UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): May 4, 2012 (May 1, 2012)

 

NGL ENERGY PARTNERS LP

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-35172

 

27-3427920

(State or other jurisdiction of
incorporation or organization)

 

(Commission File Number)

 

(I.R.S. Employer
Identification No.)

 

6120 South Yale Avenue
Suite 805
Tulsa, Oklahoma 74136

(Address of principal executive offices) (Zip Code)

 

(918) 481-1119

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12)

 

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

 

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 

 

 



 

Item 1.01.              Entry into a Material Definitive Agreement.

 

The information regarding the Registration Rights Agreement Amendment (as defined below) set forth in Item 3.02 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.

 

Item 3.02.              Unregistered Sales of Equity Securities.

 

On May 1, 2012, NGL Energy Partners LP (the “ Partnership ”) completed its previously announced transaction with Downeast Energy Corp., a Maine corporation (“ Downeast ”).  As contemplated by the Contribution and Sale Agreement (the “ Contribution and Sale Agreement ”), dated April 20, 2012, by and between the Partnership and Downeast, Downeast contributed substantially all of the assets comprising its propane and distillate operations to Osterman Propane, LLC, a subsidiary of the Partnership, in exchange for cash and the issuance of 750,000 common units (“ Common Units ”) representing limited partnership interests in the Partnership.  The Contribution and Sale Agreement also contemplates a post-closing working capital payment for certain specified working capital items that may be payable by the Partnership or Downeast.  If the working capital payment is payable by the Partnership, the Partnership will issue up to 500,000 additional Common Units to Downeast as full or partial payment of the working capital settlement.

 

In connection with the completion of the Downeast transaction and as contemplated by the Contribution and Sale Agreement, the current Registration Rights Agreement of the Partnership was amended by entering into Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement (the “ Registration Rights Agreement Amendment ”), dated May 1, 2012, by and between NGL Energy Holdings LLC (the “ General Partner ”) and Downeast.  The Registration Rights Agreement Amendment provides for, among other things, certain registration rights for the Common Units that were issued to Downeast at the closing of the transaction and that may be issued to Downeast as full or partial payment of the working capital settlement and increases the total number of permitted demand registrations from seven to eight.

 

The description of the Registration Rights Agreement Amendment is qualified in its entirety by reference to the full text of the Registration Rights Agreement Amendment, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and which is incorporated into this Item 3.02 by reference.

 

The Common Units were issued to Downeast in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(2).  The Partnership only offered the Common Units to Downeast and did not engage in any general solicitation or advertising for the offer and sale of the Common Units and Downeast represented to the Partnership that it is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act.

 

1



 

Item 5.02.              Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(b) Retirement of Named Executive Officer

 

On May 1, 2012, Stephen D. Tuttle, the President, Midstream Division of the General Partner, notified the General Partner that he intends to retire effective as of June 1, 2012.

 

Item 8.01.              Other Events.

 

On May 2, 2012, the Partnership issued a press release announcing the completion of the Downeast transaction.  A copy of the press release is furnished as Exhibit 99.1.

 

Item 9.01.              Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.

 

Description

4.1

 

Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement, dated May 1, 2012, by and between NGL Energy Holdings LLC and Downeast Energy Corp.

 

 

 

99.1

 

NGL Energy Partners LP press release dated May 2, 2012

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

 

 

 

By:

NGL Energy Holdings LLC,

 

 

 

its general partner

 

 

 

 

Date: May 4, 2012

 

 

By:

/s/ Craig S. Jones

 

 

 

 

Craig S. Jones

 

 

 

 

Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

4.1

 

Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement, dated May 1, 2012, by and between NGL Energy Holdings LLC and Downeast Energy Corp.

 

 

 

99.1

 

NGL Energy Partners LP press release dated May 2, 2012

 

4


Exhibit 4.1

 

AMENDMENT NO. 3 AND JOINDER

TO

FIRST AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement (this “ Amendment ”) is dated as of May 1, 2012 by and between NGL Energy Holdings LLC (the “ General Partner ”), a Delaware limited liability company and the general partner of NGL Energy Partners LP, a Delaware limited partnership (the “ Partnership ”), and Downeast Energy Corp., a Maine corporation (“ Downeast ”).  Capitalized terms used but not defined herein have the meanings ascribed to them in the Registration Rights Agreement (as defined below).

 

R E C I T A L S

 

WHEREAS, the Partnership is party to that certain First Amended and Restated Registration Rights Agreement dated as of October 3, 2011, as amended by Amendment No. 1 dated November 1, 2011 and Amendment No. 2 dated January 3, 2012 (as amended, the “ Registration Rights Agreement ”);

 

WHEREAS, reference is hereby made to that certain Contribution and Sale Agreement, dated as of April 20, 2012, by and among Downeast and the Partnership (as amended, restated, supplemented or otherwise modified, the “ Contribution Agreement ”);

 

WHEREAS, the execution and delivery of this Amendment is a condition precedent to the consummation of the transactions contemplated under the Contribution Agreement;

 

WHEREAS, pursuant to Section 6(c) of the Registration Rights Agreement, the General Partner may make certain amendments to the Registration Rights Agreement in its sole discretion and without any further approval rights or action by or on behalf of the Holders in connection with the issuance by the Partnership of any Common Units in connection with an acquisition or similar transaction involving the Partnership; and

 

WHEREAS, the General Partner desires to join Downeast as a party thereto in a capacity as a Rights Holder and amend the Registration Rights Agreement as set forth below.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby covenant and agree:

 

1.                                       Amendment of Registration Rights Agreement .

 

(a)                                  The fourth sentence of the definition of “Affiliate” set forth in Section 1 of the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows:

 



 

Notwithstanding anything in the foregoing to the contrary, HOH and its respective Affiliates (other than the General Partner or any Group Member), on the one hand, NGL Holdings and its Affiliates (other than the General Partner or any Group Member), on another hand, the IEP Group and their respective Affiliates (other than the General Partner or any Group Member), on another hand, the Osterman Group and their respective Affiliates (other than the General Partner or any Group Member), on another hand, SemStream and its Affiliates (other than the General Partner or any Group Member), on another hand, the Pacer Propane Group and their respective Affiliates, on another hand, and Downeast and its Affiliates (other than the General Partner or any Group Member), on another hand, will not be deemed to be Affiliates of one another hereunder unless there is a basis for such Affiliation independent of their respective Affiliation with any Group Member, the General Partner or any Affiliate (disregarding the immediately preceding sentence) of any Group Member or the General Partner.

 

(b)                                 The definitions of “Significant Holder” and “Transaction Documents” set forth in Section 1 of the Registration Rights Agreement are hereby amended and restated in their entirety to read as follows:

 

Significant Holder ” means each of (i) NGL Holdings, (ii) HOH, (iii) the IEP Group, (iv) the Osterman Group (acting together in their capacities as Holders) (v) SemStream, (vi) the Pacer Propane Group (acting together in their capacities as Holders) and (vii) Downeast, in each case only for so long as such Significant Holder continues to hold a Requisite Ownership Threshold.

 

Transaction Documents ” means (i) the Partnership Agreement, (ii) the First Amended and Restated Limited Liability Company Agreement of the General Partner, dated as of October 14, 2010, as amended from time to time, (iii) with respect to the Initial Holders, the Contribution, Purchase and Sale Agreement, (iv) with respect to the Osterman Group, the Contribution and Sale Agreement, (v) with respect to SemStream, the SemStream—NGL Contribution Agreement, (vi) with respect to the Pacer Propane Group, the Pacer—NGL Contribution Agreements, and (vii) with respect to Downeast, the Downeast—NGL Contribution Agreement.

 

(c)                                  Section 1 of the Registration Rights Agreement is hereby amended to add the following definitions of “Downeast” and “Downeast—NGL Contribution Agreement” thereto:

 

Downeast ” means Downeast Energy Corp., a Maine corporation.

 

Downeast—NGL Contribution Agreement ” means the Contribution and Sale Agreement, dated as of April 20, 2012, by and among the Partnership and Downeast, as amended, restated, supplemented or otherwise modified from time to time.

 



 

(d)                                 Section 2(a)(iii) of the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows:

 

Subject to the other limitations contained in this Agreement, the Partnership is not obligated hereunder to effect more than (A) one (1) Demand Registration by each Significant Holder other than SemStream, which shall have two (2) Demand Registrations; (B) eight (8) Demand Registrations in total; (C) one (1) Demand Registration on Form S-1 (or any equivalent or successor form under the Securities Act) in any twelve (12) month period; or (D) two (2) Demand Registrations on Form S-3 (or any equivalent or successor form under the Securities Act) in any twelve (12) month period.

 

2.                                       Joinder .

 

(a)                                  Downeast acknowledges receipt of a copy of the Registration Rights Agreement and, after review and examination thereof, by execution of this Amendment does hereby agree to be bound by the terms, conditions and agreements contained therein in its capacity as a Rights Holder thereunder.

 

(b)                                 By execution hereof, the General Partner hereby (i) accepts Downeast’s agreement to be bound by the Registration Rights Agreement, (ii) covenants and agrees that the Registration Rights Agreement is hereby amended to include Downeast as a party in a capacity as a Rights Holder and (iii) agrees that Downeast shall have all rights provided to a Rights Holder under the Registration Rights Agreement.

 

3.                                       Miscellaneous .

 

(a)                                  From and after the date hereof, each reference in the Registration Rights Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, shall mean and be a reference to the Registration Rights Agreement as amended hereby.

 

(b)                                 Except as specifically set forth above, the Registration Rights Agreement shall remain unaltered and in full force and effect and the respective terms, conditions or covenants thereof are hereby in all respects ratified and confirmed.

 

(c)                                  This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law.

 

 [signature page follows]

 



 

IN WITNESS WHEREOF, the parties hereto have executed and deliver this Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement on the date first written above.

 

 

 

NGL ENERGY HOLDINGS LLC

 

 

 

 

 

By:

/s/ Vincent J. Osterman

 

 

Vincent J. Osterman

 

 

President of Eastern Retail Operations

 

 

 

 

 

 

 

DOWNEAST ENERGY CORP.

 

 

 

 

 

 

By:

/s/ William Morrell

 

Name:

William Morrell

 

Title:

Vice President

 

Signature Page to Amendment No. 3 and Joinder to Registration Rights Agreement

 


Exhibit 99.1

 

NGL Energy Partners LP Acquires Downeast Energy Corporation

 

TULSA, Okla.—(BUSINESS WIRE)—May 2, 2012— NGL Energy Partners LP (NYSE: NGL) has completed its previously announced acquisition of Downeast Energy Corporation’s assets in exchange for a combination of cash and NGL Common Units.  The assets contributed by Downeast are located in Maine and New Hampshire.

 

About NGL Energy Partners LP

 

NGL Energy Partners LP is a Delaware limited partnership. The Partnership owns and operates a vertically integrated energy business with three operating segments: midstream, wholesale supply and marketing and retail propane. The Partnership completed its initial public offering in May 2011. For further information visit the Partnership’s website atwww.nglenergypartners.com.

 

The information contained in this press release is available on the Partnership’s website at www.nglenergypartners.com.

 

Source: NGL Energy Partners LP

 

Contacts

 

NGL Energy Partners LP

Craig S. Jones, (918) 477-0532

Chief Financial Officer

Craig.jones@nglep.com