Battalion Oil Corp DEFA14A, filed Feb 6, 2024
Battalion Oil Corp (BATL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2024
Battalion Oil Corporation
(Exact name of registrant as specified in its charter)
Delaware |
| 001-35467 |
| 20-0700684 |
(State or other jurisdiction |
| (Commission File Number) |
| (IRS Employer |
820 Gessner Road |
| 77024 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (832) 538-0300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⌧ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol |
| Name of each exchange on which registered |
Common Stock par value $0.0001 |
| BATL |
| NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ◻
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Item 1.01 | Entry into a Material Definitive Agreement |
Second Amendment to Merger Agreement
On February 6, 2024, Battalion Oil Corporation, a Delaware corporation (the “Company” or “we”), Fury Resources, Inc., a Delaware corporation (“Parent”), and San Jacinto Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), entered into a Second Amendment (the “Second Amendment”) to the Agreement and Plan of Merger, dated as of December 14, 2023 (the “Merger Agreement”), by and among the Company, Parent and Merger Sub, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 24, 2024 (the “First Amendment”).
Pursuant to the Merger Agreement, Parent agreed to deposit amounts in cash into a segregated escrow account (the “Escrow Account”) established pursuant to that certain Escrow Agreement, dated as of December 14, 2023, by and among Parent, the Company and Wilmington Trust, National Association, as escrow agent, for purposes of securing Parent’s obligations pursuant to the Merger Agreement. Prior to the execution and delivery of the Merger Agreement, Parent had deposited $10,000,000 (the “Initial Deposit Amount”) into the Escrow Account and, pursuant to the terms of the Merger Agreement as amended by the First Amendment, agreed to deposit an additional $15,000,000 into the Escrow Account (the “Subsequent Deposit Amount”) on or before 5:00 p.m. Central Time on February 5, 2024 (such date and time, the “Funding Deadline” and the funding of the Subsequent Deposit Amount into the Escrow Account, the “Full Escrow Funding”). On January 24, 2024, pursuant to the terms of the Merger Agreement as amended by the First Amendment, Parent caused an amount equal to $9,999,999.99 of the Initial Deposit Amount to be released to the Company. For a summary of the material terms of the Merger Agreement and the First Amendment, including the escrow arrangements, please see the Company’s Current Reports on Forms 8-K filed with the Securities and Exchange Commission on December 18, 2023 and January 24, 2024.
Subsequent to the execution of the Merger Agreement and the First Amendment, and in order to facilitate the Full Escrow Funding on a timely basis, on February 6, 2024, the Company and Parent entered into the Second Amendment.
The Second Amendment amends the Merger Agreement to reflect, among other things, the following changes:
| • | The Funding Deadline was extended from 5:00 p.m. Central Time on February 5, 2024 to 5:00 p.m. Central Time on February 15, 2024. |
| • | Parent agreed to deliver to the Company an amendment to certain Additional Financing Documents, in form reasonably acceptable to the Company, which contemplate that the Company is a direct third-party beneficiary to enforce the applicable Financing Source’s (as defined in the Merger Agreement) obligation to deposit their portion of the Additional Financing (as defined in the Merger Agreement) equal to $15,000,000 into the Escrow Account for purposes of funding the Subsequent Deposit Escrow Amount. |
| • | Parent and the Company agreed to deem the Closing Failure Fee under the Merger Agreement to be an amount equal to the Initial Deposit Amount plus the Subsequent Deposit Amount. |
| • | Parent and the Company agreed to decrease the Company Termination Fee (as defined in the Merger Agreement) from $8,000,000 to $3,500,000. |
| • | The Company’s liability for damages under the Merger Agreement payable to any Parent Related Party (as defined in the Merger Agreement) is capped at the amount of the Company Termination Fee (plus, in certain limited circumstances, the Initial Deposit Amount), other than in the case of Willful Breach (as defined in the Merger Agreement) by the Company. |
| • | The Company is permitted to solicit Company Takeover Proposals until Parent delivers Evidence of Funding (as defined in the Merger Agreement). Upon delivery of Evidence of Funding, the non-solicitation obligations under the Merger Agreement as they existed prior to the Second Amendment would, in all material respects, come back into effect. |
| • | The Company may, in its sole and absolute discretion, terminate, waive, amend, release or modify any |
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standstill provision of any confidentiality or standstill agreement to which the Company is a party. | ||
| • | Parent and the Company agreed to amend the definition of “Qualifying Additional Financing Documents” to be Additional Financing Documents (as defined in the Merger Agreement) evidencing equity financing commitments to fund the transaction in an aggregate amount equal to $100,000,000. If such Qualifying Additional Financing Documents are not delivered to the Company by the Funding Deadline, the Company shall be entitled to terminate the Merger Agreement and receive a reverse termination fee from Parent. |
| • | In the event (a) Parent has completed the Full Escrow Funding by the Funding Deadline and (b) the Company terminates the Merger Agreement to accept a Company Superior Proposal (as defined in the Merger Agreement) or Parent terminates the Merger Agreement due to a Change of Recommendation having been made (as defined in the Merger Agreement), then the Company will return the Initial Deposit Amount to Parent. |
| • | Parent and the Company agreed to further qualify all of the representations and warranties made by the Company in the Merger Agreement under Article IV of the Merger Agreement such that, in all cases, such representations and warranties are so represented and warranted as except as has had not or would not reasonably be expected to have, individually or in the aggregate a Company Material Adverse Effect (as defined in the Merger Agreement). |
| • | The obligation of Parent and Merger Sub to close the merger under the Merger Agreement that was conditioned on the representations and warranties of the Company made in the Merger Agreement being true and correct as of the date of such closing or another specified date, subject to certain levels of materiality, was amended to be qualified uniformly that such representations and warranties shall be true and correct other than where such failure to be true and correct has not had, individually or in the aggregate, a Company Material Adverse Effect. |
| • | Parent and the Company agreed to remove the covenants by the Company pertaining to certain interim period operations. |
Except as modified by the Second Amendment, the terms of the Merger Agreement and the First Amendment, in the forms filed as Exhibit 2.1 to the Current Reports on Form 8-K filed by the Company on December 18, 2023 and January 24, 2024, respectively, with the U.S. Securities and Exchange Commission (the “SEC”), are unchanged.
Limited Guarantee
On February 6, 2024 and in connection with the Second Amendment, the Company and Abraham Mirman, the chairman of Parent (“Guarantor”), entered into a Limited Guarantee (the “Limited Guarantee”) in favor of the Company. Pursuant to the Limited Guarantee, Guarantor irrevocably and unconditionally guarantees the due and punctual payment and performance by Parent and Merger Sub of their respective obligations under the Merger Agreement to make any payment of any kind under the terms of the Merger Agreement, in cash, if and when due, subject to the terms and conditions of the Limited Guarantee. The Limited Guarantee is limited to an amount equal to $1,000,000 and does not cover any other obligations of Parent or Merger Sub under the Merger Agreement or otherwise.
The foregoing descriptions of the Second Amendment and the Limited Guarantee do not purport to be complete and are qualified in their entirety by reference to the full text of the Second Amendment and the Limited Guarantee, which are attached hereto as Exhibit 2.1 and Exhibit 2.2 and are incorporated by reference herein.
Important Information for Investors and Stockholders
This communication is being made in respect of the proposed transaction involving the Company and Parent. In connection with the proposed transaction, the Company intends to file the relevant materials with the SEC, including a proxy statement on Schedule 14A and a transaction statement on Schedule 13e-3 (the “Schedule 13e-3”). Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement, the Schedule 13e-3 and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement, the Schedule 13e-3 or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed
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transaction. The materials to be filed by the Company will be made available to the Company’s investors and stockholders at no expense to them and copies may be obtained free of charge on the Company’s website at www.battalionoil.com. In addition, all of those materials will be available at no charge on the SEC’s website at www.sec.gov. Investors and stockholders of the Company are urged to read the proxy statement, the Schedule 13e-3 and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction because they contain important information about the Company and the proposed transaction.
The Company and its directors, executive officers, other members of its management and employees may be deemed to be participants in the solicitation of proxies of the Company stockholders in connection with the proposed transaction under SEC rules. Investors and stockholders may obtain more detailed information regarding the names, affiliations and interests of the Company’s executive officers and directors in the solicitation by reading the Company’s Annual Report on Form 10-K, as amended on Form 10-K/A, for the fiscal year ended December 31, 2022, and the proxy statement, the Schedule 13e-3 and other relevant materials that will be filed with the SEC in connection with the proposed transaction when they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the proposed transaction and the Schedule 13e-3 when they become available.
Forward-Looking Statements
All statements and assumptions in this communication that do not directly and exclusively relate to historical facts could be deemed “forward-looking statements.” Forward-looking statements are often identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “may,” “could,” “should,” “forecast,” “goal,” “intends,” “objective,” “plans,” “projects,” “strategy,” “target” and “will” and similar words and terms or variations of such. These statements represent current intentions, expectations, beliefs or projections, and no assurance can be given that the results described in such statements will be achieved. Forward-looking statements include, among other things, statements about the potential benefits of the proposed transaction; the prospective performance and outlook of the Company’s business, performance and opportunities; the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction; as well as any assumptions underlying any of the foregoing. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of the Company’s control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by the Company’s stockholders; (iii) the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iv) the possibility that competing offers or acquisition proposals for the Company will be made; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances, which would require the Company to pay a termination fee; (vi) the effect of the announcement or pendency of the proposed transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; (vii) risks related to the proposed transaction diverting management’s attention from the Company’s ongoing business operations; (viii) the amount of costs, fees and expenses related to the proposed transaction; (ix) the risk that the Company’s stock price may decline significantly if the Merger is not consummated; (x) the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (xi) other factors as set forth from time to time in the Company’s filings with the SEC, including its Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2022, as may be updated or supplemented by any subsequent Quarterly Reports on Form 10-Q or other filings with the SEC. Readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events except as required by law.
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Item 9.01 | Financial Statements and Exhibits. |
(d)Exhibits. The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
| Description |
|---|---|---|
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2.1 | | |
2.2 | | Limited Guarantee, dated February 6, 2024, by Abraham Mirman in favor of Battalion Oil Corporation. |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BATTALION OIL CORPORATION | |
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| |
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February 6, 2024 | By: | /s/ Matthew B. Steele |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
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Exhibit 2.1
Execution Copy
SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER is made as of February 6, 2024 (this “Amendment”) by and among Battalion Oil Corporation, a Delaware corporation (the “Company”), Fury Resources, Inc., a Delaware corporation (“Parent”), and San Jacinto Merger Sub, Inc., a Delaware corporation (“Merger Sub”).
WHEREAS, the Company, Parent and Merger Sub are parties to that certain Agreement and Plan of Merger, dated as of December 14, 2023 (the “Agreement”), which was amended pursuant to that certain First Amendment to the Agreement and Plan of Merger, dated as of January 23, 2024; and
WHEREAS, the Company, Parent and Merger Sub desire to amend certain terms of the Agreement to the extent provided herein.
NOW, THEREFORE, in consideration of foregoing and the mutual covenants and agreements contained herein, the parties, intending to be legally bound, agree as follows:
“Closing Failure Fee” means an amount equal to the Initial Deposit Escrow Amount plus the Subsequent Deposit Escrow Amount.
“Company Superior Proposal” means a bona fide, written Company Takeover Proposal (with references to twenty percent (20%) and eighty percent (80%) being deemed to be replaced with references to fifty percent (50%), respectively) by a third party, which the Company Board (after considering the recommendation of the Company Special Committee) determines in good faith, after consultation with the Company’s outside legal and financial advisors, to be more favorable from a financial point of view to the Company and its stockholders than the Transactions (including any adjustment to the terms of the Transactions proposed by Parent pursuant to clause (B) of Section 6.4(d) and taking in consideration the timing and likelihood of consummation of such Company Superior Proposal).
“Company Termination Fee” means an amount equal to $3,500,000.
“Qualifying Additional Financing Documents” means Additional Financing Documents that contemplate Additional Financing in an amount equal to $100,000,000, in the aggregate.
Except as (x) disclosed in the Company SEC Documents filed with, or furnished to, the SEC and publicly available prior to the date hereof (excluding any disclosures set forth in any “risk factors,” “forward-looking statements” and similar disclosures to the extent cautionary, predictive or forward-looking in nature, but including any factual information contained within such statements), or in the disclosure schedule delivered by the Company to Parent concurrently with the execution of this Agreement (the “Company Disclosure Letter”) (each section of which qualifies the correspondingly numbered representation or warranty specified therein and any such other representations or warranties where its applicability to, relevance as an exception to, or disclosure for purposes of, such other representation or warranty is reasonably apparent), or (y) except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company represents and warrants to Parent and Merger Sub as follows:
During the Interim Period, other than (i) as expressly required or permitted by this Agreement, (ii) with the prior written consent of Parent (not to be unreasonably withheld, delayed or conditioned), (iii) as required by or reasonably responsive to a request or requirement of a Governmental Authority, applicable Law or the rules and regulations of the NYSE American, (iv) any actions taken reasonably and in good faith in response to or as a result of COVID-19 or in response to or to comply with COVID-19 Measures or (v) as set forth in Section 6.2(a) of the Company Disclosure Letter (the exceptions in clauses (i)-(v), the “Interim Covenant Exceptions”), the Company shall, and shall cause its Subsidiaries to (x) use commercially reasonable efforts to conduct their respective businesses in all material respects in the ordinary course consistent with past practice, and (y) use commercially reasonable efforts to maintain and preserve intact, in all material
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respects, their respective business organizations; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.2(b) or Section 6.20 (subject to the exceptions set forth therein) shall be deemed a breach of this sentence, unless such action would constitute a breach of such other provision.
(i) Solicitation or Negotiation Prior to Delivery of Evidence of Funding. From and after the date of this Agreement until the date on which Parent delivers Evidence of Funding to the Company pursuant to Section 6.10(a)(ix), the Company, its Subsidiaries and each of its and their respective Representatives shall have the right to (A) solicit, initiate, or knowingly encourage or facilitate any proposal or offer or any inquiries regarding the making of any proposal or offer, including any proposal or offer to its stockholders, that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal, or (B) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person any information with respect to, any inquiry, proposal or offer that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal.
(ii) No Solicitation or Negotiation After Delivery of Evidence of Funding. Except as expressly permitted by this Section 6.4, from the date on which Parent delivers Evidence of Funding to the Company pursuant to Section 6.10(a)(ix) until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company shall not, and shall cause each of its Subsidiaries and its and their respective officers and directors, and shall instruct its and its Subsidiaries’ other Representatives not to, directly or indirectly, (A) solicit, initiate, or knowingly encourage or facilitate any proposal or offer or any inquiries regarding the making of any proposal or offer, including any proposal or offer to its stockholders, that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal, or (B) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person any information with respect to, any inquiry, proposal or offer that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal (other than, in response to an unsolicited inquiry that did not arise from a breach of this Section 6.4(a), solely to ascertain facts from the Person making such Company Takeover Proposal consistent with its fiduciary duties about such Company Takeover Proposal and the Person that made it, and to refer the inquiring Person to this Section 6.4). Upon delivery by Parent of Evidence of Funding to the Company pursuant to Section 6.10(a)(ix), the Company shall, and the Company shall cause its Subsidiaries, and its and their respective officers and directors to, and shall cause its and its Subsidiaries’ other Representatives to, immediately cease any and all existing solicitation, discussions or negotiations with any Persons (or provision of any non-public information to any Persons) with respect to any inquiry, proposal or offer that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal. Upon delivery by Parent of Evidence of Funding to the Company pursuant to Section 6.10(a)(ix), the Company shall promptly (I) request in writing that each Person that has heretofore executed a confidentiality agreement within
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the six (6) month period immediately preceding such date in connection with its consideration of a Company Takeover Proposal or potential Company Takeover Proposal promptly destroy or return to the Company all non-public information heretofore furnished by the Company or any of its Representatives to such Person or any of its Representatives in accordance with the terms of such confidentiality agreement and (II) terminate access to any physical or electronic data rooms relating to a possible Company Takeover Proposal by such Person and its Representatives.
(iii) Waiver of Standstills. Notwithstanding anything in this Agreement to the contrary, the Company may, in its sole and absolute discretion, terminate, waive, amend, release or modify any standstill provision of any confidentiality or standstill agreement to which the Company is a party with respect to any Company Takeover Proposal or potential Company Takeover Proposal, and any such action taken by the Company, in and of itself, shall not be deemed a breach of any provision of this Agreement in any respect.
Superior Proposals. Notwithstanding anything to the contrary contained in this Agreement, if at any time from and after the date hereof and prior to obtaining the Company Stockholder Approval, the Company receives a written Company Takeover Proposal that is not withdrawn from any Person (and, if such written Company Takeover Proposal is received after the date that Parent delivers Evidence of Funding to the Company pursuant to Section 6.10(a)(ix), such written Company Takeover Proposal did not result from a material breach of Section 6.4(a)(ii)), and if the Company Board (after considering the recommendation of the Company Special Committee) has determined in good faith, after consultation with the Company’s independent financial advisor and outside legal counsel, (i) that such Company Takeover Proposal is bona fide and constitutes or could reasonably be expected to lead to a Company Superior Proposal, and (ii) failure to take the actions set forth in clauses (A) and (B) below would be inconsistent with its fiduciary duties under applicable Law, then the Company and its Representatives may, in response to such Company Takeover Proposal, (A) furnish, pursuant to an Acceptable Confidentiality Agreement, information (including non-public information) with respect to the Company and its Subsidiaries and afford access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its Subsidiaries to the Person that has made such written Company Takeover Proposal and its Representatives (provided that the Company shall, prior to or concurrently with the delivery to such Person, provide to Parent any information concerning the Company or any of its Subsidiaries that is provided or made available to such Person or its Representatives unless such information has been previously provided to Parent) and (B) engage in or otherwise participate in discussions or negotiations with the Person making such Company Takeover Proposal and its Representatives regarding such Company Takeover Proposal; provided that the Company and its Representatives may contact any Person in writing (with a request that any response from such Person is in writing) with respect to a Company Takeover Proposal to clarify any ambiguous terms and conditions thereof which are necessary to determine whether the Company Takeover Proposal constitutes a Company Superior Proposal
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(without the Company Board (or any committee thereof, including the Company Special Committee) being required to make the determination in the foregoing clauses (i) and (ii)). The Company shall promptly (and in any event within twenty-four (24) hours) notify Parent in writing if the Company Board makes the determinations set forth in this Section 6.4(b), and shall not take any of the actions set forth in clauses (A) and (B) prior to providing such notice.
Notwithstanding anything to the contrary set forth in this Agreement, prior to obtaining the Company Stockholder Approval, the Company Board, after considering the recommendation of the Company Special Committee, or the Company Special Committee may, in response to a Company Superior Proposal received by the Company after the date of this Agreement that, if received after the date on which Parent delivers Evidence of Funding to the Company pursuant to Section 6.10(a)(ix), did not result from a material breach of Section 6.4(a), (x) make a Change of Recommendation, or (y) cause the Company to validly terminate this Agreement in accordance with Section 8.1(d)(ii) in order to enter into a binding Company Acquisition Agreement with respect to such Company Superior Proposal; provided that prior to making such Change of Recommendation or terminating this Agreement in accordance with Section 8.1(d)(ii), (A) the Company shall have given Parent at least five (5) Business Days’ prior written notice of its intention to take such action, including a summary of the material terms and conditions of, and the identity of the Person making any such Company Superior Proposal and contemporaneously provide to Parent a copy of the Company Superior Proposal and a copy of any proposed Company Acquisition Agreement and any other relevant transaction documents, (B) during such five (5)-Business Day period following the date on which such notice is received, the Company shall and shall cause its Representatives to, negotiate with Parent in good faith (to the extent Parent wishes to negotiate) to make such adjustments to the terms and conditions of this Agreement as Parent may propose, (C) upon the end of such notice period (or such subsequent notice period as contemplated by clause (D)), the Company Board (after considering the recommendation of the Company Special Committee) shall have considered in good faith any revisions to the terms of this Agreement proposed in writing by Parent, and shall have determined, after consultation with the Company’s independent financial advisor and outside legal counsel, that the Company Superior Proposal would nevertheless continue to constitute a Company Superior Proposal and the failure to make a Change of Recommendation or terminate this Agreement, as applicable, would be inconsistent with its fiduciary duties under applicable Law, and (D) in the event of any change to any of the financial terms (including the form, amount and timing of payment of consideration) or any other material terms of such Company Superior Proposal, the Company shall, in each case, have delivered to Parent an additional notice consistent with that described in clause (A) above of this proviso and a new notice period under clause (A) of this proviso shall commence (provided that the notice period thereunder shall only be three (3) Business Days) during which time the Company shall be required to comply with the requirements of this Section 6.4(d) anew with respect to such additional notice, including clauses (A) through (D) above of this
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proviso. Notwithstanding anything to the contrary contained herein, neither the Company nor any of its Subsidiaries shall enter into any Company Acquisition Agreement unless this Agreement has been terminated in accordance with its terms.
6.20[Intentionally Omitted]
The obligations of Parent and Merger Sub to complete the Closing and effect the Merger under Article III are further subject to the satisfaction (or waiver in writing by Parent and Merger Sub) of the following conditions precedent on or before the Effective Time: each of the representations and warranties of the Company contained in this Agreement shall be true and correct as of the date hereof and as of the Closing Date (without giving effect to any “materiality” or “Company Material Adverse Effect” qualifiers) as though made on and as of such date and time (except to the extent that any such representation and warranty speaks as of any earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except, in each case, for such failures to be true and correct as have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
if Parent fails to deliver Qualifying Additional Financing Documents to the Company on or before 5:00 p.m. Central Time on February 15, 2024;
this Agreement is terminated (A) for any reason pursuant to Section 8.1 other than (x) those contemplated by clause (B) below or (y) under circumstances in which the Company Termination Fee is payable to Parent pursuant to Section 8.3(b)(i) or Section 8.3(b)(ii), then the Company shall retain the Initial Escrow Deposit Amount (it being understood that such retention shall be deemed to be a payment by Parent to the Company of the Closing Failure Fee in an amount equal to the Initial Escrow Deposit Amount), or (B) (1) by the Company pursuant to Section 8.1(d)(i), Section 8.1(d)(iii), Section 8.1(d)(iv), Section 8.1(d)(v) or Section 8.1(d)(vi) or (2) by either Parent or the Company pursuant to Section 8.1(b) under circumstances where the Company would have been entitled to terminate this Agreement pursuant to Section 8.1(d)(i), Section 8.1(d)(iii), Section 8.1(d)(iv), Section 8.1(d)(v) or Section 8.1(d)(vi), and in the case of the foregoing clauses (1) and (2), such termination takes place after 5:00 p.m. Central
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Time on February 5, 2024, then the Company shall retain the Initial Escrow Deposit Amount as contemplated by the immediately preceding clause (A) (it being understood that such retention shall be deemed to be a partial payment by Parent to the Company of the Closing Failure Fee in an amount equal to the Initial Escrow Deposit Amount) and Parent shall pay to the Company the remainder of the Closing Failure Fee in accordance with Section 8.4(b)(iii).
In connection with any losses or damages suffered by any Parent Related Party as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise, other than in circumstances in which Parent is entitled to receive the Company Termination Fee in accordance with Section 8.3(b)(i) or Section 8.3(b)(ii) (in which case Sections 8.3(f) and (m) shall apply), Parent agrees, on behalf of itself and the Parent Related Parties, that the maximum aggregate monetary liability of the Company and the Company Related Parties shall be limited to an amount equal to the Company Termination Fee as determined in accordance with Section 8.3(b)(i) or Section 8.3(b)(ii), as applicable, plus, if applicable, the Initial Escrow Deposit Amount (to the extent that Parent is entitled to the return of such amount pursuant to Section 8.3(m)) and in no event shall Parent or any Parent Related Party seek or be entitled to recover from the Company or any Company Related Parties, and Parent on behalf of itself and the Parent Related Parties hereby irrevocably waives and relinquishes any right to seek or recover, any monetary damages in the aggregate in excess of such amount, including for the liability of the Company in the case of Willful Breach.
Notwithstanding anything in this Agreement to the contrary, in the event that (i) the Full Escrow Funding has been consummated on or before 5:00 p.m. Central Time on February 15, 2024 and (ii) Parent is entitled to receive the Company Termination Fee pursuant to Section 8.3(b)(i) (other than if this Agreement is terminated by Parent pursuant to Section 8.1(e)(iii)), then the Company shall return to Parent, and Parent shall be entitled to receive from the Company, an amount equal to the Initial Escrow Deposit Amount.
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[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.
BATTALION OIL CORPORATION
By:/s/ Matthew Steele
Name:Matthew Steele
Title:Chief Executive Officer
[Signature page to Amendment to Agreement and Plan of Merger]
FURY RESOURCES, INC.
By:/s/ Ariella Fuchs
Name:Ariella Fuchs
Title:President and General Counsel
SAN JACINTO MERGER SUB, INC.
By:/s/ Ariella Fuchs
Name:Ariella Fuchs
Title:President and General Counsel
[Signature page to Amendment to Agreement and Plan of Merger]
Exhibit 2.2
Abraham Mirman
17503 La Cantera Pkwy
Suite 104-603
San Antonio, TX 78257
Re: Limited Guarantee
Ladies and Gentlemen:
This Limited Guarantee is being entered into by Abraham Mirman (“Guarantor”) in favor of Battalion Oil Corporation, a Delaware corporation (“Company”), in connection with that certain Agreement and Plan of Merger, dated as of December 14, 2023 (as amended from time to time, the “Merger Agreement”), by and among the Company, Fury Resources, Inc., a Delaware corporation (“Parent”), and San Jacinto Merger Sub, Inc., a Delaware corporation (“Merger Sub”). Capitalized terms used but not defined in this Limited Guarantee shall have the meaning ascribed to them in the Merger Agreement. References to any agreement specified in this Limited Guarantee shall mean such agreement as it may be amended, modified or supplemented from time to time in accordance with its terms.
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if to the Company:
Battalion Oil Corporation
Two Memorial City Plaza
820 Gessner Road, Suite 1100
Houston, TX 77024
Attention:Walter R. Mayer, Senior Vice President, General Counsel and Corporate Secretary
Email: wmayer@battalionoil.com
with a copy to (which shall not constitute notice):
Mayer Brown LLP
700 Louisiana Street Suite 3400
Houston, TX 77002
Attention:William T. Heller IV; Jeff M. Dobbs
Email:wheller@mayerbrown.com; jdobbs@mayerbrown.com
and
Mayer Brown LLP
71 S. Wacker Dr.
Chicago, IL 60606
Attention:Ryan H. Ferris
Email:rferris@mayerbrown.com
February 6, 2024
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if to Guarantor:
Abraham Mirman
17503 La Cantera Pkwy, Suite 104-603
San Antonio, TX 78257
Attention: Abraham Mirman
Email: amirman@furyresources.com
and with a copy to (which shall not constitute notice):
K&L Gates LLP
1 Park Plaza, Twelfth Floor
Irvine, CA 92614
Attention: Michael A. Hedge; Jason C. Dreibelbis
Email: michael.hedge@klgates.com; jason.dreibelbis@klgates.com
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
[Remainder of page intentionally left blank. Signature pages follow.]
Very truly yours,
GUARANTOR:
ABRAHAM MIRMAN
By: /s/ Abraham Mirman
[Signature page to Limited Guarantee]
Accepted and agreed: | | |
COMPANY:
BATTALION OIL CORPORATION
By:/s/ Matthew Steele
Name:Matthew Steele
Title:Chief Executive Officer
[Signature page to Limited Guarantee]