Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
At the effective time of the Mergers (the "Effective Time"): (i) 6,520,944
common units representing limited partner interests in OMP (the "OMP Common
Units") issued and outstanding immediately prior to the Effective Time and owned
by
Each award of restricted units that corresponds to OMP Common Units, vested or unvested (each, an "OMP Restricted Unit Award"), that is outstanding immediately prior to the Effective Time, will, immediately prior to the Effective Time, automatically become fully vested to the extent unvested and will, without any action on the part of OMP, Crestwood or the holder thereof and subject to satisfaction of all applicable tax withholding obligations, be cancelled and converted into a right to receive a number of unrestricted Crestwood Common Units equal to the product obtained by multiplying the number of OMP Common Units subject to such OMP Restricted Unit Award immediately prior to the Effective Time by the Public Holder Exchange Ratio.
The completion of the Mergers is subject to the satisfaction or waiver of customary closing conditions, including, among others: (i) adoption of the Merger Agreement by holders of a majority of the outstanding OMP Common Units entitled to vote thereon, (ii) absence of any court order or regulatory injunction prohibiting completion of the Mergers, (iii) expiration or termination of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (iv) effectiveness of a registration statement of Crestwood on Form S-4 (the "Form S-4") in connection with the issuance of Crestwood Common Units in the LP Merger, (v) the mailing of the combined consent statement/prospectus to all holders of OMP Common Units following effectiveness of the Form S-4 and at least 20 days prior to the closing date, (vi) the authorization for listing of Crestwood Common Units to be issued in the LP Merger on the NYSE and (vii) the consummation of the Pre-Closing Transactions (as defined in the Merger Agreement). The obligation of each of OMP and Crestwood to consummate the Mergers is also conditioned upon compliance by the other party in all material respects with its covenants and, subject to materiality standards specified in the Merger Agreement, the accuracy of the representations and warranties of the other party.
Crestwood and OMP have made customary representations and warranties in the Merger Agreement. The Merger Agreement also contains customary covenants and agreements, including covenants and agreements relating to (i) the conduct of each of OMP's and Crestwood's respective businesses between the date of the signing of the Merger Agreement and the Effective Time and (ii) the efforts of the parties to cause the Mergers to be completed, including actions which may be necessary to cause the expiration or termination of the waiting period under the HSR Act. Pursuant to the terms of the Merger Agreement, each of Crestwood and OMP shall use its reasonable best efforts to take any and all steps necessary, subject to certain limitations, to obtain antitrust clearance in order to facilitate closing of the Mergers.
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The Merger Agreement contains certain termination rights for OMP and Crestwood
as more particularly set forth in the Merger Agreement. The Merger Agreement
further provides that, upon termination of the Merger Agreement under certain
circumstances, OMP may be required to pay Crestwood a termination fee of
At the closing of the transactions contemplated by the Merger Agreement, the Company will enter into a Registration Rights Agreement, a Director Nomination Agreement, Master Amendment to Commercial Agreements and the Transition Services Agreement, forms of which are attached as exhibits to the Merger Agreement.
The Registration Rights Agreement will grant the Company and certain of its affiliates (the "Unitholders") certain rights to require Crestwood to file and maintain the effectiveness of a registration statement with respect to the resale of the Crestwood Common Units owned by the Unitholder (including by having their Crestwood Common Units registered for resale in certain other registration statements filed by Crestwood or in certain underwritten offerings proposed by Crestwood) and, under certain circumstances, to require Crestwood to initiate three underwritten offerings for such Crestwood Common Units, subject to a minimum threshold.
Also pursuant to the Registration Rights Agreement, the Unitholders will agree not to directly or indirectly sell or otherwise dispose of its Crestwood Common Units for a period ending 90 days following the closing date. Additionally, for a period of two years following the closing date, Crestwood will have a right of first offer in connection with certain sales by the Unitholders of Crestwood Common Units.
The Director Nomination Agreement will grant the Company certain designation rights pursuant to which the Company may cause the board of directors of the Crestwood GP to elect the designees selected by the Company. At the closing, the Company may designate two directors to the board of directors of Crestwood GP and for so long as it and its affiliates own 15% of the issued and outstanding Crestwood Common Units. The Company may designate one director if the Company and its affiliates hold at least 10% (but less than 15%) of the issued and outstanding Crestwood Common Units.
The Master Amendment to Commercial Agreements will amend certain commercial agreements between the Company and OMP at closing, as more particularly set forth in the Master Amendment to Commercial Agreements.
Under the Transition Services Agreement, a subsidiary of the Company will provide customary transition services to Crestwood for a limited duration.
The transaction has been unanimously approved by the board of directors of the
Company and both general partners of Crestwood and OMP. The transaction terms
were reviewed, negotiated and approved by the conflicts committee of the board
of directors of the general partner of OMP. In making its determination to
approve the transaction, the board of directors consulted with its management
and financial and legal advisors and considered a number of factors including,
among other things, strategic alternatives for its midstream business, precedent
midstream transactions and, among other things, an opinion received from
The Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Merger Agreement, including the Registration Rights Agreement, Director Nomination Agreement, Master Amendment to Commercial Agreements and Transition Services Agreement attached as exhibits thereto and is qualified in its entirety by the terms and conditions of the Merger Agreement, including the Registration Rights Agreement, Director Nomination Agreement, Master Amendment to Commercial Agreements and Transition Services Agreement. It is not intended to provide any other factual information about OMP, Crestwood or their respective
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subsidiaries and affiliates. The Merger Agreement contains representations and warranties by each of the parties to the Merger Agreement, which were made only for purposes of the Merger Agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of OMP, Crestwood or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the OMP's or Crestwood's public disclosures.
Support Agreement
Contemporaneously with the execution of the Merger Agreement, the Company, OMP,
Crestwood, the
In addition, the Support Agreement includes certain affirmative and restrictive covenants of the parties, including, among others, the Company's waiver of certain consent, notice, approval and re-negotiation rights under certain Commercial Agreements (as defined in the Support Agreement) that would be triggered by the transactions contemplated by the Merger Agreement.
The Support Agreement is attached hereto as Exhibit 10.1 and is incorporated into this Item 1.01 by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Support Agreement and is qualified in its entirety by the terms and conditions of the Support Agreement. It is not intended to provide any other factual information about the parties or their respective subsidiaries and affiliates. The Support Agreement contain representations and warranties by each of the parties to the Support Agreement, which were made only for purposes of the Support Agreement and as of a specified date. The representations, warranties and covenants in the Support Agreement were made solely for the benefit of the parties to the Support Agreement; may be subject to limitations agreed upon by the contracting parties; and may be subject to standards of materiality, applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Support Agreement, which subsequent information may or may not be fully reflected in the Company's, OMP's or Crestwood's public disclosures. . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1* Agreement and Plan of Merger, dated as ofOctober 25, 2021 , by and amongOasis Midstream Partners LP ,OMP GP LLC , Crestwood Equity Partners LP,Project Phantom Merger Sub LLC ,Project Falcon Merger Sub LLC , and, solely for the purposes of Section 2.1(a)(i) thereof,Crestwood Equity GP LLC . 10.1** Support Agreement, dated as ofOctober 25, 2021 , by and among Crestwood Equity Partners LP,Oasis Midstream Partners LP ,OMP GP LLC ,Oasis Petroleum Inc. andOMS Holdings LLC . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Schedules and certain exhibits to this Exhibit are omitted pursuant to
Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a
copy of any omitted schedule or exhibit to the
** Schedules and certain exhibits to this Exhibit are omitted pursuant to
Regulation S-K Item 601(b)(10). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to theSEC upon request. 6
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