EXHIBIT 10.49
Stock Purchase Agreement
This Stock Purchase Agreement ("Agreement") is entered into
on April __, 1998 at Riverton, Wyoming by (i) U.S. Energy Corp.,
000 Xxxxx 0xx Xxxx, Xxxxxxxx, Xxxxxxx 00000, a Wyoming
corporation (the "Company"); and (ii) Xxxxxxxx & Xxxxxxxx
Securities, Inc., Suite 1714, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 (the "Purchaser").
Recitals
A. The Company owns, directly and through subsidiaries and
joint ventures, uranium, gold and other mineral properties and
uranium processing facilities in the United States. Certain of
these properties are being developed for future mining and
processing of gold and uranium.
B. In May 1997, Altamira Management Ltd. (with offices at
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, Xxxxxx X0X
0X0) purchased 204,600 Special Purchase Warrants (the "Special
Warrants") issued by Xxxxxx Gold Mining Company, a Wyoming
corporation ("SGMC") which is a subsidiary of the Company, for a
cash investment of Cdn$1,125,300. Each Special Warrant entitled
the holder to acquire from SGMC, at no further cost, one share of
Common Stock of SGMC, and one Purchase Warrant; each Purchase
Warrant would have entitled the holder to purchase one share of
Common Stock of SGMC, at a price of Cdn$6.00 per whole share (the
"Purchase Warrants"), during the 18 months following closing of
the offering of the SGMC Special Purchase Warrants. The offering
was conducted pursuant to SGMC's Confidential Offering Memorandum
("Memorandum") dated May 5, 1997.
C. Pursuant to SGMC's Memorandum and the terms and
conditions of the Special Warrants, if SGMC were to fail to
obtain Prospectus Qualification before the Qualification Deadline
(as such terms were defined in the Memorandum) from the
securities commissions of the Canadian Provinces wherein
purchasers of the Special Warrants reside, the holders of the
Special Warrants would be entitled to receive a Dilution Penalty
in the amount of 1.1 shares of Common Stock of SGMC and 1.1
Purchase Warrants, for each Special Warrant exercised after the
Qualification Deadline if Prospectus Qualification were not
obtained by the Qualification Deadline.
D. The Qualification Deadline has passed as of the date of
this Agreement, and the Prospectus Qualification has not been
obtained by SGMC. Altamira Management Ltd. has not received a
Dilution Penalty with respect to the Special Warrants and their
constituent securities.
E. For the account of Altamira Management Ltd. the
Purchaser desires to diversify and increase the original
investment by the acquisition of shares of the Common Stock of
the Company, and the Purchaser has made an offer to the Company
to purchase shares of Common Stock of the Company. The Purchaser
and the Company have negotiated the terms of acceptance of the
offer by the Company. As a result of the offer and subsequent
negotiations with the Purchaser, the Company has determined to
sell shares of Common Stock of the Company to the Purchaser, for
the consideration and on the terms set forth in this Agreement.
Agreement
Now Therefore, in consideration of the mutual promises and
covenants contained herein, and subject to the terms and
conditions of this Agreement, the parties agree as follows:
1. Purchase and Sale of Company Shares; Closing Times.
(a) At the closings of this Agreement, the Company
will sell to the Purchaser (in trust for the account of Altamira
Management Ltd.) and the Purchaser (in trust for the account of
Altamira Management Ltd.) will purchase from the Company 157,530
shares of Common Stock of the Company, for US$315,000 in cash and
all of the 204,600 Special Warrants held by the Purchaser. As
further consideration for the purchase of the shares from the
Company, at and as of the First Closing Time, the Purchaser (as
duly authorized by Altamira Management Ltd.) shall relinquish and
forever give up the Dilution Penalty, and no further document or
certificate concerning this relinquishment and give up shall be
necessary.
(b) The Company is represented in this transaction by
Xxxxxxxx & Xxxxxxxx Securities, Inc. (the "Placement Agent")
pursuant to the terms of the Agency Agreement between the Company
and the Placement Agent. The closings of the purchase and sale
of the shares of the Company will be completed at the offices of
the Placement Agent on or before April 1, 1998, or on such other
date to which the Company and the Placement Agent agree (the
"Closing Times").
(i) The closing at the First Closing Time will be
effected with the delivery of the $315,000 cash to the Company,
and the delivery to the Placement Agent for transmission to
Altamira Management Ltd. of certificates for 45,000 shares of
Common Stock of the Company. Certificates for the remaining
112,530 shares of Common Stock shall be delivered to the
Placement Agent to hold, in trust for Altamira Management Ltd.
until the Second Closing Time. If there is no closing at the
Second Closing Time, the certificates for the 112,530 shares of
Common Stock shall be returned to the Company by the Placement
Agent.
(ii) Upon notification to the Purchaser by the
Company that the Company's registration statement has been
declared effective by the United States Securities and Exchange
Commission pursuant to paragraph 3(d) of this Agreement (the date
of receipt by the Purchaser of such notice shall be the date of
the Second Closing Time), (x) the Purchaser shall deliver to the
Placement Agent the certificates for the Special Warrants (duly
endorsed to the Company by Altamira Management Ltd. or
accompanied by a stock power with signature guaranteed), for
delivery by the Placement Agent to the Company; and (y) the
Placement Agent shall deliver certificates for the remaining
112,530 shares of Common Stock of the Company to the Purchaser to
hold in trust for Altamira Management Ltd. At the election of
the Purchaser, the certificates for such 1112,530 shares may be
turned in to the Company's transfer agent for immediate reissue
without restriction.
(iii) Certificates to the Placement Agent for
transmittal to the Purchaser, which certificates shall be signed
by two officers of the Company, dated as of the First and Second
Closing Times, certifying on behalf of the Company that as of
each such Closing Time, (x) all of the Company's representations
and warranties set forth in paragraph 2.1 of this Agreement are
true and correct in all material respects; and (y) with respect
to 2.1(i), except as disclosed in the public record of the
Company as filed with the United States Securities and Exchange
Commission, there has been no material adverse change in the
consolidated financial condition of the Company. Certificates
for the shares of the Company purchased by the Purchaser shall be
delivered in the name of Altamira Management Ltd., or in such
other name as instructed by the Purchaser prior to each of the
Closing Times.
2 Representations and Warranties. Each party represents
and warrants to the other party as follows:
2.1 By the Company. The Company represents and warrants to
the Purchaser as follows:
(a) (i) Except as disclosed in subparagraph
2.1(a)(i)(x) below, the documents comprising the Company's public
record as filed with the United States Securities and Exchange
Commission pursuant to the United States Securities Exchange Act
of 1934 contain an accurate and complete record of the business
of the Company. There has been no material adverse change in the
business, financial affairs or other condition of the Company
that has not been publicly disclosed. The public record does not
omit to disclose any facts relating to the Company which would be
material to a prospective purchaser of its Common Shares.
(x) The Company's Form 10-Q Report for the
fiscal quarter ended November 30, 1997 disclosed (in Item 2
"Management's Discussion and Analysis of Financial Condition and
Results of Operations") that the $4,000,000 line item on the
balance sheet was classified as deferred income, as such amount
was forfeitable back to Kennecott Uranium Company until certain
conditions were fulfilled. The Company further disclosed that
the forfeitable terms were satisfied in the third quarter, which
would allow such $4,000,000 to be recognized as income during the
Company's third fiscal quarter (ended February 28, 1998).
Pending further evaluation of the proper accounting treatment of
the Company's receipt of such $4,000,000, the Company has
determined that it may amend the Form 10-Q Report for the fiscal
quarter ended November 30, 1997 to delete reference to the
Company recognizing such $4,000,000 as income. If the Form 10-Q
Report is to be amended, such amendment may not be filed with the
United States Securities and Exchange Commission until after the
Closing Time. However, for purposes of this Agreement, the
disclosures in this subparagraph 2.1(a)(i)(x) shall be deemed to
be part of the public record of the Company as of the date
hereof.
(ii) The public record (with respect to
information therein which concerns SGMC) filed with the United
States Securities and Exchange Commission pursuant to the United
States Securities Exchange Act of 1934 does not omit to disclose
any non-adverse facts which could be material to a seller of
securities of SGMC.
(b) Each of the Company and its material subsidiaries
is, and will be at the Closing Time, duly incorporated and
organized and validly subsists under the laws of its jurisdiction
of incorporation (or other form of organization), with full
corporate (or other entity power) and capacity to carry on its
business as presently conducted.
(c) Except as disclosed in the audited financial
statements for the year ended May 31, 1997 or disclosed in
writing to the Purchaser, there are no actions, suits, proceeding
or enquiries threatened or, to the best of its knowledge, pending
against or affecting the Company or any of its subsidiaries at
law or in equity or before or by any federal, provincial,
municipal or other governmental department, commission, board,
bureau or agency which may in any way materially adversely affect
the business, operations or condition (financial or otherwise) of
the Company or any of its subsidiaries, taken as a whole, or
which affects or may affect the sale of Common Stock, and the
Company is not aware of any existing grounds on which such
action, suit, proceeding or enquiry might be commenced with any
reasonable likelihood of success.
(d) The authorized capital of the Company consists of
(i) 20,000,000 shares of Common Stock, $.01 par value, of which,
as at the date hereof, there were issued and outstanding
6,696,474 shares of Common Stock as fully paid and nonassessable,
not including (a) 4,092 shares to be issued to employees for the
1997 Christmas bonus, (b) 2,500 shares to be issued to outside
director Xxxxxxx and 2,500 shares to be issued to Advisory Board
Member Fraser, and (c) 229,606 shares which are forfeitable; and
(ii) 100,000 preferred shares, none issued or outstanding.
(e) American Securities Transfer & Trust, Inc., 000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx XXX 00000-0000,
telephone 0-000-000-0000, is the duly appointed registrar and
transfer agent for the shares of Common Stock of the Company.
(f) No regulatory authority of any other jurisdiction
has issued any order preventing or suspending trading in any
securities of the Company which at the Closing Time will be
outstanding, and the Company is not in default of any requirement
of the securities laws of any province of Canada or any laws of
the United States which would reasonably be expected to affect
trading in the Company's securities.
(g) The issued and outstanding shares of Common Stock
of the Company are quoted on NASDAQ.
(h) The Common Stock class of the Company is
registered with the United States Securities and Exchange
Commission pursuant to Section 12(g) of the Securities Exchange
Act of 1934, the Company has timely filed all reports and other
documents required to be filed thereunder, and the public record
as filed with such Commission as of the date hereof is materially
complete and accurate.
