American Resources Corp 8-K, filed Jun 9, 2021
American Resources Corp (AREC)
8-K
2021-06-09
For: 2021-06-06
View Original
Added on
April 06, 2026
About this 8-K
American Resources Corp filed this 8-K on June 9, 2021, reporting on events of June 6, 2021.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of Earliest event Reported) June 7, 2021
AMERICAN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
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Florida
(State
or other jurisdiction
of
incorporation)
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000-55456
(Commission
File
Number)
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46-3914127
(I.R.S.
Employer
Identification
No.)
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12115
Visionary Way, Suite 174, Fishers Indiana, 46038
(Address
of principal executive offices)
(317)
855-9926
(Registrant’s
telephone number, including area code)
________________________________________________
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (See: General Instruction
A.2. below):
[
]
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[
]
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act
(17CFR240.14a-12)
[
]
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17CFR240.14d-2(b))
[
]
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17CFR240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On June
7, 2021, American Resources Corporation (the “Company”)
entered into a securities purchase agreement (the “Purchase
Agreement”) with accredited investors (each, an
“Investor” and collectively, the
“Investors”). providing for the issuance of (i)
8,600,000 shares of the Company’s Class A common stock, par
value $0.0001 per share (the “Shares”) and (ii)
warrants, with a term of 5 years, to purchase an aggregate of up to
4,300,000 shares of Common Stock (the “Warrants
Shares”) at an exercise price of $3.50 per share (the
“Warrants”). The Shares, Warrants and Warrant Shares
are collectively referred to as the “Securities”.
Pursuant to the Purchase Agreement, the Investors are purchasing
the Securities for an aggregate purchase price of
$30,100,000.
Pursuant
to the Purchase Agreement, an aggregate of 8,600,000 Shares were
issued to the Investors in a registered direct offering (the
“Offering”) and registered under the Securities Act of
1933, as amended (the “Securities Act”), pursuant to a
prospectus supplement to the Company’s currently effective
registration statement on Form S-3, (File No. 333-230786), which
was declared effective with the U.S. Securities and Exchange
Commission (“SEC”) on June 4, 2019. A preliminary
prospectus supplement relating to the offering was filed with the
SEC on June 8, 2021 and is available on the SEC’s web site at
http://www.sec.gov. Copies of the final prospectus supplement may
be obtained from Kingswood Capital Markets, division of Benchmark
Investments, LLC, 17 Battery Place,
New York, NY 10004, Attention: Syndicate Department, or via email
at syndicate@kingswoodcm.com or
telephone at (212) 404-7002.
The
Offering was conducted pursuant to a placement agent agreement,
dated June 7, 2021 (the “Placement Agent Agreement”),
between the Company and Kingswood Capital Markets, division of
Benchmark Investments, LLC. The
Placement Agent has agreed to use its “reasonable best
efforts” to solicit offers to purchase the Shares and the
Purchase Warrants. The Placement Agent has no obligation to
purchase any of the Securities or to arrange for the purchase or
sale of any specific number or dollar amount of Securities. The
Company has agreed to pay the Placement Agent a fee equal to 6% of
the aggregate purchase price paid by Investors placed by the
Placement Agent and certain expenses.
The
Company expects the Offering to close on or about June 9, 2021,
subject to the satisfaction of
customary closing conditions in the Purchase Agreement. The
Purchase Agreement contains customary representations, warranties
and agreements of the Company and the Investors and customary
indemnification rights and obligations of the parties thereto. The
Investors have previously invested in securities of the Company or
otherwise had pre-existing relationships with the Placement Agent;
the Company did not engage in general solicitation or advertising
with regard to the issuance and sale of the securities. The
Investors represented that they are accredited investors and
purchased the Securities for investment and not with a view to
distribution.
The foregoing description of the Placement Agent Agreement, the
Purchase Agreement, and the Warrants are qualified in their
entirety by reference to the full text of such Placement Agent
Agreement, Purchase Agreement, and Warrants, the forms of which are
attached as Exhibits 10.1, 10.2, and 4.1, respectively, to this
Current Report on Form 8-K and which are incorporated herein in
their entirety by reference. The Company is filing the opinion of
its counsel, Clifford J. Hunt, P.A., relating to the legality of the issuance and
sale of the Shares as Exhibit 5.1.
The
Company’s press releases, dated June 7, 2021 and June 9,
2021, announcing the pricing of the offering and the closing of the
offering are attached as Exhibits 99.1 and 99.2, respectively, to
the Current Report on Form 8-K.
This
report does not constitute an offer to sell or the solicitation of
an offer to buy, and these securities cannot be sold in any state
or jurisdiction in which this offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any state or jurisdiction. Any offer will be
made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration
statement.
This
report contains forward-looking statements. Forward-looking
statements include, but are not limited to, statements that express
our intentions, beliefs, expectations, strategies, predictions or
any other statements related to our future activities, or future
events or conditions. These statements are based on current
expectations, estimates and projections about our business based,
in part, on assumptions made by management and involve a number of
risks and uncertainties, many of which are beyond the control of
the Company including the substantial doubt relating to the
Company’s ability to continue as a going concern. These
statements are not a guarantee of future performances and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in the forward-looking statements
due to numerous factors, including those risks discussed in our
Annual Report on Form 10-K and in other documents that we file from
time to time with the SEC. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report, except as
required by law.
Item 9.01.1.
Financial Statements and
Exhibits.
(d)
Exhibits
The
following exhibits are attached hereto and filed
herewith.
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Exhibit
No.
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Description
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Form of Common
Stock Purchase Warrant
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Opinion of Law
Office of Clifford J. Hunt, P.A.
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Placement Agent
Agreement, dated June 7, 2021, by and between American Resources
Corporation and Kingswood Capital Markets
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Securities Purchase
Agreement, dated June 7, 2021, by and between American Resources
Corporation and the Investors
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Press Release Dated
June 7, 2021
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Press Release Dated
June 9, 2021
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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American Resources
Corporation
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Date: June 9,
2021
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By:
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/s/ Mark C.
Jensen
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Mark C. Jensen |
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Chief Executive
Officer
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Exhibit 4.1
COMMON STOCK PURCHASE WARRANT
AMERICAN RESOURCES CORPORATION
Warrant Shares:
[_______]
Initial Exercise
Date: June __, 2021
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, [_____________] or its assigns (the
“Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date
hereof (the “Initial
Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on June ___, 2026 (the “Termination Date”) but
not thereafter, to subscribe for and purchase from American
Resources Corporation, a Florida corporation (the
“Company”), up to [______]
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).
Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”),
dated June 7, 2021, among the Company and the purchasers signatory
thereto.
Section
2. Exercise.
a) Exercise of Warrant. Exercise
of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to
the Company of a duly executed facsimile copy or PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as
defined in Section 2(d)(i) herein) following the date of exercise
as aforesaid, the Holder shall deliver the aggregate Exercise Price
for the shares specified in the applicable Notice of Exercise by
wire transfer or cashier’s check drawn on a United States
bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of
Exercise. No
ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice.
Notwithstanding the foregoing, with respect to any Notice(s) of
Exercise delivered on or prior to 4:00 p.m. (New York City time) on
the Trading Date prior to the Initial Exercise Date, which may be
delivered at any time after the time of execution of the Purchase
Agreement, the Company agrees to deliver the Warrant Shares subject
to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment
of the aggregate Exercise Price (other than in the case of a
cashless exercise) is received by such Warrant Share Delivery Date.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.
1
b) Exercise Price. The exercise
price per share of Common Stock under this Warrant shall be
$3.50, subject to adjustment
hereunder (the “Exercise
Price”).
c) Cashless Exercise. If at the
time of exercise hereof there is no effective registration
statement registering, or the prospectus contained therein is not
available for the issuance of the Warrant Shares to the Holder,
then this Warrant may also be exercised, in whole or in part, at
such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
(A) =
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading
Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(68) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise or (z) the
Bid Price of the Common Stock on the principal Trading Market as
reported by Bloomberg L.P. (“Bloomberg”) as of the
time of the Holder’s execution of the applicable Notice of
Exercise if such Notice of Exercise is executed during
“regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter (including until two (2)
hours after the close of “regular trading hours” on a
Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such
Notice of Exercise is a Trading Day and such Notice of Exercise is
both executed and delivered pursuant to Section 2(a) hereof after
the close of “regular trading hours” on such Trading
Day;
(B) =
the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to this Section
2(c).
2
“Bid Price” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in
question (or the nearest preceding date) on the Trading Market on
which the Common Stock is then listed or quoted as reported by
Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if OTCQB or
OTCQX is not a Trading Market, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on
OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for
the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a
majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b)
if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX
and if prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).
3
d)
Mechanics of
Exercise.
i. Delivery of Warrant Shares Upon
Exercise. The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
the Warrant Shares are eligible for resale by the Holder without
volume or manner of sale limitations pursuant to Rule 144 (assuming
cashless exercise of the Warrants), and otherwise by physical
delivery of a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number
of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the address specified by the Holder in the Notice of
Exercise by the date that is the earliest of (i) two (2) Trading
Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise
Price to the Company and (iii) the number of Trading Days
comprising the Standard Settlement Period after the delivery to the
Company of the Notice of Exercise (such date, the
“Warrant Share
Delivery Date”). Upon delivery of the Notice of
Exercise, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date
of delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise.
If the
Company fails for any reason to deliver to the Holder the Warrant
Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading
Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the
FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.
4
ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
5
v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.
vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that, in the event
that Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
6
e)
Holder’s Exercise
Limitations. The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 4.99% (or, upon
election by a Holder prior to the issuance of any Warrants, 9.99%)
of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon notice to
the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
7
Section
3. Certain
Adjustments.
a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
8
b)
Adjustment Upon Issuance of Common
Stock. If and whenever on or after the Initial Exercise
Date, the Company grants, issues or sells, (or enters into any
agreement to grant, issue or sell), or in accordance with this
Section 3(b) is deemed to have issued or sold, any Common Stock
(including the issuance or sale of Common Stock owned or held by or
for the account of the Company, but excluding any Exempt Issuances
issued or sold or deemed to have been issued or sold) for a
consideration per share (the “New Issuance Price”) less
than a price equal to the Exercise Price in effect immediately
prior to such issuance or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to herein as the
“Applicable Exercise Price”) (the foregoing a
“Dilutive Issuance”), then immediately after such
Dilutive Issuance, the Exercise Price then in effect shall be
reduced to an amount equal to the New Issuance Price. For all
purposes of the foregoing (including, without limitation,
determining the adjusted Exercise Price and the New Issuance Price
under this Section 3(b)), the following shall be
applicable:
1.
Issuance of
Options. If the Company in any manner grants, issues or sells (or
enters into any agreement to grant, issue or sell) any options
(“options”) to purchase Common Stock or to purchase
securities that are convertible into or exercisable or exchangeable
for Common Stock (“convertible securities”) (other than
Exempt Issuances) and the lowest price per share for which one
share of Common Stock are at any time issuable upon the exercise of
any such option or upon conversion, exercise or exchange of any
convertible securities issuable upon exercise of any such option or
otherwise pursuant to the terms thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the
time of the granting, issuance or sale (or the time of execution of
such agreement to grant, issue or sell, as applicable) of such
option for such price per share. For purposes of this Section
3(b)(i), the “lowest price per share for which one share of
Common Stock is at any time issuable upon the exercise of any such
options or upon conversion, exercise or exchange of any convertible
securities issuable upon exercise of any such option or otherwise
pursuant to the terms thereof” shall be equal to (1) the
lower of (x) the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one
share of Common Stock upon the granting, issuance or sale (or
pursuant to the agreement to grant, issue or sell, as applicable)
of such option, upon exercise of such option and upon conversion,
exercise or exchange of any Convertible Security issuable upon
exercise of such opotion or otherwise pursuant to the terms thereof
and (y) the lowest exercise price set forth in such option for
which one Common Stock is issuable (or may become issuable assuming
all possible market conditions) upon the exercise of any such
options or upon conversion, exercise or exchange of any convertible
securities issuable upon exercise of any such option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid
or payable to the holder of such option (or any other Person) upon
the granting, issuance or sale (or the agreement to grant, issue or
sell, as applicable) such option, upon exercise of such option and
upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such option or otherwise pursuant to the
terms thereof plus the value of any other consideration received or
receivable by, or benefit conferred on, the holder of such option
(or any other Person). Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual
issuance of such Common Stock or of such convertible securities
upon the exercise of such options or otherwise pursuant to the
terms of or upon the actual issuance of such Common Stock upon
conversion, exercise or exchange of such convertible
securities.
9
2.
Issuance of
Convertible Securities. If the Company in any manner issues or
sells (or enters into any agreement to issue or sell) any
convertible securities (other than Exempt Issuances) and the lowest
price per share for which one Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise
pursuant to the terms thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the
issuance or sale (or the time of execution of such agreement to
issue or sell, as applicable) of such convertible securities for
such price per share. For the purposes of this Section 3(b)(ii),
the “lowest price per share for which one Common Stock is at
any time issuable upon the conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof” shall be equal to
(1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale (or pursuant to the
agreement to issue or sell, as applicable) of the Convertible
Security and upon conversion, exercise or exchange of such
Convertible Security or otherwise pursuant to the terms thereof and
(y) the lowest conversion price set forth in such Convertible
Security for which one Common Stock is issuable (or may become
issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms
thereof minus (2) the sum of all amounts paid or payable to the
holder of such Convertible Security (or any other Person) upon the
issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other
consideration received or receivable by, or benefit conferred on,
the holder of such Convertible Security (or any other Person).
Except as contemplated below, no further adjustment of the Exercise
Price shall be made upon the actual issuance of such Common Stock
upon conversion, exercise or exchange of such convertible
securities or otherwise pursuant to the terms thereof, and if any
such issuance or sale of such convertible securities is made upon
exercise of any options for which adjustment of this Warrant has
been or is to be made pursuant to other provisions of this Section
3(b), except as contemplated below, no further adjustment of the
Exercise Price shall be made by reason of such issuance or
sale.
3.
Change in option
Price or Rate of Conversion. If the purchase or exercise price
provided for in any options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any
convertible securities, or the rate at which any convertible
securities are convertible into or exercisable or exchangeable for
Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as
applicable, in connection with an event referred to in Section
3(a)), the Exercise Price in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price which would have
been in effect at such time had such options or convertible
securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate,
as the case may be, at the time initially granted, issued or sold.
For purposes of this Section 3(b)(iii), if the terms of any option
or Convertible Security that was outstanding as of the Initial
Exercise Date are increased or decreased in the manner described in
the immediately preceding sentence, then such option or Convertible
Security and the Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. No adjustment pursuant
to this Section 3(b) shall be made if such adjustment would result
in an increase of the Exercise Price then in effect.
10
4.
Calculation of
Consideration Received. If any option and/or Convertible Security
and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the
Company (as determined by the Holder, the “Primary
Security”, and such option and/or Convertible Security and/or
Adjustment Right, the “Secondary Securities” and
together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate
consideration per share of Common Stock with respect to such
Primary Security shall be deemed to be the lowest of (x) the
purchase price of such Unit, (y) if such Primary Security is an
option and/or Convertible Security, the lowest price per share for
which one Common Stock is at any time issuable upon the exercise or
conversion of the Primary Security in accordance with Section
3(b)(i) or 3(b)(ii) above and (z) the lowest VWAP of the Common
Stock on any Trading Day during the five (5) Trading Day period
(the “Adjustment Period”) immediately following the
public announcement of such Dilutive Issuance (for the avoidance of
doubt, if such public announcement is released prior to the opening
of the applicable Trading Market on a Trading Day, such Trading Day
shall be the first Trading Day in such five Trading Day period and
if this Warrant is exercised, on any given Exercise Date during any
such Adjustment Period, solely with respect to such portion of this
Warrant converted on such applicable Exercise Date, such applicable
Adjustment Period shall be deemed to have ended on, and included,
the Trading Day immediately prior to such Exercise Date). If any
Common Stock, options or convertible securities are issued or sold
or deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount of
consideration received by the Company therefor. If any Common
Stock, options or convertible securities are issued or sold for a
consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly
traded securities, in which case the amount of consideration
received by the Company for such securities will be the arithmetic
average of the VWAPs of such security for each of the five (5)
Trading Days immediately preceding the date of receipt. If any
Common Stock, options or convertible securities are issued to the
owners of the non-surviving entity in connection with any merger in
which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity
as is attributable to such Common Stock, options or convertible
securities (as the case may be). The fair value of any
consideration other than cash or publicly traded securities will be
determined jointly by the Company and the Holder. If such parties
are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be
determined within five (5) Trading Days after the tenth (10th) day
following such Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Holder. The
determination of such appraiser shall be final and binding upon all
parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.
11
5.
Record Date. If the
Company takes a record of the holders of Common Stock for the
purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, options or in convertible
securities or (B) to subscribe for or purchase Common Stock,
options or convertible securities, then such record date will be
deemed to be the date of the issuance or sale of the Common Stock
deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of
the granting of such right of subscription or purchase (as the case
may be).
c) Subsequent Rights Offerings.
In addition to any adjustments
pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided,
however,
that, to the extent that the Holder’s right to participate in
any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of
such Purchase Right to such extent) and such Purchase Right to such
extent shall be held in abeyance for the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“Distribution”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, that, to the extent
that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Distribution to such extent (or in the beneficial ownership of
any shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation). To
the extent that this Warrant has not been partially or completely
exercised at the time of such Distribution, such portion of the
Distribution shall be held in abeyance for the benefit of the
Holder until the Holder has exercised this
Warrant.
12
e)
Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been
accepted by the holders of fifty percent (50%) or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or
scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary,
in the event of a Fundamental Transaction, the Company or any
Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within 30
days after, the consummation of the Fundamental Transaction (or, if
later, the date of the public announcement of the applicable
Fundamental Transaction), purchase
this Warrant from the Holder by paying to the Holder an
amount of cash equal to the Black Scholes Value (as defined below)
of the remaining unexercised portion of this Warrant on the date of
the consummation of such Fundamental Transaction; provided, however, that, if the
Fundamental Transaction is not within the Company's control,
including not approved by the Company's Board of Directors, Holder
shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same
proportion), at the Black Scholes Value of the unexercised portion
of this Warrant, that is being offered and paid to the holders of
Common Stock of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash,
stock or any combination thereof, or whether the holders of Common
Stock are given the choice to receive from among alternative forms
of consideration in connection with the Fundamental Transaction;
provided,
further, that if
holders of Common Stock of the Company are not offered or paid any
consideration in such Fundamental Transaction, such holders of
Common Stock will be deemed to have received common stock of the
Successor Entity (which Entity may be the Company following such
Fundamental Transaction) in such Fundamental Transaction.
“Black Scholes
Value” means the value of this Warrant based on the
Black-Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg determined as of the day of
consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained
from the HVT function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction,
(C) the underlying price per share used in such calculation shall
be the greater of (i) the sum of the price per share being offered
in cash, if any, plus the value of any non-cash consideration, if
any, being offered in such Fundamental Transaction and (ii) the
highest VWAP during the period beginning on the Trading Day
immediately preceding the announcement of the applicable
Fundamental Transaction (or the consummation of the applicable
Fundamental Transaction, if earlier) and ending on the Trading Day
of the Holder’s request pursuant to this Section 3(e) and (D)
a remaining option time equal to the time between the date of the
public announcement of the applicable Fundamental Transaction and
the Termination Date and
(E) a zero cost of borrow. The payment
of the Black Scholes Value will be made by wire transfer of
immediately available funds (or such other consideration) within
the later of (i) five Business Days of the Holder’s election
and (ii) the date of consummation of the Fundamental
Transaction. The Company shall
cause any successor entity in a Fundamental Transaction in which
the Company is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.
13
f)
Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly deliver to the Holder
by facsimile or email a notice setting forth the Exercise Price
after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company (or any of its Subsidiaries) is a party, any sale or
transfer of all or substantially all of its assets, or any
compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the
Company shall cause to be delivered by facsimile or email to the
Holder at its last facsimile number or email address as it shall
appear upon the Warrant Register of the Company, at least 20
calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein.
14
h) Voluntary Adjustment By
Company. Subject to the rules and regulations of the Trading
Market, the Company may at any time during the term of this
Warrant, subject to the prior written consent of the Holder, reduce
the then current Exercise Price to any amount and for any period of
time deemed appropriate by the board of directors of the
Company.
Section
4. Transfer
of Warrant.
a) Transferability. This Warrant and all rights hereunder
(including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in
the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this
Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to
the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this
Warrant in full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.
b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.
c) Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.
d)
15
Section
5. Miscellaneous.
a) No Rights as Stockholder Until
Exercise; No Settlement in Cash. This Warrant does not
entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set
forth in Section 2(d)(i), except as expressly set forth in Section
3. Without limiting any rights of a Holder to receive Warrant
Shares on a “cashless exercise” pursuant to Section
2(c) or to receive cash payments pursuant to Section 2(d)(i) and
Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such
right may be exercised on the next succeeding Business
Day.
d) Authorized Shares.
The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
16
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
e) Jurisdiction. All questions
concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, and the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.
g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant or
the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies
hereunder.
17
h) Notices. Any notice, request or
other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.
i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.
j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.
k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be
modified or amended or the provisions hereof waived with the
written consent of the Company and the
Holder.
m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.
n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.
********************
(Signature Page Follows)
18
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
|
AMERICAN RESOURCES CORPORATION
|
|
By:__________________________________________
Name:
Title:
|
19
NOTICE OF EXERCISE
TO:
AMERICAN
RESOURCES CORPORATION
(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.
(2) Payment shall take
the form of (check applicable box):
[ ] in
lawful money of the United States; or
[ ] [if
permitted the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account
Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity:
_________________________________________________
Name of
Authorized Signatory:
___________________________________________________________________
Title
of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
20
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
|
Name:
|
|
|
|
(Please Print)
|
|
Address:
|
|
|
Phone Number:
Email Address:
|
(Please
Print)
______________________________________
______________________________________
|
|
Dated: _______________ __, ______
|
|
|
Holder’s
Signature:
|
|
|
Holder’s
Address:
|
|
21
Exhibit
5.1
Reply to:
cjh@huntlawgrp.com
June 9,
2021
Kingswood
Capital Markets,
a
division of Benchmark Investments, LLC
71
Battery Place, Suite 625
New
York, NY 10004
(“Placement
Agent”)
Re:
Registered Direct
Securities Offering of Class A Common Stock and Warrants to
Purchase shares of Class A Common Stock for American Resources
Corporation
Ladies
and Gentlemen:
We have
acted as counsel for American Resources Corporation, a Florida
corporation (the “Company”), regarding a registered
direct securities offering of Class A Common Stock of the Company
and the legality of the offer and sale of 8,600,000 shares of the
Class A Common Stock (the “Common Stock”) and Warrants
to purchase 4,300,000 shares of Common Stock (the
“Warrants”) (collectively, the
“Securities”). The shares of Common Stock underlying
the Warrants are referred to herein as the “Warrant
Shares.” The Company has prepared and filed in conformity
with the requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and the published rules and
regulations thereunder (the “Rules”) adopted by the
Securities and Exchange Commission (the “Commission”),
a Registration Statement on Form S-3 (No. 333-230786), including
the related base prospectus, prospectus supplement (collectively
the “Prospectus”) and all exhibits, financial schedules
and all documents and information deemed to be a part thereof (the
“Registration Statement”), covering the registration of
certain classes of securities of the Company (including the Common
Stock and Warrants) under the Securities Act for offer and sale
from time to time in accordance with Rule 415 of the Rules. The
Registration Statement was declared effective by the Commission on
June 4, 2019 (the “Effective Date”).
As to
questions of fact material to this opinion, we have relied upon,
with the consent of the Company and its Board of Directors: (i) the
representations of the Company, its officers and directors as set
forth in the aforementioned documents; and (ii) assurances from the
officers and directors of the Company regarding factual
representations as we have deemed necessary for purposes of
expressing the opinions set forth herein. We have not undertaken
any independent investigation to determine or verify any
information and representations made by the Company, its officers
and directors in the aforementioned documents and have relied upon
such information and representations as being accurate and complete
in expressing our opinion.
In
rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents
submitted to us as duplicates or certified or conformed copies, and
the authenticity of the originals of such latter documents. We have
assumed in rendering the opinions set forth herein that no person
or entity has taken any action inconsistent with the terms of the
aforementioned documents or prohibited by law. This opinion letter
is limited to the matters set forth herein and no opinions may be
implied or inferred beyond the matters expressly stated herein. We
undertake no, and hereby disclaim any, obligation to make any
inquiry after the date hereof or to advise you of any changes in
any matter set forth herein, whether based on a change in the law,
a change in any fact relating to the Company or any other person or
any other circumstance.
In
connection with the rendering of this opinion, we
have:
(a)
examined and are
familiar with originals or copies, certified or otherwise
identified to our satisfaction, of:
●
Articles of
Incorporation and amendments thereto (collectively, the
“Articles of Incorporation”);
●
Bylaws;
●
Minutes of the
Board of Directors meeting authorizing the issuance of the
Securities;
●
The Company’s
Registration Statement on Form S-3 and amendments thereto (File No.
333-230786);
●
The prospectus of
the Company included in the Registration Statement (the
“Prospectus”);
●
The Company’s
Prospectus Supplement dated June 7, 2021 (the “Prospectus
Supplement”);
●
The Placement Agent
Agreement dated June 7, 2021 between the Company and Kingswood
Capital Markets, a division of Benchmark Investments,
LLC;
●
The Securities
Purchase Agreement dated June 7, 2021, between the Company and
certain Purchasers parties thereto (the “Securities Purchase
Agreement”);
●
The Warrants as
executed by the Company;
●
such other
corporate records, certificates and other records and documents
that we have deemed appropriate; and
(b)
made such inquiries
of officers and representatives of the Company as we have deemed
necessary or appropriate for the opinions set forth below;
and
(c)
investigated such
questions of law as we have deemed necessary or appropriate for the
opinions set forth below.
Capitalized
terms used herein without definition shall have the meanings
ascribed to such terms in the Securities Purchase Agreement. Based
on the foregoing assumptions, and subject to the qualifications and
exceptions stated below, we are of the opinion that:
1.
The Company is a
corporation duly organized, validly existing and in good standing
under the laws of Florida. The Company has all requisite power and
authority, and all material governmental licenses, authorizations,
consents and approvals that are required to own and operate its
properties and assets and to carry on its business as now conducted
and as proposed to be conducted (all as described in the Company's
SEC Reports). To our knowledge, the Company is duly qualified to
transact business and is in good standing in each jurisdiction in
which the failure to qualify could have a Material Adverse Effect
on the Company.
2.
The Company has all
requisite power and authority (i) to execute, deliver and perform
the Transaction Documents, (ii) to issue, sell and deliver the
Shares, the Warrants and the Warrant
Shares pursuant to the Securities Purchase Agreement and
(iii) to carry out and perform its obligations under, and to
consummate the transactions contemplated by, the Transaction
Documents.
3.
All action on the
part of the Company, its directors and its stockholders necessary
for the authorization, execution and delivery by the Company of the
Transaction Documents, the authorization, issuance, sale and
delivery of the Securities pursuant to the Securities Purchase
Agreement and the consummation by the Company of the transactions
contemplated by the Transaction Documents has been duly taken. The
Transaction Documents have been duly and validly executed and
delivered by the Company and constitute the legal, valid and
binding obligation of the Company, enforceable against the Company
in accordance with their terms, except that (a) such enforceability
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and (b)
the remedies of specific performance and injunctive and other forms
of injunctive relief may be subject to equitable
defenses.
4.
The Shares and the
Warrants which are being issued on the date hereof pursuant to the
Securities Purchase Agreement have been duly authorized and validly
issued and are fully paid and nonassessable and free of preemptive
or similar rights, and have been issued in compliance with
applicable securities laws, rules and regulations. The Warrant
Shares to be issued upon the exercise of the Warrants have been
duly authorized and when issued in accordance with the terms of the
Warrants will be fully paid and nonassessable and free of
preemptive or similar rights. To our knowledge, except for rights
described in Schedule 3.1(g) of the Securities Purchase Agreement,
there are no other options, warrants, conversion privileges or
other rights presently outstanding to purchase or otherwise acquire
from the Company any capital stock or other securities of the
Company, or any other agreements to issue any such securities or
rights. The rights, privileges and preferences of the Common Stock
are as stated in the Company’s articles of incorporation
existing as of the date hereof.
5.
The Registration
Statement filed with the
Commission No. 333-230786 which registers the sale of the
Securities to the Purchasers is currently effective.
6.
To our knowledge,
the Company has filed all reports required to be filed by it under
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange
Act") during the past two years (the “SEC Reports”). As
of their respective filing dates, the SEC Reports complied in all
material respects as to form with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated
thereunder.
7.
The execution,
delivery and performance by the Company of, and the compliance by
the Company with the terms of, the Transaction Documents and the
issuance, sale and delivery of the Securities pursuant to the Securities
Purchase Agreement do not (a) conflict with or result in a
violation of any provision of law, rule or regulation or any rule
or regulation of any Trading Market applicable to the Company or of
the articles of incorporation or by-laws or other similar
organizational documents of the Company, (b) conflict with, result
in a breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
result in or permit the termination or modification of, any
agreement, instrument, order, writ, judgment or decree to which the
Company or its Subsidiaries is a party or is subject or (c) result
in the creation or imposition of any lien, claim or encumbrance on
any of the assets or properties of the Company or its
Subsidiaries.
8.
To our knowledge,
except as set forth in the Disclosure Schedules to the Securities
Purchase Agreement, there is no claim, action, suit, proceeding,
arbitration, investigation or inquiry, pending or threatened,
before any court or governmental or administrative body or agency,
or any private arbitration tribunal, against the Company or its
Subsidiaries, or any of its officers, directors or employees (in
connection with the discharge of their duties as officers,
directors and employees), of the Company or its Subsidiaries, or
affecting any of their respective properties or
assets.
9.
In connection with
the valid execution, delivery and performance by the Company of the
Transaction Documents, or the offer, sale, issuance or delivery of
the Securities or the
consummation of the transactions contemplated thereby, no consent,
license, permit, waiver, approval or authorization of, or
designation, declaration, registration or filing with, any court,
governmental or regulatory authority, or self-regulatory
organization, is required.
10.
The Company is not,
and after the consummation of the transactions contemplated by the
Transaction Documents shall not be, an Investment Company within
the meaning of the Investment Company Act of 1940, as
amended.
11.
In addition,
although we are not passing upon and do not assume any
responsibility for nor have we independently verified, the
accuracy, completeness or fairness of the statements contained in
the Registration Statement, the Prospectus and the Prospectus
Supplement, in connection with the preparation of the Registration
Statement, the Prospectus and the Prospectus Supplement, we have
participated in conferences with representatives and counsel of the
Placement Agent and with certain officers and employees of, and
independent certified public accountants for, the Company, at which
conferences the contents of the Registration Statement, the
Prospectus and the Prospectus Supplement and related matters were
discussed, and we advise the Placement Agent that nothing has come
to our attention that would lead us to believe that:
●
as of its effective
date, the Registration Statement (other than the financial
statements, related schedules and other financial data therein, as
to which we express no opinion), contained an untrue statement of a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or that,
●
as of its date and
as of the date hereof, the Prospectus and the Prospectus Supplement
(other than the financial statements, related schedules and other
financial data therein, as to which we express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
The
opinions we express above are based upon a review only of those
laws, statutes, rules, ordinances and regulations which, in our
experience, a lawyer who is a member of the bar of the State of
Florida exercising customary professional diligence would
reasonably recognize as being applicable to the transaction
contemplated by the Transaction Documents. We have not examined and
we do not express any opinion herein concerning any laws other than
the laws of the States of New York and Florida and, to the extent
expressly set forth herein, the federal laws of the United States
of America, and we express no opinion as to the extent to which any
other laws of any jurisdiction are applicable to the subject matter
hereof.
The
opinions set forth above are subject to the effects of (i)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights
generally, (ii) general equitable principles (whether considered in
a proceeding in equity or at law), and (iii) an implied covenant of
good faith and fair dealing.
.
Sincerely,
LAW
OFFICE OF CLIFFORD J. HUNT, P.A.
/s/: Clifford J. Hunt, Esquire
cc:
American Resources
Corporation
Exhibit 10.1
PERSONAL AND CONFIDENTIAL
June 7,
2021
Mark
Jensen
Chief
Executive Officer
American
Resources Corporation
12115
Visionary Way, Suite 174
Fishers,
Indiana 46038
Dear
Mr. Jensen:
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:
Sam Fleischman
Title:
Supervisory Principal
Accepted
and Agreed to as of
the
date first written above:
American Resources Corporation
By:
Name:
Mark Jensen
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.
Exhibit 10.2
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as
of June 7, 2021, between American Resources Corporation., a Florida
corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), the Company
desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the
meaning ascribed to such term in Section 4.5.
“Action” shall have the
meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.
“Board of Directors” means
the board of directors of the Company.
“Business Day” means any
day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to
remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions
or the closure of any physical branch locations at the direction of
any governmental authority so long as the electronic funds transfer
systems (including for wire transfers) of commercial banks in The
City of New York generally are open for use by customers on such
day.
“Closing” means the
closing of the purchase and sale of the Securities pursuant to
Section 2.1.
“Closing Date” means the
Trading Day on which all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to
pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the second
(2nd)
Trading Day following the date hereof.
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means the
class A common stock of the Company, par value $0.0001 per share,
and any other class of securities into which such securities may
hereafter be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.
“Company Counsel” means
The Law Offices of Clifford J. Hunt P.A. with offices located at
8200 Seminole Blvd, Seminole, FL 33772.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered
concurrently herewith.
“Disclosure Time” means,
(i) if this Agreement is signed on a day that is not a Trading Day
or after 9:00 a.m. (New York City time) and before midnight (New
York City time) on any Trading Day, 9:01 a.m. (New York City time)
on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent,
and (ii) if this Agreement is signed between midnight (New York
City time) and 9:00 a.m. (New York City time) on any Trading Day,
no later than 9:01 a.m. (New York City time) on the date hereof,
unless otherwise instructed as to an earlier time by the Placement
Agent.
“Evaluation Date” shall
have the meaning ascribed to such term in Section
3.1(s).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Exempt Issuance” means
the issuance of (a) Common Stock or options to employees,
officers or directors of the Company pursuant to the
Company’s 2018 Stock Incentive Plan or pursuant to the
compensation agreements previously authorized by the Board of
Directors; (b) securities upon the exercise or exchange of or
conversion of securities exercisable or exchangeable for or
convertible into Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or
conversion price of such securities (other than in connection with
stock splits or combinations) or to extend the term of such
securities, and (c) securities issued pursuant to acquisitions
or strategic transactions and the payment of contractor invoices in
the ordinary course of business approved by a majority of the
disinterested directors of the Company, provided that such
securities are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights that
require or permit the filing of any registration statement in
connection therewith during the prohibition period in
Section 4.10(a) herein, and provided that any such
issuance shall only be to a Person (or to the equityholders of a
Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.
“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).
“Indebtedness” shall have
the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property
Rights” shall have the meaning ascribed to such term
in Section 3.1(p).
“Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
“Legend Removal Date”
shall have the meaning ascribed to such term in Section
4.1(c).
“Lock-Up Agreements” means
the written agreement, in the form acceptable to the Placement
Agents, addressed to the Placement Agents by each of the Company's
directors and officers.
“Loeb” means Loeb &
Loeb LLP, with offices located at 345 Prak Avenue, New York, New
York 10154
“Material Adverse Effect”
shall have the meaning assigned to such term in Section
3.1(b).
“Material Permits” shall
have the meaning ascribed to such term in Section
3.1(n).
“Participation Maximum”
shall have the meaning ascribed to such term in Section
4.11(a).
“Per Share Purchase Price”
equals $3.50, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this
Agreement.
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Placement Agency
Agreement” means the Placement Agency Agreement, dated
June 7, 2021, by and among the Company and the Placement
Agent.
“Placement
Agent” means Kingswood Capital Markets, division of
Benchmark Investments, Inc.
“Pro
Rata Portion” shall have the meaning ascribed to such
term in Section 4.11(e).
“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“Prospectus
Supplement” means the prospectus supplement to the
base prospectus included in the Registration Statement with respect
to the Securities filed pursuant to Rule 424(b) of the Securities
Act that is filed with the Commission and delivered by the Company
to each Purchaser at the Closing.
“Purchase Warrants” means,
collectively, the common stock purchase warrants delivered to the
Purchasers at the Closing in accordance with Section 2.2(a) hereof,
which Purchase Warrants shall be exercisable immediately and have a
term of exercise equal to five (5) years, in the form acceptable to
the Placement Agent and the Purchasers.
“Purchase Warrant Shares”
means the shares of Common Stock issuable upon exercise of the
Purchase Warrants.
“Purchaser Party” shall
have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means, collectively, the Company’s Registration Statement on
Form S-3 (File No. 333-230786), including the base prospectus
contained therein, with respect to the Securities as amended as of
the date hereof, including the Prospectus Supplement, and all
exhibits filed with or incorporated by reference into such
registration statement.
“Required Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).
“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(h).
“Securities” means the
Shares, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
“Shares” means the shares
of Common Stock issued or issuable to each Purchaser pursuant to
this Agreement.
“Short Sales” means all
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not
be deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate
amount to be paid for Shares and Warrants purchased hereunder as
specified below such Purchaser’s name on the signature page
of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately
available funds.
“Subsequent Financing”
shall have the meaning ascribed to such term in Section
4.11(a).
“Subsequent Financing
Notice” shall have the meaning ascribed to such term
in Section 4.11(b).
“Subsidiary” means any
subsidiary of the Company as set forth on Schedule 3.1(a), and shall,
where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.
“Trading Day” means a day
on which the principal Trading Market is open for
trading.
“Trading Market” means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, or the New York Stock Exchange (or any
successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Warrants, the Placement Agency Agreement,
the Lock-Up Agreements, all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Transfer Agent” means
VStock Transfer LLC, the current transfer agent of the Company,
with a mailing address of 18 Lafayette Place, Woodmere, New York,
and any successor transfer agent of the Company.
“Variable Rate
Transaction” shall have the meaning ascribed to such
term in Section 4.12(b).
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)); (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable;
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Sheet Open Market published by OTC Markets Group, Inc.
(or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per shares of Common
Stock so reported; or (d) in all other cases, the fair market value
of one share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchasers of a majority in
interest of the Securities then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be
paid by the Company.
“Warrants” means,
collectively, the Purchase Warrants.
“Warrant Shares” means,
collectively, the Purchase Warrant Shares.
ARTICLE II.
PURCHASE
AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $30,100,000 of Shares and
Purchase Warrants; Each Purchaser’s Subscription Amount as
set forth on the signature page hereto executed by such Purchaser
shall be made available for “Delivery Versus Payment”
settlement with the Company or its designee. The Company shall
deliver to each Purchaser its respective Shares, and a Purchase
Warrant as determined pursuant to Section 2.2(a), and the Company
and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the
Closing shall occur at the offices of Loeb or such other location
as the parties hereto shall mutually agree. Unless otherwise
directed by the Placement Agent, settlement of the Shares shall
occur via “Delivery Versus Payment”
(i.e.,
on the Closing Date, the Company shall issue the Shares registered
in the Purchasers’ names and addresses and released by the
Transfer Agent directly to the account(s) at the Placement Agent
identified by each Purchaser; upon receipt of such Shares, the
Placement Agent shall promptly electronically deliver such Shares
to the applicable Purchaser, and payment therefor shall be made by
the Placement Agent (or its clearing firm) by wire transfer to the
Company).
Notwithstanding
anything herein to the contrary, if at any time on or after the
time of execution of this Agreement by the Company and an
applicable Purchaser, through, and including the time immediately
prior to the Closing (the “Pre-Settlement Period”), if
such Purchaser sells to any Person all, or any portion, of any
Common Stock to be issued hereunder to such Purchaser at the
Closing (collectively, the “Pre-Settlement Shares”),
such Purchaser shall, automatically hereunder (without any
additional required actions by such Purchaser or the Company), be
deemed to be unconditionally bound to purchase, and the Company
shall be deemed unconditionally bound to sell, such Pre-Settlement
Shares to such Purchaser at the Closing; provided, that the Company
shall not be required to deliver any Pre-Settlement Shares to such
Purchaser prior to the Company’s receipt of the Subscription
Amount for such Pre-Settlement Shares hereunder; provided, further,
that the Company hereby acknowledges and agrees that the forgoing
shall not constitute a representation or covenant by such Purchaser
as to whether or not such Purchaser will elect to sell any
Pre-Settlement Shares during the Pre-Settlement Period. The
decision to sell any shares of Common Stock will be made in the
sole discretion of such Purchaser from time to time, including
during the Pre-Settlement Period.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to each Purchaser and the Placement Agent the
following:
(i) this Agreement duly
executed by the Company;
(ii) a
legal opinion of Company Counsel, in the form acceptable to the
Placement Agent, Loeb, and each of the Purchasers;
(iii) executed
Lock-Up Agreements;
(iv) Reserved
(v) the Company shall
have provided each Purchaser with the Company’s wire
instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;
(vi) a
copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit or Withdrawal at Custodian
system (“DWAC”) Shares equal to
such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such
Purchaser;
(vii) a
Purchase Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 50% of
such Purchaser’s Shares with an exercise price equal to
$3.50, subject to adjustment therein;
(viii) cold
comfort letters, addressed to the Placement Agent from each of
MaloneBailey, LLP, the former registered independent accountant of
the Company and BF Borgers CPA, PC, the current registered
independent accountant of the Company, each in a form and substance
reasonably satisfactory in all respects to the Placement Agent;
and
(ix) the
Prospectus and the Prospectus Supplement (which may be delivered in
accordance with Rule 172 under the Securities Act).
(b) On or prior to the
Closing Date, each Purchaser shall deliver or cause to be delivered
to the Company, the following:
(i) this Agreement duly
executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount, which shall be made
available for “Delivery Versus Payment” settlement with
the Company or its designee.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being
met:
(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) on the Closing Date of the representations and warranties
of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such
date);
(ii) all
obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.
(b) The respective
obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being
met:
(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of
such date);
(ii) all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
(v) from the date
hereof to the Closing Date, trading in the Common Stock shall not
have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing
Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking
moratorium have been declared either by the United States or New
York State authorities nor shall there have occurred any material
outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any
material adverse change which, in each case, in the reasonable
judgment of such Purchaser, makes it impracticable or inadvisable
to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company.
Except as set forth in the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof and shall qualify any
representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company and
their respective jurisdictions of incorporation or formation are
set forth on Schedule
3.1(a). The Company owns,
directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all
of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or
purchase securities. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of
its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in:
(i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(c) Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Board of
Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required
Approvals. This Agreement and each other Transaction Document to
which it is a party has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
(d) No Conflicts. The execution,
delivery and performance by the Company of this Agreement and the
other Transaction Documents to which it is a party, the issuance
and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, anti-dilution or similar
adjustments, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to
the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which
the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.
(e) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.4 of this Agreement, (ii) the filing
with the Commission of the Prospectus Supplement, (iii)
application(s) to each applicable Trading Market for the listing of
the Shares and Warrant Shares for trading thereon in the time and
manner required thereby and (iv) the filing of a Form D with the
Commission and such filings as are required to be made under
applicable state securities laws (collectively, the
“Required
Approvals”).
(f) Issuance of the Securities;
Registration. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company.
The Warrant Shares, when issued in accordance with the terms of the
Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement and
the Warrants. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities
Act, which became effective on May 13, 2020, and any such
amendments and supplements thereto as may have been required prior
to the date of this Agreement. The Registration Statement is
effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the prospectus, included
therein (the “Prospectus”) has been
issued by the Commission and no proceedings for that purpose have
been instituted or, to the knowledge of the Company, are threatened
by the Commission. The Company, if required by the rules and
regulations of the Commission, shall file the Prospectus Supplement
with the Commission pursuant to Rule 424(b). At the time the
Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and
will conform in all material respects to the requirements of the
Securities Act and did not and will not 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; and the Prospectus and any amendments or
supplements thereto, at the time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form S-3
under the Securities Act and it meets the transaction requirements
with respect to the aggregate market value of the voting and
non-voting common equity held by non-affiliates of the Company, as
set forth in General Instruction I.B.1 of Form S-3.
(g) Capitalization. The
capitalization of the Company as of the date hereof is as set forth
on Schedule 3.1(g),
which Schedule
3.1(g) shall also include the number of shares of Common
Stock owned beneficially, and of record, by Affiliates of the
Company as of the date hereof. Except as set forth on Schedule 3.1(g), the Company
has not issued any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option
plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans or Rule 10b5-1
trading plans and pursuant to the conversion and/or exercise of
Common Stock Equivalents outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as
disclosed in the Registration Statement, the Prospectus and the
Prospectus Supplement, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common
Stock or other securities to any Person (other than the
Purchasers). There are no outstanding securities or instruments of
the Company or any Subsidiary with any provision that adjusts the
exercise, conversion, exchange or reset price of such security or
instrument upon an issuance of securities by the Company or any
Subsidiary. There are no outstanding securities or instruments of
the Company or any Subsidiary that contain any redemption or
similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. Other than as permitted under the
Company’s stock option and restricted stock plans, the
Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan
or agreement. All of the outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. There are
no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to
which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s
stockholders.
(h) SEC Reports; Financial
Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and
the Prospectus Supplement, being collectively referred to herein as
the “SEC
Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, 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 the light of the circumstances
under which they were made, not misleading. The Company has never
been an issuer subject to Rule 144(i) under the Securities Act. The
financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) Material Changes; Undisclosed Events,
Liabilities or Developments. Since the date of the latest
audited financial statements included within the SEC Reports,
except as set forth on Schedule 3.1(i), (i) there has
been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed
in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock
option plans or Rule 10b5-1 trading plans. The Company does not
have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Securities
contemplated by this Agreement or as set forth on Schedule 3.1(i), no event,
liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is
made or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is
made.
(j) Litigation. Except as set forth
on Schedule 3.1(j),
there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”). None of the
Actions set forth on Schedule 3.1(j), (i) adversely
affects or challenges the legality, validity or enforceability of
any of the Transaction Documents or the Securities or (ii) could,
if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any
current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities
Act.
(k) Labor Relations. No labor
dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could
reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the
knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment
of each such executive officer does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms
and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material
Adverse Effect.
(m) Environmental Laws. The
Company and its Subsidiaries (i) are in compliance with all
federal, state, local and foreign laws relating to pollution or
protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively,
“Hazardous
Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials, as well as all authorizations, codes, decrees, demands,
or demand letters, injunctions, judgments, licenses, notices or
notice letters, orders, permits, plans or regulations, issued,
entered, promulgated or approved thereunder (“Environmental Laws”);
(ii) have received all permits licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where in
each clause (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
(n) Regulatory Permits. The Company
and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit.
(o) Title to Assets. The Company
and the Subsidiaries have good and marketable title in fee simple
to all real property owned by them and good and marketable title in
all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the
Company and the Subsidiaries and (ii) Liens for the payment of
federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are
in compliance.
(p) Intellectual Property. The
Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). None of, and neither the Company
nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or
infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect.
Except as disclosed in the Registration Statement, Prospectus and
Prospectus Supplement, to the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(q) Insurance. The Company and the
Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which the Company
and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage at least equal to the
aggregate Subscription Amount. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant
increase in cost.
(r) Transactions with Affiliates and
Employees. Except as set forth on Schedule 3.1(r), none of the
officers or directors of the Company or any Subsidiary and, to the
knowledge of the Company, none of the employees of the Company or
any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from,
providing for the borrowing of money from or lending of money to or
otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i)
payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.
(s) Sarbanes-Oxley; Internal Accounting
Controls. The Company and the Subsidiaries are in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the
Subsidiaries and designed such disclosure controls and procedures
to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. The
Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the
Company and the Subsidiaries as of the end of the period covered by
the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation
Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act)
of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its
Subsidiaries.
(t) Certain Fees. Except as set
forth in the Prospectus Supplement and the compensation payable to
the Placement Agent pursuant to the terms of the Placement Agency
Agreement, no brokerage or finder’s fees or commissions are
or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The
Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.
(u) Investment Company. The Company
is not, and is not an Affiliate of, and immediately after receipt
of payment for the Securities, will not be or be an Affiliate of,
an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(v) Registration Rights. Except as
set forth on Schedule
3.1(v), no Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary.
(w) Listing and Maintenance
Requirements. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration. Except as set forth in the Registration Statement and
Prospectus, the Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no
reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company or another
established clearing corporation and the Company is current in
payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such
electronic transfer.
(x) Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s articles
of incorporation, as amended (or similar charter documents), or the
laws of its state of incorporation that is or could become
applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.
(y) Disclosure. Except with respect
to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has
provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed
in the Prospectus Supplement. The Company understands and confirms
that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, is true and
correct and does not 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 the light of the circumstances
under which they were made, not misleading. The press releases
disseminated by the Company during the twelve months preceding the
date of this Agreement taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made and when made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
(z) No Integrated Offering.
Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any
of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or
designated.
(aa) Solvency.
Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted, including its capital needs, taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive
pursuant to this Agreement, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its
liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one
year from the Closing Date. Schedule 3.1(aa) sets forth as
of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this
Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others,
whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.
(bb) Tax
Status. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i)
has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and
declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside
on its books provision reasonably adequate for the payment of all
material taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.
(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, has
(i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any
provision of FCPA.
(dd) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(dd) of the
Disclosure Schedules. To the knowledge and belief of the Company,
such accounting firm (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the
Company’s Annual Report on Form 10-K for the fiscal year
ending December 31, 2020.
(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The
Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and
any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The
Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company
and its representatives.
(ff) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein
to the contrary notwithstanding (except for Sections 3.2(f) and
4.14 hereof), it is understood and acknowledged by the Company
that: (i) none of the Purchasers has been asked by the Company to
agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing
of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded
securities; (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser
is a party, directly or indirectly, presently may have a
“short” position in the Common Stock, and (iv) each
Purchaser shall not be deemed to have any affiliation with or
control over any arm’s length counter-party in any
“derivative” transaction. The Company further
understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period
that the Securities are outstanding, and (z) such hedging
activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the time
that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction
Documents.
(gg) Regulation
M Compliance. The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or
agreed to pay to any Person any compensation for soliciting another
to purchase any other securities of the Company, other than, in the
case of clauses (ii) and (iii), compensation paid to the Placement
Agent in connection with the placement of the
Securities.
(hh) Intentionally
Omitted.
(ii) Stock
Option Plans. Each stock option granted by the Company under
the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii)
with an exercise price at least equal to the fair market value of
the Common Stock on the date such stock option would be considered
granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The
Company has not knowingly granted, and there is no and has been no
Company policy or practice to knowingly grant, stock options prior
to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their
financial results or prospects.
(jj) Office
of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer,
agent, employee or Affiliate of the Company or any Subsidiary is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”).
(kk) U.S.
Real Property Holding Corporation. The Company is not and
has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon Purchaser’s
request.
(ll) Bank
Holding Company Act. Neither the Company nor any of its
Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more
of the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.
(mm) Money
Laundering. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company or any Subsidiary,
threatened.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other
Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a
specific date therein, in which case they shall be accurate as of
such date):
(a) Organization;
Authority. Such Purchaser is
either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and
delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction
Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as
applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(b) Understandings
or Arrangements. Such Purchaser
is acquiring the Securities as principal for its own account and
has no direct or indirect arrangement or understandings with any
other persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting such
Purchaser’s right to sell the Securities pursuant to the
Registration Statement, Prospectus and Prospectus Supplement or
otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its
business.
(c) Purchaser
Status. At the time such
Purchaser was offered the Securities, it was, and as of the date
hereof it is, and on each date on which it exercises any Warrants,
it will be either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities
Act.
(d) Experience
of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete
loss of such investment.
(e) Access
to Information. Such Purchaser
acknowledges that it has had the opportunity to review the
Transaction Documents (including all exhibits and schedules
thereto) and the SEC Reports and has been afforded, (i) the
opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities;
(ii) access to information about the Company and its financial
condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment
decision with respect to the investment. Such Purchaser
acknowledges and agrees that neither the Placement Agent nor any
Affiliate of the Placement Agent has provided such Purchaser with
any information or advice with respect to the Securities nor is
such information or advice necessary or desired. Neither the
Placement Agent nor any Affiliate thereof has made or makes any
representation as to the Company or the quality of the Securities
and the Placement Agent and any Affiliate may have acquired
non-public information with respect to the Company which such
Purchaser agrees need not be provided to it. In connection
with the issuance of the Securities to such Purchaser, neither the
Placement Agent nor any of its Affiliates has acted as a financial
advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such
Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during
the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any
other Person representing the Company setting forth the material
pricing terms of the transactions contemplated hereunder and ending
immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to
the portion of assets managed by the portfolio manager that made
the investment decision to purchase the Securities covered by this
Agreement. Other than to other Persons party to this Agreement or
to such Purchaser’s representatives, including, without
limitation, its officers, directors, partners, legal and other
advisors, employees, agents and Affiliates, such Purchaser has
maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms
of this transaction). Notwithstanding the foregoing, for the
avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or
similar transactions in the future.
(g) General
Solicitation. Such Purchaser is
not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or, to the
knowledge of such Purchaser, any other general solicitation or
general advertisement.
The
Company acknowledges and agrees that the representations contained
in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby. Notwithstanding the
foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any
actions, with respect to locating or borrowing shares in order to
effect Short Sales or similar transactions in the
future.
ARTICLE IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Issuance
of Securities.
The
Securities shall be issued free of legends.
4.2 Furnishing
of Information. (a) Until the
earliest of the time that (i) no Purchaser owns Securities or (ii)
all of the Warrants have expired, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of
the Exchange Act;: and
(b) At any time during the period
commencing from the six (6) month anniversary of the date hereof
and ending at such time that all of the Purchase Warrant Shares
(assuming cashless exercise) may be sold without the requirement
for the Company to be in compliance with Rule 144(c)(1) and
otherwise without restriction or limitation pursuant to Rule 144,
if the Company (i) shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) or (ii) has ever
been an issuer described in Rule 144(i)(1)(i) or becomes such an
issuer in the future, and the Company shall fail to satisfy any
condition set forth in Rule 144(i)(2) (a “Public Information
Failure”) then, in addition to such Purchaser’s other
available remedies, the Company shall pay to a Purchaser, in cash,
as partial liquidated damages and not as a penalty, by reason of
any such delay in or reduction of its ability to sell the Purchase
Warrant Shares, an amount in cash equal to one percent (1.0%) of
the aggregate Exercise Price of such Purchaser’s Purchase
Warrants on the day of a Public Information Failure and on every
thirtieth (30th) day (pro rated for periods totaling less than
thirty days) thereafter until the earlier of (a) the date such
Public Information Failure is cured and (b) such time that such
public information is no longer required for the Purchasers to
transfer the Purchase Warrant Shares pursuant to Rule 144. The
payments to which a Purchaser shall be entitled pursuant to this
Section 4.2(b) are referred to herein as “Public Information
Failure Payments.” Public Information Failure Payments shall
be paid on the earlier of (i) the last day of the calendar month
during which such Public Information Failure Payments are incurred
and (ii) the third (3rd) Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured. In
the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full. Nothing herein
shall limit such Purchaser’s right to pursue actual damages
for the Public Information Failure, and such Purchaser shall have
the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief
4.3 Integration.
The Company shall not sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of
such other transaction unless shareholder approval is obtained
before the closing of such subsequent
transaction.
4.4 Securities
Laws Disclosure; Publicity. The
Company shall (a) by the Disclosure Time, issue a press release
disclosing the material terms of the transactions contemplated
hereby, and (b) file a Current Report on Form 8-K, including the
Transaction Documents as exhibits thereto, with the Commission
within the time required by the Exchange Act. From and after the
issuance of such press release, the Company represents to the
Purchasers that it shall have publicly disclosed all material,
non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents. In
addition, effective upon the issuance of such press release, the
Company acknowledges and agrees that any and all confidentiality or
similar obligations under any agreement, whether written or oral,
between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on
the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate. The Company and each Purchaser
shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release
nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public
statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (a) as required by
federal securities law in connection with the filing of final
Transaction Documents with the Commission and (b) to the extent
such disclosure is required by law or Trading Market or FINRA
regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause
(b).
4.5 Shareholder
Rights Plan. No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that any Purchaser is an
“Acquiring
Person” under any control
share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement
between the Company and the Purchasers.
4.6 Non-Public
Information. Except with
respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, which shall be disclosed
pursuant to Section 4.4, the Company covenants and agrees that
neither it, nor any other Person acting on its behalf will provide
any Purchaser or its agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such
Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential.
The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company. To the extent that the Company, any of
its Subsidiaries, or any of their respective officers, directors,
agents, employees or Affiliates delivers any material, non-public
information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall
not have any duty of confidentiality to the Company, any of its
Subsidiaries, or any of their respective officers, directors,
agents, employees or Affiliates, or a duty to the Company, any of
its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates not to trade on the basis of, such
material, non-public information, provided that the Purchaser shall
remain subject to applicable law. To the extent that any notice
provided pursuant to any Transaction Document constitutes, or
contains, material, non-public information regarding the Company or
any Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.7 Use of
Proceeds. Except as set forth
on Schedule 4.7
attached hereto, the Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital purposes and shall not use such proceeds: (a) for
the satisfaction of any portion of the Company’s debt (other
than payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) for the
redemption of any Common Stock or Common Stock Equivalents, (c) for
the settlement of any outstanding litigation or (d) in violation of
FCPA or OFAC regulations.
4.8 Indemnification
of Purchasers. Subject to the
provisions of this Section 4.8, the Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, members,
partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as
a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
solely based upon a material breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or
any conduct
by such Purchaser Party which is finally judicially determined to
constitute fraud, gross negligence or willful
misconduct) or
(c) in connection with any registration statement of the Company
providing for the resale by the Purchasers of the Warrant Shares
issued and issuable upon exercise of the Warrants, the Company will
indemnify each Purchaser Party, to the fullest extent permitted by
applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation,
reasonable attorneys’ fees) and expenses, as incurred,
arising out of or relating to (i) any untrue or alleged untrue
statement of a material fact contained in such registration
statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus or
supplement thereto, in the light of the circumstances under which
they were made) not misleading, except to the extent, but only to
the extent, that such untrue statements or omissions are based
solely upon information regarding such Purchaser Party furnished in
writing to the Company by such Purchaser Party expressly for use
therein, or (ii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act or any state securities
law, or any rule or regulation thereunder in connection
therewith. If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party
under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The
indemnification required by this Section 4.8 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are
incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.
4.9 Reservation
of Common Stock. As of the date
hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights,
a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and
Warrant Shares pursuant to any exercise of the
Warrants.
4.10 Listing
of Common Stock. The Company
hereby agrees to use best efforts to maintain the listing or
quotation of the Common Stock on the Trading Market on which it is
currently listed, and concurrently with the Closing, the Company
shall apply to list or quote all of the Shares and Warrant Shares
on such Trading Market and promptly secure the listing of all of
the Shares and Warrant Shares on such Trading Market. The Company
further agrees, if the Company applies to have the Common Stock
traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take
such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market
as promptly as possible. The Company will then take all action
reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company agrees
to maintain the eligibility of the Common Stock for electronic
transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.
4.11 Participation
in Future Financing.
(a) From
the date hereof until the date that is the twelve (12) month
anniversary of the Closing Date, upon any issuance by the Company
or any of its Subsidiaries of Common Stock or Common Stock
Equivalents for cash consideration, Indebtedness or a combination
of units thereof (a “Subsequent Financing”),
each Purchaser shall have the right to participate in up to an
amount of the Subsequent Financing equal to fifty percent (50%) of
the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the
Subsequent Financing.
(b) Between the time
period of 4:00 pm (New York City time) and 6:00 pm (New York City
time) on the Trading Day immediately prior to the Trading Day of
the expected announcement of the Subsequent Financing (or, if the
Trading Day of the expected announcement of the Subsequent
Financing is the first Trading Day following a holiday or a weekend
(including a holiday weekend), between the time period of 4:00 pm
(New York City time) on the Trading Day immediately prior to such
holiday or weekend and 2:00 pm (New York City time) on the day
immediately prior to the Trading Day of the expected announcement
of the Subsequent Financing), the Company shall deliver to each
Purchaser a written notice of the Company’s intention to
effect a Subsequent Financing (a “Subsequent Financing
Notice”), which notice shall describe in reasonable
detail the proposed terms of such Subsequent Financing, the amount
of proceeds intended to be raised thereunder and the Person or
Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet and transaction
documents relating thereto as an attachment.
(c) Any Purchaser
desiring to participate in such Subsequent Financing must provide
written notice to the Company by 6:30 am (New York City time) on
the Trading Day following the date on which the Subsequent
Financing Notice is delivered to such Purchaser (the
“Notice Termination
Time”) that such Purchaser is willing to participate
in the Subsequent Financing, the amount of such Purchaser’s
participation, and representing and warranting that such Purchaser
has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice. If the Company
receives no such notice from a Purchaser as of such Notice
Termination Time, such Purchaser shall be deemed to have notified
the Company that it does not elect to participate in such
Subsequent Financing.
(d) If, by the Notice
Termination Time, notifications by the Purchasers of their
willingness to participate in the Subsequent Financing (or to cause
their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may
effect the remaining portion of such Subsequent Financing on the
terms and with the Persons set forth in the Subsequent Financing
Notice.
(e) If, by the Notice
Termination Time, the Company receives responses to a Subsequent
Financing Notice from Purchasers seeking to purchase more than the
aggregate amount of the Participation Maximum, each such Purchaser
shall have the right to purchase its Pro Rata Portion (as defined
below) of the Participation Maximum. “Pro Rata Portion” means
the ratio of (x) the Subscription Amount of Securities purchased on
the Closing Date by a Purchaser participating under this Section
4.11 and (y) the sum of the aggregate Subscription Amounts of
Securities purchased on the Closing Date by all Purchasers
participating under this Section 4.11.
(f) The Company must
provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set
forth above in this Section 4.11, if the definitive agreement
related to the initial Subsequent Financing Notice is not entered
into for any reason on the terms set forth in such Subsequent
Financing Notice within two (2) Trading Days after the date of
delivery of the initial Subsequent Financing Notice.
(g) The
Company and each Purchaser agree that, if any Purchaser elects to
participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or
provision that, directly or indirectly, will, or is intended to,
exclude one or more of the Purchasers from participating in a
Subsequent Financing, including, but not limited to, provisions
whereby such Purchaser shall be required to agree to any
restrictions on trading as to any of the Securities purchased
hereunder or be required to consent to any amendment to or
termination of, or grant any waiver, release or the like under or
in connection with, this Agreement, without the prior written
consent of such Purchaser. In addition, the Company and each
Purchaser agree that, in connection with a Subsequent Financing,
the transaction documents related to the Subsequent Financing shall
include a requirement for the Company to issue a press release by
9:30 am (New York City time) on the Trading Day of execution of the
transaction documents in such Subsequent Financing (or, if the date
of execution is not a Trading Day, on the immediately following
Trading Day) that discloses the material terms of the transactions
contemplated by the transaction documents in such Subsequent
Financing.
(h) Notwithstanding
anything to the contrary in this Section 4.11 and unless otherwise
agreed to by such Purchaser, the Company shall either confirm in
writing to such Purchaser that the transaction with respect to the
Subsequent Financing has been abandoned or shall publicly disclose
its intention to issue the securities in the Subsequent Financing,
in either case in such a manner such that such Purchaser will not
be in possession of any material, non-public information, by 9:30
am (New York City time) on the second (2nd) Trading Day
following date of delivery of the Subsequent Financing Notice. If
by 9:30 am (New York City time) on such second (2nd) Trading Day, no
public disclosure regarding a transaction with respect to the
Subsequent Financing has been made, and no notice regarding the
abandonment of such transaction has been received by such
Purchaser, such transaction shall be deemed to have been abandoned
and such Purchaser shall not be deemed to be in possession of any
material, non-public information with respect to the Company or any
of its Subsidiaries.
(i) Notwithstanding the
foregoing, this Section 4.11 shall not apply in respect of an
Exempt Issuance.
4.12 Subsequent
Equity Sales.
(a) From the date
hereof until sixty (60) days after the Closing Date, neither the
Company nor any Subsidiary shall (i) issue, enter into any
agreement to issue or announce the issuance or proposed issuance of
any shares of Common Stock or Common Stock Equivalents, or (ii) or
(ii) file any registration statement or any amendment or supplement
thereto, other than the Prospectus Supplement.
(b) From the date
hereof until such time as no Purchaser holds any of the Warrants
the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents (or a
combination of units thereof) involving a Variable Rate
Transaction. “Variable Rate
Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the
right to receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into,
or effects a transaction under, any agreement, including, but not
limited to, an "at the market" offering or equity line of credit,
whereby the Company may issue securities at a future determined
price. Any Purchaser shall be entitled to obtain injunctive relief
against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.
(c) Notwithstanding the
foregoing, this Section 4.12 shall not apply in respect of an
Exempt Issuance, except that no Variable Rate Transaction shall be
an Exempt Issuance.
4.13 Equal
Treatment of Purchasers. No
consideration (including any modification of any Transaction
Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered
to all of the parties to such Transaction Document. For
clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately
by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or
otherwise.
4.14 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with
the other Purchasers, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales of any of the
Company’s securities during the period commencing with the
execution of this Agreement and ending at such time that the
transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in
Section 4.4. Each Purchaser, severally and not jointly with
the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed
by the Company pursuant to the initial press release as described
in Section 4.4, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information
included in the Disclosure Schedules. Notwithstanding the
foregoing, and notwithstanding anything contained in this Agreement
to the contrary, the Company expressly acknowledges and agrees that
(i) no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in effecting transactions in any
securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4,
(ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the
transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of
confidentiality or duty not to trade in the securities of the
Company to the Company or its Subsidiaries after the issuance of
the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the covenant set forth
above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this
Agreement.
4.15 Capital
Changes. Until the six
(6)-month anniversary of the Closing Date, the Company shall not
undertake a reverse or forward stock split or reclassification of
the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the
Shares.
4.16 Exercise
Procedures. The form of Notice
of Exercise included in the Warrants set forth the totality of the
procedures required of the Purchasers in order to exercise the
Warrants. No additional legal opinion, other information or
instructions shall be required of the Purchasers to exercise their
Warrants. Without limiting the preceding sentences, no ink-original
Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any
Notice of Exercise form be required in order to exercise the
Warrants. The Company shall honor exercises of the Warrants and
shall deliver Warrant Shares in accordance with the terms,
conditions and time periods set forth in the Transaction
Documents.
4.17 Lock-Up
Agreements. During the 60 day
period following the date of this Agreement, the Company shall not
amend, modify, waive or terminate any provision of any of the
Lock-Up Agreements except to extend the term of the lock-up period
and shall enforce the provisions of each Lock-Up Agreement in
accordance with its terms. If any party to a Lock-Up Agreement
breaches any provision of a Lock-Up Agreement, the Company shall
promptly use its best efforts to seek specific performance of the
terms of such Lock-Up Agreement.
4.18 Intentionally
Omitted.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before the fifth
(5th)
Trading Day following the date hereof; provided,
however,
that no such termination will affect the right of any party to sue
for any breach by any other party (or parties).
5.2 Fees
and Expenses. At the Closing,
the Company has agreed to reimburse Kingswood Capital Markets,
division of Benchmark Investments, Inc. (“Kingswood”)
the non-accountable sum of $50,000 for its legal fees and expenses.
Except as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any
instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the
Purchasers.
5.3 Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto, the
Registration Statement, Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.
5.4 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 time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment at the email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the time of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or
email attachment at the email address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd)
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight 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 attached hereto. To the extent that
any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.
5.5 Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the
Company and Purchasers which purchased at least 55% in interest of
the Shares based on the initial Subscription Amounts hereunder or,
in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought, provided that if any
amendment, modification or waiver disproportionately and adversely
impacts a Purchaser (or group of Purchasers), the consent of such
disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and
obligations of the other Purchasers shall require the prior written
consent of such adversely affected Purchaser. Any amendment
effected in accordance with this Section 5.5 shall be binding upon
each Purchaser and holder of Securities and the
Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7 Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its
rights under this Agreement to any Person to whom such Purchaser
assigns or transfers any Securities, provided that such transferee
agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that
apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The
Placement Agent shall be a third party beneficiary of the
representations and warranties of the Company in Section 3.1 and
the representations and warranties of the Purchasers in Section
3.2. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8
and this Section 5.8, and the Placement Agency
Agreement.
5.9 Governing
Law. All questions concerning
the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and
enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof.
Each party hereto agrees that all legal Proceedings concerning the
interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Action or
Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such Action or
Proceeding by mailing a copy thereof via registered or certified
mail or 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 other manner permitted by law. If any party hereto
shall commence an Action or Proceeding to enforce any provisions of
the Transaction Documents, then, in addition to the obligations of
the Company under Section 4.8, the prevailing party in such Action
or Proceeding shall be reimbursed by the non-prevailing party for
its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of
such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.
5.11 Execution.
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 hereto and delivered to each other party
hereto, it being understood that such parties need not sign the
same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a
“.pdf” format data 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.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties hereto that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13 Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in
its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights;
provided,
however,
that, in the case of a rescission of an exercise of a Warrant, the
applicable Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded exercise notice
concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the
restoration of such Purchaser’s right to acquire such shares
pursuant to such Purchaser’s Warrant (including, issuance of
a replacement warrant certificate evidencing such restored
right).
5.14 Replacement
of Securities. If any
certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft
or destruction. The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance
of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties hereto
agree that monetary damages may not be adequate compensation for
any loss incurred by reason of any breach of obligations contained
in the Transaction Documents and hereby agree to waive and not to
assert in any Action for specific performance of any such
obligation the defense that a remedy at law would be
adequate.
5.16 Payment
Set Aside. To the extent that
the Company makes a payment or payments to any Purchaser pursuant
to any Transaction Document or a Purchaser enforces or exercises
its rights thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and
Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall
be responsible in any way for the performance or non-performance of
the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce
its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an
additional party in any Proceeding for such purpose. Each Purchaser
has been represented by its own separate legal counsel in its
review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, each Purchaser and its respective
counsel have chosen to communicate with the Company through Loeb.
Loeb does not represent any of the Purchasers and only represents
Kingswood with respect to such transactions. The Company has
elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other applicable
Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.
5.18 Liquidated
Damages. The Company’s
obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of
the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding
the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable
shall have been canceled.
5.19 Saturdays,
Sundays, Holidays,
etc. If
the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Trading Day, then such action may be taken or such right may be
exercised on the next succeeding Trading Day.
5.20 Construction.
The parties hereto agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved
against any drafting party shall not be employed in the
interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject
to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the
Common Stock that occur after the date of this
Agreement.
5.21 WAIVER
OF JURY TRIAL.
IN ANY
ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY
PARTY HERETO AGAINST ANY OTHER PARTY HERETO, THE PARTIES HERETO
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
|
AMERICAN RESOURCES CORPORATION.
|
Address
For Notice:
12115
Visionary Way, Suite 174
Fishers
Indiana, 46038
Attention
:Mark C. Jensen
|
|
By:__________________________________________
Name:
Marc C. Jensen
Title:
Chief Executive Officer
With a
copy to (which shall not constitute notice):
|
E-Mail:
|
|
The Law Offices of Clifford J. Hunt PA
8200
Seminole Blvd
Seminole, Florida 33772
Attention: .
Facsimile:
E-mail:
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASERS FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
Name of
Purchaser:
________________________________________________________
Signature of Authorized Signatory of
Purchaser: _________________________________
Name of
Authorized Signatory:
_______________________________________________
Title
of Authorized Signatory:
________________________________________________
Email
Address of Authorized Signatory:
_________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Warrants to Purchaser (if not same as address for
notice):
DWAC
for Shares:
Subscription
Amount: $_________________
Shares:
_________________
Purchase Warrant
Shares: __________________
Beneficial
Ownership Blocker ☐ 4.99% or ☐ 9.99%
EIN
Number: ____________________
☐
Notwithstanding anything contained in this Agreement to the
contrary, by checking this box (i) the obligations of the
above-signed to purchase
the securities set forth in this Agreement to be purchased from the
Company by the above-signed, and the obligations of the Company to
sell such securities to the above-signed, shall be unconditional
and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the second (2nd) Trading Day
following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being
disregarded by clause (i) above) that required delivery by the
Company or the above-signed of any agreement, instrument,
certificate or the like or purchase price (as applicable) shall no
longer be a condition and shall instead be an unconditional
obligation of the Company or the above-signed (as applicable) to
deliver such agreement, instrument, certificate or the like or
purchase price (as applicable) to such other party on the Closing
Date.
Exhibit 99.1
American Resources Corporation
Announces Pricing of $30.1 Million
Registered Direct Offering Priced At-The-Market
June 7, 2021 | Source: American Resources
Corporation
FISHERS, INDIANA / ACCESSWIRE / June 7, 2021
/ American Resources
Corporation (NASDAQ:AREC)
(“American Resources” or the “Company”), a
next generation and socially responsible supplier of raw materials
to the new infrastructure and electrification marketplace, today
announced that it entered into
a securities purchase agreement with certain institutional
investors for the issuance and sale of 8,600,000 shares of its
common stock and 4,300,000 warrants to purchase up to 4,300,000
shares of its common stock, priced at the market under Nasdaq
rules, for aggregate gross proceeds of approximately $30.1 million
in a registered direct offering.
Kingswood Capital Markets, division of Benchmark Investments, Inc.,
acted as exclusive placement agent for the offering.
The warrants will be exercisable immediately upon the date of
issuance and have an exercise price of $3.50 per share.
The warrants will expire 5 years from the date of
issuance.
The offering was made pursuant to an effective shelf registration
statement on Form S-3 (File No. 333-230786) previously filed and
declared effective by the Securities and Exchange Commission (the
"SEC") and declared effective on June 4, 2019. The offering of the
shares of common stock and warrants will be made only by means of a
prospectus, including a prospectus supplement, forming a part of
the effective registration statement, describing the terms of the
offering, which was filed with the SEC.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor will there be any sales of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such
jurisdiction.
When available, copies of the prospectus supplement relating to
this registered direct offering, together with the accompanying
prospectus, can be obtained at the SEC's website at www.sec.gov or
from Kingswood Capital Markets, division of Benchmark Investments
Inc., 590 Madison Avenue, 39th
Floor, New York, NY 10022, Attention:
Syndicate Department, or via email at syndicate@kingswoodcm.com or
telephone at (212) 404-7002. Before investing in this offering,
interested parties should read in their entirety the prospectus
supplement and the accompanying prospectus and the other documents
that the Company has filed with the SEC that are incorporated by
reference in such prospectus supplement and the accompanying
prospectus, which provide more information about the Company and
such offering.
About American Resources Corporation
American Resources Corporation is a next-generation,
environmentally and socially responsible supplier of high-quality
raw materials to the new infrastructure market. The Company is
focused on the extraction and processing of metallurgical carbon,
an essential ingredient used in steelmaking, critical and rare
earth minerals for the electrification market, and reprocessed
metal to be recycled. American Resources has a growing portfolio of
operations located in the Central Appalachian basin of eastern
Kentucky and southern West Virginia where premium quality
metallurgical carbon and rare earth mineral deposits are
concentrated.
American Resources has established a nimble, low-cost business
model centered on growth, which provides a significant opportunity
to scale its portfolio of assets to meet the growing global
infrastructure and electrification markets while also continuing to
acquire operations and significantly reduce their legacy industry
risks. Its streamlined and efficient operations are able to
maximize margins while reducing costs. For more information
visit
americanresourcescorp.com or connect with the Company on
Facebook,
Twitter, and
LinkedIn.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks,
uncertainties, and other important factors that could cause the
Company's actual results, performance, or achievements or industry
results to differ materially from any future results, performance,
or achievements expressed or implied by these forward-looking
statements. These statements are subject to a number of risks and
uncertainties, many of which are beyond American Resources
Corporation's control. The words "believes", "may", "will",
"should", "would", "could", "continue", "seeks", "anticipates",
"plans", "expects", "intends", "estimates", or similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words. Any
forward-looking statements included in this press release are made
only as of the date of this release. The Company does not undertake
any obligation to update or supplement any forward-looking
statements to reflect subsequent events or circumstances. The
Company cannot assure you that the projected results or events will
be achieved.
PR Contact
Precision
Public Relations
Matt
Sheldon
917-280-7329
matt@precisionpr.co
Investor Contact:
JTC
Team, LLC
Jenene
Thomas
833-475-8247
arec@jtcir.com
RedChip
Companies Inc.
Todd
McKnight
1-800-RED-CHIP
(733-2447)
Info@redchip.com
Company Contact:
Mark
LaVerghetta
Vice
President of Corporate Finance and Communications
317-855-9926
ext. 0
investor@americanresourcescorp.com
Exhibit
99.2
American Resources Corporation
Announces Closing of $30.1 Million
Registered Direct Offering Priced At-The-Market
June 9, 2021 | Source: American Resources
Corporation
FISHERS, INDIANA / ACCESSWIRE / June 9, 2021
/ American Resources
Corporation (NASDAQ:AREC)
(“American Resources” or the “Company”), a
next generation and socially responsible supplier of raw materials
to the new infrastructure and electrification marketplace, today
announced the closing of its registered direct offering
of 8,600,000 shares of its common
stock and 4,300,000 warrants to purchase up to 4,300,000 shares of
its common stock, priced at the market under Nasdaq rules, for
aggregate gross proceeds of approximately $30.1
million.
Kingswood Capital Markets, division of Benchmark Investments, LLC,
acted as exclusive placement agent for the offering.
The warrants are exercisable immediately upon the date of issuance
and have an exercise price of $3.50 per share. The
warrants will expire 5 years from the date of
issuance.
The offering was made pursuant to an effective shelf registration
statement on Form S-3 (File No. 333-230786) previously filed and
declared effective by the Securities and Exchange Commission (the
"SEC") and declared effective on June 4, 2019. The offering of the
shares of common stock and warrants was made only by means of a
prospectus, including a prospectus supplement, forming a part of
the effective registration statement, describing the terms of the
offering, which was filed with the SEC.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor will there be any sales of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such
jurisdiction.
When available, copies of the prospectus supplement relating to
this registered direct offering, together with the accompanying
prospectus, can be obtained at the SEC's website at www.sec.gov or
from Kingswood Capital Markets, division of Benchmark Investments,
LLC, 590 Madison Avenue, 39th
Floor, New York, NY 10022, Attention:
Syndicate Department, or via email at syndicate@kingswoodcm.com or
telephone at (212) 404-7002. Before investing in this offering,
interested parties should read in their entirety the prospectus
supplement and the accompanying prospectus and the other documents
that the Company has filed with the SEC that are incorporated by
reference in such prospectus supplement and the accompanying
prospectus, which provide more information about the Company and
such offering.
About American Resources Corporation
American Resources Corporation is a next-generation,
environmentally and socially responsible supplier of high-quality
raw materials to the new infrastructure market. The Company is
focused on the extraction and processing of metallurgical carbon,
an essential ingredient used in steelmaking, critical and rare
earth minerals for the electrification market, and reprocessed
metal to be recycled. American Resources has a growing portfolio of
operations located in the Central Appalachian basin of eastern
Kentucky and southern West Virginia where premium quality
metallurgical carbon and rare earth mineral deposits are
concentrated.
American Resources has established a nimble, low-cost business
model centered on growth, which provides a significant opportunity
to scale its portfolio of assets to meet the growing global
infrastructure and electrification markets while also continuing to
acquire operations and significantly reduce their legacy industry
risks. Its streamlined and efficient operations are able to
maximize margins while reducing costs. For more information
visit
americanresourcescorp.com or connect with the Company on
Facebook,
Twitter, and
LinkedIn.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks,
uncertainties, and other important factors that could cause the
Company's actual results, performance, or achievements or industry
results to differ materially from any future results, performance,
or achievements expressed or implied by these forward-looking
statements. These statements are subject to a number of risks and
uncertainties, many of which are beyond American Resources
Corporation's control. The words "believes", "may", "will",
"should", "would", "could", "continue", "seeks", "anticipates",
"plans", "expects", "intends", "estimates", or similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words. Any
forward-looking statements included in this press release are made
only as of the date of this release. The Company does not undertake
any obligation to update or supplement any forward-looking
statements to reflect subsequent events or circumstances. The
Company cannot assure you that the projected results or events will
be achieved.
PR Contact
Precision
Public Relations
Matt
Sheldon
917-280-7329
matt@precisionpr.co
Investor Contact:
JTC
Team, LLC
Jenene
Thomas
833-475-8247
arec@jtcir.com
RedChip
Companies Inc.
Todd
McKnight
1-800-RED-CHIP
(733-2447)
Info@redchip.com
Company Contact:
Mark
LaVerghetta
Vice
President of Corporate Finance and Communications
317-855-9926
ext. 0
investor@americanresourcescorp.com