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PSTR > SEC Filings for PSTR > Form 8-K on 18-Oct-2013All Recent SEC Filings

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Entry into a Material Definitive Agreement, Unregistered Sale of Equity Secu

Item 1.01 Entry into a Material Definitive Agreement.

On October 14, 2013, PostRock MidContinent Production, LLC ("PMP"), a wholly owned subsidiary of PostRock Energy Corporation ("PostRock"), entered into a Purchase and Sale Agreement (the "Purchase Agreement") with West Star Operating Company, West Star Exploration and Production Company and Shalco Energy (Delaware), LLC (collectively, the "Sellers"), pursuant to which PMP has agreed to purchase from the Sellers approximately 22,000 net acres of leasehold mineral interests, including certain producing oil and gas properties and related wells and other assets located in Pottawatomie, Cleveland and McClain Counties in central Oklahoma (the "Purchased Assets").

PMP is to acquire the Purchased Assets for a total purchase price of $10 million, subject to certain purchase price adjustments at closing (the "Purchase Price"). The Purchase Price consists of $3 million in cash and 4,516,129 shares of PostRock common stock (the "Stock Consideration"). The Purchase Agreement provides that at closing the Purchase Price may be adjusted based on mutually agreed title deficiencies, if any, and certain other customary items.

The Purchase Agreement includes customary representations, warranties, covenants and indemnities by the parties. Subject to the satisfaction or waiver of the closing conditions set forth in the Purchase Agreement, the acquisition of the Purchased Assets is anticipated to close by November 1, 2013. The Purchase Agreement provides that the effective date of the closing will be July 1, 2013 (the "Effective Time"), and all proceeds and certain customary operational costs and expenses attributable to the Purchased Assets shall be apportioned among the Sellers and PMP as of the Effective Time.

The Purchase Agreement contains certain termination rights for both PMP and the Sellers, including (i) if certain closing conditions are not satisfied by November 1, 2013; or (ii) if closing has not occurred by December 6, 2013.

Item 3.02 Unregistered Sales of Equity Securities.

The disclosure set forth under Item 1.01 above relating to the Purchase Agreement and the transactions contemplated thereby is incorporated into this Item 3.02 by reference. The agreement to issue the Stock Consideration was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof, which exempts transactions by an issuer not involving any public offering. The issuance of the Stock Consideration will not be a public offering for purposes of Section 4(2) because of its being made only to the Sellers and certain of their designees, such persons' status as accredited investors and the manner of the issuance, including that PostRock did not, and will not, engage in general solicitation or advertising with regard to the issuance of the Stock Consideration and did not, and will not, offer the Stock Consideration to the public in connection with the issuance.

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