Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Subject to the terms and conditions of the Merger Agreement, upon consummation
of the Merger, Parent will pay an aggregate amount of consideration worth
approximately
Prior to the effective time of the Merger (the "Effective Time"), the board of directors of American Freight will take all action necessary under American Freight's 2015 Stock Option Plan and the Warrant Documents (as defined in the Merger Agreement) so that (i) immediately prior to the Effective Time each issued and outstanding In-the-Money Option and In-the-Money Warrant (each as defined in the Merger Agreement), in each case, that is unexercisable or otherwise unvested, shall automatically be deemed exercisable or otherwise vested, (ii) at the Effective Time, each Option and Warrant (as defined in the Merger Agreement), in each case, that is not an In-the-Money Option or and In-the-Money Warrant, as applicable, shall be automatically canceled and extinguished with no right to receive any consideration or payment and (iii) at the Effective Time all issued and outstanding In-the-Money Options and In-the-Money Warrants will be deemed exercised and automatically converted into the right to receive, at such time and in the manner provided in, and subject to adjustment in accordance with, the Merger Agreement, the applicable Per Option Merger Consideration and Per Warrant Merger Consideration (each as defined in the Merger Agreement), as applicable.
Consummation of the Merger is subject to certain customary conditions, including, without limitation: (i) the adoption of the Merger Agreement and approval of the Merger by the affirmative vote of the holders of at least a majority of the outstanding shares of common stock and Series A Preferred Stock of American Freight; and (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
In connection with the Merger, Parent and Merger Sub have obtained a customary
buyer's representation and warranty insurance policy providing for up to
The parties to the Merger Agreement have each made customary representations and warranties in the Merger Agreement.
The Merger Agreement contains certain customary termination rights for Parent
and American Freight, including a right by either party to terminate the Merger
Agreement if the Merger is not consummated by
Upon termination of the Merger Agreement under specified circumstances, Parent
will be required to pay American Freight a termination fee of
The Company has secured committed debt financing from two financial institutions
(the "Financing"), providing the Company with sufficient cash to consummate the
Merger, to refinance substantially all outstanding indebtedness of
The representations, warranties, covenants and agreements of American Freight contained in the Merger Agreement have been made solely for the benefit of Parent and Merger Sub. In addition, such representations, warranties and covenants: (i) have been made only for purposes of the Merger Agreement; (ii) have been qualified by disclosures made to Parent and Merger Sub in the disclosure letter delivered in connection with the Merger Agreement; (iii) are subject to certain materiality qualifications contained in the Merger Agreement, which may differ from what may be viewed as material by investors; and (iv) were made only as of the date of the Merger Agreement and, in the event that the closing of the Merger occurs, as of the date of such closing, or such other date as is specified in the Merger Agreement. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding American Freight, its subsidiaries or their respective businesses. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 and incorporated by reference.
Cautionary Statement Regarding Forward-Looking Statements
This report contains forward-looking statements within the meaning of 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, those that contain, or are identified by, words such as "outlook", "guidance", "believes", "expects", "potential", "continues", "may", "will", "should", "predicts", "intends", "plans", "estimates", "anticipates", "could" or the negative version of these words or other comparable words. Forward-looking statements may include, but are not limited to, statements relating to the Merger and the Financing, which is subject to various significant risks and uncertainties, many of which are outside of the control of the Company. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from historical results and any future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors that could cause actual results to differ materially from forward-looking statements include, among others, the risk that the Merger may not be completed in a timely manner or at all, which may adversely affect the business and stock price of the Company; the risk of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the effect of the announcement or pendency of the Merger on the ability of the Company and American Freight to retain and hire key personnel and maintain relationships with their customers, suppliers, partners and others with whom they do business, or on their . . .
Item 8.01. Other Events.
On
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed with this Current Report on Form 8-K:
Agreement and Plan of Merger, dated as ofDecember 28, 2019 , by and amongFranchise Group Newco Intermediate AF, LLC , American 2.1*Freight Group, Inc. ,Franchise Group Merger Sub AF, Inc. , and TheJordan Company, L.P. , solely in its capacity as representative for the Fully-Diluted Stockholders. 99.1 Press release datedDecember 30, 2019 .
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* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to the Merger
Agreement have been omitted from this Report and will be furnished
supplementally to the
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