Item 1.02 Termination of a Material Definitive Agreement.
In connection with the Merger (defined below), the Credit Agreement, dated as of
May 28, 2019, among Rattler Midstream LP, a Delaware limited partnership
("Rattler"), Rattler Midstream Operating LLC, a Delaware limited liability
company ("Rattler OpCo"), each of the lenders from time to time party thereto
and Wells Fargo Bank, National Association, as administrative agent for the
lenders, as amended by that certain First Amendment to Credit Agreement and
Guaranty and Security Agreement, dated as of October 23, 2019, that certain
Second Amendment to Credit Agreement, dated as of November 2, 2020, that certain
Third Amendment to Credit Agreement, dated as of December 21, 2021, and that
certain Fourth Amendment to Credit Agreement, dated as of June 8, 2022 (as so
amended, the "Credit Agreement"), was terminated, all obligations thereunder
were repaid and all liens granted to secure such obligations were released.
Among other things, the Credit Agreement provided for a revolving credit
facility in the maximum amount of $600.0 million and was scheduled to mature on
May 28, 2024. The obligations under the Credit Agreement were guaranteed by
Rattler, Tall City Towers LLC, Rattler OMOG LLC, Rattler Ajax Processing LLC,
Rattler WTG LLC and Rattler Holdings LLC and were secured by substantially all
of Rattler OpCo's and the guarantors' assets.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On August 24, 2022, pursuant to the terms of the previously disclosed Agreement
and Plan of Merger (the "Merger Agreement") by and among Rattler, Diamondback
Energy, Inc., a Delaware corporation ("Diamondback"), Rattler Midstream GP LLC,
a Delaware limited liability company and the general partner of Rattler (the
"General Partner"), and Bacchus Merger Sub Company, a Delaware corporation and
wholly owned subsidiary of Diamondback ("Merger Sub"), Merger Sub merged with
and into Rattler (the "Merger"), with Rattler as the surviving entity in the
Merger.
Pursuant to the terms and conditions of the Merger Agreement, at the effective
time of the Merger (the "Effective Time"), each issued and outstanding publicly
held common unit representing a limited partner interest in Rattler (each, a
"Common Unit") (other than any Common Units owned by Diamondback and its
subsidiaries) (each, a "Public Common Unit") was converted into the right to
receive 0.113 (the "Exchange Ratio") of a share of common stock, par value $0.01
per share ("Common Stock"), of Diamondback (the "Merger Consideration"). At the
Effective Time, (a) Diamondback E&P LLC, a wholly owned subsidiary of
Diamondback ("E&P"), continued as a Limited Partner (as defined in the Merger
Agreement) of Rattler and a holder of all of the outstanding Class B units in
Rattler, (b) by virtue of the Merger, Diamondback was admitted as a Limited
Partner of Rattler and a holder of all of the outstanding Common Units in
Rattler, (c) the General Partner continued as the general partner of Rattler,
and (d) Rattler (as the surviving entity after the Merger) continued without
dissolution as a limited partnership.
In addition, on August 24, 2022, in connection with the completion of the
Merger, the Partnership terminated the Rattler Midstream LP Long Term Incentive
Plan (the "Rattler LTIP"). Pursuant to the terms and conditions of the Merger
Agreement, at the Effective Time, each Partnership Phantom Unit (as defined in
the Merger Agreement) that was outstanding immediately prior to the Effective
Time was converted into an award of Parent RSUs (as defined in the Merger
Agreement), was converted into an award of Parent RSUs (as defined in the Merger
Agreement), as adjusted by the Exchange Ratio, and otherwise on the same terms
and conditions as were applicable to the corresponding Partnership Phantom
Units, including any payment timing provisions and distribution equivalent
rights, as applicable.
Pursuant to the Merger Agreement, Diamondback issued approximately 4.4 million
shares of Diamondback Common Stock to the holders of the Public Common Units as
the Merger Consideration, as described above.
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The foregoing summary of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Merger
Agreement, a copy of which is filed as Exhibit 2.1 to Rattler's Current Report
on Form 8-K filed with the Securities and Exchange Commission ("SEC") on May 16,
2022, which agreement is incorporated herein by reference. The Merger Agreement
has been included to provide investors with information regarding its terms. It
is not intended to provide any other factual information about Rattler,
Diamondback or their respective subsidiaries and affiliates.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.02 above is incorporated into this Item
2.03 by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In connection with the closing of the Merger, Rattler (a) notified The Nasdaq
Global Select Market ("Nasdaq") that the Merger had been consummated and
(b) requested that Nasdaq (i) suspend trading of the Common Units prior to
market open on August 24, 2022, (ii) withdraw the Common Units from listing on
Nasdaq and (iii) file with the SEC a Form 25 notification of Removal from
Listing and/or Registration to delist and deregister the Common Units under
Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Rattler intends to file a certification on Form 15 under the Exchange
Act with the SEC requesting the deregistration of the Common Units under
Section 12(g) of the Exchange Act and the suspension of Rattler's reporting
obligations under Sections 13 and 15(d) of the Exchange Act.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth under Item 1.02, Item 2.01 and Item 3.01 above and
Item 5.03 below is incorporated into this Item 3.03 by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The information set forth under Item 2.01 above is incorporated into this Item
5.02 by reference.
In connection with the Merger, effective as of the Effective Time, Steve E.
West, Laurie H. Argo and Arturo Vivar stepped down from their respective roles
as members of the board of directors of the General Partner (the "GP Board").
The decision of each of Mr. West, Ms. Argo and Mr. Vivar to step down as a
member of the GP Board was not the result of any disagreement with the General
Partner or Rattler on any matter relating to the operations, policies or
practices of the General Partner or Rattler.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On August 24, 2022, in connection with the Merger, (a) Rattler amended and
restated its amended and restated agreement of limited partnership and
(b) Rattler OpCo amended and restated its amended and restated limited liability
company agreement, each to, among other things, outline the rights of its
respective unitholders resulting from the Merger.
On August 24, 2022, in connection with the Merger, the General Partner amended
its amended and restated limited liability company agreement to, among other
things, reduce the minimum number of directors on the GP Board from three
directors to two directors and to eliminate the requirement that the General
Partner maintain an audit committee.
Item 7.01 Regulation FD Disclosure.
On August 24, 2022, Rattler and Diamondback issued a joint press release
announcing the closing of the Merger. A copy of the press release is attached
hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into
this Item 7.01 by reference.
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In accordance with General Instruction B.2 of Form 8-K, the information
furnished under Item 7.01 of this Current Report on Form 8-K and the exhibit
attached hereto are deemed to be "furnished" and shall not be deemed "filed" for
the purpose of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of that section, nor shall such information and exhibit be deemed
incorporated by reference into any filing under the Securities Act of 1933, as
amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
Exhibit
Number Exhibit
2.1* Agreement and Plan of Merger, dated as of May 15, 2022, by and among
Diamondback Energy, Inc., Rattler Midstream GP LLC, Bacchus Merger Sub
Company and Rattler Midstream LP (filed as Exhibit 2.1 to the
Registrant's Current Report on Form 8-K filed May 16, 2022 and
incorporated herein by reference).
99.1 Press release, dated August 24, 2022.
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
* Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation
S-K and will be provided to the Securities and Exchange Commission upon
request.
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