As filed with the Securities and Exchange Commission on July 6, 2022
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SILVERBOW RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 20-3940661 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
920 Memorial City Way, Suite 850
Houston, Texas 77024
(281) 874-2700
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Christopher M. Abundis
Executive Vice President, Chief Financial Officer,
General Counsel & Secretary
SilverBow Resources, Inc.
920 Memorial City Way, Suite 850
Houston, Texas 77024
(281) 874-2700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Hillary H. Holmes
Gibson, Dunn & Crutcher LLP
811 Main Street, Suite 3000
Houston, Texas 77002
Telephone: (346) 718-6600
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement becomes effective, as determined by market conditions and other factors.
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. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 6, 2022
Prospectus
4,148,472 Shares of Common Stock
The selling stockholders named in this prospectus (the selling stockholders), should it choose to do so after the effectiveness of this registration statement, may offer up to 4,148,472 shares of common stock, $0.01 par value per share (the Common Stock), of SilverBow Resources, Inc. (the Company). Such shares were issued by the Company to the selling stockholders in connection with an acquisition by the Company pursuant to a purchase and sale agreement by and among Sundance Energy, Inc. (Sundance), Armadillo E&P, Inc. and Sea Eagle Ford, LLC, and the Company and SilverBow Resources Operating, LLC, dated April 13, 2022 (the Purchase Agreement). All of these shares of stock are being sold by the selling stockholders named in this prospectus, or any of the selling stockholders respective transferees, pledgees, donees or successors-in-interest. The selling stockholders will receive all proceeds from the sale of the shares of Common Stock being offered in this prospectus. We will not receive any proceeds from the sale of shares by any of the selling stockholders. We are required to pay certain offering fees and expenses in connection with the registration of the selling stockholders securities and to indemnify the selling stockholders against certain liabilities. For more information related to the selling stockholders, please read Selling Stockholders.
This prospectus describes the general manner in which these securities may be offered and sold. If necessary, the specific manner in which these securities may be offered and sold will be described in one or more supplements to this prospectus. Any prospectus supplement may add, update or change information contained in this prospectus. You should carefully read this prospectus, and any applicable prospectus supplement, as well as the documents incorporated by reference herein or therein before you invest in any of our securities.
There can be no assurances that the selling stockholders will sell any or all of the securities offered under this prospectus. The selling stockholders may offer and sell our Common Stock to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. In addition, the selling stockholders may offer and sell these securities from time to time, together or separately. If the selling stockholders use underwriters, dealers or agents to sell such securities, we will name them and describe their compensation in a prospectus supplement. The price to the public of those securities and the net proceeds the selling stockholders expect to receive from that sale will also be set forth in a prospectus supplement.
Our Common Stock is listed on the New York Stock Exchange (NYSE) under the symbol SBOW. The last reported sale price of our Common Stock on June 30, 2022, as reported by the NYSE, was $28.36 per share.
See the section entitled Risk Factors beginning on page 7 of this prospectus and any similar section contained in any applicable prospectus supplement to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus is dated , 2022.
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You should rely only on the information contained or incorporated by reference in this prospectus and any prospectus supplement. We have not authorized any dealer, salesperson or other person to provide you with additional or different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus and any prospectus supplement are not an offer to sell or the solicitation of an offer to buy any securities other than the securities to which they relate and are not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. You should not assume that the information in this prospectus or any prospectus supplement or in any document incorporated by reference in this prospectus or any prospectus supplement is accurate as of any date other than the date of the document containing the information.
You should read carefully the entire prospectus, as well as the documents incorporated by reference in the prospectus and the applicable prospectus supplement, before making an investment decision.
Unless the context requires otherwise or unless otherwise noted, all references in this prospectus or any accompanying prospectus supplement to SilverBow Resources, Company, we, us or our are to SilverBow Resources, Inc. and, as applicable, its subsidiaries.
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This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission (the SEC) using a shelf registration process. Under this shelf registration process, the selling stockholders may, over time, offer and sell the securities described in this prospectus in one or more offerings or resales. This prospectus provides a general description of the securities. Each time the selling stockholders sell any of the securities described herein, the selling stockholders may provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add to, update or change the information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any applicable prospectus supplement, you should rely on the information in the applicable prospectus supplement. Please carefully read this prospectus, any applicable prospectus supplement and any free-writing prospectus together with the information contained in the documents we refer to under the heading Where You Can Find More Information.
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This prospectus and the documents incorporated by reference contain forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995, 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). These forward-looking statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this prospectus and the documents incorporated by reference, including those regarding our strategy, future operations, financial position, well expectations and drilling plans, estimated production levels, expected oil and natural gas pricing, estimated oil and natural gas reserves or the present value thereof, reserve increases, service costs, impact of inflation, capital expenditures, budget, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus, the words will, could, believe, anticipate, intend, estimate, budgeted, guidance, expect, may, continue, predict, potential, plan, project and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following risks and uncertainties:
| the severity and duration of world health events, including the COVID-19 pandemic, related economic repercussions, including disruptions in the oil and gas industry; |
| actions by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia (together with OPEC and other allied producing countries) with respect to oil production levels and announcements of potential changes in such levels; |
| the benefits of the transactions with SandPoint Operating, LLC (SandPoint) and Sundance; |
| risks related to the transactions with SandPoint and Sundance, including the risk that the benefits of the transactions may not be fully realized or may take longer to realize than expected, that the costs of the acquisitions will be significant, and that management attention will be diverted to transaction-related issues; |
| operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; |
| volatility in natural gas, oil and NGL prices; |
| future cash flows and their adequacy to maintain our ongoing operations; |
| liquidity, including our ability to satisfy our short- or long-term liquidity needs; |
| our borrowing capacity, future covenant compliance, cash flow and liquidity; |
| operating results; |
| asset disposition efforts or the timing or outcome thereof; |
| ongoing and prospective joint ventures, their structures and substance, and the likelihood of their finalization or the timing thereof; |
| the amount, nature and timing of capital expenditures, including future development costs; |
| timing, cost and amount of future production of oil and natural gas; |
| availability of drilling and production equipment or availability of oil field labor; |
| availability, cost and terms of capital; |
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| timing and successful drilling and completion of wells; |
| availability and cost for transportation of oil and natural gas; |
| costs of exploiting and developing our properties and conducting other operations; |
| competition in the oil and natural gas industry; |
| general economic and political conditions, including political tensions and war; |
| opportunities to monetize assets; |
| our ability to execute on strategic initiatives; |
| effectiveness of our risk management activities including hedging strategy; |
| environmental liabilities; |
| counterparty credit risk; |
| governmental regulation and taxation of the oil and natural gas industry; |
| developments in world oil and natural gas markets and in oil and natural gas-producing countries; |
| uncertainty regarding our future operating results; and |
| other risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2021 (Annual Report), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and other filings with the SEC. |
Many of the foregoing risks and uncertainties, as well as risks and uncertainties that are currently unknown to us, are, and may be, exacerbated by the COVID-19 pandemic and any consequent worsening of the global business and economic environment. New factors emerge from time to time, and it is not possible for us to predict all such factors. Should one or more of the risks or uncertainties described in this prospectus occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements speak only as of the date they are made. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this prospectus are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under the section entitled Risk Factors beginning on page 7 of this prospectus, as well as the other documents that we incorporate by reference into this prospectus and any applicable prospectus supplement, including our Annual Report, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law.
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WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to you by referring you to another document that we have filed with the SEC. You should read the information incorporated by reference because it is an important part of this prospectus. We incorporate by reference the following information or documents that we have filed with the SEC:
| our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 3, 2022; |
| our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 5, 2022; |
| our Current Reports on Form 8-K filed with the SEC on April 13, 2022, April 14, 2022, May 17, 2022 and July 5, 2022; |
| our Current Report on Form 8-K filed with the SEC on June 6, 2022 including (i) the unaudited consolidated statements of operations, statements of cash flows and statements of members common equity of Sundance for the three-month periods ended March 31, 2022 and 2021, and the notes related thereto and (ii) the unaudited pro forma condensed combined balance sheet of the Company as of March 31, 2022 and the unaudited pro forma condensed combined statements of operations of the Company for the three-month period ended March 31, 2022, filed as Exhibit 99.1 and Exhibit 99.2, respectively, thereto; |
| the description of our Common Stock contained in our registration statement on Form 8-A, filed May 2, 2017, as updated by Exhibit 4.9 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as subsequently amended or updated for the purpose of updating the description of our Common Stock; |
| the audited statement of revenues and direct operating expenses of the assets for the year ended December 31, 2020 and the unaudited statement of revenues and direct operating expenses of the assets for the nine months ended September 30, 2021 of Teal Natural Resources, LLC and Castlerock Production, LLC, each included in Exhibit 99.1 to our Amendment to Current Report on Form 8-K/A, filed with the SEC on February 2, 2022; |
| the financial statements as of December 31, 2021 and for the period from January 1, 2021 through April 22, 2021 (predecessor) and for the period from April 23, 2021 through December 31, 2021 (successor) of Sundance Energy, Inc. and its consolidated subsidiaries, as included on pages B-1 through B-39 of Annex B to our Definitive Proxy Statement on Schedule 14A filed with the SEC on May 9, 2022; and |
| the unaudited pro forma condensed combined financial information as of and for the year ended December 31, 2021 of SilverBow Resources, as included on pages 57 through 69 of our Definitive Proxy Statement on Schedule 14A filed with the SEC on May 9, 2022. |
In addition, all documents filed after the date of the filing of the registration statement of which this prospectus forms a part and prior to the effectiveness of the registration statement and all documents subsequently filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 with the SEC on any Current Report on Form 8-K and other portions of documents that are furnished, but not filed, pursuant to applicable rules promulgated by the SEC, unless otherwise noted), prior to the completion or termination of the applicable offering under this prospectus and any applicable prospectus supplement, shall be deemed to be incorporated by reference into this prospectus.
We file annual, quarterly and other reports and other information with the SEC (File No. 001-08754). The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and
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other information regarding issuers that file electronically with the SEC. You may inspect a copy of the registration statement through the SECs website. We make available free of charge on or through our Internet website, http://www.sbow.com, our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on our Internet website is not a part of this prospectus and is not incorporated by reference into this prospectus (unless specifically incorporated by reference into this prospectus as described above).
You may obtain any of the documents incorporated by reference into this prospectus from the SEC through the SECs website at the address provided above. We will provide to each person, including any beneficial owner, to whom this prospectus is delivered a copy of any or all of the information that is incorporated by reference into this prospectus (excluding any exhibit to those documents, unless the exhibit is specifically incorporated by reference into such documents), at no cost, by visiting our Internet website at www.sbow.com, or by writing or calling us at the following address:
Investor Relations Department
920 Memorial City Way, Suite 850
Houston, Texas 77024
(281) 874-2700
Except as provided above, no other information, including information on our website, is incorporated by reference in this prospectus.
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SilverBow is an independent oil and gas company headquartered in Houston, Texas. The Companys strategy is focused on acquiring and developing assets in the Eagle Ford and Austin Chalk located in South Texas. SilverBows acreage position in each of its operating areas is highly contiguous and designed for optimal and efficient horizontal well development. The Company has built a balanced portfolio of properties with a significant base of current production and reserves coupled with low-risk development drilling opportunities and meaningful upside from newer operating areas.
Our principal executive offices are located at 920 Memorial City Way, Suite 850, Houston, Texas 77024. The telephone number of our principal executive offices is (281) 874-2700. Our corporate website address is http://www.sbow.com. The information contained on our website does not constitute part of this prospectus.
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An investment in our securities involves a significant degree of risk. Before you invest in our securities you should carefully consider those risk factors included in our most recent Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K, which are incorporated herein by reference, and those risk factors that may be included in any applicable prospectus supplement, together with all of the other information included in this prospectus, any prospectus supplement and the documents we incorporate by reference, in evaluating an investment in our securities. If any of the risks discussed in the foregoing documents were to occur, our business, financial condition, results of operations and cash flows could be materially adversely affected. Also, please read the cautionary statement in this prospectus under Forward-Looking Statements.
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General
As of the date of this prospectus, we are authorized to issue up to 50,000,000 shares of stock, including up to 40,000,000 shares of Common Stock, par value $0.01 per share, and up to 10,000,000 shares of preferred stock, par value $0.01 per share (Preferred Stock). As of June 30, 2022, we had 22,306,506 shares of Common Stock and no shares of Preferred Stock issued and outstanding.
The following is a summary of the key terms and provisions of our equity securities. You should refer to the applicable provisions of our First Amended and Restated Certificate of Incorporation (our Certificate of Incorporation), our First Amended and Restated Bylaws (our Bylaws), the Delaware General Corporation Law (DGCL) and the documents we have incorporated by reference for a complete statement of the terms and rights of our capital stock.
Common Stock
Voting Rights. Each holder of Common Stock is entitled to one vote per share. Subject to the rights, if any, of the holders of any series of Preferred Stock pursuant to applicable law or the provisions of the certificate of designation creating that series, all voting rights are vested in the holders of shares of Common Stock. Holders of shares of Common Stock have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors can elect 100% of the directors, and the holders of the remaining shares voting for the election of directors will not be able to elect any directors.
Dividends. Dividends may be paid to the holders of Common Stock when, as and if declared by the board of directors of the Company (the Board) out of funds legally available for their payment, subject to the rights of holders of any Preferred Stock. We have never declared a cash dividend and we intend to continue our policy of using retained earnings for expansion of our business.
Rights upon Liquidation. In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of Common Stock will be entitled to share equally, in proportion to the number of shares of Common Stock held by them, in any of our assets available for distribution after the payment in full of all debts and distributions and after the holders of all series of outstanding Preferred Stock, if any, have received their liquidation preferences in full.
Non-Assessable. All outstanding shares of Common Stock are fully paid and non-assessable. Any additional Common Stock we or the selling stockholders offer and issue under this prospectus will also be fully paid and non-assessable.
No Preemptive Rights. Holders of Common Stock are not entitled to preemptive purchase rights in future offerings of our Common Stock.
Section 1123. We are prohibited from issuing any nonvoting equity securities to the extent required under Section 1123(a)(6) of the U.S. Bankruptcy Code and only for so long as Section 1123 of the U.S. Bankruptcy Code is in effect and applicable to us.
Listing. Our outstanding shares of Common Stock are listed on the NYSE under the symbol SBOW. Any additional Common Stock we issue will also be listed on the NYSE.
Preferred Stock
The Board can, without approval of our shareholders, issue one or more series of Preferred Stock and determine the number of shares of each series and the rights, preferences and limitations of each series. The
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following description of the terms of the Preferred Stock sets forth certain general terms and provisions of our authorized Preferred Stock. If we offer Preferred Stock, a description will be filed with the SEC and the specific designations and rights will be described in a prospectus supplement, including the following terms:
| the series, the number of shares offered and the liquidation value of the Preferred Stock; |
| the price at which the Preferred Stock will be issued; |
| the dividend rate, the dates on which the dividends will be payable and other terms relating to the payment of dividends on the Preferred Stock; |
| the liquidation preference of the Preferred Stock; |
| the voting rights of the Preferred Stock; |
| whether the Preferred Stock is redeemable or subject to a sinking fund, and the terms of any such redemption or sinking fund; |
| whether the Preferred Stock is convertible or exchangeable for any other securities, and the terms of any such conversion; and |
| any additional rights, preferences, qualifications, limitations and restrictions of the Preferred Stock. |
The description of the terms of the Preferred Stock to be set forth in an applicable prospectus supplement will not be complete and will be subject to and qualified in its entirety by reference to the certificate of designation relating to the applicable series of Preferred Stock. The registration statement of which this prospectus forms a part will include the certificate of designation as an exhibit or incorporate it by reference.
Undesignated Preferred Stock may enable our Board to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management. The issuance of shares of Preferred Stock may adversely affect the rights of the holders of our Common Stock. For example, any Preferred Stock issued may rank prior to our Common Stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of Common Stock. As a result, the issuance of shares of Preferred Stock may discourage bids for our Common Stock or may otherwise adversely affect the market price of our Common Stock or any existing Preferred Stock.
Any Preferred Stock will, when issued, be fully paid and non-assessable.
Anti-Takeover Effects of Delaware Law, Our Certificate of Incorporation and Our Bylaws
Some provisions of Delaware law, our Certificate of Incorporation and our Bylaws contain provisions that could make the following transactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise or removal of our incumbent officers and directors. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.
These provisions are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.
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Delaware Law
Section 203 of the DGCL prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:
| the transaction is approved by the Board before the date the interested stockholder attained that status; |
| upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or |
| on or after such time the business combination is approved by the Board and authorized at a meeting of stockholders by at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
An interested stockholder is defined as a person who, together with any affiliates or associates of such person, beneficially owns, directly or indirectly, 15% or more of the outstanding voting shares of a Delaware corporation. The term business combination is broadly defined to include a broad array of transactions, including mergers, consolidations, sales or other dispositions of assets having a total value in excess of 10% of the consolidated assets of the corporation or all of the outstanding stock of the corporation, and some other transactions that would increase the interested stockholders proportionate share ownership in the corporation.
We have elected to not be subject to the provisions of Section 203 of the DGCL.
Our Certificate of Incorporation and Our Bylaws
Provisions of our Certificate of Incorporation and our Bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our Common Stock.
Among other things, our Certificate of Incorporation and Bylaws:
| provide for the division of the Board into three classes, each class consisting as nearly as possible of one-third of the whole. The term of office of one class of directors expires each year; with each class of directors elected for a term of three years and until the stockholders elect their qualified successors, subject to the terms of the Nomination Agreement (as defined below); |
| provide that all vacancies, including newly created directorships, may, except as otherwise required by law or, if applicable, the rights of holders of a series of Preferred Stock or certain Board designation rights, and subject to the terms of the Nomination Agreement, be filled by a majority of directors then in office, even if less than a quorum, or by the sole remaining director; |
| provide that our Bylaws may be amended by the affirmative vote of the holders of at least 66 2/3% of our then outstanding voting stock; |
| provide that special meetings of our stockholders may only be called by our Chairman of the Board, Chief Executive Officer or by a majority of the total number of directors which the Company would have if there were no vacancies; |
| authorize the Board to adopt resolutions providing for the issuance of undesignated Preferred Stock. This ability makes it possible for the Board to issue, without stockholder approval, Preferred Stock with voting or other rights or preferences that could impede the success of any attempt to change control of us; |
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| provide that the authorized number of directors may be changed only by the Board, subject to the terms of the Nomination Agreement; |
| establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business (other than proposals submitted in accordance with Rule 14a-8 for inclusion in our proxy proposals) to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, for a proposal to be timely submitted for consideration at an annual meeting, notice must be delivered to our secretary not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Our Bylaws specify the requirements as to form and content of all stockholders notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting; |
| provide that our Bylaws may be amended by the Board; and |
| provide that that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or the Companys stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, the Certificate of Incorporation or Bylaws, or (4) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. |
Any person or entity purchasing or otherwise holding any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our Certificate of Incorporation regarding exclusive forum. The enforceability of similar exclusive forum provisions in other companies certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could rule that this provision in our Certificate of Incorporation is inapplicable or unenforceable.
The exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Director Nomination Agreement
In connection with our emergence from bankruptcy on April 22, 2016, we entered into the Director Nomination Agreement (the Nomination Agreement) with Strategic Value Partners, LLC (SVP) and certain other consenting noteholders named therein (the Consenting Noteholders). The Nomination Agreement is referenced in the Certificate of Incorporation as necessary to effectuate its terms. Pursuant to the Nomination Agreement:
(1) following the expiration of the initial terms of the Board, the Board will consist of seven members as follows:
(a) | the Chief Executive Officer of the Company, which shall be a Class III Director (as defined in the Certificate of Incorporation); |
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(b) | two nominees designated by SVP (the SVP Designated Directors), which shall be one Class I Director (as defined in the Certificate of Incorporation) and one Class III Director; provided, that (i) the number of nominees designated by SVP shall be reduced to one director, which shall be a Class III Director, at such time as SVP and its affiliates (other than other Consenting Noteholders) (the SVP Entities) collectively beneficially own Common Stock representing an equity percentage of less than 15% and greater than or equal to 8%, with the understanding that such reduction to one director shall be permanent and despite any later increase in their equity percentage, and (ii) SVP shall permanently, and despite any later increase in their equity percentage, no longer be entitled to designate a nominee at such time as the SVP Entities collectively beneficially own Common Stock representing an equity percentage of less than 8%; |
(c) | two nominees designated by the Consenting Noteholders (excluding SVP until such time that SVP is no longer entitled to designate an SVP Designated Director), which shall be two Class II Directors (as defined in the Certificate of Incorporation); provided, that (i) the number of nominees designated by the Consenting Noteholders shall be reduced to one director, which shall be a Class II Director, at such time as the Consenting Noteholders and their affiliates (the Noteholder Entities) collectively beneficially own Common Stock representing an equity percentage of less than 15% and greater than or equal to 8%, with the understanding that such reduction to one director shall be permanent and despite any later increase in their equity percentage, and (ii) except as set forth in section (d) below, such Consenting Noteholders shall permanently, and despite any later increase in their equity percentage, no longer be entitled to designate a nominee at such time as the Noteholder Entities collectively beneficially own Common Stock representing an equity percentage of less than 8%; |
(d) | for the purposes of calculating the equity percentage in clauses (i) and (ii) of section (c), with respect to SVPs ownership, the equity percentage shall only include the portion of SVPs equity percentage that exceeds 15% up to a maximum of 7.9%, until such time that SVP is no longer entitled to designate an SVP Designated Director. At such time that SVP is no longer entitled to designate an SVP Designated Director, all of SVPs ownership shall be included in the equity percentage calculations in clauses (i) and (ii) of section (c). For the purposes of section (c), the designation right contained in such provision shall still be available at the time SVP is no longer entitled to designate an SVP Designated Director, if at such time, the equity percentage ownership threshold in clause (ii) of section (c) is satisfied; and |
(e) | one independent director and one additional director (which will be the Chairman) nominated by the Nominating and Strategy Committee of the Board, which shall be a Class I Director and a Class III Director, respectively. |
(2) for so long as such persons are entitled to designate a nominee for director under the terms thereof, SVP and the Consenting Noteholders have the right to remove the respective directors nominated by them pursuant to the Nomination Agreement, and to designate an individual to fill the vacancy created by such removal or upon any other removal of such person as director under the Certificate of Incorporation or Bylaws on the date of such replacement designation.
The Nomination Agreement terminates upon the earlier to occur of (x) such time as the Consenting Noteholders in the aggregate no longer beneficially own Common Stock representing an equity percentage equal to or greater than 8% or (y) the delivery of written notice to the Company by all of the Consenting Noteholders, requesting the termination of the Nomination Agreement. Further, at such time as a particular Consenting Noteholder no longer beneficially owns any shares of Common Stock, all rights and obligations of such Consenting Noteholder under the Nomination Agreement will terminate.
As of June 30, 2022, the Consenting Noteholders own less than the requisite equity percentage necessary to maintain their right to nominate two Class II Directors under the Nomination Agreement and certain negative control rights provided for in the Certificate of Incorporation. As such, the related provisions of the Nomination
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Agreement for the right to nominate each of the Class II Directors and the Certificate of Incorporation are no longer operative.
Limitations of Liability and Indemnification Matters
Our Certificate of Incorporation limits the liability of our directors for monetary damages for breach of their fiduciary duty as directors, except for liability that cannot be eliminated under the DGCL. Delaware law provides that directors of a company will not be personally liable for monetary damages for breach of their fiduciary duty as directors, except for liabilities:
| for any breach of their duty of loyalty to us or our stockholders; |
| for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
| for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided under Section 174 of the DGCL; or |
| for any transaction from which the director derived an improper personal benefit. |
Any amendment, repeal or modification of these provisions will be prospective only and would not affect any limitation on liability of a director for acts or omissions that occurred prior to any such amendment, repeal or modification.
Our Certificate of Incorporation also provides that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our Certificate of Incorporation also permits us to purchase insurance on behalf of any officer, director, employee or other agent for any liability arising out of that persons actions as our officer, director, employee or agent, regardless of whether Delaware law would permit indemnification. We have entered into indemnification agreements with each of our directors and officers. These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liability that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the limitation of liability provision in Certificate of Incorporation and the indemnification agreements facilitates our ability to continue to attract and retain qualified individuals to serve as directors and officers.
The limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholders investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is American Stock Transfer & Trust Company, LLC.
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This prospectus relates to 4,148,472 shares of our Common Stock, which were issued by the Company to the selling stockholders in connection with an acquisition by the Company pursuant to the Purchase Agreement. The filing of the registration statement of which this prospectus forms a part is pursuant to our obligations under the registration rights agreement, dated June 30, 2022, between the Company and the selling stockholders, which was executed in connection with the closing of the transactions contemplated by the Purchase Agreement. We agreed to pay certain offering fees and expenses in connection with the registration of the selling stockholders securities and to indemnify the selling stockholders against certain liabilities.
The information contained in the table below in respect of the selling stockholders (including the number of shares of Common Stock beneficially owned and the number of shares of Common Stock offered) has been obtained from the selling stockholders and has not been independently verified by us. We may supplement this prospectus from time to time in the future to update or change this list of selling stockholders and the number of shares of Common Stock that may be offered and sold by any of the selling stockholders. The registration for resale of the shares of Common Stock does not necessarily mean that the selling stockholders will sell all or any of these shares. In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, shares of Common Stock in transactions exempt from the registration requirements of the Securities Act, after the date on which it provided the information set forth in the table below.
The information set forth in the following table regarding the beneficial ownership after resale of the shares of Common Stock is based upon the assumption that the selling stockholders will sell all of the shares of Common Stock beneficially owned by it that are covered by this prospectus. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares of Common Stock and the right to acquire such voting or investment power within 60 days through the exercise of any option, warrant or other right. Except as described in the footnotes to the following table, the selling stockholders named in the table have not held any position or office or had any other material relationship with us or our affiliates during the three years prior to the date of this prospectus. The inclusion of any shares of Common Stock in the footnotes of this table does not constitute an admission of beneficial ownership for the selling stockholders named below.
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As of June 30, 2022, there were 22,306,506 shares of our Common Stock issued and outstanding.
Name of selling stockholder |
Shares of Common Stock beneficially owned prior to the offering |
Shares of Common Stock to be offered |
Shares of Common Stock beneficially owned after the offering |
|||||||||||||||||
Number | Percentage | Number | Percentage | |||||||||||||||||
AG Energy Funding, LLC (1) |
1,546,851 | 6.9 | % | 1,546,851 | | | % | |||||||||||||
Apollo Atlas (Holdings) SPV, LLC (2) |
167,227 | * | 167,227 | | | % | ||||||||||||||
Apollo Kings Alley Credit SPV, L.P. (3) |
80,121 | * | 80,121 | | | % | ||||||||||||||
Apollo Moultrie Credit Fund L.P. (4) |
124,985 | * | 124,985 | | | % | ||||||||||||||
Apollo Tactical Value SPN Investments, L.P. (5) |
318,735 | 1.4 | % | 318,735 | | | % | |||||||||||||
ATCF SPV, L.P. (6) |
207,175 | * | 207,175 | | | % | ||||||||||||||
Apollo TR Opportunistic LTD (7) |
115,133 | * | 115,133 | | | % | ||||||||||||||
Apollo Union Street SPV, L.P. (8) |
63,315 | * | 63,315 | | | % | ||||||||||||||
MPI (London) Limited (9) |
10,283 | * | 10,283 | | | % | ||||||||||||||
Amissima Diversified Income ICAV (10) |
51,413 | * | 51,413 | | | % | ||||||||||||||
Tranquilidade Diversified Income ICAV (11) |
83,611 | * | 83,611 | | | % | ||||||||||||||
Ares Capital Corporation (12) |
1,015,215 | 4.6 | % | 1,015,215 | | | % | |||||||||||||
Ares Direct Finance I LP (12) |
19 | * | 19 | | | % | ||||||||||||||
CION Ares Diversified Credit Fund (12) |
16,722 | * | 16,722 | | | % | ||||||||||||||
Diversified Loan Fund-Private Debt A S.À R.L. (12) |
47,409 | * | 47,409 | | | % | ||||||||||||||
Ares Credit Strategies Insurance Dedicated Fund Series Interests of the SALI Multi-Series Fund, L.P. (12) |
7,609 | * | 7,609 | | | % | ||||||||||||||
Morgan Stanley Capital Group Inc. (17) |
292,649 | 1.3 | % | 292,649 | | | % |
* | Less than 1%. |
(1) | Angelo, Gordon & Co., L.P. (Angelo Gordon), in its capacity as manager of AG Energy Funding, LLC (AG Energy Funding), has sole power to vote and dispose of all Common Stock held by AG Energy Funding. Josh Baumgarten and Adam Schwartz are the co-managing members of AG GP LLC (AG GP), which is the general partner of Angelo Gordon, and Messrs. Baumgarten and Schwartz are the co-chief executive officers of Angelo Gordon. Each of Mr. Baumgarten, Mr. Schwartz, and AG GP may be deemed to control Angelo Gordon. |
(2) | Apollo Atlas (Holdings) SPV, LLC is a Delaware limited liability company, its sole member is Apollo Atlas Master Fund, LLC, a Cayman Islands limited liability company. Joseph Glatt, Tammy Jennissen and Sam Ellis are the managing members of Apollo Atlas Master Fund, LLC. |
(3) | Apollo Kings Alley Credit SPV, L.P. is a Delaware limited partnership, its general partner is Apollo Kings Alley Credit Advisors (DC), L.P., a Delaware limited partnership. Apollo Kings Alley Credit Advisors (DC), L.P.s general partner is Apollo Kings Alley Credit Advisors (DC-GP), LLC, a Delaware limited liability company. Apollo Kings Alley Credit Advisors (DC-GP), LLCs sole member is APH Holdings (DC), L.P., a Cayman Islands limited partnership. APH Holdings (DC), L.P.s general partner is Apollo Principal Holdings IV GP, Ltd., a Cayman Islands limited company. Scott Kleinman, Marc Rowan and James Zelter are the directors of Apollo Principal Holdings IV GP, Ltd. |
(4) | Apollo Moultrie Credit Fund, L.P. is a Delaware limited partnership, its general partner is Apollo Moultrie Credit Fund Advisors, L.P., a Delaware limited partnership. Apollo Moultrie Credit Fund Advisors, L.P.s general partner is Apollo Moultrie Capital Management, LLC, a Delaware limited liability company. Apollo Moultrie Capital Management, LLCs sole member is APH Holdings (DC), L.P., a Cayman Islands limited partnership. APH Holdings (DC), L.P.s general partner is Apollo Principal Holdings IV GP, Ltd., a Cayman Islands limited company. Scott Kleinman, Marc Rowan and James Zelter are the directors of Apollo Principal Holdings IV GP, Ltd. |
(5) | Apollo Tactical Value SPN Investments, L.P. is a Cayman Island limited partnership, its general partner is Apollo Tactical Value SPN Advisors (APO DC), L.P., a Cayman Islands limited partnership. Apollo |
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Tactical Value SPN Advisors (APO DC), L.P.s general partner is Apollo Tactical Value SPN Capital Management (APO DC-GP), LLC, an Anguilla limited liability company. Apollo Tactical Value SPN Capital Management (APO DC-GP), LLCs sole member is APH Holdings (DC), L.P., a Cayman Islands limited partnership. APH Holdings (DC), L.P.s general partner is Apollo Principal Holdings IV GP, Ltd., a Cayman Islands limited company. Scott Kleinman, Marc Rowan and James Zelter are the directors of Apollo Principal Holdings IV GP, Ltd. |
(6) | ATCF SPV, L.P. is a Delaware limited partnership, its general partner is Apollo Tower Credit Advisors (DC), L.P., a Cayman Islands limited partnership. Apollo Tower Credit Advisors (DC), L.P.s general partner is Apollo Tower Credit Advisors (DC-GP), LLC, a Cayman Islands limited liability company. Apollo Tower Credit Advisors (DC-GP), LLCs sole member is APH Holdings (DC), L.P., a Cayman Islands limited partnership. APH Holdings (DC), L.P.s general partner is Apollo Principal Holdings IV GP, Ltd., a Cayman Islands limited company. Scott Kleinman, Marc Rowan and James Zelter are the directors of Apollo Principal Holdings IV GP, Ltd. |
(7) | Apollo TR Opportunistic Ltd. is a Cayman Islands limited company. Joseph Glatt is the director of Apollo TR Opportunistic Ltd. |
(8) | Apollo Union Street SPV, L.P. is a Delaware limited partnership, its general partner is Apollo Union Street SPV Advisors, LLC, a Delaware limited liability company. Apollo Union Street SPV Advisors, LLCs managing member is APH Holdings (DC), L.P., a Cayman Islands limited partnership. APH Holdings (DC), L.P.s general partner is Apollo Principal Holdings IV GP, Ltd., a Cayman Islands limited company. Scott Kleinman, Marc Rowan and James Zelter are the directors of Apollo Principal Holdings IV GP, Ltd. |
(9) | MPI (London) Limited is a United Kingdom limited company, its investment manager is Apollo TRF MP Management, LLC, a Delaware limited liability company. Apollo TRF MP Management, LLCs sole member is Apollo Capital Management, L.P., a Delaware limited partnership. Apollo Capital Management, L.P.s general partner is Apollo Capital Management GP, LLC, a Delaware limited liability company. Apollo Capital Management GP, LLCs sole member is Apollo Management Holdings, L.P., a Delaware limited partnership. Apollo Management Holdings, L.P.s general partner is Apollo Management Holdings GP, LLC, a Delaware limited liability company. Marc Rowan, Scott Kleinman and James Zelter are the managers of Apollo Management Holdings GP, LLC. |
(10) | Amissima Diversified Income ICAV is an Irish Collective Asset-management Vehicle. Apollo Management International LLP, a United Kingdom limited liability partnership, is its portfolio manager. Apollo Management International LLPs member is AMI (Holdings), LLC, a Delaware limited liability company. AMI (Holdings), LLCs sole member is Apollo International Management, L.P., a Delaware limited partnership. Apollo International Management, L.P.s general partner is Apollo International Management GP, LLC, a Delaware limited liability company. Apollo International Management GP, LLCs sole member is Apollo Management Holdings, L.P., a Delaware limited partnership. Apollo Management Holdings, L.P.s general partner is Apollo Management Holdings GP, LLC, a Delaware limited liability company. Marc Rowan, Scott Kleinman and James Zelter are the managers of Apollo Management Holdings GP, LLC. |
(11) | Tranquilidade Diversified Income ICAV is an Irish Collective Asset-management Vehicle. Apollo Management International LLP, a United Kingdom limited liability partnership, is its portfolio manager. Apollo Management International LLPs member is AMI (Holdings), LLC, a Delaware limited liability company. AMI (Holdings), LLCs sole member is Apollo International Management, L.P., a Delaware limited partnership. Apollo International Management, L.P.s general partner is Apollo International Management GP, LLC, a Delaware limited liability company. Apollo International Management GP, LLCs sole member is Apollo Management Holdings, L.P., a Delaware limited partnership. Apollo Management Holdings, L.P.s general partner is Apollo Management Holdings GP, LLC, a Delaware limited liability company. Marc Rowan, Scott Kleinman and James Zelter are the managers of Apollo Management Holdings GP, LLC. |
(12) | Each of Ares Capital Corporation, Ares Direct Finance I LP, CION Ares Diversified Credit Fund, Diversified Loan Fund-Private Debt A S.À R.L. and Ares Credit Strategies Insurance Dedicated Fund Series Interests of the SALI Multi-Series Fund, L.P. (collectively, the Ares Entities) are governed by Ares Management LLC and certain of its affiliates (collectively, Ares Advisor Entities) which serve as |
17
managers, investment advisers or investment sub-advisors to such Area Entities. The sole member of Ares Management LLC is Ares Management Holdings L.P. (Ares Management Holdings) and the general partner of Ares Management Holdings is Ares Holdco LLC (Ares Holdco). The sole member of Ares Holdco is Ares Management Corporation (Ares Management). Ares Management GP LLC (Ares Management GP) is the sole holder of the Class B common stock, $0.01 par value per share, of Ares Management (the Ares Class B Common Stock) and Ares Voting LLC (Ares Voting) is the sole holder of the Class C common stock, $0.01 par value per share, of Ares Management (the Ares Class C Common Stock). Pursuant to Ares Managements Certificate of Incorporation, the holders of the Ares Class B Common Stock and the Ares Class C Common Stock, collectively, will generally have the majority of the votes on any matter submitted to the stockholders of Ares Management if certain conditions are met. The sole member of both Ares Management GP and Ares Voting is Ares Partners Holdco LLC (Ares Partners and together with Ares Advisor Entities, Ares Voting, Ares Management GP, Ares Management, Ares Holdco and Ares Management Holdings, the Ares Entities). Ares Partners is managed by a board of managers, which is composed of Michael Arougheti, Ryan Berry, R. Kipp deVeer, David Kaplan, Michael McFerran, Antony Ressler and Bennett Rosenthal (collectively, the Board Members). Mr. Ressler generally has veto authority over decisions by the Board Members. Each of the Ares Entities, and the Board Members, and the other directors, officers, partners, stockholders, members and managers of the Ares Entities, expressly disclaims beneficial ownership of any and all shares held by the Managed Funds, except to the extent of any pecuniary interest therein. |
(13) | Morgan Stanley Capital Group Inc. is a Delaware corporation. Brett Humphreys, Sebastian Crapanzano, Jay Hallik, Parker Corbin and Jakob Horder are the directors of Morgan Stanley Capital Group Inc. |
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As of the date of this prospectus, we have not been advised by the selling stockholders as to any plan of distribution. Distributions of the shares of Common Stock by the selling stockholders, or by any of the selling stockholders partners, pledgees, donees (including charitable organizations), transferees or other successors in interest, may from time to time be offered for sale either directly by such individual, or through underwriters, dealers or agents or on any exchange on which the shares of Common Stock may from time to time be traded, in the over-the-counter market, or in independently negotiated transactions or otherwise. The methods by which the shares of Common Stock may be sold include:
1. | privately negotiated transactions; |
2. | underwritten transactions; |
3. | exchange distributions and/or secondary distributions; |
4. | sales in the over-the-counter market; |
5. | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
6. | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
7. | a block trade (which may involve a cross trade) in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
8. | purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this prospectus; |
9. | short sales; |
10. | through the writing of options on the shares, whether or not the options are listed on an options exchange; |
11. | through the distribution of the shares by the selling stockholders to any of the selling stockholders partners, members or stockholders; |
12. | a combination of any such methods; and |
13. | any other method permitted pursuant to applicable law. |
The selling stockholders may also sell shares of Common Stock pursuant to an exemption from regulation pursuant to Rule 144 under the Securities Act, if available, rather than under this prospectus. The selling stockholders may elect to make an in-kind distribution of its shares of Common Stock to any of the selling stockholders members, partners or shareholders. To the extent that such members, partners or shareholders are not affiliates of ours, such members, partners or shareholders would thereby receive freely tradeable shares of our Common Stock pursuant to the distribution through the registration statement of which this prospectus is a part of.
Transactions may be effected by the selling stockholders at market prices prevailing at the time of sale or at negotiated prices. The selling stockholders may effect such transactions by selling the securities to underwriters or through broker-dealers, and such underwriters or broker-dealers may receive compensation in the form of discounts or commissions from the selling stockholders and may receive commissions from the purchasers of the securities for whom they may act as agent. The selling stockholders may agree to indemnify any underwriter, broker-dealer or agent that participates in transactions involving sales of the shares of Common Stock against certain liabilities, including liabilities arising under the Securities Act. We have agreed to register the shares of Common Stock for sale under the Securities Act and to indemnify the selling stockholders and each person who participates as an underwriter in the offering of the shares of Common Stock against certain civil liabilities, including certain liabilities under the Securities Act.
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In connection with sales of the securities under this prospectus, the selling stockholders may enter into hedging transactions with broker-dealers, who may in turn engage in short sales of the securities in the course of hedging the positions they assume. The selling stockholders also may sell securities short and deliver them to close its short positions, or loan or pledge the securities to broker-dealers that in turn may sell them.
The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of Common Stock owned by such selling stockholder and, if such selling stockholder defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424 or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as a selling stockholder under this prospectus.
The selling stockholders and any underwriters, dealers or agents that participate in distribution of the securities may be deemed to be underwriters, and any profit on sale of the securities by them and any discounts, commissions or concessions received by any underwriter, dealer or agent may be deemed to be underwriting discounts and commissions under the Securities Act.
There can be no assurances that the selling stockholders will sell any or all of the securities offered under this prospectus.
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The validity of the securities described in this prospectus will be passed upon for us by Gibson, Dunn & Crutcher LLP, Houston, Texas. If the securities are being distributed through underwriters or agents, the validity of the securities will be passed upon for the underwriters or agents by counsel identified in the related prospectus supplement. Matters relating to the securities will be passed for the selling stockholders by each of the selling stockholders own respective counsel.
The consolidated financial statements as of December 31, 2021 and 2020 and for each of the two years in the period ended December 31, 2021 incorporated by reference in this prospectus and in the registration statement have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.
Information set forth or incorporated by reference in this prospectus regarding our estimated quantities of oil and gas reserves and the discounted present value of future net cash flows therefrom is based upon estimates of such reserves and present values in the report prepared by H.J. Gruy and Associates, Inc., independent petroleum engineers. All such information has been so included on the authority of such firm as expert regarding the matters contained in its reports.
The audited statement of revenues and direct operating expenses of the assets of Teal Natural Resources, LLC and Castlerock Production, LLC for the year ended December 31, 2020, incorporated by reference in this prospectus and elsewhere in the registration statement, have been so incorporated by reference in reliance upon the report of Weaver and Tidwell, L.L.P., independent auditors, upon the authority of said firm as experts in accounting and auditing.
The financial statements of Sundance Energy, Inc. as of and for the year ended December 31, 2020, incorporated by reference in this prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are incorporated by reference in reliance upon the report of such firm given their authority as experts in accounting and auditing.
The consolidated financial statements of Sundance Energy, Inc. and its subsidiaries, as of December 31, 2021 (Successor) and, for the period from January 1, 2021 through April 22, 2021 (Predecessor) and for the period from April 23, 2021 through December 31, 2021 (Successor), incorporated in this Registration Statement on Form S-3 from SilverBow Resources, Inc.s Definitive Proxy Statement on Schedule 14A filed with the SEC on May 9, 2022, have been audited by Moss Adams LLP, independent auditors, as stated in their report (which report expresses an unqualified opinion and includes an other matter paragraph related to the classification of the oil and gas assets and liabilities as held for sale) which is incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
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Part II
Information Not Required in Prospectus
Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forth the costs and expenses payable by SilverBow Resources in connection with the sale of securities being registered hereby. All amounts are estimates, except the registration fee.
Item | Amount | |||
SEC registration fee |
$ | 11,244.63 | ||
Accounting fees and expenses |
* | |||
Legal fees and expenses |
* | |||
Trustees fees and expenses |
* | |||
Printing and engraving expenses |
* | |||
Listing fees |
* | |||
Miscellaneous |
* | |||
|
|
|||
Total |
* | |||
|
|
* | These fees are calculated based on the number of issuances and amount of securities offered and accordingly cannot be estimated at this time. |
Item 15. | Indemnification of Officers and Directors |
Delaware General Corporation Law
Section 145(a) of the DGCL provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding if he acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the persons conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees) actually and reasonably incurred by the person in connection with the defense or settlement of the action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which the person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which the action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses which the Delaware Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in
II-1
Section 145(a) and (b), or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by the person in connection therewith.
Section 145(d) of the DGCL provides that any indemnification under Section 145(a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in Section 145(a) and (b). The determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that the person is not entitled to be indemnified by the corporation as authorized in Section 145. The expenses (including attorneys fees) incurred by former directors and officers or other employees and agents may be so paid upon those terms and conditions, if any, as the corporation deems appropriate.
Section 145(f) of the DGCL provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section 145(g) of the DGCL provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the persons status as such, whether or not the corporation would have the power to indemnify the person against such liability under Section 145.
Section 145(k) of the DGCL provides that the indemnification and advancement of expenses provided by, or granted in accordance with, Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Certificate of Incorporation
Article XI of the Certificate of Incorporation provides that the Companys directors shall not be personally liable to the Company or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such elimination or limitation of liability is not permitted under the.
Article XV of the Certificate of Incorporation provides that each person who at any time is or was a director or officer of the Company, or any person who, while a director or officer of the Company, is or was serving at the Companys request as a director, officer, employee or agent of another corporation, partnership (limited or general), joint venture, trust, enterprise or nonprofit entity (including service with respect to employee benefit plans), shall be entitled to (1) indemnification and (2) the advancement of expenses incurred by such person in defending any proceeding in advance of its final disposition from the Company as, and to the fullest extent, permitted by applicable laws. The rights conferred in Article XV of the Certificate of Incorporation are not exclusive of any other right which any person may have or hereafter acquire under any statute, other provision of the Certificate of Incorporation, Bylaws, a separate agreement, vote of stockholders or disinterested directors or otherwise.
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Indemnification Agreements
The Company has entered into indemnification agreements with its directors and certain of its officers. Under the terms of the indemnification agreements, the Company has generally agreed to indemnify an officer or director for liabilities incurred to the fullest extent permitted by the DGCL. Also, as permitted under Delaware law, the indemnification agreements require the Company to advance expenses in defending any such action provided that the director or executive officer undertakes to repay the amounts if the person ultimately is determined not to be entitled to indemnification from the Company.
Directors and Officers Liability Insurance
The Nomination Agreement provides that the Company shall use its reasonable best efforts to maintain in effect at all times directors and officers indemnity insurance coverage reasonably satisfactory to SVP and the Consenting Noteholders. As a result, the Company maintains directors and officers liability insurance.
The above discussion of Section 145 of the Delaware General Corporation Law, the Certificate of Incorporation, the indemnification agreements and the Companys maintenance of directors and officers liability insurance is not intended to be exhaustive and is qualified in its entirety by reference to such statute and each respective document.
Item 16. | Exhibits |
* | Filed herewith. |
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Item 17. | Undertakings |
(a) 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 20% 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 (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic 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.
(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.
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(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.
(b) The undersigned registrant hereby undertakes 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 Section 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.
(c) 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 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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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 Houston, State of Texas, on July 6, 2022.
SILVERBOW RESOURCES, INC. | ||
By: | /s/ Sean C. Woolverton | |
Name: | Sean C. Woolverton | |
Title: | Chief Executive Officer and Director |
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below authorizes and appoints Sean C. Woolverton and Christopher M. Abundis as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities to sign any and all amendments (including pre- and post-effective amendments) to this registration statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact or agent, or his substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities held on July 6, 2022.
Signature | Title | |
/s/ Sean C. Woolverton Sean C. Woolverton |
Chief Executive Officer and Director (principal executive officer) | |
/s/ Christopher M. Abundis Christopher M. Abundis |
Executive Vice President, Chief Financial Officer, General Counsel & Secretary (principal financial officer) | |
/s/ W. Eric Schultz W. Eric Schultz |
Controller | |
/s/ Marcus C. Rowland Marcus C. Rowland |
Chairman of the Board | |
/s/ Michael Duginski Michael Duginski |
Director | |
/s/ Gabriel L. Ellisor Gabriel L. Ellisor |
Director | |
/s/ David Geenberg David Geenberg |
Director | |
/s/ Christoph O. Majeske Christoph O. Majeske |
Director | |
/s/ Charles W. Wampler Charles W. Wampler |
Director |
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Exhibit 5.1
July 6, 2022
SilverBow Resources, Inc.
920 Memorial City Way, Suite 850
Houston, Texas 77024
Re: | SilverBow Resources, Inc. |
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to SilverBow Resources, Inc., a Delaware corporation (the Company), in connection with the preparation and filing with the U.S. Securities and Exchange Commission (the Commission) of a Registration Statement on Form S-3 (the Registration Statement) under the Securities Act of 1933, as amended (the Securities Act), relating to the registration under the Securities Act and the proposed offering and sale from time to time pursuant to Rule 415 under the Securities Act by the selling shareholders named therein, together or separately, of up to 4,148,472 shares (the Shares) of the Companys common stock, par value $0.01 per share.
In arriving at the opinion expressed below, we have examined originals, or copies certified or otherwise identified to our satisfaction as being true and complete copies of the originals, of such documents, corporate records, certificates of officers of the Company and of public officials and other instruments as we have deemed necessary or advisable to enable us to render the opinion expressed below. In our examination, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. As to any facts material to this opinion, we have relied to the extent we deemed appropriate and without independent investigation upon statements and representations of officers and other representatives of the Company and others.
Based upon the foregoing, and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that the Shares are validly issued, fully paid and non-assessable.
We render no opinion herein as to matters involving the laws of any jurisdiction other than the United States of America and the Delaware General Corporation Law. This opinion is limited to the effect of the current state of the laws of the United States of America and, to the limited extent set forth above, the laws of the State of Delaware and the facts as they currently exist. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such facts.
July 6, 2022
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We consent to the filing of this opinion as an exhibit to the Registration Statement, and we further consent to the use of our name under the caption Legal Matters in the Registration Statement and the prospectus that forms a part thereof. In giving these consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
Exhibit 10.1
Execution Version
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this Agreement) is made and entered into as of June 30, 2022, by and among SilverBow Resources, Inc., a Delaware corporation (the Company), and each of the other parties listed on the signature pages hereof (each, an Initial Holder, collectively the Initial Holders, and, together with the Company, the Parties). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement (defined below).
WHEREAS, this Agreement is made in connection with the closing of the issuance and sale of Stock Consideration pursuant to the terms and conditions of the Purchase and Sale Agreement, dated as of April 13, 2022 (the Purchase Agreement), by and among the Company, SilverBow Resources Operating, LLC, a Texas limited liability company, Sundance Energy Inc., a Colorado corporation, Armadillo E&P, Inc., a Delaware corporation and SEA Eagle Ford, LLC, a Texas limited liability company; and
WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Holders (defined below) pursuant to the terms and conditions of the Purchase Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the Parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the meanings indicated:
Affiliate of any specified Person means any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified Person. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.
Agreement has the meaning set forth in the preamble.
Automatic Shelf Registration Statement means an automatic shelf registration statement as defined under Rule 405 promulgated under the Securities Act.
Blackout Period has the meaning set forth in Section 3(n).
Board means the board of directors of the Company.
Business Day means any day other than a Saturday, Sunday or any other day on which banking institutions in the State of Texas or the State of New York are authorized or required to be closed.
Commission means the Securities and Exchange Commission or any other federal agency then administering the Securities Act or Exchange Act.
Common Stock means the common stock, par value $0.01 per share, of the Company.
Company has the meaning set forth in the preamble.
Company Securities means any equity interest of any class or series in the Company.
Demand Notice has the meaning set forth in Section 2(b)(i).
Demand Registration has the meaning set forth in Section 2(b)(i).
Effective Date means the time and date that a Registration Statement is first declared effective by the Commission or otherwise becomes effective.
Effectiveness Period has the meaning set forth in Section 2(a)(iii).
Equity Percentage means, for any Person, the percentage produced by dividing the number of shares of Common Stock owned by such Person by the total number of shares of Common Stock that are outstanding at such time.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
Holder means (a) each Initial Holder and (b) any person who becomes a party to this Agreement pursuant to Section 8(e) as a Permitted Transferee. A Holder shall cease to be a Holder hereunder at such time as it ceases to hold any Registrable Securities.
Holder Indemnified Person has the meaning set forth in Section 6(a).
Initial Holder has the meaning set forth in the preamble.
Initiating Holders means the Holders delivering the Demand Notice or the Underwritten Offering Notice, as applicable.
Losses has the meaning set forth in Section 6(a).
Material Adverse Change means (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States; (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States; (iii) a material outbreak or escalation of armed hostilities or other international or national calamity involving the United States or the declaration by the United States of a national emergency or war or a change in national or international financial, political or economic conditions; and (iv) any event, change, circumstance or effect that is or is reasonably likely to be materially adverse to the business, properties, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company and its subsidiaries taken as a whole.
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Minimum Amount has the meaning set forth in Section 2(b).
Opt-Out Notice has the meaning set forth in Section 2(e).
Parties has the meaning set forth in the preamble.
Permitted Transferee means (a) with respect to any Initial Holder, any of the direct or indirect partners, shareholders or members of such Initial Holder or any trust, family partnership or family limited liability company, the beneficiaries, partners or members of which are an Initial Holder and (b) any Affiliate of a Holder.
Person means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, estate, trust, government (or an agency or subdivision thereof) or other entity of any kind.
Piggyback Notice has the meaning set forth in Section 2(d).
Piggyback Registration has the meaning set forth in Section 2(d).
Proceeding means any action, claim, suit, proceeding or investigation (including a preliminary investigation or partial proceeding, such as a deposition) pending or, to the knowledge of the Company, to be threatened.
Prospectus means the prospectus included in a Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A, Rule 430B or Rule 430C promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement has the meaning set forth in the recitals.
Registrable Securities means, collectively, (i) the Stock Consideration, (ii) any additional shares of Common Stock paid, issued or distributed in respect of any such shares by way of a stock dividend or distribution, or in connection with a combination of shares, and any security into which such Common Stock shall have been converted or exchanged in connection with a recapitalization, reorganization, reclassification, merger, consolidation, exchange, distribution or otherwise; provided, however, that Registrable Securities shall not include: (i) any shares of Common Stock that have been registered under the Securities Act and disposed of pursuant to an effective Registration Statement or otherwise transferred to a Person who is not entitled to the registration and other rights hereunder; (ii) any shares of Common Stock that have been sold or
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transferred by any Holder thereof pursuant to Rule 144 (or any similar provision then in force under the Securities Act) and the transferee thereof does not receive restricted securities as defined in Rule 144; (iii) after the second anniversary of the Effective Date, any shares of Common Stock that may be sold or transferred by any Holder thereof pursuant to Rule 144 (or any similar provision then in force under the Securities Act) or pursuant to any other exemption from the registration requirements of the Securities Act without volume limitations or other restrictions; and (iv) any shares of Common Stock that cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).
Registration Expenses has the meaning set forth in Section 5.
Registration Statement means a registration statement of the Company in the form required to register the resale of the Registrable Securities under the Securities Act and other applicable law, and including any Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
Requested Underwritten Offering has the meaning set forth in Section 2(c).
Rule 144 means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time.
Rule 405 means Rule 405 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time.
Rule 415 means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time.
Rule 424 means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
Selling Expenses means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for the Holders.
Shelf Registration Statement means a Registration Statement of the Company filed with the Commission on Form S-3 (or any successor form or other appropriate form under the Securities Act) covering the Registrable Securities, as applicable, for an offering to be made on a continuous or delayed basis pursuant to Rule 415 (or any similar rule that may be adopted by the Commission), including without limitation any such Registration Statement filed pursuant to Section 2(a), and all amendments and supplements to such Shelf Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein.
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Stock Consideration has the meaning given to such term in the Purchase Agreement.
Suspension Period has the meaning set forth in Section 8(b).
Trading Market means the principal national securities exchange on which Registrable Securities are listed.
Underwritten Offering means an underwritten offering of Common Stock for cash (whether a Requested Underwritten Offering or in connection with a public offering of Common Stock by the Company, a public offering of Common Stock by stockholders, or both, but excluding an offering relating solely to an employee benefit plan, an offering relating to a transaction on Form S-4 or S-8 or an offering on any registration statement form that does not permit secondary sales).
Underwritten Offering Notice has the meaning set forth in Section 2(c).
WKSI means a well known seasoned issuer as defined under Rule 405 under the Securities Act.
Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (b) references to Sections refer to Sections of this Agreement; (c) the terms include, includes, including and words of like import shall be deemed to be followed by the words without limitation; (d) the terms hereof, herein or hereunder refer to this Agreement as a whole and not to any particular provision of this Agreement; (e) unless the context otherwise requires, the term or is not exclusive and shall have the inclusive meaning of and/or; (f) defined terms herein will apply equally to both the singular and plural forms and derivative forms of defined terms will have correlative meanings; (g) references to any law or statute shall include all rules and regulations promulgated thereunder, and references to any law or statute shall be construed as including any legal and statutory provisions consolidating, amending, succeeding or replacing the applicable law or statute; (h) references to any Person include such Persons successors and permitted assigns; and (i) references to days are to calendar days unless otherwise indicated.
2. Registration.
(a) Shelf Registration
(i) Within five Business Days after the date hereof, the Company shall prepare and file a Registration Statement under the Securities Act to permit the public resale by the Holders of all Registrable Securities from time to time as permitted by Rule 415 under the Securities Act and subject to the terms and conditions specified in this Section 2(a). The Company shall use commercially reasonable efforts to cause any such Shelf Registration Statement to become or be declared effective as soon as practicable after the filing thereof, including by filing an Automatic Shelf Registration Statement that becomes effective upon filing with the Commission in accordance with Rule 462(e) under the Securities Act to the extent the Company is then a WKSI. Promptly following the Effective Date of the Shelf Registration Statement, the Company shall notify the Holders of the effectiveness of such Registration Statement.
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(ii) The Shelf Registration Statement shall be on Form S-3 or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar rule adopted by the Commission then in effect) at any time beginning on the Effective Date for such Registration Statement. The Shelf Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to the Holders, including providing for a distribution to, and resale by, the direct and indirect members, stockholders or partners of such Holder (each, a Member Distribution) and (ii) the Company shall, at the reasonable request of such Holder if seeking to effect a Member Distribution, file any prospectus supplement or post-effective amendments and otherwise take any action reasonably necessary to include such language, if such language was not included in the initial Shelf Registration Statement, or revise such language if deemed reasonably necessary by such investor Holder to effect any such Member Distribution.
(iii) The Company shall use commercially reasonable efforts to cause the Shelf Registration Statement to remain continuously effective, and to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available or, if not available, that another Registration Statement is available, for the resale by the Holders of all Registrable Securities as permitted by Rule 415 under the Securities Act and subject to the terms, conditions and restrictions of this Agreement, until the date on which all of the Registrable Securities have been sold (the Effectiveness Period).
(iv) At the time it becomes effective, (A) the Shelf Registration Statement (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (B) in the case of any Prospectus contained in the Shelf Registration Statement, such Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which such statements are made, not misleading.
(b) Demand Registration.
(i) To the extent the Registrable Securities are not included on a Registration Statement filed under Section 1(a) above, any Holder or group of Holders shall have the option and right, exercisable by delivering a written notice to the Company (a Demand Notice), to require the Company to, pursuant to the terms of and subject to the limitations contained in this Agreement, prepare and file with the Commission a Registration Statement registering the offering and sale of the number and type of Registrable Securities on the terms and conditions specified in the Demand Notice, which may include sales on a delayed or continuous basis pursuant to a Shelf Registration
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Statement pursuant to Rule 415 (a Demand Registration); provided, however, that in no event shall any eligible Holder be entitled to exercise more than two Demand Registrations for its Registrable Securities. The Demand Notice must set forth the name and address of the Initiating Holders, the number of Registrable Securities that the Initiating Holders intend to include in such Demand Registration and the intended methods of disposition thereof. Notwithstanding anything to the contrary herein, in no event shall the Company be required to effectuate a Demand Registration for Registrable Securities representing an Equity Percentage of less than 5% (the Minimum Amount).
(ii) Within five Business Days of the receipt of the Demand Notice, the Company shall, subject to the limitations of this Section 2(b), file a Registration Statement in accordance with the terms and conditions of the Demand Notice, which Registration Statement shall cover all of the Registrable Securities to be included in the Demand Registration. The Company shall use commercially reasonable best efforts to cause such Registration Statement to be declared and remain effective under the Securities Act during the Effectiveness Period.
(iii) Subject to the other limitations contained in this Agreement, the Company is not obligated hereunder to effect (A) a Demand Registration within 180 days of the closing of any Underwritten Offering or such longer period of time as may be set forth in the underwriters lock-up agreement for the Underwritten Offering (provided such Underwritten Offering is completed), (B) a subsequent Demand Registration pursuant to a Demand Notice if a Registration Statement covering all of the Registrable Securities held by the Holder providing such Demand Notice shall have become effective under the Securities Act and remains effective under the Securities Act and is sufficient to permit offers and sales of the number and type of Registrable Securities on the terms and conditions specified in the Demand Notice in accordance with the intended timing and method or methods of distribution thereof specified in the Demand Notice or (C) more than one Demand Registration or Underwritten Offering every 180 days. No Demand Registration shall be deemed to have occurred for purposes of this Section 2(b)(iii) if the Registration Statement relating thereto does not become effective or is not maintained effective for the period required pursuant to Section 2(b)(ii), in which case the Initiating Holders shall be entitled to an additional Demand Registration in lieu thereof.
(iv) An Initiating Holder and any other Holder that has requested its Registrable Securities be included in a Demand Registration may withdraw all or any portion of its Registrable Securities included in a Demand Registration from such Demand Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon delivery of a notice by the Initiating Holders to the effect that the Initiating Holders are withdrawing all or an amount such that the remaining amount is below the Minimum Amount of their Registrable Securities to be included in a Demand Registration, the Company may, at its option, cease all efforts to secure effectiveness of the applicable Registration Statement. Such registration shall be deemed a Demand Registration unless (i) each Initiating Holder shall have paid or reimbursed the Company for its pro rata share of all commercially reasonable and documented out-of-pocket fees and expenses incurred by the Company in connection with the withdrawn registration of such Registrable Securities (based on the number of securities such Initiating Holder sought to register, as compared to the total number of securities included in such Demand Registration) or (ii) the withdrawal is made (A) following the occurrence of a Material Adverse Change or (B) because the registration would require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential.
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(v) Subject to the limitations contained in this Agreement, the Company shall effect any Demand Registration on Form S-3 or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities and shall contain a prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar rule adopted by the Commission then in effect) at any time beginning on the Effective Date for such Registration Statement. The Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to the Holders. In the event the Company becomes, and is at the time of its receipt of a Demand Notice, a WKSI, the Demand Registration for any offering and selling of Registrable Securities shall be effected pursuant to an Automatic Shelf Registration Statement, which shall be on Form S-3 or any equivalent or successor form under the Securities Act (if available to the Company). If at any time a Registration Statement on Form S-3 is effective and a Holder provides written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration Statement, the Company will amend or supplement such Registration Statement as soon as reasonably practicable as may be necessary in order to enable such offering to take place.
(vi) Without limiting Section 3, in connection with any Demand Registration pursuant to and in accordance with this Section 2(b), the Company shall (A) promptly prepare and file or cause to be prepared and filed (1) such additional forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents, as may be necessary or advisable to register or qualify the securities subject to such Demand Registration, including under the securities laws of such states as the Holders shall reasonably request; provided, however, that no such qualification shall be required in any jurisdiction where, as a result thereof, the Company would become subject to general service of process or to taxation or qualification to do business in such jurisdiction solely as a result of registration and (2) such forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents as may be necessary to apply for listing or to list the Registrable Securities subject to such Demand Registration on the Trading Market and (B) do any and all other acts and things that may be commercially reasonably necessary or appropriate or reasonably requested by the Holders to enable the Holders to consummate a public sale of such Registrable Securities in accordance with the intended timing and method or methods of distribution thereof.
(vii) In the event a Holder transfers Registrable Securities included on a Registration Statement and such Registrable Securities remain Registrable Securities following such transfer, at the request of such Holder, the Company shall amend or supplement such Registration Statement as may be necessary in order to enable such transferee to offer and sell such Registrable Securities pursuant to such Registration Statement; provided that in no event shall the Company be required to file a post-effective amendment to the Registration Statement unless the Company has received written consent therefor from stockholders for whom securities have been registered on (but not yet sold under) such Registration Statement, other than such Holder, Affiliates of such Holder or transferees of such Holder and the Company receives a written request from the subsequent transferee, requesting that its shares of Common Stock be included in the Registration Statement, with all information reasonably requested by the Company.
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(c) Requested Underwritten Offering.
(i) Any Holder or group of Holders for whom Registrable Securities have been included in a Shelf Registration Statement covering such Registrable Securities, or any Holder or group of Holders effectuating a Demand Registration pursuant to the terms of Section 2(b), shall have the option and right, exercisable by delivering written notice to the Company of its intention to distribute Registrable Securities by means of an Underwritten Offering (an Underwritten Offering Notice), to require the Company, pursuant to the terms of and subject to the limitations of this Agreement, to effectuate a distribution of any or all of its Registrable Securities by means of an Underwritten Offering pursuant to an effective Registration Statement covering such Registrable Securities (or pursuant to an effective Automatic Shelf Registration Statement) (a Requested Underwritten Offering); provided, however, that that in no event shall (A) any Holder or group of affiliated Holders be entitled to exercise a Requested Underwritten Offering for its Registrable Securities unless it reasonably expects the proceeds from the sale of Registrable Securities in any such Underwritten Offering (before the deduction of underwriting discounts) to exceed $20 million in the aggregate, (B) any Holder or group of affiliated Holders be entitled to exercise more than three Requested Underwritten Offerings for its Registrable Securities and (C) the Company be required to effect more than one Underwritten Offering or Demand Registration every 180 days (provided, that any such 180 day period shall not be extended due to the existing of any lock-up agreement for a longer period (other than any such lock-up restricting the Companys ability to effect an Unwritten Offering for any such longer period), notwithstanding anything to the contrary in Section 2(b)(iii)). The managing underwriter or managing underwriters of a Requested Underwritten Offering shall be designated by the Initiating Holders (provided, however, that the designated managing underwriter or managing underwriters shall be reasonably acceptable to the Company). Any Requested Underwritten Offering shall constitute a Demand Registration of the Initiating Holders for purposes of Section 2(b)(iii), unless an Underwritten Offering Notice relating to a Demand Registration is delivered to the Company concurrent with a related Demand Notice.
(ii) If the managing underwriter or underwriters of a proposed Underwritten Offering of the Registrable Securities (or, in the case of a Demand Registration not being underwritten, the Initiating Holders), advise the Company that, in its or their opinion, the number of securities requested to be included in such Underwritten Offering or Demand Registration, as applicable, exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the securities to be included in such Demand Registration shall be allocated, (A) first, to the Holders (including any Initiating Holders) that have requested to participate in such Demand Registration based on the relative number of Registrable Securities then held by such Holders; (B) second, and only if all the securities referred to in clause (A) have been included in such registration, to the Company up to the number of securities that the Company proposes to include in such registration that, in the opinion of the managing underwriter or underwriters (or
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the Initiating Holders, as the case may be) can be sold without having such adverse effect and (C) third, and only if all of the securities referred to in clause (B) have been included in such registration, up to the number of securities that in the opinion of the managing underwriter or underwriters (or the Initiating Holders, as the case may be), can be sold without having such adverse effect.
(d) Piggyback Registration.
(i) If the Company shall at any time propose to conduct an Underwritten Offering, the Company shall promptly notify the Holders of such proposal reasonably in advance of (and in any event at least five Business Days before) the commencement of the offering, which notice will set forth the principal terms and conditions of the issuance, including the proposed offering price (or range of offering prices), the anticipated filing date of the Registration Statement and the number of shares of Common Stock that are proposed to be registered (the Piggyback Notice); provided, however, notwithstanding any other provision of this Agreement, if the managing underwriter or managing underwriters of an Underwritten Offering other than a Requested Underwritten Offering advise the Company that in their reasonable opinion that the inclusion of any of the Holders Registrable Securities requested for inclusion in the subject Underwritten Offering (and any related registration, if applicable) would likely have an adverse effect in any material respect on the price, timing or distribution of Common Stock proposed to be included in such Underwritten Offering, the Company shall have no obligation to provide a Piggyback Notice to the Holder and the Holder shall have no right to include any Registrable Securities in such Underwritten Offering (and any related registration, if applicable). The Piggyback Notice shall offer the Holders the opportunity to include for registration in such Underwritten Offering (and any related registration, if applicable) the number of Registrable Securities as they may request (a Piggyback Registration); provided, however, that in the event that the Company proposes to effectuate the subject Underwritten Offering pursuant to an effective Shelf Registration Statement of the Company other than an Automatic Shelf Registration Statement, only Registrable Securities of the Holders which are subject to an effective Shelf Registration Statement may be included in such Piggyback Registration. The Company shall use commercially reasonable efforts to include in each such Piggyback Registration such Registrable Securities for which the Company has received written requests for inclusion therein within three Business Days after sending the Piggyback Notice. If a Holder decides not to include all of its Registrable Securities in any Registration Statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent Registration Statement or Registration Statements as may be filed by the Company with respect to offerings of Common Stock, all upon the terms and conditions set forth herein.
(ii) If the managing underwriter or managing underwriters of an Underwritten Offering advise the Company and the Holder who has requested its Registrable Securities be included in such offering following a Piggyback Notice that, in their commercially reasonable opinion, the inclusion of all of the Holders Registrable Securities requested for inclusion in the subject Registration Statement (and any other Common Stock proposed to be included in such offering) would likely have an adverse effect in any material respect on the price, timing or distribution of Common Stock proposed to be included in such offering by the Company, the Company shall
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include in such Underwritten Offering only that number of shares of Common Stock proposed to be included in such Underwritten Offering that, in the commercially reasonable opinion of the managing underwriter or managing underwriters, will not have such effect, with such number to be allocated as follows: (A) first, (1) in the case of a Requested Underwritten Offering, to the Holders that have requested to participate in such Requested Underwritten Offering based on the number of Registrable Securities such Holders are entitled to include in such Requested Underwritten Offering and, if there remains availability for additional shares of Common Stock to be included in such registration, to the Company, or (2) in the case of any other Underwritten Offerings, to the Company, (B) if there remains availability for additional shares of Common Stock to be included in such registration, second pro-rata among all Holders desiring to register Registrable Securities based on the number of Registrable Securities such Holder is entitled to include in such registration and, if applicable, to any other Holders on whose behalf the Company filed such Registration Statement and (C) if there remains availability for additional shares of Common Stock to be included in such registration, third pro-rata among all other Holders of Common Stock who may be seeking to register such Common Stock based on the number of Common Stock such Holder is entitled to include in such registration. If a Holder disapproves of the terms of any such Underwritten Offering, such Holder may elect to withdraw therefrom by written notice to the Company and the managing underwriter(s) delivered on or prior to the time of the commencement of such offering. Any Registrable Securities withdrawn from such underwriting shall be excluded and withdrawn from the registration.
(iii) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2(d) at any time in its sole discretion whether or not any Holder has elected to include Registrable Securities in such Registration Statement. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 5 hereof.
(iv) A Holder shall have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a Piggyback Registration by giving written notice to the Company of its request to withdraw; provided, that (i) such request must be made in writing prior to the effectiveness of such Registration Statement and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, such Holder shall no longer have any right to include Registrable Securities in the Piggyback Registration as to which such withdrawal was made.
(v) No registration of Registrable Securities effected pursuant to a request under this Section 2(d) be deemed to have been effected pursuant to Section 2(b) or shall relieve the Company of its obligations under Section 2(b).
(e) Opt-Out Notices.
(i) Any Holder may deliver written notice (an Opt-Out Notice) to the Company requesting that such Holder not receive notice from the Company of the proposed filing of any Underwritten Offering or the withdrawal of any Underwritten Offering or any event that would lead to a Suspension Period as contemplated by Section 3(e) and Section 3(n); provided, however, that such Holder may later revoke any such Opt-Out Notice in writing; provided, further, that if the Company has provided a Demand Notice or a Piggyback Notice at the time a Holder revokes
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its Opt-Out Notice, such revocation shall not extend any applicable response period. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not deliver any notice to such Holder pursuant to Section 2(b), Section 2(c) or Section 2(d), as applicable, and such Holder shall no longer be entitled to the rights associated with any such notice and each time prior to a Holders intended use of an effective Registration Statement, such Holder will notify the Company in writing at least two Business Days in advance of such intended use, and if a notice of a Suspension Period was previously delivered (or would have been delivered but for the provisions of this Section 2(e)) and the Suspension Period remains in effect, the Company will so notify such Holder, within one Business Day of such Holders notification to the Company, by delivering to such Holder a copy of such previous notice of such Suspension Period, and thereafter will provide such Holder with the related notice of the conclusion of such Suspension Period immediately upon its availability.
3. Registration and Underwritten Offering Procedures.
The procedures to be followed by the Company and any Holder or group of Holders electing to sell Registrable Securities in a Registration Statement pursuant to this Agreement, and the respective rights and obligations of the Company and the Holders, with respect to the preparation, filing and effectiveness of such Registration Statement and the effectuation of any Underwritten Offering, are as follows:
(a) Registration Statement Holder Comments.
In connection with any Registration Statement under this Agreement, the Company will, at least three Business Days prior to the anticipated filing of the Registration Statement and any related Prospectus or any amendment or supplement thereto (other than, after effectiveness of the Registration Statement, any filing made under the Exchange Act that is incorporated by reference into the Registration Statement), (i) furnish to the Holders copies of all such documents prior to filing, or notice that such filing has been made and the document is available on EDGAR and (ii) use commercially reasonable efforts to address in each such document when so filed with the Commission such comments relating to itself or its intended manner of distribution (only) as the Holders reasonably shall propose prior to the filing thereof.
(b) Piggyback Registration and Underwritten Offering Holder Comments.
In connection with a Piggyback Registration or a Requested Underwritten Offering, the Company will, at least three Business Days prior to the anticipated filing of any initial Registration Statement that identifies the Holders and any related Prospectus or any amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name the Holders and provide information with respect thereto), as applicable, (i) furnish to the Holders copies of any such Registration Statement or related Prospectus or amendment or supplement thereto that identify the Holders and any related Prospectus or any amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name the Holders and provide information with respect thereto) prior to filing, or notice that such filing has been made and the document is available on EDGAR and (ii) use commercially reasonable efforts to address in each such document when so filed with the Commission such comments relating to itself or its intended manner of distribution (only) as the Holders reasonably shall propose prior to the filing thereof.
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(c) Maintain Effectiveness.
The Company will use commercially reasonable efforts to as promptly as reasonably practicable (i) prepare and file with the Commission such amendments, including post-effective amendments, and supplements to each Registration Statement and the Prospectus used in connection therewith as may be necessary under applicable law to keep such Registration Statement continuously effective with respect to the disposition of all Registrable Securities covered thereby for its Effectiveness Period and, subject to the limitations contained in this Agreement, prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities held by the Holders; (ii) cause the related Prospectus to be amended or supplemented by any required prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; and (iii) respond to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably practicable provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to a Holder as a selling stockholder but not any comments that would result in the disclosure to a Holder of material and non-public information concerning the Company.
(d) Compliance with Securities Laws.
The Company will comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement.
(e) Notice.
The Company will notify any Holder that is included in a Registration Statement as promptly as reasonably practicable: (i)(A) when a Prospectus or any prospectus supplement or post-effective amendment to a Registration Statement in which a Holder is included has been filed, or notice that such filing has been made and the document is available on EDGAR; (B) when the Commission notifies the Company whether there will be a review of the applicable Registration Statement and whenever the Commission comments in writing on such Registration Statement (in which case the Company shall provide true and complete copies thereof and all written responses thereto to a Holder that pertains to such Holder as a selling stockholder); and (C) with respect to each applicable Registration Statement or any post-effective amendment thereto, when the same has been declared effective; (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information that pertains to a Holder as a seller of Registrable Securities; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
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Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no notice by the Company shall be required pursuant to this clause (v) in the event that the Company either promptly files a prospectus supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which in either case, contains the requisite information that results in such Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading).
(f) Avoidance of Stop Orders and Suspension of Qualification.
The Company will use commercially reasonable efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as reasonably practicable, or if any such order or suspension is made effective during any Blackout Period or Suspension Period, as promptly as reasonably practicable after such Blackout Period or Suspension Period is over.
(g) Delivery of Registration Statement.
During the Effectiveness Period, the Company will furnish to the Holders, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by the Holders (including those incorporated by reference) promptly after the filing of such documents with the Commission; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is available on the Commissions EDGAR system.
(h) Delivery of Prospectus.
The Company will promptly deliver to the Holders, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) authorized by the Company for use and each amendment or supplement thereto as the Holders may reasonably request during the Effectiveness Period; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is available on the Commissions EDGAR system. Subject to the terms of this Agreement, including Section 8(b), the Company consents to the use of such Prospectus and each amendment or supplement thereto by the selling Holder in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
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(i) Certificates; Cooperation.
The legend on any Registrable Securities covered by this Agreement shall be removed if (i) such Registrable Securities are validly sold or distributed pursuant to an effective registration statement in accordance with the Plan of Distribution set forth therein, (ii) such Registrable Securities may be sold by the Holder thereof free of restrictions pursuant to Rule 144(b) under the Securities Act or (iii) such Registrable Securities are being sold, assigned or otherwise transferred pursuant to Rule 144 under the Securities Act; provided, that with respect to clause (i), (ii) or (iii) above, the Holder of such Registrable Securities has provided all necessary documentation and evidence as may reasonably be required by the Company to confirm that the legend may be removed under applicable securities law. The Company shall cooperate with the applicable Holder of Registrable Securities covered by this Agreement to effect removal of the legend on such shares pursuant to this Section 3(i) as soon as reasonably practicable after delivery of notice from such Holder that the conditions to removal are satisfied (together with any documentation required to be delivered by such Holder pursuant to the immediately preceding sentence), which may include, among other things, causing to be delivered an opinion of the Companys counsel to the Companys transfer agent in a form and substance reasonably satisfactory to the transfer agent. The Company shall bear all transfer agent fees and fees of the Companys counsel associated with the removal of a legend pursuant to this Section 3(i). Additionally, in connection with any non-marketed, non-underwritten offering taking the form of a block trade to a financial institution, qualified institutional buyer (as defined in Rule 144A under the Securities Act) or institutional accredited investor (as defined in Rule 501(a) of Regulation D under the Securities Act) or other disposition of Registrable Securities by any Holder, the Company agrees to use its commercially reasonable efforts to timely furnish any information or take any actions reasonably requested by the Holders in connection with such a block trade, including the delivery of customary comfort letters, customary legal opinions and customary underwriter due diligence, in each case subject to receipt by the Company, its auditors and legal counsel of representation and documentation by such Persons to permit the delivery of such comfort letter and legal opinions.
(j) Required Supplements and Amendments.
Upon the occurrence of any event contemplated by Section 3(e)(v), as promptly as reasonably practicable, the Company will prepare a supplement or amendment, including a post-effective amendment, if required by applicable law, to the affected Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(k) Duties of Holders.
With respect to Underwritten Offerings, (i) the right of a Holder to include its Registrable Securities in an Underwritten Offering shall be conditioned upon such Holders participation in the process and required delivery of information for such underwriting and the inclusion of such
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Holders Registrable Securities in the underwriting to the extent provided herein, (ii) a Holder participating in such Underwritten Offering agrees to enter into an underwriting agreement in customary form and sell the Holders Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled to select the managing underwriter or managing underwriters hereunder and (iii) a Holder participating in such Underwritten Offering agrees to complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. The Company hereby agrees with the Holders that, in connection with any Underwritten Offering in accordance with the terms hereof, it will negotiate in good faith and execute all indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, including using all commercially reasonable efforts to procure customary legal opinions, auditor comfort letters and reports of independent petroleum engineers of the Company relating to the oil and gas reserves of the Company to be included in the Registration Statement if the Company has had its reserves prepared, audited or reviewed by an independent petroleum engineer. In the event a Holder seeks to complete an Underwritten Offering, for a commercially reasonable period prior to the filing of any Registration Statement and throughout the Effectiveness Period, the Company will make available upon commercially reasonable notice at the Companys principal place of business or such other commercially reasonable place for inspection during normal business hours by the managing underwriter or managing underwriters selected in accordance with this Section 3(k) such financial and other information and books and records of the Company, and cause the appropriate officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary (and in the case of counsel, not violate an attorney client privilege in such counsels reasonable belief) to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act.
(l) Availability of Officers and Employees.
In connection with any Requested Underwritten Offering, the Company will use commercially reasonable efforts to cause appropriate officers and employees to be available, on a customary basis and upon commercially reasonable notice, to meet with prospective investors in presentations, meetings and road shows.
(m) Holder Provision of Information.
The Holders agree to furnish to the Company the information required to be contained in any Demand Notice and any other information regarding the Holders and the distribution of such securities as the Company reasonably determines is required to be included in any Registration Statement or any prospectus or prospectus supplement relating to an Underwritten Offering, and if a Holder does not do so after prompt written request by the Company, then the Company will not be required to register any shares of Common Stock of such Holder in a Registration Statement.
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(n) Suspension and Postponement.
Notwithstanding any other provision of this Agreement, the Company shall not be required to file a Registration Statement (or any amendment thereto) or effect a Requested Underwritten Offering (or, if the Company has filed a Shelf Registration Statement and has included Registrable Securities therein, the Company shall be entitled to suspend the offer and sale of Registrable Securities pursuant to such Registration Statement) for a period of up to 60 days, (i) if the Board determines that a postponement is in the best interest of the Company and its stockholders generally due to a pending transaction involving the Company (including a pending securities offering by the Company), (ii) if the Board determines such registration would render the Company unable to comply with applicable securities laws, (iii) if the Board determines such registration would require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, (iv) upon issuance by the Commission of a stop order suspending the effectiveness of any Registration Statement under Section 8(d) or 8(e) of the Securities Act, (v) if the Company elects at such time to offer Common Stock or other equity securities of the Company to (A) fund a merger, third-party tender offer or other business combination, acquisition of assets or similar transaction or (B) meet rating agency and other capital funding requirements, (vi) if the Company is pursuing a primary underwritten offering of Common Stock pursuant to a Registration Statement, or (vii) if any other material development would materially and adversely interfere with any such Demand Registration or Shelf Registration (any such period, a Blackout Period); provided, however, that in no event shall any Blackout Period together with any Suspension Period collectively exceed an aggregate of 90 days in any 12-month period.
4. No Inconsistent Agreements; Additional Rights. The Company shall not hereafter enter into, and is not currently a party to, any agreement with respect to its securities that is inconsistent in any material respect with the rights granted to the Holders of Registerable Securities by this Agreement.
5. Registration Expenses. All expenses incident to the Parties performance of or compliance with their respective obligations under this Agreement or otherwise in connection with any Demand Registration, Requested Underwritten Offering or Piggyback Registration (in each case, excluding any Selling Expenses) (Registration Expenses) shall be borne by the Company, whether or not any Registrable Securities are sold pursuant to a Registration Statement. Registration Expenses shall include, without limitation, (i) all registration and filing fees (including fees and expenses (A) with respect to filings required to be made with the Trading Market and (B) in compliance with applicable state securities or blue sky laws), (ii) printing expenses (including expenses of printing certificates for Company Securities and of printing Prospectuses if the printing of Prospectuses is reasonably requested by the Holders of Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel, auditors, accountants and independent petroleum engineers for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement and (vii) all expenses relating to marketing the sale of the Registrable Securities, including expenses related to conducting a road show. In addition, the Company shall be responsible for all of its expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including expenses payable to third parties and including all salaries and expenses of their officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on the Trading Market.
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6. Indemnification.
(a) The Company shall indemnify and hold harmless each Holder, its Affiliates and each of their respective officers and directors and any agent thereof (each a Holder Indemnified Person), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, joint or several, costs (including commercially reasonable costs of preparation and commercially reasonable external counsels attorneys fees) and expenses, judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative (collectively, Claims), with which any Holder Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (collectively, Losses), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which any Registrable Securities were registered, in any preliminary prospectus or in any summary or final prospectus or free writing prospectus (if such free writing prospectus was authorized for use by the Company) or in any amendment or supplement thereto (if used during the period the Company is required to keep the Registration Statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading; provided, however, that the Company shall not be liable to any Holder Indemnified Person to the extent that (i) any such Claim arises out of, is based upon or results from an untrue or alleged untrue statement or omission or alleged omission made in such Registration Statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder Indemnified Person or any underwriter specifically for use in the preparation thereof, (ii) the Holder Indemnified Person continued to use a Registration Statement or Prospectus after the Company notified such Holder Indemnified Person to cease such use pursuant to Section 8(b) or (iii) the Company provided a corrected, supplemented or amended Registration Statement or Prospectus pursuant to Section 3(j) but the Holder Indemnified Person continued to use the then outdated or uncorrected Registration Statement or Prospectus. The Company shall notify the applicable Holder promptly of the institution, threat or assertion of any Claim of which the Company is aware in connection with the transactions contemplated by this Agreement. This indemnity shall be in addition to any liability the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the applicable Holder or any indemnified party and shall survive the transfer of such securities by the applicable Holder. Notwithstanding anything to the contrary herein, this Section 6 shall survive any termination or expiration of this Agreement indefinitely.
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(b) In connection with any Registration Statement in which a Holder participates, such Holder shall, severally and not jointly, indemnify and hold harmless the Company, its Affiliates and each of their respective officers, directors and any agent thereof to the fullest extent permitted by applicable law, from and against any and all Losses as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any such Registration Statement, in any preliminary prospectus (if used prior to the Effective Date of such Registration Statement), or in any summary or final prospectus or free writing prospectus or in any amendment or supplement thereto (if used during the period the Company is required to keep the Registration Statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to such Holder furnished in writing to the Company by such Holder for use therein. This indemnity shall be in addition to any liability such Holder may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any indemnified party. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such Holder under the sale of the Registrable Securities giving rise to such indemnification obligation.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any Claim with respect to which it seeks indemnification and (ii) unless in such indemnified partys reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such Claim or there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, permit such indemnifying party to assume the defense of such Claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a Claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such Claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such Claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.
(d) If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any Losses referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the untrue or alleged untrue statement of a material fact or the omission to state a material fact that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.
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7. Facilitation of Sales Pursuant to Rule 144. To the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and shall take such further action as the Holders may reasonably request, all to the extent required from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of a Holder in connection with such Holders sale pursuant to Rule 144, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of any of its obligations under this Agreement, the Holders, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement.
(b) Discontinued Disposition. Each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in clauses (ii) through (v) of Section 3(e) or (i) through (vi) of Section 3(n), each Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until each Holders receipt of the copies of the supplemental Prospectus or amended Registration Statement as contemplated by Section 3(j) or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement (a Suspension Period). The Company may provide appropriate stop orders to enforce the provisions of this Section 8(b).
(c) Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Holders. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right.
(d) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail as specified in this Section 8(d) prior to 5:00 p.m. Central Time on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication
20
is delivered via facsimile or electronic mail as specified in this Agreement later than 5:00 p.m. Central Time on any date and earlier than 11:59 p.m. Central Time on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) upon actual receipt by the Party to whom such notice is required to be given. The address for such notices and communications shall be as follows:
If to the Company: | SilverBow Resources, Inc. | |
Attention: Chris Abundis | ||
920 Memorial City Way, Suite 850 | ||
Houston, Texas 77024 | ||
Electronic mail: legal.notices@sbow.com; | ||
chris.abundis@sbow.com | ||
With a copy to (which shall not constitute notice): | ||
Gibson, Dunn & Crutcher LLP | ||
811 Main St., Ste. 3000 | ||
Houston, Texas 77002 | ||
Attention: Hillary Holmes | ||
Gerald Spedale | ||
Email: HHolmes@gibsondunn.com | ||
GSpedale@gibsondunn.com | ||
If to the Holders: | Sundance Energy Inc. | |
1050 17th Street, Suite 700 | ||
Denver, Colorado 80265 | ||
Attention: General Counsel | ||
Email: chumber@sundanceenergy.net | ||
With a copy to (which shall not constitute notice): | ||
Kirkland & Ellis LLP | ||
609 Main St., Suite 4700 | ||
Houston, TX 77002 | ||
Attention: Julian J. Seiguer, P.C. | ||
Bryan D. Flannery | ||
Email: julian.seiguer@kirkland.com | ||
bryan.flannery@kirkland.com |
(e) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, executors, administrators, successors, legal representatives and permitted assigns. Except as provided in this Section 8(e), this Agreement, and any rights or obligations hereunder, may not be assigned without the prior written consent of the Company and the Holders. Notwithstanding anything in the foregoing to the contrary, the
21
registration rights of the Holders pursuant to this Agreement with respect to all or any portion of its Registrable Securities may be transferred or assigned without such consent (but only with all related obligations) with respect to such Registrable Securities (and any Registrable Securities issued as a dividend or other distribution with respect to, in exchange for or in replacement of such Registrable Securities) by the Holders to one or more Permitted Transferees; provided (i) (x) such transfer or assignment is to an Affiliate of an Initial Holder or (y) the amount of Registrable Securities transferred or assigned shall represent an Equity Percentage of at least 5% and such transfer or assignment represents the transfer or assignment of all of the Holders Common Stock, (ii) the Company is, within a commercially reasonable time after such transfer, furnished with written notice of the name and address and, if applicable, the Affiliate status, of such transferee or assignee and the Registrable Securities with respect to which such registration rights are being assigned and (iii) such transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this Agreement. The Company may not assign its rights or obligations hereunder without the prior written consent of the Holders.
(f) No Third Party Beneficiaries. Nothing in this Agreement, whether express or implied, shall be construed to give any Person, other than the parties hereto or their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit under or in respect of this Agreement.
(g) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile or electronic mail transmission, such signature shall create a valid binding obligation of the Party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature delivered by facsimile or electronic mail transmission were the original thereof.
(h) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. Each of the Parties irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in the Borough of Manhattan in the City of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each Party anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the Parties irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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(i) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
(j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the Parties shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the Parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(k) Entire Agreement. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior contracts or agreements with respect to the subject matter hereof and the matters addressed or governed hereby, whether oral or written.
(l) Termination. The rights and obligations of the Company and of each Holder under this Agreement, other than those obligations contained in Section 6, shall terminate with respect to the Company and a Holder on the first date upon which such Holder no longer beneficially owns any Registrable Securities.
[THIS SPACE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
SILVERBOW RESOURCES, INC. | ||
By: | /s/ Christopher M. Abundis | |
Name: | Christopher M. Abundis | |
Title: | Executive Vice President, Chief Financial Officer, General Counsel & Secretary |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
AMISSIMA DIVERSIFIED INCOME ICAV, an Umbrella Irish Collective Asset-Management Vehicle with Segregated Liability between its Sub-Funds, acting in respect of its Sub-Fund, Amissima Assicurazioni Multi-Credit Strategy Fund, as a Lender
By: Apollo Management International, LLP, solely in its
capacity as Portfolio Manager and not in its
individual corporate capacity
By: AMI (Holdings), LLC, Its member
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO ATLAS (HOLDINGS) SPV, LLC, | ||
By: Apollo Atlas Master Fund, LLC, its sole member By: Apollo Atlas Management, LLC, its investment Manager | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO KINGS ALLEY CREDIT SPV, L.P. | ||
By: Apollo Kings Alley Credit Advisors (DC), L.P., its general partner | ||
By: Apollo Kings Alley Credit Advisors (DC-GP), LLC, its general partner | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO MOULTRIE CREDIT FUND, L.P. | ||
By: Apollo Moultrie Credit Fund Management, LLC, its investment manager | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO TACTICAL VALUE SPN INVESTMENTS, L.P. | ||
By: Apollo Tactical Value SPN Management, LLC, its investment manager | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
ATCF SPV, L.P. | ||
By: Apollo Tower Credit Advisors (DC), L.P., its general partner | ||
By: Apollo Tower Credit Advisors (DC-GP), LLC, its general partner | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO UNION STREET SPV, L.P. | ||
By: Apollo Union Street SPV Advisors, LLC, its general partner | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
APOLLO TR OPPORTUNISTIC LTD. | ||
By: Apollo Total Return Management LLC, its investment manager | ||
By: Apollo Total Return Enhanced Management LLC, its investment manager | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
MPI (LONDON) LIMITED | ||
By: Apollo TRF MP Management LLC, its investment manager | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
9 West 57th Street, 43rd Floor | ||
New York, NY 10019 | ||
Attention: Joseph D. Glatt | ||
Email: jglatt@apollo.com; dvogel@apollo.com; chwong@apollo.com; mlotito@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
TRANQUILIDADE MULTI CREDIT STRATEGY FUND | ||
By: Apollo Management International LLP, solely in its capacity as Portfolio Manager and not in its individual corporate capacity | ||
By: AMI (Holdings), LLC, its member | ||
By: | /s/ Joseph D. Glatt | |
Name: | Joseph D. Glatt | |
Title: | Vice President | |
Notice: | ||
Tranquilidade Diversified Income ICAV c/o Apollo | ||
Management International LLP 25 St. George Street | ||
London W1S 1FS | ||
Attn: Sundip Kalley | ||
Email: skalley@apollo.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
MORGAN STANLEY CAPITAL GROUP INC. | ||
A Delaware corporation | ||
By: | /s/ Parker Corbin | |
Name: | Parker Corbin | |
Title: | Chairman, President, CEO | |
Notice: | ||
1585 Broadway, 24th Floor | ||
New York, NY 10036 | ||
Attention: David Lazarus | ||
Email: David.Lazarus@morganstanley.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
AG ENERGY FUNDING, LLC | ||
A Delaware Limited Liability Company | ||
By: Angelo, Cordon & Co., L.P., its manager | ||
By: | /s/ Todd Dittmann | |
Name: | Todd Dittmann | |
Title: | Authorized Person | |
Notice: 245 Park Avenue, 24th Floor | ||
New York, NY 10167 | ||
Attention: | Chad Hanover | |
Email:notices.AGEnergyFundingLLC@virtusllc.com ; | ||
AGEnergyAcctOps@angelogordon.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
ARES CAPITAL CORPORATION | ||
A Maryland Corporation | ||
By: | /s/ Mitchell Goldstein | |
Name: | Mitchell Goldstein | |
Title: | Authorized Signatory | |
Notice: | ||
245 Park Avenue, 44th Floor | ||
New York, NY 10167 | ||
Attention: General Counsel | ||
Email: arccgeneralcounsel@aresmgmt.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
CION ARES DIVERSIFIED CREDIT FUND | ||
A Delaware Corporation | ||
By: | /s/ Mitchell Goldstein | |
Name: | Mitchell Goldstein | |
Title: | Authorized Signatory | |
Notice: | ||
245 Park Avenue, 44th Floor | ||
New York, NY 10167 | ||
Attention: General Counsel | ||
Email: arccgeneralcounsel@aresmgmt.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
ARES CREDIT STRATEGIES INSURANCE | ||
DEDICATED FUND SERIES INTERESTS OF THE | ||
SALI MULTI-SERIES FUND, L.P. (IDF), | ||
Ares Credit Strategies Insurance Dedicated Fund Series | ||
Interests of the SALI Multi-Series Fund, L.P. | ||
By: Ares Management LLC, its investment subadvisor | ||
By Ares Capital Management LLC, as subadvisor | ||
By: | /s/ Mitchell Goldstein | |
Name: | Mitchell Goldstein | |
Title: | Authorized Signatory | |
Notice: | ||
245 Park Avenue, 44th Floor | ||
New York, NY 10167 | ||
Attention: General Counsel | ||
Email: arccgeneralcounsel@aresmgmt.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
DIVERSIFIED LOAN FUND PRIVATE DEBT S.À | ||
R.L. | ||
A Luxembourg Investment Fund | ||
By: Ares Capital Management LLC, its investment manager | ||
By: | /s/ Mitchell Goldstein | |
Name: | Mitchell Goldstein | |
Title: | Authorized Signatory | |
Notice: | ||
245 Park Avenue, 44th Floor | ||
New York, NY 10167 | ||
Attention: General Counsel | ||
Email: arccgeneralcounsel@aresmgmt.com |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
ARES DIRECT FINANCE I LP | ||
A Delaware Limited Partnership | ||
By: Ares Capital Management LLC, its investment manager | ||
By: | /s/ Mitchell Goldstein | |
Name: | Mitchell Goldstein | |
Title: | Authorized Signatory | |
Notice: | ||
245 Park Avenue, 44th Floor | ||
New York, NY 10167 | ||
Attention: General Counsel | ||
Email: arccgeneralcounsel@aresmgmt.com |
[Signature Page to Registration Rights Agreement]
Exhibit 23.1
![]() |
Tel: 713-960-1706 Fax: 713-960-9549 www.bdo.com |
2929 Allen Parkway, 20th Floor Houston, TX 77019 |
Consent of Independent Registered Public Accounting Firm
SilverBow Resources, Inc.
Houston, Texas
We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our reports dated March 3, 2022, relating to the consolidated financial statements and the effectiveness of SilverBow Resources, Inc.s internal control over financial reporting appearing in the Companys Annual Report on Form 10-K for the year ended December 31, 2021.
We also consent to the reference to us under the caption Experts in the Prospectus.
/s/ BDO USA, LLP
Houston, Texas
July 6, 2022
H.J. GRUY AND ASSOCIATES, INC.
6575 West Loop South, Suite 550, Bellaire, Texas 77401 TEL. (713) 739-1000 FAX (713) 739-6112
EXHIBIT 23.2
CONSENT OF H.J. GRUY AND ASSOCIATES, INC.
We hereby consent to the use of the name H.J. Gruy and Associates, Inc. and of reference to H.J. Gruy and Associates, Inc. and to the inclusion of and references to our report, or information contained therein, dated January 21, 2022 prepared for SilverBow Resources, Inc. in the Registration Statement on Form S-3 filed on or about July 6, 2022.
We further consent to references to this firm under the heading EXPERTS.
H.J. GRUY AND ASSOCIATES, INC. |
by: | /s/ Marilyn Wilson |
Marilyn Wilson, P.E | ||
Chief Executive Officer |
July 6, 2022
Houston, Texas
Exhibit 23.3
Consent of Independent Auditors
SilverBow Resources, Inc.
Houston, Texas
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3, of our report dated February 2, 2022, relating to the statement of revenues and direct operating expenses of certain oil and gas properties of Teal Natural Resources, LLC and Castlerock Production, LLC, acquired by SilverBow Resources, Inc. for the year ended December 31, 2020, and to the reference to our firm under the heading Experts in the registration statement.
/s/ WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
July 6, 2022
Exhibit 23.4
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-3 of SilverBow Resources, Inc. (the Company) of our report dated March 31, 2021, relating to financial statements of Sundance Energy, Inc., appearing in Annex B to the Companys Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 9, 2022. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Deloitte & Touche LLP
Denver, Colorado
July 6, 2022
Exhibit 23.5
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-3 of SilverBow Resources, Inc., of our report dated April 20, 2022, relating to the consolidated financial statements of Sundance Energy, Inc. and its subsidiaries (the Company) as of December 31, 2021 (Successor) and for the period from January 1, 2021 through April 22, 2021 (Predecessor) and for the period from April 23, 2021 through December 31, 2021 (Successor) (which report expresses an unqualified opinion and includes an other matter paragraph relating to the classification of the oil and gas assets and liabilities as held for sale), included in the Companys Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 9, 2022. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Moss Adams LLP
Denver, Colorado
July 6, 2022
Exhibit 107
Calculation of Filing Fee Table
FORM S-3
(Form Type)
SILVERBOW RESOURCES, INC.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
Security Type |
Security Class Title | Fee Calculation or Carry Forward Rule |
Amount Registered (1) |
Proposed Maximum Offering Price Per Unit (2) |
Maximum Aggregate Offering Price |
Fee Rate | Amount of Registration Fee |
Carry Forward Form Type |
Carry Forward File Number |
Carry Forward Initial effective date |
Filing Fee Previously Paid In Connection with Unsold Securities to be Carried Forward | |||||||||||||
Newly Registered Securities | ||||||||||||||||||||||||
Fees to Be Paid |
Equity | Common Stock, par value $0.01 per share |
Rule 457(a) | 4,148,472 | $29.24 | $121,301,321.28 | $92.70 per $1,000,000 |
$11,244.63 | ||||||||||||||||
Fees Previously Paid |
N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||
Carry Forward Securities | ||||||||||||||||||||||||
Carry Forward Securities |
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Total Offering Amounts | $121,301,321.28 | $11,244.63 | ||||||||||||||||||||||
Total Fees Previously Paid | N/A | |||||||||||||||||||||||
Total Fee Offsets | N/A | |||||||||||||||||||||||
Net Fee Due | $11,244.63 |
(1) | Pursuant to Rule 416 under the Securities Act of 1933 (the Securities Act), the Registrant is also registering hereunder an indeterminate number of additional shares of class A common stock that shall be issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(2) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) of the Securities Act, based on the average of the high and low sale prices of the Registrants common stock on June 30, 2022, as reported on the New York Stock Exchange. |