Item 1.01
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Entry into a Material Definitive Agreement.
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Joint Venture Formation and LLC Agreement
On February 16, 2018, Green Plains Partners LP, the Delaware limited partnership formed by Green Plains Inc. (the partnership), and Delek
Logistics Partners LP (DKL) announced the formation of a joint venture and entered into the Limited Liability Company Agreement (LLC Agreement) of DKGP Energy Terminals LLC (DKGP JV). Upon the closing of the
Acquisition (described below), DKGP JV will conduct the business of the joint venture, including (i) owning and operating the Terminals (as defined below), (ii) acquiring and operating DKLs existing terminals also located in Caddo Mills,
Texas and North Little Rock, Arkansas, and (iii) any other activities approved by DKGP JVs committee members (the Committee).
Under the DKGP JV LLC Agreement, the partnership has certain rights and obligations, including but not limited to, the right or obligation: (i) to
appoint two out of four members of the Committee, (ii) to contribute its pro rata percentage of the purchase price upon the closing of the Acquisition, and (iii) to fund additional capital contributions in accordance with the percentage
interest upon mutual agreement by the partnership and DKL. DKL will manage the
day-to-day
operations of the Terminals.
Membership Interest Purchase Agreement
On
February 16, 2018, DKGP JV entered into a Membership Interest Purchase Agreement (the Purchase Agreement) with AMID Merger LP, an affiliate of American Midstream Partners LP (the Seller), pursuant to which DKGP JV agreed
to acquire (the Acquisition) all of the membership interests of AMID Refined Products LLC (AMID). Through subsidiaries, AMID owns the assets of the North Little Rock Refined Products Terminal and the assets of Caddo Mills
Refined Products Terminal (collectively, the Terminals).
DKGP JV will acquire AMID for approximately $138.5 million, plus working
capital adjustments. The Acquisition is expected to close in the next 90 to 120 days, subject to customary closing conditions and regulatory approvals. Green Plains Partners will contribute $81.75 million in cash for its 50% stake in DKGP JV,
not including working capital adjustments. When completed, the Terminals, including DKLs existing terminals, will have approximately 1.8 million barrels of storage capacity, access to major pipelines and railroads and the ability to
transload a variety of products including gasoline, diesel, biodiesel, distillates, and ethanol.
The Purchase Agreement contains various representations,
warranties and covenants of DKGP JV and Seller that are customary in transactions of this type. The closing of the Acquisition is subject to satisfaction or waiver of customary specified conditions, including the material accuracy of the
representations and warranties of DKGP JV and the Seller and obtaining any necessary approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Purchase Agreement contains certain customary termination rights for both
DKGP JV and the Seller, including the rights of either party to terminate in the event that the Acquisition has not been completed by June 30, 2018, subject to certain exceptions.
Copies of the LLC Agreement and Purchase Agreement are filed with this Current Report on Form
8-K
and are incorporated
herein by reference. The foregoing summary of the material terms of these agreements does not purport to be a complete description thereof and is qualified in its entirety by the full text of the agreements.