UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 19, 2021
Independence Contract Drilling, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
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001-36590 |
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37-1653648 |
(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
of incorporation) |
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File Number) |
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Identification No.) |
20475 State Highway 249, Suite 300
Houston, TX 77070
(Address of principal executive offices)
(281) 598-1230
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading symbol(s) |
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Name of each exchange where registered |
Common Stock, $0.01 par value per share |
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ICD |
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New York Stock Exchange |
Item 1.01 Entry into a Material Definitive Agreement
On August 19, 2021, Independence Contract Drilling, Inc. (the “Company”) entered into an amended and restated equity distribution agreement (the “Agreement”) with Piper Sandler & Co. and Johnson Rice & Company L.L.C. (the “Agents”), which amended and restated the original equity distribution, entered into by the Company and Piper Sandler & Co. on June 5, 2020. Pursuant to the Agreement, the Company from time to time may offer and sell through the Agents shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to a maximum amount specified therein (the “Shares”). Pursuant to General Instruction I.B.6 to a Registration Statement on Form S-3, the Company may sell shares at this time, and the board of directors has authorized the sale of an additional $7.5 million in shares of its common stock. Sales of the Shares, if any, under the Agreement may be made in any transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
The Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Agents, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.
The Shares to be sold under the Agreement, if any, will be issued and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No 333-258534), which was declared effective by the Securities and Exchange Commission on August 18, 2021, and a prospectus supplement thereto. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Shares nor shall there be any sale of the Shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to complete text of the Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K. A legal opinion related to the issuance and sale of the Shares is filed herewith as Exhibit 5.1.
Item 9.01 Financial Statements and Exhibits
(d) |
Exhibits |
Exhibit
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Description |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Independence Contract Drilling, Inc. |
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Date: August 19, 2021 |
By: |
/s/ Philip A. Choyce |
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Name: |
Philip A. Choyce |
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Title: |
Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
INDEPENDENCE CONTRACT DRILLING, INC.
AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT
August 19, 2021
PIPER SANDLER & CO.
U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, Minnesota 55402
JOHNSON RICE & COMPANY L.L.C.
639 Loyola Avenue, Suite 2775
New Orleans, LA 70113
Ladies and Gentlemen:
Reference is hereby made to the Equity Distribution Agreement, dated June 5, 2020 (the “Original Equity Distribution Agreement”), by and among Independence Contract Drilling, Inc., a Delaware corporation (the “Company”) and Piper Sandler & Co. Capitalized terms used herein and not defined have the respective meanings set forth in the Original Equity Distribution Agreement.
The Original Equity Distribution Agreement contemplates the offering and sale of Shares pursuant to the Company’s registration statement on Form S-3 (File No. 333-227185), which was filed by the Company with the Securities and Exchange Commission (the “Commission”) on September 4, 2018 and declared effective by the Commission on September 12, 2018 (the “Original Shelf Registration Statement”). In connection with the expiration of the Original Shelf Registration Statement on September 12, 2021, the Company has filed with the Commission a shelf registration statement on Form S-3 (File No. 333-258534) relating to, among other things, the Company’s common stock, par value $0.01 per share (the “Common Stock”) (which new registration statement was declared effective by the Commission on August 18, 2021). In connection therewith, the parties to the Original Equity Distribution Agreement hereby agree to amend and restate the Original Equity Distribution Agreement in its entirety, as follows (this “Agreement” and, together with the Original Equity Distribution Agreement, the “Equity Distribution Agreement”).
As further set forth in this Agreement, the Company proposes to issue and sell from time to time through Piper Sandler & Co. (“Piper”) and Johnson Rice & Company L.L.C. (“Johnson Rice”) (each an “Agent,” and collectively, the “Agents”) the Company’s Common Stock (such shares of Common Stock to be sold pursuant to this Agreement, the “Shares”) on terms set forth herein. Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in Section 2 of this Agreement on the number of shares of Shares issued and sold under this Agreement shall be the sole responsibility of the Company, and the Agents shall have no obligation in connection with such compliance.
The Company hereby confirms its agreement with the Agents with respect to the sale of the Shares.
(i)Registration Statement and Prospectus. The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Securities Act”), with the Commission a registration statement on Form S-3 (File No. 333-258534), including a base prospectus, relating to certain securities, including the Common Stock, to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). The Company has prepared a prospectus supplement to the base prospectus included as part of such registration statement specifically relating to the Shares (the “Prospectus Supplement”). The Company has furnished to the Agents, for use by the Agents, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Shares. Except where the context otherwise requires, such registration statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b) of the Securities Act, is herein called the “Registration Statement.” The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act regulations (“Rule 433”), relating to the Shares, if any, that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the
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Commission pursuant the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”).
(ii) Continuing Effectiveness of Registration Statement. The Registration Statement has been declared effective by the Commission under the Securities Act; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company, threatened by the Commission.
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(e)Market Transactions by Agent. The Company acknowledges and agrees that the Agents have informed the Company that the Agents may, to the extent permitted under the Securities Act, the Exchange Act and this Agreement, purchase and sell shares of Common Stock for its own account while this Agreement is in effect, provided, that (i) no sale for its own account shall take place while a Placement Notice is in effect (except to the extent the Agents may engage in sales of Shares purchased or deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by the Agents. The Company consents to the Agents trading in the Common Stock for the account of any of its clients at the same time as sales of the Shares occur pursuant to this Agreement.
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Notwithstanding the foregoing, the requirement to provide counsel opinions under this Section 3(o) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the date the Company delivers a Placement Notice to the Agents. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Representation Date when the Company relied on such waiver and did not provide the Agents with opinions under this Section 3(o), then before the Agents sells any Shares pursuant to Section 2(a), the Company shall cause the opinions (including the opinion pursuant to Section 3(o) if not delivered on the date of the prior Form 10-K), comfort letter, certificates and documents that would be delivered on a Representation Date to be delivered.
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All opinions, certificates, letters and other documents described in this Section 4 will be in compliance with the provisions hereof only if they are satisfactory in form and substance to Agent and the Agents’ counsel. The Company will furnish Agent with such conformed copies of such opinions, certificates, letters and other documents as Agent shall reasonably request.
(i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the Rule 430B Information and at any subsequent time pursuant to Rules 430A and 430B promulgated under the Securities Act, and any other information deemed to be part of the Registration Statement at the time of effectiveness, and at any subsequent time pursuant to the Securities Act or the Exchange Act, and the Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus), any Permitted Free Writing Prospectus, or any road show, or an omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
(ii) any inaccuracy in the representations and warranties of the Company contained herein;
and will reimburse the Agents for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case of (i) through (iv) to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by Agent specifically for use in the preparation thereof. “Rule 430B Information,” as used herein, means
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information with respect to the Shares and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430B.
In addition to its other obligations under this Section 5(a), the Company agrees that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 5(a), it will reimburse the Agents on a monthly basis for all reasonable legal fees or other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company’s obligation to reimburse the Agents for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. Any such interim reimbursement payments which are not made to the Agents within 30 days of a request for reimbursement shall bear interest at the WSJ Prime Rate (as published from time to time by the Wall Street Journal).
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The indemnifying party under this Section 5 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this Section 5, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into, and (iii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
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[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement among the Company and the Agents in accordance with its terms.
Very truly yours,
INDEPENDENCE CONTRACT DRILLING, INC.
By:
Name:
Title:
[Signature Page to Equity Distribution Agreement]
Confirmed as of the date first
above mentioned.
PIPER SANDLER & CO.
By:
Name:
Title:
JOHNSON RICE & COMPANY L.L.C.
By:
Name:
Title:
[Signature Page to Equity Distribution Agreement]
SCHEDULE 1
FORM OF PLACEMENT NOTICE
No Facsimile and No Voicemail
From: |
Independence Contract Drilling, Inc. |
To: |
Piper Sandler & Co. Attention: Neil A. Riley Neil.A.Riley@psc.com Connor N. Anderson Connor.N.Anderson@psc.com Tom Wright Thomas.E.Wright@psc.com Jay A. Hershey Jay.A.Hershey@psc.com Johnson Rice & Company L.L.C Attention: Clayton Cummings clay@jrco.com Joshua Cummings cummings@jrco.com Joseph Seremet Seremet@jrco.com |
Date: Subject: |
[ ⚫ ], 20[ ⚫ ] Amended and Restated Equity Distribution Agreement – Placement Notice |
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Gentlemen: |
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Pursuant to the terms and subject to the conditions contained in the Amended and Restated Equity Distribution Agreement among Independence Contract Drilling, Inc. (“Company”), Piper Sandler
& Co. and Johnson Rice & Company L.L.C. (“Agents”) dated August 19, 2021, (the “Agreement”), the Company hereby requests that Agents sell up to [ ⚫ ] shares of the Company’s common stock, par value $0.01 per share, at a minimum market price of $[ ⚫ ] per share. Sales should begin on the date of this Placement Notice and shall continue until [ ⚫ ] /[all shares are sold].
SCHEDULE 2
NOTICE PARTIES
Independence Contract Drilling, Inc.
Anthony Gallegos
agallegos@icdrilling.com
Philip Choyce
pchoyce@icdrilling.com
Katherine Kokenes
kkokenes@icdrilling.com
Piper Sandler & Co.
Neil A. Riley
Neil.A.Riley@psc.com
Connor N. Anderson
Connor.N.Anderson@psc.com
Tom Wright
Thomas.E.Wright@psc.com
Jay A. Hershey
Jay.A.Hershey@psc.com
Ira Green
Ira.Green@simmonspsc.com
Michael Bassett
Michael.Bassett@psc.com
Johnson Rice & Company L.L.C.
Clayton Cummings
clay@jrco.com
Joshua Cummings
cummings@jrco.com
Joseph Seremet
Seremet@jrco.com
SCHEDULE 3
FORM OF REPRESENTATION CERTIFICATE
PURSUANT TO SECTION 4(j) OF THE AGREEMENT
[Date]
Piper Sandler & Co.
800 Nicollet Mall
Minneapolis, MN 55402
Johnson Rice & Company L.L.C.
639 Loyola Avenue, Suite 2775
New Orleans, LA 70113
Sir or Madam:
The undersigned, the duly qualified and elected [ ⚫ ], of Independence Contract Drilling, Inc., a Delaware corporation (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to Section 3(q) of the Amended and Restated Equity Distribution Agreement, dated August 19, 2021, (the “Amended and Restated Equity Distribution Agreement”), among the Company, Piper Sandler & Co. and Johnson Rice & Company L.L.C., that to the best of the knowledge of the undersigned:
Capitalized terms used herein without definition shall have the meanings given to such terms in the Amended and Restated Equity Distribution Agreement.
INDEPENDENCE CONTRACT DRILLING, INC. |
By: |
Name: |
Title: |
SCHEDULE 4
SUBSIDIARIES
Sidewinder Drilling LLC (formerly named ICD Operating LLC)
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Suite 5900 AMERICA ● ASIA PACIFIC ● EUROPE |
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August 19, 2021
Independence Contract Drilling, Inc.
20475 State Highway 249, Suite 300
Houston, Texas 77070
Re:Registration Statement on Form S-3
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3, File No. 333-258534 (the “Registration Statement”), filed by Independence Contract Drilling, Inc., a Delaware corporation (the “Company”), with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), which Registration Statement was declared effective under the Securities Act on August 18, 2021. Pursuant to the Registration Statement and a Prospectus Supplement to be filed thereunder, dated as of August 19, 2021 (the “Prospectus Supplement”), the Company is issuing and selling from time to time shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $7.5 million (the “Shares”). The Shares are to be sold by the Company pursuant to an amended and restated equity distribution agreement dated August 19, 2020 (the “Agreement”) among the Company, Piper Sandler & Co. and Johnson Rice & Company L.L.C.
This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We have examined the Registration Statement, the Prospectus Supplement, the Agreement, the Company’s amended and restated certificate of incorporation and the resolutions adopted by the board of directors of the Company (the “Board”) relating to the Registration Statement and the issuance of the Shares by the Company. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and statements of the Company and other corporate documents and instruments, and have examined such questions of law, as we have considered relevant and necessary as a basis for this opinion letter. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all persons and the conformity with the original documents of any copies thereof submitted to us for examination. As to facts relevant to the opinions expressed herein, we have relied without independent investigation or verification upon, and assumed the accuracy and completeness of, certificates, letters and oral and written statements and representations of public officials and officers and other representatives of the Company.
Sidley Austin LLP is a limited liability partnership practicing in affiliation with other Sidley Austin partnerships. |
Independence Contract Drilling, Inc.
August 19, 2021
Page 2
For purposes of the opinion set forth below, we have assumed that each Share is issued and sold for a price not less than the par value thereof and equal to or greater than the minimum price authorized by the Board (the “Minimum Price”).
Based on and subject to the foregoing and the other limitations, qualifications and assumptions set forth herein, we are of the opinion that the issuance and sale of the Shares covered by the Registration Statement and the Prospectus Supplement pursuant to the Agreement have been duly authorized by the Company, and such Shares will be validly issued, fully paid and non-assessable when certificates representing such Shares shall have been duly executed, countersigned and registered and duly delivered to the purchasers thereof against payment of the agreed consideration therefor in an amount equal to or greater than the Minimum Price or, if any such Shares are to be issued in uncertificated form, the Company’s books shall reflect the issuance of such Shares to the purchasers thereof against payment of the agreed consideration therefor in an amount equal to or greater than the Minimum Price, in accordance with the Agreement.
This opinion letter is limited to the General Corporation Law of the State of Delaware. We express no opinion as to the laws, rules or regulations of any other jurisdiction, including, without limitation, the federal laws of the United States of America or any state securities or blue sky laws.
We hereby consent to the filing of this opinion letter as an Exhibit to the Registration Statement and to all references to our Firm included in or made a part of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ SIDLEY AUSTIN LLP