SOLARIS OILFIELD INFRASTRUCTURE, INC. (NYSE:SOI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
Underwriting Agreement
On May11, 2017, Solaris Oilfield Infrastructure, Inc., a Delaware
corporation (the Company), entered into an Underwriting Agreement
(the Underwriting Agreement) with Credit Suisse Securities (USA)
LLC and Goldman Sachs Co. LLC, as representatives of the several
underwriters named therein (the Underwriters), relating to the
offer and sale of the Companys ClassA common stock, par value
$0.01 per share (the ClassA Common Stock). The Underwriting
Agreement provides for the offer and sale (the Offering) of an
aggregate of 10,100,000 shares of ClassA Common Stock at a price
to the public of $12.00 per share ($11.28 per share net of
underwriting discounts and commissions). to the Underwriting
Agreement, the Company has granted the Underwriters a
30-day option to
purchase up to an aggregate of 1,515,000 additional shares of
ClassA Common Stock if the Underwriters sell more than an
aggregate of 10,100,000 shares of ClassA Common Stock. The
material terms of the Offering are described in the prospectus,
dated May11, 2017 (the Prospectus), filed by the Company with the
Securities and Exchange Commission (the Commission) on May15,
2017, to Rule 424(b) under the Securities Act of 1933, as amended
(the Securities Act). The Offering is registered with the
Commission to a Registration Statement on Form S-1, as amended
(File No.333-216721), initially filed by the Company on March15,
2017 (the Registration Statement).
The Underwriting
Agreement contains customary representations and warranties,
agreements and obligations, closing conditions and termination
provisions. The Company has agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments the Underwriters
may be required to make because of any of those
liabilities.
The Offering
closed on May17, 2017, and the Company received proceeds from the
Offering of approximately $110.8million (net of underwriting
discounts, commissions and estimated offering expenses payable by
the Company). As described in the Prospectus, the Company intends
to contribute all of the net proceeds of this offering to Solaris
Oilfield Infrastructure, LLC (Solaris LLC) in exchange for a
single class of units in Solaris LLC (Solaris LLC Units). Solaris
LLC will use (i) $5.5million to fully repay the existing balance
under Solaris LLCs revolving credit facility, (ii)approximately
$3.1million to pay cash bonuses to certain employees,
(iii)approximately $25.8million to make a cash distribution to
the existing owners of Solaris LLC and (iv)any remaining net
proceeds for general corporate purposes, including to fund the
Companys 2017 capital program.
The foregoing
description is qualified in its entirety by reference to the full
text of the Underwriting Agreement, which is attached as Exhibit
1.1 to this Current Report on Form 8-K and incorporated in this
Item 1.01 by reference.
Second
Amended and Restated Limited Liability Company Agreement of
Solaris Oilfield Infrastructure, LLC
On May11, 2017, in
connection with the Offering, Solaris LLC amended and restated
its First Amended and Restated Limited Liability Company
Agreement (the Solaris LLC Agreement and as amended, the AR
Solaris LLC Agreement). The amendments to the Solaris LLC
Agreement, among other things, (i)converted all of the membership
interests in Solaris LLC into (a) a single class of units in
Solaris LLC representing in the aggregate 32,365,823 Solaris LLC
Units and (b) the right to receive the distributions of proceeds
described above and an aggregate of 32,365,823 shares of Class B
common stock and (ii)admitted the Company as the sole managing
member of Solaris LLC. In accordance with the terms of the AR
Solaris LLC Agreement, the holders of Solaris LLC Units will
generally have the right to exchange their Solaris LLC Units (and
a corresponding number of shares of the Companys ClassB common
stock (the ClassB Common Stock)), for an aggregate of 32,365,823
shares of the Companys ClassA Common Stock at an exchange ratio
of one share of ClassA Common Stock for each Solaris LLC Unit
(and corresponding share of ClassB Common Stock) exchanged,
subject to conversion rate adjustments for stock splits, stock
dividends and reclassifications.
The foregoing
description of the AR Solaris LLC Agreement is not complete and
is qualified in its entirety by reference to the full text of the
AR Solaris LLC Agreement, which is filed as Exhibit10.1 to this
Current Report on Form8-K and is incorporated in this Item1.01 by
reference.
2
Indemnification
Agreements
On May11, 2017, in
connection with the Offering, the Company entered into
Indemnification Agreements (Indemnification Agreements) with each
of the executive officers and directors of the Company. These
Indemnification Agreements require the Company to indemnify these
individuals to the fullest extent permitted under Delaware law
against liability that may arise by reason of their service to
the Company, and to advance expenses incurred as a result of any
proceeding against them as to which they could be
indemnified.
The foregoing
description of the Indemnification Agreements is not complete and
is qualified in its entirety by reference to the full text of the
Indemnification Agreements, which are attached as Exhibits 10.2,
10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11 and 10.12
to this Current Report on Form 8-K and incorporated in this
Item1.01 by reference.
| Item3.02 | Unregistered Sales of Equity Securities. |
On May 17, 2017 in
connection with the closing of the Offering, the Company issued
32,365,823 shares of its Class B Common Stock in connection with
the consummation of the transactions contemplated by the AR LLC
Agreement. The foregoing transaction was undertaken in reliance
upon the exemption from the registration requirements of the
Securities Act by Section 4(a)(2) thereof. The information set
forth under Item 1.01 under Second Amended and Restated Limited
Liability Company Agreement of Solaris Oilfield Infrastructure,
LLC is incorporated herein by reference.
| Item5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of
Directors
Effective May11,
2017, the Board of Directors of the Company (the Board) appointed
James R. Burke, Edgar R. Giesinger, W. Howard Keenan, Jr., F.
Gardner Parker and A. James Teague as members of the
Board.
In connection with
their respective appointments, Messrs. Burke, Giesinger, Keenan,
Parker and Teague entered into Indemnification Agreements with
the Company, which are attached as Exhibits 10.8 through 10.12 to
this Current Report on Form 8-K. A description of the
Indemnification Agreements is contained above.
There are no
arrangements or understandings between Messrs. Burke, Giesinger,
Keenan, Parker and Teague and any other person to which he was
selected as a director. Messrs. Burke, Giesinger, Keenan, Parker
and Teague have no family relationship with any director or
executive officer of the Company or any person nominated or
chosen by the Company to become a director or executive officer.
There are no transactions in which Messrs. Burke, Giesinger,
Keenan, Parker and Teague have an interest requiring disclosure
under Item404(a)of Regulation S-K.
Messrs. Burke and
Keenan will serve on the Boards Nominating and Governance
Committee, Messrs. Keenan and Parker will serve on the Boards
Compensation Committee and Messrs. Giesinger, Parker and Teague
will serve on the Boards Audit Committee.
| Item9.01 | Financial Statements and Exhibits. |
(d)
Exhibits.
|
Exhibit Number |
Description |
|
| 1.1 |
Underwriting Agreement, dated as of May11, 2017, by and among Solaris Oilfield Infrastructure, Inc. and Credit Suisse Securities (USA) LLC and Goldman Sachs Co. LLC, as representatives of the several underwriters named therein. |
|
| 10.1 |
Second Amended and Restated Limited Liability Company Agreement of Solaris Oilfield Infrastructure, LLC. |
|
| 10.2 | Indemnification Agreement (William A. Zartler). |
3
|
Exhibit Number |
Description |
|
| 10.3 | Indemnification Agreement (Gregory A. Lanham). | |
| 10.4 | Indemnification Agreement (Kyle S. Ramachandran). | |
| 10.5 | Indemnification Agreement (Kelly L. Price). | |
| 10.6 | Indemnification Agreement (Cynthia M. Durrett). | |
| 10.7 | Indemnification Agreement (Lindsay R. Bourg). | |
| 10.8 | Indemnification Agreement (James R. Burke). | |
| 10.9 | Indemnification Agreement (Edgar R. Giesinger). | |
| 10.10 | Indemnification Agreement (W. Howard Keenan, Jr.). | |
| 10.11 | Indemnification Agreement (F. Gardner Parker). | |
| 10.12 | Indemnification Agreement (A. James Teague). |
4
About SOLARIS OILFIELD INFRASTRUCTURE, INC. (NYSE:SOI)
Solaris Oilfield Infrastructure, Inc. manufactures and provides its mobile proppant management systems that unload, store and deliver proppant at oil and natural gas well sites. The Company offers its services to oil and natural gas exploration and production (E&P) companies, as well as oilfield service companies. Its mobile proppant system is designed to address the challenges associated with transferring large quantities of proppant to the well site, including the cost and management of last mile logistics. Its systems provide 2.5 million pounds of proppant storage capacity. The Company manufactures its systems at its facility in Early, Texas, The Company’s system provides Streamlined last mile logistics and Improved execution to meet completion designs. Its systems provide triple the storage capacity, such as trailer-mounted, hydraulically powered storage bins. Its integrated PropView system delivers real-time proppant inventory and consumption levels. SOLARIS OILFIELD INFRASTRUCTURE, INC. (NYSE:SOI) Recent Trading Information
SOLARIS OILFIELD INFRASTRUCTURE, INC. (NYSE:SOI) closed its last trading session up +0.01 at 12.04 with 263,422 shares trading hands.