Item 1.01 Entry into a Material Definitive Agreement.
On October 5, 2021, Hess Midstream LP., a Delaware limited partnership (the “Company”), Hess Midstream GP LP, a Delaware limited partnership and the general partner of the Company (the “General Partner”), Hess Midstream GP LLC, a Delaware limited liability company and the general partner of the General Partner, Hess Investments North Dakota LLC, a Delaware limited liability company (“HINDL”), GIP II Blue Holding, L.P., a Delaware limited partnership (together with HINDL, the “Selling Shareholders”), and J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as representatives of the several underwriters listed therein (the “Underwriters”), entered into an Underwriting Agreement (the “Underwriting Agreement”), pursuant to which the Selling Shareholders agreed to sell to the Underwriters, and the Underwriters agreed to purchase from the Selling Shareholders, subject to and upon the terms and conditions set forth therein, 7,500,000 Class A shares representing limited partner interests in the Company (the “Class A Shares”) at a price of $26.00 per Class A Share, less underwriting discounts.
Pursuant to the terms of the Underwriting Agreement, the Selling Shareholders also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 1,125,000 Class A Shares at the same price per share as the Class A Shares, less underwriting discounts. The Underwriters subsequently notified the Selling Shareholders of their intent to exercise such option in full, and the Selling Shareholders completed the sale of an aggregate of 8,625,000 Class A Shares to the Underwriters on October 8, 2021. The Selling Shareholders received net proceeds from the offering of approximately $216,625,500, after deducting underwriting discounts. The Company did not receive any proceeds in the offering.
The Underwriting Agreement includes customary representations, warranties and covenants by the Company and Selling Shareholders and customary conditions to closing, obligations of the parties and termination provisions. Additionally, under the terms of the Underwriting Agreement, the Company and the Selling Shareholders have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”), or to contribute to payments the Underwriters may be required to make in respect of these liabilities.
Pursuant to the Underwriting Agreement, the Company, the Selling Shareholders and certain directors and officers of the Company have agreed not to sell or otherwise dispose of any Class A Shares held by them for a period ending 60 days after the date of the Underwriting Agreement without first obtaining the written consent of the representatives of the Underwriters, subject to certain exceptions.
The offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-235650), a base prospectus dated December 31, 2019, included as part of the registration statement, and a prospectus supplement, dated October 5, 2021, filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act.
The Underwriting Agreement is attached hereto as an exhibit to provide interested persons with information regarding its terms, but is not intended to provide any other factual information about the Company or the Selling Shareholders. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of the Underwriting Agreement as of specific dates indicated therein, were solely for the benefit of the parties to the agreement, and may be subject to limitations agreed upon by such parties.
The foregoing description of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated by reference herein.
The legal opinion of Latham & Watkins LLP relating to the validity of the Class A Shares is attached as Exhibit 5.1 to this Current Report on Form 8-K.
