The Purchase Agreement contains customary representations, warranties and agreements by the Issuer and the Guarantors and customary conditions to closing, obligations of the parties and termination provisions. Additionally, the Issuer and the Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Initial Purchasers may be required to make because of any of those liabilities. Furthermore, the Issuer and the Guarantors have agreed with the Initial Purchasers not to offer or sell any debt securities issued or guaranteed by the Issuer or the Guarantors having more than one year until maturity for a period of 30 days after the date of the Purchase Agreement without the prior written consent of the Representative, subject to certain exceptions.
Certain of the Initial Purchasers and their respective affiliates have provided, and may in the future provide, a variety of sales and trading, commercial and investment banking, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses. For example, the Representative is serving as the sole dealer manager for the Tender Offer. Certain of the Initial Purchasers and/or their affiliates may be holders of the 2026 Notes and/or are lenders under the credit facility. In particular, an affiliate of the Representative is a lender and the administrative agent under the credit facility, and affiliates of other Initial Purchasers are lenders under the credit facility. Accordingly, any such Initial Purchasers and/or their affiliates may receive a portion of the net proceeds from the Notes Offering to the extent any such proceeds are used to fund the Tender Offer, the Redemption or to repay amounts outstanding under the credit facility. In addition, in the ordinary course of their business activities, the Initial Purchasers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or its affiliates.
Underwriting Agreement
On July 29, 2024, Permian Resources and Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC (the “Underwriters”) entered into an underwriting agreement (the “Underwriting Agreement”), pursuant to which Permian Resources agreed to sell to the Underwriters, and the Underwriters agreed to purchase from Permian Resources, subject to and upon the terms and conditions set forth therein, an aggregate 26,500,000 shares of Class A Common Stock (the “Equity Offering”), at a price to the public of $15.30 per share. The Equity Offering was made pursuant to a registration statement previously filed by Permian Resources with the U.S. Securities and Exchange Commission (the “SEC”), which became effective automatically upon filing on May 24, 2024, by means of a prospectus that meets the requirements under the Securities Act, and the prospectus supplement dated July 29, 2024 and filed with the with the SEC on July 30, 2024 (such supplement, together with the base prospectus, the “Prospectus”).
The Equity Offering is expected to close on July 30, 2024, and Permian Resources is expected to receive proceeds from the Equity Offering of approximately $401.9 million (less the underwriting discounts and commissions). As described in the Prospectus, Permian Resources intends to use the net proceeds from the Equity Offering, along with a portion of the net proceeds of the Notes Offering, to fund a portion of the aggregate purchase price for the Acquisition, which is expected to close during the third quarter of 2024, subject to customary closing conditions. The Acquisition is not contingent upon the completion of the Equity Offering or the Notes Offering. In the event the Acquisition is not consummated, or if there are any remaining net proceeds from the Equity Offering following its consummation, we intend to use the portion of the net proceeds from the Equity Offering for general corporate purposes, including potential future acquisitions.
The Underwriting Agreement contains customary representations, warranties and agreements of Permian Resources and other customary obligations of the parties and termination provisions. A legal opinion related to the Equity Offering is filed herewith as Exhibit 5.1.
The Underwriters and their affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for Permian Resources and its affiliates, for which they received or will receive customary fees and expenses. A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference herein. The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such Exhibit.
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