AGREEMENT AND PLAN OF MERGER By and Among AMERICAN RESOURCES CORPORATION, and EMPIRE KENTUCKY LAND, INC. Dated as of February 12, 2019 AGREEMENT AND PLAN OF MERGER
Exhibit 10.18
AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN RESOURCES CORPORATION,
and
EMPIRE KENTUCKY LAND, INC.
Dated as of February 12, 2019
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this
“Agreement”), dated the 12 day of February, 2019, is by
and among AMERICAN RESOURCES
CORPORATION, a Florida
corporation (“American Resources”), and
EMPIRE KENTUCKY
LAND, INC., a Kentucky
corporation (“Company”). Capitalized terms used herein
(including in the immediately preceding sentence) and not otherwise
defined herein shall have the meanings set forth in Appendix A
hereof.
WHEREAS,
the parties intend for American Resources to acquire the Company,
on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS,
in furtherance of such acquisition of the Company by American
Resources, and on the terms and subject to the conditions set forth
in this Agreement, Company shall be merged with and into American
Resources (the “Merger”), with American Resources
surviving the Merger and each outstanding share of the
Company’s common stock, no par value (the “Company
Common Stock”) (other than the Cancelled Shares and the
Dissenting Shares) shall be converted into the right to receive the
Merger Consideration;
WHEREAS,
the Board of Directors of the Company (the “Company
Board”) has unanimously: (a) determined that it is in the
best interests of the Company and the holders of shares of the
Company Common Stock, and declared it advisable, to enter into this
Agreement with American Resources; (b) approved the execution,
delivery, and performance of this Agreement and the consummation of
the transactions contemplated hereby, including the Merger; and (c)
resolved, subject to the terms and conditions set forth in this
Agreement, to recommend adoption of this Agreement by the
stockholders of the Company;
WHEREAS,
the Board of Directors of American Resources (the “American
Resources Board”) has unanimously: (a) determined that it is
in the best interests of American Resources, and its stockholders,
and declared it advisable, to enter into this Agreement; and (b)
approved the execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby,
including the Merger;
WHEREAS,
the American Resources Board has resolved to recommend that the
holders of shares of American Resources’ common stock, par
value $0.0001 per share (the “American Resources Common
Stock”) approve the issuance of shares of American Resources
Common Stock in connection with the Merger on the terms and subject
to the conditions set forth in this Agreement (the “American
Resources Stock Issuance”);
WHEREAS,
for U.S. federal income Tax purposes, the parties intend that the
Merger qualify as a “reorganization” within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the “Code”), and that this Agreement be, and is
hereby, adopted as a plan of reorganization within the meaning of
Section 368(a) of the Code; and
WHEREAS,
the parties desire to make certain representations, warranties,
covenants, and agreements in connection with the Merger and the
other transactions contemplated by this Agreement and also to
prescribe certain terms and conditions to the Merger.
NOW,
THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants, and agreements contained in
this Agreement, the parties, intending to be legally bound, agree
as follows:
1.01. The
Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Florida
Business Corporation Act (“FBCA”) and the Kentucky
Business Corporation Act (“KBCA”), at the Effective
Time: (i) the Company will merge with and into American Resources;
(ii) the separate corporate existence of the Company will cease;
and (iii) American Resources will continue its corporate existence
under the FBCA as the surviving corporation in the
Merger.
1.02. Closing.
Upon the terms and subject to the conditions set forth herein, the
closing of the Merger (the “Closing”) will take place
at Lexington, KY, as soon as practicable (and, in any event, within
three Business Days) after the satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger set
forth in Section 6 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the
satisfaction or, to the extent permitted hereunder, waiver of all
such conditions), unless this Agreement has been terminated
pursuant to its terms or unless another time or date is agreed to
in writing by the parties hereto. The Closing shall be held at the
offices of McBrayer, McGinnis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ PLLC, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, unless another place
is agreed to in writing by the parties hereto, and the actual date
of the Closing is hereinafter referred to as the “Closing
Date.”
1.03. Effective
Time. Subject to the provisions
of this Agreement, on the Closing Date, the Company and American
Resources will cause a certificate of merger (the
“Certificate of Merger”) to be executed, acknowledged,
and filed with the Secretaries of State of the State of Florida and
the Commonwealth of Kentucky in accordance with the relevant
provisions of the FBCA and the KBCA and shall make all other
filings or recordings required under the FBCA and the KBCA. The
Merger will become effective at such time as the Certificate of
Merger has been duly filed with the Secretaries of State of the
State of Florida and the Commonwealth of Kentucky or at such later
date or time as may be agreed by the Company and American Resources
in writing and specified in the Certificate of Merger in accordance
with the FBCA and the KBCA (the effective time of the Merger being
hereinafter referred to as the
“Effective Time”).
1.04. Effects
of the Merger.
The Merger shall have the effects set in this Agreement and in the
applicable provisions of the FBCA and the KBCA. Without limiting
the generality of the foregoing, and subject thereto from and after
the Effective Time, the effects of the Merger shall be that all
property, rights, privileges, immunities, powers, franchises,
licenses, and authority of the Company shall vest in American
Resources, and all debts, liabilities, obligations, restrictions,
and duties of the Company shall become the debts, liabilities,
obligations, restrictions, and duties of American
Resources.
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2. Effect
of the Merger on Capital Stock; Exchange of
Certificates.
2.01. Effect
of the Merger on Capital Stock.
At the Effective Time, as a result of the Merger and without any
action on the part of American Resources or the Company or the
holder of any capital stock of American Resources or the
Company:
(a). Cancellation
of Certain Company Common Stock. Each share of Company Common Stock that is owned
by the Company (as treasury stock or otherwise) or any of their
respective direct or indirect wholly-owned Subsidiaries as of
immediately prior to the Effective Time (the “Cancelled
Shares”) will automatically be cancelled and retired and will
cease to exist, and no consideration will be delivered in exchange
therefor.
(b). Conversion
of Company Common Stock. Each
share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (other than Cancelled Shares and
Dissenting Shares) will be converted into the right to receive: (i)
two thousand (2,000) (the “Exchange Ratio”) shares of
American Resources Common Stock (the “Merger
Consideration”); and (ii) any dividends or other
distributions to which the holder thereof becomes entitled to upon
the surrender of such shares of Company Common Stock in accordance
with Section 2.02(g).
(c). Cancellation
of Shares. At the Effective
Time, all shares of Company Common Stock will no longer be
outstanding and all shares of Company Common Stock will be
cancelled and retired and will cease to exist, and each holder of:
(i) a certificate formerly representing any shares of Company
Common Stock (each, a “Certificate”); or (ii) any
book-entry shares which immediately prior to the Effective Time
represented shares of Company Common Stock (each, a
“Book-Entry Share”) will, subject to applicable Law in
the case of Dissenting Shares, cease to have any rights with
respect thereto, except the right to receive (A) the Merger
Consideration in accordance with Section 2.02 hereof, (B) any cash in lieu of fractional shares
of American Resources Common Stock payable pursuant to
Section 2.01(e), and (C) any dividends
or other distributions to which the holder thereof becomes entitled
to upon the surrender of such shares of Company Common Stock in
accordance with Section 2.02(g).
(d). Intentionally
omitted.
(e). Fractional
Shares. No certificates or
scrip representing fractional shares of American Resources Common
Stock shall be issued upon the conversion of Company Common Stock
pursuant to Section 2.01(b) and
such fractional share interests shall not entitle the owner thereof
to vote or to any other rights of a holder of shares of American
Resources Common Stock. Notwithstanding any other provision of this
Agreement, each holder of shares of Company Common Stock converted
pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of American Resources Common Stock
(after taking into account all shares of Company Common Stock
exchanged by such holder) shall in lieu thereof, upon surrender of
such holder’s Certificates and Book-Entry Shares, receive in
cash (rounded to the nearest whole cent), without interest, an
amount equal to such fractional amount multiplied by the last
reported sale price of American Resources Common Stock on the
NASDAQ Stock Market (“Nasdaq”) or OTC listing
(“OTC”), as applicable, on the last complete trading
day prior to the date of the Effective Time.
2.02. Exchange
Procedures.
(a). Exchange
Agent; Exchange Fund. Prior to
the Effective Time, American Resources shall appoint an exchange
agent (the “Exchange Agent”) to act as the agent for
the purpose of paying the Merger Consideration for the Certificates
and the Book-Entry Shares. At or promptly following the Effective
Time, American Resources shall deposit with the Exchange Agent: (i)
certificates representing the shares of American Resources Common
Stock to be issued as Merger Consideration (or make appropriate
alternative arrangements if uncertificated shares of American
Resources Common Stock represented by book-entry shares will be
issued); and (ii) any cash sufficient to make payments in lieu of
fractional shares pursuant to Section 2.01(e). In addition, American Resources shall deposit or
cause to be deposited with the Exchange Agent, as necessary from
time to time after the Effective Time, any dividends or other
distributions, if any, to which the holders of Company Common
Shares may be entitled pursuant to Section 2.02(g)
for distributions or dividends, on the
American Resources Common Stock to which they are entitled to
pursuant to Section 2.01(b), with both a record and payment date after the
Effective Time and prior to the surrender of the Company Common
Shares in exchange for such American Resources Common Stock. Such
cash and shares of American Resources Common Stock, together with
any dividends or other distributions deposited with the Exchange
Agent pursuant to this Section 2.02(a), are referred to collectively in this Agreement as
the “Exchange Fund.”
(b). Procedures
for Surrender; No Interest.
Promptly after the Effective Time, American Resources shall send,
or shall cause the Exchange Agent to send, to each record holder of
shares of Company Common Stock at the Effective Time, whose Company
Common Stock was converted pursuant to Section 2.01(b)
into the right to receive the Merger
Consideration, a letter of transmittal and instructions (which
shall specify that the delivery shall be effected, and risk of loss
and title shall pass, only upon proper delivery of the Certificates
or transfer of the Book-Entry Shares to the Exchange Agent, and
which letter of transmittal will be in customary form and have such
other provisions as American Resources may reasonably specify) for
use in such exchange. Each holder of shares of Company Common Stock that have
been converted into the right to receive the Merger Consideration
shall be entitled to receive the Merger Consideration into which
such shares of Company Common Stock have been converted pursuant
to Section 2.01(b) in respect
of the Company Common Stock represented by a Certificate or
Book-Entry Share, any cash in lieu of fractional shares which the
holder has the right to receive pursuant to Section 2.01(e),
and any dividends or other
distributions pursuant to Section 2.02(g) upon: (i) surrender to the Exchange Agent of a
Certificate; or (ii) receipt of an “agent’s
message” by the Exchange Agent (or such other evidence, if
any, of transfer as the Exchange Agent may reasonably request) in
the case of Book-Entry Shares; in each case, together with a duly
completed and validly executed letter of transmittal and such other
documents as may reasonably be requested by the Exchange Agent. No
interest shall be paid or accrued upon the surrender or transfer of
any Certificate or Book-Entry Share. Upon payment of the Merger
Consideration pursuant to the provisions of this Section 2, each
Certificate or Certificates or Book-Entry Share or Book-Entry
Shares so surrendered or transferred, as the case may be, shall
immediately be cancelled.
(c). Investment
of Exchange Fund. Until
disbursed in accordance with the terms and conditions of this
Agreement, the cash in the Exchange Fund will be invested by the
Exchange Agent, as directed by American Resources. No losses with
respect to any investments of the Exchange Fund will affect the
amounts payable to the holders of Certificates or Book-Entry
Shares. Any income from investment of the Exchange Fund will be
payable to American Resources on demand.
(d). Payments
to Non-Registered Holders. If
any portion of the Merger Consideration is to be paid to a Person
other than the Person in whose name the surrendered Certificate or
the transferred Book-Entry Share, as applicable, is registered, it
shall be a condition to such payment that: (i) such Certificate
shall be properly endorsed or shall otherwise be in proper form for
transfer or such Book-Entry Share shall be properly transferred;
and (ii) the Person requesting such payment shall pay to the
Exchange Agent any transfer or other Tax required as a result of
such payment to a Person other than the registered holder of such
Certificate or Book-Entry Share, as applicable, or establish to the
reasonable satisfaction of the Exchange Agent that such Tax has
been paid or is not payable.
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(e). Full
Satisfaction. All Merger
Consideration paid upon the surrender of Certificates or transfer
of Book-Entry Shares in accordance with the terms hereof shall be
deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock formerly
represented by such Certificate or Book-Entry Shares, and from and
after the Effective Time, there shall be no further registration of
transfers of shares of Company Common Stock on the stock transfer
books of American Resources. If, after the Effective Time,
Certificates or Book-Entry Shares are presented to American
Resources, they shall be cancelled and exchanged as provided in
this Section 2.
(f). Termination
of Exchange Fund. Any portion
of the Exchange Fund that remains unclaimed by the holders of
shares of Company Common Stock six (6) months after the Effective
Time shall be returned to American Resources, upon demand, and any
such holder who has not exchanged shares of Company Common Stock
for the Merger Consideration in accordance with this Section
2.02 prior to that time shall
thereafter look only to American Resources (subject to abandoned
property, escheat, or other similar Laws), as general creditors
thereof, for payment of the Merger Consideration without any
interest. Notwithstanding the foregoing, American Resources shall
not be liable to any holder of shares of Company Common Stock for
any amounts paid to a public official pursuant to applicable
abandoned property, escheat, or similar Laws. Any amounts remaining
unclaimed by holders of shares of Company Common Stock one (1) year
after the Effective Time (or such earlier date, immediately prior
to such time when the amounts would otherwise escheat to or become
property of any Governmental Entity) shall become, to the extent
permitted by applicable Law, the property of American Resources
free and clear of any claims or interest of any Person previously
entitled thereto.
(g). Distributions
with Respect to Unsurrendered Shares of Company Common
Stock. All shares of American
Resources Common Stock to be issued pursuant to the Merger shall be
deemed issued and outstanding as of the Effective Time and whenever
a dividend or other distribution is declared by American Resources
in respect of the American Resources Common Stock, the record date
for which is after the Effective Time, that declaration shall
include dividends or other distributions in respect of all shares
issuable pursuant to this Agreement. No dividends or other
distributions in respect of the American Resources Common Stock
shall be paid to any holder of any unsurrendered Company Common
Share until the Certificate (or affidavit of loss in lieu of the
Certificate as provided in Section 2.06) or Book-Entry Share is surrendered for exchange
in accordance with this Section 2.02. Subject to the effect of applicable Laws,
following such surrender, there shall be issued or paid to the
holder of record of the whole shares of American Resources Common
Stock issued in exchange for Company Common Shares in accordance
with this Section 2.02, without
interest: (i) at the time of such surrender, the dividends or other
distributions with a record date after the Effective Time
theretofore payable with respect to such whole shares of American
Resources Common Stock and not paid; and (ii) at the appropriate
payment date, the dividends or other distributions payable with
respect to such whole shares of American Resources Common Stock
with a record date after the Effective Time but with a payment date
subsequent to surrender.
(h). Dissenting
Shares Merger Consideration.
Any portion of the Cash Consideration made available to the
Exchange Agent in respect of any Dissenting Shares shall be
returned to American Resources, upon demand.
2.03. Dissenting
Shares. Notwithstanding any
provision of this Agreement to the contrary, including
Section 2.01, shares of Company Common
Stock issued and outstanding immediately prior to the Effective
Time (other than Cancelled Shares) and held by a holder who has not
voted in favor of adoption of this Agreement or consented thereto
in writing and who is entitled to demand and has properly exercised
appraisal rights of such shares in accordance with the KBCA (such
shares of Company Common Stock being referred to collectively as
the “Dissenting Shares” until such time as such holder
fails to perfect or otherwise waives, withdraws, or loses such
holder’s appraisal rights under the KBCA with respect to such
shares) shall not be converted into a right to receive the Merger
Consideration, but instead shall be entitled to only such rights as
are granted by the KBCA; provided,
however, that if, after the
Effective Time, such holder fails to perfect, waives, withdraws, or
loses such holder’s right to appraisal pursuant to the KBCA
or if a court of competent jurisdiction shall determine that such
holder is not entitled to the relief provided by the KBCA, such
shares of Company Common Stock shall be treated as if they had been
converted as of the Effective Time into the right to receive the
Merger Consideration in accordance with Section 2.01(b),
without interest thereon, upon
surrender of such Certificate formerly representing such share or
transfer of such Book-Entry Share, as the case may be. The Company
shall provide American Resources prompt written notice of any
demands received by the Company for appraisal of shares of Company
Common Stock, any waiver or withdrawal of any such demand, and any
other demand, notice, or instrument delivered to the Company prior
to the Effective Time that relates to such demand, and American
Resources shall have the opportunity and right to direct all
negotiations and proceedings with respect to such demands. Except
with the prior written consent of American Resources, the Company
shall not make any payment with respect to, or settle, or offer to
settle, any such demands.
2.04. Adjustments.
Without limiting the other provisions of this Agreement, if at any
time during the period between the date of this Agreement and the
Effective Time, any change in the outstanding shares of capital
stock of the Company or the American Resources Common Stock shall
occur (other than the issuance of additional shares of capital
stock of the Company or American Resources as permitted by this
Agreement), including by reason of any reclassification,
recapitalization, stock split (including a reverse stock split), or
combination, exchange, readjustment of shares, or similar
transaction, or any stock dividend or distribution paid in stock,
the Exchange Ratio and any other amounts payable pursuant to this
Agreement shall be appropriately adjusted to reflect such
change; provided,
however, that this sentence
shall not be construed to permit American Resources or the Company
to take any action with respect to its securities that is
prohibited by the terms of this Agreement.
2.05. Intentionally
omitted.
2.06. Lost
Certificates. If any
Certificate shall have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen, or destroyed and, if required by
American Resources, the posting by such Person of a bond, in such
reasonable amount as American Resources may direct, as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue, in exchange for such
lost, stolen, or destroyed Certificate, the Merger Consideration to
be paid in respect of the shares of Company Common Stock formerly
represented by such Certificate as contemplated under this Section
2.
2.07. Intentionally
omitted.
2.08. Tax
Treatment. The Merger is
intended to constitute a “reorganization” within the
meaning of Section 368(a) of the Code.
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3. Representations
and Warranties of the Company. Except as
set forth in the correspondingly numbered Section of the Disclosure
Schedule that relates to such Section or in another Section of the
Company Disclosure Schedule to the extent that it is reasonably
apparent on the face of such disclosure that such disclosure is
applicable to such Section, the Company hereby represents and
warrants to American Resources as follows:
3.01. Organization;
Standing and Power.
The Company is a corporation, duly
organized and validly existing, under the Laws of its jurisdiction
of organization, and has the requisite corporate power and
authority to own, lease, and operate its assets and to carry on its
business as now conducted. The Company is duly qualified or
licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the assets and
properties owned, leased, or operated by it or the nature of its
business makes such qualification or license necessary, except
where the failure to be so qualified or licensed or to be in good
standing, would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse
Effect.
3.02. Capital
Structure.
(a). Capital
Stock. The authorized capital
stock of the Company consists of: (i) one thousand (1,000) shares
of Company Common Stock; and (ii) zero (0) shares of preferred
stock of the Company (the “Company Preferred Stock”).
As of the date of this Agreement: (A) 1,000 shares of Company
Common Stock were issued and outstanding (not including shares held
in treasury); (B) no shares of Company Common Stock were issued and
held by the Company in its treasury; and (C) no shares of Company
Preferred Stock were issued and outstanding or held by the Company
in its treasury. All of the outstanding shares of capital stock of
the Company are, and all shares of capital stock of the Company
which may be issued as contemplated or permitted by this Agreement
will be, when issued, duly authorized, validly issued, fully paid,
and non-assessable, and not subject to any pre-emptive rights. No
Subsidiary of the Company owns any shares of Company Common
Stock.
(b). Stock
Awards.
(i). As
of the date of this Agreement, no shares of Company Common Stock
were reserved for issuance pursuant to Company Equity Awards not
yet granted under the Company Stock Plans.
(ii). There
are no Contracts to which the Company is a party obligating the
Company to accelerate the vesting of any Company Equity Award as a
result of the transactions contemplated by this Agreement (whether
alone or upon the occurrence of any additional or subsequent
events). As of the date hereof, there are no outstanding: (A)
securities of the Company or any of its Subsidiaries convertible
into or exchangeable for Voting Debt or shares of capital stock of
the Company; (B) options, warrants, or other agreements or
commitments to acquire from the Company or any of its Subsidiaries,
or obligations of the Company or any of its Subsidiaries to issue,
any Voting Debt or shares of capital stock of (or securities
convertible into or exchangeable for shares of capital stock of)
the Company; or (C) restricted shares, restricted stock units,
stock appreciation rights, performance shares, profit participation
rights, contingent value rights, “phantom” stock, or
similar securities or rights that are derivative of, or provide
economic benefits based, directly or indirectly, on the value or
price of, any shares of capital stock of the Company, in each case
that have been issued by the Company or its Subsidiaries (the items
in clauses (A), (B), and (C), together with the capital stock of
the Company, being referred to collectively as “Company
Securities”). All outstanding shares of Company Common Stock,
all outstanding Company Equity Awards, and all outstanding shares
of capital stock, voting securities, or other ownership interests
in any Subsidiary of the Company, have been issued or granted, as
applicable, in compliance in all material respects with all
applicable securities Laws.
(iii). There
are no outstanding Contracts requiring the Company or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any
Company Securities or Company Subsidiary Securities. Neither the
Company nor any of its Subsidiaries is a party to any voting
agreement with respect to any Company Securities or Company
Subsidiary Securities.
(c). Voting
Debt. No bonds, debentures,
notes, or other indebtedness issued by the Company or any of its
Subsidiaries: (i) having the right to vote on any matters on which
stockholders or equity holders of the Company or any of its
Subsidiaries may vote (or which is convertible into, or
exchangeable for, securities having such right); or (ii) the value
of which is directly based upon or derived from the capital stock,
voting securities, or other ownership interests of the Company or
any of its Subsidiaries, are issued or outstanding (collectively,
“Voting Debt”).
(d). Company
Subsidiary Securities. As of
the date hereof, there are no outstanding: (i) securities of the
Company or any of its Subsidiaries convertible into or exchangeable
for Voting Debt, capital stock, voting securities, or other
ownership interests in any Subsidiary of the Company; (ii) options,
warrants, or other agreements or commitments to acquire from the
Company or any of its Subsidiaries, or obligations of the Company
or any of its Subsidiaries to issue, any Voting Debt, capital
stock, voting securities, or other ownership interests in (or
securities convertible into or exchangeable for capital stock,
voting securities, or other ownership interests in) any Subsidiary
of the Company; or (iii) restricted shares, restricted stock units,
stock appreciation rights, performance shares, profit participation
rights, contingent value rights, “phantom” stock, or
similar securities or rights that are derivative of, or provide
economic benefits based, directly or indirectly, on the value or
price of, any capital stock or voting securities of, or other
ownership interests in, any Subsidiary of the Company, in each case
that have been issued by a Subsidiary of the Company (the items in
clauses (i), (ii), and (iii), together with the capital stock,
voting securities, or other ownership interests of such
Subsidiaries, being referred to collectively as “Company
Subsidiary Securities”).
3.03. Authority;
Non-Contravention; Governmental Consents; Board
Approval.
(a). Authority.
The Company has all requisite corporate power and authority to
enter into and to perform its obligations under this Agreement and,
subject to, in the case of the consummation of the Merger, adoption
of this Agreement by the affirmative vote or consent of the holders
of a majority of the outstanding shares of Company Common Stock
(the “Requisite Company Vote”), to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of
this Agreement or to consummate the Merger and the other
transactions contemplated hereby, subject only, in the case of
consummation of the Merger, to the receipt of the Requisite Company
Vote. The Requisite Company Vote is the only vote or consent of the
holders of any class or series of the Company’s capital stock
necessary to approve and adopt this Agreement, approve the Merger,
and consummate the Merger and the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by the
Company and, assuming due execution and delivery by American
Resources, constitutes the legal, valid, and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, and other similar Laws affecting
creditors’ rights generally and by general principles of
equity.
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(b). Non-Contravention.
The execution, delivery, and performance of this Agreement by the
Company, and the consummation by the Company of the transactions
contemplated by this Agreement, including the Merger, do not and
will not: (i) subject to obtaining the Requisite Company Vote,
contravene or conflict with, or result in any violation or breach
of, the Charter Documents of the Company or any of its
Subsidiaries; (ii) assuming that all Consents contemplated
by Section 3.03(c) have been obtained
or made and, in the case of the consummation of the Merger,
obtaining the Requisite Company Vote, conflict with or violate any
Law applicable to the Company, any of its Subsidiaries, or any of
their respective properties or assets; (iii) result in any breach
of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the
Company’s or any of its Subsidiaries’ loss of any
benefit or the imposition of any additional payment or other
liability under, or alter the rights or obligations of any third
party under, or give to any third party any rights of termination,
amendment, acceleration, or cancellation, or require any Consent
under, any Contract to which the Company or any of its Subsidiaries
is a party or otherwise bound as of the date hereof; or (iv) result
in the creation of a Lien (other than Permitted Liens) on any of
the properties or assets of the Company or any of its Subsidiaries,
except, in the case of each of clauses (ii), (iii), and (iv), for
any conflicts, violations, breaches, defaults, loss of benefits,
additional payments or other liabilities, alterations,
terminations, amendments, accelerations, cancellations, or Liens
that, or where the failure to obtain any Consents, in each case,
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c). Governmental
Consents. Except as set forth
on Section 3.03(c) of the Disclosure Schedule, no consent,
approval, order, or authorization of, or registration, declaration,
or filing with, or notice to (any of the foregoing being a
“Consent”), any supranational, national, state,
municipal, local, or foreign government, any instrumentality,
subdivision, court, administrative agency or commission, or other
governmental authority, or any quasi-governmental or private body
exercising any regulatory or other governmental or
quasi-governmental authority (a “Governmental Entity”)
is required to be obtained or made by the Company in connection
with the execution, delivery, and performance by the Company of
this Agreement or the consummation by the Company of the Merger and
other transactions contemplated hereby.
(d). Board
Approval. The Company Board, by
unanimous written consent not subsequently rescinded or modified in
any way, has: (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, upon the
terms and subject to the conditions set forth herein, are fair to,
and in the best interests of, the Company and the Company’s
stockholders; (ii) approved and declared advisable this Agreement,
including the execution, delivery, and performance thereof, and the
consummation of the transactions contemplated by this Agreement,
including the Merger, upon the terms and subject to the conditions
set forth herein; (iii) directed that this Agreement be submitted
to a vote of the Company’s stockholders for adoption at the
Company Stockholders Meeting; and (iv) resolved to recommend that
Company stockholders vote in favor of adoption of this Agreement in
accordance with the FBCA and the KBCA (collectively, the
“Company Board Recommendation”).
3.04. Intentionally
omitted.
3.05. Absence
of Certain Changes or Events.
Since the date of the Company Balance Sheet, except in connection
with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, the business
of the Company and each of its Subsidiaries has been conducted in
the ordinary course of business consistent with past practice and
there has not been or occurred:
(a). any
Company Material Adverse Effect or any event, condition, change, or
effect that could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect;
or
(b). any
event, condition, action, or effect that, if taken during the
period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 5.01.
3.06. Taxes.
(a). Tax
Returns and Payment of Taxes.
The Company and each of its Subsidiaries have duly and timely filed
or caused to be filed (taking into account any valid extensions)
all material Tax Returns required to be filed by them. Such Tax
Returns are true, complete, and correct in all material respects.
Neither Company nor any of its Subsidiaries is currently the
beneficiary of any extension of time within which to file any Tax
Return other than extensions of time to file Tax Returns obtained
in the ordinary course of business consistent with past practice.
All material Taxes due and owing by the Company or any of its
Subsidiaries (whether or not shown on any Tax Return) have been
timely paid or, where payment is not yet due, the Company has made
an adequate provision for such Taxes in the Company’s
financial statements. The Company’s most recent financial
statements reflect an adequate reserve for all material Taxes
payable by the Company and its Subsidiaries through the date of
such financial statements. Neither the Company nor any of its
Subsidiaries has incurred any material Liability for Taxes since
the date of the Company’s most recent financial statements
outside of the ordinary course of business or otherwise
inconsistent with past practice.
(b). Withholding.
The Company and each of its Subsidiaries have withheld and timely
paid each material Tax required to have been withheld and paid in
connection with amounts paid or owing to any Company Employee,
creditor, customer, stockholder, or other party (including, without
limitation, withholding of Taxes pursuant to Sections 1441 and 1442
of the Code or similar provisions under any state, local, and
foreign Laws), and materially complied with all information
reporting and backup withholding provisions of applicable
Law.
(c). Liens.
There are no Liens for material Taxes upon the assets of the
Company or any of its Subsidiaries other than for current Taxes not
yet due and payable or for Taxes that are being contested in good
faith by appropriate proceedings and for which adequate reserves
has been made in the Company’s most recent financial
statements.
(d). Tax
Deficiencies and Audits. No
deficiency for any material amount of Taxes which has been
proposed, asserted, or assessed in writing by any taxing authority
against the Company or any of its Subsidiaries remains unpaid.
There are no waivers or extensions of any statute of limitations
currently in effect with respect to Taxes of the Company or any of
its Subsidiaries. There are no audits, suits, proceedings,
investigations, claims, examinations, or other administrative or
judicial proceedings ongoing or pending with respect to any
material Taxes of the Company or any of its
Subsidiaries.
6
(e). Tax
Jurisdictions. No claim has
ever been made in writing by any taxing authority in a jurisdiction
where the Company and its Subsidiaries do not file Tax Returns that
the Company or any of its Subsidiaries is or may be subject to Tax
in that jurisdiction.
(f). Tax
Rulings. Neither the Company
nor any of its Subsidiaries has requested or is the subject of or
bound by any private letter ruling, technical advice memorandum, or
similar ruling or memorandum with any taxing authority with respect
to any material Taxes, nor is any such request
outstanding.
3.07. Intellectual
Property.
(a). Company-Owned
IP. The Company has no
Company-Owned IP that is the subject of any issuance, registration,
certificate, application, or other filing by, to or with any
Governmental Authority or authorized private registrar, including
patents, patent applications, trademark registrations and pending
applications for registration, copyright registrations and pending
applications for registration, and internet domain name
registrations.
(b). Right
to Use; Title. The Company or
one of its Subsidiaries is the sole and exclusive owner of all
right, title, and interest in and to the Company-Owned IP, and has
the valid and enforceable right to use all other Intellectual
Property used in or necessary for the conduct of the business of
the Company and its Subsidiaries as currently conducted and as
proposed to be conducted (“Company IP”), in each case,
free and clear of all Liens other than Permitted Liens, except as
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c). Validity
and Enforceability. The Company
and its Subsidiaries’ rights in the Company-Owned IP are
valid, subsisting, and enforceable, except as would not reasonably
be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and each of its Subsidiaries
have taken reasonable steps to maintain the Company IP and to
protect and preserve the confidentiality of all trade secrets
included in the Company IP, except where the failure to take such
actions would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse
Effect.
(d). Non-Infringement.
Except as would not be reasonably expected to have, individually or
in the aggregate, a Company Material Adverse Effect: (i) the
conduct of the businesses of the Company and any of its
Subsidiaries has not infringed, misappropriated, or otherwise
violated, and is not infringing, misappropriating, or otherwise
violating, any Intellectual Property of any other Person; and (ii)
to the Knowledge of the Company, no third party is infringing upon,
violating, or misappropriating any Company IP.
(e). IP
Legal Actions and Orders. There
are no Legal Actions pending or, to the Knowledge of the Company,
threatened: (i) alleging any infringement, misappropriation, or
violation by the Company or any of its Subsidiaries of the
Intellectual Property of any Person; or (ii) challenging the
validity, enforceability, or ownership of any Company-Owned IP or
the Company or any of its Subsidiaries’ rights with respect
to any Company IP, in each case except for such Legal Actions that
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company and its
Subsidiaries are not subject to any outstanding Order that
restricts or impairs the use of any Company-Owned IP, except where
compliance with such Order would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect.
3.08. Compliance;
Permits.
(a). Compliance.
The Company and each of its Subsidiaries is in material compliance
with all Laws or Orders applicable to the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries or
any of their respective businesses or properties is bound. Since
December 31, 2018, no Governmental Entity has issued any notice or
notification stating that the Company or any of its Subsidiaries is
not in compliance with any Law in any material
respect.
(b). Permits.
The Company and its Subsidiaries hold, to the extent necessary to
operate their respective businesses as such businesses are being
operated as of the date hereof, all permits, licenses,
registrations, variances, clearances, consents, commissions,
franchises, exemptions, orders, authorizations, and approvals from
Governmental Entities (collectively, “Permits”), except
for any Permits for which the failure to obtain or hold would not
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. No suspension, cancellation,
non-renewal, or adverse modifications of any Permits of the Company
or any of its Subsidiaries is pending or, to the Knowledge of the
Company, threatened, except for any such suspension or cancellation
which would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse
Effect.
3.09. Litigation.
There is no Legal Action pending, or to the Knowledge of the
Company, threatened against the Company or any of its Subsidiaries
or any of their respective properties or assets or, to the
Knowledge of the Company, any officer or director of the Company or
any of its Subsidiaries in their capacities as such. None of the
Company or any of its Subsidiaries or any of their respective
properties or assets is subject to any order, writ, assessment,
decision, injunction, decree, ruling, or judgment
(“Order”) of a Governmental Entity or arbitrator,
whether temporary, preliminary, or permanent, which would
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
3.10. Brokers’
and Finders’ Fees.
Neither the Company nor any of its Subsidiaries has incurred, nor
will it incur, directly or indirectly, any liability for investment
banker, brokerage, or finders’ fees or agents’
commissions, or any similar charges in connection with this
Agreement or any transaction contemplated by this
Agreement.
3.11. Related
Person Transactions. There are
no Contracts, transactions, arrangements, or understandings between
the Company or any of its Subsidiaries, on the one hand, and any
Affiliate (including any director, officer, or employee) thereof or
any holder of 5% or more of the shares of Company Common Stock, but
not including any wholly-owned Subsidiary of the Company, on the
other hand.
7
3.12. Employee
Matters. The Company has no employees and no employee
benefit plans.
3.13. Real
Property and Personal Property Matters.
(a). Owned
Real Estate. The Company has
good and marketable title to the Owned Real Estate free and clear
of any Liens other than the Permitted Liens. Section 3.13(a) of the
Company Disclosure Schedule contains a true and complete list of
the Owned Real Estate as of the date hereof.
(b). Leased
Real Estate. Section 3.13(b) of
the Company Disclosure Schedule contains a true and complete list
of all Leases (including all amendments, extensions, renewals,
guaranties, and other agreements with respect thereto) as of the
date hereof for each such Leased Real Estate (including the date
and name of the parties to such Lease document). The Company has
made available to American Resources a true and complete copy of
each such Lease. Except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect or as set forth on Section 3.13(b) of the Company Disclosure
Schedule, with respect to each of the Leases: (i) such Lease is
legal, valid, binding, enforceable, and in full force and effect;
(ii) neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any other party to the Lease, is in
breach or default under such Lease, and no event has occurred or
circumstance exists which, with or without notice, lapse of time,
or both, would constitute a breach or default under such Lease;
(iii) the Company’s or its Subsidiary’s possession and
quiet enjoyment of the Leased Real Estate under such Lease has not
been disturbed, and to the Knowledge of the Company, there are no
disputes with respect to such Lease; and (iv) there are no Liens on
the estate created by such Lease other than Permitted
Liens.
(c). Real
Estate Used in the Business.
The Owned Real Estate identified in Section 3.13(a) of the Company
Disclosure Schedule and the Leased Real Estate identified in
Section 3.13(b) of the Company Disclosure Schedule comprise all of
the real property of the Company or any of its
Subsidiaries.
(d). Personal
Property. Except as would not
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, the Company and each of its
Subsidiaries are in possession of and have good and marketable
title to, or valid leasehold interests in or valid rights under
contract to use, the machinery, equipment, furniture, fixtures, and
other tangible personal property and assets owned, leased, or used
by the Company or any of its Subsidiaries, free and clear of all
Liens other than Permitted Liens.
3.14. Intentionally
omitted.
3.15. Material
Contracts.
(a). Material
Contracts. For purposes of this
Agreement, “Company Material Contract” shall mean the
following to which the Company or any of its Subsidiaries is a
party or any of the respective assets are bound (excluding any
Leases):
(i). any
Contract providing for indemnification or any guaranty by the
Company or any Subsidiary thereof, in each case that is material to
the Company and its Subsidiaries, taken as a whole, other than (A)
any guaranty by the Company or a Subsidiary thereof of any of the
obligations of (1) the Company or another wholly-owned Subsidiary
thereof or (2) any Subsidiary (other than a wholly-owned
Subsidiary) of the Company that was entered into in the ordinary
course of business pursuant to or in connection with a customer
Contract, or (B) any Contract providing for indemnification of
customers or other Persons pursuant to Contracts entered into in
the ordinary course of business;
(ii). any
Contract that purports to limit in any material respect the right
of the Company or any of its Subsidiaries (or, at any time after
the consummation of the Merger, American Resources or any of its
Subsidiaries) (A) to engage in any line of business, (B) compete
with any Person or solicit any client or customer, or (C) operate
in any geographical location;
(iii). any
Contract relating to the disposition or acquisition, directly or
indirectly (by merger, sale of stock, sale of assets, or
otherwise), by the Company or any of its Subsidiaries after the
date of this Agreement of assets or capital stock or other equity
interests of any Person;
(iv). any
Contract that grants any right of first refusal, right of first
offer, or similar right with respect to any material assets,
rights, or properties of the Company or any of its
Subsidiaries;
(v). any
Contract that contains any provision that requires the purchase of
all or a material portion of the Company’s or any of its
Subsidiaries’ requirements for a given product or service
from a given third party, which product or service is material to
the Company and its Subsidiaries, taken as a whole;
(vi). any
Contract that obligates the Company or any of its Subsidiaries to
conduct business on an exclusive or preferential basis or that
contains a “most favored nation” or similar covenant
with any third party or upon consummation of the Merger or Second
Merger will obligate American Resources or any of its Subsidiaries
to conduct business on an exclusive or preferential basis or that
contains a “most favored nation” or similar covenant
with any third party;
(vii). any
partnership, joint venture, limited liability company agreement, or
similar Contract relating to the formation, creation, operation,
management, or control of any material joint venture, partnership,
or limited liability company, other than any such Contact solely
between the Company and its wholly-owned Subsidiaries or among the
Company’s wholly-owned Subsidiaries;
8
(viii). any
mortgages, indentures, guarantees, loans, or credit agreements,
security agreements, or other Contracts, in each case relating to
indebtedness for borrowed money, whether as borrower or lender, in
each case in excess of $50,000.00, other than (A) accounts
receivables and payables, and (B) loans to direct or indirect
wholly-owned Subsidiaries of the Company;
(ix). any
employee collective bargaining agreement or other Contract with any
labor union;
(x). any
Company IP Agreement, other than licenses for shrinkwrap,
clickwrap, or other similar commercially available off-the-shelf
software that has not been modified or customized by a third party
for the Company or any of its Subsidiaries; or
(xi). any
other Contract under which the Company or any of its Subsidiaries
is obligated to make payment or incur costs in excess of $50.000.00
in any year and which is not otherwise described
above.
(b). Schedule
of Material Contracts; Documents. Section 3.15(b) of the Company Disclosure
Schedule sets forth a true and complete list as of the date hereof
of all Company Material Contracts. The Company has made available
to American Resources correct and complete copies of all Company
Material Contracts, including any amendments
thereto.
(c). No
Breach. (i) All the Company
Material Contracts are legal, valid, and binding on the Company or
its applicable Subsidiary, enforceable against it in accordance
with its terms, and is in full force and effect; (ii) neither the
Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any third party has violated any provision of, or failed
to perform any obligation required under the provisions of, any
Company Material Contract; and (iii) neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any third
party is in breach, or has received written notice of breach, of
any Company Material Contract.
3.16. Insurance.
Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, all
insurance policies of the Company and its Subsidiaries are in full
force and effect and provide insurance in such amounts and against
such risks as the Company reasonably has determined to be prudent,
taking into account the industries in which the Company and its
Subsidiaries operate, and as is sufficient to comply with
applicable Law. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect, neither the Company nor any of its Subsidiaries is
in breach or default, and neither the Company nor any of its
Subsidiaries has taken any action or failed to take any action
which, with notice or the lapse of time, would constitute such a
breach or default, or permit termination or modification of, any of
such insurance policies. Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material
Adverse Effect and to the Knowledge of the Company: (i) no insurer
of any such policy has been declared insolvent or placed in
receivership, conservatorship, or liquidation; and (ii) no notice
of cancellation or termination, other than pursuant to the
expiration of a term in accordance with the terms thereof, has been
received with respect to any such policy.
4. Representations
and Warranties of American Resources. Except: (a)
as disclosed in the American Resources SEC Documents and that is
reasonably apparent on the face of such disclosure to be applicable
to the representation and warranty set forth herein (other than any
disclosures contained or referenced therein under the captions
“Risk Factors,” “Forward-Looking
Statements,” “Quantitative and Qualitative Disclosures
About Market Risk,” and any other disclosures contained or
referenced therein of information, factors, or risks that are
predictive, cautionary, or forward-looking in nature); or (b) as
set forth in the correspondingly numbered Section of the American
Resources Disclosure Schedule that relates to such Section or in
another section of the American Resources Disclosure Schedule to
the extent that it is reasonably apparent on the face of such
disclosure that such disclosure is applicable to such Section;
American Resources represents and warrants to the Company as
follows:
4.01. Organization;
Standing and Power; Charter Documents;
Subsidiaries.
(a). Organization;
Standing and Power. Each of
American Resources and its Subsidiaries is a corporation, limited
liability company, or other legal entity duly organized, validly
existing, and in good standing (to the extent that the concept of
“good standing” is applicable in the case of any
jurisdiction outside the United States) under the Laws of its
jurisdiction of organization, and has the requisite corporate,
limited liability company, or other organizational, as applicable,
power and authority to own, lease, and operate its assets and to
carry on its business as now conducted. Each of American Resources
and its Subsidiaries is duly qualified or licensed to do business
as a foreign corporation, limited liability company, or other legal
entity and is in good standing (to the extent that the concept of
“good standing” is applicable in the case of any
jurisdiction outside the United States) in each jurisdiction where
the character of the assets and properties owned, leased, or
operated by it or the nature of its business makes such
qualification or license necessary, except where the failure to be
so qualified or licensed or to be in good standing, would not
reasonably be expected to have, individually or in the aggregate,
an American Resources Material Adverse Effect.
(b). Charter
Documents. The copies of the
Certificate of Incorporation and By-Laws of American Resources as
most recently filed with the American Resources SEC Documents are
true, correct, and complete copies of such documents as in effect
as of the date of this Agreement. American Resources is not in
violation of any of the provisions of its Charter
Documents.
(c). Subsidiaries.
All of the outstanding shares of capital stock of, or other equity
or voting interests in, each Subsidiary of American Resources have
been validly issued and are owned by American Resources, directly
or indirectly, free of pre-emptive rights, are fully paid and
non-assessable, and are free and clear of all Liens, including any
restriction on the right to vote, sell, or otherwise dispose of
such capital stock or other equity or voting interests, except for
any Liens: (i) imposed by applicable securities Laws; or (ii)
arising pursuant to the Charter Documents of any non-wholly-owned
Subsidiary of American Resources. Except for the capital stock of,
or other equity or voting interests in, its Subsidiaries, American
Resources does not own, directly or indirectly, any capital stock
of, or other equity or voting interests in, any
Person.
9
4.02. Capital
Structure.
(a). Capital
Stock. The authorized capital
stock of American Resources consists of: (i) 230,000,000 shares of
American Resources Common Stock; (ii) 5,000,000 shares of Series A
Preferred stock, par value $0.0001 per share, of American Resources
(the “American Resources Series A Preferred Stock”);
and (iii) 20,000,000 shares of Series C Preferred stock, par value
$0.0001 per share, of American Resources (the “American
Resources Series C Preferred Stock”). As of the date of this
Agreement and immediately prior to the share offering contemplated
under American Resources Form S1/A: (A) 18,639,433 shares of
American Resources Common Stock were issued and outstanding (not
including shares held in treasury); (B) 452,729 shares of American
Resources Series A Preferred Stock were issued and outstanding; and
(D) 50,000 shares of American Resources Series C Preferred Stock
were issued and outstanding; and through the date hereof, no
additional shares of American Resources Common Stock or shares of
American Resources Preferred Stock have been issued other than the
issuance of shares of American Resources Common Stock upon the
exercise or settlement of American Resources Equity Awards. For all
classes of common stock and preferred stock of American Resources,
no shares are issued and held by American Resources in its treasury
All of the outstanding shares of capital stock of American
Resources are, and all shares of capital stock of American
Resources which may be issued as contemplated or permitted by this
Agreement, including the shares of American Resources Common Stock
constituting the Merger Consideration, will be, when issued, duly
authorized, validly issued, fully paid, and non-assessable, and not
subject to any pre-emptive rights. No Subsidiary of American
Resources owns any shares of American Resources Common
Stock.
(b). Stock
Awards.
(i). As
of the date of this Agreement, an aggregate of 3,363,170 shares of
American Resources Common Stock were reserved for issuance pursuant
to American Resources Equity Awards not yet granted under the
American Resources Stock Plans. As of the date of this Agreement,
636,830 shares of American Resources Common Stock were reserved for
issuance pursuant to outstanding American Resources Stock Options
and no shares of American Resources Restricted Shares were issued
and outstanding. Except as provided in this Agreement, since
September 12, 2018 and through the date hereof, no American
Resources Equity Awards have been granted and no additional shares
of American Resources Common Stock have become subject to issuance
under the American Resources Stock Plans. All shares of American
Resources Common Stock subject to issuance under the American
Resources Stock Plans upon issuance in accordance with the terms
and conditions specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully paid,
and non-assessable.
(ii). Other
than the American Resources Equity Awards, as of the date hereof,
there are no outstanding (A) securities of American Resources or
any of its Subsidiaries convertible into or exchangeable for
American Resources Voting Debt or shares of capital stock of
American Resources, (B) options, warrants, or other agreements or
commitments to acquire from American Resources or any of its
Subsidiaries, or obligations of American Resources or any of its
Subsidiaries to issue, any American Resources Voting Debt or shares
of capital stock of (or securities convertible into or exchangeable
for shares of capital stock of) American Resources, or (C)
restricted shares, restricted stock units, stock appreciation
rights, performance shares, profit participation rights, contingent
value rights, “phantom” stock, or similar securities or
rights that are derivative of, or provide economic benefits based,
directly or indirectly, on the value or price of, any shares of
capital stock of American Resources, in each case that have been
issued by American Resources or its Subsidiaries (the items in
clauses (A), (B), and (C), together with the capital stock of
American Resources, being referred to collectively as
“American Resources Securities”). All outstanding
shares of American Resources Common Stock, all outstanding American
Resources Equity Awards, and all outstanding shares of capital
stock, voting securities, or other ownership interests in any
Subsidiary of American Resources, have been issued or granted, as
applicable, in compliance in all material respects with all
applicable securities Laws.
(iii). As
of the date hereof, there are no outstanding Contracts requiring
American Resources or any of its Subsidiaries to repurchase,
redeem, or otherwise acquire any American Resources Securities or
American Resources Subsidiary Securities. Neither American
Resources nor any of its Subsidiaries is a party to any voting
agreement with respect to any American Resources Securities or
American Resources Subsidiary Securities.
(c). Voting
Debt. No bonds, debentures,
notes, or other indebtedness issued by American Resources or any of
its Subsidiaries: (i) having the right to vote on any matters on
which stockholders or equity holders of American Resources or any
of its Subsidiaries may vote (or which is convertible into, or
exchangeable for, securities having such right); or (ii) the value
of which is directly based upon or derived from the capital stock,
voting securities, or other ownership interests of American
Resources or any of its Subsidiaries, are issued or outstanding
(collectively, “American Resources Voting
Debt”).
(d). American
Resources Subsidiary Securities. As of the date hereof, there are no outstanding:
(i) securities of American Resources or any of its Subsidiaries
convertible into or exchangeable for American Resources Voting
Debt, capital stock, voting securities, or other ownership
interests in any Subsidiary of American Resources; (ii) options,
warrants, or other agreements or commitments to acquire from
American Resources or any of its Subsidiaries, or obligations of
American Resources or any of its Subsidiaries to issue, any
American Resources Voting Debt, capital stock, voting securities,
or other ownership interests in (or securities convertible into or
exchangeable for capital stock, voting securities, or other
ownership interests in) any Subsidiary of American Resources; or
(iii) restricted shares, restricted stock units, stock appreciation
rights, performance shares, profit participation rights, contingent
value rights, “phantom” stock, or similar securities or
rights that are derivative of, or provide economic benefits based,
directly or indirectly, on the value or price of, any capital stock
or voting securities of, or other ownership interests in, any
Subsidiary of American Resources, in each case that have been
issued by a Subsidiary of American Resources (the items in clauses
(i), (ii), and (iii), together with the capital stock, voting
securities, or other ownership interests of such Subsidiaries,
being referred to collectively as “American Resources
Subsidiary Securities”).
4.03. Authority;
Non-Contravention; Governmental Consents; Board
Approval.
(a). Authority.
American Resources has all requisite corporate power or limited
liability power, as applicable, and authority to enter into and to
perform its obligations under this Agreement and, subject to, in
the case of the consummation of the Merger, the need to obtain the
affirmative vote or consent of 9,506,111 of the outstanding shares
of the American Resources Common Stock to the American Resources
Stock Issuance (the “Requisite American Resources
Vote”), to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by American
Resources and the consummation by American Resources of the
transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or limited liability action,
as applicable, on the part of American Resources and no other
corporate or limited liability proceedings, as applicable, on the
part of American Resources are necessary to authorize the execution
and delivery of this Agreement or to consummate the Merger, the
American Resources Stock Issuance, and the other transactions
contemplated by this Agreement, subject only, in the case of
consummation of the Merger, to the need to obtain the Requisite
American Resources Vote. This Agreement has been duly executed and
delivered by American Resources and, assuming due execution and
delivery by the Company, constitutes the legal, valid, and binding
obligation of American Resources, enforceable against American
Resources in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
moratorium, and other similar Laws affecting creditors’
rights generally and by general principles of
equity.
10
(b). Non-Contravention.
The execution, delivery, and performance of this Agreement by
American Resources and the consummation by American Resources of
the transactions contemplated by this Agreement, do not and will
not: (i) contravene or conflict with, or result in any violation or
breach of, American Resources’ Charter Documents; (ii)
assuming that all of the Consents contemplated by Section
4.03(c) have been obtained or made,
and in the case of the consummation of the Merger, obtaining the
Requisite American Resources Vote, conflict with or violate any Law
applicable to American Resources or any of its properties or
assets; (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a
default) under, result in American Resources’ or any of its
Subsidiaries’ loss of any benefit or the imposition of any
additional payment or other liability under, or alter the rights or
obligations of any third party under, or give to any third party
any rights of termination, amendment, acceleration, or
cancellation, or require any Consent under, any Contract to which
American Resources or any of its Subsidiaries is a party or
otherwise bound as of the date hereof; or (iv) result in the
creation of a Lien (other than Permitted Liens) on any of the
properties or assets of American Resources or any of its
Subsidiaries, except, in the case of each of clauses (ii), (iii),
and (iv), for any conflicts, violations, breaches, defaults, loss
of benefits, additional payments or other liabilities, alterations,
terminations, amendments, accelerations, cancellations, or Liens
that, or where the failure to obtain any Consents, in each case,
would not reasonably be expected to have, individually or in the
aggregate, an American Resources Material Adverse
Effect.
(c). Governmental
Consents. Except as set forth
in Section 4.03(c) of the American Resources Disclosure Schedule,
no Consent of any Governmental Entity is required to be obtained or
made by American Resources in connection with the execution,
delivery, and performance by American Resources of this Agreement
or the consummation by American Resources of the Merger, the
American Resources Stock Issuance, and the other transactions
contemplated hereby.
(d). Board
Approval. The American Resources Board by resolutions duly
adopted by a unanimous vote at a meeting of all directors of
American Resources duly called and held and, not subsequently
rescinded or modified in any way, has (A) determined that this
Agreement and the transactions contemplated hereby, including the
Merger, and the American Resources Stock Issuance, upon the terms
and subject to the conditions set forth herein, are fair to, and in
the best interests of, American Resources and the American
Resources’ stockholders, (B) approved and declared advisable
this Agreement, including the execution, delivery, and performance
thereof, and the consummation of the transactions contemplated by
this Agreement, including the Merger and the American Resources
Stock Issuance, upon the terms and subject to the conditions set
forth herein, (C) directed that the American Resources Stock
Issuance be submitted to a vote of the American Resources’
stockholders for adoption at the American Resources Stockholders
Meeting, and (D) resolved to recommend that American
Resources’ stockholders vote in favor of approval of the
American Resources Stock Issuance (collectively, the
“American Resources Board
Recommendation”).
4.04. SEC
Filings; Financial Statements; Undisclosed
Liabilities.
(a). SEC
Filings. American Resources has
timely filed with or furnished to, as applicable, the SEC all
registration statements, prospectuses, reports, schedules, forms,
statements, and other documents (including exhibits and all other
information incorporated by reference) required to be filed or
furnished by it with the SEC since September 30, 2018 (the
“American Resources SEC Documents”). True, correct, and
complete copies of all the American Resources SEC Documents are
publicly available on ▇▇▇▇▇. As of their respective filing dates
or, if amended or superseded by a subsequent filing prior to the
date hereof, as of the date of the last such amendment or
superseding filing (and, in the case of registration statements and
proxy statements, on the dates of effectiveness and the dates of
the relevant meetings, respectively), each of the American
Resources SEC Documents complied as to form in all material
respects with the applicable requirements of the Securities Act,
the Exchange Act, and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the rules and
regulations of the SEC thereunder applicable to such American
Resources SEC Documents. None of the American Resources SEC
Documents, including any financial statements, schedules, or
exhibits included or incorporated by reference therein at the time
they were filed (or, if amended or superseded by a subsequent
filing prior to the date hereof, as of the date of the last such
amendment or superseding filing), contained any untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. To the Knowledge of American Resources, none of the
American Resources SEC Documents is the subject of ongoing SEC
review or outstanding SEC investigation and there are no
outstanding or unresolved comments received from the SEC with
respect to any of the American Resources SEC Documents. None of
American Resources’ Subsidiaries is required to file or
furnish any forms, reports, or other documents with the
SEC.
(b). Financial
Statements. Each of the
consolidated financial statements (including, in each case, any
notes and schedules thereto) contained in or incorporated by
reference into the American Resources SEC Documents: (i) complied
as to form in all material respects with the published rules and
regulations of the SEC with respect thereto as of their respective
dates; (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto and, in the case of unaudited
interim financial statements, as may be permitted by the SEC for
Quarterly Reports on Form 10-Q); and (iii) fairly presented in all
material respects the consolidated financial position and the
results of operations, changes in stockholders’ equity, and
cash flows of American Resources and its consolidated Subsidiaries
as of the respective dates of and for the periods referred to in
such financial statements, subject, in the case of unaudited
interim financial statements, to normal and year-end audit
adjustments as permitted by GAAP and the applicable rules and
regulations of the SEC (but only if the effect of such adjustments
would not, individually or in the aggregate, be
material).
(c). Undisclosed
Liabilities. The audited
balance sheet of American Resources dated as of January 31, 2019,
contained in the American Resources SEC Documents filed prior to
the date hereof is hereinafter referred to as the “American
Resources Balance Sheet.” Neither American Resources nor any
of its Subsidiaries has any Liabilities other than Liabilities
that: (i) are reflected or reserved against in the American
Resources Balance Sheet (including in the notes thereto); (ii) were
incurred since the date of the American Resources Balance Sheet in
the ordinary course of business consistent with past practice;
(iii) are incurred in connection with the transactions contemplated
by this Agreement; or (iv) would not reasonably be expected to
have, individually or in the aggregate, an American Resources
Material Adverse Effect.
(d). NASDAQ
Compliance. American Resources
is in compliance with all of the applicable listing and corporate
governance rules of NASDAQ, except for any non-compliance that
would not reasonably be expected to have, individually or in the
aggregate, an American Resources Material Adverse
Effect.
4.05. Absence
of Certain Changes or Events.
Since the date of the American Resources Balance Sheet, except in
connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, the
business of American Resources and each of its Subsidiaries has
been conducted in the ordinary course of business consistent with
past practice and there has not been or occurred any American
Resources Material Adverse Effect or any event, condition, change,
or effect that could reasonably be expected to have, individually
or in the aggregate, an American Resources Material Adverse
Effect.
11
4.06. Compliance;
Permits.
(a). Compliance.
American Resources and each of its Subsidiaries are and, since
December 31, 2016, have been in compliance with, all Laws or Orders
applicable to American Resources or any of its Subsidiaries or by
which American Resources or any of its Subsidiaries or any of their
respective businesses or properties is bound, except for such
non-compliance that would not reasonably be expected to have,
individually or in the aggregate, an American Resources Material
Adverse Effect. Since December 31, 2016, no Governmental Entity has
issued any notice or notification stating that American Resources
or any of its Subsidiaries is not in compliance with any Law,
except where such non-compliance would not reasonably be expected
to have, individually or in the aggregate, an American Resources
Material Adverse Effect.
(b). Permits.
American Resources and its Subsidiaries hold, to the extent
necessary to operate their respective businesses as such businesses
are being operated as of the date hereof, all Permits except for
any Permits for which the failure to obtain or hold would not
reasonably be expected to have, individually or in the aggregate,
an American Resources Material Adverse Effect. No suspension,
cancellation, non-renewal, or adverse modifications of any Permits
of American Resources or any of its Subsidiaries is pending or, to
the Knowledge of American Resources, threatened, except for any
such suspension or cancellation which would not reasonably be
expected to have, individually or in the aggregate, an American
Resources Material Adverse Effect. American Resources and each of
its Subsidiaries is and, since December 31, 2016, has been in
compliance with the terms of all Permits, except where the failure
to be in such compliance would not reasonably be expected to have,
individually or in the aggregate, an American Resources Material
Adverse Effect.
4.07. Litigation.
There is no Legal Action pending, or to the Knowledge of American
Resources, threatened against American Resources or any of its
Subsidiaries or any of their respective properties or assets or, to
the Knowledge of American Resources, any officer or director of
American Resources or any of its Subsidiaries in their capacities
as such other than any such Legal Action that: (a) does not involve
an amount that would reasonably be expected to have, individually
or in the aggregate, an American Resources Material Adverse Effect;
and (b) does not seek material injunctive or other material
non-monetary relief. None of American Resources or any of its
Subsidiaries or any of their respective properties or assets is
subject to any Order of a Governmental Entity or arbitrator,
whether temporary, preliminary, or permanent, which would
reasonably be expected to have, individually or in the aggregate,
an American Resources Material Adverse Effect. To the Knowledge of
American Resources, there are no SEC inquiries or investigations,
other governmental inquiries or investigations, or internal
investigations pending or, to the Knowledge of American Resources,
threatened, in each case regarding any accounting practices of
American Resources or any of its Subsidiaries or any malfeasance by
any officer or director of American Resources.
4.08. Brokers.
Except for fees payable to Maxim Group, LLC, the fees and expenses
of which will be paid by American Resources, neither American
Resources, nor any of its Affiliates has incurred, nor will it
incur, directly or indirectly, any liability for investment banker,
brokerage, or finders’ fees or agents’ commissions, or
any similar charges in connection with this Agreement or any
transaction contemplated hereby for which the Company would be
liable in connection with the Merger.
4.09. Information
Supplied. None of the
information supplied or to be supplied by or on behalf of American
Resources for inclusion or incorporation by reference in any form
filed with the SEC, and at any time it is amended or supplemented
or at the time it becomes 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 not misleading. None of the information
supplied or to be supplied by or on behalf of American Resources
for inclusion or incorporation by reference in any proxy statement
will, at the date it is first mailed to American Resources’
stockholders or at the time of the American Resources Stockholders
Meeting or at the time of any amendment or supplement thereof,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading. Any proxy statement will comply as to form in all
material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, no representation or warranty is
made by American Resources with respect to statements made or
incorporated by reference therein based on information that was not
supplied by or on behalf of American Resources.
4.10. Ownership
of Company Common Stock.
Neither American Resources nor any of its Affiliates or Associates
owns any shares of Company Common Stock.
4.11. Intended
Tax Treatment. Neither American
Resources nor any of its Subsidiaries has taken or agreed to take
any action, and to the Knowledge of American Resources there exists
no fact or circumstance, that is reasonably likely to prevent or
impede the Merger from qualifying as a “reorganization”
within the meaning of Section 368(a) of the
Code.
4.12. Financial
Capability. American Resources
has or will have prior to the Effective Time, sufficient funds to
pay the aggregate Cash Consideration contemplated by this Agreement
and to perform the other obligations of American Resources
contemplated by this Agreement.
5. Covenants.
5.01. Conduct
of Business of the Company.
During the period from the date of this Agreement until the
Effective Time, the Company shall, and shall cause each of its
Subsidiaries, except as expressly contemplated by this Agreement,
as required by applicable Law, or with the prior written consent of
American Resources (which consent shall not be unreasonably
withheld, conditioned, or delayed), to use its reasonable best
efforts to conduct its business in the ordinary course of business
consistent with past practice. To the extent consistent therewith,
the Company shall, and shall cause each of its Subsidiaries to, use
its reasonable best efforts to preserve substantially intact its
and its Subsidiaries’ business organization, to keep
available the services of its and its Subsidiaries’ current
officers and employees, to preserve its and its Subsidiaries’
present relationships with customers, suppliers, distributors,
licensors, licensees, and other Persons having business
relationships with it. Without limiting the generality of the
foregoing, between the date of this Agreement and the Effective
Time, except as otherwise expressly contemplated by this Agreement,
as set forth in Section 5.01 of
the Company Disclosure Schedule, or as required by applicable Law,
the Company shall not, nor shall it permit any of its Subsidiaries
to, without the prior written consent of American Resources (which
consent shall not be unreasonably withheld, conditioned, or
delayed):
12
(a). amend
or propose to amend its Charter Documents;
(b). (i)
split, combine, or reclassify any Company Securities or Company
Subsidiary Securities, (ii) repurchase, redeem, or otherwise
acquire, or offer to repurchase, redeem, or otherwise acquire, any
Company Securities or Company Subsidiary Securities, or (iii)
declare, set aside, or pay any dividend or distribution (whether in
cash, stock, property, or otherwise) in respect of, or enter into
any Contract with respect to the voting of, any shares of its
capital stock (other than dividends from its direct or indirect
wholly-owned Subsidiaries);
(c). issue,
sell, pledge, dispose of, or encumber any Company Securities or
Company Subsidiary Securities, other than the issuance of shares of
Company Common Stock upon the exercise of any Company Equity Award
outstanding as of the date of this Agreement in accordance with its
terms;
(d). except
as required by applicable Law or by any Company Employee Plan or
Contract in effect as of the date of this Agreement (i) increase
the compensation payable or that could become payable by the
Company or any of its Subsidiaries to directors, officers, or
employees, other than increases in compensation made to non-officer
employees in the ordinary course of business consistent with past
practice, (ii) promote any officers or employees, except in
connection with the Company’s annual or quarterly
compensation review cycle or as the result of the termination or
resignation of any officer or employee, or (iii) establish, adopt,
enter into, amend, terminate, exercise any discretion under, or
take any action to accelerate rights under any Company Employee
Plans or any plan, agreement, program, policy, trust, fund, or
other arrangement that would be a Company Employee Plan if it were
in existence as of the date of this Agreement, or make any
contribution to any Company Employee Plan, other than contributions
required by Law, the terms of such Company Employee Plans as in
effect on the date hereof, or that are made in the ordinary course
of business consistent with past practice;
(e). acquire,
by merger, consolidation, acquisition of stock or assets, or
otherwise, any business or Person or division thereof or make any
loans, advances, or capital contributions to or investments in any
Person in excess of $100,000.00 in the aggregate;
(f). (i)
transfer, license, sell, lease, or otherwise dispose of (whether by
way of merger, consolidation, sale of stock or assets, or
otherwise) or pledge, encumber, or otherwise subject to any Lien
(other than a Permitted Lien), any assets, including the capital
stock or other equity interests in any Subsidiary of the
Company; provided, that
the foregoing shall not prohibit the
Company and its Subsidiaries from transferring, selling, leasing,
or disposing of obsolete equipment or assets being replaced, or
granting of non-exclusive licenses under the Company IP, in each
case in the ordinary course of business consistent with past
practice, or (ii) adopt or effect a plan of complete or partial
liquidation, dissolution, restructuring, recapitalization, or other
reorganization;
(g). repurchase,
prepay, or incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, issue or sell any debt
securities or options, warrants, calls, or other rights to acquire
any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another Person, enter into any
“keep well” or other Contract to maintain any financial
statement condition of any other Person (other than any
wholly-owned Subsidiary of it) or enter into any arrangement having
the economic effect of any of the foregoing, other than in
connection with the financing of ordinary course trade payables
consistent with past practice;
(h). enter
into or amend or modify in any material respect, or consent to the
termination of (other than at its stated expiry date), any Company
Material Contract or any Lease with respect to material Real Estate
or any other Contract or Lease that, if in effect as of the date
hereof would constitute a Company Material Contract or Lease with
respect to material Real Estate hereunder;
(i). institute,
settle, or compromise any Legal Action involving the payment of
monetary damages by the Company or any of its Subsidiaries of any
amount exceeding $50,000.00 in the aggregate, other than (i) any
Legal Action brought against American Resources arising out of a
breach or alleged breach of this Agreement by American Resources,
and (ii) the settlement of claims, liabilities, or obligations
reserved against on the Company Balance Sheet; provided, that
neither the Company nor any of its
Subsidiaries shall settle or agree to settle any Legal Action which
settlement involves a conduct remedy or injunctive or similar
relief or has a restrictive impact on the Company’s
business;
(j). make
any material change in any method of financial accounting
principles or practices;
(k). (i)
settle or compromise any material Tax claim, audit, or assessment
for an amount materially in excess of the amount reserved or
accrued on the Company Balance Sheet, (ii) make or change any
material Tax election, change any annual Tax accounting period, or
adopt or change any method of Tax accounting, (iii) amend any
material Tax Returns or file claims for material Tax refunds, or
(iv) enter into any material closing agreement, surrender in
writing any right to claim a material Tax refund, offset or other
reduction in Tax liability or consent to any extension or waiver of
the limitation period applicable to any material Tax claim or
assessment relating to the Company or its
Subsidiaries;
(l). enter
into any material agreement, agreement in principle, letter of
intent, memorandum of understanding, or similar Contract with
respect to any joint venture, strategic partnership, or
alliance;
(m). except
in connection with actions permitted by Section 5.04
hereof, take any action to exempt any
Person from, or make any acquisition of securities of the Company
by any Person not subject to, any state takeover statute or similar
statute or regulation that applies to Company with respect to a
Takeover Proposal or otherwise, except for American Resources or
the transactions contemplated by this
Agreement;
13
(n). abandon,
allow to lapse, sell, assign, transfer, grant any security interest
in otherwise encumber or dispose of any material Company IP, or
grant any right or license to any material Company IP other than
pursuant to non-exclusive licenses entered into in the ordinary
course of business consistent with past practice;
(o). terminate
or modify in any material respect, or fail to exercise renewal
rights with respect to, any material insurance policy;
(p). except
to the extent expressly permitted by Section 5.04
or Section 7, take any action that is
intended or that would reasonably be expected to, individually or
in the aggregate, prevent, materially delay, or materially impede
the consummation of the Merger, or the other transactions
contemplated by this Agreement; or
(q). agree
or commit to do any of the foregoing.
5.02. Conduct
of the Business of American Resources. During the period from the date of this
Agreement until the Effective Time, American Resources shall, and
shall cause each of its Subsidiaries, except as expressly
contemplated by this Agreement, as required by applicable Law, or
with the prior written consent of the Company (which consent shall
not be unreasonably withheld, conditioned, or delayed), to use its
reasonable best efforts to conduct its business in the ordinary
course of business consistent with past practice. Without limiting
the generality of the foregoing, between the date of this Agreement
and the Effective Time, except as otherwise expressly contemplated
by this Agreement, as set forth in Section 5.02 of
the American Resources Disclosure
Schedule, or as required by applicable Law, American Resources
shall not, nor shall it permit any of its Subsidiaries to, without
the prior written consent of the Company (which consent shall not
be unreasonably withheld, conditioned, or
delayed):
(a). amend
its Charter Documents in a manner that would adversely affect the
Company or the holders of Company Common Stock relative to the
other holders of American Resources Common Stock;
(b). (i)
split, combine, or reclassify any American Resources Securities or
American Resources Subsidiary Securities in a manner that would
adversely affect the Company or the holders of Company Common Stock
relative to the other holders of American Resources Common Stock,
(ii) repurchase, redeem, or otherwise acquire, or offer to
repurchase, redeem, or otherwise acquire, any American Resources
Securities or American Resources Subsidiary Securities, or (iii)
declare, set aside, or pay any dividend or distribution (whether in
cash, stock, property, or otherwise) in respect of, or enter into
any Contract with respect to the voting of, any shares of its
capital stock (other than dividends from its direct or indirect
wholly-owned Subsidiaries and ordinary quarterly dividends,
consistent with past practice with respect to timing of declaration
and payment);
(c). issue,
sell, pledge, dispose of, or encumber any American Resources
Securities or American Resources Subsidiary Securities, other than
(i) the issuance of shares of American Resources Common Stock upon
the exercise of any American Resources Equity Awards outstanding as
of the date of this Agreement in accordance with its terms, (ii)
the issuance of shares of American Resources Common Stock in
connection with or upon the exercise of any American Resources
Equity Awards granted after the date hereof in the ordinary course
of business consistent with past practice, and (iii) sales or
issuances of shares of American Resources Common Stock or
convertible securities in an amount not exceeding 5% of the issued
and outstanding shares of American Resources Common Stock (in the
case of convertible securities, on an as-converted basis) as of the
date of this Agreement;
(d). acquire,
by merger, consolidation, acquisition of stock or assets, or
otherwise, any business or Person or division thereof or make any
loans, advances, or capital contributions to or investments in any
Person, in each case that would reasonably be expected to prevent,
impede, or materially delay the consummation of the Merger or other
transactions contemplated by this Agreement;
(e). adopt
or effect a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization, or other
reorganization;
(f). except
to the extent expressly permitted by Section 5.04
or Section 7, take any action that is
intended or that would reasonably be expected to, individually or
in the aggregate, prevent, impede, or materially delay the
consummation of the Merger, or the other transactions contemplated
by this Agreement; or
(g). agree
or commit to do any of the foregoing.
5.03. Access
to Information; Confidentiality.
(a). Access
to Information. From the date
of this Agreement until the earlier to occur of the Effective Time
or the termination of this Agreement in accordance with the terms
set forth in Section 7, the Company shall, and shall cause its
Subsidiaries to, afford to American Resources and American
Resources’ Representatives reasonable access, at reasonable
times and in a manner as shall not unreasonably interfere with the
business or operations of the Company or any Subsidiary thereof, to
the officers, employees, accountants, agents, properties, offices,
and other facilities and to all books, records, contracts, and
other assets of the Company and its Subsidiaries, and the Company
shall, and shall cause its Subsidiaries to, furnish promptly to
American Resources such other information concerning the business
and properties of the Company and its Subsidiaries as American
Resources may reasonably request from time to time. Neither the
Company nor any of its Subsidiaries shall be required to provide
access to or disclose information where such access or disclosure
would jeopardize the protection of attorney-client privilege or
contravene any Law (it being agreed that the parties shall use
their reasonable best efforts to cause such information to be
provided in a manner that would not result in such jeopardy or
contravention). No investigation shall affect the Company’s
representations, warranties, covenants, or agreements contained
herein, or limit or otherwise affect the remedies available to
American Resources pursuant to this Agreement.
14
(b). Confidentiality.
[reserved].
5.04. Company
Stockholders Meeting. The
Company shall take all action necessary to duly call, give notice
of, convene, and hold the Company Stockholders Meeting as soon as
reasonably practicable.
5.05. American
Resources Stockholders Meeting. American
Resources shall take all action necessary to duly call, give notice
of, convene, and hold the American Resources Stockholders Meeting
as soon as reasonably practicable.
5.06. ▇▇▇▇▇
Elkhorn Coal LLC. Immediately
subsequent to the Merger, American Resources shall take all steps
necessary to cause the assets of the Company to ultimately be owned
by ▇▇▇▇▇ Elkhorn Coal LLC, the single-member limited liability
company owned by Quest Energy, Inc., American Resources’
wholly-owned subsidiary.
5.07. Company
Bond. American Resources and
its Subsidiaries shall cause the Company surety bonds in place
prior to Closing to be released within thirty (30) days after
Closing and the cash collateral for such bonds shall be delivered
to the holders of shares of Company Common Stock. This Section and
the covenants set forth herein shall expressly survive
Closing.
5.08. Public
Announcements. The initial
press release with respect to this Agreement and the transactions
contemplated hereby shall be a release mutually agreed to by the
Company and American Resources. Thereafter, no public release or
announcement concerning the transactions contemplated hereby shall
be issued by any party without the prior written consent of the
Company and American Resources (which consent shall not be
unreasonably withheld, conditioned, or delayed), except as may be
required by applicable Law or the rules or regulations of any
applicable United States securities exchange or other Governmental
Entity to which the relevant party is subject or submits, in which
case the party required to make the release or announcement shall
use its reasonable best efforts to allow the other party reasonable
time to comment on such release or announcement in advance of such
issuance.
5.09. Section
16 Matters. Prior to the
Effective Time, the Company and American Resources shall each take
all such steps as may be required to cause to be exempt under Rule
16b-3 promulgated under the Exchange Act:
(a). any
dispositions of shares of Company Common Stock (including
derivative securities with respect to such shares) that are treated
as dispositions under such rule and result from the transactions
contemplated by this Agreement by each director or officer of the
Company who is subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to the Company immediately
prior to the Effective Time; and
(b). any
acquisitions of American Resources Common Stock (including
derivative securities with respect to such shares) that are treated
as acquisitions under such rule and result from the transactions
contemplated by this Agreement by each individual who may become or
is reasonably expected to become subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to
American Resources immediately after the Effective
Time.
5.10. Stock
Exchange Matters.
American Resources shall use its
reasonable best efforts to cause the shares of American Resources
Common Stock to be issued in connection with the Merger to be
listed on NASDAQ (or such other stock exchange as may be mutually
agreed upon by the Company and American Resources), subject to
official notice of issuance, prior to the Effective
Time.
6. Conditions.
6.01. Conditions
to Each Party’s Obligation to Effect the
Merger. The respective
obligations of each party to this Agreement to effect the Merger is
subject to the satisfaction or waiver (where permissible pursuant
to applicable Law) on or prior to the Closing Date of each of the
following conditions:
(a). Company
Stockholder Approval. This
Agreement will have been duly adopted by the Requisite Company
Vote.
(b). American
Resources Stockholder Approval.
The American Resources Stock Issuance will have been approved by
the Requisite American Resources Vote.
(c). Listing.
The shares of American Resources Common Stock issuable as Merger
Consideration pursuant to this Agreement shall have been approved
for listing on NASDAQ, subject to official notice of
issuance.
(d). Form
S-4. The Form S-4 shall have
become effective under the Securities Act and shall not be the
subject of any stop order.
(e). Regulatory
Approvals. All waiting periods
applicable to the consummation of the Merger under the HSR Act (or
any extension thereof) shall have expired or been terminated and
all required filings shall have been made and all required
approvals obtained (or waiting periods expired or terminated) under
applicable Antitrust Laws.
15
(f). No
Injunctions, Restraints, or Illegality. No Governmental Entity having jurisdiction over
any party hereto shall have enacted, issued, promulgated, enforced,
or entered any Laws or Orders, whether temporary, preliminary, or
permanent, that make illegal, enjoin, or otherwise prohibit
consummation of the Merger, the American Resources Stock Issuance,
or the other transactions contemplated by this
Agreement.
6.02. Conditions
to Obligations of American Resources. The obligations of American Resources to effect
the Merger are also subject to the satisfaction or waiver (where
permissible pursuant to applicable Law) by American Resources on or
prior to the Effective Time of the following
conditions:
(a). Representations
and Warranties. The
representations and warranties of the Company this Agreement shall
be true and correct in all respects when made and on and as of the
Closing Date, as if made on and as of such date (except those
representations and warranties that address matters only as of a
particular date, which shall be true and correct in all respects as
of that date), except where the failure of such representations and
warranties to be so true and correct would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b). Performance
of Covenants. The Company shall
have performed in all material respects all obligations, and
complied in all material respects with the agreements and
covenants, in this Agreement required to be performed by or
complied with by it at or prior to the Closing
Date.
(c). Company
Material Adverse Effect. Since
the date of this Agreement, there shall not have been any Company
Material Adverse Effect or any event, change, or effect that would,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
6.03. Conditions
to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject
to the satisfaction or waiver by the Company on or prior to the
Effective Time of the following conditions:
(a). Representations
and Warranties. The
representations and warranties of American Resources set forth in
this Agreement shall be true and correct in all respects when made
and on and as of the Closing Date, as if made on and as of such
date (except those representations and warranties that address
matters only as of a particular date, which shall be true and
correct in all respects as of that date), except where the failure
of such representations and warranties to be so true and correct
would not reasonably be expected to have, individually or in the
aggregate, an American Resources Material Adverse
Effect.
(b). Performance
of Covenants. American
Resources shall have performed in all material respects all
obligations, and complied in all material respects with the
agreements and covenants, of this Agreement required to be
performed by or complied with by them at or prior to the Closing
Date.
(c). American
Resources Material Adverse Effect. Since the date of this Agreement, there shall
not have been any American Resources Material Adverse Effect or any
event, change, or effect that would, individually or in the
aggregate, reasonably be expected to have an American Resources
Material Adverse Effect.
(d). Consents.
(i). The
Company will have received written consent regarding the effect of
the Merger and any change of control or assignment provision in any
Company Material Contract, including without limitation, that
certain Amended and Restated Agreement of Lease dated January 1,
1992, by and between the Company and Kentucky Berwind Land
Company.
(ii). The
Company will have received written consent from Community Trust
Bank regarding the effect of the Merger and any change of control,
assignment provision or other applicable provision within the
Company’s loan documents with Community Trust
Bank.
(e). Assignment
Prior to Closing. The Company
shall have transferred, assigned or distributed the Company’s
rights, title and interest in and to that certain Forbearance
Agreement dated April 29, 2016, by and among Empire Coal Holdings,
LLC, the Company, Revelation Energy, LLC and Empire Coal
Processing, LLC.
(f). Empire
Coal Holdings, LLC Merger. The
closing of the merger transaction by and between Empire Coal
Holdings, LLC and ▇▇▇▇▇ Elkhorn Coal LLC, the consideration for
which shall be $2,500,000.00 (payable $500,000.00 upon the
execution of the definitive agreement between Empire Coal Holdings,
LLC and ▇▇▇▇▇ Elkhorn Coal LLC and a promissory note in the
original principal amount of $2,000,000.00 delivered at closing)
shall occur immediately prior to the Closing.
7. Termination,
Amendment, and Waiver.
7.01. Termination
by Mutual Consent. This
Agreement may be terminated at any time prior to the Effective Time
(whether before or after the receipt of the Requisite Company Vote
or the Requisite American Resources Vote) by the mutual written
consent of American Resources and the Company.
7.02. Termination
by Either American Resources or the Company. This Agreement may be terminated by either
American Resources or the Company at any time prior to the
Effective Time (whether before or after the receipt of the
Requisite Company Vote or the Requisite American Resources
Vote):
(a). if
the Merger shall not have been consummated on or prior to 5:00
p.m., Eastern Time, on March 15, 2019 (the “End
Date”); provided,
however, that the right to
terminate this Agreement pursuant to this Section 7.02(a)
shall not be available to any party
whose breach of any representation, warranty, covenant, or
agreement set forth in this Agreement has been the cause of, or
resulted in, the failure of the Merger to be consummated on or
before the End Date;
16
(b). if
any Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced, or entered any Law or Order
making illegal, permanently enjoining, or otherwise permanently
prohibiting the consummation of the Merger, the American Resources
Stock Issuance, or the other transactions contemplated by this
Agreement, and such Law or Order shall have become final and
nonappealable; provided,
however, that the right to
terminate this Agreement pursuant to this Section 7.02(b)
shall not be available to any party
whose breach of any representation, warranty, covenant, or
agreement set forth in this Agreement has been the cause of, or
resulted in, the issuance, promulgation, enforcement, or entry of
any such Law or Order;
(c). if
this Agreement has been submitted to the stockholders of the
Company for adoption at a duly convened Company Stockholders
Meeting and the Requisite Company Vote shall not have been obtained
at such meeting (unless such Company Stockholders Meeting has been
adjourned or postponed, in which case at the final adjournment or
postponement thereof); or
(d). if
the American Resources Stock Issuance has been submitted to the
stockholders of American Resources for approval at a duly convened
American Resources Stockholders Meeting and the Requisite American
Resources Vote shall not have been obtained at such meeting (unless
such American Resources Stockholders Meeting has been adjourned or
postponed, in which case at the final adjournment or postponement
thereof).
7.03. Termination
by American Resources. This
Agreement may be terminated by American Resources at any time prior
to the Effective Time:
(a). if
prior to the receipt of the Requisite American Resources Vote at
the American Resources Stockholders Meeting, the American Resources
Board authorizes American Resources, in full compliance with the
terms of this Agreement, to enter into an Acquisition Agreement
(other than an Acceptable Confidentiality Agreement) in respect of
a Superior Proposal; provided, that
American Resources shall have paid any
amounts due pursuant to Section 7.06(b)(ii) hereof
in accordance with the terms, and at
the times, specified therein; and provided
further, that in the event of
such termination, American Resources substantially concurrently
enters into such Acquisition Agreement;
(b). if:
(i) a Company Adverse Recommendation Change shall have occurred; or
(ii) the Company shall have breached or failed to perform in any
material respect any of its covenants and agreements set forth in
this Agreement; or
(c). if
there shall have been a breach of any representation, warranty,
covenant, or agreement on the part of the Company set forth in this
Agreement such that the conditions to the Closing of the Merger set
forth in Section 6.02 would not be satisfied; provided, that
American Resources shall not have the
right to terminate this Agreement pursuant to this Section
7.03(c) if American Resources is then
in material breach of any representation, warranty, covenant, or
obligation hereunder, which breach has not been
cured.
7.04. Termination
by the Company. This Agreement
may be terminated by the Company at any time prior to the Effective
Time:
(a). if
prior to the receipt of the Requisite Company Vote at the Company
Stockholders Meeting, the Company Board authorizes the Company, in
full compliance with the terms of this Agreement to enter into an
Acquisition Agreement (other than an Acceptable Confidentiality
Agreement) in respect of a Superior Proposal; provided, that
the Company shall have paid any
amounts due pursuant to Section 7.06(b)(i) hereof
in accordance with the terms, and at
the times, specified therein; and provided
further, that in the event of
such termination, the Company substantially concurrently enters
into such Acquisition Agreement; or
(b). if:
(i) a American Resources Adverse Recommendation Change shall have
occurred; or (ii) American Resources shall have breached or failed
to perform in any material respect any of its covenants and
agreements set forth in this Agreement; or
(c). if
there shall have been a breach of any representation, warranty,
covenant, or agreement on the part of American Resources set forth
in this Agreement such that the conditions to the Closing of the
Merger set forth in Section 6.03 would not be satisfied;
provided,
that the Company shall not have
the right to terminate this Agreement pursuant to this
Section 7.04(c) if the Company is then
in material breach of any representation, warranty, covenant, or
obligation hereunder, which breach has not been
cured.
7.05. Notice
of Termination; Effect of Termination. The party desiring to terminate this Agreement
pursuant to this Section 7 (other than pursuant to Section 7.01)
shall deliver written notice of such termination to each other
party hereto specifying with particularity the reason for such
termination, and any such termination in accordance with this
Section 7.05 shall be effective immediately upon delivery of such
written notice to the other party. If this Agreement is terminated
pursuant to this Section 7, it will become void and of no further
force and effect, with no liability on the part of any party to
this Agreement (or any stockholder, director, officer, employee,
agent, or Representative of such party) to any other party hereto,
except: (a) with respect to, this Section 7.05, Section
7.06, and Section 8 (and any related
definitions contained in any such Sections or Article), which shall
remain in full force and effect; and (b) with respect to any
liabilities or damages incurred or suffered by a party, to the
extent such liabilities or damages were the result of fraud or the
breach by another party of any of its representations, warranties,
covenants, or other agreements set forth in this
Agreement.
7.06. Fees
and Expenses Following Termination.
(a). If
this Agreement is terminated by American Resources pursuant
to Section 7.03(a), or by the Company pursuant to Section 7.04(b)
or Section 7.04(c), then American
Resources shall pay to the Company (by wire transfer of immediately
available funds), at or prior to such termination, $500,000.00 (the
“American Resources Termination Fee”) plus the
Company’s Expenses actually incurred by the Company on or
prior to the termination of this Agreement.
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(b). The
parties acknowledge and hereby agree that the provisions of
this Section 7.06 are an integral part
of the transactions contemplated by this Agreement (including the
Merger), and that, without such provisions, the parties would not
have entered into this Agreement. If American Resources shall fail
to pay in a timely manner the amounts due pursuant to this
Section 7.06, and, in order to obtain
such payment, the other party makes a claim against the non-paying
party that results in a judgment, the non-paying party shall pay to
the other party the reasonable costs and expenses (including its
reasonable attorneys’ fees and expenses) incurred or accrued
in connection with such suit, together with interest on the amounts
set forth in this Section 7.06 at the prime lending rate prevailing during such
period as published in The Wall Street
Journal. Any interest payable
hereunder shall be calculated on a daily basis from the date such
amounts were required to be paid until (but excluding) the date of
actual payment, and on the basis of a 360-day year. The parties
acknowledge and agree that in no event shall American Resources be
required to pay the American Resources Termination Fee on more than
one occasion.
(c). Except
as expressly set forth in this Section 7.06, all Expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by
the party incurring such Expenses.
7.07. Amendment.
At any time prior to the Effective Time, this Agreement may be
amended or supplemented in any and all respects, whether before or
after receipt of the Requisite Company Vote or the Requisite
American Resources Vote, by written agreement signed by each of the
parties hereto; provided,
however, that: (a) following
the receipt of the Requisite Company Vote, there shall be no
amendment or supplement to the provisions of this Agreement which
by Law or in accordance with the rules of any relevant
self-regulatory organization would require further approval by the
holders of Company Common Stock without such approval; and (b)
following the receipt of the Requisite American Resources Vote,
there shall be no amendment or supplement to the provisions of this
Agreement which by Law or in accordance with the rules of any
relevant self-regulatory organization would require further
approval by the holders of American Resources Common Stock without
such approval.
7.08. Extension;
Waiver. At any time prior to
the Effective Time, American Resources or the Company may: (a)
extend the time for the performance of any of the obligations of
the other party(ies); (b) waive any inaccuracies in the
representations and warranties of the other party(ies) contained in
this Agreement or in any document delivered under this Agreement;
or (c) unless prohibited by applicable Law, waive compliance with
any of the covenants, agreements, or conditions contained in this
Agreement. Any agreement on the part of a party to any extension or
waiver will be valid only if set forth in an instrument in writing
signed by such party. The failure of any party to assert any of its
rights under this Agreement or otherwise will not constitute a
waiver of such rights.
8. Miscellaneous.
8.01. Definitions.
For purposes of this Agreement, defined terms will have the
meanings set forth in Appendix A, attached hereto and incorporated
herein by reference, when used herein with initial capital
letters.
8.02. Interpretation;
Construction.
(a). The
table of contents and headings 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. Where a reference in this Agreement is made to a Section,
Exhibit, or Schedule, such reference shall be to a Section of,
Exhibit to, or Schedule of this Agreement unless otherwise
indicated. Unless the context otherwise requires, references
herein: (i) to an agreement, instrument, or other document means
such agreement, instrument, or other document as amended,
supplemented, and modified from time to time to the extent
permitted by the provisions thereof; and (ii) to a statute means
such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated
thereunder. Whenever the words “include,”
“includes,” or “including” are used in this
Agreement, they shall be deemed to be followed by the words
“without limitation,” and the word “or” is
not exclusive. The word “extent” in the phrase
“to the extent” means the degree to which a subject or
other thing extends, and does not simply mean “if.” A
reference in this Agreement to $ or dollars is to U.S. dollars. The
definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. The words “hereof,”
“herein,” “hereby,” “hereto,”
and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. References to
“this Agreement” shall include the Company Disclosure
Schedule and American Resources Disclosure Schedule.
(b). The
parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent
or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provision of this Agreement.
8.03. Survival.
None of the representations and warranties contained in this
Agreement or in any instrument delivered under this Agreement will
survive the Effective Time. This Section 8.03 does
not limit any covenant or agreement of
the parties contained in this Agreement which, by its terms,
contemplates performance after the Effective
Time.
8.04. Governing
Law. This Agreement and all
Legal Actions (whether based on contract, tort, or statute) arising
out of or relating to this Agreement or the actions of any of the
parties hereto in the negotiation, administration, performance, or
enforcement hereof, shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Kentucky without giving effect to
any choice or conflict of law provision or rule (whether of the
Commonwealth of Kentucky or any other jurisdiction) that would
cause the application of Laws of any jurisdiction other than those
of the Commonwealth of
Kentucky.
8.05. Submission
to Jurisdiction. Each of the
parties hereto irrevocably agrees that any Legal Action with
respect to this Agreement and the rights and obligations arising
hereunder, or for recognition and enforcement of any judgment in
respect of this Agreement and the rights and obligations arising
hereunder brought by any other party hereto or its successors or
assigns shall be brought and determined exclusively in the
Commonwealth of Kentucky, or in the event (but only in the event)
that such court does not have subject matter jurisdiction over such
Legal Action, in the Commonwealth of Kentucky. Each of the parties
hereto agrees that mailing of process or other papers in connection
with any such Legal Action in the manner provided in Section
8.07 or in such other manner as may be
permitted by applicable Laws, will be valid and sufficient service
thereof. Each of the parties hereto hereby irrevocably submits with
regard to any such Legal Action for itself and in respect of its
property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not
bring any Legal Action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court or
tribunal other than the aforesaid courts. Each of the parties
hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim, or otherwise, in any Legal
Action with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and the rights and
obligations arising hereunder: (a) any claim that it is not
personally subject to the jurisdiction of the above named courts
for any reason other than the failure to serve process in
accordance with this Section 8.05; (b) any claim that it or its property is exempt or
immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise); and (c)
to the fullest extent permitted by the applicable Law, any claim
that (i) the suit, action, or proceeding in such court is brought
in an inconvenient forum, (ii) the venue of such suit, action, or
proceeding is improper, or (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such
courts.
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8.06. Waiver
of Jury Trial. EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT: (A) NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE
FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (B) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY; AND (D) SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.06.
8.07. Notices.
All notices, requests, consents, claims, demands, waivers, and
other communications hereunder shall be in writing and shall be
deemed to have been given: (a) when delivered by hand (with written
confirmation of receipt); (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt
requested); (c) on the date sent by facsimile or email of a PDF
document (with confirmation of transmission) if sent during normal
business hours of the recipient, and on the next Business Day if
sent after normal business hours of the recipient; or (d) on the
third day after the date mailed, by certified or registered mail,
return receipt requested, postage prepaid. Such communications must
be sent to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice
given in accordance with this Section 8.07) or to such other Persons, addresses or facsimile
numbers as may be designated in writing by the Person entitled to
receive such communication as provided above.
8.08. Entire
Agreement. This Agreement
(including the Exhibits to this Agreement), the Company Disclosure
Schedule, the American Resources Disclosure Schedule, and the
Confidentiality Agreement constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and
supersede all other prior agreements and understandings, both
written and oral, among the parties to this Agreement with respect
to the subject matter of this Agreement. In the event of any
inconsistency between the statements in the body of this Agreement,
the Confidentiality Agreement, the American Resources Disclosure
Schedule, and the Company Disclosure Schedule (other than an
exception expressly set forth as such in the American Resources
Disclosure Schedule or Company Disclosure Schedule), the statements
in the body of this Agreement will control.
8.09. No
Third-Party Beneficiaries. This
Agreement is for the sole benefit of the parties hereto and their
permitted assigns and respective successors and nothing herein,
express or implied, is intended to or shall confer upon any other
Person or entity any legal or equitable right, benefit, or remedy
of any nature whatsoever under or by reason of this
Agreement.
8.10. Severability.
If any term or provision of this Agreement is invalid, illegal, or
unenforceable in any jurisdiction, such invalidity, illegality, or
unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal, or unenforceable,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
8.11. Assignment.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns. Neither American Resources nor the Company may assign its
rights or obligations hereunder without the prior written consent
of the other party, which consent shall not be unreasonably
withheld, conditioned, or delayed. No assignment shall relieve the
assigning party of any of its obligations
hereunder.
8.12. Remedies.
Except as otherwise provided in this Agreement, any and all
remedies expressly conferred upon a party to this Agreement will be
cumulative with, and not exclusive of, any other remedy contained
in this Agreement, at Law, or in equity. The exercise by a party to
this Agreement of any one remedy will not preclude the exercise by
it of any other remedy.
8.13. Counterparts;
Effectiveness. This Agreement
may be executed in any number of counterparts, all of which will be
one and the same agreement. This Agreement will become effective
when each party to this Agreement will have received counterparts
signed by all of the other parties.
[SPACE INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING
PAGE]
19
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thereunto duly authorized.
EMPIRE KENTUCKY LAND, INC.
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, President
(the
“Company”)
AMERICAN RESOURCES CORPORATION
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇
▇. ▇▇▇▇▇▇, Chief Executive Officer
(“American
Resources”)
20
APPENDIX A
DEFINED TERMS
“Acquisition Agreement” has the meaning set forth in
Section 5.04(a).
“Affiliate” means, with respect to any Person, any
other Person that directly or indirectly controls, is controlled
by, or is under common control with, such first Person. For the
purposes of this definition, “control” (including, the
terms “controlling,” “controlled by,” and
“under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities, by
Contract, or otherwise.
“Affordable Care Act” means the Patient Protection and
Affordable Care Act (PPACA), as amended by the Health Care and
Education Reconciliation Act (HCERA).
“Agreement” has the meaning set forth in the
Preamble.
“Antitrust Laws” has the meaning set forth in Section
3.03(c).
“Book-Entry Share” has the meaning set forth in Section
2.01(c).
“Business Day” means any day, other than Saturday,
Sunday, or any day on which banking institutions located in
Commonwealth of Kentucky are authorized or required by Law or other
governmental action to close.
“Cancelled Shares” has the meaning set forth in Section
2.01(a).
“Certificate” has the meaning set forth in Section
2.01(c).
“Charter Documents” means: (a) with respect to a
corporation, the charter, articles or certificate of incorporation,
as applicable, and bylaws thereof; (b) with respect to a limited
liability company, the certificate of formation or organization, as
applicable, and the operating or limited liability company
agreement, as applicable, thereof; (c) with respect to a
partnership, the certificate of formation and the partnership
agreement; and (d) with respect to any other Person the
organizational, constituent and/or governing documents and/or
instruments of such Person.
“Closing” has the meaning set forth in Section
1.02.
“Closing Date” has the meaning set forth in Section
1.02.
“COBRA” means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and as codified in Section
4980B of the Code and Section 601 et. seq. of ERISA.
“Code” has the meaning set forth in the
Recitals.
“Company” has the meaning set forth in the
Preamble.
“Company Adverse Recommendation Change” shall mean the
Company Board: (a) failing to make, withdraw, amend, modify, or
materially qualify, in a manner adverse to American Resources, the
Company Board Recommendation; (b) failing to include the Company
Board Recommendation in the Joint Proxy Statement that is mailed to
the Company’s stockholders; (c) recommending a Takeover
Proposal; (d) failing to recommend against acceptance of any tender
offer or exchange offer for the shares of Company Common Stock
within ten Business Days after the commencement of such offer; (e)
failing to reaffirm (publicly, if so requested by American
Resources) the Company Board Recommendation within ten Business
Days after the date any Takeover Proposal (or material modification
thereto) is first publicly disclosed by the Company or the Person
making such Takeover Proposal; (f) making any public statement
inconsistent with the Company Board Recommendation; or (g)
resolving or agreeing to take any of the foregoing
actions.
21
“Company Balance Sheet” has the meaning set forth in
Section 3.04(e).
“Company Board” has the meaning set forth in the
Recitals.
“Company Board Recommendation” has the meaning set
forth in Section 3.03(d).
“Company Common Stock” has the meaning set forth in the
Recitals.
“Company Disclosure Schedule” means the disclosure
schedule, dated as of the date of this Agreement and delivered by
the Company to American Resources concurrently with the execution
of this Agreement.
“Company Equity Award” means a Company Stock Option or
a Company Restricted Share granted under one of the Company Stock
Plans, as the case may be.
“Company Financial Advisor” has the meaning set forth
in Section 3.10.
“Company IP” has the meaning set forth in Section
3.07(b).
“Company IP Agreements” means all licenses,
sublicenses, consent to use agreements, settlements, coexistence
agreements, covenants not to ▇▇▇, waivers, releases, permissions,
and other Contracts, whether written or oral, relating to
Intellectual Property and to which the Company or any of its
Subsidiaries is a party, beneficiary, or otherwise
bound.
“Company IT Systems” means all software, computer
hardware, servers, networks, platforms, peripherals, data
communication lines, and other information technology equipment and
related systems that are owned or used by the Company or any of its
Subsidiaries.
“Company Material Adverse Effect” means any event,
occurrence, fact, condition, or change that is, or would reasonably
be expected to become, individually or in the aggregate, materially
adverse to: (a) the business, results of operations, condition
(financial or otherwise), or assets of the Company and its
Subsidiaries, taken as a whole; or (b) the ability of the Company
to consummate the transactions contemplated hereby on a timely
basis; provided, however, that a Company Material Adverse Effect
shall not be deemed to include events, occurrences, facts,
conditions or changes arising out of, relating to, or resulting
from: (i) changes generally affecting the economy, financial, or
securities markets; (ii) the announcement of the transactions
contemplated by this Agreement; (iii) any outbreak or escalation of
war or any act of terrorism; or (iv) general conditions in the
industry in which the Company and its Subsidiaries operate;
provided further, however, that any event, change, and effect
referred to in clauses (i), (iii), or (iv) immediately above shall
be taken into account in determining whether a Company Material
Adverse Effect has occurred or would reasonably be expected to
occur to the extent that such event, change, or effect has a
disproportionate effect on the Company and its Subsidiaries, taken
as a whole, compared to other participants in the industries in
which the Company and its Subsidiaries conduct their
businesses.
“Company Material Contract” has the meaning set forth
in Section 3.15(a).
“Company-Owned IP” means all Intellectual Property
owned by the Company or any of its Subsidiaries.
“Company Preferred Stock” has the meaning set forth in
Section 3.02(a).
“Company Restricted Share” has the meaning set forth in
Section 2.07(b).
“Company Securities” has the meaning set forth in
Section 3.02(b)(ii).
“Company Stock Option” has the meaning set forth in
Section 2.07(a).
“Company Stock Plans” means the following plans, in
each case as amended: [LIST OF PLANS].
“Company Stockholders Meeting” means the special
meeting of the stockholders of the Company to be held to consider
the adoption of this Agreement.
“Company Subsidiary Securities” has the meaning set
forth in Section 3.02(d).
“Confidentiality Agreement” has the meaning set forth
in Section 5.03(b).
“Consent” has the meaning set forth in Section
3.03(c).
“Contracts” means any contracts, agreements, licenses,
notes, bonds, mortgages, indentures, leases, or other binding
instruments or binding commitments, whether written or
oral.
22
“Dissenting Shares” has the meaning set forth in
Section 2.03.
“▇▇▇▇▇” has the meaning set forth in Section
3.04(a).
“Effective Time” has the meaning set forth in Section
1.03(a).
“End Date” has the meaning set forth in Section
7.02(a).
“Environmental Laws” means any applicable Law, and any
Order or binding agreement with any Governmental Entity: (a)
relating to pollution (or the cleanup thereof) or the protection of
natural resources, endangered or threatened species, human health
or safety, or the environment (including ambient air, soil, surface
water or groundwater, or subsurface strata); or (b) concerning the
presence of, exposure to, or the management, manufacture, use,
containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, production,
disposal or remediation of any Hazardous Materials. The term
“Environmental Law” includes, without limitation, the
following (including their implementing regulations and any state
analogs): the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et
seq.; the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous
and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et
seq.; the Federal Water Pollution Control Act of 1972, as amended
by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et
seq.; the Toxic Substances Control Act of 1976, as amended, 15
U.S.C. §§ 2601 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001
et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act
Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
§§ 651 et seq.
“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended.
“Exchange Act” has the meaning set forth in Section
3.03(c).
“Exchange Agent” has the meaning set forth in Section
2.02(a).
“Exchange Fund” has the meaning set forth in Section
2.02(a).
“Exchange Ratio” has the meaning set forth in Section
2.01(b).
“Expenses” means, with respect to any Person, all
reasonable and documented out-of-pocket fees and expenses
(including all fees and expenses of counsel, accountants, financial
advisors, and investment bankers of such Person and its
Affiliates), incurred by such Person or on its behalf in connection
with or related to the authorization, preparation, negotiation,
execution, and performance of this Agreement and any transactions
related thereto.
“Certificate of Merger” has the meaning set forth in
Section 1.03(a).
“Merger” has the meaning set forth in the
Recitals.
“Foreign Antitrust Laws” has the meaning set forth in
Section 3.03(c).
“Form S-4” has the meaning set forth in Section
3.17.
“GAAP” has the meaning set forth in Section
3.04(b).
“Governmental Antitrust Authority” has the meaning set
forth in Section 5.11(b).
“Governmental Entity” has the meaning set forth in
Section 3.03(c).
“Hazardous Substance” shall mean: (a) any material,
substance, chemical, waste, product, derivative, compound, mixture,
solid, liquid, mineral, or gas, in each case, whether naturally
occurring or man-made, that is hazardous, acutely hazardous, toxic,
or words of similar import or regulatory effect under Environmental
Laws; and (b) any petroleum or petroleum-derived products, radon,
radioactive materials or wastes, asbestos in any form, lead or
lead-containing materials, urea formaldehyde foam insulation, and
polychlorinated biphenyls.
23
“HIPAA” means the Health Insurance Portability and
Accountability Act of 1996, as amended.
“HSR Act” has the meaning set forth in Section
3.03(c).
“Indemnified Party” has the meaning set forth in
Section 5.10(a).
“Intellectual Property” means any and all of the
following arising pursuant to the Laws of any jurisdiction
throughout the world: (a) trademarks, service marks, trade names,
and similar indicia of source or origin, all registrations and
applications for registration thereof, and the goodwill connected
with the use of and symbolized by the foregoing; (b) copyrights and
all registrations and applications for registration thereof; (c)
trade secrets and know-how; (d) patents and patent applications;
(e) internet domain name registrations; and (f) other intellectual
property and related proprietary rights.
“IRS” means the United States Internal Revenue
Service.
“Knowledge” means: (a) with respect to the Company and
its Subsidiaries, the actual knowledge of each of the individuals
listed in Section 8.01 of the Company’s Disclosure Schedule;
and (b) with respect to American Resources and its Subsidiaries,
the actual knowledge of each of the individuals listed in Section
8.01 of the American Resources’ Disclosure Schedule; in each
case, after due inquiry.
“Laws” means any federal, state, local, municipal,
foreign, multi-national or other laws, common law, statutes,
constitutions, ordinances, rules, regulations, codes, Orders, or
legally enforceable requirements enacted, issued, adopted,
promulgated, enforced, ordered, or applied by any Governmental
Entity.
“Lease” shall mean all leases, subleases, licenses,
concessions, and other agreements (written or oral) under which the
Company or any of its Subsidiaries holds any Leased Real Estate,
including the right to all security deposits and other amounts and
instruments deposited by or on behalf of the Company or any of its
Subsidiaries thereunder.
“Leased Real Estate” shall mean all leasehold or
subleasehold estates and other rights to use or occupy any land,
buildings, structures, improvements, fixtures, or other interest in
real property held by the Company or any of its
Subsidiaries.
“Legal Action” means any legal, administrative,
arbitral, or other proceedings, suits, actions, investigations,
examinations, claims, audits, hearings, charges, complaints,
indictments, litigations, or examinations.
“Liability” shall mean any liability, indebtedness, or
obligation of any kind (whether accrued, absolute, contingent,
matured, unmatured, determined, determinable, or otherwise, and
whether or not required to be recorded or reflected on a balance
sheet under GAAP).
“Liens” means, with respect to any property or asset,
all pledges, liens, mortgages, charges, encumbrances,
hypothecations, options, rights of first refusal, rights of first
offer, and security interests of any kind or nature
whatsoever.
“Maximum Premium” has the meaning set forth in Section
5.10(b).
“Merger” has the meaning set forth in the
Recitals.
“Merger Consideration” has the meaning set forth in
Section 2.01(b).
“Net Shares” has the meaning set forth in Section
2.07(a).
“Nasdaq” has the meaning set forth in Section
2.01(e).
“Order” has the meaning set forth in Section
3.09.
“Other Governmental Approvals” has the meaning set
forth in Section 3.03(c).
“Owned Real Estate” shall mean all land, including
without limitation, owned surface and owned mineral rights,
together with all buildings, structures, fixtures, and improvements
located thereon and all easements, rights of way, and appurtenances
relating thereto, owned by the Company or any of its
Subsidiaries.
“American Resources” has the meaning set forth in the
Preamble.
“American Resources Adverse Recommendation Change”
shall mean the American Resources Board: (a) failing to make,
withdraw, amend, modify, or materially qualify, in a manner adverse
to the Company, the American Resources Board Recommendation; (b)
failing to include the American Resources Board Recommendation in
the Joint Proxy Statement that is mailed to the American
Resources’ stockholders; (c) recommending a Takeover
Proposal; (d) failing to recommend against acceptance of any tender
offer or exchange offer for the shares of American Resources Common
Stock within ten Business Days after the commencement of such
offer; (e) failing to reaffirm (publicly, if so requested by the
Company) the American Resources Board Recommendation within ten
Business Days after the date any Takeover Proposal (or material
modification thereto) is first publicly disclosed by American
Resources or the Person making such Takeover Proposal; (f) making
any public statement inconsistent with the American Resources Board
Recommendation; or (g) resolving or agreeing to take any of the
foregoing actions.
“American Resources Balance Sheet” has the meaning set
forth in Section 4.04(c).
“American Resources Benefit Plans” has the meaning set
forth in Section 5.09(b).
“American Resources Board” has the meaning set forth in
the Recitals.
24
“American Resources Board Recommendation” has the
meaning set forth in Section 4.03(d)(i).
“American Resources Common Stock” has the meaning set
forth in the Recitals.
“American Resources Disclosure Schedule” means the
disclosure letter, dated as of the date of this Agreement and
delivered by American Resources to the Company concurrently with
the execution of this Agreement.
“American Resources Equity Award” means a American
Resources Stock Option or a American Resources Restricted Share, as
the case may be.
“American Resources Material Adverse Effect” means any
event, occurrence, fact, condition, or change that is, or would
reasonably be expected to become, individually or in the aggregate,
materially adverse to: (a) the business, results of operations,
condition (financial or otherwise), or assets of American Resources
and its Subsidiaries, taken as a whole; or (b) the ability of
American Resources to consummate the transactions contemplated
hereby on a timely basis; provided, however, that an American
Resources Material Adverse Effect shall not be deemed to include
events, occurrences, facts, conditions, or changes arising out of,
relating to, or resulting from: (i) changes generally affecting the
economy, financial, or securities markets; (ii) the announcement of
the transactions contemplated by this Agreement; (iii) any outbreak
or escalation of war or any act of terrorism; (iv) general
conditions in the industry in which American Resources and its
Subsidiaries operate; (v) any failure, in and of itself, by
American Resources to meet any internal or published projections,
forecasts, estimates, or predictions in respect of revenues,
earnings, or other financial or operating metrics for any period
(it being understood that the facts or occurrences giving rise to
or contributing to such failure may be deemed to constitute, or be
taken into account in determining whether there has been or would
reasonably be expected to become, an American Resources Material
Adverse Effect, to the extent permitted by this definition and not
otherwise excepted by a clause of this proviso); or (vi) any
change, in and of itself, in the market price or trading volume of
American Resources’ securities or in its credit ratings (it
being understood that the facts or occurrences giving rise to or
contributing to such change may be deemed to constitute, or be
taken into account in determining whether there has been or would
reasonably be expected to become, an American Resources Material
Adverse Effect, to the extent permitted by this definition and not
otherwise excepted by a clause of this proviso), provided further,
however, that any event, change, and effect referred to in clauses
(i), (iii), or (iv) immediately above shall be taken into account
in determining whether an American Resources Material Adverse
Effect has occurred or would reasonably be expected to occur to the
extent that such event, change, or effect has a disproportionate
effect on American Resources and its Subsidiaries, taken as a
whole, compared to other participants in the industries in which
American Resources and its Subsidiaries conduct their
businesses.
“American Resources Series A Preferred Stock” has the
meaning set forth in Section 4.02(a).
“American Resources Series C Preferred Stock” has the
meaning set forth in Section 4.02(a).
“American Resources Restricted Share” means any
American Resources Common Stock subject to vesting, repurchase, or
other lapse of restrictions granted under any American Resources
Stock Plan.
“American Resources SEC Documents” has the meaning set
forth in Section 4.04(a).
“American Resources Securities” has the meaning set
forth in Section 4.02(b)(ii).
“American Resources Stockholders Meeting” means the
special meeting of the stockholders of American Resources to be
held to consider the approval of the American Resources Stock
Issuance.
“American Resources Stock Issuance” has the meaning set
forth in the Recitals.
“American Resources Stock Option” means any option to
purchase American Resources Common Stock granted under any American
Resources Stock Plan.
“American Resources Stock Plans” means the following
plans, in each case as amended: the 2018 Stock Option Plan dated
July 1, 2018.
“American Resources Subsidiary Securities” has the
meaning set forth in Section 4.02(d).
“American Resources Termination Fee” means
$500,000.00.
“American Resources Trading Price” means the volume
weighted average price per share of American Resources Common Stock
as reported on the Nasdaq for the 10 consecutive trading days
ending on the trading day immediately preceding the Effective Time
(as adjusted as appropriate to reflect any stock splits, stock
dividends, combinations, reorganizations, reclassifications, or
similar events).
“American Resources Voting Debt” has the meaning set
forth in Section 4.02(c).
“PBGC” has the meaning set forth in Section
3.12(d).
“Permits” has the meaning set forth in Section
3.08(b).
25
“Permitted Liens” means: (a) statutory Liens for
current Taxes or other governmental charges not yet due and payable
or the amount or validity of which is being contested in good faith
(provided appropriate reserves required pursuant to GAAP have been
made in respect thereof); (b) mechanics’, carriers’,
workers’, repairers’, and similar statutory Liens
arising or incurred in the ordinary course of business for amounts
which are not delinquent or which are being contested by
appropriate proceedings (provided appropriate reserves required
pursuant to GAAP have been made in respect thereof); (c) zoning,
entitlement, building, and other land use regulations imposed by
Governmental Entities having jurisdiction over such Person’s
owned or leased real property, which are not violated by the
current use and operation of such real property; (d) covenants,
conditions, restrictions, easements, and other similar non-monetary
matters of record affecting title to such Person’s owned or
leased real property, which do not materially impair the occupancy
or use of such real property for the purposes for which it is
currently used in connection with such Person’s businesses;
(e) any right of way or easement related to public roads and
highways, which do not materially impair the occupancy or use of
such real property for the purposes for which it is currently used
in connection with such Person’s businesses; and (f) Liens
arising under workers’ compensation, unemployment insurance,
social security, retirement, and similar legislation.
“Per Share Cash Equivalent Consideration” has the
meaning set forth in Section 2.07(a).
“Person” means any individual, corporation, limited or
general partnership, limited liability company, limited liability
partnership, trust, association, joint venture, Governmental
Entity, or other entity or group (which term will include a
“group” as such term is defined in Section 13(d)(3) of
the Exchange Act).
“Real Estate” means the Owned Real Estate and the
Leased Real Estate.
“Representatives” has the meaning set forth in Section
5.04(a).
“Requisite Company Vote” has the meaning set forth in
Section 3.03(a).
“Requisite American Resources Vote” has the meaning set
forth in Section 4.03(a).
“Securities Act” has the meaning set forth in Section
3.03(c).
“Merger Consideration” has the meaning set forth in
Section 2.01(b).
“Subsidiary” of a Person means a corporation,
partnership, limited liability company, or other business entity of
which a majority of the shares of voting securities is at the time
beneficially owned, or the management of which is otherwise
controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person.
“Superior Proposal” means a bona fide written Takeover
Proposal with respect to the applicable party or its Subsidiaries
(except that, for purposes of this definition, each reference in
the definition of “Takeover Proposal” to
“15%” shall be “50%”), that such
party’s board determines in good faith (after consultation
with outside legal counsel and such party’s financial
advisor) is more favorable from a financial point of view to the
holders of such party’s common stock than the transactions
contemplated by this Agreement, taking into account: (a) all
financial considerations; (b) the identity of the third party
making such Takeover Proposal; (c) the anticipated timing,
conditions (including any financing condition or the reliability of
any debt or equity funding commitments) and prospects for
completion of such Takeover Proposal; (d) the other terms and
conditions of such Takeover Proposal and the implications thereof
on such party, including relevant legal, regulatory, and other
aspects of such Takeover Proposal deemed relevant by such party;
and (e) any revisions to the terms of this Agreement and the
transaction contemplated by this Agreement proposed by the other
party during the Superior Proposal Notice Period set forth in
Section 5.04(d).
“Superior Proposal Notice Period” has the meaning set
forth in Section 5.04(d).
“Takeover Proposal” means with respect to the Company
or American Resources, as the case may be, an inquiry, proposal, or
offer from, or indication of interest in making a proposal or offer
by, any Person or group relating to any transaction or series of
related transactions (other than the transactions contemplated by
this Agreement), involving any: (a) direct or indirect acquisition
of assets of such party hereto or its Subsidiaries (including any
voting equity interests of Subsidiaries, but excluding sales of
assets in the ordinary course of business) equal to 15% or more of
the fair market value of such party’s consolidated assets or
to which 15% or more of such party’s net revenues or net
income on a consolidated basis are attributable; (b) direct or
indirect acquisition of 15% or more of the voting equity interests
of such party hereto or any of its Subsidiaries whose business
constitutes 15% or more of the consolidated net revenues, net
income, or assets of such party and its Subsidiaries, taken as a
whole; (c) tender offer or exchange offer that if consummated would
result in any Person or group (as defined in Section 13(d) of the
Exchange Act) beneficially owning (within the meaning of Section
13(d) of the Exchange Act) 15% or more of the voting power of such
party hereto; (d) merger, consolidation, other business
combination, or similar transaction involving such party hereto or
any of its Subsidiaries, pursuant to which such Person or group (as
defined in Section 13(d) of the Exchange Act) would own 15% or more
of the consolidated net revenues, net income, or assets of such
party and its Subsidiaries, taken as a whole; (e) liquidation,
dissolution (or the adoption of a plan of liquidation or
dissolution), or recapitalization or other significant corporate
reorganization of such party hereto or one or more of its
Subsidiaries which, individually or in the aggregate, generate or
constitute 15% or more of the consolidated net revenues, net
income, or assets of such party and its Subsidiaries, taken as a
whole; or (f) any combination of the foregoing.
“Taxes” means all federal, state, local, foreign and
other income, gross receipts, sales, use, production, ad valorem,
transfer, franchise, registration, profits, license, lease,
service, service use, withholding, payroll, employment,
unemployment, estimated, excise, severance, environmental, stamp,
occupation, premium, property (real or personal), real property
gains, windfall profits, customs, duties or other taxes, fees,
assessments, or charges of any kind whatsoever, together with any
interest, additions or penalties with respect thereto and any
interest in respect of such additions or penalties.
“Tax Returns” means any return, declaration, report,
claim for refund, information return or statement, or other
document relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
“Treasury Regulations” means the Treasury regulations
promulgated under the Code.
“Voting Debt” has the meaning set forth in Section
3.02(c).
26