| Item 1.01 |
Entry into a Material Definitive Agreement |
On November 14, 2022, Delek Logistics Partners, LP, a Delaware limited partnership (the “Partnership”), and Delek Logistics GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “General Partner”), entered into an Equity Distribution Agreement (the “Distribution Agreement”) by and among the Partnership, the General Partner and RBC Capital Markets, LLC (the “Manager”). Pursuant to the terms of the Distribution Agreement, the Partnership may sell from time to time to or through the Manager, as sales agent and/or principal, as applicable, common units representing limited partner interests in the Partnership having an aggregate offering price of up to $100,000,000 (the “common units”). The sales, if any, of the common units under the Distribution Agreement will be made by means of ordinary brokers’ transactions on the New York Stock Exchange at market prices, in block transactions or as otherwise agreed upon by the Manager and the Partnership by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
Under the terms of the Distribution Agreement, the Partnership will pay the Manager a commission at a mutually agreed rate not to exceed 2.0% of the gross sales price per common unit. In addition, the Partnership has agreed to pay certain expenses incurred by the Manager in connection with the offering. The Partnership may also sell common units to the Manager as principal for its own account at a price agreed upon at the time of sale. If the Partnership sells common units to the Manager as principal, the Partnership will enter into a separate terms agreement with the Manager.
The offering has been registered under the Securities Act pursuant to the Partnership’s shelf registration statement on Form S-3 (File No. 333-264300), as supplemented by the prospectus supplement dated November 14, 2022, relating to the sale of the common units (the “Prospectus Supplement”).
The Distribution Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions under which the Partnership and the Manager have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act. The Partnership expects to use the net proceeds from any sale under the Distribution Agreement of the common units for general partnership purposes.
As more fully described under the caption “Plan of Distribution (Conflicts of Interest)” in the Prospectus Supplement, from time to time, in the ordinary course of their business, the Manager and/or its affiliates have in the past performed, and may continue to perform, investment banking, broker dealer, lending, financial advisory or other services for the Partnership and its subsidiaries, for which the Manager and/or its affiliates have received separate fees, and the Manager and/or its affiliates may continue to perform these services for the Partnership and its subsidiaries in the future, in connection with which the Manager and/or its affiliates may receive customary fees and expenses.
The representations, warranties and covenants contained in the Distribution Agreement were made only for purposes of that agreement and as of specific dates; were solely for the benefit of the parties to the Distribution Agreement; and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other as a way of allocating contractual risk between them that differ from those applicable to investors. Moreover, the subject matter of the representations and warranties are subject to more recent developments. Accordingly, investors should be aware that these representations, warranties and covenants or any description thereof alone may not describe the actual state of affairs of the Partnership, the General Partner or any of their respective subsidiaries, affiliates, businesses or equityholders as of the date they were made or at any other time.
The foregoing description and the description to be contained in the Prospectus Supplement are not complete and are qualified in their entirety by reference to the full text of the Distribution Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K (this “Current Report”), and is incorporated herein by reference.
Legal opinions relating to the common units are included as Exhibits 5.1 and 8.1 to this Current Report.
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