What changed in this filing

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Item 5. Other Information

2021-10-28 compared with 2021-07-30 · 55 added, 6 removed, 37 unchanged (62% of the section changed)

Other Information

On October 22, 2021, the Company, Liberty Oilfield Services LLC, Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S.

LOS Corp, LOS Solar Acquisition LLC, Freedom Proppant LLC, LOS Kermit LLC, LOS Cibolo RE Investments, LLC, LOS Odessa RE Investments, LLC, ST9 Gas and Oil LLC, Wells Fargo Bank, National Association, as administrative agent, and other lenders entered into a Sixth Amendment to Credit Agreement and Second Amendment to Guaranty and Security Agreement (the “Revolving Credit Agreement Amendment” ).

The Revolving Credit Agreement Amendment further amends the credit agreement and guaranty and security agreement originally entered into by the parties on September 19, 2017 which governs the Company’s revolving credit facility.

Along with other revisions, the Revolving Credit Agreement Amendment (i) expanded the definition of borrowing base to include certain eligible US investment grade accounts, Canadian accounts solely after a specified event, and both chemical and spare parts inventory;

(ii) increased the maximum revolver amount from $250 million to $350 million and provided for a potential increase in the maximum revolver amount;

(iii) increased certain indebtedness baskets;

(iv) provided additional flexibility for a potential future internal structuring;

(v) added new lenders to the facility;

and (vi) extended the maturity date through October 22, 2026.

The foregoing description of the Revolving Credit Agreement Amendment is qualified in its entirety by reference to the full text of the Revolving Credit Agreement Amendment, which is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

Term Loan Facility

On October 22, 2021, the Company, Liberty Oilfield Services LLC, Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S.

LOS Corp, LOS Cibolo RE Investments, LLC, LOS Odessa RE Investments, LLC, ST9 Gas and Oil LLC, LOS Solar Acquisition LLC, Freedom Proppant LLC, LOS Kermit LLC, U.S.

Bank National Association, as administrative agent, and other lenders entered into a Fifth Amendment to Credit Agreement, Second Amendment to Guaranty and Security Agreement and Termination of Right of First Offer Letter (the “Term Loan Credit Agreement Amendment” ).

The Term Loan Credit Agreement Amendment further amends the credit agreement and guaranty and security agreement and terminates the Right of First Offer Letter originally entered into by the parties on September 19, 2017 which governs the Company’s term loan credit facility.

Along with other revisions, the Term Loan Credit Agreement Amendment (i) increased certain indebtedness baskets;

(ii) provided additional flexibility for a potential future internal structuring;

(iii) extended the maturity date through September 19, 2024;

and (iv) terminated a right of first offer in favor of the term loan lenders.

The foregoing description of the Term Loan Credit Agreement Amendment is qualified in its entirety by reference to the full text of the Term Loan Credit Agreement Amendment, which is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

PropX Acquisition

On October 26, 2021, we acquired all of the issued and outstanding units of membership interests of Proppant Express Investments, LLC and its subsidiaries (“PropX”) pursuant to that certain unit purchase agreement, dated October 26, 2021, by and among Liberty Oilfield Services LLC, an indirect subsidiary of the Company, the equity holders of PropX party thereto (the “Sellers”), and each of (i) Hi-Crush PODS LLC and (ii) Big Box Proppant Investments LLC, acting jointly, in their capacity as the sellers representative thereunder.

Pursuant to the unit purchase agreement, we paid $13.5 million in cash and issued 3,405,526 shares of our Class A common stock and 2,441,010 shares of our Class B common stock and 2,441,010 units (the “Liberty LLC Units”) of Liberty LLC for aggregate consideration of approximately $90.0 million, based on the average closing price for our Class A common stock for the 30 trading days prior to this acquisition.

The purchase price is subject to customary adjustments after closing, including for working capital adjustments.

The Company issued the foregoing securities in transactions not involving a public offering and not requiring registration under Section 5 of the Securities Act of 1933, as amended, in reliance on the exemption afforded by Section 4(a)(2) thereof.

Joinder to Liberty LLC Agreement

In connection with the PropX acquisition, each of the sellers and certain of their investors that received Liberty LLC units, entered into a joinder to the Second Amended and Restated Limited Liability Company Agreement of Liberty LLC (the “Liberty LLC Agreement”).

Under the Liberty LLC Agreement, holders, subject to certain limitations, have the right, pursuant to a redemption right, to cause Liberty LLC to acquire all or a portion of their Liberty LLC Units for, at Liberty LLC’s election, (i) shares of our Class A common stock at a redemption ratio of one share of Class A common stock for each Liberty LLC Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification or (ii) an equivalent amount of cash.

Alternatively, upon the exercise of the redemption right, we (instead of Liberty LLC) have a call right to acquire each tendered Liberty LLC Unit directly from the holder for, at its election, (x) one share of Class A common stock or (y) an equivalent amount of cash.

In addition, upon a change of control, we have the right to require each holder of Liberty LLC Units (other than us) to exercise its redemption right with respect to some or all of such unitholder’s Liberty LLC Units.

As the holders redeem their Liberty LLC Units, our membership interest in Liberty LLC will be correspondingly increased, the number of shares of Class A common stock outstanding will be increased, and the number of shares of Class B common stock outstanding will be reduced.

Registration Rights Agreement

In addition, we entered into a registration rights agreement with each of the sellers and certain of their investors.

Pursuant to the terms of the registration rights agreement, the Holders (as defined therein) have registration rights which, among other things, and subject to certain limitations set forth therein, include one customary demand registration right for certain Holders.

We were obligated to prepare and file a prospectus supplement registering the offer and sale of all of the shares of our Class A common stock acquired in the PropX acquisition by the sellers at closing and all of the shares of our Class A common stock issuable upon redemption or conversion of the Liberty LLC Units (the “Transaction Shares”).

In addition, pursuant to the registration rights agreement, the Holders that may exercise demand rights (the “Principal Holders”) have the right to require us, subject to certain limitations set forth therein, to effect a distribution of any or all of their shares of our Class A common stock by means of an underwritten offering.

We are not obligated, however, to effect any underwritten offering unless the dollar amount of the registrable securities of the Principal Holder demanding such underwritten offering to be included therein, together will all other participating holders, is reasonably likely to result in gross sale proceeds of at least $20 million.

The registration rights agreement also provides Holders with certain customary piggyback registration rights.

These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration or offering and our right to delay or withdraw a registration statement under certain circumstances.

We must pay certain fees and expenses related to our obligations under the registration rights agreement, except underwriting discounts and commission, if any, which must be paid by the Holders.

In addition, the Transaction Shares cease to be subject to registration once (i) all such shares have been disposed of pursuant to an effective registration statement or otherwise transferred to a person who is not entitled to the registration and other rights thereunder, (ii) all such shares have been sold or transferred by the Holder thereof pursuant to Rule 144 and the transferee thereof does not receive “restricted securities”

as defined in Rule 144, (iii) all such shares may be sold pursuant to Rule 144 without regard to volume or manner of sale limitations, and (iv) all such shares cease to be outstanding.

The descriptions above of the joinder to the Liberty LLC Agreement and the registration rights agreement are not complete and are qualified in their entirety by reference to the terms of each of the respective agreements, a copy of which is filed as Exhibit 10.3 and Exhibit 10.4 hereto, respectively, and are incorporated herein by reference.

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

INDEX TO EXHIBITS

1.1 Underwriting Agreement, dated June 7, 2021, by and among Liberty Oilfield Services Inc., R/C Energy IV Direct Partnership, L.P., R/C IV Liberty Holdings, L.P.

and Morgan Stanley & Co.

2.1 Master Transaction Agreement, dated as of August 31, 2020, by and among Schlumberger Technology Corporation Limited, Liberty Oilfield Services New HoldCo LLC, LOS Canada Operations Inc.

4 unchanged sentences

and Schlumberger (4)

10.1 Sixth Amendment to Credit Agreement and Second Amendment to Guaranty and Security Agreement, dated October 22, 2021, by and among Liberty Oilfield Services LLC, Liberty Oilfield Services Inc., Liberty Oilfield Services New HoldCo LLC, R/C IV Non-U.S.

10.2 Fifth Amendment to Credit Agreement, Second Amendment to Guaranty and Security Agreement and Termination of Right of First Offer Letter, dated October 22, 2021, by and among Liberty Oilfield Services LLC, Liberty Oilfield Services Inc., Liberty Oilfield Services New HoldCo LLC, R/C IV Non-U.S.

LOS Corp, LOS Cibolo RE Investments, LLC, LOS Odessa RE Investments, LLC, ST9 Gas and Oil LLC, LOS Solar Acquisition LLC, Freedom Proppant LLC, LOS Kermit LLC, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto *

10.3 Form of Joinder Agreement to Second Amended and Restated Limited Liability Company Operating Agreement of Liberty Oilfield Services New HoldCo LLC *

10.4 Registration Rights Agreement, dated October 26, 2021, by and among Liberty Oilfield Services Inc.

and the other parties named therein *

31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) *

11 unchanged sentences

101.DEF XBRL Taxonomy Extension Definition Linkbase Document *

(1) Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on June 10, 2021.

104 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).

(1) Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on September 1, 2020.

7 unchanged sentences

/s/ Christopher A.

July 29, 2021 By:

October 28, 2021 By:

Christopher A.

1 unchanged sentence

/s/ Michael Stock

July 29, 2021 By:

October 28, 2021 By:

Michael Stock

Chief Financial Officer (Principal Financial Officer)

July 29, 2021 By:

October 28, 2021 By:

Chief Accounting Officer (Principal Accounting Officer)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information