Exhibit 10.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this “Agreement”) dated as of March 20, 2024 (the “Execution Date”) is made and entered into by and among Comstock Resources, Inc., a Nevada corporation (the “Company”), Arkoma Drilling L.P., a Texas limited partnership (“Arkoma”), and Williston Drilling, L.P., a Texas limited partnership (“Williston” and, together with Arkoma, the “Jones Entities”). The Company and the Jones Entities are sometimes referred to herein individually, as a “Party” and, collectively, as the “Parties.” Any term used but not defined in this Agreement shall have the meaning given to such term in Annex A, which Annex A is hereby incorporated herein by reference.
WHEREAS, subject to the terms and conditions of this Agreement, the Jones Entities desire to purchase from the Company, and the Company desires to issue and sell to the Jones Entities the number of shares (the “Shares”) of common stock of the Company, par value $0.50 per share (“Common Stock”), equal to approximately $100.5 million in the aggregate based on the Common Stock price described herein (the “Transaction”); and
WHEREAS, each of the Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”) of the Company and the Board has approved the entry into this Agreement and any certificate, instrument, agreement or other document to be delivered by or on behalf of the Company in connection with the Transaction.
NOW, THEREFORE, for and in consideration of the premises and mutual covenants, representations, warranties and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
SUBSCRIPTION; PAYMENT; CLOSING
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
The Company hereby represents and warrants to each Jones Entity as of the Execution Date and as of the Closing Date (except as set forth herein) as follows:
2
3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE JONES ENTITIES
As an inducement to the Company to enter into this Agreement, the Jones Entities, severally and not jointly, hereby represent and warrant to and agree with the Company as of the Execution Date and as of the Closing Date (except as set forth herein) as follows:
4
5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE AND WERE OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT (WHICH MAY INCLUDE AN OPINION OF COUNSEL) THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
UNDERSTANDINGS AND NOTICE TO THE JONES ENTITIES
The Jones Entities understand and acknowledge as follows:
6
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS SALE OF SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE JONES ENTITIES SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME
COVENANTS AND AGREEMENTS
7
CONDITIONS TO OBLIGATIONS
8
9
ADDITIONAL AGREEMENTS AND PROVISIONS
10
If to the Company:
Comstock Resources, Inc.
5300 Town and Country Blvd., Suite 500
Frisco, Texas 75034
Attention: Roland O. Burns, President
Email: rob@crkfrisco.com
With a copy to (which shall not constitute notice):
O’Melveny & Myers LLP
2801 N. Harwood Street, Suite 1600
Dallas, Texas 75219
Attention: Jack Jacobsen
E-mail: jjacobsen@omm.com
If to the Jones Entities:
c/o Arkoma Drilling L.P.
1 Cowboys Way, Suite 100
Frisco, Texas 75034
Attention: Tom Walker
Email: twalker@dallascowboys.net
With a copy to (which shall not constitute notice):
Gibson, Dunn & Crutcher LLP
2001 Ross Ave., Suite 2100
Dallas, Texas 75201
Attention: Doug Rayburn
Email: drayburn@gibsondunn.com
11
12
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Execution Date.
COMPANY:
COMSTOCK RESOURCES, INC.
By: /s/ M. Jay Allison
Name: M. Jay Allison
Title: Chief Executive Officer
JONES ENTITIES:
ARKOMA DRILLING L.P.
By: /s/ Thomas L. Walker
Name: Thomas L. Walker
Title: Treasurer
WILLISTON DRILLING, L.P.
By: /s/ Thomas L. Walker
Name: Thomas L. Walker
Title: Treasurer
Signature Page to Subscription Agreement
ANNEX A
DEFINED TERMS
As used in the Agreement to which this Annex A is attached and incorporated by reference therein, the following terms will have the meanings specified:
“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such specified Person. For the purposes of this definition, the term "control," when used with respect to any specified Person, means the power to direct or cause the direction of the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have correlative meanings.
“Business Day” means any day other than a Saturday, a Sunday or other day on which commercial banks in Dallas, Texas or New York, New York are authorized or required by Law to close.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations thereunder.
“Governmental Authority” means any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar government, governmental, administrative or regulatory authority, agency, branch or commission or other U.S. or non-U.S. governmental authority or instrumentality or any court, tribunal, arbitral or judicial body (including any grand jury).
“Law” means all laws, statutes, rules, regulations, ordinances, codes, or Orders of any Governmental Authority, principle of common law, or any similar provisions having the force or effect of law.
“NYSE” means the New York Stock Exchange.
“Order” means any order, injunction, judgment, decree, ruling, writ, assessment, determination, stipulation, directive, restriction, charge, plan or award of any Governmental Authority, including any ruling or award in any arbitration proceeding.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, together with the rules and regulations thereunder.
SCHEDULE 1.1
Jones Entity | Shares of Common Stock |
Arkoma Drilling L.P. | 9,428,750 |
Williston Drilling, L.P. | 3,071,250 |