As filed with the Securities and Exchange Commission on May 8, 2019
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Southwest Gas Holdings, Inc.
(Exact name of registrant as specified in its charter)
California | 81-3881866 | |
(State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification No.) |
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive Offices)
Gregory J. Peterson
Senior Vice President, Chief Financial Officer
Southwest Gas Holdings, Inc.
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(702) 876-7237
Copies to:
Brandon C. Parris, Esq. Morrison & Foerster LLP 425 Market Street San Francisco, California 94105 (415) 268-7500 |
Randall J. Towers, Esq. Robert C. Kim, Esq. Ballard Spahr LLP 1735 Market Street Philadelphia, Pennsylvania 19103 (215) 665-8500 |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☒ | Accelerated filer | ☐ | ||
Non-accelerated filer ☐ | Smaller reporting company | ☐ | ||
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of each class of
Securities to be Registered |
Amount to be
registered/ Proposed maximum offering price |
Amount of
registration fee(1) |
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Common Stock, par value $1.00 per share |
$300,000,000 | $36,360 | ||
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(1) |
Calculated in accordance with Rule 457(o) under the Securities Act of 1933, as amended |
PROSPECTUS
Up to $300,000,000
Common Stock
We have entered into a sales agency agreement with BNY Mellon Capital Markets, LLC, or BNYMCM, relating to shares of our common stock, par value $1.00 per share, offered by this prospectus. In accordance with the terms of the sales agency agreement, we may offer and sell up to $300,000,000 in shares of our common stock from time to time through BNYMCM as our agent for the offer and sale of the shares. Sales of the shares will be made at market prices prevailing at the time of sale.
Our common stock is listed on the New York Stock Exchange under the symbol SWX. On May 7, 2019, the last reported sales price of our common stock on the New York Stock Exchange was $81.48 per share.
Sales of our common stock, if any, under this prospectus may be made in sales deemed to be at-the-market equity offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. BNYMCM will use commercially reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between BNYMCM and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement. Please see Plan of Distribution beginning on page 7.
BNYMCM will receive from us a commission equal to 1% of the sales price of all shares sold through it as agent under the sales agency agreement. In connection with the sale of our common stock on our behalf, BNYMCM will be deemed to be an underwriter within the meaning of the Securities Act and the compensation of BNYMCM will be deemed to be underwriting commissions or discounts.
Investing in our common stock involves risks. See Risk Factors beginning on page 4 of this prospectus and Item 1A Risk Factors beginning on page 8 of our Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of certain risks that you should consider in connection with an investment in our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
BNY MELLON CAPITAL MARKETS, LLC
The date of this prospectus is May 8, 2019.
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You should rely only on the information contained or incorporated by reference in this prospectus and in any supplement. We have not, and BNYMCM has not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any supplement to this prospectus is accurate as of the dates on their covers. Our business, financial condition, results of operations and prospects may have changed since those dates. Any information contained on or accessible through our Internet site is not incorporated herein and does not constitute part of this prospectus.
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Before purchasing any securities, you should carefully read both this prospectus and any supplement, together with the additional information described under the heading Where You Can Find More Information. You should also read and consider the information set forth in the section entitled Risk Factors in each of this prospectus and the documents incorporated by reference in this prospectus before you make an investment decision.
We are not making any representation to any purchaser of the common stock regarding the legality of an investment in the common stock by such purchaser. You should not consider any information in this prospectus to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in the common stock.
The common stock is being offered only for sale in jurisdictions where it is lawful to make such offer. The distribution of this prospectus and the offering of the common stock in other jurisdictions may also be restricted by law. Persons who receive this prospectus should inform themselves about and observe any such restrictions. This prospectus does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not authorized or qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. See Plan of Distribution beginning on page 7 of this prospectus.
When we use the terms the Company, we, our, or us, we are referring to Southwest Gas Holdings, Inc., a California corporation, together with our subsidiaries, except where the context otherwise requires or where otherwise indicated. The term Southwest Gas Holdings refers to Southwest Gas Holdings, Inc. without its consolidated subsidiaries. The term Southwest refers to our subsidiary, Southwest Gas Corporation.
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This summary highlights information contained elsewhere or incorporated by reference in this prospectus. Because it is a summary, it does not contain all of the information that you should consider before investing in shares of our common stock. You should read this entire prospectus and the documents incorporated by reference carefully, including the sections entitled Risk Factors and Description of Common Stock and the financial statements and related notes thereto included or incorporated by reference in this prospectus in their entirety before making an investment decision.
Southwest Gas Holdings, Inc.
Southwest Gas Holdings, Inc., a California corporation, is a holding company headquartered in Las Vegas, Nevada. Through our wholly owned subsidiaries, Southwest and Centuri Group, Inc. (Centuri), we operate in two business segments: natural gas operations and utility infrastructure services.
In January 2017, we completed a reorganization into our present holding company structure. The holding company structure provides further legal separation between our regulated natural gas operations and unregulated utility infrastructure services businesses and additional financing flexibility. Through the reorganization, shareholders of Southwest (the predecessor publicly held parent company) became shareholders of the Company, on a one-for-one basis, with the same number of shares and same ownership percentage as they held immediately prior to the reorganization, and Southwest became an indirect, wholly owned subsidiary of the Company. Also as a part of the reorganization, Southwest transferred its equity interest in Centuri to a direct, wholly owned subsidiary of the Company; whereas, historically, Centuri had been a direct subsidiary of Southwest.
Southwest was incorporated in March 1931 under the laws of the state of California and provides regulated natural gas delivery services to customers in portions of Arizona, Nevada, and California. Public utility rates, practices, facilities, and service territories of Southwest are subject to regulatory oversight. The timing and amount of rate relief can materially impact results of operations. Natural gas purchases and the timing of related recoveries can materially impact liquidity. Results for the natural gas operations segment are higher during winter periods due to the seasonality incorporated in its regulatory rate structures.
Centuri is a comprehensive utility infrastructure services enterprise dedicated to delivering a diverse array of solutions to North Americas gas and electric providers. Centuri derives revenue from installation, replacement, repair, and maintenance of energy distribution systems, and developing industrial construction solutions. Centuri operations are generally conducted under the business names of NPL Construction Co., NPL Canada Ltd., New England Utility Constructors, Inc. (Neuco), and Linetec Services, LLC (Linetec).
At our annual meeting of shareholders held on May 2, 2019, our shareholders voted to approve our reincorporation from California to Delaware (the Reincorporation). The Reincorporation is expected to become effective during the second or third quarter of 2019 subject to certain regulatory approvals. No change in ownership will result from the Reincorporation. Upon completion of the Reincorporation, the existing holders of our common stock will own all of the outstanding shares of common stock of Southwest Gas Holdings, Inc., a Delaware corporation. Other than the change in corporate domicile, the Reincorporation will not result in any change in our business operations, board composition or term, assets, liabilities or net worth, or physical location, nor will it result in any change of our current employees, including management, or in their title or responsibilities. For more information about the Reincorporation, see our definitive proxy statement on Schedule 14A filed with the SEC on March 18, 2019. Shareholders also approved an amendment to Article V of our articles of incorporation increasing the number of shares of common stock which we have authority to issue from 60,000,000 shares to 120,000,000 shares. No change was made to the number of authorized shares of preferred and preference stock.
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Our corporate headquarters is located at 5241 Spring Mountain Road, P.O. Box 98510, Las Vegas, NV 89150-8510, telephone number (702) 876-7237. We maintain a website (www.swgasholdings.com) for the benefit of shareholders, investors, customers, and other interested parties. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports are available, free of charge, through the www.swgasholdings.com website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information on our website is not incorporated by reference into this prospectus.
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Common stock to be offered by us |
Shares of our common stock, having an aggregate offering price of up to $300,000,000. |
Manner of offering |
At-the-market offering that may be made from time to time through our sales agent, BNYMCM. See Plan of Distribution on page 7. |
Use of proceeds |
We currently expect to use the net proceeds primarily for general corporate purposes, including the acquisition of property for the construction, completion, extension or improvement of pipeline systems and facilities located in and around the communities Southwest serves. See Use of Proceeds on page 7. |
New York Stock Exchange symbol |
SWX |
Risk factors |
Before investing in our common stock, you should carefully read and consider the Risk Factors beginning on page 4 of this prospectus. |
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Investing in our common stock involves risks. You should carefully consider the risk factors set forth below, as well as the additional risk factors described in Item 1ARisk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated by reference in this prospectus, as well as those risks discussed from time to time in our subsequently filed reports, before deciding to invest in the common stock. You should also consider the other information contained or incorporated by reference in this prospectus before deciding to invest in our common stock.
We may use the net proceeds of this offering in ways that have a negative impact on our stock price.
We intend to use the net proceeds of this offering for general corporate purposes, which may include the acquisition of property for the construction, completion, extension or improvement of pipeline systems and facilities located in and around the communities Southwest serves. Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. Accordingly, you will be relying on the judgment of our management with regard to the use of net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. Our failure to apply these funds effectively could have a material adverse effect on our business and cause the price of our common stock to decline.
You may experience future dilution as a result of future equity offerings or other equity issuances.
In order to raise additional capital, we may in the future offer and issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by you, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering paid by you.
Our common stock price may be volatile or may decline.
The market price for our common stock may fluctuate significantly from time to time as a result of many factors, including:
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investors perceptions of us and our prospects; |
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investors perceptions of us and/or our industries risk and return characteristics relative to other investment alternatives; |
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investors perceptions of the prospects of the natural gas and utility infrastructure services markets; |
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differences between actual financial and operating results and those expected by investors and analysts; |
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changes in analyst reports, recommendations or earnings estimates regarding us, other comparable companies or our industries generally, and our ability to meet those estimates; |
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actual or anticipated fluctuations in quarterly financial and operating results; |
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volatility in the equity securities market; |
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sales, or anticipated sales, of large blocks of our common stock; |
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a real or perceived economic downturn; and |
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other factors described under Cautionary Statement Regarding Forward-Looking Information. |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This prospectus and the documents we incorporate by reference herein and therein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical fact included or incorporated by reference in this prospectus are forward-looking statements, including, without limitation, statements regarding the Companys plans, objectives, goals, intentions, projections, strategies, future events or performance, and underlying assumptions. The words may, if, will, should, could, expect, plan, anticipate, believe, estimate, predict, project, continue, forecast, intend, promote, seek, and similar words and expressions are generally used and intended to identify forward-looking statements.
For example, statements regarding the expected timing of the Reincorporation, operating margin patterns, customer growth, the composition of our customer base, price volatility, seasonal patterns, payment of debt, interest savings, the Companys Company-Owned Life Insurance strategy, replacement market and new construction market, expected impacts of valuation adjustments associated with the redeemable non-controlling interest in Linetec, the impacts of the Tax Cuts and Jobs Act legislation including disposition in regulatory proceedings, bonus depreciation tax deductions, the impact of recent PHSMA rulemaking, the amounts and timing for completion of estimated future construction expenditures, including the liquefied natural gas facility in southern Arizona, forecasted operating cash flows and results of operations, net earnings impacts from gas infrastructure replacement surcharges, funding sources of cash requirements, amounts generally expected to be reflected in 2019 or future period revenues from regulatory rate proceedings including amounts requested from the Arizona recently filed general rate case, the approved recovery of the Arizona DCA balance, the outcome of judicial review of the recently concluded Nevada rate case, rates and surcharges, purchased gas adjustment (PGA), and other rate adjustments, sufficiency of working capital and current credit facilities, bank lending practices, the Companys views regarding its liquidity position, ability to raise funds and receive external financing capacity, future dividend increases and the Companys board of directors current target dividend payout ratio, pension and postretirement benefits, certain impacts of tax acts, the effect of any rate changes or regulatory proceedings, contract or construction change order negotiations, impacts of accounting standards updates, infrastructure replacement mechanisms and Customer-Owned Yard Line programs, statements regarding future gas prices, gas purchase contracts and derivative financial instruments, recoverability of regulatory assets, the impact of certain legal proceedings, and the timing and results of future rate hearings, including the multi-jurisdictional filings for recovery of the CDMI and approvals are forward-looking statements. All forward-looking statements are intended to be subject to the safe harbor protection provided under Sections 27A of the Securities Act and Section 21E of the Exchange Act.
A number of important factors affecting the business and financial results of the Company could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, customer growth rates, conditions in the housing market, the ability to recover costs through the PGA mechanisms or other regulatory assets, the effects of regulation/deregulation, governmental or regulatory policy regarding natural gas or alternative energy, the timing and amount of rate relief, the timing, amount, and methods determined by regulators to refund amounts to customers resulting from U.S. tax reform, changes in rate design, variability in volume of gas or transportation service sold to customers, changes in gas procurement practices, changes in capital requirements and funding, the impact of conditions in the capital markets on financing costs, changes in construction expenditures and financing, changes in operations and maintenance expenses, effects of pension expense forecasts, accounting changes and regulatory treatment related thereto, currently unresolved and future liability claims, changes in pipeline capacity for the transportation of gas and related costs, results of Centuri bid work, Centuris projections about the acquired business earnings (including accretion within the first twelve months) and future acquisition related costs, the impacts of changes in value of the redeemable non-controlling interest if at other than fair value), the resolution of events subject to cash consideration held back associated with representations, warranties, and other estimates including working capital adjustments related to the Linetec acquisition, Centuri utility infrastructure expenses, differences between
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actual and originally expected outcomes of Centuri bid or other fixed-price construction agreements, outcomes from contract and change order negotiations, ability to successfully procure new work, impacts from work awarded or failing to be awarded from significant customers, the mix of work awarded, the amount of work awarded to Centuri following the lifting of work stoppages, acquisitions and managements plans related thereto, competition, our ability to raise capital in external financings, our ability to continue to remain within the ratios and other limits subject to our debt covenants, and ongoing evaluations in regard to goodwill and other intangible assets. In addition, the Company can provide no assurance that its discussions regarding certain trends relating to its financing and operating expenses will continue or cease to continue in future periods. Additional factors that could cause actual results to differ and that you should consider prior to investing in our securities are discussed under the heading Risk Factors and in other sections of this prospectus supplement, the accompanying prospectus and our current and periodic reports, and other filings, filed from time to time with the SEC that are incorporated by reference into this prospectus. See Incorporation by Reference and Where You Can Find More Information below and for information about how to obtain copies of those documents. All forward-looking statements in this prospectus and the documents incorporated by reference herein are made only as of the date of the document in which they are contained, based on information available to us as of the date of that document, and we caution you not to place undue reliance on forward-looking statements in light of the risks and uncertainties associated with them. We assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
You should consider these risks and those set forth in, or incorporated into, the Risk Factors section of this prospectus and in our most recent Annual Report on Form 10-K prior to investing in our common stock.
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We expect to use net proceeds from the sale of shares of common stock under the sales agency agreement for general corporate purposes, including the acquisition of property for the construction, completion, extension or improvement of pipeline systems and facilities located in and around the communities Southwest serves.
We have entered into a sales agency agreement, dated as of May 8, 2019 with BNY Mellon Capital Markets, LLC, or BNYMCM, under which we may issue and sell shares of our common stock with an aggregate sales price of up to $300,000,000 from time to time through BNYMCM, as our agent for the offer and sale of the shares. The sales, if any, of the shares of common stock under the sales agency agreement will be made in at the market offerings as defined in Rule 415 of the Securities Act.
From time to time during the term of the sales agency agreement, and subject to the terms and conditions set forth therein, we may deliver an issuance notice to BNYMCM specifying the length of the selling period (not to exceed 20 trading days), the amount of common stock to be sold and the minimum price below which sales may not be made. Upon receipt of an issuance notice from us, and subject to the terms and conditions of the sales agency agreement, BNYMCM has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares on such terms. We or BNYMCM may suspend the offering of shares of common stock at any time upon proper notice to the other, upon which the selling period will immediately terminate. Settlement between us and BNYMCM for sales of common stock will occur on the second business day following the date on which any sales are made, or on some other date that is agreed to between us and BNYMCM in connection with a particular transaction. The obligation of BNYMCM under the sales agency agreement to settle such purchases with us pursuant to any issuance notice is subject to a number of conditions, which BNYMCM reserves the right to waive in its sole discretion.
We will pay BNYMCM a commission equal to 1% of the sales price of all shares sold through it as agent under the sales agency agreement. We have also agreed to reimburse BNYMCM for its reasonable documented out-of-pocket expenses, including fees and expenses of counsel, in connection with the sales agency agreement.
We will deliver to the New York Stock Exchange copies of this prospectus and the accompanying prospectus pursuant to the rules of the exchange. We will report at least quarterly the number of shares of common stock sold through BNYMCM, as agent, in at-the-market offerings, the net proceeds to us and the compensation paid by us to BNYMCM in connection with such sales of common stock.
BNYMCM and its affiliates have performed certain investment banking and advisory and general financing, trustee and banking services for us from time to time for which they have received customary fees and expenses. BNYMCM and its affiliates may, from time to time, engage in transactions with, and perform services for, us in the ordinary course of our business.
In connection with the sale of the common stock hereunder, BNYMCM, may be deemed to be an underwriter within the meaning of the Securities Act of 1933, and the compensation paid to BNYMCM will be deemed to be underwriting commissions or discounts. We have agreed to indemnify BNYMCM against certain civil liabilities, including liabilities under the Securities Act of 1933.
The offering of common stock pursuant to the sales agency agreement will terminate upon the earlier of (1) the sale of all shares of common stock subject to the sales agency agreement and (2) termination of the sales agency agreement by either BNYMCM or us. The sales agency agreement may be terminated by BNYMCM or
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us at any time upon 10 days notice, and upon 1 days notice by BNYMCM in certain circumstances, including certain bankruptcy events relating to us or any material subsidiary, our failure to maintain a listing of our common stock on the New York Stock Exchange or the occurrence of a material adverse change in the Company.
We have agreed not to directly or indirectly sell, offer to sell, contract to sell, grant any option to sell or otherwise dispose of, shares of our common stock or securities convertible into or exchangeable for shares of our common stock, warrants or any rights to purchase or acquire our common stock for a period beginning on the first trading day prior to the delivery of any issuance notice to BNYMCM and ending on the first trading day following the settlement date for the applicable issuance notice, without the prior written consent of BNYMCM. This consent may be given at any time without public notice. The restriction described in this paragraph does not apply to sales of:
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shares we offer or sell pursuant to the sales agency agreement; |
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shares we issue in connection with acquisitions; |
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shares we issue upon conversion of convertible securities, or the exercise of warrants, options or other rights; or |
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shares and options to purchase shares we issue, in either case, pursuant to any employee or director stock option or benefit plan, stock purchase or ownership plan or dividend reinvestment plan. |
We have also agreed not to sell any shares of our common stock pursuant to the sales agency agreement from and after the closing date of the Reincorporation until the time that we have filed a post-effective amendment to this registration statement to reflect the Reincorporation.
Furthermore, one of BNYMCMs affiliates is, and, in the future, one or more affiliates of BNYMCM may be, lenders or agents under our credit facilities, term loan facilities or other borrowing facilities. To the extent that we use the net proceeds from this offering to repay amounts we have borrowed, may borrow or re-borrow in the future under those facilities, those lenders may receive their pro rata portion of any of the proceeds from this offering that we use to repay any such amounts. See Use of Proceeds.
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The following description of Southwest Gas Holdings common stock is only a summary and is qualified in its entirety by reference to our articles of incorporation and bylaws. Therefore, you should read carefully the more detailed provisions of our articles of incorporation and bylaws, copies of which are incorporated by reference as exhibits to the registration statement of which this prospectus is a part.
The authorized capital stock of Southwest Gas Holdings consists of (1) 120,000,000 shares of Southwest Gas Holdings common stock, with a $1.00 par value, (2) 5,000,000 shares of preferred stock, without par value, and (3) 2,000,000 shares of preference stock, with a $20.00 par value. As of May 7, 2019, there were issued and outstanding 53,397,106 shares of Southwest Gas Holdings common stock and no shares of Southwest Gas Holdings preferred stock or preference stock. No other classes of capital stock are authorized under our articles of incorporation.
On May 2, 2019, our shareholders approved the Reincorporation. The Reincorporation is expected to become effective during the second or third quarter of 2019 subject to certain regulatory approvals. Upon completion of the Reincorporation, the existing holders of our common stock will own all of the outstanding shares of common stock of Southwest Gas Holdings, Inc., a Delaware corporation. For more information about the Reincorporation, see our definitive proxy statement on Schedule 14A filed with the SEC on March 18, 2019.
The holders of Southwest Gas Holdings common stock are entitled to receive such dividends as the Southwest Gas Holdings board of directors may from time to time declare, subject to any rights of holders of outstanding shares of Southwest Gas Holdings preferred or preference stock. Except as otherwise provided by law, each holder of common stock is entitled to one vote per share on each matter submitted to a vote of a meeting of shareholders, subject to series voting rights of holders of preferred or preference stock.
In the event of any liquidation, dissolution or winding up of Southwest Gas Holdings, whether voluntary or involuntary, the holders of shares of Southwest Gas Holdings common stock, subject to any rights of the holders of outstanding shares of Southwest Gas Holdings preferred or preference stock, are entitled to receive any remaining assets of Southwest Gas Holdings after the discharge of its liabilities.
Holders of Southwest Gas Holdings common stock are not entitled to preemptive rights to subscribe for or purchase any part of any new or additional issue of stock or securities convertible into stock. Southwest Gas Holdings common stock does not contain any redemption provisions or conversion rights and is not liable to assessment or further call.
EQ Shareowner Services is the registrar and transfer agent for our common stock.
Our articles of incorporation and bylaws contain provisions that may have the effect of discouraging persons from acquiring large blocks of Southwest Gas Holdings stock or delaying or preventing a change in control of Southwest Gas Holdings. The material provisions which may have such an effect are:
(a) provisions requiring a super-majority vote by shareholders of common stock in order to approve certain types of business combinations;
(b) a provision permitting the Southwest Gas Holdings board of directors to make, amend or repeal the bylaws;
(c) authorization for the Southwest Gas Holdings board of directors to issue preferred or preference stock in any series and to fix rights and preferences of the series (including, among other things, whether, and to what extent, the shares of any series will have voting rights and the extent of the preferences of the shares of any series with respect to dividends and other matters);
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(d) advance notice procedures with respect to proposals other than those adopted or recommended by the Southwest Gas Holdings board of directors; and
(e) provisions permitting amendment of certain of these provisions only by an affirmative vote of the holders of at least 65 percent of the outstanding shares of Southwest Gas Holdings common stock entitled to vote.
The provisions described above are currently in effect under our existing articles of incorporation and bylaws, and they will be in effect under our new certificate of incorporation and bylaws upon the completion of the Reincorporation in Delaware.
The financial statements and managements assessment of the effectiveness of internal control over financial reporting (which is included in Managements Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to our Annual Report on Form 10-K for the year ended December 31, 2018 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The validity of the shares of common stock offered by this prospectus will be passed upon for us by Morrison & Foerster LLP. Certain legal matters will be passed upon for BNYMCM by Ballard Spahr LLP.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public through the SECs Internet site at http://www.sec.gov and through the New York Stock Exchange, 11 Wall Street, New York, New York 10005, on which our common stock is listed.
We have filed with the SEC an automatic registration statement on Form S-3 relating to the common stock covered by this prospectus. This prospectus is a part of the registration statement and does not contain all the information in the registration statement. Whenever a reference is made in this prospectus to a contract or other document of the Company, the reference is only a summary and you should refer to the exhibits that are a part of the registration statement for a copy of the contract or other document. You may review a copy of the registration statement through the SECs Internet site.
Incorporation by Reference
The SEC allows us to incorporate by reference into this prospectus the information in other documents that we file with it, which means that we can disclose important information to you by referring you to those documents. The information that we incorporate by reference is considered to be a part of this prospectus.
Any reports that we file with the SEC on or after the date of this prospectus and before the date that the offering of the Shares is terminated will automatically update and, where applicable, supersede any information
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contained in this prospectus or incorporated by reference into this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any documents previously incorporated by reference into this prospectus have been modified or superseded. We specifically incorporate by reference into this prospectus the following documents filed with the SEC (other than, in each case, documents or information deemed furnished and not filed in accordance with SEC rules, including pursuant to Item 2.02 or Item 7.01 of Form 8-K, and no such information shall be deemed specifically incorporated by reference hereby):
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Our Annual Report on Form 10-K for the year ended December 31, 2018 filed on February 28, 2019; |
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed on May 8, 2019; |
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The portions of our Definitive Proxy Statement on Schedule 14A (filed on March 18, 2019) that were incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2018; |
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Current Reports on Form 8-K filed on February 26, 2019, March 1, 2019, April 25, 2019 and May 6, 2019; and |
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Any future filings that we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus until the termination of the offering of the shares. |
You may obtain a copy of any or all of the documents referred to above which may have been or may be incorporated by reference into this prospectus (excluding certain exhibits unless they are specifically incorporated by reference in any such documents) at no cost to you by writing or telephoning us at the following:
Southwest Gas Holdings, Inc.
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
Attention: Corporate Secretary
Telephone: (702) 876-7237
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Up to $300,000,000
Common Stock
PROSPECTUS
BNY MELLON CAPITAL MARKETS, LLC
The date of this prospectus is May 8, 2019
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
The following is a statement of the estimated expenses (other than underwriting discounts and commissions) to be incurred by Southwest Gas Holdings, Inc. in connection with the issuance and distribution of the securities registered under this registration statement.
SEC registration fee |
$ | 36,360 | ||
Legal fees and expenses |
400,000 | |||
Accounting fees and expenses |
60,000 | |||
Printing fees |
6,500 | |||
Miscellaneous |
5,000 | |||
|
|
|||
Total |
$ | 507,860 | ||
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Item 15. Indemnification of Directors and Officers
The Companys articles of incorporation contain a provision which eliminates the liability of directors for monetary damages to the fullest extent permissible under California law. The General Corporation Law of California (the Law) (i) authorizes the elimination of liability of directors for monetary damages in an action brought by a shareholder in the right of the Company or by the Company for breach of a directors duties to the Company and its shareholders and (ii) authorizes the Company to indemnify directors and officers for monetary damages for all acts or omissions committed by them in their respective capacities; provided, however, that liability is not limited nor may indemnification be provided (a) for acts or omissions that involve intentional misconduct or knowing and culpable violation of law, (b) for acts or omissions that a director or officer believes to be contrary to the best interests of the Company or its shareholders or that involve the absence of good faith on the part of a director or officer seeking indemnification, (c) for any transaction from which a director or officer derives an improper personal benefit, (d) for acts or omissions that show a reckless disregard for the directors or officers duty to the Company or its shareholders in circumstances in which such person was aware, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to the Company or its shareholders, (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the directors or officers duty to the Company or its shareholders, and (f) for liabilities arising under Section 310 (contracts in which a director has a material financial interest) and Section 316 (certain unlawful dividends, distributions, loans and guarantees) of the Law. In addition, the Company may not indemnify directors and officers in circumstances in which indemnification is expressly prohibited by Section 317 of the Law.
The bylaws of the Company provide that the Company has the power to indemnify directors and officers to the fullest extent permitted under California law and the Companys articles of incorporation. The Company has entered into indemnification agreements with its directors and officers which require that the Company indemnify such directors and officers in all cases to the fullest extent permitted by applicable provisions of the Law. The Company also maintains a directors and officers liability insurance policy insuring directors and officers of the Company for covered losses as defined in the policy.
Item 16. Exhibits
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* |
Filed herewith |
Item 17 . Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however , that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided , however , that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrants annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) That, insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or
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otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on May 8, 2019.
SOUTHWEST GAS HOLDINGS, INC.
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||
By: |
/s/ John P. Hester |
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Name: John P. Hester | ||
Title: President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
Signature |
Title |
Date |
||
/s/ John P. Hester John P. Hester |
Director, President and
Chief Executive Officer (Principal Executive Officer) |
May 8, 2019 | ||
/s/ Gregory J. Peterson Gregory J. Peterson |
Senior Vice President,
Chief Financial Officer, (Principal Financial Officer) |
May 8, 2019 | ||
/s/ Lori L. Colvin Lori L. Colvin |
Vice President, Controller, Chief
Accounting Officer (Principal Accounting Officer) |
May 8, 2019 | ||
/s/ Robert L. Boughner* Robert L. Boughner |
Director | May 8, 2019 | ||
/s/ José A. Cárdenas* José A. Cárdenas |
Director | May 8, 2019 | ||
/s/ Thomas E. Chestnut* Thomas E. Chestnut |
Director | May 8, 2019 | ||
/s/ Stephen C. Comer* Stephen C. Comer |
Director | May 8, 2019 | ||
/s/ Jane Lewis-Raymond* Jane Lewis-Raymond |
Director | May 8, 2019 | ||
/s/ Anne L. Mariucci* Anne L. Mariucci |
Director | May 8, 2019 |
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Signature |
Title |
Date |
||
/s/ Michael J. Melarkey* Michael J. Melarkey |
Chairman of the Board of Directors | May 8, 2019 | ||
/s/ A. Randall Thoman* A. Randall Thoman |
Director | May 8, 2019 | ||
/s/ Thomas A. Thomas* Thomas A. Thomas |
Director | May 8, 2019 | ||
/s/ Leslie T. Thornton* Leslie T. Thornton |
Director | May 8, 2019 |
*By: | /s/ Gregory J. Peterson | |
Gregory J. Peterson Attorney-in-Fact |
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SALES AGENCY AGREEMENT
This Sales Agency Agreement (this Agreement) is dated May 8, 2019, by and among SOUTHWEST GAS HOLDINGS, INC., a California corporation (SWX California), and BNY MELLON CAPITAL MARKETS, LLC, a registered broker-dealer organized under the laws of Delaware (BNYMCM).
BACKGROUND
A. |
SWX California has authorized and proposes to issue and sell in the manner contemplated by this Agreement Common Shares (as defined below) with an aggregate Sales Price (as defined below) of up to $300,000,000 upon the terms and subject to the conditions contained in this Agreement, and in no event at a price per share less than $1.00. |
B. |
BNYMCM has been appointed by the Company as its agent to sell the Common Shares and agrees to use its commercially reasonable efforts to sell the Common Shares offered by the Company upon the terms and subject to the conditions contained in this Agreement. |
C. |
To the extent the Reincorporation (as defined below) is completed, the existing holders of the Common Stock (as defined below) will own all of the outstanding shares of common stock of SWX Delaware through a merger of SWX California with and into Southwest Gas Holdings, Inc., an entity to be formed as a Delaware corporation (SWX Delaware), with SWX Delaware becoming the successor issuer of the Common Shares for the duration of this Agreement. SWX Delaware will expressly assume pursuant to this Agreement, in addition to the assumption by operation of law through the merger, all rights and obligations of SWX California contained in this Agreement. |
In consideration of the premises, representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Definitions . For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the following respective meanings:
Actual Sold Amount means the number of Common Shares that BNYMCM has sold during the Selling Period.
Affiliate of a Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first mentioned Person. The term control (including the terms controlling, controlled by and under common control with) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Applicable Time means the time of sale of any Common Shares sold pursuant to this Agreement.
Authorized Officer has the meaning set forth in Section 2.01(c).
Closing has the meaning set forth in Section 2.02.
Closing Date means the date on which the Closing occurs.
Comfort Letter Trigger Event has the meaning set forth in Section 4.08.
Commission means the United States Securities and Exchange Commission.
Commitment Period means the period commencing on the date of this Agreement and expiring on the earliest to occur of (a) the date on which BNYMCM shall have sold the Maximum Program Amount pursuant to this Agreement and (b) the date this Agreement is terminated pursuant to Article VII.
Common Shares shall mean shares of the Companys Common Stock issued or issuable pursuant to an Issuance that has occurred or may occur in accordance with the terms and conditions of this Agreement.
Common Stock shall mean the Companys Common Stock, $1.00 par value per share.
Company shall mean SWX California, except upon the occurrence of the Reincorporation Date, and then shall mean SWX Delaware.
CPUC has the meaning set forth in Section 3.08.
DTC means The Depository Trust Company.
Effective Date has the meaning set forth in Section 3.03.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Floor Price means the minimum price set by the Company in the Issuance Notice below which BNYMCM shall not sell Common Shares during the Selling Period, which may be adjusted by the Company at any time during the Selling Period and which in no event shall be less than $1.00 without the prior written consent of BNYMCM, which may be withheld in BNYMCMs sole discretion.
Incorporated Documents has the meaning set forth in Section 3.02.
Indemnified Party has the meaning set forth in Section 6.03.
Indemnifying Party has the meaning set forth in Section 6.03.
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Issuance means each occasion the Company elects to exercise its right to deliver an Issuance Notice requiring BNYMCM to use its commercially reasonable efforts to sell the Common Shares as specified in such Issuance Notice, subject to the terms and conditions of this Agreement.
Issuance Amount means the number of Common Shares to be sold by BNYMCM with respect to any Issuance.
Issuance Date means any Trading Day during the Commitment Period that an Issuance Notice is deemed delivered pursuant to Section 2.03(b) hereof.
Issuance Notice means a written notice to BNYMCM delivered in accordance with this Agreement in the form attached hereto as Exhibit A.
Issuance Price means the Sales Price less the Selling Commission.
Material Adverse Effect means a material adverse effect on the business, earnings, assets, operations, properties, or financial condition of the Company and its Subsidiaries, taken as a whole, or any material adverse effect on the Companys ability to consummate the transactions contemplated by, or to execute, deliver and perform its obligations under, this Agreement.
Material Subsidiary has the meaning set forth in Section 3.05.
Maximum Program Amount means Common Shares with an aggregate Sales Price of $300,000,000. For the avoidance of doubt, the use of Common Shares in this definition shall in each instance be an aggregate amount constituting both the shares of SWX California and SWX Delaware, and the Registration Statement shall, after the Reincorporation Date, specify SWX Delaware as the registrant thereunder.
Merger Agreement means that certain Agreement and Plan of Merger of Southwest Gas Holdings, Inc. (a California corporation) and Southwest Gas Holdings, Inc. (a Delaware corporation), in the form substantially set forth in SWX Californias definitive proxy statement on Schedule 14A filed with the Commission on March 18, 2019.
NYSE means the New York Stock Exchange.
Officers Certificate Trigger Event has the meaning set forth in Section 4.09(a).
Opinion Trigger Event has the meaning set forth in Section 4.07(a).
Person means an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or other entity of any kind.
Principal Market means the NYSE.
Prospectus has the meaning set forth in Section 3.01.
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Registration Statement has the meaning set forth in Section 3.01.
Reincorporation means the merger of SWX California with and into SWX Delaware pursuant to the Merger Agreement and the completion of all Reincorporation Conditions.
Reincorporation Conditions means each of the following conditions:
(a) the Merger Agreement shall not be amended, modified, or changed in a way that materially and adversely affects BNYMCMs rights under this Agreement other than with the prior written consent of BNYMCM; provided that , other than for the sole purpose of determining whether the Reincorporation Conditions have occurred pursuant to this Agreement, BNYMCM shall have no consent or other rights in respect to the Merger Agreement;
(b) the merger of SWX California with and into SWX Delaware pursuant to the Merger Agreement, including but limited to, the satisfaction of all conditions of the Merger Agreement;
(c) the consolidated financial condition and results of operations of SWX Delaware immediately after consummation of the Reincorporation will be substantially identical as those of SWX California immediately prior to the consummation of the Reincorporation;
(d) SWX Delaware will be a corporation, duly formed, validly existing and in good standing under the laws of the State of Delaware.
(e) the certificate of incorporation and bylaws of SWX Delaware in effect as of the Reincorporation Date shall be substantially identical to those set forth in SWX Californias definitive proxy statement on Schedule 14A filed with the Commission on March 18, 2019;
(f) the exception to registration provided by Rule 145(a)(2) of the Securities Act shall apply to the Reincorporation;
(g) SWX Delawares Common Stock distributed in the Reincorporation will not be restricted securities within the meaning of Rule 144(a)(3) of the Securities Act solely as a result of the Reincorporation;
(h) Upon the completion of the Reincorporation, SWX Delaware will be a successor issuer to SWX California within the meaning Rule 414 of the Securities Act, and SWX Delaware will file a post-effective amendment to the Registration Statement, as approved by BNYMCM reflecting the Reincorporation, including SWX Delaware as the registrant thereunder;
(i) SWX Delaware common stock to be issued and reserved for issuance in connection with this Agreement shall have been approved for listing by the Principal Market;
(j) SWX Delaware will succeed to the CIK number used by SWX California; and
(k) No Material Adverse Effect has resulted because of, arising from, connected to, or related to the Reincorporation.
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Reincorporation Date means the date upon which SWX California merges with and into SWX Delaware, with SWX Delaware surviving thereby causing the completion of the Reincorporation.
Representation Date has the meaning set forth in the introductory paragraph of Article III.
Sales Price means the actual sale execution price of each Common Share sold by BNYMCM on the Principal Market hereunder in the case of ordinary brokers transactions, or as otherwise agreed by the parties in other methods of sale.
Securities Act means the Securities Act of 1933, as amended.
Selling Commission means 1.0% of the Sales Price.
Selling Period means the period of one (1) to twenty (20) consecutive Trading Days (as determined by the Company in its sole discretion and specified in the applicable Issuance Notice) following the Trading Day on which an Issuance Notice is delivered or deemed to be delivered pursuant to Section 2.03(b) hereof.
Settlement Date means the second (2 nd ) Trading Day following the sale of any Common Shares pursuant to this Agreement.
Stand-Off Period has the meaning set forth in Section 4.10.
Subsidiary has the meaning set forth in Section 3.05.
Trading Day means any day which is a trading day on the NYSE, other than a day on which trading is scheduled to close prior to its regular weekday closing time.
Voting Stock of any Person as of any date means the capital stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
ARTICLE II
ISSUANCE AND SALE OF COMMON STOCK
Section 2.01 Issuance .
(a) Upon the terms and subject to the conditions of this Agreement, the Company may sell Common Shares through BNYMCM and BNYMCM shall use its commercially reasonable efforts to sell Common Shares, up to the Maximum Program Amount, based on and in accordance with such number of Issuance Notices as the Company, in its sole discretion, shall choose to deliver during the Commitment Period until the aggregate number of Common Shares sold under this Agreement equals the Maximum Program Amount or this Agreement is otherwise terminated. Subject to the foregoing and the other terms and conditions of this Agreement, upon the delivery of an Issuance Notice, and unless the sale of the Common Shares described therein has been suspended, cancelled or otherwise terminated in accordance with the terms of this Agreement, BNYMCM will use its commercially reasonable efforts consistent with its normal trading and
5
sales practices to sell such Common Shares up to the Issuance Amount specified in such Issuance Notice, and otherwise in accordance with the terms of such Issuance Notice. BNYMCM will provide written confirmation to the Company no later than the opening of the Trading Day next following the Trading Day on which it has made sales of Common Shares hereunder setting forth the portion of the Actual Sold Amount for such Trading Day, the corresponding Sales Price and the Issuance Price payable to the Company in respect thereof. BNYMCM may sell Common Shares in the manner described in Section 2.01(b) herein. The Company acknowledges and agrees that (i) there can be no assurance that BNYMCM will be successful in selling Common Shares and (ii) BNYMCM will incur no liability or obligation to the Company or any other Person if it does not sell Common Shares for any reason other than a failure by BNYMCM to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Common Shares as required under this Section 2.01. In acting hereunder, BNYMCM will be acting as agent for the Company and not as principal.
(b) Method of Offer and Sale . The Common Shares may be offered and sold by any method permitted by law and deemed to be an at the market offering as defined in Rule 415 under the Securities Act. The Common Shares may also be offered and sold to or through a market maker or in privately negotiated transactions, provided the parties hereto have so agreed in writing and if so provided in the Plan of Distribution section of the Prospectus or a further supplement to the Prospectus describing the terms of such negotiated transaction. Nothing in this Agreement shall be deemed to require either party to agree to the offering and sale of Common Shares to or through a market maker or in privately negotiated transactions and either party may withhold its consent thereto in its sole discretion.
(c) Issuances . Upon the terms and subject to the conditions set forth herein, on any Trading Day as provided in Section 2.03(b) hereof during the Commitment Period on which the conditions set forth in Section 5.01 and 5.02 hereof have been satisfied, the Company may exercise an Issuance by the delivery of an Issuance Notice, executed by the Chief Executive Officer, President, Chief Financial Officer, Vice President/Finance/Treasurer, Corporate Secretary, and Assistant Corporate Secretary of the Company (each, an Authorized Officer), to BNYMCM. BNYMCM shall use its commercially reasonable efforts to sell pursuant to such Issuance not more than the Issuance Amount. Each sale of Common Shares will be settled on the applicable Settlement Date following such sale.
Section 2.02 Effectiveness . The effectiveness of this Agreement (the Closing) shall be deemed to take place concurrently with the execution and delivery of this Agreement by the parties hereto and the completion of the closing transactions set forth in the immediately following sentence. At the Closing, the following closing transactions shall take place, each of which shall be deemed to occur simultaneously with the Closing: (a) the Company shall deliver to BNYMCM a certificate executed by the Secretary or Assistant Secretary of the Company, signing in such capacity, dated the date of the Closing (i) certifying that attached thereto are true and complete copies of the resolutions duly adopted by the Board of Directors of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the issuance of the Common Shares pursuant to this Agreement), which authorization shall be in full force and effect on and as of the date of such certificate and (ii) certifying and attesting to the office, incumbency, due authority and specimen signatures of each Person who executed the Agreement for or on behalf of the Company; (b) the
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Company shall deliver to BNYMCM a certificate executed by the Chief Executive Officer, the President, Chief Financial Officer, Treasurer or Vice-President of Finance of the Company and by the Controller, Director/Accounting or Chief Accounting Officer of the Company, signing in such capacity, dated the date of the Closing, confirming that the representations and warranties of the Company contained in this Agreement are true and correct in all material respects and that the Company has performed in all material respects all of its obligations hereunder to be performed on or prior to the Closing Date and as to the matters set forth in Section 5.01(a) hereof; (c) Morrison & Foerster LLP, counsel to the Company, shall deliver to BNYMCM an opinion, dated the date of the Closing and addressed to BNYMCM, substantially in the form of Exhibit B-1 attached hereto; (d) Karen Haller, Executive Vice President, Chief Legal and Administrative Officer of the Company, or other counsel selected by the Company and reasonably satisfactory to BNYMCM, shall deliver to BNYMCM an opinion, dated the date of the Closing and addressed to BNYMCM, substantially in the form of Exhibit B-2 attached hereto; (e) Ballard Spahr LLP, counsel to BNYMCM, shall deliver such opinion or opinions, dated as of the Closing as BNYMCM may reasonably request; (f) PricewaterhouseCoopers LLP shall deliver to BNYMCM a letter, dated the Closing Date, in form and substance reasonably satisfactory to BNYMCM; and (i) the Company shall pay the expenses set forth in Section 9.02(b), (d) and (i) hereof by wire transfer to the account designated by BNYMCM in writing prior to the Closing.
Section 2.03 Mechanics of Issuances .
(a) Issuance Notice . On any Trading Day during the Commitment Period, the Company may deliver an Issuance Notice to BNYMCM, subject to the satisfaction of the conditions set forth in Sections 5.01 and 5.02; provided , however , that, notwithstanding anything in this Agreement to the contrary, BNYMCM shall have no further obligations with respect to any Issuance Notice if and to the extent the number of Common Shares to be sold pursuant thereto, together with the aggregate number of the Common Shares previously sold under this Agreement shall exceed the Maximum Program Amount.
(b) Delivery of Issuance Notice . An Issuance Notice shall be deemed delivered on the Trading Day that it is received by facsimile or e-mail (and the Company either such notice by telephone (including voice-mail message)) by BNYMCM. No Issuance Notice may be delivered other than on a Trading Day during the Commitment Period and as set forth in Section 4.13.
(c) Floor Price . BNYMCM shall not sell Common Shares below the Floor Price during any Selling Period, as such Floor Price may be adjusted by the Company at any time during any Selling Period upon notice to BNYMCM and confirmation to the Company.
(d) Trading Guidelines . BNYMCM may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell Common Stock for its own account while this Agreement is in effect provided that (i) no such purchase or sale shall take place while an Issuance Notice is in effect (except to the extent that, if the parties have agreed in writing that sales may be made to or through a market maker or in privately negotiated transactions, BNYMCM may engage in sales of Common Shares purchased or deemed purchased from the Company as a riskless principal or in a similar capacity), (ii) in no circumstances shall BNYMCM have a short position in the Common Stock for its own account and (iii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by BNYMCM. In addition, the Company
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hereby acknowledges and agrees that BNYMCMs Affiliates, subject to compliance with Regulation M under the Exchange Act, may make markets in the Common Stock or other securities of the Company, in connection with which they may buy and sell, as agent or principal, for long or short account, shares of Common Stock or other securities of the Company, at the same time BNYMCM is acting as agent pursuant to this Agreement.
Section 2.04 Use of Free Writing Prospectuses . Neither the Company nor BNYMCM has prepared, used, referred to or distributed, or will prepare, use, refer to or distribute any written communication which constitutes a free writing prospectus without the other partys written consent, as such terms are defined in Rule 405 under the Securities Act.
Section 2.05 Settlements . Subject to the provisions of Article V, on or before each Settlement Date, the Company will cause EQ Shareowner Services, its transfer agent, to electronically transfer the Common Shares being sold by crediting BNYMCM or its designees account at DTC through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other means of delivery as may be mutually agreed upon by the parties hereto and concurrently with the receipt of such Common Shares, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form, BNYMCM will deliver the related Issuance Price in same day funds delivered to an account designated by the Company prior to the Settlement Date. If the Company defaults in its obligation to deliver Common Shares on a Settlement Date, the Company agrees that it will (a) hold BNYMCM harmless against any loss, claim, damage or expense (including, without limitation, penalties, interest and reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (b) pay to BNYMCM any Selling Commission to which it would otherwise have been entitled absent such default. The individuals listed on Schedule 1 hereto shall be the contact persons for all matters related to the settlement of the transfer of Common Shares through the DWAC System for purposes of this Section 2.05.
Section 2.06 Material Non-Public Information . Notwithstanding any other provision of this Agreement, BNYMCM shall not be obligated to sell any Common Shares hereunder during any period in which it reasonably believes that the Company is in possession of material non-public information. Notwithstanding any other provision of this Agreement, the Company shall not offer, sell or deliver, or request the offer or sale, of any Common Shares pursuant to this Agreement and, by notice to BNYMCM given by telephone (confirmed promptly by e-mail), shall cancel any instructions for the offer or sale of any Common Shares, during any period in which the Company is in possession of material non-public information.
Section 2.07 Exemption from Regulation M . If BNYMCM reasonably believes that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act (applicable to securities with an average daily trading volume value of at least $1,000,000 that are issued by an issuer whose common equity securities have a public float value of at least $150,000,000) are not satisfied with respect to the Company or the Common Shares, it shall promptly notify the Company of such belief and sales of Common Shares under this Agreement shall be suspended until that or other exemptive provisions have been satisfied in the reasonable judgment of both parties. If, either immediately prior to delivery of an Issuance Notice or during a Selling Period, the Company reasonably believes that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to the Company or the Common Shares, it shall promptly notify BNYMCM of such belief and sales of Common Shares under this Agreement shall be suspended until that or other exemptive provisions have been satisfied in the reasonable judgment of both parties.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to, and agrees with, BNYMCM that as of the Closing Date, as of each Issuance Date, as of each Settlement Date, and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (each of the times referenced above is referred to herein as a Representation Date), except as may be disclosed in the Prospectus on or before a Representation Date:
Section 3.01 Registration . The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed and quoted on the Principal Market under the trading symbol SWX, and, prior to the delivery of the first Issuance Notice, the Common Shares shall have been listed on the Principal Market, subject to notice of issuance. The Company meets the requirements for the use of Form S-3 under the Securities Act and the rules and regulations thereunder for the registration of the transactions contemplated by this Agreement. Promptly after the execution and delivery of this Agreement, the Company will file with the Commission a registration statement on Form S-3 which registration statement will become effective automatically upon filing pursuant to Rule 462(e) under the Securities Act for the registration under the Securities Act of $300,000,000 aggregate amount of Common Stock the offering thereof from time to time pursuant to Rule 415 under the Securities Act. Such registration statement and the prospectus constituting a part of such registration statement, including all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the Securities Act, in each case, as from time to time amended or supplemented, are referred to herein as the Registration Statement and the Prospectus, respectively, except that if any revised prospectus is provided to BNYMCM by the Company for use in connection with the offering of the Common Shares that is not required to be filed by the Company pursuant to Rule 424(b) under the Securities Act, the term Prospectus shall refer to such revised prospectus from and after the time it is first provided to BNYMCM for such use. As used in this Agreement, the terms amendment or supplement when applied to the Registration Statement or the Prospectus shall be deemed to include the filing by the Company with the Commission of any document under the Exchange Act after the date hereof that is or is deemed to be incorporated therein by reference.
Section 3.02 Incorporated Documents . The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus pursuant to Item 12 of Form S-3 (collectively, the Incorporated Documents), as of the date filed with the Commission under the Exchange Act, conformed and will conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and none of such documents contained or will contain at such time an untrue statement of a material fact or omitted or will omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Section 3.03 Registration Statement; Prospectus . No stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceeding for that purpose has been initiated or threatened by the Commission. The Registration Statement, as of the Effective Date, conformed or will conform in all material respects to the requirements of the Securities Act, and the rules and regulations of the Commission thereunder and, as of the Effective Date, does not and will not contain an untrue statement of a
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material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as of its date and as of the date of any other amendment or supplement thereto, conforms or will conform in all material respects to the requirements of the Securities Act and the rules and regulations of the Commission thereunder, and as of the date of any other amendment or supplement thereto and as of each Applicable Time, does not and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this Section 3.03 shall not apply to any statements or omissions made in reliance upon and in conformity with information (a) furnished in writing to the Company by BNYMCM expressly for use in the Prospectus or (b) provided on the DTC website for use in prospectuses and relating to DTC and its book entry clearance and settlement system. As used herein, with respect to the Registration Statement, the term Effective Date means, as of a specified time, the later of (i) the date that the Registration Statement or the most recent post-effective amendment thereto was or is declared effective by the Commission under the Securities Act and (ii) the date that the Companys Annual Report on Form 10-K for its most recently completed fiscal year after the date of the Registration Statement is filed with the Commission under the Exchange Act.
Section 3.04 Changes . Neither the Company, nor any Material Subsidiary has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, (a) except in respect to the Reincorporation to the extent the Reincorporation Date has occurred, neither the Company nor any of its Subsidiaries has incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, that are material to the Company and its Subsidiaries, and (b) except in respect to the Reincorporation to the extent the Reincorporation Date has occurred, there has not been any change in the capital stock, except for issuances of capital stock pursuant to the Companys dividend reinvestment program, employee or director stock option or benefit plans, stock purchase or ownership plan or dividend reinvestment plan, or warrants, options or other rights described in the Prospectus, or long-term debt, other than the repayment of current maturities of long-term debt, of the Company or any of its Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders equity or results of operations of the Company and its Subsidiaries, otherwise than as set forth or contemplated by the Prospectus.
Section 3.05 Organizational Matters . The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of California before the Reincorporation Date, and the State of Delaware after the Reincorporation Date, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement and the Prospectus; the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. Each Material Subsidiary of the Company has been duly incorporated or formed, as applicable, and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation. As used in this Agreement, the term Subsidiary means any Person
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(other than a natural person), at least a majority of the outstanding Voting Stock of which is owned by the Company, by one or more Subsidiaries or by the Company and one or more Subsidiaries. As used in this Agreement, the term Material Subsidiary means each Subsidiary of the Company set forth on Exhibit 21 to the Companys most recent annual report on Form 10-K filed prior to or during the term of this Agreement; provided however, that for purposes of this Agreement Exhibit 21 to the Companys annual report on Form 10-K filed for the year ended December 31, 2018 shall be deemed to have been changed as follows: the reference to Centuri Construction Group, Inc. shall be deemed changed to Centruri Group, Inc., the reference to Meritus Group, Inc. shall be deemed to have been changed to Centuri U.S. Division, Inc., the reference to Vistus Construction Group, Inc. shall be deemed to be changed to Oil & Gas Division LLC, and Centuri Oil & Gas Group LLC shall be deemed added. Except as disclosed on Schedule 2, as of the date of this Agreement, no Subsidiary of the Company considered in the aggregate, constitute a significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X.
Section 3.06 Authorization; Enforceability . The Company has the corporate power and authority to execute, deliver and perform the terms and provisions of this Agreement and has taken all necessary corporate action to authorize the execution, delivery and performance by it of, and the consummation of the transactions to be performed by it contemplated by, this Agreement. No other corporate proceeding on the part of the Company is necessary, and no consent of any shareholder (except as has been obtained prior to the execution of this Agreement) in its capacity as such of the Company is required, for the valid execution and delivery by the Company of this Agreement, and the performance and consummation by the Company of the transactions contemplated by this Agreement to be performed by the Company. The Company has duly executed and delivered this Agreement. This Agreement constitutes the valid and binding obligation of the Company, enforceable against each in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and by limitations imposed by law and public policy on indemnification or exculpation; provided, however, that from and after the Reincorporation Date, SWX Delaware shall assume all obligations of SWX California.
Section 3.07 Capitalization . The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued and outstanding shares of Common Stock of the Company have been duly authorized and issued and are fully paid and non-assessable; none of the outstanding shares of Common Stock of the Company was issued in violation of the preemptive or other similar rights of any security holder of the Company; all of the issued shares of capital stock of each Material Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable; and all shares of Common Stock or other equity interests of each Material Subsidiary (other than directors qualifying shares) are owned directly or indirectly by the Company, free and clear of any liens, encumbrances or security interests, except as described in the Registration Statement and the Prospectus. The Common Stock has been duly authorized by all necessary corporate action on the part of the Company, and when issued and delivered against payment therefor as provided in this Agreement, the Common Shares will be validly issued, fully paid and nonassessable, will not be subject to any preemptive or similar rights and will be free and clear of all claims, liens, charges, encumbrances and security interests of any nature whatsoever. The Common Shares conform to the description contained in the Prospectus under the caption
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Description of Common Stock. Except as set forth in the Prospectus, there are no outstanding options, warrants, conversion rights, subscription rights, preemptive rights, rights of first refusal or other rights or agreements of any nature outstanding to subscribe for or to purchase any shares of Common Stock of the Company or any other securities of the Company of any kind binding on the Company (except pursuant to dividend reinvestment, stock purchase or ownership, stock option, director or employee benefit plans ) and there are no outstanding securities or instruments of the Company containing anti-dilution or similar provisions that will be triggered by the issuance of the Common Shares as described in this Agreement. Except as set forth in the Prospectus, there are no restrictions upon the voting or transfer of any shares of the Companys Common Stock pursuant to the Companys Articles of Incorporation or Certificate of Incorporation, as applicable, or bylaws. There are no agreements or other obligations (contingent or otherwise) that may require the Company to repurchase or otherwise acquire any shares of its Common Stock. No Person has the right, contractual or otherwise, to cause the Company to issue to it, or to register pursuant to the Securities Act, any shares of capital stock or other securities of the Company upon the filing of the Registration Statement or the issuance or sale of the Common Shares hereunder.
Section 3.08 No Conflicts . The execution and delivery by the Company of, and the performance by each of its obligations under, this Agreement will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the imposition of a lien or security interest under, any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any Material Subsidiary is a party or by which the Company or any Material Subsidiary is bound or to which any of the property or assets used in the conduct of the business of the Company or any Material Subsidiary is subject, (b) result in any violation of the provisions of the Articles of Incorporation, Certificate of Incorporation, as applicable, or the bylaws of the Company or the organizational documents of any Material Subsidiary, or (c) result in any violation of any applicable statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any Material Subsidiary or any of their properties (except in each case for conflicts, breaches, violations, defaults, liens or security interests that would not have a Material Adverse Effect). No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the performance by the Company of its obligations under this Agreement, except (1) such as have been, or will have been prior to the Closing Date, obtained under the Securities Act, (2) such as have been, or will have been obtained in connection with the Reincorporation prior to the Reincorporation Date to the extent the Reincorporation Date has not occurred, and to the extent the Reincorporation Date has occurred, such as have been obtained in connection with the Reincorporation, and (3) for such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or blue sky laws, as the case may be, and except in any case where the failure to obtain such consent, approval, authorization, order, registration or qualification would not have a Material Adverse Effect.
Section 3.09 Legal Proceedings . Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its Subsidiaries, would individually or in the aggregate have a Material Adverse Effect and, to the best of the Companys knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.
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Section 3.10 Sale of Common Shares . Immediately after any sale of Common Shares by the Company hereunder, the aggregate amount of Common Stock that has been issued and sold by the Company hereunder will not exceed the aggregate amount of Common Stock (a) registered under the Registration Statement or (b) that shall be authorized by the CPUC from time to time (in this regard, the Company acknowledges and agrees that BNYMCM shall have no responsibility for maintaining records with respect to the aggregate amount of Common Shares sold, or of otherwise monitoring the availability of Common Stock for sale, under the Registration Statement or applicable CPUC authorizations).
Section 3.11 Permits . Each of the Company and the Material Subsidiaries has such permits, licenses, franchises and authorizations of governmental or regulatory authorities (collectively, the permits) as are necessary to own its respective properties and to conduct its business in the manner described in the Prospectus, except where the failure to obtain such permits would not reasonably be expected to have a Material Adverse Effect; to the best knowledge of the Company after due inquiry, each of the Company and the Material Subsidiaries has fulfilled and performed all its material obligations with respect to such permits, except where the failure to fulfill or perform any such obligation would not reasonably be expected to have a Material Adverse Effect; and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination of any material permits or would result in any other material impairment of the rights of the holder of any such material permits, subject in each case to such qualifications as may be set forth in the Prospectus.
Section 3.12 Investment Company . The Company is not, and after giving effect to the offering and sale of the Common Shares, will not be, an investment company within the meaning of the Investment Company Act of 1940, as amended.
Section 3.13 Financial Condition; No Adverse Changes .
(a) The financial statements, together with related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus, present fairly, in all material respects, the consolidated financial position, results of operations and changes in financial position of Southwest Gas Corporation (the Predecessor) or the Company, as applicable, and the Subsidiaries on the basis stated in the Registration Statement and the Prospectus at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, subject to normal year-end adjustments, except as disclosed therein; and the other financial and statistical information and data included or incorporated by reference in the Registration Statement and the Prospectus are accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Predecessor or the Company, as applicable, and the Subsidiaries. No other financial statements are required to be set forth or to be incorporated by reference in the Registration Statement or the Prospectus under the Securities Act.
(b) The Company and its Subsidiaries maintain systems of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations; (ii) transactions are recorded as necessary to
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permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with managements general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) material information relating to the Company and its Subsidiaries is made known to the Company by its officers and employees. The Companys internal control over financial reporting was effective as of December 31, 2018, and the Company is not aware of any material weaknesses therein. Since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, there has been no change in the Companys internal control over financial reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Companys internal control over financial reporting.
(c) The accountants who have audited the financial statements of the Company or the Predecessor that are incorporated by reference in the Registration Statement and the Prospectus and who have audited the Companys or the Predecessors internal control over financial reporting are independent registered public accountants as required by the Securities Act and the rules and regulations of the Commission thereunder and the Public Company Accounting Oversight Board.
(d) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act), which, as maintained by the Company, were effective as of December 31, 2018.
Section 3.14 Use of Proceeds . The Company will use the net proceeds from the offering of Common Shares in the manner specified in the Prospectus under Use of Proceeds.
Section 3.15 Environmental Matters . Other than as set forth in the Prospectus, (a) the Company and its Subsidiaries are in compliance in all material respects with all applicable state and federal environmental laws, except for instances of noncompliance that, individually or in the aggregate, would not have a Material Adverse Effect, and (b) no event or condition has occurred that is reasonably likely to interfere in any material respect with the compliance by the Company and its Subsidiaries with any environmental law or that is reasonably likely to give rise to any liability under any environmental law, in each case that, individually or in the aggregate, would have a Material Adverse Effect.
Section 3.16 eXtensible Business Reporting Language . The Companys disclosure controls and procedures provide reasonable assurance that the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus is prepared in accordance with the Commissions rules and guidelines applicable thereto. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto in all material respects.
Section 3.17 Insurance . Each of the Company and its Subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent.
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Section 3.18 Officers Certificate . Any certificate delivered to BNYMCM or to counsel for BNYMCM in connection with an Issuance shall be deemed a representation and warranty by the Company to BNYMCM as to the matters covered thereby on the date of such certificate.
Section 3.19 Finders Fees . The Company has not incurred (directly or indirectly) nor will either incur, directly or indirectly, any liability for any brokers, finders, financial advisors or other similar fee, charge or commission in connection with this Agreement or the transactions contemplated hereby.
Section 3.20 Actively Traded Security . Except under circumstances where the Company has provided BNYMCM with notice that it reasonably believes that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to the Company or the Common Shares (in which case any sales of Common Shares under this Agreement shall be suspended in the manner provided for in Section 2.07 of this Agreement), the Common Stock is an actively traded security exempted from the requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such rule.
ARTICLE IV
COVENANTS
The Company covenants and agrees during the term of this Agreement with BNYMCM as follows:
Section 4.01 Registration Statement and Prospectus . (a) To make no amendment or supplement to the Registration Statement or the Prospectus (other than (i) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares and (ii) by means of an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference in the Registration Statement or the Prospectus, provided that the Company will give prior notice in writing or by telephone to BNYMCM of the intention to file such report and describing the subject matter to be included in such report as soon as reasonably practicable prior to the filing of such report) after the date of delivery of an Issuance Notice and prior to the related Settlement Dates that is reasonably disapproved by BNYMCM promptly after reasonable notice thereof; (b) to make no amendment or supplement to the Registration Statement or the Prospectus (other than (i) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares and (ii) by means of an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference in the Registration Statement or the Prospectus) at any time prior to having afforded BNYMCM a reasonable opportunity to review and comment thereon; (c) to file within the time periods required by the Exchange Act all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required under the Securities Act or under the blue sky or securities laws of any jurisdiction in connection with the offering or sale of the Common Shares, and during such same period to advise BNYMCM, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or has become effective or any supplement to the
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Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Common Shares, of the suspension of the qualification of the Common Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, of any request by the Commission for the amendment or supplement of the Registration Statement or the Prospectus or for additional information, or the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus (including, without limitation, any Incorporated Documents); (e) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, to use promptly its commercially reasonable efforts to obtain its withdrawal and (f) to promptly advise BNYMCM in writing or by telephone (promptly followed by e-mail or facsimile) of the issuance of any authorization relating to the authority of the Company to issue and sell Common Stock in addition to the authorizations referred to in Section 3.08 of this Agreement or any expirations thereof.
Section 4.02 Blue Sky . To use its commercially reasonable efforts to cause the Common Shares to be listed on the Principal Market and promptly from time to time to take such action as BNYMCM may reasonably request to cooperate with BNYMCM in the qualification of the Common Shares for offering and sale under the blue sky or securities laws of such jurisdictions within the United States of America and its territories as BNYMCM may reasonably request and to use its commercially reasonable efforts to comply with such laws so as to permit the continuance of sales and dealings therein for as long as may be necessary to complete the sale of the Common Shares; provided , however , that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process or to subject itself to taxation in respect of doing business in any jurisdiction.
Section 4.03 Copies of Registration Statement and Prospectus . To furnish BNYMCM with copies (which may be electronic copies) of the Registration Statement and each amendment thereto (other than an amendment by means of any document incorporated or deemed to be incorporated therein by reference and which is available on the Commissions EDGAR system), and with copies of the Prospectus and each amendment or supplement thereto (other than an amendment by means of any document incorporated or deemed to be incorporated therein by reference and which is available on the Commissions EDGAR system), both in such quantities as BNYMCM may reasonably request from time to time; and, if the delivery of a prospectus is required under the Securities Act or under the blue sky or securities laws of any jurisdiction at any time on or prior to the applicable Settlement Date for any Selling Period in connection with the offering or sale of the Common Shares and if at such time any event has occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it is necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify BNYMCM and request BNYMCM to suspend offers to sell Common Shares (and, if so notified, BNYMCM shall cease such offers as soon as practicable); and if the Company decides to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to advise BNYMCM promptly by telephone (with confirmation in writing) and to
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prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided , however , that if during such same period BNYMCM is required to deliver a prospectus in respect of transactions in the Common Shares, the Company shall promptly prepare and file with the Commission such an amendment or supplement.
Section 4.04 Rule 158 . To make generally available to its holders of the Common Shares as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act), an earnings statement of the Company and the Subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder (including the option of the Company to file periodic reports in order to make generally available such earnings statement, to the extent that it is required to file such reports under Section 13 or Section 15(d) of the Exchange Act, pursuant to Rule 158 under the Securities Act).
Section 4.05 Information . Except where such reports, communications, financial statements or other information are available on the Commissions EDGAR system, to furnish to BNYMCM (in paper or electronic format) copies of all publicly available reports or other communications (financial or other) furnished generally to stockholders and filed with the Commission pursuant to the Exchange Act, and deliver to BNYMCM (in paper or electronic format) (i) promptly after they are available, copies of any publicly available reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional publicly available information concerning the business and financial condition of the Company as BNYMCM may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its Subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission).
Section 4.06 Representations and Warranties . That each delivery of an Issuance Notice and each delivery of Common Shares on a Settlement Date shall be deemed to be (a) an affirmation to BNYMCM that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct in all material respects as of the date of such Issuance Notice or of such Settlement Date, as the case may be, as though made at and as of each such date, except as may be disclosed in the Prospectus (including any documents incorporated by reference therein and any supplements thereto) or otherwise in writing by the Company to BNYMCM on or before such date of delivery or Settlement Date, as the case may be, and (b) an undertaking that the Company will advise BNYMCM if any of such representations and warranties will not be true and correct in all material respects as of the Settlement Date for the Common Shares relating to such Issuance Notice, as though made at and as of each such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Common Shares).
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Section 4.07 Opinions of Counsel .
(a) That each time the Registration Statement or the Prospectus is amended or supplemented (other than by means of (x) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares, or (y) a Current Report on Form 8-K, unless reasonably requested by BNYMCM within thirty (30) days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus (each such amendment or supplement an Opinion Trigger Event), the Company shall at any time selected by the Company on or following the date of such Opinion Trigger Event (except that during a Selling Period or any other period in which a prospectus relating to the Common Shares is required to be delivered by BNYMCM under the Securities Act, such time shall be no later than one (1) Trading Day after each Opinion Trigger Event that occurs during such period; and provided that in any case delivery shall be a condition to the delivery of an Issuance Notice) furnish forthwith to BNYMCM a written opinion or negative assurance letter of Morrison & Foerster LLP, counsel for the Company, and Karen Haller, Executive Vice President, Chief Legal and Administrative Officer of the Company, or other counsel selected by the Company and reasonably satisfactory to BNYMCM, in each case dated the date of delivery and in form reasonably satisfactory to BNYMCM, (i) if such counsel has previously furnished an opinion or negative assurance letter to the effect set forth in Exhibit B-1 or B-2 hereto (as applicable), to the effect that BNYMCM may rely on such previously furnished opinion of such counsel to the same extent as though it were dated the date of such letter authorizing reliance (except that the statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or (ii) if such counsel has not previously furnished an opinion to the effect set forth in Exhibit B-1 or B-2 hereto (as applicable), of the same tenor as such opinion of such counsel but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date.
(b) Notwithstanding the foregoing, the Company may upon written notice to BNYMCM elect to, in lieu of furnishing to BNYMCM such written opinions contemplated by Section 4.07(a) at the times specified in Section 4.07(a), furnish or cause to be furnished to BNYMCM such written opinions on each Issuance Date, dated such Issuance Date. Such written opinions shall satisfy the requirements of this Section 4.07 for the period from the date of such written opinions until the Registration Statement or the Prospectus is next amended or supplemented (other than (x) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares and (y) by a Current Report on Form 8-K, unless reasonably requested by BNYMCM within thirty (30) days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus, upon which amendment or supplement the Company shall furnish such written opinions contemplated by Section 4.07(a) as soon as practicable after such amendment or supplement, each dated the date of such amendment or supplement, as the case may be.
Section 4.08 Comfort Letters . That, to the extent the Registration Statement or the Prospectus is amended or supplemented, including by means of an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K (but only a Current Report on Form 8-K that contains financial statements of the Company filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus), but other than by means of an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares, and in any case to set forth financial information
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included in or derived from the Companys financial statements or accounting records (each such amendment or supplement a Comfort Letter Trigger Event), the Company shall, at any time selected by the Company on or following the date of such Comfort Letter Trigger Event, but on or prior to the first Issuance Date following such Comfort Letter Trigger Event, and as a condition to delivering an Issuance Notice, cause its independent certified public accountants who have audited the financial statements of the Company included or incorporated by reference in the Registration Statement to furnish to BNYMCM a letter, dated the date of delivery, in form reasonably satisfactory to BNYMCM, of the same tenor as the letter referred to in Section 5.01(g) hereof but modified to relate to the Registration Statement and the Prospectus as amended or supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company, to the extent such financial statements and other information are available as of a date not more than five (5) business days prior to the date of such letter; provided , however , that, with respect to any financial information or other matters, such letter may reconfirm as true and correct at such date as though made at and as of such date, rather than repeat, statements with respect to such financial information or other matters made in the letter referred to in Section 5.01(g) hereof that was last furnished to BNYMCM; provided , further , that the Company shall not be required to furnish such a letter with respect to the financial statements of any business acquired that are included in a Current Report on Form 8-K. A comfort letter delivered in accordance with this Section 4.08 shall satisfy the requirements of this section for the period from the date of such comfort letter until the next Comfort Letter Trigger Event upon which the Company shall cause its independent certified public accountants to furnish a new comfort letter as contemplated by this Section 4.08.
Section 4.09 Officers Certificate .
(a) That each time the Registration Statement or the Prospectus is amended or supplemented (other than by means of (x) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares or (y) a Current Report on Form 8-K, unless reasonably requested by BNYMCM within thirty (30) days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus (each such amendment or supplement, an Officers Certificate Trigger Event), the Company shall at any time selected by the Company on or following the date of such Officers Certificate Trigger Event (except that during a Selling Period or any other period in which a prospectus relating to the Common Shares is required to be delivered by BNYMCM under the Securities Act, such time shall be no later than one (1) Trading Day after each Officers Certificate Trigger Event that occurs during such period; and provided that in any case delivery shall be a condition to the delivery of an Issuance Notice) furnish forthwith to BNYMCM a certificate, dated the date of delivery, in such form and executed by such officers of the Company as is reasonably satisfactory to BNYMCM, of the same tenor as the certificate referred to in Section 2.02(a-b) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date.
(b) Notwithstanding the foregoing, the Company may upon written notice to BNYMCM elect to, in lieu of furnishing to BNYMCM such certificates contemplated by Section 4.09(a) at the times specified in Section 4.09(a), furnish or cause to be furnished to BNYMCM such certificate on each Issuance Date, dated such Issuance Date; provided that such certificate
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shall satisfy the requirements of this Section 4.09 for the period from the date of such certificate until the Registration Statement or the Prospectus is next amended or supplemented (other than (i) an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares and (ii) by a Current Report on Form 8-K, unless reasonably requested by BNYMCM within thirty (30) days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus, upon which amendment or supplement the Company shall furnish or cause to be furnished such certificate contemplated by Section 4.09(a) as soon as practicable after such amendment or supplement, dated the date of such amendment or supplement, as the case may be.
Section 4.10 Stand Off Agreement . Without the written consent of BNYMCM, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than Common Shares hereunder), warrants or any rights to purchase or acquire, Common Stock during the period beginning on the first (1st) Trading Day immediately prior to the date on which any Issuance Notice is delivered to BNYMCM hereunder and ending on the first (1st) Trading Day immediately following the last Settlement Date with respect to Common Shares sold pursuant to such Issuance Notice (the Stand-Off Period); provided , however , that such restriction will not be required in connection with the Companys issuance or sale of (i) Common Stock, options to purchase shares of Common Stock or Common Stock issuable upon the exercise or vesting of options or other equity awards pursuant to any employee or director stock option, incentive or benefit plan, stock purchase or ownership plan (whether currently existing or adopted hereafter) or dividend reinvestment plan (but not shares subject to a waiver to exceed plan limits in a stock purchase plan) of the Company, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights disclosed in the Companys Commission filings, (iii) Common Stock issuable as consideration in connection with acquisitions of business, assets or securities of other Persons and (iv) any issuances to be made in connection with the Reincorporation.
Section 4.11 Market Activities . The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Common Shares or (ii) during the Stand-Off Period, sell, bid for or purchase the Common Shares, or pay anyone any compensation for soliciting purchases of the Common Shares other than BNYMCM.
Section 4.12 Reincorporation Reaffirmation and Assumption . From and after the Reincorporation Date, SWX Delaware, in addition to the operation of law, pursuant to Section 259 of the Delaware General Corporation Law, 8 Del C. §259, by action of delivering an Issuance Notice or allowing any continued performance of BNYMCM under this Agreement, shall reaffirm and ratify this Agreement, and expressly assume all of SWX Californias obligations hereunder.
Section 4.13 Reincorporation Date . If a Selling Period is then ongoing, the Company shall notify BNYMCM at least three (3) Trading Days prior to the Reincorporation Date and the Issuance Notice relating to such Selling Period shall be immediately terminated and deemed withdrawn, immediately terminating the Selling Period. Upon the withdrawal of the Issuance
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Notice, the Company shall not deliver an Issuance Notice and no Common Shares shall be sold pursuant to this Agreement from the Reincorporation Date until the time that such post-effective amendment to the Registration Statement becomes effective and the Reincorporation is complete. The Company shall provide written notice to BNYMCM if the Merger Agreement is amended, modified, or changed in any way, or the performance of any of its material terms is waived, whether expressly or not, by any party thereto.
ARTICLE V
CONDITIONS TO DELIVERY OF ISSUANCE
NOTICES AND TO SETTLEMENT
Section 5.01 Conditions Precedent to the Right of the Company to Deliver an Issuance Notice and the Obligation of BNYMCM to Sell Common Shares During the Selling Period(s) . The right of the Company to deliver an Issuance Notice hereunder is subject to the satisfaction, on the date of delivery of such Issuance Notice, and the obligation of BNYMCM to sell Common Shares during the applicable Selling Period(s) is subject to the satisfaction, on the applicable Settlement Date(s), of each of the following conditions:
(a) Effective Registration Statement and Authorizations . The Registration Statement shall remain effective, and sales of Common Shares may be made by BNYMCM thereunder and (i) no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; (ii) no other suspension of the use or withdrawal of the effectiveness of the Registration Statement or Prospectus shall exist; (iii) all requests for additional information on the part of the Commission with respect to the Registration Statement or the Prospectus shall have been complied with to the reasonable satisfaction of BNYMCM; and (iv) no event specified in Section 4.03 hereof shall have occurred and be continuing without the Company amending or supplementing the Registration Statement or the Prospectus as provided in Section 4.03. The authorizations referred to in Section 3.08 of this Agreement are in full force and effect, to the knowledge of the Company, are not the subject of any pending application for rehearing or petition for modification and are sufficient to authorize the issuance and sale of the Common Shares.
(b) Accuracy of the Companys Representations and Warranties . The representations and warranties of the Company shall be true and correct in all material respects as of each Representation Date (including such Issuance Date and Settlement Date), as though made at such time, except as may be disclosed in the Prospectus on or before the applicable Representation Date.
(c) Performance by the Company . The Company shall have performed, satisfied and complied with in all material respects all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to such date.
(d) No Injunction . No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.
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(e) Material Adverse Changes . Since the date of this Agreement, no event that had or is reasonably likely to have a Material Adverse Effect shall have occurred that has not been disclosed in the Registration Statement or the Prospectus (including the documents incorporated by reference therein and any supplements thereto).
(f) No Suspension of Trading In or Delisting of Common Stock; Other Events . The trading of the Common Stock (including without limitation the Common Shares) shall not have been suspended by the Commission, the Principal Market or the Financial Industry Regulatory Authority since the immediately preceding Settlement Date or, if there has been no Settlement Date, the Closing Date, and the Common Shares (including without limitation the Common Shares) shall have been approved for listing or quotation on (subject only to notice of issuance) and shall not have been delisted from the Principal Market. There shall not have occurred (and be continuing in the case of occurrences under clauses (i) and (ii) below) any of the following: (i) if trading generally on the NYSE has been suspended or materially limited, or minimum and maximum prices for trading have been fixed, or maximum ranges for prices have been required, by the NYSE or by order of the Commission, the Financial Industry Regulatory Authority or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States; (ii) a general moratorium on commercial banking activities in New York declared by either federal or New York state authorities; or (iii) any material adverse change in the financial markets in the United States or in the international financial markets, any outbreak or escalation of hostilities or other calamity or crisis involving the United States or the declaration by the United States of a national emergency or war or any change or development involving a prospective change in national or international political, financial or economic conditions, if the effect of any such event specified in this clause (iii) in the reasonable judgment of BNYMCM makes it impracticable or inadvisable to proceed with the sale of Common Shares of the Company.
(g) Comfort Letter . On the Closing Date, PricewaterhouseCoopers LLP shall have furnished to BNYMCM a letter of the sort contemplated by Section 2.02(f) hereof, dated the Closing Date, to the effect required by Section 2.02(f), and on each applicable date referred to in Section 4.08 hereof that is on or prior to such Issuance Date or Settlement Date, as the case may be, the independent registered public accounting firm who has audited the financial statements of the Company included or incorporated by reference in the Registration Statement shall have furnished to BNYMCM a letter of the sort contemplated by Section 4.08, dated such applicable date, in form and substance satisfactory to BNYMCM to the effect required by Section 4.08.
(h) No Defaults . Upon execution and delivery of this Agreement and immediately after consummation of the proposed sale of the Common Shares to BNYMCM, none of the Company nor any of the Material Subsidiaries shall be in default under (whether upon the passage of time, the giving of notice or both) its organizational or other governing documents, or any provision of any security issued by the Company or any of its Material Subsidiaries, or of any agreement, instrument, indenture, mortgage, deed of trust or other undertaking to which the Company or any of its Material Subsidiaries is a party or by which it or any of its property or assets is bound, or the applicable provisions of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company, any of its Material Subsidiaries or any of their property or assets is bound, in each case which default, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(i) Trading Cushion . The Selling Period for any previous Issuance Notice shall have expired.
(j) Maximum Issuance Amount . In no event may the Company issue an Issuance Notice to sell an Issuance Amount to the extent that (i) the sum of (x) the requested Issuance Amount, plus (y) the number of Common Shares issued under all previous Issuances effected pursuant to this Agreement (including all Common Shares issued by SWX California and SWX Delaware), would exceed the Maximum Program Amount.
(k) Counsel Letter . The counsel specified in Section 4.07, or other counsel selected by the Company and reasonably satisfactory to BNYMCM, shall have furnished to BNYMCM their written opinions, dated the Closing Date and each applicable date referred to in Section 4.07 that is on or prior to such Issuance Date or Settlement Date, as the case may be, to the effect required by Section 4.07.
(l) Officers Certificate . The Company shall have furnished or caused to be furnished to BNYMCM an officers certificate executed by one of the Authorized Officers specified in Section 2.01(c), dated the Closing Date and each applicable date referred to in Section 4.09(a) that is on or prior to such Issuance Date or Settlement Date, as the case may be, as to the matters specified in Section 2.02(a-b).
(m) Other Documents . On the Closing Date and prior to each Issuance Date and Settlement Date, BNYMCM and its counsel shall have been furnished with such documents as they may reasonably require in order to evidence the accuracy and completeness of any of the representations or warranties, or the fulfillment of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Common Shares as herein contemplated shall be reasonably satisfactory in form and substance to BNYMCM and its counsel.
(n) Reincorporation . Following the Reincorporation Date, each of the Reincorporation Conditions shall have been met prior to the delivery of any Issuance Notice by the Company.
Section 5.02 Documents Required to be Delivered on each Issuance Date . BNYMCMs obligation to sell Common Shares pursuant to an Issuance hereunder shall additionally be conditioned upon the delivery to BNYMCM on or before the Issuance Date of a certificate in form and substance reasonably satisfactory to BNYMCM, executed by an Authorized Officer of the Company, to the effect that all conditions precedent to the delivery of such Issuance Notice shall have been satisfied as at the date of such certificate (which certificate shall not be required if the foregoing representations shall be set forth in the Issuance Notice).
Section 5.03 Suspension of Sales . The Company or BNYMCM may, upon notice to the other party in writing or by telephone (confirmed immediately by verifiable facsimile transmission or e-mail), suspend any sale of Common Shares, and the Selling Period shall immediately terminate; provided , however , that such suspension and termination shall not affect or impair either
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partys obligations with respect to any Common Shares sold hereunder prior to the receipt of such notice. The Company agrees that no such notice shall be effective against BNYMCM unless it is made to one of the individuals named on Schedule 1 hereto, as such Schedule may be amended from time to time. BNYMCM agrees that no such notice shall be effective against the Company unless it is made to one of the individuals named on Schedule 1 annexed hereto, as such Schedule may be amended from time to time.
ARTICLE VI
INDEMNIFICATION AND CONTRIBUTION
Section 6.01 Indemnification by the Company . The Company agrees to indemnify and hold harmless BNYMCM, its officers, directors, employees and agents, and each Person, if any, who controls BNYMCM within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, together with each such Persons respective officers, directors, employees and agents (collectively, the Controlling Persons), from and against any and all losses, claims, damages or liabilities, and any action or proceeding in respect thereof, to which BNYMCM, its officers, directors, employees and agents, and any such Controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares (including a Free Writing Prospectus), or any amendment or supplement thereto, or any preliminary prospectus, or arise out of, or are based upon, any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances in which they were made) not misleading, except insofar as the same are made (i) in reliance upon and in conformity with information related to BNYMCM or its plan of distribution furnished in writing to the Company by BNYMCM expressly for use therein, or (ii) in a Free Writing Prospectus used by BNYMCM in violation of Section 2.04, and the Company shall reimburse BNYMCM, its officers, directors, employees and agents and each Controlling Person for any reasonable legal and other expenses incurred thereby in investigating or defending or preparing to defend against any such losses, claims, damages or liabilities, or actions or proceedings in respect thereof, as such expenses are incurred; provided , however , that the Company shall not be liable in any such case to the extent that any such losses, claims, damages or liabilities, or any action or proceeding, arise out of or are based upon an untrue statement or omission contained in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares, or any amendment thereto, if (x) such untrue statement or omission or alleged untrue statement or omission is corrected in an amendment or supplement to such prospectus and (y) having previously been furnished by or on behalf of the Company with copies of such prospectus as so amended or supplemented, BNYMCM thereafter fails to deliver such prospectus as so amended or supplemented (in such cases where BNYMCM is legally required to deliver a prospectus) prior to the transaction giving rise to the claims from which such losses, claims, damages or liabilities, or action or proceeding arise.
Section 6.02 Indemnification by BNYMCM . BNYMCM agrees to indemnify and hold harmless the Company, its officers, directors, employees and agents and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, together with each such Persons respective officers, directors, employees and
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agents, from and against any losses, claims, damages or liabilities, and any action or proceeding in respect thereof, to which the Company, its officers, directors, employees or agents, any such controlling Person and any officer, director, employee or agent of such controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as losses, claims, damages or liabilities (or action or proceeding in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares (including a Free Writing Prospectus), or any amendment or supplement thereto, or any preliminary prospectus, or arise out of, or are based upon, any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or any other prospectus relating to the Common Shares, or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances in which they were made) not misleading in each case to the extent, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made therein (a) in reliance upon and in conformity with written information related to BNYMCM or its plan of distribution furnished to the Company by BNYMCM expressly for use therein, or (b) in a Free Writing Prospectus used by BNYMCM in violation of Section 2.04, and BNYMCM shall reimburse the Company, its officers, directors, employees and agents, and each controlling Person of the Company for any reasonable legal and other expenses incurred thereby in investigating or defending or preparing to defend against any such losses, claims, damages or liabilities, or actions or proceedings in respect thereof, as such expenses are incurred.
Section 6.03 Conduct of Indemnification Proceedings . As promptly as reasonably practicable after receipt by any Person (an Indemnified Party) of notice of any claim or the commencement of any action in respect of which indemnity may be sought pursuant to Section 6.01 or 6.02, the Indemnified Party shall, if a claim in respect thereof is to be made against the Person against whom such indemnity may be sought (an Indemnifying Party), notify the Indemnifying Party in writing of the claim or the commencement of such action. In the event an Indemnified Party shall fail to give such notice as provided in this Section 6.03 and the Indemnifying Party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, the indemnification provided for in Sections 6.01 or 6.02 shall be reduced to the extent of any actual prejudice resulting from such failure to so notify the Indemnifying Party; provided, that the failure to notify the Indemnifying Party shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under Section 6.01 or 6.02. If any such claim or action shall be brought against an Indemnified Party, the Indemnifying Party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided that the Indemnified Party shall have the right to employ separate counsel to represent the Indemnified Party, but the fees and expenses of such counsel shall be for the account of such Indemnified Party unless (a) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (b) such Indemnified Party reasonably concludes that representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest with the
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Company, it being understood, however, that the Indemnifying Party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all Indemnified Parties or for fees and expenses that are not reasonable. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnification could have been sought hereunder by such Indemnified Party unless such settlement includes an unconditional release of each such Indemnified Party from all losses, claims, damages or liabilities arising out of such claim or proceeding and such settlement does not admit or constitute an admission of fault, guilt, failure to act or culpability on the part of any such Indemnified Party. Whether or not the defense of any claim or action is assumed by an Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its prior written consent, which consent will not be unreasonably withheld.
Section 6.04 Contribution . If for any reason the indemnification provided for in this Article VI is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company, on the one hand, and BNYMCM, on the other hand, in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand and BNYMCM on the other hand from the offering of the Common Shares to which such losses, claims, damages or liabilities relate. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each Indemnifying Party shall contribute to such amount paid or payable by such Indemnifying Party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and of BNYMCM in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and by BNYMCM, on the other, shall be deemed to be in the same proportion as the total net proceeds from the sale of Common Shares (before deducting expenses) received by the Company bear to the total commissions received by BNYMCM in respect thereof. The relative fault of the Company, on the one hand, and of BNYMCM, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on one hand or by BNYMCM on the other hand, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and BNYMCM agree that it would not be just and equitable if contribution pursuant to this Section 6.04 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6.04, BNYMCM shall in no
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event be required to contribute any amount in excess of the commissions received by it under this Agreement. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6.04 each officer, director, employee and agent of BNYMCM, and each Controlling Person, shall have the same rights to contribution as BNYMCM, and each director of the Company, each officer of the Company who signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. The obligations of the Company and BNYMCM under this Article VI shall be in addition to any liability that the Company and BNYMCM may otherwise have.
ARTICLE VII
TERMINATION
Section 7.01 Term . Subject to the provisions of this Article VII, the term of this Agreement shall run until the end of the Commitment Period.
Section 7.02 Termination by BNYMCM .
(a) BNYMCM may terminate the right of the Company to effect any Issuances under this Agreement upon one (1) Trading Days notice if any of the following events shall occur:
(i) The Company or any Material Subsidiary shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for all or substantially all of its property or business; or such a receiver or trustee shall otherwise be appointed;
(ii) Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any Material Subsidiaries;
(iii) The Company shall fail to maintain the listing of the Common Stock on the Principal Market; or
(iv) Since the Effective Date, there shall have occurred any event, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) BNYMCM shall have the right, by giving ten (10) days notice as hereinafter specified to terminate this Agreement, in BNYMCMs sole discretion, at any time.
Section 7.03 Termination by the Company . The Company shall have the right, by giving ten (10) days notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time. After delivery of such notice, the Company shall no longer have any right to deliver any Issuance Notices hereunder.
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Section 7.04 Liability; Provisions that Survive Termination . If this Agreement is terminated pursuant to this Article VII, such termination shall be without liability of any party to any other party except as provided in Section 9.02 and for the Companys obligations in respect of all prior Issuance Notices, and provided further that in any case the provisions of Article VI, Article VIII and Article IX shall survive termination of this Agreement without limitation.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES TO SURVIVE DELIVERY
All representations and warranties of the Company herein or in certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of (1) any investigation made by or on behalf of BNYMCM and its officers, directors, employees and agents and any Controlling Persons, (2) delivery and acceptance of the Common Shares and payment therefor or (3) any termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Press Releases and Disclosure . The Company may issue a press release describing the material terms of the transactions contemplated hereby as soon as practicable following the Closing Date, and may file with the Commission a Current Report on Form 8-K describing the material terms of the transactions contemplated hereby, and the Company shall consult with BNYMCM prior to making such disclosures, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties. No party hereto shall issue thereafter any press release or like public statement (including, without limitation, any disclosure required in reports filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby not substantially similar to previously approved disclosure without the prior written approval of the other party hereto, except as may be necessary or appropriate in the opinion of the party seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules. If any such press release or like public statement is so required, the party making such disclosure shall consult with the other party prior to making such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is reasonably satisfactory to all parties. Notwithstanding the foregoing, the Company may disclose the results of any Issuance, including the Issuance Price and number of shares of Common Stock issued pursuant to an Issuance, in a press release, quarterly report on Form 10-Q or annual report on Form 10-K, and the Company may provide oral updates of such previously publicly disclosed information to investors and/or shareholders without the prior written approval of BNYMCM.
Section 9.02 Expenses . The Company covenants and agrees with BNYMCM that the Company shall pay or cause to be paid the following: (a) the fees, disbursements and expenses of the Companys counsel and accountants in connection with the Reincorporation and the preparation, printing and filing of the Registration Statement, the Prospectus and all other amendments and supplements thereto and the mailing and delivering of copies thereof to BNYMCM and the Principal Market; (b) BNYMCMs reasonable documented out-of-pocket expenses, including the reasonable fees, disbursements and expenses of counsel for BNYMCM (including in connection with the qualification of the Common Shares for offering and sale under state securities laws as provided in Section 4.02 hereof and in connection with preparing any blue
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sky survey), in connection with this Agreement and the Registration Statement and ongoing services in connection with the transactions contemplated hereunder; (c) the cost (other than those expenses described in clause (b) above) of printing, preparing or reproducing this Agreement and any other documents in connection with the offering, sale and delivery of the Common Shares; (d) all filing fees and expenses (other than those expenses described in clause (b) above) in connection with the qualification of the Common Shares for offering and sale under state securities laws as provided in Section 4.02 hereof; (e) the cost of preparing the Common Shares; (f) the fees and expenses of any transfer agent of the Company; (g) the cost of providing any CUSIP or other identification numbers for the Common Shares; (h) the fees and expenses incurred in connection with the listing or qualification of the Common Shares on the Principal Market and any filing fees incident to any required review by the Financial Industry Regulatory Authority of the terms of the sale of the Common Shares in connection with this Agreement and the Registration Statement (including the reasonable fees, disbursements and expenses of counsel for BNYMCM), and (i) all other costs and expenses incident to the performance of the Companys obligations hereunder that are not otherwise specifically provided for in this Section The Company will not bear any costs or expenses of BNYMCM with respect to BNYMCMs obligation to deliver shares of Common Stock to any Person.
Section 9.03 Notices . Except as otherwise provided in this Agreement, all notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or that are given with respect to this Agreement shall be in writing and shall be personally served or deposited in the mail, registered or certified, return receipt requested, postage prepaid or delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex, facsimile or e-mail, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice: (a) if to the Company to: Southwest Gas Holdings, Inc., 5241 Spring Mountain Road, P.O. Box 98510, Las Vegas, Nevada 89193-8510, Attention Kenneth J. Kenny, Vice President/Finance/Treasurer; Facsimile No. 702-876-7037, e-mail ken.kenny@swgas.com, with a copy (which shall not constitute notice) to: Morrison & Foerster LLP, 425 Market Street, San Francisco, CA 94105-2482, Attention: Brandon C. Parris, Facsimile No. 415-268-7522, e-mail bparris@mofo.com; and (b) if to BNYMCM, BNY Mellon Capital Markets, LLC, 240 Greenwich Street, 3 rd Floor, New York, NY 10286, Attention: Equity Capital Markets, Daniel Klinger; Facsimile No. 212-815-6403, e-mail daniel.klinger@bnymellon.com, with a copy to Attention: Operations Department; Facsimile No. 724-540-6311, e-mail bnymcmfiops@bnymellon.com, with an additional copy (which shall not constitute notice) to: Ballard Spahr LLP, 1980 Festival Plaza Drive, Suite 900, Las Vegas, Nevada 89135, Attention: Robert C. Kim, Facsimile No. 702-471-7070, e-mail kimr@ballardspahr.com. Except as otherwise provided in this Agreement, notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex, confirmed facsimile or e-mail. Notice otherwise sent as provided herein shall be deemed given on the third (3rd) business day following the date mailed or on the next business day following delivery of such notice to a reputable air courier service for next day delivery.
Section 9.04 Entire Agreement . This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written, with respect to the subject matter hereof.
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Section 9.05 Amendment and Waiver . Except with respect to SWX California after the Reincorporation Date, this Agreement may not be amended, modified, supplemented, restated or waived except by a writing executed by the party against which such amendment, modification, supplement, restatement or waiver is sought to be enforced. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts or of any preceding or succeeding obligations or acts.
Section 9.06 No Assignment; No Third Party Beneficiaries . This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by the Company or BNYMCM. Any purported assignment or delegation of rights, duties or obligations hereunder shall be void and of no effect. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and, to the extent provided in Article VI, the controlling persons, officers, directors, employees and agents referred to in Article VI. This Agreement is not intended to confer any rights or benefits on any Persons other than as set forth in Article VI or elsewhere in this Agreement.
Section 9.07 Severability . This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
Section 9.08 Further Assurances . Each party hereto, upon the request of any other party hereto, shall do all such further acts and execute, acknowledge and deliver all such further instruments and documents as may be necessary or desirable to carry out the transactions contemplated by this Agreement.
Section 9.09 Titles and Headings . Titles, captions and headings of the sections of this Agreement are for convenience of reference only and shall not affect the construction of any provision of this Agreement.
Section 9.10 Governing Law; Jurisdiction . THIS AGREEMENT SHALL BE GOVERNED BY, INTERPRETED UNDER AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF. Any action, suit or proceeding to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the Southern District of the State of New York or any New York state court located in the Borough of Manhattan, and the Company agrees to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) and each party waives (to the full extent permitted by law) any objection it may have to the laying of venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding has been brought in an inconvenient forum.
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Section 9.11 Waiver of Jury Trial . The Company and BNYMCM each hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.
Section 9.12 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission or by an e-mail that contains a portable document format (.pdf) file of an executed signature page.
Section 9.13 Adjustments for Stock Splits, etc . The parties acknowledge and agree that share related numbers contained in this Agreement (including the minimum Floor Price) shall be equitably adjusted to reflect stock splits, stock dividends, reverse stock splits, combinations and similar events.
Section 9.14 No Fiduciary Duty . The Company acknowledges and agrees that BNYMCM is acting in the capacity of an arms length contractual counterparty to the Company with respect to the offering of Common Shares contemplated hereby (including in connection with determining the terms of offering) and not as a financial advisor, trustee or fiduciary to, or as agent (except on the terms expressly set forth herein) of, the Company or any other person and will not claim that BNYMCM is acting in any such capacity in connection with the offering of the Common Shares contemplated hereby. Additionally, BNYMCM is not advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction with respect to the offering of Common Shares contemplated hereby. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and BNYMCM shall have no responsibility or liability to the Company with respect thereto. Any review by BNYMCM of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of BNYMCM and shall not be on behalf of the Company.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.
EXHIBIT A
ISSUANCE NOTICE
[Date]
BNY Mellon Capital Markets, LLC 240 Greenwich Street, 3 rd Floor |
New York, NY 10286 |
Facsimile No.: 212.815.6403 |
Attn: Daniel Klinger |
Reference is made to the Sales Agency Agreement between SOUTHWEST GAS HOLDINGS, INC., a California corporation [a Delaware corporation and successor-in-interest to SOUTHWEST GAS HOLDINGS, INC., a California corporation], and BNY MELLON CAPITAL MARKETS, LLC, dated as of May [ ], 2019. The Company (as defined in the above-referenced Sales Agency Agreement) confirms that all conditions precedent to the delivery of this Issuance Notice are satisfied as of the date hereof.
Effective Date of Delivery of Issuance Notice (determined pursuant to Section 2.03(b)): |
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Number of Days in Selling Period: |
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First Date of Selling Period: |
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Last Date of Selling Period: |
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Settlement Date(s): |
Second (2 nd ) Trading Day after each sale |
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Issuance Amount: |
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Floor Price Limitation (adjustable by the Company during the Selling Period, but not less than $1.00) |
$ per share |
SOUTHWEST GAS HOLDINGS, INC., | ||
a [ ] corporation | ||
By: | ||
Name: |
Title: Chief Executive Officer, President, Chief Financial Officer, Vice President/Finance/Treasurer, Corporate Secretary, and Assistant Corporate Secretary |
EXHIBIT B-1
[LETTERHEAD OF MORRISON & FOERSTER LLP]
B-1-1
EXHIBIT B-2
[LETTERHEAD OF SOUTHWEST GAS HOLDINGS, INC.]
B-1-1
SCHEDULE 1
BNYMCM | ||||
Name: |
Telephone Number: |
E-mail: |
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EQ Shareowner Services | ||||
Name: |
Telephone Number: |
E-mail: |
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Southwest Gas Holdings, Inc. | ||||
Name: |
Telephone Number: |
E-mail: |
SCHEDULE 2
Southwest Gas Corporation
Carson Water Company
Centuri Group, Inc.
Oil & Gas Division LLC
NPL Construction Co.
Southwest Gas Utility Group, Inc.
Centuri Oil & Gas Group LLC
Centuri U.S. Division Inc.
Exhibit 5.1
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425 MARKET STREET SAN FRANCISCO CALIFORNIA 94105-2482
TELEPHONE: 415.268.7000 FACSIMILE: 415.268.7522
WWW.MOFO.COM |
MORRISON & FOERSTER LLP
BEIJING, BERLIN, BOSTON, BRUSSELS, DENVER, HONG KONG, LONDON, LOS ANGELES, NEW YORK, NORTHERN VIRGINIA, PALO ALTO, SAN DIEGO, SAN FRANCISCO, SHANGHAI, SINGAPORE, TOKYO, WASHINGTON, D.C |
May 8, 2019
Southwest Gas Holdings, Inc.
5241 Spring Mountain Road
Post Office Box 98510
Las Vegas, Nevada 89193-8510
Ladies and Gentlemen:
We have acted as counsel to Southwest Gas Holdings, Inc., a California corporation (the Company ), in connection with its registration statement on Form S-3 (the Registration Statement ), filed on the date hereof with the Securities and Exchange Commission (the Commission ) relating to the public offering of shares of the Companys common stock, $1.00 par value (the Common Shares ), that may be offered and sold by the Company from time to time as set forth in the prospectus dated as of the date hereof (the Prospectus ). This opinion is rendered in connection with the proposed issuance and sale from time to time of Common Shares with an aggregate Sales Price of up to $300,000,000, in accordance with the terms of that certain Sales Agency Financing Agreement (the Sales Agency Agreement ), dated as of May 8, 2019, by and between the Company and BNY Mellon Capital Markets, LLC as the sales agent, as described in the Prospectus.
As your counsel in connection with this opinion, we have examined such corporate records, documents, and instruments of the Company and reviewed such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein and we have examined the proceedings proposed to be taken by the Company relating to the issuance and sale by the Company of the Shares. We have also examined the Registration Statement as filed with the Commission in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
In connection with this opinion, we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies. In making our examination of documents executed by parties other than the Company, we have assumed that each other party has the power and authority to execute and deliver, and to perform and observe the provisions of, such documents and has duly authorized, executed and delivered such documents, and that such documents constitute the legal, valid and binding obligations of each such party. With respect to certain factual matters, we have relied upon certificates of officers of the Company.
We are of the opinion that upon completion of the procedures proposed to be taken by the Company as set forth in the Sales Agency Agreement and in the Prospectus, the Common Shares that may be issued and sold by the Company will be duly authorized, legally issued, fully paid and non-assessable when sold.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to reference therein to us under the caption Legal Matters in the Prospectus which form parts of the Registration Statement. In giving such consent, we do not hereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes of the facts stated or assumed herein or of any subsequent changes in applicable law.
Very truly yours,
/s/ Morrison & Foerster LLP
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Southwest Gas Holdings, Inc. of our report dated February 28, 2019 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2018 Annual Report to Shareholders, which is incorporated by reference in Southwest Gas Holdings Inc.s Annual Report on Form 10-K for the year ended December 31, 2018. We also consent to the references to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Las Vegas, NV
May 8, 2019
Exhibit 24.1
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints John P. Hester and Gregory J. Peterson, and each of them (with full power of each to act alone), severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and to execute in his or her name, place and stead (individually and in any capacity stated below) a registration statement on Form S-3 covering the registration of $300 million of common stock, to be sold at a price not less than $70 per share, through an equity shelf program for Southwest Gas Holdings, Inc. (the Registration Statement), and any and all amendments to the Registration Statement, and all documents and instruments necessary or advisable in connection therewith, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission (or any other governmental regulatory authority), each of said attorneys-in-fact and agents to have power to act with or without the others and to have full power and authority to do and to perform in the name and on behalf of each of the undersigned every act whatsoever necessary or advisable to be done in the premises as fully and to all intents and purposes as any of the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and/or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: February 25, 2019
/s/ Michael J. Melarkey Michael J. Melarkey, Chairman |
/s/ Jane Lewis-Raymond Jane Lewis-Raymond, Director |
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/s/ Robert L. Boughner Robert L. Boughner, Director |
/s/ Anne L. Mariucci Anne L. Mariucci, Director |
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/s/ José A. Cárdenas José A. Cárdenas, Director |
/s/ A. Randall Thoman A. Randall Thoman, Director |
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/s/ Thomas E. Chestnut Thomas E. Chestnut, Director |
/s/ Thomas A. Thomas Thomas A. Thomas, Director |
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/s/ Stephen C. Comer Stephen C. Comer, Director |
/s/ Leslie T. Thornton Leslie T. Thornton, Director |