U.S. ENERGY CORP. Item 1.01. Entry into a Material Definitive Agreement.
Purchase and Sale Agreements
On
Pursuant to the Purchase Agreements, we agreed to acquire certain oil and gas
properties from the Sellers, representing a diversified, conventional portfolio
of operated, producing, oil-weighted assets located across the Rockies,
The initial base purchase price for the assets is (a)
Each Purchase Agreement required the Company to place a
Each Purchase Agreement has substantially similar terms (other than certain differences related to assets acquired, purchase terms, certain representations and warranties, and other matters, as individually negotiated by the parties).
The Purchase Agreements are subject to termination prior to the closing of the
transactions (the "Transactions") contemplated by the Purchase Agreements (each
the "Closing" and such date, the "Closing Date") under certain circumstances,
and may be terminated: (a) at any time prior to the Closing Date by the mutual
consent of the parties; (b) by any Seller if we fail to timely deliver the
Deposit to such Seller; (c) by any Seller if (i) we materially breach any
provision of the applicable Purchase Agreement, and such breach remains uncured
for 30 days after notice thereof, or (ii) we update a disclosure schedule prior
to Closing and such update would constitute a material adverse effect on our
assets or operations, or our ability to complete the applicable acquisition;
(d) by us, if (i) any Seller materially breaches any provision of its applicable
Purchase Agreement, and such breach remains uncured for 30 days after notice
thereof, (ii) certain preferential rights associated with the assets exceed 10%
of the purchase price payable under the Purchase Agreements, or (iii) if a
Seller updates a disclosure schedule prior to Closing, and such update would
constitute a material adverse effect on Seller's assets or operations, or
Seller's ability to complete the applicable sale; (e) by us or any Seller in the
event the Closing has not occurred by
If a Seller is entitled to terminate their applicable Purchase Agreement pursuant to (b) above, then Seller may terminate the applicable agreement and pursue any other claim, right, or remedy against us available at law or in equity. If a Seller is entitled to terminate its applicable Purchase Agreement pursuant to (c) or (f), above, then under certain circumstances, such Seller has the right, as their sole and exclusive remedy and in lieu of all other damages, to terminate the agreement, receive the applicable Deposit as liquidated damages and be entitled to reimbursement from us of all of the Seller's reasonable out-of-pocket expenses incurred in connection with the contemplated transaction. If we are entitled to terminate a Purchase Agreement pursuant to (d) above, then under certain circumstances, we have the right, as our sole and exclusive remedy and in lieu of all other damages, to terminate the applicable agreement and, in conjunction therewith, receive a return of the Deposit. If the applicable agreement is terminated for any reason other than as described above, then the Deposit is returned to us.
The transactions contemplated by the Purchase Agreements are expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions, including approval of the transactions contemplated by the Purchase Agreements, and the issuance of the PSA Shares, by the shareholders of the Company, as required by applicable Nasdaq Capital Market rules, the accuracy of the representations and warranties of the parties at Closing, subject, in certain instances, to certain materiality and other thresholds, the performance by the parties of their obligations and covenants under the Purchase Agreements, the delivery of certain documentation by the parties and the absence of any injunction or other legal prohibitions preventing consummation of the Transactions.
The conditions to the closing of the Purchase Agreements may not be met, and such Closing may not ultimately occur on the terms set forth in the Purchase Agreements, if at all.
The transactions are not subject to financing as the Company plans to finance the cash portion of the transactions with cash on hand.
Upon closing of the transactions, the Sellers will own approximately 80.98% of the Company's then outstanding shares of common stock, and will effectively control the Company, and as such, the Transactions will result in a change of control of the Company.
The Company and the Sellers have each made customary representations and warranties and have agreed to customary covenants in the Purchase Agreements, including indemnification obligations, subject in some cases to deductibles, thresholds and limits as relate to the Sellers. The Purchase Agreements also limit the liability of the Sellers and include various disclaimers regarding the . . .
Item 3.02 Unregistered Sales of
We claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule
506 of Regulation D of the Securities Act of 1933, as amended (the "Securities
Act"), for the offer, and will claim a similar exemption for the sale, of the
19,905,736 SPA Shares, since the transactions described above will not involve a
public offering, the recipients are "accredited investors", and will acquire the
securities for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof. The securities will be
subject to transfer restrictions, and the certificates evidencing the securities
will contain an appropriate legend stating that such securities have not been
registered under the Securities Act and may not be offered or sold absent
registration or pursuant to an exemption therefrom and are further subject to
the terms of the escrow agreement. The securities will not be registered under
the Securities Act and such securities may not be offered or sold in
Item 3.03. Material Modifications to Rights of Security Holders.
The information set forth in Item 1.01 above relating to the Purchase Agreements (including the copies thereof incorporated by reference into Item 1.01) and the restrictions on the Company's activities thereunder through Closing is incorporated by reference into this Item 3.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 2.1*+ Purchase and Sale Agreement between amongLubbock Energy Partners , LLC, as seller, andU.S. Energy Corp. , as purchaser, dated as ofOctober 4, 2021 2.2*+ Purchase and Sale Agreement between amongBanner Oil & Gas, LLC ,Woodford Petroleum, LLC andLlano Energy LLC , as sellers, andU.S. Energy Corp. , as purchaser, dated as ofOctober 4, 2021 2.3*+ Purchase and Sale Agreement between amongSynergy Offshore, LLC , as seller, andU.S. Energy Corp. , as purchaser, dated as ofOctober 4, 2021 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) * Filed herewith.
+ Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule or exhibit will be furnished
supplementally to the
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "would," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements.
Important factors that may cause actual results and outcomes to differ
materially from those contained in such forward-looking statements include,
without limitation, the ability of the parties to close the Purchase Agreements
on the terms set forth in, and pursuant to the required timing set forth in, the
Purchase Agreements, if at all; the occurrence of any event, change or other
circumstances that could give rise to the right of one or all of Sellers or the
Company (collectively, the "Sale Agreement Parties") to terminate the Purchase
Agreements; the effect of such termination, including fees potentially payable
in connection therewith; the outcome of any legal proceedings that may be
instituted against Sale Agreement Parties or their respective directors or
officers; the ability to obtain approvals and meet other closing conditions to
the Purchase Agreements on a timely basis or at all, including the risk that
approvals required for the Purchase Agreements are not obtained on a timely
basis or at all, or are obtained subject to conditions that are not anticipated
or the expected benefits of the transaction; the ability to obtain approval by
the Company's shareholders on the expected schedule of the transactions
contemplated by the Purchase Agreements; potential adverse reactions or changes
to business relationships resulting from the announcement or completion of the
Purchase Agreements; the ability of the Company to retain and hire key
personnel; the diversion of management's attention from ongoing business
operations; uncertainty as to the long-term value of the common stock of the
Company following the closing of the Purchase Agreements; the business, economic
and political conditions in the markets in which Sale Agreement Parties operate;
fluctuations in oil and natural gas prices, uncertainties inherent in estimating
quantities of oil and natural gas reserves and projecting future rates of
production and timing of development activities; competition; operating risks;
acquisition risks; liquidity and capital requirements; the effects of
governmental regulation; adverse changes in the market for the Company's oil and
natural gas production; dependence upon third-party vendors; risks associated
with COVID-19, the global efforts to stop the spread of COVID-19, potential
downturns in the
Other important factors that may cause actual results and outcomes to differ
materially from those contained in the forward-looking statements included in
this communication are described in the Company's publicly filed reports,
including, but not limited to, the Company's Annual Report on Form 10-K for
the year ended
The Company cautions that the foregoing list of important factors is not
complete, and does not undertake to update any forward-looking statements except
as required by applicable law. All subsequent written and oral forward-looking
statements attributable to the Company or any person acting on behalf of any
Sale Agreement Parties are expressly qualified in their entirety by the
cautionary statements referenced above. Other unknown or unpredictable factors
also could have material adverse effects on
Additional Information and Where to Find It
In connection with the proposed Transactions, the Company plans to file with the
Investors and security holders may obtain copies of these documents free of
charge through the website maintained by the
No Offer Or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Participants in the Solicitation
The Company, the Sellers and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the respective shareholders of the Company in respect of the proposed
Transactions under the rules of the
© Edgar Online, source
