13D Filing: Anchorage Advisors and Rosehill Resources Inc (ROSE)

CUSIP No.  49877M108

SCHEDULE 13D

Page 11 of 16 Pages

The response to Item 3 and Item 4 of this Schedule 13D is incorporated by reference herein.

Except as described in this Item 6, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the persons named in Item 2 or, to the knowledge of the Reporting Persons, between such persons and any other person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

Shareholders’ and Registration Rights Agreement

Concurrently with the execution of the Business Combination Agreement, the Issuer entered into a Shareholders’ and Registration Rights Agreement (“SHRRA”) dated December 20, 2016, with each of KLR Sponsor, Tema Oil and Gas Company (together with KLR Sponsor, the “Sponsors”), AIO V and AIO V AIV 3 (AIO V and AIO V AIV 3, collectively, “Anchorage”).  Pursuant to the terms of the SHRRA, the Sponsors and Anchorage are entitled to certain registration rights, including the right to initiate two underwritten offerings in any twelve-month period and unlimited piggyback registration rights, subject to customary black-out periods, cutback provisions and other limitations as set forth in the SHRRA. Pursuant to the SHRRA, as promptly as practicable and in no event later than seven days following the completion of the Business Combination, the Issuer has agreed to file with the Securities and Exchange Commission (the “SEC”) a shelf registration statement relating to the offer and sale of the Registrable Securities (as defined in the SHRRA) owned by the Sponsors and Anchorage (and any permitted transferees) and to keep such shelf registration statement effective on a continuous basis until the date as of which all such Registrable Securities have been sold or another registration statement is filed under the Securities Act of 1933.

Pursuant to the SHRRA, subject to specified ownership thresholds, Anchorage is entitled to designate one director.  Anchorage is also entitled to appoint a representative or observer on each committee of the Board.  There will be an audit committee, a compensation committee, and a nominating and governance committee of the Board, and the Anchorage director will sit on all of the committees.

Also pursuant to the SHRRA, during the period beginning on the date of closing of the Business Combination and ending on the two year anniversary thereof, the Board may not approve, or cause Rosehill Operating Company, LLC to approve, certain Major Transactions (as defined in the SHRRA) without the affirmative vote of at least 70% of the directors then serving on the Board.

Anchorage will have preemptive rights under the SHRRA to participate in future equity issuances by the Issuer, subject to certain exceptions, so as to maintain its then-current percentage ownership of the Issuer’s capital stock.

Certain rights and obligations of Anchorage under the SHRRA will automatically cease if