AGREEMENT AND PLAN OF MERGER By and Among AMERICAN RESOURCES CORPORATION, ARC ACQUISITION CORP., and EMPIRE KENTUCKY LAND, INC. Dated as of February 20, 2019 AGREEMENT AND PLAN OF MERGER
Exhibit 99.1
By and Among
AMERICAN RESOURCES CORPORATION,
ARC ACQUISITION CORP.,
and
EMPIRE KENTUCKY LAND, INC.
Dated as of February 20, 2019
This Agreement and Plan of Merger (this
“Agreement”), dated the 20th
day of February, 2019, and made
effective as of February 12, 2019, is by and among
AMERICAN RESOURCES
CORPORATION, a Florida
corporation (“Parent”), ARC ACQUISITION
CORP., an Indiana corporation
(“Merger Sub”), 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,
pursuant to the terms of this Agreement and certain related
documents, the parties intend that Merger Sub be merged with and
into the Company, with the Company surviving the merger on the
terms and subject to the conditions set forth herein (the
“Merger”).
WHEREAS,
this Agreement contemplates that the Merger is a tax-free merger
pursuant to IRC § 368(a)(2)(E).
WHEREAS, the board of directors of the Company
(the “Company Board”) has unanimously (a) determined
that this Agreement and the transactions contemplated hereby,
including the Merger, are in the best interests of the Company and
its stockholders, (b) approved and declared advisable this
Agreement and the transactions contemplated hereby, including the
Merger, and (c) resolved to recommend adoption of this Agreement by
the stockholders of the Company.
WHEREAS,
the shareholders of the Company (the “Company
Shareholders”) have unanimously (a) determined that this
Agreement and the transactions contemplated hereby, including the
Merger, are in the best interests of the Company and its
stockholders, (b) approved and declared advisable this Agreement
and the transactions contemplated hereby, including the
Merger.
WHEREAS,
the respective boards of directors of Parent and Merger Sub have
unanimously (a) determined that this Agreement and the transactions
contemplated hereby, including the Merger, are in the best
interests of Parent, Merger Sub and their respective stockholders,
and (b) approved and declared advisable this Agreement and the
transactions contemplated hereby, including the
Merger.
WHEREAS,
the respective shareholders of the Parent (the “Parent
Shareholders”) and the Merger Sub (the “Merger Sub
Shareholder”) have unanimously (a) determined that this
Agreement and the transactions contemplated hereby, including the
Merger, are in the best interests of the Company and its
stockholders, (b) approved and declared advisable this Agreement
and the transactions contemplated hereby, including the
Merger.
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. The
Merger
1.01. The
Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Indiana
Business Corporation Act (“IBCA”) and the Kentucky
Business Corporation Act (“KBCA”), at the Effective
Time: (i) the Merger Sub will merge with and into the Company; (ii)
the separate corporate existence of the Merger Sub will cease; and
(iii) the Company will continue its corporate existence under the
KBCA as the surviving corporation in the Merger and a wholly-owned subsidiary of the
Parent.
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, Xxxxxx & Xxxxxxxx PLLC, 000 Xxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx, unless another place
is agreed to in writing by the parties hereto. The “Closing
Date” shall be 12:01 a.m. on February 12, 2019,
notwithstanding the actual date of the Closing.
1.03. Effective
Time. Subject to the provisions
of this Agreement, on the Closing Date, the Merger Sub and the
Company 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 Indiana and the Commonwealth
of Kentucky in accordance with the relevant provisions of the IBCA
and the KBCA and shall make all other filings or recordings
required under the IBCA 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 Indiana and the
Commonwealth of Kentucky or at such later date or time as may be
agreed by the Merger Sub and the Company in writing and specified
in the Certificate of Merger in accordance with the IBCA 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 IBCA 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 and the Merger Sub shall
vest in the Company, and all debts, liabilities, obligations,
restrictions, and duties of the Company and the Merger Sub shall
become the debts, liabilities, obligations, restrictions, and
duties of the Company.
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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 Parent, Merger Sub, or the Company, or the
holder of any capital stock of Parent, Merger Sub, 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) shall be converted into the right to receive:
(i) one hundred (100) (the “Exchange Ratio”) shares of
Parent 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 Parent 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). Conversion
of Merger Sub Capital Stock. Each share
of common stock, no par value, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and
become one newly issued, fully paid, and non-assessable share of
common stock, no par value, of the Company with the same rights,
powers, and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the
Company. From and after the Effective Time, all certificates
representing shares of Merger Sub Common Stock shall be deemed for
all purposes to represent the number of shares of common stock of
the Company into which they were converted in accordance with the
immediately preceding sentence.
(e). Fractional
Shares. No certificates or
scrip representing fractional shares of Parent 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 Parent 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 Parent 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 Parent 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, Parent 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,
Parent shall deposit with the Exchange Agent: (i) certificates
representing the shares of Parent Common Stock to be issued as
Merger Consideration (or make appropriate alternative arrangements
if uncertificated shares of Parent 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, Parent
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
Parent 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 Parent
Common Stock. Such cash and shares of Parent 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.”
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(b). Procedures
for Surrender; No Interest.
Promptly after the Effective Time, Parent 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 Parent 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 Parent. 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
Parent 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.
(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 Parent. If, after the Effective Time, Certificates or
Book-Entry Shares are presented to Parent, 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 Parent, 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 Parent (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, Parent 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 Parent 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 Parent
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 Parent in respect of
the Parent 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
Parent 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 Parent 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 Parent
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 Parent 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 Parent, upon demand.
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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 Parent 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 Parent shall have
the opportunity and right to direct all negotiations and
proceedings with respect to such demands. Except with the prior
written consent of Parent, 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 Parent Common Stock shall occur (other
than the issuance of additional shares of capital stock of the
Company or Parent 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 Parent 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
Parent, the posting by such Person of a bond, in such reasonable
amount as Parent 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.
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 Parent as follows:
3.01. Organization;
Standing and Power.
(a). The
Company and each of 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 the Company 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, a Company Material Adverse
Effect.
(b). Subsidiaries.
The Company is the sole shareholder of Colonial Coal Company, Inc.
(“Colonial”). All of the outstanding shares of capital
stock of, or other equity or voting interests in, Colonial that is
owned directly or indirectly by the Company have been validly
issued, were issued 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 imposed by applicable securities Laws. Except for the
capital stock of, or other equity or voting interests in, Colonial,
the Company does not own, directly or indirectly, any capital stock
of, or other equity or voting interests in, any
Person.
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3.02. Capital
Structure.
(a). Capital
Stock. The authorized capital
stock of the Company consists of: (i) twenty thousand (20,000)
shares of Company Common Stock (two hundred (200) designated as
Class A common voting stock having no par value and nineteen
thousand eight hundred (19,800) designated as Class B common
non-voting stock having no par value); and (ii) zero (0) shares of
preferred stock of the Company (the “Company Preferred
Stock”). As of the date of this Agreement: (A) 20,000 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 Parent,
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 IBCA 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.
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(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.
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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.
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 Parent 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, Parent 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;
9
(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 Parent 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;
(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 Parent 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 Parent and Merger Sub. Except: (a)
as disclosed in the Parent 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 Parent
Disclosure Schedule that relates to such Section or in another
section of the Parent Disclosure Schedule to the extent that it is
reasonably apparent on the face of such disclosure that such
disclosure is applicable to such Section; Parent and Merger Sub
hereby jointly and severally represent and warrant to the Company
as follows:
10
4.01. Organization;
Standing and Power; Charter Documents;
Subsidiaries.
(a). Organization;
Standing and Power. Each of
Parent 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 Parent 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 Parent Material Adverse
Effect.
(b). Charter
Documents. The copies of the
Certificate of Incorporation and By-Laws of Parent as most recently
filed with the Parent SEC Documents are true, correct, and complete
copies of such documents as in effect as of the date of this
Agreement. Parent 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 Parent have been validly
issued and are owned by Parent, 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 Parent. Except for
the capital stock of, or other equity or voting interests in, its
Subsidiaries, Parent does not own, directly or indirectly, any
capital stock of, or other equity or voting interests in, any
Person.
4.02. Capital
Structure.
(a). Capital
Stock. The authorized capital
stock of Parent consists of: (i) 230,000,000 shares of Parent
Common Stock; (ii) 5,000,000 shares of Series A Preferred stock,
par value $0.0001 per share, of Parent (the “Parent Series A
Preferred Stock”); and (iii) 20,000,000 shares of Series C
Preferred stock, par value $0.0001 per share, of Parent (the
“Parent Series C Preferred Stock”). As of the date of
this Agreement and immediately prior to the share offering
contemplated under Parent Form S1/A: (A) 18,639,433 shares of
Parent Common Stock were issued and outstanding (not including
shares held in treasury); (B) 452,729 shares of Parent Series A
Preferred Stock were issued and outstanding; and (D) 50,000 shares
of Parent Series C Preferred Stock were issued and outstanding; and
through the date hereof, no additional shares of Parent Common
Stock or shares of Parent Preferred Stock have been issued other
than the issuance of shares of Parent Common Stock upon the
exercise or settlement of Parent Equity Awards. For all classes of
common stock and preferred stock of Parent, no shares are issued
and held by Parent in its treasury All of the outstanding shares of
capital stock of Parent are, and all shares of capital stock of
Parent which may be issued as contemplated or permitted by this
Agreement, including the shares of Parent 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 Parent owns any shares of
Parent Common Stock.
(b). Stock
Awards.
(i). As
of the date of this Agreement, an aggregate of 3,363,170 shares of
Parent Common Stock were reserved for issuance pursuant to Parent
Equity Awards not yet granted under the Parent Stock Plans. As of
the date of this Agreement, 636,830 shares of Parent Common Stock
were reserved for issuance pursuant to outstanding Parent Stock
Options and no shares of Parent Restricted Shares were issued and
outstanding. Except as provided in this Agreement, since September
12, 2018 and through the date hereof, no Parent Equity Awards have
been granted and no additional shares of Parent Common Stock have
become subject to issuance under the Parent Stock Plans. All shares
of Parent Common Stock subject to issuance under the Parent 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 Parent Equity Awards, as of the date hereof, there are no
outstanding (A) securities of Parent or any of its Subsidiaries
convertible into or exchangeable for Parent Voting Debt or shares
of capital stock of Parent, (B) options, warrants, or other
agreements or commitments to acquire from Parent or any of its
Subsidiaries, or obligations of Parent or any of its Subsidiaries
to issue, any Parent Voting Debt or shares of capital stock of (or
securities convertible into or exchangeable for shares of capital
stock of) Parent, 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 Parent, in each case that
have been issued by Parent or its Subsidiaries (the items in
clauses (A), (B), and (C), together with the capital stock of
Parent, being referred to collectively as “Parent
Securities”). All outstanding shares of Parent Common Stock,
all outstanding Parent Equity Awards, and all outstanding shares of
capital stock, voting securities, or other ownership interests in
any Subsidiary of Parent, have been issued or granted, as
applicable, in compliance in all material respects with all
applicable securities Laws.
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(iii). As
of the date hereof, there are no outstanding Contracts requiring
Parent or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any Parent Securities or Parent Subsidiary
Securities. Neither Parent nor any of its Subsidiaries is a party
to any voting agreement with respect to any Parent Securities or
Parent Subsidiary Securities.
(c). Voting
Debt. No bonds, debentures,
notes, or other indebtedness issued by Parent or any of its
Subsidiaries: (i) having the right to vote on any matters on which
stockholders or equity holders of Parent 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 Parent or any of its
Subsidiaries, are issued or outstanding (collectively,
“Parent Voting Debt”).
(d). Parent
Subsidiary Securities. As of
the date hereof, there are no outstanding: (i) securities of Parent
or any of its Subsidiaries convertible into or exchangeable for
Parent Voting Debt, capital stock, voting securities, or other
ownership interests in any Subsidiary of Parent; (ii) options,
warrants, or other agreements or commitments to acquire from Parent
or any of its Subsidiaries, or obligations of Parent or any of its
Subsidiaries to issue, any Parent 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
Parent; 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 Parent, in each case that
have been issued by a Subsidiary of Parent (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 “Parent Subsidiary
Securities”).
4.03. Authority;
Non-Contravention; Governmental Consents; Board
Approval.
(a). Authority.
Parent 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 the majority of the outstanding
shares of the Parent Common Stock to the Parent Stock Issuance (the
“Requisite Parent Vote”), to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and the consummation by Parent
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 Parent and no other corporate or
limited liability proceedings, as applicable, on the part of Parent
are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger, the Parent 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 Parent Vote. This Agreement has been duly
executed and delivered by Parent and, assuming due execution and
delivery by the Company, constitutes the legal, valid, and binding
obligation of Parent, enforceable against Parent 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.
(b). Non-Contravention.
The execution, delivery, and performance of this Agreement by
Parent and the consummation by Parent 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,
Parent’ 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 Parent Vote,
conflict with or violate any Law applicable to Parent 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 Parent’ 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
Parent 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 Parent
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 Parent Material Adverse
Effect.
(c). Governmental
Consents. Except as set forth
in Section 4.03(c) of the Parent Disclosure Schedule, no Consent of
any Governmental Entity is required to be obtained or made by
Parent in connection with the execution, delivery, and performance
by Parent of this Agreement or the consummation by Parent of the
Merger, the Parent Stock Issuance, and the other transactions
contemplated hereby.
(d). Board
Approval. The Parent Board by resolutions duly adopted by a
unanimous vote at a meeting of all directors of Parent 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 Parent Stock
Issuance, upon the terms and subject to the conditions set forth
herein, are fair to, and in the best interests of, Parent and the
Parent’ 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 Parent Stock Issuance,
upon the terms and subject to the conditions set forth herein, (C)
directed that the Parent Stock Issuance be submitted to a vote of
the Parent’ stockholders for adoption at the Parent
Stockholders Meeting, and (D) resolved to recommend that
Parent’ stockholders vote in favor of approval of the Parent
Stock Issuance (collectively, the “Parent Board
Recommendation”).
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4.04. SEC
Filings; Financial Statements; Undisclosed
Liabilities.
(a). SEC
Filings. Parent 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 “Parent SEC
Documents”). True, correct, and complete copies of all the
Parent SEC Documents are publicly available on XXXXX. 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 Parent SEC Documents complied as to form
in all material respects with the applicable requirements of the
Securities Act, the Exchange Act, and the Xxxxxxxx-Xxxxx Act, and
the rules and regulations of the SEC thereunder applicable to such
Parent SEC Documents. None of the Parent 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 Parent, none of the Parent 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 Parent SEC Documents. None of
Parent’ 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 Parent 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 Parent 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 Parent dated as of January 31, 2019, contained in
the Parent SEC Documents filed prior to the date hereof is
hereinafter referred to as the “Parent Balance Sheet.”
Neither Parent nor any of its Subsidiaries has any Liabilities
other than Liabilities that: (i) are reflected or reserved against
in the Parent Balance Sheet (including in the notes thereto); (ii)
were incurred since the date of the Parent 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 Parent Material Adverse
Effect.
(d). NASDAQ
Compliance. Parent 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, a Parent Material Adverse Effect.
4.05. Absence
of Certain Changes or Events.
Since the date of the Parent Balance Sheet, except in connection
with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, the business
of Parent 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 Parent Material Adverse Effect or any
event, condition, change, or effect that could reasonably be
expected to have, individually or in the aggregate, an Parent
Material Adverse Effect.
4.06. Compliance;
Permits.
(a). Compliance.
Parent and each of its Subsidiaries are and, since December 31,
2016, have been in compliance with, all Laws or Orders applicable
to Parent or any of its Subsidiaries or by which Parent 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 Parent Material Adverse Effect. Since December 31, 2016, no
Governmental Entity has issued any notice or notification stating
that Parent 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, a Parent
Material Adverse Effect.
(b). Permits.
Parent 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, a Parent
Material Adverse Effect. No suspension, cancellation, non-renewal,
or adverse modifications of any Permits of Parent or any of its
Subsidiaries is pending or, to the Knowledge of Parent, threatened,
except for any such suspension or cancellation which would not
reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect. Parent 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, a Parent Material Adverse
Effect.
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4.07. Litigation.
There is no Legal Action pending, or to the Knowledge of Parent,
threatened against Parent or any of its Subsidiaries or any of
their respective properties or assets or, to the Knowledge of
Parent, any officer or director of Parent 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 Parent
Material Adverse Effect; and (b) does not seek material injunctive
or other material non-monetary relief. None of Parent 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, a
Parent Material Adverse Effect. To the Knowledge of Parent, there
are no SEC inquiries or investigations, other governmental
inquiries or investigations, or internal investigations pending or,
to the Knowledge of Parent, threatened, in each case regarding any
accounting practices of Parent or any of its Subsidiaries or any
malfeasance by any officer or director of
Parent.
4.08. Brokers.
Except for fees payable to Maxim Group, LLC, the fees and expenses
of which will be paid by Parent, neither Parent, 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 Parent
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 Parent for inclusion or
incorporation by reference in any proxy statement will, at the date
it is first mailed to Parent’ stockholders or at the time of
the Parent 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 Parent with respect to statements made or
incorporated by reference therein based on information that was not
supplied by or on behalf of Parent.
4.10. Ownership
of Company Common Stock.
Neither Parent nor any of its Affiliates or Associates owns any
shares of Company Common Stock.
4.11. Intended
Tax Treatment. Neither Parent
nor any of its Subsidiaries has taken or agreed to take any action,
and to the Knowledge of Parent 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. Parent 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 Parent 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
Parent (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 Parent (which consent shall not be unreasonably
withheld, conditioned, or delayed):
(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;
14
(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 Parent arising out of a breach or
alleged breach of this Agreement by Parent, 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 Parent or the
transactions contemplated by this Agreement;
(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;
15
(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 Parent.
During the period from the date of this Agreement until the
Effective Time, Parent 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 Parent Disclosure Schedule, or as required by
applicable Law, Parent 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 Parent Common Stock;
(b). (i)
split, combine, or reclassify any Parent Securities or Parent
Subsidiary Securities in a manner that would adversely affect the
Company or the holders of Company Common Stock relative to the
other holders of Parent Common Stock, (ii) repurchase, redeem, or
otherwise acquire, or offer to repurchase, redeem, or otherwise
acquire, any Parent Securities or Parent 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 Parent Securities or
Parent Subsidiary Securities, other than (i) the issuance of shares
of Parent Common Stock upon the exercise of any Parent Equity
Awards outstanding as of the date of this Agreement in accordance
with its terms, (ii) the issuance of shares of Parent Common Stock
in connection with or upon the exercise of any Parent 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 Parent Common Stock or convertible securities in an
amount not exceeding 5% of the issued and outstanding shares of
Parent 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 Parent and Parent’ 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 Parent such other information
concerning the business and properties of the Company and its
Subsidiaries as Parent 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 Parent pursuant to this
Agreement.
(b). Confidentiality.
[reserved].
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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. Parent
Stockholders Meeting.
Parent shall take all action necessary
to duly call, give notice of, convene, and hold the Parent
Stockholders Meeting as soon as reasonably
practicable.
5.06. Company
Assets. The assets of the
Company shall not be transferred from the Company, and the assets
of Colonial shall not be transferred from Colonial, at any time
after the Merger without the express written consent of Xxxx
XxXxxxxx, which consent shall not be unreasonably withheld.
Beginning at the Effective Time, Parent and its Subsidiaries shall
take all steps necessary to cause the assets of the Company to
remain as assets of the Company and the assets of Colonial to
remain as assets of Colonial, it being acknowledged and agreed the
Company and Colonial will grant liens in their respective assets to
secure debt to Empire Coal Holdings, LLC, an Affiliate of the
Company. This Section and the covenants set forth herein shall
expressly survive Closing until the consideration described in
6.03(f) is paid in full.
5.07. Company
and Colonial Bonds. Parent and
its Subsidiaries shall cause the surety bonds in place with the
Company and/or Colonial 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 Parent. 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
Parent (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 Parent 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 Parent 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
Parent immediately after the Effective Time.
5.10. Obligations
of Merger Sub. Parent will take
all action necessary to cause Merger Sub to perform its obligations
under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement.
5.11. Further
Assurances. At and after the
Effective Time, the officers and directors of the Company shall be
authorized to execute and deliver, in the name and on behalf of the
Company or Merger Sub, any deeds, bills of sale, assignments, or
assurances and to take and do, in the name and on behalf of the
Company or Merger Sub, any other actions and things to vest,
perfect, or confirm of record or otherwise in the Company any and
all right, title, and interest in, to and under any of the rights,
properties, or assets of the Company pre-Merger acquired or to be
acquired by the Company as a result of, or in connection with, the
Merger.
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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). Parent
Stockholder Approval. The
Parent Stock Issuance will have been approved by the Requisite
Parent Vote.
(c). Listing.
The shares of Parent 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.
(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 Parent Stock Issuance, or the other
transactions contemplated by this Agreement.
6.02. Conditions
to Obligations of Parent. The
obligations of Parent to effect the Merger are also subject to the
satisfaction or waiver (where permissible pursuant to applicable
Law) by Parent 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 Parent 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 Parent Material Adverse Effect.
(b). Performance
of Covenants. Parent 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). Parent
Material Adverse Effect. Since
the date of this Agreement, there shall not have been any Parent
Material Adverse Effect or any event, change, or effect that would,
individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
18
(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 and any Material Contract of Colonial,
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 Transaction.
The closing of the transaction by and between Empire Coal Holdings,
LLC and Parent or one of its Subsidiaries, 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 buyer 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 Parent Vote) by the mutual written consent of
Parent and the Company.
7.02. Termination
by Either Parent or the Company. This Agreement may be terminated by either
Parent 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 Parent 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;
(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 Parent 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 Parent Stock Issuance has been submitted to the stockholders of
Parent for approval at a duly convened Parent Stockholders Meeting
and the Requisite Parent Vote shall not have been obtained at such
meeting (unless such Parent Stockholders Meeting has been adjourned
or postponed, in which case at the final adjournment or
postponement thereof).
19
7.03. Termination
by Parent. This Agreement may
be terminated by Parent at any time prior to the Effective
Time:
(a). if
prior to the receipt of the Requisite Parent Vote at the Parent
Stockholders Meeting, the Parent Board authorizes Parent, 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
Parent 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, Parent 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
Parent shall not have the right to
terminate this Agreement pursuant to this Section 7.03(c)
if Parent 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 Parent Adverse Recommendation Change shall have occurred; or
(ii) Parent 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 Parent 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 Parent pursuant to Section
7.03(a), or by the Company pursuant to Section 7.04(b) or Section
7.04(c), then Parent shall pay to the
Company (by wire transfer of immediately available funds), at or
prior to such termination, $500,000.00 (the “Parent
Termination Fee”) plus the Company’s Expenses actually
incurred by the Company on or prior to the termination of this
Agreement.
(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 Parent 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 Parent be required to
pay the Parent 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.
20
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 Parent
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 Parent 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 Parent Common Stock without such
approval.
7.08. Extension;
Waiver. At any time prior to
the Effective Time, Parent 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 Parent 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.
21
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 Parent 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 Parent Disclosure Schedule, and the Company
Disclosure Schedule (other than an exception expressly set forth as
such in the Parent 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 Parent 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]
22
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:
Xxxx
X. XxXxxxxx, President
(the
“Company”)
AMERICAN RESOURCES CORPORATION
By:
Xxxxxx
X. Xxxxx, President
(the
“Parent”)
ARC ACQUISITION CORP.
By:
Its:
(the
“Merger Sub”)
23
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.
24
“Company Adverse Recommendation Change” shall mean the
Company Board: (a) failing to make, withdraw, amend, modify, or
materially qualify, in a manner adverse to Parent, 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 Parent) 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.
“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 Parent 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 xxx, 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.
25
“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.
“Dissenting Shares” has the meaning set forth in
Section 2.03.
“XXXXX” 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.
26
“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.
“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).
27
“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 Parent and its Subsidiaries, the actual
knowledge of each of the individuals listed in Section 8.01 of the
Parent’ 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.
“Parent” has the meaning set forth in the
Preamble.
28
“Parent Adverse Recommendation Change” shall mean the
Parent Board: (a) failing to make, withdraw, amend, modify, or
materially qualify, in a manner adverse to the Company, the Parent
Board Recommendation; (b) failing to include the Parent Board
Recommendation in the Joint Proxy Statement that is mailed to the
Parent’ stockholders; (c) recommending a Takeover Proposal;
(d) failing to recommend against acceptance of any tender offer or
exchange offer for the shares of Parent Common Stock within ten
Business Days after the commencement of such offer; (e) failing to
reaffirm (publicly, if so requested by the Company) the Parent
Board Recommendation within ten Business Days after the date any
Takeover Proposal (or material modification thereto) is first
publicly disclosed by Parent or the Person making such Takeover
Proposal; (f) making any public statement inconsistent with the
Parent Board Recommendation; or (g) resolving or agreeing to take
any of the foregoing actions.
“Parent Balance Sheet” has the meaning set forth in
Section 4.04(c).
“Parent Benefit Plans” has the meaning set forth in
Section 5.09(b).
“Parent Board” has the meaning set forth in the
Recitals.
“Parent Board Recommendation” has the meaning set forth
in Section 4.03(d)(i).
“Parent Common Stock” has the meaning set forth in the
Recitals.
“Parent Disclosure Schedule” means the disclosure
letter, dated as of the date of this Agreement and delivered by
Parent to the Company concurrently with the execution of this
Agreement.
“Parent Equity Award” means a Parent Stock Option or a
Parent Restricted Share, as the case may be.
“Parent 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 Parent and its Subsidiaries,
taken as a whole; or (b) the ability of Parent to consummate the
transactions contemplated hereby on a timely basis; provided,
however, that an Parent 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 Parent
and its Subsidiaries operate; (v) any failure, in and of itself, by
Parent 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 Parent 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
Parent’ 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 Parent 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 Parent 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
Parent and its Subsidiaries, taken as a whole, compared to other
participants in the industries in which Parent and its Subsidiaries
conduct their businesses.
“Parent Series A Preferred Stock” has the meaning set
forth in Section 4.02(a).
“Parent Series C Preferred Stock” has the meaning set
forth in Section 4.02(a).
“Parent Restricted Share” means any Parent Common
Stock subject to vesting, repurchase, or other lapse of
restrictions granted under any Parent Stock Plan.
“Parent SEC Documents” has the meaning set forth in
Section 4.04(a).
“Parent Securities” has the meaning set forth in
Section 4.02(b)(ii).
29
“Parent Stockholders Meeting” means the special meeting
of the stockholders of Parent to be held to consider the approval
of the Parent Stock Issuance.
“Parent Stock Issuance” has the meaning set forth in
the Recitals.
“Parent Stock Option” means any option to purchase
Parent Common Stock granted under any Parent Stock
Plan.
“Parent Stock Plans” means the following plans, in each
case as amended: the 2018 Stock Option Plan dated July 1,
2018.
“Parent Subsidiary Securities” has the meaning set
forth in Section 4.02(d).
“Parent Termination Fee” means
$500,000.00.
“Parent Trading Price” means the volume weighted
average price per share of Parent 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).
“Parent 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).
“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).
30
“Requisite Parent 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 Parent, 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).
31
