second Amendment to Omnibus Agreement is filed as Exhibit 10.1 to this Current
Report on
Form 8-K.
Amendment No. 2 to Operational Services Agreement
Effective September 23, 2016, in connection with the Drop Down Transaction, the General Partner entered into Amendment No. 2
to the Operational Services and Secondment Agreement with GPRE pursuant to which GPRE will second certain employees to the General Partner to provide management, maintenance and operational functions with respect to the Storage Assets. The
provided functions will be substantially similar to the management, maintenance and operational functions previously provided under the Operational Services and Secondment Agreement, as amended. Amendment No. 2 to the Operational Services
Agreement is filed as Exhibit 10.2 to this Current Report on Form 8-K.
Amendment No. 2 to Ethanol Storage and Throughput Agreement
Effective September 23, 2016, in connection with the Drop Down Transaction, Green Plains Storage entered into Amendment
No. 2 to Ethanol Storage and Throughput Agreement (the Storage and Throughput Agreement Amendment) with Green Plains Trade Group LLC (Green Plains Trade). Pursuant to the Storage and Throughput Agreement Amendment, Green
Plains Trade is obligated to throughput a minimum of 296.6 million gallons per calendar quarter (previously 246.5 million gallons per calendar quarter) of product at the Partnerships facilities. The Storage and Throughput Agreement
Amendment is filed as Exhibit 10.3 to this Current Report on Form 8-K.