Item 8.01 Other Events
On
Upon the terms and subject to the conditions set forth in the Merger Agreement,
at the effective time of the Merger (the "Effective Time"), each issued and
outstanding share of QES common stock, par value
Following the closing of the Merger, the KLXE Common Stock will continue to be listed on the Nasdaq Global Select Market. At the Effective Time, QES restricted stock units held by employees will automatically be converted into corresponding restricted stock units with respect to shares of KLXE Common Stock (the "Converted Awards") based on the Exchange Ratio, with performance criteria deemed satisfied based on achievement levels set forth in the Merger Agreement. Following the closing, the Converted Awards will otherwise continue to be governed by the same terms and conditions as applicable to such awards prior to the Effective Time, including with respect to service-based vesting. QES phantom units and non-employee director restricted stock units will vest at the Effective Time in accordance with the terms of the underlying award agreements and will be cancelled in exchange for shares of KLXE Common Stock based on the Exchange Ratio.
The Merger Agreement provides, among other things, that effective as of the
Effective Time, the board of directors of the combined company will be comprised
of nine directors, consisting of (a) five directors to be designated by KLXE and
(b) four directors to be designated by QES. At the Effective Time, (i)
The Merger Agreement provides that, as of the Effective Time, the combined
company will have its corporate headquarters in
The Merger Agreement was unanimously approved by the board of directors of each of QES and KLXE and the board of directors of QES has agreed to recommend that QES's stockholders adopt the Merger Agreement. In addition, the board of directors of KLXE has agreed to recommend that KLXE's stockholders approve the issuance of shares of KLXE Common Stock in the Merger.
The Merger is intended to be treated for
The parties have made customary representations, warranties and covenants in the
Merger Agreement, including, among others, covenants regarding (i) the conduct
of their respective businesses during the period between signing and closing,
(ii) obligations to convene and hold meetings of their respective stockholders
to obtain the required stockholder approvals and (iii) obligations to cooperate
with each other to prepare and file a registration statement on Form S-4 and
joint proxy statement with the
Neither QES nor KLXE is permitted to solicit, initiate or knowingly encourage or facilitate any alternative transaction proposals from third parties, furnish any non-public information to third parties, engage in discussions or negotiations with third parties regarding any alternative transaction proposals, approve, endorse or recommend any alternative transaction proposals or enter into any agreement providing for any alternative transaction proposals. Notwithstanding these limitations, prior to a party obtaining the required stockholder approval, such party may under certain circumstances provide information to and participate in discussions or negotiations with third parties with respect to an unsolicited alternative transaction proposal that its board of directors has determined in good faith is or is reasonably expected to result in a superior proposal. Each party's board of directors may change its recommendation to its stockholders in response to (i) a superior proposal (in which event, such party's board of directors may upon payment of a termination fee and expense reimbursement also terminate the Merger Agreement) or (ii) an intervening event (in which event, the other party's board of directors may terminate the Merger Agreement following such change in recommendation), in each case, if the respective board of directors determines in good faith that the failure to take such action would be reasonably likely to be inconsistent with the exercise of the directors' fiduciary duties under applicable law.
The Merger Agreement also provides that KLXE will, prior to or concurrently with
the closing of the Merger, repay in full all existing debt of QES under that
certain Loan, Security and Guaranty Agreement, dated as of
The consummation of the Merger is subject to customary closing conditions,
including (i) the adoption of the Merger Agreement by QES stockholders and
approval of the issuance of KLXE Common Stock in connection with the Merger (the
"Stock Issuance") by KLXE's stockholders, (ii) the absence of certain legal
impediments, (iii) the approval for listing of KLXE Common Stock issuable in the
Merger on Nasdaq and (iv) the effectiveness of the registration statement on
Form S-4, pursuant to which the shares of KLXE Common Stock issuable in the
Merger will be registered with the
The Merger Agreement contains certain termination rights for both QES and KLXE.
Upon termination of the Merger Agreement in certain specified circumstances,
including in connection with a superior proposal or certain intervening events,
KLXE or QES may be required to pay a termination fee of
The foregoing description of the Merger Agreement and the transactions contemplated by the Merger Agreement does not purport to be a complete description thereof and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Merger Agreement has been included to provide security holders with information regarding its terms. It is not intended to provide any other factual information about QES, KLXE or their respective subsidiaries and affiliates. The Merger Agreement contains representations, warranties and covenants by each of the parties to the Merger Agreement. These representations, warranties and covenants were made solely for the benefit of the other parties to the Merger Agreement and (a) are not intended to be treated as categorical statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate, (b) may have been qualified in the Merger Agreement by confidential disclosure schedules that were delivered to the other party in connection with the signing of the Merger Agreement, which disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the Merger Agreement, (c) may be subject to standards of materiality applicable to the parties that differ from what might be viewed as material to stockholders and (d) were made only as of the date of the Merger Agreement or such other date or dates as may be specified in the Merger Agreement. Accordingly, you should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of QES or KLXE.
Support Agreements
In connection with the execution of the Merger Agreement, QES entered into a
Support Agreement, dated
In connection with the execution of the Merger Agreement, KLXE entered into a
Support Agreement, dated
The foregoing descriptions of the QES Support Agreement and the KLXE Support Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the QES Support Agreement and the KLXE Support Agreement, as applicable, which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
Registration Rights Agreement
In connection with the execution of the Merger Agreement, the Designated
Stockholders entered into a Registration Rights Agreement, dated as of
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit No. Description 2.1 Agreement and Plan of Merger, datedMay 3, 2020 , by and among KLX Energy Services Holdings, Inc.,Quintana Energy Services Inc. ,Krypton Intermediate LLC andKrypton Merger Sub Inc. 10.1 Support Agreement, dated as ofMay 3, 2020 , by and amongAmin J. Khoury andQuintana Energy Services Inc. 10.2 Support Agreement, dated as ofMay 3, 2020 , by and among the DesignatedStockholders and KLX Energy Services Holdings, Inc. 10.3 Registration Rights Agreement, dated as ofMay 3, 2020 , by and among theDesignated Stockholders and KLX Energy Services Holdings, Inc. 99.1 Press Release, datedMay 3, 2020 99.2 Investor Presentation, datedMay 3, 2020
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