Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 6, 2022, USD Partners LP (the "Partnership") and certain of its
subsidiaries (together with the Partnership, the "Acquiring Entities") completed
the previously announced acquisition of equity interests in certain subsidiaries
of USD Group LLC ("USD Group") that own 100% of the Hardisty South Terminal (the
"Acquisition"). Simultaneously with the closing of the Acquisition, the
Partnership and USD Partners GP LLC, the general partner of the Partnership (the
"General Partner"), completed (i) the cancellation of the Partnership incentive
distribution rights ("IDRs") held by the General Partner, and (ii) the
conversion of the General Partner's approximate 1.6% economic general partner
interest in the Partnership into a non-economic general partner interest in the
Partnership (the "GP/IDR Restructuring" and, together with the Acquisition, the
"Transactions").
The Transactions closed pursuant to a Contribution Agreement, dated as of
March 27, 2022 (the "Contribution Agreement"), by and among the Acquiring
Entities, and USD Group and certain subsidiaries of USD Group ("Contributor
Parties"). Subject to the terms and conditions of the Contribution Agreement,
simultaneously with the closing of the Transactions, the General Partner amended
and restated the Second Amended and Restated Agreement of Limited Partnership of
the Partnership, dated as of October 15, 2014 to reflect the GP/IDR
Restructuring (the "Third Amended and Restated Partnership Agreement"). The
total consideration for the Transactions was $75 million in cash, plus 5,751,136
newly issued common units representing limited partner interests in the
Partnership (the "Common Units"), which were issued to USD Group.
Upon the closing of the Transactions, the Partnership has 33,371,045 Common
Units outstanding, of which USD Group owns 17,308,226 Common Units in the
Partnership, representing an aggregate 51.9% limited partner interest. The terms
of the Transactions, the Contribution Agreement and the Third Amended and
Restated Partnership Agreement were approved by the board of directors of the
General Partner (the "Board"), based on the approval and recommendation of the
conflicts committee of the Board, which consists entirely of independent
directors. The conflicts committee engaged an independent financial advisor and
legal counsel.
The foregoing description of the Contribution Agreement is qualified in its
entirety by reference to the full text of the Contribution Agreement, which was
filed as Exhibit 10.1 to the Partnership's Current Report on Form 8-K filed on
March 29, 2022 and is incorporated herein by reference.
In connection with the closing of the Transactions, the Partnership entered into
an amendment to its Amended and Restated Credit Agreement to permit the
Partnership to acquire the Netherlands cooperative which is the parent company
of the company that owns the Hardisty South Terminal. The foregoing description
is not complete and is qualified in its entirety by reference to the full text
of the amendment to the Amended and Restated Credit Agreement, a copy of which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The description in Item 2.01 above of the Partnership's issuance of the Common
Units in connection with the Transactions is incorporated into this Item 3.02 by
reference, insofar as such information relates to the sale of unregistered
equity securities. The sale and issuance of the Partnership's Common Units in
connection with the Transactions are exempt from registration under
Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act").
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with the closing of the Transactions, the General Partner entered
into the Third Amended and Restated Partnership Agreement, dated as of April 6,
2022. Among other things, the Third Amended and Restated Partnership Agreement
provides for the (i) cancellation of the IDRs, (ii) conversion of the general
partner's 1.6% economic general partner interest in the Partnership into a
non-economic general partner interest, and (iii) elimination of certain legacy
provisions that no longer apply, including provisions related to the IDRs, the
economic general partner interest and the subordinated units.
The disclosure contained in this Item 5.03 does not purport to be a complete
description of the Third Amended and Restated Partnership Agreement and is
qualified in its entirety by reference to the full text of the Third Amended and
Restated Partnership Agreement, which is filed as Exhibit 3.1 hereto and is
incorporated by reference into this Item 5.03.
Item 7.01 Regulation FD Disclosure.
On April 6, 2022, the Partnership issued a press release announcing the entry
into the Contribution Agreement. A copy of the press release is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.
The information provided in this Item 7.01 (including the exhibits referenced
therein) shall be deemed "furnished" and shall not be deemed "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), nor shall it be incorporated by reference in any filing made by
the Partnership pursuant to the Securities Act, except to the extent that such
filing incorporates by reference any or all of such information by express
reference thereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
3.1 Third Amended and Restated Agreement of Limited Partnership of USD
Partners LP, dated as of April 6, 2022.
10.1 Amendment No. 2 to Amended and Restated Credit Agreement, dated as
of April 6, 2022, among USD Partners LP, USD Terminals Canada ULC, the
Guarantors party thereto, Bank of Montreal, as Administrative Agent,
and the other financial institutions party thereto executing the
Amendment as Lenders.
99.1 Press Release dated April 6, 2022, issued by USD Partners LP.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL.
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