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 4, 2016 (July 29, 2016)
SILVER RUN ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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001-37697 |
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47- 5381253 |
1000 Louisiana Street, Suite 1450
Houston, TX, 77002
(address of principal executive offices)
(zip code)
(713) 357-1400
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
Amendment to Contribution Agreement
As previously announced, on July 21, 2016, Silver Run Acquisition Corporation (“Silver Run”) entered into an Agreement to Assign with New Centennial, LLC, a Delaware limited liability company (“New Centennial”) and affiliate of Riverstone Holdings, LLC, pursuant to which, subject to the satisfaction or waiver of certain conditions, New Centennial agreed to assign, and Silver Run agreed to assume, all of the rights and obligations of New Centennial under that certain Contribution Agreement, dated as of July 6, 2016 (the “Contribution Agreement”), by and among Centennial Resource Development, LLC, a Delaware limited liability company (“CRD”), NGP Centennial Follow-On LLC, a Delaware limited liability company (“NGP Follow-On”), and Celero Energy Company, LP, a Delaware limited partnership (together with CRD and NGP Follow-On, the “Centennial Contributors”), Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”), and New Centennial. Upon the assignment of the Contribution Agreement to Silver Run (the “Assignment”) and at the closing of the transactions contemplated by the Contribution Agreement, Silver Run will acquire approximately 89% of the outstanding membership interests in CRP (the “Business Combination” and, together with the other transactions contemplated by the Contribution Agreement, the “Transactions”).
On July 29, 2016, the parties to the Contribution Agreement entered into Amendment No. 1 to Contribution Agreement (the “Amendment”). Pursuant to the Amendment, the parties agreed to amend the Contribution Agreement such that, giving effect to the Amendment, the consideration for the Business Combination is as set forth below. In the summary of the Amendment set forth below, it is assumed that New Centennial’s rights and obligations under the Contribution Agreement are assigned to Silver Run.
Upon the terms and subject to the satisfaction or written waiver of the conditions contained in the Contribution Agreement, at the closing of the Business Combination:
· Silver Run will contribute to CRP cash in the amount of (i) $1,186,744,348 plus (ii) $200,000,000 if the Centennial Contributors make a Centennial Cash Election (as defined in the Contribution Agreement) (the “Cash Contribution”). In addition, Silver Run will contribute to CRP additional cash as necessary to repay any outstanding debt of CRP or any of its subsidiaries that becomes due and payable as a result of the consummation of the Business Combination;
· CRP will distribute to the Centennial Contributors cash in an amount equal to the Cash Contribution in partial redemption of the Centennial Contributors’ membership interests in CRP (or in full redemption of such membership interests if the Centennial Contributors make a Centennial Cash Election); and
· Silver Run and the Centennial Contributors will effect a recapitalization of CRP pursuant to which (1) provided a Centennial Cash Election is not made, all of the remaining outstanding membership interests in CRP will be converted into 20,000,000 units representing common membership interests in CRP (the “CRP Common Units”) and (2) Silver Run will be admitted as a member of CRP and issued such number of CRP Common Units as is equal to the number of shares of Silver Run’s Class A common stock, par value $0.0001 per share, outstanding following the consummation of the Transactions.
The Amendment also added as a condition to the closing of the Business Combination the requirement that, as of the closing, no more than 12,500,000 shares of Silver Run’s Class B common stock, par value $0.0001 per share, shall be issued and outstanding.
Promissory Note
The disclosure set forth below in Item 2.03 of this Current Report on Form 8-K regarding the unsecured promissory note, dated August 2, 2016 (the “Note”), issued by Silver Run to its sponsor, Silver Run Sponsor, LLC (the “Sponsor”), is incorporated by reference herein and is qualified in its entirety by reference to the Note, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On August 2, 2016, Silver Run issued the Note to the Sponsor. The Note permits borrowings by Silver Run from time to time from the Sponsor in an aggregate principal amount of up to $300,000. Silver Run intends to use the proceeds from such borrowings for on-going operational expenses and certain other expenses in connection with the Transactions. No amounts were outstanding under the Note as of August 4, 2016. The Note is unsecured, non-interest bearing and matures on the earlier of: (i) December 31, 2016 or (ii) the date on which Silver Run consummates the Transactions. Funds held in Silver Run’s trust account established in connection with its initial public offering will not be used to repay any amounts outstanding under the Note if Silver Run does not complete an initial business combination by February 28, 2018.
The issuance of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
A copy of the Note is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference. The disclosure set forth in this Item 2.03 is intended to be a summary only and is qualified in its entirety by reference to the Note.
Legend Information
Forward-Looking Statements
This communication includes certain statements that may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about: Silver Run’s ability to effect the Assignment and consummate the Transactions; the benefits of the Business Combination; the future financial performance
of Silver Run following the Business Combination; changes in CRP’s reserves and future operating results; and expansion plans and opportunities. These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Silver Run’s views as of any subsequent date, and Silver Run does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, Silver Run’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Contribution Agreement; (ii) the outcome of any legal proceedings that may be instituted against Silver Run following announcement of the Transactions; (iii) the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Silver Run, or other conditions to closing in the Contribution Agreement; (iv) the risk that the proposed Business Combination disrupts current plans and operations of Silver Run or CRP as a result of the announcement and consummation of the Transactions; (v) Silver Run’s ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Silver Run to grow and manage growth profitably following the Business Combination; (vi) costs related to the Business Combination; (vii) changes in applicable laws or regulations; (viii) the possibility that Silver Run or CRP may be adversely affected by other economic, business, and/or competitive factors; and (ix) other risks and uncertainties indicated in the preliminary proxy statement related to the proposed Business Combination, including those under the section entitled “Risk Factors.”
No Offer or Solicitation
This communication is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Important Information For Investors and Stockholders
In connection with the proposed Business Combination, Silver Run has filed a preliminary proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of Silver Run and will contain important information about the proposed Business Combination and related matters. Silver Run stockholders and other interested persons are advised to read, when available, the definitive proxy statement in connection with Silver Run’s solicitation of proxies for the meeting of stockholders to be held to approve the proposed Business Combination because the definitive proxy statement will contain important information about the proposed Business Combination. When available, the definitive proxy statement will be mailed to Silver Run stockholders as of a record date to be established for voting on the proposed transaction. Stockholders are able to obtain copies of the preliminary proxy statement and, once available, will also be able to obtain copies of the definitive proxy statement, without charge, at the SEC’s website at www.sec.gov.
Participants in the Solicitation
Silver Run and its directors and officers may be deemed participants in the solicitation of proxies of Silver Run stockholders in connection with the proposed Business Combination. Silver Run stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of Silver Run in Silver Run’s registration statement on Form S-1, as amended as of February 17, 2016. Additional information will be available in the definitive proxy statement when it becomes available.
Item 9.01 Exhibits
(d) Exhibits
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Exhibit |
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Exhibit |
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10.1 |
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Promissory Note, dated August 2, 2016, issued by Silver Run Acquisition Corporation to Silver Run Sponsor, LLC. |
SIGNATURE
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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Silver Run Acquisition Corporation | |
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Date: August 4, 2016 |
By: |
/s/ Stephen S. Coats |
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Name: |
Stephen S. Coats |
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Title: |
Secretary |
Exhibit 10.1
Execution Version
THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
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Principal Amount: $300,000 |
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Dated as of August 2, 2016 |
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New York, New York |
Silver Run Acquisition Corporation, a Delaware corporation (the “Maker”), promises to pay to the order of Silver Run Sponsor, LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of Three Hundred Thousand Dollars ($300,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.
1. Principal. The entire unpaid principal balance of Note shall be payable on the earlier of: (i) December 31, 2016, or (ii) the date on which Maker consummates its proposed acquisition of a majority of the outstanding membership interests in Centennial Resource Production, LLC (the “Initial Business Combination”), as contemplated by that certain Agreement to Assign, dated as of July 21, 2016, by and between the Maker and New Centennial, LLC (such earlier date, the “Maturity Date”). The principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.
2. Drawdown Requests. Maker and Payee agree that Maker may request, from time to time, up to Three Hundred Thousand Dollars ($300,000) in draw downs under this Note to be used for on-going operational expenses and certain other expenses of the Maker in connection with the Initial Business Combination. Principal of this Note may be drawn down from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000). Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Three Hundred Thousand Dollars ($300,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker.
3. Interest. No interest shall accrue on the unpaid principal balance of this Note.
4. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.
5. Events of Default. The following shall constitute an event of default (“Event of Default”):
(a) Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of the date specified above.
(b) Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
6. Remedies.
(a) Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
7. Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
8. Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9. Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
10. Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
11. Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12. Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account established in which the proceeds of the initial public offering (the “IPO”) conducted by the Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants issued in a private placement at the time of the IPO were deposited, as described in greater detail in the registration statement and prospectus filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.
13. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and the Payee.
14. Assignment. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.
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SILVER RUN ACQUISITION CORPORATION | |
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By: |
/s/ Stephen S. Coats |
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Name: Stephen S. Coats |
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Title: Secretary |
Acknowledged and Agreed to
as of the date first written above.
SILVER RUN SPONSOR, LLC
By SILVER RUN SPONSOR MANAGER, LLC
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By: |
/s/ Thomas J. Walker |
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Name: |
Thomas J. Walker |
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Title: |
Managing Director |
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