HOLLY ENERGY PARTNERS, L.P. (NYSE:HEP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
Common Unit Purchase Agreement
On January 25, 2018, Holly Energy Partners, L.P. (the “Partnership”) entered into a Common Unit Purchase Agreement (the “Purchase Agreement”) with each of the purchasers listed on Schedule A thereto (the “Purchasers”) to which the Purchasers have agreed to purchase (the “Private Placement”) 3,700,000 common units representing limited partner interests in the Partnership (the “Common Units”) at a price of $29.73 per Common Unit. The issuance of the Common Units to the Purchase Agreement is being made in reliance upon an exemption from registration provided under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
The Purchase Agreement contains customary representations, warranties and covenants of the Partnership and the Purchasers. The Partnership, on the one hand, and each of the Purchasers (severally and not jointly), on the other hand, have agreed to indemnify each other and their respective affiliates, officers, directors and other representatives against certain losses resulting from any breach of their representations, warranties or covenants contained in the Purchase Agreement, subject to certain limitations and survival periods.
to the Purchase Agreement, the Partnership has agreed to enter into a Registration Rights Agreement with the Purchasers in connection with the closing of the Private Placement to which the Partnership will file and maintain a registration statement with respect to the resale of the Common Units on the terms and conditions set forth therein.
The Private Placement is expected to close on or about February 6, 2018. The closing of the Private Placement is conditioned upon certain customary closing conditions. The Partnership expects to receive gross proceeds from the issuance of the Common Units to the Purchasers of approximately $110 million, and the Partnership intends to use the net proceeds to repay borrowings under the Partnership’s credit facility and for general partnership purposes.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase 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 3.02Unregistered Sales of Equity Securities.
The information provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 3.02.
Item 7.01. Regulation FD Disclosure.
On January 26, 2018, the Partnership issued a press release announcing (a) the declaration of its regular quarterly distribution, which was increased to $0.6500 per unit from $0.6450 per unit for the previous quarterly distribution, (b) 2018 distribution and coverage guidance for the Partnership, and (c) the private placement of the Partnership’s common units to the Purchasers. A copy of the Partnership’s press release is attached hereto as Exhibit 99.1 and incorporated herein in its entirety.
The information contained in, or incorporated into, this Item 7.01 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit NumberExhibit Title
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* Furnished herewith.
HOLLY ENERGY PARTNERS LP ExhibitEX-10.1 2 hep2018pipe-commonunitpurc.htm EXHIBIT 10.1 Exhibit Execution VersionCOMMON UNIT PURCHASE AGREEMENTBY AND BETWEEN HOLLY ENERGY PARTNERS,…To view the full exhibit click here
About HOLLY ENERGY PARTNERS, L.P. (NYSE:HEP)
Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals and loading rack facilities. The Company operates in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington. The Company’s assets include pipelines; refined product terminals and refinery tankage, and refinery processing units. Holly Logistic Services, L.L.C. (HLS) is a subsidiary of HollyFrontier Corporation (HFC), which is the general partner of HEP and manages HEP. The Company owns and operates petroleum product and crude pipelines, terminal, tankage and loading rack facilities, and refinery processing units that support the refining and marketing operations of HFC in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Alon USA, Inc.’s (Alon) refinery in Big Spring, Texas.
