AGREEMENT AND PLAN OF SHARE EXCHANGE, dated as of November , 1993
("Agreement") between U.S. Energy Corp., a Wyoming corporation ("USE"),
and The Brunton Company, a Wyoming corporation ("Brunton").
R E C I T A L S
A. The Exchange. At the Effective Time (as defined in
Section 1.4), the parties intend for USE to acquire all the
outstanding 5,547,950 common shares of Brunton ("Brunton Shares")
which are not owned by USE at Agreement date, in exchange for
277,398 shares of the common stock of USE ("USE Shares"), plus such
additional USE Shares as may be required for rounding up fractions.
The USE Shares shall be voting stock.
B. Intention of the Parties. It is the intention of the
parties that for federal income tax purposes the Exchange shall
qualify as a "reorganization" within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended
("Code").
C. Approvals. The respective Boards of Directors of USE and
Brunton have determined that this Agreement is in the best
interests of USE or Brunton, as the case may be, and its respective
shareholders, and have duly approved this Agreement and authorized
its execution and delivery.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants, and agreements set forth
herein, the parties agree as follows:
ARTICLE I.
THE EXCHANGE; CLOSING; EFFECTIVE TIME
1.1 The Exchange. Subject to the terms and conditions of this
Agreement, at the Effective Time, USE and Brunton shall consummate
the Exchange by which Brunton shall become a 100 percent owned
subsidiary of USE, without change in the separate existence of
Brunton as an operating corporation under the laws of the State of
Wyoming. The Exchange shall have the effects specified in Section
17-16-1106(b) of the Wyoming Business Corporation Act ("WBCA").
1.2 Effective Time. Promptly after all conditions to
consummation of this Agreement have been satisfied, USE shall
prepare and file Articles of Share Exchange with the Wyoming
Secretary of State, pursuant to WBCA Section 17-16-1105. The
Effective Time of the Exchange shall be the time and date of such
filing.
1.3 Closing. The closing of the Exchange ("Closing") shall
take place at the offices of USE, 877 North 8th West, Second Floor,
Riverton, Wyoming 82501, at 10:30 a.m. on the first business day on
which all the conditions set forth in this Agreement (other than
those that are waived by the party for whose benefit such
conditions exist) can be fulfilled, or at such other place and/or
time and/or on such other date to which the parties agree. The
date upon which the Closing shall occur is herein called the
"Closing Date."
ARTICLE II.
ARTICLES OF INCORPORATION AND BYLAWS
OF USE AND BRUNTON
2.1 Articles of Incorporation. The Articles of Incorporation
of USE, and of Brunton, at Agreement date shall not be affected by
the Exchange.
2.2 Bylaws. The Bylaws of USE, and of Brunton, at Agreement
date shall not be affected by the Exchange.
ARTICLE III.
DIRECTORS AND OFFICERS
OF USE AND BRUNTON
3.1 Directors. The number of directors to serve on the board
of directors of USE, and of Brunton, at Agreement date, shall not
be affected by the Exchange. There shall be no change in the
persons serving as directors of USE, or of Brunton, due to the
Exchange.
3.2 Officers. The officers of USE, and of Brunton, at
Agreement date, shall not be changed due to the Exchange.
ARTICLE IV.
EXCHANGE CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE Exchange
4.1 Exchange Consideration; Conversion or Cancellation of
Shares. At the Effective Time, by virtue of the Exchange and
without any action on the part of any holder of Brunton Shares, all
of the Brunton Shares (other than Brunton Shares owned by USE at
Agreement date) shall be exchanged into USE Shares, at the rate of
20 Brunton Shares for one USE Share, and USE shall own all the
outstanding Brunton Shares. After the Effective Time, the former
holders of the Brunton Shares (other than USE) shall be entitled
only to receive the USE Shares to which they are entitled under
this Agreement, or to the benefit of their rights as Dissenting
Shareholders.
4.2 Exchange of Old Certificates for New Certificates.
a. Appointment of Exchange Agent. From and after the
Effective Time until the end of the twelve-month period following
the Effective Time, USE shall make available or cause to be made
available to Society Investment Management and Trust Services,
Denver, Colorado (the "Exchange Agent") certificates ("New
Certificates") representing the USE Shares, for the Exchange Agent
to deliver New Certificates to the former holders of the Brunton
shares in exchange for certificates therefor ("Old Certificates").
b. Exchange Procedures. Promptly after the Effective
Time, USE shall cause the Exchange Agent to mail or deliver to each
person (other than any Dissenting Shareholder) who was, at the
Effective Time, a holder of record of Brunton Shares a form of
transmittal letter with instructions for surrender of Old
Certificates in exchange for New Certificates, or for deposit of
Old Certificates by Dissenting Shareholders. Upon surrender to the
Exchange Agent of an Old Certificate for cancellation together with
the completed transmittal letter, the holder of such Old
Certificate shall be entitled to receive a New Certificate
representing the USE Shares, and the Old Certificate as surrendered
shall forthwith be canceled. If any New Certificate is to be
issued in a name other than that in which the Old Certificate
surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the person requesting such exchange
shall pay any transfer or other taxes required by reason of the
issuance of such New Certificate in a name other than the
registered holder of the Old Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that any such
taxes have been paid or are not applicable.
Twelve months after the Effective Time, USE shall be
entitled to cause the Exchange Agent to deliver back any unclaimed
New Certificates. Any former Brunton shareholders who have not
theretofore exchanged their Old Certificates for New Certificates
shall thereafter look exclusively to USE only as general creditors
thereof for the USE Shares to which they became entitled, subject
to exchange of their Old Certificates. Notwithstanding the
foregoing, neither the Exchange Agent nor any party hereto shall be
liable to any former holder of Brunton Shares for USE Shares
delivered to public officials pursuant to escheat laws.
USE shall pay all expenses of the exchange of New
Certificates for Old Certificates.
c. Fractional Shares. No fractional USE Share shall be
issued in the Exchange, and any fraction to which a former holder
of Brunton Shares would otherwise be entitled, shall be rounded up
to the next full USE Share if the former holder of Brunton Shares
owned 10 or more thereof, and down to the next lower full USE Share
if the former holder of Brunton Shares owned 9 or fewer thereof.
d. Distributions with Respect to Unexchanged Shares. No
dividends on USE Shares shall be paid to a former holder of Brunton
Shares holding an Old Certificate, until the Old Certificate is
surrendered for exchange. Subject to the effect of applicable
laws, following surrender of any such Old Certificate by any holder
thereof other than a Dissenting Shareholder, there shall be paid to
the holder of the New Certificate issued in exchange therefor,
without interest (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to the USE Shares
represented thereby and not paid, less any required withholding
taxes, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the
Effective Time but prior to the time of such surrender and a
payment date subsequent to the time of such surrender payable with
respect to the USE Shares represented thereby, less the amount of
any required withholding taxes.
e. Transfers. At and after the Effective Time, there
shall be no transfers of Brunton Shares on the Brunton stock
transfer books, except to transfer all issued and outstanding
Brunton Shares to USE as record and beneficial owner.
f. No Liability. If any Old Certificate shall have been
lost, stolen or destroyed, upon making of an affidavit of that fact
by the person claiming such, and if required by USE the posting by
such person of a bond in reasonable amount as indemnity against
possible future claim against it with respect to such Old
Certificate, USE shall cause the Exchange Agent to issue the USE
Shares in respect thereof pursuant to this Article IV.
4.3 Dissenters' Rights. If any Brunton Dissenting
Shareholder gives written notice to Brunton under WBCA Section 17-
60-1321 to seek payment of the "fair value" of his or her Brunton
Shares as provided in the WBCA, Brunton shall give USE notice
thereof, and USE shall have the right to participate in
negotiations with respect to such demands. Only Brunton shall make
any such payments, and then only from Brunton funds. Pursuant to
the WBCA, a Dissenting Shareholder who fails to perfect, or loses
the right to dissent, shall only be entitled to USE Shares based on
the Exchange, and shall be entitled to no payment for his or her
Brunton Shares.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties. Brunton hereby
represents and warrants to USE, and USE represents and warrants to
Brunton that, except as set forth in a letter ("Disclosure Letter")
delivered by it to the other party prior to executing and
delivering this Agreement, or in its Reports (as defined in Section
5.1(e)) in the case of USE, or in its financial statements in the
case of Brunton, in both cases prior to the date hereof:
a. Corporation Organization and Qualification. Each of
it and any subsidiaries (as defined in Section 9.8) is a
corporation (or a limited liability company, in the case of USECC
Gold Venture, a USE subsidiary), duly organized and in good
standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by
it or such subsidiary requires such qualification, except for any
such failure so to qualify or be in good standing which, when taken
together with all other such failures, is not reasonably likely to
have a Material Adverse Effect. "Material Adverse Effect" means an
effect which would be materially adverse to the properties,
business, financial condition, results of operations or prospects
of Brunton or USE. Each of it and its subsidiaries has the
requisite corporate power and authority to carry on its businesses
as they are now being conducted. It has made available to the
other complete and correct copies of its Articles of Incorporation
and Bylaws, each as amended to date.
b. Capital Stock. (i) USE. USE has authorized capital
stock of 100,000 preferred shares, $.01 par value, none of which
are outstanding, and 20,000,000 common shares, $.01 par value, of
which 4,360,151 are issued and outstanding, including 155,780
common shares issued as stock bonus shares to officers, directors
and other employees of USE, and to directors and others for payment
of services. Of the 155,780 total shares, 149,780 are subject to
forfeiture unless certain employment and service conditions are
met. All issued and outstanding shares of USE common stock (except
for those shares subject to forfeiture) have been duly authorized
and validly issued and are fully paid and nonassessable. USE has
reserved 550,000 common shares for issuance under the 1989 Stock
Option Plan, under which there are outstanding options to purchase
the number of shares of common stock, as stated on Exhibit A. The
capital shares or other interests of each significant subsidiary of
USE have been duly authorized and validly issued and are fully paid
and nonassessable. Such shares or other interests are held
directly or indirectly by USE free and clear of all liens, security
interests, preemptive or subscriptive rights, or other
encumbrances. USE has outstanding no bonds, debentures or other
obligations the holders of which have the right to vote (or are
convertible or exchangeable into or exercisable for securities
having the right to vote) with the shareholders of USE on any
matter.
(ii) Brunton. Brunton has authorized capital stock of
20,000,000 common shares, $.01 par value, of which 8,195,450 are
issued and outstanding, and an additional 90,750 are held in
treasury as issued but not outstanding common shares. All issued
and outstanding shares of Brunton common stock have been duly
authorized and validly issued and are fully paid and nonassessable.
Brunton has outstanding no bonds, debentures or other obligations
the holders of which have the right to vote (or are convertible or
exchangeable into or exercisable for securities having the right to
vote) with the shareholders of Brunton on any matter.
c. Corporate Authority. Subject only approval of this
Agreement by the holders of a majority of the issued and
outstanding shares of Brunton common stock under Section 7.1, each
has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute, deliver and perform
this Agreement and to consummate the transactions contemplated
herein.
d. Partnerships and Ventures. Except as disclosed in
its Reports and Disclosure Letter, USE is in compliance in all
material respects with the terms of each partnership agreement and
joint venture agreement to which USE is a party, and each interest
therein is held free and clear of all liens or security interests.
Except as may be set forth in its Disclosure Letter, Brunton is not
party to any partnership or venture.
e. Governmental Filings; No Violations. (i) Other than
filings required under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Securities Act of 1933, as
amended (the "Securities Act"), state securities and "Blue Sky"
laws (collectively, the "Regulatory Filings"), except as set forth
in its Disclosure Letter, no notices, reports or other filings are
required to be made by it with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by it from any governmental or regulatory authority,
agency, court, commission or other entity, domestic or foreign
("Governmental Entity"), in connection with this Agreement, the
failure to make or obtain any or all of which, individually or in
the aggregate, is reasonably likely to have a Material Adverse
Effect.
(ii) The execution, delivery and performance by it of
this Agreement does not or will not, and the consummation by it of
any of the transactions contemplated hereby will not, constitute or
result in (x) a breach or violation of, or a default under, its
Articles of Incorporation or Bylaws, or the comparable governing
instruments of any of its subsidiaries, or (y) a breach or
violation of, or acceleration or creation of a security interest or
other encumbrance on assets of it pursuant to any material
agreement, lease or other obligation ("Contracts") of it or any of
its subsidiaries or any law, ordinance, regulation or judgment or
decree or permit to which it or any of its subsidiaries is subject
except, in the case of clause (y) above, for such that are
disclosed in its Disclosure Letter or are not reasonably likely to
have a Material Adverse Effect.
f. Reports; Financial Statements; No Undisclosed
Liabilities. (i) USE has delivered to Brunton each registration
statement, report, proxy statement or information statement
prepared by it since May 31, 1990, (collectively, "Reports") filed
with the Securities and Exchange Commission (the "SEC"). As of
their respective dates (but including any change therein due to a
Form 8 Amendment to a Report), the Reports of USE did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading. All of its financial
statements included in or incorporated by reference into its
Reports fairly present the financial position of it and its
subsidiaries as of the date and for the periods set forth therein,
in each case in accordance with generally accepted accounting
principles.
(ii). Brunton has delivered to USE annual financial
statements prepared by Brunton since May 31, 1990, audited by
independent certified public accountants. All of such financial
statements fairly present the financial position of Brunton as of
the date and for the periods set forth therein, in each case in
accordance with generally accepted accounting principles.
(iii) To the knowledge of its executive officers, except
as disclosed in the Reports of USE or in its Disclosure Letter, or
in the case of Brunton as disclosed in the Brunton financial
statements since May 31, 1990 or in its Disclosure Letter, neither
it nor its subsidiaries in the case of USE, or Brunton, has any
liabilities, whether or not accrued, contingent or otherwise, that,
individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
g. Absence of Certain Events and Changes. Except as
disclosed in its Reports filed with the SEC prior to the date
hereof or in its Disclosure Letter, since May 31, 1993 USE and its
subsidiaries have conducted their respective businesses only in the
ordinary and usual course, and there has not been any change or
development which is reasonably likely to result in a Material
Adverse Effect. Except as disclosed in its Disclosure Letter or in
its financial statements since May 31, 1993, Brunton has conducted
its business only in the ordinary and usual course, and there has
not been any change or development which is reasonably likely to
result in a Material Adverse Effect.
h. Compliance with Laws. It (and in the case of USE,
its subsidiaries) has complied with all applicable laws,
regulations, ordinances, judgments, orders or decrees applicable
thereto, except where the failure to comply is not reasonably
likely to have a Material Adverse Effect. To the knowledge of its
officers, each of it (and in the case of USE, its subsidiaries) has
all permits and has made all filings, applications, and
registrations with governmental or regulatory bodies that are
required in order to permit it or such subsidiary to carry on
business as presently conducted, except for such failures which are
not reasonably likely to have a Material Adverse Effect.
i. Title to Assets. Each of it (and in the case of USE,
its subsidiaries) has good and marketable title to its assets
(other than property as to which it is lessee), including
intellectual property assets in the case of Brunton, except for
such defects in title that are not reasonably likely to have a
material adverse effect, and in the case of USE except for such
title matters as are disclosed in its Reports.
j. Litigation. In the case of USE, except as disclosed
in its Reports filed with the SEC prior to the date hereof or in
its Disclosure Letter, and in the case of Brunton, except as
disclosed in its Disclosure Letter, there are no suits,
investigations or proceedings pending or, to the knowledge of its
executive officers, threatened, against it (or, in the case of USE,
any of its subsidiaries) that, individually or in the aggregate,
are reasonably likely to have a Material Adverse Effect. Except,
in the case of USE, as may be disclosed in its Reports or
Disclosure Letter, and in the case of Brunton, as may be disclosed
in its financial statements or Disclosure Letter, there are no
judgments or outstanding injunctions, or awards against it, its
properties or business, which are reasonably likely to have a
Material Adverse Effect.
k. Taxes. All material federal, state, local and
foreign tax returns required to be filed by or on behalf of it (or,
in the case of USE, any of its subsidiaries) have been timely filed
or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all
such filed returns are complete and accurate in all material
respects. In the case of USE, except as disclosed in its Reports
or in its Disclosure Letter, and in the case of Brunton, except as
disclosed in its financial statements and Disclosure Letter, all
material taxes required to be shown on returns filed by it, as of
the date of such Report, have been paid in full or have been
recorded on its balance sheet and statement of earnings or income
(in accordance with generally accepted accounting principles). As
of the date of this Agreement and, in the case of USE except as
disclosed in its Reports or in its Disclosure Letter, and in the
case of Brunton except as disclosed in its financial statements or
in its Disclosure Letter, there is no outstanding audit
examination, deficiency, or refund litigation with respect to any
taxes of it that, individually or in the aggregate, is reasonably
likely to have a material adverse effect. All material taxes,
interest, additions, and penalties due with respect to completed
and settled examinations or concluded litigation relating to it
have been paid in full or have been recorded on its balance sheet
and statement of earnings or income (in accordance with generally
accepted accounting principles). Except for the Tax Benefit
Transfer Agreement to which Plateau Resources Inc. is a party and
as to which USE is an indemnitor, neither USE nor any subsidiary
has indemnified another party with respect to taxes.
l. Labor Matters. Neither party, nor any USE
subsidiary, is a party to, or is bound by any collective bargaining
agreement with a labor organization.
m. Employee Benefits. (i) The Reports filed by USE with
the SEC, and the Brunton financial statements, disclose all bonus,
deferred compensation, retirement, employee stock ownership, and
other stock plans, as well as all material employment or similar
provisions in any consulting plan ("Compensation Plans").
(ii) In the case of USE, except as may be disclosed
in the USE Reports, and in the case of Brunton, except as may be
disclosed in the Brunton financial statements, all material
contributions required to be made by each party under its
Compensation Plans have been timely made or have been reflected on
its respective balance sheet.
n. Environmental Matters. In the case of USE, except as
disclosed in its Reports or its Disclosure Letter, and in the case
of Brunton except as may be disclosed in the Brunton financial
statements or its Disclosure Letter, save for such matters that,
individually or in the aggregate, are not reasonably likely to have
a Material Adverse Effect, to the knowledge of its executive
officers, other than as permitted under then applicable
Environmental Law, it is (and, in the case of USE, subsidiaries
are) in compliance with applicable Environmental Laws.
"Environmental Law" means (i) any law, ordinance, rule,
permit or agreement with any government entity, (x) relating to the
protection, preservation or restoration of the environment or to
human health or safety, or (y) Hazardous Substances, in each case
as amended and as now in effect. "Hazardous Substance" means any
substances classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law.
o. Brokers and Finders. Neither USE nor Brunton has
employed any broker or finder in connection with the Exchange.
ARTICLE VI.
COVENANTS
6.1 Interim Operations. Each of USE and Brunton covenants
and agrees as to itself (and, in the case of USE, its subsidiaries)
that, from and after the date hereof until the Effective Time,
except as the other party otherwise consents or except as otherwise
contemplated by this Agreement:
a. Its business will be conducted in the ordinary course
and it will maintain existing relations with customers, suppliers,
employees and business associates.
b. It will not (i) in the case of USE, sell or pledge or
agree to sell or pledge any stock owned by it in any of its
subsidiaries; (ii) amend its Articles of Incorporation or Bylaws;
(iii) split, combine or reclassify any outstanding capital stock;
(iv) declare, set aside or pay any dividend with respect to its
capital stock; or (v) repurchase shares of capital stock or
securities convertible or exercisable for capital stock.
c. It will not issue any shares of, or securities
convertible or exchangeable for, or options, puts, warrants, calls,
commitments or rights of any kind to acquire any shares of capital
stock, other than shares of USE common stock on exercise of
outstanding options.
d. It will not sell, mortgage or dispose of property or
assets or encumber any property or assets or incur or modify any
indebtedness or other liability other than in the ordinary course
of business.
e. In the case of USE, except as required by agreements
disclosed in its Reports or its Disclosure Letter, and in the case
of Brunton except as required by agreements disclosed in the
Brunton financial statements or its Disclosure Letter, grant
severance or termination pay to a director or officer.
6.2 Information Supplied. USE and Brunton agree that none of
the information to be supplied by it for inclusion in the
Registration Statement on Form S-4 to be filed with the SEC in
connection with the Exchange (including the joint proxy statement
and prospectus, the "Registration Statement") will, at the time
effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
6.3 Shareholder Approval. Brunton agrees to convene a
meeting of the holders of Brunton common stock to consider and vote
upon approval of this Agreement.
6.4 Filings. Brunton and USE agree to promptly prepare and
USE will file with the SEC the Registration Statement. USE agrees
to use its best efforts to have the Registration Statement declared
effective, and thereafter to mail the Proxy Statement to the
Brunton shareholders. USE also agrees to use its best efforts to
obtain all necessary state securities law or permits required.
6.5 Accountants' Letters. USE and Brunton will cause to be
delivered to the other a letter of its independent auditors, dated
shortly prior to the Closing Date, in form and substance customary
for "comfort" letters.
6.6 Access. Each party agrees to afford each other party's
officers and other authorized representatives (the
"Representatives") access until the Closing Date, to its
properties, books and records, and furnish information concerning
its business, properties and personnel as may be reasonably
requested. Each party will not use information obtained for any
purpose unrelated to the transactions contemplated by this
Agreement.
6.7 Notification of Certain Matters. Each party will give
prompt notice to the other party of any change that is reasonably
likely to result in any Material Adverse Effect.
6.8 Publicity. Brunton acknowledges USE will control
distribution to the public of information concerning this Agreement
and the transactions hereunder.
6.9 Benefits. No change in either party's Compensation Plans
shall occur due to Closing of the Exchange.
6.10 Expenses. Each party shall pay its own expenses in
connection with the Exchange.
ARTICLE VII.
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the
Reorganization. The respective obligation of USE and Brunton to
consummate the Exchange is subject to the following conditions.
(a) The holders of a majority of the outstanding Brunton
common shares shall have duly approved this Agreement and the
Exchange contemplated hereby, in accordance with the Securities
Act, applicable state securities laws, the WBCA, and the Brunton
Articles of Incorporation and Bylaws.
(b) Any consent or approval of third persons required for or
in connection with this Agreement, shall have been obtained, except
for such the failure to obtain which would not constitute a
Material Adverse Effect.
(c) No material litigation shall have been initiated against
either party.
(d) The representations and warranties of each party set forth
in this Agreement shall be true and correct in all material
respects as of Agreement date and as of the Closing Date, as though
made on and as of the Closing date, and each party shall have
received a certificate signed by the other's chief executive and
chief financial officers, to such effects.
(e) Each shall have received an opinion of counsel, to the
effect that the Exchange is a "reorganization" under Code Section
368(a)(1)(B), and concerning such other matters as are customary in
transactions like the Exchange.
(f) USE common stock shall be listed on the NASDAQ/National
Market System.
ARTICLE VIII.
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be
terminated and the Exchange may be abandoned at any time prior to
the Effective Time, before or after approval by the Brunton
shareholders, by the mutual consent of Brunton and USE.
8.2 Termination by Either Brunton or USE. This Agreement may
be terminated and the reorganization may be abandoned by action of
the Board of Directors of either Brunton or USE if (i) the Exchange
shall not have been consummated by February 28, 1994, or (ii) this
Agreement is not approved at a Brunton shareholders' meeting called
for such purpose.
8.3 Effect of Termination and Abandonment. If this Agreement
is terminated pursuant to this Article VIII, no party shall have
liability or further obligation to any other party, except for
liability for material and willful breach of any covenant contained
herein.
ARTICLE IX.
MISCELLANEOUS AND GENERAL
9.1 Survival. Only those agreements and covenants of the
parties which by their express terms apply in whole or in part
after the Effective Time shall survive the Effective Time. All
other representations, warranties, agreements and covenants shall
be deemed only to be conditions of the Exchange and shall not
survive the Effective Time.
9.2 Modification or Amendment. At any time prior to the
Closing Date, the parties may modify or amend this Agreement, by
written agreement executed and delivered.
9.3 Waiver of Conditions. The conditions to each party's
obligation to consummate the Exchange are for the sole benefit of
such party and may be waived by such party in whole or in part.
9.4 Counterparts. This Agreement may be executed in any
number of separate counterparts.
9.5 Governing Laws. This Agreement shall be governed by and
construed in accordance with the laws of the State of Wyoming.
9.6 Notices. Any notice or document to be given hereunder
shall be in writing and shall be deemed to have been duly given on
the date of delivery if delivered personally upon confirmation of
receipt, or on the third business day following the date of mailing
if delivered by certified mail, return receipt requested, postage
prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice.
a. If to Brunton:
The Brunton Company
620 East Monroe Avenue
Riverton, Wyoming 82501
b. If to USE:
U.S. Energy Corp.
877 North 8th West
Riverton, Wyoming 82501
9.7 Entire Agreement. This Agreement (a) constitutes the
entire agreement and supersedes all other prior agreements,
understandings, representations and warranties, both written and
oral, among the parties, with respect to the subject matter hereof,
and (b) shall not be assignable by operation of law or otherwise.
9.8 Definition of "Subsidiary". When a reference is made in
this Agreement to a subsidiary of a party, the term "subsidiary"
means any corporation or other organization whether incorporated or
unincorporated of which at least a majority of the securities or
interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or
other organization, is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries, or by such
party and one or more of its subsidiaries.
9.9 Captions. The Article , Section and paragraph captions
herein are for convenience of reference only, do not constitute
part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof.
9.10 Specific Performance. In the event of actual or
threatened default in or breach of, any terms of this Agreement,
the party or parties who are or are to be thereby aggrieved shall
have the right of specific performance and injunctive relief giving
effect to its or their rights under this Agreement, in addition to
other rights and remedies at law or in equity. All such rights and
remedies shall be cumulative. The parties agree that the remedies
at law for any breach or threatened breach, including monetary
damages, are inadequate compensation for any loss, and that any
defense in any action for specific performance that a remedy at law
would be adequate is waived.
9.11 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by
a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application
of such provision to persons or circumstances other than those as
to which it has been held invalid or unenforceable, shall remain in
full force and effect and shall in no way be affected, impaired, or
invalidated thereby, so long as the economic or legal substance of
the transaction contemplated hereby is not affected in any manner
substantially adverse to any party. Upon such determination, the
parties shall negotiate in good faith in an effort to agree upon a
suitable and equitable substitute provision to effect the original
intent of the parties.
9.14 No Third Party Beneficiaries. Nothing contained in this
Agreement, expressed or implied, is intended to confer any person
or entity other than the parties hereto, with any benefit, right or
remedies.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on
the date first above written.
THE BRUNTON COMPANY
By:
Harold F. Herron, President
U.S. ENERGY CORP.
By:
John L. Larsen, President