June 7, 2021 Mark Jensen Chief Executive Officer American Resources Corporation 12115 Visionary Way, Suite 174 Fishers, Indiana 46038 Dear Mr. Jensen:
Exhibit 10.1
PERSONAL AND CONFIDENTIAL
June 7,
2021
▇▇▇▇
▇▇▇▇▇▇
Chief
Executive Officer
American
Resources Corporation
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▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear
▇▇. ▇▇▇▇▇▇:
This
letter (the “Agreement”) constitutes the
agreement between, Kingswood Capital Markets, division of Benchmark
Investments, LLC (“Kingswood”, or the
“Placement
Agent”) and American Resources Corporation, a company
incorporated under the laws of the State of Florida (the
“Company”),
pursuant to which the Placement Agent shall serve as the exclusive
placement agent for the Company, on a “reasonable best
efforts” basis, in connection with the proposed placement
(the “Placement”) of equity and/or
equity derivatives (the “Securities”) of the Company, par
value $0.001 per share (“Common Stock”). The terms of the
Placement and the Securities shall be mutually agreed upon by the
Company and the purchasers (each, a “Purchaser” and collectively, the
“Purchasers”)
and nothing herein constitutes that the Placement Agent would have
the power or authority to bind the Company or any Purchaser or an
obligation for the Company to issue any Securities or complete the
Placement. This Agreement and the documents executed and delivered
by the Company and the Purchasers in connection with the Placement,
including but not limited to the Purchase Agreement (as defined
below), shall be collectively referred to herein as the
“Transaction
Documents.” The date of the closing of the Placement
shall be referred to herein as the “Closing Date.” The Company
expressly acknowledges and agrees that the obligations of the
Placement Agent hereunder are on a reasonable best-efforts basis
only and that the execution of this Agreement does not constitute a
commitment by the Placement Agent to purchase the Securities and
does not ensure the successful placement of the Securities or any
portion thereof or the success of the Placement Agent with respect
o securing any other financing on behalf of the Company. The
Placement Agent may retain other brokers or dealers to act as
sub-Agent or selected-dealers on its behalf in connection with the
Placement. The sale of the Securities to any Purchaser will be
evidenced by a securities purchase agreement (the
“Purchase
Agreement”) between the Company and such Purchaser in
a form mutually agreed upon by the Company and the Placement Agent.
Capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement. Prior to
the signing of any Purchase Agreement, executive officers of the
Company will be available upon reasonable notice and during normal
business hours to answer inquiries from prospective
Purchasers.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. Each of the representations and warranties
(together with any related disclosure schedules thereto) and
covenants made by the Company to the Purchasers in the Purchase
Agreement in connection with the Placement is hereby incorporated
herein by reference into this Agreement (as though fully restated
herein) and is, as of the date of the Purchase Agreement and as of
the Closing Date, hereby made to, and in favor of, the Placement
Agent.
SECTION 2.
REPRESENTATIONS OF THE PLACEMENT AGENT
. The
Placement Agent represents and warrants that it (i) is a member in
good standing of FINRA, (ii) is registered as a broker/dealer under
the Exchange Act, (iii) is licensed as a broker/dealer under the
laws of the States applicable to the offers and sales of the
Securities by such Placement Agent, (iv) is and will be a corporate
entity validly existing under the laws of its place of
incorporation, and (v) has full power and authority to enter into
and perform its obligations under this Agreement. The Placement
Agent will immediately notify the Company in writing of any change
in its status as such. The Placement Agent covenants that it will
use its reasonable best efforts to conduct the Placement hereunder
in compliance with the provisions of this Agreement and the
requirements of applicable law.
SECTION 3. COMPENSATION.
In consideration of the services to be provided for hereunder, the
Company shall pay to the Placement Agent the following compensation
with respect to the Securities which they are placing:
A. A cash fee (the
“Cash Fee”)
equal to an aggregate of six percent (6.0%) of the aggregate gross
proceeds raised in the Placement. The Cash Fee shall be paid at the
Closing of the Placement.
B. Subject to
compliance with FINRA Rule 5110(f)(2)(D), the Company will be
responsible for and will pay all expenses relating to the
Placement, including, without limitation, (a) all filing fees and
expenses relating to the registration of the securities with the
Commission; (b) all fees and expenses relating to the listing of
the Company’s common stock on a national exchange, if
applicable; (c) all fees, expenses and disbursements relating to
the registration or qualification of the securities under the
“blue sky” securities laws of such states and other
jurisdictions as Placement Agent may reasonably designate
(including, without limitation, all filing and registration fees,
and the reasonable fees and disbursements of the Company’s
“blue sky” counsel, which will be the Placement
Agent’s counsel) unless such filings are not required in
connection with the Company’s proposed listing on a national
exchange, if applicable; (d) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the
securities under the securities laws of such foreign jurisdictions
as the Placement Agent’s may reasonably designate; (e) the
costs of all mailing and printing of the Placement documents; (f)
transfer and/or stamp taxes, if any, payable upon the transfer of
securities from the Company to the Placement Agent; and (g) the
fees and expenses of the Company’s accountants; and (h) a
maximum of $50,000 for fees and expenses including “road
show”, diligence, and reasonable legal fees and disbursements
for Kingswood’s counsel. The Placement Agent may deduct from
the net proceeds of the Placement payable to the Company on the
Closing Date the expenses set forth herein to be paid by the
Company to the Placement Agent. For the sake of clarity, it is
understood and agreed that the Company shall be responsible for the
Placement Agent’s external counsel legal costs detailed in
this Section irrespective of whether the Placement is consummated
or not, subject to $50,000 in the event that there is not a
Closing. Additionally, one percent (1.0%) of the gross proceeds of
the Offering shall be provided to Kingswood for non-accountable
expenses. The Placement Agent may deduct from the net proceeds of
the Offering payable to the Company on the Closing Date, or the
Option Closing Date, if any, the expenses set forth herein to be
paid by the Company to the Underwriters.
C. The Placement
Agent reserves the right to reduce any item of its compensation or
adjust the terms thereof as specified herein in the event at a
determination shall be made by FINRA to the effect that such
Placement Agent’s aggregate compensation is in excess of
FINRA Rules or that the terms thereof require
adjustment.
SECTION 4. INDEMNIFICATION.
The Company agrees to the indemnification and other agreements set
forth in the Indemnification Provisions (the “Indemnification”) attached hereto
as Addendum A, the
provisions of which are incorporated herein by reference and shall
survive the termination or expiration of this
Agreement.
SECTION 5. ENGAGEMENT
TERM. The Placement
Agent engagement hereunder shall be until the earlier of (i) two
(2) months and (ii) the final closing date of the Placement (such
date, the “Termination
Date” and the period of time during which this
Agreement remains in effect is referred to herein as the
“Term”);
provided, however, that either party may terminate this Agreement
upon thirty days prior written notice to the other party.
Notwithstanding anything to the contrary contained herein, the
provisions concerning the Company’s obligation to pay any
fees actually earned pursuant to Section 3 hereof, expense
reimbursement pursuant to Section 3 hereof and the provisions
concerning Tail Financings, Right of First Refusal,
confidentiality, indemnification and contribution contained herein
and the Company’s obligations contained in the
Indemnification Provisions will survive any expiration or
termination of this Agreement. If this Agreement is terminated
prior to the completion of the Placement, all fees and expense
reimbursement due to the Placement Agent shall be paid by the
Company to the Placement Agent on or before the Termination Date
(in the event such fees are earned or owed as of the Termination
Date). The Placement Agent agree not to use any confidential
information concerning the Company provided to such Placement Agent
by the Company for any purposes other than those contemplated under
this Agreement.
SECTION 6.
PLACEMENT AGENT’ INFORMATION. The Company
agrees that any information or advice rendered by the Placement
Agent in connection with this engagement is for the confidential
use of the Company only in their evaluation of the Placement and,
except as otherwise required by law, the Company will not disclose
or otherwise refer to the advice or information in any manner
without such Placement Agent’s prior written
consent.
SECTION 7.
NO FIDUCIARY RELATIONSHIP. This Agreement
does not create and shall not be construed as creating rights
enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the Indemnification Provisions
hereof. The Company acknowledges and agrees that the Placement
Agent is nor shall the Placement Agent be construed as a fiduciary
of the Company and the Placement Agent shall have any duties or
liabilities to the equity holders or the creditors of the Company
or any other person by virtue of this Agreement or the retention of
the Placement Agent hereunder, all of which are hereby expressly
waived.
SECTION 8.
CLOSING. The obligations
of the Placement Agent, and the closing of the sale of the
Securities hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties on the part
of the Company contained herein and in the Purchase Agreement, to
the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance
by the Company of their obligations hereunder, and to each of the
following additional terms and conditions, except as otherwise
disclosed to and acknowledged and waived by the Placement Agent by
the Company:
A. No action shall
have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or
body which would, as of the Closing Date, prevent the issuance or
sale of the Securities or materially and adversely affect or
potentially and adversely affect the business or operations of the
Company; and no injunction, restraining order or order of any other
nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities or materially and adversely
affect or potentially and adversely affect the business or
operations of the Company.
B. The Company shall
have entered into a Purchase Agreement with each of the Purchasers
and such agreements shall be in full force and effect and shall
contain representations, warranties and covenants of the Company as
agreed between the Company and the Purchasers.
C. Prior to the
Closing Date, the Company shall have furnished to the Placement
Agent such further information, certificates and documents as the
Placement Agent may reasonably request, including without
limitation, a cold-comfort letter and customary closing
certificates.
If any
of the conditions specified in this Section 8 shall not have been
fulfilled when and as required by this Agreement, or if any of the
certificates, written statements or letters furnished to the
Placement Agent or to Placement Agent’s counsel pursuant to
this Section 8 shall not be reasonably satisfactory in form and
substance to the Placement Agent and to Placement Agent’s
counsel, all obligations of the Placement Agent hereunder may be
cancelled by the Placement Agent at, or at any time prior to, the
consummation of the Closing. Notice of such cancellation shall be
given to the Company in writing or orally. Any such oral notice
shall be confirmed promptly thereafter in writing.
SECTION 9. COVENANTS
AND OBLIGATIONS.
A. Tail Financing. In the event that
Kingswood does not consummate the Placement as contemplated by this
Agreement, Kingswood shall be entitled to a cash fee equal to six
percent (6.0%) of the gross proceeds received by the Company from
the sale of the securities to any investor actually introduced by
Kingswood to the Company during the Engagement Period (the
“Tail
Financing”), and such Tail Financing is consummated at
any time during the six (6) month period following the expiration
of the Engagement Period, provided that such financing is by a
party actually introduced to the Company in an offering in which
the Company has direct knowledge of such party’s
participation. The Placement Agent will provide the company a list
of all parties introduced to the company.
B. Right of First Refusal. Intentionally
omitted.
C. Lock-Up Agreement: The Company, on
behalf of itself and any successor entity, agrees that, without the
prior written consent of the Placement Agent, it will not, for a
period of 180 days after the date of this Agreement (the
“Lock-Up
Period”), (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of
capital stock of the Company; (ii) file or caused to be filed any
registration statement with the Commission relating to the offering
of any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of
capital stock of the Company; (iii) complete any offering of debt
securities of the Company, other than entering into a line of
credit with a traditional bank or (iv) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of capital stock of the
Company, whether any such transaction described in clause (i),
(ii), (iii) or (iv) above is to be settled by delivery of shares of
capital stock of the Company or such other securities, in cash or
otherwise.
SECTION 10. GOVERNING
LAW. This Agreement
will be governed by, and construed in accordance with, the laws of
the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be
assigned by either party without the prior written consent of the
other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and
permitted assigns. Any right to trial by jury with respect to any
dispute arising under this Agreement or any transaction or conduct
in connection herewith is waived. Any dispute arising under this
Agreement may be brought into the courts of the State of New York
or into the Federal Court located in New York, New York and, by
execution and delivery of this Agreement, the Company hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of aforesaid courts. Each party
hereto hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. If
either party shall commence an action or proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in
such action or proceeding shall be reimbursed by the other party
for its attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action
or proceeding.
SECTION 10.
ENTIRE AGREEMENT/MISC. This Agreement
(including the attached Indemnification Provisions) embodies the
entire agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings, relating to the
subject matter hereof. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect
or any other provision of this Agreement, which will remain in full
force and effect. This Agreement may not be amended or otherwise
modified or waived except by an instrument in writing signed by
both Placement Agent and the Company. The representations,
warranties, agreements and covenants contained herein shall survive
the closing of the Placement and delivery of the Securities. This
Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or a .pdf
format file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile or .pdf signature page were an original
thereof.
SECTION 11.
CONFIDENTIALITY. The Placement
Agent (i) will keep the Confidential Information (as such term is
defined below) confidential and will not (except as required by
applicable law or stock exchange requirement, regulation or legal
process (“Legal
Requirement”), without the Company’s prior
written consent, disclose to any person any Confidential
Information, and (ii) will not use any Confidential Information
other than in connection with the Placement. The Placement Agent
further agrees to disclose the Confidential Information only to its
Representatives (as such term is defined below) who need to know
the Confidential Information for the purpose of the Placement, and
who are informed by such Placement Agent of the confidential nature
of the Confidential Information. The term “Confidential Information”
shall mean, all confidential, proprietary and non-public
information (whether written, oral or electronic communications)
furnished by the Company to a Placement Agent or its
Representatives in connection with such Placement Agent’s
evaluation of the Placement. The term “Confidential Information”
will not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by a
Placement Agent or its Representatives in violation of this
Agreement, (ii) is or becomes available to a Placement Agent or any
of its Representatives on a non-confidential basis from a
third-party, (iii) is known to a Placement Agent or any of its
Representatives prior to disclosure by the Company or any of its
Representatives, or (iv) is or has been independently developed by
a Placement Agent and/or the Representatives without use of any
Confidential Information furnished to it by the Company. The term
“Representatives” shall mean with respect to the
Placement Agent, such Placement Agent’s directors, board
committees, officers, employees, financial advisors, attorneys and
accountants. This provision shall be in full force until the
earlier of (a) the date that the Confidential Information ceases to
be confidential and (b) two years from the date hereof.
Notwithstanding any of the foregoing, in the event that the
Placement Agent or any of its Representatives are required by Legal
Requirement to disclose any of the Confidential Information, such
Placement Agent and its Representatives will furnish only that
portion of the Confidential Information which such Placement Agent
or its Representative, as applicable, is required to disclose by
Legal Requirement as advised by counsel, and will use reasonable
efforts to obtain reliable assurance that confidential treatment
will be accorded the Confidential Information so
disclosed.
SECTION 12.
NOTICES. Any and all
notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of
transmission, if such notice or communication is sent to the email
address specified on the signature pages attached hereto prior to
6:30 p.m. (New York City time) on a business day, (b) the next
business day after the date of transmission, if such notice or
communication is sent to the email address on the signature pages
attached hereto on a day that is not a business day or later than
6:30 p.m. (New York City time) on any business day, (c) the third
business day following the date of mailing, if sent by U.S.
internationally recognized air courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages hereto.
SECTION 13.
PRESS ANNOUNCEMENTS. The Company
agrees that the Placement Agent shall, from and after any Closing,
have the right to reference the Placement and the Placement
Agent’s role in connection therewith in the Placement
Agent’ marketing materials and on its website and to place
advertisements in financial and other newspapers and journals, in
each case at its own expense.
[Signature page to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Very
truly yours,
KINGSWOOD CAPITAL MARKETS,
division of Benchmark Investments, LLC
By:
Name:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
Supervisory Principal
Accepted
and Agreed to as of
the
date first written above:
American Resources Corporation
By:
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
Chief Executive Officer
EXHIBIT A
INDEMNIFICATION PROVISIONS
In
connection with the engagement of Kingswood Capital Markets,
division of Benchmark Investments, LLC (“Kingswood”, the
“Placement
Agent”) by American Resources Corporation (the
“Company”)
pursuant to a placement agency agreement dated as of the date
hereof, by and among the Company and the Placement Agent, as it may
be amended from time to time in writing (the
“Agreement”), the Company hereby agrees as
follows:
1. To the extent
permitted by law, the Company will indemnify the Placement Agent
and its respective affiliates, directors, officers, shareholders,
members, managers, partners, employees, representatives,
affiliates, and controlling persons (within the meaning of Section
15 of the Securities Act of 1933, as amended, or Section 20 of the
Securities Exchange Act of 1934) against all losses, claims,
damages, expenses and liabilities, as the same are incurred
(including the reasonable fees and expenses of counsel), relating
to or arising out of its activities hereunder or pursuant to the
Agreement, except, with regard to the Placement Agent, to the
extent that any losses, claims, damages, expenses or liabilities
(or actions in respect thereof) are found in a final judgment (not
subject to appeal) by a court of law to have resulted primarily and
directly from such Placement Agent’s willful misconduct or
gross negligence in performing the services described herein, as
the case may be.
2. Promptly after
receipt by the Placement Agent of notice of any claim or the
commencement of any action or proceeding with respect to which such
Placement Agent is entitled to indemnity hereunder, such Placement
Agent will notify the Company in writing of such claim or of the
commencement of such action or proceeding, and the Company will
assume the defense of such action or proceeding and will employ
counsel reasonably satisfactory to such Placement Agent and will
pay the fees and expenses of such counsel. Notwithstanding the
preceding sentence, the Placement Agent will be entitled to employ
counsel separate from counsel for the Company and from any other
party in such action if counsel for such Placement Agent reasonably
determines that it would be inappropriate under the applicable
rules of professional responsibility for the same counsel to
represent both the Company and such Placement Agent. In such event,
the reasonable fees and disbursements of no more than one such
separate counsel will be paid by the Company. The Company will have
the exclusive right to settle the claim or proceeding provided that
the Company will not settle any such claim, action or proceeding
without the prior written consent of the Placement Agent, which
will not be unreasonably withheld.
3. The Company agrees
to notify the Placement Agent promptly of the assertion against it
or any other person of any claim or the commencement of any action
or proceeding relating to a transaction contemplated by the
Agreement.
4. If for any reason
the foregoing indemnity is unavailable to the Placement Agent or
insufficient to hold such Placement Agent harmless, then the
Company shall contribute to the amount paid or payable by such
Placement Agent, as the case may be, as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate
to reflect not only the relative benefits received by the Company
on the one hand, and such Placement Agent on the other, but also
the relative fault of the Company on the one hand and such
Placement Agent on the other that resulted in such losses, claims,
damages or liabilities, as well as any relevant equitable
considerations. The amounts paid or payable by a party in respect
of losses, claims, damages and liabilities referred to above shall
be deemed to include any legal or other fees and expenses incurred
in defending any litigation, proceeding or other action or claim.
Notwithstanding the provisions hereof, no Placement Agent’s
share of the liability hereunder shall be in excess of the amount
of fees actually received, or to be received, by such Placement
Agent under the Agreement (excluding any amounts received as
reimbursement of expenses incurred by such Placement
Agent).
5. These
Indemnification Provisions shall remain in full force and effect
whether or not the transaction contemplated by the Agreement is
completed and shall survive the termination of the Agreement, and
shall be in addition to any liability that the Company might
otherwise have to any indemnified party under the Agreement or
otherwise.