Item 1.01. Entry Into a Material Definitive Agreement.
On May 2, 2017, Jones Energy, Inc. (the
Company
) entered into an Amended and Restated Registration Rights and Stockholders Agreement (the
Restated Agreement
) with certain affiliates of Metalmark Capital, LLC (
Metalmark
), certain affiliates of JVL Advisors, L.L.C. (
JVL
) and certain entities directly or indirectly controlled by Jonny Jones, the Companys chief executive officer (the
Jones Family Entities
).
The Restated Agreement amends and restates in its entirety that certain Registration Rights and Stockholders Agreement, dated July 29, 2013 (the
Original Agreement
), by and among the Company, Metalmark and the Jones Family Entities, to, among other things, provide JVL with certain rights, in addition to those rights granted to Metalmark and the Jones Family Entities in the Original Agreement, to require the Company to register the sale of any number of JVLs shares of the Companys Class A common stock, par value $0.001 per share (the
Class A Common Stock
). JVL shall have the right to cause up to an aggregate of three such required or demand registrations. The Company is not obligated to effect any demand registration in which the anticipated aggregate offering price included in such offering is equal to or less than $50,000,000 ($25,000,000 where the registration is on a Form S-3).
Furthermore, if, at any time, the Company proposes to register an offering of Class A Common Stock (subject to certain exceptions) for the Companys own account, then it must give prompt notice to Metalmark, JVL and the Jones Family Entities to allow them to include a specified number of their shares in that registration statement. These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration and the Companys right to delay or withdraw a registration statement under certain circumstances. The Company will generally be obligated to pay all registration expenses in connection with the registration obligations, regardless of whether a registration statement is filed or becomes effective. The Restated Agreement also includes customary provisions dealing with indemnification, contribution and allocation of expenses.
As previously disclosed, the rights granted to JVL as set forth in the Restated Agreement were given as a result of JVLs execution of a letter agreement, dated August 17, 2016 (the
Letter Agreement
), with the Company in connection with JVLs purchase of shares of Class A Common Stock in the Companys August 26, 2016 underwritten public offering (the
August 2016 Offering
). Following such purchase, JVL owned in excess of 15% of the Companys outstanding voting stock. The Letter Agreement approved JVLs purchase of the Class A Common Stock in the August 2016 Offering, resulting in JVLs not being subject to the restrictions on business combinations contained in Section 203 of the Delaware General Corporation Law (
Second 203
). In consideration of such approval, JVL agreed that, among other things, until the earlier to occur of the date that is three years from the date of the Letter Agreement and the date on which JVL no longer owns 15% or more of the Companys outstanding voting stock, it will not (i) acquire any material assets of the Company, (ii) become the owner of more than 19.9% of the Companys outstanding voting stock (as a result of actions taken solely by the Company) without the prior approval of the Companys independent directors who are not affiliated with JVL and (iii) engage in any business combination (as
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defined in the Letter Agreement). However, if the restrictions terminate as a result of JVLs no longer owning 15% or more of the Companys outstanding voting stock and JVL subsequently re-acquires beneficial ownership of 15% or more of the Companys outstanding voting stock, JVL will become subject to Section 203.
The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Restated Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits.
EXHIBIT
NUMBER
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DESCRIPTION
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4.1
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Amended and Restated Registration Rights and Stockholders Agreement, dated May 2, 2017, among Jones Energy, Inc., Jones Energy Holdings, LLC and the other parties thereto.
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