Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-222566
PROSPECTUS
$75,000,000
Yuma Energy, Inc.
Common Stock
Preferred Stock
Debt Securities
Depositary Shares
Warrants
Rights
Units
Guarantees of Debt Securities
We may offer and
sell from time to time, in one or more series or issuances and on
terms that we will determine at the time of the offering, any
combination of the securities described in this prospectus, up to
an aggregate amount of $75,000,000.
We will provide
specific terms of any offering in a supplement to this prospectus.
Any prospectus supplement may also add, update or change
information contained in this prospectus. You should carefully read
this prospectus and the applicable prospectus supplement as well as
the documents incorporated or deemed to be incorporated by
reference in this prospectus before you purchase any of the
securities offered hereby.
These securities
may be offered and sold in the same offering or in separate
offerings; to or through underwriters, dealers and agents; or
directly to purchasers. The names of any underwriters, dealers or
agents involved in the sale of our securities, their compensation
and any over-allotment options held by them will be described in
the applicable prospectus supplement. See the section titled
“Plan of Distribution.”
Our common stock is
traded on the NYSE American under the symbol “YUMA.” On
February 1, 2018, the last reported sales price of our common stock
on the NYSE American was $1.22 per share.
As of February 1,
2018, the aggregate market value of our outstanding shares of
common stock held by non-affiliates, or public float, was
approximately $31.6 million, based on 19,390,571 shares of
outstanding common stock held by non-affiliates, at a
price of $1.63 per share, which is the closing price of our common
stock on the NYSE American on January 12, 2018. Pursuant to General
Instruction I.B.6 of Form S-3, we will not sell
securities registered on the registration statement of which this
prospectus is a part in a public primary offering with a value
exceeding more than one-third of our public float in
any 12-month period so long as our public float remains
below $75.0 million. As of the date hereof, we have not
offered any securities pursuant to General
Instruction I.B.6 of Form S-3 during the 12
calendar months prior to and including the date of this
prospectus.
Investing
in our securities involves a high degree of risk. You should
carefully consider the matters set forth in “Risk
Factors” on page 4 of this prospectus and in the documents
incorporated by reference into this prospectus.
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.
————————
The date of this
prospectus is February 2, 2018.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
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3
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ABOUT YUMA ENERGY, INC.
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4
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ABOUT THE SUBSIDIARY GUARANTORS
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4
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RISK FACTORS
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4
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
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5
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USE OF PROCEEDS
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6
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DESCRIPTION OF CAPITAL STOCK
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7
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DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
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14
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DESCRIPTION OF DEPOSITARY SHARES
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26
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DESCRIPTION OF WARRANTS
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26
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DESCRIPTION OF RIGHTS
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27
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DESCRIPTION OF UNITS
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28
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PLAN OF DISTRIBUTION
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29
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LEGAL MATTERS
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31
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EXPERTS
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31
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WHERE YOU CAN FIND MORE INFORMATION
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31
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_____________
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we
filed with the United States Securities and Exchange Commission
(the “SEC”) using a “shelf” registration
process. Under this shelf process, we may, from time to time, sell
any combination of the securities described in this prospectus in
one or more offerings up to a total amount of $75 million. Although
we are registering securities in the total amount of $75 million,
under the rules of the SEC, the amount of securities we may sell is
limited to an amount not exceeding one-third of the aggregate
market value of our voting and non-voting common equity owned by
non-affiliates (“float”) in the twelve months
immediately prior to, and including, any particular sale. This
limitation is not applicable if our float exceeds $75
million.
This
prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific
information about the terms the securities sold in that offering.
The prospectus supplement may also add to, update or change
information contained in the prospectus and, accordingly, to the
extent inconsistent, information in this prospectus is superseded
by the information in the prospectus supplement.
The
prospectus supplement to be attached to the front of this
prospectus may describe, as applicable: the terms of the securities
offered; the initial public offering price; the price paid for the
securities; net proceeds; and the other specific terms related to
the offering of the securities.
You
should only rely on the information contained or incorporated by
reference in this prospectus and any prospectus supplement or free
writing prospectus relating to a particular offering. No person has
been authorized to give any information or make any representations
in connection with this offering other than those contained or
incorporated by reference in this prospectus, any accompanying
prospectus supplement and any related free writing prospectus in
connection with the offering described herein and therein, and, if
given or made, such information or representations must not be
relied upon as having been authorized by us. Neither this
prospectus nor any prospectus supplement nor any related free
writing prospectus shall constitute an offer to sell or a
solicitation of an offer to buy offered securities in any
jurisdiction in which it is unlawful for such person to make such
an offering or solicitation. This prospectus does not contain all
of the information included in the registration statement. For a
more complete understanding of the offering of the securities, you
should refer to the registration statement, including its
exhibits.
You
should read the entire prospectus and any prospectus supplement and
any related free writing prospectus, as well as the documents
incorporated by reference into this prospectus or any prospectus
supplement or any related free writing prospectus, before making an
investment decision. Neither the delivery of this prospectus or any
prospectus supplement or any free writing prospectus nor any sale
made hereunder shall under any circumstances imply that the
information contained or incorporated by reference herein or in any
prospectus supplement or free writing prospectus is correct as of
any date subsequent to the date hereof or of such prospectus
supplement or free writing prospectus, as applicable. You should
assume that the information appearing in this prospectus, any
prospectus supplement or any document incorporated by reference is
accurate only as of the date of the applicable documents,
regardless of the time of delivery of this prospectus or any sale
of securities. Our business, financial condition, results of
operations and prospects may have changed since that date and we
have no obligation to update such information except as required by
law.
ABOUT YUMA ENERGY, INC.
Yuma
Energy, Inc. is an independent Houston-based exploration and
production company focused on acquiring, developing and exploring
for conventional and unconventional oil and natural gas resources.
Historically, our operations have focused on onshore properties
located in central and southern Louisiana and southeastern Texas
where we have a long history of drilling, developing and producing
both oil and natural gas assets. More recently, we have begun
acquiring acreage in Yoakum County, Texas, with plans to explore
and develop oil and natural gas assets in the Permian Basin.
Finally, we have operated positions in Kern County, California, and
non-operated positions in the East Texas Woodbine and the Bakken
Shale in North Dakota. Our common stock is listed on the NYSE
American under the trading symbol “YUMA.”
Corporate Information
Our
principal executive offices are located at 1177 West Loop South,
Suite 1825, Houston, Texas 77027. Our telephone number is (713)
768-7000. You can find more information about us at our website
located at www.yumaenergyinc.com. The information contained on our
website is not a part of, and should not be construed as being
incorporated by reference into, this prospectus.
ABOUT THE SUBSIDIARY GUARANTORS
If
specified in an accompanying prospectus supplement respecting a
series of debt securities, Yuma Exploration and Production Company,
Inc., Davis Petroleum Corp., Pyramid Oil LLC, and any other of our
future subsidiaries specified in the prospectus supplement (the
“Subsidiary Guarantors”) may jointly and severally,
fully, irrevocably and unconditionally guarantee our payment
obligations under any series of debt securities offered by this
prospectus. Financial information concerning our Subsidiary
Guarantors and non-guarantor subsidiaries, if any, will be included
in our consolidated financial statements filed as a part of our
periodic reports filed pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”), to the extent
required by the rules and regulations of the SEC.
RISK FACTORS
Investing in our
securities involves a high degree of risk. You should carefully
consider the risk factors and all of the other information included
in, or incorporated by reference into, this prospectus, including
those included in our most recent Annual Report on Form 10-K, in
our Quarterly Reports on Form 10-Q and in our Current Reports on
Form 8-K, in evaluating an investment in our securities. If any of
these risks were to occur, our business, financial condition or
results of operations could be adversely affected. In that case,
the trading price of our securities could decline and you could
lose all or part of your investment. When we offer and sell any
securities pursuant to a prospectus supplement, we may include
additional risk factors relevant to such securities in the
prospectus supplement.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain
information contained in this prospectus may contain
“forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Exchange
Act. All statements other than statements of historical facts
contained in this prospectus are forward-looking statements. These
forward-looking statements can generally be identified by the use
of words such as “may,” “will,”
“could,” “should,” “project,”
“intends,” “plans,” “pursue,”
“target,” “continue,”
“believes,” “anticipates,”
“expects,” “estimates,”
“predicts,” or “potential,” the negative of
such terms or variations thereon, or other comparable terminology.
Statements that describe our future plans, strategies, intentions,
expectations, objectives, goals or prospects are also
forward-looking statements. Actual results could differ materially
from those anticipated in these forward-looking statements. Readers
should consider carefully the risks described under or incorporated
by reference in the “Risk Factors” section contained
herein and other sections of this prospectus which describe factors
that could cause our actual results to differ from those
anticipated in forward-looking statements, including, but not
limited to, the following factors:
●
high volatility and
weakness in commodity prices for oil and natural gas and the effect
of prices set or influenced by actions of OPEC and other oil and
natural gas producing countries;
●
near term and long
term dislocations in the development, production, transportation
and refining of oil and natural gas and related products resulting
from extreme weather conditions and events, such as hurricanes in
the Gulf coast area;
●
our ability to
repay outstanding debt when due;
●
our limited
liquidity and ability to finance our exploration, acquisition and
development strategies;
●
reductions in the
borrowing base under our credit facility;
●
impacts to our
financial statements as a result of oil and natural gas property
impairment write-downs;
●
our ability to
successfully integrate acquired oil and natural gas businesses and
operations;
●
the possible
adverse impact or depressive effect on the market price our common
stock because of significant market overhang;
●
our ability to
successfully develop our inventory of undeveloped acreage in our
resource plays;
●
our oil and natural
gas assets are concentrated in a relatively small number of
properties;
●
our access to
adequate gathering systems, processing facilities, transportation
take-away capacity to move our production to market and marketing
outlets to sell our production at market prices;
●
our ability to
generate sufficient cash flow from operations, borrowings or other
sources to enable us to fund our operations, satisfy our
obligations and seek to develop our undeveloped acreage
positions;
●
our ability to
replace our oil and natural gas reserves;
●
the presence or
recoverability of estimated oil and natural gas reserves and actual
future production rates and associated costs;
●
the potential for
production decline rates for our wells to be greater than we
expect;
●
our ability to
retain key members of senior management and key technical
employees;
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environmental,
drilling, operating, and exploration and development
risks;
●
the possibility
that our industry may be subject to future regulatory or
legislative actions (including additional taxes and changes in
environmental regulations);
●
general economic
conditions, whether internationally, nationally or in the regional
and local market areas in which we do business, may be less
favorable than we expect, including the possibility that economic
conditions in the United States could worsen and that capital
markets could be disrupted, which could adversely affect demand for
oil and natural gas and make it difficult to access
capital;
●
social unrest,
political instability or armed conflict in major oil and natural
gas producing regions outside the United States, such as Africa,
the Middle East, and armed conflict or acts of terrorism or
sabotage;
●
the insurance
coverage maintained by us may not adequately cover all losses that
may be sustained in connection with our business
activities;
●
title to the
properties in which we have an interest may be impaired by title
defects;
●
the cost and
availability of goods and services, such as drilling rigs;
and
●
our dependency on
the skill, ability and decisions of third party operators of the
oil and natural gas properties in which we have a non-operated
working interest.
All
forward-looking statements are expressly qualified in their
entirety by the cautionary statements in this section and elsewhere
in this document. Other than as required under applicable
securities laws, we do not assume a duty to update these
forward-looking statements, whether as a result of new information,
subsequent events or circumstances, changes in expectations or
otherwise. You should not place undue reliance on these
forward-looking statements. All forward-looking statements speak
only as of the date of this prospectus or, if earlier, as of the
date they were made.
USE OF PROCEEDS
Except
as may be stated in the applicable prospectus supplement, we intend
to use the net proceeds we receive from any sales of securities by
us under this prospectus and any accompanying prospectus supplement
for general corporate purposes, which may include, among other
things:
●
reduction or
refinancing of debt or other corporate obligations;
●
additions to our
working capital;
●
capital
expenditures associated with our oil and natural gas projects;
and
●
potential future
acquisitions, including but not limited to acquisitions of
undeveloped acreage, producing properties or corporate
entities.
Any
specific allocation of the net proceeds of an offering of
securities to a specific purpose will be determined at the time of
the offering and will be described in a prospectus
supplement.
DESCRIPTION OF CAPITAL STOCK
General
The
following description summarizes certain important terms of our
capital stock. Because it is only a summary, it does not contain
all the information that may be important to you. For a complete
description of the matters set forth in this section entitled
“Description of Capital Stock,” you should refer to our
amended and restated certificate of incorporation (the
“Certificate of Incorporation”), and our amended and
restated bylaws (the “Bylaws”), and to the applicable
provisions of Delaware law. Our authorized capital stock consists
of 120,000,000 shares of capital stock, $0.001 par value per share,
of which:
●
100,000,000 shares
are designated as common stock; and
●
20,000,000 shares
are designated as preferred stock.
As of
February 1, 2018, there were 22,675,101 shares of common stock
issued, of which 22,661,758 were outstanding and 13,343 shares were
held as treasury stock, and 1,904,391 shares of Series D preferred
stock (as defined below) outstanding. Our Board of Directors is
authorized, without stockholder approval except as required by the
listing standards of the NYSE American, to issue additional shares
of capital stock.
Common Stock
Dividend Rights
Subject
to preferences that may apply to any shares of preferred stock
outstanding at the time, the holders of common stock are entitled
to receive dividends out of funds legally available if our Board of
Directors, in its discretion, determines to issue dividends and
then only at the times and in the amounts that our Board of
Directors may determine.
Voting Rights
Holders
of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders. However, each holder
of preferred stock will be entitled to vote equally with the
holders of the common stock on an as-converted basis (currently
each share of preferred stock is convertible into approximately
1.68 shares of common stock).We have not provided for cumulative
voting for the election of directors in the Certificate of
Incorporation. The Certificate of Incorporation initially
established a classified Board of Directors that was divided into
three classes with staggered three-year terms. Pursuant to our
Certificate of Incorporation, at our next annual meeting of
stockholders and each subsequent annual meeting of stockholders,
each of the successors elected to replace a director whose term of
office expires at such annual meeting will serve for a term of one
year ending on the date of the next annual meeting of stockholders
and until his or her respective successor has been duly elected and
qualified. This will result in the declassification of our Board of
Directors over a three-year period. The directors will be subject
to election by a majority of the votes cast at each annual meeting
of stockholders. In the event that the number of nominees for
director exceeds the number of directors to be elected, directors
shall be elected by a plurality of the votes cast.
No Preemptive or Similar Rights
Our
common stock is not entitled to preemptive rights, and is not
subject to conversion, redemption or sinking fund
provisions.
Right to Receive Liquidation Distributions
If we
become subject to a liquidation, dissolution or winding-up, the
assets legally available for distribution to our stockholders would
be distributable ratably among the holders of common stock and any
participating preferred stock outstanding at that time, subject to
prior satisfaction of all outstanding debt and liabilities and the
preferential rights of and the payment of liquidation preferences,
if any, on any outstanding shares of preferred stock.
Fully Paid and Non-Assessable
All of
the outstanding shares of common stock are fully paid and
non-assessable and the shares offered hereby will be, upon
issuance, fully paid and non-assessable.
Preferred Stock
We have
created a series of preferred stock, the Series D Convertible
Preferred Stock (the “Series D preferred stock”), with
the terms set forth in the Certificate of Designation of Series D
Convertible Preferred Stock (the “Certificate of
Designation”).
Our
Board of Directors is authorized, subject to limitations prescribed
by Delaware law, to issue preferred stock in one or more series, to
establish from time to time the number of shares to be included in
each series and to fix the designation, powers, preferences and
rights of the shares of each series and any of its qualifications,
limitations or restrictions, in each case without further vote or
action by our stockholders. Our Board of Directors can also
increase or decrease the number of shares of any series of
preferred stock, but not below the number of shares of that series
then outstanding, without any further vote or action by our
stockholders. Our Board of Directors may authorize the issuance of
preferred stock with voting or conversion rights that could
adversely affect the voting power or other rights of the holders of
common stock. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, have the effect of
delaying, deferring or preventing a change in control of us and
might adversely affect the market price of common stock and the
voting and other rights of the holders of common stock. We have no
current plan to issue any shares of preferred stock.
General
Pursuant to our
Certificate of Incorporation, we are currently authorized to
designate and issue up to 20,000,000 shares of preferred stock,
$0.001 par value per share, in one or more classes or series and,
subject to the limitations prescribed by our Certificate of
Incorporation and Delaware law, with such rights, preferences,
privileges and restrictions of each class or series of preferred
stock, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the number of
shares constituting any class or series as our Board of Directors
may determine, without any vote or action by our stockholders. Our
Board of Directors has designated a series of preferred stock with
the rights described herein consisting of up to 7,000,000
authorized shares, designated as Series D preferred stock.
Following the designation of the Series D preferred stock by our
Board of Directors, we have available 13,000,000 shares of
undesignated preferred stock authorized under the terms of our
Certificate of Incorporation. Our Board of Directors may, without
the approval of holders of the preferred stock or the common stock,
designate additional series of authorized preferred stock ranking
junior to or on parity with the Series D preferred stock or
designate additional shares of the Series D preferred stock and
authorize the issuance of such shares.
Maturity
The
Series D preferred stock has no stated maturity and will not be
subject to any sinking fund or mandatory redemption. Shares of the
Series D preferred stock will remain outstanding indefinitely
unless converted into common stock.
Ranking
The
Series D preferred stock will generally rank, with respect to
rights to the payment of dividends and the distribution of assets
upon our liquidation, dissolution or winding up senior to all
classes or series of our common stock and to all other equity
securities issued by us.
Dividends
The
holders of shares of Series D preferred stock are entitled to
receive, in preference to all of our common stock, a 7.0% per annum
dividend on the original issue price of each share of Series D
preferred stock held by such holder that is cumulative and payable
in kind per share in such number of shares of Series D preferred
stock determined using a price per share equal to approximately
$11.0741176 per share (adjusted appropriately for stock splits,
stock dividends, recapitalizations, consolidations, mergers,
reclassifications and the like with respect to the Series D
preferred stock) (the “original issue price”) and
calculated on actual number of days elapsed in a year of 365 days.
In lieu of the issuance of a fractional share of Series D preferred
stock as a dividend, we will issue a whole share of Series D
preferred stock (rounded to the nearest whole share), determined on
the basis of the total number of shares of Series D preferred stock
held by the holder with respect to which such dividends are being
calculated. Such dividends are cumulative and compound on a
quarterly basis to the extent not paid for any reason. Dividends
accrue and are cumulative from the date that the Series D preferred
stock is issued under the Certificate of Designation, whether or
not we have earnings or profits, whether or not there are funds
legally available for the payment of such dividends and whether or
not such dividends are declared or paid. Quarterly dividends will
be paid on the last business day of the fiscal quarter, or the
payment date. Dividends paid in an amount less than the total
amount of such accrued dividends at the time shall be allocated pro
rata on a share-by-share basis among all shares of Series D
preferred stock at the time outstanding. The record date for
determination of the holders of Series D preferred stock entitled
to receive payment of a dividend thereon shall be fifteen (15) days
before the payment date, or such other date that we establish no
less than ten (10) days and no more than thirty (30) days preceding
the payment date. In addition, if and when any dividend
is declared or paid by our Board of Directors with respect to the
common stock, our Board of Directors will also declare and pay the
same dividend on each share of the Series D preferred stock then
outstanding on an as-if-converted to common stock
basis.
Liquidation Preference
In the
event of a triggering event, the holders of Series D preferred
stock shall be entitled to receive, prior and in preference to any
distribution of any of our assets to the holders of common stock by
reason of their ownership thereof, the preference amount payable
with respect to each outstanding share of Series D preferred stock
held by them. If, upon the occurrence of such triggering event, the
assets and funds thus distributed or the consideration paid to the
holders of our capital stock, as the case may be, among the holders
of Series D preferred stock shall be insufficient to permit the
payment to such holders of the full preference amounts, then the
entire assets and funds of our company legally available for
distribution or the consideration paid to the holders of our
capital stock, as the case may be, shall be distributed ratably
among the holders of Series D preferred stock in proportion to the
preference amounts each such holder is otherwise entitled to
receive.
The
term “triggering event” means a transaction or series
of related transactions that results in (i) the sale, conveyance,
transfer or other disposition of all or substantially all of the
property, assets or business of our company or its subsidiaries,
taken as a whole, (ii) the merger of our company with or into or
the consolidation of our company with any other corporation,
limited liability company or other entity (other than our
wholly-owned subsidiary), (iii) a third party or a group of related
third parties (other than pursuant to an offering registered under
the Securities Act) acquiring from our company, or from the holders
of our capital stock, shares representing 50% or more of our
outstanding voting power, or (iv) the liquidation, dissolution or
winding up of our company, either voluntary or involuntary;
provided that none of the following shall be considered a
triggering event: (A) a merger effected exclusively for the purpose
of changing the domicile of our company or (B) a transaction in
which our stockholders immediately prior to the transaction own 50%
or more of the voting power of the surviving corporation following
the transaction.
The
term “preference amount” means, with respect to each
outstanding share of Series D preferred stock, the greater of (x)
the original issue price for each outstanding share of Series D
preferred stock then held by them, plus accrued but unpaid
dividends and (y) the amount distributable or the consideration
payable with respect to common stock on the number of shares of
common stock into which such share of Series D preferred stock is
convertible in the event of a triggering event if all outstanding
shares of Series D preferred stock were deemed to have converted
into shares of common stock immediately prior to such triggering
event.
Redemption
The
Series D preferred stock is not redeemable.
Conversion Rights
Optional Conversion
. Each
share of Series D preferred stock (including any shares of Series D
preferred stock payable as dividends that have accrued but are
unpaid) is convertible, at the option of the holder thereof, at any
time after the date of issuance of such share, at our principal
corporate offices or any transfer agent for such stock, into such
number of fully paid and nonassessable shares of common stock as is
determined by dividing (i) the original issue price ($11.0741176,
subject to adjustment), by (ii) the conversion price (the
“conversion price”) applicable to such share in effect
on the date the stock certificate is surrendered for conversion. As
of this date hereof, the conversion price per share of Series D
preferred stock is $6.5838109, subject to adjustment as set forth
in Certificate of Designation.
Mandatory
Conversion
. Each share of Series D
preferred stock shall, at our election, automatically be converted
into shares of common stock at the conversion price then in effect
for such share immediately upon a mandatory conversion event. The
term “mandatory conversion event” means any of: (i) the
date specified, if any, by vote or written consent of the holders
of a majority of the outstanding shares of Series D preferred
stock; (ii) with respect to any holder, any time that less than 10%
of the original number of shares of Series D preferred stock issued
to such holder (as adjusted for stock splits, stock dividends,
reclassification and the like) are held by such holder together
with its affiliates on combined basis; or (iii) with respect to any
holder, when such holder, together with its affiliates on combined
basis, is no longer a holder of shares of common stock (or any
securities received in consideration for such common stock in the
event of merger, reorganization, reclassification or similar
transaction).
Voting Rights
General Voting Rights
. The
holders of the Series D preferred stock are entitled to notice of
all stockholder meetings at which holders of common stock are
entitled to vote and are entitled to vote equally with the holders
of the common stock as a single class on an as-converted basis on
any matter presented to our stockholders for their action or
consideration.
Special Voting Rights
. In
addition to any other vote required by law, the Certificate of
Incorporation or the Certificate of Designation, the holders of
shares of Series D preferred stock are entitled to vote as a
separate class on all matters specifically affecting the Series D
preferred stock. Without limiting the foregoing, we
shall not, either directly or indirectly, by amendment, merger,
consolidation or otherwise, do any of the following without first
obtaining the approval (by vote or written consent, as provided by
law) of the holders of at least a majority of the outstanding
shares of Series D preferred stock, and any such act or transaction
entered into without such approval shall be null and void ab
initio, and of no force or effect:
●
amend or repeal any
provision of, or add any provision to, the Certificate of
Incorporation or the Certificate of Designation if such action
would adversely alter or change the relative rights, preferences,
privileges or powers of the Series D preferred stock;
●
authorize or issue,
or obligate itself to issue, any other equity security, including
any security convertible into or exercisable for any equity
security, having a preference over, or being on a parity with, the
Series D preferred stock with respect to voting (other than the
pari passu voting rights of common stock), dividends, redemption,
conversion or upon liquidation;
●
redeem, purchase or
otherwise acquire (or pay into or set aside for a sinking fund for
such purpose) any share of common stock or any security (other than
Series D preferred stock) convertible into or exchangeable or
exercisable for shares of common stock; provided, however, that
this restriction shall not apply to the repurchase of shares of
common stock at fair market value from employees, officers,
directors, consultants or other persons performing services for us
or any subsidiary pursuant to agreements under which we have the
option to repurchase such shares under existing agreements and/or
upon the occurrence of certain events, such as the termination of
employment or service, or pursuant to a right of first refusal;
or
●
declare, pay or set
aside any dividends on any class of our capital stock (other than
the payment of dividends on the Series D preferred
stock).
Preemptive Rights
No
holders of the Series D preferred stock will, as holders of Series
D preferred stock, have any preemptive rights to purchase or
subscribe for common stock or any other security.
Anti-Takeover Provisions
The
provisions of Delaware law, the Certificate of Incorporation and
the Bylaws, which are summarized below, may have the effect of
delaying, deferring or discouraging another person from acquiring
control of our company. They are also designed, in part, to
encourage persons seeking to acquire control of us to negotiate
first with our Board of Directors. We believe that the benefits of
increased protection of our potential ability to negotiate with an
unfriendly or unsolicited acquirer outweigh the disadvantages of
discouraging a proposal to acquire us because negotiation of these
proposals could result in an improvement of their
terms.
Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws
The
Certificate of Incorporation and the Bylaws include a number of
provisions that could deter hostile takeovers or delay or prevent
changes in control of our Board of Directors or management team,
including the following:
Board of Directors Vacancies
. The
Certificate of Incorporation and the Bylaws authorize only our
Board of Directors to fill vacant directorships, including newly
created seats. In addition, the number of directors constituting
our Board of Directors will be permitted to be set only as provided
in, or in the manner provided by the Bylaws. The Bylaws provide
that the number of directors will be no fewer than two and no more
than seven, as determined by resolution of our Board of Directors
from time to time. These provisions would prevent a stockholder
from increasing the size of our Board of Directors and then gaining
control of our Board of Directors by filling the resulting
vacancies with its own nominees. This will make it more difficult
to change the composition of our Board of Directors and will
promote continuity of management.
Special Meeting of Stockholders
. The
Bylaws provide that special meetings of our stockholders may be
called only by our Board of Directors, the chairman of our Board of
Directors, our Chief Executive Officer, our President in absence of
a Chief Executive Officer, or by our Corporate Secretary upon
request to do so by holders of at least 10% of the voting power of
our outstanding shares.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations.
The Bylaws provide
advance notice procedures for stockholders seeking to bring
business before our annual meeting of stockholders or to nominate
candidates for election as directors at our annual meeting of
stockholders. The Bylaws will also specify certain requirements
regarding the form and content of a stockholder’s notice.
These provisions might preclude our stockholders from bringing
matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders if
the proper procedures are not followed. We expect that these
provisions may also discourage or deter a potential acquirer from
conducting a solicitation of proxies to elect the acquirer’s
own slate of directors or otherwise attempting to obtain control of
the Company.
No Cumulative Voting
. The Delaware
General Corporation Law (the “DGCL”), provides that
stockholders are not entitled to cumulate votes in the election of
directors unless a corporation’s certificate of incorporation
provides otherwise. The Certificate of Incorporation does not
provide for cumulative voting.
Directors Removed Only for Cause
. The
Certificate of Incorporation provides that stockholders may remove
directors only for cause.
Amendment of Certificate of Incorporation
Provisions
. Any amendment of the above provisions in the
Certificate of Incorporation require approval by holders of at
least a majority of the voting power of our then outstanding
capital stock.
Issuance of Undesignated Preferred
Stock
. Our Board of Directors will have the authority,
without further action by our stockholders, to issue up to
13,000,000 shares of undesignated preferred stock with rights and
preferences, including voting rights, designated from time to time
by our Board of Directors. The existence of authorized but unissued
shares of preferred stock would enable our Board of Directors to
render more difficult or to discourage an attempt to obtain control
of our company by means of a merger, tender offer, proxy contest or
other means.
Forum Selection Provision
. The
Certificate of Incorporation provides that unless we consent to the
selection of an alternative forum, the Court of Chancery of the
State of Delaware shall be the sole and exclusive forum for any (i)
derivative action or proceeding brought on behalf, to the fullest
extent permitted by law, of our company, (ii) action asserting a
claim of breach of a fiduciary duty owed by any of our directors or
officers to us or our stockholders, creditors or other
constituents, (iii) action asserting a claim against us or any of
our directors or officers arising pursuant to any provision of the
DGCL or the Certificate of Incorporation or the Bylaws, or (iv)
action asserting a claim against us or any of our directors or
officers governed by the internal affairs doctrine, in each such
case subject to the Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. Any
person or entity purchasing or otherwise acquiring any interest in
shares of our capital stock shall be deemed to have notice of and
consented to the forum provisions in the Certificate of
Incorporation.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A., 250 Royall Street, Canton, Massachusetts
02021. Its telephone number is (800) 962-4284.
Limitations of Liability and Indemnification
The
Certificate of Incorporation contains provisions that limit the
liability of our directors for monetary damages to the fullest
extent permitted by Delaware law. Consequently, our directors are
not to be personally liable to us or our stockholders for monetary
damages for any breach of fiduciary duties as directors, except
liability for the following:
●
any breach of their
duty of loyalty to us or our stockholders;
●
any act or omission
not in good faith or that involves intentional misconduct or a
knowing violation of law;
●
unlawful payments
of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the DGCL; or
●
any transaction
from which they derived an improper personal benefit.
Any
amendment to, or repeal of, these provisions will not eliminate or
reduce the effect of these provisions in respect of any act,
omission or claim that occurred or arose prior to that amendment or
repeal. If the DGCL is amended to provide for further limitations
on the personal liability of directors of corporations, then the
personal liability of our directors will be further limited to the
greatest extent permitted by the DGCL.
The
Bylaws provide that we will indemnify, to the fullest extent
permitted by law, any person who is or was a party or is threatened
to be made a party to any action, suit or proceeding by reason of
the fact that he or she is or was one of our directors or officers
or is or was serving at our request as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise. The Bylaws provide that we may indemnify to the fullest
extent permitted by law any person who is or was a party or is
threatened to be made a party to any action, suit or proceeding by
reason of the fact that he or she is or was one of our employees or
agents or is or was serving at its request as an employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. The Bylaws also provide that we must advance expenses
incurred by or on behalf of a director or officer in advance of the
final disposition of any action or proceeding, subject to limited
exceptions.
Further, we have
entered into indemnification agreements with each of our directors
and executive officers that may be broader than the specific
indemnification provisions contained in the DGCL. These
indemnification agreements require us, among other things, to
indemnify our directors and executive officers against liabilities
that may arise by reason of their status or service. These
indemnification agreements also require us to advance all expenses
incurred by the directors and executive officers in investigating
or defending any such action, suit or proceeding. We believe that
these agreements are necessary to attract and retain qualified
individuals to serve as directors and executive
officers.
The
limitation of liability and indemnification provisions included in
the Certificate of Incorporation, the Bylaws and in indemnification
agreements that we have entered into or will enter into with our
directors and executive officers may discourage stockholders from
bringing a lawsuit against our directors and executive officers for
breach of their fiduciary duties. They may also reduce the
likelihood of derivative litigation against our directors and
executive officers, even though an action, if successful, might
benefit us and our stockholders. Further, a stockholder’s
investment may be adversely affected to the extent that we pay the
costs of settlement and damage awards against directors and
executive officers as required by these indemnification provisions.
At present, we are not aware of any pending litigation or
proceeding involving any person who is or was one of our directors,
officers, employees or other agents or is or was serving at our
request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
for which indemnification is sought, and we are not aware of any
threatened litigation that may result in claims for
indemnification.
We have
obtained or will obtain insurance policies under which, subject to
the limitations of the policies, coverage is provided to our
directors and executive officers against loss arising from claims
made by reason of breach of fiduciary duty or other wrongful acts
as a director or executive officer, including claims relating to
public securities matters, and to us with respect to payments that
may be made by us to these directors and executive officers
pursuant to its indemnification obligations or otherwise as a
matter of law.
Certain
of our non-employee directors may, through their relationships with
their employers, be insured and/or indemnified against certain
liabilities incurred in their capacity as members of our Board of
Directors.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that,
in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is therefore
unenforceable.
Listing
Our
common stock is listed on the NYSE American under the symbol
“YUMA.”
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
The
Debt Securities may be either our senior debt securities
(“Senior Debt Securities”) or our subordinated debt
securities (“Subordinated Debt Securities”) or a
combination of both. The Senior Debt Securities and the
Subordinated Debt Securities will be issued under separate
indentures among us, the Subsidiary Guarantors of such Debt
Securities, if any, and a trustee to be determined (the
“Trustee”). Senior Debt Securities will be issued under
a “Senior Indenture” and Subordinated Debt Securities
will be issued under a “Subordinated Indenture.”
Together, the Senior Indenture and the Subordinated Indenture are
called “Indentures.”
The
Debt Securities may be issued from time to time in one or more
series. The particular terms of each series that are offered by a
prospectus supplement will be described in such prospectus
supplement.
Unless
the Debt Securities are guaranteed by our subsidiaries as described
below, the rights of Yuma and our creditors, including holders of
the Debt Securities, to participate in the assets of any subsidiary
upon the latter’s liquidation or reorganization, will be
subject to the prior claims of the subsidiary’s creditors,
except to the extent that we may be a creditor with recognized
claims against such subsidiary.
We have
summarized selected provisions of the Indentures below. The summary
is not complete. The form of each Indenture has been filed with the
SEC as an exhibit to the registration statement of which this
prospectus is a part, and you should read the Indentures for
provisions that may be important to you. Capitalized terms used in
the summary have the meanings specified in the
Indentures.
General
The
Indentures provide that Debt Securities in separate series may be
issued thereunder from time to time without limitation as to
aggregate principal amount. We may specify a maximum aggregate
principal amount for the Debt Securities of any series. We will
determine the terms and conditions of the Debt Securities,
including the maturity, principal and interest. Unless indicated in
a prospectus supplement applicable to a series of Debt Securities,
the Debt Securities will be our unsecured obligations.
The
Subordinated Debt Securities will be subordinated in right of
payment to the prior payment in full of all of our Senior Debt as
described under “—Subordination of Subordinated Debt
Securities” and in the prospectus supplement applicable to
any Subordinated Debt Securities. If the prospectus supplement so
indicates, the Debt Securities will be convertible into our common
stock.
If
specified in the prospectus supplement respecting a particular
series of Debt Securities, certain subsidiaries of Yuma (each a
“Subsidiary Guarantor”) will fully and unconditionally
guarantee (the “Subsidiary Guarantee”) that series as
described under “—Subsidiary Guarantee” and in
the prospectus supplement. Each Subsidiary Guarantee will be an
unsecured obligation of the Subsidiary Guarantor. A Subsidiary
Guarantee of Subordinated Debt Securities will be subordinated to
the Senior Debt of the Subsidiary Guarantor on the same basis as
the Subordinated Debt Securities are subordinated to our Senior
Debt.
The
applicable prospectus supplement will set forth the price or prices
at which the Debt Securities to be issued will be offered for sale
and will describe the following terms of such Debt
Securities:
(1)
the title of the
Debt Securities;
(2)
whether the Debt
Securities are Senior Debt Securities or Subordinated Debt
Securities and, if Subordinated Debt Securities, the related
subordination terms;
(3)
whether any
Subsidiary Guarantor will provide a Subsidiary Guarantee of the
Debt Securities;
(4)
any limit on the
aggregate principal amount of the Debt Securities;
(5)
each date on which
the principal of the Debt Securities will be payable;
(6)
the interest rate
that the Debt Securities will bear and the interest payment dates
for the Debt Securities;
(7)
each place where
payments on the Debt Securities will be payable;
(8)
any terms upon
which the Debt Securities may be redeemed, in whole or in part, at
our option;
(9)
any sinking fund or
other provisions that would obligate us to redeem or otherwise
repurchase the Debt Securities;
(10)
the portion of the
principal amount, if less than all, of the Debt Securities that
will be payable upon declaration of acceleration of the Maturity of
the Debt Securities;
(11)
whether the Debt
Securities are defeasible;
(12)
any addition to or
change in the Events of Default;
(13)
whether the Debt
Securities are convertible into our common stock and, if so, the
terms and conditions upon which conversion will be effected,
including the initial conversion price or conversion rate and any
adjustments thereto and the conversion period;
(14)
any addition to or
change in the covenants in the Indenture applicable to the Debt
Securities; and
(15)
any other terms of
the Debt Securities not inconsistent with the provisions of the
Indenture, except as permitted by clause (12) of the first
paragraph under the caption “—Modification and
Waiver.”
Debt
Securities, including any Debt Securities that provide for an
amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof
(“Original Issue Discount Securities”), may be sold at
a substantial discount below their principal amount. Special United
States federal income tax considerations applicable to Debt
Securities sold at an original issue discount may be described in
the applicable prospectus supplement. In addition, special United
States federal income tax or other considerations applicable to any
Debt Securities that are denominated in a currency or currency unit
other than United States dollars may be described in the applicable
prospectus supplement.
Subordination of Subordinated Debt Securities
The
indebtedness evidenced by the Subordinated Debt Securities will, to
the extent set forth in the Subordinated Indenture with respect to
each series of Subordinated Debt Securities, be subordinated in
right of payment to the prior payment in full of all of our Senior
Debt, including the Senior Debt Securities, and it may also be
senior in right of payment to all of our Subordinated Debt. The
prospectus supplement relating to any Subordinated Debt Securities
will summarize the subordination provisions of the Subordinated
Indenture applicable to that series including:
●
the applicability
and effect of such provisions upon any payment or distribution
respecting that series following any liquidation, dissolution or
other winding-up, or any assignment for the benefit of creditors or
other marshalling of assets or any bankruptcy, insolvency or
similar proceedings;
●
the applicability
and effect of such provisions in the event of specified defaults
with respect to any Senior Debt, including the circumstances under
which and the periods during which we will be prohibited from
making payments on the Subordinated Debt Securities;
and
●
the definition of
Senior Debt applicable to the Subordinated Debt Securities of that
series and, if the series is issued on a senior subordinated basis,
the definition of Subordinated Debt applicable to that
series.
The
prospectus supplement will also describe, as of a recent date, the
approximate amount of Senior Debt to which the Subordinated Debt
Securities of that series will be subordinated.
The
failure to make any payment on any of the Subordinated Debt
Securities by reason of the subordination provisions of the
Subordinated Indenture described in the prospectus supplement will
not be construed as preventing the occurrence of an Event of
Default with respect to the Subordinated Debt Securities arising
from any such failure to make payment.
The
subordination provisions described above will not be applicable to
payments in respect of the Subordinated Debt Securities from a
defeasance trust established in connection with any legal
defeasance or covenant defeasance of the Subordinated Debt
Securities as described below under “—Legal Defeasance
and Covenant Defeasance.”
Subsidiary Guarantee
If
specified in the prospectus supplement, one or more of the
Subsidiary Guarantors will guarantee the Debt Securities of a
series. Unless otherwise indicated in the prospectus supplement,
the following provisions will apply to the Subsidiary Guarantee of
the Subsidiary Guarantor.
Subject
to the limitations described below and in the prospectus
supplement, one or more of the Subsidiary Guarantors will jointly
and severally, fully and unconditionally guarantee the punctual
payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all our payment obligations under the Indentures and
the Debt Securities of a series, whether for principal of, premium,
if any, or interest on the Debt Securities or otherwise (all such
obligations guaranteed by a Subsidiary Guarantor being herein
called the “Guaranteed Obligations”). The Subsidiary
Guarantors will also pay all expenses (including reasonable counsel
fees and expenses) incurred by the applicable Trustee in enforcing
any rights under a Subsidiary Guarantee with respect to a
Subsidiary Guarantor.
In the
case of Subordinated Debt Securities, a Subsidiary
Guarantor’s Subsidiary Guarantee will be subordinated in
right of payment to the Senior Debt of such Subsidiary Guarantor on
the same basis as the Subordinated Debt Securities are subordinated
to our Senior Debt. No payment will be made by any Subsidiary
Guarantor under its Subsidiary Guarantee during any period in which
payments by us on the Subordinated Debt Securities are suspended by
the subordination provisions of the Subordinated
Indenture.
Each
Subsidiary Guarantee will be limited in amount to an amount not to
exceed the maximum amount that can be guaranteed by the relevant
Subsidiary Guarantor without rendering such Subsidiary Guarantee
voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of
creditors generally.
Each
Subsidiary Guarantee will be a continuing guarantee and
will:
(1)
remain in full
force and effect until either (a) payment in full of all the
applicable Debt Securities (or such Debt Securities are otherwise
satisfied and discharged in accordance with the provisions of the
applicable Indenture) or (b) released as described in the following
paragraph;
(2)
be binding upon
each Subsidiary Guarantor; and
(3)
inure to the
benefit of, and be enforceable by, the applicable Trustee, the
Holders and their successors, transferees and assigns.
In the
event that (a) a Subsidiary Guarantor ceases to be a Subsidiary,
(b) either legal defeasance or covenant defeasance occurs with
respect to the series or (c) all or substantially all of the assets
or all of the Capital Stock of such Subsidiary Guarantor is sold,
including by way of sale, merger, consolidation or otherwise, such
Subsidiary Guarantor will be released and discharged of its
obligations under its Subsidiary Guarantee without any further
action required on the part of the Trustee or any Holder, and no
other person acquiring or owning the assets or Capital Stock of
such Subsidiary Guarantor will be required to enter into a
Subsidiary Guarantee. In addition, the prospectus supplement may
specify additional circumstances under which a Subsidiary Guarantor
can be released from its Subsidiary Guarantee.
Form, Exchange and Transfer
The
Debt Securities of each series will be issuable only in fully
registered form, without coupons, and, unless otherwise specified
in the applicable prospectus supplement, only in denominations of
$1,000 and integral multiples thereof.
At the
option of the Holder, subject to the terms of the applicable
Indenture and the limitations applicable to Global Securities, Debt
Securities of each series will be exchangeable for other Debt
Securities of the same series of any authorized denomination and of
a like tenor and aggregate principal amount.
Subject
to the terms of the applicable Indenture and the limitations
applicable to Global Securities, Debt Securities may be presented
for exchange as provided above or for registration of transfer
(duly endorsed or with the form of transfer endorsed thereon duly
executed) at the office of the Security Registrar or at the office
of any transfer agent designated by us for such purpose. No service
charge will be made for any registration of transfer or exchange of
Debt Securities, but we may require payment of a sum sufficient to
cover any tax or other governmental charge payable in that
connection. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be,
being satisfied with the documents of title and identity of the
person making the request. The Security Registrar and any other
transfer agent initially designated by us for any Debt Securities
will be named in the applicable prospectus supplement. We may at
any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be
required to maintain a transfer agent in each Place of Payment for
the Debt Securities of each series.
If the
Debt Securities of any series (or of any series and specified
tenor) are to be redeemed in part, we will not be required to (1)
issue, register the transfer of or exchange any Debt Security of
that series (or of that series and specified tenor, as the case may
be) during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption of any such
Debt Security that may be selected for redemption and ending at the
close of business on the day of such mailing or (2) register the
transfer of or exchange any Debt Security so selected for
redemption, in whole or in part, except the unredeemed portion of
any such Debt Security being redeemed in part.
Global Securities
Some or
all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Securities that will have
an aggregate principal amount equal to that of the Debt Securities
they represent. Each Global Security will be registered in the name
of a Depositary or its nominee identified in the applicable
prospectus supplement, will be deposited with such Depositary or
nominee or its custodian and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for
pursuant to the applicable Indenture.
Notwithstanding any
provision of the Indentures or any Debt Security described in this
prospectus, no Global Security may be exchanged in whole or in part
for Debt Securities registered, and no transfer of a Global
Security in whole or in part may be registered, in the name of any
Person other than the Depositary for such Global Security or any
nominee of such Depositary unless:
(1)
the Depositary has
notified us that it is unwilling or unable to continue as
Depositary for such Global Security or has ceased to be qualified
to act as such as required by the applicable Indenture, and in
either case we fail to appoint a successor Depositary within 90
days;
(2)
an Event of Default
with respect to the Debt Securities represented by such Global
Security has occurred and is continuing and the Trustee has
received a written request from the Depositary to issue
certificated Debt Securities;
(3)
subject to the
rules of the Depositary, we shall have elected to terminate the
book-entry system through the Depositary; or
(4)
other circumstances
exist, in addition to or in lieu of those described above, as may
be described in the applicable prospectus supplement.
All
certificated Debt Securities issued in exchange for a Global
Security or any portion thereof will be registered in such names as
the Depositary may direct.
As long
as the Depositary, or its nominee, is the registered holder of a
Global Security, the Depositary or such nominee, as the case may
be, will be considered the sole owner and Holder of such Global
Security and the Debt Securities that it represents for all
purposes under the Debt Securities and the applicable Indenture.
Except in the limited circumstances referred to above, owners of
beneficial interests in a Global Security will not be entitled to
have such Global Security or any Debt Securities that it represents
registered in their names, will not receive or be entitled to
receive physical delivery of certificated Debt Securities in
exchange for those interests and will not be considered to be the
owners or Holders of such Global Security or any Debt Securities
that it represents for any purpose under the Debt Securities or the
applicable Indenture. All payments on a Global Security will be
made to the Depositary or its nominee, as the case may be, as the
Holder of the security. The laws of some jurisdictions may require
that some purchasers of Debt Securities take physical delivery of
such Debt Securities in certificated form. These laws may impair
the ability to transfer beneficial interests in a Global
Security.
Ownership of
beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
(“participants”) and to persons that may hold
beneficial interests through participants. In connection with the
issuance of any Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective
principal amounts of Debt Securities represented by the Global
Security to the accounts of its participants. Ownership of
beneficial interests in a Global Security will be shown only on,
and the transfer of those ownership interests will be effected only
through, records maintained by the Depositary (with respect to
participants’ interests) or any such participant (with
respect to interests of Persons held by such participants on their
behalf). Payments, transfers, exchanges and other matters relating
to beneficial interests in a Global Security may be subject to
various policies and procedures adopted by the Depositary from time
to time. None of us, the Subsidiary Guarantors, the Trustees or the
agents of us, the Subsidiary Guarantors or the Trustees will have
any responsibility or liability for any aspect of the
Depositary’s or any participant’s records relating to,
or for payments made on account of, beneficial interests in a
Global Security, or for maintaining, supervising or reviewing any
records relating to such beneficial interests.
Payment and Paying Agents
Unless
otherwise indicated in the applicable prospectus supplement,
payment of interest on a Debt Security on any Interest Payment Date
will be made to the Person in whose name such Debt Security (or one
or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Unless
otherwise indicated in the applicable prospectus supplement,
principal of and any premium and interest on the Debt Securities of
a particular series will be payable at the office of such Paying
Agent or Paying Agents as we may designate for such purpose from
time to time, except that at our option payment of any interest on
Debt Securities in certificated form may be made by check mailed to
the address of the Person entitled thereto as such address appears
in the Security Register. Unless otherwise indicated in the
applicable prospectus supplement, the corporate trust office of the
Trustee under the Senior Indenture in The City of New York will be
designated as sole Paying Agent for payments with respect to Senior
Debt Securities of each series, and the corporate trust office of
the Trustee under the Subordinated Indenture in The City of New
York will be designated as the sole Paying Agent for payment with
respect to Subordinated Debt Securities of each series. Any other
Paying Agents initially designated by us for the Debt Securities of
a particular series will be named in the applicable prospectus
supplement. We may at any time designate additional Paying Agents
or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts, except that we
will be required to maintain a Paying Agent in each Place of
Payment for the Debt Securities of a particular
series.
All
money paid by us to a Paying Agent for the payment of the principal
of or any premium or interest on any Debt Security which remains
unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to us, and the
Holder of such Debt Security thereafter may look only to us for
payment.
Consolidation, Merger and Sale of Assets
Unless
otherwise specified in the prospectus supplement, we may not
consolidate with or merge into, or transfer, lease or otherwise
dispose of all or substantially all of our assets to, any Person (a
“successor Person”), and may not permit any Person to
consolidate with or merge into us, unless:
(1)
the successor
Person (if not us) is a corporation, partnership, trust or other
entity organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia
and assumes our obligations on the Debt Securities and under the
Indentures;
(2)
immediately before
and after giving pro forma effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, has occurred and is continuing;
and
(3)
several other
conditions, including any additional conditions with respect to any
particular Debt Securities specified in the applicable prospectus
supplement, are met.
The
successor Person (if not us) will be substituted for us under the
applicable Indenture with the same effect as if it had been an
original party to such Indenture, and, except in the case of a
lease, we will be relieved from any further obligations under such
Indenture and the Debt Securities.
Events of Default
Unless
otherwise specified in the prospectus supplement, each of the
following will constitute an Event of Default under the applicable
Indenture with respect to Debt Securities of any
series:
(1)
failure to pay
principal of or any premium on any Debt Security of that series
when due, whether or not, in the case of Subordinated Debt
Securities, such payment is prohibited by the subordination
provisions of the Subordinated Indenture;
(2)
failure to pay any
interest on any Debt Securities of that series when due, continued
for 30 days, whether or not, in the case of Subordinated Debt
Securities, such payment is prohibited by the subordination
provisions of the Subordinated Indenture;
(3)
failure to deposit
any sinking fund payment, when due, in respect of any Debt Security
of that series, whether or not, in the case of Subordinated Debt
Securities, such deposit is prohibited by the subordination
provisions of the Subordinated Indenture;
(4)
failure to perform
or comply with the provisions described under
“—Consolidation, Merger and Sale of Assets”
above;
(5)
failure to perform
any of our other covenants in such Indenture (other than a covenant
included in such Indenture solely for the benefit of a series other
than that series), continued for 60 days after written notice has
been given by the applicable Trustee, or the Holders of at least
25% in principal amount of the Outstanding Debt Securities of that
series, as provided in such Indenture;
(6)
any Debt of ours,
any Significant Subsidiary or, if a Subsidiary Guarantor has
guaranteed the series, such Subsidiary Guarantor, is not paid
within any applicable grace period after final maturity or is
accelerated by its holders because of a default and the total
amount of such Debt unpaid or accelerated exceeds $25.0 million;
provided, however, that if any such default is cured or waived or
any such acceleration rescinded, or such Debt is repaid, within a
period of 30 days from the continuation of such default beyond the
applicable grace period or the occurrence of such acceleration, as
the case may be, such Event of Default and any consequential
acceleration of the Debt Securities shall be automatically
rescinded, so long as such rescission does not conflict with any
judgment or decree;
(7)
any judgment or
decree for the payment of money in excess of $25.0 million (net of
any amounts covered by insurance or a binding indemnity agreement)
is entered against us, any Significant Subsidiary or, if a
Subsidiary Guarantor has guaranteed the series, such Subsidiary
Guarantor, remains outstanding for a period of 60 consecutive days
following entry of such judgment and is not discharged, waived or
stayed;
(8)
certain events of
bankruptcy, insolvency or reorganization affecting us, any
Significant Subsidiary or, if a Subsidiary Guarantor has guaranteed
the series, such Subsidiary Guarantor; and
(9)
if any Subsidiary
Guarantor has guaranteed such series, the Subsidiary Guarantee of
any such Subsidiary Guarantor is held by a final non-appealable
order or judgment of a court of competent jurisdiction to be
unenforceable or invalid or ceases for any reason to be in full
force and effect (other than in accordance with the terms of the
applicable Indenture) or any Subsidiary Guarantor or any Person
acting on behalf of any Subsidiary Guarantor denies or disaffirms
such Subsidiary Guarantor’s obligations under its Subsidiary
Guarantee (other than by reason of a release of such Subsidiary
Guarantor from its Subsidiary Guarantee in accordance with the
terms of the applicable Indenture).
If an
Event of Default (other than an Event of Default with respect to
Yuma Energy, Inc. described in clause (8) above) with respect to
the Debt Securities of any series at the time Outstanding occurs
and is continuing, either the applicable Trustee or the Holders of
at least 25% in principal amount of the Outstanding Debt Securities
of that series by notice as provided in the Indenture may declare
the principal amount of the Debt Securities of that series (or, in
the case of any Debt Security that is an Original Issue Discount
Debt Security, such portion of the principal amount of such Debt
Security as may be specified in the terms of such Debt Security) to
be due and payable immediately, together with any accrued and
unpaid interest thereon. If an Event of Default with respect to
Yuma Energy, Inc. described in clause (8) above with respect to the
Debt Securities of any series at the time Outstanding occurs, the
principal amount of all the Debt Securities of that series (or, in
the case of any such Original Issue Discount Security, such
specified amount) will automatically, and without any action by the
applicable Trustee or any Holder, become immediately due and
payable, together with any accrued and unpaid interest thereon.
After any such acceleration and its consequences, but before a
judgment or decree based on acceleration, the Holders of a majority
in principal amount of the Outstanding Debt Securities of that
series may, under certain circumstances, rescind and annul such
acceleration if all Events of Default with respect to that series,
other than the non-payment of accelerated principal (or other
specified amount), have been cured or waived as provided in the
applicable Indenture. For information as to waiver of defaults, see
“—Modification and Waiver” below.
Subject
to the provisions of the Indentures relating to the duties of the
Trustees in case an Event of Default has occurred and is
continuing, no Trustee will be under any obligation to exercise any
of its rights or powers under the applicable Indenture at the
request or direction of any of the Holders, unless such Holders
have offered to such Trustee reasonable security or indemnity.
Subject to such provisions for the indemnification of the Trustees,
the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Debt Securities of that
series.
No
Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the applicable Indenture,
or for the appointment of a receiver or a trustee, or for any other
remedy thereunder, unless:
(1)
such Holder has
previously given to the Trustee under the applicable Indenture
written notice of a continuing Event of Default with respect to the
Debt Securities of that series;
(2)
the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of
that series have made written request, and such Holder or Holders
have offered reasonable security or indemnity, to the Trustee to
institute such proceeding as trustee; and
(3)
the Trustee has
failed to institute such proceeding, and has not received from the
Holders of a majority in principal amount of the Outstanding Debt
Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and
offer.
However, such
limitations do not apply to a suit instituted by a Holder of a Debt
Security for the enforcement of payment of the principal of or any
premium or interest on such Debt Security on or after the
applicable due date specified in such Debt Security or, if
applicable, to convert such Debt Security.
We will
be required to furnish to each Trustee annually a statement by
certain of our officers as to whether or not we, to their
knowledge, are in default in the performance or observance of any
of the terms, provisions and conditions of the applicable Indenture
and, if so, specifying all such known defaults.
Modification and Waiver
We may
modify or amend an Indenture without the consent of any holders of
the Debt Securities in certain circumstances,
including:
(1)
to evidence the
succession under the Indenture of another Person to us or any
Subsidiary Guarantor and to provide for its assumption of our or
such Subsidiary Guarantor’s obligations to holders of Debt
Securities;
(2)
to add any
additional covenants of us or the Subsidiary Guarantors for the
benefit of the holders of all or any series of Debt Securities or
to surrender any right or power under the applicable Indenture
conferred upon us or any Subsidiary Guarantor;
(3)
to add any
additional Events of Default with respect to all or any series of
Debt Securities;
(4)
to provide for
uncertificated notes in addition to, or in place of, certificated
notes;
(5)
to secure the Debt
Securities;
(6)
to establish the
form or terms of any series of Debt Securities;
(7)
to evidence and
provide for the acceptance of appointment under the Indenture of a
successor Trustee;
(8)
to cure any
ambiguity, defect or inconsistency;
(9)
to add Subsidiary
Guarantors;
(10)
in the case of any
Subordinated Debt Security, to make any change in the subordination
provisions that limits or terminates the benefits applicable to any
holder of Senior Debt;
(11)
to make other
changes that do not adversely affect the interests of the Holders
of Debt Securities of any series issued thereunder in any material
respect; or
(12)
to add to, change
or eliminate any of the provisions of the applicable Indenture in
respect of one or more series of Debt Securities, provided that any
such addition, change or elimination (a) shall neither (i) apply to
any Debt Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (ii) modify the rights of the Holder of any such Debt
Security with respect to such provision or (b) shall become
effective only when there is no such Debt Security
Outstanding.
Other
modifications and amendments of an Indenture may be made by us, the
Subsidiary Guarantors, if applicable, and the applicable Trustee
with the consent of the Holders of a majority in principal amount
of the Outstanding Debt Securities of each series affected by such
modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of
each Outstanding Debt Security affected thereby:
(1)
change the Stated
Maturity of the principal of, or any installment of principal of or
interest on, any Debt Security;
(2)
reduce the
principal amount of, or any premium or interest on, any Debt
Security;
(3)
reduce the amount
of principal of an Original Issue Discount Security or any other
Debt Security payable upon acceleration of the Maturity
thereof;
(4)
change the place or
currency of payment of principal of, or any premium or interest on,
any Debt Security;
(5)
impair the right to
institute suit for the enforcement of any payment due on or any
conversion right with respect to any Debt Security;
(6)
modify the
subordination provisions in the case of Subordinated Debt
Securities, or modify any conversion provisions, in either case in
a manner adverse to the Holders of such Debt
Securities;
(7)
except as provided
in the applicable Indenture, release the Subsidiary Guarantee of a
Subsidiary Guarantor;
(8)
reduce the
percentage in principal amount of Outstanding Debt Securities of
any series, the consent of whose Holders is required for
modification or amendment of the Indenture;
(9)
reduce the
percentage in principal amount of Outstanding Debt Securities of
any series necessary for waiver of compliance with certain
provisions of the Indenture or for waiver of certain
defaults;
(10)
modify such
provisions with respect to modification, amendment or waiver;
or
(11)
following the
making of an offer to purchase Debt Securities from any Holder that
has been made pursuant to a covenant in such Indenture, modify such
covenant with respect to such offer in a manner adverse to such
Holder.
The
Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by us with certain
restrictive provisions of the applicable Indenture. The Holders of
a majority in principal amount of the Outstanding Debt Securities
of any series may waive any past default under the applicable
Indenture, except a default in the payment of principal, premium or
interest and certain covenants and provisions of the Indenture
which cannot be amended without the consent of the Holder of each
Outstanding Debt Security of such series.
Each of
the Indentures provides that in determining whether the Holders of
the requisite principal amount of the Outstanding Debt Securities
have given or taken any direction, notice, consent, waiver or other
action under such Indenture as of any date:
(1)
the principal
amount of an Original Issue Discount Security that will be deemed
to be Outstanding will be the amount of the principal that would be
due and payable as of such date upon acceleration of Maturity to
such date;
(2)
if, as of such
date, the principal amount payable at the Stated Maturity of a Debt
Security is not determinable (for example, because it is based on
an index), the principal amount of such Debt Security deemed to be
Outstanding as of such date will be an amount determined in the
manner prescribed for such Debt Security;
(3)
the principal
amount of a Debt Security denominated in one or more foreign
currencies or currency units that will be deemed to be Outstanding
will be the United States-dollar equivalent, determined as of such
date in the manner prescribed for such Debt Security, of the
principal amount of such Debt Security (or, in the case of a Debt
Security described in clause (1) or (2) above, of the amount
described in such clause); and
(4)
certain Debt
Securities, including those owned by us, any Subsidiary Guarantor
or any of our other Affiliates, will not be deemed to be
Outstanding.
Except
in certain limited circumstances, we will be entitled to set any
day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities of any series entitled to give or take
any direction, notice, consent, waiver or other action under the
applicable Indenture, in the manner and subject to the limitations
provided in the Indenture. In certain limited circumstances, the
Trustee will be entitled to set a record date for action by
Holders. If a record date is set for any action to be taken by
Holders of a particular series, only persons who are Holders of
Outstanding Debt Securities of that series on the record date may
take such action. To be effective, such action must be taken by
Holders of the requisite principal amount of such Debt Securities
within a specified period following the record date. For any
particular record date, this period will be 180 days or such other
period as may be specified by us (or the Trustee, if it set the
record date), and may be shortened or lengthened (but not beyond
180 days) from time to time.
Satisfaction and Discharge
Each
Indenture will be discharged and will cease to be of further effect
as to all outstanding Debt Securities of any series issued
thereunder, when:
(a)
all outstanding
Debt Securities of that series that have been authenticated (except
lost, stolen or destroyed Debt Securities that have been replaced
or paid and Debt Securities for whose payment money has theretofore
been deposited in trust and thereafter repaid to us) have been
delivered to the Trustee for cancellation; or
(b)
all outstanding
Debt Securities of that series that have been not delivered to the
Trustee for cancellation have become due and payable or will become
due and payable at their Stated Maturity within one year or are to
be called for redemption within one year under arrangements
satisfactory to the Trustee and in any case we have irrevocably
deposited with the Trustee as trust funds money in an amount
sufficient, without consideration of any reinvestment of interest,
to pay the entire indebtedness of such Debt Securities not
delivered to the Trustee for cancellation, for principal, premium,
if any, and accrued interest to the Stated Maturity or redemption
date;
(2)
we have paid or
caused to be paid all other sums payable by us under the Indenture
with respect to the Debt Securities of that series;
and
(3)
we have delivered
an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and
discharge of the Indenture with respect to the Debt Securities of
that series have been satisfied.
Legal Defeasance and Covenant Defeasance
To the
extent indicated in the applicable prospectus supplement, we may
elect, at our option at any time, to have our obligations
discharged under provisions relating to defeasance and discharge of
indebtedness, which we call “legal defeasance,” or
relating to defeasance of certain restrictive covenants applied to
the Debt Securities of any series, which we call “covenant
defeasance.”
Legal Defeasance
. The Indentures
provide that, upon our exercise of our option (if any) to have the
legal defeasance provisions applied to any series of Debt
Securities, we and, if applicable, each Subsidiary Guarantor will
be discharged from all our obligations, and, if such Debt
Securities are Subordinated Debt Securities, the provisions of the
Subordinated Indenture relating to subordination will cease to be
effective, with respect to such Debt Securities (except for certain
obligations to convert, exchange or register the transfer of Debt
Securities, to replace stolen, lost or mutilated Debt Securities,
to maintain paying agencies and to hold moneys for payment in
trust) upon the deposit in trust for the benefit of the Holders of
such Debt Securities of money or U.S. Government Obligations, or
both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money
in an amount sufficient (in the opinion of a nationally recognized
firm of independent public accountants) to pay the principal of and
any premium and interest on such Debt Securities on the respective
Stated Maturities in accordance with the terms of the applicable
Indenture and such Debt Securities. Such defeasance or discharge
may occur only if, among other things:
(1)
we have delivered
to the applicable Trustee an Opinion of Counsel to the effect that
we have received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a
change in tax law, in either case to the effect that Holders of
such Debt Securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit and legal
defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been
the case if such deposit and legal defeasance were not to
occur;
(2)
no Event of Default
or event that with the passing of time or the giving of notice, or
both, shall constitute an Event of Default shall have occurred and
be continuing at the time of such deposit (other than a default or
an Event of Default resulting from the borrowing of funds to be
applied to such deposit (and any similar concurrent deposit
relating to other Indebtedness) and the granting of liens to secure
such borrowing) or, with respect to any Event of Default described
in clause (8) under “—Events of Default,” at any
time until 121 days after such deposit;
(3)
such deposit and
legal defeasance will not result in a breach or violation of, or
constitute a default under, any agreement or instrument (other than
the applicable Indenture) to which we are a party or by which we
are bound; and
(4)
in the case of
Subordinated Debt Securities, at the time of such deposit, no
default in the payment of all or a portion of principal of (or
premium, if any) or interest on any Senior Debt shall have occurred
and be continuing, no event of default shall have resulted in the
acceleration of any Senior Debt and no other event of default with
respect to any Senior Debt shall have occurred and be continuing
permitting after notice or the lapse of time, or both, the
acceleration thereof.
Covenant Defeasance
. The Indentures
provide that, upon our exercise of our option (if any) to have the
covenant defeasance provisions applied to any Debt Securities, we
may fail to comply with certain restrictive covenants (but not with
respect to conversion, if applicable), including those that may be
described in the applicable prospectus supplement, and the
occurrence of certain Events of Default, which are described above
in clause (5) (with respect to such restrictive covenants) and
clauses (6), (7) and (9) under “Events of Default” and
any that may be described in the applicable prospectus supplement,
will not be deemed to either be or result in an Event of Default
and, if such Debt Securities are Subordinated Debt Securities, the
provisions of the Subordinated Indenture relating to subordination
will cease to be effective, in each case with respect to such Debt
Securities. In order to exercise such option, we must deposit, in
trust for the benefit of the Holders of such Debt Securities, money
or U.S. Government Obligations, or both, which, through the payment
of principal and interest in respect thereof in accordance with
their terms, will provide money in an amount sufficient (in the
opinion of a nationally recognized firm of independent public
accountants) to pay the principal of and any premium and interest
on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the applicable Indenture and such Debt
Securities. Such covenant defeasance may occur only if we have
delivered to the applicable Trustee an Opinion of Counsel to the
effect that Holders of such Debt Securities will not recognize gain
or loss for federal income tax purposes as a result of such deposit
and covenant defeasance and will be subject to federal income tax
on the same amount, in the same manner and at the same times as
would have been the case if such deposit and covenant defeasance
were not to occur, and the requirements set forth in clauses (2),
(3) and (4) above are satisfied. If we exercise this option with
respect to any series of Debt Securities and such Debt Securities
were declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government
Obligations so deposited in trust would be sufficient to pay
amounts due on such Debt Securities at the time of their respective
Stated Maturities but may not be sufficient to pay amounts due on
such Debt Securities upon any acceleration resulting from such
Event of Default. In such case, we would remain liable for such
payments.
If we
exercise either our legal defeasance or covenant defeasance option,
any Subsidiary Guarantee will terminate.
No Personal Liability of Directors, Officers, Employees and
Stockholders
No
director, officer, employee, incorporator, stockholder, member,
manager, partner or trustee of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any obligations of
the Company or any Subsidiary Guarantor under the Debt Securities,
the Indentures or any Subsidiary Guarantees or for any claim based
on, in respect of, or by reason of, such obligations or their
creation. By accepting a Debt Security, each Holder shall be deemed
to have waived and released all such liability. The waiver and
release shall be a part of the consideration for the issue of the
Debt Securities. The waiver may not be effective to waive
liabilities under the federal securities laws, and it is the view
of the SEC that such a waiver is against public
policy.
Notices
Notices
to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security
Register.
Title
We, the
Subsidiary Guarantors, the Trustees and any agent of us, the
Subsidiary Guarantors or a Trustee may treat the Person in whose
name a Debt Security is registered as the absolute owner of the
Debt Security (whether or not such Debt Security may be overdue)
for the purpose of making payment and for all other
purposes.
Governing Law
The
Indentures and the Debt Securities will be governed by, and
construed in accordance with, the law of the State of New
York.
The Trustee
We will
enter into the Indentures with a Trustee that is qualified to act
under the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”), and with any other Trustees chosen by us and
appointed in a supplemental indenture for a particular series of
Debt Securities. We may maintain a banking relationship in the
ordinary course of business with our Trustee and one or more of its
affiliates.
Resignation or Removal of Trustee
. If
the Trustee has or acquires a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee must either
eliminate its conflicting interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust
Indenture Act and the applicable Indenture. Any resignation will
require the appointment of a successor Trustee under the applicable
Indenture in accordance with the terms and conditions of such
Indenture.
The
Trustee may resign or be removed by us with respect to one or more
series of Debt Securities and a successor Trustee may be appointed
to act with respect to any such series. The holders of a majority
in aggregate principal amount of the Debt Securities of any series
may remove the Trustee with respect to the Debt Securities of such
series.
Limitations on Trustee if It is Our
Creditor
. Each Indenture will contain certain limitations on
the right of the Trustee, in the event that it becomes our
creditor, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim
as security or otherwise.
Certificates and Opinions to Be Furnished to
Trustee
. Each Indenture will provide that, in addition to
other certificates or opinions that may be specifically required by
other provisions of an Indenture, every application by us for
action by the Trustee must be accompanied by an officers’
certificate and an opinion of counsel stating that, in the opinion
of the signers, all conditions precedent to such action have been
complied with by us.
DESCRIPTION OF DEPOSITARY SHARES
We may
offer fractional interests in shares of preferred stock rather than
full shares of preferred stock. In that event, depositary receipts
will be issued to evidence depositary shares, each of which will
represent a fraction of a share of a particular series of preferred
stock, as described in the prospectus supplement relating to the
particular issue of depositary shares.
The
shares of preferred stock represented by depositary shares will be
deposited under a deposit agreement between us and a depositary
that is a bank or trust company, as depositary, that we select as
set forth in the prospectus supplement relating to the particular
issue of depositary shares. Unless otherwise specified in the
prospectus supplement relating to a particular issue of depositary
shares, each owner of a depositary share will be entitled, in
proportion to the applicable fraction of a share of preferred stock
represented by such depositary share, to all the rights and
preferences of the shares of preferred stock represented by such
depositary share, including dividend and liquidation rights and any
right to convert the shares of preferred stock into common
stock.
We will
describe the terms of any depositary shares we offer and the
related depositary agreement, as well as the terms of the shares of
preferred stock represented thereby, in the prospectus supplement
relating to the particular issue of depositary shares.
DESCRIPTION OF WARRANTS
We may
issue warrants that entitle the holder to purchase common stock,
preferred stock, debt securities or other securities. Warrants may
be issued independently or together with common stock, preferred
stock, debt securities or other securities offered by any
prospectus supplement and may be attached to or separate from any
such offered securities. Each series of warrants will be issued
under a separate warrant agreement to be entered into between us
and a bank or trust company, as warrant agent, all as will be set
forth in the prospectus supplement relating to the particular issue
of warrants. The warrant agent will act solely as our agent in
connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of warrants
or beneficial owners of warrants.
The
following summary of certain provisions of the warrants does not
purport to be complete and is subject to, and is qualified in its
entirety by reference to, all provisions of the warrant
agreements.
Reference is made
to the prospectus supplement relating to the particular issue of
warrants offered pursuant to such prospectus supplement for the
terms of and information relating to such warrants, including,
where applicable:
●
the number of
shares of common stock purchasable upon the exercise of warrants to
purchase common stock and the price at which such number of shares
of common stock may be purchased upon such exercise;
●
the number of
shares and series of preferred stock purchasable upon the exercise
of warrants to purchase preferred stock and the price at which such
number of shares of such series of preferred stock may be purchased
upon such exercise;
●
the designation,
aggregate principal amount, denominations and terms of the series
of debt securities purchasable upon exercise of warrants to
purchase debt securities and the price at which such debt
securities may be purchased upon such exercise;
●
the number of other
securities purchasable upon exercise of the warrants to purchase
such other securities and the price at which such securities may be
purchased upon exercise;
●
the date on which
the right to exercise such warrants shall commence and the date on
which such right shall expire;
●
United States
federal income tax consequences applicable to such
warrants;
●
the amount of
warrants outstanding as of the most recent practicable date;
and
●
any other terms of
such warrants.
Warrants will be
offered and exercisable for United States dollars only. Warrants
will be issued in registered form only. The exercise price for
warrants will be subject to adjustment in accordance with the
applicable prospectus supplement.
Each
warrant will entitle the holder thereof to purchase such number of
shares of common stock, preferred stock or other securities or such
principal amount of debt securities at such exercise price as shall
in each case be set forth in, or calculable from, the prospectus
supplement relating to the warrants, which exercise price may be
subject to adjustment upon the occurrence of certain events as set
forth in such prospectus supplement. After the close of business on
the expiration date, or such later date to which such expiration
date may be extended by us, unexercised warrants will become void.
The place or places where, and the manner in which, warrants may be
exercised shall be specified in the prospectus supplement relating
to such warrants.
Prior
to the exercise of any warrants to purchase common stock, preferred
stock, debt securities or other securities, holders of such
warrants will not have any of the rights of holders of such common
stock, preferred stock, debt securities or other securities, as the
case may be, purchasable upon such exercise, including the right to
receive payments of dividends, if any, on the common stock or
preferred stock purchasable upon such exercise, or to receive
payments of principal of, premium, if any, or interest, if any, on
the debt securities purchasable upon such exercise or to enforce
covenants in the applicable indenture.
DESCRIPTION OF RIGHTS
We may
issue rights to purchase our common stock, preferred stock, debt
securities or depositary shares. These rights may be offered
independently or together with any other security offered hereby
and may or may not be transferable by the stockholder receiving the
rights in such offering. In connection with any offering of rights,
we may enter into a standby arrangement with one or more
underwriters or other purchasers pursuant to which the underwriters
or other purchasers may be required to purchase any securities
remaining unsubscribed for after such offering.
The
prospectus supplement relating to any rights we offer, if any,
will, to the extent applicable, include specific terms relating to
the offering, including some or all of the following:
●
the price, if any,
for the rights;
●
the exercise price
payable for our common stock, preferred stock, debt securities or
depositary shares upon the exercise of the rights;
●
the number of
rights to be issued to each stockholder;
●
the number and
terms of our common stock, preferred stock, debt securities or
depositary shares which may be purchased per each
right;
●
the extent to which
the rights are transferable;
●
any other terms of
the rights, including the terms, procedures and limitations
relating to the exchange and exercise of the rights;
●
the date on which
the right to exercise the rights shall commence, and the date on
which the rights shall expire;
●
the extent to which
the rights may include an over-subscription privilege with respect
to unsubscribed securities or an over-allotment privilege to the
extent the securities are fully subscribed; and
●
if applicable, the
material terms of any standby underwriting or purchase arrangement
which may be entered into by the Company in connection with the
offering of rights.
The
description in the applicable prospectus supplement of any rights
we offer will not necessarily be complete and will be qualified in
its entirety by reference to the applicable rights certificate,
which will be filed with the SEC if we offer rights. We urge you to
read the applicable rights certificate and any applicable
prospectus supplement in their entirety.
DESCRIPTION OF UNITS
We may
issue units comprised of one or more of the other classes of
securities described in this prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder of a
unit will have the rights and obligations of a holder of each
included security. The units may be issued under unit agreements to
be entered into between us and a unit agent, as detailed in the
prospectus supplement relating to the units being offered. The
prospectus supplement will describe:
●
the designation and
terms of the units and of the securities comprising the units,
including whether and under what circumstances the securities
comprising the units may be held or transferred
separately;
●
a description of
the terms of any unit agreement governing the units;
●
a description of
the provisions for the payment, settlement, transfer or exchange of
the units;
●
a discussion of
material federal income tax considerations, if applicable;
and
●
whether the units
if issued as a separate security will be issued in fully registered
or global form.
The
descriptions of the units in this prospectus and in any prospectus
supplement are summaries of the material provisions of the
applicable agreements. These descriptions do not restate those
agreements in their entirety and may not contain all the
information that you may find useful. We urge you to read the
applicable agreements because they, and not the summaries, define
your rights as holders of the units. For more information, please
review the forms of the relevant agreements, which will be filed
with the SEC promptly after the offering of units and will be
available as described in the section titled “Where You Can
Find More Information.”
PLAN OF DISTRIBUTION
We may
sell the offered securities in and outside the United States (1)
through underwriters or dealers, (2) directly to purchasers,
including our affiliates and stockholders, (3) through agents or
(4) through a combination of any of these methods. The prospectus
supplement will include the following information:
●
the terms of the
offering;
●
the names of any
underwriters or agents;
●
the name or names
of any managing underwriter or underwriters;
●
the purchase price
of the securities;
●
the estimated net
proceeds to us from the sale of the securities;
●
any delayed
delivery arrangements;
●
any underwriting
discounts, commissions and other items constituting underwriters'
compensation;
●
any discounts or
concessions allowed or reallowed or paid to dealers;
and
●
any commissions
paid to agents.
Sale Through Underwriters or Dealers
If
underwriters are used in the sale, the underwriters will acquire
the securities for their own account for resale to the public,
either on a firm commitment basis or a best efforts basis. The
underwriters may resell the securities from time to time in one or
more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time
of sale. Underwriters may offer securities to the public either
through underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as
underwriters. Unless we inform you otherwise in the prospectus
supplement and except as described below, the obligations of the
underwriters to purchase the securities will be subject to certain
conditions. The underwriters may change from time to time any
initial public offering price and any discounts or concessions
allowed or re-allowed or paid to dealers.
During
and after an offering through underwriters, the underwriters may
purchase and sell the securities in the open market. These
transactions may include overallotment and stabilizing transactions
and purchases to cover syndicate short positions created in
connection with the offering. The underwriters may also impose a
penalty bid, which means that selling concessions allowed to
syndicate members or other broker-dealers for the offered
securities sold for their account may be reclaimed by the syndicate
if the offered securities are repurchased by the syndicate in
stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the
offered securities, which may be higher than the price that might
otherwise prevail in the open market. If commenced, the
underwriters may discontinue these activities at any
time.
If
dealers are used, we will sell the securities to them as
principals. The dealers may then resell that securities to the
public at varying prices determined by the dealers at the time of
resale. The dealers participating in any sale of the securities may
be deemed to be underwriters within the meaning of the Securities
Act with respect to any sale of those securities. We will include
in the prospectus supplement the names of the dealers and the terms
of the transaction.
At-the-Market Offerings
Underwriters or
agents could makes sales in privately negotiated transactions
and/or any other method permitted by law, including sales deemed to
be an “at-the-market” offering as defined in Rule 415
under the Securities Act, which includes sales made directly on or
through the NYSE American, the existing trading market for our
common stock, or sales made to or through a market maker other than
on an exchange.
To the
extent that we make sales through one or more underwriters or
agents in “at-the-market” offerings, we will do so
pursuant to the terms of a sales agency financing agreement or
other “at-the-market” offering arrangement with such
underwriters or agents. If we engage in at-the-market sales
pursuant to any such agreement, we will issue and sell securities
through one or more underwriters or agents, which may act on an
agency basis or on a principal basis. During the term of any such
agreement, we may sell securities on a daily basis in exchange
transactions or otherwise as we agree with the underwriters or
agents. The agreement will provide that any securities sold will be
sold at prices related to the then prevailing market prices for
such securities. Therefore, exact figures regarding proceeds that
will be raised or commissions to be paid cannot be determined at
this time. Pursuant to the terms of the agreement, we also may
agree to sell, and the relevant underwriters or agents may agree to
solicit offers to purchase, blocks of securities. The terms of each
such agreement will be set forth in more detail in the applicable
prospectus supplement and any related free writing prospectus. In
the event that any underwriter or agent acts as principal, or any
broker-dealer acts as underwriter, it may engage in certain
transactions that stabilize, maintain, or otherwise affect the
price of the securities. Any such activities will be described in
the prospectus supplement or any related free writing prospectus
relating to the transaction.
Direct Sales and Sales Through Agents
We may
sell the securities directly. In this case, no underwriters or
agents would be involved. We may also sell the securities through
agents we designate from time to time. In the prospectus
supplement, we will name any agent involved in the offer or sale of
the offered securities, and we will describe any commissions
payable by us to the agent. Unless we inform you otherwise in the
prospectus supplement, any agent will agree to use its reasonable
best efforts to solicit purchases for the period of its
appointment.
We may
sell the securities directly to institutional investors or others
who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any sale of those securities. We
will describe the terms of any such sales in the prospectus
supplement.
Remarketing Arrangements
Offered
securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing
upon their purchase, in accordance with a redemption or repayment
pursuant to their terms, or otherwise, by one or more remarketing
firms, acting as principals for their own accounts or as agents for
us. Any remarketing firm will be identified and the terms of its
agreements, if any, with us and its compensation will be described
in the applicable prospectus supplement. Remarketing firms may be
deemed to be underwriters, as that term is defined in the
Securities Act, in connection with the securities
remarketed.
Delayed Delivery Contracts
If we
so indicate in the prospectus supplement, we may authorize agents,
underwriters or dealers to solicit offers from certain types of
institutions to purchase securities from us at the public offering
price under delayed delivery contracts. These contracts would
provide for payment and delivery on a specified date in the future.
The contracts would be subject only to those conditions described
in the prospectus supplement. The prospectus supplement will
describe the commission payable for solicitation of those
contracts.
General Information
We may
have agreements with the agents, dealers, underwriters and
remarketing firms to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, or to
contribute with respect to payments that the agents, dealers,
underwriters or remarketing firms may be required to make. Agents,
dealers, underwriters and remarketing firms may be customers of,
engage in transactions with, or perform services for us in the
ordinary course of their businesses.
LEGAL MATTERS
The
validity of our securities offered by this prospectus will be
passed upon for us by Jones & Keller, P.C., Denver,
Colorado.
EXPERTS
The
audited financial statements of Yuma Energy, Inc. as of
December 31, 2016 and for the year then ended, incorporated by
reference in this prospectus and elsewhere in this registration
statement, have been so incorporated by reference in reliance on
the report of Grant Thornton LLP, independent registered public
accountants, upon the authority of said firm as experts in auditing
and accounting.
The
financial statements of Davis Petroleum Acquisition Corp. for the
year ended December 31, 2015 incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended
December 31, 2016 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, an independent registered
public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
Information about
the estimated oil and gas proved reserves and the future net cash
flows of Yuma Energy, Inc. as of December 31, 2016 and incorporated
by reference in this prospectus was prepared by Netherland,
Sewell & Associates, Inc., an independent petroleum
engineering and consulting firm, and is included herein in reliance
upon their authority as experts in petroleum
engineering.
WHERE YOU CAN FIND MORE INFORMATION
We are
required to file annual and quarterly reports and other information
with the SEC. You may read and copy any materials we file with the
SEC at the SEC’s Public Reference Room at 100 F Street,
N.E., Washington, D.C., 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
The SEC
maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
The SEC
allows us to “incorporate by reference” information
that we file with them, which means that we can disclose important
information to you by referring you to documents previously filed
with the SEC. The information incorporated by reference is deemed
to be part of this prospectus except for any information that is
superseded by information included directly in this prospectus, and
the information that we file later with the SEC will automatically
supersede this information. Any statement contained in this
prospectus or a document incorporated by reference in this
prospectus will be deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document that is
incorporated by reference in this prospectus modifies or superseded
the statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus. You should not assume that the information in
this prospectus is current as of the date other than the date on
the cover page of this prospectus.
The
following documents previously filed by us with the SEC are
incorporated by reference in this prospectus:
●
Our Annual Report
on Form 10-K for the year ended December 31, 2016 filed with the
SEC on April 12, 2017;
●
Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2017 filed with
the SEC on May 11, 2017;
●
Our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2017 filed with
the SEC on August 14, 2017;
●
Our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2017 filed
with the SEC on November 13, 2017;
●
Our Current Reports
on Form 8-K, as filed with the SEC on March 14, 2017, March 27,
2017, April 26, 2017, May 1, 2017, May 23, 2017, June 19, 2017,
July 11, 2017, September 12, 2017 and November 16, 2017, and on
Form 8-K/A, as filed with the SEC on January 9, 2017 and January
18, 2017; and
●
The description of
our common stock contained in our Registration Statement on Form
8-A, as filed with the SEC on October 25, 2016, including any
amendment to that form that we may file in the future for the
purpose of updating the description of our common
stock.
We are
also incorporating by reference into this prospectus any additional
documents that we may file with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act (excluding any information
furnished and not filed with the SEC) after the date on which the
registration statement that includes this prospectus was initially
filed with the SEC (including all such documents that we may file
with the SEC after the date of the initial registration statement
and prior to the effectiveness of the registration statement) and
until all offerings under this registration statement are
terminated shall be deemed to be incorporated in this prospectus by
reference and to be a part hereof from the date of filing of such
documents.
We will
provide to each person, including any beneficial holder, to whom a
prospectus is delivered, at no cost, upon written or oral request,
a copy of any or all of the information that has been incorporated
by reference in the prospectus but not delivered with the
prospectus. You should direct any requests for documents to the
following address or telephone number:
Yuma
Energy, Inc.
Attention:
James J. Jacobs
1177
West Loop South, Suite 1825
Houston,
Texas 77027
(713)
968-7000
You may
access the documents incorporated by reference on our website at
www.yumaenergyinc.com, although our website shall not be deemed to
be a part of this prospectus.
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