Item 1.01 Entry into a Material Definitive Agreement.
On
October 16, 2022, Archaea Energy Inc. (the “Company”) and LFG Acquisition Holdings LLC, a subsidiary of the Company (“Opco”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BP Products North America Inc., a Maryland corporation
(“Parent”), Condor RTM Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and
Condor RTM LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Opco Merger Sub”). Pursuant
to the Merger Agreement, upon the terms and subject to the conditions thereof, Merger Sub will be merged with and into the Company with
the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Company Merger”), and Opco
Merger Sub will be merged with and into Opco with Opco continuing as the surviving company and a wholly owned subsidiary of Parent (the
“Opco Merger” and, together with the Company Merger, the “Mergers”).
Effect on Company Capital
Stock
Upon
the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Company Merger (the “Effective
Time”), (i) each share of Class A common stock, par value $0.0001 per share, of the Company (the “Company Class A Common
Stock”) that is issued and outstanding as of immediately prior to the Effective Time (other than any shares of Company Class A Common
Stock that are held by the Company as treasury stock or owned by Parent, Merger Sub, Opco Merger Sub or any other subsidiaries thereof,
or any shares of Company Class A Common Stock as to which appraisal rights have been properly exercised in accordance with Delaware law),
will be automatically cancelled, extinguished and converted into the right to receive $26.00, without interest thereon (the “Per Share
Price”), (ii) each share of Company Class A Common Stock that is held by the Company as treasury stock or owned by Parent, Merger
Sub, Opco Merger Sub or any other subsidiaries thereof, in each case, as of immediately prior to the Effective Time, will be automatically
cancelled and extinguished without conversion thereof or consideration paid therefor and (iii) each share of Class B common stock, par
value $0.0001 per share, of the Company (the “Company Class B Common Stock” and, together with the Company Class A Common
Stock, the “Company Common Stock”) will be automatically cancelled and extinguished without any conversion thereof or consideration
paid therefor.
Effect on Opco Units
Upon
the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Opco Merger (the “Opco Merger
Effective Time”), (i) each Class A Unit of Opco (each, an “Opco Unit”) held by a holder other than the Company or any
of its subsidiaries (such holders, the “Specified Opco Holders”) issued and outstanding as of immediately prior to the Opco
Merger Effective Time will be automatically cancelled, extinguished and converted into the right to receive cash in an amount equal to
the Per Share Price and (ii) each Opco Unit held by the Company or any of its subsidiaries immediately prior to the Opco Merger Effective
Time will become an equivalent number of limited liability company interests of the surviving Opco held by the Company, as the surviving
corporation in the Company Merger.
Representations and Warranties
and Covenants
The
Company, Opco, Parent, Merger Sub and Opco Merger Sub have each made customary representations, warranties and covenants in the Merger
Agreement. Among other things and subject to certain exceptions, from the date of the Merger Agreement until the earlier of the
Effective Time or the termination of the Merger Agreement in accordance with its terms, each of the Company and Opco has agreed to use
reasonable best efforts to conduct its business in all material respects in the ordinary course of business and preserve intact in all
material respects its business and preserve its commercial relationships with counterparties, suppliers, distributors and third parties
and not to take certain actions without the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed).
The
Merger Agreement also contains a customary “no shop” provision that, in general, restricts
the Company’s ability to solicit third-party acquisition proposals or provide information to, or engage in discussions or negotiations
with, third parties regarding, or that would reasonably be expected to lead to, any acquisition proposal. The no shop provision is subject
to a customary “fiduciary out” provision that allows the Company, prior to receiving the approval of the Company’s stockholders,
under certain circumstances and in compliance with certain obligations, to provide information, afford access to personnel and joint venture
partners and participate in discussions and negotiations with respect to unsolicited third-party acquisition proposals that could reasonably
be expected to lead to a “Superior Proposal” (as defined in the Merger Agreement) and, subject to compliance with certain
obligations, to terminate the Merger Agreement and accept a Superior Proposal upon payment to Parent of the Company Termination Fee discussed
below.
Treatment of Company
Equity Awards
Each
award of restricted stock units of the Company (“Company RSUs”) that is outstanding and vested as of immediately prior to
the Effective Time and each Company RSU that is held by a non-employee director of the Company immediately prior to the Effective Time,
and each award of performance-based restricted stock units of the Company (“Company PSUs”) that is outstanding and vested
as of immediately prior to the Effective Time (“Vested Company RSUs” and “Vested Company PSUs,” respectively)
and, with respect to each holder of Company RSUs or Company PSUs, 50% of such holder’s Company RSUs and such holder’s Company
PSUs that are outstanding and unvested as of immediately prior to the Effective Time (“Deemed Vested Company RSUs” and “Deemed
Vested Company PSUs,” respectively) will, in each case, automatically, at the Effective Time, be cancelled and converted into the
right to receive an amount in cash (without interest and subject to applicable withholding taxes) equal to the product of (i) the Per
Share Price and (ii) the total number of shares of Company Class A Common Stock subject to such Vested Company RSU or Deemed Vested Company
RSU or such Vested Company PSU or Deemed Vested Company PSU (with Deemed Vested Company PSUs being deemed achieved at maximum performance),
respectively, as of immediately prior to the Effective Time.
Each
award of Company RSUs and Company PSUs that is outstanding as of immediately prior to the Effective Time that is not a Vested Company
RSU or Deemed Vested Company RSU (an “Unvested Company RSU”) or a Vested Company PSU or Deemed Vested Company PSU (an “Unvested
Company PSU”), respectively, will, in each case, automatically, at the Effective Time, be cancelled and converted into an award
representing the right to receive an amount in cash (without interest and subject to applicable withholding taxes) equal to the product
of (i) the Per Share Price and (ii) the total number of shares of Company Class A Common Stock subject to such Unvested Company RSU or
Unvested Company PSU (with Unvested Company PSUs being deemed achieved at maximum performance), respectively, as of immediately prior
to the Effective Time (a “Deferred Cash RSU Award” or “Deferred Cash PSU Award,” respectively). Each Deferred
Cash RSU Award or Deferred Cash PSU Award will, subject to the holder’s continued service with Parent or its affiliates through
the applicable vesting dates, generally vest and be payable on the earlier of (A) the same time as the Company RSU or Company PSU for
which the Deferred Cash RSU Award or Deferred Cash PSU Award, respectively, was exchanged would have vested and been payable pursuant
to its service-based vesting schedule and (B) the first anniversary of the date of the Effective Time.
Treatment of Company
Warrants
Each
of the Company’s warrants (the “Warrants”) will be redeemed for cash immediately following the Opco Merger Effective
Time in accordance with the terms of the Warrant Agreement (as defined below) and the Warrant Agreement Amendment (as defined below).
Holders of the Warrants will be entitled to receive, following the Opco Merger Effective Time, the net cash consideration described in
the Warrant Agreement Amendment, which is summarized below under “Warrant Agreement Amendment.”
Closing Conditions
The
closing of the Mergers (the “Closing”) is conditioned on certain conditions, including (i) the adoption of the Merger Agreement
by the holders of a majority of the outstanding shares of the Company Common Stock, (ii)
the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
(iii) approvals and clearances by the Federal Energy Regulatory Commission (“FERC”) and (iv) other customary conditions for
a transaction of this type, such as the absence of any legal restraint prohibiting the consummation of the Mergers and the absence of
any Company Material Adverse Effect (as defined in the Merger Agreement).
Termination Rights
The Merger Agreement contains certain customary termination rights
for the Company and Parent, including (i) if the Company Merger is not consummated by 11:59 p.m., New York City time, on July 16, 2023
(subject to an automatic extension until October 16, 2023 under certain circumstances for the purpose of obtaining certain regulatory
approvals, in either case, the “Termination Date”), (ii) if the required approval by the holders of a majority of the outstanding
shares of the Company Common Stock (the “Requisite Stockholder Approval”) is
not obtained, (iii) if the other party breaches its representations, warranties or covenants in a manner that would cause the conditions
to the Closing set forth in the Merger Agreement to not be satisfied and fails to cure such breach or (iv) if any legal restraint prohibiting
the consummation of the Mergers has become final and non-appealable. In addition, subject to compliance with certain terms of the Merger
Agreement, (A) the Merger Agreement may be terminated by the Company (prior to obtaining the Requisite Stockholder Approval) in order
to enter into a definitive agreement providing for a superior proposal and (B) the Merger Agreement may be terminated by Parent if the
Company’s board of directors changes its recommendation.
Termination Fees
If (i) the Merger Agreement is validly terminated by (A) Parent or
the Company, if the Company Merger has not occurred by the Termination Date (provided that at the Termination Date (x) the Requisite Stockholder
Approval has not been obtained or the Company stockholder meeting to approve the Mergers has not been held prior to the Termination Date
or (y) Parent has the right to terminate due to the Company’s uncured breach of its representations, warranties and covenants set
forth in the Merger Agreement), (B) Parent or the Company, if the Company fails to obtain the Requisite Stockholder Approval or (C) Parent
due to the Company’s uncured breach of its representations, warranties and covenants set forth in the Merger Agreement, (ii) prior
to such termination, a third party publicly announces and (in the case of a termination at a time when the Company has failed to obtain
the Requisite Stockholder Approval) does not withdraw a proposal for an alternative control transaction with the Company at least one
business day before the Company fails to obtain the Requisite Stockholder Approval and (iii) within one year following such termination,
the Company consummates or enters into a definitive agreement providing for an alternative control transaction that is subsequently consummated
(or is terminated but a subsequent alternative control transaction is then consummated), the Company will be required to pay Parent a
termination fee equal to $114,500,000 (the “Company Termination Fee”). The Company is also required to pay the Company Termination
Fee if (i) Parent terminates the Merger Agreement because the board of directors of the Company changes its recommendation regarding the
Mergers or (ii) if, prior to obtaining the Requisite Stockholder Approval, the Company terminates the Merger Agreement to enter into a
definitive agreement providing for an alternative control transaction the board of directors of the Company deems to be superior to the
Mergers, if the Company has complied in all material respects with its non-solicitation covenant with respect to such superior proposal.
If
the Merger Agreement is validly terminated by Parent or the Company (i) if any judgment, law or order prohibiting the Mergers in respect
of, pursuant to or arising under any antitrust law has become final and non-appealable or because FERC has not yet issued an order authorizing
the Mergers or (ii) if the Company Merger has not occurred by the Termination Date and, in either case, at the time of such termination
(A) any regulatory condition to Closing is not satisfied and (B) all other conditions to the obligations of Parent to consummate the Mergers
have been satisfied or waived, Parent will be required to pay the Company a termination fee equal to $327,200,000 (the “Parent Termination
Fee”).
The
foregoing description of the Merger Agreement and the Mergers is only a summary, does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the copy of the Merger Agreement attached hereto as Exhibit 2.1 and incorporated herein by
reference. The Merger Agreement and the above description have been included to provide investors and security holders with information
regarding the terms of the Merger Agreement. They are not intended to provide any other factual information about the Company or Parent.
The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as of
specific dates; were solely for the benefit of the parties to the Merger Agreement; and may be subject to limitations agreed upon by the
parties, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating
contractual risk between them. Investors should be aware that the representations, warranties and covenants or any description thereof
may not reflect the actual state of facts or condition of the Company or Parent. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after the date of the Merger Agreement. Further, investors should read the Merger
Agreement not in isolation, but only in conjunction with the other information that the respective companies include in reports, statements
and other filings they make with the Securities and Exchange Commission (the “SEC”).
Voting Agreement
Concurrently
with the execution of the Merger Agreement, certain stockholders of the Company executed a voting agreement (the “Voting Agreement”)
in favor of Parent, pursuant to which such stockholders have agreed, among other things, to vote all shares of Company Common Stock owned
by them, collectively constituting approximately 27% of the outstanding shares of Company Common Stock, in favor of the approval and adoption
of the Merger Agreement.
The
foregoing description of the Voting Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the copy of the Voting Agreement attached hereto as Exhibit 10.1 and incorporated herein by reference.
Amendment to the
Warrant Agreement
In connection with the entry by the Company and Opco into the Merger
Agreement, on October 16, 2022, the Company, Opco and Continental Stock Transfer & Trust Company (the “Warrant Agent”)
entered into Amendment No. 1 to Warrant Agreement (the “Warrant Agreement Amendment”), which amends the Warrant Agreement,
dated as of October 21, 2020 (the “Warrant Agreement”), by and between the Company (formerly known as Rice Acquisition Corp.),
Opco (formerly known as Rice Acquisition Holdings LLC) and the Warrant Agent. Pursuant to the Warrant Agreement Amendment, immediately
following the Opco Merger Effective Time, each Warrant that is issued and outstanding immediately prior to the Effective Time will be
automatically redeemed for the right to receive an amount, in cash, equal to (i) the Per Share Price minus (ii) the Warrant Price (as
defined in the Warrant Agreement and which is currently $11.50) as reduced pursuant to the calculation provided in Section 4.4 of the
Warrant Agreement (the “Per Warrant Redemption Amount”), without interest. Following the Effective Time, no Warrant shall
entitle the holder thereof to receive any equity or other securities of the Company, Opco or any of their affiliates and all Warrants
will be cancelled and cease to exist. In addition, pursuant to the Warrant Agreement Amendment, the Warrant Agreement (except with respect
to the right to receive the Per Warrant Redemption Amount) will be automatically terminated immediately following the Opco Merger Effective
Time. In the event the Merger Agreement is terminated in accordance with its terms, the Warrant Agreement Amendment will automatically
terminate and become null and void.
The
foregoing description of the Warrant Agreement Amendment is only a summary, does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the copy of the Warrant Agreement Amendment attached hereto as Exhibit 10.2 and incorporated herein by
reference.
Amendment to the Second
Amended and Restated Limited Liability Company Agreement of Opco
In connection with the entry by the Company and Opco into the Merger
Agreement, on October 16, 2022, Opco, the Company and certain holders of Opco Units, entered into the First Amendment to the Second Amended
and Restated Limited Liability Company Agreement of Opco (the “Opco LLC Agreement Amendment”). The Opco LLC Agreement Amendment
authorizes the Company, as the managing member of Opco, to appoint a unitholder representative to act on behalf of the holders of Opco
Units in connection with certain tax matters, as contemplated by Section 6.17 of the Merger Agreement.
The
foregoing description of the Opco LLC Agreement Amendment is only a summary, does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the copy of the Opco LLC Agreement Amendment attached hereto as Exhibit 10.3 and incorporated herein
by reference.