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CAK > SEC Filings for CAK > Form 8-K on 27-Feb-2014All Recent SEC Filings

Show all filings for CAMAC ENERGY INC.

Form 8-K for CAMAC ENERGY INC.


27-Feb-2014

Entry into a Material Definitive Agreement, Completion of Acquisition or Dispos


Item 1.01. Entry Into A Material Definitive Agreement

On February 21, 2014, CAMAC Energy Inc. (the "Company") completed the Company's acquisition of Allied Energy Plc's ("Allied") remaining economic interests in a production sharing contract (the "PSC") and related assets, contracts and rights pertaining to those certain Oil Mining Leases 120 and 121 located offshore Nigeria, which include the currently producing Oyo Field (the "Assets"), and received the first of two investments of $135 million each from the Public Investment Corporation (SOC) Limited, a state-owned company registered and duly incorporated in the Republic of South Africa ("PIC"), through a private placement of 188,442,211 shares of common stock, par value $0.001 ("Common Stock").

Under the terms of that certain Transfer Agreement, dated November 19, 2013 (the "Transfer Agreement"), by and among the Company, its wholly owned subsidiary, CAMAC Petroleum Limited ("CPL"), CAMAC Energy Holdings Limited ("CEHL"), CAMAC International (Nigeria) Limited ("CINL") and Allied, the Company, as partial consideration for the Assets, paid $85 million in cash to Allied, issued 497,454,857 shares of Common Stock to Allied and delivered a convertible subordinated promissory note (the "Convertible Subordinated Note") to Allied under which $25 million was deemed to be advanced. Within two business days following a second investment of $135 million by PIC (the "Second Closing") pursuant to that Share Purchase Agreement, effective as of November 18, 2013 (the "Share Purchase Agreement"), by and between the Company and PIC, the Company will be required to pay to Allied an additional $85 million in cash, as may be adjusted pursuant to the Transfer Agreement, and an additional $25 million will be deemed to be advanced to Allied under the Convertible Subordinated Note. Pursuant to the Share Purchase Agreement, the Second Closing is scheduled to occur on the later of (i) 90 days after February 21, 2014 and
(ii) as soon as practicable after the conditions to the Second Closing are satisfied, but in no event later than the fifth business day thereafter. At the Second Closing, PIC will receive an additional 188,442,211 shares of Common Stock in a private placement.

The material terms of the Transfer Agreement and the Share Purchase Agreement were reported in Item 1.01 of the Company's Current report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on November 22, 2013, and are incorporated herein by reference. The descriptions of the Transfer Agreement and Share Purchase Agreement above are summaries only and are respectively qualified in their entirety by reference to the Transfer Agreement and the Share Purchase Agreement, copies of which were attached as Exhibits 2.1 and 10.1, respectively, to the Company's Current Report on Form 8-K filed with the SEC on November 22, 2013, and are hereby incorporated herein by reference.

The Company and CPL also entered into the following agreements in connection with the completion of the transactions with Allied and PIC:

Allied Registration Rights Agreement

On February 21, 2014, the Company and Allied executed a Registration Rights Agreement (the "Allied Registration Rights Agreement") pursuant to which the Company has granted Allied customary registration rights for the shares of Common Stock that (a) were issued to Allied upon the closing of the Acquisition;
(b) may be issued to Allied in the event of a failure by PIC to pay an additional $135 million in exchange for additional shares of Common Stock at the Second Closing; (c) may be issued to Allied in connection with the conversion of the Convertible Subordinated Note; (d) may be issued to Allied as liquidated damages under the Transfer Agreement; and (e) may be issued to Allied upon the Company completing certain oil and gas exploration and production milestones as set forth in the Transfer Agreement.


The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Allied Registration Rights Agreement, including the Annexes thereto, a copy of which is attached as Exhibit 4.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.

Convertible Subordinated Note

On February 21, 2014, the Company issued to Allied the Convertible Subordinated Note as partial consideration for the Assets. In conjunction with the closing of . . .



Item 2.01. Completion of Acquisition or Disposition of Assets

The information set forth under Item 1.01 regarding the completion of the Acquisition is hereby incorporated by reference into this Item 2.01.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 regarding the Convertible Subordinated Note is hereby incorporated by reference into this Item 2.03.



Item 3.02. Unregistered Sales of Equity Securities

Pursuant to the Convertible Subordinated Note, the Company may potentially issue up to 70,695,089 shares of Common Stock upon Allied's election to convert all or any portion of the outstanding principal amount of, and/or any accrued and unpaid interest on, the Convertible Subordinated Note.

The information set forth under Item 1.01 regarding the issuances and potential issuances of Common Stock to Allied and PIC are hereby incorporated by reference into this Item 3.02.

The transactions described above do not involve any public offering and the securities issued to PIC and Allied, and the securities that may be issued to PIC in connection with the Second Closing and to Allied under the Convertible Subordinated Note, are exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act") pursuant to Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering and Rule 506 of Regulation D promulgated thereunder and, with respect to the securities to be issued in connection with the Second Closing, pursuant to Regulation S for offshore transactions involving non-U.S. persons. The securities described above will not be registered under the Securities Act or the securities laws of any other jurisdiction. Unless they are registered, the securities may be offered and sold only in transactions that are exempt from registration under the Securities Act and the securities laws of any other applicable jurisdiction. This exemption is based on certain representations, warranties, agreements and covenants of Allied and PIC contained in the Transfer Agreement and the Share Purchase Agreement, respectively.



Item 8.01. Other Events

On February 21, 2014, the Company issued 227,996,378 shares of Common Stock in connection with the payment of the stock dividend previously announced by the Company in Item 8.01 of the Company's Current Report on Form 8-K filed with the SEC on January 27, 2014, which is hereby incorporated herein by reference. Each share of stock of record as of the close of business on February 13, 2014, carried the right to receive 1.4348 additional shares of Common Stock for every one share of Common Stock held. Cash will be paid in lieu of issuing fractional shares at a rate of $0.68 per share, which was the closing price of the Common Stock on February 24, 2014 - the first day of trading at the dividend adjusted price.




Item 9.01. Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired

The financial statements required by Item 9.01(a) of Form 8-K were previously filed as Annex A (Financial Statements of the Assets to be Acquired) to the Definitive Proxy Statement on Schedule 14A filed with the SEC on January 15, 2014, and are incorporated herein by reference in accordance with Form 8-K General Instruction B.3.

(b) Pro Forma Financial Information

The pro forma financial information required by Item 9.01(b) of Form 8-K was previously filed as Annex B (Unaudited Pro Forma Condensed Combined Financial Statements) of the Definitive Proxy Statement on Schedule 14A filed with the SEC on January 15, 2014, and is incorporated herein by reference in accordance with Form 8-K General Instruction B.3.

(d) Exhibits

Exhibit Descriptions

4.1 Allied Registration Rights Agreement, dated February 21, 2014, by and between CAMAC Energy Inc. and Allied Energy Plc.

4.2 Convertible Subordinated Note issued on February 21, 2014, by CAMAC Energy Inc. in favor of Allied Energy Plc.

4.3 PIC Registration Rights Agreement, dated February 21, 2014, by and between CAMAC Energy Inc. and the Public Investment Corporation (SOC) Limited.

10.1 Assignment and Bill of Sale, dated February 21, 2014, by and among Allied Energy Plc, CAMAC International (Nigeria) Limited and CAMAC Petroleum Limited.

10.2 Right of First Refusal and Corporate Opportunities Agreement, dated February 21, 2014, by and among CAMAC Energy Inc., CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited and Allied Energy Plc.


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